IR-2003-28, March 11, 2003
WASHINGTON  — Thirty-eight persons who attempted to delay tax collections by pursuing frivolous court cases ended up with $126,000 in penalties during the last two years. The Internal Revenue Service warns that the Tax Court may impose sanctions of up to $25,000 on those who misuse their right to a court review of IRS collection procedures merely to stall their tax payments.
“Taxpayers have rights that they should invoke when appropriate,” said IRS Chief Counsel B. John Williams.  “But those who would abuse those rights to stall tax collections should realize that they may incur substantial penalties.”
The IRS Restructuring and Reform Act of 1998 set forth various taxpayer rights related to tax liens or levies, including the right to seek judicial review. While an appeal is pending, the IRS usually may not enforce collection.
In December 2000, the Tax Court warned taxpayers that it would impose penalties against those who “institute or maintain a lien or levy action primarily for delay or whose position in such a proceeding is frivolous or groundless” (Pierson v. CommissionerPDF, 115 T.C. 581). Such positions contend that the income tax is not valid, that the person or type of income is not subject to the tax, or espouse other arguments that the Court has previously rejected as baseless.
The Court has repeatedly stated that frivolous cases waste its limited resources and delay the resolution of other taxpayers’ genuine controversies. Using its authority under Internal Revenue Code Section 6673, it is levying increasingly severe penalties on those pursuing such cases. 
The final section of a document called The Truth about Frivolous Tax ArgumentsPDF, lists a number of cases that have incurred penalties. The document presents 21 frivolous assertions, along with a summary of the law and relevant legal decisions involving these false claims. 
The table below is a list of Section 6673 penalties imposed in Collection Due Process cases by the Tax Court. To read specific opinions, use the petitioner's last name to search in the Tax Court's Historical Opinion area.
 


Case


Citation


Penalty

TCM refers to Tax Court Memorandum Decision
			TC refers to Tax Court Regular Decision

Bartschi v. Commissioner


TCM 2002-268


$2,500


Copeland v. Commissioner


TCM 2003-46


$1,000


Craig v. Commissioner


119 TC No. 15


$2,500


Crow v. Commissioner


TCM 2002-149


$1,500


Davich v. Commissioner


TCM 2002-255


$5,000


Davidson v. Commissioner


TCM 2002-194


$4,000


Davis v. Commissioner


TCM 2001-87


$4,000


Eiselstein v. Commissioner


TCM 2003-22


$5,000


Fink v. Commissioner


TCM 2003-61


$2,000


Flathers v. Commissioner


TCM 2003-60


$1,500


Gunselman v. Commissioner


TCM 2003-11


$1,000


Hack v. Commissioner


TCM 2002-243 and -244


$2,000


Haines. v. Commissioner


TCM 2003-16


$2,000


Hauck v. Commissioner


TCM 2002-184


$10,000


Hill v. Commissioner


TCM 2002-272


$3,500


Keene v. Commissioner


TCM 2002-277


$5,000


Kiley v. Commissioner


TCM 2002-315


$5,000


Koenig v. Commissioner


TCM 2003-40


$2,000


Land v. Commissioner


TCM 2002-263


$4,000


Nestor v. Commissioner


TCM 2002-251


$5,000


Newman v. Commissioner


TCM  2002-135


$1,000


Perry v. Commissioner


TCM 2002-165


$2,500


Rennie v. Commissioner


TCM 2002-296


$1,500


Roberts v. Commissioner


118 TC 365 (2002)


$10,000


Robinson v. Commissioner


TCM 2002-316


$2,500


Schmith v. Commissioner


TCM 2002-252


$1,000


Schroeder v. Commissioner


TCM 2002- 190


$1,000


Smeton v. Commissioner


TCM 2002-140


$1,000


Smith v. Commissioner


TCM 2003-45


$500


Standifird v. Commissioner


TCM 2002-245


$7,500


Stewart v. Commissioner


TCM 2002-225


$7,500


Tornichio v. Commissioner


TCM 2002-291


$12,500


Villwock v. Commissioner


TCM 2002-235


$1,000


Wagner v. Commissioner


TCM 2002-180


$4,000


Watson v. Commissioner


TCM 2001-213


$1,500


Williams v. Commissioner


TCM 2002-111


$1,000


Yacksyzn v. Commissioner


TCM 2002-99


$1,000


 
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