1984 U.S. Tax Ct. LEXIS 28">*28
T, a tax protester, claimed he was exempt from the Federal income tax on the grounds: (1) That the 1977 Form 1040 "Privacy Act Notice" was faulty; (2) that Forms 1040 and W-4 and the related "Privacy Act" notices had not been published in the Federal Register; and (3) that the statute of limitations barred any assessment of tax.
1. The Form 1040 "Privacy Act Notice" meets the requirements of the Privacy Act of 1974;
2. Forms 1040 and W-4 or the related Privacy Act Notices need not be published in the Federal Register; and
3. The statute of limitations does not bar the assessment of T's 1977 tax, since the determination of deficiency was made within the period of limitations as extended by a waiver signed by T that was not obtained by fraud of the IRS, as contended by T.
83 T.C. 534">*535 OPINION
The Commissioner determined a $ 13,901 deficiency in petitioner's Federal income tax and a $ 695 addition to tax under
1984 U.S. Tax Ct. LEXIS 28">*30 Petitioner is a tax protester. At the time he filed his petition herein, he was a resident of the Republic of Panama. During 1977 he worked as a ship pilot, receiving $ 39,114.50 in wages from the Panama Canal Co. He filed a Form 1040 for that year but reported no income of any kind. He inserted the word "None" in response to items on his Form 1040 calling for the amount of his wages, salaries, and other employee compensation, as well as for the amounts of his dividends, interest, and other income. However, he claimed deductions for charitable contributions in the aggregate amount of $ 91,166, consisting of (1) his $ 39,114.50 wages which he described as "remuneration received * * * for the assigned agent services as directed by the Miletus Church," and (2) $ 54,260 2 in purported transfers to the Miletus Church of various items of property, specified in an attached receipt as his residence equity, a lot, personal property, and "H.H. Furnishings," gun collection, securities, an automobile, and two bank accounts (savings and checking). He attempted to justify the deduction or nontaxability of his $ 39,114.50 wages as a ship pilot by a certification and a notice attached to his1984 U.S. Tax Ct. LEXIS 28">*31 Form 1040 to the effect that petitioner, as a "member" of the Miletus Church, Inc., Wayzata, MN, "served 83 T.C. 534">*536 as an appointed agent performing directed duties as a missionary and Christian priest," and that he was "required by the church to perform missionary duties as Pilot with the Panama Canal Company." A W-2 Form is attached to petitioner's Form 1040 showing his $ 39,114.50 wages and $ 2,208.57 of Federal taxes withheld, and he claimed a refund of the entire amount withheld. In view of his failure or refusal to report any income whatever on his Form 1040, it would appear that his sole reason for submitting the W-2 along with the Form 1040 was to obtain a refund of the taxes withheld, and not to report any wages received. Petitioner voluntarily signed the Form 1040, dated March 21, 1978, and there is no credible evidence that his signature was obtained by deception or fraud, notwithstanding his contention to the contrary in respect of the Form 1040 and the Form 872 referred to in the next paragraph.
1984 U.S. Tax Ct. LEXIS 28">*32 On January 17, 1981, petitioner signed a Form 872, "Consent to Extend the Time to Assess Income Tax," for his 1977 taxable year, thereby agreeing to extend the time during which he could be assessed a tax or sent a deficiency notice in respect of that year to December 31, 1981. There is no credible evidence that his signature was obtained under any duress or through fraud or deception.
In his deficiency notice, dated October 29, 1981, the Commissioner disallowed petitioner's charitable contribution "since it has not been established that any amount was contributed to any qualified charity," increased his taxable income by the amount of wages received from the Panama Canal Co., and determined the deficiency here in controversy accordingly. The Commissioner also found that the underpayment in tax was due to negligence or intentional disregard of rules and regulations, and, as a consequence, determined a $ 695 addition to tax pursuant to
The amended petition filed in this Court attacking the Commissioner's determination contains 39 assignments of error and 52 allegations of supporting fact, most of them frivolous and largely of the tax protester variety. 1984 U.S. Tax Ct. LEXIS 28">*33 Thus, he challenged the Commissioner's determination that he is a "taxpayer," or that he had a "tax year" ending December 31, 1977, or that he was "a person liable for tax for the year in dispute," or that "the labor performed by Petitioner was not property acquired by Petitioner from another person." Such 83 T.C. 534">*537 assignments of error are typical of many others in the amended petition.
At the trial, petitioner categorically refused to present any substantive evidence to establish that he was entitled to the deductions claimed by him or that his earnings as a ship pilot were not includable in gross income. However, to the extent that the materials in the record permit any kind of judgment on the merits, it would seem clear that the position taken by petitioner in his return is thoroughly unsound. The Court has been inundated with a flood of tax protester cases involving sham or questionable "churches," 3 spurious religious "orders," and patently deceptive "vows of poverty." To be sure, the record before us is not as complete as we would like in this respect as a result of petitioner's adamant refusal to present any evidence on the merits. Nevertheless, there is more than enough1984 U.S. Tax Ct. LEXIS 28">*34 to make clear the tax protester type of claim put forward by him and to conclude that there is no merit to the substance of his position as revealed in his return. In this connection, it may be well to call attention to the following comments recently made by the Fifth Circuit in the case of another tax protester,
We perceive no need to refute * * * [the taxpayer's] arguments with somber reasoning and copious citation of precedent; to do so might suggest that these arguments have some colorable merit. * * *
* * * *
We are sensitive to the need for the courts to remain open to all who seek in good faith to invoke the protection of law. An appeal that lacks merit is not always -- or often -- frivolous. However, we are not obliged to suffer in silence the filing of baseless, insupportable appeals presenting no colorable claims of error and designed only to delay, obstruct, or incapacitate the operations of the courts or any other governmental authority. Crain's present appeal is of this sort. It is a hodgepodge of unsupported assertions, irrelevant platitudes, and legalistic gibberish. The1984 U.S. Tax Ct. LEXIS 28">*35 government should not have been put to the trouble of responding to such spurious arguments, nor this court to the trouble of "adjudicating" this meritless appeal.
83 T.C. 534">*538 * * * The United States shall recover from appellant Crain twice its cost of this appeal. Additionally, we assess against Crain a damage award of $ 2,000 in favor of the appellee United States.
Even if it be thought that there is not enough affirmative material in the record herein to characterize the present case in like terms, it must be remembered that the burden of proof was upon the petitioner, and he has completely failed to establish the correctness of the return filed by him. In this respect, 1984 U.S. Tax Ct. LEXIS 28">*36 this case is quite similar to
Although petitioner refused to present1984 U.S. Tax Ct. LEXIS 28">*37 any evidence at the trial to support his church-related claims, he did make an aggressive attack upon the Government's position, and sought to escape all liability for tax by relying on the Privacy Act of 1974, Pub. L. 93-579, 88 Stat. 1896 (1974), codified at
The Privacy Act requires Government agencies which request information to disclose to those from whom information is sought the statute or order that authorizes such request for information. The Secretary of the Treasury (or his delegate) is empowered to request certain information with respect to the payment of taxes by
1984 U.S. Tax Ct. LEXIS 28">*40 To be sure,
Even if there were a clear violation of the Privacy Act by the IRS, the consequences of such violation would not nullify petitioner's liability for income tax. That act merely authorizes an individual who has1984 U.S. Tax Ct. LEXIS 28">*41 been adversely affected by the violation "to bring a civil action against the agency," and sets forth certain allowable penalties.
Petitioner next alleges that the Government's failure to publish Forms 1040 and W-4 and the related Privacy Act notices in the Federal Register obviates any responsibility that he may have to file a Federal income tax return and relieves him of all liability for Federal income tax. This is patently frivolous. Forms 1040 and W-4 merely facilitate taxpayers' compliance with the Internal Revenue laws and we know of no authority requiring them to be published in the Federal Register.
Petitioner's last contention is that the statute of limitations bars any assessment of tax with respect to his 1977 tax year since his agreement (generally referred to as a waiver) to extend such statute was fraudulently obtained. His argument in this respect is based on his position that the waiver, like the Form 1040, is a nullity since the IRS Privacy Act Notice was fraudulent. In this connection, his testimony at the trial and 83 T.C. 534">*541 no credible evidence whatever of the fraud charged by him. Petitioner's position is so lacking in merit that it does not deserve any further comment. Indeed, the shoe could well be on the other foot, and quite possibly he may be fortunate that
Finally, as to the 5-percent addition to tax under
1984 U.S. Tax Ct. LEXIS 28">*44 Accordingly,
1. For convenience, our findings of fact are combined with and are incorporated in the opinion.↩
2. The fact that this figure when added to the $ 39,114.50 wages is not equal to the $ 91,166 claimed deduction is unexplained.↩
3. In one such case, the taxpayer's counsel cynically, or perhaps facetiously, inquired of his client whether he had considered calling his church the "Church of the Immaculate Deduction."
4. The opinion in
5. PRIVACY ACT NOTICE
Our legal right to ask for information is
6. This case does not present the question whether art. III of the Panama Canal Treaty, T.I.A.S. 10030, and the agreement in implementation of art. III, T.I.A.S. 10031, exempt from U.S. Federal taxation wages paid to U.S. citizen employees by the Panama Canal Commission, the successor to the petitioner's employer. The effective date of that treaty and the agreement was Oct. 1, 1979, and under no theory could they relate to the 1977 wages involved herein. Moreover, notwithstanding the recent decision of the Claims Court in