                 T.C. Summary Opinion 2008-85



                      UNITED STATES TAX COURT



                  KAREN HODSDON, Petitioner v.
         COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 1089-07S.            Filed July 15, 2008.




     Karen Hodsdon, pro se.

     Kim Nguyen, for respondent.



     HAINES, Judge:   This case was heard pursuant to the

provisions of section 7463 of the Internal Revenue Code in effect

when the petition was filed.1   Pursuant to section 7463(b), the

decision to be entered is not reviewable by any other court, and


     1
      Unless otherwise indicated, section references are to the
Internal Revenue Code as in effect for the year at issue, and all
Rule references are to the Tax Court Rules of Practice and
Procedure. Amounts are rounded to the nearest dollar.
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this opinion shall not be treated as precedent for any other

case.

     Respondent determined a deficiency in petitioner’s 2004

Federal income tax of $944 and additions to tax under section

6651(a)(1) and (2) of $212 and $76, respectively.

     The issues are:   (1) Whether petitioner received income

during 2004; (2) whether petitioner is liable for the additions

to tax; and (3) whether the Court should impose a penalty under

section 6673(a).

                            Background

     Petitioner resided in California at the time her petition

was filed.

     During 2004 petitioner earned wages of $16,632 from her

employer, Goodwill Industries of Orange County.   Petitioner and

her husband, Michael E. Hodsdon, submitted a joint Federal income

tax return for 2004 that reported zeros on all lines, except the

return reported a standard deduction, two exemptions, Federal

income tax withheld, and a refund requested.   Respondent

determined the return was not valid and did not process it.

     On August 2, 2006, respondent prepared for petitioner a

substitute return under section 6020(b) for 2004.   On October 13,

2006, respondent issued petitioner a notice of deficiency.

Petitioner timely petitioned this Court.   Trial was held in Los

Angeles, California, on March 10, 2008.
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                            Discussion

I.   Unreported Income

     Generally, a taxpayer bears the burden of proving the

Commissioner’s determinations incorrect.    Rule 142(a); Welch v.

Helvering, 290 U.S. 111, 115 (1933).     However, the U.S. Court of

Appeals for the Ninth Circuit, the court to which appeal in this

case would lie, has held that the Commissioner must establish

“some evidentiary foundation” connecting the taxpayer with the

income-producing activity, or otherwise demonstrate that the

taxpayer received unreported income, for the presumption of

correctness to attach to the deficiency determination in

unreported income cases.   Weimerskirch v. Commissioner, 596 F.2d

358, 361-362 (9th Cir. 1979), revg. 67 T.C. 672 (1977).    If the

Commissioner introduces such evidence demonstrating that the

taxpayer received unreported income, the burden shifts to the

taxpayer to show by a preponderance of the evidence that the

deficiency was arbitrary or erroneous.    See Hardy v.

Commissioner, 181 F.3d 1002, 1004 (9th Cir. 1999), affg. T.C.

Memo. 1997-97.

     Respondent introduced into evidence a computer-generated

form stating that respondent received from Goodwill Industries of

Orange County a Form W-2, Wage and Tax Statement, reporting that

it paid petitioner wages of $16,632 during 2004.    Respondent has

therefore made the requisite connection between petitioner and
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the unreported income.   See id. at 1005 (evidentiary foundation

requirement satisfied when the taxpayer’s employer reported the

taxpayer’s income to the Commissioner).

      Petitioner does not deny that she received the income at

issue.   Rather, she raises frivolous and groundless challenges to

the taxation of the income at issue.   For example, petitioner

argues that private citizens are not liable for income tax.

Petitioner’s arguments have been rejected by this Court and other

courts, and “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.”

Crain v. Commissioner, 737 F.2d 1417, 1417 (5th Cir. 1984); see

United States v. Romero, 640 F.2d 1014, 1016 (9th Cir. 1981)

(compensation for labor or services, paid in the form of wages or

salary, has been universally held by the courts of the United

States to be income subject to the income tax laws currently

applicable).   We therefore find that petitioner received the

income at issue and she is liable for Federal income tax upon it.

II.   Additions to Tax

      The Commissioner bears the initial burden of production with

respect to a taxpayer’s liability for additions to tax under

section 6651(a)(1) and (2).   Sec. 7491(c); Rule 142(a); Higbee v.

Commissioner, 116 T.C. 438, 446-447 (2001).   To meet this burden

the Commissioner must come forward with sufficient evidence
                                 -5-

indicating it is appropriate to impose the additions to tax.

Higbee v. Commissioner, supra at 446-447.    Once the Commissioner

meets his burden, the taxpayer must come forward with evidence

sufficient to persuade the Court that the Commissioner’s

determinations are incorrect.

     Section 6651(a)(1) imposes an addition to tax for failure to

file a return on the date prescribed (determined with regard to

any extension of time for filing) unless the taxpayer can

establish that such failure is due to reasonable cause and not

due to willful neglect.   A return that reports zeros on all

relevant lines is not a valid return for purposes of section

6651(a)(1).   Cabirac v. Commissioner, 120 T.C. 163, 169-170

(2003).   Petitioner’s 2004 return reported zeros on all relevant

lines, and she did not make an honest and reasonable attempt to

supply the information required by the Internal Revenue Code.    We

therefore find that petitioner did not file a valid 2004 return.

Petitioner did not establish that her failure to file was due to

reasonable cause.   Accordingly, we sustain the section 6651(a)(1)

addition to tax as determined.

     Section 6651(a)(2) imposes an addition to tax of 0.5 percent

per month (up to a maximum of 25 percent) for failure to make

timely payment of the tax shown on a return unless the taxpayer

shows that the failure is due to reasonable cause and not due to

willful neglect.    The addition to tax applies only when an amount
                                 -6-

of tax is shown on a return.    Cabirac v. Commissioner, supra at

170.    Under section 6651(g), a return prepared by the Secretary

pursuant to section 6020(b) is treated as a return filed by the

taxpayer for the purpose of determining the amount of an addition

to tax under section 6651(a)(2).    For these purposes, a section

6020(b) return, in the context of section 6651(a)(2) and (g)(2),

“must be subscribed, it must contain sufficient information from

which to compute the taxpayer’s tax liability, and the return

form and any attachments must purport to be a ‘return’.”

Spurlock v. Commissioner, T.C. Memo. 2003-124; see also Cabirac

v. Commissioner, supra at 170-171.     Respondent prepared a

substitute for return that satisfied the requirements of sections

6651(a)(2) and (g)(2) and 6020(b).     Petitioner has not paid the

tax due and has not established that her failure to timely pay

was due to reasonable cause.    Accordingly, we sustain the section

6651(a)(2) addition to tax as determined.

III. Section 6673 Penalty

       Section 6673(a)(1) authorizes the Court to require a

taxpayer to pay the United States a penalty in an amount not to

exceed $25,000 whenever it appears to the Court that the

proceedings were instituted primarily for delay or the taxpayer’s

position is frivolous or groundless.    The Court may sua sponte

determine whether to impose such a penalty.
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     This is not the first time petitioner has been faced with

the imposition of a section 6673(a)(1) penalty by this Court.      In

docket No. 23930-04S the Court imposed a penalty of $1,000

against petitioner and her husband for instituting the

proceedings for the purpose of delay and for raising frivolous

arguments.    In docket No. 15420-05S, the Court did not impose a

penalty but warned petitioner and her husband that they could be

held liable for a section 6673(a)(1) penalty because they

insisted on raising frivolous and groundless arguments.

     The record shows that petitioner regards this case as a

vehicle to protest the tax laws of this country and espouse her

own misguided views.    She has repeatedly wasted the Court’s time

and resources.    The Court previously imposed upon petitioner a

$1,000 penalty in the hope that she would cease this unacceptable

behavior.    However, it appears that the $1,000 penalty was

insufficient to deter her from behaving in a similar fashion in

this case.    For that reason we now require petitioner to pay a

penalty of $2,000 pursuant to section 6673(a)(1).    Petitioner and

her husband are warned that if they insist on taking frivolous or

groundless positions in this Court, much harsher penalties will

be imposed in the future.

     In reaching our holdings herein, we have considered all

arguments made, and to the extent not mentioned above, we

conclude they are moot, irrelevant, or without merit.
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To reflect the foregoing,


                                  Decision will be entered for

                            respondent.
