Precourt v. Comm'r , 99 T.C.M. 1112 ( 2010 )

T.C. Memo. 2010-24
UNITED STATES TAX COURT
WILLIAM G. PRECOURT, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 19110-08. Filed February 16, 2010.
P’s petition is one of eight that he has filed in
this Court, in addition to three complaints in the
District Court--all advancing frivolous arguments. P
has been penalized under I.R.C. sec. 6673 on four
previous occasions, accumulating $22,500 in penalties.
P filed a petition in this case, asserting frivolous
arguments. When this case was called for trial on
June 22, 2009, P failed to appear (as he had failed in
four prior cases), and R moved to dismiss for lack of
prosecution and to impose a penalty under I.R.C.
sec. 6673.
Held: R’s motion to dismiss for lack of
prosecution will be granted.
Held, further: A penalty of $25,000 is imposed
against P under I.R.C. sec. 6673 for his maintaining
frivolous positions and for his instituting and
maintaining this suit primarily for delay.
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William G. Precourt, pro se.
Louise R. Forbes, for respondent.
MEMORANDUM OPINION
GUSTAFSON, Judge: The Internal Revenue Service (IRS)
determined a deficiency of $12,554 in petitioner William G.
Precourt’s 2006 Federal income tax, together with additions to
tax of $2,824.65 under section 6651(a)(1) for failure to file,
$627.70 under section 6651(a)(2) for failure to pay tax, and
$594.11 under section 6654(a) for failure to pay estimated tax.1
Mr. Precourt petitioned this Court pursuant to section 6213(a) to
redetermine the deficiency and additions to tax; but when his
case was scheduled for trial, he failed to appear. The case is
now before the Court on respondent’s “Motion to Dismiss for
Failure to Properly Prosecute and to Impose a Penalty Under
I.R.C. § 6673”.
Since May 2004 Mr. Precourt has commenced eight separate
cases in this Court and three related cases in Federal District
Court.2 His petitions are largely the same except for years and
1
Unless otherwise indicated, all citations of sections refer
to the Internal Revenue Code of 1986 (26 U.S.C.), as amended, and
all citations of Rules refer to the Tax Court Rules of Practice
and Procedure.
2
Precourt v. Commissioner, docket No. 1450-09L (filed Jan.
(continued...)
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amounts, sometimes addressing penalties that were not determined
for that year. He files new petitions while often failing to
appear at trials or hearings in his existing cases. In this case
he failed to appear at trial despite the Court’s explicit order
served 10 days before the calendar call.
For the reasons discussed below, respondent’s motion will be
granted and a penalty in the maximum amount of $25,000 will be
imposed.
Background
The following facts are derived from the petition, from
respondent’s unopposed motion, and from the records of the U.S.
District Court for the District of Massachusetts (District Court)
and of this Court, as cited.3
2
(...continued)
21, 2009; dismissed Apr. 8, 2009); Precourt v. Commissioner,
docket No. 19110-08 (this case, filed May 5, 2008); Precourt v.
Commissioner, docket No. 16728-07 (filed July 25, 2007; dismissed
Dec. 12, 2007); Precourt v. Commissioner, docket No. 20438-06S
(filed Oct. 10, 2006; dismissed Jan. 30, 2008); Precourt v.
Commissioner, docket No. 19695-06S (filed Sept. 27, 2006; summary
judgment for respondent entered on Jan. 30, 2008); Precourt v.
Commissioner, docket No. 15561-05L (filed Aug. 22, 2005;
dismissed Dec. 5, 2006); Precourt v. Commissioner, docket No.
10645-05 (filed June 9, 2005; dismissed Aug. 19, 2005); Precourt
v. Commissioner, docket No. 7411-05 (filed Apr. 20, 2005;
dismissed June 16, 2005); Precourt v. IRS, No. 1:09-cv-11015-NG
(D. Mass.) (filed June 15, 2009; dismissed Oct. 8, 2009);
Precourt v. IRS, No. 1:06-cv-11738-NMG (D. Mass.) (filed Sept.
27, 2006; dismissed Aug. 6, 2007); and Precourt v. IRS, No. 1:04-
cv-11021-REK (D. Mass.) (filed May 21, 2004; dismissed July 26,
2005).
3
We take judicial notice, pursuant to Fed. R. Evid. 201, of
(continued...)
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Mr. Precourt’s First District Court Case
On May 21, 2004, Mr. Precourt filed a case in the District
Court challenging an April 21, 2004, Notice of Determination
Concerning Collection Action(s) Under Section 6320 and/or 6330
that he had received from the IRS for a liability that we cannot
identify from the available records. Precourt v. IRS, No. 1:04-
cv-11021-REK (D. Mass.) (This case was eventually dismissed in
July 2005, as is set out below.)
Mr. Precourt’s First Tax Court Case (for 2002)
On April 20, 2005, Mr. Precourt timely filed a petition in
the Tax Court, docket No. 7411-05, in response to a notice of
deficiency for tax year 2002 (hereinafter, the 2002 deficiency
case). His 18-paragraph petition was almost identical (except
for dollar amounts and tax years) to the amended petition
eventually filed in this case. His petition included his
opposition to a penalty under section 6662 that the IRS had
determined for that year.
3
(...continued)
District Court and Tax Court proceedings in which Mr. Precourt
was a party, as stated in our order of December 22, 2009 (to
which documents from those proceedings are attachments A1 through
J7). See Aguilar v. U.S. Immigration & Customs Enforcement Div.,
510 F.3d 1, 8 n.1 (1st Cir. 2007); Bucci v. Essex Ins. Co., 393
F.3d 285, 296 n.5 (1st Cir. 2005), (“‘It is well-accepted that
federal courts may take judicial notice of proceedings in other
courts if those proceedings have relevance to the matters at
hand.’”) (quoting Rodi v. S. New Eng. Sch. of Law, 389 F.3d 5, 19
(1st Cir. 2004)).
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On May 10, 2005, respondent filed a motion to dismiss the
2002 deficiency case for failure to state a claim upon which
relief can be granted. The Court set a hearing for June 15,
2005, and ordered Mr. Precourt to file an amended petition, which
he did on May 31, 2005.
Mr. Precourt’s Second Tax Court Case (for 2003)
On June 9, 2005 (i.e., nine days after filing his amended
petition in the 2002 deficiency case), Mr. Precourt timely filed
another petition, docket No. 10645-05, in response to a notice of
deficiency for tax year 2003 (the 2003 deficiency case). The
petition was virtually the same as the one filed in his 2002
case, except for differing years and amounts and the inclusion of
a 19th paragraph. The petition had been modified to reflect the
year and dollar amounts at issue, but it retained the opposition
to an accuracy-related penalty under section 6662, even though
the IRS did not determine any such penalty for 2003.
Mr. Precourt’s First Failure To Appear
On June 15, 2005, just six days after filing the petition in
the 2003 deficiency case, Mr. Precourt failed to appear at the
motion hearing in the 2002 deficiency case. Respondent’s motion
to dismiss was granted the following day. Our order of June 16,
2005, held that “petitioner continues to make only frivolous and
groundless arguments” and dismissed the case. Our order--
disposing of Mr. Precourt’s first case in his string of eight
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filed here--gave this warning (which he has repeatedly declined
to heed, as we will show):
Section 6673(a)
Finally, we take this opportunity to acquaint
petitioner with the penalty under section 6673(a).
As relevant herein, section 6673(a)(1) authorizes
the Tax Court to require a taxpayer to pay to the
United States a penalty not in excess of $25,000
whenever it appears that proceedings have been
instituted or maintained by the taxpayer primarily for
delay or that the taxpayer's position in such
proceedings is frivolous or groundless.
Although petitioner failed to raise a justiciable
issue in his pleadings, we are not inclined to impose a
penalty under section 6673(a)(1) in this case.
Nevertheless, petitioner is admonished that the Court
will consider imposing such a penalty should he return
to the Court and advance similar arguments in some
future case.
Dismissal of the District Court Case and the 2003 Deficiency Case
The next month, on July 26, 2005, the District Court
dismissed his pending case. Days earlier, on July 8, 2005,
respondent had filed a motion to dismiss the 2003 deficiency case
for failure to state a claim upon which relief can be granted.
By order of July 11, 2005, the Court set respondent’s motion for
a hearing on August 17, 2005, and directed Mr. Precourt to file
an amended petition.
On August 5, 2005, Mr. Precourt filed an amended petition,
and on August 16, 2005, he filed a statement in lieu of
attendance pursuant to Rule 50(c), which permits a party to make
a written submission in lieu of appearing at a hearing on a
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motion. Mr. Precourt attached to his statement the notice of
deficiency, the Form 1040A, U.S. Individual Income Tax Return,
that he had sent to the IRS for tax year 2003, his original and
amended petitions, and a copy of our order of July 11, 2005,
which set the date of the motion hearing. His statement
concludes with a paragraph that he reuses in later cases either
word-for-word or in substantially similar form:
Further, I pray that the Court will endeavor to review
my case, and due to the complexity of the many rules and
regulations that is way beyond the understanding of one who
is not of legal mind, I ask that all due consideration be
given to me in support of what I have stated all along in
the handling of this matter.
The hearing occurred as scheduled on August 17, 2005. The
Court, comparing the previous case (which challenged the 2002
notice of deficiency) with the 2003 deficiency case before it,
noted that “Petitioner’s approach in both cases has been
substantively identical.” On August 19, 2005, the Court entered
an order dismissing the 2003 deficiency case and imposing a
penalty under section 6673(a)(1) in the amount of $2,500. The
order noted the Court’s finding that “petitioner instituted and
maintained this proceeding primarily, if not exclusively, for
purposes of delay.” Thus, as of August 19, 2005, all three cases
that Mr. Precourt had filed (the District Court case and the 2002
and 2003 deficiency cases) had been dismissed.
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Mr. Precourt’s First CDP Case (2000-2001)
However, the Court’s order dismissing the 2003 deficiency
case (served August 19, 2005) presumably crossed in the mail with
Mr. Precourt’s next petition (mailed August 20, 2005). That
petition (docket No. 15561-05L, filed August 22, 2005) commenced
a collection due process (CDP) case concerning Mr. Precourt’s
income taxes for tax years 2000 and 2001 (the 2000-2001 CDP
case). The petition appealed, pursuant to section 6330(d), the
IRS’s decision to proceed with collection as described in a
Notice of Determination Concerning Collection Action(s) Under
Section 6320 and/or 6330. In the petition for the 2000-2001 CDP
case, Mr. Precourt objected to the IRS’s denial of a face-to-face
CDP hearing. Respondent filed an answer on October 19, 2005, and
trial was set for October 23, 2006.
On August 18, 2006, respondent filed a motion for summary
judgment. On September 18, 2006, Mr. Precourt filed a response,
which restated the “complexity of the many rules and regulations”
language discussed above. Before that motion was heard and
before the date set for trial in that case (October 23, 2006),
Mr. Precourt filed three more lawsuits.
Mr. Precourt’s Three Filings in Fall 2006
First, on September 27, 2006, Mr. Precourt filed a second
complaint in the District Court, asking that court to compel the
IRS to grant him a face-to-face CDP hearing concerning his income
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taxes for tax years 2000 and 2001. Precourt v. IRS, No. 1:06-cv-
11738-NMG (D. Mass.). (This case was eventually dismissed on
August 6, 2007).
Second, also on September 27, 2006, Mr. Precourt timely
filed another CDP petition in this Court (docket No. 19695-06S,
the 2002 CDP case), in which he challenged an IRS collection
determination concerning income tax for 2002--i.e., the same year
that had been the subject of the 2002 deficiency case. In the
2002 CDP case he objected to the IRS’s denying him a face-to-face
CDP hearing as to the collection of that tax.
Third, on October 10, 2006, Mr. Precourt timely filed yet
another petition in this Court (docket No. 20438-06S)--this one
in response to a notice of deficiency issued for tax year 2004
(the 2004 deficiency case). The petition was worded mostly as if
it were a CDP challenge, referring at one point to a “Notice of
Determination”, but it also referred to the “Deficiency Notice”.
Mr. Precourt’s Non-Appearance in October 2006
The 2000-2001 CDP case was set to be tried October 23, 2006,
but Mr. Precourt acted as if his intervening filing of the
District Court complaint excused any further participation in his
Tax Court case. By a letter dated October 16, 2006, and
referencing the 2000-2001 CDP case, Mr. Precourt informed
respondent that he is not an attorney, should not be held to the
same standards as a lawyer, and had filed a complaint with the
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District Court in the matter (a copy of which was attached).
Furthermore, he asserted that “the action of the hearing set for
the Tax Court on 10/23/06 should be dismissed forthwith” and that
“it is my contention that no further action need be done by me in
this matter of the above referenced hearing and I will consider
this matter closed under these circumstances.” Respondent
advised Mr. Precourt by letter that the District Court did not
have jurisdiction and that he was required to attend his Tax
Court trial.
Mr. Precourt failed to attend a conference for his 2000-2001
CDP case that respondent had proposed for October 19, 2006. In a
letter dated October 22, 2006, Mr. Precourt advised respondent
that “no further action will be taken on my part until the above
action has been rectified and/or dismissed.”
Mr. Precourt then failed to appear at the October 23, 2006,
trial of his 2000-2001 CDP case. The Court denied the pending
motion for summary judgment, and respondent filed a motion to
dismiss for lack of prosecution. Mr. Precourt filed a three-
sentence response to the motion to dismiss on November 16, 2006.
The Court’s order of December 5, 2006, observed:
Petitioner’s response, filed November 16, 2006, offers
no reason why petitioner did not appear at the calendar
call or why he did not prepare for trial. Accordingly,
for the reasons stated in respondent’s motion to
dismiss for lack of prosecution and for cause, it is
ORDERED that respondent’s motion to dismiss for
lack of prosecution, filed October 23, 2006, is
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granted, and this case is dismissed for lack of
prosecution. * * *
The 2000-2001 CDP case was thus disposed of, but the two cases
filed in September and October 2006 (i.e., the 2002 CDP case and
the 2004 deficiency case) were still pending.
The 2005 Deficiency Case
In July 2007 the IRS issued to Mr. Precourt a notice of
deficiency for the year 2005. (At that time Mr. Precourt had two
cases still pending in the Tax Court and one case pending in
Federal District Court.) On July 25, 2007, Mr. Precourt sent a
brief letter to the Court requesting forms to file an “S case”
with the Court (i.e., a “small tax case” pursuant to section 7463
and Rules 170-175). The Court filed the letter as a petition,
docket No. 16728-07 (2005 case), but ordered Mr. Precourt to file
a proper amended petition and pay the filing fee. On August 29,
2007, Mr. Precourt filed an 18-paragraph amended petition that
was virtually identical to the one he filed in his first case,
the 2002 deficiency case. This was just over a month before the
date set for trial of Mr. Precourt’s two pending Tax Court cases.
Mr. Precourt’s Non-Appearance in October 2007
The Court had served notice on Mr. Precourt in both the 2002
CDP case and the 2004 deficiency case that the cases would be
called for trial on October 1, 2007. On the appointed day,
Mr. Precourt once again failed to appear. As of that date,
respondent had already filed a motion for summary judgment and
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for a penalty under section 6673(a) in the 2002 CDP case, which
motion the Court had set to be heard at the calendar call; and on
that date, when Mr. Precourt did not appear, respondent filed a
motion to dismiss for lack of prosecution in the 2004 deficiency
case.
Rather than appearing, Mr. Precourt sent two letters to the
Court, one for each case, dated the same day as the trial,
October 1, 2007. They were captioned with the docket numbers and
contained numbered paragraphs in which Mr. Precourt reiterated
his position that his rights had been violated, requested that
the Court not find him liable for any taxes, and repeated his
request for leniency because he is a layman who (he alleges) is
incapable of understanding the “complexity” of the applicable
law.
In the dispositive motion in each case, respondent requested
that a penalty be imposed on Mr. Precourt pursuant to
section 6673(a). The Court took the motions under advisement
(and granted them three months later, as is set out below).
Dismissal of the 2005 Deficiency Case
In the meantime, on October 12, 2007, respondent filed a
motion to dismiss the 2005 deficiency case (commenced in
July 2007) for failure to state a claim. The Court ordered Mr.
Precourt to file a second amended petition by November 7, 2007,
set the same date as the due date for an objection to
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respondent’s motion, and ordered that respondent’s motion would
be heard December 5, 2007.
Mr. Precourt filed a second amended petition on November 8,
2007, to which he attached as an exhibit his response to
respondent’s motion to dismiss. In that response Mr. Precourt
listed, as evidence that his rights had been denied, each of his
previous cases by docket number, and he referred to Rule 50(c).
Mr. Precourt did not attend the motion hearing.
By order of December 12, 2007, the Court granted
respondent’s motion to dismiss the 2005 deficiency case and
imposed a penalty under section 6673(a) in the amount of $5,000:
[W]e find that the petition, the amended petition, and
the second amended petition filed in this case fail to
raise any justiciable issue. See Parker v.
Commissioner, 117 F.3d 785 (5th Cir. 1997); White v.
Commissioner, T.C. Memo. 1997-459; see also Crain v.
Commissioner, 737 F.2d 1417, 1417 (5th Cir. 1984).
We also find that petitioner’s pleadings are
frivolous and groundless, and that petitioner
instituted this case primarily, if not exclusively, for
purposes of delay. See sec. 6673(a)(1); Coleman v.
Commissioner, 791 F.2d 68, 71-72 (7th Cir. 1986); Crain
v. Commissioner, supra at 1417-1418. Having previously
been before this Court and having previously been the
recipient of a $2,500 penalty under section 6673(a), an
even greater penalty is warranted in the instant case.
Premises considered, it is
ORDERED that respondent’s Motion To Dismiss For
Failure To State A Claim Upon Which Relief Can Be
Granted And To Impose A Penalty Under I.R.C.
§ 6673(a)(1), filed October 12, 2007, is granted. It
is further * * *
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ORDERED AND DECIDED that petitioner is liable for
a penalty under section 6673(a)(1) in the amount of
$5,000.
Dismissal of the 2002 CDP Case and the 2004 Deficiency Case
As is noted above, in October 2007 the Court took under
advisement respondent’s dispositive motions in the 2002 CDP case
and the 2004 deficiency case. On January 30, 2008, the Court
granted respondent’s motion in each of the cases and imposed a
penalty under section 6673 in each case.
The Court’s order issued January 30, 2008, in the 2002 CDP
case stated:
Pursuant to notice, respondent’s motion for summary
[judgment] and penalty was called for hearing on
October 1, 2007, at the Court’s trial session in
Boston, Massachusetts. Counsel for respondent appeared
and argued in support of respondent’s motion. There
was no appearance by or on behalf of petitioner.
Petitioner did not submit a statement under Rule 50(c).
The Court took respondent’s motion under advisement.
After reciting the history of Mr. Precourt’s prior petitions, his
non-appearance at hearings, and the prior imposition of
section 6673(a) penalties against him, the Court stated:
We conclude that petitioner has made only
frivolous and groundless arguments throughout these
proceedings and that petitioner brought and maintained
these proceedings primarily for delay. Given
petitioner’s history of filing “zero” tax returns and
his consistently frivolous arguments in the six cases
filed in this Court, despite warnings and the
imposition of penalties under section 6673, an
escalating penalty under section 6673 is appropriate in
this case. * * *
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Premises considered, it is
ORDERED that respondent’s Motion for Summary
Judgment and [To] Impose a Penalty Under I.R.C. § 6673,
filed on August 31, 2007, is granted. It is
further * * *
ORDERED AND DECIDED that petitioner is liable for
a penalty pursuant to section 6673(a) in the amount of
$7,500.
In the 2004 deficiency case the Court stated in its order of
January 30, 2008:
Pursuant to notice, this case was called for trial
in Boston, Massachusetts, on October 1, 2007.
Petitioner failed to appear at the scheduled October 1,
2007, trial session, either in person or by counsel.
Petitioner failed to contact the Court and provide a
reason for his failure to appear at trial or otherwise
communicate with the Court.
On October 1, 2007, respondent filed the instant
Motion to Dismiss for Lack of Prosecution and To Impose
a Penalty Under I.R.C. § 6673. Respondent served this
motion on petitioner by mail on October 1, 2007.
Petitioner has not responded or objected to
respondent’s motion.
After again recounting Mr. Precourt’s history, the Court stated:
We conclude that petitioner failed to file a tax
return for 2004, attached frivolous and groundless
protester rhetoric to the Form 1040A he submitted to
respondent, filed a petition in this case that did not
comport with the Rules of this Court, failed to
communicate and cooperate with respondent, and failed
to prepare for and attend the trial in this case.
Petitioner brought and maintained these proceedings
primarily for delay. Given petitioner’s history of
filing “zero” tax returns and his consistently
frivolous arguments in the six cases filed in this
Court, despite warnings and the imposition of penalties
under section 6673, an escalating penalty under section
6673 is appropriate in this case. * * *
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Upon due consideration and for cause, it is
ORDERED that respondent’s motion to dismiss for
lack of prosecution and to impose a penalty, filed
October 1, 2007, is granted and this case is hereby
dismissed for lack of prosecution. It is further
ORDERED AND DECIDED that petitioner is liable for
a penalty under section 6673(a)(1) in the amount of
$7,500.
Thus, as of early 2008, Mr. Precourt had filed six cases in
the Tax Court--i.e., the 2002 deficiency case, the 2003
deficiency case, the 2000-2001 CDP case, the 2002 CDP case, the
2004 deficiency case, and the 2005 deficiency case. He had
submitted a Rule 50(c) statement for two hearings but had
otherwise failed to appear at the hearings or trials set in those
cases. Each case had ended with either dismissal or summary
judgment for respondent. Penalties under section 6673(a) had
been imposed in four of the cases--one penalty of $2,500 in
August 2004, one penalty of $5,000 in December 2007, and two
penalties of $7,500 in January 2008, for a total of $22,500. But
evidently Mr. Precourt was undaunted.
Commencement of the Instant 2006 Deficiency Case
On May 24, 2007, the IRS received a Form 1040, U.S.
Individual Income Tax Return, submitted by Mr. Precourt, on which
every line from 6 through 77 either contained a zero or was left
blank. Attached to the Form 1040 was a two-page statement
alleging, inter alia, that he had received no income in the
“constitutional sense.” On February 2, 2008, using
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third-party information identifying wages, unemployment
compensation, and IRA distributions, the IRS prepared a
substitute for return under section 6020(b), showing income of
$62,602.
On April 18, 2008, the IRS issued to Mr. Precourt a
statutory notice of deficiency for 2006, determining a deficiency
in income tax and additions to tax for failure to file, failure
to pay, and failure to pay estimated taxes, under sections
6651(a)(1) and (2) and 6654(a).
After receiving the April 2008 notice of deficiency,
Mr. Precourt began this case with a short letter to the Court,
filed on May 5, 2008, that requested a petition form and
information about Tax Court procedures.4 He subsequently filed a
detailed, 19-paragraph amended petition on August 5, 2008.5
Three paragraphs were devoted to rebutting “the alleged 6662
penalty,” despite the fact that the IRS did not determine any
such penalty for 2006.
4
In his petition Mr. Precourt alleged an address in
Massachusetts (the same address that appears on the IRS’s notice
of deficiency and other papers in this case), and he alleged no
different address as his legal residence. We therefore find, for
purposes of this case, that he resided in Massachusetts at the
time he filed his petition.
5
On September 30, 2008, respondent filed a motion to dismiss
for lack of jurisdiction on the basis that the August 5, 2008,
filing was not timely under section 6213(a). The Court denied
respondent’s motion, accepting Mr. Precourt’s initial letter as a
timely petition.
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On January 16, 2009, the Court set this case for trial at
the Boston, Massachusetts, trial session commencing June 22,
2009. The notice served on the parties included the following:
The calendar for that Session will be called at
10:00 A.M. on that date and both parties are expected
to be present at that time and be prepared to try the
case. YOUR FAILURE TO APPEAR MAY RESULT IN DISMISSAL
OF THE CASE AND ENTRY OF DECISION AGAINST YOU.
The 2003/2004/2006 CDP Case
Around the time Mr. Precourt received the January 2009
notice of the upcoming trial in this case, he was commencing yet
another suit. About a month earlier, on December 8, 2008, the
IRS had issued to Mr. Precourt a Notice of Determination
Concerning Collection Action(s) Under Section 6320 and/or 6330,
for his income tax for the year 2003 and for penalties under
section 6702 (“Frivolous Tax Submissions”) for 2004 and 2006.
The second paragraph on the first page of the notice stated, “If
you want to dispute this determination in court, you must file a
petition with the United States Tax Court within 30 days from the
date of this letter”--i.e., by January 7, 2009. See
sec. 6330(d)(1).
On January 15, 2009 (i.e., more than 30 days after the IRS
issued the December 8, 2008, notice), Mr. Precourt signed a
petition challenging that determination, which he mailed on
January 16, 2009 (docket No. 1450-09L, received and filed
January 21, 2009). On March 6, 2009, respondent moved to dismiss
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the case for lack of jurisdiction, and the Court granted the
motion and dismissed the case on April 8, 2009.
Mr. Precourt’s Non-Participation in Pretrial Activities
Two weeks before the June 22, 2009, calendar call in this
case, respondent submitted a pretrial memorandum to the Court in
accordance with the standing pretrial order. Mr. Precourt failed
to submit a pretrial memorandum. Respondent’s memorandum
alleged, among other things, that Mr. Precourt had failed to
attend a pretrial “Branerton conference” with respondent, see
Branerton Corp. v. Commissioner, 61 T.C. 691 (1974), and that
respondent did not expect Mr. Precourt to appear at the June 22
trial session. Prompted by respondent’s memorandum, the Court
served an order on June 12, 2009--ten days before the calendar
call--that stated as follows:
Without prejudging the accuracy of respondent’s
allegations or prediction, we do take judicial notice
of the records of this Court in prior proceedings
involving this petitioner, and we note that petitioner
did not appear on December 5, 2007, in Docket
No. 16728-07, nor on October 1, 2007, in Docket
Nos. 20438-06S and 19695-06S, nor on October 23, 2006,
in Docket No. 15561-05L. The warning stated in the
notice of trial issued January 16, 2009, still stands:
YOUR FAILURE TO APPEAR MAY RESULT
IN DISMISSAL OF THE CASE AND ENTRY
OF DECISION AGAINST YOU.
In view of the foregoing, it is
ORDERED that petitioner shall appear at the
calendar call at 10:00 a.m. on June 22, 2009, in
Boston, Massachusetts, as previously ordered.
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Mr. Precourt’s Commencement of a Third District Court Case
On June 15, 2009, just seven days before he was due to
appear at the calendar call for this case, Mr. Precourt filed a
complaint against the IRS in the District Court. Precourt v.
IRS, No. 1:09-cv-11015-NG (D. Mass). In that complaint Mr.
Precourt requested the invalidation of the 2006 notice of
deficiency, suspension of IRS enforcement activity, and dismissal
of a proposed stipulation of facts that respondent had drafted
for this case. (That District Court case was eventually
dismissed on October 8, 2009.)
Mr. Precourt had preceded his District Court complaint with
a letter to respondent dated June 11, 2009, indicating that he
was ceasing participation in the Tax Court proceeding. In the
letter, which is virtually identical to the one he submitted in
the 2000-2001 CDP case, he asserted that “the action of the
hearing set for the Tax Court on 06/22/09 should be dismissed
forthwith” and that “it is my contention that no further action
need be done by me in this matter of the above referenced hearing
and I will consider this matter closed under these
circumstances.”
Mr. Precourt’s Non-Appearance in June 2009
On the date of the calendar call in this case--Monday,
June 22, 2009--Mr. Precourt failed to appear for trial. At the
calendar call respondent’s counsel advised the Court that on
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Friday, June 19, 2009, Mr. Precourt had faxed to respondent a
motion for continuance and a request that respondent deliver that
motion to the Court.6 The Court allowed Mr. Precourt’s motion to
be filed and then denied it. At the calendar call respondent
filed a motion to dismiss for failure to properly prosecute. On
June 26, 2009, the Court served an order directing Mr. Precourt
to respond to the motion by July 13, 2009. Mr. Precourt has
never filed any response.
Discussion
Mr. Precourt has begun eight Tax Court cases, has failed to
appear for trial or hearing at five of them, and has offered no
support for the merits of any of them. Penalties have been
assessed against him under section 6673(a) totaling $22,500, yet
he continues to file suits that he evidently has no intention of
prosecuting. In this case, he failed to participate in
preparations for trial required by the standing pretrial order
and he failed to appear at his trial despite an order
specifically instructing him to appear.
His conduct justifies the dismissal of this case and the
imposition of a penalty under section 6673(a) in the amount of
$25,000, as we now show.
6
Although the letter and motion were dated “Oct. 19, 2009”
and “October 19, 2009,” respectively, the fax machine timestamp
indicates that they were sent on June 19, 2009, the Friday before
the Monday trial.
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I. Lack of Prosecution
The Court may, under Rule 123(b), dismiss a case for failure
to properly prosecute or for failure to comply with Court orders.
Failure to properly prosecute includes a taxpayer’s unexcused
failure to appear at trial or to otherwise participate in the
resolution of his claim. Rule 149(a); Rollercade, Inc. v.
Commissioner, 97 T.C. 113, 116-117 (1991); Smith v. Commissioner,
T.C. Memo. 2003-266, affd. sub nom. Hook v. Commissioner, 103
Fed. Appx. 661 (10th Cir. 2004). Dismissal is appropriate where
the taxpayer’s failure to comply with the Court’s Rules and
orders is due to willfulness, bad faith, or fault. See Dusha v.
Commissioner, 82 T.C. 592, 599 (1984).
Over the course of his Tax Court litigation, Mr. Precourt
has repeatedly failed to obey orders of the Court, and in this
case he has consistently disregarded Court Rules since the time
we denied respondent’s September 30, 2008, motion to dismiss.
Mr. Precourt must have known that his filing a District Court
complaint would not end his Tax Court case, having tried that
tactic once before in the fall of 2006 during the 2000-2001 CDP
case and having seen both cases dismissed as a result.
Nevertheless, in his June 19, 2009, letter to respondent he
stated his intention to cease participation, saying that no
further actions were needed on his part and that he considered
the matter closed.
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Mr. Precourt failed to follow the Court’s standing pretrial
order by failing to submit a pretrial memorandum and by failing
to attend the required Branerton conference. Despite the
January 16, 2009, notice setting the case for trial that the
Court served on him, and despite a June 12, 2009, order reminding
and instructing him to attend the trial set for June 22, 2009,
Mr. Precourt failed to attend. Even after the trial, when the
Court ordered him to respond to the outstanding motion to
dismiss, he failed to respond or participate further in this
case.
We find that Mr. Precourt’s failings in this case are due to
willfulness, bad faith, or fault. He has failed to comply with
the Court’s Rules and orders and has failed to properly prosecute
his case. Thus, we conclude that dismissal is appropriate, and
we will grant respondent’s motion.
II. Penalty Under Section 6673
The IRS is charged with the responsibility of assessing tax
against taxpayers. Sec. 6201. When the IRS proposes to assess a
deficiency of income tax, the taxpayer may file a petition asking
the Tax Court to redetermine the deficiency, and the mere filing
of the petition has the effect of delaying the assessment until
the case has been decided by the Tax Court. Sec. 6213(a). This
creates an opportunity for a cynical taxpayer to file a petition,
even if he has no good-faith basis for doing so, in order to put
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off the inevitable assessment of tax against him. To deter this
abuse, the Court is authorized under section 6673(a)(1) to impose
a penalty not in excess of $25,000 when the taxpayer’s position
is frivolous or groundless or it appears that proceedings before
it have been instituted or maintained by the taxpayer primarily
for delay. A position maintained by the taxpayer is “frivolous”
where it is “contrary to established law and unsupported by a
reasoned, colorable argument for change in the law.” Coleman v.
Commissioner, 791 F.2d 68, 71 (7th Cir. 1986); see also Hansen v.
Commissioner, 820 F.2d 1464, 1470 (9th Cir. 1987) (section 6673
penalty upheld because taxpayer should have known claim was
frivolous).
Mr. Precourt’s petition contained frivolous arguments (e.g.,
that he had received no income in the “constitutional sense”).
This Court has repeatedly warned Mr. Precourt that frivolous
arguments are subject to sanction, and we have followed through
by imposing sanctions under section 6673 in four previous cases.
Nevertheless, Mr. Precourt has continued to file frivolous
petitions with this Court. He has persisted in his pattern of
failing to appear for Court proceedings and failing to obey Court
orders. We find that Mr. Precourt’s position in this case is
frivolous and that the case was instituted and maintained
primarily for delay. Thus, we will impose a penalty under
section 6673.
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We note that penalties totaling $22,500 have previously been
imposed against Mr. Precourt under section 6673, but this amount
has not deterred him.7 We conclude that the maximum penalty--
$25,000--is therefore appropriate in this case.
We take no pleasure in imposing such a penalty. The Tax
Court exists for the very purpose of giving taxpayers a forum
within which they can challenge the IRS’s determinations, and
taxpayers who are not represented by counsel must feel free to
resort to this Court without fear of penalty. Taxpayers who file
petitions in good faith need have no such fear, even if they do
not prevail in the litigation. This case, however, involves a
litigant who persists in making frivolous arguments despite
judicial warnings and who fails to appear before the Court,
showing that he knows full well that his cases have no merit, and
demonstrating that he brought this suit only to delay the
inevitable assessment of tax that he owes. It is clear that he
files Tax Court suits not in order to receive a hearing, but with
an intention of failing to appear for a hearing. This is a
flagrant abuse of the remedies that Congress created for
taxpayers--an abuse that this Court has the responsibility to
address. If prior penalties totaling $22,500 have not succeeded
7
See Rodriguez v. Commissioner, T.C. Memo. 2009-92 (taking
account of prior penalties in imposing the maximum penalty under
section 6673(a)).
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in getting his attention, then we can only hope that a $25,000
penalty will do so.
To reflect the foregoing,
An appropriate order of
dismissal and decision will be
entered.