Kenneth Sauter v. CIR ( 2019 )

Case: 18-60858 Document: 00515026297 Page: 1 Date Filed: 07/09/2019
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 18-60858
United States Court of Appeals
Fifth Circuit
Summary Calendar FILED
July 9, 2019
Lyle W. Cayce
KENNETH WARREN SAUTER, Clerk
Petitioner - Appellant
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent - Appellee
Appeal from a Decision of the
United States Tax Court,
T.C. No. 15972-17
Before DAVIS, HAYNES, and GRAVES, Circuit Judges.
PER CURIAM:*
Kenneth Warren Sauter appeals the Tax Court’s order granting
summary judgment to the Commissioner of the Internal Revenue Service.
Sauter claims the $97,188 he failed to report as income was nontaxable. In
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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No. 18-60858
granting summary judgment, the court held Sauter’s arguments were frivolous
and without merit. We AFFIRM.
The Social Security Administration reported on a Form SSA-1099 that
in 2015 it paid $20,712 to Sauter. Additionally, Alma Products Holdings, Inc.
reported on a Form 1099-MISC, Miscellaneous Income, that it paid $97,188 to
Sauter in 2015. When Sauter filed his 2015 tax return, he reported only the
$20,712 in income paid by the Social Security Administration (SSA). The IRS
sent Sauter a notice of deficiency, determining a $26,132 deficiency in his 2015
federal income tax due to his failure to report the Alma Products earnings.
On July 26, 2017, Sauter filed a petition with the Tax Court, contesting
only the IRS’ determination that the Alma Products payments were taxable
income. The Commissioner moved for summary judgment, and Sauter failed
to respond. The Tax Court granted the motion, finding Sauter’s arguments
frivolous and without merit.
We review the Tax Court’s grant of summary judgment de novo. Jones
v. C.I.R., 338 F.3d 463, 466 (citing Perez v. United States, 312 F.3d 191, 193
(5th Cir. 2002)). Summary judgment is appropriate if “there is no genuine
dispute as to any material fact” and “a decision may be rendered as a matter
of law.” TAX COURT R. PRAC. & PROC. 121(b). “If the adverse party does not so
respond [to the summary judgment motion], then a decision, if appropriate,
may be entered against such party.” Rule 121(d).
Sauter does not dispute receiving the $97,188 from Alma Products;
instead, he argues only that the income is nontaxable because “trade or
business” in Internal Revenue Code § 7701(a)(26) is defined as “includ[ing] the
performance of the functions of a public officer,” and, thus, only those trade or
business activities that can be defined as “the performance of the functions of
a public office” are taxable. We agree with the Tax Court that this argument
is frivolous and without merit.
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Case: 18-60858 Document: 00515026297 Page: 3 Date Filed: 07/09/2019
No. 18-60858
Section 61 defines “gross income” as “all income from whatever source
derived, including . . . [c]ompensation for services.” I.R.C. § 61(a). Section 7701
further clarifies that “includes” and “including” when used in a definition “shall
not be deemed to exclude other things otherwise within the meaning of the
term defined.” Id. at § 7701(c). There is no genuine dispute of material fact,
as Sauter admitted to receiving the compensation for engineering design work,
and the Commissioner is entitled to judgment as a matter of law.
The remainder of Sauter’s arguments were not raised below and are,
therefore, waived. See Day v. Wells Fargo Nat’l Ass’n, 768 F.3d 435, 436 n.1
(5th Cir. 2014) (per curiam).
AFFIRMED.
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