Tax Court Issues Warning to Attorneys Representing TPs

[jcolvin2]

In Tinnerman v. Comm'r, T.C. Memo. 2010-150 (July 13, 2010), the Tax Court imposed a $25,000 section 6673 penalty on recidivist tax protestors. While declining to penalize Tinnerman's counsel, the Tax Court Judge (Cohen) issued a pointed warning to others who might be tempted to tred the protestor path:

The attention of petitioner’s counsel is directed to Rule
3.1 of the Model Rules of Professional Conduct of the American
Bar Association (Model Rule 3.1), applicable here under Rule
201(a), and to section 6673(a)(2). See Takaba v. Commissioner,
119 T.C. 285, 296-305 (2002); Nis Family Trust v. Commissioner,
115 T.C. 523, 547-553 (2000); see also Powell v. Commissioner,
T.C. Memo. 2009-174; Edwards v. Commissioner, T.C. Memo. 2003-
149, affd. 119 Fed. Appx. 293 (D.C. Cir. 2005). We recognize
that counsel cooperated in presenting this case on the
stipulation, but the filings in responses to motions and in
briefs demonstrate reckless disregard of the facts and the
settled law and contentions so lacking in merit as to be
frivolous, dilatory, and subject to sanctions. See, e.g, United
States v. Patridge, 507 F.3d 1092, 1095-1097 (7th Cir. 2007)
(counsel was sanctioned in part for arguing that a collection hearing could be used to contest previously determined substantive liabilities); Johnson v. Commissioner, 116 T.C. 111
(2001), affd. 289 F.3d 452, 456-457 (7th Cir. 2002); see also
United States v. Collins, 920 F.2d 619, 624-628 (10th Cir. 1990);
United States v. Nelson (In re Becraft), 885 F.2d 547, 548 (9th
Cir. 1989) (sanctions were imposed on counsel in criminal cases,
notwithstanding greater leeway generally allowed under Model Rule
3.1); Charczuk v. Commissioner, 771 F.2d 471 (10th Cir. 1985),
affg. T.C. Memo. 1983-433. We will deny respondent’s motion for
a penalty against counsel under section 6673(a)(2). However, we
issue this warning for the future to present counsel and to those
similarly situated.

[Judge Roy Bean]

Who was Tinnerman's counsel?

[Famspear]

Who was Tinnerman's counsel?

Donald W. Wallis and Steven L. Zakrocki.

[Judge Roy Bean]

Wow.

[LPC]

Who was Tinnerman's counsel?

Donald W. Wallis and Steven L. Zakrocki.

Wow.

Explanation? (Those names mean nothing to me.)

[Judge Roy Bean]

http://www.ubulaw.com/people.php#donwallis

They do a lot of title work in Florida.

[LPC]

They do a lot of title work in Florida.

I just finished reading the Tax Court opinion, and they were working for some real nut jobs who were really working to delay and obstruct the system, and I think that the lawyers showed poor judgment in enabling their clients at all.

[Judge Roy Bean]

I don't know the case but have to ask if the Tinnerman's were either absurdly wealthy or just very well connected.

[The Observer]

And our undaunted TP tries again to challenge the assessment, albeit indirectly in his suit to contest a quiet title action brought by the government against his stock.

WILLIAM R. TINNERMAN,
Plaintiff - Appellant,
v.
UNITED STATES OF AMERICA,
Defendant - Appellee.

Release Date: MARCH 14, 2012


[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT

D.C. Docket No. 3:09-cv-00652-MMH-JBT

Appeal from the United States District Court
for the Middle District of Florida

(March 14, 2012)

Before MARCUS, PRYOR and SILER,/*/ Circuit Judges.

PER CURIAM:

William Tinnerman appeals the district court's dismissal of his quiet title action against the United States related to a federal tax lien imposed on Tinnerman's personal property. The property subject to the government's tax lien is all of the issued and outstanding shares of stock in a Florida corporation, St. Augustine Self-Storage, Inc., which is solely owned by Tinnerman. The lien is for the purpose of collection of Tinnerman's unpaid income tax liabilities for the 1999-2002 tax years, additional tax penalties for those years, and penalties imposed for filing frivolous tax returns for the 1996-1998 tax years.

Tinnerman's quiet title suit challenges the tax lien on two fronts. First, Tinnerman seeks to invalidate the Internal Revenue Service's ("IRS") underlying assessment of his tax liability, alleging, inter alia, that IRS agents lacked the authority to take certain steps in the assessment process. Second, Tinnerman claims that the tax lien itself was procedurally deficient, because the notice of tax lien failed to clearly identify the kind of tax giving rise to the lien and was improperly filed. On appeal, Tinnerman challenges only the district court's dismissal of the first prong of his amended complaint.

After thorough review, and having the benefit of oral argument, we affirm. We do so on the basis of the district court's thorough and well-reasoned opinion of March 31, 2011. The district court correctly determined that it lacked subject matter jurisdiction over the first prong of Tinnerman's challenge, because Tinnerman improperly used the vehicle of a quiet title action to "challenge the merits of the underlying assessment," and the federal government has not waived its sovereign immunity with respect to such challenges. Stoecklin v. United States, 943 F.2d 42, 43 (11th Cir. 1991). 1

AFFIRMED.

//*//

Honorable Eugene E. Siler, Jr., United States Circuit Judge for the Sixth Circuit, sitting by designation.


FOOTNOTES:

/1/ We note in passing that, although Tinnerman does not challenge on appeal the district court's dismissal of the second prong of his amended complaint, we can discern no error in the district court's conclusion that it retained jurisdiction over Tinnerman's challenge to the procedural validity of the lien itself, see Stoecklin, 943 F.2d at 43, but that dismissal under Fed. R. Civ. P. 12(b)(6) was appropriate because the notice of tax lien attached to the pleadings was facially valid and properly filed, and therefore Tinnerman failed to state a plausible claim for relief. See Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007).