                              T.C. Memo. 2017-197



                         UNITED STATES TAX COURT



               JOHN HOBART ZENTMYER, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 5692-17.                           Filed October 4, 2017.



      John Hobart Zentmyer, pro se.

      Monica I. Cendejas, for respondent.



                           MEMORANDUM OPINION


      JACOBS, Judge: Petitioner failed to file a Federal income tax return or pay

income tax for 1996. After petitioner was convicted of income tax evasion, among

other things, and served time in prison, the Internal Revenue Service (IRS)

prepared a substitute for return. On December 12, 2016, the IRS mailed petitioner

a notice of deficiency for 1996. On March 8, 2017, petitioner filed a petition in
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[*2] this Court, using the standard form provided by the Court. Petitioner filled in

all of the lines on the form and attached a document as his petition.

      On April 26, 2017, respondent filed a motion to dismiss for failure to state a

claim upon which relief can be granted (motion to dismiss) under Rule 40. On

May 9, 2017, the Court ordered petitioner to state his objections to respondent’s

motion to dismiss or file an amended petition containing clear and concise

assignments of each and every error that petitioner alleges to have been committed

by respondent, by May 30, 2017.

      On May 30, 2017, petitioner sent a document to the Court which

incorporated his (1) amended petition; (2) reply to respondent’s motion to dismiss;

and (3) motion for partial summary judgment. The Court separated this document

into its three component elements. The amended petition was filed as of May 30,

2017; the reply to respondent’s motion to dismiss and the motion for summary

judgment were filed June 5, 2017. On July 7, 2017, respondent filed a first

supplemental motion to dismiss for failure to state a claim upon which relief can

be granted (supplemental motion to dismiss). On August 22, 2017, petitioner filed

a response to respondent’s supplemental motion to dismiss. Finally, on September

5, 2017, petitioner filed a motion for judgment on the pleadings.
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[*3] For the reasons stated infra, we will grant respondent’s motion to dismiss as

supplemented by respondent’s supplemental motion to dismiss and deny as moot

petitioner’s motion for partial summary judgment and his motion for judgment on

the pleadings. Unless otherwise indicated, all section references are to the Internal

Revenue Code (Code) as amended and in effect for the year at issue, and all Rule

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

                                     Background

      The following facts are not in dispute and are derived from the pleadings,

the parties’ motions, and supporting exhibits attached thereto. The facts are stated

solely for purposes of deciding the motions before us. See Hahn v. Commissioner,

110 T.C. 140, 141 (1998); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520

(1992), aff’d, 17 F.3d 965 (7th Cir. 1994). At the time petitioner filed his petition,

he resided in California.

      In the notice of deficiency respondent determined an income tax deficiency

of $256,365, a section 6651(a)(1) addition to tax of $57,682, a section 6651(a)(2)

addition to tax of $64,091, and a section 6654 addition to tax of $13,645. The

deficiency in tax is related to petitioner’s conviction in the U.S. District Court for
                                             -4-

[*4] the Central District of California on January 31, 2005.1 Petitioner was

convicted of one count of making a false statement to a financial institution in

violation of title 18 U.S.C. sec. 1014; one count of income tax evasion in violation

of section 7201; and multiple counts of structuring financial transactions in

violation of title 31 U.S.C. sec. 5324(a)(3) and (d)(1). Petitioner was sentenced to

33 months in prison and, inter alia, ordered to pay tax restitution of $264,335 to

the United States pursuant to the terms of 18 U.S.C. sec. 3612(f)(3)(A).

          Petitioner makes his views clear on the first page of his petition, wherein he

states:

          [t]his Notice [of deficiency] shows an adjustment to a conclusion of
          law predicated on what appears to be Respondent’s implication that
          in 1996 Petitioner received a certain amount of something, and then
          claims that this adjustment resulted in a deficiency attributed to
          Petitioner.

          One can only speculate about whether there might have been a worker
          bee in a particular federal office who led to this adjustment suddenly
          popping up after a period of more than 20 years had elapsed, but this
          revelation is of no consequence because Petitioner’s instant challenge
          shifts the burden of proof to Respondent such that the Notice is void
          unless Respondent can validate the purported deficiency.

Thereafter, petitioner criticizes the notice of deficiency, asserting that it is

inadequate as a matter of law.


          1
              Petitioner’s conviction was entered on February 7, 2005.
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[*5] “We determined that you owe” is not legal support for the imposition
     of the purported tax but merely shows that Respondent went through
     the motions to satisfy itself that Petitioner is in arrears. “How we
     figured the deficiency” is not legal support for the amount due but is
     merely a statement which implies that Respondent used certain
     statute(s) that set forth the various formulae used for its calculations.
     “Amount due” is not legal support for the exaction from Petitioner’s
     personal property but is merely the amount determined by
     Respondent’s unsupported calculations.

In elaborating his position, petitioner includes numerous arguments. First,

petitioner asserts that the notice of deficiency is inadequate because “the laws that

led to the [IRS’] conclusions are nowhere to be found in Respondent’s Notice.”

      Next, petitioner asserts that the IRS failed to define the adjustments

determined in the notice of deficiency.

      These adjustments appear to be the result of Respondent’s belief that
      Petitioner is somehow culpable because he had received 738,690.20
      un-denominated things. (Id.) Nowhere in this form 4549-A is there
      any definitive statement as to what these things might be, but
      whatever they are, the end result is that purportedly Petitioner is
      supposed to supply 1,137,309.17 of them to the government.

      In the temporal realm (the real world), one cannot receive an
      abstraction. One can only receive actual physical objects, all of
      which are classified as personal property and further denominated by
      name, such as tennis ball or dollar bill. Respondent’s Notice appears
      to imply that Petitioner received a certain number of un-denominated
      physical items, as can be inferred from the numbers therein alleging
      various amounts. If this assumption is accurate, it forms the only
      antecedent fact in the entire instant matter: [sic] According to
      Respondent, Petitioner received 738,690.20 items of un-denominated
      personal property (the “total adjustments”). This implication and all
                                        -6-

[*6] other assertions in Respondent’s Notice are conclusions of law, not
     stipulations of fact, which appear to have been derived from the
     application of undisclosed law to the singular factual implication that
     Petitioner received a certain amount of personal property.

      Third, petitioner asserts that in the notice of deficiency the IRS failed to

define the tax determined.

      There are only three logical options for creating an arrearage
      traceable to the receipt of personal property: (1) a tax on the value of
      the property received, (2) an excise on the event of the receipt, or (3)
      a tax on the increase in net worth of the recipient. Respondent’s
      Notice does not disclose which of these three options is the basis for
      the purported “amount due” from Petitioner or whether Respondent
      chose another option based on logic, but Regardless [sic] of what
      Respondent believes is being taxed, the Notice does not disclose the
      specific statutes that purportedly support the tax itself or the amount
      Respondent claims is due.

      Fourth, petitioner asserts that the IRS’ aforementioned failures signify that

the IRS is taxing only an undefined abstraction.

      Without specifically defining, as opposed to merely labeling [sic],
      what is being taxed, Respondent is claiming that an undefined
      abstraction is taxable and asking Petitioner and this Court to assume
      without that it truly is taxable. Therefore, to satisfy Respondent’s
      burden of proof by at least attempting to legitimize the amount due,
      and regardless of the legal basis Respondent believes supports this
      amount or what Respondent believes is being taxed, Respondent must
      disclose (1) the statute or case law that defines legally, rather than
      merely labels, what Respondent claims is being taxed, and (2) the
      statute that imposes a tax on what has just been defined.
                                         -7-

[*7] Fifth, petitioner asserts that the statutes “disclosed” in the notice of

deficiency involve only penalties and interest. “There are no statutes disclosed

that support Respondent’s legal conclusions about what Respondent is purporting

to tax, why Respondent believes that whatever is being taxed is taxable, or that

require Petitioner to supply any of his personal property to the government.”

Petitioner further asserts that the penalties imposed would apply only if petitioner

were required to file a tax return and that respondent has failed to make such a

showing.

      Finally, petitioner asserts that the Form 4549-A, Income Tax Examination

Changes, attached to the notice of deficiency is in error because his last name was

misspelled as “Zentmeyer” and, consequently he, John Zentmyer, was never a

party to the examination.

      Respondent did not file an answer to the petition. Rather, as stated supra

p. 2, respondent filed a motion to dismiss. In his motion respondent asserts that

the petition does not meet the requirements of Rule 34(b) and that “[p]etitioner’s

disjointed filing raises several frivolous arguments” and that his contentions “bear

no merit with regard to whether the determinations set forth in the notice of

deficiency are erroneous.” Thus, respondent concludes, “[t]he document filed as

the Petition does not comply with the Rules of the Tax Court as to the form and
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[*8] content of the Petition and fails to state a claim upon which relief can be

granted.”

      In his amended petition, petitioner states:

      B. In accordance with T.C. rule 34(b), Petitioner assigns the
      following single dispositive error to Respondent’s notice:
      Respondent has already admitted in error his belief that Petitioner
      received income. In his answering MTD, Respondent states:

      “[N]owhere in the petition does [Petitioner] state any facts indicating
      that he did not receive the income that is the subject of the notice of
      deficiency.” (MTD at 4.)

      C. With this statement Respondent admits that he has not alleged
      facts in his form 4549-A because he knows, or certainly should know,
      that Petitioner could not have received income because as a matter of
      law no one has ever received income.

Continuing, petitioner states:

      Respondent appears to believe that the legal definition of income is
      “everything that comes in,” but the U.S. Supreme Court put this
      definition on the ash heap of mistaken beliefs many years ago with
      the definition of income that remains legally valid today and that is
      binding precedent for the instant case:

      “‘Income may be defined as the gain derived from capital, from labor
      [the work of a company’s employees], or from both combined,’
      provided it be understood to include profit gained through a sale or
      conversion of capital assets[.]”--Eisner v. Macomber, 252 U.S. 189,
      207 (1920).

      In his supplemental motion to dismiss respondent asserts that “[s]imilar to

the original petition, petitioner fails to state any facts indicating that he did not
                                         -9-

[*9] receive the income that is the subject of the notice of deficiency” and indeed

that the amended petition surpasses the original petition in raising frivolous

arguments.

      In his response to respondent’s supplemental motion to dismiss, petitioner

asserts that “[r]espondent admitted that Petitioner received income in his original

Motion to Dismiss (MTD. at 4), which satisfies the rule 34(b) format. However,

the legal reasoning behind this conclusion appears to have escaped Respondent’s

attention; therefore, Petitioner will again explain it but with more detail and legal

authority.” Petitioner argues:

      Although Respondent is attempting to collect an un-apportioned
      direct tax by re-naming Petitioner’s personal property “income” and
      then taxing this purported income rather than the underlying property,
      his form 4549-A contains no facts or law with which to support either
      his methodology or his calculations. Therefore, as Petitioner stated in
      his earlier submissions and re-states here, with no facts or law to
      support Respondent’s calculations, they cannot be correct as a matter
      of law.

Petitioner maintains that “income” is “classified as an abstractions [sic] because it

has no mass, shape or color, which means that income is incapable of being

received.” And he concludes:

      Respondent’s all-encompassing claim that wages are income may be
      true for some recipients under some circumstances, but lower court
      decisions that ignore the Supreme Court’s binding definition of the
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[*10] generic term “income” do not have the force of law except for the
      cases in which they were issued.

                                      Discussion

      The Commissioner’s determinations in the notice of deficiency are

presumed correct, and the taxpayer bears the burden of proving error. Rule

142(a); Welch v. Helvering, 290 U.S. 111 (1933). In challenging the

Commissioner’s determination, a petition filed by a taxpayer should be simple,

concise, and direct. Rule 31(b). The petition must provide the basis on which the

taxpayer disagrees with the determinations, supporting facts, and a prayer setting

forth the relief sought. Rule 34(b). Specifically, Rule 34(b)(4) requires that the

petition provide “[c]lear and concise assignments of each and every error which

the petitioner alleges to have been committed by the Commissioner in the

determination of the deficiency or liability. * * * Any issue not raised in the

assignments of error shall be deemed to be conceded.” While we construe all

pleadings to do substantial justice, Rule 31(d), we may dismiss a petition for

failure to state a claim upon which relief can be granted under Rule 40. Dismissal

for failure to state a claim is appropriate where, even if all of the allegations

contained in a pleading are true, a claim fails as a matter of law. See Phillips v.
                                        - 11 -

[*11] Cty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008); Cohen v.

Commissioner, 139 T.C. 299 (2012), aff’d, 550 F. App’x 10 (D.C. Cir. 2014).

      Upon review of petitioner’s petition and his amended petition, we find that

no justiciable issue has been raised. Consequently, we will grant respondent’s

motion to dismiss, as supplemented.

      Petitioner has failed to assert any error in the notice of deficiency. Instead,

he has drafted a rambling collection of tax-protester arguments. As has been said

on many occasions by many courts: “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 Rapp v. Commissioner,

774 F.2d 932, 936 (9th Cir. 1985). Nonetheless, in the hope that this opinion may

deter individuals from raising these “points” in the future, we will briefly address

petitioner’s assertions.

      Most of petitioner’s assertions may be grouped into two categories: (1) the

notice of deficiency did not spell out the laws under which the determinations

were made and (2) the IRS’ determinations were undefined abstractions and

petitioner was unable to determine whether he owed a “dollar” or a “tennis ball”.
                                        - 12 -

[*12] With respect to the first group of assertions, we have held that it is not

necessary to include a statutory citation for each adjustment. Wheeler v.

Commissioner, 127 T.C. 200, 205 (2006) (citing Jarvis v. Commissioner, 78 T.C.

646, 655-656 (1982)), aff’d, 521 F.3d 1289 (10th Cir. 2008). With respect to the

second group of assertions, we cannot help but observe that these are

quintessential examples of frivolous arguments. The Form 886-A, Explanation of

Items, attached to the notice of deficiency clearly includes U.S. dollar symbols, i.e.

“$”, and it is obvious to any reasonable person what the IRS’ deficiency

determination is. Income is not an abstraction. Were we to accept petitioner’s

position, the 16th Amendment, authorizing the income tax, would be meaningless.

      Petitioner’s final assertion--that the Form 4549-A attached to the notice of

deficiency is addressed to “John Zentmeyer” rather than petitioner, John

Zentmyer--is also frivolous. The spelling of petitioner’s surname on the form is

obviously a typographical error.

      Petitioner’s amended petition is no better than the original petition.

Petitioner asserts that not only did he not receive income, but “as a matter of law

no one has ever received income”, citing the Supreme Court’s holding in Eisner v.

Macomber, 252 U.S. 189, 207 (1920). In Macomber the Supreme Court decided

that a shareholder-taxpayer did not realize gain on the receipt of a stock dividend.
                                          - 13 -

[*13] The Court did not hold that no one has ever received income. Indeed, in

Commissioner v. Glenshaw Glass Co., 348 U.S. 426, 430-431 (1955), the Supreme

Court emphatically held that the definition of income in Macomber “was not

meant to provide a touchstone to all future gross income questions.” In other

words, the Supreme Court said that Macomber does not hold what petitioner

claims it holds. The Code provides that gross income includes all income from

whatever source derived unless excluded by law. Sec. 61; Commissioner v.

Kowalski, 434 U.S. 77, 82-83 (1977); Commissioner v. Glenshaw Glass Co., 348

U.S. at 430.

        To conclude, we find that petitioner has failed to raise a justiciable issue in

his petition. We therefore will grant respondent’s motion to dismiss filed April

26, 2017, as supplemented by respondent’s supplemental motion to dismiss filed

July 7, 2017, and dismiss petitioner’s petition. Finally, we will deny as moot

petitioner’s motion for partial summary judgment as well as petitioner’s motion

for judgment on the pleadings.

        We caution petitioner that raising frivolous arguments similar to the ones

herein in the future may subject him to penalties imposed by the Court. See sec.

6673.
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[*14] In the light of the foregoing,


                                                An appropriate order and order

                                       of dismissal will be entered.
