In Uncategorized on 09/03/2019 at 16:03

Petitioners are well-advised to heed a warning from the Judge that their litigating positions are frivolous. While Derrick Barron Tartt, 2019 T. C. Memo. 112, filed 9/3/19, escapes the Section 6673 chop from Judge Lauber, who only shows him the yellow card, George J. Smith and Sheila Ann Smith, 2019 T. C. Memo. 111, filed 9/3/19, persist in post-trial brief after being warned by Judge Halpern on the trial that the tired old FICA non-wages argument is a non-starter.

First, George’s and Sheila’s story.

“At the beginning of the trial, we informed petitioners that, on the basis of our reading of the petition and their pretrial memorandum, they appeared to be proceeding with only frivolous or groundless claims.  We warned them that we could impose a penalty of up to $25,000 for such conduct.  After reading petitioners’ 36-page posttrial brief, which repeats the arguments they made in the 40-page petition and in their pretrial memorandum, and with which we have dealt supra, we believe that petitioners are deserving of a penalty because they lack grounds for their claim and their arguments are frivolous.  We will impose on them a section 6673(a)(1) penalty of $2,500.” 2019 T. C. Memo. 111, at pp. 13-14.

Derrick Barron wants to offset monies he claims the Feds owe him for employment discrimination against his income tax liabilities for three (count ‘em, three) years of six-figure income.

For a start, Derrick Barron tried to get the money in USDCNDIL (twice), got tossed both times, and 7 Cir. affirmed. So Derrick Barton doubled down. “Petitioner then filed a complaint alleging that the participants in the preceding lawsuits–including the defendants, their attorneys, the presiding judges, and the U.S. Government–had joined in a conspiracy to deprive him of employment benefits.  The Court of Appeals summarily affirmed the dismissal of that action and imposed sanctions on petitioner for frivolous filings. ” Order, at p. 3. (Citation omitted).

Derrick Barron did report the income, so IRS gave him a NFTL. Derrick Barron got a CDP but only stated he couldn’t pay but would go to the Supremes on his most recent toss. So he got a NOD.

Judge Lauber: “At the CDP hearing petitioner did not contend (or supply evidence) that his reported …tax liabilities were incorrect.  Nor did he allege that he has an ‘available credit’ from another year that could be applied to reduce those liabilities.  Rather, he wishes to offset against those liabilities a monetary judgment that he seeks in litigation deemed frivolous by every court to consider the question.

“We lack jurisdiction to consider petitioner’s collateral attack on his…tax liabilities.  Neither the SO nor we have authority to second-guess the decisions of the courts that have ruled against him.  Even if we had such jurisdiction, no legal authority exists for offsetting, against an assessed Federal tax liability, a claim against the Government in a totally unrelated matter.” 2019 T. C. Memo. 112, at pp. 8-9.

No Section 6673, but Derrick Barron does get the yellow card, because he wasn’t in Court (this was IRS seeking and getting summary J), so he wasn’t warned before proceeding.

I have often said that poets get it right, but I would caution Tax Court petitioners to be wary of William Blake: “If the fool would persist in his folly he would become wise.” Possibly wise, but maybe also poorer.


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