Court Opinion

ID: 945875
Source: CourtListenerOpinion
Date Created: 2013-06-27 19:45:03.822849+00
Date Added: 2024-06-11T09:09:06.998587
License: Public Domain

UNPUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT

                             No. 13-1074

MICHAEL CRAIG WORSHAM,

                 Petitioner - Appellant,

          v.

COMMISSIONER OF INTERNAL REVENUE,

                 Respondent - Appellee.

               Appeal from the United States Tax Court.
                        (Tax Ct. No. 031151-09)

Submitted:   June 13, 2013                     Decided:    June 27, 2013

Before TRAXLER,    Chief   Judge,   and   NIEMEYER   and   MOTZ,   Circuit
Judges.

Affirmed by unpublished per curiam opinion.

Michael C. Worsham, Forest Hill, Maryland, for Appellant.
Kathryn Keneally, Assistant Attorney General, Robert W. Metzler,
Steven   K.  Uejio,   UNITED   STATES  DEPARTMENT   OF  JUSTICE,
Washington, D.C., for Appellee.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

      After a trial, the tax court found that Michael Worsham

failed to report taxable income of $193,026 for 2006 and that he

was liable for increased penalties because his failure to file

was fraudulent.       We affirm.

      Worsham does not dispute that he failed to pay taxes on the

income he earned in 2006, or the Commissioner’s calculations as

to   the   amount   of   the      deficiency.             However,     he    argues     that

Congress    lacks   authority         to    tax     his    income.          This    argument

clearly    fails.      See     U.S.    Const.       art.    I,     §   8,    cl.    1   (“The

Congress    shall   have      Power    To     lay    and    collect     Taxes,       Duties,

Imposts and Excises . . . .”); U.S. Const. amend. XVI (“The

Congress shall have power to lay and collect taxes on incomes,

from whatever source derived, without apportionment among the

several     States,      and      without         regard      to       any     census     or

enumeration.”).          We     find        similarly       unpersuasive           Worsham’s

argument that the federal income tax infringes his fundamental

rights.

      Worsham also argues that his earnings as an attorney are

not taxable income because they include the “basis value” of his

labor.      We   agree     with       the    numerous       other      courts      to   have

addressed this argument that it is meritless.                          See, e.g., Boggs

v. Comm’r, 569 F.3d 235, 238 (6th Cir. 2009); Olson v. United

States, 760 F.2d 1003, 1005 (9th Cir. 1985).

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       Finally,       Worsham       contends             that    the       tax    court     erred   in

imposing    a    penalty       under       26    U.S.C.         §     6651(f)      for     fraudulent

failure to file a tax return.                    “A finding of fraud requires that

the   Commissioner          prove    affirmatively               by     clear      and     convincing

evidence actual and intentional wrongdoing on the part of the

[taxpayer] with a specific intent to evade the tax.”                                         Grossman

v. Comm’r, 182 F.3d 275, 277 (4th Cir. 1999) (internal quotation

marks omitted).             However, “[i]ntent to defraud . . . may be

proven by circumstantial evidence.”                              Id.         We review the tax

court’s finding of fraud for clear error.                                  Romm v. Comm’r, 245

F.2d 730, 734 (4th Cir. 1957).

       Worsham does not dispute that he failed to file a return.

The tax court found several indicia of fraud present, including:

1)    Worsham    had    filed        tax    returns             in    years       preceding      2006,

demonstrating         his    awareness           of       the        filing      requirement;        2)

Worsham’s       tax    liability       increased                in    2006       because    his     law

practice    became      more        profitable;            3)        Worsham      raised    numerous

frivolous arguments; and 4) Worsham is highly educated and has a

law degree and thus should have been able to identify frivolous

arguments.        Worsham       v.    Comm’r,            T.C.       Memo    2012-219,       at    17-21

(2012).         The    court     found          it       particularly            significant       that

Worsham previously moved to dismiss his case after learning that

the Commissioner had subpoenaed his bank accounts; the court

concluded that Worsham was more concerned with concealing the

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true       amount     of    his   income     than    with   presenting         good-faith

arguments           regarding      his     tax      liability.           Given       these

considerations, we cannot conclude that the tax court’s finding

of fraud was clearly erroneous.

       In addition to the 26 U.S.C. § 6651(f) penalty, the tax

court imposed penalties under 26 U.S.C. §§ 6651(a)(2) and 6654

for failure to pay the tax shown on a substitute for return and

failure      to     pay    estimated     taxes.     Worsham       does   not    challenge

those penalties beyond arguing that he never owed any income tax

to begin with.             We have rejected that argument and thus need not

consider the issue further. *

       Accordingly, we affirm the judgment of the tax court.                           We

dispense       with        oral   argument    because       the    facts       and   legal

contentions are adequately presented in the materials before the

court and argument would not aid the decisional process.

                                                                                 AFFIRMED

       *
       The Commissioner has filed a motion seeking sanctions
against Worsham, acting pro se, for noting a frivolous appeal.
See 28 U.S.C. § 1912; Fed. R. App. P. 38. We deny that motion.

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