TAX COURT OPINION

Case: Danelle Turner
Docket Number: 6316-08S
Judge: Colvin
Opinion Type: bench
Filed: 02/27/2009
Pages: 11

. UNITED STATES TAX COURT WASHINGTON , DC 2021 7 DANELLE TURNER, Petitioner v . Docket No . 6316-08S . COMMISSIONER OF INTERNAL REVENUE, Respondent O R D E R Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it i s ORDERED that the Clerk of th .e Court shall transmit herewith to petitioner and to respondent a copy of the pages of the transcript of the hearing of the above case before Special Trial Judge Robert .N . Armen, Jr . at Phoenix, Arizona, on January 29, 2009, containing his,oral findings of fact and opinion rendered at the conclusion of the hearing . In accordance with the oral-findings of fact and opinion, an Order and Decision will be entered for respondent . (Signed) Robert N . Armen, Jr. Special Trial Judg e Dated : Washington, D .C . February 27, . 2009 SERVED MAR 5 2009 3 1 Bench Opinion Thursday, January 29, 200 9 2 By Special Trial Judge Robert N . Armen, Jr . 3 Turner v . Commissioner Docket No . 6316-08 S 4 THE COURT : The Court has decided to render oral 5 findings of fact and opinion in this case and th e 6 following represents the Court's oral findings of fact 7 and opinion . The oral findings of fact and opinio n 8 shall not be relied upon as precedent in any other 9 case . 10 This proceeding was heard as a Small Tax 11 Case pursuant to the provisions of Section 7463 of the 12 Internal Revenue Code of 1986, as amended, and Rules 13 170 through 175 of the Tax Court Rules of Practice and 14 Procedure . 15 This bench opinion is made pursuant to the 16 authority granted by Section 7459(b) of the Internal 17 Revenue Code of 1986, as amended, and Rule 152 of the 18 Tax Court Rules of Practice and Procedure . 19 Hereinafter in this bench opinion, and unless 20 otherwise indicated, all section numbers refer to the 21 Internal Revenue Code, as amended and in effect fo r 22 2005, the taxable year in issue, and all rule numbers 23 refer to the Tax Court Rules of Practice and 24 Procedure . 25 Petitioner appeared on her own behalf . Heritage Reporting Corporation (202) 628-4888 4 1 Heidi I . Hansen appeared on behalf of Respondent . 2 This case is before the Court o n 3 Respondent's Motion For Summary Judgment and to impose 4 a penalty under I .R .C . § 6673, filed November 4, 2008, 5 pursuant to Rule 121 . 6 Petitioner resided in the State of Arizona 7 at the time that the Petition was filed with the Court . 9 Petitioner's 2005 Return : Petitioner file d 10 a Form 1040A, U .S . Individual Income Tax Return fo r 11 2005 . On her return, Petitioner listed her occupation 12 as "data entry," and she attached to her return a Form 13 W-2, Wage and Tax Statement, reflecting the payment of 14 wages of $83,823 by Alaska Airlines in 2005 . However, 15 Petitioner did not report this amount on line 7 16 ("wages, salaries, tips, etc .") of her return . I n 17 fact, Petitioner made no numerical entries whatsoever 18 on any numbered line of her return other than line 27 19 ("taxable income"), where she wrote "0 .00 . " 20 Upon examination of her 2005 ..return , 21 Petitioner demanded a refund of all taxes, both income 22 taxes and withholding taxes, that had been withhel d 23 from her wages by her employer . Petitioner sought 24 such refund on the ground that as "a private-sector 25 citizen (non-federal employee) employed by a private- Heritage Reporting Corporation (202) 628-4888 5 1 sector company (non-federal entity)," she was a non- 2 taxpayer and therefore not subject to the Interna l 3 Revenue laws . 4 Respondent's Notice of Deficiency : By 5 notice dated December 24'h, 2007, Respondent determined 6 a deficiency in petitioner's Federal income tax fo r 7 2005 in the amount of $15,682 and an accuracy-related 8 penalty under section 6662(a) in the amount of $492 . 9 The deficiency in income tax is based o n 10 Respondent's determination that Petitioner failed to 11 report, on her income tax return for 2005, wages of 12 $83,823 received from Alaska Airlines in 2005 . 13 (Parenthetically, we note that Respondent 14 has credited Petitioner for the amount withheld from 15 her wages insofar as her ultimate tax liability is 16 concerned . However, we note further that the 17 determination of a statutory deficiency does not take .18 such withheld amount into account . See Section 6211(b) 19 (1) . ) 20 The accuracy-related penalty is based on 21 Respondent's determination that petitioner is liable 22 for the penalty based on a substantial understatement 23 of income tax liability . (Parenthetically, we note 24 that in the Notice of Deficiency, Responden t 25 miscomputed the amount of the accuracy-related penalt y Heritage Reporting Corporation (202) 628-4888 6 1 in Petitioner's favor .- See Section 6662(d) . However , 2 Respondent has not sought to increase the amount of 3 the penalty, see Section 6214(a) . ) 4 Petitioner's Pleadings : On March 13, 2008, 5 Petitioner filed an imperfect Petition appealing from 6 the December 24, 2007 Notice of Deficiency . The 7 imperfect Petition contained no substantive 8 allegations . 9 On April 8th, 2008, Petitioner filed a n 10 amended petition . Paragraph 5, the sole substantive 11 paragraph of the amended petition, recites in it s 12 entirety as follows : 13 "The monies I receive are private sector, 14 unprivileged payment for labor and therefore are not 15 taxable . There is no statutory language in Title 26 16 that makes private sector earnings taxable . " 17 Significantly, in her pleadings, Petitioner 18 does not assign error, nor allege facts specifically 19 in respect of the determinations made by Respondent in 20 the Notice of Deficiency . In particular, Petitioner 21 does not deny receiving wages in 2005, nor doe s 22 Petitioner allege receiving wages in any amount less .23 than that determined by Respondent in the Notice of 24 Deficiency . See Parker v . Commissioner , 117 F .3d 785 25 (5th Cir . 1997) ; White v . Commissioner , T .C . Memo . Heritage Reporting Corporation (202) 628-4888 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 7 1997-459 . Respondent ' s Motion and Hearing : On November 4, 2008, Respondent filed his Motion Fo r Summary Judgment and to impose a penalty under I .R .C . § 6673 . Thereafter , by Order dated November 5, 2008 , the Court directed Petitioner to file an objection o r other reply to Respondent ' s motion on or befor e December 5"', .2008 . Petitioner failed to do so . . Pursuant to notice , Respondent ' s motion wa s , 2009, in Phoenix , called for hearing on January 26th Arizona . Petitioner and Counsel for Responden t appeare . d At the hearing , Petitioner admitted that she is a United States citizen and a resident of the Stat e of Arizona and that she worked (and continues to work ) for Alaska Airlines in the field of data entry . Als o at the hearing , petitioner submitted written materia l that the Court filed as her objection to Respondent' s Motion . In this material, and in her oral remarks , Petitioner espoused a variety of typical , and long - discredited , tax protestor arguments . Summary Judqment : Summary judgment i s intended to expedite litigation and avoid unnecessar y and expensive trials . Florida Peach Corp . v . Commissioner , 90 T . 678, 681 ( 1988 ) . Summary Heritage Reporting Corporation (202) 628-4888 8 1 judgment may be granted with respect to all or any 2 part of the legal issues in controversy "if th e 3 pleadings, answers to interrogatories, depositions, 4 admissions, and any other acceptable materials , 5 together with the affidavits, if any, show that there 6 is no genuine issue as to any material fact and that a 7 decision may be rendered as a matter of law ." Rul e 8 121(a) and (b) . 9 After carefully reviewing the record, we are 10 satisfied that there is no genuine issue as to an y 11 material fact, and a decision may be rendered as a 12 matter of law . Accordingly, we shall grant 13 Respondent's motion . 14 Respondent's Deficiency-Relate d 15 Determinations : There is no question that Petitioner, 16 a United States citizen and resident of the*State of 17 Arizona, is a taxpayer subject to the federal income 18 tax who is obliged to file a federal income tax return 19 and pay federal income tax on her wages and othe r 20 compensation . See Sections 1, 61(a)(1), 6012(a)(1) , 21 7701(a)(1) and (14) ; United States v . Romero , 640 F .2d 22 1014, 1016 (9th Cir . 1981) ("Compensation for labor or 23 services, paid in the form of wages or salary, ha s 24 been universally held by the courts of this republic 25 to be income, subject to the income tax laws currentl y Heritage Reporting Corporation (202) 628-4888 1 applicable .") . See also Crain v . Commissioner , 73 7 2 F .2d 1417, 1417 (5th Cir . 1984), wherein the Court of 3 Appeals stated : "We perceive no need to refute these 4 arguments with somber reasoning and copious citation 5 of precedent ; to do so might suggest that thes e 6 arguments have some colorable merit . " 7 Insofar as the accuracy-related penalty i s 8 concerned, Respondent has satisfied Section 7491(c) by 9 demonstrating (as shown in paragraphs 13 and 15 of his 10 motion) a substantial understatement of income ta x 11 liability . See Section 6662(d) . In contrast, Section 12 6664 affords Petitioner no relief because, as a matter 13 of law, there was no reasonable cause for th e 14 understatement and she did not act in good faith with 15 respect thereto . Section 6664(c)(1) ; Section 1 .6664- 16 4(b), Income Tax Regulations . 17 Imposition of Penalty Under Section 6673 : 18 We turn now to that part of Respondent's motion that .19 seeks the imposition of a penalty against Petitioner 20 under Section 6673 . 21 As relevant herein, Section 6673(a)(1 ) 22 authorizes the Tax Court to require a taxpayer to pay 23 to the United States a penalty not in excess o f 24 $25,000 whenever it appears that proceedings have been 25 instituted or maintained by the taxpayer primarily fo r Heritage Reporting Corporation (202) 628-4888 1 0 1 delay or that the taxpayer's position in such 2 proceeding is frivolous or groundless . 3 The record in this case convinces us tha t 4 Petitioner was not interested in disputing the merits 5 of the deficiency in income tax and the penalt y 6 determined by Respondent in the Notice of Deficiency . 7 See Coleman v . Commissioner , 791 F .2d 68, 71 (7 th Cir . 1986) . Rather, the record demonstrates tha t 9 Petitioner regards this case as a vehicle to protest 10 the tax laws of this country and espouse her own 11 misguided views . 12 A petition to the Tax Court is frivolous "if 13 it is contrary to established law and unsupported by a 14 reasoned, colorable argument for change in the law ." 15 Coleman v . Commissioner, supra . Petitioner' s 16 position, as set forth in the amended Petition, in her 17 objection to Respondent's motion, and in her ora l 18 remarks at the hearing on Respondent's motion , 19 consists solely of tax protestor rhetoric . Based on 20 well-established law, Petitioner's position i s 21 frivolous and groundless . 22 We are also convinced that Petitione r 23 instituted and maintained this proceeding primarily, 24 if not exclusively, for purposes of delay . Having to 25 deal with this matter wasted the Court's time, as wel l Heritage Reporting Corporation (202) 628-4888 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 1 1 as Respondent's . Moreover, taxpayers with genuin e controversies may have been delayed . Many years ago, Supreme Court Justice Olive r Wendell Holmes said, "Taxes are what we pay fo r civilized society ." Petitioner undoubtedly feel s herself to be entitled to every benefit that civilize d society has to,offer . Unfortunately, she feels n o obligation to pay her fair share . In view of the foregoing, we shall requir e Petitioner to pay a penalty to the United States i n the amount of $3,000 pursuant to Section 6673(a)(1) . See Coleman v . Commissioner, supra at 7172 ; Crain v . Commissioner, supra at 1417-1418 . In order to reflect the foregoing, an Orde r and Decision will be entered : (1) Granting Respondent's Motion For Summary Judgment and to impos e a penalty under I .R .C . § 6673, filed November 4, 2008 ; (2) finding Petitioner liable for the deficiency .in income tax and the accuracy-related penalty unde r Section 6662, as determined by Respondent in th e December 24'h, 2007 Notice of Deficiency ; and (3 ) imposing on Petitioner a penalty under Sectio n 6673(a)(1) in the amount of $3,000 . This concludes the Court's oral findings o f fact and opinion in this case . Heritage Reporting Corporation (202) 628-4888 1 (Whereupon, at 8 :30 a .m ., the bench opinion 2 in the above-entitled matter was concluded . ) 1 2 3 4 5 6 7 8 9 10 11 // 1 2 13 // 1 4 15 16 17 / / 18 19 // 2 0 21 22 23 24 25 Heritage Reporting Corporation (202) 628-4888