Lawrence Horowitz, Petitioner

T .C . Memo . 2006-9 1

UNITED STATES TAX COUR T

i f LAWRENCE HOROWITZ, Petitioner v . COMMISSIONER OF INTERNAL REVENUE, Responden t Docket Nos . 3422-05, 3854-05 .

Filed May 2, 2006 .

Lawrence Horowitz, pro se .

Donald A . Glasel , for respondent .

MEMORANDUM OPINIO N

COHEN, Judge : Respondent determined deficiencies of $7,515, and $13,352 in petitioner's Federal income taxes for 2001 and 2002, respectively . Respondent also determined additions to tax of $1,690 .20 and $2,766 .37 under section 6651(a)(1) and $297 .24 and $406 .91 under section 6654 for 2001 and 2002, respectively .

SERVED MAY 2 2006

Respondent also determined additions to tax under section 6651 ( a)(2) . In each of the answers, respondent conceded the additions to tax under section 6651 ( a)(2) and , accordingly, alleged increases in the additions to tax under section 6651 ( a)(1) . The issue remaining for decision is whether a penalty should be awarded to the United States under section 6673 . Unless otherwise indicated , all section references are to the Internal Revenue Code in effect for the years in issue, and all Rule references are to the Tax Court Rules of Practice and Procedure .

Background All of the facts have been stipulated , and the stipulate d facts are incorporated in our findings by this reference .

Petitioner resided in Calverton , New York, at the time that he filed his petitions .

The petitions alleged no facts showing errors in respondent ' s determinations but set forth frivolous tax protester arguments , including that "petitioner could find no statute or regulation making petitioner liable for an income tax" . In his petitions , petitioner admitted that he failed to file Federal income tax returns for 2001 and 2002 .

After these cases were set for trial , respondent sent to petitioner requests for admissions for each year, setting forth the items of income received by petitioner , petitioner ' s failure to file income tax returns for either year, and petitioner's failure to pay estimated taxes for either year . The items of income identified included wages, interest, and dividends reported by third-party payors and comprising the unreported income determined in the notices of deficiency for 2001 and 2002 .

The requests for admissions, however, mischaracterized certain income from sale of stocks and/or bonds as "ordinary income" . At the time of trial, the parties stipulated to all of the items of income received by petitioner, and respondent conceded that the receipts from sale of stocks and/or bonds were capital gains .

However, because petitioner failed to present any information concerning his holding period or basis in the stocks or bonds sold, the gross proceeds are includable in petitioner's income as short-term capital gains .

Petitioner's frivolous claims that his income is not subject to tax were repeated in filings in these cases subsequent to the petitions, including motions to continue in order to conduc t frivolous discovery, and in his trial memorandum . Petitioner was warned by respondent and by the Court prior to trial that his arguments were frivolous and that a penalty might be imposed .

Petitioner persisted in making his frivolous arguments at the time of trial .

Discussion Petitioner's arguments that the items of income that h e received are not taxable have long been recognized as stale, groundless , and frivolous . Section 1 imposes an income tax on petitioner ' s taxable income .

Section 63 defines taxable income as gross income minus deductions .

Section 61 defines gross income as including wages and the other categories of receipts admitted by petitioner .

Arguments to the contrary have been consistently rejected and characterized as frivolous in innumerable cases . No further discussion of them is merited .

See Connor v . Commissioner , 770 F .2d 17, 20 ( 2d Cir . 1985 ) ; Crain v . Commissioner , 737 F . 2d 1417, 1418 ( 5th Cir . 1984) ; Cabirac v .

Commissioner , 120 T . C . 163, 167 ( 2003 ) .

Petitioner ' s arguments concerning respondent ' s procedures are similarly frivolous and lacking in merit .

Section 6673 provides :

SEC . 6673 ( a) . Tax Court Proceedings . — (1) Procedures instituted primarily for delay, etc .--Whenever it appears to the Tax Court that-- (A) proceedings before it have been instituted or maintained by the taxpayer primarily for delay , (B) the taxpayer ' s position in such proceeding is frivolous or groundless, o r (C) the taxpayer unreasonably failed to pursue available administrative remedies , the Tax Court, in its decision, may require the taxpayer to pay to the United States a penalty not in excess of $25,000 .

Notwithstanding prior warnings , petitioner has been undeterred .

A penalty shall be awarded to the United States in each of these consolidated cases in the amount of $5,000, for a total of $10,000 .

To reflect any recomputation required as a result of recharacterizing petitioner's gains from sales of stocks and bonds as short-term capital gains, Decisions will be entere d under Rule 155 .