United States Tax Court

United States Tax Court

T.C. Memo. 2025-42

PETER JOSEPH ISAIAH GIBBONS O’CONNOR,

Petitioner

v.

COMMISSIONER OF INTERNAL REVENUE,

Respondent

__________

Docket No. 21651-19.

Filed May 12, 2025.

__________

Peter Joseph Isaiah Gibbons O’Connor, pro se.

Wesley J. Wong, for respondent.

MEMORANDUM OPINION

ARBEIT, Judge: By joint motion filed March 5, 2024, this case

was submitted fully stipulated for decision without trial, pursuant to

Rule 122. 1 The parties have stipulated the relevant facts. See Rule

122(a).

For the eight taxable years at issue, petitioner, a tax lawyer

admitted to practice before this Court, failed to file federal income tax

returns and to pay federal income tax. As a result, for the taxable years

at issue the Internal Revenue Service (IRS) determined deficiencies and

additions to tax. In his defense petitioner makes four main legal

arguments contesting the authority of the IRS to assess tax. He concedes

that, should those arguments fail, for all taxable years at issue he is

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

all dollar amounts to the nearest dollar.

Served 05/12/25

2

[*2] liable for the deficiencies and additions to tax as stipulated. His

only remaining argument, raised for the first time on brief, is that with

respect to the additions to tax he had reasonable cause as a matter of

law.

Because we find petitioner’s four main legal arguments frivolous,

we sustain the deficiency determinations as modified by the parties’

stipulation. Further, since we find petitioner’s argument with respect to

reasonable cause similarly frivolous, we sustain the application of the

additions to tax. Finally, we find petitioner liable for a penalty under

section 6673(a)(1)(B) for advancing frivolous arguments.

Background

When he filed the petition, petitioner resided in Nevada. Absent

stipulation to the contrary, appeal of this case would lie to the U.S. Court

of Appeals for the Ninth Circuit. See § 7482(b)(1)(A), (2).

Petitioner, a tax lawyer licensed in California and admitted to

practice before this Court, 2 failed to file federal income tax returns for

taxable years 2010 through 2017.

On September 10, 2019, respondent mailed to petitioner a notice

of deficiency determining deficiencies and additions to tax as follows:

Year

2010

2011

2012

2013

2014

2015

2016

2017

Deficiency

$89,237

71,536

91,277

153,166

271,246

274,325

73,490

67,656

Additions to Tax

§ 6651(a)(2)

$22,309

17,884

22,819

38,291

67,811

54,865

10,288

5,412

§ 6651(f) 3

$64,696

51,863

66,175

111,045

196,653

198,885

53,280

49,050

§ 6654

$1,913

1,416

1,636

2,750

4,870

4,940

1,756

1,619

2 Court records reflect an admitted lawyer with a name, address, email

address, and phone number that petitioner has used at one time or another during this

case. We take judicial notice that petitioner is the same Peter J. Gibbons admitted to

the Bar of this Court. See Rule 143; Fed. R. Evid. 201. He remains in active status.

3 Respondent has since conceded the additions to tax for fraudulent failure to

file under section 6651(f) and instead asserts only additions to tax for failure to timely

file under section 6651(a)(1).

3

[*3] On March 5, 2024, the parties submitted their first stipulation of

facts. 4 The stipulation includes the parties’ agreements respecting

petitioner’s unreported gross income and various items necessary to

compute petitioner’s federal income tax for the taxable years at issue.

Petitioner expressly concedes that, should his four main legal

arguments fail, he is liable with respect to all taxable years at issue for

self-employment tax, net investment income tax, and additional

Medicare tax. His final argument, raised for the first time in his opening

brief, is that he had reasonable cause as a matter of law with respect to

the additions to tax under sections 6651(a)(1) and (2) and 6654, which

in the stipulation he otherwise concedes should his four main legal

arguments fail.

With his opening brief, filed on May 21, 2024, petitioner filed four

separate memoranda in support of the brief, a request for judicial notice

of certain public records, a memorandum in support of that request, and

a declaration of Jeffrey A. Dickstein describing at length the documents

that are the subject of petitioner’s request for judicial notice. At the core

of petitioner’s 136-page opening brief are the contentions that

respondent lacks the authority to assess tax, that petitioner is not

subject to federal income tax, and that petitioner is under no obligation

to file a federal income tax return.

On July 5, 2024, respondent filed his seriatim answering brief

refuting the arguments set forth by petitioner.

On August 5, 2024, petitioner filed a seriatim reply brief in

response to respondent’s seriatim answering brief; on August 7, 2024,

petitioner lodged a first amended seriatim reply brief, which he filed

August 9, 2024, following the Court’s leave. In this brief, another 57

pages, he mostly restates the arguments found in his opening brief. Yet

he also acknowledges that courts have long settled many issues he

raises, describes respondent’s brief as “frivolous” (despite disparaging

such labels), and comes rather close to issuing threats.

To date, petitioner has filed more than 1,000 pages that consist of

documents such as purported records of state legislative history from

the early 20th century, purported summaries of state legislative history,

purported records of federal legislative history from the early 20th

4 More than two years before, on February 16, 2022, the parties filed a

stipulation of settled issues specifying that during the taxable years at issue petitioner

was not married and, for that reason, had no income derived from community property.

The parties’ later stipulation incorporates the earlier one.

4

[*4] century, purported historical background on the Sixteenth

Amendment to the U.S. Constitution, and hundreds of primary

authorities cited ostensibly in support of his main arguments.

Discussion

I.

Deficiencies Respecting Unreported Income

A.

Burden of Proof

In general, the Commissioner’s determinations set forth in a

notice of deficiency are presumed correct, and the taxpayer bears the

burden of proving them erroneous. Rule 142(a)(1); Welch v. Helvering,

290 U.S. 111, 115 (1933). In the case of unreported income, however, the

Commissioner must first come forward with minimal evidence

connecting the taxpayer with income-producing activity or showing

actual receipt of unreported income. Walquist v. Commissioner, 152 T.C.

61, 67 (2019); see also Hardy v. Commissioner, 181 F.3d 1002, 1004 (9th

Cir. 1999) (addressing the Commissioner’s burden to first put forth some

evidence of unreported income before the presumption of correctness

applies), aff’g T.C. Memo. 1997-97. Once the Commissioner meets this

burden of production, the burden is on to the taxpayer to prove by a

preponderance of the evidence that the Commissioner’s determinations

are arbitrary or erroneous. See Walquist, 152 T.C. at 67–68. Submission

of a case under Rule 122 does not alter the burden of proof. Rule 122(b).

Where, as here, the parties have fully stipulated the unreported

income and the taxpayer has agreed to the facts, the Commissioner has

necessarily met his burden. See El v. Commissioner, 144 T.C. 140, 143

(2015). Petitioner evidently believes that respondent’s determinations

here are unconstitutional (or otherwise invalid according to convoluted

legal arguments). As we will explain, petitioner has failed to show

anything of the kind; indeed, respondent has done nothing other than

apply the law to the agreed facts.

B.

Frivolity of Petitioner’s Arguments

Petitioner has built his case around four notorious arguments all

reaching the same astonishing conclusion: respondent lacks the

authority to assess tax. Petitioner contends that (1) the Sixteenth

Amendment was not properly ratified and is therefore invalid,

(2) section 1 does not plainly and clearly impose a tax on the income of

petitioner, (3) the income tax is an excise tax to which his income is not

subject, and (4) petitioner is a citizen of Nevada and therefore not

5

[*5] subject to federal income tax. To the extent he asserts other claims

(e.g., a purported cost basis in his personal labor), they fit within these

general themes. All are frivolous.

This Court generally does not address frivolous arguments such

as those petitioner puts forward. See Wnuck v. Commissioner, 136 T.C.

498, 499 (2011). “We perceive no need to refute these arguments with

somber reasoning and copious citation of precedent . . . .” Crain v.

Commissioner, 737 F.2d 1417, 1417 (5th Cir. 1984) (per curiam). As

here, frivolous antitax arguments are often used as a time-consuming

delay tactic. See Wnuck, 136 T.C. at 510–11. Consider the more than

1,000 pages petitioner has filed. Addressing every assertion and citation

would waste substantial time and resources; by slowing down the Court,

answering frivolous arguments harms litigants with legitimate

arguments. See id. at 511. We see “little advantage to be gained by

addressing frivolous arguments, and there are disadvantages that may

accrue from doing so. For that reason, litigants who present frivolous

arguments should not expect to see them answered in opinions of this

Court.” Id. at 513.

We address them here (albeit briefly) only because petitioner, a

tax lawyer admitted to practice before this Court, is not the typical tax

defier. See id. at 502 n.2 (explaining our use of the term “tax defier”).

Petitioner insists on the correctness of his positions even as he cites

contrary precedent. His great efforts to distinguish his arguments fail

utterly. 5 In reaching his self-serving conclusions, the sole purpose of

5 To give just one example, petitioner argues:

The case of Commissioner v. Glenshaw Glass Co. [348 U.S. 426, 431

(1955)] is cited by the Commissioner to contend that any “undeniable

accessions to wealth, clearly realized, and over which the taxpayers

have complete dominion” is gross income. However, nowhere in his

brief does the Commissioner explain what, if any “undeniable

accessions to wealth, clearly realized, and over which the taxpayers

have complete dominion” ever accrued to the Petitioner. On the

contrary, there appears to be an irrebuttable presumption that any

funds received by the Petitioner are “undeniable accessions to wealth,

clearly realized, and over which the taxpayers have complete dominion,”

which is patently false as explained ad nauseum in not only the

Petitioner’s opening brief, but also in the plethora of controlling

Supreme Court precedent cited therein. In fact, the decision in

Glenshaw clearly indicates that remuneration for labor is not income

but rather a source from which income may be derived and therefore

cannot be “gross income.”

Pet’r’s First Am. Seriatim Reply Br. ¶14.

6

[*6] which is the evasion of his civic obligation to pay his fair share of

taxes, he leverages his professional training to willfully disregard the

caselaw and any legitimate legal analysis.

First, the Sixteenth Amendment was properly ratified and is the

law of the land. See Cook v. Spillman, 806 F.2d 948, 949 (9th Cir. 1986)

(per curiam) (rejecting as frivolous a challenge to the validity of the

Sixteenth Amendment); United States v. Stahl, 792 F.2d 1438, 1440 (9th

Cir. 1986) (rejecting assertions that the Sixteenth Amendment was void

because of improper ratification by two states); see also Leser v. Garnett,

258 U.S. 130, 137 (1922) (explaining the principle that after adopting

resolutions of ratification, a state’s “official notice to the Secretary [of

State], duly authenticated, . . . [is] conclusive upon him, and, being

certified to by his proclamation, is conclusive upon the courts”).

Petitioner boldly proclaims his arguments are a fresh take (as many tax

defiers do) but proceeds to give the same tired arguments challenging

ratification in a handful of states based on claimed typographical errors.

We will not risk dignifying his arguments with further discussion—

“to do so might suggest that these arguments have some colorable

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

Petitioner’s other arguments are similarly frivolous. Section 1

does impose an income tax on individuals. See Lucas v. Earl, 281 U.S.

111, 114–15 (1930) (addressing predecessor to section 1); United States

v. Romero, 640 F.2d 1014, 1016 (9th Cir. 1981) (explaining that an

argument that one is “not a ‘person’ and that the wages . . . [are] not

‘income’ is fatuous as well as obviously incorrect”); Bonaccorso v.

Commissioner, T.C. Memo. 2005-278, slip op. at 3–4 (rejecting as

frivolous the argument that section 1 does not impose an income tax on

individuals). Further, to argue that the income tax is an excise tax with

respect to which the taxpayer did not engage in the taxable excise

activity is nonsense. See Cabirac v. Commissioner, 120 T.C. 163, 167

(2003) (rejecting this argument as frivolous), aff’d per curiam, No. 033157, 2004 WL 7318960 (3d Cir. Feb. 10, 2004); Heisey v. Commissioner,

T.C. Memo. 2002-41, slip op. at 3–4 (describing this argument as “tax

[defier] rhetoric and legalistic gibberish” and imposing penalties), aff’d,

59 F. App’x 233 (9th Cir. 2003). Finally, being a citizen of a state of

course does not exempt an individual from federal income tax. See Upton

v. IRS, 104 F.3d 543, 545 n.1 (2d Cir. 1997) (rejecting this “tax [defier]”

argument as “barely worth a footnote”); United States v. Hilgeford,

7 F.3d 1340, 1342 (7th Cir. 1993) (describing this as a “shop worn” tax

defier argument); McLaurine v. Commissioner, T.C. Memo. 2010-236,

slip op. at 9–10 (rejecting as frivolous the argument that because an

7

[*7] individual is a citizen of a state the individual is exempt from

federal income tax).

Because we reject petitioner’s frivolous arguments, we sustain the

deficiency determinations as modified by the parties’ stipulation.

II.

Additions to Tax Under Sections 6651 and 6654

A.

Burden of Production

Generally, the Commissioner bears the burden of production

concerning additions to tax and must introduce evidence that imposing

those additions to tax is appropriate. § 7491(c); Wheeler v.

Commissioner, 127 T.C. 200, 206 (2006), aff’d, 521 F.3d 1289 (10th Cir.

2008). Nonetheless, if a taxpayer concedes a penalty at issue, the burden

of production is no longer relevant. See Funk v. Commissioner, 123 T.C.

213, 218 (2004); Swain v. Commissioner, 118 T.C. 358, 363 (2002);

Morales v. Commissioner, T.C. Memo. 2013-192, at *6 (“[The

Commissioner] is not required to establish the validity of a conceded

issue.”), aff’d, 633 F. App’x 884 (9th Cir. 2015); Carlson v. Commissioner,

T.C. Memo. 2012-76, slip op. at 9 (deeming issues regarding additions to

tax and penalties conceded for failure to raise in petition or on brief in

favor of frivolous arguments), aff’d, 604 F. App’x 628 (9th Cir. 2015). Our

rule is that “[a] stipulation will be treated, to the extent of its terms, as

a conclusive admission by the parties to the stipulation.” Rule 91(e).

Once accepted, we “will not permit a party to a stipulation to qualify,

change, or contradict a stipulation in whole or in part.” Id. If enforcing

a stipulation is manifestly unjust, however, we will provide relief. See

id.; Bail Bonds by Marvin Nelson, Inc. v. Commissioner, 820 F.2d 1543,

1547 (9th Cir. 1987) (first citing Vallejos v. C.E. Glass Co., 583 F.2d 507,

511 (10th Cir. 1978); and then citing Jeffries v. United States, 477 F.2d

52, 55 (9th Cir. 1973)), aff’g T.C. Memo. 1986-23.

The stipulation reflects petitioner’s concession that should his

legal arguments fail he is liable for the additions to tax. Having already

determined that his legal arguments fail and seeing no injustice in

holding petitioner to the stipulation, we conclude that respondent has

no unmet burden. To the extent petitioner raised any contrary

arguments in his petition, 6 his briefing shows he abandoned those

6 While the petition broadly asserts errors respecting managerial approval,

certification, and various miscalculations, both the parties’ joint motion to submit the

case for decision and the stipulation reveal the limited scope of his remaining legal

arguments.

8

[*8] positions, favoring instead the frivolous arguments discussed

above. See Rule 151(e); Thiessen v. Commissioner, 146 T.C. 100, 106

(2016) (“[I]ssues and arguments not advanced on brief are considered to

be abandoned.”); Mendes v. Commissioner, 121 T.C. 308, 312–13 (2003);

Nicklaus v. Commissioner, 117 T.C. 117, 120 n.4 (2001). Thus, petitioner

is liable for the additions to tax under sections 6651(a)(1) and (2) and

6654 unless we agree with him that, as a matter of law, there was

reasonable cause for his failure to file (under section 6651(a)(1)) and pay

(under section 6651(a)(2)). 7 We turn now to that issue and hold against

him.

B.

Petitioner’s Reasonable Cause Argument 8

As an exception to section 6651, a taxpayer may seek to show that

reasonable cause, not willful neglect, was the reason for a failure to file

a timely return or pay tax. See § 6651(a)(1) and (2); Higbee v.

Commissioner, 116 T.C. 438, 447 (2001) (explaining that once the

Commissioner’s burden of production is met, taxpayers bear the burden

of proof for application of the reasonable cause exception). A taxpayer

must show he was unable to file the required return or pay the tax

without undue hardship within the prescribed time despite exercising

ordinary business care and prudence. See United States v. Boyle, 469

U.S. 241, 246 (1985); Treas. Reg. § 301.6651-1(c). Willful neglect, by

contrast, elicits “a conscious, intentional failure or reckless

indifference.” Boyle, 469 U.S. at 245.

Petitioner raises a final argument against the additions to tax

under sections 6651(a)(1) and (2) and 6654. Yet, if correct, he proves far

more: namely that because of the purported failure of the IRS to comply

with a statutory mandate he (and everyone else) is relieved of the

obligation to file a federal income tax return. How does he get there? He

contends that the IRS is under an obligation to publish every year a

regulation in the Federal Register with the applicable income threshold

for filing a return (known as the exemption amount). According to

petitioner, since 1990 the exemption amount has appeared not in the

Code or any regulation but only in “some informal IRS publication”

without the “force and effect of law.” Thus according to petitioner for the

7 Section 6654 does not provide for a generally applicable reasonable cause

exception. See Mendes, 121 T.C. at 323. While there is a narrow exception in

section 6654(e)(3)(B), petitioner does not argue the narrow exception applies.

8 Petitioner raises reasonable cause for the first time in his opening brief. While

he is bound by his concessions in the stipulation, we address his additional argument

here for completeness and to show it too is frivolous.

9

[*9] past 35 years apparently there has been no enforceable obligation

to file a federal income tax return. This argument is as frivolous as his

others. See Bradley v. United States, 817 F.2d 1400, 1404 (9th Cir. 1987)

(“The test for frivolousness is purely an objective one.”).

Petitioner’s obligation to file a return is based on section 6012, not

on some secondary publication. See § 6012 (“Returns with respect to

income taxes . . . shall be made by . . . [e]very individual having for the

taxable year gross income which equals or exceeds the exemption

amount . . . .” (Emphasis added.)); Rader v. Commissioner, 143 T.C. 376,

390 (2014) (regarding contrary arguments as meritless), aff’d in part,

appeal dismissed in part, 616 F. App’x 391 (10th Cir. 2015). If petitioner

insists on refusing to follow IRS guidance, the Code provides what he

needs to figure out the exemption amount himself. See

§§ 6012(a)(1)(D)(ii), 151(d), 1(f)(3). The irony of course is that the

stipulation makes clear that petitioner’s gross income for the years at

issue far exceeded even a cursory estimation of the relevant exemption

amount. Petitioner has failed as a matter of law to show any reasonable

cause for his failure to file and pay. Instead we find that his “conscious,

intentional failure or reckless indifference” caused his willful refusal to

file and pay. Boyle, 469 U.S. at 245. The additions to tax under sections

6651(a)(1) and (2) and 6654, as determined and stipulated, are proper.

III.

Penalty Under Section 6673

Section 6673(a)(1)(B) provides that when a taxpayer advances

frivolous or groundless arguments before this Court, we may impose a

penalty of up to $25,000. Frivolous positions are those “contrary to

established law and unsupported by a reasoned, colorable argument for

change in the law. . . . The inquiry is objective.” Nis Fam. Tr. v.

Commissioner, 115 T.C. 523, 544 (2000) (quoting Coleman v.

Commissioner, 791 F.2d 68, 71 (7th Cir. 1986)); accord Bradley, 817 F.2d

at 1404; see also Hansen v. Commissioner, 820 F.2d 1464, 1470 (9th Cir.

1987) (explaining penalties are permissible when a taxpayer should

know the position is frivolous). “The purpose of section 6673 is to compel

taxpayers to think and to conform their conduct to settled principles

before they file returns and litigate.” Takaba v. Commissioner, 119 T.C.

285, 295 (2002). With his spurious reasoning petitioner seeks to

challenge long-settled principles. We should, and we will, impose a

penalty. The facts and circumstances of this case guide our

determination as to the appropriate amount.

10

[*10] Petitioner is a tax lawyer licensed in California and admitted to

practice before this Court. Throughout his briefing he acknowledges

that he understands the substantial caselaw establishing that his

arguments are without support. He knows that his arguments were

found frivolous in cases that he cites. See, e.g., Miller v. United States,

868 F.2d 236, 238, 241–42 (7th Cir. 1989) (per curiam) (noting prior

sanctions and imposing additional sanctions for a frivolous challenge to

ratification of the Sixteenth Amendment). Nevertheless, he persists in

making his frivolous arguments. Further, he has done so in a way—

filing more than 1,000 pages in this case—that could only hinder the

work of the Court.

His failure to file federal income tax returns was not an isolated

incident of misjudgment but a pattern of misconduct over a period of at

least eight taxable years. During that time, petitioner operated

businesses generating substantial gross income. His decision not to file

allowed him to avoid (for a while) paying any federal income tax. That,

in addition to his vexatious briefing, suggests that his goal, at least in

significant part, was to delay facing his federal income tax obligations.

Our concern is that if we fail to dissuade him now, in the future his

noncompliance may continue.

Those with specialized expertise should expect that we may hold

them to a higher standard where appropriate. See Tippin v.

Commissioner, 104 T.C. 518, 534 (1995) (holding attorney specialized in

tax to higher standard of care respecting section 6653(a)(1) addition to

tax and section 6662(a) penalty); Leyshon v. Commissioner, T.C. Memo.

2015-104, at *26–27 (finding a taxpayer’s background and education is

an important consideration when applying section 6673), aff’d, 649

F. App’x 299 (4th Cir. 2016). Petitioner has the knowledge and training

that should have made him aware of the possible consequences of his

frivolous arguments far in advance of his making them. He should, and

his briefing reflects that he does, know better.

Worse still, petitioner has represented a client in a previous

matter before this Court that resulted in a penalty for similarly frivolous

arguments. See Avery v. Commissioner, T.C. Memo. 2007-60, slip op.

at 16–17 (discussing frivolous arguments that appear again in this case),

aff’d, 399 F. App’x 195 (9th Cir. 2010). 9 We do not see petitioner’s effort

9 Having already found that petitioner is the same Peter J. Gibbons admitted

to the Bar of this Court, we also take notice of the record in Avery in so far as his

representation there relates to his conduct here. See Rule 143; Fed. R. Evid. 201; see

also Leyshon, T.C. Memo. 2015-104, at *14.

11

[*11] here as a good faith attempt at changing the law, as he would have

us believe. See Rule 202(a)(3); Model Rules of Pro. Conduct r. 3.1 (Am.

Bar Ass’n 2023). Instead he puts forward the same baseless arguments

this Court and others have long rejected.

As a result, we will impose a penalty of $2,000. See generally

Leyshon, T.C. Memo. 2015-104, at *24–29 (describing how we decide to

impose a penalty). We decline to impose a higher amount for a few

reasons. First, because petitioner raised his frivolous arguments only on

brief, he did not in this case receive a warning that such arguments

could subject him to a penalty (and Avery was nearly 20 years ago). 10

See, e.g., Wheeler, 127 T.C. at 214 (noting repeated warnings before

imposing penalty); see also Leyshon, T.C. Memo. 2015-104, at *14

(warning issued in prior case preceded present case by only a few years).

Second, respondent has not asked that we impose any penalty. See, e.g.,

Takaba, 119 T.C. at 294. But see Leyshon, T.C. Memo. 2015-104, at *15

(noting that the Commissioner requested neither penalties nor judicial

notice of prior warning). Finally, and most importantly, petitioner’s

cooperation with respondent in stipulating “to the fullest extent,” see

Rule 91(a)(1), and agreeing to submit this case fully stipulated under

Rule 122 tempers our view of his otherwise flagrant conduct. Our

forbearance shows the great weight we attach to our Rules promoting

judicial economy and especially to our pretrial procedures. See

Branerton Corp. v. Commissioner, 61 T.C. 691, 692 (1974).

IV.

Conclusion

We have considered all the arguments that the parties have made

and, to the extent they are not addressed herein, we find them to be

moot, irrelevant, or without merit.

To reflect the foregoing and concessions by the parties,

Decision will be entered under Rule 155.

10 While he may consider the penalty here modest, petitioner would do well to

consider this his warning: Should he appear before us in the future, he should not

again make frivolous arguments. See Wheeler v. Commissioner, T.C. Memo. 2011-278,

slip op. at 5–6 (imposing the maximum penalty where prior penalties failed to deter

misconduct).