Christian D. Silver

• Court: United States Tax Court
• Decided: August 9, 2021
• Docket: 8805-18
• Status: Unpublished

Opinion

T.C. Memo. 2021-98

UNITED STATES TAX COURT

CHRISTIAN D. SILVER, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 8805-18. Filed August 9, 2021.

Christian D. Silver, pro se.

Christopher J. Richmond and Sarah A. Herson, for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

COPELAND, Judge: In a notice of deficiency dated February 14, 2018,

respondent, the Commissioner of Internal Revenue, determined an income tax

deficiency of $3,640, a section 6662(a) 1 penalty of $728, and a section 6651(a)(2)

1 All section references are to the Internal Revenue Code in effect at all relevant times, and all Rule references are to the Tax Court Rules of Practice and

Served 08/09/21 -2- [*2] addition to tax of $910 for tax year 2012. On May 7, 2018, petitioner,

Christian Silver, timely filed a petition in this Court disputing the notice of

deficiency.2 At trial an oral motion requesting that we impose a penalty pursuant

to section 6673 against Mr. Silver was made.

After concessions,3 the two issues remaining for decision are: (1) whether

Mr. Silver received unreported income as the Commissioner determined for tax

year 2012 and (2) whether we should impose a section 6673 penalty.

FINDINGS OF FACT

Some of the facts were deemed admitted under Rule 90(e) or deemed

stipulated under Rule 91(f) and are so found. 4 The deemed admissions, stipulated

Procedure, unless otherwise indicated. All monetary amounts are rounded to the nearest dollar. 2 Mr. Silver also disputed notices of deficiency for tax years 1984 through 2011 and 2013 through 2017 and notices of determination concerning collection action for tax years 1984 through 2017. Because the Commissioner had not issued those notices, we dismissed for lack of jurisdiction the petition as to those notices and tax years. 3 The Commissioner conceded the sec. 6662(a) penalty and sec. 6651(a)(2) addition to tax in his pretrial memorandum filed on November 4, 2019. 4 The Commissioner, pursuant to Rule 90, filed a first request for admissions asking Mr. Silver to admit that he was paid by each of the 12 businesses that reported to the Internal Revenue Service doing so in 2012; Mr. Silver responded by advancing several frivolous arguments. In response to the Commissioner’s motion to review the sufficiency of answers or objections to requests for admissions, by order dated October 8, 2019, this Court deemed those 12 payments to have been -3- [*3] facts, and attached exhibits are incorporated into our findings by this

reference. Mr. Silver resided in California when his petition was filed.

Mr. Silver worked for 12 businesses throughout tax year 2012. Eleven of

these businesses reported Mr. Silver’s wages on Forms W-2, Wage and Tax

Statement, and one business reported a payment as “Other Income” on Form 1099-

MISC, Miscellaneous Income. In total Mr. Silver received $28,155 in wages and

$5,000 as other income in tax year 2012.

Mr. Silver untimely filed Form 1040, U.S. Individual Income Tax Return,

for tax year 2012 on March 27, 2016. His return reported no gross income and no

tax liability.5 Attached to Mr. Silver’s 2012 tax return were 11 Forms 4852,

Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distribution

From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance

Contracts, etc., and one corrected Form 1099-MISC. On each Form 4852 he

claimed his employer paid him “0.00” as wages for tax year 2012 and withheld

Social Security tax and Medicare tax. On the “corrected” Form 1099-MISC he

paid to Mr. Silver in tax year 2012. The Commissioner likewise filed a motion pursuant to Rule 91(f) with the intention of having certain facts and evidence deemed established. Mr. Silver again advanced frivolous arguments in response. Thus, on November 15, 2019, we deemed established the Commissioner’s proposed stipulation of facts and evidence. 5 None of the 12 businesses that paid Mr. Silver during tax year 2012 withheld Federal or State income tax. -4- [*4] included the following statement at the bottom, which was signed and dated

the same day as the Form 1040:

This corrected form 1099-MISC is submitted to rebut a document known to have been submitted by the party identified as “PAYOR” which erroneously alleges payment to the party identified as “Recipient” of “gains, profit, or income” made in the course of a “trade or business” within the meaning of relevant law.

On February 14, 2018, the Commissioner issued a notice of deficiency to

Mr. Silver which led him to file a petition with this Court.

OPINION

I. Burden of Proof

Generally, the Internal Revenue Service’s (IRS’) determinations are

presumed correct, and the taxpayer bears the burden of proving that those

determinations are erroneous. Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115

(1933); Worsham v. Commissioner, T.C. Memo. 2012-219, 2012 WL 3101491,

at *3, aff’d, 531 F. App’x 310 (4th Cir. 2013). However, Mr. Silver’s deficiency

involves unreported income. In the Court of Appeals for the Ninth Circuit, the

circuit in which an appeal in this case would normally lie, see sec. 7482(b), a

deficiency determination involving unreported income is not entitled to the

presumption of correctness unless the IRS can provide “some evidentiary

foundation linking the taxpayer to the alleged income-producing activity,”

Weimerskirch v. Commissioner, 596 F.2d 358, 362 (9th Cir. 1979), rev’g 67 -5- [*5] T.C. 672 (1977); see also Petzoldt v. Commissioner, 92 T.C. 661, 689 (1989).

Once the government has carried this initial burden of introducing some

substantive evidence linking the taxpayer with income-producing activity, the

taxpayer has the burden to rebut the presumption of correctness of the deficiency

determination by establishing, by a preponderance of the evidence, that the

deficiency determination is arbitrary or erroneous. Petzoldt v. Commissioner, 92

T.C. at 689; see also secs. 6201(d), 7491(a).

To satisfy this minimal factual burden the Commissioner introduced into

evidence a computer-generated “Wage and Income Transcript” showing data from

Forms W-2 issued by Mr. Silver’s 11 employers and Form 1099-MISC issued by

the one business which paid him other income. Mr. Silver has not denied that he

received those wages and that income; he simply argued that his income is not

taxable. The Commissioner has linked Mr. Silver to income-producing activities;

thus, the burden of showing error lies with Mr. Silver. See, e.g., Hendrickson v.

Commissioner, T.C. Memo. 2019-10, at *18-*19, aff’d, 125 A.F.T.R.2d 2020-

2185 (6th Cir. Apr. 2, 2020); Canzoni v. Commissioner, T.C. Memo. 2018-130,

at *7-*8; Oman v. Commissioner, T.C. Memo. 2010-276, 2010 WL 5209360,

at *4-*5. -6- [*6] II. Mr. Silver’s Deficiency Based on Unreported Income

Gross income includes “all income from whatever source derived.” Sec.

61(a). The Supreme Court has consistently held that gross income “was used by

Congress to exert in this field ‘the full measure of its taxing power.’”

Commissioner v. Glenshaw Glass Co., 348 U.S. 426, 429 (1955) (quoting

Helvering v. Clifford, 309 U.S. 331, 334 (1940)). Payments that are “undeniable

accessions to wealth, clearly realized, and over which the taxpayers have complete

dominion” are taxable income unless an exclusion applies. Id. at 431; see Sewards

v. Commissioner, 785 F.3d 1331, 1334 (9th Cir. 2015) (citing Hawkins v. United

States, 30 F.3d 1077, 1079 (9th Cir. 1994)), aff’g 138 T.C. 320 (2012). Wages are

considered to be an accession to wealth and thus are includible in gross income;

they are the very paradigm of income. See Commissioner v. Dunkin, 500 F.3d

1065, 1069 (9th Cir. 2007), rev’g 124 T.C. 180 (2005). Therefore, the $28,155 in

wages that Mr. Silver received in tax year 2012 should have been included in his

gross income for that tax year.

As mentioned supra, Mr. Silver also does not deny receiving $5,000 reported

to the Commissioner as “Other Income.” Thus, the $5,000 payment should also

have been included in Mr. Silver’s gross income for tax year 2012. See sec.

61(a)(1). -7- [*7] During the course of this case Mr. Silver has filed numerous documents

asserting common tax-protester arguments, such as: (1) he is not a taxpayer within

the meaning of section 7701(a)(14), which defines a taxpayer as “any person

subject to any internal revenue tax”; (2) he did not receive taxable compensation in

tax year 2012 but rather exchanged his labor and services for remuneration paid to

him; (3) his wages are not taxable because they were paid by a private sector

employer; (4) only wages paid by a public sector employer to a public sector

employee are taxable; (5) the Internal Revenue Service is attempting to apply a

direct tax without apportionment in violation of the United States Constitution; and

(6) he is not a United States citizen, but rather a “private American citizen within

the States of the Union.”

Mr. Silver’s contentions are of the type that we have repeatedly addressed

and rejected as groundless and frivolous. See, e.g., Wnuck v. Commissioner, 136

T.C. 498 (2011); Waltner v. Commissioner, T.C. Memo. 2014-35, aff’d, 659

F. App’x 440 (9th Cir. 2016). We will not refute his arguments with somber

reasoning and copious citation of precedent because to do so might suggest that

these arguments have some colorable merit. See Crain v. Commissioner, 737 F.2d

1417, 1417 (5th Cir. 1984).

The payments that Mr. Silver received in tax year 2012 represent a clear

accession to wealth. Mr. Silver has made only frivolous arguments and thus has -8- [*8] not shown that these payments are not taxable. Consequently, we hold that

the $28,155 in wages and $5,000 in “Other Income” that Mr. Silver received in tax

year 2012 are all taxable under section 61(a).

III. Section 6673 Penalty

At trial the Commissioner made an oral motion for a section 6673 penalty to

be applied here. Section 6673(a)(1) allows the Court to impose a penalty not to

exceed $25,000 when it appears that a taxpayer’s position is frivolous or

groundless. Whether to impose a section 6673 penalty is entirely within our

discretion. See sec. 6673(a). Aside from this case, Mr. Silver has filed two other

petitions with this Court.6 In neither case was he warned that a penalty under

section 6673 might be imposed on him; further, the penalty request here was not

advanced until the time of trial. Thus, we decline to impose a section 6673 penalty

upon Mr. Silver at this time, but we warn him that if he continues to advance the

same positions in the future it is likely that a section 6673 penalty may be imposed.

IV. Conclusion

For the foregoing reasons, we will sustain the Commissioner’s $3,640

income tax deficiency determination for tax year 2012; however, we will not

impose a section 6673 penalty and, on the basis of the Commissioner’s

The case at docket No. 20396-19 was dismissed for lack of jurisdiction 6

because Mr. Silver did not timely file his petition. The case at docket No. 3372- 20L is currently pending before this Court. -9- [*9] concessions, we will not impose a penalty under section 6662(a) or an

addition to tax under section 6651(a)(2).

In reaching our holding herein, we have considered all arguments made, and

to the extent not addressed herein, we find them to be moot, irrelevant, or without

merit.

An appropriate order and decision

will be entered.