KLEIN v. COMM., Cite as 107
AFTR 2d 2011-XXXX, 04/22/2011
DENNIS KLEIN, Appellant v. COMMISSIONER OF INTERNAL REVENUE.
Case Information:
HEADNOTE
Reference(s):
OPINION
On Appeal from the United
States Tax Court (Tax Court No. 07-27365) Tax Court Judge: Honorable David
Gustafson
Before: RENDELL, CHAGARES and ALDISERT, Circuit Judges
OPINION
Judge: PER
CURIAM
NOT PRECEDENTIAL
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. §
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. §
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
§ 6651(a)(1) was $295. Klein appeals.
We have jurisdiction pursuant to 26 U.S.C. § 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 [85 AFTR 2d 2000-1854] (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 [15 AFTR 2d 842] (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
§ 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. § 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 [44 AFTR 2d 79-5515] (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 [14 AFTR 688] (1934); Florsheim Bros. Drygoods
Co. v. United States,
280 U.S. 453, 462 [8 AFTR 10281] (1930).
In 2005, a person with income of $3,200 or more was required to
file a tax return.
I.R.C. § 6012(a)(1)(A). Income is “all income from whatever source
derived,” including pensions.
I.R.C. § 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 [47 AFTR 2d 81-515] (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 [56 AFTR 2d 85-5767] (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
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.
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).
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.
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