                                                                                                                           Opinions of the United
2008 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


7-25-2008

Schlosser v. Comm IRS
Precedential or Non-Precedential: Non-Precedential

Docket No. 07-4811




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Recommended Citation
"Schlosser v. Comm IRS" (2008). 2008 Decisions. Paper 789.
http://digitalcommons.law.villanova.edu/thirdcircuit_2008/789


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                                                  NOT PRECEDENTIAL

           UNITED STATES COURT OF APPEALS
                FOR THE THIRD CIRCUIT
                   ________________

                   Nos. 07-4811 & 07-4812
                     ________________

                CYNTHIA ANN SCHLOSSER

                                     Appellant in No. 07-4811

                                v.

         COMMISSIONER OF INTERNAL REVENUE

                 _________________________

                   JAMES K. SCHLOSSER

                                     Appellant in No. 07-4812

                                v.

         COMMISSIONER OF INTERNAL REVENUE

                   _____________________

           On Appeal from the United States Tax Court
              Tax Court Nos. 23355-06 & 23356-06
          (Tax Court Judge: Honorable Robert P. Ruwe)
                   _____________________

           Submitted Under Third Circuit LAR 34.1(a)
                        July 22, 2008

Before: RENDELL, JORDAN and VAN ANTWERPEN, Circuit Judges

                     (Filed: July 25, 2008)
                                  ___________________

                                       OPINION
                                  ___________________

PER CURIAM

       Cynthia Ann Schlosser and James K. Schlosser appeal the United States Tax

Court’s decision granting the Commissioner’s motion for summary judgment. For the

reasons that follow, we will affirm the Tax Court’s decision.

       The procedural history of this case and the details of Schlossers’ claims are well-

known to the parties, set forth in the Tax Court’s opinion, and need not be discussed at

length. Briefly, both parties failed to file income tax returns in 1994 and the Internal

Revenue Service (“IRS”) sent both parties a notice of intent to levy and notice of right to

a collection-due-process (“CDP”) hearing. The parties requested a CDP and stated that

they were not required to file income tax forms and that they did not have taxable income.

The IRS Appeals Office issued a notice of determination to each party upholding the

proposed levy actions and the lien filings. Appellants next filed an appeal to the Tax

Court challenging the notices of determination. In their petitions, Appellants alleged that

they were not required to file federal income tax returns, that they had no income, and that

they were not subject to “the jurisdiction of the United States”. The Commissioner filed

motions for summary judgment which the Tax Court granted. The Tax Court also

imposed a penalty of $1000 pursuant to I.R.C. § 6673. Appellants filed separate appeals

challenging the Tax Court’s decision. The Commissioner filed a motion to consolidate

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the cases which was granted. The Commissioner has also filed a motion requesting that

Appellants pay damages and costs pursuant to Fed. R. App. P. 38.

       We have jurisdiction pursuant to 26 U.S.C. § 7482(a)(1). We exercise plenary

review over the Tax Court’s conclusions of law, and review the Tax Court’s factual

findings for clear error. See PNC Bancorp, Inc. v. Comm’r of Internal Revenue, 212 F.3d

822, 827 (3d Cir. 2000). We review the Tax Court’s imposition of a penalty under § 6673

for abuse of discretion. See Sauers v. Comm’r of Internal Revenue, 771 F.2d 64, 65 (3d

Cir. 1985).

       Appellants argue that the Tax Court erroneously granted summary judgment

because there were material facts in dispute. See Dahlstrom v. Comm’r of Internal

Revenue 85 T.C. 812, 820-21 (1985) (discussing summary judgment standard).

Appellants, in the Tax Court, raised the same baseless arguments raised by previous tax

protestors. See e.g., United States v. Sloan, 939 F.2d 499, 500 (7th Cir. 1991); United

States v. Collins, 920 F.2d, 619, 629-631 (10th Cir. 1990). Appellants’ arguments are

patently frivolous and the Tax Court did not err in granting the Commissioner’s motion

for summary judgment. Furthermore, Appellants were warned numerous times that their

continued frivolous arguments could result in the imposition of monetary penalties.

Therefore, we discern no abuse of discretion in the Tax Court’s imposition of a § 6673

penalty on Appellants.

       Accordingly, we will affirm the judgment of the United States Tax Court.



                                            -3-
       Under Fed. R. App. P. 38 a court of appeals may award damages and costs to an

appellee if it determines that an appeal is frivolous. “This court has been reluctant to

classify appeals as frivolous,” and has reserved award of fees and costs for extreme cases

where appeals were without doubt devoid of merit. Hilmon Co. (V.I.) Inc. v. Hyatt

Intern., 899 F.2d 250, 253 (3d Cir. 1990). Because the Schlossers’ appeals raise

arguments that have been repeatedly deemed frivolous, we grant the Government’s

motion and award costs in the amount of $1,000 against each Appellant.




                                             -4-
