Beard v. Commissioner

Robert Beard (plaintiff) was a participant in a coordinated effort to protest the federal government’s taxation of earned wages as income. Under Treasury regulations, a taxpayer could file his annual return using Treasury Form 1040. Beard tampered with an official copy of Form 1040, changing several item captions. On several lines, for example, Beard deleted the word income and added the words gain or receipts. Beard also claimed a deduction to income equal to the entire amount of wages he received from his employer and sought a refund for the wages his employer had withheld. Although many of the captions had been altered, Beard accurately entered the proper amounts as line items. That is, apart from the claimed deduction equal to his wages, Beard’s form was filled out in the same way that a properly completed, nonaltered form would have been. Beard and fellow protestors filed such tampered forms with the Internal Revenue Service (IRS) (defendant). Many of these purported returns included memoranda arguing that inclusion of wages as taxable income was unlawful. The IRS refused to accept Beard’s form as a valid tax return. The IRS determined a deficiency and assessed a penalty for failure to file a tax return. Beard petitioned the United States Tax Court, challenging the IRS’s position. The IRS filed a motion for summary judgment to affirm the deficiency and penalties.