Court Opinion

ID: 62265
Source: CourtListenerOpinion
Date Created: 2010-04-26 04:40:41+00
Date Added: 2024-06-11T17:20:03.850634
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT United States Court of Appeals
                                                   Fifth Circuit

                                                                            FILED
                                                                            May 6, 2008

                                     No. 07-60851                     Charles R. Fulbruge III
                                   Summary Calendar                           Clerk

WILSON D WATSON

                                                  Petitioner-Appellant
v.

COMMISSIONER OF INTERNAL REVENUE

                                                  Respondent-Appellee

                            Appeal from the Decision of the
                               United States Tax Court
                                      (18616-03)

Before JOLLY, DENNIS, and PRADO, Circuit Judges.
PER CURIAM:*
       Petitioner-Appellant Wilson Watson (“Watson”) appeals the orders of the
United States Tax Court in four consolidated cases that required Watson to pay
almost $30,000 in back taxes and penalties. On appeal, Watson does not
challenge the specific findings of the Tax Court, but instead contends that the
Tax Court lacked jurisdiction over the proceedings. Specifically, Watson argues
that the Tax Court lost jurisdiction over the proceedings when the Internal

       *
         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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.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.
                                       No. 07-60851

Revenue Service (“IRS”) did not respond to his arguments that there was no law
permitting the taxation. Watson first presented these arguments in briefs that
he attached to his tax returns in 1998, 1999, 2001, and 2002 that he filed “under
protest,” and he has continued to press these arguments throughout the Tax
Court proceedings and this appeal. Because we conclude that the Tax Court had
jurisdiction and that Watson’s income was taxable, we affirm the orders of the
Tax Court.
       Between 2003 and 2004, the IRS sent Watson four notices of deficiency
regarding his taxes for the years 1998, 1999, 2001, and 2002. As permitted by
26 U.S.C. § 6213, Watson filed four petitions with the Tax Court for a
redetermination of the alleged deficiencies. The Tax Court consolidated the
cases and ultimately concluded that Watson owed taxes and penalties for the
years 1998 and 1999, but that Watson did not owe taxes for 2001 and 2002.
Watson has appealed.
       Turning first to jurisdiction, we have held that “[t]he Tax Court acquires
jurisdiction when a taxpayer files a timely petition contesting a notice of
deficiency issued by the Commissioner.” Selgas v. Comm’r, 475 F.3d 697, 699
(5th Cir.), cert. denied, 128 S. Ct. 180 (2007); see also 26 U.S.C. § 6214(a) (stating
that “the Tax Court shall have jurisdiction to redetermine the correct amount of
the deficiency”). Here, Watson filed four petitions with the Tax Court asking it
to rule on his objections to the notices of deficiency that he received. Thus, the
Tax Court had jurisdiction to determine whether Watson owed the taxes as
claimed by the IRS or, instead, whether Watson’s contention that he did not owe
taxes was correct.1
       Having correctly exercised jurisdiction, the Tax Court also correctly
determined that Watson’s income was taxable. Pursuant to 26 U.S.C. § 1, an

       1
          There is no merit to Watson’s argument that the Tax Court was required to
specifically rule on each and every one of his objections before it could exercise jurisdiction.

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                                      No. 07-60851

individual’s “taxable income” is taxed at a rate that is determined by the
individual’s status (married, unmarried, etc.) and the amount of his taxable
income. “Taxable income” is defined as “gross income” minus certain deductions,
see 26 U.S.C. § 63(a), and “gross income” means “all income from whatever
source derived, including . . . [c]ompensation for services . . . [i]nterest . . .
[d]ividends . . . [and] [a]nnuities . . . .” Id. § 61(a). Therefore, the Tax Code
clearly imposes a tax on the income Watson seeks to exclude from taxation,
namely his income for services rendered and his pension payments.
Consequently, the Tax Court appropriately ruled that Watson owed taxes for the
years 1998 and 1999.2
       Because the Tax Court had jurisdiction and correctly concluded that
Watson’s income was taxable, we AFFIRM the orders of the Tax Court.
       AFFIRMED.

       2
         Watson makes no legal argument that the Tax Court incorrectly assessed the
penalties it imposed on him; therefore, we find no error in those portions of the Tax Court’s
orders.

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