Pekrul v. Commissioner, Docket No. 20472-91.
| Decision Date | 11 August 1992 |
| Docket Number | Docket No. 20472-91. |
| Citation | 64 T.C.M. 453 |
| Parties | Merton W. Pekrul and Linda L. Pekrul v. Commissioner. |
| Court | U.S. Tax Court |
Merton W. Pekrul, pro se. Stephen S. Ash, for the respondent.
This case was assigned to Special Trial Judge Stanley J. Goldberg pursuant to section 7443A(b)(4) and Rules 180, 181, and 183.1 The Court agrees with and adopts the opinion of the Special Trial Judge, which is set forth below.
1. All section references are to the Internal Revenue Code in effect for the years in issue. All Rule references are to the Tax Court Rules of Practice and Procedure.
Opinion of the Special Trial Judge
GOLDBERG, Special Trial Judge:
This case is before the Court on respondent's Motion to Dismiss For Failure to State a Claim upon which relief can be granted. The motion was calendared for hearing in Phoenix, Arizona, on March 9, 1992. When this case was called from the calendar, counsel for respondent appeared and was heard. Petitioner Merton W. Pekrul appeared and was heard. There was no appearance by petitioner Linda L. Pekrul.
In a notice of deficiency mailed to petitioner Merton W. Pekrul on June 6, 1991, respondent determined the following deficiencies in and additions to his Federal income taxes:
Additions to Tax
Sec. Sec. Sec. Sec
Year Deficiency 6651(a)(1) 6653(a)(1) 6653(a)(2) 6654(a)
1984 ............................. $4,507 $1,127 $225 1 $284
1985 ............................. 7,492 1,873 375 1 429
1988 ............................. 5,047 1,262 252 -- 322
1 50 percent of the interest due on the underpayment of tax attributable to negligence or intentional disregard of
rules or regulations
Also on June 6, 1991, respondent mailed a notice of deficiency to petitioner Linda L. Pekrul, determining the following deficiencies in and additions to her Federal income taxes:
Additions to Tax
Sec. Sec. Sec. Sec
Year Deficiency 6651(a)(1) 6653(a)(1) 6653(a)(2) 6654(a)
1984 ............................ $1,397 $349 $ 70 1 $ 87
1985 ............................ 2,819 705 141 1 162
1988 ............................ 3,672 918 184 -- 234
1 50 percent of the interest due on the underpayment of tax attributable to negligence or intentional disregard of
rules or regulations
In both notices of deficiency, respondent determined that petitioners, married individuals domiciled in Arizona, a community property State, failed to file Federal income tax returns for 1984, 1985, and 1988, and did not report community property income earned in the following amounts for those years:
Source 1984 1985 1988
Mass. Indemnity & Life Ins. Co. ............................. $15,594 $6,929 $ --
First American National
Securities, Inc. ............................................ 11,929 1,264 --
Trinity Foundation .......................................... 8,333
Shell Mining Ltd. ........................................... -- 31,455 --
Eastside Christian Schools .................................. -- -- 5,408
Family Bible Church ......................................... -- -- 17,660
Family Bible Church ......................................... -- -- 12,500
_______ _______ _______
Total Community Income ................................. $27,523 $39,648 $43,901
======= ======= =======
½ of Community Income ........................... $13,761 $19,824 $21,950
======= ======= =======
Respondent further determined that each petitioner was liable for self-employment taxes. In arriving at the deficiency for each taxable year, respondent subtracted from total income the applicable amount for exemptions and standard deductions. Since petitioners did not file returns, respondent computed the income tax deficiencies using the tax tables for married persons filing separately. Respondent then computed self-employment tax on income subject to this tax and the additions to tax set forth above.
Petitioners mailed a letter to the Court which we filed as a petition on September 9, 1991. By Order dated September 11, 1991, we directed petitioners to file, on or before November 12, 1991, a proper amended petition, and pay the $60 filing fee. Petitioners filed their Amended Petition on November 21, 1991. At the time petitioners filed their petition, they resided in Mesa, Arizona. In their Amended Petition, petitioners contend that respondent erred as follows:
(a). Error in failing to make a determination that the Petitioners are liable to the income tax imposed by the Code before issuing the Notice of Deficiency.
(b). Error in issuing a Notice of Deficiency without making a written determination that a deficiency exists.
(c). Error in imposing and assessing penalties against the Petitioners for negligence and failing to file in violation of the Administrative Procedures Act of 1946, 5 USC § 551 et. seq.
(d). Error in imposing and assessing penalties against the Petitioners for negligence and failing to file in violation of § 3512 of the Paperwork Reduction Act of 1980, 44 USC § 3501 et. seq.
The purported facts upon which petitioners rely can be summarized as follows: (a) Although born in Ingham County, Michigan, petitioner Merton Pekrul was born "without" the United States; (b) although petitioners are both Americans by birth and permanently reside in Maricopa County, Arizona, they are not citizens or residents of the United States or the State of Arizona; (c) petitioners have not received any income or conducted any trade or business "within" the United States as defined in the Internal Revenue Code and the Treasury regulations; therefore, they are not taxpayers; (d) the district directors have not been properly delegated to issue statutory notices of deficiency; (e) petitioners have been unable to find the current job descriptions for the tax examiner, which should have been published in the Federal Register; (f) the regulations promulgated by the Secretary for preparation of the Form 1040 do not adequately describe the scope and contents of the information contained in Form 1040 and are not published in the Federal Register; (g) the Secretary and the Internal Revenue Service (IRS) are not exempt from the Administrative Procedure Act; (h) the IRS has failed to apply for and receive clearance for the regulations related to the reporting and record keeping requirements for the Form 1040 for the years 1984, 1985, and 1988 from the Office of Management and Budget (OMB) or has failed to state that approval or clearance is not required by the Paperwork Reduction Act (Act) or its regulations; (i) the IRS has failed to apply for and receive clearance for the Form 1040 from the OMB or to state that it is not required to do so by the Act or its regulations; (j) the IRS has failed to display on the Form 1040 the clearance expiration date assigned by the OMB or to state that it is not required to do so by the Act or its regulations; (k) the IRS has failed to apply for and receive clearance for the instructions to the Form 1040 from the OMB or state that it is not required by the Act or its regulations; and (1) the IRS failed to display on the instructions to the Form 1040 the clearance expiration date assigned by the OMB, or to state that it is not required by the Act or its regulations.
Petitioners' Amended Petition contains virtually all imaginable timeworn challenges to the Federal income tax system which have been totally rejected by this Court and other courts. Before addressing the merits of respondent's motion, we will briefly address petitioners' contentions and hope that they will see the error of their misguided beliefs.
Section 7701(a)(14) defines the term "taxpayer" "as any person subject to any internal revenue tax." Section 61(a)(1) defines gross income as "all income from whatever source derived," including but not limited to "Compensation for services, including fees, commissions, fringe benefits, and similar items". Section 63 defines and explains how to compute "taxable income". Section 1 then imposes a tax based upon taxable income.
A Federal income tax return must be filed by all individuals receiving gross income in excess of certain minimum amounts. Sec. 6012; sec. 1.6012-1(a), Income Tax Regs. Petitioners' gross income in each year exceeds the minimum amount. In short, petitioners are taxpayers subject to the income tax laws.
As explained in United States v. Romero [81-1 USTC ¶ 9276], 640 F.2d 1014, 1016 (9th Cir. 1981):
Compensation for labor or services, paid in the form of wages or salary, has been universally, held by the courts of this republic to be income, subject to the income tax laws currently applicable. We recognize that the tax laws bear heavily on all persons engaged in gainful activity, and recognize the right of a taxpayer to minimize his taxes by all lawful means. But Romero here is not attempting to minimize his taxes; instead he is attempting willfully and intentionally to shift his burden to his fellow workers by the use of semantics. He seems to have been inspired by various tax protesting groups across the land who postulate weird and illogical theories of tax avoidance, all to the...
To continue reading
Request your trial