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4-plex. I kept working two jobs and bought more property.” In
1996, petitioner owned at least two rental properties.
Petitioner’s Decision Not To File Income Tax Returns
In the early 1980s, petitioner became convinced that the
Federal income tax is voluntary. Before 1984, petitioner filed
income tax returns, reporting wage and rental income, although,
because of deductions, she had little taxable income and paid
little tax. In 1984, petitioner made the decision not to file a
return. In the posttrial memorandum, petitioner claims: “I
sincerely believed then as I do now there is no dispute the
Pollock decision says real estate rents could not be subject to a
mandatory income tax.”1
Petitioner did not file Federal income tax returns for her
taxable (calendar) years 1983 through 1993, the years here in
issue.
Respondent’s Examination
In 1992, one of respondent’s agents learned that, in 1990,
petitioner had expended $8,000 for an automobile. The agent
asked to meet with petitioner so she could explain the lack of
returns. Petitioner was requested to file delinquent returns.
1 Apparently, petitioner is referring to Pollock v.
Farmers’ Loan & Trust Co., 158 U.S. 601 (1895), striking down the
income tax enacted in 1894 as a direct tax not apportioned among
the States in conformity with the Constitution. The modern
income tax is not vulnerable to that attack. See U.S. Const.
amend. XVI; see also Brushaber v. Union Pac. R.R., 240 U.S. 1,
17-18 (1916).
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