Couple Assessed Penalty for Wasting IRS’s Time

by Bruce Givner on May 7, 2015

Judge Albert G. Lauber ruled on April 15 that a Michigan couple, who failed to pay the full amount of taxes they owed for the years 2005 – 2008, had “wasted many hours of respondent’s time and of this Court’s time,” and granted an Internal Revenue Service (IRS) motion for summary judgement against the couple.

After receiving a notice of federal tax lien filing, George H. and Felomina F. Patton requested a hearing with an IRS settlement officer (SO). On October 6, 2011, an IRS Appeals Office SO conducted a telephone hearing with the couple and determined that the Pattons qualified for an installment agreement with monthly payments of $750. However, the couple rejected the proposal and alleged that the “government” (by which they meant the local or county government) had destroyed their tax records by allowing water to “trespass” on their property starting in 2001. The SO was unconvinced by this argument and issued the Pattons a notice sustaining the tax lien filing.

On April 16, 2013 the Pattons petitioned the Tax Court and, upon review, the Court found that the SO hadn’t adequately considered the petitioner’s underlying tax liabilities and remanded the case back to the IRS Appeals Office.

Following a two-week extension to supply the requisite documents, the Pattons failed to provide any pertinent information so the SO closed the case and once against sustained the tax lien. The couple responded by petitioning the Tax Court on several occasions between December 2013 and June 2014 to dismiss the case and lift the tax lien, each of which was rejected by the court.

On November 25, 2014, the IRS filed a motion for summary judgement, given the lack of any further disputed materials for the court to rule on, to which Lauber agreed. Lauber stated that the Pattons had been given plenty of opportunity to file the materials required to properly sustain their tax liability with the IRS, but the couple “repeatedly ignored these overtures, despite the many opportunities the SO gave them.”

In addition to sustaining the tax lien, Lauber also imposed a penalty of $3,500 on the couple for “advancing the same frivolous arguments that they have repeatedly been warned not to make.”

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