                       T.C. Memo. 2009-174



                     UNITED STATES TAX COURT



                  ROBERT POWELL, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 18134-06L.              Filed July 21, 2009.



     Robert Powell, pro se.

     Martha J. Weber, for respondent.



                       MEMORANDUM OPINION


     COHEN, Judge: This case was filed in response to a notice of

determination concerning collection action.    It is before the

Court on (1) respondent’s motion for summary judgment and to

impose a penalty under section 6673 against petitioner, and (2)

the Court’s order to show cause directed at petitioner’s counsel

requiring him to explain why counsel should not be required under
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section 6673(a)(2) to pay personally any excess costs, expenses,

and attorneys’ fees reasonably incurred because of his conduct in

this case.   Unless otherwise indicated, all section references

are to the Internal Revenue Code, and all Rule references are to

the Tax Court Rules of Practice and Procedure.

                            Background

     Petitioner resided in Tennessee at the time his petition was

filed.   He received compensation for services and other forms of

taxable income during 1999, 2000, 2001, and 2002.   Petitioner

failed to file valid Federal income tax returns for those years,

and he claims that he is not required to file returns or pay

taxes on money earned from his labor or services.   He also makes

other frivolous arguments about whether he is a “taxpayer” or an

“individual” under the Internal Revenue Code.

     The Internal Revenue Service (IRS) sent statutory notices of

deficiency to petitioner.   Although he received the notices of

deficiency, petitioner did not file petitions in this Court, and

the amounts determined in the notices were assessed.   The IRS

also determined a frivolous return penalty for 1999 under section

6702. (Although the petition included reference to the section

6702 penalty, that part of the case was dismissed for lack of

jurisdiction because the determination appealed by the petition
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was made before the effective date of the amendment of section

6330(d)(1) by the Pension Protection Act of 2006, Pub. L. 109-

280, sec. 855, 120 Stat. 1019.)

     On October 12, 2005, the IRS sent to petitioner a Final

Notice of Intent to Levy and Notice of Your Right to a Hearing in

order to enforce collection of the unpaid liabilities for 1999

through 2002.   The notice showed then-outstanding liabilities

totaling $434,796.64.   By letter dated October 25, 2005,

petitioner requested a hearing and made various spurious demands.

He claimed to have researched the Constitution, the Internal

Revenue Code, caselaw, and “other publications” and asserted: “My

research has lead [sic] me to the conclusion that I am NOT

required by any law to file an individual tax return or pay

income tax on the money I earn from my labor or services.”

     On April 21, 2006, a settlement officer responded to

petitioner’s request for a hearing and advised petitioner that

the items mentioned in his request are items that courts have

determined are frivolous or groundless.   The letter advised

petitioner that “Appeals does not provide a face-to-face

conference if the only items you wish to discuss are those

mentioned”, indicated the alternatives available to petitioner,

and scheduled a telephone conference.   Petitioner responded with

a letter dated May 10, 2006, repeating his demands and making
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threats.    Petitioner acknowledged that he had reviewed the IRS

publication entitled “The Truth About Frivolous Tax Arguments”,

but he denied that the publication addressed the issues he had

raised.

     On August 11, 2006, a Notice of Determination Concerning

Collection Action(s) Under Section 6320 and/or 6330 was sent to

petitioner.    The notice sustained the proposed levy, noting that

petitioner had raised only frivolous issues and had been warned

that if he persisted in raising frivolous arguments, the Court

may impose sanctions under section 6673.

     In his petition filed September 11, 2006, petitioner sought

relief “on all non-frivolous issues” but did not specify errors

in the notice of determination.

     On August 31, 2007, Respondent’s Motion For Summary Judgment

(first motion for summary judgment) was filed.    Respondent set

out the history of petitioner’s frivolous arguments and requested

a penalty under section 6673.    At the hearing on the motion for

summary judgment, respondent’s counsel disclosed to the Court

that certain additions to tax reflected in the transcripts of

petitioner’s account had been improperly assessed and would be

abated.    The first motion for summary judgment was denied, and

the Court stated that satisfaction of the requirements of section

6330 should be demonstrated at trial rather than in a summary

adjudication.    The Court was also concerned with unjustified
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delay in resolving this action because of the infrequency of

trial sessions in Memphis, Tennessee, the place of trial

requested by petitioner.

     On November 14, 2008, Respondent’s Motion For Summary

Judgment and to Impose a Penalty Under I.R.C. Section 6673

(second motion for summary judgment), which is now pending, and

Respondent’s Motion to Permit Levy were filed.   The pending Order

to Show Cause dated February 4, 2009, recounted additional

history and included the following:

          By notice served January 8, 2008, this case was
     set for trial in Memphis on June 9, 2008. On June 5,
     2008, petitioner moved for a continuance, which was not
     opposed by respondent, on the ground that he had
     employed counsel, Jerold Barringer, “so that Mr.
     Barringer and Petitioner can eliminate issues
     Petitioner sought to raise, but which would be
     foreclosed” at trial. The Court reluctantly granted
     the continuance.

          By notice served November 18, 2008, this case was
     set for trial in Memphis on April 20, 2009.
     Respondent’s pending motions apparently crossed in the
     mail with the notice of trial. Respondent’s motions
     recount the history of frivolous arguments made by
     petitioner, establish that petitioner is precluded from
     disputing the underlying liabilities in this case
     because of his receipt of statutory notices of
     deficiency, explain that the invalid assessments of
     certain penalties have been abated, and assert that
     respondent has shown good cause for the removal of the
     suspension of the levy that results during the pendency
     of this action. Petitioner’s response does not raise a
     bona fide material issue of fact but merely seeks more
     time to pursue discovery. Petitioner’s argument that
     respondent’s motions should be denied because they are
     premature until petitioner secures responses to his
     various inquiries is patently for the purpose of delay.
     Petitioner’s interrogatories indirectly assert stale
     tax defiance arguments about terms such as “taxpayer”,
                         - 6 -

“person”, “non-resident alien”, “income”, and other
non-meritorious arguments about delegated authority.
These arguments are directed to the underlying
liabilities that will not be considered in this case.

     We agree with respondent and conclude that
petitioner’s pursuit of frivolous and groundless
arguments throughout the collection review process is
intended to delay collection. Under such
circumstances, levy action should not be suspended.
Section 6630(e)(2). See Burke v. Commissioner, 124
T.C. 189, 196-197 (2005).

     The discovery of the invalid assessment of certain
penalties that led to the Court’s denial of
respondent’s prior motion for summary judgment was made
and disclosed by respondent and was not revealed by
petitioner’s frivolous and dilatory tactics. That
concession by respondent does not preclude an otherwise
appropriate penalty under section 6673. Petitioner’s
counsel, rather than resolving issues as represented in
the petitioner’s motion for continuance filed June 5,
2008, has continued the frivolous and dilatory course
of conduct and seeks to multiply these proceedings
unreasonably and vexatiously. See section 6673(a)(2).
Petitioner’s counsel is fully aware of the consequences
of pursuing frivolous arguments. See United States v.
Patridge, 507 F.3d 1092, 1095-1097 (7th Cir. 2007).
Upon due consideration and for cause, it is hereby

     ORDERED that respondent’s Motion to Permit Levy
filed November 14, 2008, is granted pursuant to section
6630(e)(2), and the levy action that is the basis of
this proceeding is not suspended. It is further

     ORDERED that respondent’s Motion for Summary
Judgment and to Impose a Penalty Under I.R.C. section
6673 is set for hearing on April 20, 2009, at the trial
session of the Court theretofore scheduled to commence
at 10:00 A.M. in Room 1006, Federal Building, 167 North
Main Street, Memphis, TN 38103. Trial may proceed
immediately if the motion for summary judgment is
denied, and this case will not be further continued.
It is further

     ORDERED that at the hearing on April 20, 2009,
petitioner’s counsel, Jerold W. Barringer, shall show
cause, if any he has, why he should not be required
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     under section 6673(a)(2) to pay personally any excess
     costs, expenses, and attorneys’ fees reasonably
     incurred because of his conduct in this case. It is
     further

          ORDERED that at the hearing on April 20, 2009,
     respondent shall present evidence of costs, expenses,
     and attorneys’ fees, if any, that respondent would
     claim under section 6673(a)(2).

     On April 15, 2009, the Court received a letter from

petitioner in which he claimed that his counsel, Jerold W.

Barringer (Barringer), had failed to communicate with him.    The

letter stated in part:   “I am in the process of preparing

motions, the purpose of which is to obtain postponement of the

scheduled trial date so I can retain another lawyer, complete

Discovery and otherwise prepare for trial.”

     When the case was called on April 20, 2009, petitioner’s

letter was filed as a motion to withdraw counsel.   Barringer

stated:

          We’ve had a breakdown of communication. I have,
     in fact, sent emails to Mr. Powell, as well as left
     phone messages for him, but we have different theories
     about where this case is going or what this case could
     do, and for some time now I’ve not been able to pursue
     the issues he wants to pursue, so I don’t know how I
     can represent what he wants to do. I have a different
     theory of where the case could conceivably go, but I
     don’t know whether he wants to go that route.

Respondent’s counsel did not oppose withdrawal of petitioner’s

counsel but did oppose a continuance.   Respondent’s counsel filed

a declaration describing respondent’s attorneys’ time and

claiming $6,275 as the amount to be awarded under section
                                - 8 -

6673(a)(2).    Barringer was allowed 30 days to respond to the

claimed costs, and the motion to withdraw counsel was granted.

     Petitioner proceeded pro se and persisted in his demands for

discovery and a continuance.    He submitted an Offer of Proof in

which he set forth his frivolous arguments that he is not an

individual required to file income tax returns or pay taxes and

complained of the denial of a face-to-face hearing and denial of

discovery.    He did not raise any issue of material fact

precluding summary judgment.

     Barringer’s Response and Objection to Motion For 6673

Sanctions and Response to Request for Attorneys Fees was filed

May 20, 2009.    He challenges the validity of the assessment and

other documents on the alleged absence of appropriate signatures

by IRS personnel.    He claims that respondent was obligated to

produce a Form 23C, Assessment Certificate--Summary Record of

Assessments, and copies of the notices of deficiency petitioner

requested as a pro se, even though Barringer has acknowledged to

respondent’s counsel that petitioner received the notices of

deficiency.    He insists that the discovery was appropriate

because “Petitioner has sought to know exactly how all the

provisions of the I.R.C. apply to him”, but he asserts that

“Petitioner would not have agreed to any issue, ever, as

demonstrated in open court on April 20, 2009.”    The latter

statement is made in support of Barringer’s argument that
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counsel’s involvement was not the cause of the time expended by

respondent’s counsel that is the basis of the claim under section

6673(a)(2).

                           Discussion

     Petitioner has not been deterred by the multiple warnings

that his arguments are frivolous, and his former counsel argues,

persuasively, that petitioner would never give up his arguments.

     Despite repeated warnings by respondent and the Court,

petitioner continues to maintain the same frivolous positions and

to impose extra burdens on respondent in pursuing matters where

there is no reasonable dispute.   Arguments that compensation for

services is not taxable have been repeatedly and thoroughly

rejected in cases too numerous to mention.   Arguments such as

those pursued by petitioner have resulted in criminal

convictions, e.g., United States v. Sloan, 939 F.2d 499 (7th Cir.

1991; United States v. Collins, 920 F.2d 619 (10th Cir. 1990);

civil fraud penalties, e.g., Rowlee v. Commissioner, 80 T.C. 1111

(1983); Chase v. Commissioner, T.C. Memo. 2004-142; section 6673

penalties, e.g., Sawukaytis v. Commissioner, T.C. Memo. 2002-156,

affd. 102 Fed. Appx. 29 (6th Cir. 2004); and sanctions for

frivolous appeals, e.g., Martin v. Commissioner, 756 F.2d 38 (6th

Cir. 1985), affg. T.C. Memo. 1983-473; Perkins v. Commissioner,

746 F.2d 1187 (6th Cir. 1984), affg. T.C. Memo. 1983-474.    In any
                             - 10 -

event, arguments about his underlying liability for the taxes

were precluded by section 6330(c)(2)(B) because petitioner

received notices of deficiency for the years in dispute.

     In the context of cases brought under section 6330,

procedural arguments such as those made by petitioner and now by

Barringer have been refuted repeatedly.    See, e.g., Roberts v.

Commissioner, 118 T.C. 365, 372-373 (2002) (and cases cited

thereat) (section 6673 penalty imposed on the taxpayer, who had

been counsel in prior cases), affd. 329 F.3d 1224 (11th Cir.

2003); see also Craig v. Commissioner, 119 T.C. 252, 261-264

(2002); Pierson v. Commissioner, 115 T.C. 576, 579-580 (2000);

Davis v. Commissioner, 115 T.C. 35 (2000).    The arguments made

and the cases rejecting them are cited in the IRS publication,

“The Truth About Frivolous Tax Arguments”, sec. II (Feb. 1,

2009), available on the IRS Web site at www.irs.gov, which

petitioner acknowledges reviewing.    Under the circumstances,

petitioner did not have a right to a face-to-face hearing.    See

Lunsford v. Commissioner, 117 T.C. 183 (2001).    (Because of the

demonstrated abuses of the section 6330 procedures, in the Tax

Relief and Health Care Act of 2006, Pub. L. 109-432, div. A, sec.

407(a), 120 Stat. 2960, Congress has added a penalty for

frivolous submissions including submissions under section 6330.

Sec. 6702(b)(2)(B)(i)(II); see Notice 2008-14, 2008-1 C.B. 310.)
                              - 11 -

     Neither petitioner nor Barringer acknowledges the

authorities showing that their arguments are totally lacking in

merit and have no likelihood of success.   In similar

circumstances in United States v. Patridge, 507 F.3d 1092, 1095-

1097 (7th Cir. 2007), the Court of Appeals described Barringer’s

“inability to distinguish between plausible and preposterous

arguments” and characterized him as a “recidivist” for ignoring

that court’s “2006 decision reminding him that taxpayers cannot

use a request for a collection hearing to contest their

substantive liability.”   In the absence of any acknowledgment of

current law, there is no indication of a good-faith attempt to

change it.   See Rule 201(a); Model Rules of Profl. Conduct R. 3.1

(2008).   We conclude that Barringer was adequately warned yet

persisted.   Thus his conduct was reckless and in bad faith.    See

Takaba v. Commissioner, 119 T.C. 285 (2002); Davis v.

Commissioner, T.C. Memo. 2007-201, affd. 301 Fed. Appx. 398 (6th

Cir. 2008); Gillespie v. Commissioner, T.C. Memo. 2007-202, affd.

292 Fed. Appx. 517 (7th Cir. 2008); Edwards v. Commissioner, T.C.

Memo. 2003-149, affd. 119 Fed. Appx. 293 (D.C. Cir. 2005).

     According to Barringer, all of his conduct in this case was

consistent with demands of petitioner.   Petitioner’s conduct

while acting pro se was totally groundless and patently for the

purpose of delay.   On the entire record, a penalty will be

awarded against petitioner in the amount of $25,000.
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     Respondent’s itemization claims 36.25 hours as “excess hours

attributable to the involvement of petitioner’s counsel” and

includes time for preparation of the second motion for summary

judgment, time spent as a result of the frivolous discovery

requests sent by Barringer after he entered his appearance in the

case, and time spent in response to the Court’s order to show

cause.    Respondent sets out the time and experience of various

attorneys and proposes rates previously adopted by the Court.

See Takaba v. Commissioner, supra at 303-305; Harper v.

Commissioner, 99 T.C. 533, 551 (1992).

     Barringer claims that the time spent in relation to the

second motion for summary judgment would have been necessary even

without his involvement.    He attempts to excuse his submission of

the interrogatories on the basis that they were demanded by his

client.    He does not dispute the reasonableness of the hourly

rates suggested for the various attorneys based on their

experience.

     In denying the first motion for summary judgment, the Court

expressly stated that satisfaction of the requirements of section

6330 should be demonstrated at trial rather than in a summary

adjudication.    The case was submitted on the second motion for

summary judgment at the time of trial because petitioner offered

only the same stale frivolous arguments he had pursued from the

beginning of the administrative proceedings and did not
                              - 13 -

demonstrate any remaining material issues of fact.    The same

result would have been achieved without the second motion for

summary judgment.   We do not accept Barringer’s argument that the

second motion for summary judgment would have been necessary

without his involvement.   We believe that it was unnecessary with

or without his involvement.   It was a choice by respondent to

disregard the advice of the Court, and we decline to require

Barringer to compensate respondent for that choice.

     Effecting delay and unnecessary responses through abuse of

the discovery process is an appropriate basis for an award under

section 6673(a)(2).   See Johnson v. Commissioner, 116 T.C. 111

(2001), affd. 289 F.3d 452, 456-457 (7th Cir. 2002).    The motion

to permit levy was an appropriate response to the continuance and

delays caused by the false representation that Barringer’s entry

of appearance would lead to reasoned resolution of this case.

Costs of supervising counsel are recoverable.   See Takaba v.

Commissioner, supra at 304-305.   Barringer complains about time

spent in consultations among and between respondent’s counsel,

but that time was appropriate because of respondent’s cautious

approach to seeking sanctions by reason of counsel’s conduct and

because the motion to permit levy is not a frequently employed

option.

     Excluding time spent in preparation of the second motion for

summary judgment, we conclude that the recoverable amount
                             - 14 -

reasonably incurred as a result of Barringer’s unreasonable and

vexatious conduct is 7.5 hours at $150 per hour and 18 hours at

$200 per hour, for a total award of $4,725 under section

6673(a)(2).


                                      An appropriate order and

                                decision will be entered.
