U999 F.2d 1255

UNITED STATES of America, Appellee, v. Gregory L. GERADS,
individually; Dorothea A. Gerads, individually, Appellants, Gregory L.
Gerads, as Trustee for Rocky Hills; Dorothea A. Gerads; Ruth M. Bloch;
Jeffrey J. Gerads; Beth M. Gerads; Peggy E. Gerads, Defendants. No.
93-1449. United States Court of Appeals, Eighth Circuit. Submitted
June 29, 1993. Decided July 26, 1993. Rehearing Denied Aug. 30, 1993.

Gregory L. Gerads and Dorothea A. Gerads, Freeport, MN, for
appellants. Gary R. Allen, Dept. of Justice, Washington, DC, for
appellee.

Before FAGG, BEAM, HANSEN, Circuit Judges.

PER CURIAM.

Gregory L. Gerads and Dorothea A. Gerads, husband and wife
(appellants), appeal from the district court's [FN1] orders granting
the government's motions for summary judgment in this action to
recover back income taxes. We affirm.

FN1. The Honorable Harry H. MacLaughlin, United States District Judge
for the District of Minnesota.

Appellants are tax protestors who have refused to file or pay federal
income taxes since 1976. They reside on a tract of farmland in
Freeport, Minnesota, in Stearns County. On December 5, 1988, the IRS
sent appellants Notice of Deficiency letters for the tax years 1976
through 1983. On April 18, 1989, the government assessed federal
income taxes, additions to tax, and statutory interest against
appellants for these tax years. The government filed notice of the
assessments and demanded payment. Appellants did not contest the
deficiencies, and, other than Gregory's payment of $449.63, they have
not attempted to satisfy their tax liability. The government then
filed notices of federal tax lien against the farmland with the
Stearns County Recorder in the names of appellants, Rocky Hills, as
nominee of Gregory L. Gerads, and Sunrise Living Trust, as nominee of
both appellants. On July 24, 1991, the government commenced this
action, under 26 U.S.C. ss 7401-03, to (1) reduce to judgment the
income taxes it had assessed against appellants for the years 1976
through 1983; (2) set aside as fraudulent appellants' purported
conveyance of the farmland to the two "trusts"; (3) quiet title to the
property; and (4) eject any and all inhabitants from the property to
facilitate foreclosure of its tax liens. Thereafter, the government
moved for summary judgment. The district court granted the motions and
the relief the government requested. This appeal followed.

The district court correctly granted the government's motions for
summary judgment because appellants did not contest the factual bases
for the assessments and because their legal arguments attacking the
court's jurisdiction and the validity of the assessments were clearly
meritless. See Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct.
2548, 2552, 91 L.Ed.2d 265 (1986). The arguments they advance on
appeal are also frivolous. First, the Certificates of Assessments and
Payments submitted by the government here are sufficient to establish
the validity of the assessments. See Geiselman v. United States, 961
F.2d 1, 5-6 (1st Cir.) (per curiam), cert. denied, --- U.S. ----, 113
S.Ct. 261, 121 L.Ed.2d 191 (1992). Second, appellants' claim that the
government failed to establish that the district court had "inland
jurisdiction," and therefore, the case against them should have been
dismissed is meritless. United States v. Saunders, 951 F.2d 1065, 1068
(9th Cir.1991). Third, we have rejected, on numerous occasions, the
tax-protestor argument that the federal income tax is an
unconstitutional direct tax that must be apportioned. See, e.g.,
Lively v. Commissioner, 705 F.2d 1017, 1018 (8th Cir.1983) (per
curiam). Likewise, we have held that wages are within the definition
of income under the Internal Revenue Code and the Sixteenth Amendment,
and are subject to taxation. Denison v. Commissioner, 751 F.2d 241,
242 (8th Cir.1984) (per curiam), cert. denied, 471 U.S. 1069, 105
S.Ct. 2149, 85 L.Ed.2d 505 (1985). Appellants' claim that payment of
federal income tax is voluntary clearly lacks substance. See Newman v.
Schiff, 778 F.2d 460, 467 (8th Cir.1985). And, finally, we reject
appellants' contention that they are not citizens of the United
States, but rather "Free Citizens of the Republic of Minnesota" and,
consequently, not subject to taxation. See United States v. Kruger,
923 F.2d 587, 587-88 (8th Cir.1991) (rejecting similar argument as
"absurd").

The government requests that we assess $1,500 in sanctions against
appellants for bringing this frivolous appeal based on discredited,
tax- protestor arguments. Because the arguments appellants advance for
reversal are clearly lacking in merit and frivolous, we grant the
government's motion for $1,500 in sanctions pursuant to 28 U.S.C. s
1912 and Federal Rule of Appellate Procedure 38. See United States v.
Carter, 988 F.2d 68, 69-70 (8th Cir.1993) (per curiam) ("As the
arguments raised in this appeal are frivolous, and we have many times
so held, we award a sanction in the form of damages in the amount of
$1500 against appellants."); Kruger, 923 F.2d at 588 ("Because this
appeal is utterly frivolous, the government's motion for sanctions in
the amount of $1,500 is granted.").

Accordingly, we affirm the district court's judgment and grant the
government's motion for sanctions in the amount of $1,500.