--from United States v. Richard C. Shaw et al., case No. 2:16-cv-0220-KJD-NJK, United States District Court for the District of Nevada (Sept. 28, 2018), at:[ . . . ] Thus, tax returns with zeros in the income section where income actually existed are "substantially incorrect and frivolous, thus making [taxpayers] liable for the frivolous return penalty." Lemieux v. United States, 230 F.Supp.2d 1143, 1146 (D. Nev. 2002). Here, the United States has assessed the frivolous return penalties for the years at issue, for returns submitted to the IRS in 2008 (but for the 2002 and 2003 tax years). Those returns show zeroes listed as income; with those returns were submitted "corrected" Form 1099s that Mr. Shaw admitted he had modified in order to show zeroes on the amount he purportedly received from each entity. Mr. Shaw has since submitted returns that he contends are more accurate, that do reflect him having received income. Mr. and Mrs. Shaw stated that the reason they submitted the "zero" returns were because of positions taken in a book called Cracking the Code, positions that numerous courts have found to be frivolous. See, e.g., Waltner v. Comm'r, T.C. Memo. 2014-35, 2014 WL 775179 (Tax Court 2014) (imposing sanctions on litigant for making frivolous arguments where litigant "appear[ed] to be perpetuating frivolous positions that have been promoted and encouraged by Peter Hendrickson's book Cracking the Code."); United States v. Hendrickson, 664 F.Supp.2d 793 (E.D. Mich. 2009) (denying the motions to dismiss the indictment of defendant (author of Cracking the Code)). Therefore, Shaw is liable for the assessed frivolous return penalty.
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