Court Opinion

ID: 4107046
Source: CourtListenerOpinion
Date Created: 2016-12-14 01:01:00.357019+00
Date Added: 2024-06-11T07:46:07.848286
License: Public Domain

Case: 16-60115      Document: 00513794859         Page: 1    Date Filed: 12/13/2016

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                         United States Court of Appeals
                                                                                  Fifth Circuit

                                    No. 16-60115                                FILED
                                  Summary Calendar                      December 13, 2016
                                                                           Lyle W. Cayce
                                                                                Clerk
BRUCE EDWARD HADDIX; RAE ANN HADDIX,

              Petitioners - Appellants

v.

COMMISSIONER OF INTERNAL REVENUE,

              Respondent - Appellee

                               Appeal from the Decision
                           of the United States Tax Court
                                  TC No. 019647-13

Before KING, DENNIS, and COSTA, Circuit Judges.
PER CURIAM:*
       After a due process collection hearing, the Internal Revenue Service
Office of Appeals sustained tax levies against Petitioners–Appellants Bruce
and Rae Ann Haddix. The Haddixes appealed those determinations to the Tax
Court, which ultimately dismissed the appeal for lack of jurisdiction. The
Haddixes, proceeding pro se, now challenge the Tax Court’s dismissal, as well

       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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                                       No. 16-60115
as its decisions to quash certain subpoenas and deny their request for sanctions
against the Commissioner. For the following reasons, we AFFIRM, except for
the appeal from the quashing of the subpoenas, which we DISMISS as moot.
              I. FACTUAL AND PROCEDURAL BACKGROUND
       On January 14, 2013, the Internal Revenue Service sent the Haddixes
notices of intent to levy on their property for unpaid tax liabilities. In response,
the Haddixes timely requested a collections due process hearing before the
Internal Revenue Service Office of Appeals. See I.R.C. § 6330(b). After the
Haddixes’ hearing, the Office of Appeals sent the Haddixes “notices of
determination” sustaining the proposed levies. The notices were dated and
mailed July 16, 2013. They stated that the Haddixes could “file a petition with
the United States Tax Court within 30 days from the date of this letter”; that
this deadline was “fixed by law”; and “[t]he courts cannot consider your case if
you file late.”
       The Haddixes subsequently filed a petition with the Tax Court
challenging the determinations of the Office of Appeals. The petition was
dated August 15, 2013—exactly 30 days after the notices of determination were
issued—but arrived at the Tax Court on August 23, 2013—38 days after the
notices of determination were issued. The petition arrived in an envelope with
a priority mailing label bearing an August 16, 2013, date of sale.
       On October 22, 2014, the Commissioner moved the Tax Court to dismiss
the Haddixes’ case for lack of jurisdiction because their petition was not mailed
on or before August 15, 2013—the jurisdictional deadline prescribed by the
Internal Revenue Code. 1          The Commissioner’s motion (as supplemented)

       1The parties do not dispute that the 30-day period to appeal prescribed by the Internal
Revenue Code expired on August 15, 2013, or that this deadline was jurisdictional. See I.R.C.
§ 6330(d)(1); Treas. Reg. § 301.6330-1(e), Question E10; see also Gray v. Comm’r, 723 F.3d
790, 793 (7th Cir. 2013); Boyd v. Comm’r, 451 F.3d 8, 10 n.1 (1st Cir. 2006). Nor do they
dispute that, under the so-called timely mailing / timely filing rule, the Haddixes’ petition
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argued that the mailing label’s August 16, 2013, date of sale constituted a U.S.
Postal Service postmark date, which was controlling as to when the Haddixes
filed their petition. It further argued that, regardless of the characterization
of the mailing label’s date of sale, the Haddixes could not meet their burden of
proving that they mailed their petition on or before August 15, 2013.
       The Haddixes’ response (as supplemented) argued that (1) they did, in
fact, mail their petition on or before the August 15, 2013, deadline; (2) the
mailing label was “blacked out,” rendering the date of sale illegible; (3) the
mailing label’s August 16, 2013, date of sale was not a U.S. Postal Service
postmark; and (4) the Commissioner’s motion—filed more than a year after the
Haddixes filed their petition—was untimely. To substantiate their assertions,
the Haddixes provided a bank statement which indicated the postal charge was
“posted” to their account on August 16, 2013, at 12:00 a.m.; a declaration in
support of their response attesting, under penalty of perjury, that they mailed
their petition on either “August 14, 2013 or August 15, 2013”; and an email
from a U.S. Postal Service employee indicating that a “Postmark AUG 16 2013”
notation on a copy of the envelope in which the Haddixes’ petition arrived was
“not one of our postmarks.” In their response, the Haddixes also requested
that the Tax Court impose sanctions on the Commissioner.
       The Tax Court scheduled the Commissioner’s motion to be heard on
March 9, 2015. The Haddixes—believing a trial on the merits would follow
argument on the Commissioner’s motion—caused subpoenas to be issued to
several individuals involved in a prior criminal prosecution of a relative. The
Haddixes sought evidence from these individuals to substantiate their defense
that the criminal prosecution created a financial hardship that prevented them

was timely if it was mailed on or before August 15, 2013. See I.R.C. § 7502(a)(1); Treas. Reg.
§ 301.7502–1(c)(1)(ii) and (iii).
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from paying their taxes. On March 4, 2015, two of the subpoenaed individuals
moved to quash to their subpoenas, which the Tax Court did on March 6, 2015.
A third individual orally moved to quash his subpoena at the March 9, 2015,
hearing, which the Tax Court also did. The Tax Court subsequently denied the
Haddixes’ motion to vacate the quashing of the subpoenas.
        At the March 9, 2015, hearing (which the Haddixes declined to attend),
a U.S. Postal Service employee testified that the August 16, 2013, date of sale
was both accurate and a U.S. Postal Service postmark. He also testified that,
prior to its delivery, the U.S. Postal Service irradiated the Haddixes’ petition
(along with other mail), which darkened the mailing label but did not render
it unreadable. The Tax Court also took judicial notice that the “Postmark AUG
16 2013” notation on the copy of the envelope in which the Haddixes’ petition
arrived was placed there by the Tax Court’s clerk.
        Following the hearing, the Tax Court granted the Commissioner’s
motion and dismissed the case for lack of jurisdiction. In its opinion, the Tax
Court       found   that   the   timing    of   the   Commissioner’s       motion     was
“inconsequential” because a party can question a lack of subject matter
jurisdiction at any time. It further found that, even if the mailing label’s date
of sale did not constitute a U.S. Postal Service postmark date, as the Haddixes
contended, the Haddixes “failed to prove their petition was timely mailed on or
before August 15, 2013.” The Tax Court concluded by noting that it “considered
all arguments [made by the Haddixes], and to the extent not mentioned, we
consider them irrelevant, moot, or without merit.” 2             The Haddixes timely
appealed.

        We thus reject the Haddixes’ apparent contention on appeal that the Tax Court never
        2

considered their arguments about the “blacked out” mailing label or purported
“discrepancies” in the Commissioner’s motion. We note that the purported “discrepancies”—
relating to an apparent attempt by the Commissioner to confer with the Haddixes prior to
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                                       II. ANALYSIS
       “As we begin our review, we are mindful that ‘we liberally construe briefs
of pro se litigants and apply less stringent standards to parties proceeding pro
se than parties represented by counsel.’” Haase v. Countrywide Home Loans,
Inc., 748 F.3d 624, 629 (5th Cir. 2014) (quoting Grant v. Cuellar, 59 F.3d 523,
524 (5th Cir. 1995)). Under this standard, we construe the Haddixes’ brief on
appeal to raise three issues: whether the Tax Court erred in (1) concluding that
they failed to prove that they mailed their petition on or before August 15,
2013; (2) quashing the subpoenas to the individuals involved in the prior
criminal prosecution; and (3) denying their request for the imposition of
sanctions against the Commissioner. 3
A. Timeliness of Petition
       On appeal, the Haddixes renew their arguments that their petition was
timely filed and that the mailing label is “blacked out,” rendering it illegible.
According to the Haddixes, without the ability to read all of the information on
the label, “there is absolutely no evidence that this label was actually . . . used
to mail the [p]etition”—let alone that they untimely mailed their petition.
       “This Court ‘applies the same standard of review to decisions of the Tax
Court that it applies to district court decisions.’” Terrell v. Comm’r, 625 F.3d

filing its motion to dismiss—are irrelevant to the substantive issues at hand. Thus, we, like
the Tax Court, do not separately discuss them.
         3 The Haddixes’ brief also challenges the Internal Revenue Code’s rules for computing

the time period within which a taxpayer may seek judicial review because they do not account
for the time a notice of determination spends in the mail. See I.R.C. § 6330(d)(1); Treas. Reg.
§ 301.6330-1(e), Question E10. We do not reach this issue, however, because the Haddixes
did not raise it before the Tax Court. The fact that this court grants leeway to pro se litigants
like the Haddixes generally does not permit them to raise a completely new issue on appeal.
See Yohey v. Collins, 985 F.2d 222, 225 (5th Cir. 1993); see also XL Specialty Ins. Co. v. Kiewit
Offshore Servs., Ltd., 513 F.3d 146, 153 (5th Cir. 2008). Nor does the fact that “a lack of
subject matter jurisdiction may be raised . . . for the first time on appeal,” Giles v. NYLCare
Health Plans, Inc., 172 F.3d 332, 336 (5th Cir. 1999) (emphasis added), mean that the
Haddixes may raise an issue that “might have supported such jurisdiction” for the first time
on appeal, United States v. Century Healthcare Corp., 90 F.3d 1514, 1518 n.2 (10th Cir. 1996).
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254, 258 (5th Cir. 2010) (alternations omitted) (quoting Green v. Comm’r, 507
F.3d 857, 866 (5th Cir. 2007)). Thus, we review the Tax Court’s application of
law de novo and factual findings for clear error. United States ex rel. Branch
Consultants v. Allstate Ins. Co., 560 F.3d 371, 376 (5th Cir. 2009).         The
allocation of the burden of proof is a question of law reviewed de novo, and the
findings of fact underlying the Tax Court’s conclusion on whether a party met
that burden are reviewed for clear error.        See Guajardo v. Tex. Dep’t of
Criminal Justice, 363 F.3d 392, 395 (5th Cir. 2004) (per curiam).
        The Haddixes do not dispute that they, as the ones invoking the Tax
Court’s jurisdiction, had the burden of proving the Tax Court’s jurisdictional
prerequisites by a preponderance of the evidence, including that they timely
mailed their petition on or before August 15, 2013. See Savoy v. Comm’r, 108
T.C.M. 168, 2014 WL 3928972, at *6 (2014), aff’d, 589 F. App’x 187 (4th
Cir. 2015); see also Irving v. Veterans Admin., 874 F.2d 1092, 1096 (5th Cir.
1989). Thus, our review is limited to whether the Tax Court clearly erred in
finding that the Haddixes had not met that burden. The Tax Court’s finding
is only clearly erroneous “if, after reviewing the record, this [c]ourt is firmly
convinced that a mistake has been made.” Branch Consultants, 560 F.3d at
376.
        After a thorough review of the record, we are not firmly convinced that a
mistake was made by the Tax Court. The Haddixes’ petition is dated August
15, 2013, and the mailing label affixed to the envelope in which the Haddixes’
petition arrived at the Tax Court clearly bears an August 16, 2013, date of sale.
The testimony heard by the Tax Court further showed that the U.S. Postal
Service’s machines cannot generate a mailing label with a date of sale after the
actual date of sale; the machines simply “won’t allow it.” Thus, the Haddixes
could not have purchased (and consequently mailed) their postage before
August 16, 2013. The Haddixes’ bank statement corroborates that fact: the
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postal charge was posted to their account on August 16, 2013. The Tax Court,
therefore, did not clearly err in finding that the Haddixes failed to present
sufficient evidence to substantiate their assertion that they timely mailed their
petition on August 14, 2013, or August 15, 2013, and thus in dismissing their
case for lack of jurisdiction.
B. Quashing of Subpoenas
       The Haddixes argue that the Tax Court erred in relying on several
purportedly untruthful assertions in the subpoenaed individuals’ motions to
quash without first affording them an opportunity to refute those assertions.
Specifically, they challenge the Tax Court’s reliance on assertions that the
subpoenas they caused to be issued were unrelated to their defense of
“financial hardship and inability to pay.”           We cannot reach the merit of the
Haddixes’ challenge, however, because the subpoena dispute is unquestionably
moot in light of our decision to affirm the dismissal of the Haddixes’ case for
lack of jurisdiction. See United States v. Christo, 614 F.2d 486, 494 n.10 (5th
Cir. 1980) (finding that point of error directed towards the quashing of
subpoenas was moot in light of decision to grant retrial); see also United States
v. Miller, 685 F.2d 123, 124 (5th Cir. Unit B 1982) (per curiam) (finding
subpoena dispute mooted by conclusion of underlying criminal prosecution).
Although the subpoenas were issued in connection with the March 9, 2015,
hearing on the Commissioner’s motion to dismiss, they indisputably were
issued to present evidence at a trial on the merits. 4               But in light of our

       4 Thus, this case does not involve a jurisdictional discovery dispute, which we would
have jurisdiction to address. See Freeman v. United States, 556 F.3d 326, 341–43 (5th Cir.
2009) (addressing jurisdictional discovery dispute in connection with review of dismissal for
lack of subject matter jurisdiction); see also U.S. Catholic Conference v. Abortion Rights
Mobilization, Inc., 487 U.S. 72, 76 (1988) (recognizing distinction between subpoenas issued
“in aid of determining [subject matter] jurisdiction” and those “issued to obtain discovery on
the merits of the litigation”).
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affirmance of the dismissal of the case, there can be no trial in which such
evidence can be used.         Thus, the Haddixes’ appeal from the Tax Court’s
quashing of the subpoenas must be dismissed as moot.
C. Request for Sanctions
       The    Haddixes      contend      that    imposing      sanctions     against     the
Commissioner would have been appropriate in this case to compensate them
“for all labor hours required” to respond to, among other things, the
Commissioner’s motion to dismiss.                Unlike the subpoena dispute, this
sanctions dispute was not rendered moot by the dismissal of the Haddixes’ case
for lack of jurisdiction. See Willy v. Coastal Corp., 503 U.S. 131, 138–39 (1992)
(recognizing courts retain the power to impose sanctions even after they
dismiss a case for lack of jurisdiction). Accordingly, we must consider the merit
of the Haddixes’ argument.
       We review the Tax Court’s denial of the Haddixes’ request for sanctions
for abuse of discretion.       Haase, 748 F.3d at 630. 5 In the Tax Court, the
Haddixes did not attempt to identify the source of sanctioning authority upon
which their request relied, and we need not attempt to isolate one on appeal,
because the Haddixes’ request for sanctions was entirely without merit.
Therefore, the Tax Court did not abuse its discretion in denying that request.
                                  III. CONCLUSION
       For the foregoing reasons, we AFFIRM the Tax Court’s dismissal of the
case for lack of jurisdiction and denial of the Haddixes’ request for sanctions
against the Commissioner. We DISMISS AS MOOT the Haddixes’ appeal from
the Tax Court’s quashing of the subpoenas. The Haddixes shall bear the costs
of this appeal.

       5 As noted supra, the same standard of review applies to decisions of the Tax Court as
to decisions of district courts. Terrell, 625 F.3d at 257.
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