Opinion
831-19
08-12-2021
ORDER
Albert G. Lauber, Judge
Petitioner failed to file Federal income tax returns for 2013-2016. On the basis of third-party reports the Internal Revenue Service (IRS or respondent) prepared substitutes for returns (SFRs) and issued petitioner notices of deficiency based on the SFRs. The notices determined that petitioner had received several categories of unreported income, chiefly rents, capital gain, and income from cancellation of indebtedness. The IRS accordingly determined tax deficiencies of $40,169, $113,886, $24,419, and $22,242, respectively, plus additions to tax for failure to file, failure to pay, and failure to pay estimated tax. Petitioner timely petitioned this Court in January 2019. In his petition he asserted that he was not required to file Federal income tax returns because he is a "State Citizen of Oregon," not a "[F]ederal Citizen and NOT a resident alien."
Rather than address the matters that are actually at issue in this case, petitioner has continued to advance frivolous contentions. On May 6, 2019, he filed a motion to dismiss, arguing that the IRS "lacks personam jurisdiction" over him because he is a "Citizen of Oregon," not a "[F]ederal citizen." And he asserted that the deficiency notices were invalid because the IRS issued them only to "damage and harass him."
By Order served May 8, 2019, we denied petitioner's motion to dismiss. On May 28, 2019, he moved to vacate our May 8 Order, again asserting that the deficiency notices were invalid and that the Court must take "Mandatory Judicial Notice" of the Internal Revenue Code. We denied that motion on May 29, 2019. In a motion for continuance of trial, filed August 13, 2020, he again asserted that he is neither a "[F]ederal citizen nor a resident alien."
By Order served February 4, 2021, we warned petitioner that he risked a significant penalty if he continued to raise frivolous contentions. We advised him that I.R.C. § 6673(a)(1) authorizes this Court to require a taxpayer to pay to the United States a penalty of up to $25,000 if it appears to the Court that the taxpayer has instituted or maintained proceedings "primarily for delay" or has taken a position that "is frivolous or groundless." See, e.g., Briggs v. Commissioner, T.C. Memo. 2016-86 (imposing penalty of $3,000); Balice v. Commissioner, T.C. Memo. 2015-46 (imposing penalty of $25,000).
Petitioner has nevertheless filed another Motion, captioned "Motion to Strike Rule 52 and Motion to Dismiss," that raises many of the same frivolous contentions. He again asserts that he is "NOT a Federal citizen" and that respondent is "attempting to present a fraud upon the Court." He contends that the IRS agent who prepared the SFRs lacked authority to do so and "intentionally mis-assigned" and mischaracterized income received from third parties.
Most of petitioner's contentions are frivolous on their face. To the extent they are not frivolous--i.e., to the extent he is asserting that the SFRs did not comply with I.R.C. § 6020(b) or that he did not receive the income alleged in the SFRs--these issues present questions of fact that are not a proper basis for a motion to dismiss. As we have explained to petitioner previously, he bears the burden of proving that the IRS' determinations are erroneous. Lipnick v. Commissioner, 153 T.C. 1, 7 (2019); see Tax Court Rule 142(a). Whether he can meet his burden involves factual matters that must be resolved in the course of further proceedings.
In consideration of the foregoing, it is
ORDERED that petitioner's motion, filed July 26, 2021, at docket entry #33, captioned "Motion to Strike Rule 52 and Motion to Dismiss," is denied.