Gary Thomason v. CIR
UNPUBLISHED OPINION FILED. [10-60200 Affirmed] Judge: TMR , Judge: JLD , Judge: EBC. Mandate pull date is 01/06/2011 [10-60200]
Gary Thomason v. CIR se: 10-60200 Ca
Document: 00511293496 Page: 1 Date Filed: 11/15/2010
IN THE UNITED STATES COURT OF APPEALS United States Court of Appeals FOR THE FIFTH CIRCUIT Fifth Circuit FILED
November 15, 2010 N o . 10-60200 S u m m a r y Calendar Lyle W. Cayce Clerk
G A R Y L. THOMASON, P e titio n e r-A p p e lla n t v. C O M M IS S I O N E R OF INTERNAL REVENUE, R e s p o n d e n t -A p p e lle e
A p p e a l from the Decision of the United States Tax Court T C No. 21182-08
B e fo r e REAVLEY, DENNIS, and CLEMENT, Circuit Judges. P E R CURIAM:* G a r y Thomason appeals pro se the tax court's order sustaining an IRS tax d e t e r m in a t i o n that he owed $2,313.13 in taxes and penalties, and imposing a $ 2 ,0 0 0 sanction on Thomason under 26 U.S.C. § 6673. We affirm the tax court's order. I n 2001, Thomason received $21,084 in wages and other taxable income fr o m sources within the United States. But Thomason filed a 2001 federal
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
Case: 10-60200 Document: 00511293496 Page: 2 Date Filed: 11/15/2010
No. 10-60200 in c o m e tax return reporting zero income and requesting a refund of $2,616 for in c o m e , Social Security, and Medicare taxes that had been withheld from his w a g e s . The Internal Revenue Service (IRS) refused to accept Thomason's return o n the grounds that the return was frivolous and required that a proper return b e filed. Thomason resubmitted the same tax return. The IRS then prepared a substitute tax return for Thomason pursuant to 26 U.S.C. § 6020(b) and c a lc u la t e d that Thomason owed the federal government $1,926 in taxes and $ 3 8 7 .1 3 in tax penalties. Thomason appealed the tax deficiency to the tax court, w h ic h denied his appeal and imposed a $2,000 sanction on Thomason under 26 U .S .C . § 6673. T h o m a s o n raises numerous arguments before this court as to why the tax c o u r t's order was incorrect. All of Thomason's arguments as to his tax deficiency r a is e questions of law, which we review de novo. Whitehouse Hotel Ltd. v. C o m m 'r , 615 F.3d 321, 333 (5th Cir. 2010). He first argues that the § 6020(b) s u b s t it u t e tax return that the IRS prepared for him was invalid because it did n o t have a § 6020(b) certification, as required by IRS regulations. He also a r g u e s that the IRS tax penalties were invalid because they were based on an in v a lid § 6020(b) substitute tax return. But the record shows that the IRS did s u b m it a § 6020(b) certification, prepared by a tax technician. Thomason argues t h a t the tax technician did not have the authority to prepare the IRS c e r t ific a t io n , but IRS internal regulations specifically allow tax auditors, in c lu d in g tax technicians, to prepare the certification. See IRM 22.214.171.124(3); IRM 4 .9 .2 .3 (1 ). The § 6020(b) substitute tax return and corresponding penalties were v a lid . T h o m a s o n next asserts that United States resident citizens are exempt fr o m paying income tax on income sourced in the United States. Thomason's a r g u m e n t , a variant of the "U.S. Sources argument" or "861 argument," has been u n i v e r s a lly discredited. United States v. Bell, 414 F.3d 474, 475-76 (3d Cir. 2
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No. 10-60200 2 0 0 5 ) (per curiam); see also United States v. Clayton, 506 F.3d 405, 412 (5th Cir. 2 0 0 7 ). "In general, all citizens of the United States . . . are liable to the income t a x e s imposed by the Code whether the income is received from sources within o r without the United States." Rayner v. Comm'r, 70 F. App'x 739, 740 (5th Cir. 2 0 0 3 ) (unpublished) (quoting Treas. Reg. § 1.1-1(b) (2003)) (internal quotation m a r k s omitted). T h o m a s o n also raises several other arguments as to why he did not have t o file an income tax return or pay income taxes. He argues that, as a United S t a te s citizen residing in the United States, he is exempt from paying income t a x e s under Treas. Reg. § 1.6049-4(c)(1)(ii). But United States citizens are not o n the list of tax-exempt entities set forth in § 1.6049-4(c)(1)(ii). Thomason avers t h a t his bank erroneously withheld $9 in interest, but 26 U.S.C. § 61(a)(4) makes in t e r e s t , in any amount, part of a recipient's gross income. He argues that U n ite d States citizens residing in the United States do not have to pay income t a x because resident citizens are not on a list of taxpayers eligible for an e x t e n s io n under Treas. Reg. § 1.6081-5(a). This argument is illogical: The fact t h a t resident citizens are not eligible for an extension has no bearing on their tax lia b ilit y . T h o m a s o n finally argues that the tax court abused its discretion in im p o s in g a $2,000 penalty on Thomason under 26 U.S.C. § 6673(a)(1). We r e v ie w the tax court's imposition of a penalty under § 6673 for abuse of d i s c r e t io n . Sandvall v. Comm'r, 898 F.2d 455, 459 (5th Cir. 1990). Section 6 6 7 3 (a )(1 ) states: "Whenever it appears to the Tax Court that . . . (B) the t a x p a y e r 's position in such proceeding is frivolous or groundless . . . the Tax C o u r t , in its decision, may require the taxpayer to pay to the United States a p e n a lt y not in excess of $25,000." The tax court found that Thomason's
a r g u m e n t s were "frivolous and groundless, and . . . were made for the purpose o f delaying or avoiding entirely his tax reporting and payment obligations." As 3
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No. 10-60200 e x p la in e d above, Thomason's arguments are either gross distortions of IRS r e g u la tio n s or stale arguments that this court and others have consistently r e je c t e d . See Clayton, 506 F.3d at 412; Bell, 414 F.3d 475-76. The tax court w a r n e d Thomason before trial that if he continued to pursue frivolous a r g u m e n t s at trial, he would be subject to sanctions. Thomason did not heed t h is warning, and the tax court did not abuse its discretion in imposing a $2,000 fe e under § 6673(a)(1). T h e judgment of the tax court is AFFIRMED.
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