                        T.C. Memo. 2006-121



                       UNITED STATES TAX COURT



                  MARK D. GEORGE, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 19063-03.               Filed June 13, 2006.



     Mark D. George, pro se.

     Anne D. Melzer, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     COHEN, Judge:    Respondent determined deficiencies of $5,149

and $8,027 in petitioner’s Federal income taxes for 2000 and

2001, respectively.   Respondent also determined additions to tax

under section 6651(a)(1) of $1,287.25 and $2,006.75 for the years

in issue, respectively.     Additionally, respondent determined
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additions to tax under section 6654(a) of $275.03 and $320.77 for

the years in issue, respectively.

       After concessions by the parties, the issues for decision

are:

       (1) Whether compensation that petitioner received in 2000

and 2001 is taxable to him;

       (2) whether petitioner is entitled to itemized deductions

for the years in issue;

       (3) whether petitioner is liable for the addition to tax

under section 6651(a)(1) for 2000; and

       (4) whether petitioner is liable for the addition to tax

under section 6654(a) for the years in issue.

       Unless otherwise indicated, all section references are to

the Internal Revenue Code in effect for the years in issue.

                          FINDINGS OF FACT

       Some of the facts have been stipulated, and the stipulated

facts are incorporated in our findings by this reference.

Petitioner had a mailing address in Syracuse, New York, at the

time that he filed his petition.

       Petitioner is a member of the Onondaga, a constituent Nation

of the Iroquois Confederacy.    Petitioner worked for Ridley

Electric Co., Inc. (Ridley), during the years in issue.    While

employed by Ridley, petitioner worked mainly on commercial

buildings, in particular, the Turning Stone Casino.    In 2000,
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petitioner received $32,170 in wages from Ridley and $5,618 in

unemployment compensation.   In 2001, petitioner received

$50,003.94 in wages from Ridley.   Petitioner did not have any

Federal taxes withheld from his wages during these years because

he claimed he was exempt on his Form W-4, Employee’s Withholding

Allowance Certificate.   Petitioner did not make any estimated tax

payments for the years in issue.   Petitioner is entitled to only

one exemption for 2000 and 2001.   Petitioner is not entitled to

any income tax credits for 2000 and 2001.

     In 2000, petitioner made a noncash contribution of a 1986

Ford XL pickup truck with approximately 194,317 miles on it to

the National Kidney Foundation of Central New York (NKF) in

Syracuse, New York.   He received a letter from NKF confirming

receipt of the pickup truck and verifying that petitioner did not

receive any goods or services in return for the donation.   In

2000, petitioner paid dues to his local union and the

International Brotherhood of Electrical Workers of $1,319.06 and

$237.60, respectively.

     In 2001, petitioner incurred a casualty loss when tools and

change amounting to approximately $565 were stolen from his

vehicle.

     Petitioner mailed to the Internal Revenue Service (IRS) a

Form 1040, U.S. Individual Income Tax Return, for 2000 showing

his adjusted gross income of $37,789.08 and a tax liability of
                                 - 4 -

zero.   The Form 1040 was not accepted by the IRS and was returned

to petitioner as a frivolous return.

     Petitioner filed a Form 1040 for 2001 showing adjusted gross

income of $50,003.94 and a tax liability of zero.   He attached a

copy of his Form W-2, Wage and Tax Statement, for the year and

documents summarizing his legal argument that Native Americans

are not subject to income tax.    The 2001 return, though similar

to petitioner’s 2000 return, was not returned to petitioner.

     One of the documents attached to the 2001 return was

Executive Order 13175 of November 6, 2000, Consultation and

Coordination With Indian Tribal Governments.   65 Fed. Reg. 67249

(Nov. 9, 2000).   The Executive order provides direction to

Federal agencies to “establish regular and meaningful

consultation and collaboration with tribal officials in the

development of Federal policies that have tribal implications”.

“Policies that have tribal implications”--

     refers to regulations, legislative comments or proposed
     legislation, and other policy statements or actions
     that have substantial direct effects on one or more
     Indian tribes, on the relationship between the Federal
     Government and Indian tribes, or on the distribution of
     power and responsibilities between the Federal
     Government and Indian tribes. [Id.]

The fundamental principles of the Executive order are to continue

to recognize the Indian tribes as domestic dependent nations

under the protection of the United States, work with the Indian

tribes on a government-to-government basis, and recognize the
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right of Indian tribes to self-government and support tribal

sovereignty and self-determination.     The consultation requirement

in Executive Order 13175 provides that “Each agency shall have an

accountable process to ensure meaningful and timely input by

tribal officials in the development of regulatory policies that

have tribal implications.”   Id. at 67250.    Executive Order 13175

does not revoke or supersede any statute or regulation.

                              OPINION

Wages and Unemployment Compensation

     Section 1 imposes a tax on all taxable income.    Section

61(a)(1) includes in gross income “all income from whatever

source derived”, including compensation for services.    Respondent

thus determined that the amounts paid to petitioner by Ridley and

his unemployment compensation were taxable income.    Petitioner

contends that he is not a U.S. citizen, but rather an “Indian not

paying taxes”.   Citing a number of treaties and statutes, he

argues that his compensation is exempt from tax because he is an

“Onondaga and as such entitled to the exemption”.    Petitioner has

used similar arguments in the past, and the Court has previously

found that he is not exempt from taxation on his income.     George

v. Commissioner, T.C. Memo. 1989-401.

     Native Americans are subject to the same Federal income tax

laws as are other U.S. citizens, unless there is an exemption

explicitly created by treaty or statute.     Squire v. Capoeman, 351
                               - 6 -

U.S. 1, 6 (1956); Estate of Poletti v. Commissioner, 99 T.C. 554,

557-558 (1992), affd. 34 F.3d 742 (9th Cir. 1994); see Allen v.

Commissioner, T.C. Memo. 2006-11; see also George v.

Commissioner, supra; Rev. Rul. 2006-20, 2006-15 I.R.B. 746.      Any

exemption must be based on the clear and unambiguous language of

a statute or treaty.   Squire v. Capoeman, supra; see Allen v.

Commissioner, supra.   Petitioner has not shown that any of the

cited treaties or statutes specifically exempts any of his

compensation.

     In this case, petitioner relies on Executive Order 13175 of

November 6, 2000.   65 Fed. Reg. 67249 (Nov. 9, 2000).    He

contends that the Executive order overrides all prior law on the

subject.   Petitioner’s reliance on Executive Order 13175 is

misplaced.   As described in our findings, the Executive order

provides policymaking criteria for agencies to follow when

formulating and implementing policies that have tribal

implications.   However, the Executive order does not contain any

language regarding the taxation of Native Americans.     Further,

section 10 of the Executive order states:

     This order is intended only to improve the internal
     management of the executive branch, and is not intended
     to create any right, benefit, or trust responsibility,
     substantive or procedural, enforceable at law by a
     party against the United States, its agencies, or any
     person. [Exec. Order 13175, 65 Fed. Reg. 67252.]

Therefore, Executive Order 13175 does not change decided law that

Native Americans are subject to income tax.   In any event, an
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Executive order is judicially enforceable only if it has the

force and effect of law.    Chrysler Corp. v. Brown, 441 U.S. 281,

303-304 (1979).    Executive Order 13175 lacks the force and effect

of law because it is not grounded in a statutory mandate.      Id. at

304-305.   Petitioner had taxable income and is liable for the

2000 and 2001 deficiencies.

Itemized Deductions

     The burden of showing a right to a claimed deduction rests

with the taxpayer.    INDOPCO, Inc. v. Commissioner, 503 U.S. 79,

84 (1992).   The taxpayer must maintain records sufficient to

substantiate the amounts of the deductions claimed.      Sec. 6001;

sec. 1.6001-1(a), Income Tax Regs.      If the taxpayer does not

retain the required records, the burden of proof does not shift

to respondent.    Sec. 7491(a)(2)(A) and (B).

     At trial, petitioner presented the letter from NKF and a

computer printout from CarPrices.com showing the wholesale value

of a 1986 Ford F250 SuperCab 4WD, taking the mileage on the truck

into consideration, to be $2,960.24 and the retail value to be

$5,540.47.   Petitioner is claiming a $5,000 deduction for the

donation of the truck.

     Under section 170(a)(1), a deduction is allowed for

charitable contributions made within the year.      See sec. 1.170A-

1, Income Tax Regs.    The regulations state that the amount to be

allowed for a charitable contribution of property other than
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money is to be the “fair market value of the property at the time

of the contribution”.   Sec. 1.170A-1(c)(1), Income Tax Regs.

Generally, a taxpayer must maintain certain records in order to

claim a deduction for a charitable contribution.    The taxpayer

must have a receipt (or letter) from the donee showing the name

of the donee, the date and location of the contribution, and a

description of the property.    Sec. 1.170A-13(b)(1) and (2),

Income Tax Regs.   Additionally, the regulations require that a

taxpayer taking a deduction in excess of $500 must maintain

records that show the fair market value of the property at the

time of the contribution and the method utilized in determining

the fair market value; the manner and date of acquisition of the

property; and the cost or other basis of the property, adjusted

as provided by section 1016.    See sec. 1.170A-13(b)(2)(ii) and

(3)(i), Income Tax Regs.

     The only information in evidence is the letter from NKF

confirming receipt of the truck with a description.    There is no

reliable evidence of the fair market value of the truck at the

time that it was contributed.    The printout from CarPrices.com

gives no indication as to how adjustments are made or how, sight

unseen, the fair market value of the vehicle is determined.

There is no evidence that CarPrices.com is a reliable source of

market information.   Additionally, there is no evidence proving

petitioner’s original cost or other basis in the truck.
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Therefore, petitioner is not allowed a deduction for the

contribution of his truck in 2000.

     Additionally, petitioner claims that he is entitled to a

deduction for the $1,556.66 of union dues that he paid in 2000

and for the $565 casualty loss in 2001.     A taxpayer may either

elect the standard deduction allowed by statute or, in the event

his deductions amount to more than the standard deduction for

that year, elect to itemize his deductions on Schedule A,

Itemized Deductions.    See secs. 63(b), 67.   The standard

deductions for a single taxpayer in 2000 and 2001 were $4,400 and

$4,550, respectively.    Sec. 63(c)(2).   In the absence of other

evidence, neither the deduction of $1,556.66 in 2000 nor $565 in

2001 establishes petitioner’s right to deductions in excess of

the standard deductions allowed by respondent.     (With respect to

the casualty loss, his deduction would also be limited or

eliminated by section 165(h).)

Additions to Tax

     Respondent determined an addition to tax under section

6651(a)(1) for failure to file the 2000 return.     Respondent

conceded the addition to tax for the similar 2001 return.

Respondent has the burden of production to show that petitioner

did not file his 2000 return.    Sec. 7491(c).   To avoid the

addition to tax, petitioner has the burden of proving that the

failure to file did not result from willful neglect and was due
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to reasonable cause.   See United States v. Boyle, 469 U.S. 241,

245 (1985).    To prove reasonable cause, a taxpayer must show that

he or she exercised ordinary business care and prudence but

nevertheless could not file the return when it was due.    See

Crocker v. Commissioner, 92 T.C. 899, 913 (1989); sec. 301.6651-

1(c)(1), Proced. & Admin. Regs.

     At trial, petitioner testified that he mailed his 2000

income tax return to the IRS and that it had been returned to him

as frivolous.    Petitioner contends that the return was not

frivolous because he is exempt from income tax.    Respondent

produced no evidence that petitioner’s return was not received by

the IRS.   Respondent contends that petitioner’s original return

(which listed wages and unemployment compensation totaling

$37,789.08, but listed total tax as “N/A” and total amount owed

as “$0”, similar to his 2001 return) was not a valid return and

that petitioner was liable for the addition to tax.

     A document constitutes a "return" for Federal income tax

purposes if:    (1) It contains sufficient data to calculate tax

liability; (2) it purports to be a return; (3) it represents an

honest and reasonable attempt to satisfy the requirements of the

tax law; and (4) it is executed under penalties of perjury.

Beard v. Commissioner, 82 T.C. 766, 777 (1984), affd. 793 F.2d

139 (6th Cir. 1986); see also Cabirac v. Commissioner, 120 T.C.

163, 169 (2003); Coulton v. Commissioner, T.C. Memo. 2005-199.
                              - 11 -

     Petitioner’s 2000 return (which he tried to file but was

prevented from doing so by the IRS’s action of returning it to

him unfiled) disclosed the income and unemployment compensation

he received for that year.   Petitioner mistakenly relied on the

Executive order to claim that he had zero tax liability, but

there was sufficient data to calculate tax liability.   The IRS

could have filed the return as received and determined a penalty

for negligence or disregard of rules and regulations.   In view of

his attempt to comply, however, petitioner is not liable for the

section 6651(a) addition to tax for 2000.   Petitioner is warned

that further claims that he is exempt from taxes because he is a

Native American may warrant sanctions under section 6662 or

section 6673 for frivolous or groundless arguments.   See sec.

6673(a)(1)(B).

     Respondent also determined additions to tax under section

6654(a) for failure to pay estimated taxes for the years in

issue.   Petitioner made no estimated tax payments, and no income

taxes were withheld for 2000 and 2001.   In the absence of special

exceptions not applicable here, petitioner is liable for this
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addition to tax for the years in issue.       Grosshandler v.

Commissioner, 75 T.C. 1, 20-21 (1980).

     To reflect the foregoing,


                                         Decision will be entered for

                                 respondent as to the deficiencies

                                 and additions to tax under section

                                 6654 for 2000 and 2001 and for

                                 petitioner as to the additions to

                                 tax under section 6651 for 2000 and

                                 2001.
