TAX COURT OPINION

Case: Virginia Bryant-Lawrence
Docket Number: 18182-12
Judge: Gustafson
Opinion Type: bench
Filed: 12/18/2013
Pages: 8

SYM UNITED STATES TAX COURT WASHINGTON, DC 20217 NORVAL EDMOND HILDERBRAND, JR., Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ) Docket No. 18248-12. ) ) ) ) OR D E R Pursuant to the opinion of the Court as set forth in the pages of the transcript of the proceedings before Judge David Gustafson at Miami, Florida, on November 20, 2013, containing his oral findings of fact and opinion, it is ORDERED that the Clerk of the Court shall transmit herewith to petitioner and to respondent a copy of the pages of the transcript of the trial in the above case before Judge Gustafson at Miami, Florida, containing his oral findings of fact and opinion rendered at the trial session at which the case was heard. In accordance with the oral findings of fact and opinion, decision will be entered under Rule 155. (Signed) David Gustafson Judge Dated: Washington, D.C. December 18, 2013 SERVED Dec 19 2013 Cagital Reporting Company 3 1 2 Bench Opinion by Judge David Gustafson November 20, 2013 3 Norval Edmond Hilderbrand v. Commissioner 4 5 6 7 8 9 10 11 1.2 13 14 15 16 17 18 Docket No. 18248- 2 THE COURT: The Court has decided to render oral Findings of Fact and Opinion in this case. This Bench Opinion is nade pursuant to the authority granted by section 7459(b) of the Internal Revenue Code, and Rule 152 of the Tax Court Rules of Practice and Procedure; and it shall not be relied on as precedent in any other case. By notic of deficiency dated May 21, 2012 (Ex. 1-R), the Int rnal Revenue Service (IRS) dete·rmined a def1c ency In the Federal income tax of petitioner Norval E. Hilderbrand, Jr., for the year 2009, along with additions to tax for failure to file a return and failu e to pay tax when due, pursuant to section 6651(a) (1) and (2). This case was tried in 19 Miami, Florida, on November 18, 2013. Mr. 20 Hilderbrand represented himself, and Brain A. Pfeifer represented the Commissioner. The issues for decision are whether Mr. Hilderbrand is liable for Federal income tax on his income and whether he is liable for the additions to tax. 21 22 23 24 25 866.488.DEPO www.Cap talReportingCompany.com Capital Reporting Company 2 Petitioner's background FINDINGS OF FACT 3 4 5 6 7 8 9 10 11 12 13 14 Mr. Hilderbrand was born in Miami, Florida, in 1937. He is a U.S. citizen and has never been a citizen of any other country. He completed the 11th grade and then joined the Air Force, where his enlistment lasted almost four years. He then worked at Dade Dry dock ês a welder's helper, worked on reconditioning parts for airplane engines, drove a taxicab, and worked for 25 years as a lineman, climbing poles. He then became an inside electrician and retired in 2000 at about age 63. He lived most of his working years in Florida but eight-and-one- half years in Alaska. In 2009 he was married. 15 Petitioner's tax reporting 16 17 18 19 Mr.- Hild rbrand began having disputes with the IRS in about 2005, but those disputes did not result in litigation until tax year 2009. In that year he received undisputed amounts of money from 20 National Electrical Benefit Fund, from South Florida 21 Electrical Workers Pension Plan, and from the Social 22 Security Administration, but he did not file a 23 24 25 Federal income tax return. He justified this approach by relying on materials he found on the Internet and elsewhere that argue that he is not 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 1 2 3 4 subject to tax and that his income is not taxable. . The IRS prepared a substitute for return (an "SFR"; Ex. 2-J) pursuant to section 6020 (b) (Ex. 2-J) and then on May 21, 2012, issued to 5 Mr. Hilderbrand a notice of deficiency (Ex. 1-J) 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 pursuant to section 6213(a) that determined him liable for tax of $3,719 plus additions. On July 18, 2012, Mr. Hilderbrand timely filed a petition with this Court challenging that determination. At the time he filed his petition, he resided in Florida. OPINION I. Income tax liability The.income tax is explicitly authorized by the 16th Amendment to the U.S. Constitution. Congress has employed that authority in eqacting the Internal Revenue Code.. Sec ion 1 of the Code provides that "there is hereby imposed on the taxable income of every married individual", such as Mr. Hilderbrand, "who does not make a single return jointly with his spouse under secticn 6013, a tax"--and the statute nowhere suggests that the tax liability thus imposed is in any way voluntary. Section 61(a) brings.within that tax "all income from whatever source derived", 25 which includes Mr. Bilderbrand's admitted income. In 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 1 2 3 4 5 6 7 8 9 10 11 particular, secti6n 61(a) (1) makes "compensation for services" subject to tax. Section 6012 provides that an income tax return "shall be made"--language that is mandatory, not voluntary. Mr. Hilderbrand's arguments to the ontrary--i.e., t at the income tax is voluntary, that as a citizen of the Republic of Florida he is not subject to the income tax, etc.--are frivolous. We will not spend further time and effort refuting these frivolous arguments, for the reasons we explained in 12 Wnuck v. Commissio,ner, 136 T.C. 498, 501-513 (2011). 13 14 15 16 17 18 19 20 21 22 23 24 25 However, Mr. Hilderbrand is entitled to one correction of the IRS's determination. Section 63(b) (1) allows a "standard deduction" for each taxpayer who does not claim itemized deductions. In its notice of defibiency, the IRS allowed such a deduction for Mr. ilderbrand. However, section 63(f) (1) provides that "[t]he taxpayer shall be entitled to an addÃtional amount of $600...for himself if he has attained age 65 before the close of his taxable year." Mr. Hilderbrand turned age 65 in 2002, well before tax year 2009, but the IRS did not allow him this add tional amount. At trial the Commissioner volun eered that this error should be 866.488.DEPO www.Cap talReportingCompany.com Capital Reporting Company 1 2 3 4 5 6 7 8 corrected in Mr. Hilderbrand's favor. To enable that correction, .we will enter decision under Rule 155. II. Additions to tax A. Failure to file Section 6651(a) (1) authorizes the imposition of an addition to tax for failure to file a timely return unless the taxpayer proves that such failure is due to reasonable cause and is not due to 9 willful neglect . Mr . Hilderbrand admits that he 10 11 12 13 failed to file a ceturn for 2009. The addition applies "unless it is shown that such failure is due to reasonable cause and not due to willful neglect". Sec . 6651 (a) (1) . Mr . 14 Hilderbrand's failure to file was due entirely to his 15 16 17 18 19 20 21 22 23 24 25 frivolous positions . He therefore had no reasonable cause for his non -filing, and he is liable for the addition to tax under section 6651(a) (1) . B. Failure to pay Section 6651(a) (2) imposes an addition to tax for failure to pay th amount of tax shown on a return, and the Commissio er contends that Mr. Hilderbrand is liable for this a dition for 2009. A return made by the Secretary und r section 6020 (b) -i . e . , an SFR-is treated as "the r turn filed by the taxpayer for purposes of determining the amount of the addition" 866.488.DEPO www.CapitalReportingCompany.com C pital Reporting Company 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 under section 6651(a) (2) J. See sec. 6651(g) (2) . The Commissioner did prepare an SFR for Mr. Hilderbrand (see Ex. 2-J) and has thus carried his burden of production to show that Mr. Hilderbrand is liable for the addition to tax under section 6651(a) (2) . Mr. Hilderbrand has not made any defense, and he is liable for the fa lure-to-pay addition to tax. III. Section 6673 penalty Section 6673(a) authorized the Tax Court to impose a penalty not in excess of $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 the proceeding is frivolous or groundless. Mr. Hilderbrand's position is certainly frivo ous. But the Commissioner has not requested such a penalty in this case, and we will not impose one. However, Mr. Hilderbrand is hereby warned that future rivolous arguments may result in the imposition of such a penalty. So that t e liabilities can be recalculated to reflect the Commissioner's concession of the greater standard deduction, decision will be entered pursuant to Rule 155. This concl des the Court' s oral Findings of Fact and Opinion in this case. 866.488.DEPO www.CapitalReportingCompany.com 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Capital Reporting Company (Whereupon, at 11:00 a.m., the above- entitled matter was concluded. ) 9 866.488.DEPO www.CapitalReportingCompany.com