TAX COURT OPINION

Case: Thomas Frank Ferenczy
Docket Number: 2912-15
Judge: Buch
Opinion Type: bench
Filed: 01/07/2016
Pages: 4

UNITED STATES TAX COURT WASHINGTON, DC 20217 THOMAS FRANK FERENCZY, Petitioner, v. KVC ) ) ) ) Docket No. 2912-15. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ORDER Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit with this order to petitioner and respondent a copy of the pages of the transcript of the trial in this case before Judge Ronald L. Buch at Cleveland, Ohio, containing his oral findings of fact and opinion rendered at the trial session at which the case was heard. In accordance with the oral findings of fact and opinion, decision will be entered for respondent. (Signed) Ronald L. Buch Judge Dated: Washington, D.C. January 7, 2016 SERVED Jan 08 2016 Capital Reporting Company 3 1 2 3 4 5 Bench Opinion by Judge Ronald L. Buch December 2, 2015 Thomas Frank Ferenczy v. Commissioner Docket No. 2912-15 THE COURT: The following represents the 6 Court's oral findings of fact and opinion. The oral 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 findings of fact and opinion may not be relied upon as precedent in any other case. The opinion is in conformity with Internal Revenue Code section 7459(b) and Rule 152(a) of the Tax Court Rules of Practice and Procedure. Any section references refer to the Internal Revenue Code or the Treasury regulations in effect during the year at issue, and Rule references are to the Tax Court Rules of Practice and Procedure. No facts are in dispute. Mr. Ferenczy received income in 2011. He did not file a tax return. Respondent issued a notice of deficiency determining tax as well as additions to tax for a failure to file and a failure to pay. At trial, Respondent made a minor concession as to the amount of the addition to tax for failure to pay. After that concession, the only issue remaining is whether Mr. Ferenczy is subject to the income tax; if he is, then the additions to tax 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company I 4 1 2 3 4 5 6 7 follow as a matter of law. Throughout the trial, Mr. Ferenczy asserted what are commonly referred to as protester arguments. Respondent orally moved that the Court impose sanctions under section 6673, arguing that Mr. Ferenczy offered only frivolous arguments. Following the trial and on the record, the 8 Court directed Mr. Ferenczy to some cases that 9 address his arguments and explained why those 10 11 12 13 14 15 16 arguments are misguided. (We direct Mr. Ferenczy's attention to Kernan v. Commissioner, T.C. Memo, 2014- 228 and Waltner v. Commissioner, T.C. Memo 2014-35.) As a general matter, the Commissioner's determinations in the notice of deficiency are presumed correct, and the taxpayer bears the burden of proving an error. Rule 142(a); Welch v. 17 Helvering, 290 U.S. 111, 115 (1933). 18 19 20 In this case, Petitioner has only offered frivolous arguments. In such situations we often invoke the words of the Fifth Circuit, which said in 21 Crain v. Commissioner, "We perceive no need to refute 22 23 24 25 these arguments with somber reasoning and copious citation of precedent; to do so might suggest that these arguments have some colorable merit." 737 F.2d 1417, 1417 (5th 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 1 2 Nonetheless, the Court discussed and refuted Mr. Ferenczy's arguments on the record. The 3 Court also cauti-oned him that presenting similar arguments in future cases could result in a sanction under section 6673. Commissioner bears the burden of production regarding penalties. Here, Commissioner has satisfied that burden as to the additions to tax for failure to file and failure to pay; Petitioner does not dispute that he did not file a return or that he did not pay the tax. As to the facts underlying the tax liability, Petitioner does not dispute the income Respondent attributed to him, and for the reasons stated herein and on the record, Respondent's determinations are sustained except to the extent of concessions made by Respondent. Respondent's oral motion for sanctions will be denied, but the Court has cautioned Mr. Ferenczy against making frivolous arguments in the future. The Court will enter a decision for Respondent. (Whereupon, at 10:25 a.m., the above- entitled matter was concluded.) 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 866.488.DEPO www.CapitalReportingCompany.com