George J. Smith; Sheila Ann Smith v. Commissioner of Internal Revenue

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
GEORGE J. SMITH; SHEILA ANN
SMITH,
Petitioners-Appellants,
v.
COMMISSIONER OF INTERNAL
REVENUE,
Respondent-Appellee.
No. 20-70698
Tax Ct. No. 6105-16
MEMORANDUM*
Appeal from a Decision of the
United States Tax Court
Submitted February 15, 2022**
Before: FERNANDEZ, TASHIMA, and FRIEDLAND, Circuit Judges.
George J. and Sheila Ann Smith appeal pro se from the Tax Court’s
decision, following a bench trial, upholding the determinations of deficiency,
penalties, and an addition by the Commissioner of Internal Revenue regarding their
federal income taxes for the 2013 and 2014 tax years. We have jurisdiction under
* This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
** The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
FILED
FEB 25 2022
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

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26 U.S.C. § 7482(a)(1). We review de novo the Tax Court’s legal conclusions and
for clear error its factual findings. Hardy v. Comm’r, 181 F.3d 1002, 1004 (9th
Cir. 1999). We affirm.
The Tax Court properly upheld the Commissioner’s deficiency
determinations because the Commissioner presented stipulated evidence that the
Smiths failed to report income, and the Smiths failed “to show by a preponderance
of the evidence that the deficiency was arbitrary or erroneous.” See 26 U.S.C.
§ 61(a)(3) (defining gross income as “all income from whatever source derived”);
Hardy, 181 F.3d at 1004-05 (“If the Commissioner introduces some evidence that
the taxpayer received unreported income, the burden shifts to the taxpayer to show
by a preponderance of the evidence that the deficiency was arbitrary or
erroneous.”); see also Maisano v. United States, 908 F.2d 408, 409 (9th Cir. 1990)
(recognizing that this court has rejected multiple variations of the “wages are not
income” argument); Roat v. Comm’r, 847 F.2d 1379, 1381 (9th Cir. 1988) (holding
that the Commissioner is not required to prepare a return on a taxpayer’s behalf
before determining and issuing a notice of deficiency).
The Tax Court did not abuse its discretion by imposing a $2,500 penalty
under 26 U.S.C. § 6673 against the Smiths because they maintained frivolous
positions despite the Tax Court’s warnings. See Wolf v. Comm’r, 4 F.3d 709, 716
(9th Cir. 1993) (setting forth standard of review and concluding that the Tax Court

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was within its discretion in imposing penalties under § 6673 against taxpayer who
persisted in litigating frivolous positions following warning).
We reject as meritless the Smiths’ contentions regarding the constitutionality
of income taxes, that the income tax is an excise tax that does not apply to the
money the Smiths received in 2013 and 2014, and that the Tax Court
mischaracterized or “changed” the stipulated facts.
We do not consider whether the Tax Court erred in sustaining the addition
for failure to file a timely return for 2013 because the Smiths do not address this
issue in their opening brief. See Indep. Towers of Wash. v. Washington, 350 F.3d
925, 929 (9th Cir. 2003) (“[W]e will not consider any claims that were not actually
argued in appellant’s opening brief.”).
The Commissioner’s motion for sanctions (Docket Entry No. 29) is granted.
See Fed. R. App. P. 38; 28 U.S.C. § 1291; Wilcox, 848 F.2d 1007, 1008-09 (9th
Cir. 1988) ($1,500 sanction imposed against pro se litigant for bringing a frivolous
appeal).
AFFIRMED.

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