Scott R. Philips - Page 5

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               On September 11, 1995, respondent filed a Motion for                   
          Sanctions Pursuant to I.R.C. � 6673.  A trial was held in Los               
          Angeles, California, on September 12, 1995.                                 
                                       OPINION                                        
               The Internal Revenue Code provides that gross income means             
          all income from whatever source derived.  Sec. 61(a).  The                  
          Supreme Court has held that income includes "gain derived from              
          capital, from labor, or from both combined."  Eisner v. Macomber,           
          252 U.S. 189, 207 (1920).  The Court of Appeals for the Ninth               
          Circuit, to which any appeal in this case would lie, has                    
          expressly held that wages are income and are subject to taxation.           
          United States v. Romero, 640 F.2d 1014, 1016 (9th Cir. 1981).               
               In affirming this Court's decision in a tax protester case,            
          the Court of Appeals for the Seventh Circuit aptly noted:  "Some            
          people believe with great fervor preposterous things that just              
          happen to coincide with their self-interest.  'Tax protesters'              
          have convinced themselves that wages are not income, that only              
          gold is money, that the Sixteenth Amendment is unconstitutional,            
          and so on."  Coleman v. Commissioner, 791 F.2d 68, 69 (7th Cir.             
          1986).                                                                      
               In this case, petitioner advanced a variety of                         
          constitutional arguments that the courts have uniformly rejected.           
          Generally, he argued that:  (1) He is not a "taxpayer" as defined           
          in the Internal Revenue Code; (2) the Tax Court lacks                       





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