Steven Waltner v. Cir , 714 F. App'x 726 ( 2018 )

NOT FOR PUBLICATION FILED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
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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
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reply briefs, are denied.
AFFIRMED.
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