                        T.C. Memo. 2006-154



                      UNITED STATES TAX COURT



                PATRICK J. MCGOWAN, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 24699-04.             Filed July 27, 2006.



     Patrick J. McGowan, pro se.

     Michael A. Pesavento, for respondent.



                        MEMORANDUM OPINION


     WELLS, Judge:   Respondent determined deficiencies in income

tax and additions to tax pursuant to sections 6651(a)(1) and 6654

for petitioner’s taxable years 1997 and 2002 as follows:
                                - 2 -

     Year        Deficiency     Sec. 6651(a)(1)     Sec. 6654

     1997          $1,991           $497.75          $106.50

     2002           7,666            479.50            N/A

Unless otherwise indicated, all section references are to the

Internal Revenue Code, as amended, and all Rule references are to

the Tax Court Rules of Practice and Procedure.    The issues we

must decide are:

     1.     Whether petitioner received $6,531 in wages from Sprint

Management Co. (Sprint) and $13,526 in wages from Janus Service

Corp. (Janus) during taxable year 1997.1

     2.     Whether petitioner received $47,074 in wages from

Merrill Lynch, Pierce, Fenner, & Smith Inc. (Merrill Lynch) and

$2,534 in unemployment compensation from the Colorado Division of

Unemployment and Training (unemployment compensation) during

taxable year 2002.

     3.     Whether petitioner is liable for an addition to tax

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

taxable years 1997 and 2002.


     1
      At the conclusion of trial, respondent moved to amend the
pleadings to conform to the record in order to assert an addition
to tax under sec. 6651(f)(1) for fraudulent failure to file for
taxable year 1997 based on petitioner’s admission that he claimed
nine personal exemptions on his Forms W-4, Employee’s Withholding
Allowance Certificate. Although petitioner’s actions and
testimony clearly show that he is a tax protester, the record
fails to persuade us by clear and convincing evidence that
petitioner’s actions were fraudulent. Sec. 7454(a); Rule 142(b);
Clayton v. Commissioner, 102 T.C. 632 (1994). Accordingly,
respondent’s motion will be denied.
                               - 3 -

     4.   Whether petitioner is liable for an addition to tax

under section 6654 for failure to pay estimated income tax for

taxable year 1997.

     5.   Whether the Court should impose a section 6673 penalty

on petitioner.

                            Background

     At the time of filing the petition in the instant case,

petitioner resided in Jacksonville, Florida.    Petitioner has a 15

year history of not filing Federal income tax returns and did not

file returns for the years in issue.     Respondent determined that

petitioner received $6,531 in wages from Sprint and $13,526 in

wages from Janus during taxable year 1997 and $47,074 in wages

from Merrill Lynch and $2,534 in unemployment compensation during

taxable year 2002.   Accordingly, respondent sent petitioner

separate notices of deficiency for each year in issue, and

petitioner petitioned this Court.

                            Discussion

     As a general rule, the Commissioner’s determinations in the

notice of deficiency are presumed correct, and the burden of

proving an error is on the taxpayer.2    Rule 142(a); Welch v.

Helvering, 290 U.S. 111, 115 (1933).     Under section 7491(c), the



     2
      Sec. 7491(a)(1) does not apply in the instant case to shift
the burden of proof to respondent because petitioner did not
introduce credible evidence or comply with the substantiation and
record keeping requirements of sec. 7491(a)(2).
                                - 4 -

Commissioner’s burden of production is to produce evidence that

it is appropriate to impose the relevant penalty, addition to

tax, or additional amount.    Higbee v. Commissioner, 116 T.C. 438,

446 (2001).   The Commissioner, however, does not have the

obligation to introduce evidence regarding reasonable cause.        Id.

at 446-447.

     Gross income means income from whatever source derived

including compensation for services and unemployment

compensation.   Sec. 61(a)(1); George v. Commissioner, T.C. Memo.

2006-121.   At trial, petitioner’s contentions consisted of

nothing but frivolous tax protester arguments.    Petitioner

repeatedly asked what section of the Internal Revenue Code

required him to pay tax.    Petitioner testified that he worked for

Sprint, Janus, and Merrill Lynch, that he earned wages from each

of those employers, and that he applied for unemployment

compensation.   Petitioner further testified:   “I’m assuming, in

hindsight, that I must have been paid.”    Petitioner disputed,

however, that he ever received income.    When respondent asked

petitioner how he supported himself, petitioner testified:     “I

worked for a company that paid me wages that were not part of any

income as I know income.”    Petitioner’s argument that there is no

Code section requiring him to pay tax has been rejected by every

court that has addressed the issue and is the type of frivolous
                                 - 5 -

tax protester argument that wastes the Court’s time and

resources.

     We do not address petitioner’s argument with somber

reasoning and copious citations of precedent, as to do so might

suggest that petitioner’s arguments possess some degree of

colorable merit.   See Crain v. Commissioner, 737 F.2d 1417, 1417

(5th Cir. 1984).   Accordingly, we hold that petitioner is liable

for the amounts of the deficiencies in his income tax set forth

in the notices of deficiency for taxable years 1997 and 2002.

     Section 6651(a)(1) imposes an addition to tax for a failure

to file an income tax return.    A taxpayer may be relieved of the

additions to tax, however, if he can demonstrate that the failure

is “due to reasonable cause and not to willful neglect”.        Higbee

v. Commissioner, supra at 447.    Willful neglect means intentional

failure or reckless indifference.        United States v. Boyle, 469

U.S. 241, 245 (1985).   Section 301.6651-1(c)(1), Proced. & Admin.

Regs., provides that, if a taxpayer exercises ordinary business

care and prudence and is nevertheless unable to file on time,

then the delay is due to reasonable cause.       Petitioner did not

timely file tax returns during the years in issue because he does

not believe that there is a Code section requiring him to pay

income tax.   Misguided interpretations of the Constitution or

other typical tax protester arguments are not reasonable cause.

See Yoder v. Commissioner, T.C. Memo. 1990-116.       Accordingly, we
                               - 6 -

hold that petitioner is liable for the additions to tax under

section 6651(a)(1) for taxable years 1997 and 2002.

     Section 6654(a) imposes an addition to tax for failure to

pay estimated income tax.   Section 6654 applies where prepayments

of tax, either through withholdings or by making estimated

quarterly payments, do not equal the percentage of total

liability required under the statute,3 unless one of the several

statutory exceptions under section 6654(e) applies.     Niedringhaus

v. Commissioner, 99 T.C. 202, 222 (1992).    In his petition,

petitioner only raised typical tax protester arguments that he

did not owe tax and did not specifically assign error to the

section 6654 penalty.   Accordingly, petitioner is deemed to have

conceded the section 6654 penalty.     Rule 34(b); Funk v.

Commissioner, 123 T.C. 213, 218 (2004); Swain v. Commissioner,

118 T.C. 358, 365 (2002); We therefore hold that petitioner is

liable for the addition to tax under section 6654 for taxable

year 1997.




     3
      Sec. 6654(d) requires quarterly installment payments of 25
percent of the required annual payment. Sec. 6654(d)(1)(A). In
cases where no return was filed for the year in issue and the
preceding taxable year, the required annual payment is 90 percent
of the tax due for the year in issue. Sec. 6654(d)(1)(B)(i),
(flush language).

     The record in the instant case demonstrates that petitioner
failed to make quarterly payments of 90 percent of the tax due
for taxable year 1997 and did not file a tax return for taxable
year 1996. Accordingly, sec. 6654 applies.
                                 - 7 -

     Section 6673(a)(1) provides that this Court may require the

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

appears to this Court:   (a) The proceedings were instituted or

maintained by the taxpayer primarily for delay; (b) the

taxpayer’s position is frivolous or groundless; or (c) the

taxpayer unreasonably failed to pursue available administrative

remedies.   Respondent has moved that the Court impose a penalty

in the instant case because petitioner’s arguments are frivolous

and groundless.   Petitioner received several warnings, including

one at the beginning of trial, that this Court could impose a

penalty if petitioner persisted in raising frivolous arguments.

Despite being warned, petitioner nonetheless raised frivolous

arguments and wasted the Court’s time.       Accordingly, we shall

impose a penalty on petitioner of $5,000 pursuant to section

6673.

     To reflect the foregoing,


                                              An appropriate order and

                                         decision will be entered.
