David P. Fontaine v. Commissioner of Revenue (August 7, 2008)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD



DAVID P. FONTAINE 		v.  	COMMISSIONER OF REVENUE
 

Docket No. C287460				Promulgated:
  		   		               August 7, 2008

This is an appeal filed under the formal procedure pursuant to G.L. c. 62C, § 39, from the refusal of the Commissioner of Revenue ("Commissioner") to abate personal income taxes for the tax years ending on December 31, 2000 and December 31, 2001 ("tax years at issue").                                      
Commissioner Rose heard the appeal.  Chairman Hammond and Commissioners Scharaffa, Egan, and Mulhern joined him in the decision for the appellee.  These findings of fact and report are made at the request of the appellant pursuant to G.L. c. 58A, § 13 and 831 CMR 1.32.

David P. Fontaine, pro se, for the appellant.
Diane M. McCarron, Esq. for the appellee.


FINDINGS OF FACT AND REPORT
During calendar years 2000 and 2001, David P. Fontaine ("appellant") was a resident of the Commonwealth of Massachusetts, residing at 68 Van Horn Street in West Springfield.  During this time, the appellant received income from wages, unemployment compensation, interest and dividends, the sale of securities, and a pension plan ("income at issue").  The appellant, however, failed to file a Massachusetts income-tax return for the tax years at issue.   
The Massachusetts Department of Revenue's Audit Division ("Audit Division") notified the appellant of its intention to assess personal income tax upon discovering that the appellant had failed to report his income for the years at issue.  On January 4, 2004, the Audit Division issued a Notice of Intention to Assess Personal Income Tax ("NIA") to the appellant for the 2000 tax year.  Later, on November 24, 2004, the Audit Division issued an NIA to the appellant for the 2001 tax year.  The Commissioner subsequently assessed the appellant on February 20, 2004, and January 13, 2005, respectively.  
On March 1, 2006, the appellant filed two Form 1's, one each for the 2000 and 2001 tax years.  On each Form 1, the appellant reported zero tax due.  Also on March 1, 2006, the appellant filed an Application for Abatement with the Commissioner, which was denied on August 2, 2006.  On October 2, 2006, the appellant timely filed an appeal with the Appellate Tax Board ("Board"). On the basis of these facts, the Board found and ruled that it had jurisdiction over this appeal.
At the hearing, the appellant submitted as an exhibit a twenty-five page document entitled "Court Prep" that delineated his extensive legal and jurisdictional challenges, constitutional exceptions, and other generally averred objections to the assessments.  The appellant's testimony at the hearing very closely paralleled his prepared "Court Prep" document.  
Notwithstanding his documentary submission and testimony, the Board found that the appellant failed to produce any factual evidence at the hearing that would justify an abatement.  The evidence produced demonstrated that the appellant was a resident of the Commonwealth, and he earned the income at issue during the tax years at issue.  In an attempt to minimize or obfuscate these facts, the appellant proffered numerous arguments unsupported by current case law in an attempt to bolster his contention that it was illegal for the state to tax his income at issue.  In addition, the appellant implied that his relationship with the state was merely contractual, that his signatures on his Forms 1 were obtained "under threat, duress, and/or coercion" under the Uniform Commercial Code, and that the Commissioner somehow breached his duty to uphold the U.S. Constitution.  
Since the appellant failed to produce any probative factual predicate for abatement, the Board found that he failed to meet his burden of proof in the present appeal. Furthermore, the Board found that the appellant only proffered frivolous legal and constitutional arguments to support his claim.  Accordingly, the Board decided the instant appeal for the appellee.
 				
OPINION
For Massachusetts income tax purposes, "[r]esidents shall be taxed on their taxable income." G.L. c. 62, § 4.  The starting point for determining Massachusetts taxable income is "federal gross income" with certain modifications not here relevant. G.L. c. 62, § 2. Federal gross income is defined as "all income from whatever source derived, including but not limited to (1) [c]ompensation for services . . . [and] (2) income derived from business . . . ." I.R.C. § 61(a)(1) and (2).  "The phrase 'gross income' is intended to be comprehensive: it encompasses all income from whatever source . . . . There is no ambiguity and no room for semantic maneuver: the duty of the Board is to give effect to the plain meaning of the words chosen by the Legislature."  Olson v. Commissioner of Revenue, Mass. ATB Findings of Fact and Reports 2001-437, 441 (citing Massachusetts Broken Stone Co. v. Weston, 430 Mass. 637, 640 (2000))(emphasis in original).  
For the tax years at issue, the Board found that the income at issue was attributable to the appellant and he was a resident of the Commonwealth.  Thus, the appellant's claim that he was a "sovereign individual," without a state residency, and, therefore, not subject to the laws of the Commonwealth, was without merit.  "'Taxation is neither a penalty imposed on the taxpayer nor a liability which he assumes by contract.  It is but a way of apportioning the cost of government among those who in some measure are privileged to enjoy its benefits and must bear its burdens . . . . No citizen enjoys immunity from that burden.'"  United States v. Carlton, 512 U.S. 26, 33 (1994) (quoting Welch v. Henry, 305 U.S. 134, 146-47 (1938)).     
Additionally, since the appellant was the party seeking abatement, the burden of proof was with him.  "The taxpayer has the burden of proving as a matter of law its right to an abatement of the tax."  Commissioner of Revenue v. J.C. Penney Company, Inc., 431 Mass. 684, 686 (2000) (citing Towle v. Commissioner of Revenue, 397 Mass. 599, 603 (1986)).  The appellant's presentation at trial was confined to mere assertions and irrelevant questions of law.  The Board ruled that this trial presentation was manifestly insufficient. See Theatre Holdings, Inc. v. Commissioner of Revenue, ATB No. F206084 (Decision with Findings of Fact, October 28, 1997), aff'd, 46 Mass. App. Ct. 1117 (1999)(stating that the failure to submit relevant evidence at trial is fatal to a claim for abatement).  Thus, the appellant failed to carry his burden of proving any basis for an abatement in the present case.  
Consequently, the Board ruled that the appellant's legal arguments, including jurisdictional challenges and definitional perversities of "income" and "avoidable privileges," were akin to "basic tax-protester rhetoric which has long been dismissed as frivolous and without merit."  Bolton v. Commissioner, Mass. ATB Findings of Fact and Reports 2005-387, 394 (quoting Lonsdale v. Commissioner, 661 F.2d 71, 72 (5th Cir. 1981)).  Like many other tax protestors before him, the Board also found and ruled that the appellant "combined case quotations taken out of context and erroneous statements of law with misguided and illogical beliefs." Id. at 395 (quoting Nunn v. Commissioner, T.C. Memo. 2002-250, at *6 (U.S. Tax. Ct., 2002)).  Further, the Board found and ruled that the appellant's arguments were nothing more than a "hodgepodge of unsupported assertions, irrelevant platitudes, and legalistic gibberish."  Bojourquez v. Commissioner of Revenue, Mass ATB Findings of Fact and Reports 2005-377, 384-85 (quoting Crain v. Commissioner, 737 F.2d 1417-18 (5th Cir. 1981)). 
In addition, "the constitutionality of our income tax system . . . has long been established." Id. at 385 (quoting Crain, 732 F.2d at 1417-18). See also United States v. Schiff, 269 F. Supp. 2d 1262, 1268 (2003), aff'd U.S. v. Schiff, 379 F.3d 621 (9th Cir. 2004); Nunn, T.C. Memo. 2002-250, at *6.  "Argument[s] . . . that the federal income tax is unconstitutional because it is a direct, unapportioned tax . . . ha[ve] been raised and rejected for decades."  United States v. Maggi, 173 F.3d 430, at *2 (6th Cir. 1999)(citing Brushaber v. Union Pac. R.R. Co., 240 U.S. 1, 18-19 (1916)).  Since "Massachusetts gross income shall mean the federal gross income," G.L. c. 62, § 2, the Board similarly rejected the appellant's argument in this regard. 
	On the basis of the foregoing, the Board ruled that the Commissioner properly included income from wages, unemployment compensation, interest and dividends, the sale of securities, and pension in the appellant's Massachusetts gross income for the tax years at issue. Therefore, the Board decided this appeal for the appellee.

                  		     APPELLATE TAX BOARD



				 By:	___________________________________
					Thomas W. Hammond, Jr., Chairman


A true copy,


Attest: ____________________________
	      Clerk of the Board

 The Commissioner acknowledged at the hearing of this appeal that the amounts of tax at issue were $1,685.46 for 2000 and $1,332.00 for 2001.

ATB 2008-1044