Hamlet C. Bennett - Architect of his own fate

[jcolvin2]

Protestor gets both 75% fraudulent failure to file penalty, and a $25,000 section 6673 penalty.
Hamlet C. Bennett v. Comm'r, T C. Memo. 2014-256
http://www.ustaxcourt.gov/InOpTodays/Be ... CM.WPD.pdf

Excerpt:

In applying section 6651(f) to determine whether petitioner’s failure to file
tax returns was fraudulent, we consider the same elements considered in cases
involving former section 6653(b) and present section 6663. See Clayton v.
Commissioner, 102 T.C. 632, 653 (1994); Niedringhaus v. Commissioner, 99 T.C.
202, 211-213 (1992). Fraud may be proved by circumstantial evidence, and the
taxpayer’s entire course of conduct may establish the requisite fraudulent intent.
Rowlee v. Commissioner, 80 T.C. 1111, 1123 (1983). Circumstantial evidence of [*11] fraud includes “badges of fraud” such as those present here: a longtime
pattern of failure to file returns, failure to report substantial amounts of income,
failure to cooperate with taxing authorities in determining the taxpayer’s correct
liability, implausible or inconsistent explanations of behavior, and concealment of
assets. See, e.g., Bradford v. Commissioner, 796 F.2d 303, 307-308 (9th Cir.
1986), aff’g T.C. Memo. 1984-601; Powell v. Granquist, 252 F.2d 56, 60 (9th Cir.
1958); Grosshandler v. Commissioner, 75 T.C. 1, 19-20 (1980); Gajewski v.
Commissioner, 67 T.C. 181, 199-200 (1976), aff’d without published opinion, 578
F.2d 1383 (8th Cir. 1978).

Petitioner admits that he received payments for architectural services
performed during each of the years in issue, and the specific items of diverted
income and the bank deposits have been deemed stipulated because he did not
deny them. Bank deposits are prima facie evidence of income. See Tokarski v.
Commissioner, 87 T.C. 74, 77 (1986); Estate of Mason v. Commissioner, 64 T.C.
651, 656-657 (1975), aff’d, 566 F.2d 2 (6th Cir. 1977). Proof of gross receipts in
the amounts shown by the bank deposits analysis for each of the years in issue in
this case is sufficient to satisfy respondent’s burden of showing that petitioner had
an obligation to file returns. See secs. 1, 6011, 6012.

[*12] We reject any inference that petitioner’s persistence in his frivolous theories
demonstrates sincerity or good faith or is otherwise a defense to the charge of
fraud. Petitioner filed tax returns for decades before 1995, stopping only after he
faced large tax liabilities for 1993 and 1994. He “discovered” his various
frivolous arguments in alleged reliance on a carpet cleaner turned tax adviser,
while disregarding the cautionary advice of his certified public accountant. He
adopted various means of concealing income by diverting income to nominees or
to entity accounts. He rejects the judgments of the courts, including a jury verdict,
a District Court judgment, and an appellate court opinion that he was criminally
responsible for his conduct. A person with his education and skills could be
expected to abandon unsuccessful arguments if acting in good faith. We conclude
that petitioner’s failure to file for each year in issue was due to fraud. See Miller
v. Commissioner, 94 T.C. 316, 332-336 (1990); Chase v. Commissioner, T.C.
Memo. 2004-142; Tonitis v. Commissioner, T.C. Memo. 2004-60; Madge v.
Commissioner, T.C. Memo. 2000-370, aff’d, 23 Fed. Appx. 604 (8th Cir. 2001);
Greenwood v. Commissioner, T.C. Memo. 1990-362.

Petitioner was warned of the possibility of a penalty under section 6673 if
he persisted in his contention that he was not required to file returns and pay tax
on his income for architectural services performed in Hawaii. Under these [*13] circumstances, section 6673(a)(1) provides for a penalty not in excess of
$25,000 when proceedings have been instituted or maintained by the taxpayer
primarily for delay or the taxpayer’s position is frivolous or groundless. It mayseem that an additional $25,000 on top of the amounts petitioner already owes will
not change his position. However, serious sanctions also serve to warn other
taxpayers to avoid pursuing similar tactics. See Coleman v. Commissioner, 791
F.2d 68, 71-72 (7th Cir. 1986); Takaba v. Commissioner, 119 T.C. at 295. An
award of $25,000 to the United States will be included in the decision to be
entered here.

[LPC]

He “discovered” his various frivolous arguments in alleged reliance on a carpet cleaner turned tax adviser,

Which makes about as much sense as relying on the advice of a video arcade manager turned tax adviser.

[Famspear]

He “discovered” his various frivolous arguments in alleged reliance on a carpet cleaner turned tax adviser,

Which makes about as much sense as relying on the advice of a video arcade manager turned tax adviser.

Dan, you are cruuuuueeel and unusual!

[Burnaby49]

Russ Porisky, instigator of one of the biggest tax evasion schemes Canada's seen, was a carpenter with no tax or accounting background.

[grixit]

I wonder what Bennett would say if there was someone going around offering to design cheaper buildings by using an "alternative" theory of load bearing and material strength? And what if, despite them having had the roof fall on 20 clients in a row, Bennett heard that said person was still in business? Wouldn't he think that said person's clients were total idiots?

[JamesVincent]

Russ Porisky, instigator of one of the biggest tax evasion schemes Canada's seen, was a carpenter with no tax or accounting background.

Huh. Here it's chiropractors, in Canada it's carpenters.

[Pottapaug1938]

I wonder what Bennett would say if there was someone going around offering to design cheaper buildings by using an "alternative" theory of load bearing and material strength? And what if, despite them having had the roof fall on 20 clients in a row, Bennett heard that said person was still in business? Wouldn't he think that said person's clients were total idiots?

One things I've noticed, for quite some time now, is the "fair play" or "democratic" approach to certain issues. "Let competing theories be presented," they say, "and then let people choose which ones to accept." The problem, though, is that not all theories or hypotheses are equally valid. One would have to search for quite some time to find a scientist who contends, for example, that the earth is flat or hollow or that it is the center of the Universe; yet there are some who feel that such contentions have a place in our schools' science classes. Others say (for example) that when students study historical events like the JFK assassination,"alternative" hypotheses must be presented to "encourage critical thinking". The problem has gotten worse since the advent of the Internet, because now a science or history crank no longer has to rely on photocopied screeds sent to limited audiences via the US Mail; now, he or she can simply create a blog or webpage, and Google will do the rest.

[Gregg]

One things I've noticed, for quite some time now, is the "fair play" or "democratic" approach to certain issues. "Let competing theories be presented," they say, "and then let people choose which ones to accept." The problem, though, is that not all theories or hypotheses are equally valid. One would have to search for quite some time to find a scientist who contends, for example, that the earth is flat or hollow or that it is the center of the Universe; yet there are some who feel that such contentions have a place in our schools' science classes. Others say (for example) that when students study historical events like the JFK assassination,"alternative" hypotheses must be presented to "encourage critical thinking". The problem has gotten worse since the advent of the Internet, because now a science or history crank no longer has to rely on photocopied screeds sent to limited audiences via the US Mail; now, he or she can simply create a blog or webpage, and Google will do the rest.

Redeeming Lawful Money?

[notorial dissent]

[Pottapaug1938]

One things I've noticed, for quite some time now, is the "fair play" or "democratic" approach to certain issues. "Let competing theories be presented," they say, "and then let people choose which ones to accept." The problem, though, is that not all theories or hypotheses are equally valid. One would have to search for quite some time to find a scientist who contends, for example, that the earth is flat or hollow or that it is the center of the Universe; yet there are some who feel that such contentions have a place in our schools' science classes. Others say (for example) that when students study historical events like the JFK assassination,"alternative" hypotheses must be presented to "encourage critical thinking". The problem has gotten worse since the advent of the Internet, because now a science or history crank no longer has to rely on photocopied screeds sent to limited audiences via the US Mail; now, he or she can simply create a blog or webpage, and Google will do the rest.

Redeeming Lawful Money?

Excellent example. Imagine DMVP trying to spread his delusions in 1964, rather than 2014....

[Gregg]

Yes, it wouldn't have been possible, back in the day we ignored monetary theories touted by the mentally disturbed, now we make psuedo demi internet celebrities out of them.

The problem started with too many TV channels. When I was a kid, the news was what Walter Cronkite said it was in 30 minutes every night before dinner. If Walter didn't mention, it was considered too much minutia to be important, and Walter, except for a few "breaking news" events like the Kennedy assassination or the moon landings, had to filter it down to the 26 minutes net of commercials time he had every night. In 1979, when terrorists overran the US Embassy in Iran, ABC ran a special, late night wrap up on events there that before their release had morphed into "Nightline" and the late night news recap was born, giving the nation sometimes a story the 3 networks didn't get to during the day, but still, the amount of time the media had to cover a story nationwide was limited and the stories that made it were in fact, important.
Along comes Ted Turner, and suddenly, a major audience is available 24/7, although in the beginning CNN spent most of the day recycling a 1 hour newscast and the Prime Time hours had newsmagazine like productions. Eventually, the non-newscast type shows came to dominate CNN and CNN Headline News (CNN2) took over the 24/7 newscycle. The is when someone in marketing discovered the "2% Batshit Crazy Programming Marketing Model". This marketing model is based upon the theory that if you distribute the population politically along a bell curve, 45% would lean left and right of the center, 4% more would be made up of people like your crazy uncle who sleeps with more firepower than a motorized rifle regiment in the bedroom but is, or can fake, normal long enough to get through Christmas dinner or family holidays without scaring the children, and 1% to each side of the curve is the part of the usually non-incarcerated population who are Bat Shit Crazy, but still make good TV. Most of these people got radio talk shows, and when this medium of minor leagues had developed ready for prime time talent, they got show on either Fox News or MSNBC depending upon their side of the curve.

And that kids is how Glenn Beck became a star!

[The Observer]

"To friv or not to friv - that is the question." - Hamlet C. Bennett, by appealing to the 9th Circuit.

And here is the 9th's response - adding another $8,000 in sanctions.


HAMLET C. BENNETT,
Petitioner-Appellant,
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent-Appellee.

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

Tax Ct. No. 15929-10

MEMORANDUM 1

Appeal from a Decision of the
United States Tax Court

Submitted May 8, 2017 2

Before: REINHARDT, LEAVY, and NGUYEN, Circuit Judges.

Hamlet C. Bennett appeals pro se from the Tax Court’s decision, after a bench trial, upholding the Commissioner of the Internal Revenue’s determination of income tax deficiencies, additions, and penalties for tax years 1995 through 2003, and imposing a penalty under 26 U.S.C. § 6673. We have jurisdiction under 26 U.S.C. § 7482(a)(1). We review de novo the Tax Court’s legal conclusions and for clear error its factual findings. Hardy v. Comm’r, 181 F.3d 1002, 1004 (9th Cir. 1999). We affirm.

The Tax Court properly upheld the Commissioner’s deficiency determination because the Commissioner presented "some substantive evidence" that Bennett failed to report income and Bennett failed to show "that the deficiency was arbitrary or erroneous." Id. at 1004-05. Contrary to Bennett’s contention, the Commissioner mailed valid notices of deficiency and the Tax Court had jurisdiction. See 26 U.S.C. § 6212; see also Scar v. Comm’r, 814 F.2d 1363, 1366-70 (9th Cir. 1987) (discussing requirements for valid notice of deficiency). Moreover, Bennett failed to show that the Tax Court erred in sustaining the Commissioner’s additions to taxes for Bennett’s failure to pay taxes and fraudulent failure to file a return. See 26 U.S.C. §§ 6651(a)(2), 6651(f).

The Tax Court did not abuse its discretion by imposing against Bennett a $ 25,000 penalty under § 6673 for maintaining frivolous positions despite the Tax Court’s repeated warnings. See id. § 6673(a)(1) (authorizing penalty not to exceed $ 25,000 where taxpayer’s position is frivolous or groundless); Wolf v. Comm’r, 4 F.3d 709, 716 (9th Cir. 1993) (setting forth standard of review and concluding Tax Court was within its discretion in imposing penalties under § 6673 against taxpayer who persisted in litigating frivolous positions following warning).

Contrary to Bennett’s contention that the Tax Court erred in granting summary judgment without requiring the Commissioner to respond to additional discovery, Bennett failed to show that any outstanding information sought would have raised a genuine dispute of material fact.

We reject as meritless Bennett’s contentions regarding recusal and alleged ex parte communications.

We do not consider matters not specifically and distinctly raised and argued in the opening brief. See Greenwood v. FAA, 28 F.3d 971, 977 (9th Cir. 1994) ("We will not manufacture arguments for an appellant, and a bare assertion does not preserve a claim . . .").

The Commissioner’s request to dismiss this appeal for improper venue or alternatively to transfer the appeal to the Fifth Circuit Court of Appeals, set forth in the answering brief, is denied.

Bennett’s requests for costs, return of property, and for an order to show cause why the Commissioner should not be held in contempt or sanctioned, set forth in his reply brief, are denied.

The Commissioner’s unopposed motion for $ 8,000 sanctions (Docket Entry No. 23) is granted because we conclude this appeal was frivolous. See Fed. R. App. P. 38; Wilcox v. Comm’r, 848 F.2d 1007, 1008-09 (9th Cir. 1988).

AFFIRMED.

FOOTNOTES:

/1/ This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3.

/2/ The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2).