Tax Court Holds Individual Liable for Tax Deficiency, Frivolous Argument Penalty

Timothy S. Murphy, Robert D. Heitmeyer, A. Gary Begun, and John D. Davis, for respondent.

Petitioner resided in Michigan at the time he filed the petition.

During 2008, petitioner worked for Jacobs Technology, Inc. (Jacobs Technology). During that year, petitioner received wage income from Jacobs Technology of $30,431.56.

During 2008, petitioner also received unemployment compensation from the Michigan Employment Security Commission of $234. He also won during that year a "Detroit Tigers Fantasy Package" valued at $2,500 that CBS Radio, Inc., had provided.

Petitioner did not file a Federal income tax (tax) return for his taxable year 2008. Respondent prepared a substitute for return for that taxable year.

On June 20, 2011, respondent issued to petitioner a notice of deficiency with respect to his taxable year 2008. In that notice, respondent determined the [*3] following deficiency in, and additions to, petitioner's tax for his taxable year 2008:

                                  Additions to Tax under Secs.

On December 19, 2012, petitioner filed petitioner's response.

In respondent's filings, respondent seeks summary adjudication that petitioner is liable for the following deficiency in, and additions to, petitioner's tax for his taxable year 2008:

                                  Additions to Tax under Secs.

Based upon our examination of the entire record before us, we conclude that there is no genuine dispute as to any material fact that requires a trial. We further conclude that respondent is entitled to summary adjudication as a matter of law.

We turn now sua sponte to section 6673(a)(1), a provision that we brought to petitioner's attention in our September 24, 2012 Order. Section 6673(a)(1) authorizes us to require a taxpayer to pay to the United States a penalty in an amount not to exceed $25,000 whenever it appears to us, inter alia, that the [*5] taxpayer instituted or maintained a proceeding before us primarily for delay, sec. 6673(a)(1)(A), or that the taxpayer's position in a proceeding before us is frivolous or groundless, sec. 6673(a)(1)(B).

In our September 24, 2012 Order, we ordered petitioner to file a response to respondent's motion for summary judgment. We also admonished petitioner in that Order that we would impose a penalty on him under section 6673(a)(1) if he advanced frivolous and/or groundless statements, contentions, arguments, and/or questions and/or instituted or maintained this proceeding primarily for delay. Nonetheless, petitioner advances in petitioner's response certain statements, contentions, and/or arguments that we find to be frivolous and/or groundless.

On the record before us, we find that petitioner's position in this case is frivolous and groundless and that he instituted and maintained this case primarily for delay. Accordingly, we shall impose on petitioner a penalty under section 6673(a)(1) in the amount of $1,500.

We have considered any statements, contentions, arguments, and/or questions of petitioner that are not frivolous and/or groundless and that are not discussed herein, and we find them to be without merit and/or irrelevant.

On the record before us, we shall grant respondent's motion.

[*6] To reflect the foregoing,

An order granting respondent's motion and decision for respondent will be entered.

² We shall refer collectively to the motion for summary judgment and the supplement thereto that respondent filed as respondent's motion. Petitioner filed a response to respondent's motion (petitioner's response), and respondent filed a reply to that response (respondent's reply). We shall sometimes refer to respondent's motion and respondent's reply as respondent's filings.