                  T.C. Summary Opinion 2005-124



                       UNITED STATES TAX COURT



                 MICHAEL T. CROW, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent


     Docket Nos. 1611-04S, 6123-04S.      Filed August 15, 2005.


     Michael T. Crow, pro se.

     Thomas M. Newman, for respondent.



     COUVILLION, Special Trial Judge:    These consolidated cases

were heard pursuant to section 7463 in effect at the time the

petition was filed.1   The decisions to be entered are 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. All Rule references are to the Tax Court Rules of
Practice and Procedure.
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     In separate notices of deficiency, respondent determined the

following deficiencies and additions to tax for petitioner’s 2001

and 2002 tax years:

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

     2001     $13,060.70         $  636.18          $ 55.01
     2002       9,988.00          1,925.25           248.80


At trial, respondent filed written motions for imposition of the

penalty under section 6673(a).

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

liable for Federal income taxes for the 2 years in question on

compensation he received from his employer for services he

performed as an employee, for State income tax refunds, and, for

the year 2001, on distributions received from a qualified pension

plan; (2) whether petitioner is liable for the additions to tax

under sections 6651(a)(1) and 6654 for the 2 years in question;

and (3) whether petitioner is liable for the section 6673(a)

penalty for the 2 years before the Court.

     At trial, respondent conceded an income adjustment for the

2002 tax year for a State income tax refund of $3,186.

Respondent agreed that petitioner did not claim an itemized

deduction for State income taxes on his 2001 Federal income tax

return; therefore, the refund of $3,186 to him during the year

2002 did not constitute income.
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     Some of the facts were stipulated, and those facts, with the

annexed exhibits, are so found and are incorporated herein by

reference.   At the time the petitions were filed, petitioner was

a legal resident of Manteca, California.

     During the years in question, petitioner was employed as a

mechanic by a trucking company, Martin-Brower.    He received wages

of $58,037 and $55,021, respectively, for the 2 years at issue.

There was no testimony at trial by petitioner of the $7,167

distribution he received during the year 2001 from First Trust

Corp., administrator of a qualified pension plan.    That

adjustment, therefore, is deemed conceded.

     On his Federal income tax return for each of the 2 years at

issue, petitioner claimed single filing status, a personal

exemption for himself, and the standard deduction.    All other

lines on the returns are listed as “-0-”, except for the Federal

income taxes withheld, all of which were listed and claimed as

overpayments, which were to be refunded to him.   The withholdings

shown on the returns are $10,516 and $2,287.74, respectively, for

2001 and 2002.   The 2001 return is stamped received by the IRS on

April 30, 2002, and the 2002 return is stamped May 1, 2003.    Both

returns also bear a stamp “Frivolous Return Program, Internal

Revenue Service, Fresno, CA”.   Petitioner attached to each return

a two-page signed typewritten statement containing classic tax

protester statements such as that no section of the Internal
                               - 4 -


Revenue Code establishes an income tax liability; that his return

was not being filed voluntarily but was being filed in order to

avoid prosecution for failure to file a return; that, in the

Ninth Circuit of the Federal Appellate Court system, a tax return

(Form 1040) with all zeros on the return constitutes a valid

return; and that he had zero income because there is no reference

in the Internal Revenue Code for the taxation of wages, salaries,

or compensation for personal services, along with several other

arguments of this nature.   Petitioner also attached to his

returns the Forms W-2, Wage and Tax Statement, that had been

issued by his employer.

     Petitioner filed identical petitions in response to each

notice of deficiency, alleging:


     Income tax is based on voluntary compliance and self-
     assessment income is not defined in the IRC. “Income” is
     defined by the Supreme Court as “Gains and profits derived
     from corporate activities”. I never received a “Statutory”
     Notice Demand for payment. I am not “Statutorily Liable”
     for “Income” tax. I was never granted an administrative
     hearing as per due process. No IRS agent ever produced a
     “Delegation of Authority” to change my 1040 or assess any
     deficiency.


     The Court rejects entirely petitioner’s allegations and the

same arguments he made at trial.   Section 61(a)(1) defines gross

income to include all income from whatever source derived,

including, but not limited to, compensation for services

rendered, whether such services are for a corporation, an
                                 - 5 -


individual, or in a self-employed activity.    Petitioner’s

protester arguments have been heard on numerous occasions by this

Court, as well as other courts, and have been consistently

rejected.   The Court sees no need to further respond to

petitioner’s arguments with somber reasoning and copious

citations of precedent, as to do so might suggest that his

argument possesses some degree of colorable merit.    See Crain v.

Commissioner, 737 F.2d 1417 (5th Cir. 1984).    In short,

petitioner is a taxpayer subject to the income tax laws, and he

is liable for income tax on the compensation and other income

paid to him during the years in question, none of which was

questioned or denied.   His arguments are rejected.

     Although not addressed by petitioner at trial, his gross

income for 2001 includes the distribution to him of proceeds of a

qualified pension plan.   Sec. 72.   Petitioner did not deny that

he received the distribution, and he presented no argument

relating thereto.   As noted earlier, the Court considers that

income adjustment as conceded.

     With respect to the second issue, section 6651(a)(1)

provides for an addition to tax in the event a taxpayer fails to

file a timely return (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.    Petitioner’s

2001 return was received by respondent on April 30, 2002.     His
                                - 6 -


2002 return was received by respondent on May 1, 2003.    United

States citizens must file income tax returns on or before the

15th day of the fourth month following the end of their taxable

years.   Sec. 1.6072-1(a), Income Tax Regs.   That date, for a

calendar year taxpayer is April 15th.   Petitioner’s returns,

therefore, for the years 2001 and 2002 were required to be filed

on or before, respectively, April 15, 2002, and April 15, 2003.

They were not received by respondent until April 30, 2002, and

May 1, 2002, respectively.   Respondent, therefore, is sustained

on this issue.2

     Respondent determined that petitioner was liable for the

addition to tax under section 6654(a) for failure to pay

estimated tax.    This addition to tax is applicable where there is

an underpayment of estimated tax, subject to exceptions or

waivers that are not applicable here.   Sec. 6654(e).   In general,

estimated income tax payments are used to provide for payment of

income taxes not collected through withholding.    Section 6654(c)

provides for four quarterly installments.     Income taxes withheld

from salaries or wages apply toward the amount of each required

quarterly installment; however, to the extent withholdings do not

satisfy the required quarterly installments, the taxpayer is


     2
      The Court notes that, even though the tax returns of
petitioner contained primarily zeroes, respondent treated the
returns as returns and did not impose a failure to file addition
to tax against petitioner. Sec. 7203.
                                 - 7 -


required to make supplemental quarterly payments of estimated

taxes.    Sec. 6654(f).   Under section 6654(d), the amount of the

four quarterly installments (including taxes withheld) generally

must equal 90 percent of the tax for the year, or 100 percent of

the tax for the preceding taxable year, whichever is less.    Where

there is an underpayment of estimated tax, there is no

exonerating provision, such as reasonable cause or lack of

willful neglect.    Estate of Ruben v. Commissioner, 33 T.C. 1071

(1960).

     As noted earlier, taxes were withheld from petitioner’s

earnings for each of the years in question; therefore,

petitioner’s liability for the section 6654 addition to tax will

depend on whether, after these prepayments are credited and a

further credit is allowed in the Rule 155 computation, because of

respondent’s concession that the $3,186 State income tax refund

received by petitioner during 2002 did not constitute gross

income as determined in the notice of deficiency, the balances

due are within or without the 90-percent rule of section 6654(d).

To that extent, respondent is sustained on this issue.

     Respondent filed a motion for imposition of the penalty

under section 6673.    Section 6673(a)(1) authorizes this Court to

require a taxpayer to pay a penalty to the United States, in an

amount not to exceed $25,000, whenever it appears that

proceedings have been instituted or maintained by such taxpayer
                                - 8 -


primarily for delay, or that the taxpayer's position in a

proceeding is frivolous or groundless.    A petition in the Tax

Court is frivolous "if it is contrary to established law and

unsupported by a reasoned, colorable argument for change in the

law."   Coleman v. Commissioner, 791 F.2d 68, 71 (7th Cir. 1986).

Prior to the trial, petitioner was advised by letter from the IRS

that his positions were frivolous and could lead to sanctions

against him if he persisted with such arguments.    At trial,

respondent filed motions for imposition of the section 6673

penalty.    Throughout his testimony, petitioner dwelt solely on

his protester arguments.    Those arguments are considered

frivolous, and respondent’s motion will be granted.    The Court

will require petitioner to pay a penalty of $1,000 in each docket

number.

     Reviewed and adopted as the report of the Small Tax Case

Division.



                           An Order and Decision will be entered

                     for respondent in docket No. 1611-04S.

                           An Order and Decision will be entered

                     under Rule 155 in docket No. 6123-04S.
