                  T.C. Summary Opinion 2006-48



                     UNITED STATES TAX COURT



               RICHARD A. PAIKOWSKI, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 11529-04S.             Filed April 3, 2006.


     Richard A. Paikowski, pro se.

     Frederic J. Fernandez, for respondent.



     DEAN, Special Trial Judge:   This case was heard pursuant to

the provisions of section 7463 of the Internal Revenue Code in

effect at the time the petition was filed.    Unless otherwise

indicated, subsequent section references are to the Internal

Revenue Code as in effect for the years at issue.    The decision

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

opinion should not be cited as authority.
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       Respondent determined the following deficiencies in and

additions to petitioner’s Federal income taxes for 1999 and 2002:

                                   Additions to Tax
Year        Deficiency     Sec. 6651(a)(1)     Sec. 6654(a)
1999         $5,788                $179           $7.38
2002          6,397               1,118          142.31

       The issues for decision are:   (1) Whether petitioner filed

timely Federal income tax returns for 1999 and 2002, and (2)

whether petitioner is liable for additions to tax under sections

6651(a)(1) and 6654(a).

                             Background

       The stipulated facts and the exhibits received into evidence

are incorporated herein by reference.     At the time the petition

in this case was filed, petitioner resided in Waterford,

Wisconsin.

       In 1999, petitioner was employed by Jack Safro Toyota, Inc.

in car sales and earned wages totaling $39,669.    In 2002,

petitioner was employed by Andrew Motor Sales, Inc. in car sales

and earned wages totaling $44,905.

       Petitioner submitted to respondent Forms 1040, U.S.

Individual Income Tax Return, for 1999 and 2002.    In the income

portion of both returns, petitioner entered zeros on all lines.

Petitioner reported that he had no taxable income and that no

taxes were due.    Petitioner claimed a refund of $5,072.17 for

1999 and $1,925.15 for 2002, which represented the full amounts
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of Federal income taxes that were withheld from his wages by his

employers during those years.

     Respondent subsequently issued to petitioner statutory

notices of deficiency for 1999 and 2002.   Respondent determined

that the forms submitted by petitioner do not constitute Federal

income tax returns and that the wages earned by petitioner in

1999 and 2002 are income.

                            Discussion

     The Commissioner’s determinations are presumed correct, and

generally taxpayers bear the burden of proving otherwise.    Rule

142(a)(1); Welch v. Helvering, 290 U.S. 111, 115 (1933).

     Section 7491(a)(1) provides that if, in any court

proceeding, the taxpayer introduces credible evidence with

respect to factual issues relevant to ascertaining the taxpayer’s

liability for a tax, the burden of proof with respect to such

factual issues will be placed on the Commissioner.   See Higbee v.

Commissioner, 116 T.C. 438, 440-441 (2001).

     Petitioner has not raised the issue of section 7491(a)(1),

nor has he introduced any credible evidence with respect to the

factual issues.   Therefore, section 7491(a)(1) does not apply.

Whether Petitioner Timely Filed His Tax Returns

     The majority of courts, including this Court, have held

that, generally, a return that contains only zeros is not a valid

return.   Cabirac v. Commissioner, 120 T.C. 163, 169 (2003).    A
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return “‘which does not contain any information relating to the

taxpayer’s income from which the tax may be computed is not a

return within the meaning of the Internal Revenue Code.’”     United

States v. Moore, 627 F.2d 830, 834 (7th Cir. 1980) (quoting

United States v. Porth, 426 F.2d 519, 523 (10th Cir. 1970));

Sloan v. Commissioner, 102 T.C. 137, 142 (1994).   The taxpayer

must have an honest and reasonable intent to supply the

information required by the tax code for a form to constitute a

return.   United States v. Moore, supra at 835.

     Petitioner, by entering zeros on all lines on the income

portion of his returns, did not have an honest and reasonable

intent to supply the information required.   Therefore, the forms

submitted by petitioner for 1999 and 2002 do not constitute

Federal income tax returns.

     Section 61(a)(1) provides that “gross income means all

income from whatever source derived”, including “Compensation for

services”.   See Cent. Ill. Pub. Serv. Co. v. United States, 435

U.S. 21, 25 (1978); United States v. Basye, 410 U.S. 441, 449

(1973).   Petitioner does not dispute that he earned wages for

1999 and 2002 and that the wages represented compensation for

services rendered.   See Cabirac v. Commissioner, supra at 167

(“It is beyond contention that wages represent taxable income”).

It is a general tax law principle that “full compensation for

services rendered--no matter to whom paid, or when--is income
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immediately taxable to the person who earned the money.”        Howell

v. United States, 775 F.2d 887, 889 (7th Cir. 1985); see Cent.

Ill. Pub. Serv. Co. v. United States, supra.      Therefore,

petitioner’s wages are income.

     Petitioner raised at trial typical “tax protester” type

arguments.    On the basis of well-established law, the Court sees

no need to address petitioner’s frivolous and groundless

arguments.    See Crain v. Commissioner, 737 F.2d 1417 (5th Cir,

1984).

Additions to Tax Under Sections 6651(a)(1) and 6654(a)

     Section 7491(c) imposes the burden of production in any

court proceeding on the Commissioner with respect to the

liability of any individual for penalties and additions to tax.

Higbee v. Commissioner, supra at 446; Trowbridge v. Commissioner,

T.C. Memo. 2003-164, affd. 378 F.3d 432 (5th Cir. 2004).        In

order to meet the burden of production under section 7491(c), the

Commissioner need only make a prima facie case that imposition of

the penalty or addition to tax is appropriate.      Higbee v.

Commissioner, supra.

     The burden of proof remains on the petitioner, who must

prove that his failure to file was: (1) Due to reasonable cause

and (2) not due to willful neglect.      Sec. 6651(a); United States

v. Boyle, 469 U.S. 241, 245 (1985); Higbee v. Commissioner, supra

at 446-447.   A failure to file a Federal income tax return is due
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to reasonable cause if the taxpayer exercised ordinary business

care and prudence and nevertheless was unable to file the return

within the prescribed time.     Barkley v. Commissioner, T.C. Memo.

2004-287; sec. 301.6651-1(c)(1), Proced. & Admin. Regs.    Willful

neglect means a conscious, intentional failure or reckless

indifference.   United States v. Boyle, supra at 245.

     Respondent determined additions to tax under section

6651(a)(1) for 1999 and 2002, asserting that petitioner failed to

file Federal income tax returns for those years.    Respondent has

met his burden of production since the “zero returns” filed by

the petitioner are not valid returns.    The Court finds that

petitioner did not have reasonable cause for his failure to file

the returns and that he is liable for the additions to tax as

respondent determined.

     Respondent also determined that petitioner is liable for an

addition to tax under section 6654(a) for failure to make timely

and sufficient payments for 1999 and 2002 estimated taxes.      The

section 6654(a) addition to tax is mandatory unless petitioner

can place himself within one of the computational exceptions

provided by that section.     Recklitis v. Commissioner, 91 T.C.

874, 913 (1988); Grosshandler v. Commissioner, 75 T.C. 1, 20-21

(1980).   Since petitioner has failed to do so, respondent’s

determination is sustained.
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     Section 6673(a)(1) provides that the Court is authorized to

require a taxpayer to pay to the United States a penalty of up to

$25,000 whenever it appears that the taxpayer’s position in the

proceeding is frivolous and groundless.    While a penalty will not

be imposed at this time, the Court cautions petitioner that a

penalty may be imposed if he continues to advance the same

frivolous and groundless arguments in the future.

     Reviewed and adopted as the report of the Small Tax Case

Division.


                                           Decision will be entered

                                      for respondent.
