Kevin M. Moore v. Comm. IRS , 296 F. App'x 821 ( 2008 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
OCT 17, 2008
No. 07-15165 THOMAS K. KAHN
Non-Argument Calendar CLERK
________________________
Agency No. 17901-06L
KEVIN M. MOORE,
Petitioner-Appellant,
versus
COMMISSIONER OF INTERNAL REVENUE,
Respondent-Appellee.
________________________
Petition for Review of a Decision of the
United States Tax Court
_________________________
(October 17, 2008)
Before ANDERSON, HULL and WILSON, Circuit Judges.
PER CURIAM:
Kevin M. Moore appeals a decision of the U.S. Tax Court finding that the
Commissioner of Internal Revenue did not abuse his discretion in determining that
the Internal Revenue Service (IRS) may proceed to collect Moore’s unpaid tax
liabilities by levy and imposing a $25,000 penalty for advancing frivolous
positions and maintaining the proceedings primarily for delay. Finding no
reversible error, we affirm.
BACKGROUND
Moore did not file federal income tax returns for the years 1997, 1999,
2000, and 2001. He filed returns for the years 1998 and 2002, but he did not pay
the taxes due for those years. He was audited by the IRS, which issued notices
assessing deficiencies, penalties, and interest against him. He did not file petitions
in the Tax Court for redetermination. He also failed to pay the assessments.
Moore later submitted tax returns for the years 1997, 1999, 2000, and 2001.
Based on those returns, the IRS abated Moore’s liability, but Moore still failed to
pay. Accordingly, the IRS sent, pursuant to I.R.C. § 6331(d), a final notice of
intent to levy and of Moore’s right to a collection due process hearing.
Moore requested a hearing. He indicated on his hearing request form that
he did not agree with the proposed levy because he “[did] not make sufficient
money to . . . support [him]self.” During his hearing, Moore reiterated his
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financial hardship, which was the only non-frivolous issue that he raised. He did
not otherwise challenge his underlying tax liabilities.
The IRS officer then discussed collection alternatives with Moore. The
officer reviewed Moore’s financial information, which indicated that Moore
owned two houses, one of which he rented out; that he used an inaccurately small
value for the houses; and that he overstated the amount of encumbrances on those
houses. The officer suggested that Moore immediately sell the rental house and
apply the net proceeds to the tax liabilities. Moore apparently refused to do so.
The IRS subsequently mailed Moore a “notice of determination concerning
collection action(s) under section 6320 and/or 6330.” The IRS attached to its
notice a written statement by the officer. The officer indicated that he received
more financial information from Moore’s accountant. According to the
accountant, Moore was receiving net business income, but was not making his
estimated tax payments. Thus, the officer noted that Moore was not entitled to a
collection alternative unless and until he became current with his estimated tax
payments.
Moore timely filed a petition in the Tax Court for review of the notice.
Before trial, Moore had refused to cooperate with the IRS’ attempt to establish
stipulated facts and exhibits pursuant to Tax Court Rule 91(a). At trial, Moore
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attempted several times to ask whether the judge and opposing counsel were
“required to take an oath to support and defend the Constitution of the United
States” and whether the judge was “required to abide by [his] oath in performing
[his] official duties.”
After the court replied multiple times to Moore’s questions by asking
whether Moore had any evidence to present, Moore remarked, “I’d just like the
citizen-witnesses to make note that the Judge has refused to answer the second
question and also the court reporter, I wish I had a silver dollar or something to
give you because this is good stuff.” Moore introduced no evidence at trial.
The court found that the IRS could proceed with its collection of Moore’s
unpaid tax liabilities. The court further imposed a $25,000 penalty pursuant to §
6673(a) for displaying an “obvious pattern of delay and extensive waste of”
governmental and judicial resources.
STANDARDS OF REVIEW
“The Commissioner’s determination of a deficiency is presumed correct,
and the taxpayer has the burden of proving it is incorrect. The Tax Court’s
findings must stand unless clearly erroneous.” Webb v. Comm’r of Internal
Revenue, 872 F.2d 380, 381 (11th Cir. 1989) (citations omitted). “[W]here the
validity of the underlying tax liability is not properly at issue, the Court will
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review the Commissioner’s administrative determination for abuse of discretion.”
Sego v. Comm’r of Internal Revenue, 114 T.C. 604, 610 (2000). “Review of the
Tax Court’s imposition of statutory damages against a taxpayer is for abuse of
discretion.” Webb, 872 F.2d at 381 (citation omitted).
DISCUSSION
The Tax Court properly found that the IRS Appeals Office did not abuse its
discretion in determining that the collection action could proceed. Tax Court Rule
91(a)(1) provides that “[t]he parties are required to stipulate, to the fullest extent to
which complete or qualified agreement can or fairly should be reached, all matters
not privileged which are relevant to the pending case, regardless of whether such
matters involve fact or opinion or the application of law to fact.” If a party refuses
or fails to stipulate as to “any matter within the terms of [Rule 91], the party
proposing [stipulation] may . . . file a motion with the Court for an order directing
the delinquent party to show cause why the matters covered in the motion should
not be deemed admitted for the purposes of the case.” TAX CT. R. 91(f)(1). “[I]f
the response is evasive or not fairly directed to the proposed stipulation or portion
thereof, that matter or portion thereof will be deemed stipulated for purposes of the
pending case, and an order will be issued accordingly.” TAX CT. R. 91(f)(3).
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Here, instead of providing “fairly direct[]” responses to the proposed
stipulation, see TAX CT. R. 91(f)(3), Moore asserted that the income tax is
unconstitutional; that the income tax applies only to public employees; that the
IRS is not a federal agency; that the IRS has no power outside the District of
Columbia or “federal enclaves”; and that the Paperwork Reduction Act relieves
taxpayers from the statutory requirements of filing tax returns and paying taxes.
Because Moore’s response to the order to show cause is “not fairly directed to the
proposed stipulation,” the Tax Court properly deemed the proposed stipulation
established. See TAX CT. R. 91(f)(3).
To the extent that Moore seeks in this appeal to challenge his underlying tax
liability documented in the stipulation, he may not do so now. Giamelli v.
Comm’r of Internal Revenue, 129 T.C. 107, 115 (2007) (holding “that [the Tax
Court] do[es] not have authority to consider section 6630(c)(2) issues that were
not raised before the Appeals Office”). The parties were limited to the
administrative record before the IRS officer, and Moore has failed to show that the
officer’s determinations were unsupported by that record. Therefore, we must
presume, as the Tax Court did, that the Commissioner’s determinations as to
Moore’s tax liability are correct and that the collection action may proceed. See
Webb, 872 F.2d at 381.
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Furthermore, the Tax Court did not abuse its discretion in assessing a
$25,000 penalty against Moore. Section 6673(a) authorizes the Tax Court to
impose a penalty not exceeding $25,000 if the taxpayer “maintain[s] [a
proceeding] . . . primarily for delay,” § 6673(a)(1)(A), or “the taxpayer’s position
in such proceeding is frivolous.” § 6673(a)(1)(B).
Moore has delayed the resolution of his tax liabilities by providing
frivolous, evasive responses to the proposed stipulation. Although Moore was
given multiple opportunities to present evidence during his trial, he failed to do so
and acted disrespectfully. He
belligerently shouted, yelled, and screamed irrelevant questions
repeatedly at the Court. [He] repeatedly interrupted the Court
and directed disrespectful statements to the Court. Additionally,
rather than directing his attention to his case or the Court, [he]
shouted and called out to approximately a dozen persons in the
gallery disrespectful and irrelevant remarks impugning the
integrity of the Court.
Moore characterizes his behavior as a jurisdictional defense, which can be
raised at any time during the proceedings. His characterization is implausible. In
reality, Moore created a courtroom spectacle by attacking the Tax Court’s
integrity, causing further delay. Thus, the Tax Court did not abuse its discretion
by imposing on Moore the maximum penalty under § 6673(a). Cf. Stearman v.
Commissioner, 436 F.3d 533, 538 (5th Cir. 2006) (finding no abuse of discretion
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in the Tax Court’s imposition of a $25,000 penalty pursuant to § 6673(a) on a
taxpayer who maintained a frivolous proceeding primarily for delay). For the
foregoing reasons, we affirm.
AFFIRMED.
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