Christiansen v. Tax Commission

2020 UT App 46

THE UTAH COURT OF APPEALS

TERRE LYNN CHRISTIANSEN,
Petitioner,
v.
TAX COMMISSION, SCOTT W. SMITH,
AND JOHN L. VALENTINE, ET AL,
Respondents.

Per Curiam Opinion
No. 20190570-CA
Filed March 26, 2020

Original Proceeding in this Court

Terre Lynn Christiansen, Petitioner Pro Se
Sean D. Reyes and Brent A. Burnett, Attorneys
for Respondents

Before JUDGES MICHELE M. CHRISTIANSEN FORSTER, DAVID N.
MORTENSEN, and RYAN M. HARRIS.

PER CURIAM:

¶1 Terre Lynn Christiansen petitions for review of the Tax
Commission’s final order assessing tax deficiencies and penalties
for the years 2012 through 2016. Christiansen did not file state
tax returns in those years.

¶2 In 2017, the Auditing Division sent Christiansen requests
for filing information for years 2012 to 2016, noting that Division
records showed that she had not filed state tax returns in those
years. The requests informed Christiansen that she could still file
the returns, and in addition identified for Christiansen the
information she should provide to the Division to enable it to
evaluate her filing status in the event Christiansen took the
position that she was not required to file tax returns.
Christiansen did not provide the information identified in the
Christiansen v. Tax Commission

requests. However, in response to each request, Christiansen
sent a letter to the Division requesting that the Division provide
proof that Christiansen was required to file a federal tax return,
which is a prerequisite to the requirement to file a state
tax return. See Utah Code § 59-10-502(1) (LexisNexis 2018)
(providing that a state tax return must be filed by every
resident individual who is required to file a federal income tax
return).

¶3 In the absence of the necessary information from
Christiansen, the Division sent out notices of deficiency and
estimated income tax for the years in question. Each notice
included an estimated federal adjusted gross income and
showed that the income was greater than the sum of the
standard deduction and personal exemption, which triggers tax
liability. See id. § 59-10-104.1(2) (providing that an individual is
exempt from state income tax if the individual’s federal adjusted
gross income is less than or equal to the sum of the personal
exemptions and standard deduction).

¶4 Christiansen responded to the notices of deficiency with
additional demands for proof that she was required to file a
federal tax return. She stated that she had requested such proof
from the Internal Revenue Service in 2015 and had never
received any evidence that she was required to file a federal
return. The Division construed these letters as a petition for
redetermination of the deficiencies and set the matter for
hearing. Ultimately, after a formal hearing, the Commission
upheld the deficiency and penalty assessments. After the denial
of her petition for reconsideration, Christiansen seeks review in
this court.

¶5 On review, Christiansen continues to demand evidence
from the Commission showing that she was required to file
a federal tax return. However, in proceedings before the
Commission seeking a redetermination of a deficiency, with

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Christiansen v. Tax Commission

some exceptions not applicable here, “the burden of proof is
on the petitioner.” Utah Code § 59-1-1417(1). Accordingly, it
is Christiansen who bears the burden to show that the
Commission’s assessments are in error. See also Jensen v. State
Tax Comm’n, 835 P.2d 965, 971 (Utah 1992) (“When a
recalcitrant or evading taxpayer refuses to file an income tax
return and the Commission is therefore compelled to reconstruct
financial data from available evidence to estimate the
taxpayer’s income, it is reasonable to shift the burden to the
taxpayer . . . to show that the Commission’s figures are
incorrect.”).

¶6 Furthermore, the Commission provided evidence in the
notices of deficiency when it showed that Christiansen received
income greater than the filing requirement minimum for
federal tax returns. See 26 U.S.C. § 6012(a)(1) (providing that a
federal tax return is required by “every individual having for
the taxable year gross income which equals or exceeds
the exemption amount”). Although she argues that she is
exempt for other reasons, the Commission demonstrated as
an initial matter that Christiansen was required to file a
federal tax return and, therefore, was required to file a state tax
return.

¶7 Christiansen argues that she is exempt from filing a
federal tax return because she is a member of a church, and “the
Church is exempt from federal taxation.” Under the federal tax
code, certain organizations are exempt from taxation. 26 U.S.C.
§ 501(a). “Corporations . . . organized and operated exclusively
for religious . . . purposes, . . . no part of the net earnings of
which inures to the benefit of any private shareholder or
individual,” are exempt from taxation. Id. § 501(c)(3). But even
assuming that Christiansen is a member of a church that is
exempt under section 501(c)(3), she has not provided any
authority to support the proposition that a church’s tax-exempt
status extends to its individual members.

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Christiansen v. Tax Commission

¶8 Under the plain language of the statute, the tax exemption
belongs to the corporate entity. Id. “In order to be exempt under
section 501(c)(3), an organization must qualify under both the
organizational and the operational tests.” Basic Bible Church v.
Commissioner of Internal Revenue, 74 T.C. 846, 856 (1980). “The
operational test requires that an organization’s activities be
primarily those which accomplish one or more exempt
purposes” under the statute. Id. Furthermore, to be tax exempt,
an organization “must establish that it is not operated for the
benefit of private interests.” Id.

¶9 Christiansen has acknowledged that she is a member of a
church and has not asserted that she has organized in any form
within the statute. Additionally, at the formal hearing, she
acknowledged that she received her own wages for her own
benefit. The wages did not go to the church. Christiansen, on her
own, is not eligible for a tax exemption under section 501(c) and
there is no support for her assertion that she, as an individual, is
entitled to a corporate church’s exemption. 1 This is particularly
so when her wages were her own and “for the benefit of private
interests.”

¶10 As Christiansen notes in her brief, the critical fact to be
determined is whether she was required to file a federal tax
return which would then require her to file a state tax return.
The Commission demonstrated that she was required to file a
federal tax return. Her belief that she was not required to file
does not negate that fact. The other arguments Christiansen
asserts have been rejected as “lacking in legal merit and patently
frivolous.” Lonsdale v. U.S., 919 F.2d 1440, 1448 (10th Cir. 1990)

1. In contrast to the religious organization exemption under
section 501(c)(3), under the tax code individuals are broadly
required to file tax returns and are exempt only if they do not
meet the minimum income level. 26 U.S.C. § 6012(a).

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Christiansen v. Tax Commission

(listing frivolous arguments including “wages are not income”
and “the income tax is voluntary”). 2

¶11 Accordingly, we decline to disturb the Commission’s
order. 3

2. “The government may not prohibit the holding of these
beliefs, but it may penalize people who act on them.” U.S. v.
Carman, 2007 WL 9729022 (D. N.M. 2007).

3. Christiansen also requests payment for her time in litigating
this matter. Generally, pro se litigants are not entitled to recover
payment for representing themselves. Jones Waldo Holbrook
& McDonough v. Dawson, 923 P.2d 1366, 1375 (Utah 1996). And,
even where there is a basis for fees, a litigant must be the
prevailing party in order to recover. See, e.g., Valcarce v.
Fitzgerald, 961 P.2d 305, 319 (Utah 1998). We therefore deny
Christiansen’s request for payment.

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