Appellate Case: 24-9005 Document: 25 Date Filed: 02/21/2025 Page: 1 FILED United States Court of Appeals UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT February 21, 2025 _________________________________ Christopher M. Wolpert Clerk of Court RYAN LANCE MACCUBBIN,
Petitioner - Appellant,
v. No. 24-9005 (CIR No. 15352-22) COMMISSIONER OF INTERNAL (United States Tax Court) REVENUE,
Respondent - Appellee. _________________________________
ORDER AND JUDGMENT* _________________________________
Before HARTZ, BALDOCK, and MORITZ, Circuit Judges.** _________________________________
Ryan Lance MacCubbin refused to pay any federal income tax on his 2018
earnings. Exercising jurisdiction under 26 U.S.C. § 7482(a)(1), we affirm the United
States Tax Court’s deficiency determination and related penalties.
I. BACKGROUND
In 2018 Mr. MacCubbin worked at Chenega Technical Innovations, LLC
* This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. It may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. ** After examining the briefs and appellate record, this panel has determined unanimously that oral argument would not materially assist in the determination of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument. Appellate Case: 24-9005 Document: 25 Date Filed: 02/21/2025 Page: 2
(Chenega), where he earned $51,007. He did not report these earnings on his federal
income tax return. Rather, he entered zeros on the lines for reporting income and
taxes owed. In an attached document he claimed that since he had not received any
“Wages,” he was not an “Employee,” and he was not involved in a “Trade or
Business” as defined in the Internal Revenue Code. R., Vol. II at 110–11 (internal
quotation marks omitted). He also requested a refund of $5,449—the amount of
federal taxes that Chenega had withheld from his earnings.
In March 2022 the Commissioner of Internal Revenue sent Mr. MacCubbin a
notice of deficiency, informing him that he owed $4,525 in federal income taxes for
2018, and assessing an accuracy-related penalty of $595. See 26 U.S.C. § 6662
(“Imposition of accuracy-related penalty on underpayments”).
After a trial in March 2024, the United States Tax Court sustained the
Commissioner’s deficiency determination and accuracy-related penalty. Because the
parties had stipulated that Mr. MacCubbin had “worked at Chenega” in 2018 and
received “earnings of $51,007,” the court said that there was “little more to
consider.” R., Vol. II at 112. And because Mr. MacCubbin had been warned that his
arguments were frivolous—but he persisted in making them at trial—the tax court
imposed an additional $1,000 penalty. R., Vol. II at 115–16; see 26 U.S.C. §
6673(a)(1) (allowing the tax court to impose a penalty if the taxpayer’s position is
“frivolous or groundless”).
On appeal Mr. MacCubbin challenges the deficiency determination and
accuracy-related penalty; he does not challenge the frivolousness penalty.
Page 2 Appellate Case: 24-9005 Document: 25 Date Filed: 02/21/2025 Page: 3
II. DISCUSSION
We review the tax court’s conclusions of law de novo and its factual findings
for clear error. See Esgar Corp. v. Comm’r, 744 F.3d 648, 652 (10th Cir. 2014).
We review its evidentiary rulings for abuse of discretion. See Kurzet v. Comm’r, 222
F.3d 830, 840 n.8 (10th Cir. 2000).
A. Deficiency
The Internal Revenue Code defines gross income as “all income from
whatever source derived, including (but not limited to) . . . [c]ompensation for
services.” 26 U.S.C. § 61(a). Once gross income is determined, allowable deductions
are subtracted to arrive at a taxpayer’s “adjusted gross income” and “taxable
income.” 26 U.S.C. §§ 62, 63 (internal quotation marks omitted).
Mr. MacCubbin maintains that the earnings he received from Chenega were
not taxable “wages” under 26 U.S.C. § 3401. His position is wholly without merit.
That section defines wages to include “all remuneration (other than fees paid to a
public official) for services performed by an employee for his employer[.]” 26 U.S.C.
§ 3401(a); see Lonsdale v. United States, 919 F.2d 1440, 1447–48 (10th Cir. 1990)
(“[T]he [taxpayers] cannot by any stretch of the imagination assert that their
arguments [against] the taxability of wages have any support in this circuit.”).
Mr. MacCubbin similarly asserts that he was not an employee under 26 U.S.C.
§ 3401(c), which states that the term “includes an officer, employee, or elected
official of the United States, a State, or any political subdivision thereof, or the
District of Columbia, or any agency or instrumentality of any one or more of the
Page 3 Appellate Case: 24-9005 Document: 25 Date Filed: 02/21/2025 Page: 4
foregoing [or] an officer of a corporation.” He argues that the definition “includes”
only government employees and corporate officers. He is mistaken. See United States
v. Latham, 754 F.2d 747, 750 (7th Cir. 1985) (“[The assertion] that under 26 U.S.C.
§ 3401(c) the category of ‘employee’ does not include privately employed wage
earners is a preposterous reading of the statute. It is obvious that within the context of
[the] statute[] the word ‘includes’ is a term of enlargement not of limitation, and the
reference to certain entities or categories is not intended to exclude all others.”).
Mr. MacCubbin further contends that the Commissioner failed to establish a
factual basis for a deficiency. He first argues that the Commissioner did not identify a
mathematical error or an improper deduction. But nothing in the definition of
deficiency suggests that deficiencies are limited to those two types of errors. See 26
U.S.C. § 6211; Laing v. United States, 423 U.S. 161, 173 (1976) (“In essence, a
deficiency as defined in the [Internal Revenue] Code is the amount of tax imposed
less any amount that may have been reported by the taxpayer on his return.”). He also
argues that the Commissioner’s deficiency determination was based on “self-serving,
entirely unsupported and purely hearsay allegations made by unexamined others” in
Forms W-2 and 1099. Aplt. Br. at 18. The Commissioner did not, however, rely on
any Form 1099. And we see no abuse of discretion in the tax court’s admission of the
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Appellate Case: 24-9005 Document: 25 Date Filed: 02/21/2025 Page: 1 FILED United States Court of Appeals UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT February 21, 2025 _________________________________ Christopher M. Wolpert Clerk of Court RYAN LANCE MACCUBBIN,
Petitioner - Appellant,
v. No. 24-9005 (CIR No. 15352-22) COMMISSIONER OF INTERNAL (United States Tax Court) REVENUE,
Respondent - Appellee. _________________________________
ORDER AND JUDGMENT* _________________________________
Before HARTZ, BALDOCK, and MORITZ, Circuit Judges.** _________________________________
Ryan Lance MacCubbin refused to pay any federal income tax on his 2018
earnings. Exercising jurisdiction under 26 U.S.C. § 7482(a)(1), we affirm the United
States Tax Court’s deficiency determination and related penalties.
I. BACKGROUND
In 2018 Mr. MacCubbin worked at Chenega Technical Innovations, LLC
* This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. It may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. ** After examining the briefs and appellate record, this panel has determined unanimously that oral argument would not materially assist in the determination of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument. Appellate Case: 24-9005 Document: 25 Date Filed: 02/21/2025 Page: 2
(Chenega), where he earned $51,007. He did not report these earnings on his federal
income tax return. Rather, he entered zeros on the lines for reporting income and
taxes owed. In an attached document he claimed that since he had not received any
“Wages,” he was not an “Employee,” and he was not involved in a “Trade or
Business” as defined in the Internal Revenue Code. R., Vol. II at 110–11 (internal
quotation marks omitted). He also requested a refund of $5,449—the amount of
federal taxes that Chenega had withheld from his earnings.
In March 2022 the Commissioner of Internal Revenue sent Mr. MacCubbin a
notice of deficiency, informing him that he owed $4,525 in federal income taxes for
2018, and assessing an accuracy-related penalty of $595. See 26 U.S.C. § 6662
(“Imposition of accuracy-related penalty on underpayments”).
After a trial in March 2024, the United States Tax Court sustained the
Commissioner’s deficiency determination and accuracy-related penalty. Because the
parties had stipulated that Mr. MacCubbin had “worked at Chenega” in 2018 and
received “earnings of $51,007,” the court said that there was “little more to
consider.” R., Vol. II at 112. And because Mr. MacCubbin had been warned that his
arguments were frivolous—but he persisted in making them at trial—the tax court
imposed an additional $1,000 penalty. R., Vol. II at 115–16; see 26 U.S.C. §
6673(a)(1) (allowing the tax court to impose a penalty if the taxpayer’s position is
“frivolous or groundless”).
On appeal Mr. MacCubbin challenges the deficiency determination and
accuracy-related penalty; he does not challenge the frivolousness penalty.
Page 2 Appellate Case: 24-9005 Document: 25 Date Filed: 02/21/2025 Page: 3
II. DISCUSSION
We review the tax court’s conclusions of law de novo and its factual findings
for clear error. See Esgar Corp. v. Comm’r, 744 F.3d 648, 652 (10th Cir. 2014).
We review its evidentiary rulings for abuse of discretion. See Kurzet v. Comm’r, 222
F.3d 830, 840 n.8 (10th Cir. 2000).
A. Deficiency
The Internal Revenue Code defines gross income as “all income from
whatever source derived, including (but not limited to) . . . [c]ompensation for
services.” 26 U.S.C. § 61(a). Once gross income is determined, allowable deductions
are subtracted to arrive at a taxpayer’s “adjusted gross income” and “taxable
income.” 26 U.S.C. §§ 62, 63 (internal quotation marks omitted).
Mr. MacCubbin maintains that the earnings he received from Chenega were
not taxable “wages” under 26 U.S.C. § 3401. His position is wholly without merit.
That section defines wages to include “all remuneration (other than fees paid to a
public official) for services performed by an employee for his employer[.]” 26 U.S.C.
§ 3401(a); see Lonsdale v. United States, 919 F.2d 1440, 1447–48 (10th Cir. 1990)
(“[T]he [taxpayers] cannot by any stretch of the imagination assert that their
arguments [against] the taxability of wages have any support in this circuit.”).
Mr. MacCubbin similarly asserts that he was not an employee under 26 U.S.C.
§ 3401(c), which states that the term “includes an officer, employee, or elected
official of the United States, a State, or any political subdivision thereof, or the
District of Columbia, or any agency or instrumentality of any one or more of the
Page 3 Appellate Case: 24-9005 Document: 25 Date Filed: 02/21/2025 Page: 4
foregoing [or] an officer of a corporation.” He argues that the definition “includes”
only government employees and corporate officers. He is mistaken. See United States
v. Latham, 754 F.2d 747, 750 (7th Cir. 1985) (“[The assertion] that under 26 U.S.C.
§ 3401(c) the category of ‘employee’ does not include privately employed wage
earners is a preposterous reading of the statute. It is obvious that within the context of
[the] statute[] the word ‘includes’ is a term of enlargement not of limitation, and the
reference to certain entities or categories is not intended to exclude all others.”).
Mr. MacCubbin further contends that the Commissioner failed to establish a
factual basis for a deficiency. He first argues that the Commissioner did not identify a
mathematical error or an improper deduction. But nothing in the definition of
deficiency suggests that deficiencies are limited to those two types of errors. See 26
U.S.C. § 6211; Laing v. United States, 423 U.S. 161, 173 (1976) (“In essence, a
deficiency as defined in the [Internal Revenue] Code is the amount of tax imposed
less any amount that may have been reported by the taxpayer on his return.”). He also
argues that the Commissioner’s deficiency determination was based on “self-serving,
entirely unsupported and purely hearsay allegations made by unexamined others” in
Forms W-2 and 1099. Aplt. Br. at 18. The Commissioner did not, however, rely on
any Form 1099. And we see no abuse of discretion in the tax court’s admission of the
Form W-2 (provided by Chenega) as a self-authenticating business record. See Fed.
R. Evid. 803(6), 902(11). “It is well-established that the Commissioner’s deficiency
determination in a civil case is presumptively correct, and that the taxpayer bears the
burden of coming forward with sufficient evidence to overcome the presumption.”
Page 4 Appellate Case: 24-9005 Document: 25 Date Filed: 02/21/2025 Page: 5
Erickson v. Comm’r, 937 F.2d 1548, 1551 (10th Cir. 1991). Mr. MacCubbin has not
satisfied that burden. See Hardy v. Comm’r, 181 F.3d 1002, 1005 (9th Cir. 1999)
(“[B]ecause [the taxpayer’s] employer reported his income to the IRS, the
Commissioner satisfied the foundational requirements [to apply the presumption of
correctness].”).
Relatedly, Mr. MacCubbin argues that the tax court erred by granting the
Commissioner’s motion for leave to file an exhibit—consisting of the Form W-2,
paystubs, and Chenega’s certification of records—four days out of time. The
Commissioner represented in his motion, however, that he had just received those
documents that same day. And Mr. MacCubbin fails to explain why granting the
Commissioner’s motion amounted to an abuse of discretion, except to claim unfair
surprise. But it is difficult to see how he could have been unfairly surprised or
prejudiced by the admission of his own W-2 and paystubs.
Mr. MacCubbin also contends that the tax court “ignored” his trial exhibits,
which purportedly showed that the Commissioner’s deficiency determination was
“arbitrary, capricious, and brought in bad-faith.” Aplt. Br. at 26. But the tax court
admitted and considered all his exhibits, save one duplicative exhibit. And those
exhibits hardly demonstrate that the Commissioner’s deficiency determination was
“based upon falsifications and/or inaccuracies.” Aplt. Br. at 28. We discern no clear
error.
Similarly, Mr. MacCubbin argues that two of his exhibits—a 2023 IRS Notice
and his account transcript—prove there was no deficiency. But as the
Page 5 Appellate Case: 24-9005 Document: 25 Date Filed: 02/21/2025 Page: 6
Commissioner’s counsel explained at trial, that notice was “erroneously issued”: the
IRS had not placed a litigation hold on his account, “so the system assumed that this
case was settled and therefore issued [him a tax] refund.” R., Vol. II at 148. And the
account transcript simply reflected that same mistake. These exhibits fail to
overcome the presumption of correctness, much less disprove a deficiency.
Mr. MacCubbin’s next contention is that the notice of deficiency was improper
because the Commissioner did not prepare a substitute return for him under 26 U.S.C.
§ 6020(b) in opposition to his zero-income return. We reject the contention. Although
section 6020(b) “authorizes the Secretary to file for a taxpayer, the statute does not
require such a filing, nor does it relieve the taxpayer of the duty to file.” United
States v. Stafford, 983 F.2d 25, 27 (5th Cir. 1993) (emphasis added); see Smalldridge
v. Comm’r, 804 F.2d 125, 127 n.2 (10th Cir. 1986) (“We do not mean to suggest that
[§ 6020] is in anywise mandatory on the Commissioner.”).
B. Negligence Penalty
Finally, Mr. MacCubbin argues that the tax court incorrectly imposed an
accuracy-related penalty for negligence. We disagree. Section 6662 imposes a 20%
accuracy-related penalty on the portion of an underpayment attributable to, among
other things, “[n]egligence or disregard of rules or regulations.” 26 U.S.C. § 6662(a),
(b)(1). “The term ‘negligence’ includes any failure to make a reasonable attempt to
comply with the provisions of [the tax code].” 26 U.S.C. § 6662(c). “The
Commissioner’s determination of negligence is presumed correct, and the taxpayer
has the burden of proving it wrong.” Van Scoten v. Comm’r, 439 F.3d 1243, 1252
Page 6 Appellate Case: 24-9005 Document: 25 Date Filed: 02/21/2025 Page: 7
(10th Cir. 2006) (internal quotation marks omitted). Mr. MacCubbin has not proved it
wrong. As the tax court explained, the “authority is plain” that his position—that
money earned for services rendered is not income—is “too good to be true.” R., Vol.
II at 115 (quoting 26 C.F.R. § 1.6662-3(b)(1)(ii)).
III. CONCLUSION
We AFFIRM the decision of the tax court.
Entered for the Court
Harris L Hartz Circuit Judge
Page 7