Lowe v. CIR ( 2022 )

Case: 22-60204 Document: 00516524957 Page: 1 Date Filed: 10/27/2022
United States Court of Appeals
for the Fifth Circuit
___________ United States Court of Appeals
Fifth Circuit
No. 22-60204
FILED
October 27, 2022
Summary Calendar
___________ Lyle W. Cayce
Clerk
Michael R. Lowe,
Petitioner—Appellant,
versus
Commissioner of Internal Revenue,
Respondent—Appellee.
______________________________
Appeal from a Decision of the
United States Tax Court
Tax Court No. 10954-20
______________________________
Before Wiener, Elrod, and Engelhardt, Circuit Judges.
Jacques L. Wiener, Jr., Circuit Judge:*
Appellant Michael Lowe appeals the Tax Court’s decision on his tax
deficiencies. Lowe was given ample warning of the frivolous nature of his
claims, yet here we are.
*
Pursuant to 5th Circuit Rule 47.5, the court has determined that this
opinion should not be published and is not precedent except under the limited
circumstances set forth in 5th Circuit Rule 47.5.4.
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No. 22-60204
In 2017, Lowe was employed by AltairStrickland LLC as a “site
quality manager.” That year, he received $193,068.81 for his work. Lowe
claims no tax liability on this amount, because—in his own words—these
“payments were not the result of any federal taxable activity whatsoever,
were private, non-reportable, and did not constitute any excise amount of
gains, profits, or income subject to any relevant income tax law of the United
States.” Unsurprisingly, the Tax Court found all of that inapposite, correctly
applying well-established law to a clear record. 1
Because the Tax Court entered its decision after a trial on the
merits, we review its findings of fact for clear error and its conclusions of
law de novo. See Green v. Comm’r, 507 F.3d 857, 866 (5th Cir. 2007) (“Clear
error exists when [we are] left with the definite and firm conviction that a
mistake has been made.”).
As this court has noted time and time again, “[w]e perceive no need
to refute these arguments with somber reasoning and copious citation of
precedent; to do so might suggest that these arguments have some colorable
merit.” 2 Crain v. Comm’r, 737 F.2d 1417, 1417 (5th Cir. 1984); see also
Williams v. Comm’r, 801 F. App’x 328, 329 (5th Cir. 2020), cert. denied, 141
S. Ct. 1067 (2021).
The record is clear that Lowe was provided ample opportunity to
present his case to his fullest ability. The Tax Court was not obligated to
accept Lowe’s self-assessment—which simply states that his tax liability was
1
At trial, Lowe affirmed that the source of these funds was his “work at
AltairStrickland” and that he used this money to pay his mortgage, utilities, and other
expenses.
2
On appeal, Lowe accuses the Tax Court and government counsel of “extortion,”
conspiracy and other unlawful acts. Putting aside that these issues were brought here in the
first instance, Lowe cites only statutes without regard for caselaw or addressing key
assumptions premised on his misinterpretation of the tax code.
2
Case: 22-60204 Document: 00516524957 Page: 3 Date Filed: 10/27/2022
No. 22-60204
$0—or his testimony regarding that assessment. See New England Merchants
Nat. Bank v. Rosenfield, 679 F.2d 467, 473 (5th Cir. 1982) (reasoning that
“neither [the trial or appellate] court is required to accept, as credible,
unsupported self-serving testimony that flies in the teeth of unimpeachable
contradictory evidence and universal experience”). We find no reason to
depart from, or add to, the Tax Court’s thorough decision that Lowe had
received unreported taxable income and that he failed to demonstrate that
the government’s assessment was arbitrary or erroneous. See Toledano v.
Comm’r, 362 F.2d 243, 245 (5th Cir. 1966).
We now turn to Appellee Commissioner of Internal Revenue’s
motion for sanctions against Lowe. The Internal Revenue Code authorizes
us to impose a penalty in cases “where the decision of the Tax Court is
affirmed and it appears that the appeal was instituted or maintained primarily
for delay or that the taxpayer’s position in the appeal is frivolous or
groundless.” 26 U.S.C. § 7482(c)(4). The Tax Court graciously spared Lowe
of sanctions but warned him that the further advancement of frivolous
arguments may prove otherwise.
Having granted Lowe the courtesy of a response to the possibility of
sanctions, we have no concern with the imposition of sanctions for his
frivolous appeal. Appeals are frivolous when the result is obvious or the
arguments of error are wholly without merit. Buck v. United States, 967 F.2d
1060, 1062 (5th Cir. 1992). This court is no stranger to sanctions in similarly
baseless tax cases. See Tello v. Comm’r, 410 F.3d 743, 744 (5th Cir. 2005).
The Commissioner requests a lump-sum sanction of $8,000 and provides
persuasive reasoning of that calculation. We agree that this amount is fair,
and conclude that imposing a lump sum sanction, in lieu of costs, conserves
the same government and judicial resources which Lowe is keen to waste.
3
Case: 22-60204 Document: 00516524957 Page: 4 Date Filed: 10/27/2022
No. 22-60204
We AFFIRM the decision of the Tax Court, and GRANT the
Commissioner’s motion for sanctions in the amount of $8,000 against Lowe.
4