A TD to Watch

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A TD to Watch

Post by LPC »

Not much of a history yet, but this tax denier could be one to watch. (Although he seems to have some anger management issues that may need to be addressed to keep him from burning out too quickly.)

Lester R. Ramer v. Commissioner, No. 11623-08 (USTC 12/16/2009) (unpublished), aff'd No. 10-1584 (8th Cir. 9/30/2010) (per curiam).

The 8th Circuit opinion simply affirms the Tax Court opinion for the reasons stated in that opinion, but the order and decision entered by the TC is worth a read. (Note the amounts of income and deficiency. Not a pool cleaner. However, it occurs to me that the amounts determined by the IRS might have been gross receipts and did not reflect the costs of sales or other expenses, which means that this clown might have really hurt himself by not filing a return.)
Tax Court wrote:UNITED STATES TAX COURT
WASHINGTON, DC 20217

LESTER R . RAMER,
Petitioner
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent

Docket No. 11623-08

ORDER AND DECISION

On May 29, 2009, respondent's motion for summary judgment was filed. On June 2, 2009, this Court served upon petitioner a Notice of Filing, which gave petitioner until July 2, 2009, to submit "a notice of objection which sets forth the basis for the objection". On or about June 26, 2009, petitioner executed a document entitled "Ramer's Response to Comm'r's Motion for Summary Judgment" (petitioner's response), which bore an incorrect caption, and served it on respondent . Petitioner also sent it and several other, documents to this Court. The Court received the documents on June 30, 2009. However, the documents were not filed at that time because they did not comply with the Tax Court Rules of Practice and Procedure.

In a "Notice Setting Case For Trial", which was served on petitioner on October 22, 2009, this case was set for trial at the Little Rock, AR Trial Session beginning on March 22, 2010, (Marvel, J . presiding) . The unfiled documents were forwarded to the undersigned for appropriate action. By order dated October 26, 2009, the undersigned directed that most of the documents, including petitioner's response, be filed after the Court corrected the captions. The October 26, 2009, order also warned petitioner about the consequences of continuing to submit documents containing frivolous and groundless arguments and/or improper captions.

Respondent's motion for summary judgment requests summary adjudication in his favor under Rule 121, Tax Court Rules of Practice and Procedure. Rule 121 authorizes this Court to grant such a motion and render a decision "if the pleadings, answers to interrogatories, depositions, admissions, and any other acceptable materials, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that a decision may be rendered as a matter of law." Rule 121(d) also warns that "an adverse party may not rest upon the mere allegations or denials of such party's pleading, but such party's response, by affidavits or as otherwise provided in this Rule, must set forth specific facts showing that there is a genuine issue for trial. If the adverse party does not so respond, then a decision, if appropriate, may be entered against such party."

Respondent's motion was made and supported as required by Rule 121. Petitioner was given an opportunity to respond to the motion and did submit a response. However, the response did not comply with Rule 121 in that the response did not set forth specific relevant facts showing that there is a genuine issue for trial, and petitioner did not submit affidavits under oath directed to the factual issues or any other materials that would support a conclusion that a trial is necessary. Petitioner's response is riddled with derogatory and inflammatory remarks about Court personnel, respondent, and the tax system, and demonstrates a complete disregard for the actual issues that this case presents. Petitioner's response makes it clear that he has no intention of addressing the issues on their merits either in the context of respondent's motion or at trial.

We turn then to respondent's motion, and we examine whether it contains sufficient information to support a conclusion that summary adjudication is appropriate. The relevant facts are as follows.

By notice of deficiency dated February 13, 2008, respondent determined an income tax deficiency of $328,190 and additions to tax under sections 6651(f), I.R.C., 6651(a)(2), I.R.C., and 6654, I.R.C, for the taxable year 2002. In the notice of deficiency, respondent determined the following : (1) Petitioner had taxable business income of $823,895 from Petra Stone for 2002, which respondent calculated by using the bank deposits method of reconstructing income; (2) petitioner was liable for self-employment tax of $32,592.74 and was entitled to a deduction of $16,297, representing one-half of the self-employment tax for 2002 ; (3) petitioner is entitled to a standard deduction of $3,925 for 2002 (assuming a filing status as a married taxpayer filing a separate return) ; (4) petitioner is liable for the section 6651(f), I.R.C., addition to tax because petitioner did not file a Federal income tax return for 2002 and his failure to file was fraudulent; (5) petitioner is liable for the section 6651(a)(2), I.R.C., addition to tax because he failed to pay the tax he owed for 2002 ; and (6) petitioner is liable for the section 6654, I.R.C., addition to tax because he did not make required estimated tax payments for 2002.

In response to the notice of deficiency, petitioner filed a lengthy petition that was rife with allegations that he did not have income or owe any income or self-employment tax, that he was not required to file a tax return because he had no income, and that he did not have a fiduciary duty to the United States of America. Respondent answered the petition, and in the answer he made affirmative allegations in support of his position that petitioner had substantial income for 2002 and that petitioner fraudulently failed to file a tax return for 2002.

On February 2, 2009, respondent filed a motion pursuant to Rule 37, Tax Court Rules of Practice and Procedure, that the affirmative allegations in his answer be deemed admitted. In a Notice of Filing of Motion for Order Under Rule 37, dated February 6, 2009, and served on petitioner February 9, 2009, the Court required petitioner to file a reply, as required by Rule 37(a) and (b), on or before March 2, 2009.

On or before February 13, 2009, petitioner mailed to the Court several documents that were not properly captioned. On March 2, 2009, the Court ordered that the documents be returned to petitioner and extended the deadline for petitioner to file his reply to March 20, 2009. Petitioner failed to submit a proper reply as required by the Court's order and Rule 37.

On March 26, 2009, the Court ordered that the affirmative allegations in respondent's answer be deemed admitted as required by Rule 37(c). The deemed admissions establish, among other facts, that (1) petitioner owned and operated a business conducted under the name of Petra Stone during 2002; (2) petitioner maintained bank accounts during 2002 into which he deposited $823,895, representing unexplained deposits that were not excludable income or nontaxable income; (3) petitioner established a sham trust to conceal his business income; (4) neither the trust nor petitioner filed a tax return for 2002; (5) petitioner has not filed an individual income tax return since 1996; (6) petitioner was extremely uncooperative during the 2002 audit; (7) petitioner actively espouses frivolous anti-tax positions; (8) petitioner failed to maintain or submit for examination by respondent complete and accurate books and records of his income-producing activities for 2002; (9) respondent determined petitioner's 2002 income using the bank deposits method of reconstructing income; (10) petitioner's failure to file a return and related actions were fraudulent with the intent to evade his 2002 Federal income tax liability; (11) petitioner did not pay any 2002 estimated tax payments or any part of his 2002 income tax liability; (12) petitioner has asserted frivolous and groundless positions in his petition and in several motions and documents submitted in this case. In addition, certified transcripts of petitioner's 2001 and 2002 tax accounts and a section 6020(b), I.R.C., certification that are attached to respondent's motion as exhibits demonstrate that petitioner was required to make but did not make estimated tax payments for 2002, that petitioner did not pay any part of his 2002 income tax liability, and that respondent prepared a substitute for return for 2002 under section 6020(b), I .R .C ., as a predicate for asserting the section 6651(a)(2), I .R .C ., addition to tax . See Wheeler v . Commissioner , 127 T .C . 200, 208-209 (2006), affd . 521 F .3d 1289 (10th Cir . 2008; Cabirac v . Commissioner , 120 T .C . 163, 170 (2003).

Petitioner has the burden of proving that respondent's determinations are in error, except that respondent must prove by clear and convincing evidence that petitioner's failure to file was fraudulent. See Rule 142, Tax Court Rules of Practice and Procedure, and sec. 6651(f), I.R.C. Petitioner has failed to submit any relevant information to demonstrate that there is a legitimate dispute about any relevant fact, that respondent is not entitled to a decision as a matter of law, or that petitioner is not liable for the income tax deficiency and the additions to tax determined in the notice of deficiency . In addition, by reason of the deemed admissions, respondent has satisfied his burden of proving that petitioner's failure to file a return for 2002 was fraudulent. See Brian M . DiMercurio v . Commissioner, T.C. Memo. 2009-225. We conclude, therefore, that respondent's motion for summary judgment should be granted and that decision should be entered accordingly.

Upon consideration of the above, it is hereby

ORDERED that respondent's motion for summary judgment, filed May 29, 2009, is granted. It is further

ORDERED and DECIDED that there is a deficiency in income tax due from petitioner for 2002 of $328,190. It is further

ORDERED and DECIDED that there is an addition to tax under section 6651(f), I.R.C., due from petitioner for 2002 of $237,937.75 ; that there is an addition to tax under section 6651(a)(2), I .R .C ., due from petitioner for 2002 of $ 82,047.50; and that there is an addition to tax under section 6654 , I .R .C ., due from petitioner for 2002 of $10,967.16.

(Signed) L . Paige Marvel
Judge

ENTERED: DEC 16 2009
Dan Evans
Foreman of the Unified Citizens' Grand Jury for Pennsylvania
(And author of the Tax Protester FAQ: evans-legal.com/dan/tpfaq.html)
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Re: A TD to Watch

Post by Judge Roy Bean »

Just out of curiosity, the petitioner hasn't filed a tax return for over a decade and only the year 2002 is chosen because . . . ? :?
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Re: A TD to Watch

Post by The Observer »

Judge Roy Bean wrote:Just out of curiosity, the petitioner hasn't filed a tax return for over a decade and only the year 2002 is chosen because . . . ? :?
Given the fact that the basis of the assessment was made on records of banks deposits, I would venture to say that the IRS summonsed for those records, possibly meaning that this is the only tax year for which there existed a source that would withstand scrutiny in court over the validity of the assessment. Since this TP has been involved with a sham trust, it may nigh impossible to meet the burden of proof without having some concrete evidence that he received monies; 2002 might be the only year where they could show he was involved with that bank account. There is also a policy of not pursuing periods older than 6 years unless there is good evidence of criminal fraud present; I note that the IRS commenced the NOD in 2008 which would put it at the extreme end of that time frame.

The other years forward of 2002 might well be in a stage of being worked and developed for assessment and the IRS is only waiting to see how this court case turned out before pursuing the rest. Or it may be that they lack the necessary sources and facts to support a SFR assessment due to the fact that theTP developed a network of sham trusts and has kept the monies moving through them in order to hid his income. Or it could be there are a number of separate actions going on that haven't gotten to the stage yet to bring these other years into the courtroom.
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Re: A TD to Watch

Post by wserra »

Judge Roy Bean wrote:Just out of curiosity, the petitioner hasn't filed a tax return for over a decade and only the year 2002 is chosen because . . .
it was the first palindrome since 1991, and there won't be another until 2112.
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Re: A TD to Watch

Post by LPC »

This guy has more of a history than I thought.

He twice filed for bankruptcy in 2005. I didn't check the dockets to see if he ever got a discharge.

In 2006, he filed a petition to quash the summonses that the IRS had served on three banks, looking for his financial records for 2002, but the petition was dismissed. Lester R. Ramer et ux. v. Internal Revenue Service et al., No. 5:06-cv-05036-JLH (USDC W.D. Ark. 10/4/2006).

In 2006, he also filed a 28 page complaint against the United States in the DC District Court for damages under IRC section 7433. He partially survived a motion to dismiss, but failed to amend his complaint in order to show the *facts* for which he was requesting damages, and so the complaint was finally dismissed last April. Lester R. Ramer et ux. v. United States Government, No. 1:06-cv-01276-RBW (USDC D.C. 4/23/2010). (He filed a motion to reinstate in June, but I don't think anyone is paying any attention to it, given that the court had already reinstated the case once before, after he had failed to timely file an amended complaint.)
Dan Evans
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(And author of the Tax Protester FAQ: evans-legal.com/dan/tpfaq.html)
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Re: A TD to Watch

Post by LPC »

Judge Roy Bean wrote:Just out of curiosity, the petitioner hasn't filed a tax return for over a decade and only the year 2002 is chosen because . . . ? :?
In his complaint described above, there are some allegations that the IRS had been engaged in collection activity even before they started to investigate 2002. For example:
Lester R. Ramer wrote:COUNT 2

Beginning with "tax year" 1997 through and including the present year defendant, through principals, officers, agents, and/or employees of the Internal Revenue Service, have sent plaintiff a continuing series of collection letters. [...]

COUNT 9

Beginning with "tax year" 1997 through and including the present year defendant, through principals, officers, agents, and/or employees of the Internal Revenue Service disregarded 26 U .S.C. §7214(a) with intent to defeat the application thereof by attempting and continuing to attempt to collect sums greater than appear on [the non-existing] records of assessment of taxes and penalties for any of the aforementioned years. [...]

COUNT 10

Beginning with "tax year" 1997 through and including the present year defendant, through principals, officers, agents, and/or employees of the Internal Revenue Service disregarded 26 U.S.C. §6402 with intent to defeat the application thereof by failing to return all unlawfully collected taxes to plaintiff(s). [...]

COUNT 14

Beginning with "tax year" 1997 through and including the present year defendant, through principals, officers, agents, and/or employees of the Internal Revenue Service disregarded 26 U.S.C. §6321 with intent to defeat the application thereof by filing an invalid and unlawful Notice of Federal Tax Lien against plaintiff(s) for each of the aforementioned years. [...]

COUNT 24

Beginning with "tax year" 1997 through and including the present year defendant, through principals, officers, agents, and/or employees of the Internal Revenue Service disregarded 26 U.S.C. §6321 with intent to defeat the application thereof by filing of an invalid and unlawful Notice of Tax Levy on plaintiff(s) wages, bank account, & etc. [...]
This is speculation, but it's possible that the IRS prepared substitutes for returns based on W-2s or other third-party reports for years before 2002, but Ramer went self-employed in 2002, so the IRS started an investigation in late 2005 or early 2006, and Ramer finally started paying attention to the notices of deficiencies.

And I suspect that we haven't seen any civil enforcement actions since 2006 because the IRS decided to open a criminal investigation.

So, as I said, I think we're going to hear more from Ramer in the future.
Dan Evans
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Re: A TD to Watch

Post by Judge Roy Bean »

It's amazing that someone can deliberately avoid filing for over a decade and not be behind bars.
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Re: A TD to Watch

Post by LPC »

I've also done some research into "Petra Stone," which the Tax Court refers to as Ramer's business, and the results are somewhat intriguing.

The Arkansas Secretary of State lists 9 corporations using the phrase "Petra Stone," two of which were dissolved and six of which had their charters revoked (which I think is usually the result of non-payment of state taxes).

The only corporation associated with Ramer's name is one of the dissolved corporations, Petra Stone Products NWA, Inc. It was incorporated in 1987, but it doesn't say when it was dissolved.

The only active corporation is Petra Stone, NWA, Inc. (http://www.petrastone.org), and it was incorporated in 2003, and it's address is on the same street as the one Ramer lists as his home address in court papers.

There are two other websites based in Arkansas with "Petra Stone" in their names, http://www.petrastone.com and http://www.petrastoneproducts.com, and one of them refers to "Petra Stone" as some kind of franchise.

Anyway, here's what it's beginning to look like to me. People start a bunch of Petra Stone franchise operations in the mid-1980s, but almost all of them eventually fail. Ramer starts out in 1986, but by 1996 the cash flow gets tight so he pulls a Simkanin and stops filing personal income tax returns, perhaps also failing to pay payroll taxes and state taxes. By 2001 or 2002, he starts trying to run the businesses through various personal bank accounts to avoid levies, but finally gives up in 2003 and sells out to another group of people, who form a second corporation using the same "NWA" (which probably stands for "North West Arkansas") description. He tries to file bankruptcy in 2005. By 2006, he's broke and bitter, and decides to start fighting the IRS instead of running from them.
Dan Evans
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(And author of the Tax Protester FAQ: evans-legal.com/dan/tpfaq.html)
"Nothing is more terrible than ignorance in action." Johann Wolfgang von Goethe.
Nikki

Re: A TD to Watch

Post by Nikki »

Ramer's original Tax Court petition was filed, in typical sovereignoramus style, as
"Lester R. Ramer and LESTER R. RAMER"

vs. Commissioner.
Harvester

Re: A TD to Watch

Post by Harvester »

Judge Roy Bean wrote:It's amazing that someone can deliberately avoid filing for over a decade and not be behind bars.
Well that's something we can all aspire to. I'll be there in . . let's see, eight years.

Anyway, thanks for the info. More reason to avoid traditional banking.
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Re: A TD to Watch

Post by Gregg »

Harvester wrote:
Judge Roy Bean wrote:It's amazing that someone can deliberately avoid filing for over a decade and not be behind bars.
Well that's something we can all aspire to. I'll be there in . . let's see, eight years.
If you get teh same sentence as pete, you may be out by then.
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Re: A TD to Watch

Post by LPC »

The Supreme Court has denied certiorari in Ramer's attempted appeal of the 8th Circuit decision, so the full cite is now Lester R. Ramer v. Commissioner, No. 11623-08 (USTC 12/16/2009) (unpublished), aff'd No. 10-1584 (8th Cir. 9/30/2010) (per curiam), cert. den., No. 10-807 (1/18/2011).

I'm sure we'll be seeing his name again.
Dan Evans
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"Nothing is more terrible than ignorance in action." Johann Wolfgang von Goethe.
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Re: A TD to Watch

Post by jcolvin2 »

Ramer apparently has continued to be recalcitrant in his dealings with the IRS. The latest from the Eight Circuit results in an additional $8k in sanctions:

http://media.ca8.uscourts.gov/opndir/17/11/171301U.pdf
United States Court of Appeals
For the Eighth Circuit
___________________________
No. 17-1301
___________________________
United States of America
Plaintiff - Appellee
v.
Lester R. Ramer; Mary Ramer
Defendants - Appellants
Deer Creek Financial Services, LLC; Sycamore Leasing; Echo Acres; Concrete Concepts; HIS Management; Benton County Tax Collector; State of Arkansas; Arkansas Commissioner of State Lands
Defendants
____________
Appeal from United States District Court
for the Western District of Arkansas - Fayetteville
____________
Submitted: October 26, 2017
Filed: November 3, 2017
[Unpublished]
____________
Before COLLOTON, BOWMAN, and KELLY, Circuit Judges.
____________
PER CURIAM.

Lester and Mary Ramer appeal following entry of default judgment by the district court in the government’s civil 1 action to reduce federal income tax assessments to judgment and enforce federal tax liens against real property. The government has moved for sanctions on appeal.

Having carefully reviewed the record, and considered the parties’ submissions on appeal, we find that the Ramers’ appellate arguments are frivolous. First, the district court did not abuse its discretion in granting default, as the Ramers affirmatively refused to file an answer or otherwise participate in the proceedings once their motion to dismiss was denied. See Fed. R. Civ. P. 12(a)(4)(A) (answer is due 14 days after court denies motion to dismiss); 55(a) (default judgment is warranted when the defendant “has failed to plead or otherwise defend”); Ackra Direct Mktg. Corp. v. Fingerhut Corp., 86 F.3d 852, 857 (8th Cir. 1996) (default judgment is appropriate if the conduct is willful, contumacious, or intentional). Next, the government had standing to bring this debt-collection action under specific statutory authority. See 26 U.S.C. § 7403(a), (c) (government may bring civil action to enforce tax liens; where tax debt is established, court may order sale of property and distribution of proceeds). Further, the district court did not abuse its discretion in denying the Ramers’ recusal motion. See United States v. Oaks, 606 F.3d 530, 537 (8th Cir. 2010) (recusal decision is reviewed for abuse of discretion; judge is presumed impartial, and party seeking disqualification bears substantial burden of proving that judge’s impartiality might reasonably be questioned; adverse rulings do not establish bias). We reject the Ramers’ remaining arguments for the reasons articulated by the district court.

This court may award “just damages” and single or double costs if it determines that an appeal is frivolous. 28 U.S.C. § 1912; Fed. R. App. P. 38. In this case, sanctions are appropriate. See United States v. Gerads, 999 F.2d 1255, 1256–57 (8th Cir. 1993) (per curiam) (rejecting frivolous tax-protester arguments; granting government’s motion for sanctions for frivolous appeal).

The judgment is affirmed, see 8th Cir. R. 47B, and this court grants the
government’s motion for sanctions in the amount of $8,000.

1 The Honorable Timothy L. Brooks, United States District Judge for the Western District of Arkansas.