Opinion
14252-20L
01-26-2023
LEONARD W. TOBIN, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Ronald L. Buch, Judge.
In this collection case brought pursuant to section 6330, Leonard Tobin seeks review of a notice of determination in which the Commissioner sustained a notice of intent to levy for unpaid frivolous return penalties and income tax. See I.R.C. § 6702. Pending before us is Mr. Tobin's motion for summary judgment filed pursuant to Rule 121 in which he challenges his underlying liabilities on the grounds that the returns he filed were not frivolous. Because Mr. Tobin has only raised frivolous arguments, his underlying liabilities are not properly at issue, and we will deny the motion for summary judgment.
BACKGROUND
Mr. Tobin has outstanding tax liabilities from 2015, 2016, and 2018. The Commissioner determined frivolous tax return penalties pursuant to section 6702 for 2015 and 2016. Additionally, the Commissioner notified Mr. Tobin and demanded payment (CP11T) of additional income tax due for 2018 based on miscalculations on Mr. Tobin's return for the year. (The Notice CP11 is sometimes referred to as a math error notice.)
The Commissioner commenced collection action, and Mr. Tobin requested a collection hearing. On September 17, 2019, the Commissioner mailed Mr. Tobin a notice of intent to levy. Mr. Tobin timely requested a hearing and participated in a telephone hearing with the IRS Independent Office of Appeals. He did not propose collection alternatives or submit financial information for the consideration of collection alternatives. He challenged the underlying liabilities, but his challenges were frivolous. Because Mr. Tobin failed to raise any meritorious issues, Appeals verified that the Commissioner satisfied all legal and procedural requirements and determined that the levy was appropriate. The Commissioner mailed Mr. Tobin a Notice of Determination Concerning Collection Action on November 2, 2020. Mr. Tobin thereafter paid the 2018 liability.
Mr. Tobin filed a Tax Court petition challenging the notice of determination on December 8, 2020. In that petition, he contends that his returns were not frivolous and thus disputes the underlying liabilities.
Mr. Tobin filed a Motion for Summary Judgment on October 6, 2022. In that motion, he again contends that his returns are not frivolous. In support of this contention, he advances only frivolous arguments. He argues, for example, that "his earnings were not from privileged activities subject to the tax" based on the definitions of "wages, employee, employer, includes, and trade or business" under sections 3401, 3121, and 7701. He thus contends that the businesses from which he received payments should not have reported those payments on Forms W-2 or 1099 and withheld FICA taxes from them.
To support his motion, among other documents, he filed Forms W-2 that he labeled as "ERRONEOUS" and Forms 4852, Substitute for Form W-2 or Form 1099-R, purporting to correct those Forms W-2 for the same frivolous reasons he asserts in his motion. He also submitted documents of other taxpayers who allegedly were successful in making these frivolous arguments. Those same documents can be found on a tax protester website, that we will not cite here. For the sake of completeness of the record, the Court will place a copy of the relevant page of this website on the record of this case, however because the website contains information required to be redacted under Rule 27, we will seal it from the public (we will, however, serve a copy on the parties, and it will be available to any court that might review this case on appeal).
Because Mr. Tobin's motion lacks merit, we did not order the Commissioner to respond. Discussion I. Standard of Review
The purpose of summary judgment is to expedite litigation and avoid unnecessary and expensive trials. Fla. Peach Corp. v. Commissioner, 90 T.C. 678, 681 (1988). Under Rule 121(a), either party may move for summary judgment regarding any part of the legal issues in controversy. We may grant summary judgment only if there is no genuine dispute as to any material fact. Rule 121(b); Naftel v. Commissioner, 85 T.C. 527, 528-29 (1985). The moving party bears the burden of demonstrating that there is no genuine dispute as to any material fact. Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), aff'd, 17 F.3d 965 (7th Cir. 1994). In deciding whether to grant summary judgment, we draw factual inferences in the light most favorable to the nonmoving party. FPL Grp., Inc. & Subs. v. Commissioner, 115 T.C. 554, 559 (2000). When a motion for summary judgment is made and properly supported, the nonmoving party may not rest on mere allegations or denials, but instead must set forth specific facts showing that there is a genuine dispute for trial. Rule 121(d). We make factual inferences in the light most favorable to the Commissioner, the nonmoving party.
II. The Underlying Liability
Where the underlying liability is properly at issue in a collection case, we review the issue of underlying liability de novo. Where the underlying liability is not properly at issue, we review the notice of determination for an abuse of discretion. Sego v. Commissioner, 114 T.C. 604, 610 (2000). Whether the underlying liability may be raised in a collection proceeding (and before the Court) turns on whether the taxpayer received a notice of deficiency or otherwise had a prior opportunity to dispute the liability. See I.R.C. § 6330(c)(2)(B).
In his motion for summary judgment, Mr. Tobin only raises the underlying liability. Section 6330(c)(2) addresses the issues a taxpayer may raise in a collection hearing. A taxpayer may raise "any relevant issue" including spousal defenses, challenges to the appropriateness of collection actions, and offers of collection alternatives. I.R.C. § 6330(c)(2) (emphasis added). If a taxpayer did not receive a notice of deficiency or otherwise have a prior opportunity to dispute his underlying liability, he may challenge his liability. Id. However, frivolous arguments are not relevant issues, and the Commissioner need not address them. See Battle v. Commissioner, T.C. Memo. 2009-171, 98 T.C.M. (CCH) 45, 47; I.R.C. § 6330(c)(3). Similarly, the Court is under no obligation to address frivolous arguments. See id.; Hendrickson v. Commissioner, T.C. Memo. 2019-10 at *14-*15. This Court has repeatedly held that arguments such as those made by Mr. Tobin are frivolous. See Waltner v. Commissioner, T.C. Memo. 2014-35.
The Waltner case is particularly instructive. This Court will regularly dispose of protester arguments in summary fashion with a cite to Crain v. Commissioner, 737 F.2d 1417, 1417 (5th Cir. 1984) ("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."). But in Waltner, the Court addressed the petitioner's frivolous arguments point-by-point because those arguments were predicated on a book written by a "felon and serial tax evader." Waltner, at *34. Mr. Tobin's arguments mirror those raised and addressed in Waltner and the book referenced in that opinion. And notably, Mr. Tobin provided materials from the same website as the petitioner in Waltner. See Waltner, at *29.
The only issues Mr. Tobin has raised in this case mirror those already addressed in Waltner and the book and website referenced in that opinion. They are frivolous. We need not reach the question of whether Mr. Tobin had a prior opportunity to dispute his liabilities because the only issues he presented, both administratively and to the Court, are frivolous. See Hendrickson, T.C. Memo. 2019-10 at *14-*15; Battle, 98 T.C.M. (CCH) at 47.
C. Sanctions
This case is not Mr. Tobin's first time presenting frivolous arguments to this Court. Most notably, in his case at docket no. 19687-19, he raised frivolous issues and presented frivolous arguments similar to those presented here. In response, the Court cautioned Mr. Tobin,
Mr. Tobin is warned that section 6673(a)(1) empowers the Court to impose a penalty of up to $25,000 when a taxpayer pursues an action in the Tax Court and the Court determines, inter alia, that either (1) the taxpayer instituted or maintained litigation in the Court primarily for delay; or (2) the taxpayer's litigation position is frivolous or groundless.
The Court issued that order on October 20, 2020, more than a month before Mr. Tobin filed his petition in this case and nearly two years before he filed the motion before us. He did not heed the Court's warning, thus we will follow through on that warning. We have found that Mr. Tobin's litigation position is frivolous and thus will impose a sanction of at least $5,000 when entering a decision in this case. Continuing to perpetuate frivolous arguments in this case or others may result in further or increased sanctions.
III. Conclusion Because Mr. Tobin only raised frivolous arguments as to his underlying liabilities, it is ORDERED that Mr. Tobin's motion for summary judgment filed October 6, 2022, is denied. It is further
ORDERED that the Clerk shall place tax protester website referenced in this order on the docket record as an Online Cited Source. It is further
ORDERED that the Online Cited Source shall be sealed from the public but remain viewable by the parties.