92-1871 - Income





Petitioner, ) FINDINGS OF FACT,






) Account No. XXXXX


Respondent. )



This matter was heard in a formal hearing on XXXXX by the Utah State Tax Commission. Lisa L. Olpin, Administrative Law Judge, heard the matter for and on behalf of the Commission. Petitioner participated by telephone. Respondent was represented by XXXXX, Assistant Utah Attorney General, who was present.

At the start of the hearing and pursuant to Petitioner's brief, Petitioner requested a summary judgment en banc on all issues. Petitioner's motion was denied.

Based upon the evidence and testimony presented at the hearing, the Tax Commission makes its:


1. The tax in question is individual income tax.

2. The years in question are XXXXX-XXXXX.

3. Petitioner has not filed individual income tax returns in Utah for the years in question nor has he paid any tax amount on these respective years.

4. The Auditing Division has estimated Petitioner's tax amount due for these years and has assessed Petitioner these tax deficiencies. Two ten percent penalties for non-filing and non-payment plus interest have also been added on each year in question.

5. Petitioner maintains that the assessment of individual income tax against him is unconstitutional. He has repeatedly requested exempt status from any tax assessments on all of his personal income and feels that he has never volunteered to pay any government any tax amount. He contends that he has never entered into any contractual agreement to pay taxes to any entity and, therefore, cannot be required to pay.

6. While there appears to be no dispute on the facts of this case, rather a difference of interpretation on the constitutionality of individual income taxation only, Petitioner testified to the following:

7. For the year XXXXX, Petitioner thinks he was living in XXXXX. He did, however, in XXXXX, list a XXXXX, Utah rental address on his Utah driver's license.

8. In either XXXXX or XXXXX, Petitioner remembers he came to Utah and worked for six months at XXXXX in Utah. He recalls that he requested exempt status on all of his Internal Revenue Service tax forms.

9. Also in XXXXX or XXXXX, Petitioner worked for XXXXX XXXXX in Nevada. He remembers moving to XXXXX, Nevada where he rented an apartment.

10. From XXXXX through XXXXX, Petitioner recalls he lived in XXXXX, Utah at an XXXXX address. During these years he worked for XXXXX XXXXX and XXXXX in XXXXX (outside Utah), XXXXX (Utah), XXXXX (Utah), XXXXX (Utah) and XXXXX (Utah).

11. He did not file state or federal returns during any of the years in question even though he received compensation by all of his employers.

12. Petitioner maintained a Utah driver's license during the years in question. He registered one vehicle in Utah in XXXXX.

13. He also obtained an Arizona driver's license at one point during the years in question.

14. In XXXXX, Petitioner used his XXXXX, Utah address on his small game Utah hunting license.

15. According to Auditing Division employee, XXXXX, the Tax Commission estimated Petitioner's tax liabilities for the years XXXXX and XXXXX. For tax year XXXXX, the Tax Commission obtained information from the I.R.S. on the amount of wages Petitioner earned. For tax years XXXXX and XXXXX, the Commission obtained copies of W-2 forms from the XXXXX and XXXXX.

16. Petitioner does not dispute the amount of taxes the Auditing Division says he owes on the years in question. He argues that the tax is unlawful on several grounds as cited in his brief. Generally, Petitioner states that he has a natural right to exchange labor without incurring a liability in the form of taxes. He believes that Article I, Section 9 of the U.S. Constitution bans taxation. He also referred to the 16th Amendment on slavery whereby the anti-tax clause was never repealed. Petitioner also stated that income is not defined by the I.R.S. as wages earned in exchange for labor. For these reasons and others as incorporated in Petitioner's brief, Petitioner contends that the tax in question is illegal.

17. The Auditing Division responds that the taxation of individual income by the State is appropriate under Utah law.


The Individual Income Tax Act states that one of its objectives is to "impose on each resident individual, estate, or trust for each taxable year measured by the amount of his "taxable income" for such year, as determined for federal income tax purposes, subject to certain adjustments." Utah Code Ann. 59-10-102(a).

"State taxable income" in the case of a resident individual means his federal taxable income ... with the modifications, subtractions, and adjustments provided in Section 59-10-114." Utah Code Ann. 59-10-112.

"Federal taxable income" means taxable income as currently defined in Section 63, Internal Revenue Code of 1986." Utah Code Ann. 59-10-111.

Generally, the term "taxable income" means gross income minus the deductions allowed. Gross income is defined by the Internal Revenue Code 61(a) as "all income from whatever source derived, including (but not limited to) the following items: (1) Compensation for services, including fees, commissions, fringe benefits, and similar items; (2) Gross income derived from businesses;...".

Further, if any person fails to make and file any return required...the commission shall make such return from its own knowledge and from such information as it can obtain through testimony or otherwise. Any return so made and subscribed by the commission shall be prima facie good and sufficient for all legal purposes. Utah Code Ann. 59-10-506(2).

The petitioning party has the burden of proof to establish that the petition should be granted. Utah Admin. Rule R861-1A-7(G).


The Tax Commission finds that Petitioner was correctly assessed individual income tax for the years XXXXX-XXXXX based upon Petitioner's own testimony and the information provided by the Auditing Division. The penalty and interest amounts are not waived. It is so ordered.

DATED this 27th day of October, 1993.


W. Val Oveson* Roger O. Tew

Chairman Commissioner

Joe B. Pacheco Alice Shearer*

Commissioner Commissioner