United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
July 18, 2005
FOR THE FIFTH CIRCUIT
________________ Charles R. Fulbruge III
Clerk
No. 04-61146
Summary Calendar
________________
JOHN TELLO
Petitioner - Appellant
v.
COMMISSIONER OF INTERNAL REVENUE
Respondent - Appellee
_________________________________________________________________
Appeal from a Decision of the United States Tax Court
No. 11336-04
_________________________________________________________________
Before KING, Chief Judge, and JOLLY and DeMOSS, Circuit Judges.
PER CURIAM:*
Petitioner-Appellant John Tello contested a notice of
deficiency he received regarding his 2002 taxes. The United
States Tax Court dismissed his petition for failure to state a
claim and imposed sanctions. We AFFIRM.
I. BACKGROUND
On June 30, 2004, Petitioner-Appellant John Tello filed a
pro se petition for redetermination with the United States Tax
Court, contesting a notice of deficiency for 2002 sent to him by
*
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that this opinion should not be published and is not precedent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.
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Respondent-Appellee Commissioner of Internal Revenue (the “CIR”).
In his petition, Tello alleged, inter alia, that the notice of
deficiency was levied improperly because: (1) the accounting
method the CIR employed was not as suitable as Tello’s preferred
accounting method; (2) the CIR is not permitted to provide
accounting services in the State of Texas; (3) the CIR is not
permitted to practice law in the State of Texas; and (4) Tello
has no “fiduciary obligation” to pay taxes to the Internal
Revenue Service (the “IRS”) or the CIR. Notably, Tello did not
deny receiving the income stated in the notice of deficiency.
On July 23, 2004, the CIR filed a motion to dismiss, arguing
that Tello failed to state a claim. The CIR also moved for
sanctions against Tello under I.R.C. § 6673 (2000) for
instituting a proceeding for the purposes of delay and/or for
making frivolous arguments in his petition for redetermination.
The CIR noted that in another case involving Tello’s tax
deficiencies for the 1996, 1997, 1998, and 2000 tax years, Tello
was informed that his fiduciary argument was frivolous and that
he was sanctioned $2,500 for continuing to advance the argument.1
In response to the CIR’s motion, the Tax Court ordered Tello to
“file with the Court an amended petition [setting] forth with
specificity each error he alleges was made by the respondent in
1
This court recently affirmed the Tax Court’s decision
against Tello in this related case. Tello v. Comm’r, __ F.3d __,
2005 WL 1269579 (5th Cir. 2005) (per curiam).
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the determination of the deficiency . . . .” Tello in turn filed
a bellicose response in which he did not set forth with
specificity any alleged errors made by the CIR in calculating
Tello’s notice of deficiency. On September 7, 2004, the Tax
Court issued an order in which it dismissed Tello’s petition for
redetermination, upheld the CIR’s determination of deficiency,
and sanctioned Tello $500 under § 6673.
On November 26, 2004, Tello filed a notice of appeal.
Tello, proceeding pro se, argues that the Tax Court: (1) denied
him due process in dismissing his petition; and (2) levied
sanctions against him inappropriately. The CIR has moved for
additional sanctions of $6,000 against Tello for maintaining a
frivolous appeal. The CIR claims that on appeal, Tello has
renewed his fiduciary argument, which repeatedly has been ruled
frivolous. Citing, inter alia, Trowbridge v. Commissioner, 378
F.3d 432 (5th Cir. 2004)(per curiam) and Parker v. Commissioner,
117 F.3d 785 (5th Cir. 1997)(per curiam), the CIR notes that we
have repeatedly sanctioned taxpayers for persisting in making
frivolous tax-protest arguments on appeal.
II. DISCUSSION
A. Dismissal for Failure to State a Claim
Tello’s main argument on appeal seems to be that the Tax
Court denied him due process and committed various other
procedural improprieties in dismissing his petition. To the
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extent Tello’s arguments are comprehensible, they are wholly
without merit. “We perceive no need to refute these arguments
with somber reasoning and copious citation of precedent; to do so
might suggest that these arguments have some colorable merit.”
Crain v. Comm’r, 737 F.2d 1417, 1417 (5th Cir. 1984).
It is clear that Tello’s petition was the proper subject of
a dismissal for failure to state a claim. Petitions in the Tax
Court are governed by TAX CT. R. 34(b)(4), which states that a
petition must contain: “Clear and concise assignments of each and
every error which the petitioner alleges to have been committed
by the Commissioner in the determination of the deficiency or
liability. . . . Any issue not raised in the assignments of
error shall be deemed to be conceded.” The assignments of error
Tello made in his petition for redetermination were patently
frivolous. The heart of Tello’s argument in the Tax Court was
that the CIR has no authority to collect tax revenue. It is
manifest that the CIR and the IRS have the authority to collect
tax revenue by virtue of the Internal Revenue Code. See I.R.C.
§§ 7801-7804 (2000). Thus, his primary assignment of error was
plainly without merit. Furthermore, it is evident that by virtue
of promulgating official tax documents, the CIR has not engaged
in the unauthorized practice of accounting or law. We have
previously upheld the Tax Court’s dismissal of petitions for
redetermination under Rule 34(b)(5) for failure “to allege any
justiciable error in the determinations upon which the notice of
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deficiency was based or any facts tending to support any such
error.” Sochia v. Comm’r, 23 F.3d 941, 943 (5th Cir. 1994).
Accordingly, we affirm the Tax Court’s dismissal of Tello’s
petition for redetermination.
B. Tax Court Sanctions
Section 6673(a)(1) of the Internal Revenue Code provides for
sanctions up to $25,000 when a taxpayer initiates a proceeding
primarily for delay or advocates frivolous or groundless
arguments. “The Tax Court’s assessment of penalties under
section 6673 can be reversed by this court only for an abuse of
discretion.” Sandvall v. Comm’r, 898 F.2d 455, 459 (5th Cir.
1990). In the instant case we see no abuse of discretion. We
have previously upheld penalties under § 6673 where taxpayers
were warned by the Tax Court to stop litigating frivolous issues.
Id. Here, Tello received multiple warnings regarding his
fiduciary argument. He chose to ignore those warnings and
persisted in advocating frivolous arguments. Accordingly, we
affirm the Tax Court’s sanctions.
C. Appellate Sanctions
Section 7482(c)(4) of the Internal Revenue Code endows this
court with “the power to require the taxpayer to pay to the
United States a penalty in any case where the decision of the Tax
Court is affirmed and . . . the taxpayer’s position in the appeal
is frivolous or groundless.” It is clear that the due process
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and other procedural arguments Tello makes on appeal are
frivolous and groundless. We thus find that appellate sanctions
are appropriate, and assess sanctions against Tello in the amount
of $2,500.
III. CONCLUSION
For the foregoing reasons, the Tax Court’s judgment and
imposition of sanctions is AFFIRMED. The CIR’s motion for
sanctions is GRANTED IN PART, and sanctions in the amount of
$2,500 are ASSESSED against Tello.
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