Roark v. Commissioner

¶2MEMORANDUM OPINION

¶3CHABOT, Judge: Respondent determined deficiencies in Federal individual income taxes and additions to tax under sections 6653(a) ¹ (negligence) and 6654 (underpayment of estimated tax) against petitioners as follows:

¶4These cases have been consolidated for trial, argument, and opinion. The primary issues for decision are (1) whether petitioner-husband's wages are taxable as income and (2) whether Federal Reserve Notes are to be valued at other than their face amount for purposes of determining petitioners' chapter 1 and chapter 2 tax liabilities.

¶5This case has been submitted fully stipulated; the stipulations and the stipulated exhibits*642 are incorporated herein by this reference.

¶6When the petition in Docket No. 14222-81 was filed, petitioners Frank E. Roark (hereinafter sometimes referred to as "Roark") and Eleanor C. Roark, husband and wife, resided in Casper, Wyoming; when the petition in Docket No. 15454-82 was filed, petitioners resided in North Platte, Nebraska.

¶7Roark received compensation for his services in the years in issue as indicated in table 1.

¶8Table 1

¶9Petitioners calculated their income tax liabilities on the basis that, because of the relative value of gold and its use as a common denominator, a one-dollar denomination Federal Reserve Note was worth $0.25 for 1977, $0.22-2/9 for 1978, and approximately $0.1368 for 1979. On their income tax returns for these years, petitioners first determined their tax liabilities on the basis of "dollars" and then converted the liabilities from "dollars" into Federal Reserve Notes.

¶10Petitioners maintain that Roark's compensation is not subject*643 to income tax because it was received in exchange for labor of equal value and so there is no "gain". They maintain that, if Roark's compensation is taxable at all, then its value must be determined by relation to the value of "lawful money".

¶11Respondent argues that compensation for labor is taxable and that Federal Reserve Notes are taxable at their face amount.

¶12We agree with respondent.

¶13Under section 61(a)(1), ³ compensation for services, in whatever form received, is incluible in gross income. Commissioner v. Duberstein,363 U.S. 278 (1960); Reiff v. Commissioner,77 T.C. 1169, 1173 (1981).

¶14Federal Reserve Notes are to be taken into account at their face amount ⁴ in determining petitioners' income tax liabilities. Birkenstock v. Commissioner,646 F.2d 1185 (CA7 1981), affg. a Memorandum Opinion of this Court; ⁵*644United States v. Ware,608 F.2d 400 (CA10 1979); Hellermann v. Commissioner,77 T.C. 1361, 1365-1366 (1981).

¶15We hold for respondent as to the chapter 1 and chapter 2 tax liabilities.

¶16An addition to tax under section 6653(a) is imposed if any part of any underpayment of tax is due to negligence or intentional disregard of rules or regulations. Petitioners have the burden of proving error in respondent's determinations that such an addition to tax should be imposed against them. Bixby v. Commissioner,58 T.C. 757, 791-792 (1972).

¶17Petitioners have failed to carry their burden of proof.

¶18We hold for respondent on this issue.

¶19Petitioners have the burden of proving error in respondent's determination that additions to tax should be imposed under section 6654(a). Hollman v. Commissioner,38 T.C. 251, 263 (1962).*645 Petitioners have failed to introduce any evidence indicating that respondent so erred.

¶20We conclude that petitioners are liable for additions to tax under section 6654(a).

¶21We hold for respondent on this issue.

¶22On petition in Docket No. 14222-81, petitioners demand a jury trial. There is no right to a jury trial in the Tax Court and the denial thereof does not violate the Seventh Amendment. Wickwire v. Reinecke,275 U.S. 101, 105-106 (1927); Browne v. Commissioner,73 T.C. 723, 730 (1980).

¶23We hold for respondent on all the matters presented for decision. ⁶

¶24Decisions will be entered for respondent.