Andrew D. Scott, Petitioner
v.
Commissioner of Internal Revenue, Respondent
Docket No. 26392-06
United States Tax Court
Bench Opinion by Judge Diane L. Kroupa
June 4, 2008
(oral findings of fact and opinion)
(not precedential)
The Court goes on to state that the Internal Revenue Service (IRS) issued a statutory notice of deficiency for $10,031. The IRS also asserted a $2,941 penalty under section 6662.This is a deficiency case in which Petitioner [Andrew D. Scott] asserts he is not an “employee” and did not receive “wages,” as defined in the [Internal Revenue] Code, although he acknowledges that he received earnings in exchange for his services in 2004.
[ . . . ]
Petitioner resided in Vermont at the time he filed the petition.
Petitioner was a mortgage broker for the Manhattan Mortgage Company during 2004 and earned $61,072, from which Petitioner’s employer withheld, as required by law, $8,828.55 of federal income tax. Also required by law, Petitioner’s employer issued Petitioner a Form W-2 entitled “Wage and Tax Statement” reflecting that Petitioner received $61,072 of wages, tips, and other compensation during 2004.
Petitioner filed a return for 2004 and reported “zero” on the line specified for “wages, salaries, tips, etc.” In addition, Petitioner attached a Form 4852 [ . . . ] to report that Petitioner’s employer paid him zero in wages while $8,828.55 was withheld for federal income tax.
The Petitioner, however, asserted that he was actually owed a refund of $13,500, consisting of income tax, Social Security tax, and Medicare tax.
The Court continued:
The Court goes on to note that the Petitioner claims he has been “enlightened” by Hendrickson’s book, and that the Petitioner filed zero returns for 2004 through 2007.Petitioner informed Respondent [IRS] that he is a follower of a book entitled Cracking the Code: The Fascinating Truth about Taxation in America by Peter Eric Hendrickson [ . . . . ] Petitioner did not consult with any tax attorney in filing the return for 2004 or in checking Mr. Hendrickson’s position in the book.
Respondent warned Petitioner, in a letter, dated October 10, 2007, that Mr. Hendrickson’s arguments have been repeatedly rejected by the courts and gave Petitioner cites to five different federal cases in which the courts rejected Mr. Hendrickson’s arguments. Respondent also warned Petitioner, in the letter, that he was at risk that this Court might impose a penalty, under Section 6673, up to $25,000 if he continued to maintain such frivolous arguments.
The Court continues:
The Court found Andrew Scott’s arguments that he was not an “employee,” and that he did not earn “wages,” to be “frivolous and false.”Petitioner again asserts, in his response, that he was not an “employee” of the Manhattan Mortgage Company, as defined in the Code, nor did he earns [sic] “wages,” as defined in the Code.
The Court found Andrew Scott liable for the $10,031 deficiency in tax.
The Court also sustained the IRS determination that Andrew Scott was liable for the section 6662(a) accuracy-related penalty ($2,941).
The maximum possible penalty under section 6673 is $25,000. The Court imposed a $20,000 penalty under this section.
