TAX COURT OPINION

Case: Robert Powell
Docket Number: 23474-09
Judge: Colvin
Opinion Type: bench
Filed: 02/18/2011
Pages: 6

UNITED STATES TAX COURT WASHINGTON, DC 20217 ROBERT POWELL, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ) ) ) Docket No. 23474-09. Order of Service of Transcript 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 transcript of Cohen at San Antonio, Texas, on February 7, 2011, containing her oral the trial the trial in the above case before Judge Mary Ann fact and opinion rendered at the pages of the findings of the conclusion of In accordance with the oral findings of fact and opinion, decision will be entered for respondent. (Signed) Mary Ann Cohen Judge Date: Washington, D.C. February 18, 2011 [ SERVED FEB 2 3 2911 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 Bench Opinion by Judge Mary Ann Cohen Powell v. Commissioner Docket Number 23474-09 February 7, 2011 The following is representing my oral opinion. The material facts have been stipulated and the applicable law in this case is clear. This Court has decided to render an oral opinion pursuant to Rule 152, Tax Court Rules of Practice and Procedure as follows: Respondent determined deficiencies in Petitioner's federal income taxes for 2004, 2005, 2006 and 2007 and additions to tax for failure to file returns, failure to pay taxes, and failure to make estimated tax payments. As the stipulation makes clear, there is no dispute that Petitioner received compensation for his services during the years in issue, and failed to file returns. Petitioner's contentions are summarized in his pretrial memorandum that Title 26 and the related regulations "exclude, eliminate and exempt Petitioner's gross income from the jurisdictional reach of the Commissioner as a matter of law." In that regard, Petitioner makes a variety of arguments in support of his convoluted interpretation of the law, each of which has been repeatedly rejected in Heritage Reporting Corporation (202) 628-4888 | I 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 3 scores of cases over decades beginning in the last century. Petitioner was previously before the Court in a collection case, Docket Number 18134-06L, in which he made the same frivolous arguments. In TC Memo 2009-174, the cited cases in which arguments that compensation for services is not taxable have resulted in criminal convictions, civil fraud penalties, and Section 6673 penalties. That list now includes Petitioner's prior case in which we imposed a $25,000 penalty under Section 6673, and in the order of the Court of Appeals for 6th Circuit filed December 7, 2010, in which the appellate court added an $8,000 penalty for a frivolous appeal. In addition, for reasons stated in TC Memo 2009-174, the lawyer who assisted Petitioner in pursuing his frivolous claims was penalized, and that penalty was affirmed by the Court of Appeals for the DC Circuit on December 2, 2010. MR. POWELL: Your Honor? THE COURT: Mr. Powell? MR. POWELL: I wish to object. I'll allow you'll to finish your statement, or your findings -- THE COURT: Okay. 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 4 MR. POWELL: -- but I will be objecting to several things you've stated. THE COURT: All right. Well, just don't interrupt us, because this is going to be the Court's opinion, and the court reporter is going to have to transcribe it as such. MR. POWELL: Very well, Your Honor. I just wanted to make my record. THE COURT: I'll give you the last word. In affirming our opinion in Docket Number 18134-06L, the Court of Appeals directly addressed Petitioner's argument that neither the Internal Revenue Code nor the regulations imposed tax on income earned entirely from sources within the United States, the same argument he makes here. The Court of Appeals stated that, "The arguments not only lack merit, but are patently frivolous" and that they "do not warrant extensive discussion." Other courts have described his semantic arguments, notably those that interpret "include" as a term of limitation rather than one of inclusion, as inane, preposterous, utterly without merit and frivolous non-sequitur in cases going back 25 years or more and cited in Tinnerman v Commissioner, TC Memo 2010-150, and in Respondent's motion for penalty under 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 Section 6673. The argument that wages are not taxable was characterized as beyond frivolous and frivolous squared in United States v Cooper, 170 F.3d 691, (7th Cir. 1999). As is apparent from his history, Petitioner will not be deterred in his attempts to draw a conjurer's circle around his tax liability. He purports to believe that he has discovered a new issue that would free millions of Americans from the obligation to file returns and pay taxes on his inc ome . Those who follow those fallacious arguments by refusing to file returns forego the benefits of joint return rates, if married; itemizing deductions, if any they have; and refund of over-withheld taxes to which they might otherwise be entitled. And of course they incur penalties such as those in issue here. After all the warnings that he has been given, we refuse to believe that Petitioner is acting in good faith. We do not have the authority to impose civil or criminal fraud penalties in this case. So the most we can do is to add another $25,000 penalty under Section 6673 to Petitioner's accruing liabilities. Respondent's motion will be granted. The Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 is 1'7 18 19 20 21 22 23 24 25 6 record of frivolous and groundless arguments compels the conclusion that this case is maintained primarily for delay, and we will impede that ef fort by promptly entering a decision for Respondent. And that concludes the Court's opinion. (Whereupon, at 2:25 p.m., the bench opinion in the above-entitled matter was concluded.) // // // // // // // // // // // // // // // // // // Heritage Reporting Corporation (202) 628-4888