Unpublished Disposition, 924 F.2d 1062 (9th Cir. 1991)

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US Court of Appeals for the Ninth Circuit - 924 F.2d 1062 (9th Cir. 1991)

John W. HANES, Plaintiff-Appellant,v.Robert E. WENZEL and Internal Revenue Service, Defendants-Appellees.

No. 89-16456.

United States Court of Appeals, Ninth Circuit.

Submitted Oct. 23, 1990.* Decided Jan. 30, 1991.

Before HUG, DOROTHY W. NELSON and LEAVY, Circuit Judges.


John W. Hanes appeals pro se the district court's summary judgment in favor of the defendants in his action for a refund of penalties assessed against him for filing a frivolous tax return.1  We review de novo. See Kruso v. International Tel. & Tel. Corp., 872 F.2d 1416, 1421 (9th Cir. 1989), cert. denied, 110 S. Ct. 3217 (1990). We have jurisdiction under 28 U.S.C. § 1291, and affirm.

Hanes filed three documents for tax years 1984, 1985, and 1986. Each was entitled "Income Tax Return" and contained explicit statements that they were being filed as optional income tax returns in lieu of Form 1040. Thus, Hanes filed documents which purported to be returns. See 26 U.S.C. § 6702(a) (1).

The returns included W-2 forms indicating that Hanes received wages of $32,655.20, $35,283.50, and $36,567.20 in tax years 1984, 1985, and 1986 respectively. On the face of the returns, Hanes asserted, " [t]he wages shown on the Form W-2 were received in an equal and fair exchange for my services. This exchange in property resulted in my realizing a net income of zero. Because my net income is zero I am not liable for any income tax and my assessment should be zero." This assertion is merely a variation of the "wages are not income" argument which we have repeatedly rejected as frivolous. See, e.g., Olson v. United States, 760 F.2d 1003, 1005 (9th Cir. 1985) (citations omitted); see also Maisano v. United States, 908 F.2d 408, 409 (9th Cir. 1990) (citation omitted). The district court concluded that because each return contained information indicating that Hanes's self-assessment2  was substantially incorrect (that he was not liable for income taxes), and because this assessment resulted from a frivolous position (that wages are not taxable income), the IRS properly assessed section 6702 penalties. See 26 U.S.C. § 6702(a) (1) (B), (2) (A).

On the second page of each of the purported returns, however, Hanes set forth an amount, taken from a tax table, which he claims correctly represented his tax liability for each year in question, if he were liable for income taxes. Hanes argues that the IRS could have judged the substantial correctness of the returns from the information supplied on the second page of the returns. Thus, he argues the IRS improperly imposed section 6702 penalties against him. We disagree. Hanes's return contained information that his self-assessment was zero. See Fuller, 786 F.2d at 1439; 26 U.S.C. § 6702(a) (1) (B). Given his income, this assessment was substantially incorrect. Id. Therefore, because Hanes's self-assessment of zero was substantially incorrect, and because this assessment resulted from a frivolous position, the district court did not err in determining that the IRS correctly imposed section 6702 penalties against Hanes. See 26 U.S.C. § 6702(a) (1) (B).

Hanes raises a number of other meritless arguments on appeal. He argues that the district court erred in denying him the opportunity to obtain counsel, and in holding him, a pro se, to the standard of an attorney. The record shows that the district court judge urged him to seek competent counsel. Hanes disregarded this advice and chose to proceed pro se. The trial court was under no obligation to become an advocate for Hanes. See Jacobsen v. Filler, 790 F.2d 1362, 1365, n. 5 (9th Cir. 1985) (citation omitted).

Hanes also argues that his statements on his returns to the effect that wages are not income and that he owed no taxes are protected by the first amendment. The IRS, however, may impose a penalty under section 6702 without infringing a taxpayer's first amendment rights. See Todd v. United States, 849 F.2d 365, 370 (9th Cir. 1988).

Finally, Hanes argues that the district court erred in denying him a jury trial. There is no common law right of action against the sovereign, and thus, the seventh amendment right to a jury trial does not apply to suits against the United States. See McCoy v. C.I.R., 696 F.2d 1234, 1236 (9th Cir. 1983).



The panel unanimously finds this case suitable for disposition without oral argument. Fed. R. App. P. 34(a); 9th Cir.R. 34-4


This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir.R. 36-3


The district court relied on the government's declaration and attached exhibits in its order of dismissal. Thus, we will treat the dismissal as one for summary judgment. See Grove v. Mead School Dist. No. 354, 753 F.2d 1528, 1533 (9th Cir. 1985) (when the district court looks beyond the pleadings in evaluating a Rule 12(b) (6) motion to dismiss, the motion must be treated as one for summary judgment under Rule 56)


Hanes also argues that he did not assess himself. Nevertheless, a return which shows no tax liability and no basis for reaching such a conclusion is the "functional and legal equivalent of a self-assessment of zero." See Fuller v. United States, 786 F.2d 1437, 1439 (9th Cir. 1986)