TAX COURT OPINION

Case: Andrea J. Darnell
Docket Number: 16752-21S
Judge: Carluzzo
Opinion Type: bench
Filed: 07/26/2022
Pages: 6

United States Tax Court Washington, DC 20217 ANDREA J. DARNELL, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. 16752-21S. ORDER 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 the pages of the transcript of the hearing in the above case before Chief Special Trial Judge Lewis R. Carluzzo at Chicago, Illinois, on June 28, 2022, 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, an appropriate Order and Decision will be entered. (Signed) Lewis R. Carluzzo Chief Special Trial Judge Served 07/26/22 1 2 3 4 5 6 7 8 9 10 11 12 Bench Opinion by Judge Lewis R. Carluzzo 3 June 28, 2022 Andrea J. Darnell v. Commissioner Docket No. 16752-21S THE COURT: The Court decided to render oral findings of fact and opinion in this case, and the following represents the Court's oral findings of fact and opinion (bench opinion). Section references contained in this bench opinion are to the Internal Revenue Code of 1986, as amended, in effect for the relevant period. Rule references are to the Tax Court Rules of Practice and 13 Procedure. 14 15 16 17 18 19 20 21 This case for the redetermination of a deficiency is subject to the Small Tax Case provisions of section 7463 and Rules 170 through 174. This bench opinion is made pursuant to the authority granted by section 7459(b) and Rule 152. Except as provided in Rule 152(c), this bench opinion shall not be treated as authority, and pursuant to section 7463(b) the decision entered in this shall not be treated as precedent for any 22 other case. 23 24 25 This case is before the Court on respondent's motion for summary judgment, filed March 17, 2022. Respondent's motion was heard on June 27, 2022, during the 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Chicago, Illinois, trial session that began on that date. 4 Hannah E. Miller appeared on behalf of respondent and argued in support of the motion. Andrea J. Darnell, appeared on her on behalf to oppose it. The issues for decision are whether: (1) the compensation that petitioner received from her employer during 2017 is includable in her income for that year; (2) petitioner timely filed her 2017 Federal income tax return and if not, whether she is liable for a section 6651(a)(1) addition to tax; and (3) the position taken and maintained by petitioner is this proceeding subjects her to the imposition of a section 6673 penalty. The underlying facts relied upon by respondent in support of the motion are not in dispute and easily 15 summarized. 16 At the time the petition was filed, petitioner 17 lived in Indiana. 18 19 20 21 22 23 24 25 In a notice of deficiency, dated March 2, 2021, (notice), respondent (1) determined a deficiency in petitioner's 2017 Federal income tax; (2) imposed a section 6662(a) accuracy-related penalty; and (3) imposed a section 6651(a)(1) addition to tax. Respondent now concedes the section 6663(a) penalty. In 2017 petitioner worked for Midwest Accounting, LLC (Midwest), which paid her a bit less than 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 $40,000 in wages that year. Midwest reported her wages on 5 an information return filed with the respondent (a Form W- 2, Wage and Tax Statement). Petitioner's 2017 Federal income tax return (return) was due on April 16, 2018, but it was not filed until April 26, 2018. As relevant, the compensation that petitioner received from Midwest is not reported on the return. Although petitioner was employed and earned compensation from that employment during 2017, there is neither income nor any Federal income tax liability reported on her 2017 return. Section 61(a) provides that "gross income means all income from whatever source derived," including compensation for services. Petitioner does not dispute that she received the compensation attributed to her in the notice. Rather, according to petitioner, nothing in the Internal Revenue Code makes her liable for a Federal income tax, so the compensation she received from Midwest does not subject her to Federal income taxation. Petitioner's position to that end is patently inconsistent with the literal language of section 61(a)(1), and as observed and commented upon in countless opinions, frivolous. The Court need not address frivolous arguments "with somber reasoning and copious citation of precedent; to do so might suggest that these arguments 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 have some colorable merit." Crain v. Commissioner, 737 6 F.2d 1417, 1417(5th Cir. 1984). It suffices to note that petitioner's arguments have no colorable merit and nothing more be said other than to state that she is a taxpayer who is subject to Federal income taxation and obligated to pay Federal income tax on the wage income she earned and received during 2017. Section 6651(a)(1) imposes an addition to tax if a taxpayer's Federal income tax return is not filed when due. Petitioner's 2017 return was not filed when due, and petitioner is liable for the addition to tax. Respondent's motion also requests the imposition of a section 6673 penalty. That section authorizes the Tax Court to require a taxpayer to pay to the United States a penalty not in excess of $25,000, whenever it appears that the proceedings have been instituted or maintained by the taxpayer primarily for delay or that the taxpayer's position in such proceeding is frivolous or 19 groundless. 20 21 22 23 24 25 Petitioner's position in this proceeding is most certainly frivolous, and this is not the first case that she initiated in this Court in which she advanced a frivolous position. Nevertheless, respondent's concession of the section 6662(a) penalty constrains us to deny so much of respondent's motion that requests the imposition 1 2 3 4 5 6 7 8 9 10 11 12 of a section 6673 penalty. After all, petitioner's 2017 7 Federal income liability would have been greater if she had not initiated this proceeding. It follows that in all other respects, respondent's motion is well-made and respondent is entitled to a decision as a matter of law. See Rule 121. To reflect the foregoing, an appropriate order will be issued, and decision will be entered for respondent with respect to the deficiency and the section 6651(a) addition to tax, but not with respect to the imposition of a section 6673 penalty. This concludes the Court's bench opinion in this 13 matter. 14 15 16 17 18 19 20 21 22 23 24 25 (Whereupon, at 2:52 p.m., the above-entitled matter was concluded.)