                   T.C. Summary Opinion 2004-161



                      UNITED STATES TAX COURT



                  JOHN E. BURAS, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 13004-03S.              Filed November 29, 2004.


     John E. Buras, pro se.

     Wendy S. Harris, for respondent.




     COUVILLION, Special Trial Judge:    This case was heard

pursuant to section 7463 in effect for the time when the petition

was filed.1   The decision to be entered is not reviewable by any

other court, and this opinion should not be cited as authority.




     1
          Unless otherwise indicated, subsequent section
references are to the Internal Revenue Code in effect for the
years at issue.
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       Pursuant to the stipulation of the parties, petitioner has

deficiencies of $949, $896, and $1,843 in Federal income taxes

for 1999, 2000, and 2001; section 6651(a)(1) additions to tax of

$237, $224, and $451, respectively, for those years; and a

section 6654(a) addition to tax of $39 for 2001.2    At trial,

respondent orally moved to impose the section 6673 addition to

tax.

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

required to file Federal income tax returns for the years at

issue, and (2) whether petitioner’s pension and Social Security

income is exempt from Federal income taxes.

       Some of the facts were stipulated.   Those facts, with the

exhibits annexed thereto, are so found and are made part hereof.

Petitioner’s legal residence at the time the petition was filed

was Springfield, Oregon.

       Petitioner worked as a truck driver for the Motion Picture

Industry in Studio City, California, for 30 years.     During his

employment, petitioner traveled throughout the United States

hauling any equipment necessary for the Motion Picture Industry.



       2
          In the notice of deficiency issued to petitioner,
respondent had determined deficiencies of $2,287.50, $2,234.50,
and $3,811.70 in petitioner’s Federal income taxes and added sec.
6651(a)(1) additions of $571.88, $558.63, and $952.92, and sec.
6654(a) additions of $110.72, $119.35, and $152.32, for the
taxable years 1999, 2000, and 2001, respectively. The
stipulation of facts agreed to and submitted by both parties to
the Court listed, without explanation, the new, adjusted amounts.
                               - 3 -

When he retired in 1991, petitioner qualified for a pension from

the Motion Picture Industry.

     Petitioner received benefits from his retirement account

with the Motion Picture Industry Pension Plan of Studio City,

California (Pension Plan), of $13,385 during taxable year 1999.

During the same year, petitioner also received Social Security

benefits of $15,570.   Petitioner did not file a Federal income

tax return for taxable year 1999.   During taxable year 2000,

petitioner received Pension Plan retirement proceeds of $14,185

and Social Security benefits of $15,954.    Petitioner also did not

file a Federal income tax return for 2000.    Finally, for taxable

year 2001, petitioner did not file a Federal income tax return

even though he had received Pension Plan retirement proceeds of

$19,878 and Social Security benefits of $16,548.    Petitioner

contends he had no obligation to file income tax returns for the

taxable years 1999, 2000, and 2001.

     Sometime after his retirement from the Motion Picture

Industry, petitioner became an evangelist and associate pastor in

World’s Prayers Answered Church of God.    Petitioner grew up in

the church; his mother was a minister and ordained pastor in the

church.   Although petitioner was not an ordained minister, he had

assisted his mother in her capacity for 50 or 60 years.

Petitioner’s specific church duties were unclear, although he
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testified that he gave much of his income to the poor “for God’s

work”.

     Petitioner presented two arguments as to why he should not

be required to pay Federal income tax on his Pension Plan

payments and Social Security benefits.   He first argued that his

Pension Plan payments and Social Security benefits qualified as

exempt income because he serves as an evangelist and associate

pastor in the World’s Prayers Answered Church of God.   In the

alternative, petitioner considered himself an agent of his

religious order, the church, and viewed his income as

remuneration directly to the principal, the church, to be used

for its charitable purposes.

     To support his assertion that his Pension Plan payments and

Social Security benefits were exempt from Federal income tax,

petitioner cited section 31.3401(a)(9)-1, Employment Tax Regs.

He interpreted this section to mean that any wages, regardless of

source, that a minister earns while serving in a church are

exempt from Federal income tax.   The Court rejects that argument.

Section 31.3401(a)(9)-1, Employment Tax Regs., expressly states

that the definition of “wages” does not include moneys paid for

services performed by a member of a religious order that are

required by that order.

     Petitioner was not paid any salary, wages, or other

compensation by the church for his services to the church.    His
                                - 5 -

sole income was his Pension Plan payments and Social Security

benefits.   He did not receive this income as a minister but as a

direct result of his 30 years of employment with the Motion

Picture Industry.   Petitioner’s Pension Plan payments and Social

Security benefits were based on past services and are expressly

includable in gross income.   See sec. 61(a)(11); sec. 1.61-11(a),

Income Tax Regs.    The income he received is not exempt from tax,

and petitioner is required to pay Federal income taxes on it.

     Petitioner’s second argument appears to be that he was an

agent of his religious order and his Pension Plan payments and

Social Security benefits were remuneration directly to the

principal, the order, and that, since charitable organizations

are not taxed, his retirement income is not taxable.      His

testimony basically concluded that, because the church was not

taxed, and he was acting on behalf of the church by giving his

money to do the “work of the Lord”, then he likewise should not

be taxed.   The Court rejects that argument, which has no more

merit than petitioner’s first argument.

     Respondent cited Fogarty v. United States, 780 F.2d 1005

(Fed. Cir. 1986).   In Fogarty, a Catholic priest contracted to

teach religion classes at a public university.   He taught for 2

years, and, during his tenure, the university deposited checks in

a checking account in the name of the church, an account on which

the priest was an authorized signatory.    Id. at 1007.    Under the
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Canon Law of the church, the priest had no right to receive,

direct the use of, or dispose of the salary for his own benefit.

His salary went directly to the church, and the church provided

him with a place to live and minimal living expenses.   The court

held that the priest was not exempt from filing a Federal income

tax return and paying taxes on the income, even though he taught

at the express direction of the church, and his earnings were

paid directly to the church.

       Unlike the taxpayer's income in Fogarty, petitioner’s income

was wholly unconnected with his work for the church.

Additionally, petitioner first paid his rent and living expenses

before dispersing the remainder as he saw fit.   Unlike the

taxpayer in Fogarty, petitioner did not transfer his entire

paycheck to his church but merely dispersed funds to various

people and causes.    Although petitioner contends he gave much of

his Pension Plan payments and Social Security benefits to “do the

work of the Lord” on behalf of the church, this does not relieve

him from the obligation of paying Federal income taxes on his

income.    These actions do not bestow a tax-exempt status on him.

Respondent, therefore, is sustained.    As a result, petitioner is

also liable for the sections 6651(a)(1) and 6654(a) additions to

tax.

       At trial, respondent orally moved for the imposition of the

section 6673 penalty.    Section 6673 allows the Court to impose a
                                - 7 -

penalty, in an amount up to $25,000, on a taxpayer if the

position or positions asserted in the case are frivolous or

groundless.   Sec. 6673(a)(1)(B).

     Petitioner’s arguments were those of a classic tax

protester.    Petitioner stated at trial that he “was taught that

taxes were a slavery upon the people”.     While petitioner

professed that he was not opposed to taxes, he was of the view

that he should pay only a “legal, lawful, constitutional tax”.

Petitioner did not define what he considered to be a legal tax,

asserting simply he did not believe he should be required to pay

taxes, even though he admitted his income did not come from the

church.   Finally, petitioner acknowledged that he had appeared

before this Court at least once before and argued the same issue.

The Court also notes that in United States v. Buras, 633 F.2d

1356 (9th Cir. 1980), petitioner was convicted of willful failure

to file Federal income tax returns.     On this record, the Court

will grant respondent’s oral motion and impose a penalty of $500

on petitioner for instituting a frivolous and groundless

petition.

     Reviewed and adopted as the report of the Small Tax Case

Division.

                                An appropriate order and decision

                           for respondent will be entered.
