Tax Court in Brief | Bindel V. Commissioner | For information: salaries are taxable. . . Yes, Really – Income Tax

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The Tax Court in Brief – April 18 to April 22, 2022

Freeman Law’s “Tax Court Brief” covers all of the Tax Court’s substantive opinions, providing a weekly summary of its decisions in clear, concise prose.

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Tax litigation: the week of April 18, 2022 to April 22, 2022

  • Treece Financial Services Group, c. Comm’r, 158 TC No. 6 | April 19, 2022 | Kerrigan, J. | Dekt. No. 20850-19

  • Sezonov. Comm’r, Memo TC. 2022-40| April 20, 2022 | Wonder, J. | Dekt. No. 26650-17

  • Kohout c. Comm’r, TC Memo. 2022-37 |April 18, 2022?|Jones, J. | Dekt. No. 11958-17

Bindel c. Commissioner |20 April 2022 | Urda, P. | Dekt. No. 9552-19


Short summary

The petitioner challenged the IRS’ determinations of tax shortfalls of approximately $24,000 for each of the two tax years; he had declared that he had no taxable income. The 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. The petitioner claimed the right to reimbursement of the deductions. He attached Form 4852 to his tax returns, saying he “did not receive any salary as defined in Section 3401(a) and Section 3121(a).” The IRS noted the discrepancy and issued deficiency notices.

Main holdings

  • The Applicant’s arguments in support of his declaration of no taxable income were frivolous.

  • The Court declined to impose a sanction under section 6673(a)(1) for maintaining a frivolous claim because the petitioner had not made any frivolous claims in previous years, but it cautioned the applicant against repeating frivolous claims.

Main points of law

Generally, IRS deficiency determinations are presumed correct and once the IRS has established a factual basis linking a taxpayer to the income-generating activity, the taxpayer must show by a preponderance of evidence that a deficiency determination is arbitrary or erroneous. To see Rule 142(a); Welch versus Helvering290 US 111, 115 (1933); Carson v. United States560 F.2d 693, 695-96 (5th Cir. 1977); Portillo c, Commissioner, 932 F.2d to 1133; Carson, 560 F.2d at 695-96.

Congress has the power to levy revenue from any source of revenue, and claims that private sector employer salaries are not taxable “income” are frivolous. See Parker v. Commissioner724 F.2d 469, 471-472 (5th Cir. 1984); see also Crain v. Commissioner737 F.2d 1417, 1417 (5th Cir. 1984); Wnuck v. Commissioner136 TC 498, 510-12 (2011).


Anyone who receives a salary for services rendered must pay income tax on this salary. It’s about as simple as that.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.


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