Opinion
20079-21S
09-01-2022
Bradley Farley & Rui Shi, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER OF DISMISSAL AND DECISION
Diana L. Leyden, Special Trial Judge
This case is before the Court on respondent's Motion to Dismiss for Failure to State a Claim upon Which Relief Can Be Granted, filed June 8, 2022.
Petitioners resided in the state of Texas at the time the petition was filed.
On June 1, 2021, petitioners filed a petition to commence this case, in which they seek review with respect to their 2018 tax year. On June 8, 2022, respondent filed a Motion to Dismiss for Failure to State a Claim upon Which Relief Can Be Granted (motion to dismiss). Petitioners filed a Response to Motion to Dismiss for Failure to State a Claim Upon Which Relief Can Be Granted, on June 27, 2022 (response), and an Objection to Motion to Dismiss for Failure to State a Claim Upon Which Relief Can Be Granted, on August 22, 2022 (objection). By Order served August 29, 2022, the motion to dismiss was assigned to the undersigned for disposition.
Rule 40 provides that a party may file a motion to dismiss for failure to state a claim upon which relief can be granted. The Court may grant such a motion if the pleading that commenced the proceeding contains no or insufficient facts that support the claim for relief made in that pleading. Rule 40; see also Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007).
Unless otherwise indicated, all statutory references are to the Internal Revenue Code, Title 26 U.S.C., in effect at all relevant times, all regulation references are to the Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all relevant times, and all Rule references are to the Tax Court Rules of Practice and Procedure.
Giving petitioners the benefit of every doubt as the Court is required to do at this stage of the proceedings, see Hicks v. Small, 69 F.3d 967, 969 (9th Cir. 1995), the Court finds that the petition in this case contains no or insufficient facts that support the claim for relief made in that pleading. Rather, the petition appears to be merely an expression of protest and does not contain anything but frivolous and groundless arguments. Under the circumstances there is not any need to catalog petitioners' arguments and painstakingly address them. See 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"). Petitioners' response and objection similarly make frivolous and groundless arguments in the form of tax protester rhetoric that the Court will not address further.
Because petitioners' petition fails to state a claim upon which relief can be granted, the Court shall grant respondent's motion seeking dismissal of this case. See Rules 34(a)(1), 123(b).
I.R.C. § 6673 authorizes the Court to require taxpayers to pay the United States a penalty not in excess of $25,000 whenever it appears that proceedings have been instituted or maintained by the taxpayers primarily for delay or that the position of the taxpayers in such proceeding is frivolous or groundless. The record in this case convinces the Court that petitioners are not interested in disputing the merits of the deficiency in income tax as determined by respondent in the notice of deficiency. See Coleman v. Commissioner, 791 F.2d 68, 71 (7th Cir. 1986). Rather, the record demonstrates that petitioners are using this case as a vehicle to protest the tax laws of this country and espouse their own misguided views. A petition to the Tax Court is frivolous "if it is contrary to established law and unsupported by a reasoned, colorable argument for change in the law." Coleman v. Commissioner, 791 F.2d at 71. Petitioners' position, as set forth in the petition, consists of tax protester rhetoric. Based on well-established law, their position is frivolous and groundless.
Although an I.R.C. § 6673 penalty will not be imposed here, petitioners are admonished that the Court will consider imposing such a penalty in future cases if petitioners again file a petition asserting tax protester rhetoric. Additionally, the Court will consider imposing such a penalty in this case if petitioners continue to submit filings with the Court that assert frivolous and groundless tax protester rhetoric.
Premises considered, it is
ORDERED that respondent's Motion to Dismiss for Failure to State a Claim Upon Which Relief Can Be Granted, filed June 8, 2022, is granted and this case is dismissed upon the ground that the petition fails to state a claim upon which relief can be granted. It is further
ORDERED AND DECIDED that there is a deficiency in Federal income tax due from petitioners for the taxable year 2018 in the amount of $6,669.00; and
That there is an accuracy-related penalty due from petitioners for the taxable year 2018 under the provisions of I.R.C. § 6662(a) in the amount of $1,333.80.