Gwen Kestin seems to have started a movement. I’m sure all y’all remember Gwen. What, no? Then see my blogpost “From The Serious to The Frivolous,” 8/29/19. Now you remember Gwen sent off photocopies of her frivolous return to various service centers, each of which got a Section 6702 $5K chop, but Judge David Gustafson let Gwen off the hook, as the copies were clearly copies of a previous submission, not a new frivolity.

Judge Nega does likewise for Chule Rain Walker, T. C. Memo. 2022-63, filed 6/15/22. Chule Rain played the old 4852 Amended W-2 wages aren’t taxable gambit. IRS hit Chule Rain with Letter 3176 straighten up and fly right or Section 6702 chop.

Chule Rain responded that IRS hadn’t stated specifically what was wrong with his return, and attached a photocopy thereof (so labeled) to his letter.

That earned him a Boss Hossed chop number 2 and a NITL. Chule Rain got a CDP and a NOD confirming the NITL, which he petitions.

Chule Rain never had a chance to contest liability until he got to Appeals. IRS claims he didn’t contest there, so no contest at Tax Court. Chule Rain claims he did, and Judge Nega agrees.

“Respondent asserts that petitioner failed to meaningfully challenge his underlying liability, because in the CDP proceeding he presented only frivolous arguments about his zero tax liability for receipt of compensation. Petitioner counters by pointing to his more procedural argument in the CDP proceeding that the frivolous penalties were inappropriate because his tax position had not been identified as frivolous by respondent for purposes of section 6702(c). We disagree with petitioner’s assertion that his tax position was nonfrivolous, see I.R.S. Notice 2010-33, § III(1)(e), 2010-17 I.R.B. 609, 609, but agree that raising such an argument was sufficient to preserve his underlying liability challenge….” T. C. Memo. 2022-63, at p. 6. (Citations omitted, but they canvass the de novo scope of review in Tax Court of a Section 6702 chop).

So at close of play, Chule Rain loses on chop number 1 (his original return), but wins chop number 2, as what he attached to his letter was clearly marked “reference copy.” No new claim.

Copycatting is the new growth industry.