Davis v. Comm'r

T.C. Memo. 2007-201

UNITED STATES TAX COURT

LAURA K. DAVIS, ET AL.,1 Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket Nos. 144-05L, 145-05L, Filed July 24, 2007.
146-05L, 147-05L,
149-05L.

These cases brought pursuant to sec. 6330, I.R.C.,
are before the Court to determine whether Ps must pay
penalties pursuant to sec. 6673(a)(1), I.R.C., for
instituting procedures primarily for delay, etc., and
whether counsel must pay R’s excess counsel fees
pursuant to sec. 6673(a)(2), I.R.C., for unreasonably
and vexatiously multiplying the proceedings.
1. Held: P husband penalized pursuant to sec.
6673(a)(1), I.R.C., for instituting and maintaining
proceedings primarily for delay, making frivolous
arguments and taking groundless positions, and

1
Cases of the following petitioners are consolidated
herewith: JLD Asset Management Co., a.k.a. JLD Asset Management
Trust, Jeffrey Davis, Trustee, docket No. 145-05L; Jeffrey W.
Davis, docket No. 146-05L; Jeffrey W. Davis, docket No. 147-05L;
and Laura K. Davis, docket No. 149-05L.
 - 2 -

unreasonably failing to pursue available administrative
remedies.
2. Held, further, Ps’ lead counsel liable for R’s
attorney’s fees since he signed pleadings and other
papers knowing Ps’ claims to be meritless and, thus,
abused the judicial process and unreasonably and
vexatiously multiplied the proceedings.

Robert Alan Jones, Maria Angelisa L. Lacorte, and Mario P.

Fenu, for petitioners.

Alan J. Tomsic and Paul C. Feinberg, for respondent.

MEMORANDUM OPINION

HALPERN, Judge: Each of the cases in this consolidated

proceeding is before the Court to determine whether the

petitioner therein must pay a penalty pursuant to section

6673(a)(1) and whether two of petitioners’ counsel common to all

of the cases, Robert Alan Jones (Mr. Jones) and Maria Angelisa L.

Lacorte (Ms. Lacorte), must pay certain of respondent’s costs

pursuant to section 6673(a)(2). For the reasons that follow, we

impose on petitioner Jeffrey W. Davis (Mr. Davis) penalties

totaling $15,000 and on Mr. Jones costs totaling $25,800.

Unless otherwise indicated, all section references are to

the Internal Revenue Code of 1986, as amended, and all Rule

references are to the Tax Court Rules of Practice and Procedure.

Generally, we shall use the term “counsel” to refer to Mr.

Jones and Ms. Lacorte.
 - 3 -

Background

Introduction

Each of these cases began with a petition for review of a

determination by respondent’s Appeals Office (Appeals) that

respondent might proceed with certain activities to collect

unpaid tax (or taxes) owed by petitioner. The docket numbers,

petitioners, and years in issue are as follows:

Docket No. Petitioner Year(s)

144-05L Laura K. Davis 1999
145-05L JLD Asset Management Co., 1999
a/k/a JLD Asset Management
Trust, Jeffrey Davis, Trustee
146-05L Jeffrey W. Davis 1997, 1998
147-05L Jeffrey W. Davis 1999
149-05L Laura K. Davis 1997, 1998

Each petitioner resided in Beavercreek, Ohio, at the time he or

she (without distinction, he) filed the petition.

At the call of these cases from the calendar for the trial

session of the Court at Las Vegas, Nevada, commencing on February

27, 2006 (the Las Vegas trial session), the Court received from

the parties to each case a proposed decision document sustaining

Appeals’ determination that respondent might proceed with the

collection activities in question in that case. We filed each

proposed decision document as a stipulation of settlement to

facilitate the Court’s dealing with the penalty and costs issues

before us today. We ordered each petitioner to show cause in

writing why, in each case in which he is involved, a penalty
 - 4 -

should not be imposed on him pursuant to section 6673(a)(1), and

we ordered Mr. Jones and Ms. Lacorte to show cause why, in each

case, excess costs should not be imposed on them pursuant to

section 6673(a)(2). We also ordered respondent to inform the

Court of his fees and costs incurred in these cases and of his

positions with respect to the penalties and costs at issue. We

explained to the parties and to counsel that our orders to show

cause were motivated by our concern that petitioners had raised,

and their counsel had abetted them in raising, meritless

arguments that had served merely to delay the collection of taxes

owing. In addition to ordering petitioners and their counsel to

respond in writing to our orders to show cause, we accorded each

the opportunity to appear and be heard. Finally, in the face of

the stipulations of settlement, we vacated the orders we had

entered granting, in whole or in part, respondent’s motions for

summary judgment.

1997 and 1998 Tax Liabilities

On March 5, 2001, respondent issued to Mr. Davis and

petitioner Laura K. Davis (Ms. Davis) a notice of deficiency with

respect to their joint 1997 and 1998 Federal income taxes. Mr.

Davis timely filed a petition in this Court for a redetermination

of the deficiencies; Ms. Davis did not file a petition. On

February 11, 2003, we entered an order and decision in Mr.

Davis’s case, sustaining the deficiencies in full and imposing a
 - 5 -

penalty of $25,000 upon him under section 6673(a)(1) for

instituting the case for purposes of delay and for making

frivolous arguments.2 Mr. Davis did not appeal the order and

decision. Respondent timely assessed the 1997 and 1998

deficiencies and other amounts on August 1, 2001 (Ms. Davis, for

2
In support of our order and decision, we relied on the
following deemed admissions (paragraph numbers and ellipses
omitted):

Petitioner Jeffrey W. Davis created a series of
sham trusts designed to assist him in evading the
payment of his Federal income and employment taxes.

Petitioner Jeffrey W. Davis created the JLD Asset
Management Trust to avoid paying his Federal taxes.

The JLD Asset Management Trust is a sham trust.

The Davis Charitable Trust is a sham trust.

The petitioner Jeffrey W. Davis instituted this
case to delay the assessment of his individual income
taxes for the taxable years 1997 and 1998.

The petitioner Jeffrey W. Davis instituted this
case to use the Tax Court as a forum to present
frivolous constitutional and procedural arguments
against the United States’ Federal income tax system.

The petitioner Jeffrey W. Davis fired his
attorney, Scott W. Gross, after Mr. Gross refused to
file frivolous motions in connection with this case.

The petitioner Jeffrey W. Davis intentionally,
recklessly and negligently disregarded the Federal tax
laws in the preparation of his 1997 and 1998 Federal
income tax returns.
 - 6 -

1997), September 24, 2001 (Ms. Davis, for 1998), and August 19,

2003 (Mr. Davis, for 1997 and 1998).

1999 Tax Liabilities

On April 7, 2003, respondent issued to petitioner JLD Asset

Management Trust, Jeffrey W. Davis, trustee (the trust and the

trustee, respectively), a notice of deficiency with respect to

the trust’s 1999 Federal income tax and issued to Mr. and Ms.

Davis a notice of deficiency with respect to their 1999 Federal

income tax. Neither the trustee, Mr. Davis, nor Ms. Davis filed

a petition for redetermination of the deficiency, and respondent

timely assessed the 1999 deficiencies and other amounts on August

19, 2003 (Mr. and Ms. Davis), and September 15, 2003 (the trust).

Notices

On March 15, 2004, respondent sent to each petitioner with

respect to each year of that petitioner in issue a Final Notice –

Notice of Intent to Levy and Notice of Your Right to a Hearing

(final notice).

On March 19, 2004, respondent sent to each petitioner with

respect to each year of that petitioner in issue a Notice of

Federal Tax Lien Filing and Your Right to a Hearing Under IRC

6320 (NFTL). Each NFTL notified the recipient that respondent

had filed a lien with respect to the recipient’s unpaid Federal

income tax liability (or liabilities) for the year (or years) in

issue.
 - 7 -

Responses and Hearing

On April 13, 2004, in response to the final notices and the

NFTLs, each petitioner filed with Appeals an Internal Revenue

Service (IRS) Form 12153, Request for a Collection Due Process

Hearing. On those forms, petitioners commonly allege that there

exist “whipsaws” with related entities or persons. Ms. Davis

alleges that she is an “innocent spouse”. Mr. Jones signed the

Forms 12153 as each petitioner’s authorized representative.

On June 18, 2004, in response to the Forms 12153, an Appeals

employee, Settlement Officer Michael A. Freitag (the settlement

officer), sent Mr. Jones a letter scheduling a hearing for July

19, 2004, with respect to all of the hearing requests. Among

other things, the letter states that, if Mr. Jones wishes to

propose collections alternatives, such as an installment

agreement or an offer-in-compromise, he must complete and submit

current financial statements, along with verification, prior to

the hearing date. The hearing was rescheduled for August 24,

2004, but Mr. Jones failed to appear. On September 7, 2004, the

settlement officer held a telephone conference with Mr. Jones.

Determinations

On December 2, 2004, Appeals issued to each petitioner a

“Notice of Determination Concerning Collection Action(s) Under

Section 6320 and/or 6330” (notice). The notices sustain the

filing of the lien and the proposed levy action. Each notice is
 - 8 -

accompanied by an attachment, wherein the settlement officer sets

forth the analysis leading to his conclusion that the collection

actions should be sustained. The analysis in each attachment is

similar, and the following are among the facts, generally similar

in each attachment, on which the settlement officer relied:

Petitioner could not challenge the underlying tax liability

because he had received a notice of deficiency. Petitioner had

neither requested release or withdrawal of the NFTL nor shown

that he was entitled to release or withdrawal of the NFTL. No

collection alternatives, such as an offer-in-compromise or an

installment agreement, were finalized with petitioner because he

either did not respond with any alternatives or still believes

that he does not owe the liability and that this is a whipsaw

case. Where relevant, petitioner had not provided information

necessary for innocent spouse relief for Ms. Davis. Appeals had

verified the assessments of tax. The requirements of all

applicable laws and administrative procedures had been met. The

proposed collection action balanced the need for efficient

collection with petitioner’s concern that any collection action

be no more intrusive than necessary.

Petitions

On January 3, 2005, each petitioner timely petitioned for

review of the notice received by that petitioner. Each

petitioner assigned error in substantially the same terms.
 - 9 -

Except as noted, each (1) sought to challenge the tax liability

underlying the collection actions at issue; (2) submitted that

there were impermissible “whipsaws” with related entities or

persons; (3) submitted that the settlement officer did not make a

determination from petitioner’s tax returns; (4) claimed the

settlement officer did not allow him to raise collection

alternatives, including an offer-in-compromise; (5) claimed the

settlement officer did not allow sufficient time for him to

retrieve IRS documentation to test whether the period of

limitations on assessment had expired; (6) alleged that the

assessments were time barred and violated the statute of

limitations; and (7) in docket Nos. 144-05L and 149-05L, claimed

“innocent spouse protection” for Ms. Davis. Mr. Jones executed

each petition on behalf of the named petitioner. Respondent

answered the petitions, denying or otherwise countering those

claims.

The petitions are substantially similar to petitions filed

by Mr. Jones on behalf of taxpayers in at least eight other

cases, six of them calendared for trial at the Las Vegas trial

session. Three of those cases are the subject of our report in

Gillespie v. Commissioner, released today as T.C. Memo. 2007-202.
 - 10 -

Ms. Lacorte’s Appearance

On November 17, 2005, Ms. Lacorte filed an entry of

appearance in each case.

Amended Petitions

On December 16, 2005, approximately 2-1/2 months before

commencement of the Las Vegas trial session, each petitioner

moved for leave to amend petition. Those motions are signed by

Mr. Jones and Ms. Lacorte. The accompanying amended petitions

were lodged with the Court on the same date, and, on December 19,

2005, we ordered respondent to respond to the motions for leave

to amend. On January 5 and 6, 2007, we filed respondent’s

objections to the motions. On January 10, 2006, we granted all

of the motions, and we filed the amended petitions.3 Mr. Jones

executed each amended petition on behalf of the named petitioner.

In each amended petition, petitioner avers numerous

instances of abuse of discretion by the settlement officer; viz,

3
Respondent objected to the motions on, among other
grounds, that the proposed amendments were frivolous or
groundless, provided no basis for relief, and were being raised
solely for the purpose of delay. We granted the motions in light
of the facts before us and the standard set forth in Rule 41(a)
that leave to amend shall be freely given. However, we directed
the attention of petitioners’ counsel to the provisions of Rule
33(b), concerning the effect of signing a pleading (see
discussion of Rule 33(b) infra), and stated: “At the trial of
this case, the Court expects petitioners’ counsel to show that
the claims in the amended petition are well grounded in fact and
otherwise supported as set forth in Rule 33(b). The Court warns
petitioners and their counsel that, if justified, the Court will
not hesitate to impose sanctions and costs as provided for in
section 6673.”
 - 11 -

(1) He did not give petitioner adequate time to make his case,

including raising collection alternatives, such as an offer-in-

compromise; (2) petitioner’s counsel was not provided

documentation showing that the IRS had met the requirements of

all applicable laws and administrative procedures; (3) the

settlement officer failed to provide petitioner a copy of his

individual master file; (4) the assessment of tax was backdated

and collection was time barred; (5) the settlement officer was

biased against petitioner “because of Petitioner’s use of the

trust system”; (6) “there are impermissible ‘whipsaws’ with

related entities or individuals”; and (7) in docket Nos. 144-05L

and 149-05L, Ms. Davis is entitled to “‘innocent spouse

protection’”. In each case, respondent denied those averments.

The amended petitions are substantially similar to petitions

filed by Mr. Jones on behalf of taxpayers in at least six other

cases calendared for trial at the Las Vegas trial session.

Three of those cases are the subject of our report in Gillespie

v. Commissioner, supra.

Motions for Summary Judgment and Motion for Penalty

On January 5, 2006, in docket Nos. 146-05L and 149-05L, and

on January 12, 2006, in the remaining cases, respondent moved for

summary judgment. He relied on similar grounds in support of

each motion: Since petitioner had received a notice of

deficiency with respect to the underlying liability or
 - 12 -

liabilities (without distinction, liability), he could not

challenge the liability. Thus, at his collection due process

hearing, petitioner could raise only collection alternatives.

Although nothing prevented him from doing so, he did not raise

any collection alternative, nor did Ms. Davis present any basis

for innocent spouse relief. Finally, no other error assigned by

petitioner raised any justiciable issue or showed any abuse of

discretion by the settlement officer. Respondent also moved in

docket No. 146-05L (concerning Mr. Davis’s 1997 and 1998 taxable

years) that we impose a penalty on him under section 6673 in the

amount of $25,000, “as petitioner has instituted this proceeding

primarily for the purpose of delay, and petitioner’s position * *

* is frivolous or groundless.”

Petitioners’ Objections

On February 6, 2006, each petitioner filed an objection to

respondent’s motion for summary judgment. No petitioner disputed

that he failed to present collection alternatives. Each argued

that the settlement officer had not given him adequate time to

make his case. Each claimed that he required additional

information to prepare collection alternatives and to resolve

other issues relating to the years at issue. In docket Nos. 144-

05L, 145-05L, and 147-05L, petitioners specifically argued that

the settlement officer failed to allow additional time to

retrieve relevant documents from the IRS. Each petitioner argued
 - 13 -

that the settlement officer was biased against him on account of

his use of the trust system and that there were impermissible

whipsaws with related entities or individuals. Ms. Davis, in

docket Nos. 144-05L and 149-05L, claimed that she is an innocent

spouse. Petitioners in each case except for docket No. 145-05L

also continued to argue that the assessments of tax on which the

collection actions were based were time barred. Mr. Davis, in

docket No. 146-05L, contested the section 6673 penalty. Mr.

Jones and Ms. Lacorte signed each of the objections.

Orders Disposing of Motions for Summary Judgment and Motion for
Penalty

On February 17, 2006, we issued orders granting in full

respondent’s motion for summary judgment in docket No. 145-05L

and granting in part his motions for summary judgment in the

other four cases. In substantial part, the orders were similar.

In each, we concluded that petitioner was prohibited from

challenging the underlying liability. We found that petitioner

had approximately 5-1/2 months to submit information to the

settlement officer regarding collection alternatives but failed

to do so. We determined that, where petitioner had claimed that

he needed additional documents, he had not described to the

settlement officer or to the Court those documents or their

relevance. We concluded that the settlement officer need not

have waited any longer than he did to make his determination. We

rejected petitioner’s claim that the settlement officer was
 - 14 -

required to provide documentation verifying that all applicable

laws and procedures were followed or to produce petitioner’s

individual or business master files. We cited the following

authority specifically holding that an Appeals officer is not

required to produce that type of information. Nestor v.

Commissioner, 118 T.C. 162, 166-167 (2002); Lunsford v.

Commissioner, 117 T.C. 183, 187-188 (2001); Carrillo v.

Commissioner, T.C. Memo. 2005-290. We found petitioner’s claim

of bias to be frivolous and unsubstantiated. We found that,

beyond Ms. Davis’s bare assertion that she was entitled to

innocent spouse relief, she had done nothing (e.g., setting forth

facts showing a genuine issue for trial) to substantiate a claim

to that relief. In the orders governing the four cases in which

we granted respondent’s motion for summary judgment only in part,

we denied the motion only with respect to petitioner’s

affirmative defense of the statute of limitations.4 Each of

those petitioners based that defense on his claim that respondent

had backdated his assessment (or assessments) of tax and, as a

result, collection of the tax was time barred. In turn, each

based his claim of backdating on his argument concerning the

“cycle post date” of the assessment. Since that argument was

unclear, but we were concerned that it might involve a material

4
We determined that petitioner in docket No. 145-05L
conceded that defense because the issue was not addressed in his
opposition to the motion for summary judgment.
 - 15 -

issue of fact, we declined to adjudicate summarily petitioners’

affirmative defense claims.

By the order we issued in docket No. 146-05L, we also denied

respondent’s motion for a penalty under section 6673(a)(1). We

explained that, because we were only granting partial summary

judgment in that case, we would await further developments before

determining whether a penalty is appropriate. We added that we

would also consider imposing excess costs on counsel pursuant to

section 6673(a)(2) should we conclude that counsel had taken

actions to multiply the proceeding unreasonably and vexatiously.

We likewise warned petitioners and counsel in the orders issued

in the other cases that we were considering the imposition of

penalties and costs. In all of the orders, we stated our

impressions that petitioner, aided by counsel, may have (1)

instituted and maintained the proceeding before this Court

primarily to delay the collection of his income tax liability,

(2) in support of that goal, raised frivolous arguments and

relied on groundless claims, and (3) unreasonably failed to

pursue his opportunity for a section 6330 hearing. We cataloged

our concerns with respect to each petitioner generally as

follows: He had not challenged respondent’s statements in

support of the motion for summary judgment that petitioner

received a notice of deficiency and failed to petition the Tax

Court; he had failed to present the settlement officer any
 - 16 -

collection alternatives or the financial information necessary to

consider collection alternatives; and, in the amended petition,

he had made claims that had little or no substance, all but one

of which we had rejected. We also noted the similarity of the

amended petitions to petitions filed by counsel in other cases

calendared for trial at the Las Vegas trial session and the

shortness of the period between filing those amended petitions

and the start of the trial session. We expressed our skepticism

with respect to the “cycle post date” argument made in support of

the statute of limitations defense, stating our suspicion, based

on the rejection of the same or a similar argument in Dahmer v.

United States, 90 AFTR 2d 2002-6084, 2002-2 USTC par. 50,806

(W.D. Mo. 2002) (Magistrate Judge’s order), that the argument was

frivolous. In docket No. 145-05L, the case in which we granted

respondent’s motion for summary judgment in full, we ordered

petitioner and counsel to appear and be prepared to show cause

during the Las Vegas trial session why a penalty and excess costs

should not be imposed on them, respectively. In the other cases,

we left the penalty and cost issues for later resolution.

The Las Vegas Trial Session

As above stated, at the call of these cases from the

calendar for the Las Vegas trial session, we received from the

parties to each case a decision document (which we filed as a

stipulation of settlement) sustaining Appeals’ determination that
 - 17 -

respondent may proceed with the collection activities in

question. In the face of the stipulations of settlement, we

vacated our orders granting in whole or in part respondent’s

motions for summary judgment. We accorded each petitioner and

counsel the opportunity to appear and be heard with respect to

our orders to show cause why we should not impose on petitioner a

penalty pursuant to section 6673(a)(1) and impose on counsel

excess costs pursuant to section 6673(a)(2).

Mr. Davis appeared and was heard on February 28, 2006. The

salient points of his testimony are as follows: He did not

recall being advised that, because he received notices of

deficiency, he could not challenge his underlying tax liability

in a section 6330 hearing; he did not carefully review the

amended petitions; Mr. Jones suggested filing the amended

petitions; he did not recall reviewing the oppositions to

respondent’s motions for summary judgment; and he basically

relied on the legal advice of Mr. Jones and Ms. Lacorte in

contesting respondent’s collection actions and in filing his

petitions in these cases. Ms. Davis did not to appear and,

therefore, was not heard.

Victoria Osborn (Ms. Osborn) was called by petitioners and,

in pertinent part, testified as follows: She lives in Colorado

and has a bachelor of science from the University of Colorado,

with concentrations in accounting and finance. Her profession is
 - 18 -

public accountant, forensic accountant, and certified fraud

examiner. She is not, however, a certified public accountant,

nor is she licensed by the State of Colorado to practice

accounting. She has never been employed by the IRS, and is not

an enrolled agent or otherwise authorized to represent taxpayers

before the IRS pursuant to Treasury Department Circular No. 230,

Practice Before the Internal Revenue Service, 31 C.F.R. Part 10

(Rev. 6-2005). Among other things, she testified to the

following: She had told Mr. Jones that the assessments of tax in

these cases with respect to the taxable years in issue of both

Mr. and Ms. Davis were time barred. The date of assessment of

tax is the date an officer of the IRS signs a summary record of

assessment. The data necessary to compile a summary record of

assessment, however, is only available for that purpose after it

has been posted to the IRS’s master file system. On the basis of

her examinations of transcripts of petitioners’ individual master

files for the years at issue, which revealed postings of

assessments on dates subsequent to the assessment dates shown on

those transcripts, she had reached the conclusion that the

assessment dates were not accurate and the true assessment dates

were the dates of the postings.

Both Mr. Jones and Ms. Lacorte were accorded the opportunity

to be heard with respect to our orders to show cause why excess

costs should not be imposed on them pursuant to section
 - 19 -

6673(a)(2), but each preferred to respond to our orders in

writing.

Discussion

I. Introduction

Section 6673(a) provides for the imposition of sanctions and

the award of costs in Tax Court proceedings. In pertinent part,

the provision provides:

SEC. 6673. SANCTIONS AND COSTS AWARDED BY COURTS.

(a) Tax Court Proceedings.--

(1) Procedures instituted primarily for
delay, etc.–-Whenever it appears to the Tax Court
that--

(A) proceedings before it have been
instituted or maintained by the taxpayer
primarily for delay,

(B) the taxpayer’s position in such
proceeding is frivolous or groundless, or

(C) the taxpayer unreasonably
failed to pursue available
administrative remedies,

the Tax Court, in its decision, may require the
taxpayer to pay to the United States a penalty not
in excess of $25,000.

(2) Counsel’s liability for excessive
costs.–-Whenever it appears to the Tax Court that
any attorney or other person admitted to practice
before the Tax Court has multiplied the
proceedings in any case unreasonably and
vexatiously, the Tax Court may require--

(A) that such attorney or other person
pay personally the excess costs, expenses,
and attorney’s fees reasonably incurred
because of such conduct * * *
 - 20 -

II. Section 6673(a)(1) Liability of Petitioners

A. Positions of the Parties

Respondent’s position is that we should impose a penalty

against Mr. Davis in docket Nos. 146-05L (concerning Mr. Davis’s

1997 and 1998 taxable years) and 147-05L (concerning his 1999

taxable year) for advancing frivolous arguments and making

groundless claims and for instituting proceedings primarily for

delay. Respondent points out that Mr. Davis’s 1997 and 1998

taxable years were previously before the Court in a deficiency

case in which we sustained the deficiencies in full and imposed a

penalty of $25,000 upon him under section 6673(a)(1) for

instituting the case for purposes of delay and for making

frivolous arguments. Respondent argues that, despite the

imposition of one section 6673(a)(1) penalty against him, Mr.

Davis has continued to institute proceedings in this Court for

delay and to advance frivolous and groundless arguments therein.

Respondent adds, however, that, at the Las Vegas trial session,

Mr. Davis testified to certain facts that, if true, might

mitigate the penalty the Court saw fit to impose on him; e.g.,

his reliance on counsel. Nevertheless, respondent believes that,

given his history of advancing frivolous or groundless arguments,

the Court should impose some penalty upon him.
 - 21 -

Each petitioner filed a response to the Court’s order to

show cause. Each argues that the standard for imposition of a

penalty under section 6673 is bad faith and bad faith does not

encompass nonfrivolous arguments. Each catalogs both identical

errors in and defenses to the settlement officer’s determination

that respondent may proceed with his collection actions; viz, (1)

the affirmative defense of statute of limitations, (2) the

imposition of double taxation, or “whipsaw”, (3) an innocent

spouse claim, (4) the presentation of collection alternatives,

including an offer-in-compromise, (5) the settlement officer’s

failure to provide requested documents, and (6) the settlement

officer’s failure to accord him adequate time to perfect his

defense. Each argues that sanctions are not applicable to good

faith efforts by taxpayers and their counsel to reach agreement

with the IRS. Finally, each appears to argue that,

notwithstanding the receipt of a statutory notice of deficiency,

a taxpayer is entitled to raise the underlying tax liability in a

section 6330 hearing.

B. Discussion

Respondent has not asked us to impose a section 6673(a)(1)

penalty on Ms. Davis, in docket Nos. 144-05L and 149-05L, or on

the trustee, in docket No. 145-05L, and we shall not. We shall,

however, impose penalties on Mr. Davis in docket Nos. 146-05L and

147-05L. We shall do so because we believe that Mr. Davis
 - 22 -

instituted and has maintained the proceedings in those cases

primarily for delay. We further believe that, in support of that

goal, he raised frivolous arguments and relied on groundless

positions. We have on more than one occasion during these

consolidated proceedings stated our concern that petitioners had

raised meritless arguments that served merely to delay the

collection of tax. We accorded Mr. Davis both a hearing and the

opportunity to respond in writing to our concerns. Neither by

his testimony, Ms. Osborn’s testimony, nor his written responses

to our orders to show cause has Mr. Davis shown us the merit of

any averment, claim, or argument advanced by him.5 In our orders

5
Unsupported by any citation of authority, Mr. Davis
claims that the standard for imposition of a penalty under sec.
6673(a)(1) is bad faith. In Takaba v. Commissioner, 119 T.C.
285, 294 n.2 (2002), we observed:

There is some question whether it is necessary for
a court to find that a taxpayer acted in bad faith in
order to impose a penalty on him under sec.
6673(a)(1)(B) for putting forth a frivolous or
groundless position. Compare Branch v. I.R.S., 846
F.2d 36, 37 (8th Cir. 1988) (“A taxpayer’s asserted
good faith is not relevant to the assessment of
frivolous return [sec. 6702] penalties.”) with May v.
Commissioner, 752 F.2d 1301, 1306 (8th Cir. 1985)
(“showing of willfulness, or lack of good faith, is
required [for sec. 6673(a)(1) damages]”).

We have not, however, required a showing of bad faith before
imposing a sec. 6673(a)(1)(B) penalty, see, e.g., Bean v.
Commissioner, T.C. Memo. 2006-88; Holmes v. Commissioner, T.C.
Memo. 2006-80; Wetzel v. Commissioner, T.C. Memo. 2005-211, and
do not believe that to be a requirement of the statute.
Moreover, we believe that the Court of Appeals for the Sixth
Circuit, where, barring a stipulation to the contrary, any appeal
(continued...)
 - 23 -

granting in part and denying in part respondent’s motions for

summary judgment in docket Nos. 146-05L and 147-05L, we addressed

each item in the catalog of errors and defenses presented in Mr.

Davis’s written responses, and, except with respect to the

affirmative defense of the statute of limitations (with respect

to which we withheld judgment), we found that he failed to raise

any issue that demonstrates error or abuse of discretion on the

part of the settlement officer. We incorporate herein by this

reference those findings and the analyses supporting them

(summarized supra in our background discussion).

With respect to his affirmative defense of the statute of

limitations, Mr. Davis presents only the testimony of Ms. Osborn.

She testified to nothing more remarkable than that, after an

assessment of tax is made, record of that assessment is posted to

the IRS’ computerized record system. Ms. Osborn’s theory that

assessment predating posting indicates something fraudulent was

rejected by the Magistrate Judge in Dahmer v. United States, 90

AFTR 2d at 2002-6809, 2002-2 USTC par. 50,806 at 86,219, in a

ruling that accepted the Government’s position that:

the Dahmers’ evidence that the June 25, 1993[,]
assessment was entered into the IRS administrative

5
(...continued)
by petitioner would lie, see sec. 7482(b), would agree. See
Nelson v. United States, 796 F.2d 164, 166 (6th Cir. 1986) (good
faith not a defense to imposition of sec. 6702 penalty for
frivolous income tax return).
 - 24 -

computer records in October 1993 provided no evidence
of fraud because an assessment occurs on the date an
authorized official signs a summary record of
assessment containing the taxpayer’s assessment rather
than the date the assessment is posted to the IRS
computerized record system. * * *

Indeed, Mr. Davis neglects even to discuss Ms. Osborn or her

“cycle post date” theory in his written responses to our orders

to show cause, which suggests to us that he no longer attaches

any value to her testimony or theory. See Nicklaus v.

Commissioner, 117 T.C. 117, 120 n.4 (2001) (concluding that

taxpayers abandoned arguments and contentions asserted prior to

the filing of their brief where they failed to advance those

arguments and contentions on brief). We see no merit in his

affirmative defense.

Mr. Davis’s inability to show the merit of any averment,

claim, or argument advanced by him leads us to the conclusion

that he initiated and has maintained these proceedings primarily

for delay, and we so find. Indeed, he was sanctioned for just

such conduct (and fined $25,000) in the proceeding that he

initiated to contest respondent’s determination of his underlying

tax liabilities for 1997 and 1998. A taxpayer’s good faith

reliance on the advice of counsel is not a defense to the

imposition of a penalty under section 6673(a)(1)(B). See Branch

v. IRS, 846 F.2d 36, 37 (8th Cir. 1988). Nor need we excuse a

taxpayer’s failure to review pleadings and other documents filed

on his behalf. The purpose of section 6673 is to compel
 - 25 -

taxpayers to think and to conform their conduct to settled

principles before they file returns and litigate. Takaba v.

Commissioner, 119 T.C. 285, 295 (2002).

Not only do we determine that Mr. Davis is deserving of a

penalty for conduct that violates section 6673(a)(1)(A) and (B),

but we believe that he is deserving of a penalty pursuant to

section 6673(a)(1)(C) for unreasonably failing to pursue

available administrative remedies. As summarized in our

background discussion under the heading Determinations, Mr. Davis

neither requested release nor withdrawal of the NFTL, nor did he

show that he was entitled to release or withdrawal of it. Nor

did he respond to the settlement officer’s request for collection

alternatives. Assuming that he had a case to make to the

settlement officer, Mr. Davis did not act reasonably in

presenting less than his full case to him during the

administrative process.

C. Conclusion

Taking into account respondent’s position, we shall

discharge our orders to show cause in docket Nos. 144-05L and

149-05L, involving Ms. Davis, and 145-05L, involving the trustee,

as to why a penalty should not be imposed on the petitioner

pursuant to section 6673(a)(1), and we shall make absolute our

orders to show cause in docket Nos. 146-05L and 147-05L,
 - 26 -

involving Mr. Davis, and impose on him in each docket number a

penalty pursuant to section 6673(a)(1) in the amount of $7,500.

III. Section 6673(a)(2) Liability of Counsel for Excessive Costs

A. Positions of the Parties

Respondent’s position is that we should impose excess costs

on Mr. Jones and Ms. Lacorte pursuant to section 6673(a)(2).

Respondent argues that, on behalf of their clients, counsel made

only frivolous arguments and advanced only groundless claims, and

they did so knowingly or, at least, recklessly. Respondent

claims that at no point in these proceedings have they shown the

merit of any argument or claim made by them on behalf of

petitioners. In particular, respondent focuses on Mr. Jones’s

perseverance in challenging petitioners’ underlying tax

liabilities notwithstanding the clear language of section

6330(c)(2)(B) prohibiting such challenges to taxpayers who have

received notices of deficiency and the well-defined caselaw

interpreting that section. Respondent finds especially egregious

Mr. Jones’s challenge of Mr. Davis’s underlying tax liabilities

for 1997 and 1998 in docket No. 146-05L since those liabilities

had been finally determined by this Court in a deficiency

proceeding. Respondent notes that the motions to amend petitions

were filed less than 2 months before the start of the Las Vegas

trial session, and the amended petitions contain only additional

claims that were all determined to be meritless by the Court.
 - 27 -

Respondent implies that counsel filed the motions only to vex

respondent. Respondent argues that the lack of citation to

relevant legal authorities in the oppositions to the motions for

summary judgment signed by both Mr. Jones and Ms. Lacorte

indicates their lack of legal research or their willful disregard

of adverse authority. Respondent concludes:

Mr. Jones’ entire conduct in this case constitutes
bad faith, in that he knowingly or recklessly filed
petitions, motions for leave to amend petitions,
amended petitions, and oppositions to respondent’s
summary judgment motions that raised nothing but
frivolous, groundless, or statutorily precluded
arguments. Ms. Lacorte’s involvement was limited to
participation in the filing of motions for leave to
amend petition and oppositions to respondent’s summary
judgment motions.

Respondent claims that he incurred excessive costs of $25,800 in

litigating all of these cases and asks payment in that amount.

Alternatively, if we do not impose excess costs on Mr. Jones

and Ms. Lacorte under section 6673(a)(2), respondent asks that we

sanction both individuals under Rule 33(b), which sets standards

in connection with counsel’s signature on a pleading and provides

that counsel may be sanctioned for failure to meet those

standards.

Mr. Jones and Ms. Lacorte advance as their own defense the

arguments made on behalf of each petitioner. They also claim

errors in respondent’s calculation of his costs. Mr. Jones

states that, at all times relevant to these cases, Ms. Lacorte

was his employee, subject to his direction and advice, and is in
 - 28 -

no way responsible for the decisions made in connection with the

initiation or prosecution of these cases. Ms. Lacorte agrees

with that description of her relationship to Mr. Jones.

B. Discussion

1. Introduction

We accept that Mr. Jones is principally responsible for the

decisions of counsel made in these cases, and Ms. Lacorte, his

employee, at all times worked under his direction and control.

We shall hold only Mr. Jones financially responsible for the

excessive costs we determine.

2. Requirements for an Award of Excess Costs

Section 6673(a)(2) plainly imposes three prerequisites to an

award of excess costs. First, the attorney or other practitioner

(without distinction, attorney) must engage in “unreasonable and

vexatious” conduct. Second, that “unreasonable and vexatious”

conduct must be conduct that “multiplies the proceedings.”

Finally, the dollar amount of the sanction must bear a financial

nexus to the excess proceedings; i.e., the sanction may not

exceed the “costs, expenses, and attorney’s fees reasonably

incurred because of such conduct.” See Amlong & Amlong, P.A. v.

Denny's, Inc., 457 F.3d 1180, 1190 (11th Cir. 2006) (with

reference to the analogous language of 28 U.S.C. sec. 1927).
 - 29 -

3. Unreasonable and Vexatious Conduct

The purpose of section 6673(a)(2) is to penalize an attorney

for his misconduct in unreasonably and vexatiously multiplying

the proceedings. Congress has not, however, specified the degree

of culpability that an attorney must exhibit before we may

conclude that his conduct in multiplying the proceedings is

unreasonable and vexatious. See, e.g., Takaba v. Commissioner,

119 T.C. at 296-298 (2002). The language of section 6673(a)(2)

is substantially identical to that of 28 U.S.C. sec. 1927 (the

two provisions serving the same purpose in different forums), and

we have relied on caselaw under the latter to ascertain the

degree of culpability necessary to make an award under the

former. Takaba v. Commissioner, supra at 296-297. While most of

the United States Courts of Appeals have required a showing of

bad faith before awarding costs under 28 U.S.C. sec. 1927, a few

have required only a showing of recklessness, a lesser degree of

culpability. Id. at 297. Among those few are both the Court of

Appeals for the District of Columbia Circuit, see Reliance Ins.

Co. v. Sweeney Corp., 792 F.2d 1137, 1138 (D.C. Cir. 1986), and

the Court of Appeals for the Sixth Circuit, see Red Carpet

Studios Div. of Source Advantage, Ltd. v. Sater, 465 F.3d 642,

646 (6th Cir. 2006). The venue for appeal of any award of costs

imposed on Mr. Jones may be the Court of Appeals for the District

of Columbia Circuit. See sec. 7482(b)(1) (second sentence);
 - 30 -

Takaba v. Commissioner, supra. If not, it may be the Court of

Appeals for the Sixth Circuit. See sec. 7482(b)(1)(A). The

Court of Appeals for the Sixth Circuit has recently expressed the

standard for awarding costs under 28 U.S.C. sec. 1927 as follows:

“[A]n attorney is sanctionable when he intentionally abuses the

judicial process or knowingly disregards the risk that his

actions will needlessly multiply proceedings.” Red Carpet

Studios Div. of Source Advantage, Ltd. v. Sater, supra at 646.

In support of that standard, the Court of Appeals cites United

States v. Wallace, 964 F.2d 1214, 1220 (D.C. Cir. 1992), a case

of the Court of Appeals for the District of Columbia Circuit.

Id. Because we are uncertain of appellate venue, and because we

find that Mr. Jones’s conduct would be culpable under the

standard expressed by the Court of Appeals for the Sixth Circuit

(and presumably shared by the Court of Appeals for the District

of Columbia Circuit), we shall, for purposes of this case (and

without deciding the standard in this Court), adopt that

standard. See Takaba v. Commissioner, supra at 297-298.

We believe that Mr. Jones intentionally abused the judicial

process by bringing and continuing these cases on behalf of

petitioners knowing their claims to be without merit. In support

of our determination to impose a section 6673(a)(1) penalty on

Mr. Davis, we found that he initiated and maintained these

proceedings primarily for delay and, in support of that goal,
 - 31 -

raised frivolous arguments and relied on groundless positions.

Although we decline to impose a section 6673(a)(1) penalty on the

other petitioners, given the almost cookie-cutter similarity of

the claims made by each of them, we could (and do) make the same

finding and reach the same conclusion with respect to each of

them. None of the petitioners presents any meritorious claims.

Moreover, we have no doubt that Mr. Jones has known all along

that petitioners’ claims lack merit. We have no doubt because of

Mr. Jones’s candor in responding to the orders to show cause. In

those responses, Mr. Jones admits that, while, on average, the

cases he brings have merit, some do not:

The Orders to Show cannot be properly answered in
the context of analysis of individual issues raised on
appeal from CDP [sec. 6330] hearings. This is true
because there are some “L” [sec. 6330] case docket
numbers which standing alone do not have appealable
issue[s]. However, in conjunction with other related
“L” case docket numbers, and sometimes statutory notice
of deficiency docket numbers[, they] have sufficient
appealable issues, and “hazards of litigation” which
justify settlement of all docket numbers before the
Court[,] as agreed upon by petitioners, their counsel,
and the IRS Office of Chief Counsel acting on behalf of
respondent.

The five amended petitions before us today raise substantially

the same issues. If Mr. Jones believed that those issues were

“appealable issues”, by which term we assume that he means

meritorious issues, then there would be no reason for him to make

his probabilistic argument; i.e., while some of my cases have no

merit, some do, so that, on average, all of my cases have merit,
 - 32 -

and each is entitled to a portion of some wholesale settlement.

That Mr. Jones does indeed take a wholesale approach to

representing clients before this Court is supported by his

request that we take notice that, during the three trial sessions

of the Tax Court in Las Vegas, Nevada, between December 2004 and

February 2006, Mr. Jones and his clients settled 67 cases,

agreeing to make payments of $2,564,788 with respect to

$11,067,835 of claimed liabilities.6

The difficulty with Mr. Jones’s wholesale approach, and the

reason we believe that he intentionally abused the judicial

process, is that, in taking that approach, Mr. Jones violated the

well-known duty of an attorney before this Court to insure that

there is merit to every case that he brings before the Court.

That duty is imposed on Mr. Jones both by our Rules and by the

ABA Model Rules of Professional Conduct (Model Rules), which, by

Rule 201(a), govern his practice before this Court.7

6
That Mr. Jones takes a wholesale approach in representing
clients before the Court is also evidenced by the fact that he
made the same probabilistic argument in Gillespie v.
Commissioner, T.C. Memo. 2007-202.
7
As discussed in the text, supra, the Court of Appeals for
the Sixth Circuit requires only a showing of recklessness (not a
showing of subjective bad faith) before assessing monetary
sanctions under 28 U.S.C. sec. 1927. Red Carpet Studios Div. of
Source Advantage, Ltd. v. Sater, 465 F.3d 642, 646 (6th Cir.
2006). If Mr. Jones were to claim a lack of familiarity with our
rules of practice and the ABA Model Rules of Professional
Conduct, we would conclude that he acted recklessly in
representing petitioners before the Court in ignorance of
(continued...)
 - 33 -

In pertinent part, Rule 33(b) provides:

(b) Effect of Signature: The signature of counsel
* * * constitutes a certificate by the signer that the
signer has read the pleading; that, to the best of the
signer's knowledge, information, and belief formed
after reasonable inquiry, it is well grounded in fact
and is warranted by existing law or a good faith
argument for the extension, modification, or reversal
of existing law; and that it is not interposed for any
improper purpose, such as to harass or to cause
unnecessary delay or needless increase in the cost of
litigation. * * * If a pleading is signed in violation
of this Rule, the Court, upon motion or upon its own
initiative, may impose upon the person who signed it *
* * an appropriate sanction, which may include an order
to pay to the other party or parties the amount of the
reasonable expenses incurred because of the filing of
the pleading, including reasonable counsel’s fees.

The effect of a signature on a motion is the same as the effect

of a signature on a pleading. Rule 50(a).

In pertinent part, Model Rules 3.1 states: “A lawyer shall

not bring or defend a proceeding, or assert or controvert an

issue therein, unless there is a basis in law and fact for doing

so that is not frivolous, which includes a good faith argument

for an extension, modification or reversal of existing law.”

Mr. Jones has signed pleadings and other papers to bring and

defend these proceedings knowing petitioners’ claims to be

meritless.8 He has done so in violation of our rules and the

7
(...continued)
applicable rules.
8
The pleadings and papers we have in mind are the
petitions, motions for leave to amend petition, amended
petitions, and objections to the motions for summary judgment.
 - 34 -

Model Rules and, thus, has intentionally abused the judicial

process. If by that conduct he has multiplied the proceedings,

he is deserving of sanctions for unreasonably and vexatiously

multiplying the proceedings within the meaning of section

6673(a)(2). See Red Carpet Studios Div. of Source Advantage,

Ltd. v. Sater, supra.

4. Multiplication of the Proceedings

These proceedings should never have been brought. All of

respondent’s costs are, thus, in a sense, excessive. There is,

however, some disagreement among the Courts of Appeals in

interpreting 28 U.S.C. sec. 1927 as to whether it is only

possible to multiply, or prolong, the proceedings after a case

has been initiated; presumably because an attorney cannot begin

to multiply the proceedings until some proceeding has come into

existence for the attorney to multiply. Compare Moore v. Keegan

Mgmt. Co., 78 F.3d 431, 435 (9th Cir. 1996) (28 U.S.C. sec. 1927

“applies only to unnecessary filings and tactics once a lawsuit

has begun”), with In re TCI Ltd., 769 F.2d 441, 448 (7th Cir.

1985) (under 28 U.S.C. sec. 1927, trial judge “had the authority

to award the fees incurred right from the beginning”). We have

not addressed the analogous issue under section 6673(a)(2), and

we are not compelled to do so today since, with respect to

respondent’s costs incurred in responding to the first pleadings

(i.e., answering the petitions), there is adequate basis under
 - 35 -

Rule 33(b) for imposing upon Mr. Jones respondent’s reasonable

expenses, including reasonable counsel’s fees, incurred in

answering those pleadings.

The text of Rule 33(b) is set forth supra. By signing a

pleading, the signer certifies, among other things, that, after a

reasonable inquiry, he has concluded that, to the best of his

knowledge, the pleading is well grounded in fact and law. The

signer must inquire into both the facts and the law at the time

the pleading is filed. Versteeg v. Commissioner, 91 T.C. 339,

342 (1988). Mr. Jones does not argue that he made a reasonable

inquiry that led to his erroneous conclusion that petitioners’

claims had merit. Indeed, we have concluded that he signed the

petitions knowing that they lacked merit. Mr. Jones signed the

petitions in violation of Rule 33(b) and is deserving of a

sanction on account thereof.

5. Excess Costs

Attorney's fees awarded under section 6673(a)(2) are to be

computed by multiplying the number of excess hours reasonably

expended on the litigation by a reasonable hourly rate. Takaba

v. Commissioner, 119 T.C. at 303. The product is known as the

“lodestar” amount. Id. To assist us in computing the lodestar

amount, respondent has provided us with the declarations of

attorneys Alan J. Tomsic and Paul C. Feinberg (Messrs. Tomsic and

Feinberg, respectively, and the Tomsic and Feinberg declarations,
 - 36 -

respectively). Attached to the Tomsic declaration are copies of

reports generated from respondent’s internal time keeping records

showing the number of hours expended on these cases by Mr.

Tomsic. Although the Feinberg declaration includes the number of

hours he expended on these cases, he does not provide reports

similar to those provided by Mr. Tomsic, declaring that he does

not keep detailed records by individual case number for time he

spends in a supervisory capacity. Mr. Tomsic, explicitly, and

Mr. Feinberg, by inference, calculate their time expended working

on these cases from their first contacts with the cases; i.e.,

for Mr. Tomsic, from review of the case files leading to his

drafting answers.

Respondent asks to be reimbursed for 152 hours of Mr.

Tomsic’s time, at $150 an hour, and for 30 hours of Mr.

Feinberg’s time, at $200 an hour. Respondent provides the

following chart showing the allocations of hours and dollars

among docket numbers.

144-05L 145-05L 146-05L 147-05L 149-05L Total
Hours–Alan J. Tomsic 30 20 48 24 30 152
“Lodestar” amount at $4,500 $3,000 $7,200 $3,600 $4,500 $22,800
$150/hour (Tomsic)
Hours–Paul C. Feinberg 3 2 5 2 3 15
“Lodestar” amount at $600 $400 $1,000 $400 $600 $3,000
$200/hour (Feinberg)
“Lodestar” amount $5,100 $3,400 $8,200 $4,000 $5,100 $25,800
(Total)
 - 37 -

Mr. Tomsic is the attorney with day-to-day responsibility

for these cases. He is an attorney employed in the IRS Office of

Chief Counsel in Las Vegas, Nevada. He has been a member of one

or more State bars since 1981. He is admitted to practice before

the United States Tax Court. His declaration contains the

following chart showing the hours he spent on these cases.

144-05L 145-05L 146-05L 147-05L 149-05L Total
Review case files and 3 3 3 3 3 15
answer petition
Request information 5 1 1 2 1 10
and perform research
Objections to motions 2 2 2 2 2 10
for leave to amend
Motions for summary 6 5 20 4 15 50
judgment
Answer amended 2 2 2 2 2 10
petitions
Review info and 4 -- 12 4 -- 20
prepare settlement
documents
Prepare for and attend 8 7 8 7 7 37
Las Vegas trial
session
Total 30 20 48 24 30 152

Mr. Feinberg is an Associate Area Counsel in the IRS Office

of Chief Counsel in Las Vegas, Nevada. He has been in that

position since September 2002 and has been employed by the Chief

Counsel since July 1991. He has been a member of one or more

State bars since 1979. He is admitted to practice before the

United States Tax Court. His responsibilities include, among

other things, supervising the litigation of cases before the
 - 38 -

Court. In connection with these cases, he supervised the

activities of Mr. Tomsic, and, as supervisor, he familiarized

himself with the cases, discussed handling of the cases and

issues presented, reviewed all documents that were prepared for

filing with the Court, and attended all proceedings concerning

the cases at the Las Vegas trial session. He estimates that he

spent a total of 15 hours on these cases.

Respondent claims that it is reasonable to utilize hourly

charges of $150 and $200 for Messrs. Tomsic’s and Feinberg’s

time, respectively, in computing the lodestar amounts for these

cases. Respondent argues that those are the same rates that were

allowed by the Court for the Commissioner’s trial and supervisory

attorneys in 2002, in Takaba v. Commissioner, 119 T.C. at 304-305

(2002).

Mr. Jones does not question the reasonableness of the hourly

rates claimed for either Mr. Tomsic or Mr. Feinberg. Mr. Jones

has principally two objections to the award of excess costs.

First, he objects to respondent’s claim that all of the hours

expended by his attorneys are excessive and deserving of

compensation. Second, he claims that respondent fails to

describe and substantiate the nature of the services rendered by

his attorneys.

We see no merit to either of Mr. Jones’s objections. As we

have made plain, these cases are without merit and never should
 - 39 -

have been brought. By their declarations, Messrs. Tomsic and

Feinberg describe adequately their activities with respect to

these cases. Mr. Tomsic’s declaration is accompanied by computer

records that, we assume, were made contemporaneously with the

work performed, and that support his claim. Moreover, we are

familiar with the procedural and factual history of these cases,

and we believe that 152 hours was reasonably necessary for Mr.

Tomsic to do the work he describes. We find that $150 is a

reasonable hourly charge for Mr. Tomsic’s time, and he reasonably

expended 152 hours on this litigation. The lodestar amount for

Mr. Tomsic is, thus, $22,800. We accept at face Mr. Feinberg’s

descriptions of his duty and activities and find reasonable his

claim that he spent 15 hours in those activities. We find that

$200 is a reasonable hourly charge for Mr. Feinberg’s time, and

he reasonably expended 15 hours on this litigation. The lodestar

amount for Mr. Feinberg is, thus, $3,000.

The total lodestar amount for the time of Messrs. Tomsic and

Feinberg is $25,800. Respondent has not itemized costs for

travel expense, photocopying, or supplies used in preparing the

cases. Respondent limits his request for costs to the total

lodestar amount. We shall require Mr. Jones to pay costs in that

amount.
 - 40 -

C. Conclusion

We find that $25,800 is a reasonable amount for respondent's

excess attorney's fees incurred by reason of Mr. Jones’s

unreasonable and vexatious multiplication of these proceedings.

Therefore, we shall make the orders to show cause absolute and

order Mr. Jones personally to pay $5,100, $3,400, $8,200, $4,000,

and $5,100 in docket Nos. 144-05L, 145-05L, 146-05L, 147-05L, and

149-05L, respectively, pursuant to section 6673(a)(2).9

IV. Conclusion

To reflect the foregoing,

An appropriate order will be

issued, and an order and decision

will be entered in each docket.
.

9
Alternatively, with respect to respondent’s attorney’s
fees allocated to reviewing case files and answering petition, we
make the award pursuant to Rule 33(b), as discussed supra.