IR-2003-28, March 11, 2003 WASHINGTON — Thirty-eight persons who attempted to delay tax collections by pursuing frivolous court cases ended up with $126,000 in penalties during the last two years. The Internal Revenue Service warns that the Tax Court may impose sanctions of up to $25,000 on those who misuse their right to a court review of IRS collection procedures merely to stall their tax payments. “Taxpayers have rights that they should invoke when appropriate,” said IRS Chief Counsel B. John Williams. “But those who would abuse those rights to stall tax collections should realize that they may incur substantial penalties.” The IRS Restructuring and Reform Act of 1998 set forth various taxpayer rights related to tax liens or levies, including the right to seek judicial review. While an appeal is pending, the IRS usually may not enforce collection. In December 2000, the Tax Court warned taxpayers that it would impose penalties against those who “institute or maintain a lien or levy action primarily for delay or whose position in such a proceeding is frivolous or groundless” (Pierson v. Commissioner PDF, 115 T.C. 581). Such positions contend that the income tax is not valid, that the person or type of income is not subject to the tax, or espouse other arguments that the Court has previously rejected as baseless. The Court has repeatedly stated that frivolous cases waste its limited resources and delay the resolution of other taxpayers’ genuine controversies. Using its authority under Internal Revenue Code Section 6673, it is levying increasingly severe penalties on those pursuing such cases. The final section of a document called The Truth about Frivolous Tax Arguments PDF, lists a number of cases that have incurred penalties. The document presents 21 frivolous assertions, along with a summary of the law and relevant legal decisions involving these false claims. The table below is a list of Section 6673 penalties imposed in Collection Due Process cases by the Tax Court. To read specific opinions, use the petitioner's last name to search in the Tax Court's Historical Opinion area. Case Citation Penalty TCM refers to Tax Court Memorandum Decision TC refers to Tax Court Regular Decision Bartschi v. Commissioner TCM 2002-268 $2,500 Copeland v. Commissioner TCM 2003-46 $1,000 Craig v. Commissioner 119 TC No. 15 $2,500 Crow v. Commissioner TCM 2002-149 $1,500 Davich v. Commissioner TCM 2002-255 $5,000 Davidson v. Commissioner TCM 2002-194 $4,000 Davis v. Commissioner TCM 2001-87 $4,000 Eiselstein v. Commissioner TCM 2003-22 $5,000 Fink v. Commissioner TCM 2003-61 $2,000 Flathers v. Commissioner TCM 2003-60 $1,500 Gunselman v. Commissioner TCM 2003-11 $1,000 Hack v. Commissioner TCM 2002-243 and -244 $2,000 Haines. v. Commissioner TCM 2003-16 $2,000 Hauck v. Commissioner TCM 2002-184 $10,000 Hill v. Commissioner TCM 2002-272 $3,500 Keene v. Commissioner TCM 2002-277 $5,000 Kiley v. Commissioner TCM 2002-315 $5,000 Koenig v. Commissioner TCM 2003-40 $2,000 Land v. Commissioner TCM 2002-263 $4,000 Nestor v. Commissioner TCM 2002-251 $5,000 Newman v. Commissioner TCM 2002-135 $1,000 Perry v. Commissioner TCM 2002-165 $2,500 Rennie v. Commissioner TCM 2002-296 $1,500 Roberts v. Commissioner 118 TC 365 (2002) $10,000 Robinson v. Commissioner TCM 2002-316 $2,500 Schmith v. Commissioner TCM 2002-252 $1,000 Schroeder v. Commissioner TCM 2002- 190 $1,000 Smeton v. Commissioner TCM 2002-140 $1,000 Smith v. Commissioner TCM 2003-45 $500 Standifird v. Commissioner TCM 2002-245 $7,500 Stewart v. Commissioner TCM 2002-225 $7,500 Tornichio v. Commissioner TCM 2002-291 $12,500 Villwock v. Commissioner TCM 2002-235 $1,000 Wagner v. Commissioner TCM 2002-180 $4,000 Watson v. Commissioner TCM 2001-213 $1,500 Williams v. Commissioner TCM 2002-111 $1,000 Yacksyzn v. Commissioner TCM 2002-99 $1,000 Subscribe to IRS Newswire
