Opinion
5626-21
03-09-2022
Timothy J. McCarthy Petitioner v. Commissioner of Internal Revenue Respondent
ORDER
Elizabeth Crewson Paris Judge
On December 29, 2021, petitioner filed a document titled "Motion for Stipulations" which was deemed not conforming to the Tax Court Rules of Practice and Procedure but based upon its content was retitled as First Amendment to Petition and filed with the Court. On February 28, 2022, respondent filed a Motion to Dismiss for Failure to State a Claim (Motion to Dismiss), to which petitioner objects. The Motion to Dismiss addresses the arguments raised in both the Petition and the First Amendment to Petition. The First Amendment to Petition also included additional documents supporting petitioner's section 6702 penalty position.
Respondent's Motion to Dismiss for Failure to State a Claim will be granted in part and denied in part, without prejudice, in consideration of the following:
Section 6702 penalties cannot be challenged in this deficiency proceeding because those penalties do not form any part of respondent's determination of the deficiencies, additions to tax and penalties in the proceeding. In addition, the deficiency procedures which allow preassessment review of certain penalties do not apply to the civil penalties provided in section 6702. See section 6703(b); Buckardt v. Commissioner of Internal Revenue, T.C. Memo 2012-170 (stating that the deficiency procedures of sections 6211 through 6216 do not apply to frivolous return penalties under section 6702), aff'd, 584 Fed.Appx. 612 (9th Cir. 2014); Smith v. Commissioner of Internal Revenue, T.C. Memo 2019-111.
Petitioner's filed motions attempt to argue the assessment or collection of civil penalties for filing frivolous tax returns. Respondent's determination that petitioner took frivolous positions on his 2016 return and was deserving of a section 6702 penalty has no bearing on the Notice of Deficiency issued to petitioner for income tax year 2016.
Petitioner has now filed three different motions regarding the penalties assessed under section 6702. The Court has ordered responses to each of petitioner's motions in an abundance of caution to determine if any of the assessment or collection arguments might include the income tax deficiency for 2016, as assessment of which should be held in abeyance during the pendency of this action. Any further motions filed by petitioner regarding section 6702 penalties, whether dealing with assessment, collection or affect upon the Notice of Deficiency at issue in this case will now be considered as being instituted or maintained primarily for delay and could be subject to a sanction under section 6673(a) allowing for penalties in those situations. After due consideration, it is
ORDERED that petitioner's First Amendment to Petition filed on December 29, 2021, and its content to include arguments in regard to section 6702, is dismissed for failure to state a claim. It is further
ORDERED that the balance of respondent's Motion to Dismiss for Failure to State a Claim regarding the Notice of Deficiency addressed in the original Petition is denied without prejudice.
Petitioner is reminded that any further filings addressing the section 6702 penalty or its effects upon the validity of the Notice of Deficiency could subject petitioner to penalties under section 6673, and will be considered as being instituted or maintained primarily for delay.