TAX COURT OPINION

Case: Walter C. Lange
Docket Number: 11492-17L
Judge: Halpern
Opinion Type: bench
Filed: 04/27/2018
Pages: 6

UNITED STATES TAX COURT WASHINGTON, DC 20217 WALTER C. LANGE, Petitioner(s), v. COMMISSIONER OF INTERNAL REVENUE,. Respondent ) ) ) ) ) Docket No. 11492-17 L. ) ) ) ) ORDER Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court sháll transmit herewith to petitioner and to respondent a copy of the pages of the transcript of the trial in the above case before Judge Jamès S. Halpern at Dallas, Texas, 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 for respondent. (Signed) James S. Halpern Judge Dated: Washington, D.C. April 27, 2018 SERVED APR 27 2018 . 3 1 Bench Opinion by Judge James S. H.alpern 2 April 17, 2018 3 4 5 6 7 8 9 . Walter C. Lange v. Commissioner of Internal Revenue Docket No. 11492-17L The Court haä dédided to render oral findings of fact and opihion in this case, and the following represents the Court's oral findincjs of fact and opinion. The oral findings of fact and opinion, shall.not be relied upon as precedent in any other case. 10 This .bench opinion is made pursuant to the 11 authority gfanted by séction 7459(b) of the Internal 12 Revenue Code of 1986, as amended, and Rule 152 of the Tax 13 Court Rules of Practice and Procedure. 14 15 16 Unless otherwise indicated, all section . references are to the Internal Revenue tode in effect f.or the years in issue, arid all Rule references are to the Tax 17 Court Rules of Practider and Procedure. 18 The parties havé entered into a stipulation of 19 'facts, which is incorporated herein by this reference. At 20 the tiine the petition was filed, petitioner lived in Texas. 21 22 ~This is a collection due process case under 23 section 6330. By notice of determination dated May 2, 24 2017, rësporident determihed to sustain notices of intent 25 to levy to collect from petitioner section 6702 frivolous 4 1 2 3 4 5 6 7 8 9 10 11 12 13 filing penalties assessed against petitioner for 2007, 2009, and 2012. Respondent concedes that no penalty is due for 2007.. He- further concedes that only one penalty is due for each of 2009 and '2012. A civil penal.ty for filing frivolous returns may be assessed against a taxpayer under section 6702(å) if three requirements are met. First, the taxpayer múst file a document that purports to be-an income tax return. Second, the phrported return must lack the information needed to gauge the sùbstantial córrectness of the self- assessment or contain information indicating the self- assessment is substantiálly incorrect. Third, the taxpayer's position must be frivolous or demonstrate a 14 desire to. delay or impede the administration of Federal 15 16 17 18 income tax laws. Respondent satisfied the first element by showing that petitioner submitted documents for 2009 and 2012 that purported to be income tax re.turns, i.e., the 19 Forms 1040 submitted for each year. Petitioner attached 20 21 Formsa,4852 to each Form 1040.., reporting, among other amo.unts, gross distributions of $23,892.60 from Employee 22 Retirement System of Texas (System). 23 Respondent satisfied the second element as well. 24 The gross distributions from System are pension amounts. 25 Pension amounts are items of gross income reportable on 5 1 2 3 4 5 6 7 8 9 line 16a of Form 1040. Petitioner did not report pension income on either Form 1040. Petitioner attached . explanations to his Forms 1040 stating that he filed the Forms 4852 to correct errors by the payers because he received no payments "which were connected to the performance of the functions of a public office, or otherwise constituted gains, profit or income within thé meaning of relevant law." Neither of the Forms 1040 contained information on which the .substantial correctness 10 of the.self-assessment might be determined. 11 12 Finally, respondent.satisfied the third element by showing that the purported returns reflect frivolous 13 positions. IRS Notice 2010-33, 2010. I.R.B. 609., includes . 14 15 among its list of frivolous positions, positions that have been detérmined to. be frivolous in a published opinion of 16 the United States Tax Court. This Court has held that 17, incomplete.returns showing $0 income1i.tems attributable to 18 incorrect Forms 4852 attached may be subject to a 19 frivolous return penalty. S.ee9e.g., Grunsted v. 20 Commíssioner, 136 T.C. 455, 459 (2011). . 21 22 Petitioner's argument that he has not seen evidence of assessment of the penalties is without merit. 23 As we have said: Sëction 6330(c)(1) does not require the 24 Appeals officer to rely on any particular document in 25 satisfying the verifica.tion requirement and.does not 6 1 2 3 4 5 6 requiré that the Appeals officer actually give the taxpayer a copy of the vérification upon which he or she relied. Walker v. Commissioner, T.C. Memo. 2018-22. Retitioner's argument that respondent may not levy on him to collect taxes is also without merit. See sec. 6331.(a). The present internal Revenue Code was . 7 enacted by Congress in 1986. See Pub. L. 99-514, 100 8 9 10 11 Stat. 2085. Petitioner has failed to show that Revised Statutes sec. 3185 (1876) has any relevance to this case. Petitioñer advanced meritless tax-protester arguments to report zero wages on his purported returns. 12 We therefore find that petitioner is liable for the 13 frivolous return penalties under section 6702 because all 14 of the èlements have been met. 15 16 17 We now address .whether it is appropriate for us to impose a penalty against petitidner on our own motion under section 6673. We have warned petitioner of this 18 possibility in our order denying his motion for summary 19 20 judgment dated April. 9, 2.018. That sectlon authorizes the Tax Cóurt to réquire a taxpayes to pay to the þñited 21 States a penalty of up to $25,000 whenever it appears that 22 proceedings have been instituted or maintained primarily 23 for delay or that the taxpayer's position in such 24 25 proceedings is frivolous or groundless. The purpose of section 6673, like that of section 6702, is to compel taxpayers to think and to conform their conduct to settled 7 tax principles. Petitioner's argument that, as a Texas resident, he is not geographically within the United States for purposes of Féderal taxation is a frivolous argument,. needing no citation of authority to refute it. . Likewise, his argumënt that he is not a person liable to pay tax within the meaning of section 6331 is. . without merit. 1 2 3 4 5 6 7 9 10 Petitiöner has burdened respondent and this 11 Court with his meritless challenges to the section 6702 12 penalty. We shall impose on petitioner a penalty under 13 .section 6673(a)(1) of $2,500. (cid:16)042 That concludes this bench opinion. (Whereupon, at 12:55 p.m., the abov.e-entitled matterf was concluded.) 14 15 16 17 18 19 20 21 22 23 24 25