Cryer in Tax Court

[Quixote]

You need another option on the poll, Dan. I think he's going to raise both frivolous issues, which he will eventually drop, and non-frivolous issues some of which he will win on. He will then claim that his small victories were based on the frivolous issues.

[LPC]

I'm surprised we haven't yet see a press release or some other publicity from (or about) Mr. Cryer. Nothing on Lost Horizons or any other similar website I can find.

I've submitted a comments to "Truth Attack" and the "Lie-Free Zone" to make sure that the lack of public notice wasn't an oversight.

[Nikki]

I'm surprised we haven't yet see a press release or some other publicity from (or about) Mr. Cryer. Nothing on Lost Horizons or any other similar website I can find.

I've submitted a comments to "Truth Attack" and the "Lie-Free Zone" to make sure that the lack of public notice wasn't an oversight.

And exactly how much publicity was there, either from the petitioner or the TP hangers on, about Bannister's Tax Court case?

The TP community suffers from a severe, collective case of AADD -- the first "A" grudgingly conceded.

[Imalawman]

I'm surprised we haven't yet see a press release or some other publicity from (or about) Mr. Cryer. Nothing on Lost Horizons or any other similar website I can find.

I've submitted a comments to "Truth Attack" and the "Lie-Free Zone" to make sure that the lack of public notice wasn't an oversight.

I'd love to see them explain how he "Defeated" the IRS, but still is in tax court. Oh, those wacky, lovable tax protestors.

[ASITStands]

There will be tax deniers five years from now who think Tommy Cryer "beat" the IRS. In a manner of speaking he "beat" the criminal rap, but he did not "beat" the income tax or IRS.

The other day on Lost Horizons someone tried to remember Vernice Kuglin's "win" and raise it as a possible defense against the IRS remaining silent in the face of tax denier rebuttals.

By the way, there's STILL no docket for Hendrickson's Supreme Court Petition! Hmm.

It's this lack of clarity (some would say, lack of honesty) that plagues tax deniers until years later they're still thinking such-and-such happened when it was completely different.

Part of it comes from people like Schulz or Peymon making a circus out of it. Promotion. Wonder if Tommy Cryer will join the Peymon speaking tour to tout his tax court win?

It won't actually be a win (yet) but a chance to promote his argument and take new money.

By the way, I agree with 'Quixote' that there needs to be another category in the poll.

[Demosthenes]

http://www.cheatingfrenzy.com/cryer_tc1.pdf

Wow. Check out those gross income totals.

1993 $360,746
1994 $348,092
1995 $460,356
1996 $294,818
1997 $1,358,036
1998 $295,588
1999 $442,185
2000 $205,521
2001 $155,911

Total Gross Income $3,921,253.00

Hurry, TPs. Send Tommy those much needed donations today!

[.]

Everything is a "victory" if there are no sanctions imposed. Even bigger if less than the maximum sanction is imposed. You can lose on every single issue and still score a TP "win" because you didn't get hit with $25K.

Henrdickson's forthcoming USSC cert denied (whenever he gets around to filing something which can be formally denied) will be hailed as a victory even though no sanction is possible.

The USSC's willingness to entertain any "appeal" from anyone who can scratch out something which doesn't even come close to being an appealable issue may have to be reconsidered.

They want to appear to be open to anything, but sooner or later they're going to have to recognize reality. Or TP unreality. Just as the lower appellate courts seem to be finally getting around to doing.

[.]

1997 $1,358,036
2001 $155,911

His gross income seems to have cratered. An extrapolation to 2008 would imply welfare levels, which might explain his pleas for donations.

[LPC]

The petition sure looks like the first step towards sanctions, because it violates Tax Court rule 34(a), which requires that petitions be "complete, so as to enable ascertainment of the issues intended to be presented" and rule 34(b)(4), which requires "clear and concise assignments of each and every error which the petitioner alleges to have been committed."

Simply claiming "mathematically incorrect" and "without basis in fact or law" is a path to dismissal with sanctions.

Cryer might think he's still in criminal court, where you can just deny everything and rely on the presumption of innocence and the government's burden of proof. But civil court is different, and Tax Court is very different, because the burden of proof is on him and not the government, and so far he's failing that burden. (Yes, the burden of proof can be on the government, but only if certain conditions are met, and Cryer's petition is the first step towards failing those conditions.)

[ASITStands]

I'm getting a big chuckle out of the Petition, particularly, Points 5 & 6.

The statement, "The amount of the claimed deficiency is disputed," could be a valid argument, particularly, if Petitioner was preparing a return claiming deductions, etc.

However, adding, "The correct amount is $0.00," is a frivolous argument. Why?

Obviously, there's amounts reported in the notices of deficiency. He could have argued, "Instead of a $67,332.00 deficiency for tax year 1993, the deficiency was $32,600.00."

Or, some such thing, and the same could be argued for each year. Arguing, "The correct amount is $0.00," places the burden of proof on Petitioner and is a frivolous argument.

Sounds like the same argument made in his motions to dismiss in the criminal case.

A similar situation exists with Point 6. "The claimed deficiency is mathematically incorrect," could be a correct statement, and something Petitioner could argue in tax court.

Adding, "There is no basis for the claimed deficiency," could be true if Petitioner were to present credible evidence with respect to any factual issue pursuant to IRC § 7491(a).

On its face, it's a frivolous argument to say, "There is no basis ..."

And, saying, "The notice of deficiency is without basis in fact or law," is frivolous.

Petitioner could say, "The notice of deficiency is without basis in fact," and present credible evidence in fact, but saying, "The notice of deficiency is without basis in law," is error.

It's a frivolous argument! I count three frivolous arguments.

[ASITStands]

I agree with Dan's analysis that the Petition violates Tax Court Rule 34.

Respondent may move to dismiss for failure to state a claim upon which relief can be granted, and Petitioner will be invited to file a notice of objection or amended petition.

After those exchanges, Respondent may Answer (and Petitioner Reply), or Respondent may renew its motion to dismiss for failure to state a claim (depending on Petitioner's response), or move for summary judgment and to impose a sanction at IRC § 6673.

Either way, unless Petitioner presents credible fact evidence and a reasonable argument against sanction, I predict a sanction in the $15,000+ range. It will not go to trial.

Because Petitioner is an attorney, it could be a $25,000 sanction. Victory! (I think.)

[Famspear]

Based on a quick look at the 90+ pages of materials, it appears that the IRS asserts that Cryer owes $1,719,436.71 in taxes and penalties for the years 1993 through 2001.

Break down as follows:

$848,806.00 in Federal income taxes
$615,384.37 in section 6651(f) penalties for fraudulent failure to file tax returns
$212,201.50 in section 6651(a)(2) penalties for failure to timely pay the taxes
$43,044.84 in section 6654 penalties for failure to timely pay estimated taxes.

[LPC]

The published decisions I have found on Rule 34 violations generally follow the pattern that ASITStands describes.

Another interesting issue: The IRS normally has the burden of proof on additions to tax (section 7941(c)), and Cryer has some substantial additions due to fraud, failure to file, and failure to pay estimated taxes.

However, the Tax Court has held that, if the petition fails to raise any "justiciable claim" with respect to the additions to tax, then the petitioner is deemed to have conceded the issue. See Funk v. Commissioner, 123 T.C. 213 (2004). Funk dealt with failure to file penalties, and it's not clear to me whether the same logic would apply to fraud penalties.

[LPC]

And one more thing: Cryer filed for bankruptcy in 1998, and the notices of deficiencies go back to 1993. My understanding is that, without returns being filed, the tax debts were not discharged in bankruptcy.

[ASITStands]

Petitioner's only way out of having to pay, $1,719,436.71, is to prepare his own return. Otherwise, he risks the amounts being adjudicated and becoming res judicata.

That's much harder to overcome once it's assessed. Most tax deniers don't realize that at this stage, during the notice of deficiency and redetermination, the amounts are not assessed.

It's AFTER the Tax Court Petition is decided. Tommy Cryer would be better served to prepare his own return, submit it during pendency of the Petition, and hope to get a settlement in which he could get some credit for business expenses, exemptions, etc.

Otherwise, he'll be saddled with a huge debt and little way to challenge it. He'll be forced to pay the amount in total and make a claim for refund if he can find a reasonable argument.

Otherwise, it's "Lien and Levy City!"

[ASITStands]

And one more thing: Cryer filed for bankruptcy in 1998, and the notices of deficiencies go back to 1993. My understanding is that, without returns being filed, the tax debts were not discharged in bankruptcy.

Yeah. It's possible he could seek relief in bankruptcy again with some exceptions.

I don't think the sanctions are dischargeable, and he'll have to wait a certain period of time.

We have some bankruptcy attorneys on the forum. They should be able to tell us more.

As I read it now, I think Cryer will be saddled with an enormous tax debt.

[Famspear]

For years for which Cryer has not yet filed a return, the tax is non-dischargeable in Chapter 7.

For years 1993 through 2001, even if he files a return today, it's a late return. Therefore, he would have to wait at least two years before filing a Chapter 7.

Even if he did that, there is a good chance that the tax would be ruled non-dischargeable anyway -- as a tax that the debtor willfully attempted to evade. The courts tend to read 11 USC 523(a)(1)(C) by (more or less) ignoring the word "attempt" (which, in context of the criminal tax evasion statute, 26 USC 7201, means an "affirmative act" and not a mere failure to act) and holding that, for bankruptcy discharge purposes, even a failure to file a return could make the tax non-dischargeable. Filing returns late -- after the IRS has audited you, etc., might not cure that failure to timely file, in the eyes of a Bankruptcy Court.

[Demosthenes]

He earned $1,358,036 in 1997 and filed for bankruptcy in Feb 1998. That's interesting.

[Dezcad]

And one more thing: Cryer filed for bankruptcy in 1998, and the notices of deficiencies go back to 1993. My understanding is that, without returns being filed, the tax debts were not discharged in bankruptcy.

You're right. 11 USC 523(a)(1) prevents tax debts from being discharged for a few reasons, including the failure to file a tax return (B)(i) or if the debtor willfully attempted in any manner to evade or defeat such tax (C).

523 (a) A discharge under section 727, 1141, 1228 (a), 1228 (b), or 1328 (b) of this title does not discharge an individual debtor from any debt—
(1) for a tax or a customs duty—
(A) of the kind and for the periods specified in section 507 (a)(3) or 507 (a)(8) of this title, whether or not a claim for such tax was filed or allowed;
(B) with respect to which a return, or equivalent report or notice, if required—
(i) was not filed or given; or
(ii) was filed or given after the date on which such return, report, or notice was last due, under applicable law or under any extension, and after two years before the date of the filing of the petition; or
(C) with respect to which the debtor made a fraudulent return or willfully attempted in any manner to evade or defeat such tax;

(bolding added)

The tax debt could also fall under 11 USC 523(a)(3), if it was not listed as a debt in Cryer's bankruptcy.

[LPC]

Tommy Cryer would be better served to prepare his own return, submit it during pendency of the Petition, and hope to get a settlement in which he could get some credit for business expenses, exemptions, etc.

Absolutely.

I'm quite sure that the amounts of income we're seeing are gross receipts, without even any business deductions on Schedule C, much less Schedule A deductions. It's also clear from the community property calculation that the IRS is calculating the tax as married filing separately, probably with only the standard deduction, one personal exemption, and probably the deduction for half of the self-employment tax.

I'm quite sure that Cryer could substantially reduce his liability by just claiming deductions that he should be entitled to.

(And where is Mrs. Cryer in all this? If she was credited with half of his income, did she get a notice of deficieny also?)