270

ARNOLD BRUCE WINSLOW, PETITIONER v. COMMISSIONER OF

INTERNAL REVENUE, RESPONDENT

Docket No. 18177–11. Filed September 25, 2012. 

P filed no tax return for either 2005 or 2006. R prepared 

substitutes for returns and issued notices of deficiency for 

those years. P principally argues that he is not liable for the 

deficiencies because the individuals who prepared the substitutes for returns and issued the notices of deficiency were 

not delegated authority to do so. R also determined additions 

to tax for failure to timely file a return and failure to timely 

pay tax due and asks that we sanction P for making frivolous 

arguments. 

1. Held: The individuals who certified the substitutes for 

returns and issued the notices of deficiency had the delegated 

authority to do so; generally, intervening line supervisors 

enjoy the same delegated authority as their specifically delegated subordinates. 

2. Held, further, additions to tax are sustained. 

3. Held, further, P is sanctioned for maintaining frivolous 

positions. 

Arnold Bruce Winslow, pro se. 

Mayer Y. Silber and Robert M. Romashko, for respondent. 

HALPERN, Judge: By notices of deficiency dated May 9, 

2011 (notices), respondent determined deficiencies in, and 

(270) WINSLOW v. COMMISSIONER 271

1Section references are to the Internal Revenue Code of 1986, as amended and in effect for 

the years in issue. 

2Petitioner has not raised the issue of sec. 7491(a), which shifts the burden of proof to the 

Commissioner in certain situations. In any event, sec. 7491(a) does not apply here because petitioner has not shown that he has satisfied the preconditions for its application. See sec. 

7491(a)(2). 

additions to, petitioner’s 2005 and 2006 Federal income tax 

as follows: 1

Additions to tax 

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

2005 $2,706 $479 $532 

2006 2,491 441 461 

Petitioner assigned error to those determinations, averring 

only: ‘‘The true amount of the tax and interest and penalties 

owing is $0.00.’’ Petitioner did not, as required by our 

standing pretrial order, file a pretrial memorandum, which, 

among other things, would have described his view of the 

issues in the case. From his testimony at trial, we understand petitioner’s principal objections to respondent’s determinations to be that the determinations are not based on 

properly made substitutes for returns and that the notices 

are invalid because improperly issued. At trial, respondent 

moved for the imposition of a sanction against petitioner 

under section 6673(a)(1), which, as pertinent, empowers us to 

sanction a taxpayer on account of instituting or maintaining 

a proceeding primarily for delay or for maintaining a frivolous or groundless position. 

Petitioner bears the burden of proof. See Rule 142(a), Tax 

Court Rules of Practice and Procedure. 2

FINDINGS OF FACT 

At the time the petition was filed, petitioner resided in 

Illinois. 

During 2005 and 2006 (the years in issue), petitioner was 

employed by Dell Medical Corp. and, in return for his services, received compensation from it of $28,630 and $27,529 

for those years, respectively. During the years in issue, he 

also received dividend payments of $24 and $28 for those 

years, respectively. Because for the years in issue he received 

no income tax returns from petitioner, respondent, using 

272 139 UNITED STATES TAX COURT REPORTS (270) 

information returns he received from third parties, made 

returns (substitutes for returns) for petitioner. In part, the 

substitutes for returns consist of an Internal Revenue Service 

(IRS) Form 13496, IRC Section 6020(b) Certification, executed 

in each case by Maureen Green, whose title is stated on the 

form to be ‘‘Operations Manager, Examination’’. Ms. Green, 

whose title now may be program manager, is employed by 

the IRS in its Ogden, Utah, Service Center. She is a supervisory employee who supervises Small Business/Self 

Employed Division (SB/SE) compliance officers. The notices 

followed the substitutes for returns, each notice being 

executed for the Commissioner by Henry Slaughter, under 

whose signature appeared the designation ‘‘Service Center, 

Ogden Service Center’’. Mr. Slaughter’s position in the 

service center is ‘‘Director, Collection Area-Western’’, and he 

serves as one of several field directors of SB/SE’s collection 

activities. 

OPINION 

I. Introduction 

Although petitioner’s objections to respondent’s determinations concern principally procedural aspects of those determinations, he did at trial argue that the compensation and 

dividends he received were not taxable. The short answer is 

that compensation for services and dividends are items of 

gross income and, as such, are taxable. See sec. 61(a)(1), (7). 

Petitioner’s arguments to the contrary—i.e., that he is not an 

employee under the Internal Revenue Code unless he works 

for a controlled group of corporations; the attribution rules 

applicable to farming corporations bring into question the 

taxability of dividends generally—are nonsense and require 

no further discussion. See Crain v. Commissioner, 737 F.2d 

1417, 1417 (5th Cir. 1984) (‘‘We perceive no need to refute 

these arguments with somber reasoning and copious citation 

of precedent; to do so might suggest that these arguments 

have some colorable merit.’’); see also Wnuck v. Commissioner, 136 T.C. 498 (2011). Petitioner had sufficient gross 

income for the years in issue that, for each year, he was 

required to file a Federal income tax return. See sec. 

6012(a)(1). 

(270) WINSLOW v. COMMISSIONER 273

II. Delegation of Authority 

Petitioner argues that the substitutes for returns were not 

properly made because the individual certifying them, Ms. 

Green, had not been delegated the authority to do so. Likewise, he argues that the notices were invalid because the 

individual executing them, Mr. Slaughter, had not been delegated the authority to do so. 

The Secretary is responsible for collecting the taxes 

imposed by the internal revenue laws of the United States. 

See sec. 6301. Because one individual cannot be responsible 

for so much, Congress has enacted statutes authorizing the 

delegation of that authority. The delegation of authority is 

contained in a clear line of statutory provisions. With respect 

to substitutes for returns, section 6020(b)(1) provides: ‘‘If any 

person fails to make any return required by any internal revenue law or regulation * * * the Secretary shall make such 

return from his own knowledge and from such information as 

he can obtain through testimony or otherwise.’’ With respect 

to deficiencies in tax determined by the Secretary, section 

6212(a) authorizes him to send notice of the deficiency to the 

taxpayer. The term ‘‘Secretary’’ is defined as meaning ‘‘the 

Secretary of the Treasury or his delegate.’’ Sec. 

7701(a)(11)(B). The term ‘‘ ‘or his delegate’ * * * when used 

with reference to the Secretary of the Treasury, means any 

officer, employee, or agency of the Treasury Department duly 

authorized by the Secretary of the Treasury directly, or 

indirectly by one or more redelegations of authority, to perform the function mentioned or described in the context’’. 

Sec. 7701(a)(12)(A)(i). 

Delegation Order 5–2, set forth in Internal Revenue 

Manual (IRM) pt. 1.2.44.3 (May 5, 1997), delegates to specific 

agents and managers, including SB/SE tax compliance officers, the authority to ‘‘prepare or execute returns required by 

any internal revenue law or regulation when the person 

required to file such return fails to do so.’’ Delegation Order 

4–8, set forth in IRM pt. 1.2.43.9 (Feb. 10, 2004), delegates to 

specific managers, case leaders, reviewers, and directors, 

including SB/SE field directors, the authority to ‘‘sign and 

send to the taxpayer by registered or certified mail any 

notice of deficiency.’’ 

274 139 UNITED STATES TAX COURT REPORTS (270) 

Ms. Green was authorized to prepare and execute the substitutes for returns. While her position is not among those 

specified in Delegation Order 5–2 as being delegated 

authority to prepare substitutes for returns, she supervises 

SB/SE tax compliance officers, who are specifically delegated 

that authority by Delegation Order 5–2. With respect to the 

delegation of authority to those in intervening positions (i.e., 

in positions between the delegating official and the delegated 

official), IRM pt. 1.11.4.4.1 (1)(A) (Oct. 10, 2008) states the following general rule: ‘‘Every intervening line supervisory position up to and including the Commissioner has the same 

authority.’’ Because we are satisfied that Ms. Green is in an 

intervening line supervisory position with respect to SB/SE

tax compliance officers, who are delegated authority to prepare and execute substitutes for returns, we are satisfied 

(and find) that she had authority to prepare and execute the 

substitutes for returns. While provisions of the IRM are generally considered not to have the force of law, e.g., Fargo v. 

Commissioner, 447 F.3d 706, 713 (9th Cir. 2006) (citing cases 

from five other U.S. Courts of Appeals), aff ’g T.C. Memo. 

2004–13; accord Vallone v. Commissioner, 88 T.C. 794, 807– 

808 (1987), we think that in this instance the IRM reasonably 

interprets the delegation authority of the Secretary. 

Mr. Slaughter was authorized to issue the notices. Mr. 

Slaughter’s position is ‘‘Director, Collection Area—Western’’; 

he ‘‘serves as one of several field directors of SB/SE’s collection 

activities’’. Delegation Order 4–8 specifically delegates the 

authority to issue notices of deficiency to SB/SE field directors. 

Mr. Slaughter was delegated that authority. 

The substitutes for returns were properly made and 

executed, and the notices were properly issued. 

III. Section 6651(a)(1) Additions to Tax 

Section 6651(a)(1) provides for an addition to tax in the 

event a taxpayer fails to timely file a return (determined 

with regard to any extension of time for filing) unless the 

taxpayer shows that such failure is due to reasonable cause 

and not due to willful neglect. The amount of the addition is 

equal to 5% of the amount required to be shown as tax on 

the delinquent return for each month or fraction thereof 

during which the return remains delinquent, up to a maxVerDate Nov 24 2008 10:32 Jun 05, 2014 Jkt 372897 PO 20012 Frm 00005 Fmt 2847 Sfmt 2847 V:\FILES\BOUND VOL. WITHOUT CROP MARKS\B.V.139\WINSLOW.SEP JAMIE
(270) WINSLOW v. COMMISSIONER 275

3We note in passing that, while a properly made substitute for return is necessary before a 

sec. 6651(a)(2) addition to tax for failure to pay the tax shown on return can be imposed on 

a nonfiler, a substitute for return is not a prerequisite to the Commissioner’s determining a deficiency in tax. E.g., Roat v. Commissioner, 847 F.2d 1379, 1381–1382 (9th Cir. 1988) (‘‘Deficiency 

procedures set out in the Internal Revenue Code * * * do not require the Commissioner to prepare a return on a taxpayer’s behalf before determining and issuing a notice of deficiency.’’); accord Watson v. Commissioner, T.C. Memo. 2007–146, aff ’d, 277 Fed. Appx. 450 (5th Cir. 2008). 

imum addition of 25% for returns more than four months 

delinquent. Id. With respect to both the section 6651(a)(1) 

and (2) additions to tax, respondent bears the burden of 

coming forth with evidence that imposition of the addition is 

appropriate. See Higbee v. Commissioner, 116 T.C. 438, 446– 

447 (2001); see also sec. 7491(c). 

Respondent’s account transcripts for petitioner for the 

years in issue indicate that he filed no Federal income tax 

returns for those years, and that is sufficient for us to find, 

and we do, that petitioner filed no return for either year. See, 

e.g., Green v. Commissioner, T.C. Memo. 2007–262, 2007 WL 

2783107, at *5–*6. Respondent has met his burden under 

section 7491(c) to produce evidence that imposition of the 

section 6651(a)(1) addition to tax for failure to timely file a 

return is appropriate. See Higbee v. Commissioner, 116 T.C. 

at 447. Petitioner has not come forth with evidence that his 

failure to file was due to reasonable cause and not due to 

willful neglect. Consequently, we find that petitioner is liable 

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

IV. Section 6651(a)(2) Additions to Tax 

Section 6651(a)(2) imposes an addition to tax when a taxpayer fails to pay the amount of tax shown on a return by 

the prescribed date unless the taxpayer shows that such 

failure is due to reasonable cause and not due to willful 

neglect. The amount of the addition is equal to 0.5% of the 

tax for each month or fraction thereof during which the tax 

remains unpaid, up to a maximum addition of 25%. Under 

section 6651(g)(2), a substitute for return prepared pursuant 

to section 6020(b) is treated as the taxpayer’s return for purposes of section 6651(a)(2). 3

Petitioner filed no return for either of the years in issue, 

and respondent properly made substitutes for returns for 

him. Petitioner has not paid the tax shown on those substitutes for returns. Respondent has, therefore, met his burden under section 7491(c) to produce evidence that imposiVerDate Nov 24 2008 10:32 Jun 05, 2014 Jkt 372897 PO 20012 Frm 00006 Fmt 2847 Sfmt 2847 V:\FILES\BOUND VOL. WITHOUT CROP MARKS\B.V.139\WINSLOW.SEP JAMIE
276 139 UNITED STATES TAX COURT REPORTS (270) 

tion of the section 6651(a)(2) addition to tax for failure to 

timely pay tax shown on a return is appropriate. See Tilley 

v. Commissioner, T.C. Memo. 2009–83. Petitioner has not 

come forth with evidence that his failure to pay was due to 

reasonable cause and not due to willful neglect. Consequently, we find that petitioner is liable for the additions 

to tax under section 6651(a)(2). 

V. Section 6673(a)(1) Penalty 

In pertinent part, section 6673(a)(1) provides for 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 described as nonsense petitioner’s arguments that 

the compensation and dividends he received were not taxable. ‘‘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). ‘‘A taxpayer’s position is 

frivolous if it is contrary to established law and unsupported 

by a reasoned, colorable argument for a change in the law.’’ 

Goff v. Commissioner, 135 T.C. 231, 237 (2010). Petitioner’s 

nonsensical arguments are, within that definition, frivolous. 

Moreover, we suspect that, in part, petitioner brought this 

proceeding in order to delay the collection of income tax due 

and owing. Principally for making frivolous arguments, we 

impose upon him a penalty under section 6673(a)(1) of 

$2,500. 

VI. Conclusion 

For the foregoing reasons, petitioner is liable for the deficiencies, section 6651(a)(1) additions to tax, and section 

6651(a)(2) additions to tax. Additionally, we impose a penalty 

on petitioner pursuant to section 6673(a)(1). 

An appropriate order and decision will be 

entered. 

f