Respondent's Rule 40 Motion and Subsequent Developments

As indicated, respondent filed a Motion To Dismiss For Failure To State A Claim Upon Which Relief Can Be Granted. ² On November 27, 1995, shortly after respondent filed her motion to dismiss, the Court issued an order calendaring respondent's motion for hearing and also directing petitioner to file a second amended petition in accordance with the requirements of Rule 34. In particular, the Court directed petitioner to file a second amended petition setting forth with specificity each error allegedly made by respondent in the determination of the deficiency and separate statements of every fact upon which the assignments of error are based.

1996 Tax Ct. Memo LEXIS 264">*269 Petitioner responded to the Court's Order dated November 27, 1995, by filing a second amended petition on December 29, 1995. In his second amended petition, petitioner again admits that he did not file income tax returns for the taxable years in issue and alleges that respondent's deficiency determinations were not based on any factual evidence. The second amended petition also includes the following allegations:

Petitioner has never been notified of a duty to file, or that any requirement was placed upon the Petitioner to file, nor was Petitioner ever served with any notice by the Commissioner of Internal Revenue requiring Petitioner to keep records or file a tax return or statement; * * *

* * * *

Petitioner's Official Records (IMF, not to exclude other systems of records), created and maintained solely by the Internal Revenue Service, reflects the Internal Revenue Service fraud upon Petitioner.

On December 29, 1995, petitioner filed his first motion, namely, the Motion To Shift Burden Of Proof To Respondent. This motion is premised on petitioner's argument that respondent's deficiency determinations were not based on any factual evidence.

1996 Tax Ct. Memo LEXIS 264">*270 On January 11, 1996, petitioner filed his second motion, namely, the Motion To "Quash The Going Forward With The Evidence". Such motion closely tracks petitioner's first motion but also alleges various violations of petitioner's Constitutional rights.

The Hearing on the Parties' Motions

Respondent's motion to dismiss and petitioner's two motions were called for hearing in Washington, D.C., on February 14, 1996, and again on March 6, 1996. Counsel for respondent appeared at the hearings and presented argument and adduced evidence in respect of the pending motions. Petitioner did not appear at either hearing. However, he did file a Rule 50(c) statement, together with an "Affidavit of Fact", prior to the first hearing.

In his "Affidavit of Fact", petitioner alleges, inter alia, that he is an "Indiana state Citizen * * * having a working knowledge and understanding of the Internal Revenue Code (Title 26 USC) and its implementing regulations." Petitioner also alleges that he:

has read and studied the Internal Revenue Code and its implementing regulations, and various internal policy and procedural manuals, thereby [he] has determined that [his] current status is not1996 Tax Ct. Memo LEXIS 264">*271 that of a "taxpayer" * * *

At the hearing on February 14, 1996, respondent introduced copies of the Forms 1040X that petitioner submitted to respondent in July 1994. On Line 1 of Form 1040X for 1991, petitioner reported "Total income" in the amount of $ 56,151, whereas on Line 2 petitioner claimed an "Adjustment to income" in the form of "income from 'without U.S.'" in the same amount, thereby eliminating all income. Similarly, on Line 1 of Form 1040X for 1992, petitioner reported "Total income" in the amount of $ 34,726, whereas on Line 2 petitioner claimed an "Adjustment to income" in the form of "income from 'without U.S.'" in the same amount, once again eliminating all income. Both Forms 1040X refer to "attached supporting forms".

In the "attached supporting forms", petitioner alleges, inter alia, that the 50 States are excluded from the definition of "United States" for purposes of the income tax under subtitle A of the Internal Revenue Code. Petitioner further alleges that although he is a resident of Chesterton, Indiana, he is neither a "U.S. Citizen" nor a "resident" or "inhabitant" of the United States. Petitioner basically concludes that1996 Tax Ct. Memo LEXIS 264">*272 all income received by him is not taxable because it constitutes "compensation for labor or personal services performed without the United States". Petitioner finishes by attempting to revoke his signature on all prior Federal income tax returns. Thus:

I hereby REVOKE all signatures, of the property known as CRAIG BRATCHER, that appear on every 1040 Form (Codicil), including, but not limited to, the "original" 1040 Forms and any/all other federal forms and documents for the years 1958 through 1993.

Rule 40 provides that a party may file a motion to dismiss for failure to state a claim upon which relief can be granted. We may grant such a motion when it appears beyond doubt that the party's adversary can prove no set of facts in support of a claim which would entitle him or her to relief. Conley v. Gibson, 355 U.S. 41">355 U.S. 41, 355 U.S. 41">45-46 (1957); Price v. Moody, 677 F.2d 676">677 F.2d 676, 677 F.2d 676">677 (8th Cir. 1982).

Rule 34(b)(4) requires that a petition filed in this Court contain clear and concise assignments of each and every error that the taxpayer alleges to have been committed by the Commissioner in the determination of the1996 Tax Ct. Memo LEXIS 264">*273 deficiency and any addition to tax in dispute. Rule 34(b)(5) further requires that the petition contain clear and concise lettered statements of the facts on which the taxpayer bases the assignments of error. See Jarvis v. Commissioner, 78 T.C. 646">78 T.C. 646, 78 T.C. 646">658 (1982). The failure of a petition to conform with the requirements set forth in Rule 34 may be grounds for dismissal. Rules 34(a)(1); 123(b).

In general, the determinations made by the Commissioner in a notice of deficiency are presumed to be correct, and the taxpayer bears the burden of proving that those determinations are erroneous. Rule 142(a); Welch v. Helvering, 290 U.S. 111">290 U.S. 111, 290 U.S. 111">115 (1933). Moreover, any issue not raised in the pleadings is deemed to be conceded. Rule 34(b)(4); 78 T.C. 646">Jarvis v. Commissioner, supra at 658 n.19; Gordon v. Commissioner, 73 T.C. 736">73 T.C. 736, 73 T.C. 736">739 (1980).

The petition, amended petition, and the second amended petition filed in this case do not satisfy the requirements of Rule 34(b)(4) and (5). There is neither assignment of error nor allegation of fact in support of any justiciable claim. Rather, 1996 Tax Ct. Memo LEXIS 264">*274 there is nothing but tax protester rhetoric and legalistic gibberish, as demonstrated by the passages from petitioner's pleadings and other documents that were previously quoted. See Abrams v. Commissioner, 82 T.C. 403">82 T.C. 403 (1984); Rowlee v. Commissioner, 80 T.C. 1111">80 T.C. 1111 (1983); McCoy v. Commissioner, 76 T.C. 1027">76 T.C. 1027 (1981), affd. 696 F.2d 1234">696 F.2d 1234 (9th Cir. 1983).

The Court's order dated November 27, 1995, provided petitioner with an opportunity to assign error and allege specific facts concerning his liability for the taxable years in issue. Unfortunately, petitioner failed to respond to the Court's order in a meaningful fashion.

We see no need to catalog petitioner's arguments and painstakingly address them. As the Court of Appeals for the Fifth Circuit has remarked: "We perceive no need to refute these arguments with somber reasoning and copious citation of precedent; to do so might suggest that these arguments have some colorable merit." Crain v. Commissioner, 737 F.2d 1417">737 F.2d 1417, 737 F.2d 1417">1417 (5th Cir. 1984). Suffice it to say that petitioner is not exempt1996 Tax Ct. Memo LEXIS 264">*275 from Federal income tax or from the obligation to file income tax returns. See sec. 6012(a)(1); 82 T.C. 403">Abrams v. Commissioner, supra at 406-407. Moreover, the contention that the Commissioner cannot determine a deficiency because the taxpayer has not filed an income tax return is frivolous. Zyglis v. Commissioner, T.C. Memo. 1993-341, affd. without published opinion 29 F.3d 620">29 F.3d 620 (2d Cir. 1994); Scruggs v. Commissioner, T.C. Memo. 1995-355; Roman v. Commissioner, T.C. Memo. 1995-175.

We also think it appropriate to comment briefly on petitioner's allegation that respondent's deficiency determinations were not based on any factual evidence. Here we note that for 1991 and 1992, respondent's deficiency determinations, as supplemented in respondent's motion to dismiss, were based on admissions made by petitioner in Forms 1040X submitted by petitioner in July 1994. In other words, petitioner has been charged with having no more income than the amounts disclosed by petitioner on the Forms 1040X that he himself submitted to respondent. Moreover, 1996 Tax Ct. Memo LEXIS 264">*276 we note that petitioner has repeatedly admitted that he failed to file income tax returns for the years in issue, an admission that confirms respondent's determination and that provides a basis for imposing additions to tax under sections 6651(a)(1) and 6654(a).

Insofar as 1993 is concerned, we note that respondent's deficiency determination is based on two Forms W-2 submitted to respondent under petitioner's name and taxpayer identification number. The Forms W-2 disclose the payment of wages by USX Corporation in the amount of $ 24,411 and by Adwood Corporation in the amount of $ 1,130.

We think it significant that petitioner has not denied that he was employed by either USX Corporation or Adwood Corporation in 1993. Indeed, petitioner has not even denied receiving the amount of wages that respondent determined he received. If petitioner had wanted to dispute any of these matters, it would have been extraordinarily easy for him to have done so. ³

1996 Tax Ct. Memo LEXIS 264">*277 Given the factual basis for respondent's deficiency determinations, as supplemented in respondent's motion to dismiss, for the taxable years in issue, petitioner is in no position to argue that such determinations are arbitrary. Zuhone v. Commissioner, 883 F.2d 1317">883 F.2d 1317, 883 F.2d 1317">1325-1326 (7th Cir. 1989), affg. T.C. Memo. 1988-142.

Because the petition, amended petition, and second amended petition fail to state a claim upon which relief can be granted, we will grant respondent's motion to dismiss, as supplemented. ⁴ See Scherping v. Commissioner, 747 F.2d 478">747 F.2d 478 (8th Cir. 1984). We will also deny petitioner's two motions because they represent nothing other than a restatement of the claims made by petitioner in his pleadings.

1996 Tax Ct. Memo LEXIS 264">*278 We turn now, on our own motion, to the award of a penalty against petitioner under section 6673(a).

As relevant herein, section 6673(a)(1) authorizes the Tax Court to require a taxpayer to pay to the United States a penalty not in excess of $ 25,000 whenever it appears that proceedings have been instituted or maintained by the taxpayer primarily for delay or that the taxpayer's position in such proceeding is frivolous or groundless.

The record in this case convinces us that petitioner was not interested in disputing the merits of either the deficiencies in income taxes or the additions to tax determined by respondent in the notice of deficiency. Rather, the record demonstrates that petitioner regards this case as a vehicle to protest the tax laws of this country and espouse his own misguided views.

A petition to the Tax Court 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">791 F.2d 68, 791 F.2d 68">71 (7th Cir. 1986). Petitioner's position, as set forth in his pleadings and other filings, consists solely of tax protester rhetoric and legalistic gibberish. Based1996 Tax Ct. Memo LEXIS 264">*279 on well-established law, petitioner's position is frivolous and groundless.

We are also convinced that petitioner instituted and maintained this proceeding primarily, if not exclusively, for purposes of delay. Having to deal with this matter wasted the Court's time, as well as respondent's. Moreover, taxpayers with genuine controversies were delayed.

In view of the foregoing, we will exercise our discretion under section 6673(a)(1) and require petitioner to pay a penalty to the United States in the amount of $ 2,500. 791 F.2d 68">Coleman v. Commissioner, supra at 71-72; 737 F.2d 1417">Crain v. Commissioner, supra at 1417-1418; Coulter v. Commissioner, 82 T.C. 580">82 T.C. 580, 82 T.C. 580">584-586 (1984); 82 T.C. 403">Abrams v. Commissioner, supra at 408-411.

In order to reflect the foregoing,

An order of dismissal and decision will be entered. ⁵