                  T.C. Memo. 2000-26



                UNITED STATES TAX COURT



           RUSSELL S. GREENE, Petitioner v.
     COMMISSIONER OF INTERNAL REVENUE, Respondent



Docket No. 15225-98.             Filed January 21, 2000.



     P, maintaining that income tax could not
constitutionally be imposed on his earnings, did not file
income tax returns for the taxable years 1992 through 1996.
R determined deficiencies for individual income taxes and
self-employment taxes attributable to compensation,
interest, dividends, and capital gain received by P. R
further determined an addition to tax under sec. 6651(a),
I.R.C., for failure to file.
     Held: P is subject to Federal income tax statutes and
is liable for the deficiencies determined by R.
     Held, further, P is liable for the sec. 6651(a),
I.R.C., delinquency addition to tax for failure to file.
     Held, further, on the Court’s own motion, P is liable
for a penalty in the amount of $1,000, pursuant to sec.
6673(a), I.R.C., for asserting a frivolous and groundless
position in this proceeding.
                                - 2 -

     Russell S. Greene, pro se.

     Mark A. Weiner, for respondent.



                        MEMORANDUM OPINION


     NIMS, Judge:   Respondent determined the following

deficiencies and additions to tax with respect to petitioner’s

Federal income taxes for the taxable years 1992 through 1996:

         Taxable            Income Tax         Addition to Tax
           Year             Deficiency         Sec. 6651(a)(1)
          1992                  $4,494              $1,020
          1993                   3,757                    730
          1994                   9,079               2,180
          1995                   7,764               1,914
          1996                   7,121               1,378

     After concessions, the issues remaining for decision are:

     (1) Whether petitioner failed to report income from wages,

nonemployee compensation, interest, dividends, and capital gain

upon which petitioner is liable for individual Federal income

taxes;

     (2) whether petitioner is liable for self-employment taxes

pursuant to section 1401 on income earned in the form of

nonemployee compensation; and

     (3) whether petitioner is liable for the section 6651(a)(1)

addition to tax for failure to timely file income tax returns for

the taxable years 1992 through 1996.
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     Unless otherwise indicated, all section references are to

sections of the Internal Revenue Code in effect for the years in

issue, and all Rule references are to the Tax Court Rules of

Practice and Procedure.

     This case was submitted fully stipulated, and the facts are

so found.    The stipulations of the parties, with accompanying

exhibit, are incorporated herein by this reference.

                                Background

     Russell S. Greene resided in Oxnard, California, at the time

of filing his petition in this case.         Petitioner maintains that

he is not subject to Federal income taxes.         He did not file tax

returns for the taxable years 1992, 1993, 1994, 1995, and 1996.

He stipulated, however, to having received income from the

following sources, in the amounts and of the types stated:

             Payor &              1992    1993     1994     1995      1996
             (Type)
            of Income
Ventura County Shuttle, Inc.     $6,712   $5,291    $308
  (wages)
Survival Systems Staffing                 9,134    35,976
Center
  (wages)
St. Bernarine of Siena Church                600   1,800    $1,000
  (wages)
Sandra Jo Ann Nickerson                                     21,249   $25,943
  (wages)
Padre Serra Parish                2,955
  (nonemployee compensation)
St. Maximilian Kolbe Church               1,600    5,585    8,000     9,540
  (nonemployee compensation)
Patrick McDonald, Paddy Music                                 850
  (nonemployee compensation)
                                   - 4 -

St. Judes Catholic Church                                2,900
  (nonemployee compensation)
Chesne Boren Music                                         850
  (nonemployee compensation)
Bank of America                    18
  (interest)
Atlantic Financial Federal         33
Savings Bank
  (interest)
Jobee Development Company                  1,125   800   2,250   1,012
  (dividend)
Marvin Goodson, Alvin Duras –      916
Co-Trustees
  (capital gain)

     The amounts listed above as wages and nonemployee

compensation were paid to petitioner in consideration of

contractual services performed by him.        The amounts identified as

interest, dividend, and capital gain were likewise received by

petitioner as personal earnings.

                                Discussion

     Petitioner contends that Federal income tax statutes,

including sections 1, 3, 61, and 1401, may not constitutionally

be applied to a private independent contractor or citizen such as

himself.   He argues that to subject persons who are not employees

of a Government-created or -sanctioned entity to the tax laws

both contravenes the language of the statutes and constitutes a

violation of due process.       He additionally claims that, because

he is contesting the power to tax rather than the amount of tax,

the burden of proof in this matter should rest upon respondent.
                                - 5 -

       Conversely, respondent asserts that income received by

petitioner is taxable pursuant to the explicit terms of the

Internal Revenue Code.    Respondent further contends that

petitioner’s constitutional arguments are without merit, and, as

petitioner has presented no other evidence rebutting the

determinations made by respondent, the deficiencies and additions

to tax should be sustained.

       We agree with respondent that the Federal income tax

statutes are properly applicable to petitioner.    We therefore

conclude that petitioner is liable for the deficiencies as

determined by respondent and that petitioner’s failure to file

income tax returns justifies imposing the delinquency addition to

tax.

       As a threshold matter, we observe that petitioner’s efforts

to shift the burden of proof to respondent on constitutional

grounds are meritless.    The burden of proof rests on the

taxpayer, except in certain situations not relevant here.     See

Rule 142(a).    Furthermore, this burden of proof has been

uniformly applied, regardless of whether the taxpayer’s arguments

addressed the amount or the constitutionality of the tax.     See,

e.g., Larsen v. Commissioner, 765 F.2d 939, 941 (9th Cir. 1985);

Abrams v. Commissioner, 82 T.C. 403, 405 (1984); Kish v.
                               - 6 -

Commissioner, T.C. Memo. 1998-16; Minguske v. Commissioner, T.C.

Memo. 1997-573; Frami v. Commissioner, T.C. Memo. 1997-509;

Fisher v. Commissioner, T.C. Memo. 1996-277.

     As a general rule, sections 1 and 3 impose a Federal tax on

the taxable income of every individual.     Section 61(a) defines

gross income for purposes of calculating such taxable income as

“all income from whatever source derived” and specifies that

compensation for services, gains from dealings in property,

interest, and dividends are included within this broad

definition.   See sec. 61(a)(1), (3), (4), (7).

     Section 1401 then imposes an additional tax on the self-

employment income of every individual, both for old age,

survivors, and disability insurance and for hospital insurance.

The term “self-employment income” denotes “net earnings from

self-employment”.   Sec. 1402(b).   “Net earnings from self-

employment”, in turn, means “the gross income derived by an

individual from any trade or business carried on by such

individual, less the deductions allowed by this subtitle which

are attributable to such trade or business”.    Sec. 1402(a).

     Petitioner contends that private independent contractors and

citizens are not properly included within the meaning of

“individual” or “person” as used in the tax code and that to

treat them as such contravenes the principles of due process.    In

petitioner’s view, only employees of Government-created or
                                - 7 -

Government-sanctioned entities may constitutionally be subjected

to individual income tax.   Under petitioner’s theory, the

prohibited disparity results from taxing those whose income

derives in some way from a legislatively authorized entity in the

same manner as those who do not receive a similar benefit.

     This Court has repeatedly held taxpayers to be liable for

taxes on income accruing from self-employment, sole

proprietorship, or nonemployee activities, despite the tax

protester rhetoric advanced in contending for the opposite

result.    See, e.g., Kish v. Commissioner, supra; Minguske v.

Commissioner, supra; Frami v. Commissioner, supra; Fisher v.

Commissioner, supra.    Arguments by such individuals that they do

not hold the status of “taxpayer” or “person” within the meaning

of the Internal Revenue Code have been summarily dismissed as

well.   See, e.g., Kish v. Commissioner, supra; Fisher v.

Commissioner, supra.

     Petitioner’s position is untenable.   Since petitioner has

offered no further evidence establishing that respondent’s

determinations are erroneous, we hold that petitioner is liable

for the deficiencies as determined by respondent.

     In addition, section 6651(a) provides, in relevant part, as

follows:
                                - 8 -

     SEC. 6651.   FAILURE TO FILE TAX RETURN OR TO PAY TAX.

           (a) Addition to the Tax.--In case of failure-–

                (1) to file any return required under
           authority of subchapter A of chapter 61 * * * , on
           the date prescribed therefor (determined with
           regard to any extension of time for filing),
           unless it is shown that such failure is due to
           reasonable cause and not due to willful neglect,
           there shall be added to the amount required to be
           shown as tax on such return 5 percent of the
           amount of such tax if the failure is for not more
           than 1 month, with an additional 5 percent for
           each additional month or fraction thereof during
           which such failure continues, not exceeding 25
           percent in the aggregate.

     The Supreme Court has characterized the foregoing section as

imposing a civil penalty to ensure timely filing of tax returns

and as placing on the taxpayer “the heavy burden of proving both

(1) that the failure did not result from ‘willful neglect,’ and

(2) that the failure was ‘due to reasonable cause’”, in order to

escape the penalty.    United States v. Boyle, 469 U.S. 241, 245

(1985).   “Willful neglect” denotes “a conscious, intentional

failure or reckless indifference.”      Id.   “Reasonable cause”

correlates to “ordinary business care and prudence”.       Id. at 246

& n.4; sec. 301.6651-1(c)(1), Proced. & Admin. Regs.

     Here, petitioner did not file tax returns in 1992, 1993,

1994, 1995, or 1996.   Furthermore, he has offered no reason for
                                - 9 -

this failure to file other than his belief that income tax could

not constitutionally be imposed on his earnings.    In light of the

extensive authority rejecting similar arguments, we conclude that

petitioner’s failure to file was not due to reasonable cause.     We

therefore hold that petitioner is liable for the section 6651(a)

delinquency addition to tax.

     Finally, section 6673(a) authorizes this Court to impose a

penalty on its own motion and reads in pertinent part:

     SEC.   6673.   SANCTIONS AND COSTS AWARDED BY COURTS.

            (a) Tax Court Proceedings.--

                 (1) Procedures instituted primarily for
            delay, etc.--Whenever it appears to the Tax Court
            that–-

                      (A) proceedings before it have been
                 instituted or maintained by the taxpayer
                 primarily for delay,

                      (B) the taxpayer’s position in such
                 proceeding is frivolous or groundless, or

                      (C) the taxpayer unreasonably failed to
                 pursue available administrative remedies,

            the Tax Court, in its decision, may require the
            taxpayer to pay to the United States a penalty not
            in excess of $25,000.

     On this record, we find that petitioner’s position is

frivolous and groundless.    The body of case law unequivocally

upholding the constitutionality of the income tax statues and
                             - 10 -

rejecting countless tax protester challenges thereto leaves

petitioner’s contentions without merit or support.   Accordingly,

a penalty is awarded to the United States in the amount of

$1,000.

     To reflect the foregoing,



                                        Decision will be entered

                                   under Rule 155.
