TAX COURT OPINION

Case: Susan Lee
Docket Number: 16260-10L
Judge: Colvin
Opinion Type: bench
Filed: 03/18/2011
Pages: 5

UNITED STATES TAX COURT WA SHINGTON, DC 20217 SUSAN LEE, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ) ) ) ) ) Docket No. 16260-10L. Order of service of Transcript Pursuant to Rule 152 (b) , Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit herewith to Petitioner and to respondent a copy of transcript of Cohen at San Antonio, Texas, on February 7, 2011, containing her oral the trial the trial in the above case be'fore Judge Mary Ann fact and opinion rendered at the conclusion of the pages of findings of the In accordance with the oral findings of fact and opinion, decision will be entered for respondent. (Signed) Mary Ann Cohen Judge Date: Washington, D.C. March 18, 2011 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 3 Bench Opinion by Judge Mary Ann Cohen February 7, 2011 Susan Lee v. Commissioner Docket No. 16260-10L THE COURT: The Court has decided to render an oral opinion pursuant to rule 152, Tax Court Rules of Practice and Procedure. The material facts have been deemed stipulated pursuant to Rule 91(f), as stated in the Court's order of January 18, 2011. This case was commenced in response to a notice of determination concerning collection action, which determined that collection by levy should proceed with reference to a frivolous return penalty of $5,000 assessed pursuant to Internal Revenue Code Section 6702(a). The penalty was assessed as a result of Petitioner's submission of a Form 1040X, amended return, for 2004, which is Exhibit 3-J, fua 2007. On that Form 1040X, she indicated that she had previously reported wage income, taxable income, and tax liability, but she claimed that she had zero income and zero tax liability. Attached to the Form 1040X were copies of altered Forms 1099 on which Petitioner represented, under penalty of perjury, her position that the form "erroneously alleges a payment to the party identified Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 :UB 19 20 21 22 23 24 25 4 above as 'Recipient' of 'gains, profit or income' made in the course of a 'trade or business'." The Internal Revenue Service determined, and we agree, that the Form 1040X with attachments was frivolous on its face and reflects a desire to delay or impede the administration of federal tax laws. To the extent, therefore, that Petitioner -purports to contest the underlying liability in this proceeding, she has failed to show any error in that assessment. The document that she filed, standing alone, satisfies Respondent's burden of proof under Section 6703(a). During the administrative proceedings, and in this Court, Petitioner has maintained frivolous and groundless positions. In a letter that is Exhibit 4-J, she asserted that the compensation that she received in 2004 for services performed by her is not taxable. She has suggested that argument in her petition and in requests for admissions and interrogatories served by her. Although she partially abandoned that argument, along with numerous other frivolous contentions, in her pretrial memorandum filed February 3, she still maintains as Item 13, page 3 of her pretrial memorandum that, "I deny having duty and 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 5 authority to perform any act as an officer, employer, or partner of any entity required to file any return or perform any act with respect to Internal Revenue law." Such arguments have led to criminal convictions and civil fraud penalties, as well as Section 6702 and 6673 penalties, as involved in this case. The underlying convoluted statutory interpretations behind those arguments have been characterized as inane, preposterous, utterly without merit, frivolous non-sequitur, beyond frivolous, and frivolous squared in cases going back 25 years or more. Petitioner is not entitled to simply deny that her arguments are frivolous. She has not offered any non-frivolous explanation for her Form 1040X or her maintenance of this case. Petitioner has filed nonsensical motions challenging jurisdiction and asserting the bar of the statute of limitations. The assessment of penalty on October 12, 2009, with respect to the Form 1040X filed on October 23, 2007, was timely, and her attempts to relate back to the due date, the filing date, or the content of the 2004 return is fallacious. She has not raised any credible challenge to the validity of the 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 6 assessment or any alternatives to collection. Petitioner was warned by Respondent, and by the Court, of the possibility of a penalty under Section 6673 if she continued to pursue frivolous arguments in this case. That penalty is separate from the Section 6702(a) penalty already imposed, and from one that might have been imposed under 6702(b) by reason of any frivolous submission during the Section 6330 hearing. Notwithstanding her self-serving denials, Petitioner's positions in this proceeding are frivolous and groundless, and her multiple dilatory motions justify the conclusion that the proceeding has been instituted or maintained primarily for delay. We have considered Petitioner's other arguments, and they lack merit. We will not further indulge delaying tactics, and decision will be entered sustaining the determination on which this case is based. Our decision will also order that Petitioner shall pay a penalty to the United States under Section 6673 in the amount of $1,000. And that concludes the Court's opinion. (Whereupon, at 3:15 p.m., the bench opinion in the above-entitled matter was concluded.) Heritage Reporting Corporation (202) 628-4888