- 9 -
taxpayer exercises ordinary business care and prudence and is
nevertheless unable to file on time, then the delay is due to
reasonable cause. Petitioner did not timely file tax returns
during the years in issue because he believed that his pension
income was a nontaxable exchange of equal value for his labor and
that filing income tax returns is merely voluntary. Petitioner’s
misguided interpretations of the Constitution and other typical
tax protester arguments are not reasonable cause. See Yoder v.
Commissioner, T.C. Memo. 1990-116. Accordingly, we hold that
petitioner is liable for the addition to tax under section
6651(a)(1) for taxable years 1998 through 2002.
Section 6673(a)(1) provides that this Court may require the
taxpayer to pay a penalty not in excess of $25,000 whenever it
appears to this Court: (a) The proceedings were instituted or
maintained by the taxpayer primarily for delay; (b) the
taxpayer’s position is frivolous or groundless; (c) or the
taxpayer unreasonably failed to pursue available administrative
remedies. Respondent has moved that the Court impose a penalty
in the instant case because petitioner admitted at trial that he
received the amounts in dispute but argued his pension income was
nontaxable “labor property” and that our “Marxist” tax system is
voluntary. Petitioner received several warnings that this Court
could impose a penalty if petitioner persisted in raising
frivolous arguments. Despite being warned, petitioner
Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011