Schlosser v. Commissioner of Internal Revenue

Opinions of the United
2008 Decisions States Court of Appeals
for the Third Circuit
7-25-2008
Schlosser v. Comm IRS
Precedential or Non-Precedential: Non-Precedential
Docket No. 07-4811
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Recommended Citation
"Schlosser v. Comm IRS" (2008). 2008 Decisions. Paper 789.
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
________________
Nos. 07-4811 & 07-4812
________________
CYNTHIA ANN SCHLOSSER
Appellant in No. 07-4811
v.
COMMISSIONER OF INTERNAL REVENUE
_________________________
JAMES K. SCHLOSSER
Appellant in No. 07-4812
v.
COMMISSIONER OF INTERNAL REVENUE
_____________________
On Appeal from the United States Tax Court
Tax Court Nos. 23355-06 & 23356-06
(Tax Court Judge: Honorable Robert P. Ruwe)
_____________________
Submitted Under Third Circuit LAR 34.1(a)
July 22, 2008
Before: RENDELL, JORDAN and VAN ANTWERPEN, Circuit Judges
(Filed: July 25, 2008)
___________________
OPINION
___________________
PER CURIAM
Cynthia Ann Schlosser and James K. Schlosser appeal the United States Tax
Court’s decision granting the Commissioner’s motion for summary judgment. For the
reasons that follow, we will affirm the Tax Court’s decision.
The procedural history of this case and the details of Schlossers’ claims are well-
known to the parties, set forth in the Tax Court’s opinion, and need not be discussed at
length. Briefly, both parties failed to file income tax returns in 1994 and the Internal
Revenue Service (“IRS”) sent both parties a notice of intent to levy and notice of right to
a collection-due-process (“CDP”) hearing. The parties requested a CDP and stated that
they were not required to file income tax forms and that they did not have taxable income.
The IRS Appeals Office issued a notice of determination to each party upholding the
proposed levy actions and the lien filings. Appellants next filed an appeal to the Tax
Court challenging the notices of determination. In their petitions, Appellants alleged that
they were not required to file federal income tax returns, that they had no income, and that
they were not subject to “the jurisdiction of the United States”. The Commissioner filed
motions for summary judgment which the Tax Court granted. The Tax Court also
imposed a penalty of $1000 pursuant to I.R.C. § 6673. Appellants filed separate appeals
challenging the Tax Court’s decision. The Commissioner filed a motion to consolidate
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the cases which was granted. The Commissioner has also filed a motion requesting that
Appellants pay damages and costs pursuant to Fed. R. App. P. 38.
We have jurisdiction pursuant to 26 U.S.C. § 7482(a)(1). We exercise plenary
review over the Tax Court’s conclusions of law, and review the Tax Court’s factual
findings for clear error. See PNC Bancorp, Inc. v. Comm’r of Internal Revenue, 212 F.3d
822, 827 (3d Cir. 2000). We review the Tax Court’s imposition of a penalty under § 6673
for abuse of discretion. See Sauers v. Comm’r of Internal Revenue, 771 F.2d 64, 65 (3d
Cir. 1985).
Appellants argue that the Tax Court erroneously granted summary judgment
because there were material facts in dispute. See Dahlstrom v. Comm’r of Internal
Revenue 85 T.C. 812, 820-21 (1985) (discussing summary judgment standard).
Appellants, in the Tax Court, raised the same baseless arguments raised by previous tax
protestors. See e.g., United States v. Sloan, 939 F.2d 499, 500 (7th Cir. 1991); United
States v. Collins, 920 F.2d, 619, 629-631 (10th Cir. 1990). Appellants’ arguments are
patently frivolous and the Tax Court did not err in granting the Commissioner’s motion
for summary judgment. Furthermore, Appellants were warned numerous times that their
continued frivolous arguments could result in the imposition of monetary penalties.
Therefore, we discern no abuse of discretion in the Tax Court’s imposition of a § 6673
penalty on Appellants.
Accordingly, we will affirm the judgment of the United States Tax Court.
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Under Fed. R. App. P. 38 a court of appeals may award damages and costs to an
appellee if it determines that an appeal is frivolous. “This court has been reluctant to
classify appeals as frivolous,” and has reserved award of fees and costs for extreme cases
where appeals were without doubt devoid of merit. Hilmon Co. (V.I.) Inc. v. Hyatt
Intern., 899 F.2d 250, 253 (3d Cir. 1990). Because the Schlossers’ appeals raise
arguments that have been repeatedly deemed frivolous, we grant the Government’s
motion and award costs in the amount of $1,000 against each Appellant.
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