TAX COURT OPINION

Case: Michael-E Vierow
Docket Number: 3902-12
Judge: Kroupa
Opinion Type: bench
Filed: 03/12/2013
Pages: 8

UNITED STATES TAX COURT WASHINGTON, D.C. 2ú217 MICHAEL-E VIEROW, ) Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) ) Docket No. 3902-12 ) ) ) ) ORD E R Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit to petitioner and to respondent a copy of the pages of the transcript of the trial of this case before Judge Diane L. Kroupa in San Francisco, California on February 28, 2013, containing her 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, an appropriate decision will be entered. (Signed) Diane L. Kroupa Judge Date: Washington, D.C. March 12, 2013 SERVED MAR 132013 Capital Reporting Company Michael-E Vierow 02-28-2013 3 1 Bench Opinion by Judge Diane L. Kroupa 2 Feb. 28, 2013 Michael-E Vilerow v. Commissioner 3 Docket No. 3902-12 4 THE COURT: The Court has decided to render 5 oral findings of fact and opinion in this case, and 6 7 the following represents the Court's oral findings of fact and opinion. These oral findings of fact and 8 opinion shall not be relied upon as precedent in any 9 other case. 10 This bench opinion is made pursuant to the 11 authority granted by sect!ion 7459(b) and Rule 152. 12 All section references are to the Internal Revenue 13 Code for 2008, and all rule references are to the Tax 14 Court Rules of Practice & Procedure. 15 Petitioner appeared pro se, and Sarah 16 Sexton appeared on behalf of Respondent. 17 FINDINGS OF FACT 18 The record establishes or the.parties do not dispute 19 the following facts. Petitioner resided in 20 California when he filed.the petition. 21 22 23 Gannett Satellite Information Network, Inc., issued a form 1099-Misc. to Petitioner indicating that Petitioner was paid $10,529 of non- 24 employee compensation. Petitioner failed to report 25 the income or file a federal income tax return for (866) 448 - DEPO www.CapitalReportingCompany.com 2013 Capital Reporiting Company Michael-E Vierow 02-28-2013 1 2 3 2008. Respondent prepared a substitute for return, SFR, for that year based upon third-party information reports. Respondent issued Petitioner a statutory 4 deficiency notice based upon the SFR. 5 Respondent determined a deficiency in 6 Petitioner's federal income tax for 2008, a late- 7 8 9 10 11 filing addition to tax under section 6651(a) (1), and a late-payment addition to tax under section 6651 (a) (2) . Petitioner timely filed a petition containing only tax proteister arguments. At his 12 hearing, Petitioner againl raised only tax protester arguments. 13 14 OPINION 15 We begin by discussing two fundamental principles of 16 tax litigation. First, the presumption of 17 18 correctness attaches to the deficiency determination because the deficiency notice shows that Respondent 19 possessed direct evidence of payments to Petitioner 20 and nothing in the record reflects that Petitioner 21 failed to receive the amount. See Edwards v. 22 Commissioner, 680 F.2d 1268, 1270 (9th Cir. 1982); 23 Banister v. Commissioner, TC Memo 2008-201. 24 It is also a fundamental tax principle that 25 gross income includes all income from whatever source (866) 448 - DEPO www.CapitalReportingCompany.com 2013 Capital Reporting Company Michael-E Vierow 02-28-2013 5 1 derived, including wages, ¡non-employee compensation, 2 3 4 interest, and dividends. !Sec. 61(a) (1). Petitioner argues, however, that he is not a person required to file.a return and pay tax. 5 Simply put, he is a taxpayer required to file a 6 7 8 9 10 11 12 13 return and pay tax. Petitioner follows in the footsteps of numerous others who have unsuccessfully attempted to avoid paying federal income taxes. We need not discuss Petitioner's erroneous positions at length. See Wnuck v. Commïssioner, 136 TC 498 (2011) . To refute Petitioner's arguments with somber reasoning and conspicuous citation of 14 precedent might suggest that these arguments have 15 some colorable merit. Crain v. Commissioner, 737 16 F.2d 1417, 1418 (5th Cir. 1984). 17 We therefore sustain the deficiency 18 determination determined in the deficiency notice. 19 We now focus on the additions to tax. An 20 addition to tax is imposed if the taxpayer fails to 21 22 23 file a timely federal income tax return. Sec. 6651 (a) (1) . The record reflects that Petitioner failed 24 to file a federal income |tax return by the prescribed 25 due date for 2008. Petitioner presented no evidence (866) 448 - DEPO www.CapitalReportingCompany.com 2013 Capital Reporting Company Michael-E Vierow 02-28-2013 6 1 2 showing that his failure to file or pay was due to reasonable cause and not to willful neglect. As 3 already mentioned, Petitioner has advanced several 4 specious arguments as to why he should not have to 5. pay tax. None of his arguments establish that he had 6 reasonable cause. Accordingly, we hold that 7 Petitioner is liable for the late-filing addition to 8 9 tax under section 6651 (a) (1) . Next we address the late-payment addition 10 to tax imposed under section 6651 (a) (2) for the late 11 payment of tax shown as dpe on the SFR that 12 Respondent prepared for Petitioner . An SFR made by 13 14 the Secretary under section 6020 (b) is treated as the return filed by the taxpayer for purposes of 15 determining whether the late-payment addition to tax 16 applies . Sec. 6651 (g) (2) . 17 18 19 20 We sustain Respondent's determination of the late-payment addition to tax under section 6651 (a) (2) . Finally, we now address whether it is 21 appropriate to impose a penalty against Petitioner 22 under section 6673, which authorizes the Tax Court to 23 require a taxpayer to paÿ to the United States a 24 penalty up to $25,000 whenever it appears that 25 proceedings have been instituted or maintained by the (866) 448 - DEPO www.CapitalReportingCompany.com 2013 Capital Reporting Company Michael-E Vierow 02-28-2013 7 1 taxpayer primarily for delay or that the taxpayer's 2 position in such proceedings is frivolous or 3 groundless. See sec. 6673; Scruggs v. Commissioner, 4 5 6 TC Memo 1995-355, affd. without published opinion, 117 F.3d 1433 (11th Cir. 1997). We note that the type of arguments 7 Petitioner raises have been deemed by this Court to 8 be frivolous and sanctionable under section 6673. The 9 purpose of section 6673 is to compel taxpayers to 10 think and to conform thei;r conduct to settled tax 11 principles . Coleman v. Commissioner, 791 F. 2d 68, 71 12 13 14 15 (7th Cir. 1986); see also Grasselli v. Commissioner, TC Memo 1994- . Respondent moved to impose a penalty of $2000 under section 6673. We agree to impose a $2000 16 penalty. Petitioner has lhad a previous collection 17 action before this Court, Docket No. 19406-03L. This 18 Court found that Petitioner was making meritless 19 arguments and imposed a penalty. TC Memo -255. 9() 20 Petitioner appealed that decision to the 21 Ninth Circuit, and the Ninth Circuit affirmed the Tax 22 Court's decision. 23 In this proceeding now before the Court, 24 Petitioner asserts nothing but frivolous and 25 groundless arguments. It is apparent from the entire (866) 448 - DEPO www.CapitalReportingCompany.com 2013 Capital Reporting Company Michael-E Vierow 02-28-2013 1 record that Petitioner instituted or maintained this 8 2 proceeding primarily if not exclusively as a protest 3 against the federal income tax system. We are 4 5 6 7 8 9 convinced that no purpose would be served in repeating all that has been said about his frivolous and misguided arguments. Wnuck v. Commissioner, 136 TC 498 (2011). Petitioner's tactics have consumed valuable government resources. These tactics should not be 10 condoned. They damage the integrity of the federal 11 tax litigation system because the time and attention 12 the Court and Respondent must devote to these 13 frivolous arguments deprive other taxpayers with 14 genuine tax controversies. See Abrams v. 15 Commissioner, 82 TC 403, 412 (1984) . 16 When the Court has been faced with 17 groundless arguments that waste the Court's and 18 Respondent's limited time and resources, we have 19 consistently found the taxpayer deserves a penalty 20 under section 6673(a) (1), and that penalty should be 21 substantial if it is to have the desired deterrent 22 effect. 23 Petitioner is pdo se and may not be 24 familiar with the Court's rules and procedures. Pro 25 se status, however, is not a license to litter the (866) 448 - DEPO www.CapitalReportingCompany.com 2013 Capital Reporting Company Michael-E Vierow 02-28-2013 1 dockets of the federal courts with ridiculous 2 allegations. Parker v. Cömmissioner, 117 F.3d 785 9 3 4 (5th Cir. 1997). Moreover, Petitioner 1s no stranger to this S Court. We therefore shall require Petitioner to pay 6 a $2000 penalty pursuant to section 6673(a) (1). In 7 addition, we take this opportunity to admonish 8 Petitioner that the Court will consider imposing a 9 greater penalty if Petitioner returns to the Court 10 and advances similar arguments in the future. 11 12 To reflect the foregoing, decision will be entered for Respondent and a $2000 penalty will be 13 imposed against Petitioner under section 6673. This concludes the Court's oral findings of fact and opinion in this case. Off the record. (Whereupon, at 2:16 p.m., the above- entitled matter was concluded.) 14 15 16 17 18 19 20 21 22 23 24 25 (866) 448 - DEPO www.CapitalReportingCompany.com 2013