T.C. Memo. 2015-250
UNITED STATES TAX COURT
CAREN C. HARE, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 5867-14L. Filed December 29, 2015.
Caren C. Hare, pro se.
Inga C. Plucinski-Holbrook and Charles B. Burnett, for respondent.
MEMORANDUM OPINION
LAUBER, Judge: In this collection due process (CDP) case, petitioner
seeks review pursuant to sections 6320(c) and 6330(d)(1)1 of a determination by
1
All statutory references are to the Internal Revenue Code in effect at all
relevant times, and all Rule references are to the Tax Court Rules of Practice and
Procedure. We round all monetary amounts to the nearest dollar.
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[*2] the Internal Revenue Service (IRS or respondent) to sustain the filing of a
notice of Federal tax lien (NFTL). Respondent has moved for summary judgment
under Rule 121, contending that there are no disputed issues of material fact and
that his determination to sustain this collection action was proper as a matter of
law. We will grant the motion.
Background
The following facts are based on the parties’ pleadings and the affidavits
and exhibits attached to the pleadings and respondent’s motion. See Rule 121(b).
Petitioner resided in Utah when she filed her petition.
The tax liabilities at issue consist solely of penalties imposed under section
6702 for the submission of frivolous tax returns. The section 6702 penalty is an
“assessable penalty.” Sec. 6703(b). The IRS determined that petitioner had filed a
total of 12 frivolous returns (original or amended) for tax years 2002 through
2009. As authorized by section 6702, the IRS assessed a $5,000 penalty for each
frivolous return, for a total of $60,000. Petitioner challenges the IRS’ collection
efforts with respect to these unpaid tax liabilities.
In April 2009 petitioner filed a delinquent (but apparently accurate) return
for 2002. The IRS had previously assessed a tax liability for 2002 based on a
substitute for return; when it received the return filed in April 2009, it abated the
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[*3] assessment previously made. Three months later petitioner filed an amended
return for 2002 that reflected zero income and zero tax due, claiming a refund for
the full amount of tax withheld and prior payments made. In June 2010 petitioner
filed a second amended return for 2002, again reflecting zero income and zero tax
due. The IRS ruled both of these “zero” returns frivolous and assessed two $5,000
penalties against petitioner under section 6702(a). See Rev. Rul. 2004-34, 2004-1
C.B. 619 (informing taxpayers that “[t]he zero return position has no merit and is
frivolous” and warning that filing such returns may subject taxpayers to civil and
possibly criminal penalties).
In August 2010 petitioner filed a delinquent return for 2003 that similarly
reflected zero income and zero tax due and claimed a refund for the full amount of
tax withheld from her paychecks.2 The IRS ruled this return frivolous and
assessed a $5,000 penalty against her under section 6702(a).
In October 2009 petitioner filed delinquent returns for 2004, 2005, and 2006
that again reflected, for each year, zero income and zero tax due and claimed re-
funds for the full amounts of tax withheld. The IRS ruled these returns frivolous
2
Petitioner’s income tax liability for 2003, plus additions to tax and
penalties under sections 6651(a)(1) and 6662(a), were adjudicated by a stipulated
decision of this Court in Hare v. Commissioner, dkt. No. 13090-12 (Dec. 11,
2013).
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[*4] and assessed for each return a $5,000 penalty against her under section
6702(a).
In August 2010 petitioner filed an amended return for 2006 that again re-
flected zero income and zero tax due and claimed a refund for the full amount of
tax withheld. The IRS ruled this return frivolous and assessed a $5,000 penalty
against her under section 6702(a).
In October 2009 petitioner filed a delinquent return for 2007 that again
reflected zero income and zero tax due and claimed a refund for the full amount of
tax withheld. The IRS ruled this return frivolous and assessed a $5,000 penalty
against her under section 6702(a).
Petitioner filed a timely (and apparently accurate) return for 2008 and paid
the tax due shown on that return. In July 2009 she filed an amended return for
2008 that again reflected zero income and zero tax due and claimed a refund for
the full amount of tax withheld and prior payments made. The IRS ruled this
return frivolous and assessed a $5,000 penalty against her under section 6702(a).
In response to the assessment of these frivolous return penalties, petitioner
in September 2010 sent the IRS a letter and set of documents making various
frivolous arguments. She included with this package a second amended return for
2008 that again reflected zero income and zero tax due. The next month, she sent
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[*5] the IRS another set of documents making more frivolous arguments. She
included with this package a third amended return for 2008 that again reflected
zero income and zero tax due. The IRS ruled both amended returns frivolous and
assessed two $5,000 penalties against her under section 6702(a).
Petitioner filed a timely return for 2009 that again reflected zero income and
zero tax due and claimed a refund for the full amount of tax withheld. The IRS
ruled this return frivolous and assessed a $5,000 penalty against her under section
6702(a).
On October 23, 2012, in an effort to collect these outstanding liabilities, the
IRS sent petitioner a Notice of Federal Tax Lien Filing and Your Right to a Hear-
ing. Petitioner timely submitted a Form 12153, Request for a Collection Due Pro-
cess or Equivalent Hearing, erroneously listing her 2002-2009 income tax liabili-
ties, rather than the assessed frivolous-submission penalties, as the subject of the
hearing. The IRS treated this as a request for a CDP hearing with respect to the
frivolous-submission penalties. The case was assigned to a settlement officer (SO)
from the IRS Appeals Office in Las Vegas.
On December 5, 2013, the SO wrote petitioner to schedule a telephone CDP
hearing for January 7, 2014. The SO notified petitioner that the documents and
arguments she had previously submitted to the IRS were frivolous and that she
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[*6] would not be permitted to raise further frivolous arguments during the
hearing. Prior to the scheduled CDP hearing, petitioner corresponded with the SO
by telephone and in writing, submitting a set of documents that the SO determined
to raise solely frivolous arguments. On January 7, 2014, petitioner and the SO
participated in the scheduled CDP hearing, during the course of which petitioner
raised solely frivolous arguments.
At this point, the SO reviewed the administrative file and confirmed that the
12 frivolous-submission penalties had been properly assessed and that all require-
ments of applicable law and administrative procedure had been met. The SO
determined that petitioner had not properly raised at the CDP hearing her
underlying liabilities for these penalties because she had advanced solely frivolous
arguments. The SO accordingly closed the case and, on February 7, 2014, sent
petitioner a notice of determination sustaining the NFTL filing.
Petitioner filed a timely petition for review in this Court. As her explana-
tion of her disagreement with the IRS determination and of the facts on which she
relied, she referred to an attached 18-page document captioned “Request to Take
Judicial Notice Pursuant to FRE 201.” This document, which appears to have
been drawn from the Internet, consists of familiar tax-protester arguments cast in
boilerplate legalese. The document had blank spaces for insertion of the tax-
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[*7] payer’s name and tax years involved; petitioner inserted by hand in those
spaces her name and tax years 2002-2009. This document bears no relationship to
the facts of this case and sets forth no allegations of error on the part of the IRS.
This case was calendared for trial at the Court’s trial session in Salt Lake
City on June 1, 2015. On February 12, 2015, respondent moved for summary
judgment. By order dated February 24, 2015, we ordered petitioner to respond to
the IRS motion by March 23, 2015. Our order informed petitioner that, “under
Tax Court Rule 121(d), judgment may be entered against a party who fails to
respond to a motion for summary judgment.”
Petitioner did not respond to this Court’s order. On March 31, 2015, we
struck the case from the Salt Lake City trial session in order to give consideration
to respondent’s motion for summary judgment. On May 18, 2015, the Court
received a letter from petitioner in which she stated:
At this time I request extension on my court date of June 1, 2015. I
have never received the information that they say I have received for
my defense. I ask that you resubmit information that they say has
been sent to me because I have not received. They said they sent
information and had to be received back by March 23, 2015???? Last
I knew court date was on the 14th. I ask for at least six month
extension so I can decide what to do.
This letter does not constitute a good-faith response to the IRS motion for
summary judgment.
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[*8] Discussion
Rule 123(b) provides that “[f]or failure of a petitioner * * * to comply with
these Rules or any order of the Court * * * , the Court may dismiss a case at any
time and enter a decision against the petitioner.” Rule 121, governing summary
judgment, provides that “[w]hen a motion for summary judgment is made and
supported * * * , an adverse party may not rest upon the mere allegations or de-
nials of such party’s pleading, but such party’s response * * * must set forth speci-
fic facts showing that there is a genuine dispute for trial.” Rule 121(d). “If the
adverse party does not so respond, then a decision, if appropriate, may be entered
against such party.” Ibid.
Petitioner did not comply with this Court’s order dated February 24, 2015.
She did not reply to the IRS motion for summary judgment, and she has not com-
plied with this Court’s Rules. All the contentions she has advanced are frivolous.
We accordingly deem it appropriate to grant respondent’s motion for summary
judgment and enter a decision against petitioner under Rule 121(d). See FPL Grp.,
Inc. v. Commissioner, 115 T.C. 554, 560 (2000); Schlussel v. Commissioner, T.C.
Memo. 2013-185; Richards v. Commissioner, T.C. Memo. 2013-171.
Section 6673(a)(1) authorizes the imposition of a monetary penalty in an
amount up to $25,000 whenever it appears to this Court that a taxpayer has insti-
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[*9] tuted or maintained Tax Court proceedings primarily for delay or has taken a
position that is “frivolous or groundless.” The purpose of section 6673 is to
compel taxpayers to conform their conduct to settled tax principles and to deter the
waste of judicial resources. See Coleman v. Commissioner, 791 F.2d 68, 71 (7th
Cir. 1986); Salzer v. Commissioner, T.C. Memo. 2014-188.
Petitioner’s initial filing in this case consisted of a boilerplate amalgam of
well-trodden tax-protester arguments with no relevance to the actual facts of this
case. Her only other communication with this Court was an untimely and incom-
prehensible letter demanding a continuance. It seems clear to us that petitioner
has instituted this proceeding solely for the purpose of delaying the collection of
her Federal tax liabilities, and we would be justified in imposing a section 6673
penalty for that reason. However, because petitioner litigated a previous case in
this Court without apparent incident, we instead offer a warning. Petitioner is
admonished to refrain from advancing frivolous arguments in any future filings
she may make in this Court, because the Court is unlikely to show leniency next
time. Failure to heed this warning may lead to the imposition of a substantial
monetary penalty under section 6673(a)(1).
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[*10] To reflect the foregoing,
An appropriate order and decision
will be entered.