                        T.C. Memo. 2000-222



                      UNITED STATES TAX COURT



                  RANDAL W. HOWARD, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 18627-97.                Filed July 25, 2000.


     Randal W. Howard, pro se.

     Erin K. Huss, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     RUWE, Judge:   Respondent determined deficiencies in

petitioner's Federal income taxes and additions to tax as

follows:
                                - 2 -



                                   Additions to tax
     Year    Deficiency       Sec. 6651(a)(1) Sec. 6654
              1                  2
     1993       $3,136             $784.00          --
     1994        4,162              775.75       $154.91
     1995      10,146            2,254.50         482.15
     1
      Respondent asserts that the deficiency be increased to $5,832
in the Amended Answer because the original deficiency determination
gave petitioner credit for a prior erroneous assessment.
     2
      Respondent asserts that the addition to tax be increased to
$1,458 in the Amended Answer because the original deficiency
determination gave petitioner credit for a prior erroneous
assessment.

     After concessions, the issues for decision are:     (1) Whether

petitioner received compensation for his labor; (2) whether

payments made to petitioner for his labor should be included in

petitioner’s taxable income; (3) whether petitioner is liable for

additions to tax for failing to timely file Federal income tax

returns and for failing to pay estimated taxes; and (4) whether a

penalty should be awarded to the United States under section

6673.1

                          FINDINGS OF FACT

     Some of the facts have been stipulated and are so found.

The stipulation of facts and supplemental stipulation of facts

are incorporated herein by this reference.     Petitioner resided in

Tucson, Arizona, at the time he filed his petition.



     1
      Unless otherwise indicated, all section references are to
the Internal Revenue Code applicable to the taxable years in
issue, and all Rule references are to the Tax Court Rules of
Practice and Procedure.
                               - 3 -

     During the years 1993, 1994, and 1995, petitioner worked as

a broadcast engineer for the radio station Family Life

Broadcasting System (FLBS) located in Tucson, Arizona.   For the

year 1993, petitioner and FLBS entered into an agreement whereby

petitioner was classified as an independent contractor and was to

receive payments of $2,000 per month for part-time performance.

In 1993, petitioner received compensation of $24,000 from FLBS.

Petitioner submitted a 1993 Form 1040, U.S. Individual Income Tax

Return, which was received by the Internal Revenue Service on

August 24, 1994.   Petitioner did not sign the return under

penalties of perjury, instead writing the words “under protest”

in the signature line.   Petitioner attached to his Form 1040 the

following:   (1) Schedule D, Capital Gains and Losses,; (2) Form

1099-MISC, showing $24,000 compensation from FLBS; (3) Statement

of Randal William Howard, which generally states that petitioner

is not liable for tax for 1993; and (4) Declaration of Randal

William Howard, which contained the following statement:

     During the Year 1993, I sold labor each day that I
     worked at the Family Life Broadcasting System. For the
     Year 1993, I received $24,000.00 from the Family Life
     Broadcasting System. Based upon the facts above, and
     the provisions of the Internal Revenue Code (IRC),
     §1015(a), I had a total basis (cost) of at least
     $24,000.00 in the labor I sold to the Family Life
     Broadcasting System.

Petitioner reported the $24,000 received from FLBS on Schedule D

as an amount received for “labor” and claimed a basis in the

labor of $24,000, resulting in zero gain.    No tax was withheld
                               - 4 -

from petitioner’s 1993 compensation from FLBS.

     Petitioner’s work status at FLBS changed from independent

contractor to employee at the beginning of 1994, and he remained

an employee through 1995.   On December 28, 1993, petitioner

signed a Form W-4, Employee’s Withholding Allowance Certificate,

on which he claimed nine withholding allowances.     As an employee,

petitioner received life, health, and disability insurance

coverage.   FLBS paid wages to petitioner during 1994 and 1995 in

the amounts of $31,655.02 and $32,569.95, respectively.

     FLBS filed a 1994 Form W-2, Wage and Tax Statement,

reflecting $31,655.02 in wages paid to petitioner and $1,054.55

withheld for Federal income taxes.     FLBS filed a 1995 Form W-2

reflecting $32,569.95 in wages paid to petitioner and $1,120.59

withheld for Federal income taxes.     Except for the amounts

withheld from his wages, petitioner did not pay any Federal

income tax for the years 1994 and 1995.     Petitioner did not file

Federal income tax returns for the years 1994 and 1995.

     Based on the Form 1040 submitted by petitioner for 1993,

respondent assessed tax of $2,696 and an addition to tax under

section 6651(a)(1) in the amount of $674.     This assessment was

erroneous because the unsigned 1993 Form 1040 that petitioner

submitted was not a valid return.    On March 6, 1997, respondent

issued a notice of deficiency for the year 1993.     In the notice

of deficiency, the previously assessed tax and additions to tax
                                 - 5 -

($2,696.00 and $674.00) were subtracted from the corrected tax

liability reducing the deficiency and addition to tax amounts

determined in the notice of deficiency.     On August 22, 1997,

respondent issued separate notices of deficiency, for the years

1994 and 1995.

                                OPINION

Deficiency Determinations

     On brief, petitioner argues that the presumption of

correctness does not apply and that respondent has failed to

prove that petitioner received taxable income for the years in

issue.    We disagree.   The notices of deficiency were based on

information obtained from FLBS and from petitioner’s own

statements.    At trial, a representative of FLBS testified that

FLBS paid petitioner for his services in the amounts determined

in the notices of deficiency and petitioner admitted at trial

that he received those amounts from FLBS in return for his

services.

     Petitioner has made various other claims, including that

payments for his labor are not income, that he has a basis in

such labor equal to the amount of the payments received, that the

income tax is unconstitutional, and that he was a nonresident

alien with no relationship to the Government of the United

States.    All of these arguments have been consistently rejected

by the courts and can be accurately characterized as timeworn
                               - 6 -

protester type rhetoric.   Accordingly, we hold that the payments

received by petitioner from FLBS during 1993, 1994, and 1995,

constitute taxable income to petitioner.2

     Respondent bears the burden of proving the alleged increased

deficiency for 1993.   See Rule 142(a).   Respondent argues that

the Form 1040 that petitioner submitted for 1993 was invalid,

and, as a result, respondent could not validly make assessments

based on the 1993 Form 1040 without first sending to petitioner a

deficiency notice for that year.   Respondent argues that the

erroneous assessment should not have been subtracted from the

total corrected tax liability for 1993 in the notice of

deficiency.   Respondent states that the erroneous assessment of

tax and addition to tax must, and will, be abated.    We agree.

Petitioner’s Form 1040 for 1993 was invalid because it was not

signed under penalties of perjury.     See sec. 6065; Beard v.

Commissioner, 82 T.C. 766, 777 (1984), affd. 793 F.2d 139 (6th

Cir. 1986); see also Richardson v. Commissioner, 72 T.C. 818, 824

(1979) (stating that a signature on an attached letter is not

considered an imputed signature on the return itself).

Respondent has established the correct amount of petitioner’s

1993 Federal income tax liability and presented sufficient


     2
      Respondent determined that petitioner was self-employed for
the year 1993 and a regular employee for the years 1994 and 1995.
Respondent has presented ample evidence in the form of testimony,
employment agreements, benefits, and tax forms to sustain this
position.
                                 - 7 -

evidence to carry the burden of proof regarding the increased

deficiency for 1993.

Additions to Tax

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

file a required return on or before the specified filing date.

The addition to tax is 5 percent of the amount required to be

shown as tax on the return and an additional 5 percent is imposed

for each additional month or fraction thereof during which the

failure continues, but not to exceed 25 percent in the aggregate.

See sec. 6651(a)(1).   This addition to tax may be avoided only if

petitioner can show that his failure to file was due to

reasonable cause and not willful neglect.    See Rule 142(a);

United States v. Boyle, 469 U.S. 241, 245-246 (1985).

     The Form 1040 that petitioner submitted for 1993 was invalid

because it was not signed under penalties of perjury.     See sec.

6065; Beard v. Commissioner, supra at 777; see also Richardson v.

Commissioner, supra at 824.     Petitioner did not file or submit

any returns for 1994 or 1995.    There is no evidence in the record

to support a finding that petitioner’s failure to file returns

for 1993, 1994, and 1995, was due to reasonable cause and not

willful neglect.   We hold that the addition to tax under section

6651(a)(1) applies for the years in issue.    We also hold that the

increased addition to tax in the amount of $1,458 applies for

1993 because, as previously stated, respondent has established
                                - 8 -

the correct deficiency amount for 1993.

     Respondent also determined that petitioner is liable for

additions to tax pursuant to section 6654 for failure to pay

estimated taxes.    If the payments of tax through withholding or

the payment of estimated quarterly tax payments during the course

of the year are not equal to the statutorily required amount then

imposition of this addition to tax is automatic, unless one of

the statutory exceptions applies to the taxpayer.    See sec.

6654(a); Grosshandler v. Commissioner, 75 T.C. 1, 20-21 (1980).

The burden of qualification for such exception is on the

petitioner.    See Habersham-Bey v. Commissioner, 78 T.C. 304, 319-

320 (1982).    Petitioner has failed to show he qualifies for any

exception.    Accordingly, we hold that petitioner is liable for

additions to tax under section 6654 for the years 1994 and 1995.

Penalties

     Section 6673 permits this Court to award a penalty of up to

$25,000 to the United States when the taxpayer has maintained or

instituted an action primarily for delay or the taxpayer’s

position is frivolous or groundless.    See sec. 6673.

     This is not the first time petitioner has asserted baseless

arguments and used delay tactics.    Petitioner previously made the

same frivolous arguments in this Court and was admonished for

“[presenting] to the Court nothing more than tax protester

rhetoric and legalistic gibberish, which have absolutely no merit
                                 - 9 -

and deserve no further attention from this Court.”     Howard v.

Commissioner, T.C. Memo. 1998-57.

     Petitioner has knowingly and repeatedly advocated frivolous

and groundless positions.    His conduct has wasted the time and

resources of this Court.     Accordingly, a penalty is awarded to

the United States under section 6673 in the amount of $5,000.


                                 An appropriate order will be issued

                            granting respondent’s motion for a

                            penalty, and decision will be entered

                            under Rule 155.
