TAX COURT OPINION

Case: Clovus M. Sykes
Docket Number: 18787-12L
Judge: Kroupa
Opinion Type: bench
Filed: 11/22/2013
Pages: 12

UNITED STATES TAX COURT WASHINGTON, D.C. 20217 CLOVIS M. SYKES, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) ) ) ) ) ) ) ) Docket No. 18787-12L OR D E R Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit to petitioner and to respondent a copy of the pages of the transcript of this case before Judge Diane L. Kroupa in San Francisco, California on October 23, 2013, containing her 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, an appropriate order will be issued granting respondent's Motion for Summary Judgment. (Signed) Diane L. Kroupa Judge Date: Washington, DC November 22, 2013 SERVED NOV 2 2 2013 Capital Reporting Company 3 1 Bench Opinion by Judge Diane L. Kroupa 2 October 23, 2013 3 Clovis M. SYKES v. Commissioner 4 5 6 7 8 9 10 11 12 Docket No. 18787-12L THE COURT: The Court has decided to render oral findings of fact and opinion in this case, and the following represents the Court's oral findings of fact and opinion. These oral findings of fact and opinion shall not be relied upon as precedent in any other case. This bench opinion is made pursuant to the authority granted in section 7459(b) and Rule 152. 13 All section references are to the Internal Revenue 14 15 16 17 18 19 Code, as amended and in effect for 2008, and all Rule references are to the Tax Court Rules of Practice and Procedure. This is a collection review case involving a proposed collection action for petitioners' unpaid income tax liabilities for 2008. Respondent filed a 20 Motion for Summary Judgment. The Court ordered 21 Petitioner to respond or object to Respondent's 22 motion. The Court also calendared a hearing on 23 24 25 respondent's motion on the Court's October 21, 2013 trial session in San Francisco, California. Petitioner appeared pro se and Matt Carlson 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 1 2 3 4 5 appeared on behalf of respondent. FINDINGS OF FACT We will summarize the facts in this bench opinion. Petitioner resided in California at the time he filed the collection review petition. 6 Petitioner did not file a Federal income tax return 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 for 2008. Respondent prepared a substitute for return on behalf of petitioner for 2008. Respondent relied on third party payor information from a Form W-2 Wage and Tax Statement, Forms 1099-MISC, Miscellaneous Income, and a Form 1099-R, Distribution from Pensions, Annuities, Retirement, Etc. Respondent issued a deficiency notice for 2008. Petitioner did not file a petition to contest the determination respondent made in the deficiency notice for 2008. When petitioner failed to pay the liabilities, respondent sent petitioner a Notice of federal Lien Filing and Notice of Your Right to a Hearing Under Section 6320 (Lien Notice). Petitioner timely requested a collection review hearing. Respondent conducted the hearing by correspondence at petitioner's request. Petitioner failed to offer any collection alternatives. Respondent subsequently issued a Determination Notice 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 1 upholding respondent's proposed collection action 2 with respect to petitioners' liabilities for 2008. 3 Petitioner timely filed a petition with this Court. 4 5 6 7 8 9 10 11 12 Respondent moved for summary judgment, that respondent did not abuse his discretion in sustain the Lien Notice. Respondent also asked that we impose a penalty under section 6673(a) against petitioner for advancing frivolous arguments. Petitioner is no stranger to this Court. He has had an earlier collection review case involving frivolous return penalties under section 6702, and involving multiple other taxable years. 13 Petitioner has had a consistent pattern of providing 14 15 16 17 18 19 the IRS with information on why he has no requirement to file a return or pay income taxes. Here, petitioner argued that no one has shown him where in the Code he has the requirement to file returns and pay income taxes. Petitioner makes his arguments by taking portions of the Code, the 20 Constitution and the United States Supreme Court 21 22 23 24 25 opinions out of context, and these arguments are identical to those he made after filing a separate petition earlier, challenging the other collection review case. See Sykes v. Commissioner, docket no. 10386-11L. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 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 We rejected those arguments as frivolous, sustained the collection action, and ultimately imposed the maximum penalty under section 6673(a). For clarity, we initially imposed a $5,000 penalty under section 6673, and warned petitioner we would impose a larger penalty if he continued making the same type of argument as in the earlier case. Petitioner did not heed the Court's advice. The Court thereafter imposed a penalty against petitioner from $5,000 to $15,000. We also warned petitioner that we would impose a larger penalty if he made the same type of arguments. Again and again, petitioner failed to heed the Court's warnings. The second verse is the same as the first. This time, we increased the penalty to $25,000 from $15,000. We again warn petitioner that we would impose the largest penalty under section 6673 if petitioner continued to make the same frivolous arguments. Petitioner uses war-torn arguments, that this Court and other courts have found frivolous and sanctionable. Petitioner asserts in these various papers submitted to respondent in connection with this proceeding that he is a citizen, not a taxpayer of this great country. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 1 2 3 Petitioner has disregarded the Court's and respondent's repeated warnings and continues to make frivolous arguments in support of his position. 4 Petitioner acknowledged in the opposition to the 5 motion that he advances the same arguments the Court 6 7 8 9 10 11 12 13 14 rejected in Sykes v. Commissioner, docket no. 10386- llL. The Court warned petitioner at calendar call and at the hearing that he was at risk of having the Court impose a penalty against him under section 6673. Petitioner defied the Court and argued that he had not brought this case for delay purposes, or that he was raising only frivolous arguments. Despite the numerous warnings from the 15 Court, petitioner persisted in making frivolous 16 17 18 19 20 21 22 23 24 25 arguments, and wasting the Court's time and limited resources. The Court ultimately had petitioner removed from the courtroom, because he failed to act professionally in a courtroom. OPINION Petitioner again follows in the footsteps of numerous others who have unsuccessfully attempted to avoid paying Federal income taxes. Petitioner stated that he only is looking for the IRS to provide him the statute or law that requires him to file a 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 8 1 2 3 4 5 return and pay taxes. Simply put, petitioner questions whether the IRS has the authority over citizen petitioner. Simply put, it does. See secs. 61(a), 6001, 6012 and 6072. Specifically, petitioner argues that 6 withholding agent/payors are to determine if 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 petitioner is a U.S. or foreign person under section 1441. If he is a U.S. person, as here, then the . withholding provisions do not apply. The fallacy with petitioner's argument is that section 1441 applies to foreign withholding at source, rather than withholding under sections 3401 Bl2] and J1321, that apply to withholding of payments to U.S. citizens. Payments of non-employee compensation are not subject to withholding. Payees like petitioner, however, are required to report the payments. We are asked to decide whether to grant summary judgment. Summary judgment is intended to expedite litigation and avoid unnecessary and expensive trials. See e.g., FPL Group, Inc. v. Commissioner, 116 T.C. 73, 74 (2001). A motion for summary judgment will be granted if the pleadings and other acceptable 25 materials, together with the affidavits, if any, show 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 9 1 2 3 4 5 that there is no genuine issue to any material fact, and that a decision may be rendered as a matter of law. See Rule 121(b). Where the validity of the underlying tax liability is properly at issue, we will review the 6 matter de novo. See Callahan v. Commissioner,hT.C. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 44,50(2008); Sego v. Commissioner, 114 T.C. 604, 610 (2000). We review all other matters for an abuse of discretion. See Callahan v. Commissioner, 130 T.C. at 50-51; Sego v. Commissioner, 114 T.C. at 610. We begin with the underlying tax liability for 2008. Petitioner has not advanced any plausible, factual or legal argument challenging the validity of the underlying liability. Moreover, petitioner defaulted on the determinations in the deficiency notice for 2008. We next address whether petitioner demonstrated any facts supporting a finding that respondent abused his discretion by sustaining the proposed collection action. Here again, petitioner has failed to advance arguments or present evidence allowing us to conclude that the determination to sustain the proposed collection action was arbitrary, capricious or without sound basis in fact, or otherwise an abuse of discretion. See e.g., Giamelli 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 10 v. Commissioner, 129 T.C. 107, 112, 115 (2007). Petitioner did not provide any collection alternatives, or present any of the defenses. The record indicates that the only issues petitioner raised throughout the administrative process and in his petition and correspondence with respondent, were frivolous tax protester arguments. We therefore conclude that respondent's determination to proceed with the proposed collection actions is not an abuse of discretion. We will grant the summary judgment motion. We next determine whether to impose a penalty against petitioner under section 6673. Section 6673 authorizes the Tax Court to require a taxpayer to pay to the United States a penalty up to $25,000 whenever it appears that proceedings have been instituted or maintained primarily for delay, or that the taxpayer's position in such proceedings is frivolous or groundless. See sec. 6673; Scruggs v. Commissioner, T.C. Memo. 1995-355, aff'd without published opinion, 117 F.3d 1433 (11th Cir. 1997). The purpose of section 6673, like that of section 6702, is to compel taxpayers to think and to conform their conduct to settle tax principles. See Coleman v. Commissioner, 791 F.2d 68, 71 (7th Cir. 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 11 1 2 1986). Despite numerous warnings from the Court and respondent, petitioner persisted in wasted this 3 Court's limited time and resources. 4 5 6 7 Respondent's counsel recommended that $25,000 would be an appropriate amount, given that the Court previously imposed the penalty against petitioner for making identical arguments. 8 Petitioner's tactics again have consumed valuable 9 government resources. These tactics should not be 10 11 12 13 14 condoned. They damage the integrity of the Federal tax litigation system because of the time and attention the Court and respondent must devote to these frivolous arguments, deprives other taxpayers 15 with genuine tax controversies. See Abrams v. 16 17 18 19 20 21 22 23 24 25 Commissioner, 82 T.C. 403, 412 (1984). We are mindful that petitioner is representing himself and may not be familiar with all the Court's rules and procedures. Pro se status, however, is not a license to litter the dockets of the Federal courts with ridiculous allegations regarding the Code. Parker v. Commissioner, 117 F.3d 785 (5th Cir. 1997). Respondent contends the Court should impose the maximum penalty under section 6673 against 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 12 1 2 3 4 5 6 7 8 petitioner. As this is the second collection case petitioner has brought before this Court, and petitioner has filed two additional petitions (docket nos. 9793-13 and 20594-13). We rely upon respondent's recommendation and shall impose a $25,000 penalty against petitioner under section 6673(a) (1). 'Petitioner is warned again that the Court 9 will consider imposing another penalty for each year 10 11 at issue if he returns to the Court and advances similar arguments in the future, and wastes the 12 Court's and respondent's limited resources. 13 14 15 16 To reflect the foregoing, decision will be entered for respondent. An appropriate order will be issued granting respondent's summary judgment motion and sustaining the determination set forth in the 17 Notice of Determination Concerning Collection 18 Action(s) Under Section 6320 and/or 6330, upon which 19 20 21 22 23 24 25 this case is based, regarding the unpaid tax liability for 2008. The order will also reflect that a $25,000 penalty under section 6673 is to be imposed against petitioner. THIS CONCLUDES THE COURT'S ORAL FINDINGS OF FACT AND OPINION IN THIS CASE. 866.488.DEPO www.CapitalReportingCompany.com 1 2 3 6 7 8 9 10 11 12 13 14 15 16 17 18 19 2 0 21 2 2 23 2 4 2 5 Capital Reporting Company (Whereupon, at 2:54 p.m., the bench opinion in the above-entitled matter was concluded.) 13 866.488.DEPO www.CapitalReportingCompany.com