Albert Mark Fonda

United States Tax Court

CORRECTED

T.C. Memo. 2025-60

ALBERT MARK FONDA,

Petitioner

v.

COMMISSIONER OF INTERNAL REVENUE,

Respondent

__________

Docket No. 7871-23. Filed June 5, 2025.

__________

Albert Mark Fonda, pro se.

Peter N. Tran, Cierra C. Harris, Jessica Thomas, Gordon P. Sanz, and

Jeremiah Sowell (student), for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

LAUBER, Judge: Petitioner is a longtime tax protester. He

acknowledged during trial that he filed his last Federal income tax re-

turn for the 2012 tax year and has not filed a return since. Among the

years for which he failed to file returns is 2019, the tax year in issue.

Petitioner has stipulated that he received during 2019 wages of

$125,519 and a retirement distribution of $101,735. But he insists that

neither form of compensation is taxable. Rejecting that argument, we

will sustain the determinations by the Internal Revenue Service (IRS or

respondent) to the extent set forth in this Opinion. We will also impose

a $7,500 penalty under section 6673. 1

1 Unless otherwise indicated, statutory references are to the Internal Revenue

Code, Title 26 U.S.C. (Code), in effect at all relevant times, regulation references are

to the Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all relevant times,

and Rule references are to the Tax Court Rules of Practice and Procedure. We round

monetary amounts to the nearest dollar.

Served 06/23/25

2

[*2] FINDINGS OF FACT

The following facts are derived from the pleadings, petitioner’s

pretrial Motions, a Stipulation of Facts with attached Exhibits, and pe-

titioner’s trial testimony. He resided in Texas when his Petition was

timely filed.

The IRS received Form W–2, Wage and Tax Statement, from Me-

ridian Energy Group, Inc., reporting that it had paid petitioner wages of

$125,519 during 2019. The IRS received Form 1099–R, Distributions

from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, In-

surance Contracts, etc., from Edward Jones reporting that it had paid

petitioner a taxable retirement distribution of $101,735 during 2019.

Petitioner subsequently sent the IRS a package of documents that

included what he styled a “corrected” Form W–2 and a “corrected” Form

1099–R. These Forms were not prepared or submitted by the payors of

the income. Rather, petitioner created them himself, simply crossing

out the amounts shown on the original Forms and inserting zeros.

The account transcript for petitioner’s account shows that the IRS

commenced an examination for his 2019 tax year on July 8, 2022, and

prepared a substitute for return (SFR) on July 25, 2022. See § 6020(b).

On April 27, 2023, the IRS sent petitioner a Notice of Deficiency based

on the SFR. It determined a deficiency of $62,083, calculated on

$227,255 of unreported compensation as listed above, $120 of unre-

ported investment income, and a 10% additional tax under section 72(t)

for an early distribution from a qualified plan. The Notice also deter-

mined additions to tax for failure to timely file, failure to timely pay, and

failure to pay estimated tax. See §§ 6651(a)(1) and (2), 6654. Petitioner

timely petitioned this Court for redetermination.

Petitioner concedes that he was born in New York, that he was a

resident of Houston, Texas, during 2019, that he is a “U.S. national,”

and that he holds a U.S. passport. And he concedes that he has a U.S.

Social Security card, while asserting that he has conveyed to the Social

Security Administration “the name change from ALBERT MARK

FONDA to Albert Mark Fonda.” He has stipulated that he received

$227,255 in wages and retirement income during 2019. But he asserts

that he is not taxable on this income. In his Petition, pretrial Motions,

and trial testimony, he has based this assertion on a hodgepodge of friv-

olous arguments, including the following:

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[*3]

• He initially contended that “this case must be dismissed based on

lack of in personam jurisdiction since I am not a statutory public

federal citizen or an IRS taxpayer.” He appears to have aban-

doned that argument.

• He asserts that “the party that is named on the Notice of Defi-

ciency, which is in caps, ALBERT M. FONDA, is a transmitting

utility which is not me.” “The CAPITAL LETTER NAME,” he

says, is a “legal personality assigned shortly after birth by our

incorporated STATE government without our knowledge or con-

sent, using the birth registration process.” This “legal personal-

ity” is supposedly an “artificial person [used to] engage in com-

merce.” Petitioner asserts that he, Albert M. Fonda, has “no

surety, no trusteeship, and no agency over that entity. That is

not me. That person is not here.”

• He asserts that he has “revoked and rescinded this STATE-

created artificial person and [has] replaced it with a Private Busi-

ness Trust that now serves as my legal personality, referred to as

‘dba ALBERT MARK FONDA.’” He asserts that he has “selected

the Commissioner of Internal Revenue as a Trustee for [his] Pri-

vate Business Trust” and that the Commissioner “has not upheld

his fiduciary duties, which is clearly in breach of trust.” He as-

serts that he has therefore “been denied [his] right to civilian due

process as guaranteed by the Fifth Amendment.”

• By “rescinding” his artificial legal personality, petitioner asserts

that he has “revoked the presumption of dual political status as

both a public federal ‘U.S. Citizen’ and a Statutory ‘U.S. National’

born on federal or U.S. territorial land.” As a result, he says that

he is now “a private civilian citizen, born and domiciled on unin-

corporated state land.” He asserts that he “receive[s] no civil

rights under the 14th Amendment and thus owe[s] no corelative

[sic] duties under statutory codes and regulations, such as those

being falsely imposed upon me by the IRS.”

• Although born in New York and residing in Texas, he asserts that

he is a “non-resident alien” for Federal income tax purposes. In

his words: “I’m not a Federal citizen where I would be owing my

allegiance to the Federal corporation. Instead, I am a national,

which is recognized by the Department of State, and I have filed

and have a passport that says that I am a national.”

4

[*4]

• Because he is supposedly a nonresident alien, he asserts that he

is taxable only on income derived from the conduct of a “U.S. trade

or business.” He asserts that neither his retirement income nor

his wages were “effectively connected with a trade or business in

the United States as per [Treasury Regulation] § 1.871-

10(d)(2)(iii).”

• He asserts that the only persons subject to Federal income tax are

residents of the District of Columbia, residents of U.S. Territories,

and employees of the Federal government. In his words: “All of

my income, past and present, is from wages for labor performed

in the private sector, which is not federal taxable income, as de-

fined by [Code] § 864(b).”

• He asserts that in May 2013 he filed with the IRS a document

that “removed my consent and revoked my taxpayer status effec-

tive for the 2012 tax year going forward.” The IRS Form 1040,

U.S. Individual Income Tax Return, he says, “is a contract, an im-

plied contract, which I unwillingly agreed to several times. And

so in 2013, I sent [the IRS] a recission of contract stating that I’m

no longer bound by that implied contract.” In petitioner’s words,

this supposed rescission of contract “established my natural

birthright and declared myself as the beneficiary, not the trustee

for the STATE-created contracts or trusts established in my

name.” “The IRS substitute tax return included in the Notice of

Deficiency,” he says, “is an offer to contract which I have refused.”

After petitioning this Court petitioner filed a lengthy series of

Motions—Motions to Dismiss for Lack of Jurisdiction, Motions to Dis-

miss for Failure to State a Claim, Motions for Summary Judgment, Mo-

tions for In Camera Review, Motions to Clarify, Motions for Default, Mo-

tions to Compel Production of Documents, Motions to Serve Additional

Interrogatories, and Motions to Compel Stipulations. All these Motions

were premised on the frivolous arguments described above. When we

denied these Motions, petitioner filed Motions for Reconsideration

and/or Motions for Recusal of Judge. Those Motions were likewise de-

nied.

Petitioner’s litigating strategy has required the Court to issue at

least 25 pretrial Orders and conduct a lengthy discovery hearing in De-

cember 2023. In an Order served September 27, 2024, denying one of

his discovery Motions, we advised petitioner that his filings “contain

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[*5] frivolous arguments that attempt to relieve [him] of his underlying

tax liabilities.” We took that opportunity to inform him that the Court

“may impose a penalty of up to $25,000” upon a taxpayer who advances

frivolous arguments for the purpose of delay. See § 6673(a)(1). We de-

clined to impose a penalty at that time, but we warned petitioner that,

if he continued to “maintain a frivolous or groundless position or con-

tinue[d] to maintain this proceeding primarily for delay, . . . this Court

may impose the maximum section 6673 penalty.” We have reiterated

that warning on two subsequent occasions. Nevertheless, petitioner

continued to advance his entire panoply of frivolous arguments in sub-

sequent Motions practice and at trial.

At the outset of trial respondent conceded the $120 of investment

income, the 10% additional tax, and all three additions to tax. Respond-

ent’s counsel represented that the IRS was conceding the 10% additional

tax because it had concluded that the retirement distribution was not

an “early distribution.” See § 72(t)(2)(A)(i). Respondent’s counsel repre-

sented that the IRS was conceding the additions to tax because it could

not retrieve a copy of the SFR. Thus, the only questions remaining for

decision are the taxability of petitioner’s wages and retirement income

and the application of the section 6673 penalty.

During the trial petitioner made oral Motions to “void the Notice

of Deficiency” on two grounds. First, he contended that the Notice,

which was addressed to him at his Houston address, “was addressed to

a fictitious legal identity for which Petitioner has no surety.” We denied

that Motion as frivolous.

Second, he contended that the Notice of Deficiency “was not is-

sued in the allowable assessment period pursuant to [Code] § 6501.” The

notice was issued on April 27, 2023, slightly more than three years after

April 15, 2020, the date prescribed for filing the 2019 return. See

§ 6501(a). But because petitioner failed to file a return, no period of

limitations applies and the tax for 2019 may be assessed “at any time.”

See § 6501(c)(3). We accordingly denied that oral Motion as well.

OPINION

I. Unreported Income

The Code provides that “gross income means all income from

whatever source derived,” including “[c]ompensation for services.”

§ 61(a)(1). Gross income likewise includes distributions from a qualified

retirement plan. See §§ 61, 72(a)(1), 408(d)(1). Such distributions are

6

[*6] taxable in full unless the taxpayer has acquired a basis in his ac-

count (for example) by making nondeductible contributions to it. See

§§ 72(b), (e)(6), 408(d)(2); Campbell v. Commissioner, 108 T.C. 54, 66–67

(1997).

In cases of unreported income, the Commissioner must establish

an evidentiary foundation connecting the taxpayer with the income-

producing activity, see Portillo v. Commissioner, 932 F.2d 1128, 1133

(5th Cir. 1991), aff’g in part, rev’g in part and remanding T.C. Memo.

1990-68, or demonstrate that the taxpayer actually received income, Ed-

wards v. Commissioner, 680 F.2d 1268, 1270–71 (9th Cir. 1982) (per cu-

riam). Information supplied to the IRS by the taxpayer’s employer on

Form W–2, or by other payors on Forms 1099, is sufficient to meet this

burden. See Hardy v. Commissioner, 181 F.3d 1002, 1004–05 (9th Cir.

1999), aff’g T.C. Memo. 1997-97. “Once the Commissioner makes the

required threshold showing, the burden shifts to the taxpayer to prove

by a preponderance of the evidence that the Commissioner’s determina-

tions are arbitrary or erroneous.” Walquist v. Commissioner, 152 T.C.

61, 67–68 (2019) (citing Helvering v. Taylor, 293 U.S. 507, 515 (1935));

see Texasgulf, Inc., & Subs. v. Commissioner, 172 F.3d 209, 214 (2d Cir.

1999), aff’g 107 T.C. 51 (1996).

The IRS may not rely solely on a third-party report of income,

such as a Form 1099, if the taxpayer raises a reasonable dispute con-

cerning the accuracy of the report. See § 6201(d). Petitioner has not

done so. To the contrary, he has admitted that he received during 2019

the wages reported on the Form W–2 and the retirement distribution

reported on the Form 1099–R. He does not contend that he made non-

deductible contributions to his retirement account, and he urges no non-

frivolous argument to support the nontaxability of his retirement distri-

bution.

In contending that his 2019 income was immune from Federal in-

come taxation, petitioner offers a familiar array of arguments lifted from

the tax-protester arsenal. He asserts that he occupies two separate

identities, one individual and one legal, and urges that neither identity

earned taxable income. He asserts that he changed his name from

MARK ALBERT FONDA (all capital letters) “to remove . . . the name

from public use as a corporate strawman.” This is nonsense: Petitioner

concedes that he received the income reported on the Forms W–2 and

1099–R. His assertion that the income he concedes having received is

not subject to Federal income tax is a frivolous argument. See May v.

Commissioner, 752 F.2d 1301, 1304 (8th Cir. 1985) (citing Abrams v.

7

[*7] Commissioner, 82 T.C. 403, 406–07 (1984)); see also United States

v. Gerads, 999 F.2d 1255, 1256 (8th Cir. 1993) (“[W]e have held that

wages are within the definition of income under the Internal Revenue

Code . . . and are subject to taxation.”); Coleman v. Commissioner, 791

F.2d 68, 70–71 (7th Cir. 1986) (same and collecting authorities); Waltner

v. Commissioner, T.C. Memo. 2014-35, 107 T.C.M. (CCH) 1189, 1195,

aff’d, 659 F. App’x 440 (9th Cir. 2016).

Petitioner’s central argument, reiterated in various ways, is that

he is a citizen of a state, but not of the United States. This is a time-

worn tax-protester argument, and it has never been accepted by any

court. See Waltner, 107 T.C.M. (CCH) at 1202 n.71. Variations of this

argument are contained in The Truth About Frivolous Tax Arguments,

a compendium of frivolous positions and the caselaw refuting them that

the IRS publishes and occasionally updates. See Internal Revenue

Serv., The Truth About Frivolous Tax Arguments 9–13 (2022),

https://www.irs.gov/pub/irs-counsel/2022-the-truth-about-frivolous-tax-

arguments.pdf (characterizing as frivolous the argument that “[w]ages

. . . are not income”); see also I.R.S. Notice 2006-31, 2006-1 C.B. 751, 751

(“No authority supports the claim that individuals may avoid their fed-

eral income tax obligations based on ‘straw man’ arguments. The use of

all uppercase letters, italics, abbreviations or other formats of an indi-

vidual’s name in government documents has no significance whatso-

ever.”).

Petitioner next asserts that he is a nonresident alien and is thus

taxable only on income “effectively connected with the conduct of a trade

or business within the United States.” See § 871(b)(1). As a Texas resi-

dent who was born in New York, petitioner is neither a “nonresident”

nor an “alien.” The argument that a U.S. citizen is immune from tax by

virtue of the sourcing rules in subchapter N was held to be “standard

tax protester rhetoric” 23 years ago. Corcoran v. Commissioner, T.C.

Memo. 2002-18, 83 T.C.M. (CCH) 1107, 1108–10 (imposing penalty of

$2,000 under section 6673(a)), aff’d, 54 F. App’x 254 (9th Cir. 2002); see

Great-West Life Assurance Co. v. United States, 678 F.2d 180, 183

(Ct. Cl. 1982) (“The determination of where income is derived or

‘sourced’ is generally of no moment to either United States citizens or

United States corporations, for such persons are subject to tax . . . on

their worldwide income.”); The Truth About Frivolous Tax Arguments,

supra, at 13–15 (explaining that petitioner’s line of argument is based

on a misreading of numerous Code sections and is a “frivolous assertion[]

. . . contrary to well-established legal precedent”).

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[*8] Finally, petitioner urges that his wages are immune from tax be-

cause he is not an “employee” of the Federal government. Citing the

definition of “employee” in section 3401(c), which provides that this term

“includes” Federal officers and employees, petitioner insists that only

Federal employees and persons holding public office are taxed under the

Code. This is a tiresome tax-protester argument that no court has ever

accepted. See Wnuck v. Commissioner, 136 T.C. 498, 506 (2011) (“Any-

one fluent in English knows that the word ‘includes’ cannot be assumed

to mean ‘includes only.’ . . .”); Waltner, 107 T.C.M. (CCH) at 1201 (citing

United States v. Latham, 754 F.2d 747, 750 (7th Cir. 1985)).

In sum, petitioner’s arguments have been rejected by the courts

in hundreds of cases, and we will not dignify his position with further

response. See Crain v. Commissioner, 737 F.2d 1417, 1417 (5th Cir.

1984) (per curiam) (“We perceive no need to refute these arguments with

somber reasoning and copious citation of precedent . . . .”); see also

Wnuck, 136 T.C. at 501–13 (explaining why courts appropriately “give

short shrift to frivolous arguments”). Petitioner has not met his burden

of proving that the IRS acted erroneously or arbitrarily by including in

his 2019 gross income wages of $125,519 and a retirement distribution

of $101,735. We will accordingly sustain these adjustments.

II. Penalty for Maintaining Frivolous Positions

Section 6673(a)(1) authorizes this Court to require a taxpayer to

pay to the United States a penalty, not in excess of $25,000, “[w]henever

it appears to the Tax Court that—(A) proceedings before it have been

instituted or maintained . . . primarily for delay, [or] (B) the taxpayer’s

position in such proceeding is frivolous or groundless.” The purpose of

section 6673 is to compel taxpayers to conform their conduct to settled

tax principles and to deter the waste of judicial and IRS resources. Cole-

man v. Commissioner, 791 F.2d at 71–72; Salzer v. Commissioner, T.C.

Memo. 2014-188, 108 T.C.M. (CCH) 284, 287. “Frivolous and groundless

claims divert the Court’s time, energy, and resources away from more

serious claims and increase the needless cost imposed on other litigants

. . . .” Kernan v. Commissioner, T.C. Memo. 2014-228, 108 T.C.M. (CCH)

503, 512, aff’d, 670 F. App’x 944 (9th Cir. 2016).

Lacking any legal support for his position, petitioner has cut and

pasted gibberish from tax-protester websites. Although he is not a law-

yer, had he made even a modest inquiry using an internet search engine

he would have found the copious authorities refuting his stance. See

9

[*9] Wnuck, 136 T.C. at 504 (“Anyone with the inclination to do legal

research . . . will confront such authorities.”).

Petitioner began advancing frivolous arguments at the com-

mencement of this case, and he has not stopped since, despite our warn-

ings that he should desist. We warned petitioner during the trial that

he was advancing frivolous arguments that the courts had repeatedly

rejected. He nevertheless adhered to his position. His persistent filing

of frivolous papers has wasted the Government’s time and ours. We will

accordingly require that he pay to the United States a penalty of $7,500.

To reflect the foregoing,

Decision will be entered under Rule 155.