                  T.C. Memo. 2008-168



                UNITED STATES TAX COURT



           MICHAEL T. HAWKINS, Petitioner v.
     COMMISSIONER OF INTERNAL REVENUE, Respondent



Docket Nos. 9859-05, 15327-05.     Filed July 14, 2008.



     P failed to file Federal income tax returns for
2002 and 2003. R determined deficiencies and additions
to tax pursuant to sec. 6651(a)(1) and (2), I.R.C., for
P’s 2002 and 2003 tax years and pursuant to sec.
6654(a), I.R.C., for P’s 2003 tax year.

     Held: P is liable for the deficiencies and
additions to tax as determined by R. P is also liable
for a penalty under sec. 6673(a)(1), I.R.C., because
his position in these cases is frivolous.



Michael T. Hawkins, pro se.

Paul K. Voelker, for respondent.
                               - 2 -

             MEMORANDUM FINDINGS OF FACT AND OPINION


     WHERRY, Judge:   These consolidated cases are before the

Court on petitions for redetermination of statutory notices of

deficiency for petitioner’s 2002 and 2003 tax years.1   The issues

for decision are:

     (1) Whether the Court has jurisdiction to decide these

cases;

     (2) whether $15,387 paid to petitioner in 2002 as wages is

includable in petitioner’s 2002 taxable income;

     (3) whether $33,928 in nonemployee compensation, $5,754 in

gambling winnings, and $100 in “other income” are includable in

petitioner’s 2003 taxable income;

     (4) whether petitioner is liable for additions to tax under

section 6651(a)(1)and (2)2 for his 2002 and 2003 tax years and

under section 6654(a) for his 2003 tax year; and

     (5) whether the Court should impose a penalty on petitioner

under section 6673(a)(1).3




     1
      In addition, on Jan. 10, 2008, petitioner filed a motion to
dismiss both cases for lack of jurisdiction.
     2
      Unless otherwise indicated, all section references are to
the Internal Revenue Code of 1986, as amended and in effect for
the years in issue, and all Rule references are to the Tax Court
Rules of Practice and Procedure.
     3
      At trial respondent made an oral motion to impose a penalty
under sec. 6673.
                                 - 3 -

                           FINDINGS OF FACT

         At the time he filed his petitions, petitioner resided in

Nevada.     Petitioner failed to file Federal income tax returns for

his 2002 and 2003 tax years.     In December 2004 and April 2005

respondent prepared section 6020(b) returns for petitioner’s 2002

and 2003 tax years, respectively.4       On February 22 and June 21,

2005, respondent issued petitioner notices of deficiency for his

2002 and 2003 tax years, respectively.       With respect to

petitioner’s 2002 tax year, respondent determined a deficiency of

$851 and an addition to tax under section 6651(a)(1) of $276.58.5

With respect to petitioner’s 2003 tax year, respondent determined

a deficiency of $8,998 and additions to tax under section

6651(a)(1) and (2) of $2,024.55 and $494.89,respectively,

together with an addition to tax under section 6654(a) of

$232.18.     Petitioner then filed timely petitions with this Court,

and a trial was held on November 5, 2007, in Reno, Nevada.




     4
      Those sec. 6020(b) returns consisted of: (1) Individual
Master File Tax Modules reflecting petitioner’s account in the
Internal Revenue Service’s computer system; (2) Forms 4549,
Income Tax Examination Changes; (3) Forms 886-A, Explanation of
Items; and (4) Forms 13496, IRC Section 6020(b) Certification.
     5
      The   explanatory form sent to petitioner along with the
notice of   deficiency reveals that the $276.58 was actually
comprised   of a $191.48 addition to tax under sec. 6651(a)(1) and
an $85.10   addition to tax under sec. 6651(a)(2).
                                - 4 -

                                OPINION

I.   Petitioner’s Motion To Dismiss for Lack of Jurisdiction

     In his motion to dismiss filed with the Court after the

trial on January 10, 2008, petitioner proclaims unabashedly that

he “did not and shall not file an income tax return.”     (Emphasis

in original).   He argues that the section 6211(a), which defines

a deficiency, should be read in conjunction with section 6020(b)

and that respondent was required to but did not prepare

substitute returns.    He also argues that “The account of Michael

T. Hawkins was closed for the income tax year of 2002 on July 4,

2005, and the account was closed for the year 2003 on September

19, 2005.”

     Petitioner is wrong in all relevant respects.    Nothing in

section 6020(b), section 6211(a), or the Internal Revenue Code as

a whole suggests that those two sections should be read together.

If a taxpayer fails to file a return, the Commissioner can

determine a deficiency without first preparing a substitute

return under section 6020(b).    See Roat v. Commissioner, 847 F.2d

1379, 1382 (9th Cir. 1988) (“A rule requiring the Commissioner to

prepare a return first would create an administrative burden for

no good reason.”).    Moreover, respondent did in fact prepare

section 6020(b) returns for petitioner’s 2002 and 2003 tax years.

Finally, petitioner’s naked assertion that the Court lacks
                               - 5 -

jurisdiction because his “accounts” for 2002 and 2003 were closed

is devoid of factual or legal support.

      Our jurisdiction to redetermine a Federal income tax

deficiency depends on the issuance of a valid notice of

deficiency and a timely filed petition.    See Monge v.

Commissioner, 93 T.C. 22, 27 (1989).     Petitioner filed timely

petitions in response to valid notices of deficiency regarding

his 2002 and 2003 tax years.   We therefore have jurisdiction to

decide these cases and shall deny petitioner’s motion to dismiss

for lack of jurisdiction.

II.   2002 and 2003 Federal Income Tax Deficiencies

      Section 61(a) specifies that “Except as otherwise provided”,

gross income includes “all income from whatever source

derived”.   The Commissioner’s determination of a taxpayer’s

liability for an income tax deficiency is generally presumed

correct, and the taxpayer bears the burden of proving that the

determination is improper.   See Rule 142(a); Welch v. Helvering,

290 U.S. 111, 115 (1933).6

      In unreported income cases like this one, the Court of

Appeals for the Ninth Circuit7 has held that the presumption of


      6
      Although sec. 7491(a) may shift the burden of proof to the
Commissioner in specified circumstances, petitioner has fallen
woefully short of satisfying the prerequisites under sec.
7491(a)(1) and (2) for such a shift.
      7
       Absent stipulation to the contrary, the appropriate venue
                                                    (continued...)
                                  - 6 -

correctness applies once the Commissioner introduces some

substantive evidence reflecting that the taxpayer received

unreported income.     Hardy v. Commissioner, 181 F.3d 1002, 1004

(9th Cir. 1999), affg. T.C. Memo. 1997-97.     If the Commissioner

introduces such evidence, the burden shifts to the taxpayer to

show by a preponderance of the evidence that the deficiency was

arbitrary or erroneous.     Id.

     Respondent has submitted a Form 2866, Certificate of

Official Record, containing a computer-generated Internal Revenue

Service (IRS) “Wage and Income Transcript” which reflects that

Camco, Inc., issued petitioner a Form W-2, Wage and Tax

Statement, reporting that petitioner was paid $15,387 in wages,

tips, and other compensation during 2002 and that no Federal

income tax was withheld.     This is sufficient to lay an

evidentiary foundation with respect to the $15,387 in unreported

wage income determined with respect to petitioner’s 2002 tax

year.     See Hughes v. United States, 953 F.2d 531, 540 (9th Cir.

1992) (“this circuit as well as other circuits have held that

official IRS documents, even if generated by a computer, are

admissible as public records”).

         Concerning petitioner’s 2003 tax year, respondent has

submitted a similar Form 2866, containing a computer-generated


     7
      (...continued)
for an appeal of this decision is the Court of Appeals for the
Ninth Circuit. See Sec. 7482(b)(1)(A), (2).
                                - 7 -

IRS “Wage and Income Transcript” showing that Peppermill Casinos,

Inc., filed Forms W-2G, Certain Gambling Winnings, reporting

payments to petitioner of (1) $1,249, (2) $1,345, (3) 1,384, and

(4) $1,776 for gross winnings in 2003 and that there was no

Federal income tax withheld on any of the reported income items

for 2003.   The “Wage and Income Transcript” also reflects that

Mortgage America, LLC, filed a Form 1099-MISC, Miscellaneous

Income, reporting the payment of $33,928 in nonemployee

compensation to petitioner in 2003.     Finally, the “Wage and

Income Transcript” reflects a Form 1099-MISC filed by GDL &

Associates reporting the payment of $100 of “other income” to

petitioner in 2003.   This is sufficient to lay an evidentiary

foundation with respect to the unreported income ($33,928 in

wages, $5,754 in gambling winnings, and $100 in “other income”)

determined by respondent with respect to petitioner’s 2003 tax

year.   See Hughes v. United States, supra at 540.

     As a consequence, the burden is on petitioner to show by a

preponderance of the evidence that the deficiency was arbitrary

or erroneous.   Petitioner has not raised a reasonable dispute as

to any item of income reported on the information returns and has

not even attempted to submit information or evidence to counter

that submitted by respondent.   Instead, he resorts to tax-

protester rhetoric so frivolous that it does not warrant
                                - 8 -

discussion.8   See 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.”).

We therefore sustain the deficiencies as determined by respondent

for petitioner’s 2002 and 2003 tax years.

III. Additions to Tax

     Under section 7491(c) the Commissioner bears the burden of

production with respect to a taxpayer’s liability for penalties

or additions to tax.    This means that the Commissioner “must come

forward with sufficient evidence indicating that it is

appropriate to impose the relevant penalty.”       Higbee v.

Commissioner, 116 T.C. 438, 446 (2001).       In instances where an

exception to the penalty or addition to tax is afforded upon, for

example, a showing of reasonable cause or substantial authority,

the taxpayer bears the burden of “[coming] forward with evidence

sufficient to persuade a Court that the Commissioner’s

determination is incorrect.”    Id. at 447.

     Section 6651(a)(1) imposes an addition to tax of 5 percent

per month or a fraction thereof up to a maximum of 25 percent for



     8
      For example, in his brief he argues that filing a tax
return is voluntary, that “1040 Forms have become illegal”, and
that “I am a Christian and I do not believe in personal
taxation.” He also argues that he was denied a speedy trial and
raises the same oft-rejected substitute-return argument that he
raised in his motion to dismiss for lack of jurisdiction.
                                - 9 -

failure to file a timely return unless it is shown that such

failure is due to reasonable cause and not to willful neglect.

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 pay the amount

of tax shown on a return.   The two penalties combined, however,

may not exceed 5 percent per month.     See sec. 6651(c).   Where, as

here, both additions to tax are determined this is accomplished

by reducing the section 6651(a)(1) addition to tax from 5 percent

per month to 4.5 percent per month.

     Section 6654(a) imposes an addition to tax for underpayment

of estimated income tax by an individual taxpayer.     That addition

to tax is computed by reference to four required installment

payments of the taxpayer’s estimated tax liability, each

constituting 25 percent of the “required annual payment.”     Sec.

6654(c)(1), (d)(1)(A).   For taxpayers whose adjusted gross income

for the preceding year was $150,000 or less, the “required annual

payment” is equal to the lesser of (1) 90 percent of the tax

shown on the individual’s return for the current year or, if no

return is filed, 90 percent of his or her tax for such year, or

(2) if the individual filed a return for the immediately

preceding taxable year, 100 percent of the tax shown on that

return.   Sec. 6654(d)(1)(B).

     Respondent has satisfied his burden of production with

respect to all three additions to tax.     With respect to the
                             - 10 -

section 6651(a)(1) addition to tax, respondent has satisfied the

burden of production because petitioner has admitted repeatedly

that he failed to file Federal income tax returns for 2002 and

2003.

     Respondent has satisfied the burden of production with

respect to the section 6651(a)(2) addition to tax because

petitioner failed to pay his 2002 and 2003 tax liabilities as

shown on the section 6020(b) returns, which are treated as “filed

by the taxpayer for purposes of determining the amount of the

addition” under section 6651(a)(2).   Sec. 6651(g)(2); see Wheeler

v. Commissioner, 127 T.C. 200, 208-209 (2006), affd. 521 F.3d

1289 (10th Cir. 2008).9

     Finally, respondent has satisfied the burden of production

with respect to the section 6654(a) addition to tax because

petitioner failed to file a 2003 Federal income tax return and

made no estimated tax payments for that tax year.   Because

petitioner had taxable income and owed unpaid tax for 2003 and

did not file a Federal income tax return for the preceding tax


     9
      In Wheeler v. Commissioner, 127 T.C. 200, 210 (2006), affd.
521 F.3d 1289 (10th Cir. 2008), the Commissioner did not
introduce the sec. 6020(b) return into evidence or otherwise
prove that a sec. 6020(b) return had been prepared for the year
at issue. In contrast the sec. 6020(b) returns for petitioner’s
2002 and 2003 tax years were submitted together with respondent’s
response to petitioner’s motion to dismiss. Those returns are
sufficient for purposes of the sec. 6651(a)(2) additions to tax.
See Ellis v. Commissioner, T.C. Memo. 2007-207; Hennard v.
Commissioner, T.C. Memo. 2005-275; see also Millsap v.
Commissioner, 91 T.C. 926, 930 (1988).
                              - 11 -

year, 2002, respondent has met his burden of producing evidence

that petitioner had a required annual payment of estimated tax

for 2003.   The Court also notes that petitioner does not fit

within any of the exceptions listed in section 6654(e).10

      Accordingly, we conclude that petitioner is liable for the

section 6651(a)(1) and (2) additions to tax for his 2002 and 2003

tax years and for the section 6654(a) addition to tax for his

2003 tax year.

IV.   Section 6673(a)(1) Penalty

      Respondent by oral motion at trial has asked the Court to

impose a penalty of $20,000 under section 6673(a)(1), $10,000 for

each of the tax years at issue.    Section 6673(a)(1) authorizes

the Tax Court to impose a penalty not in excess of $25,000 on a

taxpayer for proceedings instituted primarily for delay or in

which the taxpayer’s position is frivolous or groundless.    “A

position maintained by the taxpayer is ‘frivolous’ where it is

‘contrary to established law and unsupported by a reasoned,


      10
      Sec. 6654(e) provides two exceptions to the sec. 6654(a)
addition to tax. First, the addition is not applicable if the
tax shown on the taxpayer’s return for the year in question (or,
if no return is filed, the taxpayer’s tax for that year), reduced
for these purposes by any allowable credit for wage withholding,
is less than $1,000. Sec. 6654(e)(1). Second, the addition is
not applicable if the taxpayer’s tax for the full 12-month
preceding tax year was zero and the taxpayer was a citizen or
resident of the United States. Sec. 6654(e)(2). In light of our
earlier conclusion regarding petitioner’s 2003 deficiency,
petitioner is liable for a deficiency for 2003 that net of
withholding exceeds $1,000. Further, it has not been shown that
petitioner had no tax liability in 2002.
                                   - 12 -

colorable argument for change in the law.’”         Williams v.

Commissioner, 114 T.C. 136, 144 (2000) (quoting Coleman v.

Commissioner, 791 F.2d 68, 71 (7th Cir. 1986)).

     Although we are loath to impose a frivolous filing penalty

that is unwarranted, the facts and circumstances surrounding

these proceedings cry out for the imposition of the penalty.

      This is not petitioner’s first appearance before the Court,

nor is he unfamiliar with the section 6673(a)(1) penalty.           In

Hawkins v. Commissioner, T.C. Memo. 2003-181, we warned

petitioner that we might impose upon him a section 6673(a)(1)

penalty were he to “institute or maintain a proceeding with

frivolous arguments in the future”.         That was not our only

warning to petitioner.        At trial in these cases we apprised

petitioner more than once that he was advancing frivolous

arguments and could be penalized up to $25,000 if he persisted in

doing so.     Rather than heed those warnings, petitioner continued

to make frivolous arguments in his motion to dismiss for lack of

jurisdiction and in his brief.11       As a consequence, we shall

impose upon him an $8,000 penalty pursuant to section 6673(a)(1).

     We do not impose upon petitioner the $20,000 penalty

requested by respondent primarily because we are not convinced

that petitioner fully appreciates the magnitude of his actions.

Rather, he appears to be influenced greatly by some very


     11
          See supra note 8.
                                - 13 -

inadequate advisers, at least when it comes to matters concerning

his Federal income tax obligations and litigation before this

Court.

     John E. Buras (Mr. Buras), a self-proclaimed “Public

Minister” in the World Prayers Answered Ministry, signed the

“service by mail” certificates attached to a number of

petitioner’s filings.    Mr. Buras has been convicted under section

7203 on four counts of willfully failing to file Federal income

tax returns.    See United States v. Buras, 633 F.2d 1356 (9th Cir.

1980).    Mr. Buras has also been penalized by this Court under

section 6673(a)(1) for “instituting a frivolous and groundless

petition.”     Buras v. Commissioner, T.C. Summary Opinion 2004-

161.12

     In addition to the involvement of Mr. Buras, a number of

petitioner’s frivolous pleadings, including his motion to dismiss

for lack of jurisdiction and his brief, were signed by Linwood

Edward Tracy, Jr. (Mr. Tracy), who proclaims himself “P.O.A Form

2848 and Counsel for and with World Prayers Answered

Ministry/Embassy Pursuant to the First, Ninth, and Tenth



     12
      In this Court’s 2004 summary opinion concerning John E.
Buras, the Court noted that Mr. Buras was “an evangelist and
associate pastor in World’s Prayers Answered Church of God” and
that Mr. Buras “was convicted of willful failure to file Federal
income tax returns.” Buras v. Commissioner, T.C. Summ. Op. 2004-
161. We assume that the “John E. Buras” whose name appears on
the certificates of service in petitioner’s cases is that same
individual.
                              - 14 -

Amendment of the [U]nited States Constitution, 1791.”   Like Mr.

Buras, Mr. Tracy is a “Public Minister” with World Prayers

Answered Ministry.   See Tracy v. United States, 243 F.R.D. 662

(D. Nev. 2007).   Mr. Tracy has no discernible tax experience and

is not admitted to practice before this Court.   In the end, we

can only hope that petitioner realizes that Mr. Buras and Mr.

Tracy, both of whom lack any indicia of formal tax training or

status as tax professionals, are not competent tax advisers.

Their influence, if any, has been to petitioner’s ultimate

detriment in these cases.

     The Court has considered all of petitioner’s contentions,

arguments, requests, and statements.   To the extent not discussed

herein, we conclude that they are meritless, moot, or irrelevant.

     To reflect the foregoing,


                                         Appropriate orders and

                                    decisions will be entered.
