Court Opinion

ID: 38939
Source: CourtListenerOpinion
Date Created: 2010-04-25 20:17:15+00
Date Added: 2024-06-11T17:16:07.835241
License: Public Domain

United States Court of Appeals
                                                                Fifth Circuit
                                                             F I L E D
               IN THE UNITED STATES COURT OF APPEALS
                                                               July 18, 2005
                       FOR THE FIFTH CIRCUIT
                          ________________               Charles R. Fulbruge III
                                                                 Clerk
                           No. 04-61146
                         Summary Calendar
                         ________________

JOHN TELLO

          Petitioner - Appellant

     v.

COMMISSIONER OF INTERNAL REVENUE

          Respondent - Appellee
_________________________________________________________________

      Appeal from a Decision of the United States Tax Court
                           No. 11336-04
_________________________________________________________________

Before KING, Chief Judge, and JOLLY and DeMOSS, Circuit Judges.

PER CURIAM:*

     Petitioner-Appellant John Tello contested a notice of

deficiency he received regarding his 2002 taxes.   The United

States Tax Court dismissed his petition for failure to state a

claim and imposed sanctions.   We AFFIRM.

                          I.   BACKGROUND

     On June 30, 2004, Petitioner-Appellant John Tello filed a

pro se petition for redetermination with the United States Tax

Court, contesting a notice of deficiency for 2002 sent to him by

     *
          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that this opinion should not be published and is not precedent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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Respondent-Appellee Commissioner of Internal Revenue (the “CIR”).

In his petition, Tello alleged, inter alia, that the notice of

deficiency was levied improperly because: (1) the accounting

method the CIR employed was not as suitable as Tello’s preferred

accounting method; (2) the CIR is not permitted to provide

accounting services in the State of Texas; (3) the CIR is not

permitted to practice law in the State of Texas; and (4) Tello

has no “fiduciary obligation” to pay taxes to the Internal

Revenue Service (the “IRS”) or the CIR.   Notably, Tello did not

deny receiving the income stated in the notice of deficiency.

     On July 23, 2004, the CIR filed a motion to dismiss, arguing

that Tello failed to state a claim.   The CIR also moved for

sanctions against Tello under I.R.C. § 6673 (2000) for

instituting a proceeding for the purposes of delay and/or for

making frivolous arguments in his petition for redetermination.

The CIR noted that in another case involving Tello’s tax

deficiencies for the 1996, 1997, 1998, and 2000 tax years, Tello

was informed that his fiduciary argument was frivolous and that

he was sanctioned $2,500 for continuing to advance the argument.1

In response to the CIR’s motion, the Tax Court ordered Tello to

“file with the Court an amended petition [setting] forth with

specificity each error he alleges was made by the respondent in

     1
          This court recently affirmed the Tax Court’s decision
against Tello in this related case. Tello v. Comm’r, __ F.3d __,
2005 WL 1269579 (5th Cir. 2005) (per curiam).

                              - 2 -
the determination of the deficiency . . . .”    Tello in turn filed

a bellicose response in which he did not set forth with

specificity any alleged errors made by the CIR in calculating

Tello’s notice of deficiency.   On September 7, 2004, the Tax

Court issued an order in which it dismissed Tello’s petition for

redetermination, upheld the CIR’s determination of deficiency,

and sanctioned Tello $500 under § 6673.

     On November 26, 2004, Tello filed a notice of appeal.

Tello, proceeding pro se, argues that the Tax Court: (1) denied

him due process in dismissing his petition; and (2) levied

sanctions against him inappropriately.    The CIR has moved for

additional sanctions of $6,000 against Tello for maintaining a

frivolous appeal.   The CIR claims that on appeal, Tello has

renewed his fiduciary argument, which repeatedly has been ruled

frivolous.   Citing, inter alia, Trowbridge v. Commissioner, 378
F.3d 432 (5th Cir. 2004)(per curiam) and Parker v. Commissioner,

117 F.3d 785 (5th Cir. 1997)(per curiam), the CIR notes that we

have repeatedly sanctioned taxpayers for persisting in making

frivolous tax-protest arguments on appeal.

                          II.   DISCUSSION

A.   Dismissal for Failure to State a Claim

     Tello’s main argument on appeal seems to be that the Tax

Court denied him due process and committed various other

procedural improprieties in dismissing his petition.    To the

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extent Tello’s arguments are comprehensible, they are wholly

without merit.   “We perceive no need to refute these arguments

with somber reasoning and copious citation of precedent; to do so

might suggest that these arguments have some colorable merit.”

Crain v. Comm’r, 737 F.2d 1417, 1417 (5th Cir. 1984).

     It is clear that Tello’s petition was the proper subject of

a dismissal for failure to state a claim.   Petitions in the Tax

Court are governed by TAX CT. R. 34(b)(4), which states that a

petition must contain: “Clear and concise assignments of each and

every error which the petitioner alleges to have been committed

by the Commissioner in the determination of the deficiency or

liability. . . .   Any issue not raised in the assignments of

error shall be deemed to be conceded.”   The assignments of error

Tello made in his petition for redetermination were patently

frivolous.   The heart of Tello’s argument in the Tax Court was

that the CIR has no authority to collect tax revenue.    It is

manifest that the CIR and the IRS have the authority to collect

tax revenue by virtue of the Internal Revenue Code.     See I.R.C.

§§ 7801-7804 (2000).   Thus, his primary assignment of error was

plainly without merit.   Furthermore, it is evident that by virtue

of promulgating official tax documents, the CIR has not engaged

in the unauthorized practice of accounting or law.    We have

previously upheld the Tax Court’s dismissal of petitions for

redetermination under Rule 34(b)(5) for failure “to allege any

justiciable error in the determinations upon which the notice of

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deficiency was based or any facts tending to support any such

error.”    Sochia v. Comm’r, 23 F.3d 941, 943 (5th Cir. 1994).

Accordingly, we affirm the Tax Court’s dismissal of Tello’s

petition for redetermination.

B.    Tax Court Sanctions

      Section 6673(a)(1) of the Internal Revenue Code provides for

sanctions up to $25,000 when a taxpayer initiates a proceeding

primarily for delay or advocates frivolous or groundless

arguments.    “The Tax Court’s assessment of penalties under

section 6673 can be reversed by this court only for an abuse of

discretion.”    Sandvall v. Comm’r, 898 F.2d 455, 459 (5th Cir.

1990).    In the instant case we see no abuse of discretion.   We

have previously upheld penalties under § 6673 where taxpayers

were warned by the Tax Court to stop litigating frivolous issues.

Id.   Here, Tello received multiple warnings regarding his

fiduciary argument.    He chose to ignore those warnings and

persisted in advocating frivolous arguments.    Accordingly, we

affirm the Tax Court’s sanctions.

C.    Appellate Sanctions

      Section 7482(c)(4) of the Internal Revenue Code endows this

court with “the power to require the taxpayer to pay to the

United States a penalty in any case where the decision of the Tax

Court is affirmed and . . . the taxpayer’s position in the appeal

is frivolous or groundless.”    It is clear that the due process

                                - 5 -
and other procedural arguments Tello makes on appeal are

frivolous and groundless.   We thus find that appellate sanctions

are appropriate, and assess sanctions against Tello in the amount

of $2,500.

                        III.   CONCLUSION

     For the foregoing reasons, the Tax Court’s judgment and

imposition of sanctions is AFFIRMED.   The CIR’s motion for

sanctions is GRANTED IN PART, and sanctions in the amount of

$2,500 are ASSESSED against Tello.

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