In the

United States Court of Appeals

For the Seventh Circuit ____________

No. 05-4788

SOPHIE A. SZOPA,

Plaintiff-Appellant,

v.

UNITED STATES OF AMERICA,

Defendant-Appellee.

____________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 05 C 1751—William J. Hibbler, Judge.

____________

SUBMITTED MAY 25, 2006—DECIDED JULY 5, 2006

____________

Before EASTERBROOK, WOOD, and SYKES, Circuit Judges.

EASTERBROOK, Circuit Judge. Sophie Szopa maintains

that only corporations and foreign citizens need pay income

taxes. The Internal Revenue Service sent her a notice of

intent to levy on her assets to satisfy income taxes due for

the years 1991 through 2000. A levy may be postponed or

canceled if, for example, the taxes are attributable to a

spouse’s income and an “innocent spouse” defense is

available; a taxpayer also may propose a collection schedule

or some other less drastic way to retire the debt. 26 U.S.C.

§§ 66(c), 6015(b). The IRS affords an administrative

opportunity to ask for such relief. 26 U.S.C. §6330(b). Szopa

requested a hearing under this section but offered only taxprotester arguments, and the IRS turned her down. Her
2 No. 05-4788

position was doubly frivolous: first because by the time a

notice of levy has been sent it is too late to contest the

assessment of taxes, and second because Szopa offered no

objection to the proposed means and timing of collection.

The IRS told her that if she was dissatisfied by its decision

she could obtain review in the United States Tax Court. See

26 U.S.C. §6330(d)(1).

Piling frivolous litigation on frivolous argumentation,

Szopa ignored this advice and filed suit in the United States

District Court, contending that she is entitled to review by

a district court because the Tax Court would lack jurisdiction. (Adding a frivolous fillip, she sued not the United

States or the Commissioner of Internal Revenue, the only

arguably proper parties, but Prescilla White, the manager

of the administrative group that had rejected her request

for a hearing. We have substituted the United States as the

defendant.) Szopa maintained that the Tax Court cannot

entertain litigation about what Szopa insists is an “employment tax” rather than an “income tax.” Moreover, she

asserts, the Tax Court is not a “court”—notwithstanding its

name, its governing statutes, and Freytag v. CIR, 501 U.S.

868, 890-91 (1991)—and cannot resolve disputes about

points of law. Even administrative agencies can and do

handle legal arguments all the time. Courts of appeals

regularly address on appeal legal arguments that have been

resolved by the Tax Court. The district court therefore

followed the statute and dismissed the suit for lack of

jurisdiction because Szopa’s claim could have been filed in

and resolved by the Tax Court. 26 U.S.C. §§ 6212(a),

6330(d)(1), 7442.

Szopa’s argument in this court depends on the proposition

that, because she is a U.S. citizen, the tax assessed against

her must be an “employment tax” and all disputes about its

collection are outside the Tax Court’s purview. There is no

excuse for persistence in such a foolish argument. She has

been told by the IRS, by the district judge, and by Congress
No. 05-4788 3

(in the Internal Revenue Code) that the tax is imposed on

income, not employment. We told her this ourselves a few

years ago. Szopa and her husband failed to satisfy their

obligations for the tax years 1983 through 1988, and in an

opinion rejecting the Szopas’ arguments we called the sums

they owed “income taxes.” See United States v. Szopa, 2000

U.S. App. LEXIS 3353 (7th Cir. Mar. 1, 2000) (unpublished

order). Szopa’s current position reflects obduracy and

recalcitrance rather than ignorance or confusion. She is

trying to throw sand in the gears.

Frivolous litigation is sanctionable. Fed. R. App. P. 38.

Twenty years ago we set $1,500 as the normal sanction for

an appeal resting on tax-protest arguments. See Coleman

v. CIR, 791 F.2d 68 (7th Cir. 1986). Ten years ago we upped

the ante to $2,000 in light of inflation. See Cohn v. CIR, 101

F.3d 486 (7th Cir. 1996). These numbers roughly reflected

the sums that, according to the Justice Department, had

been required to respond to frivolous tax appeals in 1985

and 1995.

Now the Department proposes a big increase—to $8,000,

somewhat less than the $11,042 that it says represents “the

average expense in attorney salaries and other costs

incurred by [the Tax Division] in the defense of frivolous

taxpayer appeals in which sanctions were awarded during 2004 and 2005”. (A footnote tells us that the Department “eliminated from consideration instances in which

significantly greater amounts of attorney time were

devoted . . . than are typically reported for such cases.”) The

Department does not give details, however, or explain why

the expense of briefing frivolous appeals has shot up.

Adjusting for inflation using the Consumer Price Index,

$1,500 in 1985 dollars comes to $2,722.58 in 2005 dollars.

How is it that the Department now spends in real dollars

four times as much per frivolous appeal as it did 10 and

20 years ago?
4 No. 05-4788

A tax lawyer in grade GS-15 earns between $91,000 and

$143,000 a year, depending on tenure and locality adjustments that reflect the higher cost of living in large cities.

Let us suppose that the average is $125,000 a year—

though this seems high, as much of the work in frivolous

appeals should be assigned to junior lawyers. Let us

suppose as well that indirect costs (fringe benefits, the

expense of secretaries and fact-checkers, etc.) double the

effective cost. Then the federal government pays $250,000

to support one year’s work by a tax lawyer. If federal

lawyers work 220 days a year (a figure that allows for a

month’s vacation plus all federal holidays), that comes to

$1,136 per day for legal services. The Tax Division’s

assertion that it costs $11,042 to respond to a frivolous

appeal implies that each case occupies a senior tax lawyer

for ten full days. (Frivolous cases are not argued in this

circuit or most of the other circuits; there is no need to

consider travel time and expenses.) If this is really how the

Department of Justice staffs these cases, it needs to rethink

its assignment practices.

The Tax Division’s brief in this appeal is 16 pages long,

much of it formulaic and doubtless straight from the

glossary function of a word-processing program. Less than

half of the brief is specific to Szopa’s situation; the rest

describes in general terms the pre-levy hearing program

and the way §3660(d) divides review between the Tax Court

and the 94 district courts. The record is short; the district

court’s opinion is one page long; an appellate lawyer would

not have needed more than a few hours to track down all

pertinent details about Szopa’s circumstances. Why would

it take 10 days to produce a brief at the glacial rate of 1.6

pages a day? Other cases may require more work, but it is

hard to imagine that any frivolous tax-protester appeal

would entail a brief exceeding 25 pages. To use more is to

show that the appeal is not frivolous after all. Yet by the

Department’s calculation the appellate lawyer generates

less than three pages a day in frivolous appeals.
No. 05-4788 5

Something must be wrong in these numbers—though

other circuits have accommodated the Department’s

request. See, e.g., Kyler v. Everson, 442 F.3d 1251 (10th Cir.

2006) ($8,000 sanction, exactly as Tax Division proposed);

Stearman v. CIR, 436 F.3d 533, 538-39 (5th Cir. 2006)

(adopting $6,000 presumptive sanction on Tax Division’s

request). At least four more circuits have made similar

awards in unpublished orders. None explains, any more

than the Department itself has done, why these

are appropriate sanctions.

An adjustment to keep this circuit’s sanction constant

in inflation-adjusted dollars is appropriate, so the presumptive fine now is $2,700. It may be, however, that the

Department has more to say on behalf of a larger number.

So we will allow it 14 days after this opinion’s issuance to

explain how many days of legal time the Tax Division

devotes (on average) to each frivolous appeal, how the

$11,000 figure was calculated, and why there has been such

a substantial increase since 1995. Szopa will have 10 days

to respond. (She ignored the Department’s Rule 38 motion;

she would do well to use this renewed opportunity to

address the subject.) We then will either stick with the

inflation-adjusted sanction of $2,700 or make a further

change if one has been justified.

One additional adjustment is apt. Repeat offenders are

more culpable, not only because they must know better (and

because the risk of mistake is lower) but also because they

have demonstrated resistance to specific deterrence. Szopa

is a recidivist, having been told by our decision of 2000 that

she owes and must pay income taxes. That she is still in

denial mode six years later, for another set of tax years,

demonstrates the need for sterner action. The presumptive

sanction for second or successive frivolous tax appeals will

be set at double the norm ($5,400 unless adjusted after the

supplemental briefing). This much, at least, is payable

immediately to the Clerk of Court, and if it remains out-
6 No. 05-4788

standing after 10 days we will enter an order under Support

Systems International, Inc. v. Mack, 45 F.3d 185 (7th Cir.

1995), blocking Szopa from conducting further civil litigation as a plaintiff in the courts of this circuit until full

payment has been received.

The judgment of the district court is affirmed, an interim

sanction of $5,400 is imposed, and the United States is

invited to file within 14 days further justification supporting a higher award.

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—7-5-06