Gillespie, Robert M. v. CIR

NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with Fed. R. App. P. 32.1

United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Argued September 3, 2008
Decided September 16, 2008

Before
FRANK H. EASTERBROOK, Chief Judge
MICHAEL S. KANNE, Circuit Judge

DIANE S. SYKES, Circuit Judge

No. 07-3577 Appeal from the United
States Tax Court.
ROBERT and INES GILLESPIE,
Petitioners-Appellants, Nos. 3405-05L, 3489-05L &
3490-05L
v. James S. Halpern, Judge.
C OMMISSIONER OF INTERNAL REVENUE,
Respondent-Appellee.

Order
The Tax Court ordered Robert and Ines Gillespie and their trust to pay a penalty of
$15,000 for engaging in frivolous litigation. See 26 U.S.C. §6673(a)(1). The court also or-
dered Robert Alan Jones, their lawyer, to pay more than $12,000 for his own role. 26
U.S.C. §6673(a)(2). The Gillespies filed a notice of appeal to this court. Jones did not—but
he wants us to review the award against him nonetheless.
Neither the caption nor the body of the notice of appeal mentions Jones, who is not
a party to the proceeding in the Tax Court. He signed the document as counsel for the
Gillespies, not as an appellant. Given Reed v. Great Lakes Cos., 330 F.3d 931 (7th Cir.
2003), the notice of appeal does not present for decision any issues concerning Jones.
Jones asks us to treat his docketing statement under Circuit Rule 3(c) as an implicit
amendment to the notice of appeal. Smith v. Barry, 502 U.S. 244 (1992), holds that docu-
ments other than those with “Notice of Appeal” in the caption can serve as notices of
appeal, but only if they include the information required by Fed. R. App. P. 3 and are
filed within the time for a notice of appeal. The decisions of the Tax Court affecting
Jones are dated July 25, 2007, and Jones had 90 days to appeal. 26 U.S.C. §7483. The
docketing statement was not filed until November 1, 2007, after that time had expired.
It therefore cannot amend the notice of appeal to include an additional appellant. Our
jurisdiction is limited to the arguments presented by the Gillespies.
No. 07-3577 Page 2

The Gillespies are, or at least were, tax protesters. They did not attempt to perform
their obligations under the Internal Revenue Code. When the Commissioner calculated
the taxes due, and issued formal notices and assessments, the Gillespies ignored them.
But when the Commissioner proposed to collect the assessed taxes, the Gillespies asked
for a hearing under 26 U.S.C. §6330(b)(1), which permits taxpayers to discuss with the
Commissioner’s representatives when and how the amounts due will be paid.
After requesting a hearing, the Gillespies proposed to discuss how much they owed.
The statute puts that subject off limits, however. 26 U.S.C. §6330(c)(2)(B). The hearing is
supposed to cover which assets will be used to pay, and on what schedule. The agency
asked the Gillespies to provide information bearing on those subjects—as well as other
information required by law, such as complete tax returns for the years in question. In-
stead of complying with these requests, the taxpayers (through counsel) demanded that
the Internal Revenue Service provide them with information justifying the assessments
and proposals to collect. The agency then concluded that the Gillespies’ failure to coop-
erate made a hearing pointless and terminated the proceeding.
The Gillespies’ petition for review in the Tax Court ignored §6330(c)(2)(B) and fea-
tured the argument that the hearing officer should have redetermined how much the
couple owed in taxes. The Gillespies also complained that the IRS had called off the
hearing without considering collection alternatives—even though the Gillespies had
spurned the invitation to propose such alternatives and had failed to supply required
information, a failure sufficient in itself to allow the agency to end the proceedings. See
Olsen v. United States, 414 F.3d 144 (1st Cir. 2005); 26 C.F.R. §301.6330–1(e)(1).
This is enough to show that the petition was frivolous, as the Tax Court found. See
Kindred v. CIR, 454 F.3d 688 (7th Cir. 2006). The Gillespies’ lawyer comes close to con-
ceding this and argues that counsel is entitled to file a petition in order to stall for time
while trying to negotiate a settlement. That effectively concedes an abuse of process.
There is no right to engage in frivolous litigation in order to delay collection.
The Tax Court’s opinion gives other reasons for awarding sanctions. Those reasons,
too, are persuasive.
AFFIRMED