Friesen v. Commissioner

¶2MEMORANDUM OPINION

¶3ARMEN, Special Trial Judge: This case is before the Court on respondent's Motion To Dismiss For Failure To State A Claim Upon Which Relief Can Be Granted, filed pursuant to Rule 40. ¹

¶4Petitioners resided in Henderson, Nebraska, at the time that their petition was filed with the Court.

¶5Respondent's Notices of Deficiency

¶6By notices dated May 12, 1995, respondent determined deficiencies in petitioners' Federal income taxes for the taxable years 1990 and 1992, as well as additions to tax, as follows:

¶7*3 The deficiency in income tax determined against petitioner Darold D. Friesen is based on respondent's determination that said petitioner failed to report wages in the amount of $ 14,564 received during 1992 from Bosselman, Inc. The addition to tax under section 6651(a)(1) is based on respondent's determination that petitioner failed to file a timely income tax return for the taxable year 1992.

¶8The deficiency in income tax determined against petitioner Rosella M. Friesen is based on respondent's determination that said petitioner failed to report self-employment tax on non-employee compensation in the amount of $ 5,018 received during 1990 from Santa Rosa Sales and Marketing, Inc. The addition to tax under section 6651(a)(1) is based on respondent's determination that petitioner failed to file a timely income tax return for the taxable year 1990.

¶9Petitioners' Petition

¶10Petitioners filed a petition for redetermination on July 31, 1995. In their petition, petitioners allege that they are "non-federal people" who are inhabitants of the Republic State, Nebraska, which is "without" the United States. In this regard, petitioners claim "status as defined at CFR 1.871-1(b)(i)". ²*5*4 The petition also includes the following allegations, among others:

¶11The Petitioners are Non-Residents of Washington, D.C., they are non-Residents of any Federal area, and are alien to the foreign Federal Jurisdiction;

¶12…

¶13The Petitioners are not now, nor have they ever been "transferees" of the federal funds for their livelihood;

¶14The Petitioners find no Treasury Dept. delegation of Authority Order that has been issued or published, which would provide for finding deficiencies or assessing them as inhabitants in the Republic State, Nebraska;

¶15The Petitioners find that there are no implementing regulation for the deficiencies or the assessments as required by Title 26 at [section] 7805(a); ³

¶16The Petitioners had no revenue taxable activity that would come under the stamp tax liability;

¶17…

¶18Respondent has placed these Petitioners into an "excise tax" category, in error, or mistake.

¶19Respondent's Rule 40 Motion and Subsequent Developments

¶20As indicated, on September 15, 1995, respondent filed a Motion To Dismiss For Failure To State A Claim Upon Which Relief Can Be Granted. Shortly thereafter, on September 18, 1995, the Court issued an order calendaring respondent's motion for hearing and also directing petitioners to file a proper amended petition in accordance with the requirements of Rule 34. In particular, the Court directed petitioners to file a proper amended petition setting forth with specificity each error allegedly made by respondent in the determination of the deficiencies and separate statements of every fact*6 upon which the assignments of error are based.

¶21On October 16, 1995, the Court received a document from petitioners that was filed as petitioners' Motion for Extension of Time to File Amended Petition. The Court granted such motion, extending for a month the time within which petitioners were to file a proper amended petition and continuing for hearing respondent's pending motion to dismiss.

¶22On November 20, 1995, petitioners filed an Amended Petition alleging that "The Respondent errors in establishing a deficiency for the years 1991, 1992, and 1993." In this regard, however, we note that respondent only determined a deficiency against petitioner Rosella M. Friesen for the taxable year 1990 and against petitioner Darold D. Friesen for the taxable year 1992. Therefore, the amended petition fails to place in dispute one of the two taxable years for which deficiencies were determined and attempts to place in dispute two taxable years for which no deficiencies were determined.

¶23Apart from the foregoing, petitioners suggest in their amended petition that Federal Reserve notes are not a form of legal tender. Their argument concludes as follows:

¶24Who may legally take Federal Reserve Notes*7 in exchange as an acceptable form of payment? To this the Petitioner adds that their [sic] exist[s] no legal way for the Petitioner to satisfy the Commissioner's assessment at any time during this Article I presentment.

¶25Petitioners also continue to argue in their amended petition that they enjoy nonresident alien status. In this regard they argue as follows:

¶26This Tax Court knows that as long as the Petitioners are within their Union State boundary, they are Non-Resident Alien to the United States. Non-Resident to the United States Jurisdiction and Foreign or Alien to them as well.

¶27The amended petition also alleges that respondent bears the burden of proof in respect of the following matters, among others:

¶28The Respondent bears the burden to prove the Petitioner is in fact a taxpayer as it relate[s] to 26 U.S.C. section 7701(a)(14). ⁴

¶29…

¶30The Respondent bears the burden to prove that the Petitioner is subject to any Act of Congress, passed under Congress's whatsoever authority, without the voluntary election agreeing to be treated as a subject of such Congressional Authority.

¶31…

¶32The Respondent bears the burden to prove*8 that the Petitioners some how became subject of a lessor race by way of becoming "Taxpayers".

¶33Respondent's motion to dismiss was called for hearing in Washington, D.C., on November 22, 1995. Counsel for respondent appeared at the hearing and presented argument in support of the pending motion. Petitioners did not appear at the hearing, nor did they file any written statement of their position under Rule 50(c). ⁵

¶34Discussion

¶35Rule 40 provides that a party may file a motion to dismiss for failure to state a claim upon which relief can be granted. We may grant such a motion when it appears beyond*9 doubt that the party's adversary can prove no set of facts in support of a claim that would entitle him or her to relief. Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Price v. Moody, 677 F.2d 676, 677 (8th Cir. 1982).

¶36Rule 34(b)(4) requires that a petition filed in this Court contain clear and concise assignments of each and every error which the taxpayer alleges to have been committed by the Commissioner in the determination of the deficiency in dispute. Rule 34(b)(5) further requires that the petition contain clear and concise lettered statements of the facts on which the taxpayer bases the assignments of error. See Jarvis v. Commissioner, 78 T.C. 646, 658 (1982). The failure of a petition to conform with the requirements set forth in Rule 34 may be grounds for dismissal. Rules 34(a)(1), 123(b).

¶37In general, the determinations made by the Commissioner in a notice of deficiency are presumed to be correct, and the taxpayer bears the burden of proving that those determinations are erroneous. Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). Moreover, *10 any issue not raised in the pleadings is deemed to be conceded. Rule 34(b)(4); Jarvis v. Commissioner, supra; Gordon v. Commissioner, 73 T.C. 736, 739 (1980).

¶38Neither the petition nor the amended petition filed in this case satisfies the requirements of Rule 34(b)(4) and (5). There is neither assignment of error nor allegation of fact in support of any justiciable claim. Rather, there is nothing but tax protester rhetoric and legalistic gibberish, as demonstrated by the passages from the petition and the amended petition that we have quoted above. See Abrams v. Commissioner, 82 T.C. 403 (1984); Rowlee v. Commissioner, 80 T.C. 1111 (1983); McCoy v. Commissioner, 76 T.C. 1027 (1981), affd. 696 F.2d 1234 (9th Cir. 1983).

¶39The Court's Order dated September 18, 1995, provided petitioners with an opportunity to assign error and allege specific facts concerning their liability for the taxable years in issue. The Court's Order dated October 18, 1995, provided petitioners with yet additional time to file a*11 proper amended petition. Unfortunately, petitioners failed to properly respond. Rather, petitioners elected to continue to proceed with time-worn tax protester rhetoric. See Abrams v. Commissioner, supra; Rowlee v. Commissioner, supra; McCoy v. Commissioner, supra; Karlin v. Commissioner, T.C. Memo. 1990-496.

¶40We see no need to painstakingly address petitioners' various arguments. The short answer to those arguments is that petitioners are not exempt from Federal income tax or from the imposition of appropriate additions to tax. See Abrams v. Commissioner, supra at 406-407. Moreover, as the Court of Appeals for the Fifth Circuit has remarked: "We perceive no need to refute these arguments with somber reasoning and copious citation of precedent; to do so might suggest that these arguments have some colorable merit." Crain v. Commissioner, 737 F.2d 1417, 1417 (5th Cir. 1984).

¶41Because the petition and the amended petition fail to state a claim upon which relief can be granted, we shall*12 grant respondent's motion to dismiss for failure to state a claim. See Scherping v. Commissioner, 747 F.2d 478 (8th Cir. 1984); see also Nieman v. Commissioner, T.C. Memo. 1993-533; Solomon v. Commissioner, T.C. Memo. 1993-509, affd. without published opinion 42 F.3d 1391 (7th Cir. 1994). ⁶

¶42In order to reflect the foregoing,

¶43An order of dismissal and decision*13 will be entered.