Is Still Frivolity

Even The Judge With a Heart, STJ Rob’t N Armen, can’t find sympathy for Jeffrey P. Heist, Docket No. 8724-18L, filed 2/22/19.

Jeff ran a burglar alarm company and filed three (count ‘em, three) years’ worth of what appeared to be straight returns, reporting tax and underwithholding (Jeff never paid ES), but paying nought. IRS assessed and filed NFTLs and NITLs, to which Jeff riposted with 1040-Xs showing zeros. IRS countered with the Section 6702 frivolous return chops.

Jeff claimed he wasn’t running a trade or business, using the old protester jive from Section 7701(a)(26) “including-means-limited-to.”

Except of course it doesn’t.

“Subsec. (a)(26) defines ‘trade or business’ to include the performance of the functions of a public office. The argument that a ‘trade or business’ includes only a public office is baseless and frivolous. Eg.,[sic] Hill v. Commissioner, T.C. Memo. 2013-265 and T.C. Memo. 2013-264; Slingsby v. Commissioner, T.C. Memo. 2011-3.” Order, at p. 3.

STJ Armen proceeds with “somber reasoning and copious citation of precedent,” including without limitation “…Notice 2010-33, 2010-17 I.R.B. 609, at part (III)(1)(e), listing as frivolous the position that a taxpayer has the option under law to file a document or set of documents in lieu of a return or elect to file a return reporting zero taxable income and zero tax liability even if the taxpayer received taxable income during the taxable period for which the return is filed, or similar arguments described as frivolous in Rev. Proc. 2004-34, 2004-1 C.B. 619, discussing the ‘zero return position’.” Order, at p. 8.

He also shows Jeff the Section 6673 yellow card, at no extra charge.

Don’t try this at home (or anywhere else).