Kent E. Hovind v. Commissioner of IRS ( 2014 )

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 13-12520
Non-Argument Calendar
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Agency No. 4245-10
KENT E. HOVIND,
Petitioner-Appellant,
versus
COMMISSIONER OF IRS,
Respondent-Appellee.
________________________
Petition for Review of a Decision of the
U.S. Tax Court
________________________
(October 23, 2014)
Before TJOFLAT, JORDAN, and ROSENBAUM, Circuit Judges.
PER CURIAM:
Kent Hovind, proceeding pro se, appeals a final order and decision of the
United States Tax Court granting the Commissioner of the Internal Revenue
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Service’s (“Commissioner”) motion for entry of decision. Hovind received a
Notice of Deficiency in 2009 relating to the 1998 to 2006 tax years, based on
Hovind’s alleged failure to file an individual tax return for those years. Hovind
timely filed a counseled petition to contest the deficiency in February 2010,
alleging that he was not liable for any deficiency because Pensacola, Florida,
where he lived during the years relevant to the deficiency notice, “ha[d] not been
located within any internal revenue district since at least 1999.” He also asserted
that he was a minister of Creation Science Evangelism (“CSE”) and that the notice
had improperly attributed CSE’s income to him.
More than three years later, on March 15, 2013, the Tax Court granted the
Commissioner’s motion for entry of decision, finding that deficiencies, penalties,
and additions to Hovind’s tax were due as stated in the deficiency notice. In its
final order, the Tax Court noted that Hovind had failed to respond to the
Commissioner’s motion as directed by the court in both January and February
2013. This appeal followed.
On appeal, Hovind argues that the Tax Court’s final order was
unconstitutional because, as a federal prisoner subject to frequent facility transfers,
he had not received notice of relevant motions and orders.1 He further argues that
1
Hovind has been serving a ten-year term of imprisonment for failing to collect and pay
employment withholding taxes, obstructing tax laws, and structuring transactions to avoid
financial reporting laws. United States v. Hovind, 305 F. App’x 615 (11th Cir. 2008).
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his activities as a minister for CSE were not taxable and that the amounts in the
deficiency notice were inconsistent with the IRS’s internal records. After careful
review of the record and consideration of the parties’ briefs, we affirm.
We review for an abuse of discretion the Tax Court’s entry of a decision on
a notice of deficiency based on the petitioner’s failure to properly prosecute a
petition for a redetermination of the deficiency. See Crandall v. Comm’r of
Internal Revenue, 650 F.2d 659, 660 (5th Cir. Unit B July 1981). 2
A notice of deficiency “is the taxpayer’s ticket to the Tax Court” to obtain a
redetermination of his tax liability. L.V. Castle Inv. Grp., Inc. v. Comm’r of
Internal Revenue, 465 F.3d 1246-47 (11th Cir. 2006) (internal quotation marks
omitted). Having received a notice of deficiency, a taxpayer may file a petition
with the Tax Court for a redetermination of the deficiency. 26 U.S.C. § 6213. The
Commissioner’s determination of a tax deficiency is presumed correct, and the
taxpayer has the burden of showing that it is erroneous. Webb v. Comm’r of
Internal Revenue, 872 F.2d 380, 381 (11th Cir. 1989).
If a petition for redetermination of any deficiency has been filed, the Tax
Court may, nevertheless, dismiss the case and enter a decision against a petitioner
for failure to properly prosecute the case or to comply with Tax Court orders or
rules. Tax Ct. R. 123(b); see 26 U.S.C. § 7453 (authorizing the Tax Court to
2
This Court adopted as binding precedent all Fifth Circuit decisions issued prior to
October 1, 1981. Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc).
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prescribe rules to govern its proceedings). In that event, the Tax Court’s decision
dismissing the proceeding “shall be considered as its decision that the deficiency is
the amount determined by the secretary.” 26 U.S.C. § 7459(d); see also Tax Ct. R.
123(d) (“A decision rendered upon a default or in consequence of a dismissal,
other than a dismissal for lack of jurisdiction, shall operate as an adjudication on
the merits.”).
The record shows that the Tax Court did not abuse its discretion in granting
the Commissioner’s motion for entry of an order establishing the deficiency based
on Hovind’s failure to prosecute the petition properly. See Crandall, 650 F.2d at
660. Hovind repeatedly delayed Tax Court proceedings by failing to file responses
to motions, participate in discovery, or follow court orders. He also consistently
advanced frivolous arguments and refused to acknowledge the Tax Court’s
authority, asserting his individual sovereignty as a free inhabitant foreign to the
United States.
And our review of the events leading up to the final order in this case makes
clear that, particularly from the perspective of the Tax Court, Hovind effectively
had abandoned the case. Hovind’s case had been set for trial in March 2012. In
November 2011, Hovind’s counsel filed a motion to withdraw Hovind’s petition
for a redetermination of any deficiency. Counsel stated in the motion that he had
conferred with Hovind, that Hovind had “no intention of proceeding in tax court at
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any time in the future,” and that counsel was being terminated by Hovind upon
completion of one task: dismissing the petition. The Tax Court denied the motion,
asserting jurisdiction to decide the controversy, but struck the case from the trial
calendar due to Hovind’s unavailability for trial in March. The court directed the
parties to file a status report by December 2012.
In December 2012, the Commissioner filed a status report stating that
Hovind’s counsel had informed the Commissioner that counsel had had no contact
with Hovind since November 2011, despite attempts to contact him. Based on the
status report and Hovind’s earlier representation that he had “no intention of
proceeding in tax court,” the Tax Court ordered the Commissioner to file a motion
for entry of decision. The Commissioner did so.
On January 9, 2013, the Tax Court ordered Hovind to respond to the
Commissioner’s motion by January 30, 2013, and warned him, “Failure to comply
with this Order will result in the granting of [the Commissioner’s] motion and
entry of decision sustaining the determinations set forth in the notice of deficiency
on which this case is based.” Instead of filing a response to the motion, Hovind
filed a pro se affidavit, dated January 28, 2013, stating that his attorney did not
have authority to file the petition and that Hovind was never informed that
retaining an attorney affected his “independence as a free inhabitant from US court
jurisdictions.” The Tax Court construed the affidavit as a motion to withdraw
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counsel, granted it, and then extended Hovind’s deadline to respond to the IRS’s
motion for entry of decision until March 6, 2013. The Tax Court also directed
service of a copy of the motion to Hovind at the address listed in the affidavit,
which also appears to be Hovind’s currently listed address. Hovind did not
respond. The Tax Court entered the final order in this case on March 15.
Given this record, including the explicit abandonment of the petition by
Hovind, the extensive length of the proceedings, and the Tax Court’s generous
accommodation of Hovind, we are not persuaded that any alleged lack of notice
prejudiced his ability to present his challenges to the deficiency notice to the Tax
Court. Consequently, we conclude that the Tax Court did not abuse its discretion
in dismissing Hovind’s case under both its own rules and this Court’s precedent.
Tax Ct. R. 123; see Crandall, 650 F.2d at 659-60.
Finally, we decline to address Hovind’s challenges to the merits of the
deficiency judgment entered against him—that he is exempt from taxation as a
minister of CSE and that IRS records contradict the Tax Court’s decision—because
these arguments were not timely and properly presented to the Tax Court for
resolution. Stubbs v. Comm’r of Internal Revenue Serv., 797 F.2d 936, 938 (11th
Cir. 1986) (stating that an issue not raised in the Tax Court is not properly before
this Court on appeal).
AFFIRMED.
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