                         T.C. Memo. 1999-187



                       UNITED STATES TAX COURT



                   STEVEN WESLEY NOE, Petitioner v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent



       Docket No. 19177-97.                Filed June 8, 1999.




       Steven Wesley Noe, pro se.

       Christal W. Hillstead, for respondent.



                          MEMORANDUM OPINION

       WOLFE, Special Trial Judge:   This case was heard pursuant to

the provisions of section 7443A(b)(3) and Rules 180, 181, and

182.    All section references are to the Internal Revenue Code in

effect for the tax years in issue, unless otherwise indicated.

All Rule references are to the Tax Court Rules of Practice and

Procedure.
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Background

     Respondent determined deficiencies in, and additions to,

petitioner's Federal income taxes for 1992 and 1993 as follows:

                                      Additions to Tax
     Year        Deficiency     Sec. 6651(a)(1)     Sec. 6654
     1992          $716              $161               $30
     1993           619               155                23

     The issues for decision are:   (1) Whether petitioner is

subject to the Federal income tax laws and, more specifically,

whether he is required to pay income tax on the wages paid to him

during the years in issue; (2) whether petitioner is liable for

additions to tax under section 6651(a)(1) for failure to file

timely an income tax return for the years 1992 and 1993; (3)

whether petitioner is liable for additions to tax under section

6654(a) for failure to pay estimated income tax for the years

1992 and 1993; and (4) whether petitioner is liable for a penalty

under section 6673(a).

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

The stipulation of facts and the attached exhibits are

incorporated herein by this reference.   Petitioner resided in

Veradale, Washington, when his petition was filed.

     Petitioner did not file Federal income tax returns for the

years 1992 and 1993.   On July 11, 1997, respondent issued a

statutory notice of deficiency to petitioner for the years 1992

and 1993 based upon taxable income reports issued by third

parties.    The amounts of the deficiencies in tax and additions to
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tax determined by respondent with respect to petitioner for 1992

and 1993 are set forth above.   During 1992, petitioner received

wages from Sunshine Nursing Homes, Inc., in the amount of $6,726,

from New Hope, Inc., in the amount of $1,142, and from Inland

Nurse Providers, Inc., in the amount $2,810.   During 1993,

petitioner received wages from Loganhurst Health Care in the

amount of $7,908.   In 1993, petitioner also received unemployment

compensation from the State of Washington in the amount of

$2,278.   The fact of these payments and the amounts have been

stipulated by the parties.   Petitioner and respondent have

stipulated that if petitioner had filed a tax return for 1992 and

1993, he would be entitled to no more than a standard deduction

based on single filing status for those years.   The parties also

have stipulated that in 1992, $71 was withheld from petitioner's

wages by Inland Nurse Providers, Inc., and that petitioner made

no other payments of estimated tax for 1992 and no payments of

estimated tax whatsoever for 1993.

     At trial, respondent moved for a penalty under section 6673

against petitioner on the grounds that he had instituted and

maintained the proceedings primarily for delay and that his

positions were frivolous and groundless.

Discussion

     Petitioner presented no evidence at trial to refute

respondent's determinations.    He stipulated to the amount of his
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earnings for 1992 and 1993.   Petitioner argues, inter alia, that

(1) the income tax is an invalid excise tax; (2) he is not

subject to the income tax since he is a resident of the United

States and a citizen of the State of Washington whose citizenship

does not depend upon immigration and naturalization or upon the

13th, 14th, and 15th Amendments; he is not subject to tax on his

earnings from his labor; and the Commissioner is only authorized

to collect taxes paid by stamp, whereas petitioner is not engaged

in an activity that requires him to buy stamps.

     Petitioner's positions are wholly frivolous.   The 16th

Amendment authorizes the imposition of a nonapportioned direct

income tax on U.S. citizens residing in the United States.     See

In re Becraft, 885 F.2d 547 (9th Cir. 1989); Wilcox v.

Commissioner, 848 F.2d 1007, 1008 (9th Cir. 1988), affg. T.C.

Memo. 1987-225; Rowlee v. Commissioner, 80 T.C. 1111, 1121-1122

(1983).   Furthermore, U.S. citizens' wages are income, and this

income may be taxed without apportionment.   See Wilcox v.

Commissioner, supra; Rowlee v. Commissioner, supra.   Petitioner's

other arguments are equally misguided, and such arguments have

been repeatedly rejected by this and other Federal courts.     See,

e.g., Wilcox v. Commissioner, supra (paying taxes is not

voluntary); Talmage v. Commissioner, T.C. Memo. 1996-114 n.3

(section 6201 grants assessment authority with respect to all

taxes as to which returns or lists are made under the code,
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including the income tax), affd. per curiam without published

opinion 101 F.3d 695 (4th Cir. 1996).

     Petitioner has not presented this Court with a valid

argument that would rebut respondent's determination.

Accordingly, respondent's determination of deficiencies in

petitioner's income tax for the years 1992 and 1993 is sustained.

     Section 6651(a) imposes an addition to tax for a taxpayer's

failure to file a required return on or before the specified

filing date, including extensions.      The addition to tax is

inapplicable, however, if the taxpayer shows that the failure to

file the return was due to reasonable cause and not due to

willful neglect.    See sec. 6651(a)(1).    To prove "reasonable

cause", a taxpayer must show that he exercised ordinary business

care and prudence and still was unable to file the return within

the statutorily prescribed time.    See Crocker v. Commissioner, 92

T.C. 899, 913 (1989).    Whether the elements that constitute

reasonable cause are present in any given situation is a question

of fact.    See United States v. Boyle, 469 U.S. 241, 249 n.8

(1985).    In the present case, petitioner admitted that he had

failed or refused to file a tax return for 1992 and 1993.

Petitioner has not asserted and we do not find that petitioner's

failure to file was due to reasonable cause.      Respondent's

determination of an addition to tax under section 6651(a) for the

years 1992 and 1993 is sustained.
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     Section 6654(a) imposes an addition to tax equal to the

amount of the underpayment multiplied by the underpayment rate

established under section 6621 for the period of the

underpayment.   The addition to tax under section 6654(a) is

mandatory unless petitioner can prove that he complies with one

of the exceptions contained in section 6654(e).   See Baldwin v.

Commissioner, 84 T.C. 859, 871 (1985); Grosshandler v.

Commissioner, 75 T.C. 1, 20-21 (1980).   Petitioner did not

introduce evidence on this issue, and we sustain respondent's

determination of the addition to tax under section 6654.

     Section 6673(a)(1) allows this Court to award a penalty not

in excess of $25,000 when proceedings have been instituted or

maintained primarily for delay, or where the taxpayer's position

is frivolous or groundless; i.e., it is contrary to established

law and unsupported by a reasoned, colorable argument for a

change in the law.   See Coleman v. Commissioner, 791 F.2d 68, 71

(7th Cir. 1986); Kish v. Commissioner, T.C. Memo. 1998-16;

Talmage v. Commissioner, supra.   In our opinion, such is the case

here, and we believe that a penalty is appropriate.    The

positions argued by petitioner are frivolous and wholly without

merit.   Moreover, we previously rejected petitioner's frivolous

arguments when he raised them by motion for summary judgment.

Accordingly, petitioner was fully warned of our opinion with
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regard to his arguments.   We will require petitioner to pay a

$500 penalty under section 6673(a).



                                       An order will be issued

                               granting respondent's motion for

                               a penalty, and decision will be

                               entered for respondent.
