TPs Take Their Act To Bankruptcy Court
-
- Further Moderator
- Posts: 7521
- Joined: Thu Feb 06, 2003 11:48 pm
- Location: Virgin Islands Gunsmith
TPs Take Their Act To Bankruptcy Court
This appears to be adherents of CtC attempting to evade taxes through bankruptcy.
HOWARD ALLEN SCOTT; GAYLE ANN SCOTT,
Appellants,
v.
UNITED STATES,
Appellee.
(In re: Howard Allen Scott and Gayle Ann Scott, Debtors.)
Release Date: JULY 21, 2010
NOT FOR PUBLICATION
UNITED STATES BANKRUPTCY APPELLATE PANEL
OF THE NINTH CIRCUIT
BAP No. NV-09-1273-DHPa
Bk. No. 09-16141-BAM
MEMORANDUM 1
Argued and Submitted on June 16, 2010 at Reno, Nevada
Filed -- June 21, 2010
Appeal from the United States Bankruptcy Court
for the District of Nevada
Hon. Bruce A. Markell, Bankruptcy Judge, Presiding
Before: DUNN, HOLLOWELL and PAPPAS, Bankruptcy Judges.
Pro se debtors, Howard and Gayle Scott, appeal the bankruptcy court's order denying their motion for an order requiring the Internal Revenue Service ("IRS") to remove its tax liens from their residence and to refund alleged overpayments of income taxes. The United States contends that the bankruptcy court did not have jurisdiction to rule on the motion because the debtors did not properly serve the motion on the United States pursuant to Rule 7004(b)(5). 2
Based on our review of the record, the debtors failed to serve the United States properly. The bankruptcy court therefore lacked jurisdiction to determine the merits of the motion. We VACATE the bankruptcy court's order and REMAND for further proceedings.
FACTS
The debtors filed their chapter 7 petition on April 22, 2009. They listed on their Schedule E three tax liens totaling approximately $ 19,651, 3 all of which were held by the IRS.
On April 28, 2009, the debtors filed a "Motion for Judicial Abatement of Tax Refunds" ("motion") requesting that the bankruptcy court order the IRS to remove the tax liens from their residence and to refund alleged overpayments of income taxes.
The debtors contended that the IRS could not place tax liens against their residence because they were not liable to pay income taxes, as they had no taxable income. The debtors reported $ 0 income on their federal income tax returns for years 1999 through 2003 because their earnings allegedly did not qualify as income as defined by the Supreme Court in Merchants' Loan & Trust Co. v. Smietanka, 255 U.S. 509 (1921).
The debtors further claimed that they were not liable to pay income taxes on the basis that nothing in the Internal Revenue Code ("I.R.C.") specifically states that an individual's wages or earnings are taxable.
The debtors also contended that they "overpaid" the IRS $ 19,598.85 in income taxes. 4 The debtors asserted that income taxes could not be owed until the IRS made an assessment and demanded payment. Because the IRS did not make an assessment and demand payment of the income taxes from the debtors, the debtors argue that they did not owe income taxes. The debtors nonetheless paid a total of $ 19,598.85 in income taxes through withholdings of their wages in the years 1999 to 2003. They further maintained that the amounts withheld were an "unapportioned, direct tax" in violation of the Constitution. The debtors therefore argued that, because they paid the taxes before they owed them, the IRS immediately should refund the amounts paid so that the debtors could use the funds to pay their creditors.
The hearing on the motion originally was set for June 2, 2009. The debtors mailed a copy of the motion to the IRS, addressed as follows: Internal Revenue Service, Fresno, CA 93888-0001.
The bankruptcy court subsequently entered an order continuing the hearing to July 14, 2009 ("continuance order"). The bankruptcy court determined that the debtors did not properly serve the motion on the IRS, so it continued the hearing to allow the debtors time to effect proper service. On the same day as the entry of the continuance order, the debtors mailed a copy of the motion to the IRS at the following address: P.O. Box 21126, DPN 781, Philadelphia, PA 19114.
The IRS neither responded to the motion nor appeared at the hearing. At the hearing, the bankruptcy court denied the motion, informing the debtors that their contentions ran contrary to established Ninth Circuit authority. The bankruptcy court entered its order denying the motion on August 5, 2009. The debtors timely appealed. 5
ISSUE
Did the bankruptcy court have jurisdiction to rule on the motion?
STANDARD OF REVIEW
We review de novo questions of jurisdiction. Piombo Corp. v. Castlerock Props. (In re Castlerock Props.), 781 F.2d 159, 161 (9th Cir. 1986).
JURISDICTION
The United States claims that the bankruptcy court lacked jurisdiction to decide the merits of the motion because the debtors did not properly serve the motion on the United States. Based on the record before us, we agree.
A bankruptcy court lacks jurisdiction over a defendant if the defendant was not served properly under Rule 7004. 6 See United States v. Levoy (In re Levoy), 182 B.R. 827, 832 (9th Cir. BAP 1995); Harlow v. Palouse Producers, Inc. (In re Harlow Props., Inc.), 56 B.R. 794, 799 (9th Cir. BAP 1985); see also Direct Mail Specialists, Inc. v. Eclat Computerized Techs., Inc., 840 F.2d 685, 688 (9th Cir. 1988)(applying Fed. R. Civ. P. 4). Rule 7004 applies in contested matters. 7 See Rule 9014(b).
Rule 7004(b)(5) governs service of a motion on an agency of the United States. Under Rule 7004(b)(5), the movant must serve the motion by mailing it addressed to: (1) the civil process clerk at the office of the U.S. attorney for the district in which the action is brought; (2) the U.S. Attorney General in Washington, D.C.; and (3) the agency.
As required under the continuance order, the debtors reserved the motion on the IRS at P.O. Box 21126, DPN 781, Philadelphia, PA 19114, the address designated by the IRS under Rule 5003(e). 8 The debtors did not serve the motion on the U.S. attorney for the District of Nevada or on the U.S. Attorney General. Because the debtors did not effect proper service on the United States under Rule 7004(b)(5), the bankruptcy court did not have jurisdiction to decide the motion.
Moreover, the IRS is not the real party in interest to the motion. 9 "It is a well-settled principle that the IRS cannot be sued and that the proper party in actions involving federal taxes is the United States of America." Levoy, 182 B.R. at 832 (citing Blackmar v. Guerre, 342 U.S. 512, 514 (1952)). The debtors thus not only failed to serve the United States correctly under Rule 7004(b)(5), but they also failed to name the proper party to the motion. Because the IRS was not the proper party for the debtors to litigate the motion against, the bankruptcy court lacked jurisdiction to determine the merits of the motion.
CONCLUSION
The bankruptcy court did not have jurisdiction to determine the merits of the motion because the debtors did not serve the United States properly under Rule 7004(b)(5). We therefore VACATE the bankruptcy court's order and REMAND for further proceedings.
FOOTNOTES:
/1/ This disposition is not appropriate for publication. Although it may be cited for whatever persuasive value it may have (see Fed. R. App. P. 32.1), it has no precedential value. See 9th Cir. BAP Rule 8013-1.
/2/ Unless otherwise indicated, all chapter, section and rule references are to the Bankruptcy Code, 11 U.S.C. section 101-1532, and to the Federal Rules of Bankruptcy Procedure, Rules 1001-9037.
/3/ The debtors attached to the motion copies of the notices of federal tax liens ("tax lien notices"). According to the tax lien notices, the debtors owed a total of $ 7,533.46 in federal income taxes for years 1999 and 2000, a total of $ 10,618.51 in federal income taxes for years 2001 and 2002, a $ 500 penalty for year 2003, and $ 1,000 in penalties for years 2004 and 2005.
/4/ The debtors apparently calculated the amount of the alleged overpayments using the amounts of federal income taxes withheld from their wages in the years 1999 to 2003, as shown in their federal income tax returns.
/5/ The debtors filed their notice of appeal on August 21, 2009, beyond the ten-day time period provided at that time under Rule 8002(a). The clerk of the BAP issued a notice of deficient appeal on August 28, 2009. In their response filed September 29, 2009, the debtors explained that they tried to file their notice of appeal on July 24, 2009, but a clerk at the bankruptcy court informed the debtors that they could not file their notice of appeal until after the bankruptcy court entered the order to which it related. The BAP issued an order of limited remand ("remand order") to allow the bankruptcy court to determine whether it announced its decision at the July 14, 2009 hearing or at any time before July 24, 2009.
On November 12, 2009, the bankruptcy court issued findings of fact pursuant to the BAP's remand order, determining that it announced its ruling at the July 14, 2009 hearing, and that the debtors indeed tried to file their notice of appeal on July 24, 2009.
On December 30, 2009, the BAP issued an order deeming that the debtors timely filed their notice of appeal on July 24, 2009.
/6/ Rule 7004 adopts in large part the procedural requirements for service of process set forth in Rule 4 of the Federal Rules of Civil Procedure. 10 Collier on Bankruptcy paragraph 7004.01 (Alan N. Resnick & Henry J. Sommer, eds., 15th ed. rev. 2009).
/7/ Where there is an actual dispute, other than an adversary proceeding, the litigation to resolve that dispute constitutes a contested matter. See 1983 Advisory Committee Note to Rule 9014. As the United States correctly points out, the debtors' motion is a contested matter within the meaning of Rule 9014(a).
/8/ Rule 5003(e) provides that an agency of the United States, such as the IRS, may file a statement designating its mailing address for service of requests under section 505(b). Rule 5003(e) further provides that the clerk of the bankruptcy court must keep a register that lists such mailing addresses. The debtors mailed the motion to the IRS at the same address listed on the register maintained by the clerk of the United States Bankruptcy Court for the District of Nevada.
A leading commentator on bankruptcy notes that sending notice to governmental entities should not be confused with proper service of process, however. 9 Collier on Bankruptcy paragraph 5003.06[1] (Alan N. Resnick & Henry J. Sommer, eds., 15th ed. rev. 2009). The commentator points out that Rule 5003(e) "specifically references 'notice' and does not mention service." Id. It stresses that Federal Rule of Civil Procedure 4(i), made applicable to bankruptcy proceedings by Rule 7004, governs service of process on a United States agency. Id.
/9/ The IRS did not file a proof of claim in the debtors' case. Had it done so, the bankruptcy court would have had jurisdiction over the IRS. "A creditor who offers proof of his claim, and demands its allowance, subjects himself to the dominion of the court, and must abide the consequences." Levoy, 182 B.R. at 832 (quotation marks and citation omitted).
HOWARD ALLEN SCOTT; GAYLE ANN SCOTT,
Appellants,
v.
UNITED STATES,
Appellee.
(In re: Howard Allen Scott and Gayle Ann Scott, Debtors.)
Release Date: JULY 21, 2010
NOT FOR PUBLICATION
UNITED STATES BANKRUPTCY APPELLATE PANEL
OF THE NINTH CIRCUIT
BAP No. NV-09-1273-DHPa
Bk. No. 09-16141-BAM
MEMORANDUM 1
Argued and Submitted on June 16, 2010 at Reno, Nevada
Filed -- June 21, 2010
Appeal from the United States Bankruptcy Court
for the District of Nevada
Hon. Bruce A. Markell, Bankruptcy Judge, Presiding
Before: DUNN, HOLLOWELL and PAPPAS, Bankruptcy Judges.
Pro se debtors, Howard and Gayle Scott, appeal the bankruptcy court's order denying their motion for an order requiring the Internal Revenue Service ("IRS") to remove its tax liens from their residence and to refund alleged overpayments of income taxes. The United States contends that the bankruptcy court did not have jurisdiction to rule on the motion because the debtors did not properly serve the motion on the United States pursuant to Rule 7004(b)(5). 2
Based on our review of the record, the debtors failed to serve the United States properly. The bankruptcy court therefore lacked jurisdiction to determine the merits of the motion. We VACATE the bankruptcy court's order and REMAND for further proceedings.
FACTS
The debtors filed their chapter 7 petition on April 22, 2009. They listed on their Schedule E three tax liens totaling approximately $ 19,651, 3 all of which were held by the IRS.
On April 28, 2009, the debtors filed a "Motion for Judicial Abatement of Tax Refunds" ("motion") requesting that the bankruptcy court order the IRS to remove the tax liens from their residence and to refund alleged overpayments of income taxes.
The debtors contended that the IRS could not place tax liens against their residence because they were not liable to pay income taxes, as they had no taxable income. The debtors reported $ 0 income on their federal income tax returns for years 1999 through 2003 because their earnings allegedly did not qualify as income as defined by the Supreme Court in Merchants' Loan & Trust Co. v. Smietanka, 255 U.S. 509 (1921).
The debtors further claimed that they were not liable to pay income taxes on the basis that nothing in the Internal Revenue Code ("I.R.C.") specifically states that an individual's wages or earnings are taxable.
The debtors also contended that they "overpaid" the IRS $ 19,598.85 in income taxes. 4 The debtors asserted that income taxes could not be owed until the IRS made an assessment and demanded payment. Because the IRS did not make an assessment and demand payment of the income taxes from the debtors, the debtors argue that they did not owe income taxes. The debtors nonetheless paid a total of $ 19,598.85 in income taxes through withholdings of their wages in the years 1999 to 2003. They further maintained that the amounts withheld were an "unapportioned, direct tax" in violation of the Constitution. The debtors therefore argued that, because they paid the taxes before they owed them, the IRS immediately should refund the amounts paid so that the debtors could use the funds to pay their creditors.
The hearing on the motion originally was set for June 2, 2009. The debtors mailed a copy of the motion to the IRS, addressed as follows: Internal Revenue Service, Fresno, CA 93888-0001.
The bankruptcy court subsequently entered an order continuing the hearing to July 14, 2009 ("continuance order"). The bankruptcy court determined that the debtors did not properly serve the motion on the IRS, so it continued the hearing to allow the debtors time to effect proper service. On the same day as the entry of the continuance order, the debtors mailed a copy of the motion to the IRS at the following address: P.O. Box 21126, DPN 781, Philadelphia, PA 19114.
The IRS neither responded to the motion nor appeared at the hearing. At the hearing, the bankruptcy court denied the motion, informing the debtors that their contentions ran contrary to established Ninth Circuit authority. The bankruptcy court entered its order denying the motion on August 5, 2009. The debtors timely appealed. 5
ISSUE
Did the bankruptcy court have jurisdiction to rule on the motion?
STANDARD OF REVIEW
We review de novo questions of jurisdiction. Piombo Corp. v. Castlerock Props. (In re Castlerock Props.), 781 F.2d 159, 161 (9th Cir. 1986).
JURISDICTION
The United States claims that the bankruptcy court lacked jurisdiction to decide the merits of the motion because the debtors did not properly serve the motion on the United States. Based on the record before us, we agree.
A bankruptcy court lacks jurisdiction over a defendant if the defendant was not served properly under Rule 7004. 6 See United States v. Levoy (In re Levoy), 182 B.R. 827, 832 (9th Cir. BAP 1995); Harlow v. Palouse Producers, Inc. (In re Harlow Props., Inc.), 56 B.R. 794, 799 (9th Cir. BAP 1985); see also Direct Mail Specialists, Inc. v. Eclat Computerized Techs., Inc., 840 F.2d 685, 688 (9th Cir. 1988)(applying Fed. R. Civ. P. 4). Rule 7004 applies in contested matters. 7 See Rule 9014(b).
Rule 7004(b)(5) governs service of a motion on an agency of the United States. Under Rule 7004(b)(5), the movant must serve the motion by mailing it addressed to: (1) the civil process clerk at the office of the U.S. attorney for the district in which the action is brought; (2) the U.S. Attorney General in Washington, D.C.; and (3) the agency.
As required under the continuance order, the debtors reserved the motion on the IRS at P.O. Box 21126, DPN 781, Philadelphia, PA 19114, the address designated by the IRS under Rule 5003(e). 8 The debtors did not serve the motion on the U.S. attorney for the District of Nevada or on the U.S. Attorney General. Because the debtors did not effect proper service on the United States under Rule 7004(b)(5), the bankruptcy court did not have jurisdiction to decide the motion.
Moreover, the IRS is not the real party in interest to the motion. 9 "It is a well-settled principle that the IRS cannot be sued and that the proper party in actions involving federal taxes is the United States of America." Levoy, 182 B.R. at 832 (citing Blackmar v. Guerre, 342 U.S. 512, 514 (1952)). The debtors thus not only failed to serve the United States correctly under Rule 7004(b)(5), but they also failed to name the proper party to the motion. Because the IRS was not the proper party for the debtors to litigate the motion against, the bankruptcy court lacked jurisdiction to determine the merits of the motion.
CONCLUSION
The bankruptcy court did not have jurisdiction to determine the merits of the motion because the debtors did not serve the United States properly under Rule 7004(b)(5). We therefore VACATE the bankruptcy court's order and REMAND for further proceedings.
FOOTNOTES:
/1/ This disposition is not appropriate for publication. Although it may be cited for whatever persuasive value it may have (see Fed. R. App. P. 32.1), it has no precedential value. See 9th Cir. BAP Rule 8013-1.
/2/ Unless otherwise indicated, all chapter, section and rule references are to the Bankruptcy Code, 11 U.S.C. section 101-1532, and to the Federal Rules of Bankruptcy Procedure, Rules 1001-9037.
/3/ The debtors attached to the motion copies of the notices of federal tax liens ("tax lien notices"). According to the tax lien notices, the debtors owed a total of $ 7,533.46 in federal income taxes for years 1999 and 2000, a total of $ 10,618.51 in federal income taxes for years 2001 and 2002, a $ 500 penalty for year 2003, and $ 1,000 in penalties for years 2004 and 2005.
/4/ The debtors apparently calculated the amount of the alleged overpayments using the amounts of federal income taxes withheld from their wages in the years 1999 to 2003, as shown in their federal income tax returns.
/5/ The debtors filed their notice of appeal on August 21, 2009, beyond the ten-day time period provided at that time under Rule 8002(a). The clerk of the BAP issued a notice of deficient appeal on August 28, 2009. In their response filed September 29, 2009, the debtors explained that they tried to file their notice of appeal on July 24, 2009, but a clerk at the bankruptcy court informed the debtors that they could not file their notice of appeal until after the bankruptcy court entered the order to which it related. The BAP issued an order of limited remand ("remand order") to allow the bankruptcy court to determine whether it announced its decision at the July 14, 2009 hearing or at any time before July 24, 2009.
On November 12, 2009, the bankruptcy court issued findings of fact pursuant to the BAP's remand order, determining that it announced its ruling at the July 14, 2009 hearing, and that the debtors indeed tried to file their notice of appeal on July 24, 2009.
On December 30, 2009, the BAP issued an order deeming that the debtors timely filed their notice of appeal on July 24, 2009.
/6/ Rule 7004 adopts in large part the procedural requirements for service of process set forth in Rule 4 of the Federal Rules of Civil Procedure. 10 Collier on Bankruptcy paragraph 7004.01 (Alan N. Resnick & Henry J. Sommer, eds., 15th ed. rev. 2009).
/7/ Where there is an actual dispute, other than an adversary proceeding, the litigation to resolve that dispute constitutes a contested matter. See 1983 Advisory Committee Note to Rule 9014. As the United States correctly points out, the debtors' motion is a contested matter within the meaning of Rule 9014(a).
/8/ Rule 5003(e) provides that an agency of the United States, such as the IRS, may file a statement designating its mailing address for service of requests under section 505(b). Rule 5003(e) further provides that the clerk of the bankruptcy court must keep a register that lists such mailing addresses. The debtors mailed the motion to the IRS at the same address listed on the register maintained by the clerk of the United States Bankruptcy Court for the District of Nevada.
A leading commentator on bankruptcy notes that sending notice to governmental entities should not be confused with proper service of process, however. 9 Collier on Bankruptcy paragraph 5003.06[1] (Alan N. Resnick & Henry J. Sommer, eds., 15th ed. rev. 2009). The commentator points out that Rule 5003(e) "specifically references 'notice' and does not mention service." Id. It stresses that Federal Rule of Civil Procedure 4(i), made applicable to bankruptcy proceedings by Rule 7004, governs service of process on a United States agency. Id.
/9/ The IRS did not file a proof of claim in the debtors' case. Had it done so, the bankruptcy court would have had jurisdiction over the IRS. "A creditor who offers proof of his claim, and demands its allowance, subjects himself to the dominion of the court, and must abide the consequences." Levoy, 182 B.R. at 832 (quotation marks and citation omitted).
"I could be dead wrong on this" - Irwin Schiff
"Do you realize I may even be delusional with respect to my income tax beliefs? " - Irwin Schiff
"Do you realize I may even be delusional with respect to my income tax beliefs? " - Irwin Schiff
Re: TPs Take Their Act To Bankruptcy Court
Does this rise to the level of Bankruptcy Fraud?
Also does the Bankruptcy Court have a sense of humor like Tax Court? Tax Court IMO puts up with way too much crap from these idiots.
Also does the Bankruptcy Court have a sense of humor like Tax Court? Tax Court IMO puts up with way too much crap from these idiots.
-
- Further Moderator
- Posts: 7521
- Joined: Thu Feb 06, 2003 11:48 pm
- Location: Virgin Islands Gunsmith
Re: TPs Take Their Act To Bankruptcy Court
bmielke, how many times do we have to tell you? Ever since we have set up these Article I admiralty courts to further the Grand Conspiracy, the Illuminati has realized it would be unwise to overplay our hand and risk being exposed. Thus, we tolerate the innumerable filings and pleadings filed by TPs to allay their suspicions and lead them into believing that they have a chance to win. Besides, it gives us endless opportunties to laugh at them behind their backs after the gavel comes down.
"I could be dead wrong on this" - Irwin Schiff
"Do you realize I may even be delusional with respect to my income tax beliefs? " - Irwin Schiff
"Do you realize I may even be delusional with respect to my income tax beliefs? " - Irwin Schiff
Re: TPs Take Their Act To Bankruptcy Court
You're right of course, but I can't help feeling that people who actually need help aren't getting it so that TPs can argue they they are not people and the money there boss gives them for showing up aren't wages.The Observer wrote:bmielke, how many times do we have to tell you? Ever since we have set up these Article I admiralty courts to further the Grand Conspiracy, the Illuminati has realized it would be unwise to overplay our hand and risk being exposed. Thus, we tolerate the innumerable filings and pleadings filed by TPs to allay their suspicions and lead them into believing that they have a chance to win. Besides, it gives us endless opportunties to laugh at them behind their backs after the gavel comes down.
Also I find nothing funnier than a TP spending 3-5 in a Federal Prison. I guess it's just Schadenfreud
-
- Knight Templar of the Sacred Tax
- Posts: 7668
- Joined: Sat May 19, 2007 12:59 pm
- Location: Texas
Re: TPs Take Their Act To Bankruptcy Court
It's "Schadenfreude".bmielke wrote:I guess it's just Schadenfreud
(signed)
Famspear (The Spelling Nazi)
Regarding Howard and Gayle Scott, they apparently filed tax returns with the typical doofus arguments falsely implying that they weren't "liable" for income tax because the statute imposing liability does not include the word "liable."
Obviously, they also presented the doofus "Merchants' Loan" argument -- the argument that "income" means only "corporate profit" -- despite the fact that the Court in Merchants' Loan never ruled any such thing, despite the fact that the income that was held to be income in that case was not "corporate profit." They even cite Lucas v. Earl for the argument that "income" means only "corporate profit" -- despite the fact that the income that was ruled to be income in Lucas v. Earl wasn't corporate profit, either.
Stupid, stupid, stupid. Dumb as dirt.
More idiocy by Howard et ux.: The claim that no IRS employee has any delegated authority to determine whether a tax return is "frivolous" under section 6702.
"My greatest fear is that the audience will beat me to the punch line." -- David Mamet
-
- Fourth Shogun of Quatloosia
- Posts: 885
- Joined: Sat Jul 21, 2007 3:04 pm
- Location: Here, I used to be there, but I moved.
Re: TPs Take Their Act To Bankruptcy Court
I think everyone is missing the point.
Bankruptcy court dismisses TPs frivolous motion.
TPs appeal.
Appellate court vacates bankruptcy court's ruling which is what the TPs wanted and with some help from the government's argument.
FLAWLESS VICTORY!
Bankruptcy court dismisses TPs frivolous motion.
TPs appeal.
Appellate court vacates bankruptcy court's ruling which is what the TPs wanted and with some help from the government's argument.
FLAWLESS VICTORY!
Light travels faster than sound, which is why some people appear bright, until you hear them speak.
-
- Trusted Keeper of the All True FAQ
- Posts: 5233
- Joined: Sun Mar 02, 2003 3:38 am
- Location: Earth
Re: TPs Take Their Act To Bankruptcy Court
I'm not sure why you say that. There doesn't seem to be anything CtC-like in any of the arguments described by the court.The Observer wrote:This appears to be adherents of CtC
Dan Evans
Foreman of the Unified Citizens' Grand Jury for Pennsylvania
(And author of the Tax Protester FAQ: evans-legal.com/dan/tpfaq.html)
"Nothing is more terrible than ignorance in action." Johann Wolfgang von Goethe.
Foreman of the Unified Citizens' Grand Jury for Pennsylvania
(And author of the Tax Protester FAQ: evans-legal.com/dan/tpfaq.html)
"Nothing is more terrible than ignorance in action." Johann Wolfgang von Goethe.
-
- Tupa-O-Quatloosia
- Posts: 1756
- Joined: Thu May 29, 2003 11:02 pm
- Location: Brea, CA
Re: TPs Take Their Act To Bankruptcy Court
(Attempt to return to rationality, for the moment.) Did the appellate court really say that the bankruptcy court didn't have jurisdiction to consider the motion, so that the dismissal (as well as the motion, itself) was improper? If so, what should the bankruptcy court have done?The Operative wrote:I think everyone is missing the point.
Bankruptcy court dismisses TPs frivolous motion.
TPs appeal.
Appellate court vacates bankruptcy court's ruling which is what the TPs wanted and with some help from the government's argument.
FLAWLESS VICTORY!
Arthur Rubin, unemployed tax preparer and aerospace engineer
Join the Blue Ribbon Online Free Speech Campaign!
Butterflies are free. T-shirts are $19.95 $24.95 $29.95
Join the Blue Ribbon Online Free Speech Campaign!
Butterflies are free. T-shirts are $19.95 $24.95 $29.95
-
- Further Moderator
- Posts: 7521
- Joined: Thu Feb 06, 2003 11:48 pm
- Location: Virgin Islands Gunsmith
Re: TPs Take Their Act To Bankruptcy Court
I was basing it on the the claim that they had no taxable income and entered zero on the income line of the return. But I realize that I getting apples and oranges mixed up here, most likely with Schiff, so you are correct.LPC wrote:I'm not sure why you say that. There doesn't seem to be anything CtC-like in any of the arguments described by the court.The Observer wrote:This appears to be adherents of CtC
"I could be dead wrong on this" - Irwin Schiff
"Do you realize I may even be delusional with respect to my income tax beliefs? " - Irwin Schiff
"Do you realize I may even be delusional with respect to my income tax beliefs? " - Irwin Schiff
-
- Knight Templar of the Sacred Tax
- Posts: 7668
- Joined: Sat May 19, 2007 12:59 pm
- Location: Texas
Re: TPs Take Their Act To Bankruptcy Court
At the Bankruptcy Court, the taxpayers asked the Court for an order requiring the Internal Revenue Service to remove its tax liens from their residence and to refund alleged overpayments of income taxes. The Bankruptcy Court denied the taxpayers' motion. However, at the time of the ruling, the Bankruptcy Court had no personal jurisdiction over the defendant (the IRS) (i.e., because the taxpayers never properly served papers on the IRS).Arthur Rubin wrote:(Attempt to return to rationality, for the moment.) Did the appellate court really say that the bankruptcy court didn't have jurisdiction to consider the motion, so that the dismissal (as well as the motion, itself) was improper? If so, what should the bankruptcy court have done?The Operative wrote:I think everyone is missing the point.
Bankruptcy court dismisses TPs frivolous motion.
TPs appeal.
Appellate court vacates bankruptcy court's ruling which is what the TPs wanted and with some help from the government's argument.
FLAWLESS VICTORY!
Meanwhile, the taxpayers appealed to the Bankruptcy Appellate Panel (BAP). I think the BAP ruled that the Bankruptcy Court lacked personal jurisdiction over the defendant. Thus, even though the Bankruptcy Court's ruling was in favor of the IRS, the ruling was thrown out.
Again, this is still a loss for the taxpayers, because the taxpayers still don't have what they really want: an order forcing the IRS to remove its tax liens, etc. The taxpayers have wasted more time (and presumably expense).
Even if the taxpayers eventually serve the proper defendant -- and serve the proper defendant properly -- and eventually get a new ruling from the Bankruptcy Court, the ruling will still be against the taxpayers, as their arguments are without merit.
But who is the proper defendant, and how should the taxpayers be handling this? I'm rusty on this, but I think a proceeding to determine the validity of a lien should generally be handled as full adversarial proceeding under Rule 7001(2) of the Federal Rules of Bankruptcy Procedure, not merely as a "contested matter." I wonder whether the taxpayers realize this.
If it is indeed required to be a full-blown adversarial proceeding, the taxpayers would have to file a complaint and (I think) serve the U.S. Attorney General or the United States Attorney (or maybe both) for the judicial district in which the bankruptcy case is pending. The proper defendant in such case is "United States of America" -- not "Internal Revenue Service," not "Commissioner of Internal Revenue," not "Secretary of the Treasury," etc.
EDIT: In bankruptcy, contested matters are governed by Rule 9014, while adversarial proceedings (full-blown lawsuits) are governed in part by Rules 7001 through 7069. This is not an area of expertise for me.
EDIT 2: I checked, and if it's required to be an adversarial proceeding, then the taxpayers do have to serve both the U.S. Attorney General and the U.S. Attorney for the applicable district. Rule 7004(b)(4).
EDIT 3: As has been previously noted here in Quatloos, a bankruptcy court may be somewhat forgiving of the taxpayer in terms of naming the proper defendant if the government files its proof of claim as "U.S. Department of the Treasury" or as "Internal Revenue Service." I remember that there was a case where the government tried to get a proceeding thrown out because the debtor failed to sue "United States of America". The judge became irate with the government attorneys because the government was complaining that the debtor was suing the "IRS" -- when the government itself had used that name (IRS) on the proof of claim that was the subject of the dispute.
EDIT 4: Oops. I see that if I had taken the time to read the entire opinion, I would have seen that BAP had addressed much of what I wrote here in my comments.
"My greatest fear is that the audience will beat me to the punch line." -- David Mamet
-
- Recycler of Paytriot Fantasies
- Posts: 4287
- Joined: Thu Apr 24, 2003 6:02 am
Re: TPs Take Their Act To Bankruptcy Court
Summary of opinion: the judge that smacked you with the gavel was the wrong one, some other judge should have smacked you.
Three cheers for the Lesser Evil!
10 . . . . . . . . . . . . . . . 2
. . . . . . Dr Pepper
. . . . . . . . . . . . . . .. . . 4
10 . . . . . . . . . . . . . . . 2
. . . . . . Dr Pepper
. . . . . . . . . . . . . . .. . . 4
-
- Tupa-O-Quatloosia
- Posts: 1756
- Joined: Thu May 29, 2003 11:02 pm
- Location: Brea, CA
Re: TPs Take Their Act To Bankruptcy Court
Thank you. That's what I was looking for.grixit wrote:Summary of opinion: the judge that smacked you with the gavel was the wrong one, some other judge should have smacked you.
Arthur Rubin, unemployed tax preparer and aerospace engineer
Join the Blue Ribbon Online Free Speech Campaign!
Butterflies are free. T-shirts are $19.95 $24.95 $29.95
Join the Blue Ribbon Online Free Speech Campaign!
Butterflies are free. T-shirts are $19.95 $24.95 $29.95
-
- Order of the Quatloos, Brevet First Class
- Posts: 1258
- Joined: Wed Apr 07, 2010 3:51 pm
Re: TPs Take Their Act To Bankruptcy Court
Nicely summarized, Grixit!
Goodness is about what you do. Not what you pray to. T. Pratchett
Always be a moving target. L.M. Bujold
Always be a moving target. L.M. Bujold
Re: TPs Take Their Act To Bankruptcy Court
I beg to differ. I would have summarized the opinion as:grixit wrote:Summary of opinion: the judge that smacked you with the gavel was the wrong one, some other judge should have smacked you.
The judge smacked you with the wrong gavel, the judge should have smacked you with a different gavel.
-
- Princeps Wooloosia
- Posts: 3144
- Joined: Sat May 24, 2008 4:50 pm
Re: TPs Take Their Act To Bankruptcy Court
... with a much bigger gavel.
-
- Pirate Purveyor of the Last Word
- Posts: 1698
- Joined: Wed Dec 31, 2003 2:06 am
Re: TPs Take Their Act To Bankruptcy Court
Hmm.
Regardless of which judge may have smacked you, and regardless of how big the gavel used may have been, and regardless of how hard you may have been smacked with said gavel, some judge is going to repeat the boffo performance, de novo, as soon as your smack-down can be scheduled for a hearing on remand, except that this time all of the "i"s will be dotted and all of the "t"s will be crossed and everyone will have been properly served and any and all appeals will turn out to be absolutely unavailing in any and all respects.
That is, you will be smacked down into and shall remain foreverafter in a perpetual state of judicial flatness, otherwise known as "You effing lost, big-time. Again. There's nothing we can do about the fact that you didn't know it the first time around because you're an idiot and jerked us around and only got a remand because of your own procedural mistake."
Regardless of which judge may have smacked you, and regardless of how big the gavel used may have been, and regardless of how hard you may have been smacked with said gavel, some judge is going to repeat the boffo performance, de novo, as soon as your smack-down can be scheduled for a hearing on remand, except that this time all of the "i"s will be dotted and all of the "t"s will be crossed and everyone will have been properly served and any and all appeals will turn out to be absolutely unavailing in any and all respects.
That is, you will be smacked down into and shall remain foreverafter in a perpetual state of judicial flatness, otherwise known as "You effing lost, big-time. Again. There's nothing we can do about the fact that you didn't know it the first time around because you're an idiot and jerked us around and only got a remand because of your own procedural mistake."
All the States incorporated daughter corporations for transaction of business in the 1960s or so. - Some voice in Van Pelt's head, circa 2006.
Re: TPs Take Their Act To Bankruptcy Court
I think this needs more of court hearing to justify the means.
-
- Quatloosian Federal Witness
- Posts: 7580
- Joined: Sat Apr 26, 2003 6:39 pm
Re: TPs Take Their Act To Bankruptcy Court
And I think this post is missing a spam link. One should be along shortly.voltline wrote:I think this needs more of court hearing to justify the means.
"A wise man proportions belief to the evidence."
- David Hume
- David Hume
-
- 17th Viscount du Voolooh
- Posts: 1088
- Joined: Thu Oct 06, 2005 5:15 pm
Re: TPs Take Their Act To Bankruptcy Court
Yeah! However, some of us appreciate your summary for the very lack of time you mention. Without looking everything up, I thought you were spot on. Thanks for the clarity.Famspear wrote:EDIT 4: Oops. I see that if I had taken the time to read the entire opinion, I would have seen that BAP had addressed much of what I wrote here in my comments.
I'm sure there are other under-informed readers who appreciate the same clarity.