James H. BETZ, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee

United States Court of Appeals for the Tenth Circuit1985-01-22No. No. 84-1816

753 F.2d 834

Summary · law.co

Holding. The appellate court affirmed the district court's grant of summary judgment against the taxpayer and imposed attorney's fees and double costs against the taxpayer for bringing a legally frivolous appeal, remanding to the district court to determine the appropriate amounts.

A taxpayer challenged a $500 frivolous return penalty imposed under federal tax law after he filed a 1982 income tax return without providing any information to calculate his tax liability. The taxpayer argued the penalty was improper based on an alleged Fifth Amendment right and claimed the statute authorizing the penalty was unconstitutional. The district court rejected both arguments and granted summary judgment for the government.

On appeal, the taxpayer abandoned his constitutional challenge and focused solely on whether the district court erred in determining his Fifth Amendment claim was frivolous. The appellate court found that general Fifth Amendment objections have long been rejected as invalid assertions of constitutional privilege in tax cases. The court affirmed the district court's judgment and found the appeal itself legally frivolous.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether a general Fifth Amendment objection constitutes a valid assertion of constitutional privilege in a tax penalty case
Whether the frivolous return penalty statute is constitutional
Whether an appeal raising only legally frivolous arguments should result in sanctions

Procedural posture

The taxpayer appealed a district court order granting the government's motion for summary judgment in a federal income tax refund suit.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

PER CURIAM.

This three-judge panel has determined unanimously that oral argument would not be of material assistance in the determination of this appeal. See Fed.R.App.P. 34(a); 10th Cir.R. 10(e). The cause is therefore ordered submitted without oral argument.

This is an appeal from a district court order granting summary judgment in favor of the defendant in plaintiffs tax refund suit.

Plaintiff taxpayer petitioned the district court for a refund of an income tax penalty imposed by the Commissioner of Internal Revenue pursuant to 26 U.S.C. § 6702 for filing his federal income tax return for fiscal year 1982 without providing any information from which tax liability could be computed.

Thereafter, the Internal Revenue Service (IRS) assessed the $500 frivolous return penalty provided by 26 U.S.C. § 6702 against the plaintiff. Plaintiff paid seventy-five dollars of the penalty as allowed by 26 U.S.C. § 6703(c) and subsequently brought the refund suit in district court.

In the district court, plaintiff contended that the penalty was improperly assessed because of his allegedly lawful assertion of the Fifth Amendment and that the Tax Equity and Fiscal Responsibility Act of 1982, which added 26 U.S.C. § 6702, was unconstitutional. The district court concluded that plaintiffs Fifth Amendment assertion was legally frivolous and that the Tax Equity and Fiscal Responsibility Act of 1982 was constitutional.

On appeal, plaintiffs only contention is that the district court erred in granting summary judgment in favor of the defendant because the defendant failed to prove that plaintiffs Fifth Amendment claim was invalid. Plaintiff does not raise the issue of the constitutionality of the Tax Equity and Fiscal Responsibility Act on appeal.

It is well settled that the Fifth Amendment general objection is not a valid claim of the constitutional privilege. Martinez v. Internal Revenue Service, 744 F.2d 71 (10th Cir.1984); United States v. Stillhammer, 706 F.2d 1072, 1076 (10th Cir.1983). Moreover, this court has imposed sanctions where this broad Fifth Amendment privilege has been asserted. Moulton v. Commissioner, 733 F.2d 734 (10th Cir.1984).

The Commissioner urges that sanctions be imposed on the taxpayer for bringing a legally frivolous appeal. Courts have the inherent power to impose a variety of sanctions on both litigants and attorneys in order to regulate their docket, promote judicial efficiency, and deter frivolous filings. See, e.g., Roadway Express, Inc. v. Piper, 447 U.S. 752, 764-67, 100 S.Ct. 2455, 2463-65, 65 L.Ed.2d 488 (1980); Link v. Wabash R. Co., 370 U.S. 626, 632, 82 S.Ct. 1386, 1389, 8 L.Ed.2d 734 (1962); Whitney v. Cook, 99 U.S. (9 Otto) 607, 25 L.Ed. 446 (1878). In addition, Fed.R.App.P. 38 and 28 U.S.C. § 1912 provide that a court of appeals may award just damages and single or double costs if the court “determine[s] that an appeal is frivolous” or brought for purposes of delay. This court has imposed double costs and attorney’s fees for the taking of frivolous appeals in other contexts. See, e.g., United States v. Rayco, Inc., 616 F.2d 462, 464 (10th Cir.1980).

In light of plaintiff’s legally frivolous arguments, the award of attorney’s fees and double costs is justified.

Accordingly, attorney’s fees and double costs are hereby imposed against plaintiff for the taking of a legally frivolous appeal. The matter is REMANDED to the district court to make the appropriate determinations. The judgment of the United States District Court for the District of Wyoming is AFFIRMED.

The mandate shall issue forthwith.