                         T.C. Memo. 2006-64



                      UNITED STATES TAX COURT



                WAYNE CURTIS SIRON, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 11208-04.               Filed April 4, 2006.



     Wayne Curtis Siron, pro se.

     Jeanne Gramling, for respondent.



                         MEMORANDUM OPINION


     WELLS, Judge:   Respondent determined a deficiency in

petitioner’s 1998 Federal income tax of $3,161, a section

6651(a)(1) addition to tax for failure to file of $788.25, and a

section 6654(a) addition to tax for failure to pay estimated

income tax of $144.25.   The issues to be decided are whether

petitioner is liable for the deficiency as determined by
                                - 2 -

respondent, whether petitioner is liable for the additions to tax

as determined by respondent, and whether petitioner is liable for

a penalty under section 6673.    All section and Code references

are to the Internal Revenue Code, as amended, and all Rule

references are to the Tax Court Rules of Practice and Procedure.

                            Background

     The facts in this case have been established by the Court’s

order of December 28, 2005.1    At the time of filing the petition,

petitioner resided in Blythewood, South Carolina.    Petitioner was

married to Rose Siron throughout 1998.

     During 1998, petitioner received compensation from FN

Manufacturing, Inc. (FN Manufacturing), of $27,011.27 and

received compensation from the State Board of Technical and

Comparative Education (the State Board) of $323.    FN

Manufacturing and the State Board each issued petitioner a

1998 Form W-2, Wage and Tax Statement, reflecting those

payments.   FN Manufacturing withheld zero Federal income taxes




     1
      As discussed below, on Nov. 18, 2005, respondent filed a
motion to show cause why proposed facts and evidence should not
be accepted as established pursuant to Rule 91(f). On Nov. 21,
2005, we granted respondent’s motion and further ordered
petitioner to file a response in compliance with Rule 91(f)(2) or
respondent’s proposed stipulations would be deemed established
and an order would be entered pursuant to Rule 91(f)(3).
Petitioner never responded to our order, and, accordingly, we
ordered the facts deemed established on Dec. 28, 2005.
                                - 3 -

from its payments to petitioner,2 and the State Board withheld

$8.

      Petitioner did not file a 1998 Federal income tax return,

and respondent prepared a substitute for return for petitioner

pursuant to section 6020(b).3   Because petitioner did not elect

to file a joint return with Rose Siron, respondent determined

petitioner’s filing status to be married filing separate.

Accordingly, respondent determined petitioner’s taxable income

for 1998 to be $21,084.4

      On April 2, 2004, respondent mailed a statutory notice of

deficiency to petitioner.   In response, petitioner timely filed a

petition with this Court for a redetermination of the deficiency.

The petition made the following contentions:     “I do not have any

tax liability.   I deny the figures and content of the Notice of

Deficiency.   I dispute the computations.    In the year in

question, I had dependents, deductions, credits, business

expenses, etc.   Have appeals contact me.”




      2
      From the record, it appears that petitioner claimed 99
exemptions on a Form W-4, Employee’s Withholding Allowance
Certificate, with respect to his 1998 Federal income tax
withholdings.
      3
      The parties have made no contentions as to whether the
substitute for return respondent prepared in the instant case
satisfies sec. 6020(b).
      4
      Respondent reduced petitioner’s $27,334 of gross income by
a $3,550 standard deduction and $2,700 of exemptions.
                                 - 4 -

     In June of 2004, petitioner designated Kansas City,

Missouri, as the place of trial, and the Court set the case for

trial at the Kansas City trial session beginning February 14,

2005.     On November 17, 2004, petitioner filed a motion to

continue and change place of trial to Columbia, South Carolina.

The Court granted petitioner’s motion.

     In a letter dated June 9, 2005, respondent’s counsel

notified petitioner that Rule 91 requires parties to “agree which

facts and documents are not in dispute, and submit them to the

court as a ‘Stipulation of Facts.’”      Accordingly, respondent’s

counsel requested that petitioner respond to the following

questions and requests for information:

     1.      Did you file a 1998 federal income tax return?    If
             so, please provide a copy of the return.

     2.      Do you agree that FN Manufacturing, Inc. paid you
             $27,011 in 1998?

     3.      Do you agree that the State Board of Technical &
             Compr. Education paid you $323 in 1998?

     4.      Do you agree that you paid mortgage interest in
             the amount of $4,161 in 1998? (This is the only
             expense which was reported to the Service).

     5.      How many dependents did you have in 1998? What
             were their names and ages? Where did each
             dependent live?

     6.      Please provide documents showing all Schedule A
             itemized deductions you claim, if any, for the
             taxable year 1998, including invoices, cancelled
             checks, and receipts.
                               - 5 -

     7.    Please provide documents showing all Schedule C
           expenses, if any, you claim for the taxable year
           1998, including invoices, cancelled checks, and
           receipts.

     8.    Please provide documents showing all credits you
           claim for the taxable year 1998.

     In a letter to respondent’s counsel dated June 25, 2005,

petitioner responded that FN Manufacturing paid petitioner

$27,011 in 1998, that the State Board paid petitioner $323 in

1998, and that petitioner did not file a 1998 Federal income tax

return.   The letter stated that it was immaterial whether

petitioner paid mortgage interest in 1998 or had dependents.

Additionally, the letter refused to provide documents

substantiating deductions claimed on Schedule A, Itemized

Deductions, or expense deductions claimed on Schedule C, Profit

or Loss from Business, on grounds that petitioner was not

required to file a 1998 Federal income tax return and refused to

provide documents substantiating claimed credits on grounds that

such information had not been proven to be required.

     On July 14, 2005, respondent’s counsel submitted to

petitioner a proposed stipulation of facts based upon the

information provided in petitioner’s letter dated June 25, 2005.

The proposed stipulation of facts stated that, at the time of

filing the petition, petitioner resided in Blythewood, South

Carolina, that petitioner did not file a 1998 Federal income tax

return, that FN Manufacturing paid petitioner $27,011 during
                               - 6 -

1998, and that the State Board paid petitioner $323 during 1998.

Respondent’s proposed stipulation of facts referenced the

following documents:   (1) The statutory notice of deficiency;

(2) respondent’s letter to petitioner dated June 9, 2005;

(3) petitioner’s letter to respondent dated June 25, 2005; and

(4) respondent’s certified literal transcript for petitioner.

Additionally, respondent provided petitioner with a copy of

respondent’s publication entitled “The Truth About Frivolous Tax

Arguments” and directed petitioner to the publication’s

discussion of penalties that may be imposed on taxpayers who take

frivolous positions.   Respondent also provided petitioner with a

copy of Hodges v. Commissioner, T.C. Memo. 2005-168, in which the

Tax Court imposed a section 6673 penalty on the taxpayer for

advancing a frivolous argument.

     In a letter to respondent’s counsel dated August 2, 2005,

petitioner stated that any stipulations would be premature until

the completion of the discovery process.   Additionally,

petitioner disputed the relevance of Hodges, and the

aforementioned IRS publication.

     In a letter to petitioner dated August 25, 2005,

respondent’s counsel informed petitioner that respondent would

request that the Court impose a penalty pursuant to section 6673
                               - 7 -

if petitioner persisted in raising frivolous arguments.    The

letter stated that petitioner could be required to pay a penalty

of $25,000 pursuant to section 6673.

     On August 26, 2005, respondent filed respondent’s requests

for admission, which made the following contentions:

     1.    The petitioner lived in Blythewood, South
           Carolina, at the time of the filing of his
           petition in this case.

     2.    The petitioner did not file a federal income tax
           return for the taxable year 1998.

     3.    Attached as Exhibit 1 is an authentic copy of the
           notice of deficiency mailed to petitioner on April
           2, 2004.

     4.    During 1998, FN Manufacturing, Inc., paid
           petitioner wages in the amount of $27,011.

     5.    FN Manufacturing, Inc., issued petitioner a Form
           W-2 for the taxable year 1998 reflecting wages in
           the amount of $27,011.

     6.    During 1998, the State Board of Technical and
           Compr. Education paid petitioner wages in the
           amount of $323.

     7.    The State Board of Technical and Compr. Issued
           petitioner a Form W-2 for the taxable year 1998
           reflecting wages in the amount of $323.

     8.    During 1998, the State Board of Technical and
           Compr. Education withheld federal income tax in
           the amount of $8 from the amount paid to
           petitioner.

     9.    Petitioner was married to Rose Siron during the
           entire year of 1998.

     10.   Attached as Exhibit 2 is a certified literal
           transcript of petitioner’s 1998 federal income tax
           account.
                               - 8 -


          PLEASE TAKE NOTICE that pursuant to Tax Court Rule
     90, a written answer to these requests must be filed
     with the Tax Court and a copy served on the undersigned
     within 30 days after service of these requests for
     admission.


Also on August 26, 2005, respondent lodged a response to

petitioner’s requests for admission.   As petitioner had filed no

request for admission with this Court, as of that date,5   the

Court ordered petitioner to file a request for admission by

September 26, 2005.   However, petitioner failed to file such a

request for admission in compliance with the Court’s order.

Instead, on September 26, 2005, petitioner filed a response to

respondent’s request for admissions.   Petitioner admitted that he

was married to Rose Siron throughout 1998, that he resided in

Blythewood, South Carolina, at the time of filing the petition,

that FN Manufacturing paid petitioner compensation of $27,011

during 1998, that the State Board paid petitioner compensation

of $323 during 1998, and that the State Board withheld Federal

income tax of $8.   However, with respect to respondent’s requests



     5
      Respondent submitted to the Court a document purporting to
be “Petitioner’s First Request for Admissions” as an exhibit to
respondent’s motion to show cause why proposed facts and evidence
should not be accepted as established. The document was signed
by petitioner and dated Aug. 29, 2005, but was not filed with
this Court by petitioner. The document contained a series of
incoherent and illogical arguments purporting to rely on the 16th
Amendment, the Internal Revenue Code, and Supreme Court
decisions.
                               - 9 -

for admission that petitioner did not file a 1998 Federal income

tax return, petitioner’s response stated:

     Respondent does not further identify the “federal
     income tax return” sufficiently as to Form Number,
     Title, and O.M.B. Number, to create with any certainty
     the identification of the “tax return” so that
     Petitioner can admit or deny with certainty any
     required “tax return”.

     If Respondent had stated such return was required, and
     further identified said required return as to its Form
     Number and O.M.B. Number, then Petitioner could respond
     with certainty.

     Conditionally denies pending further definition.

     On October 13, 2005, respondent submitted to petitioner a

revised stipulation of facts (the revised stipulation of facts)

that omitted the paragraph relating to petitioner’s failure to

file a 1998 Federal income tax return.   The revised stipulation

of facts also noted petitioner’s objections to the accuracy of

the statutory notice of deficiency and other documents.

Respondent requested that petitioner sign the revised stipulation

of facts and return it to respondent’s counsel.

     In a letter to respondent’s counsel dated October 29, 2005,

petitioner stated that none of respondent’s proposed stipulations

had merit.   With the letter dated October 29, 2005, petitioner

submitted to respondent his own proposed stipulations, comprising
                             - 10 -

various irrelevant and/or illogical statements some of which are

set forth below:

     Petitioner received a “Notice of Deficiency” in error,
     as he has not yet been proven to be a ‘taxpayer’ for
     purposes of said “Notice of Deficiency”.

               *    *    *    *    *    *    *

     The Commissioner’s employees refused, and continue to
     refuse to provide law(s) and/or authoritative
     regulation(s) to the Petitioner proving that he was
     subject to any part of Title 26, United States Code,
     Subtitle A, for 1998.

               *    *    *    *    *    *    *

     Petitioner has derived no income from any of the
     sources named by Congress in Title 26, USC, Subtitle A.

               *    *    *    *    *    *    *

     There are no laws and/or authoritative regulations in
     Title 26, USC, Subtitle A that require a sovereign
     citizen to file a Form 1040, U.S. Individual Income Tax
     Return, O.M.B. Number 1545-0074 for any money earned in
     the private sector of the U.S. economy.

               *    *    *    *    *    *    *

     Title 26, USC, Sections 6212 and 6213 have no
     authoritative or implementing regulations.

               *    *    *    *    *    *    *

     For sovereign persons who have no requirement to file
     and pay a Form 1040, U.S. Individual Income Tax Return,
     O.M.B. number 1545-0074; the legal contest to prove
     otherwise must be in compliance with 26 USC, Sections
     7401 and 7403.

     On November 18, 2005, respondent filed a motion to show

cause why proposed facts and evidence should not be accepted as
                                - 11 -

established.6    As noted supra note 1, we granted respondent’s

motion and further ordered petitioner to file a response in

compliance with Rule 91(f)(2) or respondent’s proposed

stipulations would be deemed established.    Petitioner failed to

file a response.    Consequently, we ordered the facts deemed

stipulated pursuant to Rule 91(f)(3).

     On January 9, 2006, the parties appeared at trial, and

respondent filed a motion for penalty pursuant to section 6673.

                              Discussion

     Section 61(a) provides that gross income includes all income

from whatever source derived except as otherwise provided.

Specifically, gross income includes compensation for services.

Sec. 61(a)(1).     Section 6012(a) generally requires the filing of

a tax return by every individual with gross income equal to or

exceeding the exemption amount.

     Petitioner contends that he had no taxable income in 1998

and, consequently, that he was not required to file an income tax

return or pay income tax.    However, petitioner concedes that he

received $27,011.27 of compensation from FN Manufacturing and

$323 of compensation from the State Board during 1998.

Petitioner has not made any viable contention or offered any

evidence as to why that compensation should not be included in


     6
      The proposed facts referenced in respondent’s motion to
show cause are nearly identical to the revised stipulation of
facts.
                               - 12 -

his taxable income for 1998.   Consequently, we conclude that

petitioner’s taxable income for 1998 includes the payments

received from FN Manufacturing and the State Board.

     Section 6651(a)(1) provides for an addition to tax of 5

percent of the tax required to be shown on the return for each

month or fraction thereof for which there is a failure to file,

not to exceed 25 percent.   The addition to tax for failure to

file a return timely will be imposed if the return is not filed

timely unless the taxpayer shows that the delay was due to

reasonable cause and not willful neglect.     Sec. 6651(a)(1).

Respondent bears the burden of production with respect to the

addition to tax.   Sec. 7491(c).   The record demonstrates that

petitioner failed to file a 1998 Federal income tax return.

Petitioner has made no contention and offered no evidence that

the delay was due to reasonable cause and not willful neglect.

Consequently, we conclude that petitioner is liable for the

section 6651(a)(1) addition to tax for failure to file as

determined by respondent.

     Section 6654(a) provides for an addition to tax for an

underpayment of estimated tax by an individual.     This addition to

tax is mandatory unless one of the statutorily provided

exceptions applies.   Sec. 6654(e).     The record demonstrates that

petitioner did not remit any estimated tax payments for 1998, and

none of the statutory exceptions applies.     Consequently, we
                                - 13 -

conclude that petitioner is liable for the section 6654(a)

addition to tax as determined by respondent.

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

taxpayer to pay a penalty not in excess of $25,000 whenever the

taxpayer’s position is frivolous or groundless or the taxpayer

has instituted or pursued the proceeding primarily for delay.

     SEC. 6673.    SANCTIONS AND COSTS AWARDED BY COURTS.

          (a) Tax Court Proceedings.--

               (1) Procedures instituted primarily for
          delay, etc.--Whenever it appears to the Tax Court
          that–-

                       (A) proceedings before it have been
                  instituted or maintained by the taxpayer
                  primarily for delay,

                       (B) the taxpayer’s position in such
                  proceeding is frivolous or groundless, or

                       (C) the taxpayer unreasonably failed to
                  pursue available administrative remedies,

     the Tax Court, in its decision, may require the
     taxpayer to pay to the United States a penalty not in
     excess of $25,000.

     The record demonstrates that petitioner advanced frivolous

and groundless arguments during the instant proceedings.      We

shall not refute frivolous arguments with copious citation and

extended discussion.    Williams v. Commissioner, 114 T.C. 136,

138-139 (2000) (citing Crain v. Commissioner, 737 F.2d 1417, 1417

(5th Cir. 1984)).    The record is replete with warnings to

petitioner that a penalty could be imposed if petitioner
                               - 14 -

continued making frivolous arguments.    As noted above, in July of

2005, respondent’s counsel provided petitioner with a copy of

respondent’s publication entitled “The Truth About Frivolous Tax

Arguments” and directed petitioner to the publication’s

discussion of penalties that may be imposed on taxpayers who take

frivolous positions.   Respondent also provided petitioner with a

copy of Hodges v. Commissioner, T.C. Memo. 2005-168, in which the

Tax Court imposed a penalty on the taxpayer pursuant to section

6673.    Additionally, in a letter to petitioner dated August 25,

2005, respondent’s counsel informed petitioner that respondent

would request that the Court impose a section 6673 penalty if

petitioner persisted in raising frivolous arguments.   As noted

above, respondent filed a motion for a section 6673 penalty at

trial.

     Moreover, the record demonstrates that petitioner instituted

proceedings before this Court primarily for delay.   Petitioner

initially designated Kansas City as the place of trial despite

his residence in South Carolina throughout the proceedings.

Petitioner refused to agree to respondent’s proposed stipulation

of facts, based upon information provided by petitioner, despite

the efforts of respondent’s counsel to accommodate all of

petitioner’s specific complaints.

     For the foregoing reasons, we conclude that petitioner has

intentionally made frivolous arguments in these proceedings and
                                - 15 -

has instituted these proceedings primarily for delay, wasting the

limited resources of the Federal tax system.   Consequently, we

shall grant respondent’s motion and require petitioner to pay to

the United States a penalty of $1,500 pursuant to section

6673(a)(1).

     To reflect to foregoing,


                                          An appropriate order and

                                     decision will be entered.
