Opinion
453-17
02-14-2022
GREGORY J. PODLUCKY & KARLA S PODLUCKY, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Albert G. Lauber Judge
This case was tried on October 5 and 7 during the Court's October 4, 2021, Los Angeles, California, trial session. The parties and witnesses appeared remotely via Zoomgov. On January 21, 2022, the parties filed simultaneous opening briefs.
On February 7, 2022, petitioners filed a Motion for Recusal of Judge. Petitioners contend that during trial the Court showed "a personal bias or prejudice" toward petitioner husband. Petitioners specifically take issue with the Court's characterization of certain arguments as "frivolous." But throughout these proceedings petitioner husband has repeatedly advanced positions that are unquestionably frivolous.
In the petition petitioner husband asserted that the income tax laws could not be applied to him because they constituted "a direct tax without apportionment." On January 24, 2018, he filed a motion to vacate the notice of deficiency, arguing that the IRS did not have constitutional authority to issue the notice and that this Court lacks jurisdiction over the case. On April 13, 2018, he filed a motion for summary judgment advancing similar contentions and claiming that this Court is liable for $22 billion in damages for operating as a "Star Chamber Court." On March 4, 2019, he filed another motion for summary judgment contending that there is "no enabling enforcement clause in the 16th Amendment . . . to [grant this Court] subject-matter jurisdiction." These are frivolous tax arguments. See Wnuck v. Commissioner, 136 T.C. 498 (2011); The Truth About Frivolous Tax Arguments, Internal Revenue Service (March 2018), https://www.irs.gov/privacy-disclosure/the-truth-about-frivolous-tax-arguments-introduction.
By order served June 10, 2021, we noted that petitioners had advanced frivolous positions and advised them to desist from this path lest they face penalties. See I.R.C. § 6673(a)(1) (authorizing this Court to impose a penalty up to $25,000 if a 1 taxpayer's position is "frivolous or groundless" or is maintained "primarily for delay"). Less than two weeks later petitioner husband advanced more frivolous contentions. On June 21, 2021, he filed a 244-page motion asserting (among other things) that respondent has "perpetrat[ed] fraud [on] this Court by proceeding with the prosecution of the void Notice of Deficiency by and through a want of subject-matter jurisdiction." Later that day he filed a 199-page motion asserting that "the Federal Tax Statutes are clearly in derogation of personal rights and property rights." We denied both motions and reiterated our warning about frivolous arguments. Undeterred, petitioner husband filed on July 12, 2021, a 545-page document asserting (among other things) that there is no "enforcement clause in the 16th Amendment" and that "the citing . . . of any statutes in Title 26 . . . [is] both unconstitutional and fraudulent." At trial we reasonably characterized these positions as "frivolous."
Petitioners also assert that the Court showed bias by embracing respondent's position on the central question in the case, namely, whether assets from petitioners' corporation were diverted to them personally. In this passage the Court was urging Mr. Podlucky to use his time at trial to present testimony and evidence that were relevant to the issues the Court had to decide. The Court summarized respondent's position and urged Mr. Podlucky to address it forthrightly rather than digress into facts that did not matter. In so doing the Court was attempting to help Mr. Podlucky, a pro se litigant, present his case more effectively. Concluding that petitioners' arguments do not justify recusal, it is
ORDERED that petitioners' Motion for Recusal of Judge, filed February 7, 2022, is denied. 2