T.C. Memo. 2005-12

UNITED STATES TAX COURT

ROBERT RODRIGUEZ, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 10391-03. Filed January 26, 2005.

Robert Rodriguez, pro se.

Jonae A. Harrison, for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

GERBER, Chief Judge: Respondent determined deficiencies in

and additions to petitioner’s Federal income tax as follows:
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 Additions to Tax 

 Year Deficiency Sec. 6651(a)(1) Sec. 6654(a)

 1997 $3,536 $738.75 $154.66

 1998 1 2,119 1 526.75 --

 1999 2,794 674.00 129.95

 2000 9,027 1,990.25 418.92

1 Includes additional amounts not reflected in the original

notice of deficiency. The Court has jurisdiction to redetermine

such increased amounts of the deficiency and any addition to tax

if the Secretary makes a claim at the hearing. Sec. 6214(a). 

Respondent moved at trial to amend his answer to reflect these

increases, and petitioner did not object. 

All section references are to the Internal Revenue Code in

effect for the years in issue, and all Rule references are to the

Tax Court Rules of Practice and Procedure, unless otherwise

indicated.

Petitioner petitioned the Court to redetermine the

deficiencies and additions to tax.

We must decide whether:

1. Petitioner had unreported income of $30,372, $21,091,

$25,661 and $51,612 determined by respondent for the tax years

1997, 1998, 1999, and 2000, respectively.

2. Petitioner is liable for the additions to tax determined

by respondent under section 6651(a)(1).

3. Petitioner is liable for the additions to tax determined

by respondent under section 6654(a).

4. A penalty shall be imposed on petitioner under section

6673 for advancing frivolous and/or groundless claims.
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1 The parties’ stipulation of facts and exhibits submitted

therewith are incorporated herein by this reference.

FINDINGS OF FACT1

At the time the petition was filed, petitioner resided in

Phoenix, Arizona. Petitioner did not file tax returns for the

taxable years 1997, 1998, 1999, and 2000. For the years in

question, petitioner received income in the following amounts: 

Year Payor Amount Total

1997 Rescue Industries, Inc. $30,372 $30,372

1998 Rescue Industries, Inc. 6,527

Rescue Rooster, LLC 10,903

Laboratory Sciences of AZ, LLC 3,661 21,091

1999 Rescue Rooster, LLC 5,341

Laboratory Sciences of AZ, LLC 1,627

Devau Human Resources 7,744

Metro Lock Services, Inc. 10,949 25,661

2000 Devau Human Resources 8,121

Cox Communications, Inc. 43,491 51,612

Respondent received information from third parties showing that

petitioner derived income in the amounts determined above.

Withholding was taken from petitioner’s wages in the amounts of

$581, $12, $98, and $1,067 for the years 1997, 1998, 1999, and

2000, respectively. Petitioner’s filing status was “Single” for

all years. 

Petitioner did not cooperate with respondent at any time

during the review process, failing to meet with or to provide 
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respondent with any information that would enable respondent to

properly determine petitioner’s tax liability.

OPINION

A. Burden of Proof

Generally, respondent’s deficiency determinations set forth

in the notices of deficiency are presumed correct, and petitioner

bears the burden of showing that the determination is in error. 

Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). There

are exceptions to that Rule. Section 7491 shifts the burden of

proof to respondent if the taxpayer meets certain preliminary

conditions. Here, not only did petitioner fail to cooperate with

respondent in any regard, but he did not produce one scintilla of

evidence with respect to any matter in this case. See sec.

7491(a). Therefore, section 7491(a) does not apply in this case.

Another case in which the burden may shift to respondent

concerns the determination that there is unreported income. 

Under the holdings of the U.S. Court of Appeals for the Ninth

Circuit (to which an appeal would normally lie for petitioner)

respondent is required to build an evidentiary foundation to

support a determination of unreported income. See Weimerskirch

v. Commissioner, 596 F.2d 358 (9th Cir. 1979), revg. 67 T.C. 672

(1977). Respondent issued subpoenas to six of petitioner’s

former employers. At trial, to substantiate the determination

that petitioner received the income alleged, respondent provided
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Forms W-2, Wage and Tax Statement, payroll records, and

declarations from employers as to the validity of these

underlying documents. Therefore, respondent has made a

sufficient showing to shift to petitioner the obligation to show

that respondent’s determination is in error. 

However, with respect to the additions to tax, section

7491(c) requires that respondent bear the burden of production. 

To meet this burden, respondent must present evidence indicating

that it is appropriate to impose an addition to tax. See Higbee

v. Commissioner, 116 T.C. 438, 446 (2001).

B. Respondent’s Deficiency Determinations

This is not the first time that petitioner has appeared

before this Court with substantially similar issues. Petitioner

advanced many of the same arguments in this case as he had in a

prior case involving his 1994 through 1996 tax years. See

Rodriguez v. Commissioner, T.C. Memo. 2003-105. As before,

petitioner alleged that he did not receive the income, that his

filing status was married, and that respondent failed to consider

vague and nebulous “deductions, allowances and expenses provided

for by law” (that petitioner never specifically identifies). 

Petitioner objected to the admission of respondent’s evidence

based on “timeliness”, hearsay, and lack of personal knowledge. 

Petitioner argues that he has no way of cross-examining the

people who made the declarations, that the underlying documents
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are secondary evidence, and that respondent has no personal

knowledge as to the validity of the documents. The documents

were received into evidence over the objection of petitioner. 

We find that the evidence provided by respondent was

reliable in that it met the hearsay and authentication exceptions

in rules 803(6) and 902(11) of the Federal Rules of Evidence. 

All of the underlying documents were kept in the regular course

of business, and the declarations of the validity of these

documents were made by people familiar with their use. 

Petitioner did not introduce any evidence to refute the validity

of the evidence. In addition, petitioner has again failed to

provide any evidence that the income determined by respondent is

in error or that he is entitled to file a return claiming marital

status or any deductions. The failure of petitioner to present

any evidence leaves the Court no basis for making any findings

that support petitioner’s assertions.

Petitioner also argued that he was prejudiced by the

documents offered by respondent due to the lack of a fair

opportunity to inspect the documents. Petitioner’s claim is

without merit. First, some of the documents had petitioner’s

signature on them, indicating he was familiar with the evidence

presented. Second, the documents offered at trial were 

related to petitioner’s wage income. We find it extremely 
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difficult to believe that petitioner was blind-sided by this

evidence.

Finally, petitioner had an opportunity to obtain the

evidence presented at trial. Respondent contacted petitioner to

coordinate a conference for December 15, 2003, before trial. 

Petitioner stated he could not attend that meeting and instead

informed respondent that he would be making discovery requests of

respondent. However, petitioner failed to take steps to meet

with respondent at any other time or to engage in any discovery

whatsoever. Instead, on February 19, 2004, petitioner objected

on the basis of self-incrimination and the Fifth Amendment to all

of respondent’s proposed stipulations of fact, except for the two

relating to the notices of deficiency and petitioner’s residence. 

Petitioner thus failed to cooperate with respondent and thwarted

respondent’s attempts to stipulate facts by asserting baseless

constitutional arguments. The Court’s patience for such

arguments in this civil case wears thin where there is no

indication that petitioner’s cooperation with respondent’s

requests would lead to criminal prosecution. Petitioner cannot

now claim that he is prejudiced or that he did not have an

opportunity to challenge respondent’s evidence. Accordingly, we

again find that it was proper for respondent to have determined

income for the subject years from the information received from

third parties and that respondent’s determination and the
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increased amount of unreported income for all years in question

is sustained. See Hardy v. Commissioner, 181 F.3d 1002, 1005

(9th Cir. 1999), affg. T.C. Memo. 1997-97.

C. Additions to Tax

Section 6651(a)(1) imposes an addition to tax for failing to

timely file a required Federal income tax return, unless it is

shown that the failure was due to reasonable cause and not

willful neglect. Petitioner was required to file Federal income

tax returns for each of the subject years because his income

exceeded the maximum amount to be exempt from filing in each of

the taxable years. Secs. 6012, 6072.

As was the situation in petitioner’s prior case, respondent

offered Forms 4340, Certificate of Assessments, Payments and

Other Specified Matters, and the testimony of a revenue agent as

proof that petitioner failed to file returns for the subject

years. Once again, petitioner failed to introduce any evidence

indicating that he filed the returns or that his failure to file

was reasonable. Accordingly, we again hold that petitioner is

liable for the additions to tax under section 6651(a)(1). United

States v. Boyle, 469 U.S. 241, 245 (1985); Cluck v. Commissioner,

105 T.C. 324, 338-339 (1995).

Section 6654 imposes an addition to tax on an underpayment

of estimated tax. Again, Forms 4340 and the testimony of the

revenue agent establish that petitioner failed to pay the

required estimated tax for 1997, 1999, and 2000. Furthermore, no
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evidence has been presented that petitioner paid the estimated

tax for the subject years or that any of the exceptions to the

addition to tax under section 6654(e) are available. 

Accordingly, we sustain respondent’s determinations.

D. Penalty Under Section 6673(a)

Respondent moved the Court, before trial, to impose a

$25,000 penalty under section 6673(a). Section 6673(a)(1)

authorizes the Court to require a taxpayer to pay to the United

States a penalty of up to $25,000 whenever it appears that

proceedings have been instituted or maintained by the taxpayer

primarily for delay or that the taxpayer’s position in such

proceeding is frivolous or groundless. 

At the beginning of trial, the Court explained the motion to

petitioner and then asked if petitioner objected to the motion. 

The following restates the Court’s explanation and how petitioner

replied:

THE COURT: Well, let me make sure you understand

what this motion is trying to accomplish. This motion

is a motion for sanctions pursuant to Section 6673 

* * * .

That particular section of the Code permits this

Court, if it should find that you’re just bringing this

action for purposes of delay, or if it should find that

your arguments are frivolous, without merit, it can 

fine you up to $25,000 for such activity * * * you 

don’t object to that?

* * * * *

[Mr. Rodriguez]: No, I don’t object.
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Petitioner’s only argument is that he believed that he did

not have an opportunity to challenge any of the “hearsay or

secondary information” that was presented at trial. 

As was explained to petitioner at trial, he had the

opportunity to call his own witnesses, offer any documents, and

present his own testimony, but he chose not to do so. As

discussed, he was not prejudiced by not receiving the documents

presented by respondent until trial. Moreover, sanctions of

$10,000 have previously been imposed against petitioner for the

1994, 1995, and 1996 tax years for advancing the same arguments

as he has in this case. See Rodriguez v. Commissioner, T.C.

Memo. 2003-105. The opinion admonishing petitioner for his

previous conduct in 3 taxable years was filed on April 17, 2003. 

Id. Nonetheless, petitioner had the audacity to once again

petition the Court to redetermine his tax liability for 

4 subsequent taxable years less than 3 months later, on July 1,

2003, and to continue to submit the same baseless arguments in

this case as had been presented in his earlier case. 

In his prior case, as in this case, petitioner was warned

before trial by respondent and during trial by the Court that his

position would warrant a penalty of up to $25,000. Petitioner’s

arguments are the same frivolous and groundless arguments that we

previously found were instituted primarily for delay. Petitioner

continues in his failure to cooperate with respondent and to
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advance the same frivolous arguments with the Court after

repeated warnings. Accordingly, we hold that petitioner is

liable for a $25,000 penalty under section 6673.

We have considered all arguments and have found those

arguments not discussed herein to be irrelevant and/or without

merit. To reflect the foregoing,

An appropriate order and

decision will be entered

for respondent.