T.C. Memo. 2008-198

UNITED STATES TAX COURT

ILYA ROYTBURD, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 5355-06. Filed August 26, 2008.

Ilya Roytburd, pro se.

Harry J. Negro, for respondent.

MEMORANDUM OPINION

HALPERN, Judge: By notice of deficiency dated December 9,

2005 (the notice), respondent determined deficiencies in, and

additions to, petitioner’s Federal income tax as follows:

 Additions to Tax 

Year Deficiency Sec. 6651(a)(1) Sec. 6651(a)(2) Sec. 6654

2002 $27,306 $6,144 To be determined $912

2003 14,423 1,672 To be determined 174
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1 Petitioner makes no argument that the burden of proof has

shifted to respondent pursuant to sec. 7491(a), nor would we

sustain that argument since, among other things, as discussed

infra, petitioner has introduced no credible evidence that the

bank deposits herein described have a nontaxable source. See

sec. 7491(a)(1).

Unless otherwise indicated, 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. All dollar amounts have been rounded to the nearest

dollar. Petitioner bears the burden of proof. See Rule 142(a).1

Background

Petitioner filed a petition, an amended petition, and a

second amended petition. Petitioner showed his address in each

as being in Newtown, Pennsylvania.

Respondent moved to dismiss for failure to state a claim

upon which relief can be granted and to impose a penalty under

section 6673 (the motion). The motion was called for hearing on

August 9, 2006, and petitioner and respondent’s counsel appeared

and were heard. Thereafter, we disposed of the motion by order

of the same date, granting in part and denying in part. In that

order, we stated: “Petitioner’s second amended petition contains

nothing but frivolous and groundless arguments that merit no

extended discussion.” We found, however, that certain

allegations made by petitioner at the hearing could be construed

as petitioner’s assertion that respondent erred in the notice in
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making a positive adjustment of $38,767 to petitioner’s 2002

taxable income on account of unexplained deposits to petitioner’s

bank account at Sovereign Bank and in determining that he was

liable for self-employment tax on that income. We advised

petitioner that bank deposits are prima facie evidence of income,

and we pointed him to authority for that proposition. We deemed

petitioner to have conceded all adjustments to income made by

respondent in the notice except for the aforementioned $38,767

adjustment and the related determination of self-employment tax

liability. We further deemed petitioner to have conceded all

additions to tax determined in the notice. We denied without

prejudice that portion of the motion asking for a penalty under

section 6673. We reviewed for petitioner’s benefit the

provisions of section 6673(a)(1), and we warned him: “Petitioner

is herewith expressly advised that the Court may very well impose

on him a substantial penalty under section 6673 if he persists in

advancing frivolous or groundless arguments or if he should

subsequently be found to have instituted or to have maintained

this action primarily for delay.”

Subsequently, on November 26, 2007, we held a trial. At the

trial, respondent conceded that the $38,767 adjustment was

overstated by $7,000 and that petitioner had no liability for

self-employment tax. We accepted those concessions. The only

issue left for disposition was respondent’s positive adjustment
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2 The records were accompanied by a certification of

records by an official of Sovereign Bank. We reserved ruling on

the admissibility of the records to give petitioner a chance to

argue on brief that the records should not be admitted into

evidence. Since petitioner’s brief contains no argument on that

score, we deem no objection to be made, and we receive the

records into evidence without objection.

of $31,767 to petitioner’s 2002 income. The adjustment is

described in the notice as an increase in petitioner’s taxable

income resulting from an analysis of his 2002 bank deposits. At

trial, in support of the adjustment, respondent proffered bank

records pertaining to a savings account in petitioner’s name at

Sovereign Bank and showing, among other things, deposits and wire

transfers into the account as follows:2

Date Amount Source

Jan. 16, 2002 $18,000 Wire transfer

 July 18, 2002 10,000 Wire transfer

Oct. 7, 2002 1,326 Deposit 

Nov. 1, 2002 

 Total

 2,441

$31,767

Deposit 

The two wire transfers were received by Sovereign Bank from First

Clearing Corp. The November 1, 2002, deposit was of a check from

the Travelers Indemnity Co. The October 7, 2002, deposit is

unexplained. At trial, petitioner acknowledged receiving a check

for an insurance claim. He also acknowledged receiving a check

for unemployment compensation. He testified that the wire

transfers were of money that he moved from other money market
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accounts. He offered no further explanation, or particulars, of

the deposits.

At the conclusion of the trial, the Court requested seriatim

briefs, respondent going first. The Court directed petitioner to

the requirements of Rule 151, which, among other things, sets

forth the requirements for the form and content of briefs. 

Respondent’s brief complies with the requirements of Rule 151,

containing, among other things, proposed findings of fact and a

legal argument. Petitioner answered respondent’s brief with a

document that fails to comply with the requirements of Rule 151. 

It neither proposes any findings of fact nor makes any objection

to respondent’s proposed findings of fact. See Rule 151(e)(3). 

It contains only tax-protester rhetoric. In substantial part, it

reads as follows:

Respondent served Petitioner with a Notice of

Deficiency apparently based upon Respondent’s mistaken

belief that the Petitioner, for the time period stated

in the Notice, was, in fact, a “U.S. citizen.” And,

moreover, a “taxpayer” as defined in 26 USC 7701.

Petitioner has not conducted his life as a “U.S.

citizen” for many years, having learned (discovered)

the differences between a natural born American Citizen

of the state and that of a 14th Amendment federal

citizen –- subject. Petitioner has long rejected the

status of “U.S. citizen”, and any writings or

statements to the contrary (by Petitioner) were based

upon government deceit and deception in failing to

advise Petitioner of the consequences of that “status.”

Petitioner denies being (for the period at issue)

a resident and/or citizen of the United States and is

in fact domiciled in the sovereign Republic of

Pennsylvania, and claiming state Citizenship. * * * 
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Respondent may have jurisdiction to assess “U.S.

citizens”, wherever “resident”, but again, Petitioner

rejects that status * * * .

The tax at issue Respondent seeks to impose upon

Petitioner goes far beyond Congress’ constitutionally

delegated powers * * * .

* * * * * * *

Before Tax Court can proceed to adjudicate the

matters herein, Respondent must first establish that

Petitioner is/was a “U.S. citizen” during the period at

issue.

Absent the required personam jurisdiction, this

case must be dismissed.

[signature]

Ilya Roytburd

Sovereign American Citizen

Discussion

I. Deficiencies in Tax

The only adjustment relating to the deficiencies in tax

determined by respondent in the notice that remains at issue is

respondent’s adjustment for 2002 of (after a concession) $31,767

on account of unexplained bank deposits. Respondent has produced

evidence of those deposits, and petitioner does not contradict

the fact of the deposits. Moreover: “A bank deposit is prima

facie evidence of income and respondent need not prove a likely

source of that income.” Tokarski v. Commissioner, 87 T.C. 74, 77

(1986). Petitioner bears the burden of proving that the income

was from a nontaxable source or otherwise excluded from his gross
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income by law. See, e.g., Mantakounis v. Commissioner, T.C.

Memo. 2002-306.

Petitioner makes no argument on brief concerning the bank

deposits, and that failure is sufficient for us to conclude that

he has abandoned the controversy with respect to those items. 

See Rybak v. Commissioner, 91 T.C. 524, 566 n.19 (1988). 

Moreover, at trial, petitioner’s only explanation of the

unexplained deposits was by generalized, uncorroborated, and

self-serving testimony that the unexplained deposits were

primarily from purported other bank accounts. Petitioner did not

identify those accounts. He provided no statements showing

deposits to and withdrawals from those accounts, nor did he call

any financial adviser or other person who could have corroborated

his claim that he was merely redepositing already taxed or

nontaxable funds. Petitioner had ample time and opportunity to

obtain corroborating evidence. We had advised him in our order

disposing of the motion that respondent had identified

unexplained deposits to his Sovereign Bank account and that

unexplained bank deposits were prima facie evidence of income. 

We need not accept self-serving testimony, even if unopposed. 

Fleischer v. Commissioner, 403 F.2d 403, 406 (2d Cir. 1968),

affg. T.C. Memo. 1967-85; see also Tokarski v. Commissioner,

supra at 77 (“Under all the circumstances, we are not required to

accept the self-serving testimony of petitioner * * * as
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gospel.”). Moreover, we are entitled to infer from petitioner’s

failure to offer evidence concerning the source of the deposits

that such evidence would have been unfavorable to petitioner’s

case. See Wichita Terminal Elevator Co. v. Commissioner, 6 T.C.

1158, 1165 (1946), affd. 162 F.2d 513 (10th Cir. 1947). 

Petitioner has failed to prove that deposits to his Sovereign

Bank account in 2002 totaling $31,767 were from a nontaxable

source or otherwise excluded by law. We sustain respondent’s

determination of a deficiency in tax for 2002 on account of the

omission of that amount from petitioner’s taxable income.

II. Section 6673 Penalty

In pertinent part, section 6673(a)(1) provides a penalty of

up to $25,000 if the taxpayer has instituted or maintained

proceedings before the Tax Court primarily for delay or the

taxpayer’s position in the proceeding is frivolous or groundless. 

We have already determined that the second amended petition

contains nothing but frivolous and groundless arguments. In our

order disposing of the motion, we warned petitioner that we might

impose on him a substantial penalty under section 6673 if he

persisted in advancing frivolous or groundless arguments or if he

should subsequently be found to have instituted or to have

maintained this action primarily for delay. Petitioner’s brief,

which we have set forth in substantial part, shows that he has

persisted in that sanctionable conduct. Moreover, we can see
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little reason for petitioner’s having instituted this proceeding

but to delay the collection of Federal income tax due and owing. 

Petitioner has not only wasted his time, but he has also wasted

the time of respondent’s employees, officers, and counsel, not to

mention the waste of the Court’s time in disposing of this case.

“The purpose of section 6673 is to compel taxpayers to think and

to conform their conduct to settled principles before they file

returns and litigate.” Takaba v. Commissioner, 119 T.C. 285, 295

(2002). Petitioner is deserving of a substantial penalty. We

shall exercise our authority under section 6673(a)(1) and require

petitioner to pay to the United States a penalty of $5,000.

III. Conclusion

To reflect the foregoing,

An appropriate order will

be issued, and decision will

be entered under Rule 155.