5th Circuit Hands Out $8K Sanctions for HodgePodge

[The Observer]

UNITED STATES OF AMERICA
Plaintiff-Appellee
v.
LES ROY REID
Defendant-Appellant

Release Date: OCTOBER 07, 2008


IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

Summary Calendar

Appeal from the United States District Court
for the Western District of Texas
USDC No. 1:07-cv-00118

Before JOLLY, BENAVIDES, and HAYNES, Circuit Judges..

PER CURIAM:/*/

This is an appeal from a district court's grant of summary judgment in favor of the government for unpaid federal income taxes and the order of sale that was based on the summary judgment. We affirm.

It is undisputed that Defendant-Appellant failed to file income tax returns for the years 1996, 1997, and 1999. The IRS assessed tax liabilities, interest, fees and collections costs. Although Defendant-Appellant received notice of the assessments and demand for payment, he failed to make any payment.

On November 29, 2006, the government filed suit to reduce the unpaid assessments to judgment and to foreclose the tax liens against Defendant-Appellant's real property. Defendant-Appellant filed a petition to dismiss, asserting, among other things, that although he was an "inhabitant on the land on Texas," he was not a citizen of the United States and that the district court had neither "venue nor jurisdiction over the assessed taxes." Defendant-Appellant filed an answer admitting that he owned the real property. Defendant-Appellant presented no evidence to show that the assessments or liens were invalid. The government filed a motion for summary judgment, which the district court granted, ordering judgment in the amount of $ 125,811.27, plus interest and additions provided by law until the judgment was paid.

This Court reviews a district court's grant of summary judgment de novo, applying the same standards as the district court. E.g., Hirras v. Nat'l R.R. Passenger Corp., 95 F.3d 396, 399 (5th Cir. 1996). Summary judgment is proper if the record reflects "that there is no genuine issue as to any material fact and that the movant is entitled to a judgment as a matter of law." FED. R. CIV. P. 56(c).

Defendant-Appellant appeals and asks this Court to "declare the lower court's proceedings and orders void ab initio with prejudice." We need not tarry long with this argument. Defendant-Appellant's brief "is a hodgepodge of unsupported assertions, irrelevant platitudes, and legalistic gibberish." Crain v. Commissioner, 737 F.2d 1417, 1418 (5th Cir. 1984). Defendant-Appellant did not present any relevant evidence disputing the validity of the assessments or the federal tax lien. Nor has the Defendant-Appellant raised any nonfrivolous arguments disputing the validity of the tax assessments and the lien. "The Commissioner's assessment is accorded a presumption of correctness, thus placing the burden on the taxpayer 'to prove by a preponderance of the evidence that the Commissioner's determination was erroneous.'" Carson v. United States, 560 F.2d 693, 696 (5th Cir. 1977). Defendant-Appellant has failed to raise a genuine issue of material fact. We thus affirm the district court's grant of summary judgment in favor of the government.

Finally, the government has filed a motion for $ 8,000 in sanctions pursuant to Fed. R. App. P. 38. Finding the appeal frivolous, we grant the motion. See Wallis v. Commissioner of I.R.S., 203 Fed.Appx. 591 (5th Cir. Oct. 24, 2006) (No. 06-60256) (granting the motion for sanctions based on filing a frivolous appeal).

For the above reasons, we AFFIRM the district court's grant of summary judgment and GRANT the motion for sanctions in the amount of $ 8,000.

AFFIRMED.

FOOTNOTE

/*/ Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4.

[.]

It is undisputed that Defendant-Appellant failed to file income tax returns for the years 1996, 1997, and 1999

$8K? What happened to $25K?

If you're not gonna prosecute these morons criminally for their blatant criminal acts, you might at least give them a civil financial smack-down that will be remembered for many generations to come amongst their descendant double-wide dwellers.

Government stupidity knows no equal.

[The Observer]

Wasn't there a requirement that DOJ had to provide some economic basis showing that the requested sanctions amount represented the time and manpower in contesting the case with the taxpayer due to their frivolity? If so, it may very well be that the government can't always push for the max civpen.

[jcolvin2]

I think standard operating procedure at DOJ-Tax is to ask for $8,000 to $11,000 as an estimate of its costs.

The Tenth Circuit has rejected the sanction requests on the grounds that there is not adequate factual support for either the institutional estimate or the "hourly" costs of attorneys assigned to the case. See Wheeler v. Comm'r, 521 F.3d 1289, 1291-92 (10th Cir. 2008) http://www.ca10.uscourts.gov/opinions/07/07-9005.pdf; see also Wheeler v. Comm'r, No. 07-9001, ___ F.3d ___, 2008 WL 2345940, at *8 (10th Cir. June 10, 2008) http://www.ca10.uscourts.gov/opinions/07/07-9001.pdf (discussing first Wheeler decision); Bachman v Comm'r, No. 07-9009 (10th Cir. July 1, 2008) (discussing Wheeler decisions) http://www.ca10.uscourts.gov/opinions/07/07-9009.pdf.

The Seventh Circuit has a "presumptive sanction" of $4,000 for a frivolous tax appeal, which it doubles to $8,000 in the case of recidivists. See Szopa v. United States, 460 F.3d 884, 887 (7th Cir. 2006) http://www.ca7.uscourts.gov/fdocs/docs. ... 88_020.pdf. Prior opinion questioning computations @ http://www.ca7.uscourts.gov/fdocs/docs. ... 88_016.pdf

[LPC]

Section 6673 applies only to proceedings in the Tax Court, so the $25,000 limitation in section 6673 also applies only to Tax Court.

In federal district court, the operative law is provided (I think) by Rule 11 of the Federal Rules of Civil Procedure.

The quoted appellate opinion refers to Federal Rule of Appellate Procedure 38, which I assume is similar to Rule 11.

[jcolvin2]

In the case of a frivolous appeal, after a separately-filed motion and a reasonble opportunity to respond, Rule 38 provides for "just damages and single or double costs to the appellee."

[.]

Sooner or later the entire appellate bench will figure out that the only way to reduce the sheer volume of TP gibberish they have to decipher and endure is to slather on a maximum thickness layer of sanctions on top of the very thick layer that they encourage their lower courts, by explicit or other means to assess below.

[Judge Roy Bean]

Sooner or later the entire appellate bench will figure out that the only way to reduce the sheer volume of TP gibberish they have to decipher and endure is to slather on a maximum thickness layer of sanctions on top of the very thick layer that they encourage their lower courts, by explicit or other means to assess below.

I can't fathom them doing anything more, and my opinion is based on decades of them being stoically willing to respond with reasoned opinion in even ludicrous cases.

Frankly, I fear stiffer sanctions for such things bring with them a smell of political manipulation and a crude form of judiciary law enforcement.

I'm not sure what the answer is but establishing barriers to petition and appearance without counsel is a high hurdle I doubt we can get over.

Financial penalties don't seem to be thwarting the perpetrators.

As long as the law can be interpreted in multiple ways, we're going to see fringe definitions and resulting attempts to get those views ruled on. Over and over again it seems.

Which begs for legislative clarity. Dream on.

[Burzmali]

With the exception of the death penalty, has it ever been shown that stiffer sentences reduce the number of new criminals? Clearly it reduces the number of repeat offenders, but google doesn't seem to give an easy answer as to deterrence.