Court Opinion

ID: 32380
Source: CourtListenerOpinion
Date Created: 2010-04-25 18:53:04+00
Date Added: 2024-06-11T12:17:45.956956
License: Public Domain

United States Court of Appeals
                                                                 Fifth Circuit
                                                              F I L E D
                  UNITED STATES COURT OF APPEALS
                                                                July 3, 2003
                       For the Fifth Circuit
                                                          Charles R. Fulbruge III
                                                                  Clerk

                            No. 02-60565
                          Summary Calendar

                         DREW ALLEN RAYNER,

                                              Petitioner - Appellant,

                               VERSUS

                 COMMISSIONER OF INTERNAL REVENUE,

                                               Respondent - Appellee.

                   Appeal from the Decision of
                    the United States Tax Court
                             (5749-00)

Before JONES, STEWART, and DENNIS, Circuit Judges.

PER CURIAM:*

      Drew Allen Rayner pro se appeals the United States Tax Court’s

grant of summary judgment for the Commissioner of Revenue and

accompanying order that he pay an income tax deficiency of $89,388

for tax year 1998; an additional tax of $3546 pursuant to 26 U.S.C.

  *
   Pursuant to 5TH CIR. R. 47.5, the Court has determined that this
opinion should not be published and is not precedent except under
the limited circumstances set forth in 5TH CIR. R. 47.5.4.

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§ 6654 for failure to pay estimated tax; and a penalty of $5000

pursuant to 26 U.S.C. § 6673(a)(1) for filing a frivolous petition.

We AFFIRM.      The Commissioner moves for additional sanctions of

$4000 pursuant to 28 U.S.C. § 1912 and Rule 38 of the Federal Rules

of Appellate Procedure for filing a frivolous appeal. Rayner moves

for leave to file an out-of-time response to the Commissioner’s

motion.   We GRANT both Rayner’s and the Commissioner’s motions.

      Rayner insists that he owed no tax in 1998 because all his

income that year—namely, $217,331 in distributions from various

retirement funds and $920 in nonemployee compensation—derived from

sources within the United States and therefore (so he says) is not

taxable income under 26 U.S.C. § 861 and the regulations construing

that statute.    This absurd argument is patently frivolous.

      Congress   imposed   an   income   tax   on   the    income   of   every

individual who is a citizen or resident of the United States.1

Taxable income is gross income less allowable deductions.2               Gross

income is “all income from whatever source derived.”3           Gross income

includes all “accessions to wealth, clearly realized, and over

which the taxpayers have complete dominion.”4             “Congress supplied

  1
      26 U.S.C. § 1.
  2
      Id. § 63(a).
  3
      Id. § 61(a).
  4
      Commissioner v. Glenshaw Glass Co., 348 U.S. 426, 431 (1955).

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no limitations as to the source of taxable receipts.”5     Section

61(a) specifically provides that gross income includes interest,

dividends, annuities, income from life insurance, and pensions.6

“In general, all citizens of the United States . . . are liable to

the income taxes imposed by the Code whether the income is received

from sources within or without the United States.”7   There is, in

short, no authority for the proposition that sources of gross

income for the purposes of § 61 are limited to those sources listed

in § 861 or the regulations construing that statute, which in any

event chiefly concerns non-resident aliens required to pay U.S.

income tax.8

      Because Rayner’s § 861 argument lacks any reasonable basis,

summary judgment was appropriate as a matter of law.9      Because

  5
      Id. at 429.
  6
      26 U.S.C. § 61(a)(4), (7), (9)-(11).
  7
      Treas. Reg. § 1.1-1(b) (2003).
  8
    See Great-West Life Assurance Co. v. United States, 678 F.2d
180, 183 (Ct. Cl. 1982) (“The determination of where income is
derived or sourced is generally of no moment to . . . United States
citizens . . . .”).
  9
    Similarly, because of the unreasonableness of his position, we
reject Rayner’s argument that the tax court erroneously placed the
burden of proof on him. See 26 U.S.C. § 6201(d) (burden of proof
concerning deficiency shifts to Commissioner only if taxpayer
asserts a reasonable dispute and fully cooperates). In addition,
Rayner’s arguments related to his claim that he was denied
“administrative due process” prior to the tax court proceeding do
not merit serious consideration. Rayner had ample opportunity to
be heard before the tax court made its de novo determination of the
amount of his deficiency. See generally Crain v. Commissioner, 737
F.2d 1417, 1418 (5th Cir. 1984)) (holding that courts are "not

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Rayner challenges only the tax court’s legal analysis and admits he

received the reported distributions, we adopt the tax court’s

calculation that Rayner is liable for a total deficiency of $89,388

and an additional tax of $3,546.47 under § 6654.             Furthermore,

because Rayner’s petition altogether lacked merit and because

Rayner rejected numerous opportunities to correct his return, the

tax court did not abuse its discretion in ordering him to pay $5000

pursuant to § 6673(a)(1) for filing a frivolous petition.

       We note with consternation that this is not Rayner’s first

attempt to avoid his basic civic obligation of paying income tax.

He paid none for tax year 1997, arguing that his income was not

taxable because it was not derived from corporate activity.              In

affirming the tax court’s subsequent deficiency order, we sharply

rejected    his   argument   and   warned   him   against   filing   future

frivolous actions:

       Rayner’s appeal surpasses mere frivolity and registers an
       extraordinary score on the appellate scale of vexation.
       Mr. Rayner is given notice that future frivolous appeals
       will be subject to the full panoply of sanctions
       authorized by Federal Rule of Appellate Procedure 38. We
       encourage the government to consider moving for such
       sanctions if faced with frivolous actions like this one
       in the future.10

obliged to suffer in silence the filing of baseless, insupportable
appeals presenting no colorable claims of error and designed only
to delay, obstruct, or incapacitate the operations of the courts or
any other governmental authority" through "a hodgepodge of
unsupported assertions, irrelevant platitudes, and legalistic
gibberish").
  10
     Rayner v. United States, No. 00-60625 (5th Cir. Mar. 29,
2001).

                                     4
Rayner has spurned our warning.       Accordingly, the Commissioner’s

motion for sanctions in the amount of $4000 is well taken.

     The judgment of the tax court is AFFIRMED; the motions of the

parties are GRANTED.

AFFIRMED.

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