Your Bond is No Good
Posted: Tue Aug 24, 2010 8:03 pm
135 T.C. No. 11
UNITED STATES TAX COURT
LISA S. GOFF, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 2965-09L. Filed August 34, 2010.
R may proceed with collection of tax liability and
civil penalties for filing frivolous tax returns.
1. Held: Submission of a “Bonded Promissory
Note” of P’s husband was not payment of liabilities and
penalties.
2. Held, further, P is subject to sanction under
sec. 6673(a)(1), I.R.C., for procedures instituted
primarily for delay, etc.
Lisa S. Goff, pro se.
Richard W. Kennedy, for respondent.
- 2 -
HALPERN, Judge: This case is before the Court to determine
whether respondent may proceed with the collection of
petitioner’s unpaid Federal income tax for 1996 through 2006 and
unpaid civil penalties for filing frivolous income tax returns
for 1997, 1999, 2000, 2003, and 2004 (collectively, petitioner’s
liabilities or, simply, the liabilities). We review the
determinations under section 6330(d)(1).
All section references are to the Internal Revenue Code of
1986, as amended and as applicable to this case, and all Rule
references are to the Tax Court Rules of Practice and Procedure
unless otherwise indicated.
The case presents two questions:
1. Whether a “Bonded Promissory Note” in the face amount of
$5 million (the note) that petitioner submitted to the Internal
Revenue Service (IRS) constitutes payment of the liabilities; and
2. whether we should impose an additional penalty on
petitioner pursuant to section 6673 for instituting this
proceeding primarily for delay or advancing a position that is
frivolous or groundless.
- 3 -
1At the conclusion of the trial, the Court set a schedule
for opening and answering briefs and ordered the parties to file
such briefs. The Court directed petitioner’s attention to Rule
151, which addresses briefs, and, in particular, to Rule 151(e),
which addresses the form and content of briefs. We have accepted
from petitioner what appears to be her opening brief, although it
does not contain proposed findings of fact, as Rule 151(e)(3)
requires, or otherwise conform to the requirements of that Rule.
Petitioner filed no answering brief. Respondent filed an opening
brief with proposed findings of fact and otherwise conforming to
Rule 151(e). Apparently seeing no need to answer petitioner’s
brief, respondent declined to file an answering brief. Pursuant
to Rule 151(e)(3), each party, in its answering brief, must “set
forth any objections, together with the reasons therefor, to any
proposed findings of any other party”. Petitioner did not file
an answering brief and did not set forth objections to
respondent’s proposed findings of fact. Accordingly, we must
conclude that petitioner has conceded that respondent’s proposed
findings of fact are correct except to the extent that those
findings are clearly inconsistent with evidence in the record.
See, e.g., Jonson v. Commissioner, 118 T.C. 106, 108 n.4 (2002),
affd. 353 F.3d 1181 (10th Cir. 2003). Respondent, of course, is
not similarly disadvantaged because petitioner’s opening brief
contained no proposed findings of fact.
FINDINGS OF FACT1
When she filed the petition, petitioner resided in Utah.
Respondent notified petitioner of his intent to collect
petitioner’s liabilities by levy, and, in response thereto,
petitioner requested a pre-levy hearing with Appeals under
section 6330.
During that hearing, petitioner argued that she had paid the
liabilities by means of the note, which she had sent to the IRS.
Respondent’s Appeals Office (Appeals) team manager Sharon
Patterson (Ms. Patterson) rejected petitioner’s claim that the
- 4 -
liabilities had been paid, and the determinations, signed by Ms.
Patterson, followed.
Petitioner timely filed the petition, assigning error to the
determinations primarily on the ground that “Payment for all
liabilities alleged by IRS for LISA S GOFF, TIN * * * was
tendered by Harvey Douglas Goff, Jr., hereinafter, ‘Undersigned’
on or about January 17, 2008.” Petitioner added:
Contrary to IRS’ claim, Petitioner, at all relevant
times prior to the * * * [section 6330] hearing and
during the hearing itself, challenged the existence of
a tax liability in that, the Undersigned tendered
sufficient payment for the alleged liability and IRS
failed to post the funds to the proper account.
Petitioner also assigned error on the ground that “The
proposed levy, would trespass on a bona fide lien held by the
Undersigned and thereby cause irreparable injury to the
Undersigned.”
The “Undersigned” referred to is petitioner’s husband,
Harvey D. Goff, Jr. (Mr. Goff). Both he and petitioner signed a
document prepared by Mr. Goff, attached to the petition, which
set forth petitioner’s assignments of error and the facts on
which she relies. Among the facts on which she relies are the
following:
1. On or about March 20, 2007, the Undersigned
deposits a bond with the Secretary of the Treasury
upon which the Undersigned states his intention to
draw against the proceeds of said bond in
satisfaction of debts. The Undersigned, according
to the terms of the bond order, grants the
Secretary a thirty-day opportunity in which to
- 5 -
return said bond to the Undersigned or, in the
alternative accept the Undersigned’s bond and
terms.
2. Upon expiration of said 30-day opportunity, the
Undersigned receives no communication from the
Secretary, and said bond is not returned to the
Undersigned. Accordingly, the Secretary accepts
said bond pursuant to the terms of said bond.
3. On or about September 7, 2007, the Undersigned
deposits, with the Secretary of the Treasury, a
Private Discharging and Indemnity Bond No.
RA819570054US-HDG subordinate to the March 20,
2007 bond which is issued pursuant to the
Undersigned’s full faith and credit. The stated
purpose of said Private Discharging and Indemnity
Bond is to indemnify, among others, the TIN
assigned to Petitioner, the Petitioner, Internal
Revenue Service and all subdivisions, agents and
employees thereof. The terms of said Private
Discharging and Indemnity Bond state that the
Undersigned grants the Secretary the opportunity
to return said bond within thirty days of receipt.
4. Upon expiration of said 30-day opportunity, the
Undersigned receives no communication from the
Secretary, and said Private Discharging and
Indemnity Bond is not returned. Accordingly, the
Secretary accepts said Private Discharging and
Indemnity Bond pursuant to the terms of said bond.
5. At the Undersigned’s instruction, during December
2007, Petitioner requests a consolidating billing
from IRS that includes all amounts which IRS
alleges were owed by Petitioner.
6. On or about January 11, 2008, Petitioner receives
a letter identified as LTR 681C with reference
#0774035504 alleging a total amount due of
$36,354.16.
7. On or about January 17, 2008, the Undersigned
tenders payment for Petitioner’s account through
Notary Public Kevin P. Mahoney in the form of
Bonded Promissory Note No. HDG-1005-PN in the
amount of $5,000,000.00 using Certified Mail No.
7001 1140 0002 9580 3371.
- 6 -
8. Said promissory note is payable to Secretary of
the United States Treasury * * *
The note tendered in alleged payment of petitioner’s
liabilities contains in part the following:
BONDED PROMISSORY NOTE
Registered via Utah Department of Commerce, Division of
Corporations and UCC File No. * * *
USPS CERTIFIED MAIL TRACKING NO. * * *
--- $5,000,000.00 ---
Five Million and 00/100 United States Dollars
To the Order of: Henry M Paulson, Jr. d/b/a
Secretary of the United States
Treasury,
P.S. Lane d/b/a Operations Mgr.,
ACS Remote Ops. 1, Internal Revenue
Service and Fiduciary Trustee
In the Amount of: Five Million and 00/100 United
States Dollars ($5,000,000.00)
For Credit to: Internal Revenue Service Account *
* * to the benefit of LISA STEPHENS
GOFF A/K/A LISA GOFF * * * SS No. *
* *
Routing Through: Private Discharging and Indemnity
(Securitization Bond No. RA819570054US-HDG to
Bond) Secretary of the Treasury Henry M.
Paulson, Jr. * * *
This negotiable instrument, tendered lawfully by
Harvey Douglas Goff Jr. (“Maker”) in good faith shall
evidence as a debt to the Payee pursuant to the
following terms:
1. This Note shall be posted in full dollar for
dollar pursuant to the above credit order and
presented to the co-payee, Secretary of the
Treasury Henry M. Paulson, Jr. by the
Fiduciary(ies) in the attached preaddressed
envelope by certified mail/RR (certificates
completed and supplied) or electronic transfer.
- 7 -
2. Upon receipt of this instrument, Payee shall
charge account * * * via Pass-Through Account H
DOUGLAS GOFF * * * for the purpose of terminating
any past, present, or future liabilities express
or implied attached or attributed to Account No. *
* * and/or Lisa Stephens Goff * * *
3. Payee shall ledger this Note for a period of
thirty (30) days commencing the start of business
on 16 January 2008 until close of business 14
February 2008 at an interest rate of seven percent
(7%) per annum;
4. Upon maturity, this Note shall be due and payable
in full with interest and any associated fees.
Payment shall be posted in accordance with
generally accepted accounting principles against
Private Discharging and Indemnity Bond No.
RA819570054US-HDG (Tracking Number RA 819 570 054
US) held and secured by Henry M. Paulsen, Jr.,
Secretary of the United States Treasury.
16 January 2008 /s/ Harvey Douglas Goff, Jr.
Date Authorized Signature
At the bottom of the note, the names and addresses of five
individuals were listed, presumably to show the person who issued
the note (Mr. Goff), the persons who were to receive the note as
payment (Henry M. Paulson, Jr., Secretary of the Treasury, and
Linda E. Stiff, Acting Commissioner of the IRS), and those
considered to be fiduciaries (P.S. Lane, Operations Manager, IRS,
and Renee A. Mitchell, Director, Campus Compliance Operations,
IRS).
Along with the note, petitioner sent processing instructions
to the IRS on how the note was to be posted as payment of
petitioner’s liabilities. The note and processing instructions
purported to place a legal duty on the IRS to apply up to $5
- 8 -
million toward the liabilities. The IRS ignored the note and
processing instructions and did not on account thereof apply any
amount in payment of petitioner’s liabilities.
After filing the petition, petitioner attended a conference
with respondent’s counsel, who warned her that her position was
frivolous.
Our notice setting this case for trial informed petitioner
that, if the case could not be settled, then “the parties, before
trial, must agree in writing to all facts and all documents about
which there should be no disagreement.” Our accompanying
standing pretrial order required the parties to prepare and
submit pretrial memoranda, setting forth basic information about
the case.
Petitioner both refused to enter into a stipulation of facts
and failed to submit a pretrial memorandum.
As discussed supra note 1, at the conclusion of the trial,
we set a briefing schedule and directed the parties to submit
briefs. When petitioner did not submit an opening brief on
schedule, we extended the time for her to comply. In reply, we
received documents from Mr. Goff, which we filed as petitioner’s
opening brief. Those documents in no way comply with Rule
151(e), addressing the form and content of briefs. In part, one
of those documents states as follows:
Thank you for your offer for my DEBTOR, LISA S GOFF, to
file an opening brief by close of business April 28,
- 9 -
2010. Said offer is cast as a court order and a copy
of said order is enclosed.
I accept your offer for value in behalf [sic] of myself
and my debtor for sixty million four hundred thousand
and 00/100 dollars ($60,400,000.00) and bill you and
the court for my services in the matter.
A second document states:
It comes to my attention that the UNITED STATES TAX
COURT is a for-profit corporation and is listed with
Dunn & Bradstreet as such. * * *
* * * * * * *
Are you aware of and do you realize the liability you
personally incur in acting as an agent for the
incorporated UNITED STATES TAX COURT?
OPINION
I. Review of the Determinations
Section 6330(a) provides taxpayers with the opportunity to
request an administrative review of the Commissioner’s decision
to take administrative action to collect by levy any tax owing.
Appeals conducts that review, sec. 6330(b)(1), and, as stated, we
review respondent’s determinations under section 6330(d)(1). On
the facts before us, we review those determinations de novo.
Boyd v. Commissioner, 117 T.C. 127, 131 (2001); Landry v.
Commissioner, 116 T.C. 60, 62 (2001).
Respondent may proceed by levy to collect petitioner’s
liabilities. Simply put, neither the note nor anything in
connection with the note constitutes payment of petitioner’s
liabilities. The United States Code provides that “coins and
- 10 -
currency (including Federal reserve notes and circulating notes
of Federal reserve banks and national banks) are legal tender for
all debts, public charges, taxes, and dues.” 31 U.S.C. sec. 5103
(2006). Section 6311 addresses alternative methods of payment
and authorizes the Secretary to receive for taxes any
commercially acceptable means that he deems appropriate as
prescribed by regulations. Sec. 6311(a), (d). No regulation
issued by the Secretary allows private bonds or notes such as the
note to be considered payment by commercially acceptable means.
Other types of payment are not acceptable; e.g., the Commissioner
has refused to accept real property in payment for tax
liabilities. Rev. Rul. 76-350, 1976-2 C.B. 396. Similarly, the
Commissioner is not obligated to accept an individual’s personal
property in satisfaction of her tax liabilities. E.g., Calafut
v. Commissioner, 277 F. Supp. 266, 267 (M.D. Pa. 1967).
At the conclusion of the trial, the Court asked petitioner
to provide the Court with any argument as to why the note
discharged her obligation to pay the liabilities. Petitioner
answered only that her husband had tendered the note and she had
not been advised by anyone of any defect in the note, nor had
anyone returned it. Petitioner’s brief adds nothing to that
answer. Petitioner did not address at trial or on brief any
other error that she had assigned to the determinations,
including her claim that the proposed levy would trespass on a
- 11 -
bona fide lien her husband held. We therefore consider that she
has abandoned those assignments of error. See Mendes v.
Commissioner, 121 T.C. 308, 312-313 (2003) (“If an argument is
not pursued on brief, we may consider that it has been
abandoned.”). We see no reason not to sustain the
determinations, and we shall sustain them.
II. Section 6673(a)(1) Penalty
Under section 6673(a)(1), this Court may require a taxpayer
to pay a penalty not in excess of $25,000 if (1) the taxpayer has
instituted or maintained a proceeding primarily for delay, or (2)
the taxpayer’s position is “frivolous or groundless”. A
taxpayer’s position is frivolous if it is contrary to established
law and unsupported by a reasoned, colorable argument for change
in the law. E.g., Nis Family Trust v. Commissioner, 115 T.C.
523, 544 (2000). There is no support for petitioner’s claim that
the note discharged her obligation to pay the liabilities, and
she has made no argument beyond her claim that the Government did
not return the note or point out its defects. Moreover, she
refused to enter into a stipulation of facts and disobeyed our
order to submit a pretrial memorandum. She did not comply with
the briefing schedule we set. When, in response to our order
extending her time to file a brief, we received documents from
her husband, they contained a ridiculous demand for money and a
nonsensical claim that the Court is a for-profit corporation.
- 12 -
Petitioner’s principal position in this case is so weak as to be
groundless, and her argument in support of that position is
frivolous. Indeed, we can see no reason for this case other than
delaying respondent’s collection of tax liabilities and penalties
for the 11 years in issue. Respondent’s counsel warned
petitioner that her position was frivolous. Petitioner has
wasted both the Court’s and respondent’s limited resources and
deserves a significant penalty. We shall, therefore, require
petitioner to pay a penalty under section 6673(a)(1) of $15,000.
An appropriate order and
decision will be entered.
UNITED STATES TAX COURT
LISA S. GOFF, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 2965-09L. Filed August 34, 2010.
R may proceed with collection of tax liability and
civil penalties for filing frivolous tax returns.
1. Held: Submission of a “Bonded Promissory
Note” of P’s husband was not payment of liabilities and
penalties.
2. Held, further, P is subject to sanction under
sec. 6673(a)(1), I.R.C., for procedures instituted
primarily for delay, etc.
Lisa S. Goff, pro se.
Richard W. Kennedy, for respondent.
- 2 -
HALPERN, Judge: This case is before the Court to determine
whether respondent may proceed with the collection of
petitioner’s unpaid Federal income tax for 1996 through 2006 and
unpaid civil penalties for filing frivolous income tax returns
for 1997, 1999, 2000, 2003, and 2004 (collectively, petitioner’s
liabilities or, simply, the liabilities). We review the
determinations under section 6330(d)(1).
All section references are to the Internal Revenue Code of
1986, as amended and as applicable to this case, and all Rule
references are to the Tax Court Rules of Practice and Procedure
unless otherwise indicated.
The case presents two questions:
1. Whether a “Bonded Promissory Note” in the face amount of
$5 million (the note) that petitioner submitted to the Internal
Revenue Service (IRS) constitutes payment of the liabilities; and
2. whether we should impose an additional penalty on
petitioner pursuant to section 6673 for instituting this
proceeding primarily for delay or advancing a position that is
frivolous or groundless.
- 3 -
1At the conclusion of the trial, the Court set a schedule
for opening and answering briefs and ordered the parties to file
such briefs. The Court directed petitioner’s attention to Rule
151, which addresses briefs, and, in particular, to Rule 151(e),
which addresses the form and content of briefs. We have accepted
from petitioner what appears to be her opening brief, although it
does not contain proposed findings of fact, as Rule 151(e)(3)
requires, or otherwise conform to the requirements of that Rule.
Petitioner filed no answering brief. Respondent filed an opening
brief with proposed findings of fact and otherwise conforming to
Rule 151(e). Apparently seeing no need to answer petitioner’s
brief, respondent declined to file an answering brief. Pursuant
to Rule 151(e)(3), each party, in its answering brief, must “set
forth any objections, together with the reasons therefor, to any
proposed findings of any other party”. Petitioner did not file
an answering brief and did not set forth objections to
respondent’s proposed findings of fact. Accordingly, we must
conclude that petitioner has conceded that respondent’s proposed
findings of fact are correct except to the extent that those
findings are clearly inconsistent with evidence in the record.
See, e.g., Jonson v. Commissioner, 118 T.C. 106, 108 n.4 (2002),
affd. 353 F.3d 1181 (10th Cir. 2003). Respondent, of course, is
not similarly disadvantaged because petitioner’s opening brief
contained no proposed findings of fact.
FINDINGS OF FACT1
When she filed the petition, petitioner resided in Utah.
Respondent notified petitioner of his intent to collect
petitioner’s liabilities by levy, and, in response thereto,
petitioner requested a pre-levy hearing with Appeals under
section 6330.
During that hearing, petitioner argued that she had paid the
liabilities by means of the note, which she had sent to the IRS.
Respondent’s Appeals Office (Appeals) team manager Sharon
Patterson (Ms. Patterson) rejected petitioner’s claim that the
- 4 -
liabilities had been paid, and the determinations, signed by Ms.
Patterson, followed.
Petitioner timely filed the petition, assigning error to the
determinations primarily on the ground that “Payment for all
liabilities alleged by IRS for LISA S GOFF, TIN * * * was
tendered by Harvey Douglas Goff, Jr., hereinafter, ‘Undersigned’
on or about January 17, 2008.” Petitioner added:
Contrary to IRS’ claim, Petitioner, at all relevant
times prior to the * * * [section 6330] hearing and
during the hearing itself, challenged the existence of
a tax liability in that, the Undersigned tendered
sufficient payment for the alleged liability and IRS
failed to post the funds to the proper account.
Petitioner also assigned error on the ground that “The
proposed levy, would trespass on a bona fide lien held by the
Undersigned and thereby cause irreparable injury to the
Undersigned.”
The “Undersigned” referred to is petitioner’s husband,
Harvey D. Goff, Jr. (Mr. Goff). Both he and petitioner signed a
document prepared by Mr. Goff, attached to the petition, which
set forth petitioner’s assignments of error and the facts on
which she relies. Among the facts on which she relies are the
following:
1. On or about March 20, 2007, the Undersigned
deposits a bond with the Secretary of the Treasury
upon which the Undersigned states his intention to
draw against the proceeds of said bond in
satisfaction of debts. The Undersigned, according
to the terms of the bond order, grants the
Secretary a thirty-day opportunity in which to
- 5 -
return said bond to the Undersigned or, in the
alternative accept the Undersigned’s bond and
terms.
2. Upon expiration of said 30-day opportunity, the
Undersigned receives no communication from the
Secretary, and said bond is not returned to the
Undersigned. Accordingly, the Secretary accepts
said bond pursuant to the terms of said bond.
3. On or about September 7, 2007, the Undersigned
deposits, with the Secretary of the Treasury, a
Private Discharging and Indemnity Bond No.
RA819570054US-HDG subordinate to the March 20,
2007 bond which is issued pursuant to the
Undersigned’s full faith and credit. The stated
purpose of said Private Discharging and Indemnity
Bond is to indemnify, among others, the TIN
assigned to Petitioner, the Petitioner, Internal
Revenue Service and all subdivisions, agents and
employees thereof. The terms of said Private
Discharging and Indemnity Bond state that the
Undersigned grants the Secretary the opportunity
to return said bond within thirty days of receipt.
4. Upon expiration of said 30-day opportunity, the
Undersigned receives no communication from the
Secretary, and said Private Discharging and
Indemnity Bond is not returned. Accordingly, the
Secretary accepts said Private Discharging and
Indemnity Bond pursuant to the terms of said bond.
5. At the Undersigned’s instruction, during December
2007, Petitioner requests a consolidating billing
from IRS that includes all amounts which IRS
alleges were owed by Petitioner.
6. On or about January 11, 2008, Petitioner receives
a letter identified as LTR 681C with reference
#0774035504 alleging a total amount due of
$36,354.16.
7. On or about January 17, 2008, the Undersigned
tenders payment for Petitioner’s account through
Notary Public Kevin P. Mahoney in the form of
Bonded Promissory Note No. HDG-1005-PN in the
amount of $5,000,000.00 using Certified Mail No.
7001 1140 0002 9580 3371.
- 6 -
8. Said promissory note is payable to Secretary of
the United States Treasury * * *
The note tendered in alleged payment of petitioner’s
liabilities contains in part the following:
BONDED PROMISSORY NOTE
Registered via Utah Department of Commerce, Division of
Corporations and UCC File No. * * *
USPS CERTIFIED MAIL TRACKING NO. * * *
--- $5,000,000.00 ---
Five Million and 00/100 United States Dollars
To the Order of: Henry M Paulson, Jr. d/b/a
Secretary of the United States
Treasury,
P.S. Lane d/b/a Operations Mgr.,
ACS Remote Ops. 1, Internal Revenue
Service and Fiduciary Trustee
In the Amount of: Five Million and 00/100 United
States Dollars ($5,000,000.00)
For Credit to: Internal Revenue Service Account *
* * to the benefit of LISA STEPHENS
GOFF A/K/A LISA GOFF * * * SS No. *
* *
Routing Through: Private Discharging and Indemnity
(Securitization Bond No. RA819570054US-HDG to
Bond) Secretary of the Treasury Henry M.
Paulson, Jr. * * *
This negotiable instrument, tendered lawfully by
Harvey Douglas Goff Jr. (“Maker”) in good faith shall
evidence as a debt to the Payee pursuant to the
following terms:
1. This Note shall be posted in full dollar for
dollar pursuant to the above credit order and
presented to the co-payee, Secretary of the
Treasury Henry M. Paulson, Jr. by the
Fiduciary(ies) in the attached preaddressed
envelope by certified mail/RR (certificates
completed and supplied) or electronic transfer.
- 7 -
2. Upon receipt of this instrument, Payee shall
charge account * * * via Pass-Through Account H
DOUGLAS GOFF * * * for the purpose of terminating
any past, present, or future liabilities express
or implied attached or attributed to Account No. *
* * and/or Lisa Stephens Goff * * *
3. Payee shall ledger this Note for a period of
thirty (30) days commencing the start of business
on 16 January 2008 until close of business 14
February 2008 at an interest rate of seven percent
(7%) per annum;
4. Upon maturity, this Note shall be due and payable
in full with interest and any associated fees.
Payment shall be posted in accordance with
generally accepted accounting principles against
Private Discharging and Indemnity Bond No.
RA819570054US-HDG (Tracking Number RA 819 570 054
US) held and secured by Henry M. Paulsen, Jr.,
Secretary of the United States Treasury.
16 January 2008 /s/ Harvey Douglas Goff, Jr.
Date Authorized Signature
At the bottom of the note, the names and addresses of five
individuals were listed, presumably to show the person who issued
the note (Mr. Goff), the persons who were to receive the note as
payment (Henry M. Paulson, Jr., Secretary of the Treasury, and
Linda E. Stiff, Acting Commissioner of the IRS), and those
considered to be fiduciaries (P.S. Lane, Operations Manager, IRS,
and Renee A. Mitchell, Director, Campus Compliance Operations,
IRS).
Along with the note, petitioner sent processing instructions
to the IRS on how the note was to be posted as payment of
petitioner’s liabilities. The note and processing instructions
purported to place a legal duty on the IRS to apply up to $5
- 8 -
million toward the liabilities. The IRS ignored the note and
processing instructions and did not on account thereof apply any
amount in payment of petitioner’s liabilities.
After filing the petition, petitioner attended a conference
with respondent’s counsel, who warned her that her position was
frivolous.
Our notice setting this case for trial informed petitioner
that, if the case could not be settled, then “the parties, before
trial, must agree in writing to all facts and all documents about
which there should be no disagreement.” Our accompanying
standing pretrial order required the parties to prepare and
submit pretrial memoranda, setting forth basic information about
the case.
Petitioner both refused to enter into a stipulation of facts
and failed to submit a pretrial memorandum.
As discussed supra note 1, at the conclusion of the trial,
we set a briefing schedule and directed the parties to submit
briefs. When petitioner did not submit an opening brief on
schedule, we extended the time for her to comply. In reply, we
received documents from Mr. Goff, which we filed as petitioner’s
opening brief. Those documents in no way comply with Rule
151(e), addressing the form and content of briefs. In part, one
of those documents states as follows:
Thank you for your offer for my DEBTOR, LISA S GOFF, to
file an opening brief by close of business April 28,
- 9 -
2010. Said offer is cast as a court order and a copy
of said order is enclosed.
I accept your offer for value in behalf [sic] of myself
and my debtor for sixty million four hundred thousand
and 00/100 dollars ($60,400,000.00) and bill you and
the court for my services in the matter.
A second document states:
It comes to my attention that the UNITED STATES TAX
COURT is a for-profit corporation and is listed with
Dunn & Bradstreet as such. * * *
* * * * * * *
Are you aware of and do you realize the liability you
personally incur in acting as an agent for the
incorporated UNITED STATES TAX COURT?
OPINION
I. Review of the Determinations
Section 6330(a) provides taxpayers with the opportunity to
request an administrative review of the Commissioner’s decision
to take administrative action to collect by levy any tax owing.
Appeals conducts that review, sec. 6330(b)(1), and, as stated, we
review respondent’s determinations under section 6330(d)(1). On
the facts before us, we review those determinations de novo.
Boyd v. Commissioner, 117 T.C. 127, 131 (2001); Landry v.
Commissioner, 116 T.C. 60, 62 (2001).
Respondent may proceed by levy to collect petitioner’s
liabilities. Simply put, neither the note nor anything in
connection with the note constitutes payment of petitioner’s
liabilities. The United States Code provides that “coins and
- 10 -
currency (including Federal reserve notes and circulating notes
of Federal reserve banks and national banks) are legal tender for
all debts, public charges, taxes, and dues.” 31 U.S.C. sec. 5103
(2006). Section 6311 addresses alternative methods of payment
and authorizes the Secretary to receive for taxes any
commercially acceptable means that he deems appropriate as
prescribed by regulations. Sec. 6311(a), (d). No regulation
issued by the Secretary allows private bonds or notes such as the
note to be considered payment by commercially acceptable means.
Other types of payment are not acceptable; e.g., the Commissioner
has refused to accept real property in payment for tax
liabilities. Rev. Rul. 76-350, 1976-2 C.B. 396. Similarly, the
Commissioner is not obligated to accept an individual’s personal
property in satisfaction of her tax liabilities. E.g., Calafut
v. Commissioner, 277 F. Supp. 266, 267 (M.D. Pa. 1967).
At the conclusion of the trial, the Court asked petitioner
to provide the Court with any argument as to why the note
discharged her obligation to pay the liabilities. Petitioner
answered only that her husband had tendered the note and she had
not been advised by anyone of any defect in the note, nor had
anyone returned it. Petitioner’s brief adds nothing to that
answer. Petitioner did not address at trial or on brief any
other error that she had assigned to the determinations,
including her claim that the proposed levy would trespass on a
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bona fide lien her husband held. We therefore consider that she
has abandoned those assignments of error. See Mendes v.
Commissioner, 121 T.C. 308, 312-313 (2003) (“If an argument is
not pursued on brief, we may consider that it has been
abandoned.”). We see no reason not to sustain the
determinations, and we shall sustain them.
II. Section 6673(a)(1) Penalty
Under section 6673(a)(1), this Court may require a taxpayer
to pay a penalty not in excess of $25,000 if (1) the taxpayer has
instituted or maintained a proceeding primarily for delay, or (2)
the taxpayer’s position is “frivolous or groundless”. A
taxpayer’s position is frivolous if it is contrary to established
law and unsupported by a reasoned, colorable argument for change
in the law. E.g., Nis Family Trust v. Commissioner, 115 T.C.
523, 544 (2000). There is no support for petitioner’s claim that
the note discharged her obligation to pay the liabilities, and
she has made no argument beyond her claim that the Government did
not return the note or point out its defects. Moreover, she
refused to enter into a stipulation of facts and disobeyed our
order to submit a pretrial memorandum. She did not comply with
the briefing schedule we set. When, in response to our order
extending her time to file a brief, we received documents from
her husband, they contained a ridiculous demand for money and a
nonsensical claim that the Court is a for-profit corporation.
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Petitioner’s principal position in this case is so weak as to be
groundless, and her argument in support of that position is
frivolous. Indeed, we can see no reason for this case other than
delaying respondent’s collection of tax liabilities and penalties
for the 11 years in issue. Respondent’s counsel warned
petitioner that her position was frivolous. Petitioner has
wasted both the Court’s and respondent’s limited resources and
deserves a significant penalty. We shall, therefore, require
petitioner to pay a penalty under section 6673(a)(1) of $15,000.
An appropriate order and
decision will be entered.