Sochia v. C.I.R.

United States Court of Appeals,
Fifth Circuit.
Nos. 93-5601, 93-8805
Summary Calendar.
Maurice H. SOCHIA and Beatrice M. Sochia, Petitioners-Appellants,
v.
COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee.
Maurice H. SOCHIA and Beatrice M. Sochia, Plaintiffs-Appellants,
v.
UNITED STATES of America, et al., Defendants-Appellees.
June 24, 1994.
Appeal from the Decision of the United States Tax Court.
Appeal from the United States District Court for the Western
District of Texas.
Before POLITZ, Chief Judge, JOLLY and DUHÉ, Circuit Judges.
POLITZ, Chief Judge:
These two appeals are consolidated for today's disposition.
In docket number 93-5601, Maurice H. and Beatrice M. Sochia appeal
the decision of the tax court dismissing their action and affirming
the Commissioner's determination of a tax deficiency and additions
thereto. In docket number 93-8805 the Sochias appeal the summary
judgment dismissal by the district court of their action seeking a
refund of a $500 penalty imposed for filing a frivolous tax return.
For the reasons assigned we affirm the Tax Court and district court
in the actions appealed, and impose sanctions for these patently
frivolous appeals.
1
Background
On their 1989 federal income tax return the Sochias supplied
only their names and those of their dependent children, address,
signatures, and amount of federal tax withheld. They failed to
provide any information about their income and expenses. Instead,
they inserted the phrase "Object—5th Amend" on each line of the
Form 1040 that called for specific financial information. The
Internal Revenue Service assessed taxes at $16,013, imposed $2,793
and $720 as additions to the tax for failure to file a return and
for failure to pay estimated taxes respectively, and penalized the
Sochias $500 under 26 U.S.C. § 6702 for the filing of a frivolous
return.
The Sochias filed suit in the Tax Court seeking a
redetermination of the federal income tax deficiency and additions
to tax determined by the Commissioner. After the Sochias refused
to follow the court's order directing an amendment of their
pleadings, the Tax Court dismissed for failure to state a claim
upon which relief could be granted and sustained the Commissioner's
determination of the deficiency and additions thereto. The Sochias
timely appealed.
The Sochias also filed a complaint seeking the refund of a
$500 penalty assessed against them for filing a frivolous tax
return for 1989.1 The IRS moved for summary judgment; the
1
The Sochias' federal court action sought the following:
(1) a statement from defendants that there is such a
thing as a "Fifth Amendment Right";
2
magistrate judge recommended granting the summary judgment. Over
the objections of the Sochias the district court adopted that
recommendation. The Sochias timely appealed. We consolidated the
two appeals.
Analysis
A. Tax deficiency and additions to tax
Relying upon the Federalist Papers and invoking natural law,
the Sochias allege in their pro se petition to the Tax Court that
a " "Fifth Amendment Return' is a valid, legal, legitimate, proper,
and correct tax return," that they had filed the "Fifth Amendment
Return" in good faith, that the Commissioner wrongfully ignored
(2) a statement from defendants that there is such a
thing as a "Fifth Amendment Return";
(3) a statement from defendants that a "Fifth
Amendment Return" is not a frivolous return
because a "Fifth Amendment Return" must be
examined and analyzed under standard
Constitutional law and not Tax law;
(4) a statement from defendants that the "Fifth
Amendment Right" may be invoked by both the guilty
individual and the innocent individual;
(5) a statement claiming that the United States
Constitution is still the Supreme Law of the Land;
(6) a statement that a person claiming the "Fifth
Amendment Right" does not need to demonstrate how
a particular question could incriminate that
person;
(7) a statement that statutory and administrative law
must not violate the Constitution;
(8) a permanent injunction;
(9) actual, special, and punitive damages; and
(10) costs.
3
their "Fifth Amendment Return" and issued notice of deficiency in
violation of their due process rights, and that "being State
Citizens of the sovereign State of Texas, they were not subjected
to the jurisdiction of the Internal Revenue Code produced by the
United States Congress, and therefore, ... could not legally report
on Form 1040 ... what the Commissioner had alleged is "Income'."
The Commissioner moved to dismiss the petition for failure to state
a claim upon which relief can be granted under Rule 34(b)(4) of the
Rules of Practice and Procedure of the United States Tax Court for
failure to set forth justiciable allegations of error and, under
Rule 34(b)(5) for failure to allege any facts in support of such
allegations. The Tax Court ordered the Sochias to file an amended
petition setting forth with specificity each claimed error of the
Commissioner and a specification of the facts upon which they based
each claim of error. The Sochias, however, responded to the court
order contending that the facts set forth in their petition were
sufficient to satisfy the Tax Court's rules and they reiterated the
contentions set forth in their petition.
The Tax Court held a hearing on the Commissioner's motion to
dismiss; the Sochias opted not to attend. Following the hearing
the Tax Court issued an order of dismissal and decision affirming
the Commissioner's assessment of deficiency and additions to tax.
The Tax Court concluded that the Sochias failed to allege any
justiciable error in the determinations upon which the notice of
deficiency was based or any facts tending to support any such
error. We agree. Deficiency determinations of the Commissioner
4
enjoy a presumption of correctness; the burden of proof rests upon
the taxpayer to demonstrate error.2 The pleadings by the Sochias
clearly fail to satisfy the requirements of Tax Court Rule 34(b).
The remaining issues raised by the Sochias on appeal from the Tax
Court decision totally lack merit and require no comment. That
decision is affirmed in all respects.
B. Frivolous filing penalty
The Commissioner assessed a $500 frivolous return penalty
under 26 U.S.C. § 6702 for the filing of the 1989 tax return. The
Sochias filed a pro se complaint seeking a refund, claiming that in
declaring their return frivolous the Commissioner violated their
fifth amendment rights. Under section 6702, the IRS may impose a
$500 penalty on any individual filing what purports to be a tax
return when the filing (1) does not contain information on which
the substantial correctness of the self-assessment may be judged,
and (2) is based on a frivolous position.3 We have upheld penalty
assessments for "protest returns" filed with blanket fifth
amendment objections.4 Further, the Sochias' challenge to the
validity of the sixteenth amendment has been rejected repeatedly by
the courts.5 We now uphold the penalty assessed under section
2
Sandvall v. C.I.R., 898 F.2d 455 (5th Cir.1990).
3
Mosher v. I.R.S., 775 F.2d 1292 (5th Cir.1985), cert.
denied, 475 U.S. 1123, 106 S. Ct. 1645, 90 L. Ed. 2d 189 (1986).
4
See Parker v. C.I.R., 724 F.2d 469 (5th Cir.1984) (penalty
under 26 U.S.C. § 6653(a)).
5
See Knoblauch v. C.I.R., 749 F.2d 200 (1984), cert. denied,
474 U.S. 830, 106 S. Ct. 95, 88 L. Ed. 2d 78 (1985) (noting that
every court that has considered this argument has rejected it).
5
6702.6
As the income tax form as filed is frivolous within the
meaning of section 6702, the IRS lawfully assessed a $500 penalty.
Accordingly, the district court properly granted summary judgment
in favor of the government.
C. Sanctions
The government seeks sanctions for frivolous appeals,
underscoring the waste of time and effort by the judicial officers
and support personnel and by staff and counsel for the government
in response to these appeals. We find the government's argument
persuasive. More than a decade ago,7 we repeated a warning given
three years before8 that frivolous challenges to the sixteenth
amendment and income tax legislation and regulations would result
in the imposition of the full range of sanctions provided by Rule
38 of the Federal Rules of Appellate Procedure. Apparently our
caution has gone unheeded. Sanctions are warranted herein. We
therefore impose upon Maurice H. Sochia and Beatrice M. Sochia
double costs in these appeals plus the sum of $500 in damages in
each appeal, this total of $1000 being payable to the Treasury of
the United States.
The judgments challenged in these consolidated appeals are
AFFIRMED in all respects.
6
See Miller v. United States, 868 F.2d 236 (7th Cir.1989).
7
Parker v. C.I.R.
8
Lonsdale v. C.I.R., 661 F.2d 71 (5th Cir.1981).
6
7