Houseal - 8th Circuit Imposes $8,000 sanction

[jcolvin2]

http://www.ca8.uscourts.gov/opndir/11/11/111885U.pdf

[LPC]

While affirming Tax Court sanctions of $1,000.

The gist of the Tax Court order and decision:

The petition filed in this case does not satisfy the requirements of Rule 34(b) (4) and (5). There is neither assignment of error nor allegation of fact in support of any justiciable claim. Rather, the petition contain nothing but frivolous and groundless~arguments. Under the circumstances, we see no need to catalog petitioner's arguments and painstakingly address them. As the Court of Appeals for the Fifth Circuit has remarked: "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 (5th Cir. 1984). Suffice it to say that petitioner is a taxpayer subject to the Federal income tax who is obliged to file a Federal income tax return and pay Federal income tax on the amount of compensation for services he received in 2007. See secs. 1, 61(a) (1).

We conclude that the pleadings fail to state a claim upon which relief can be granted, therefore we will grant respondent's motion to dismiss. See Scherping v. Commissioner, 747 F.2d 478 (8th Cir. 1984); Rules 34(a) (1), 123(b); see also Carter v. Commissioner, 784 F.2d 1006, 1009 (9th Cir. 1986). Section 6673(a) (1) provides that the Tax Court may impose a penalty of up to $25,000 whenever it appears to the Court that proceedings have been instituted or maintained by the taxpayer primarily for delay or that the taxpayer's position in the proceeding is frivolous or groundless.

Petitioner is no stranger to the Court. In Docket No. 20661-10 petitioner similarly argued that compensation he received was not subject to Federal income tax. Petitioner was admonished by the Court that if he should return to this Court and advance frivolous or groundless arguments, and if he should commence or prosecute a case in this Court primarily for purposes of delay, the Court would consider the imposition of a penalty pursuant to section 6673.

Notwithstanding the above warning about a penalty under section 6673, petitioner has returned to the Court asserting positions which are patently frivolous and groundless. On this record, we are convinced that petitioner instituted and maintained this proceeding primarily for purposes of delay. Accordingly, we shall grant respondent' s motion and impose a penalty on petitioner pursuant to section 6673(a) (1).