                            NOT FOR PUBLICATION                            FILED
                     UNITED STATES COURT OF APPEALS                         MAR 1 2018
                                                                        MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS
                            FOR THE NINTH CIRCUIT

STEVEN T. WALTNER; SARAH V.                      No. 16-71797
WALTNER,
                                                 Tax Ct. No. 012722-13L
                Petitioners-Appellants,

 v.                                              MEMORANDUM*

COMMISSIONER OF INTERNAL
REVENUE,

                Respondent-Appellee.

                           Appeal from a Decision of the
                             United States Tax Court

                           Submitted February 13, 2018**

Before:      LEAVY, FERNANDEZ, and MURGUIA, Circuit Judges.

      Steven T. Waltner and Sarah V. Waltner appeal pro se from the Tax Court’s

order following a bench trial sustaining a notice of intent to levy to collect

penalties under 26 U.S.C. § 6702, and imposing a penalty under 26 U.S.C. § 6673.


      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2). The Waltners’ request for
oral argument, set forth in their opening brief, is denied.
We have jurisdiction under 26 U.S.C. § 7482(a)(1). We review de novo the Tax

Court’s legal conclusions, Ann Jackson Family Found. v. Comm’r, 15 F.3d 917,

920 (9th Cir. 1994). We affirm.

      The Tax Court properly concluded that the Waltners’ § 6702 penalties were

not at issue because the Waltners had the opportunity to dispute those tax liabilities

in a separate proceeding. See 26 U.S.C. § 6330(c)(2)(B) (a person may raise

challenges to underlying tax liability in the hearing regarding a proposed levy “if

the person did not receive any statutory notice of deficiency for such tax liability or

did not otherwise have an opportunity to dispute such tax liability”).

      The Tax Court did not abuse its discretion by denying the Waltners’ motions

to consolidate this action with another proceeding concerning their underlying tax

liabilities. See In re Adams Apple, Inc., 829 F.2d 1484, 1487 (9th Cir. 1987)

(“[C]onsolidation is within the broad discretion of the district court[.]”).

      The Tax Court properly declined to address the Waltners’ arguments

concerning the Commissioner’s attempted levy on Mr. Waltner’s Washington

Mutual bank account because the Waltners did not show that they sustained any

damages as a result of the attempted levy. See 26 U.S.C. § 7433(b)(1) (a wronged

party may recover for “actual, direct economic damages sustained by the plaintiff

                                           2                                    16-71797
as a proximate result of the reckless or intentional or negligent actions of the

officer or employee”).

       The Tax Court properly concluded that the Commissioner did not commit

any error by applying a portion of the Waltners’ refund for tax year 2009 to their

tax liabilities. See 26 U.S.C. § 6402(a) (“In the case of any overpayment, the

Secretary, within the applicable period of limitations, may credit the amount of

such overpayment, including any interest allowed thereon, against any liability in

respect of an internal revenue tax . . . .”).

       The Tax Court did not abuse its discretion by imposing a $15,000 penalty on

the Waltners for taking frivolous positions after warning them that such conduct

could lead to sanctions. See 26 U.S.C. § 6673(a)(1) (authorizing penalty not to

exceed $25,000 for bringing or maintaining an action that is frivolous or

groundless); Wolf v. Comm’r, 4 F.3d 709, 716 (9th Cir. 1993) (setting forth

standard of review and explaining that “[w]hen taxpayers are on notice that they

may face sanctions for frivolous litigation, the tax court is within its discretion to

award sanctions under section 6673”).

       The Waltners’ requests for judicial notice, set forth in their opening and




                                                3                                  16-71797
reply briefs, are denied.

      AFFIRMED.




                            4   16-71797
