     Case: 19-60142        Document: 00515214737        Page: 1     Date Filed: 11/26/2019




           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT


                                       No. 19-60142
                                                                           United States Court of Appeals
                                                                                    Fifth Circuit

                                                                                  FILED
MARTIN GEORGE NITSCHKE,                                                    November 26, 2019
                                                                             Lyle W. Cayce
                 Petitioner - Appellant                                           Clerk

v.

COMMISSIONER OF INTERNAL REVENUE,

                 Respondent - Appellee




                              Appeal from a Decision of the
                                United States Tax Court
                                   TC No. 11246-19


Before WIENER, HIGGINSON, and HO, Circuit Judges.
STEPHEN A. HIGGINSON, Circuit Judge:*
       Martin George Nitschke (“Nitschke”), proceeding pro se, appeals the
United States Tax Court’s dismissal of his case for lack of jurisdiction. The
Commissioner has moved for sanctions pursuant to 28 U.S.C. § 1912, Federal
Rule of Appellate Procedure 38, and 26 U.S.C. § 7482(c)(4). 1 We AFFIRM the
Tax Court’s dismissal and DENY the Commissioner’s motion for sanctions.



       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
       1   On September 19, 2019, this motion was carried with the case.
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                                        No. 19-60142


                                                I
       On June 1, 2018, Nitschke mailed a petition to the Tax Court alleging
that the Internal Revenue Service (“IRS”) had not issued notices of deficiency
and notices of determination to him for the years 2003 to 2017. 2 However, the
IRS did issue a number of notices of deficiency and notices of determination to
Nitschke for these years. Indeed, Nitschke petitioned the Tax Court for review
in response to a number of these notices, illustrating his receipt of them. 3
       The Commissioner filed a motion to dismiss Nitschke’s 2018 petition for
lack of jurisdiction, arguing that Nitschke did not produce—and the
Commissioner could not locate—a notice of deficiency or notice of
determination sufficient to confer jurisdiction on the Tax Court. None of
Nitschke’s petitions in response to notices for the years 2003 to 2017 were
ongoing, and the IRS had not issued any new notices sufficiently recently to
confer jurisdiction on the Tax Court. Nitschke responded to the motion to
dismiss by alleging that the Commissioner had committed fraud on the Tax
Court. Specifically, he argued that there are no copies of the notices issued to
him for the years 2003 to 2017 in the IRS’s Master File, which the Internal
Revenue Manual describes as “the official control records for all taxpayer
accounts.” 4 Because the IRS’s Master File “does not document the legal




       2  Notices of deficiency inform the taxpayer that his or her tax liability, as calculated
by the IRS, exceeds that reported in his or her tax return. See 26 U.S.C. §§ 6211(a), 6212(a).
Notices of determination inform the taxpayer that the IRS intends to engage in a collection
action, such as filing a notice of federal tax lien or levying. See 26 U.S.C. §§ 6320(a), 6330(a).
        3 Specifically, Nitschke petitioned the Tax Court for review in response to notices of

deficiency concerning 2007, 2009, and 2011, and he petitioned the Tax Court for review in
response to notices of determination concerning 2007, 2008, 2009, 2010, and 2012.
        4  INTERNAL REVENUE SERV., INTERNAL REVENUE MANUAL § 21.2.1.2.1,
https://www.irs.gov/irm/part21/irm_21-002-001r.
                                                2
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                                  No. 19-60142
existence” of valid notices, Nitschke claimed that the notices he previously
received, and in some cases contested, are “fictitious.”
      The Tax Court granted the Commissioner’s motion “[f]or the reasons set
forth in respondent’s motion to dismiss for lack of jurisdiction, [] filed July 26,
2018.” The Tax Court also granted the Commissioner’s motion for sanctions
pursuant to 26 U.S.C. § 6673(a)(1) and imposed a penalty of $2,500 based on a
finding that Nitschke “commenc[ed] this proceeding with a petition that
contains patently false and groundless statements.”
                                        II
      We review the Tax Court’s jurisdictional determination de novo. Selgas
v. Comm’r, 475 F.3d 697, 699 (5th Cir. 2007). “The Tax Court is an Article I
court of limited jurisdiction.” Estate of Smith v. Comm’r, 429 F.3d 533, 537 (5th
Cir. 2005). It may only exercise jurisdiction that has been conferred upon it by
Congress. Id.
      The Tax Court has jurisdiction to consider a timely filed petition
contesting a notice of deficiency or a notice of determination. Hauptman v.
Comm’r, 831 F.3d 950, 953 (5th Cir. 2016) (citing 26 U.S.C. § 6330); Selgas,
475 F.3d at 699 (citing 26 U.S.C. § 6213). Nitschke does not contest the
Commissioner’s assertion that no notice of deficiency or notice of determination
exists that would render his petition timely. Instead, he argues that the Tax
Court had jurisdiction to reconsider his tax liability for the years 2003 to 2017
based on his allegation of fraud on the court.
      Although the Tax Court generally lacks jurisdiction to vacate a final
decision, “the Tax Court and some Courts of Appeals recognize an exception to
the finality rule if there has been fraud on the court.” Byers v. Comm’r, 117
T.C.M. (CCH) 1382, 2019 WL 2516286, at *2 (2019) (citing Drobny v. Comm’r,
113 F.3d 670, 677 (7th Cir. 1997); Snow v. Comm’r, 142 T.C. 413, 422 (2014)).
This court has recognized the possibility of such an exception in unpublished
                                        3
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opinions. See, e.g., Liu v. Comm’r, 689 F. App’x 264, 265–66 (5th Cir. 2017);
Wilson v. Comm’r, 309 F. App’x 829, 832–33 (5th Cir. 2009). Assuming that
such an exception exists, Nitschke has not alleged facts sufficient to support a
finding of fraud on the court.
      To establish fraud on the court, it is necessary to show an
      unconscionable plan or scheme which is designed to improperly
      influence the court in its discretion. Generally speaking, only the
      most egregious misconduct, such as bribery of a judge or members
      of a jury, or the fabrication of evidence by a party in which an
      attorney is implicated, will constitute a fraud on the court.

Fierro v. Johnson, 197 F.3d 147, 154 (5th Cir. 1999) (quoting First Nat’l Bank
of Louisville v. Lustig, 96 F.3d 1554, 1573 (5th Cir. 1996)).
      Nitschke essentially argues that because the IRS’s Master File, which
the Internal Revenue Manual describes as “the official control records for all
taxpayer accounts,” does not contain copies of the notices sent to him for the
years 2003 to 2017, those notices are “fictitious” and amount to fraud on the
court. 5 We have previously held that the Internal Revenue Manual “is not
legally binding and ‘do[es] not create rights in the taxpayer.’” Estate of Duncan
v. Comm’r, 890 F.3d 192, 200 (5th Cir. 2018) (alteration in original) (quoting
Oxford Capital Corp. v. United States, 211 F.3d 280, 285 n.3 (5th Cir. 2000)).
Moreover, it is not clear why the IRS’s failure to maintain copies of the notices
would render the documents that Nitschke received “fictitious.” The fact that
Nitschke petitioned the Tax Court for review after receiving notices of
deficiency for 2007, 2009, and 2011 and after receiving notices of determination
for 2007, 2008, 2009, 2010, and 2012, illustrates that these notices served their
intended purpose. See Selgas, 475 F.3d at 700 (“[A] notice of deficiency is valid
as long as it informs a taxpayer that the IRS has determined that a deficiency


      5   INTERNAL REVENUE SERV., INTERNAL        REVENUE   MANUAL    §   21.2.1.2.1,
https://www.irs.gov/irm/part21/irm_21-002-001r.
                                        4
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                                  No. 19-60142
exists and specifies the amount of the deficiency.”); 26 U.S.C. §§ 6320(a),
6330(a) (listing the requirements for a valid notice of determination, none of
which involve the Master File). Nitschke has failed to allege facts that would
support a finding of “an unconscionable plan or scheme which is designed to
improperly influence the court.” Fierro, 197 F.3d at 154 (quoting First Nat’l
Bank of Louisville, 96 F.3d at 1573). Therefore, the district court did not err in
dismissing the case for lack of jurisdiction.
                                       III
      Upon determining that an appeal is frivolous, this court may issue
sanctions under 28 U.S.C. § 1912, Federal Rule of Appellate Procedure 38, and
26 U.S.C. § 7482(c)(4). “Sanctions on pro se litigants are appropriate if they
were warned . . . that their claims are frivolous and if they were aware of ‘ample
legal authority holding squarely against them.’” Stearman v. Comm’r, 436 F.3d
533, 538 (5th Cir. 2006) (quoting Stelly v. Comm’r, 761 F.2d 1113, 1116 (5th
Cir. 1985)).
      There is no evidence that Nitschke was warned that his claim of fraud
on the court is frivolous. The Tax Court’s decision to impose sanctions was
based on a finding that Nitschke falsely claimed that the IRS did not issue
particular notices to him, not on a finding that Nitschke’s claim of fraud on the
court was frivolous. Additionally, Nitschke’s argument that the Tax Court had
jurisdiction based on his claim of fraud on the court has not been shown to us
to be foreclosed by binding precedent. In fact, in unpublished opinions, this
court has recognized a possible exception to the finality rule when there has
been fraud on the court. See, e.g., Liu, 689 F. App’x at 265–66; Wilson, 309 F.
App’x at 832–33.
      We therefore AFFIRM the Tax Court’s dismissal for lack of jurisdiction
and DENY the Commissioner’s motion for sanctions.


                                        5
