FISHER, Senior Judge.
On April 20, 2009, the Indiana Department of State Revenue (Department) issued a final determination in which it determined Lyle Lacey (Lacey) owed Indiana adjusted gross income tax for the 2007 tax year (the year at issue). Lacey has appealed that final determination.1
FACTS AND PROCEDURAL HISTORY
Lacey, an Indiana resident, is employed by Adecco as a verification engineer. (Resp't Ex. N at 14.) For the year at issue, Lacey's W-2 form indicates that Adecco paid him a substantial amount in wages. (See Resp't Ex. I.)
When Lacey filed his 2007 federal and state income tax returns, he did not attach his W-2 form. Instead, he attached to each return a federal Form 4852 on which he indicated that his wages were zero.2 (See Resp't Exs. B at 5, H at 5 (footnote added).) Accordingly, Lacey's federal return reported his federal adjusted gross income as zero; likewise, Lacey's state return reported his Indiana taxable income as zero.3 (Resp't Exs. B at 1, H at 1 (footnote added).) Lacey's state return also claimed a refund of the $5,034.98 in state and county income taxes that had been withheld by Adecco. (Resp't Ex. H at 1-2.)
After reviewing his state return, the Department determined that Lacey was not entitled to a refund and that he actually owed another $1,113.21 in state income tax.4 (Resp't Ex. P (footnote added).) Lacey protested. The Department conducted a telephonic administrative hearing on April 6, 2009. On April 20, 2009, the Department issued a letter of findings denying Lacey's protest.
Lacey filed an original tax appeal on June 12, 2009. A trial was held on July 14, 2010, and the Court heard the parties' oral arguments on December 13, 2010. Additional facts will be supplied as necessary.
ANALYSIS AND OPINION
Standard of Review
This Court reviews the Department's final determinations de novo. IND. CODE ANN. § 6-8.1-5-1(i) (West 2011) (relating to proposed assessments); IND.CODE ANN. § 6-8.1-9-1(d) (West 2011) (relating to claims for refund). Accordingly, it is bound by neither the evidence nor the issues presented at the administrative level. Snyder v. Ind. Dep't of State Revenue, 723 N.E.2d 487, 488 (Ind.Tax 2000), review denied.
A notice of proposed assessment is prima facie evidence that the Department's claim for unpaid taxes is valid. A.I.C. § 6-8.1-5-1(c). Consequently, "[t]he burden of proving that the proposed assessment is wrong rests with the person against whom the proposed assessment is made." Id.
DISCUSSION
On appeal, Lacey argues that the compensation he received in 2007 as a result of his employment with Adecco is not income within the meaning of the Sixteenth Amendment to the United States Constitution5 or the Internal Revenue Code. (Pet'r Br. at 6, 9 (footnote added).) As a result, he maintains that his federal tax return, which reported zero as the amount of his federal adjusted gross income, was properly completed. (See Pet'r Reply Br. at 2 ¶ 4.) In turn, because Indiana's adjusted gross income tax "piggybacks" the federal income tax, Lacey asserts that he has no state taxable income and, hence, no state income tax liability. (See Pet'r Pet. at 4-5 ¶¶ 40-42; Pet'r Reply Br. at 2 ¶¶ 3-6.)
As support for his argument, Lacey cites to the United States Supreme Court's decision in Eisner v. Macomber, 252 U.S. 189, 40 S.Ct. 189, 64 L.Ed. 521 (1919), for the proposition that only "gain" or "profit" can be "income."6 (See Pet'r Br. at 5 n.3 (footnote added).) Lacey then reasons that his compensation is not income because there was no "gain" or "profit"; rather, the compensation was received in equal exchange for the services he rendered for Adecco. (See Pet'r Br. at 5-7.) Lacey is incorrect.
More than eleven years ago, this Court explained the significance of the "income as gain" language found in Eisner and upon which Lacey now relies. Indeed:
In Eisner, the Supreme Court considered whether the Sixteenth Amendment permitted Congress to tax as income a taxpayer's stock dividend made against accumulated profits of the issuing corporation. The Court in Eisner defined income as the "gain derived from capital, from labor, or from both combined." Applying this definition, the Court focused on the phrase "derived from capital," which included a "gain, a profit, something of exchangeable value, proceeding from the property, severed from the capital . . . [and] received or drawn by the recipient (the taxpayer) for his separate use, benefit and disposal[.]"
* * * * * *
Eisner merely concluded that stock dividends are not income within the meaning of the Sixteenth Amendment because the taxpayer received no separate asset from the company for his own individual use and benefit. In short, the taxpayer realized no gain that was severed from and independent of the company's assets. The Court in Eisner did not discuss what constituted a "gain derived from labor."7
Snyder, 723 N.E.2d at 489-90 (internal footnotes and citations omitted) (footnote added). In any event, the Supreme Court has, since its decision in Eisner, repeatedly rejected the argument that income is limited to gain or profit. See Commissioner v. Kowalski, 434 U.S. 77, 94, 98 S.Ct. 315, 54 L.Ed.2d 252 (1977) (rejecting the assumption that Eisner's "income as gain" definition was incorporated in the current definition of income found in section 61 of the Internal Revenue Code); Commissioner v. Glenshaw Glass Co., 348 U.S. 426, 431, 75 S.Ct. 473, 99 L.Ed. 483 (1955) (explaining that while the definition of "income as gain" served a useful purpose within the limited context of Eisner, "it was not meant to provide a touchstone to all future gross income questions").)
To the extent, then, that Lacey argues his compensation from Adecco is not taxable income because it does not reflect "gain" or "profit," it matters not. Indeed, in both Kowalski and Glenshaw Glass, not only did the Supreme Court reject the notion that income was limited to gain or profit, but it accepted and applied the definition of "gross income" as provided in section 61 of the Internal Revenue Code. See Kowalski, 434 U.S. at 83, 98 S.Ct. 315; Glenshaw Glass, 348 U.S. at 432, 75 S.Ct. 473. Pursuant to that definition, wages are income for purposes of taxation. See I.R.C. § 61(a)(1) (2007) ("gross income" is "all income from whatever source derived, including . . . compensation for services"). Thus, it is undeniably clear that Lacey's claim—that the compensation he received from Adecco is not taxable income—is incorrect as a matter of law.8
Lacey also contends that because the federal income tax is "an un-apportioned direct tax," it runs counter to the Supreme Court's holding in Brushaber v. Union Pacific Railroad Company, 240 U.S. 1, 36 S.Ct. 236, 60 L.Ed. 493 (1916). (See Pet'r Br. at 8-9.) More specifically, Lacey contends that in Brushaber, the Supreme Court held that the Sixteenth Amendment's provision "exempting a tax from apportionment [is in] irreconcilable conflict with the general [constitutional] requirement that all direct taxes be apportioned." (Oral Argument Tr. at 5.) (See also Pet'r Br. at 8 (where Lacey states that the Court in Brushaber "indicated that the 16th Amendment did not change the constitution with respect to direct taxes; direct taxes must be apportioned").)
Lacey's contention is without merit. Congressional power to tax is articulated in Article 1, Section 8 of the Constitution and "embraces every conceivable power of taxation" including the power to lay and collect income taxes. Brushaber v. Union Pacific R.R. Co., 240 U.S. 1, 12-13, 36 S.Ct. 236, 60 L.Ed. 493 (1916). "It is clear. . . that the whole purpose of the [Sixteenth] Amendment was to relieve all income taxes . . . from apportionment[.]" Id. at 18, 36 S.Ct. 236. Indeed,
there is no escape from the conclusion that the Amendment was drawn for the purpose of doing away . . . with the principle. . . of determining whether a tax on income was direct [or] not . . . since in express terms the Amendment provides that income taxes, from whatever source the income may be derived, shall not be subject to the regulation of apportionment.
Id.
CONCLUSION
Lacey has not shown that the compensation he received in 2007 as a result of his employment with Adecco is not income within the meaning of the Sixteenth Amendment or the Internal Revenue Code. As a result, Lacey's employment compensation is income subject to Indiana's adjusted gross income tax and the Court therefore AFFIRMS the Department's final determination.
On a final note, this case marks the third time this Court has rejected the argument that one's employment wages do not constitute income subject to Indiana's adjusted gross income tax. See Lacey v. Ind. Dep't of State Revenue, 894 N.E.2d 1113 (Ind.Tax 2008), review denied; Snyder, 723 N.E.2d at 490-91. Consequently, the Court now provides the following warning: in the future, when a taxpayer advances the same (or a substantially similar) argument, the Court will not hesitate to consider whether an award of attorney fees is appropriate. See IND.CODE ANN. § 34-52-1-1(b) (West 2011) (allowing a court to award attorney's fees to a prevailing party if it finds, inter alia, that the losing party litigated in bad faith or pursued a frivolous, unreasonable, or groundless claim or defense). See also Chapo v. Jefferson Cnty. Plan Comm'n, 926 N.E.2d 504, 509-10 (Ind.Ct.App.2010) (defining a "frivolous, unreasonable, or groundless" claim or defense) (citation omitted).9
