Recidivist TP Gets Reduced 6673 b/c of "Inadequate Advisors"

[jcolvin2]

TP under the influence of World Prayers Answered Church of God (John E. Buras & Linwood E. Tracy, Jr.) gets slight break on 6673 penalty.

From Hawkins v Commissioner, T.C. Memo. 2008-168 (Bastille Day, 2008):

IV. Section 6673(a)(1) Penalty

Respondent by oral motion at trial has asked the Court to impose a penalty of $20,000 under section 6673(a)(1), $10,000 for each of the tax years at issue. Section 6673(a)(1) authorizes
the Tax Court to impose a penalty not in excess of $25,000 on a taxpayer for proceedings instituted primarily for delay or in which the taxpayer’s position is frivolous or groundless. “A position maintained by the taxpayer is ‘frivolous’ where it is ‘contrary to established law and unsupported by a reasoned, colorable argument for change in the law.’” Williams v. Commissioner, 114 T.C. 136, 144 (2000) (quoting Coleman v. Commissioner, 791 F.2d 68, 71 (7th Cir. 1986)).

Although we are loath to impose a frivolous filing penalty that is unwarranted, the facts and circumstances surrounding these proceedings cry out for the imposition of the penalty.

This is not petitioner’s first appearance before the Court, nor is he unfamiliar with the section 6673(a)(1) penalty. In Hawkins v. Commissioner, T.C. Memo. 2003-181, we warned petitioner that we might impose upon him a section 6673(a)(1) penalty were he to “institute or maintain a proceeding with frivolous arguments in the future”. That was not our only warning to petitioner. At trial in these cases we apprised petitioner more than once that he was advancing frivolous arguments and could be penalized up to $25,000 if he persisted in
doing so. Rather than heed those warnings, petitioner continued to make frivolous arguments in his motion to dismiss for lack of jurisdiction and in his brief.11 As a consequence, we shall impose upon him an $8,000 penalty pursuant to section 6673(a)(1).

We do not impose upon petitioner the $20,000 penalty requested by respondent primarily because we are not convinced that petitioner fully appreciates the magnitude of his actions.
Rather, he appears to be influenced greatly by some very inadequate advisers, at least when it comes to matters concerning his Federal income tax obligations and litigation before this Court.

John E. Buras (Mr. Buras), a self-proclaimed “Public Minister” in the World Prayers Answered Ministry, signed the “service by mail” certificates attached to a number of petitioner’s filings. Mr. Buras has been convicted under section 7203 on four counts of willfully failing to file Federal income tax returns. See United States v. Buras, 633 F.2d 1356 (9th Cir. 1980). Mr. Buras has also been penalized by this Court under section 6673(a)(1) for “instituting a frivolous and groundless petition.” Buras v. Commissioner, T.C. Summary Opinion 2004- 161.12

In addition to the involvement of Mr. Buras, a number of petitioner’s frivolous pleadings, including his motion to dismiss for lack of jurisdiction and his brief, were signed by Linwood
Edward Tracy, Jr. (Mr. Tracy), who proclaims himself “P.O.A Form 2848 and Counsel for and with World Prayers Answered Ministry/Embassy Pursuant to the First, Ninth, and Tenth Amendment of the nited States Constitution, 1791.” Like Mr. Buras, Mr. Tracy is a “Public Minister” with World Prayers Answered Ministry. See Tracy v. United States, 243 F.R.D. 662 (D. Nev. 2007). Mr. Tracy has no discernible tax experience and is not admitted to practice before this Court. In the end, we can only hope that petitioner realizes that Mr. Buras and Mr. Tracy, both of whom lack any indicia of formal tax training or status as tax professionals, are not competent tax advisers. Their influence, if any, has been to petitioner’s ultimate detriment in these cases.


12. In this Court’s 2004 summary opinion concerning John E. Buras, the Court noted that Mr. Buras was “an evangelist and associate pastor in World’s Prayers Answered Church of God” and that Mr. Buras “was convicted of willful failure to file Federal income tax returns.” Buras v. Commissioner, T.C. Summ. Op. 2004-161. We assume that the “John E. Buras” whose name appears on the certificates of service in petitioner’s cases is that same individual.

[The Operative]

Only $8,000 penalty instead of $20,000 penalty = VICTORY!

Seriously though, I don't know if the courts can actually do this, but why don't these courts impose the full $25,000 penalty, but offer to waive it on the condition that the person comply with tax laws?

[grixit]

Only $8,000 penalty instead of $20,000 penalty = VICTORY!

Seriously though, I don't know if the courts can actually do this, but why don't these courts impose the full $25,000 penalty, but offer to waive it on the condition that the person comply with tax laws?

Becuase it would taken as proof that the threat of sanctions is a bluff and the court isn't really authorized to impose them.