Vickers v. Commissioner

• Decision Date: 25 July 1983
• Docket Number: Docket No. 19161-82.
• Citation: 46 TCM (CCH) 833,1983 TC Memo 429
• Parties: William Vickers and Kathy Vickers v. Commissioner.
• Court: U.S. Tax Court

46 TCM (CCH) 833

1983 TC Memo 429

T.C. Memo. 1983-429.

William Vickers and Kathy Vickers v. Commissioner.

Docket No. 19161-82.

United States Tax Court.

Filed July 25, 1983.

William Vickers and Kathy Vickers, pro se, Salado, Tex. Sheri Wilcox, for the respondent.

Memorandum Opinion

DAWSON, Chief Judge:

This case was assigned to Special Trial Judge Francis J. Cantrel for the purpose of considering and ruling on respondent's Motion for Summary Judgment. After a review of the record, we agree with and adopt his opinion which is set forth below.¹

Opinion of the Special Trial Judge

CANTREL, Special Trial Judge:

This case is before the Court on respondent's Motion for Summary Judgment filed on May 16, 1983 pursuant to Rule 121, Tax Court Rules of Practice and Procedure.²

Respondent, in his notice of deficiency issued to petitioners on April 26, 1982, determined a deficiency in petitioners' Federal income tax and an addition to the tax for the taxable calendar year 1980 in the following respective amounts:

                                                          Addition to
                                                       Tax, I.R.C. 1954
                  Year        Income Tax            Section 6653(a)3
                  1980 .....   $6,917.544         $345.88
                

Respondent's income tax deficiency determination is predicated on his disallowance of a so-called "conversion figure" of $26,332.00 claimed by petitioners on their joint 1980 return.

Petitioners' legal address on the date they filed their petition was Route 1, Box 111-A, Salado, Texas. They filed a joint 1980 Federal income tax return with the Internal Revenue Service.

An imperfect petition was filed on July 26, 1982 and an amended petition was filed on September 28, 1982. Thereafter, respondent filed an answer to amended petition on November 22, 1982.⁵ Hence, the pleadings are closed. Respondent's motion was filed more than 30 days after the pleadings were closed. See Rules 34, 36, 38, and 121.

On line 8 of their 1980 return petitioners reported compensation and wage income in the amount of $28,726.00.⁶ On line 28 petitioners claimed a false deduction of $26,332.00 for what they describe as a "conversion figure" to arrive at the "fair market value" of their adjusted gross income, which they report on line 31 to be $2,394.00. By so doing, petitioners reported that they owed no tax and sought a refund of the entire tax withheld from Mr. Vicker's compensation and wages.

Rule 34(b) provides in pertinent part that the petition in a deficiency action shall contain "clear and concise assignments of each and every error which the petitioner alleges to have been committed by the Commissioner in the determination of the deficiency or liability" and "clear and concise lettered statements of the facts on which petitioner bases the assignments of error * * *". It is clear to us that petitioners are yet others in a seemingly unending parade of tax protesters bent on glutting the docket of this Court and others with frivolous claims. It is clear beyond doubt that their petition alleges no justiciable error with respect to the Commissioners' determinations and no justiciable facts in support of such error are extant therein.⁷ Since they have no valid defense to the Commissioner's determinations they use this forum as a platform to unleash a plethora of frivolous legal and constitutional contentions which have been rejected by this Court and others on innumerable occasions. We answer petitioners' frivolous claims, as gleaned from this record, hereinbelow.

Petitioners' principal contention seems to be that their 1980 wages consisted of notes and that they had to report, for Federal income tax purposes, only the fair market value of the notes they received. Such contention is patently frivolous. United States v. Benson 79-1 USTC ¶ 9316, 592 F. 2d 257 (5th Cir. 1979);⁸ Mathes v. Commissioner 78-2 USTC ¶ 9587, 576 F. 2d 70 (5th Cir. 1978); United States v. Ware 79-2 USTC ¶ 9608, 608 F. 2d 400 (10th Cir. 1979), rehearing and rehearing en banc denied Oct. 25, 1979; United States v. Anderson 78-2 USTC ¶ 9731, 584 F. 2d 369 (10th Cir. 1978); Sibla v. Commissioner Dec. 34,477, 68 T.C. 422 (1977), affd. 80-1 USTC ¶ 9143 611 F. 2d 1260 (9th Cir. 1980); Gajewski v. Commissioner Dec. 34,088, 67 T.C. 181 (1976), affd. without published opinion 578 F. 2d 1383 (8th Cir. 1978). See also Stamper v. Commissioner Dec. 40,091(M), T.C. Memo. 1983-248.

Respondent issued a valid notice of deficiency, a timely petition was filed and this Court has jurisdiction of this case. Sections 6212, 6213, and 6214.

The determinations made by respondent in his notice of deficiency are presumed correct; the burden of proof is on petitioners not respondent to show those determinations are wrong, and the imposition of the burden of proof is constitutional. Welch v. Helvering 3 USTC ¶ 1164, 290 U.S. 111 (1933); Rockwell v. Commissioner 75-1 USTC ¶ 9324, 512 F. 2d 882, 887 (9th Cir. 1975); Rule 142(a).

This Court generally (as is the case here) will not look behind a deficiency notice to examine evidence used or the propriety of the Commissioner's motives or of the administrative policy or procedures involved in making his determinations. Greenberg's Express, Inc. v. Commissioner Dec. 32,640, 62 T.C. 324, 327 (1974).

The Federal income tax laws are constitutional. Since the ratification of the Sixteenth Amendment, it is immaterial with respect to income taxes whether the tax is a direct or indirect tax. The whole purpose of the Sixteenth Amendment was to relieve all income taxes when imposed from apportionment from a consideration of the source whence the income was derived. Brushaber v. Union Pac. R.R. Co. 1 USTC ¶ 4, 240 U.S. 1 (1916). See Hayward v. Day 80-1 USTC ¶ 9296, 619 F. 2d 716 (8th Cir. 1980).

The U.S. Tax Court is a court of record established under Article I of the Constitution of the United States and duly empowered to hear and decide cases within the authority entrusted to it including this case. Burns, Stix Friedman & Co.v. Commissioner Dec. 31,114, 57 T.C. 392 (1971); sections 7441 and 7442. See also, Rowlee v. Commissioner Dec. 40,228, 80 T.C. No. 61 (filed on June 15, 1983) Slip Opinion at 6-7, which thoroughly devitalizes petitioners' contention that the United States Tax Court is not a constitutional Court.

Petitioners have not been wrongfully denied a jury trial.⁹ "The Seventh Amendment does not apply to suits against the United States, because there was no common law action against the sovereign. McElrath v. United States, 102 U.S. 426, 440 (1880). Thus, it has repeatedly been held that there is no constitutional right to a jury trial in the Tax Court. Phillips v. Commissioner 2 USTC ¶ 743, 283 U.S. 589, 599 n. 9 (1931); Dorl v. Commissioner 74-2 USTC ¶ 9826, 507 F. 2d 406 (2d Cir. 1974), affg. Dec. 31,284 57 T.C. 720 (1972); McCoy v. Commissioner 83-1 USTC ¶ 9152, 696 F. 2d 1234 (9th Cir. 1983), affg. Dec. 37,967 76 T.C. 1027 (1981); Lonsdale v. Commissioner 81-2 USTC ¶ 9772, 661 F. 2d 71, 72 (5th Cir. 1981), affg. a Memorandum Opinion of this Court Dec. 37,758(M)." Rowlee v. Commissioner, supra at 7-8. See section 7453.

Gross income means all income from whatever source derived including (but not limited to) wages. It includes income realized in any form, whether in money, property, or services. Section 61. Income as defined under the Sixteenth Amendment is "gain derived from capital, from labor, or from both combined". Eisner v. Macomber 1 USTC ¶ 32, 252 U.S. 189, 207 (1920). Section 61 encompasses all realized accessions to wealth. Commissioner v. Glenshaw Glass Co. 55 USTC ¶ 9308, 348 U.S. 426 (1955). See United States v. Buras 81-1 USTC ¶ 9126, 633 F. 2d 1356 1361 (9th Cir. 1980), where the Court said — "* * * `the earnings of the human brain and hand when unaided by capital' are commonly treated as income" and "* * * the Sixteenth Amendment is broad enough to grant Congress the power to collect and income tax regardless of the source of the taxpayer's income". Citations omitted. "One's gain, ergo his `income,' from the sale of his labor is the entire amount received therefor without any reduction for what he spends to satisfy his human needs". Reading v. Commissioner Dec. 35,354, 70 T.C. 730, 734 (1978), affd. 80-1 USTC ¶ 9162 614 F. 2d 159 (8th Cir. 1980). "Although the wages gross income received by petitioners may represent no more than the time-value of their work, they are nonetheless the fruit oftheir labor, and therefore represent gain derived from labor which may be taxed as income". Emphasis added. Rice v. Commissioner Dec. 38,859(M), T.C. Memo. 1982-129, and cases cited therein. See also Rowlee v. Commissioner, supra at 14-19, and cases cited therein.

While petitioners may, indeed, petition this Court as they did (sections 6212 and 6213), they had an option to seek another forum. Drake v. Commissioner 77-2 USTC ¶ 9483, 554 F. 2d 736, 739 (5th Cir. 1977). However, since they opted to file a petition with this Court, the mere filing of that petition is sufficient to deprive a U.S. District Court of jurisdiction for the year now before this Court. Moreover, we have no authority to remove this case to a U.S. District Court. Dorl v. Commissioner Dec. 31,284, 57 T.C. 720 (1972), affd. 74-2 USTC ¶ 9826 507 F. 2d 406 (2d Cir. 1974). Furthermore, the Court has no procedure authorizing or permitting a party to unilaterally withdraw a petition once filed.

It has long been well established that in order to be valid, a deficiency notice need not be signed at all. Commissioner v. Oswego Falls Corp. 4 USTC ¶ 1311, 71 F. 2d 673 (2d Cir. 1934, Pendola v. Commissioner Dec. 29,017, 50 T.C. 509, 514 (1968). Indeed, a notice of deficiency is only to advise the person who is to pay the deficiency that the Commissioner means to assess him; anything that does this unequivocally is good enough. Olsen v. Helvering 37-1 USTC ¶ 9167, 88 F. 2d 650, 651 (2d Cir. 1937).

Petitioners maintain that the deficiency has been determined...