TP Gets Whacked by 8th On Confirmed FrivPen?

[The Observer]

I wasn't able to find the Tax Court case on this person - but the terseness of the appellate court seems to indicate they were entirely fed up, which is pretty good evidence that Mr. Willett had been sipping the koolade.

MARK A. WILLETT,
Appellant,
v.
COMMISSIONER OF INTERNAL REVENUE,
Appellee.

Release Date: APRIL 01, 2009


[UNPUBLISHED]

UNITED STATES COURT OF APPEALS
FOR THE EIGHTH CIRCUIT

Appeal from the United States Tax Court.

Submitted: March 6, 2009
Filed: April 1, 2009

Before BYE, COLLOTON, and GRUENDER, Circuit Judges.

PER CURIAM.

Mark Willett challenges the tax court's/1/ order dismissing his pro se petition and imposing a $ 10,000 penalty under 26 U.S.C. section 6673. After careful review, we conclude that the dismissal and the penalty were proper. Accordingly, we affirm. See 8th Cir. R. 47B. All pending motions are denied.

FOOTNOTE

/1/ The Honorable Stanley J. Goldberg, United States Tax Court Judge.

[Nikki]

According to the Tax Court's docket search by name function, Mr Willett is a two-time visitor there.

His first case, 15842-05 before Judge Armen, appears to have been decided in favor of the Respondent on a motion for summary judgment.

The case at issue on appeal seems to be 1544-06L before Judge Carluzzo -- an appeal to the Tax Court from an adverse CDP hearing.

Since Willett appealed the TC decision on 10/10/07, the Tax Court decision wasn't final. So, it wasn't posted to their web site.

[LPC]

I was able to get a copy of the Tax Court opinion through the 8th Circuit website, but the quality is poor and I don't seem to be able OCR it.

A few comments:

1. The sanctions imposed by the Tax Court were sua sponte, apparently because he was warned in the previous proceedings that he could be sanctioned for pursuing his arguments.

2. The government asked for sanctions from the 8th Circuit, but were denied. (Big Win!)

[LPC]

Here the Tax Court opinion, rendered by a Special Trial Judge:

MARK A. WILLETT, Petitioner
v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 1544-06L.

ORDER OF DISMISSAL AND DECISION

The matter before the Court requiring a ruling is respondent's "Motion to Dismiss for Failure to State a Claim Upon Which Relief May Be Granted and To Impose a Penalty Under I.R.C. section 6673" (Motion to Dismiss) filed on March 7, 2006. By way of background, petitioner failed to file Federal income tax returns for taxable years 1999 through 2003. Respondent prepared substitute returns for petitioner for those years. This matter concerns only the 1999 through 2002 taxable year, although this same issue was raised at this Court at Willet v. Commissioner, Docket No. 15842-05S with respect to petitioner's 2003 taxable year. In that case, while the Court denied respondent's Motion to Dismiss, it did strike the bulk of the underlying petition. Moreover, Special Trial Judge Lewis R. Carluzzo noted petitioner's frivolous, stale, and shopworn protestor arguments which, if continued, would be grounds for the imposition of penalty under section 6673.

This matter before us concerns taxable years 1999 through 2002 only. On December 16, 2005, respondent sent petitioner a Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330 for taxable years 1999 through 2002. In the notice, respondent determined that collection of petitioner's 2002 Federal income tax liability could proceed.

On January 20, 2006, petitioner filed a petition with this Court disagreeing with the notice of determination. Attached to the petition was a copious addendum explaining petitioner's position as to why respondent's levy action should be set aside. In summary, petitioner's position is that he is entitled to relief from respondent's levy action because, "he is not required to file a Federal income tax return because his income is not in excess of the exempt amount prescribed by 6012," "Form 1040 for 2002 has an invalid and expired OMB number," "Form 1040 is in violation of the Paperwork Reduction Act," and "the riling of a Federal tax return is completely voluntary."

On June 19, 2006, this matter was called for a hearing in Kansas City, Missouri, before Special Trial Judge Stanley J. Goldberg. Counsel for respondent appeared at the hearing and presented argument on the pending motion. Petitioner did not appear at the hearing, however, he did file a "Statement of Position Pursuant to Motions Session" (Statement) at the Tax Court in Washington, D.C. on the same date, June 19, 2006. In his Statement, petitioner argues that the "Paperwork Reduction Act authorizes a complete defense, bar, or otherwise in response to a claim made by the Commissioner."

At the hearing, respondent requested that the Court grant the pending Motion to Dismiss on the grounds that petitioner's reasoning was nothing more than a timeworn and frivolous tax-protestor argument. In light of the earlier hearing before Special Trial Judge Carluzzo with respect to petitioner's 2003 taxable year, respondent asked this Court to impose a penalty pursuant to section 6673.

We will now address respondent's Motion to Dismiss.

Tax Court Rule 40 provides that a party may file a motion to dismiss for failure to state a claim upon which relief can be granted. The Court may grant such a motion when it appears beyond doubt that the party's adversary can prove no set of facts in support of a claim which would entitle him or her to relief. Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Price v. Moody, 677 F.2d 676, 677 (8th Cir. 1982).

Rule 331(b) (4) requires that a petition filed in this Court in a lien or levy action contain clear and concise assignments of each and every error that the taxpayer alleges to have been committed by the Commissioner in the determination of the deficiency and any addition to tax in dispute. Rule 331(b)(5) further requires that the petition contain clear and concise lettered statements of the facts on which the taxpayer bases the assignments of error. The requirements of Rule 331(b)(4) and (5) are basically identical to those in Rule 34(b)(4) and (5) and Rule 34(a) cross-references to Rule 331(b). See Jarvis v. Commissioner, 78 T.C. 646, 658 (1982). The failure of a petition to conform with the requirements set forth in Rule 331 may be grounds for dismissal. Rules 34(a)(1), 123(b).

The petition filed in this case does not satisfy the requirements of Rule 331(b)(4) and (5). There is neither assignment of error nor allegation of fact in support of any justiciable claim. Rather, there is nothing other than tax protester rhetoric and legalistic gibberish, as demonstrated by the statements made in the petition and petitioner's objection as previously quoted. See Abrams v. Commissioner, 82 T.C. 403 (1984); Rowlee v. Commissioner, 80 T.C. 1111 (1983); McCoy V. Commissioner, 76 T.C. 1027 (1981), affd. 696 F.2d 1234 (9th Cir. 1983).

We see no need to either give deference to the various contentions raised in the petition or to painstakingly address them. "We perceive no need to refute these arguments with somber reasoning and copious citation of precedent; to do so might suggest that these arguments have some colorable merit." Crain v. Commissioner, 737 F.2d 1417, 1417 (5th Cir. 1984). "It is within the undoubted power of Congress to provide any reasonable system for the collection of taxes * * * if only the injunction against the taking of property without due process of law in the method of collection and protection of the taxpayer is satisfied." Wickwire v. Reinecke, 275 U.S. 101, 105-106 (1927); see Goss v. Lopez, 419 U.S. 565 (1975).

As to the issue raised in petitioner's Statement, the requirement to file tax returns is mandated by statute under section 6012, and that statue is not subject to the Paperwork Reduction Act. Contrary to petitioner's argument, there is no law that allows taxpayers to avoid their obligations under the Internal Revenue Code to file a Federal income tax return through reliance on the Paperwork Reduction Act. Courts, including this Court, have repeatedly rejected such arguments based on the Paperwork Reduction Act. See United States v. Neff, 954 F.2d 698, 699 (11th Cir. 1992); Salberg v. United States, 969 F.2d 379, 383 (7th Cir. 1992); United States v. Holden, 963 F.2d 1114, 1116 (8th Cir. 1992); Wheeler v. Commissioner, 127 T.C. 200, 204 (2006); Nunn v. Commissioner, T.C. Memo. 2002-250.

Therefore, because the petition fails to state a claim upon which relief can be granted, we shall grant respondent's Motion to Dismiss. See Scherping v. Commissioner, 747 F.2d 478 (8th Cir. 1984).

We turn now, on our own motion, to the award of a penalty against petitioner under section 6673(a).

As relevant herein, section 6673(a)(1) authorizes the Tax Court to require a taxpayer to pay to the United States a penalty not in excess of $25,000 whenever it appears that proceedings have been instituted or maintained by the taxpayer primarily for delay or that the taxpayer's position in such proceeding is frivolous or groundless.

The record in this case convinces us that petitioner was not interested in disputing the merits of respondent's determination as to collection activity. Rather, the record demonstrates that petitioner regards this case as a vehicle to protest the tax laws of this country and espouse his own misguided views. Furthermore, petitioner was warned by this Court at an earlier hearing on the same motion for his 2003 taxable year that his position amounted to no more than frivolous and exasperating tax protestor arguments which, if continued, would result in the imposition of a penalty.

A petition to the Tax Court is frivolous "if it is contrary to established law and unsupported by a reasoned, colorable argument for change in the law." Coleman v. Commissioner, 791 F.2d 68, 71 (7th Cir. 1986). Petitioner's position, as set forth in the petition and objection, consists solely of tax protester rhetoric and legalistic gibberish. Based on this well established law, petitioner's position is frivolous and groundless.

We are also convinced that petitioner instituted and maintained this proceeding primarily, if not exclusively, for purposes of delay. Having to deal with this matter wasted the Court's time, as well as respondent's. Moreover, taxpayers with genuine controversies were delayed.

In view of the foregoing, we will exercise our discretion under section 6673(a)(1) and require petitioner to pay a penalty to the United States in the amount of $10,000. Coleman v. Commissioner, supra at 71-72; Crain v. Commissioner, supra at 1417-1418; Coulter v. Commissioner, 82 T.C. 580, 584-586 (1984); Abrams v. Commissioner, supra at 408-411.

Therefore, after due consideration, it is hereby

ORDERED that respondent's "Motion to Dismiss for Failure to State a Claim Upon Which Relief May Be Granted and To Impose a Penalty Under I.R.C. section 6673" filed on March 7, 2006, is granted, and it is further

ORDERED AND DECIDED that respondent may proceed with collection activity for the taxable years 1999 through 2002, and it is further
ORDERED AND DECIDED that petitioner pay $10,000 to the United States as a penalty pursuant to section 6673(a) (1).

Stanley J. Goldberg
Special Trial Judge
Entered: JUL 1 0 2001