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760 F.2d 1003
Lloyd R. OLSON, Plaintiff/Appellant,
UNITED STATES of America, Defendant/Appellee.
United States Court of Appeals,
Submitted April 25, 1985 [FN*].
FN* This panel unanimously agrees that this case is appropriate for submission
without oral argument.
Decided May 16, 1985.
Lloyd R. Olson, in pro. per.
Gary R. Allen, Martha Brissette, Washington, D.C., for defendant/appellee.
Appeal from the United States District Court for the District of Alaska.
Before KILKENNY, FERGUSON and WIGGINS, Circuit Judges.
Lloyd R. Olson filed an unsigned Form 1040 (individual income tax return)
for 1982 on which he listed his wages as zero and cautioned that it was not
return. Attached to the Form 1040 was a W-2 form showing that Olson had
been paid $53,417.69 in wages in 1982 (which Olson had marked "Incorrect"),
a Schedule C profit or loss statement in which Olson offset the wages he
received by a greater amount of "cost of labor" and other deductions
purportedly incurred in earning his wages, and a letter stating that he had
studied the tax laws and determined that he owed no taxes because he had
not obtained any privilege from a governmental agency in 1982. He asserted
that he filed the Form 1040 only to obtain a refund and not with the intent
to file a return.
The Internal Revenue Service ("INS") attempted to have Olson sign
the Form 1040 and complete a proper return. Olson refused. The IRS then assessed
a $500 civil penalty against Olson pursuant to section 6702 of Title 26 of
the United States Code. Olson paid fifteen percent of the assessment ($75)
and demanded abatement of the penalty, but the IRS disallowed his refund claim.
Olson then filed a complaint for a refund in the district court. The government
moved for judgment on the pleadings and the district court dismissed the action
with prejudice. Olson appeals to this court. Section 6702 authorizes the imposition
of a $500 civil penalty on any individual who, from a frivolous position or
a desire (which appears on the face of the purported return) to delay or impede
the administration of the tax laws, files what purports to be a tax return
which either does not contain sufficient information to judge the substantial
correctness of the self- assessment or contains information that indicates
on its face that the self- assessment is substantially incorrect. Olson contends
that he did not file "what purports to be a [tax] return" and that
his filing was not frivolous. These arguments are without merit.
Although Olson wrote the words "not a return" on the Form 1040 he
filed, he acknowledges that he filed the form to obtain a refund of the taxes
withheld from his wages in 1982. Because a taxpayer may not obtain a refund
without first filing a return, 26 C.F.R. s 301.6402-3(a)(1), the form filed
by Olson should be construed to be a "purported" return. Davis v.
United States, 742 F.2d 171, 173 (5th Cir.1984); Holker v. United States, 737
F.2d 751, 752 (8th Cir.1984).
The form also contained information that on its face showed that Olson's self-
assessment was substantially incorrect. Olson listed his wages, salaries, and
tips as zero, yet his W-2 form indicated that he had received in excess of
$50,000 in wages. He made no attempt to explain this discrepancy beyond writing
the word "incorrect" on the W-2 form. Thus, the IRS also could not
judge the substantial correctness of the return.
Further, Olson's attempts to escape tax by deducting his wages as "cost
of labor" and by claiming that he had obtained no privilege from a governmental
agency illustrate the frivolous nature of his position. This court has repeatedly
rejected the argument that wages are not income as frivolous, see, e.g., Gattuso
v. Pecorella, 733 F.2d 709, 710 (9th Cir.1984); United States v. Romero, 640
F.2d 1014, 1016 (9th Cir.1981), and has also rejected the idea that a person
is liable for tax only if he benefits from a governmental privilege. See United
States v. Buras, 633 F.2d 1356, 1361 (9th Cir.1980). Therefore, the district
court properly found that Olson was liable under section 6702 for filing a
frivolous tax return. See Davis v. United States, 742 F.2d 171 (5th Cir.1984);
Holker v. United States, 737 F.2d 751 (8th Cir.1984).
The remaining issues are easily resolved and likewise meritless. The IRS clearly
had jurisdiction to assess the penalty against Olson, see U.S. Const. art.
I, s 8; 26 U.S.C. s 6201. The district court properly denied Olson a jury trial
because there were no material facts in dispute but only issues of law. See
Ex parte Peterson, 253 U.S. 300, 310, 40 S.Ct. 543, 546, 64 L.Ed. 919 (1920);
Davis v. United States, 742 F.2d at 173; Holker v. United States, 737 F.2d
The judgment of the district court is therefore affirmed. Because Olson has
raised totally meritless arguments, we characterize this appeal as frivolous.
It is within our discretion to impose double costs and attorney fees for such
frivolous appeals. Fed.R.App.P. 38; Hatch v. Reliance Insurance Co., 758 F.2d
409, 416 (9th Cir.1985); Davis v. United States, 742 F.2d at 173. We therefore
impose attorney fees in the sum of $1,000 and double costs on Olson.
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