Opinion
7914-22
12-14-2022
JEFFREY A. HARTMAN, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER AND DECISION
DIANA L. LEYDEN SPECIAL TRIAL JUDGE
By notice of deficiency issued January 19, 2022, respondent determined a deficiency of $7,658 for petitioner's tax year 2017. On April 12, 2022, petitioner timely filed a Petition for redetermination of that deficiency.
On October 31, 2022, respondent filed a Motion for Summary Judgment (motion) under Rule 121, and in support of the motion a Declaration of Eric O. Young, Attorney and a Declaration of Denis D. Davis. Respondent seeks summary judgment in favor of respondent and asks the Court to impose a penalty under I.R.C. § 6673.Respondent asserts that there is not any dispute as to any genuine material fact and respondent is entitled to a decision as a matter of law and in support of the section 6673 penalty, that petitioner has advanced frivolous or groundless arguments in this case. Petitioner filed a response to the motion on November 15, 2022, and an objection to the motion (objection) on November 16, 2022.
Unless otherwise indicated, all statutory references are to the Internal Revenue Code, Title 26 U.S.C., in effect at all relevant times, all regulation references are to the Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all relevant times, and all Rule references are to the Tax Court Rules of Practice and Procedure.
For reasons set forth below, the Court will grant respondent's motion, but will not impose a penalty under I.R.C. § 6673.
Petitioner resided in Ohio when the Petition in this case was filed.
Background
Petitioner filed what he purported to be a federal income tax return for 2017 on or about February 8, 2019, that reported zero wage income. Petitioner's employer issued to petitioner a Form W-2 for 2017 that reported wages, tips and other compensation of $64,106, federal income tax withheld of $8,936, Social Security tax withheld of $4,146 and Medicare tax withheld of $969.
On that tax return for 2017 petitioner also reported federal income tax withheld of $14,051.27, which included the amounts of Social Security tax and Medicare tax reported as withheld by his employer.
The Internal Revenue Service (IRS) reduced the amount of federal income tax withholding reported by petitioner by $5,115, the amount of the withheld Social Security tax and Medicare tax, in accordance with respondent's summary assessment authority, I.R.C.§ 6201(a)(3), to reflect a corrected federal income tax withholding of $8,936. After this adjustment, there was a reported refund of $8,936, the total amount of the corrected federal income tax withholding. Respondent froze the reported refund and issued petitioner a notice of deficiency for 2017 on January 19, 2022. The notice of deficiency proposed that petitioner had not reported $49,656 of his wage income as reflected on the Form W-2. After accounting for a Child Tax Credit of $500, the IRS proposed a deficiency of $7,658.
The Court uses the term "IRS" to refer to administrative actions taken outside of these proceedings. The Court uses the term "respondent" to refer to the Commissioner of Internal Revenue, who is the head of the IRS and is respondent in this case, and to refer to actions taken in connection with this case.
Discussion
Summary judgment serves to "expedite litigation and avoid unnecessary and expensive trials." Fla. Peach Corp. v. Commissioner, 90 T.C. 678, 681 (1988). Either party may move for summary judgment upon all or any part of the legal issues in controversy. Rule 121(a). The Court may grant summary judgment only if there is not any genuine dispute of any material fact. Naftel v. Commissioner, 85 T.C. 527, 529 (1985). Respondent as the moving party, bears the burden of proving that no genuine dispute exists as to any material fact and that petitioner is entitled to judgment as a matter of law. See FPL Grp., Inc. v. Commissioner, 115 T.C. 554, 559 (2000); Bond v. Commissioner, 100 T.C. 32, 36 (1993); Naftel v. Commissioner, 85 T.C. at 529. In deciding whether to grant summary judgment the factual materials and inferences drawn from them must be considered in the light most favorable to the nonmoving party. See FPL Grp., Inc. v. Commissioner, 115 T.C. at 559; Bond v. Commissioner, 100 T.C. at 36; Naftel v. Commissioner, 85 T.C. at 529.
Petitioner asserts frivolous arguments as to why he did not have taxable income from wages he received from his employer. I.R.C. § 61(a) provides that "gross income means all income from whatever source derived," including wage compensation that petitioner does not dispute receiving from working at Vanner Inc. The Court does not see any need to refute these arguments. Crain v. Commissioner, 737 F.2d 1417, 1417 (5th Cir.1984) ("We perceive no need to refute these arguments with somber reasoning and copious citation of precedent; to do so might suggest that these arguments have some colorable merit."). See also Rapp v. Commissioner, 774 F.2d 932, 936 (9th Cir.1985); May v. Commissioner, 752 F.2d 1301, 1305-1306 (8th Cir. 1985); Schiff v. Commissioner, 751 F.2d 116, 117 (2d Cir. 1984), aff'g T.C. Memo.1984-223; Wnuck v. Commissioner, 136 T.C. 498, 499 (2011); McCoy v. Commissioner, 76 T.C. 1027, 1029-1030, (1981), aff'd, 696 F.2d 1234 (9th Cir. 1983); Myrick v. United States, 217 F.Supp.2d 979, 984-985 (D.Ariz. 2002), aff'd, 70 Fed.Appx. 956 (9th Cir. 2003).
The only fact that petitioner challenges is whether the notice of deficiency was valid because Denise D. Davis who signed it did not have proper delegated authority to sign and issue the notice of deficiency. By the declaration of Denise D. Davis filed by respondent the Court finds that there is not any genuine dispute that Ms. Davis had authority to sign the notice of deficiency.
As to respondent's request that the Court impose a penalty under I.R.C. § 6673, the Court notes that respondent in his motion refers to exhibits to the Declaration of Denise D. Davis that were not filed with the Court. Therefore, the Court declines to impose a penalty at this time.
However, the Court takes this opportunity to inform petitioner that this Court may impose a penalty of up to $25,000 if a taxpayer institutes or maintains a frivolous or groundless petition or institutes or maintains a proceeding primarily for delay. I.R.C. § 6673(a)(1). Although the Court will not impose such a penalty at this time, petitioner is warned that the Court may not be so forgiving if he continues to advance frivolous and groundless arguments.
Upon due consideration, it is
ORDERED that respondent's Motion for Summary Judgment, filed October 31, 2022, is granted. It is further
ORDERED AND DECIDED that there is a deficiency in income tax due from petitioner for taxable year 2017 in the amount of $7,658.