849 F2d 1476 Olson v. Commissioner of Internal Revenue
849 F.2d 1476
NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.
Ronald C. OLSON, Petitioner-Appellant,
COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee.
United States Court of Appeals, Ninth Circuit.
Submitted May 19, 1988.*
Decided June 21, 1988.
Before WALLACE, SNEED and POOLE, Circuit Judges.
Olson appeals the Tax Court's judgment sustaining the deficiencies determined by the Commissioner against the taxpayer, Olson. We affirm.
The Tax Court not only sustained the assertion of taxes due and additions to tax by the Commissioner, but also imposed on Olson a sanction of $5,000 for advancing frivolous arguments. In this appeal additional sanctions against Olson for bringing this appeal are requested.
Olson's contentions are frivolous. He argues that (1) the exchange of labor for compensation results in no taxable income, (2) the filing of a tax return, when forms 1099 and W-2 have been filed, is voluntary, and (3) the making of frivolous arguments before the Tax Court should not be sanctioned under 26 U.S.C. Sec. 6673.
Each contention is clearly without a trace of merit. This court has repeatedly held that wages, whether described as an exchange of labor for money or not, are taxable income. See Carter v. Commissioner, 784 F.2d 1006, 1009 (9th Cir.1986). Filing a tax return is mandatory. Finally, a penalty under section 6673 is proper when, in the face of warnings that a penalty may be assessed if frivolous contentions are made, the taxpayer nonetheless makes such contentions. See Hansen v. Commissioner, 820 F.2d 1464, 1469-70 (9th Cir.1987). Proper warnings of the possibility of penalties were made by the Tax Court in this case (II. R.T. 10, 20).
An appeal is frivolous "when the result of the appeal is obvious and the arguments of error are wholly without merit." Coastal Transfer Co. v. Toyota Motor Sales, 833 F.2d 208, 212 (9th Cir.1987) (quoting Grimes v. Commissioner, 806 F.2d 1451, 1454 (9th Cir.1986)). That describes this appeal precisely. We grant the Commissioner's request for $1,500 in sanctions for bringing this frivolous appeal. See Fed.R.App.P. 38; 28 U.S.C. Sec. 1912; Cook v. Spillman, 806 F.2d 948, 949 (9th Cir.1986).