If you’re going to frivol in Tax Court (and I definitely do not recommend that you do), show up, and you might just maybeso get a lighter chop than if you frivoled from afar. But do not presume too far upon the Court’s indulgence, lest you get an off-the-bench Section 6673 $1K frivolity chop from Judge Courtney D. (“CD”) Jones sua sponte, even though IRS drops the Section 6662(a)s.

Here’s Jeffery Dominic Giraldi, Docket No. 1288-23, filed 4/9/24.

Jeffery served a bunch Requests for Admissions, and motions to revIew sufficiency IRS’ responses thereto, in limne (he wins part of that, as an IRS exhibit is duplicative), and to strike some IRS’ trial exhibits (hi, Judge Holmes). While IRS and Judge CD Jones are dealing with this, IRS’ counsel warned Jeffery (“correctly,” Transcript, at p. 7) about Section 6673, and so moved. Judge CD Jones denies without prejudice, while warning Jeffery it ain’t over until…you know the rest.

But trial comes.

“…at trial, the Court once again warned Mr. Giraldi that he may face a section 6673 penalty if he advanced any frivolous arguments. Nonetheless, when the Court conducted a hearing on the pending motions and advised Mr. Giraldi of its concern that his RFAs suggested frivolous positions, Mr. Giraldi declined to give a responsive answer. Further, although Mr. Giraldi later retracted his initial position that the NOD was issued without authorization, his filings before the Court are strongly associated with typical frivolous and groundless arguments.” Transcript, at pp. 8-9.

Judge CD Jones has had enough.

“The positions taken in the Petition and throughout this litigation—including through the RFAs—are certainly frivolous. Mr. Giraldi’s motion practice before the Court is troubling. For example, in the RFAs, he propounded multiple questions that strongly suggested frivolous positions. When the Court conducted its hearing on respondent’s pending motions, the Court advised Mr. Giraldi of its concern that these questions suggested frivolous positions and inquired about their relevance to the case. Mr. Giraldi declined to give a responsive answer.” Transcript, at p. 11.

Jeffery gave dodgy answers when challenged, and never advanced non-frivolous positions, even though give a chance.

Yes, he did show up for trial, and entered into a stip of facts.

“In his favor, we note that Mr. Giraldi appeared at trial and participated in submitting a Stipulation of Facts. Although he had to be reminded of the Court’s requirement that he not interrupt respondent’s counsel, he ultimately complied. Nonetheless, he continued to advance frivolous and groundless positions during his testimony. His frivolous positions throughout this litigationprevented the IRS from assessing tax that he owed. And he burdened both the Court and the IRS with all the chores necessary for the adjudication of an inevitable tax liability.” Transcript, at p. 12.

So Judge CD Jones goes easy on Jeffery.

But lest he grow elated, there’s a chop coming.  “In determining the amount of the penalty, we take account of all the foregoing facts. We impose today a $1,000 penalty, which is a relatively modest penalty, given that we have the discretion to impose a penalty twenty-five times that high. Mr. Giraldi should be aware, however, that if he should ever repeat his maintenance of frivolous tax litigation, he would stand in peril of a much steeper penalty.” Transcript, at p. 12.

Less than a week ago, I remarked, anent the wiseguys and frivolites who play discovery games, “I fear that some less-than-diligent types will ruin useful tools for the rest of us. Lose your case at discovery, indeed.”