TP Tries The Shotgun Approach Through Tax Court And Appeals

[The Observer]

DENNIS KLEIN,
Appellant
v.
COMMISSIONER OF INTERNAL REVENUE

Release Date: APRIL 22, 2011

NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

On Appeal from the United States Tax Court
(Tax Court No. 07-27365)
Tax Court Judge: Honorable David Gustafson

Submitted Pursuant to Third Circuit LAR 34.1(a)
April 15, 2011

Before: RENDELL, CHAGARES and ALDISERT, Circuit Judges

(Opinion filed: April 22, 2011)

OPINION

PER CURIAM

Dennis Klein, proceeding pro se, appeals a decision of the United States Tax Court sustaining a tax deficiency and addition to tax determined by the Internal Revenue Service ("IRS"). For the reasons that follow, we will affirm the Tax Court's decision.

Klein worked for the New York City Transit Authority and retired in 2001. He then received monthly pension checks, which totaled $ 30,652 for the tax year 2005. Klein completed an individual income tax return, Form 1040, for that year. However, he entered a zero on all of the lines of Form 1040, including line 16b, "Pensions and annuities." The IRS issued Klein a notice of deficiency for tax year 2005 and addition to tax pursuant to 26 U.S.C. section 6651(a)(1). Klein filed a petition in Tax Court challenging the notice of deficiency.

The Tax Court held a bench trial on January 12, 2010. Klein conceded that he received a pension, but stated that he also paid mortgage interest of approximately $ 5,300 in tax year 2005. The IRS conceded that Klein was entitled to a mortgage interest deduction. Klein raised a number of arguments in Tax Court: he was not required to file a tax return pursuant to the Federal Register; Frederick Mutter, counsel for the IRS in Tax Court, committed fraud as he is not an enforcement officer nor does he have a pocket commission; Mutter failed to answer Klein's questions; Klein's deficiency had to be verified; the IRS is not a part of the United States government because it is a private corporation out of Puerto Rico; the statute of limitations had expired; a tax return completed with all zeros is legal; his income is below the poverty level and therefore he did not owe taxes; the IRS set a precedent by accepting his similarly filed tax return in previous years; and, in 2002 he received a refund check and, therefore, he did not owe any taxes.

The Tax Court sustained the deficiency determination, explaining that Klein had the burden of proof to demonstrate that the determination of deficiency was incorrect. The Tax Court found that the 2007 notice of deficiency for the 2005 tax year was sent within the limitations period and that all of Klein's other arguments were frivolous. The Tax Court also sustained the calculation of an addition to tax pursuant to 26 U.S.C. section 6651(a)(1). After receiving a computation pursuant to Rule 155 from the IRS and Klein's response, the Tax Court determined that Klein's deficiency for tax year 2005 was $ 2,946 and that the addition to tax pursuant to section 6651(a)(1) was $ 295. Klein appeals.

We have jurisdiction pursuant to 26 U.S.C. section 7482(a)(1). We exercise plenary review over the Tax Court's conclusions of law, and we review its factual findings for clear error. PNC Bancorp, Inc. v. Comm'r of Internal Revenue, 212 F.3d 822, 827 (3d Cir. 2000).

On appeal, Klein raises substantially the same arguments that he made in the Tax Court. He argues that Mutter committed fraud as he is not an enforcement officer nor does he have a pocket commission, and that Mutter failed to answer his questions. 1 He maintains that the Federal Register does not require that he file a tax return; that the IRS is not a part of the United States government as it is incorporated in Delaware as a collection agency for a Puerto Rico company; and that his purported debt was not validated. He also asserts that, because he filed his tax return in 1999 containing all zeros and received a full refund, the IRS set a precedent, and that filing a Form 1040 containing all zeros constitutes filing a tax return. 2

The Tax Court properly rejected Klein's argument that the IRS set a precedent based on acceptance of his prior tax forms and issuance of a refund for a prior tax year. Any prior inaction by the IRS had no bearing on the determination of tax liability for tax year 2005. See Dixon v. United States, 381 U.S. 68, 72-73 (1964) (prior IRS inaction or affirmative acquiescence does not bar IRS from collecting a tax lawfully due).

To the extent that Klein challenges the addition to tax pursuant to section 6651(a)(1), we conclude that the Tax Court properly sustained the addition to tax. An addition to tax shall be added if a taxpayer fails to file a tax return. 26 U.S.C. section 6651(a)(1). A tax form that does not contain information upon which a taxpayer's liability can be properly calculated does not constitute a tax return within the meaning of the Internal Revenue Code. See United States v. Edelson, 604 F.2d 232, 234 (3d Cir. 1979). A taxpayer's return must honestly and reasonably provide a statement of the items of income, deductions, and credits that would satisfy the requirements of the tax law. See Zellerbach Paper Co. v. Helvering, 293 U.S. 172, 180 (1934); Florsheim Bros. Drygoods Co. v. United States, 280 U.S. 453, 462 (1930).

In 2005, a person with income of $ 3,200 or more was required to file a tax return. I.R.C. section 6012(a)(1)(A). Income is "all income from whatever source derived," including pensions. I.R.C. section 61(a)(11). Klein conceded that he received pension payments totaling $ 30,652 in tax year 2005. Thus, Klein's Form 1040 for tax year 2005 that contained zeros on each of the lines (including line 16b, "Pensions and annuities") did not contain sufficient data from which his tax liability could properly be calculated, and failed to represent an honest or reasonable attempt to satisfy the tax law requirements. See United States v. Moore, 627 F.2d 830, 834-35 (7th Cir. 1980). Therefore, we agree that Klein's filing did not constitute a tax return for tax year 2005 and the addition to tax was properly sustained.

Klein's other arguments are the kind of tax protestor arguments that we have rejected as patently frivolous. See Sauers v. Comm'r of Internal Rev., 771 F.2d 64, 66-67 (3d Cir. 1985).

As the Tax Court properly sustained the deficiency determination and calculation of addition to tax, we will affirm the Tax Court's decision. 3

FOOTNOTES:

/1/ Based on the attachments to his notice of appeal and motion to vacate, it appears that the questions Klein posed to Mutter relate to his argument that his purported debt must be validated.

/2/ Klein failed to raise his statute of limitations and poverty level arguments in his opening brief; therefore, these claims are waived. See Kost v. Kozakiewicz, 1 F.3d 176, 182 (3d Cir. 1993).

/3/ Klein filed a notice to produce/motion to reverse decision of Tax Court as well as an appellate brief. Both documents appear to raise the same arguments, and Klein indicated in his appellate brief that his motion to reverse was his legal brief. We have considered the arguments raised in each filing. As we will affirm the Tax Court's decision, we deny Klein's motion.

[Demosthenes]

Dennis Klein posts from the Hard Drive o' Demo.

Date: Wed May 28, 2003 8:23 pm
Subject: Re: [ZIF] Because I Said So??????

QUESTION : To IRS agent -IS YOUR JOB WORTH
CATCHING A BULLET? dennis18328

 

Date: Wed May 28, 2003 9:05 pm
Subject: Re: [ZIF] New York State ZERO return...

My NYS zero return for 2000 has made the lawyers
at NYS taxation dumbies.They can not disprove my 140 page
TAX STATEMENT which went to them ,So they had to get a
lawyer from Phily PA to try to answer it .What they
cannot answer the 27 question in my tax statement? Must be
a bunch of dumbies w0rking for NYS Taxation dept .I have
the names of these dummies .Anyone want to write them
and harrass them with letters . Sounds like fun to me.
dennis18328

From: Dennis Klein <dennis18328@y...>
Date: Tue May 6, 2003 3:38 pm
Subject: Re: [ZIF] Suspicious Powder Stops Work at IRS Building

> Harley wrote:
>
> > Hmmmmmm.... Sounds like something that should
> "happen" at ALL IRS offices,
> > now don't it?? Regards, Harley
> >
> > "Diane M." <artsybill@y...> wrote:
> >
> > Suspicious Powder Stops Work at IRS BuildingMay.
> 5, 2003Debbie
> > Dujanovic reportingThe Treasury Department is
> investigating a white
> > powder found last night at the IRS facility near
> Ogden.
> >
> > Work was shut down at the facility and several
> people were
> > decontaminated while hazmat crews investigated.

Sounds like a plan . Can we shut down the irs
that way ? I think it would. Maybe we should put DUMMY
RETURN that way .

 

Date: Mon Apr 21, 2003 9:43 pm
Subject: Re: [ZIF] Re: A possible way to get government under control

I am already listed as A AMERICA TERRORIST so
therefore IF CALLED A TERRORIST SO BE IT - LETS
TERRORIZE THE ENEMY OF THE AMERICAN PEOPLE . Lets do
whatever it takes to get back to the CONSITUTIONAL
GOVERNMENT this country was - even if it takes a NEW
AMERICAN REVOULTION . Our forefathers gave everything
they owned including their lives -but they kick some butt
during the fight. (I got a few people in the IRS on my
list- I would see meet their maker) dennis18328

 
 

Date: Wed Apr 9, 2003 9:58 am
Subject: Re: [ZIF] Help me figure this out

Sue the sob if you have his name PERSONALLY in small
claims court or civil court under USC 241 and 242 . Let
him show he has the right to obey the IRS .Is he part of
the IRS ? no therefore he is voilating your rights. screw
them if they don't like it .Kick them in the ass the
only way you are in a war . No fair way to fight make
their life a living hell the only way to win
dennis18328

 

Date: Thu Apr 10, 2003 9:56 pm
Subject: Re: [ZIF] The IRS is hiring, any takers? LOL

http://www.irs.gov/businesses/small/art ... 72,00.html
I got a 7.62x39 for each one of them

   

Date: Sat Apr 12, 2003 3:10 pm
Subject: Re: [ZIF] DOJ can not defend IRS -

> to the group I sent a copy to freedom books my
scanner is not working please ask cindy to post or
write me I will have to send it out regular mail d
klein 12332 MLE dingmans ferry pa 18328

  

Date: Mon Apr 14, 2003 6:02 pm
Subject: Re: [ZIF] A LAUGH ON THE IRS

> Joe should have drag the IRS agent down to the
tracks and hold him there until their both died. At
least there would be one less irs agent alive - some of
us are willing to take them out before they get us .We
are at war and people die in war dennis18328

 

Date: Mon Apr 14, 2003 6:27 pm
Subject: Re: [ZIF] I hear violins...

Does that make the private collector domestic
enemies also? Can we sue them in court ? I rather
shoot them dead make it perment kill them like crocraches
they deseve that dennis18328

 

Date: Mon Apr 14, 2003 9:06 pm
Subject: Re: [ZIF] Re: Internal Revenue Districts are not really what you think!!!

> NOW THAT WE KNOW THE IRS IS THE DOMESTIC ENEMY OF THE
AMERICAN PEOPLE .WHAT NEXT? WE HAVE TO TAKE THIS
COUNTRY BACK IN ANYWAY WE CAN - dennis18328

 

Date: Tue Apr 8, 2003 1:30 pm
Subject: RE: [ZIF] Re: Rape of Irwin Schiff--Comments

> > I am glad that the message was not mis-understood
by people in the group - you got it the way I believe to
be told simple and direct . After 20 years of research
on the PROBLEM I got my own method of dealing with
those who chose to violate my rights . Schiff and cindy
are nice to them by being civil -I play by other rules
like the founding fathers in this country 1750-1779. I
do believe there will be a ARMED RELOVUTION IN THE USA
very soon and I got my list of domestic enemies .
dennis18328

 

Date: Wed Apr 2, 2003 9:15 am
Subject: Re: [ZIF] Was it an April fool's day joke, or the hand writing on the wall?

> If this is true then is time to start the NEW
AMERICAN REVLOUTION and take our gov't back by force
first we hang all IRS for treason

Date: Thu Mar 27, 2003 8:20 pm
Subject: Re: [ZIF] FOR VOLUNTEEERS For Freedom Books: I can take calls

> > can you use me in PA to answer phones here ?
Sorry I can not c0me to Vegas -I got several people
here I am helping with the returns - The word is
getting out here in PA Dennis18328

[The Observer]

I guess since 8 years have elapsed since those posts, we should consider it fortunate that he has not carried out his threats...yet.

[LPC]

I guess since 8 years have elapsed since those posts, we should consider it fortunate that he has not carried out his threats...yet.

It looks as though the IRS has not yet started collection proceedings, so he hasn't yet been pushed up to, or over, the edge.

Meanwhile, according to a published opinion in a later case, 135 T.C. No. 7 (2010), he's already filed for bankruptcy six times and had his petitions dismissed five times.

In the 2010 case, which relates to the 2006 tax year, the deficiency was only $1,200.

So we've clearly got a retiree with limited income who may be about to lose his home (see footnote 2 to the Tax Court opinion). The fact that he's hinted at violence in the past can't possibly be good.

[The Observer]

It looks as though the IRS has not yet started collection proceedings, so he hasn't yet been pushed up to, or over, the edge.

Given the fact that he has filed bankruptcy six times would halt any IRS attempts to carry out collection to its logical conclusion. In fact, the numerous times he has filed bankruptcy with so many dismissals may be circumstantial evidence that he is using bankruptcy to frustrate collection.

The fact that he's hinted at violence in the past can't possibly be good.

Another Ed Brown in the making, I am thinking.

[Pottapaug1938]

It looks as though the IRS has not yet started collection proceedings, so he hasn't yet been pushed up to, or over, the edge.

Given the fact that he has filed bankruptcy six times would halt any IRS attempts to carry out collection to its logical conclusion. In fact, the numerous times he has filed bankruptcy with so many dismissals may be circumstantial evidence that he is using bankruptcy to frustrate collection.

The fact that he's hinted at violence in the past can't possibly be good.

Another Ed Brown in the making, I am thinking.

... and another guy who learned his civics by reading Classic Comics, and can't process any civic concept unless it's presented to him in a catchy sound bite or Internet factoid.

[LPC]

It looks as though the IRS has not yet started collection proceedings, so he hasn't yet been pushed up to, or over, the edge.

Given the fact that he has filed bankruptcy six times would halt any IRS attempts to carry out collection to its logical conclusion. In fact, the numerous times he has filed bankruptcy with so many dismissals may be circumstantial evidence that he is using bankruptcy to frustrate collection.

I think that trick only works twice.

From the Tax Court opinion I linked to above:

Held, further: Pursuant to 11 U.S.C. sec. 362(c)(4), no automatic stay arose following P’s third, fourth, fifth, and sixth bankruptcy petitions because P had two or more bankruptcy cases dismissed during the year before he filed each of those bankruptcy petitions. Therefore, 11 U.S.C. sec. 362(a)(8) does not stay the continuance of this deficiency case.