Court Opinion

ID: 6317777
Source: CourtListenerOpinion
Date Created: 2022-02-25 21:01:04.066627+00
Date Added: 2024-06-11T09:01:32.925030
License: Public Domain

NOT FOR PUBLICATION                           FILED
                                                                          FEB 25 2022
                    UNITED STATES COURT OF APPEALS
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

GEORGE J. SMITH; SHEILA ANN                     No. 20-70698
SMITH,
                                                Tax Ct. No. 6105-16
                Petitioners-Appellants,

 v.                                             MEMORANDUM*

COMMISSIONER OF INTERNAL
REVENUE,

                Respondent-Appellee.

                           Appeal from a Decision of the
                             United States Tax Court

                          Submitted February 15, 2022**

Before:      FERNANDEZ, TASHIMA, and FRIEDLAND, Circuit Judges.

      George J. and Sheila Ann Smith appeal pro se from the Tax Court’s

decision, following a bench trial, upholding the determinations of deficiency,

penalties, and an addition by the Commissioner of Internal Revenue regarding their

federal income taxes for the 2013 and 2014 tax years. We have jurisdiction under

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
26 U.S.C. § 7482(a)(1). We review de novo the Tax Court’s legal conclusions and

for clear error its factual findings. Hardy v. Comm’r, 181 F.3d 1002, 1004 (9th

Cir. 1999). We affirm.

      The Tax Court properly upheld the Commissioner’s deficiency

determinations because the Commissioner presented stipulated evidence that the

Smiths failed to report income, and the Smiths failed “to show by a preponderance

of the evidence that the deficiency was arbitrary or erroneous.” See 26 U.S.C.

§ 61(a)(3) (defining gross income as “all income from whatever source derived”);

Hardy, 181 F.3d at 1004-05 (“If the Commissioner introduces some evidence that

the taxpayer received unreported income, the burden shifts to the taxpayer to show

by a preponderance of the evidence that the deficiency was arbitrary or

erroneous.”); see also Maisano v. United States, 908 F.2d 408, 409 (9th Cir. 1990)

(recognizing that this court has rejected multiple variations of the “wages are not

income” argument); Roat v. Comm’r, 847 F.2d 1379, 1381 (9th Cir. 1988) (holding

that the Commissioner is not required to prepare a return on a taxpayer’s behalf

before determining and issuing a notice of deficiency).

      The Tax Court did not abuse its discretion by imposing a $2,500 penalty

under 26 U.S.C. § 6673 against the Smiths because they maintained frivolous

positions despite the Tax Court’s warnings. See Wolf v. Comm’r, 4 F.3d 709, 716

(9th Cir. 1993) (setting forth standard of review and concluding that the Tax Court

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was within its discretion in imposing penalties under § 6673 against taxpayer who

persisted in litigating frivolous positions following warning).

      We reject as meritless the Smiths’ contentions regarding the constitutionality

of income taxes, that the income tax is an excise tax that does not apply to the

money the Smiths received in 2013 and 2014, and that the Tax Court

mischaracterized or “changed” the stipulated facts.

      We do not consider whether the Tax Court erred in sustaining the addition

for failure to file a timely return for 2013 because the Smiths do not address this

issue in their opening brief. See Indep. Towers of Wash. v. Washington, 350 F.3d

925, 929 (9th Cir. 2003) (“[W]e will not consider any claims that were not actually

argued in appellant’s opening brief.”).

      The Commissioner’s motion for sanctions (Docket Entry No. 29) is granted.

See Fed. R. App. P. 38; 28 U.S.C. § 1291; Wilcox, 848 F.2d 1007, 1008-09 (9th

Cir. 1988) ($1,500 sanction imposed against pro se litigant for bringing a frivolous

appeal).

      AFFIRMED.

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