Farr v. CIR ( 2018 )

FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT October 1, 2018
_________________________________
Elisabeth A. Shumaker
Clerk of Court
JOAN E. FARR, a/k/a Joan Heffington,
Petitioner - Appellant,
v. No. 18-9002
(CIR No. 002746-15)
COMMISSIONER OF INTERNAL
REVENUE,
Respondent - Appellee.
_________________________________
ORDER AND JUDGMENT*
_________________________________
Before TYMKOVICH, Chief Judge, McKAY and MATHESON, Circuit Judges.
_________________________________
Joan E. Farr appeals pro se from a Tax Court decision that sustained the
Commissioner’s assessment of excise taxes. Exercising jurisdiction under 26 U.S.C.
§ 7482(a), we affirm.
BACKGROUND
In 2015, the Commissioner issued Farr a notice of tax deficiency for engaging in
excess benefit transactions with her § 501(c)(3) organization, Association for Honest
*
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist in the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and collateral
estoppel. It may be cited, however, for its persuasive value consistent with
Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
Attorneys (AHA).1 “The term ‘excess benefit transaction’ means any transaction in
which an economic benefit is provided by an applicable tax-exempt organization directly
or indirectly to or for the use of any disqualified person if the value of the economic
benefit provided exceeds the value of the consideration (including the performance of
services) received for providing such benefit.” 26 U.S.C. § 4958(c)(1)(A).
As for the specific excess benefit transactions, the Commissioner determined that
during 2010, 2011, and 2012, Farr used AHA’s checking account to make personal
purchases from various grocery, retail, automotive, and home-improvement stores, as
well as to make tuition payments for her son and to cover the costs of exhuming her
father’s remains for DNA analysis. Based on transactions totaling $39,495.34 over the
three-year period, the Commissioner assessed a first-tier excise tax of $9,873.83 and a
second-tier excise tax of $78,990.68.
Farr then disputed the assessments in Tax Court, arguing that the AHA funds she
withdrew were used to further AHA’s business purpose, to compensate her for services
rendered to AHA, and to repay loans she made to AHA. The Tax Court upheld the
assessments, prompting Farr’s appeal to this court.
DISCUSSION
Excess benefit transactions are taxed in two tiers—first, at a rate of twenty-five
percent, and second, at a rate of two-hundred percent if the first tier is not paid within the
taxable period. See id. § 4958(a)(1), (b). These taxes apply to “disqualified person[s],”
1
According to Farr, AHA “tries to discourage litigation, improve the legal
system and seek ‘justice for all.’” Aplt. Opening Br. at 1.
2
meaning “any person who was, at any time during the 5-year period ending on the date of
such transaction, in a position to exercise substantial influence over the affairs of the
organization.” Id. § 4958(f)(1)(A).
The Tax Court sustained the Commissioner’s assessment of first- and second-tier
excise taxes because Farr failed to submit any credible evidence showing that the
economic benefits she derived from using AHA’s funds were traceable to any
consideration she provided AHA. Indeed, “an economic benefit shall not be treated as
consideration for the performance of services unless such organization clearly indicated
its intent to so treat such benefit.” Id. § 4958(c)(1)(A).2 We review the Tax Court’s legal
conclusions de novo and its factual findings for clear error. Lewis v. Comm’r, 523 F.3d
1272, 1274 (10th Cir. 2008).
On appeal, Farr advances no cogent argument with record support showing that
the Tax Court erred in determining that she engaged in excess benefit transactions with
AHA. Rather, she accuses the Tax Court and the Commissioner of, among other things,
“engag[ing] in unethical acts and . . . conspiracy/collusion, fraud and intentional fraud,
and tort of outrage.” Aplt. Opening Br. at 10. Although we liberally construe a pro se
2
In the Tax Court, Farr did not dispute that AHA was a tax-exempt
organization, that she was a disqualified person, or that she had not corrected the
first-tier tax deficiency in order to avoid the second-tier tax. Any attempt to do so
now is waived. See Tele-Commc’ns., Inc. v. Comm’r, 104 F.3d 1229, 1232-33
(10th Cir. 1997) (“[A]n issue must be presented to, considered and decided by the
trial court before it can be raised on appeal.” (brackets and internal quotation marks
omitted)); Mitchell v. Comm’r, 775 F.3d 1243, 1248 n.3 (10th Cir. 2015) (noting that
arguments forfeited before the Tax Court and unaccompanied on appeal by assertions
of plain error are waived).
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litigant’s filings, we nevertheless require a pro se litigant to provide “succinct, clear and
accurate” arguments, together “with citations to the authorities and parts of the record on
which [she] relies.” Garrett v. Selby Connor Maddux & Janer, 425 F.3d 836, 840-41
(10th Cir. 2005). This, Farr has not done. It is not our role to “serv[e] as the litigant’s
attorney in constructing arguments and searching the record.” Id. at 840. Thus, her bald
assertions of fraud/conspiracy are insufficient to invoke appellate review. See id.
(holding that a pro se litigant forfeits appellate review by advancing arguments that are
scurrilous instead of substantive).
To the extent Farr has complied with her briefing obligations by complaining that
the Tax Court did not appoint counsel for her and would not let her plead the Fifth
Amendment, we note that there is no “right to counsel in a Tax Court proceeding,”
Shamrock v. Comm’r, 860 F.3d 433, 434 (7th Cir. 2017) (emphasis omitted), and the
privilege against self-incrimination “cannot [be] invoke[d] in a Tax Court case to satisfy
[the taxpayer’s] burden of proving that the government miscalculated h[er] tax
deficiency,” Kosinski v. Comm’r, 541 F.3d 671, 678 (6th Cir. 2008); see also Anaya v.
Comm’r, 983 F.2d 186, 188 (10th Cir. 1993) (“[t]he taxpayer carries the burden of
proving [that] the Commissioner’s assessment is incorrect”).
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CONCLUSION
We affirm the decision of the Tax Court, and we grant Farr’s motion for leave to
proceed in forma pauperis.
Entered for the Court
Monroe G. McKay
Circuit Judge
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