TAX COURT OPINION

Case: George Eugene Buchanan
Docket Number: 11735-11L
Judge: Morrison
Opinion Type: bench
Filed: 05/02/2012
Pages: 6

UNITED STATES TAX COUR WASHINGTON, DC 20217 GEORGE EUGENE BUCHANAN, Petitioner v. COMMISSIONER OF 1NTERNAL REVENUE, Respondent ) ) ) ) ) ) .Docket No. 11735-11L. ORDER OF SERVICE OF TRANSCRIPT Pursuant to Rule 152(b), Tax Court Rules of Practicb of Procedure, there is transmitted herewith to petitioner and to respondent a copy of the pages of the transcript of the trial of the above case before Judge Richard T. Morrison, at Miami, Florida, on April 13, 2012, containing his oral findings of fact and opinion rendered at the conclusion of the trial. In accordance with the oral findings of fact and opinion, decision will be entered for respondent. (Signed) Richard T. Morrison udge Dated: Washington, D.C. May 2, 2012 3 1 Bench Opinion by Judge Richard T. Morrison 2 April 13, 2012 3 George Eugene Buchanan v. Commissione 4 Docket No. 11735-11L 5 THE COURT: The Court has decided to render 6 Oral Findings of Fact and Opinion in this case. The 7 8 9 10 11 12 13 following represents the Court's Oral Findings of Fact and Opinion, which shall not be relied on as precedent in any other case. .This bench opinion is made pursuant to the authority granted in section 7459(b) and Rule 152. All section references are to the Internal Revenue Code of 1986, as amended, and all Rule references are to the Tax 14 Court Rules of Practice and Procedure . 15 16 17 18 This is a collection-revie cape involving proposed levies to collect Mr. Buchanan's .unpaid liabilities f or (1) a f rivolous - return penalty under section for a Form 1040, U.S. Individual Income Tax 19 Return, that he submitted to the IRS for the tax year 20 21 22 23 24 2005, (2) his income-tax liability for the tax year 2006, and (3) two frivolous-return penalties under section 6702 for two Forms 1040 that he submitted to the IRS for the tax year 2008. The case was tried on April 10, 2012 in 25 Miami, Florida . Mr . Buchanan appeared pro se . Ms . Nancy Heritage Reporting Corporation (202) 628-4888 1 2 L. Karsh appeared on behalf of. the espondent, the IRS. The IRS moved to :impose a penaÏty under section 6673 (a). 3 Mr. Buchanan objected to the motlon. 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . FINDINGS OF FACT Mr. Buchanan was a resident of Florida when he filed his Tax Court petition. . On December 22, 2009,. the IRS sent a notice to Mr. Buchanan (which Mr. Buchanan.received) stating that the IRS had fîled a notice òf Federal tax lien to collect his income-tax liability for the tax year 2006. On December 22, 2009, the IRS sent a notice to Mr. Buchanan (which he received) stating that the IRS had:filed a notice of Federal tax lien to collect two $5, 000 sectionO5702 penalties for two Forms 1040 . submitted for the tax.year 2008:. On September 13, 2010, the IRS sent Mr. Buchanan a notice of intent to levy to collect a $ sectio 702 penalty for a Form 1040 submitted for the tax year 2005. On September 13, 2010, the IRS sent Mr. .Buchanan a notice of intent to levy to collect his 2006. income tax liability. On September 13, 2010, the IRS sent Mr. Buchanan a notice of intent.td levy to collect the two $5, 000 section(95702 penalties for the twò Forms 1040 Heritage Reportïng Corp ration (202) 628-4888 1 2 3 4 5 6 7 8 9 submitted for the tax year 2008. On or around October 13, 2010, Mr. Buchanan requested a collection-review hearing with the IRS Appeals Office regardiñg the proposed levies. On May 3, 2011, the Appeals Office issued a notice of determination sustaining the proposed levies. Øn July 25 , 2011, Mr . Buchanan f iled an amended petition with the Court to challenge the determination of the Appeals Office. The amended 10 petition claimed, among other things, that payments to 11 Mr. Buchanari from Pension Benefits Guaranty Corporation 12 13 14 15 16 17 18 19 and Trans World Airlines, Inc. ere n t taxable to Mr. Buchanan because. Florida is not a sta e . The Court struck this and other portions of the amended petition, essentially leaving paragraph 5.a as he only substantive contention in the amended petition. Paragraph 5.a stated that the IRS erred by treating Mr. Buchanan' s "remuneration during t-he years 2005, 006 and 2008 from Pension Benefits Guaranty Corporation and Trans World 20 Airlines Inc . as ' gross income ' under IRC Sec . 61 (a) . " 21 22 23 24 25 At trial, Mr. Buchanan ar ued that his income did not include various payments because Florida is not a state. He made no ot.her challenges to the determination of the Appeals Office. // Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 OPINION Mr. Buchanan's sole argument at trial was that Florida is not a state. The argument is meritless. See, e.g., Wnuck v. Commissioner, 136!T.C. 498, 505-507 (2011). Mr. Buchanan failed to make any other challenges to the determination of the Appeals oÈfice. Therefore he has waived any arguments besides his frivolous 8 Florida-is-not-a-state argument. Even before trial, Mr. 9 Buchanan had pled only the argument in paragraph 5.a of 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 the amended petition (as modified by the Court's order), and had thus conceded all other challenges to the notice of determination. See Rule 331(b) (4). It is not necessary for us to resolve any other questions of fact or law. However, in the interest of completeness, we hold that Mr. Buchanan had a prior opportunity to contest his income-tax liability for 2006 and the frivolous-return penalties for 2008. See sec. 6330 (c) (2) (B) . (He received notices o ederal tax lien filing allowing him to raise both issues. See 26 C.F.R. § 301.6330-1(e) (3), Q&A-E7.) We also find that the IRS satisfied its burden of proof that the !Form 1040 submitted by Mr. Buchanan for 2005 was la frivolous return. See sec. 6703(a) (imposing burden of proof on IRS for penalties under section 6702). ! The Form 1040, 25 which was submitted on April 1, 2006, dontained Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 information that on its face indicated that Mr. Buchanan's self-assessment was incorrect. This information was based on a position that was frivolous. Section 6673(a) authorizes the Tax Court to require a taxpayer to pay to the United States a penalty of up to $25, 000 whenever it appears that proceedings have been instituted or maintained primarily for delay or that the taxpayer's position in such a proceeding is frivolous or groundless. Mr. Buchanan's sole argument -- that Florida is not a state. -- is frivolous and groundless. His lawsuit was instituted and maintained to delay collection, not to resolve a legitimate dispute 13 with the IRS. 14 . 15 16 To reflect the foregoing, a decision will be entered for the spondent . An order ill be issued sustaining the notice of determination of the Appeals 17 office on which this case is based and imposing a $5,000 18 penalty on Mr. Buchanan under section 6673(a). 19 . This concludes the Court's Oral Findings of 20 21 22 23 24 25 Fact and Opinion in this case. (Whereupon, at 8:44 a.m., the bench opinion in the above-entitled matter was concluded.) // // // Heritage Reporting Corporation (202) 628-4888