TAX COURT OPINION

Case: Elmer Jon Buckardt
Docket Number: 22131-10
Judge: Kroupa
Opinion Type: bench
Filed: 10/11/2011
Pages: 11

UNITED STATES TAX COURT WASHINGTON,.D.C. 20217 ELMER JON BUCKARDT Petitioner, v. COlVIMISSIONER OF INTERNAL REVENUE, Re spondent . ) ) ) ) ) ) ) ) ) O R D E R Docket No. 22131-10 Pursuant to Rule 152 (b) , Tax Court Rules of Practice and . Procedure, it is ORDERED that the Clerk of the Court shall transmit the to : petitioner and tc respondent a copy of transcript of Diane L. Kroupa at Seattle, Washington, on September 15, 2011, containing her oral findings of fact and opïnion. the pages of the proceedings of the above case before Judge In accordance with the oral findings of fact and opinion, decision will be entered for respondent. (Signed) Diane L. Kroupa udge Date: Washington, D.C. October 11, 2011 GERVED OCT 1 3 2011 IN THE UNITED STATES TAX· COURT 1 In the matter of : ELMER JON BUCKARDT, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Re spondent . ) ) ) ) ) ).Docket No. 22131-10 ) ) ) ) ) Courtroom 4 Nakamura U. S . Courthouse 1010 5th Avenue Seattle, Viashington Thursday, September 15, 2011 The above entitled matter came on for bench opinion, . pursuant to notice, at 12:42 p.m. . BEFORE: HONORABLE. DIANE L. KROUPA Judge AP PEARANCES : For the Petitioner: (No Appearance . ) Fo c the Re spondent : (No Appearance . ) 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 2. R O C E E D I N G S 2 (12:42 p.m.) THE CLERK: Calling from page 10 of the calenda , Docket No. 22131-10, Elmer Jon Buckardt. (Whereupon, a bench opïnion was rendered. ) // // // // // // // // // // // // // // // // // // // // Herïtage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 2 0 21 22 23 24 25 3 . Bench Opinion by Judge Diane L. Kroupa septembgr 15, 2011 Buckardt v. Commissioner Docket No. 22131-10 THE COURT: The Court has decided to render oral findings of fact and opinion in this case, and . the fol owing represents the Court's oral findings of . fact and opinion. The oral findings of fact and opinion shall not be relied upon as precedent in any other case . . . . This bench opinion is made pursuant to the authorit.y granted in § 7459 (b) and Rule 152 . All section references are to the Internal Revenue Code .as amended and in effect for 2008, the year at issue, and all Rul references are to the Tax Court's Rules of Practice and Procedure. This is a deficiency case in which Petit-ioner again asserts that he is not liable for income t ax. Elmer Jon Buckardt appeared on his own behalf, and Lisa M. Oshiro appeared on behalf or Respond nt . Findin(cid:0)540s-of Fact . Petitioner resided in Stanwoo Washington, at the time he filed the petitior . He is .a retired airline pïlot. Petitioner was. married in 2008, but he and his wife did not file joint returns. Heritage Reporting Corporation (202) 628-4888 4 1 2 3 4 5 6 7 8 9 10 11 -12 13 14 15 16 17 Petitioner is no stranger to th.is Court. He has fi-led multiple petitions with this Court. He filed two petitions in 2004 at Docket Nos. 10591-04 and 160 4-04. Both were dismissed for failure to state a claim. . He filed a petition in 2007 at Docket -No. 27949-0' with respect to t-hree taxable years . In that case he litigated deficiencies related to payments in similar amounts from the same payee as in this case. The Commissioner prepared substitute returns, and Mr. Buckardt subsequently filed purported returns containing zeros for all dollar amounts except for the standard deduction and personal exemption. . The Còurt found in our prior Memorandum Opinióh, Buckardt v. Commissioner,. T.:C. Memo 2010-145, . that Mr. Buckardt was liable for the deficiencies and certain.penalties. The Court warned Petitioner that ..18 his arguments as to the taxability of his income were 19 20 21 22 23 24 frivolots and that he would subject himself to a penalty under § 6673 if he appeared and made the same argument s . Petitioner has appealed that case to the Court of Appeals. for the Nïnth Circuit. . . Petitioner has two cases currently pending before this Court. The .case at Docket No. 29924 09L (cid:16)042 25 was heard earlier this year with respect to 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 sé=£=ede-: as to Mr . Buckardt ' s ?990= income tax liabilit and his penalty-for submitting frivolous returns in 2001 and 2002. In the present case, Petitioner again contesta whether payments to him from State Street Retiree Services for Northwest Airlines, Inc. Pension Plans (State Street) are taxable income. Petitioner received $98,600 from State Street in 2008, as he had in other years. Petitioner filed a return for 2008 and reported zero income except for $46 of interest income. In.addition, Petitioner attached a Form 4852, the standard fare by which tax protestors zero out their income, as well as the Form 1099-R provided to him by State Street. Petitioner claimed that he received no taxable income. Respondent issued Petitioner a statutory deficier.cy notice with respect to the $98,600 received from State Street and determined that Petitioner was liable for a $19,299 deficiency in federal income tax and a $2,860 accurâcy-related penalty under § 6662 for 2008. Petitioner timely filed a petition with this Court asserting various reasons that he is not liable for the deficiency and penalty. At trial, Respondent Heritage Reporting Corporation (202) 628-4888 4HH || | || 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 filed a lVlotion to Impose Penalty Pursuant to I.R.C § 6673 (a) . Petitioñer moved for a continuance to consider the § 6673 inotiori, which we denied. Opinion. We begin with the fundamental princip e of tax litigation that the Commissioner' s determiríations in the deficiency notice are presumed correct and taxpayers bear the burden to establish those déterminations are incorrect . L See Rule . 142 (a) , Wel ch v. Helvering, 290 U. S . 111, 115 (1933 ) . The presumpi.ion applies here as the 1099-R from State Street has been provided and Petitioner admits having received that amount from State Street. See Hardy v. Commiss oner, 181 F.3d 1002, 1004-1005 (9th Cir. 1999) affg. T C. Memo 1997-97. Pension and annuity income is includable in gross income. Sec. 61(a) (9), (11). Petitioner failed to prov.ide testimony or other evidence that the funds he received were not includable in his income . At trial, he argued that he had filed a return, that the return was valid and that once a return .is valid it . is forever valid. He urges the Court to find no liabilit y against .him despite the amount of income he receivec.. We ,need not discuss Petitioner' s erroneous positior s at :length. See Wnuck v. Commissioner, 136 T . C. No . 24 (2011) . We · s.ustain Re spondent ' s Hekitage Reporting Corporatipn (202) 628-4888 1 2 (cid:16)0423 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 .22 23 24 25 deficiency determination. We next address whether Petitioner is liable for the accuracy-related penalty under § 6662. Section 6662 (a) imposes a penalty equal to 20 percent of any underpayment of tax that is due to either . negligence or disregard of rules or jegulations or a substant ial understatement of tax. See § 6662 (a) , (b) (1) 2 nd (2) . The record demonstrates that Petitioner' s underpayment was due to negligence and/or disregard of the rules as we found him liable for tax on payments in the same amount and from the same payee in prior years. The record also demonstrates that Petitioner's underst2.tement of income tax with respect to his receipt from State Street was substantial within the meaning of § 6662(d). Moreover, Petitioner failed to present any documeni s or information to show that his substantial understt tement was due to reasonable cause and not willful neglect. Petitioner advanced only frivolous and grotndless arguments. In view of! the foregoing, we sustein Respondent's determination that Petitioner is liable for the accuracy-related penalty. . We now address whether it ïs appropriate to impose a penalty against Petitioner under § 6673, 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 which at thorizes the Tax Court to require a taxpayer t o pay i o the United States a penalty up to $25, 000 wheneve ït appea s that proceedings have been instituted or maintained by the taxpayer primarily for delay or that tihe taxpayer's position in such proceed:.ngs is frivolous or groundless. See § 6673, Scruqqs v. Commissioner, T.C. Memo 1995-355, affd. without published op'inion 117 F . 3d 1433 (11th Cir . 1997) . .We note that the type of arguments Petitiorier raises have been deemed by this Court to be frivolotis and/or sanctionable under § 6673. The Court is awarm that Petitioner has pursued these arguments before this. Court .in the past. Apparently our prior warning to Petitioner has not deterred him from wasting the Court's and Respondent's limited time and resources. The purpose of § .6673 is to compel taxpayers. to think and to conform their conduct to settled tax princi les . .. Coleman. v. Commissioner, 791 F.2d 68, 71 (7th Cir. .1986) . See also Grasselli v. Commis s oner, T . C. Memo 1994 -581. In this proceeding now before the Court, Petitioner asserts nothing but frivolous and . groundless ;arguments. It is apparent from the entire record t hat Petitioner .instituted or maintained this Heritage Reporting Corporation (202) 628-4888 e 1 2 3 4 5 proceed: ng primarily, if not exclusively, as a protest against the federal income tax system, and his proceed: ng in this Court is merely a continuation of Petitioner's refusal t-o acknowledge and satisfy his tax ob1: gations . - We are convinced that no purpose (cid:16)0426 would be served in.repeating all that has been said 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 about h:.s frivolous and misguided arguments. We are also convinced that !Petitioner is aware of the warnings this Court has given to him and to taxp2..yers who provide the. type of arguments Petitioner provided ·in this case, yet Petitioner remains undeterred. We therefore shall require Petitioner to pay a penalty of $25, 000 pursuant to § 6673 (2.) (1) . In addition, (cid:16)042 we. take this opportunity to admonist Petitioner that the Court will consider imposinc another such penalty if Petitioner returns to the Còurt and advances similar arguments in the f uture . . To reflect^the foregoing, decision will be entered for Respondent and a $25, 000 penalty will be . imposed against Petitioner under § 6673. This concludes the Court's oral findings of f act and opinion .in this case . // Heritage Reporting Corporation (202) 628-4888 (Whereupon, at 12:55 p.m., the bench opinion ïn the above-entitled matter was concluded. ) 10 // // // // // // // // . // // f/ // . 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 // // // // // // // // .// Heritage Reporting Corporation (202) 628-4888