T.C. Memo. 1996-102

UNITED STATES TAX COURT

ARLIE G. CURRY, JR., Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 6404-94. Filed March 6, 1996.

Arlie G. Curry, Jr., pro se.

Elizabeth Downes, for respondent.

MEMORANDUM OPINION

DAWSON, Judge: This case was assigned to Special Trial

Judge John J. Pajak pursuant to section 7443A(b)(4) of the Code

and Rules 180, 181, and 183. Unless otherwise indicated, all

section numbers refer to the Internal Revenue Code for the

taxable year in issue, and all Rule numbers refer to the Tax
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Court Rules of Practice and Procedure. The Court agrees with and

adopts the Special Trial Judge's opinion, which is set forth

below.

OPINION OF THE SPECIAL TRIAL JUDGE

PAJAK, Special Trial Judge: This case is before the Court

on respondent's Motion To Dismiss For Failure To State A Claim

Upon Which Relief Can Be Granted, filed pursuant to Rule 40.

Respondent determined deficiencies in, and additions to,

petitioner's Federal income taxes as follows:

Additions to Tax Under Section

Year Deficiency 6651(a)(1)

1990 $11,039 $401

1991 14,664 2,547

The deficiency for the year 1990 was based on respondent's

determination that petitioner failed to report wage income of

$21,004 and interest income of $1,598, and on respondent's

disallowance of a partnership loss in the amount of $19,626. The

deficiency for the year 1991 was based on respondent's

determination that petitioner failed to report wage income of

$63,406. The additions to tax under section 6651(a)(1) were

based on respondent's determination that petitioner's failure to

file timely income tax returns for the years 1990 and 1991 was

not due to reasonable cause.

Petitioner resided in Tulsa, Oklahoma, when his petition was

filed.
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For clarity and convenience, our findings of fact and

opinion have been combined.

 After receiving the statutory notice of deficiency in this

case, petitioner sent a letter to the Court requesting

information. This letter was filed as a petition. The Court

ordered petitioner to file an amended petition, and he did so. 

In his amended petition, petitioner stated that he "disagrees

with the tax deficiencies for the years 1990 and 1991 as set

forth in the alleged NOTICE OF DEFICIENCY dated January 27, 1994,

a copy of which is attached and identified as EXHIBIT A." 

Petitioner went on to state:

4. Petitioner denies all deficiencies and all

addition [sic] to the alleged tax:

a. The alleged Notice of Deficiency issued is

not a true and/or proper Notice of

Deficiency.

b. There are no math errors.

c. I have no liability for a non-master file

tax.

d. I am not a non-resident alien, foreign

corporation, foreign partnership, or foreign

estate or trust.

Respondent subsequently filed a Motion To Dismiss For

Failure To State A Claim Upon Which Relief Can Be Granted

pursuant to Rule 40. Thereafter, the Court issued an order

calendaring respondent's motion for hearing, and also directing

petitioner to file a proper second amended petition before the

hearing. Specifically, the Court directed petitioner to file a
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second amended petition setting forth with specificity each error

allegedly made by respondent in the determination of the

deficiencies and separate statements of every fact upon which the

assignments of error are based.

Petitioner timely filed his second amended petition with the

Court. In addition to allegations virtually identical to those

in his amended petition, petitioner added the following in his

second amended petition:

5. The facts upon which the petitioner relies, as the

basis of petitioner's case, are as follows:

a. The alleged Notice of Deficiency is not a

true and/or proper Notice of Deficiency. 

Agency entries made in the administration of

petitioner's tax account are to be posted to

the Internal Revenue system of records

Treasury/IRS 24.030, Individual Master File,

with transaction code 494.

b. No transaction code 494, indicating that a

true and/or property Notice of Deficiency has

be [sic] sent to the petitioner, has been

posted to the petitioner's Individual Master

File.

c. The petitioner requested an administrative

hearing with an Internal Revenue Appeals

Officer in accordance with the Commissioner's

instructions published in the Internal

Revenue Manual.

d. The Internal Revenue Manual was promulgated

in accordance with 26 U.S.C. 7801, 7802, and

7805[.]

e. The petitioner was charged with an excise tax

violation, a non-master file tax, as

indicated on his non-master file transcript. 

The petitioner is not involved in any

activities resulting in excise tax

liabilities.
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At the hearing on respondent's motion, petitioner made an

oral motion to continue, which was denied as untimely under Rule

134. Petitioner presented no other argument.

If the Commissioner determines a deficiency in income tax,

the Commissioner is authorized to send a notice of deficiency by

certified or registered mail to the taxpayer. Secs. 6211 and

6212; secs. 301.6211-1 and 301.6212-1, Proced. & Admin. Regs. A

taxpayer has 90 days (150 days if addressed to a person outside

the United States) from the mailing of a notice of deficiency

within which to file a petition with the Tax Court challenging

the determined tax liability. Sec. 6213; sec. 301.6213-1,

Proced. & Admin. Regs. This is the route petitioner chose to

follow.

We find that the notice of deficiency in this case complies

with the applicable statutes and reject petitioner's contentions

as to its validity.

Section 61 provides that gross income means "all income from

whatever source derived," including (but not limited to)

"Compensation for services", "Gains derived from dealings in

property", "Interest", "Dividends", and "Pensions". Petitioner's

contention that he is not subject to taxation and therefore not

liable for income taxes is without merit. The short answer to

petitioner's assertions is that he is not exempt from Federal

income tax. Abrams v. Commissioner, 82 T.C. 403, 406-407 (1984).
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In his amended petition and in his second amended petition,

petitioner makes tax protester arguments that have been

repeatedly rejected by this Court and others as inapplicable or

without merit. See, e.g., Wilcox v. Commissioner, 848 F.2d 1007

(9th Cir. 1988), affg. T.C. Memo. 1987-225; Rowlee v.

Commissioner, 80 T.C. 1111 (1983); McCoy v. Commissioner, 76 T.C.

1027 (1981), affd. 696 F.2d 1234 (9th Cir. 1983). We see no need

to repeat these discussions here.

Rule 34(b)(4) and (5) provides in pertinent part that the

petition in a deficiency action shall contain "Clear and concise

assignments of each and every error which the petitioner alleges

to have been committed by the Commissioner in the determination

of the deficiency or liability", and "Clear and concise lettered

statements of the facts on which petitioner bases the assignments

of error."

We agree with respondent that petitioner's petition does not

allege any justiciable error with respect to respondent's

determinations in the notice of deficiency and alleges no

justiciable facts in support of any error as required by Rule

34(b)(4) and (5). Accordingly, respondent's motion to dismiss

will be granted, and decision will be entered for respondent.

Next, on the Court's own motion, we impose a penalty under

section 6673. Section 6673(a)(1) provides in pertinent part that

whenever it appears to the Tax Court that proceedings before it

have been instituted or maintained by the taxpayer primarily for
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delay, or the taxpayer's position in such proceeding is frivolous

or groundless, the Court may require the taxpayer to pay to the

United States a penalty not in excess of $25,000.

We hold that petitioner has instituted and maintained this

action primarily for delay and that petitioner's position in this

proceeding is frivolous and groundless. Accordingly, in our

decision we will require petitioner to pay to the United States a

penalty of $2,500.

An appropriate order and

decision will be entered.