John Charles Vuckovich v. Commissioner of Internal Revenue – Here the taxpayer sued the IRS for inappropriately filing a federal tax lien against him.
The fact pattern is a familiar one:
The taxpayer failed to file tax returns and the IRS prepared returns for him based on available evidence.
After the expiration of the Notice of Deficiency, the IRS filed a federal tax lien against the taxpayer.
The taxpayer appealed both the IRS’s calculations and the filing of the lien.
The IRS Appeals officer was willing to review the taxpayer’s evidence of the inaccuracy of the underlying tax liability and asked the taxpayer to file the correct tax returns for the years in question.
The taxpayer did not file the returns nor did he provide the financial statements requested by the IRS to evaluate collection alternatives.
Finally, the taxpayer had failed to appear and/or cancelled several telephone conferences and in-person meetings that were scheduled with IRS Appeals’ officers.
After Appeals issued a final determination upholding the assessments and the filing of the federal tax lien, the taxpayer file his Tax Court petition.T
The IRS moved for Summary Judgment on the grounds that there was no genuine issue of fact.
Judge Halpern granted Summary Judgment in favor of the Commissioner and in so doing said:
Appeals determined the assessments were correct, and we see no error in that determination. Moreover, even if Appeals erred in that respect, petitioner has failed to support his assignment of error with a sufficient specificity of fact as to his liabilities for 1999, 2000, and 2002 for us to consider those liabilities.
Under §6673(a)(1) , the Court may impose a penalty of up to $25,000 if it determines that the taxpayer instituted or maintained any administrative or court proceeding primarily for delay.
Judge Halpern imposed the maximum penalty on the taxpayer stating,
We see no reason for this case other than delay. Indeed, delay attributable to petitioner is manifest at almost every stage of this proceeding. He never provided any information necessary to support his objections, choosing instead to ask for postponement after postponement. Petitioner has had almost 2 years to submit to the settlement officers or counsel the necessary tax returns to show error in the assessments and still he has not done so.
Author’s Advice: Never file an Appeal, a Request for a Taxpayer Assistance Order (Form 911), an Offer in Compromise (Form 656) or a Tax Court Petition in order to postpone or delay IRS collection actions.
If you do so and the case ends up before a Tax Court judge, you will almost certaintly get hit with a $25,000 penalty.
Judges have crowded calendars and get very upset when litigants waste their time.
Related Posts and Links:
Tax Update – October 2008: The Collosal Tax Protestor Arguments of Rhodes
Internal Revenue Manual 35.10.2.1 - Penalties Claimed Under § 6673
1 response so far ↓
1 Tax Court, Joint Returns, Homophobia and Equal Protection // Jul 14, 2009 at 9:15 am
[...] frivolous appeal penalty is regularly imposed by the Court in tax protester [...]
Leave a Comment