Wellman v. Commissioner

• Decision Date: 04 March 1985
• Docket Number: Docket No. 39758-84.
• Parties: James F. Wellman v. Commissioner.
• Court: U.S. Tax Court

49 T.C.M. (CCH) 866 (1985)

T.C. Memo. 1985-97.

James F. Wellman v. Commissioner.

Docket No. 39758-84.

United States Tax Court.

Filed March 4, 1985.

James F. Wellman, pro se. Michael A. Urban, for the respondent.

Memorandum Opinion

DAWSON, Chief Judge:

Respondent's Motion to Dismiss Petition for Failure to State a Claim Upon Which Relief Can be Granted was assigned to Special Trial Judge Francis J. Cantrel for consideration and ruling thereon.¹ After a review of the record, we agree with and adopt his opinion which is set forth below.

Opinion of the Special Trial Judge

CANTREL, Special Trial Judge:

This case is before the Court on respondent's Motion to Dismiss Petition for Failure to State a Claim Upon Which Relief Can be Granted, which was filed pursuant to Rule 40 on January 14, 1985.²

Respondent, in his notice of deficiency issued to petitioner on August 24, 1984, determined a deficiency in petitioner's Federal income tax and additions to the tax for the taxable calendar year 1982 in the following respective amounts:

                -------------------------------------------------------------------------------------------
                                                                     Additions to Tax, I. R. C. 19543
                   Year      Income Tax     Sec. 6651(a)(1)    Sec. 6653(a)    Sec. 6653(a)(2)    Sec. 6654
                -------------------------------------------------------------------------------------------
                   1982 ....  $7,324.00        $763.50           $366.20          To be based      $174.79
                                                                             on an underpayment
                                                                                 of $7,324.00
                -------------------------------------------------------------------------------------------
                

The adjustments to income as determined by respondent in his deficiency notice are:

                  Salaries and Wages ........... $27,399.31
                  Interest Income ..............     101.00
                  Exemptions ...................  (1,000.00)
                                                 __________
                                                 $26,500.314
                

Petitioner's legal residence on the date he timely mailed and, thus, timely filed his 84 paragraph petition was 2602 Gettysburg Drive, Austin, Texas.⁵ It appears that he filed no 1982 Federal income tax return with the Internal Revenue Service.

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". Emphasis added.

Petitioner, at paragraph 52 of his petition alleges — "52. Petitioner incurred substantial costs and expenses for the year shown above 1982 which were not taken into account."

Nowhere in this record are we advised as to what these costs and expenses are or the amounts thereof. The "facts" quoted above are not facts as mandated by our Rules. They are mere conclusions.

It is clear to the Court that petitioner is yet another in a seemingly unending parade of tax protesters bent on glutting the docket of this Court and others with frivolous and groundless claims. It is clear beyond doubt that his petition alleges no justiciable error with respect to the Commissioner's determinations regarding wage income, interest income and the additions to the tax and no justiciable facts in support of any justiciable error are extant therein.⁶ Since he has no valid defense to the Commissioner's determinations he uses 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 petitioner's frivolous claims, as gleaned from the entire record, hereinbelow.

Section 7701(a)(1) defines a "person" as an individual, estate, partnership, association, company, or corporation. It is clear that petitioner is a "person" who is required to file a valid Federal income tax return and pay income tax due for the year in question. See section 6012. The authority of Congress to impose and collect Federal income taxes from individuals has long been upheld as constitutional. James v. United States 61-1 USTC ¶ 9449, 366 U. S. 213 (1961); O'Malley v. Woodrough 39-1 USTC ¶ 9520, 307 U. S. 277 (1939); Lynch v. Hornby 1 USTC ¶ 20, 247 U. S. 339 (1918).

The determinations made by respondent in his notice of deficiency are presumed correct; the burden of proof is on petitioner 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. Proesel v. Commissioner Dec. 36,514, 73 T. C. 600 (1979); Greenberg's Express, Inc. v. Commissioner Dec. 32,640, 62 T. C. 324, 327 (1974).

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.

Gross income means all income from whatever source derived including (but not limited to) wage and interest income. 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. 55-1 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 an 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 therefore without any reduction for what he spend 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 petitioner may represent no more than the time-value of his work, they are nonetheless the fruit of his 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.

Petitioner has not been wrongfully denied a jury trial. "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).⁷ Rowlee v. Commissioner Dec. 40,228, 80 T. C. 1111, 1115 (1983).

While petitioner may, indeed, petition this Court as he did (sections 6212 and 6213), he had an option to seek another forum. On this very point the Court in McCoy v. Commissioner 83-1 USTC ¶ 9152, 696 F. 2d 1234 (9th Cir. 1983), affg. Dec. 37,967, 76 T. C. 1027, 1037 (1981) opined — "Moreover, by paying the tax and perfecting a refund suit the petitioner Wellman could have obtained a jury trial. He voluntarily chose not to do this." However, since he 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 years now before this Court. Further, we have no authority to remove this case to a U. S. District Court. Dorl v. Commissioner 74-2 USTC ¶ 9826, 507 F. 2d 406 (2d Cir. 1974), affg. Dec. 31,284, 57 T. C. 720 (1972). Moreover, this Court has no procedure which authorizes or permits a party to unilaterally withdraw a petition once filed.

Petitioner's Fourth and Fifth Amendment rights have not been violated or abridged here. Edwards v. Commissioner 82-2 USTC ¶ 9472, 680 F. 2d 1268, 1270 (9th Cir. 1982), affg. per curiam an unreported decision of this Court; United States v. Neff 80-1 USTC ¶ 9397, 615 F. 2d 1235, 1239 (9th Cir. 1980), cert. denied 447 U. S. 925 (1980).

"In the notice of deficiency the Commissioner set forth the specifics upon which he made his determinations. These determinations are presumed correct, Welch v. Helvering 3 USTC ¶ 1164, 290 U. S. 111 (1933), and the party challenging bears the burden of disproving them. Tax Court Rule 142(a). The pleadings necessarily must contain the factual basis for the claim of error. Conclusions of law or general denials do not suffice. Such allegations do not satisfy the requirements of Rule 34(b). Nyhus v. Commissioner 79-1 USTC ¶ 9271, 594 F. 2d 1213 (8th Cir. 1979). Because taxpayer has failed to state facts in support of the assigned errors, but has opted instead to assert mere conclusions, he has not complied with Rule 34(b). We affirm the Tax Court's dismissal of the petition for failure to state a claim upon which relief can be granted." Guidry v. Commissioner, 729 F. 2d 1457 (5th Cir. 1984), affg. without published opinion an order of dismissal and ...