Sanctions Imposed Generally In Tax Court Cases – Some May Apply To You
Sanctions Imposed Generally In Tax Court Cases
Rodriguez v. Commissioner, T.C. Memo. 2009-92, 97 T.C.M. (CCH) 1482 (2009) – after having imposed a section 6673 penalty against the petitioner in four prior cases, the court imposed another $25,000 penalty against the petitioner in each of two consolidated cases.Ioane v. Commissioner, T.C. Memo.2009-68, 97 T.C.M. (CCH) 1344 (2009) – the court imposed a $10,000 penalty against the petitioner for asserting “frivolous and groundless” arguments.Pugh v. Commissioner, T.C. Memo. 2009-138, 97 T.C.M. (CCH) 1791 (2009) – the court stated that the petitioner “maintained this proceeding primarily for delay and to advance his frivolous and groundless arguments” and imposed a $15,000 penalty against the petitioners.Rhodes v. Commissioner, T.C. Memo. 2008-225, 96 T.C.M. (CCH) 215 (2008) – the Tax Court sua sponte imposed sanctions against the taxpayer in the total amount of $25,000: $15,000 for one docketed case, and $10,000 for a second case that was consolidated with the first. The court sanctioned the taxpayer after repeatedly warning him that his frivolous arguments could subject him to a penalty. In 2003 and 2007, the court had previously imposed sanctions of$15,000 and $2,000, respectively, against the taxpayer for maintaining frivolous arguments.McCammon v. Commissioner, T.C. Memo. 2008-114, 95 T.C.M. (CCH) 1421 (2008) – the court imposed a $25,000 sanction against a taxpayer who argued that she “did not have any income ‘in a constitutional sense,'” despite almost $200,000 paid to the taxpayer in her medical practice. In a prior Tax Court case, the taxpayer had advocated the same argument and been warned against instituting meritless proceedings.Missall v. Commissioner, T.C. Memo. 2008-258, 96 T.C.M. (CCH) 344 (2008) – the court imposed a $5,000 penalty against a taxpayer who advanced arguments that were well established as being frivolous, including a purported exemption from tax as a “Utah Sole Corporation.”Hanloh v. Commissioner, T.C. Memo. 2006-194, 92 T.C.M. (CCH) 266 (2006) – the court imposed sanctions of $25,000 where the taxpayer continued to advance frivolous and groundless arguments after having been warned that making those arguments would result in sanctions.Stallard v. Commissioner, T.C. Memo. 2006-42, 91 T.C.M. (CCH) 881 (2006) – the court imposed sanctions of $25,000 where the taxpayer raised only frivolous and groundless arguments noting that the taxpayer had been warned in the current proceeding, and sanctioned in a prior proceeding, for raising frivolous arguments.Silver v. Commissioner, T.C. Memo. 2005-281, 90 T.C.M. (CCH) 559 (2005) – the court imposed sanctions of $25,000 against the taxpayer for filing a frivolous suit challenging his tax liability and making only groundless arguments.Stearman v. Commissioner, T.C. Memo. 2005-39, 89 T.C.M. (CCH) 823 (2005), aff’d, 436 F.3d 533 (5th Cir. 2006), cert. denied, 547 U.S. 1207 (2006) – the court imposed sanctions totaling $25,000 against the taxpayer for advancing arguments characteristic of tax-protester rhetoric that has been universally rejected by the courts, including arguments regarding the Sixteenth Amendment.In affirming the Tax Court’s holding, the Fifth Circuit granted the government’s request for further sanctions of $6,000 against the taxpayer for maintaining frivolous arguments on appeal, and the Fifth Circuit imposed an additional $6,000 sanctions on its own, for total additional sanctions of $12,000.Howard v. Commissioner, T.C. Memo. 2005-144, 89 T.C.M. (CCH) 1449 (2005) – the court imposed a $12,500 penalty against the taxpayer, who had been sanctioned previously, for making frivolous arguments and instituting the court proceedings primarily for delay.Brenner v. Commissioner, T.C. Memo. 2004-202, 88 T.C.M. (CCH) 212 (2004), aff’d, 164 Fed. Appx. 848 (11th Cir. 2006) – the court imposed sanctions of $15,000 against the taxpayer where he continued making frivolous arguments despite being specifically warned by the court against doing so.Chase v. Commissioner, T.C. Memo 2004-142, 87 T.C.M. (CCH) 1414 (2004) – the court imposed sanctions of $20,000 against the taxpayer for continuing to make frivolous arguments even though the court warned him that he would likely be penalized if he persisted.Trowbridge v. Commissioner, T.C. Memo. 2003-164, 85 T.C.M. (CCH) 1450 (2003), aff’d, 378 F.3d 432 (5th Cir. 2004) – the court imposed sanctions against former husband and wife, $25,000 for Mr. Trowbridge and $15,000 for Ms. Martin, where the taxpayers failed to raise a single plausible argument.Hill v. Commissioner, T.C. Memo. 2003-144, 85 T.C.M. (CCH) 1328, 1331 (2003) – the court imposed a $15,000 penalty against the taxpayer because he disregarded warnings from the court that his position was without merit.Furthermore, the taxpayer had been previously sanctioned by the court in another proceeding for raising frivolous arguments.Nunn v. Commissioner, T.C. Memo. 2002-250, 84 T.C.M. (CCH) 403, 410 (2002) – the court, on its own motion, imposed sanctions against the taxpayers in the amount of $7,500 after warning taxpayers repeatedly that their frivolous arguments could subject them to a penalty, stating “[w]here pro se litigants are warned that their claims are frivolous . . . and where they are aware of the ample legal authority holding squarely against them, a penalty is appropriate.”Sawukaytis v. Commissioner, T.C. Memo. 2002-156, 83 T.C.M. (CCH) 1886, 1888 (2002), aff’d, 102 Fed. Appx. 29 (6th Cir. 2004), cert. denied, 543 U.S. 1022 (2004) – the court imposed a $12,500 penalty against the taxpayer for arguing the income tax is an excise tax and that he did not engage in excise taxable activities. The court found the taxpayer’s “position, based on stale and meritless contentions, is manifestly frivolous and groundless.”Ward v. Commissioner, T.C. Memo. 2002-147, 83 T.C.M. (CCH) 1820, 1824 (2002) – the court imposed sanctions against the Wards in the amount of $25,000 stating that “[t]heir insistence on making frivolous protester type arguments indicates an unwillingness to respect the tax laws of the United States.”Gill v. Commissioner, T.C. Memo. 2002-146, 83 T.C.M. (CCH) 1816, 1819 (2002) – the court imposed a $7,500 penalty against the taxpayer stating the taxpayer’s “insistence on making frivolous protester type arguments indicates an unwillingness to respect the tax laws of the United States.”Monaghan v. Commissioner, T.C. Memo. 2002-16, 83 T.C.M. (CCH) 1102, 1104 (2002) – the court rejected the taxpayer’s frivolous arguments and imposed sanctions in the amount of $1,500, stating that “[h]e has caused this Court to waste its limited resources on his erroneous views of the tax law which he should have known are completely without merit.”Hart v. Commissioner, T.C. Memo. 2001-306, 82 T.C.M. (CCH) 934 (2001) – the court imposed sanctions in the amount of $15,000 against the taxpayer, because his delaying actions caused the Service and the court to needlessly spend time preparing for the trial and writing the opinion.Sigerseth v. Commissioner, T.C. Memo.2001-148, 81 T.C.M. (CCH) 1792, 1794 (2001) – pointing out that this case involving the use of trusts to avoid taxes was “a waste of limited judicial and administrative resources that could have been devoted to resolving bona fide claims of other taxpayers,” the court imposed a $15,000 penalty.MatrixInfoSys Trust v. Commissioner, T.C. Memo. 2001-133, 81 T.C.M. (CCH) 1726, 1729 (2001), aff’d, Hromiko v. Commissioner, 56 Fed. Appx. 359 (9th Cir. 2003) – in claiming that his income belonged to his trust, the court stated that the taxpayer had made “shopworn arguments characteristic of the tax-protester rhetoric that has been universally rejected by this and other courts,” and imposed a $12,500 penalty.Madge v. Commissioner, T.C. Memo. 2000-370, 80 T.C.M. (CCH) 804 (2000), aff’d, 23 Fed. Appx. 604 (9th Cir. 2003), cert. denied, 537 U.S. 825 (2002) – after having warned the taxpayer that continuing with his frivolous arguments – that he was not a taxpayer, that his income was not taxable, and that only foreign income was taxable – would likely result in a penalty, the court imposed the maximum $25,000 penalty.Haines v. Commissioner, T.C. Memo. 2000-126, 79 T.C.M. (CCH) 1844, 1846 (2000) – stating, “[p]etitioner knew or should have known that his position was groundless and frivolous, yet he persisted in maintaining this proceeding primarily to impede the proper workings of our judicial system and to delay the payment of his Federal income tax liabilities,” the court imposed a $25,000 penalty.