TAX COURT OPINION

Case: Arthur Sterling Brown
Docket Number: 23155-13L
Judge: Holmes
Opinion Type: bench
Filed: 06/23/2015
Pages: 7

SUßzt10lrned UNITED STATES TAX COURT WASHINGTON, DC 20217 ARTHUR STERLING BROWN, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ) ) ) ) ) ORDER Docket No. 23155-13L. Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit herewith to petitioner and to respondent a copy of the pages of the transcript of the trial in the above case before Judge Mark V. Holmes at Birmingham, Alabama, 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) Mark V. Holmes Judge Dated: Washington, D.C. June 23, 2015 SERVED JUN 2 42015 Capital Reporting Company 3 1 2 Bench Opinion by Judge Mark V. Holmes June 8, 2015 3 Arthur Sterling Brown v. Commissioner 4 5 Docket Number 23155-13L In the case of Docket Number 23155-13L, the 6 Court has decided to render oral findings of fact and 7 8 9 10 11 12 13 14 15 opinion, and the following represents the Cour·t' s oral findings of fact and opinion. This bench opinion is made pursuant to the authority granted by section 7459(b) of the Internal Revenue Code of 1987, as amended, and Rule 152 of the Tax Court's Rules of Practice and .Procedure. Mr. Brown is a resident of Alabama and·was when he filed his petition. He and the Government reached a stipulation of facts by which, together 16 with his testimony, constitute the record in the 17 18 19 20 case. This case is an appeal from a notice of notice of determination by the IRS to proceed with collection by levy of Mr. Brown's 2009 tax liability. 21 Mr. Brown was a nonfiler that year, so the IRS 22 23 24 25 prepared a substitute for return under Internal Revenue Code section 6020(b) and issued a notice of deficiency to Mr. Brown. I found his testimony credible that his 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 response upon receiving it was to send it back to the IRS with his explanation for why he disagreed with it. However, there was no challenge to this notice of deficiency filed in Tax Court, and since the IRS doesn't have to respond to people who send back their notices of deficiency to the IRS itself, the IRS, in the normal course of its business, assessed the tax. Assessment means the recording of the tax liability in the records of the IRS. What this means is that it triggers a series of other events. After a number of other notices, the IRS will ultimately come to collect taxes that it has assessed, and in this case it decided to do so by proceeding with, among other things, a levy. The standard of review that I have to apply is whether there was an abuse of discretion by the IRS officer. See, for example, Robinette v. Commissioner, 123 T.C. 85 (2004). The scope of review is a somewhat open question in the 11th Circuit. The parties agreed to the contents of the administrative record here, with one or two significant exceptions that Mr. Brown noted; namely, he said that he had given to the settlement officer his claim for a refund for the 2009 tax year, and only a partial Form 3949 was put 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 into the administrative record. Neither of these make a significant different, however. The question is whether there was any abuse of discretion by the IRS agent here. And the answer is that I have to look at, first, the issues that Mr. Brown raised in his request for a CDP, or collection due process, hearing. Those grounds are in Exhibit 5-J of the stipulation, and they include such mainstays of tax protestor requests as "I object to the descriptive term taxpayer being applied to me. I deny that I have been made liable for or subject to any Internal Revenue tax. I use forms that are enclosed only under notice of that objection and not allowing my signature on any form to be construed as an admission of any liability. "I deny that I owe $19,838.79 to the IRS. I deny that I am engaged in any activity taxed by Congress for revenue purposes in 2009. I further deny that any taxable event has arisen from my activities that would lead to a tax liability." This goes on for several more paragraphs and includes, finally, "Revenue Officer" -- I won't give the name here -- "has defamed me by his actions and caused me harm personally, financially, and 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 emotionally." In other words, no serious substantive challenge even to the underlying tax liability, nor to any of the administrative procedures routinely followed by the IRS in trying to collect overdue taxes. Indeed, the 11th Circuit, the circuit to which this case would presumptively be appealed, has said for more than 30 years that arguments of the sort that Mr. Brown has raised have long been held to be frivolous, and this was from back in 1985. So there's a rich, long history of people making similarly frivolous arguments to avoid the payment of their tax debts. This was the case of Hyslep v. United States, 765 F.2d 1083, 1084 (11th Circuit, 1985). And this is really just one example of a great many that are on the books. On appeal Mr. Brown did more of the same. He made a generalized allegation of abuse of discretion on the part of the IRS in sustaining its determination to levy and included, as well, that the 3949A form with attachments was not referred to by the IRS; that he was not an employee, as that term is defined for the social security and withholding 1 2 3 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 Capital Reporting Company 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 taxes, rather than the income tax generally; denied that he worked for an employer or an employer had reported W-2 wages to him and on and on and on. There is no mention of the filing of the Form 3949 in the notice of determination, so I want to talk about that very briefly. That's the form used to report errors or fraud on W-2s that are issued. And in this case the alleged fraud that Mr. Brown spotted was that his employer had paid him wages and reported them as wages to the government. This is not only not fraud; it's frivolous to make that kind of argument. Everything else that he raised are similar arguments that have long been held to be frivolous; I 15 won't go into them at any great length. There are 16 17 18 19 20 21 22 23 24 25 certainly no reasons to refute each and every one of these allegations. Somebody who works for a company and receives wages in return for services provided is an employee. Those are wages. There's some, perhaps, ambiguity about the distinction between employees and independent contractors, but that's not where Mr. Brown was going; he was going to the allegation that only people who work for wages from the United States government or their agencies and instrumentality are 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 8 1 2 3 4 5 6 7 8 9 10 11 in fact employees, which is a frivolous argument. So I conclude there was no abuse of discretion on the part of the IRS in determining to proceed to collect these 2009 taxes by levy, by which I mean the settlement officer made no clear error of fact, no mistake of law, and certainly applied no irrational connection between the facts and the law. I warned Mr. Brown that if he's another petitioner in Tax Court, if he comes back again, section 6673 gives judges the ability to fine him up to $25,000 for taking frivolous positions in Tax 12 Court and wasting everyone's time. The decision will be entered in favor of Respondent. This concludes the Court's oral findings of fact and opinion in this case. Thank you. (Whereupon, at 3:00 p.m., the above- entitled matter was concluded.) 13 14 15 16 17 18 19 20 21 22 23 24 25 866.488.DEPO www.CapitalReportingCompany.com