Tax Court In Brief | Gilmartin v. Commissioner | Self-Employment Taxes And Frivolous Arguments

• Published date: 27 June 2022
• Subject Matter: Tax, Income Tax
• Law Firm: Freeman Law
• Author: Freeman Law

The Tax Court in Brief - June 20th - June 24th, 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 June 20th, 2022, through June 24th, 2022

• Brown v. Commissioner 158 T.C. No. 9| June 23, 2022 | Lauber, J.| Dkt. No 11519-20L
• Gianninis v Commissioner T.C. Memo. 2022-65 | June 23, 2022 | Urda, J.| Dkt. No. 20132-19.
• Alfred Christopher Morgan, v. Comm'r T.C. Summary Opinion 2022-10| June 23, 2022 | Wells, J. | Dkt. No 20912-19S

Gilmartin v. Comm'r, T.C. Memo. 2022-64 | June 23, 2022 | Vasquez, J. | Dkt. No. 21604-18

Opinion

Short Summary: During the relevant tax periods, David Gilmartin ("Petitioner"), who has a doctorate in economics, worked as an economist for various employers and clients. Petitioner's clients issued him Forms 1099-MISC, and Petitioner's employers issued him Forms W-2. Petitioner also received other information reports, such as: Forms 1099-INT, Form 1099-B, and Forms 1099-R. Petitioner failed to file federal income tax returns for tax years 1989 through 2010.

On June 25, 2012, a grand jury returned an indictment, charging Petitioner with, among other charges, tax evasion under I.R.C. ' 7201. Petitioner was ultimately found to be guilty, and the U.S. District Court (S.D. New York) imposed a prison sentence of 4 years, supervised release of 3 years, and restitution of $1,672,399.62. After Petitioner appealed, the U.S. Court of Appeals for the Second Circuit affirmed the conviction on May 10, 2017.

The IRS prepared substitutes for returns (SFRs) on the basis of third-party reporting. The IRS issued a Notice of Deficiency, determining Petitioner was liable for income taxes, self-employment taxes, and additions to tax under I.R.C. ' 6651(a)(2) and (f) and 6654. Petitioner timely petitioned the U.S. Tax Court and was set for trial. Petitioner made frivolous arguments at trial (that he was not liable for income tax on his wages and compensation). The Commissioner made an oral motion to impose a penalty against Petitioner, pursuant to I.R.C. ' 6673(a)(1). Petitioner then filed a 147-page "Simultaneous Opening Brief" that expounded on his frivolous arguments made at trial.

Key Issues:

(1) Whether Petitioner failed to report taxable income for the years at issue;

(2) Whether Petitioner...