The opinion
T.C. Memo. 2004-187
UNITED STATES TAX COURT
BRIAN TIMOTHY BRUNNER, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 5133-03. Filed August 24, 2004.
P failed to file a Federal income tax return for the
1997 year. R subsequently determined a deficiency and
additions to tax, which P then contested on the basis of tax
protester arguments.
Held: P is liable for the deficiency determined by R,
for additions to tax under secs. 6651(a)(1) and 6654,
I.R.C., and for a penalty under sec. 6673, I.R.C.
Brian Timothy Brunner, pro se.
Kathleen K. Raup, for respondent.
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MEMORANDUM FINDINGS OF FACT AND OPINION
WHERRY, Judge: Respondent determined a Federal income tax
deficiency for petitioner’s 1997 taxable year in the amount of
$13,504 and additions to tax pursuant to section 6651(a)(1) and
(2) of $2,506.27 and $2,784.75, respectively, and pursuant to
section 6654 of $585.91.1 After concessions,2 the issues for
decision are:
(1) Whether petitioner is liable for a deficiency in the
amount of $13,504 for the 1997 taxable year; and
(2) whether petitioner is liable for additions to tax under
sections 6651(a)(1) and 6654.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulations of the parties, with accompanying exhibits, are
incorporated herein by this reference. At the time this petition
was filed, petitioner resided in Reading, Pennsylvania.
Petitioner was married as of December 31, 1997.
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code (Code) in effect for the year in issue,
and all Rule references are to the Tax Court Rules of Practice
and Procedure.
2
By answer, respondent conceded the sec. 6651(a)(2) penalty
and sought a correlative increase of $278.48 in the sec.
6651(a)(1) addition to tax, on grounds that the limitations
contained in sec. 6651(c)(1) no longer applied.
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During 1997, petitioner received wages in the amount of
$63,101.50 from his employer, National Software, and interest
income in the amount of $20 from the State of California,
resulting in total taxable income for the year of $63,121.50.
National Software withheld $2,365 in Federal income tax from
petitioner’s salary during 1997. Petitioner did not file a tax
return for 1997. Respondent issued a notice of deficiency on
December 30, 2002, and determined additions to tax. Petitioner
timely filed a petition disputing the deficiency and additions to
tax, which petition included lengthy tax protester arguments.
Petitioner is not the subject of any criminal investigation.
OPINION
I. Contentions of the Parties
Petitioner contends that he is not required to file a
return. He argues that he has already paid the taxes due through
his withholdings, in that his filing status of “married, filing
jointly” and his 10 total exemptions for himself, his wife, and
his eight children were more than sufficient to reduce his tax
liabilities to an amount fully covered by the withheld
Federal income tax. In addition, petitioner raises tax protester
arguments under the Fourth, Fifth, Ninth, Thirteenth, and
Sixteenth Amendments to the Constitution in opposition to the
filing requirement.
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Respondent, noting that there is no dispute as to
petitioner’s income, claims that petitioner’s deficiency is
properly determined on the basis of “married, filing separately”
filing status with a standard deduction and one exemption.
Respondent points to the fact that petitioner did not provide any
documentation with respect to his eight children, other than
claiming exemptions for them on his Form W-4, Employee’s
Withholding Allowance Certificate, and that petitioner did not
file a joint return or elect to itemize his deductions.
II. Petitioner’s Income Tax Liability
A. General Rules
Respondent’s determination of petitioner’s tax liability is
presumed correct, and petitioner bears the burden of proving that
the determination is improper. Welch v. Helvering, 290 U.S. 111,
115 (1933); Rule 142(a). Although section 7491 may shift the
burden to respondent in specified circumstances, petitioner here
did not satisfy the prerequisites under section 7491(a)(1) and
(2) for such a shift.
B. Filing Requirement
The Code imposes a Federal tax on the taxable income of
every individual. Sec. 1. Gross income for the purposes of
calculating taxable income is defined as “all income from
whatever source derived”. Sec. 61(a). Every U.S. resident
individual whose gross income for the taxable year equals or
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exceeds the exemption amount is required to make an income tax
return. Sec. 6012(a)(1)(A). Petitioner had gross income
totaling $63,121.50 from wages and interest for taxable year
1997. The exemption amount for taxable year 1997 was $2,650.
Petitioner’s gross income exceeded the exemption amount for the
1997 taxable year, and petitioner was therefore required to file
an income tax return.
C. Filing Status
In order to qualify to calculate tax under rates applicable
to “Married Individuals Filing Joint Returns”, an individual must
make a joint return with his or her spouse pursuant to section
6013. Sec. 1(a)(1). Joint filing status is not allowable,
unless a joint return is filed and made a part of the record
before the case is submitted to our Court for decision. Phillips
v. Commissioner, 86 T.C. 433, 441 n.7 (1986), affd. in relevant
part 851 F.2d 1492 (D.C. Cir. 1988)(“where the taxpayer has filed
no return as of the date the case is submitted for decision * * *
no returns would be in the record, and, therefore, no joint
filing status could be claimed.”); Gudenschwager v. Commissioner,
T.C. Memo. 1989-6 (“If a taxpayer has not filed a return by the
time his case is submitted for decision, it is too late for the
taxpayer to file a joint return and elect joint filing status. *
* * In this situation, no returns would be in the record, so this
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Court would have no basis for finding that the taxpayer had joint
return status.”).
Neither petitioner nor his spouse filed any returns, joint
or otherwise. Thus, petitioner is not entitled to claim joint
filing status. A married person who does not make a joint return
with his or her spouse must use rates specified for “Married
Individuals Filing Separate Returns”. Sec. 1(d). Therefore,
respondent was correct in calculating petitioner’s taxes on a
married filing separately basis.
D. Dependency Exemption Deductions
The Supreme Court has stated that the extent of any
allowable deduction is a matter of legislative grace. New
Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934).
Petitioner alleges that he filed a Form W-4, indicating a total
of 10 exemptions. He argues that the Form W-4 is proof of his
entitlement to his claimed 10 exemptions.
However, petitioner’s Form W-4 is nothing more than his
certification that he believes he is entitled to a claimed number
of withholding allowances. Form W-4 is merely a declaration
enabling employers to determine the amount of Federal income tax
to withhold from an individual’s pay. The form is forwarded to
the Internal Revenue Service (IRS) by the employer only if: (1)
The taxpayer claims more than 10 allowances, and (2) the taxpayer
claims “exempt” and the taxpayer’s wages are more than $200 per
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week. IRS Publication 505, Tax Withholding and Estimated Tax, at
10 (Rev. December 1997 ed.). Petitioner’s argument that
respondent should have taken into account his claimed 10
exemptions based on an awareness of petitioner’s Form W-4
declaration is misplaced.
Petitioner is entitled to a deduction for at least one
exemption for himself pursuant to section 151(b). In addition,
an exemption is also allowed for each dependent. In cases where
a joint return is not filed, an additional exemption is permitted
for a spouse only if the spouse does not have any gross income
and “is not the dependent of another taxpayer”. Sec. 151(b). In
order for a “son or daughter of the taxpayer” to be considered a
dependent for 1997, the child must receive over half of his or
her support from the taxpayer during the 1997 taxable year.
Section 152(a)(1). If the child’s income for 1997 exceeded
$2,650, the child must also be under age 20 or a student under
age 24 at December 31, 1997. Sec. 151(c)(1).
However, no exemption is allowed for any individual unless a
Taxpayer Identification Number (TIN) for the individual is
provided on the return claiming the exemption. Sec. 151(e).3
3
Sec. 151(e) provides:
SEC. 151 (e). Identifying Information Required.--
No exemption shall be allowed under this section with
respect to any individual unless the TIN of such
individual is included on the return claiming the
(continued...)
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A TIN is the identifying number of the individual as issued for
social security account purposes. Secs. 6109(d), 7701(a)(41).
Petitioner did not provide any information as to the gross
income or the filing status of his spouse. Thus, we cannot
conclude that petitioner should be permitted an exemption
deduction for his spouse. Similarly, petitioner failed to
provide not only the names and qualifying information of the
individuals he claims as dependents, but he also neglected to
furnish any TINs. Accordingly, petitioner is not allowed
exemptions for any dependents or his spouse; petitioner is
entitled to a single exemption for himself.
E. Standard Deduction
An individual who does not elect to itemize his deductions
is entitled to the standard deduction. Sec. 63(b). An
individual may itemize his deductions for a particular taxable
year by electing to do so under section 63(e). However, an
individual must make the election on the taxpayer’s return in
order for itemization to be permitted. Sec. 63(e)(2).
Petitioner did not file a tax return. Therefore, petitioner
could not have made an election to itemize his deductions.
Absent a valid election to itemize deductions, petitioner is
entitled only to the standard deduction.
3
(...continued)
exemption.
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III. Constitutionality of the Filing Requirement
Our tax system, the Code, and the Tax Court have been firmly
established as constitutional. Crain v. Commissioner, 737 F.2d
1417, 1417-1418 (5th Cir. 1984); Ginter v. Southern, 611 F.2d
1226, 1229 (8th Cir. 1979). Furthermore, each of petitioner’s
specific constitutional arguments has been resoundingly rejected
by the courts. See, e.g., 4th Amendment--Edwards v.
Commissioner, 680 F.2d 1268, 1270 (9th Cir. 1982) (“Requiring
taxpayers, who institute civil proceedings protesting deficiency
notices, to produce records or face dismissal constitutes no
invasion of privacy or unlawful search and seizure”);4 5th
Amendment--United States v. Sullivan, 274 U.S. 259, 263 (1927)
(ruling that taxpayers cannot use the Fifth Amendment to “refuse
to make any return at all”);5 9th Amendment--Tingle v.
Commissioner, 73 T.C. 816, 816 (1980)(ruling that the Ninth
Amendment was “not intended to abridge the specific power of
4
Boyd v. United States, 116 U.S. 616 (1886), relied on by
petitioner, is inapplicable in that the case dealt exclusively
with a criminal, rather than a civil, matter. See also Mapp v.
Ohio, 367 U.S. 643 (1961)(same); Weeks v. United States, 232 U.S.
383 (1914)(same).
5
In order for an individual to claim the applicability of
the privilege against self-incrimination, there must be a “real
and appreciable danger” from the “substantial hazards of self
incrimination”, and the individual must have “reasonable cause to
apprehend [such] danger from a direct answer to questions posed
to him”. Neff v. Commissioner, 615 F.2d 1235, 1239 (9th Cir.
1980) (quoting Hoffman v. United States, 341 U.S. 479, 486
(1951)).
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Congress to lay and collect taxes from whatever source derived”);
13th Amendment--Kasey v. Commissioner, 457 F.2d 369, 370 (9th
Cir. 1972)(ruling that there was no merit to the argument that
the “record keeping requirements and the requirement that
taxpayers shall prepare and file their tax returns, as
established by the Internal Revenue Code and the Internal Revenue
Service, violate their privilege against self-incrimination under
the Fifth Amendment and amount to involuntary servitude,
prohibited by the Thirteenth Amendment”) affg. 54 T.C. 1642
(1970); 16th Amendment--Abrams v. Commissioner, 82 T.C. 403, 406-
407 (1984)(“The Federal income tax laws are constitutional. * * *
The whole purpose of the 16th Amendment was to relieve all income
taxes when imposed * * * from a consideration of the source
whence the income was derived”).
IV. Additions to Tax
Respondent bears the “burden of production in any court
proceeding with respect to the liability of any individual for
any * * * addition to tax”. Sec. 7491(c). To meet this burden,
the Commissioner must come forward with sufficient evidence
indicating that it is appropriate to impose the relevant penalty
or addition to tax. Higbee v. Commissioner, 116 T.C. 438, 446
(2001). In instances where an exception to the penalty or
addition of tax is afforded upon a showing of reasonable cause,
the taxpayer bears the burden of showing such cause. Id. at 447.
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Respondent also has the burden of proof with respect to any
increases in amount over those shown in the notice of deficiency.
Rule 142(a).
Section 6651(a) provides that there will be a 5-percent
addition to tax for each month the return is late, not to exceed
25 percent in the aggregate, imposed upon a taxpayer for failure
to file a tax return or pay tax, unless such failure to file is
due to reasonable cause and not due to willful neglect. Although
not defined in the Code, “reasonable cause” is viewed in the
applicable regulations as the “exercise of ordinary business care
and prudence”. Sec. 301.6651-1(c)(1), Proced. & Admin. Regs; see
also United States v. Boyle, 469 U.S. 241, 246 (1985). “Willful
neglect” can be interpreted as a “conscious, intentional failure
or reckless indifference.” United States v. Boyle, supra at 245.
Based on the record in this case, we conclude that respondent’s
relevant burdens of production and proof have been met, and
petitioner has not provided any evidence that his failure to file
was due to reasonable cause. Therefore, the Court sustains the
imposition of an addition to tax under section 6651(a)(1).
Section 6654(a) provides for an addition to tax for failure
to pay estimated income tax where there has been an underpayment
of estimated taxes by a taxpayer. Since the Court finds that
petitioner’s situation does not fall within any of the specified
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exceptions under section 6654(e), petitioner also is liable for
this addition to tax.
V. Section 6673 Penalty
Section 6673 allows this Court to award a penalty to the
United States in an amount not in excess of $25,000 for
proceedings instituted by the taxpayer primarily for delay or for
proceedings in which the taxpayer’s position is frivolous or
groundless. “A petition to the Tax Court, or a tax return, 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)(imposing
penalties on taxpayers who made frivolous constitutional
arguments in opposition to the income tax). Courts have ruled
that constitutional defenses to the filing requirement, such as
petitioner presents, are groundless and wholly without merit.
Ginter v. Southern, 611 F.2d 1226, 1229 (8th Cir. 1979); see also
Williams v. Commissioner, T.C. Memo. 1999-277 (imposing section
6673 penalty for tax protester arguments); Morin v. Commissioner,
T.C. Memo. 1999-240 (imposing section 6673 penalty for tax
protester arguments); Sochia v. Commissioner, T.C. Memo. 1998-294
(imposing section 6673 penalty for filing frivolous appeals).
Groundless litigation diverts the time and energies of
judges from more serious claims; it imposes needless costs
on other litigants. Once the legal system has resolved a
claim, judges and lawyers must move on to other things.
They cannot endlessly rehear stale arguments. Both
appellants say that the penalties stifle their right to
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petition for redress of grievances. But there is no
constitutional right to bring frivolous suits, see Bill
Johnson’s Restaurants, Inc. v. NLRB, 461 U.S. 731, 743, 103
S.Ct. 2161, 2170, 76 L.Ed.2d 277 (1983). People who wish to
express displeasure with taxes must choose other forums, and
there are many available. * * * [Coleman v. Commissioner,
supra at 72.]
The Court is satisfied that a penalty in this case is
appropriate, and, therefore, chooses to exercise its discretion
sua sponte under section 6673(a)(1) in requiring petitioner to
pay a penalty in the amount of $1,000 to the United States.
To reflect the foregoing,
An appropriate decision
will be entered for respondent
with respect to the deficiency
and additions to tax under
sections 6651(a)(1) and 6654
and imposing a penalty under
6673(a)(1) and to reflect
concessions made by
respondent, for petitioner
with respect to additions to
tax under section 6651(a)(2).