The Tax Court in Brief – April 18th- April 22nd, 2022

Freeman Law’s “The Tax Court in Brief” covers every substantive Tax Court opinion, providing a weekly brief of its decisions in clear, concise prose.

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Tax Litigation:  The Week of April 18th, 2022, through April 22nd, 2022

Bindel v. Commissioner |April 20, 2022 | Urda, P. | Dkt. No. 9552-19


Short Summary

Petitioner challenged IRS determinations of tax deficiencies of approximately $24,000 in each of two tax years; he had reported having no taxable income. Petitioner worked as a software developer. In each of the tax years, he received over $100,000 from employers who reported his wages to the IRS on W-2s. Petitioner claimed entitlement to refund of the withholdings. He attached to his tax returns Form 4852, claiming that he “did not receive any wages as defined in section 3401(a) and section 3121(a).” The IRS noted the discrepancy and issued deficiency notices.

Primary Holdings

  • Petitioner’s arguments in support of his reporting of no taxable income were frivolous.
  • The Court declined to impose a section 6673(a)(1) penalty for maintaining a frivolous claim because the petitioner had not made frivolous claims in previous years, but it warned petitioner against repeating frivolous claims.

Key Points of Law

Generally, IRS deficiency determinations are presumed correct and once the IRS has established a factual foundation linking a taxpayer to the income-producing activity, the taxpayer must show by a preponderance of the evidence that a deficiency determination is arbitrary or erroneous. See Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933); Carson v. United States, 560 F.2d 693, 695–96 (5th Cir. 1977); Portillo v, Commissioner, 932 F.2d at 1133; Carson, 560 F.2d at 695–96.

Congress is empowered to levy income against any source of income and assertions that wages from private-sector employers are not taxable “income” are frivolous. See Parker v. Commissioner, 724 F.2d 469, 471–72 (5th Cir. 1984); see also Crain v. Commissioner, 737 F.2d 1417, 1417 (5th Cir. 1984); Wnuck v. Commissioner, 136 T.C. 498, 510–12 (2011).


One who receives wages for services rendered must pay income tax on those wages. It’s pretty much that simple.

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