\ Wisconsin Tax Appeals Commission Docket No. 05-I-156
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STATE OF WISCONSIN

TAX APPEALS COMMISSION


ERNEST D. COLLINS,

Petitioner,

vs.

WISCONSIN DEPARTMENT OF REVENUE,

Respondent.

DOCKET NO. 05-I-156

RULING AND ORDER


DAVID C. SWANSON, COMMISSIONER:

This case comes before the Commission on the motion of the Wisconsin Department of Revenue ("Department") for summary judgment on the basis that there is no genuine issue as to any material fact and the Department is entitled to judgment as a matter of law under Wis. Stat. � 802.08 and Wis. Admin. Code � TA 1.31.

Petitioner appears pro se and has filed a response to the motion. Attorney Michael J. Buchanan represents the Department and has filed an affidavit with exhibits, a brief, and a supplemental affidavit in support of the motion.

Having considered the entire record, including the motion, affidavits, exhibits, and brief of the Department and petitioner's response, the Commission hereby finds, rules, and orders as follows:

JURISDICTIONAL AND MATERIAL FACTS

1. By letter to petitioner dated September 28, 2004, the Department notified petitioner that it had no record of receiving petitioner's Wisconsin income tax returns for tax years 2000, 2001, 2002, and 2003 (the "years at issue"), and requested that petitioner file such returns within 30 days. (Affidavit of Michael J. Buchanan filed March 3, 2006, Ex. 6.)

2. By notice dated November 22, 2004, the Department issued an assessment of income tax, interest, penalties, and fees (the "Assessment") to petitioner in the total amount of $14,530.52 for the years at issue. The Assessment indicated that the amount of income tax assessed was based upon an estimate of petitioner's income for each of the years at issue because petitioner had not filed Wisconsin income tax returns for those years. (Buchanan Affidavit, Ex. 1.)

3. Under date of January 19, 2005, petitioner filed with the Department a timely petition for redetermination of the Assessment. (Buchanan Affidavit, Ex. 2.)

4. By letter to petitioner dated April 12, 2005, the Department requested that petitioner file Wisconsin income tax returns for the years at issue by May 2, 2005. (Buchanan Affidavit, Ex. 7.)

5. On July 15, 2005, the Department issued a Notice of Action to petitioner denying the petition for redetermination on the basis that petitioner had failed to file Wisconsin income tax returns for the years at issue. (Buchanan Affidavit, Ex. 3.)

6. On September 15, 2005, petitioner filed his petition for review with the Commission, but did not enclose the $25.00 filing fee required under Wis. Stat. � 73.01(5). The Commission notified petitioner of the fee requirement by letter dated September 16, 2005, and received petitioner's payment of the fee on October 3, 2005.

7. By Notice dated December 23, 2005, the Commission notified both parties of a telephone scheduling conference to be held in this case on February 22, 2006 at 10:30 a.m.

8. Petitioner failed to appear at the February 22, 2006 telephone scheduling conference.

9. On March 3, 2006, the Department filed a motion for summary judgment in its favor.

10. On March 9, 2006, the Commission issued a Briefing Order scheduling petitioner's response to the motion to be filed no later than April 11, 2006 and the Department's reply brief to be filed no later than 14 days after petitioner's brief.

11. On April 25, 2006, the Department received a motion for permission to file a late response and attached response to the Department's motion for summary judgment from petitioner, but petitioner did not file such motion or response with the Commission. The motion states that it was sent to the Department 11 days after the deadline of April 11, 2006 specified in the Briefing Order. The Commission obtained a copy of petitioner's motion and response from the Department on June 29, 2006. In his response to the Department's motion, petitioner questions the evidence submitted by the Department and asserts that he had no taxable income in Wisconsin for the years at issue.

12. The Department filed a Supplemental Affidavit on May 1, 2006.

13. Petitioner was a full-year Wisconsin resident for all of the years at issue. (Buchanan Affidavit, Exs. 4-5 and 8-11.)

14. During 2000, petitioner received at least $38,774 of Wisconsin gross income. (Buchanan Affidavit, Ex. 8.)

15. During 2001, petitioner received at least $32,471 of Wisconsin gross income. (Buchanan Affidavit, Ex. 9.)

16. During 2002, petitioner received at least $14,825 of Wisconsin gross income. (Buchanan Affidavit, Ex. 10.)

17. During 2003, petitioner received at least $35,438 of Wisconsin gross income. (Buchanan Affidavit, Ex. 11.)

18. Petitioner never filed Wisconsin income tax returns and paid no Wisconsin income tax for any of the years at issue. (Buchanan Affidavit, Exs. 1, 3, 6, 7, and 14.)

RULING

A summary judgment motion will be granted if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Wis. Stat. � 802.08(2). A party moving for summary judgment has the burden to establish the absence of a genuine, that is, disputed, issue as to any material fact. Grams v. Boss, 97 Wis. 2d 332, 338-39, 294 N.W.2d 473 (1980).

If the moving party establishes a prima facie case for summary judgment, the court then examines the affidavits in opposition to the motion to see if the other party's affidavits show facts sufficient to entitle him to trial. Artmar, Inc. v. United Fire & Casualty Co., 34 Wis.2d 181, 188, 148 N.W.2d 641, 644 (1967). Once a prima facie case is established, "the party in opposition to the motion may not rest upon the mere allegations or denials of the pleadings, but must, by affidavits or other statutory means, set forth specific facts showing that there exists a genuine issue requiring a trial." Board of Regents v. Mussallem, 94 Wis. 2d 657, 673, 289 N.W.2d 801, 809 (1980), citing Wis. Stat. � 802.08(3). Any evidentiary facts in an affidavit are to be taken as true unless contradicted by other opposing affidavits or proof. Artmar, 34 Wis.2d at 188. Where the party opposing summary judgment fails to respond or raise an issue of material fact, the trial court is authorized to grant summary judgment pursuant to Wis. Stat. � 802.08(3). Board of Regents, 94 Wis.2dat 673.

Wisconsin Statutes � 71.02(1) provides that "there shall be assessed, levied, collected and paid a tax on all net incomes of individuals . . . residing within the state . . . ." Net income is derived from gross income, after subtracting allowable statutory deductions and exemptions. See Wis. Stat. � 71.01(16) (defining " Wisconsin taxable income" ). "Gross income" is defined as "all income, from whatever source derived and in whatever form realized, whether in money, property or services, which is not exempt from Wisconsin income taxes", and includes, but is not limited to, compensation for services. Wis. Stat. � 71.03(1).

Any resident of Wisconsin whose gross income exceeds the threshold amount set annually by the Department is required to file a Wisconsin income tax return with the Department. Wis. Stat. � 71.03(2). For each of the years at issue, this threshold amount was $9,000. (Buchanan Affidavit, Exs. 12-15.) "Any person required to file an income . . . tax return, who fails, neglects or refuses to do so . . . shall be assessed by the department according to its best judgment." Wis. Stat. � 71.74(3). In the performance of its duty to assess incomes, the Department is empowered to estimate incomes. Wis. Stat. � 71.80(1)(a). Assessments made by the Department are presumed to be correct, and the burden is on petitioner to prove by clear and satisfactory evidence in what respects the Department erred in its determination. Edwin J. Puissant, Jr. v. Dep't of Revenue, Wis. Tax Rptr. (CCH) ¶ 202-401 (WTAC 1984); Wis. Stat. � 77.59(1).

The Department estimated petitioner's Wisconsin gross income for the years at issue because petitioner failed to file Wisconsin income tax returns for those years, and it issued the Assessment based on those estimates. Petitioner has failed to meet his burden to prove that the Assessment is incorrect.

Although petitioner filed a petition for review and a response to the Department's motion, he has never submitted any evidence or legal arguments to support his own claims or rebut the Department's evidence or arguments. Petitioner appears to be attempting to delay or avoid paying state income taxes for the years at issue by simply questioning the evidence in the record and the procedures used by the Department in making the Assessment. While offering no evidence of his own, petitioner asserts that the documents provided by the Department as proof of his income, including copies of IRS Forms 1099-MISC issued to him for all of the years at issue, are "fictitious," and claims, despite extensive evidence to the contrary, that he "had no taxable income in Wisconsin" during the years at issue.

These arguments and ones like them have been consistently rejected in prior cases before the Commission and the courts. They are groundless and frivolous, and have never prevailed in Wisconsin, nor, as far as the Commission is aware, in any court in the country. See Tracy v. Dep't of Revenue, 133 Wis. 2d 151 (Ct. App. 1986); Steele v. Dep't of Revenue, WTAC Docket No. 05-I-79 (December 12, 2005); Kroeger v. Dep't of Revenue, WTAC Docket No. 04-I-228 (March 21, 2005); Boon v. Dep't of Revenue, 1999 Wisc. Tax LEXIS 7 (WTAC 1999), aff'd on other grounds (Milwaukee Co. Cir. Ct. 1999).

There is no genuine issue of material fact in this case, and the Department is entitled to summary judgment as a matter of law. In addition, in light of the well-established authority cited above, and petitioner's failure to support his claims by proof, precedent or logic, petitioner's claims are groundless, frivolous, and a waste of state resources. Petitioner is therefore subject to an additional assessment in the amount of $300.00, pursuant to Wis. Stat. � 73.01(4)(am).

IT IS ORDERED

1. Petitioner's motion to file a late response to the Department's motion for summary judgment is granted, and petitioner's response is filed and made a part of the record in this case as of June 29, 2006.

2. The Department's motion for summary judgment is granted, and its action on petitioner's petition for redetermination is affirmed.

3. An additional assessment of $300.00 is imposed on petitioner pursuant to Wis. Stat. � 73.01(4)(am).


Dated at Madison, Wisconsin, this 7th day of July, 2006.

WISCONSIN TAX APPEALS COMMISSION

Jennifer E. Nashold, Chairperson

Diane E. Norman, Commissioner

David C. Swanson, Commissioner

ATTACHMENT: NOTICE OF APPEAL INFORMATION

November 9, 2006 - Petition for Judicial Review filed with Milwaukee County Circuit Court, Case No. 06CV010910.

December 19, 2006 Milwaukee County Circuit Court, Case No. 06CV010910. For the reasons outlined, Respondent's Motion to Dismiss is Granted.