                              T.C. Memo. 2013-114




                        UNITED STATES TAX COURT




                   GLENN LEE SNOW, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent




      Docket No. 24783-09.                        Filed April 22, 2013.




      Glenn Lee Snow, pro se.

      Martha J. Weber, for respondent.




            MEMORANDUM FINDINGS OF FACT AND OPINION


      RUWE, Judge: In a notice of deficiency dated July 13, 2009, respondent

determined a $12,530 deficiency in petitioner’s 2007 Federal income tax and a
                                          -2-

[*2] $3,658 accuracy-related penalty under section 6662(a).1 In an answer to the

amended petition, respondent asserted an increased deficiency of $15,668 and an

increased accuracy-related penalty under section 6662(a) of $4,247. Respondent

has also filed a motion to impose a penalty under section 6673 on the ground that

petitioner’s position in this case is frivolous or groundless.

      After a concession by respondent, the issues for decision are: (1) whether

petitioner had unreported income of $73,256.44 in 2007; (2) whether petitioner is

liable for the accuracy-related penalty under section 6662(a) for 2007; and (3)

whether the Court should impose a penalty against petitioner under the provisions of

section 6673.

                                 FINDINGS OF FACT

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

facts, the supplemental stipulation of facts, and the attached exhibits are

incorporated herein by this reference. At the time the petition was filed, petitioner

resided in Tennessee.

      Petitioner timely filed a Federal income tax return for 2007. Attached to

the return were Forms 4852, Substitute for Form W-2, Wage and Tax Statement,

      1
       Unless otherwise indicated, all section references are to the Internal Revenue
Code (Code) in effect for the year at issue, and all Rule references are to the Tax
Court Rules of Practice and Procedure.
                                         -3-

[*3] or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-

Sharing Plans, IRAs, Insurance Contracts, etc., for the following employers:

Educational Broadcasting Corp.; Sound Recording Special Payments Fund; Film

Musicians Secondary Markets Fund; NBC [National Broadcasting Co.] Universal,

Inc.; Gep Atl., LLC; WB Studio Enterprises, Inc.; Nashville Talent Payment, Inc.;

Sharon’s Rose, Inc.; Opryland Hospitality, Inc.; Universal City Studios, LLP; Cast

& Crew Talent Services; and Axium Visual. On each Form 4852 petitioner

reported that his correct wages, tips, and other compensation was zero. On each

Form 4852 petitioner stated: “Amounts reported on [Form] W-2, lines 1, 3 & 5 are

INCORRECT as the private-sector Payer mischaracterized my personal Private-

Sector Pay for labor, as remuneration for a federally privileged activity. The

amounts reported on [Form] W-2 lines 2, 4 & 6 are CORRECT.” 2

      During 2007 petitioner received the following amounts as compensation for

his work as a musician:




      2
       On Form W-2, Wage and Tax Statement, that was in use in 2007, lines 1, 3,
and 5 reflect wages, tips, and other compensation; Social Security wages; and
Medicare wages, respectively. Lines 2, 4, and 6 reflect amounts that were withheld
from wages for Federal income tax; Social Security tax; and Medicare tax,
respectively. On petitioner’s 2007 return he claimed a refund of $16,684.65,
representing the amounts that were withheld on lines 2, 4, and 6 of Forms W-2.
                                         -4-

[*4]                     Payor                                        Amount

       Educational Broadcasting Corp.                                  $1,200
       Sound Recording Special Payments Fund                               88
       Film Musicians Secondary Markets Fund                               73
       NBC Universal, Inc.                                                876
       Gep Atl. LLC                                                      1,840
       WB Studio Enterprises, Inc.                                          98
       Nashville Talent Payment, Inc.                                   2,344
       Sharon’s Rose, Inc.                                              62,866
       Opryland Hospitality, Inc.                                        1,254
       Universal City Studios, LLP                                          15
       Cast & Crew Talent Services                                         846
       Axium Visual                                                      1,222
        Total                                                           72,722

The above payors each issued a Form W-2, reflecting the amounts paid and the

amounts withheld for taxes, Social Security, and Medicare. Petitioner did not report

as income on his 2007 return any of the compensation that he received for his work

as a musician.

       Petitioner had a $534.44 gain from the sale of stock in 2007, which he did not

report on his 2007 return.

                                      OPINION

       Over the course of petitioner’s dealings with the Internal Revenue Service he

has articulated various theories about why he should not pay taxes. The legal

theories petitioner espoused in a prior case have recently been rejected as frivolous

by this Court and the Court of Appeals for the Sixth Circuit. See Snow v.
                                         -5-

[*5] Commissioner, T.C. Dkt. No. 5675-10L (Apr. 18, 2011) (order and decision),

aff’d per order, No. 11-1911 (6th Cir. Sept. 19, 2012).

      At the beginning of the trial petitioner stated: “I hereby abandon all issues

considered frivolous by this Court, unknowingly proffered by me.” Unfortunately,

he then proceeded to claim that he was not taxable on the amounts of compensation

he received during 2007 because the payors were not “Subtitle C statutory

employers.” This is just another groundless argument.3 It is clear that all of the

unreported income that petitioner received was either compensation for his personal

services as a musician or gain from the sale of securities. We hold that these

amounts are includable in petitioner’s income regardless of the legal status of the

payors. See sec. 61(a)(1), (3); Richmond v. Commissioner, T.C. Memo. 2011-251,

2011 Tax Ct. Memo LEXIS 246, at *3, aff’d, 474 Fed. Appx. 754 (10th Cir. 2012).

      As to the various positions that petitioner has raised at one time or another,

“[w]e perceive no need to refute * * * [them] 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);




      3
     This Court rejected a similar argument in Slingsby v. Commissioner, T.C.
Memo. 2011-3, 2011 Tax Ct. Memo LEXIS 2, at *4-*5.
                                         -6-

[*6] see also Schiff v. Commissioner, 751 F.2d 116 (2d Cir. 1984), aff’g T.C.

Memo. 1984-223; Craig v. Commissioner, 119 T.C. 252 (2002).

      Section 6662(a) and (b)(1) and (2) provides for a penalty of 20% on the

portion of an underpayment which is attributable to, among other things, a

substantial understatement of income tax or negligence or disregard of rules or

regulations. A substantial understatement of income tax exists if the amount of the

understatement exceeds the greater of 10% of the tax required to be shown on the

return or $5,000. Sec. 6662(d)(1)(A). An understatement is the excess of the

amount of tax required to be shown on the return for the taxable year over the

amount of tax shown on the return, reduced by any rebate. Sec. 6662(d)(2)(A).

      We hold that petitioner is liable for the accuracy-related penalty under section

6662(a) for 2007. Petitioner substantially understated his tax liability for 2007 and

was negligent because he failed to report a substantial amount of income on his

2007 return. Sec. 1.6662-3(b)(1), Income Tax Regs.

      Respondent has also moved for the imposition of a penalty pursuant to

section 6673(a)(1). Section 6673(a)(1) authorizes the Tax Court to require a

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

appears that proceedings have been instituted or maintained by the taxpayer

primarily for delay or that the taxpayer’s position in such proceeding is frivolous
                                         -7-

[*7] or groundless. In a previous case involving petitioner, we imposed a $3,000

penalty under section 6673 against him and the Court of Appeals imposed an

additional sanction of $4,000. See Snow v. Commissioner, T.C. Dkt. No. 5675-

10L.

       Before trial petitioner filed motions that we denied as frivolous; and we

warned petitioner that if he continued to advance such positions, we would be

inclined to impose a section 6673 penalty. At the conclusion of the trial we again

warned petitioner about continuing to make frivolous or groundless arguments.

Nevertheless, petitioner persisted in making such arguments in his posttrial brief.

We are convinced that petitioner instituted the present proceeding primarily for

delay and that petitioner regards this proceeding as nothing but a vehicle to protest

the tax laws of this country and to espouse his own misguided views, which we

regard as frivolous and groundless. Petitioner has wasted the Court’s time, as well

as respondent’s. We will grant respondent’s motion and impose a penalty on

petitioner pursuant to section 6673(a) of $8,000.

       To reflect the foregoing,


                                                     An appropriate order will be

                                               issued, and decision will be entered

                                               under Rule 155.
