remain are three penalties regarding what we call the thompson penalties of one penalty regarding mr coleman and that was in a collection due process sharing the grand penalty which will also a collection due process hearing penalty and then the guthrie penalty which is a bit separate and apart we mention in the brief that the this was a five or six year civil investigation investigating with whether mr  bannister had engaged in conduct subject to penalty under sixty seven or one the investigation commenced about thirty days after his federal criminal trial concluded for tax and conspiracy charges and i mention that in the brief because i think that in my experience as a matter of policy that this was a politically charged to a politically motivated investigation and when you get those sorts of investigations you yield and sometimes unworkable you have not sought any sort of first amendment challenge to this proceeding have you know we have not or any kind of malicious prosecution challenge or anything other than just defending the merits is that right that's correct your honor yes i mention the context because over a five or six year investigation by revenue actually asserted that the that there was a possibility of reduction and or terminations of the tax liability didn't actually take a position which was inconsistent with what you just what you've just argued in your brief and i appreciate that your honor judge sessions the coleman penalty the statute requires that the alleged violator was subject to penalty created document or assist in the creation of a document that's presented to the eye or a string and i was proceeding and that would in fact result in understatement of liability if the iris relies upon it so you have to look at the actual letters and the record at forty one dash twenty five exhibit p there is a letter submitted by mr bannis in the collection due process hearing and he does in fact articulate some legal theories based on the age sixty one regulations and some other issues but the question of whether he had actual knowledge whether that would yield an understatement it can't heald an expecting it to accomplish result wasn't yes yes what was what was the result he was aiming for yet and the result he was aiming for mr bannister expounded on at length in his deposition testimony lengthy depositions were had a you know i really don't need an answer there were li depositions and an answer to my question what was his reason for making the statement yes mr bannister said respecting coleman that he believed mr coleman had a right to go into a collection due process hearing and challenge that's not answering not i didn't care about the depositions i didn't care about how to write why did your client make the statement he did what result was the hoping to accomplish he was hoping to assist route mr coleman and exercising his first amendment expect the i r s to say oh i recognize your first amendment right well that's not why he said it he said it because he was hoping to cut his client's tax bill i respectfully disagree or the record is very clear about what his intentions were he was out there to defend a first amount right he didn't care about what the result of his client's tax liability was well healey in fact mr bannister knew that a collection due process hearing cannot yield an understatement a tax levy so you're not answering the there's a reason you're a smart man there's a reason why you're not answering the question because you don't want to answer the question he was hoping to cut his client's tax bill he would accomplish that by getting the i r s to accept less but underlying his argument is the premise that the bill was too high in the first place we get this all the time in criminal sentencing for example there are lots of arguments based on well the evidence of his guilt wasn't all that great so cut him some slack here on the other wasn't simply there to defend his client's first amendment rights because the i r s was never going to comment on what his client's first memorize were so what other reason that he had for making the statement it was the expression and assisting his client  position that some of the exceptions which would permit the hearing officers to actually modify or reduce the tax liability was to be followed he actually took the affirmative position that in fact those hearings could result in a reduction and in fact sought it in now you're taking somewhat of an op ed position when you come before this court i'm wondering whether you are bound to the position that he took at the hearings themselves that in fact he was seeking reduction in tax liability you know that's a fair question jeff sessions and in the documents that were submitted missed by mr bannister and the statements that he argued and made before the c ph iris feels officers he is using legal arguments that the ira sustains is for a less and vexatious and groundless and without merit we can see the government's position on that point but what he's doing is attempting to alleviate asking them to do that so i think we're back to the question was he making frivolous arguments in that proceeding i don't think he was making frivolous arguments in the proceeding in one thousand nine hundred ninety two thousand but he was saying that the tax liability he was saying that the collection procedures liens levies and garnishment should not be applied and he was making arguments why not for various reasons including the fact that there were administrative errors in the individual master file and a bunch of other issues relative also because he said they didn't owe those taxes he expressed that to the iris appeals officer in the cd ph hearings he's assisting his clients in challenging the agency but as a metaphysical matter those c p h hearings cannot result in disputing the meaning of understand why isn't it just an understatement as soon as he understates the tax liability as soon as he says the tax liability is less than what everyone else agrees it is yes because the statute gover and the statute says it's very specific and ninth circuit authority as well as all the other circuits say when it's a penalty situation it has to be construed strictly this conduct that the i have this is the dictionary says under state means represent as less than is the case why isn't that the meaning of understate well the statute controls whether he engaged in contacts of penalty under sixty seven or one and he did not present documents that would in fact if you hold an understatement regarding the collection of process is well he did he filed a document that understated said the tax liability was less than it was he was not arguing that the appeals officer should produce that assessment the appeals officer had no such authority could i just ask about the  server because that's your right it's a separate kind of issue it makes he submits this letter about the master file what you basically say is that he's trying to change the master file because of the processes by which i r s makes the master file but ultimately the court found that really what is behind this is the seeking reduction in the amount of tax liability that's the whole purpose of that letter and how do we how would you differ with what the district court did here you have the government argues that as well and i don't think that that that's what did you say any deposition testimony that said that he actually believed these positions of the tax liability being the last word right and no that really didn't come up in his deposition the truth of the matter is he was asserting the government had an opportunity to death but isn't it necessary if you're going to say he he didn't he believe this was true so there wasn't like under cheek the supreme court case cheeky really believe this don't you need to point to something that says that he didn't submit a declaration saying he really believed this or offer testimony that he really believe this so it's not a huge hole in your argument i appreciate that your honor but respectfully you know the statute is very clear on what is kind of subs dependably this kind of doesn't apply the question of his good faith belief and sincerity in his advocacy was not a issue in the penalty proceedings if i might could i turn to judge sessions question briefly about the privacy act and request i want to really address that i've been practicing civil tax controversy incredible  controversy for quite some time i have i don't think it's metaphysically possible for those privacy act records correction requests to have an impact on tax liability and that just does not fit within the ambit of the statute i don't i don't profess to understand all of the details of the i m f i work with them i've decoded them i've used them in civil and criminal proceedings but i just don't think it's metaphysically possible for that correction requests for guthrie to understate in fact it doesn't and there's no cop in arguing from the government that it does with regard to the can grant penalty sorry sir you're out of time we'll give you one minute for about a thank you i appreciate your hon i'm curtis pitt representing the united states minister submitted documents on behalf of his clients claiming immunity from taxation based on the argument that internal revenue code section eight sixty one shelters united states citizens from income tax liability under united states sourced income the courts have uniformly held this argument to be false and frivolous indeed this court imposed eight thousand dollars and sanctions upon mr bannister for raising that argument on his own behalf in a prior appeal bannister was disbarred from practice before the i r s for asserting this position on behalf of his clients administrative law judge found that clear and convincing evidence establish that mr bannister actually knew that the arguments that he was making and behalf of his clients were false and frivolous and that is that conduct was willful and subject to disbarment and this court affirmed the disbarment and found that the evidence clearly established that mr bannister's arguments were not put forth in good faith were not the result of an innocent mistake but rather reflected a conscious disregard of known legal duties today just to jump ahead in the c d c d officer that they had the ability to reduce the tax obligation in that due process hearing yes your honor in the case of coleman the request for the c d p hearing specifically requested the elimination of the tax liability based on the eight sixty one argument the thompsons amended tax returns and c d p hearing request also sought immunity from taxation on the sixty one argument the grahams mr masters in their letter following the c d p hearing complaining that the hearing officer refused to consider the eight sixty one argument and essentially seeking a rehearing to offer them an opportunity to further press that argument in the case of the guthrie's along with that convoluted analysis of r s computer codes following that was the conclusion that iris district director is obligated to for each and every individual of the duties to file tax returns and pay taxes and that a failure to do so  eliminated those duties relieved those individuals of those duties obviously those i really just are taking a position at the appellate level which is inconsistent with the position that he took out of the due process hearings yes or that is in fact that there is the authority to reduce or eliminate tax liability yes that's correct the law is at one point the i r s argued that the taxpayer couldn't challenge the underlying liability in a c d p case where the liability was reported on the return but the iris lost that issue in mind gummi case and as reflected in the poindexter case that we're citing in the irises acquiesced in that position so that effectively is the law of the land at this point and he affirmed regardless he affirmatively sought to reduce that was the whole purpose of the c d p hearings was to reduce the my bill or eliminate the liabilities and the reasons that he's offering for for submitting these frivolous arguments none of them counter the obvious purpose of reducing liabilities and in fact there is no plausible reason for raising frivolous claims of immunity from taxation other than the understatement of tax liabilities and on this record no reasonable juror could conclude that mr was offering these arguments on behalf of his clients for any reason other than the other understatement of the liabilities under these circumstances the record summary judgment was correct and should be a for there are exceptions list ordinarily in c v hearings you don't get into the the the amount of tax liability but there are exceptions if the person had not been afforded the opportunity to raise a an objection to their tax obligation in some other for raise raised objections to their obligations and did not do so do you know i don't think the record reflects that they had opportunities to do so and regardless in other words if they didn't have an obligation to do so or if they didn't have the opportunity to do so then the exception would apply and in fact the c d p hearings could result in a reduction of tax obligation and even apart from that the argument that was submitted to the i r s which did have the right to challenge the underlying liability and they were in fact challenging the underlying liability so therefore if those documents were used for the purpose for which they were submitted in the i r s would have accepted them it would have resulted in understatement the liabilities therefore the requirement of the statute that's at issue in this case clearly was m so it seems like you're buying into his argument that he can only violate the statute if the result of this proceeding could have been to lower the tax liability but i don't understand why the statute doesn't just mean stating in the proceeding officially that the tax liability is lower is an understatement a tax liability and it results in doing it in the proceeding and that's all that is needed to violate this statute i don't understand why the i r s why there has to be a possibility of the i r s believing this argument for him to be liable it seems like all he has to do is officially make an understatement in the proceeding and he's violated the statute i think you're correct yes i agree with that it's if you're submitting a document for the purpose of understanding the tax liability that is enough because if that's how i read it that's your that is if you make that argument in your brief because it seemed like you were buying into his premise that in the majority of your brief that that isn't enough and my right that was your intention no i think it's if the you know what the statute says if the documents submitted if used for the purpose for which it was submitted would result in an understatement there and that requirement is satisfied so that it's as simple as that we didn't mean to i mean if you agree that actual knowledge is required yes and i think the evidence shows that actual knowledge in this case point extra case resolves that i r s commissioner why was he making these arguments i'm sorry so why was he arguing in this proceeding that that they didn't owe any taxes he is trying to prevent collection actions the statute does require that if a document were relied  upon by the i r s that it would affect the tax liability it's not possible the statute should be strictly construed i would point out congress amended the statute in two thousand and six to address frivolous arguments vexatious arguments we just can't shoehorn these facts into this conduct or gross incompetence is also part of that the government was correct in their appleby's brief when they set forth the other subsections of circular two thirty in which mr bannister was found was disbarred and founder of engage in disreputable conduct but the