Stringer v. Comm'r of Internal Revenue
| Decision Date | 15 April 1985 |
| Docket Number | 3389-83.,Docket Nos. 26045-82 |
| Citation | 84 T.C. No. 46,84 T.C. 693 |
| Parties | RONALD STRINGER AND ANDREA S. BOUCHER STRINGER, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent |
| Court | U.S. Tax Court |
OPINION TEXT STARTS HERE
Petitioners having failed to file a brief, after being directed by the Court to include therein ‘detailed findings of fact‘ based upon ‘specific, detailed, easily found and legible evidence‘, respondent filed a Motion for Entry of Default Judgment or Dismissal pursuant to Rule 123, Tax Court Rules of Practice and Procedure, with respect to issues upon which petitioners bear the burden of proof. HELD, under the facts of this case and in the exercise of the Court's discretion, respondent's motion to dismiss those issues pursuant to Rule 123(b) will be granted. HELD FURTHER, amounts of additional income received by petitioners during the years in issue determined. HELD FURTHER, petitioners are liable for an addition to tax under sec. 6653(b), I.R.C. 1954, for each of the years in issue. DANIEL J. WILES, for the respondent.
ARTHUR P. TRANAKOS, for the petitioners.
In these consolidated cases, respondent determined by separate notices of deficiency issued to each of petitioners and dated August 2, 1982, that petitioners Ronald Stringer and Andrea Stringer were liable for deficiencies in tax and additions to tax under sections 6651(a) and 6653(a), I.R.C. 1954, for the years 1978 and 1979 in docket No. 26045-82 in the following amounts:
+---------------------------------------------------------+
¦ ¦ ¦ ¦Addition to tax ¦
+---------------+----+----------+-------------------------¦
¦Petitioner ¦Year¦Deficiency¦Sec. 6651(a)¦Sec. 6653(a)¦
+---------------+----+----------+------------+------------¦
¦Ronald Stringer¦1978¦$5,201 ¦$387 ¦$260 ¦
+---------------+----+----------+------------+------------¦
¦ ¦1979¦6,410 ¦427 ¦321 ¦
+---------------+----+----------+------------+------------¦
¦Andrea Stringer¦1978¦271 ¦- - - ¦14 ¦
+---------------+----+----------+------------+------------¦
¦ ¦1979¦4,328 ¦375 ¦216 ¦
+---------------------------------------------------------+
By separate notices of deficiency issued to each of petitioners and dated November 17, 1982, respondent further determined that petitioners Ronald Stringer and Andrea Stringer were liable for deficiencies in tax and additions to tax under sections 6653(b) and 6654 for the years 1980 and 1981 in docket No. 3389-83 in the following amounts:
+------------------------------------------------------+
¦Addition to tax¦ ¦ ¦ ¦ ¦
+---------------+----+----------+------------+---------¦
¦Petitioner ¦Year¦Deficiency¦Sec. 6653(b)¦Sec. 6654¦
+---------------+----+----------+------------+---------¦
¦Ronald Stringer¦1980¦$8,075.00 ¦$4,037.50 ¦$515.56 ¦
+---------------+----+----------+------------+---------¦
¦ ¦1981¦14,822.00 ¦7,411.00 ¦1,135.73 ¦
+---------------+----+----------+------------+---------¦
¦Andrea Stringer¦1980¦4,775.08 ¦2,387.54 ¦381.08 ¦
+---------------+----+----------+------------+---------¦
¦ ¦1981¦10,236.00 ¦5,118.00 ¦980.40 ¦
+------------------------------------------------------+
After certain concessions by the parties, the remaining issues for decision are (1) whether we should enter a judgment of default or dismissal against petitioners pursuant to Rule 123(a) or Rule 123(b), Tax Court Rules of Practice and Procedure, 1 with respect to issues upon which they bear the burden of proof, and (2) whether respondent has carried his burden of proof with respect to issues upon which he bears the burden of proof.
Some of the facts have been stipulated and those facts are so found to the extent that they represent concessions by the parties of items of income, deductions, or credits. The stipulation of facts and the exhibits attached thereto are incorporated herein by this reference to the same extent. In addition, the Court has made its own findings of fact, but those findings are limited to facts that the Court deems necessary to dispose of respondent's Motion for Entry of Default Judgment or Dismissal pursuant to Rule 123 with respect to issues upon which petitioners bear the burden of proof and to dispose of the issues upon which respondent bears the burden of proof.
At the time they filed their petitions in this case, petitioners, who are husband and wife, resided at 872 Doris Drive in Arnold, Maryland. During the years at issue, Andrea Stringer (hereinafter Andrea) was an assistant professor at Towson State University and Ronald Stringer (hereinafter Ronald) was an engineer for Bethlehem Steel Shipyards. Andrea had obtained a Ph.D. degree in physical education at the University of Maryland. Ronald had a high school diploma and had further training in shipbuilding and the preparation of publications relating thereto. He also apparently had some college education.
For the years from at least 1974 through 1977 petitioners filed joint Federal income tax returns disclosing tax liabilities. Petitioners hired tax return preparers to prepare those returns.
For the year 1978 petitioners separately mailed to the Internal Revenue Service (IRS) altered Forms 1040 that contained no financial information with respect to petitioners' tax liabilities. The documents were filled out in a manner that fairly may be described as typical tax protester fashion. Information elicited on the Forms was responded to by asterisks. An apparently preprinted statement at the bottom of the forms explained that the asterisks denoted constitutional objections to providing the information elicited. Petitioners had a tax liability payable to the IRS for the year 1978. Their assertions of constitutional objections were frivolous, insincere, and motivated by their contempt for the American system of Federal income taxation. By letters dated June 28, 1979 and July 5, 1978, the IRS advised petitioners that the altered Forms 1040 were not acceptable as income tax returns and requested petitioners to file proper returns. Petitioners initially failed to file income tax returns as requested by respondent, preferring instead to continue asserting frivolous constitutional objections. Eventually, on December 30, 1981, petitioners did file a joint return for 1978. However, that return did not represent an honest attempt to establish correctly their 1978 tax liability, and petitioners were no longer relying on that return by the time their case came to trial.
Although petitioners had tax liabilities payable to the IRS with respect to their 1979, 1980, and 1981 taxable years, petitioners filed no Federal income tax returns for those years prior to the issuance of the statutory notices of deficiency. On May 16, 1984, one day before trial commenced in this case, petitioners filed joint Federal income tax returns for the years 1978 through 1981. The return for 1978 bore little, if any, resemblance to the 1978 return filed in December 1981. None of the returns filed on May 16, 1984 represented honest attempts to establish correctly petitioners' tax liabilities for the years in question. Attached to at least two of those returns were altered Forms W-2 prepared by petitioners' counsel, which varied from the original Forms W-2 received by petitioners. Nothing on the face of the Forms W-2 prepared by petitioners' counsel and attached to the returns suggested that they had been prepared by other than the actual payer of the wages.
Beginning in early 1980 and continuing at least through 1982, Ronald executed and filed with his employer, IRS Forms W-4 falsely claiming on each form that he had incurred no Federal income tax liability for the previous year and anticipated incurring no such liability for the current year. For the periods covered by the exemption certificates, Ronald had Federal income tax liabilities and knew that he had such liabilities. As a result of the false exemption certificates, Ronald's employer did not withhold any Federal income taxes from Ronald's salary for the years 1980 and 1981.
Andrea likewise executed and filed IRS Forms W-4E, falsely claiming to be exempt from Federal income tax withholding. As a result of the false exemption certificates, Andrea's employer did not withhold Federal income taxes from Andrea's salary in 1980 and 1981.
Respondent's agents made diligent attempts to contact and communicate with petitioners in an effort to ascertain petitioners' correct tax liabilities for the years in issue. However, petitioners remained uncooperative throughout the audit phases of this case and engaged in tactics designed to delay and obstruct respondent's determination of their tax liabilities. Respondent was left with no choice but to reconstruct petitioners' income based on whatever records he could locate.
It became apparent after their cases were docketed in this Court, that petitioners planned to assert various and sundry deductions and credits. However, it was equally apparent that the deductions and credits petitioners intended to claim were ill-defined, as witnessed by petitioners' ever-changing, inconsistent, and largely unsupported contentions. In an effort to flesh out petitioners' positions, respondent sought discovery through requests for admissions, interrogatories, and requests for production of documents. Petitioners initially disregarded respondent's attempts at discovery, forcing respondent to pursue court action to compel discovery. Petitioners never responded to respondent's first request for admissions, and the facts recited in that request were incorporated into the parties' stipulation of facts. By order dated July 12, 1983, this Court ordered petitioners to produce the documents requested in respondent's request for production of documents and to answer the interrogatories served on ...
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