FIL ED U.S. COURT OF APPEAL S EL EVENTHCI RCUI T MAY 17, 2011 J OHN L EY CL ERK [DO NOT PUBLISH] IN THE UN ITED STATES COURT OF APPEALS FOR THE ELE VENTH CIRCUIT

__ __ __ __ __ __ __ __ __ __ __ __ No. 1 0- 13 37 8 Non -Arg um en t Ca le nd ar

__ __ __ __ __ __ __ __ __ __ __ __ Tax Co urt No . 12 73 -0 9L LARRY DEEMS, Pet it io ne r-Ap pe ll an t, ve rs us COMM ISSI ONER OF THE INTERNAL REVENU E SERVICE, Res po nd en t-Ap pe ll ee.

__ __ __ __ __ __ __ __ __ __ __ __ __ App eal fro m

a Deci si on of t he Uni te d S ta te s Tax Co urt

__ __ __ __ __ __ __ __ __ __ __ __ _ (Ma y 17 , 20 11 ) Befo re TJ OFLAT, MARCUS an d B LACK, Circ ui t J ud ge s. PER CURI AM:Larry Deem s, a t ax pa y er p ro ceed in g pr o s e, ap pe al s the de ci si on of the Tax

Co urt i n fa vo r of

th e In te rn al Rev enue Serv ic e (“ IRS” ) an d i ts ord er s an ct io ni ng hi m inth e su m

of $ 1,0 00 forpre se nt in g fr iv ol ou s ar gu m en ts . He con te nd s tha t the de ci si on an d o rd er s ho ul d b e se t as id e b ecau se th e co urt erredinde nyin g h im a face -to -fac e Co ll ect io ns Due P ro ces s (“ CDP”) he ari ng an d d em on st rat eda jud ic ia l bi as ag ai ns t h im

as a pr o s e li ti ga nt . I. W e rev ie w th e Tax Co urt’s d eci si on to gra ntsu m m ary jud gm en t de no vo an d re vi ew it s i m

po si ti on of s an ct io ns foranab us e o f di sc ret io n. Rob er ts v. C.I.R. , 32 9 F .3d12 24 , 12 27 , 12 29 (11 th Cir . 20 03 ). A lev y m ay no t b e m ad e unl es s the tax pa y er i s n ot ifi edinwrit in g o f hi s rig htto a CDP h eari ng . 26 U.S.C. § 6 33 0( a)(1 ); Red eker -Bar ryv. Uni te d Sta tes , 47 6 F .3d11 89 , 11 90 (11 th Cir . 20 07 ). If a h eari ng is reque st edan d the gro un ds are s ta te d, the IRS Offi ce o f App eal s wi ll ho ldth e h eari ng . 26 U.S.C. § 6 33 0( b) (1 ). Duri ng a CDP h eari ng , a tax pa y er m ay rai se “ an y

rel ev an t i ss ue rel at in g t o the unpa idtax or the pro po se d l ev y .” Id. § 6 33 0( c)(2 )(A). Rel ev an t is su es in cl ud e: “ (i) ap pr op ria te sp ou sa l d efen se s; (ii ) ch al le ng es to th e ap pr op ria te ne ss of c ol le ct io n a ct io ns ; an d (i ii ) of fers of c ol le ct io n a lt ern at iv es .” Id. § 6 33 0( c)(2 )(A). The ap pe al s o ffi cer n eedno t co ns id er fri vo lo us arg um en ts , 2su chas p os it io ns de si gn at edby the IRS as fri vo lo us or arg um en ts refl ect in g a

de si re t o d el ay

th e adm in is tra ti on of t he tax laws . Id. §§ 63 30 (c)( 4) (B), 67 02 (b )(2 )(A). A tax pa y er s ho ul d p ro vi de th e ap pe al s o ffi cer wi th “ al l re le va ntin fo rm at io n reque st ed ,” so th e o ffi cer c anco ns id er “ th e fac ts an d i ss ue s i nv ol ve d i n [aCDP] he ari ng .” 26 C.F.R. § 30 1.6 33 0- 1( e)(1 ). A tax pa y er, h owe ve r, m ay no t ch al le ng e th e am ou ntor e xi st en ce o f th e und erl y in g t ax li ab il ity un le ss he “ di d n otrece iv e an y st atut ory no ti ce o f de fic ie nc y

forsu chtax li ab il ity

or d idno t o th erwi se ha ve anop po rtu ni ty to d is pu te su chtax li ab il ity .” 26 U.S.C. § 6 33 0( c)(2 )(B) . Bec au se pro ceed in gs be fo re an ap pe al s o ffi cer a re i nf orm al , tax reg ul at io ns pr ov id e th ata CDP h eari ng m ay , bu t i s n otrequi redto , con si stof aface -to -fac e m eet in g. Se e Rob er ts , 32 9 F .3dat 1 22 8- 29 ; se e a ls o 26 C.F.R. § 30 1.6 33 0- 1( d) (2 ) (A-D6 ) (“ CDP h eari ng s . . . are i nf orm al inna tu re an d d o n otrequi re the App eal s of fic er o r em

pl oyee an d the tax pa y er, o r th e ta xp ay er’s rep res en ta ti ve , to ho lda face -to -fac e m eet in g” ). A CDP he ari ng m ay co ns is t o f on e o r m or e wri tt enor o ral co m m un ic at io ns be twee n a n app eal s o ffi cer a ndth e ta xp ay er, wit h o r witho uta face -to -fac e m eet in g. Se e 26 C.F.R. § 30 1.6 33 0- 1( d) (2 ) (A-D6 ) . The form al he ari ng pro cedur es requi redun de r th e Adm in is tra ti ve Pro cedur e Act , 5 U.S.C. § 5 51 , et seq . , do no t ap pl y

to CDP h eari ng s. Id. A face-t o- face m eet in g wi ll no t

3be gra nt edif “ th e ta xp ay er wi sh es on ly to ra is e irrel ev an t o r fri vo lo us is su es

co nc ern in g [t he ] li ab il ity .” Id. § 3 01 .63 30 -1 (d )(2 ) (A-D8 ). In a dd it io n, a face -to -fac e m eet in g re ga rd in g aco ll ect io n a lt ern at iv e wil l n otbe gra nt edif the ta xp ay er i s n oteli gi bl e fo r analt ern at iv e b ecau se , forex am pl e, he ha s n otfil eda requi redtax return. Id.
“ The Tax C ou rt m ay

im po se san ct io ns ona ta xp ay er, i f he in st itut es or m ai nt ai ns pro ceed in gs pri m ari ly for d el ay or h is po si ti on is fri vo lo us or gr ou nd le ss .” Rob er ts , 32 9 F .3dat 1 22 9 (c it in g 2 6 U.S.C. § 66 73 (a)( 1) (A)-(B )). W e h av e aff

irmed sanc ti on s wh ere atax pay er was “ onno ti ce tha t h is cla im s wer e fri vo lo us .” Rob er ts , 32 9 F .3dat 1 22 9. Th e Tax Co urt i s empowe redto im po se sa nc ti on s i n a ny am ou ntup to $2 5,0 00 . 26 U.S.C. § 6 67 3( a)(1 ). The reco rdin di cat es th ata no ti ce o f de fic ie nc y was m ai le d t o Dee m s’s l as t kn own ad dr es s, b utth atDeem s d en ie d re cei vi ng it . If Deem s d idno t re cei ve th e no ti ce, h e was en ti tl edto ch al le ng e h is un de rlyin g t ax li ab il ity . Neverth el es s, h e ch os e n otto do so . Ins te ad , he r ep eat ed ly requ es te d aface -to -fac e h eari ng , su gg es ti ng th atth e IRS was h aras si ng hi m init s ef fo rt t o c ol le cthi s d el in qu en t 20 03 in co m e ta xe s. Co nt rary to Dee m s’s p os it io n, Ap pe al s Se tt le m en t Offi cer (“ ASO”) Ri ve rs was n otrequi redto gi ve Deem s a f ace- to -fac e h eari ng . Se e Rob er ts , 32 9 F .3dat 1 22 8- 29 ; se e a ls o 26 C.F.R. § 30 1.6 33 0- 1( d) (2 ) (A-D6 , A4D8) . The rec or d d em on st rat edth atASO Riv ers ex ch an ge d a t l eas t two wri tt en

co m m un ic at io ns with Dee m s an d a tt em pt edto co nt acthi m

by pho ne , aft er pr ov id in g h im

with n ot ic e o f th e d at e an d t im e o f th e p ho ne cal l. Deem s re fu se d to pro vi de ASO Riv ers with the reque st edfin an ci al in fo rm at io n, an d a ltho ug h Deem s al le ge s tha t h e d es ire d t o d is cu ss co ll ect io n a lt ern at iv es , he d idno t p ro vi de an y sp eci fic arg um en ts reg ard in g h is eli gi bi li ty for a co ll ect io n a lt ern at iv e. Se e 26 C.F.R. § 30 1.6 33 0- 1( d) (2 ) (A-D8 ) . Furth er, atth e Tax Co urt h eari ng , Deem s ad m it te d tha t h e h adearn ed in co m e in20 03 as acarp en te r, di d n otfil e a t ax return i n 2 00 3, an d h adno no nfri vo lo us is su es to id en ti fy at tha t t im e—a ll of wh ic h p ro vi de d fu rth er jus ti fic at io n fo r th e d en ia l o f a fac e-t o- face he ari ng . Se e 26 C.F.R. § 30 1.6 33 0- 1( d) (2 ) (A-D6 , A-D8) . Con se qu en tl y , th e Tax Co urt d idno t err ingrant in g the IRS’s m ot io n fo r su m m ary jud gm en t an d d et erm in in g tha t co ll ect io n o f th e d efi ci en cy by lev y co ul d pr oc eed ; fo r, Deem s fa il edto pre se ntan y no n- fri vo lo us , rel ev an t i ss ue s t o b e rev ie wedat a n i n- pe rs on CDP h eari ng . As fo r th e im

po si ti on of s an ct io ns , th e Tax Co urt was em po weredto im

po se a p en al ty on Dee m s, i n a ny am ou ntup to $2 5,0 00 , if i t fo un d tha t h e rai se d fri vo lo us or g ro un dl es s p os it io ns or i ns ti tu te d a ndm ai nt ai ne d the pro ceed in gs pr im ari ly for d el ay . Rob er ts , 32 9 F .3dat 1 22 9; 26 U.S.C. § 6 67 3( a)(1 ). In 5Rob er ts , we affi rm edsan ct io ns wher e th e ta xp ay er was “ on no ti ce tha t h is cla im s

were fr iv ol ou s.” Rob er ts , 32 9 F .3dat 1 22 9. Deems was re pe at ed ly w arn edab ou t m ai nt ai ni ng fri vo lo us arg um en ts ; h e co nt inue d t o d o s o a nyway , so th e im po si ti on of $1 ,00 0 i n s an ct io ns was n otanab us e o f di sc ret io n. Se e 26 U.S.C. § 6 67 3( a)(1 )(A); se e a ls o Ro be rt s , 32 9 F .3dat 1 22 9 (c on cl ud in g tha t a $ 10 ,00 0 pe na lty was n otanab us e o f di sc ret io n) . All o f th e arg um en ts Deem s p res en te d were fr iv ol ou s; he nc e, he can no t fi ndrefu ge inth e arg um en t tha t h e was no t pr op erl y advi se d abo utwhi charg um en ts lac ke d m eri t. II. Deem s cl ai m s tha t the jud ge who pre si de d o ve r hi s ca se was b ia se d. He d id no t p res en t the cla im

to th e jud ge ; thu s, we re vi ew th e que st io n the jud ge sh ou ld ha ve recu se d su a s

po nt e fo r pl ai n e rro r. Se e Hamm v. Memb er s o f Bd . of Rege nt s of Stat e o f Fla. , 70 8 F .2d64 7, 6 51 (11 thCir . 19 83 ). To es tabl is h p la in erro r, on e m us t s ho w th at“ (1 ) anerro r oc cu rred ; (2 ) th e err orwas p la in ; (3 ) itaffe ct ed[hi s] subs tant ia l ri gh ts ; an d (4 ) itser io us ly affect edth e fai rn es s o f th e jud ic ia l pr oc eed in gs .” Rod

ri gu ez , 62 7 F .3dat 1 38 0 (c it at io n a ndqu ot at io n o mit te d) .
“ Any j us ti ce, jud ge , or m ag is tra te jud ge of t he Uni te d S ta te s s ha ll di squa li fy [h ers el f] in an y

pro ceed in g i n wh ic h [h er] im pa rti al ity m ig htreas on ab ly be qu es ti on ed .” 28 U.S.C. § 4 55 (a). A jud ge is als o re qu ire d t o d is qu al ify hers el f if 6sh e h as a pe rs on al bi as or p reju di ce ag ai ns t a p arty or p ers on al kn owl ed ge of di sp ut edev id en ti ary fact s i n the pro ceed in g. 2 8 U.S.C. § 45 5( b) (1 ). The s tand ard un de r § 4 55 is ob

jecti ve an d “ requi res th e co urt t o a skwhethe r anob jecti ve , di si nt eres te d, l ay

ob se rv er fu ll y

in fo rm edof the fact s und erl y in g the gro un ds on whi chrecu sa l was so ug htwou lden te rta in a si gn ifi can t d oubtab ou t the jud ge ’s im pa rti al ity .” Bol in v. Stor

y , 22 5 F .3d12 34 , 12 39 (11 th Cir . 20 00 ) (ci tati on an d qu ot at io n o m it te d) . The all eg at io n o f bi as m

us t s ho w th at“ th e b ia s i s p ers on al as d is ti ng ui sh ed fro m jud ic ia l i n n atur e.” Bol in , 22 5 F .3dat 1 23 9 (c it at io n andqu ot at io n o m it te d) . Tha t i s, the bi as “ m

us t s te m fro m anex tra jud ic ia l s ou rce andres ul t i n a n o pi ni on on th e m eri ts on so m e b as is othe r th anwhatth e jud ge lea rn edfro m [he r] pa rti ci pa ti on inth e cas e.” Phi ll ip s v. J oi nt Leg is . Comm. o n Per

fo rma nc e a nd Exp en di tu re Revi ew o

f the Stat e o

f Miss . , 63 7 F .2d10 14 , 10 20 (5t h C ir. 1 98 1) (ci ta ti on an d quo ta ti on om it te d) . Whi le a “ jud ge ’s rem ark s i n ajud ic ia l co nt ex t 1 [can ] de m on st rat e su chpe rv as iv e b ia s an d p reju di ce tha t i t co ns ti tu te s b ia s ag ai ns t a p arty ,” ru li ng s tha t ar e adve rs e to a pa rty do no t. Hamm , 70 8 F .2dat 6 51 (ci ta ti on om it te d) . Disqua li fic at io n “ or di na ril y m ay no t b e p red ic at edon th e

The de cisions of the for

mer F ifth Circuit, handed down prior to the close of business on 1 September 30, 1981, a

re bindingprec edent on the E leventh Circuit. Bonner v. City of Prichard, 661 F.2d 1206, 1209 ( 11th Cir. 1981) ( en banc ). 7jud ge ’s rul in gs inth e in st an t ca se or i n re la te d c as es .” Phi ll ip s , 63 7 F .2dat 1 02 0

(ci ta ti on s o m it te d) . W ith re ga rdto bi as , Deem s’s ar gu m en ts are m eri tl es s. Th e p ur po rte d b ia s st em fro m co m m en ts th e jud ge m ad e atDeem s’s h eari ng an d i n the ord ers gra nt in g su m m ary jud gm en t an d i m

po si ng san ct io ns , no t fr om an y all eg edpe rs on al in te res t in th e res ol ut io n o f Deem s’s ca se . The jud ge m ad e n o re m ark s i n ajud ic ia l co nt ex t tha t d em on st rat eda pe rv as iv e b ia s. Co nt rary to Dee m s’s ar gu m en t, the jud ge ’s rem ark s co nc ern in g the ori gi n o f th e m at eri al s re li edup ondi d n otde m on st rat e a p erv as iv e b ia s ag ai ns t pr o s e li ti ga nt s. Th e rem ark s s im pl y co m m en te d o n the ori gi n o f fri vo lo us arg um en ts th e co urt h adwitne ss ed . Furt he rm or e, th e co urt’s d et erm in at io n tha t Dee m s h ad in st itut edth e p ro ceed in g p rimaril y forde lay di d n otde m on st rat e p erv as iv e b ia s, as th atde te rm in at io n was ne ces sa ry to rul e o n the IRS’s m ot io n fo r sa nc ti on s. Ru li ng s ad ve rs e to a pa rty do no t co ns ti tu te pe rv as iv e b ia s. Hamm , 70 8 F .2dat 65 1 (c it at io n o m it te d) . In s um , th e Tax Co urt ex hi bi te d n o e xt raju di ci al bi as . W e acc or di ng ly affirm

th e co urt’s s umm ary jud gm en t an d i m po si ti on of sa nc ti on s. AFFIRMED.

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