Frivolous Tax Arguments Draw Proposed Suspension, Probation
The Illinois Review Board has recommended a two-year suspension stayed after six months and probation for eighteen months as a result of an attorney’s frivolous arguments in three tax matters.
In one matter
Respondent represented Denny Patridge in an appeal before the United States Court of Appeals for the Seventh Circuit from Partridge’s criminal conviction for tax evasion, money laundering and wire fraud. In his opening brief, Respondent based his arguments on two primary premises 1) that the federal government was required to prove at trial that Patridge was aware of the specific provisions of the tax code that he was accused of violating and 2) that the federal government was prohibited from subjecting Patridge to penalties because the tax forms in question failed to display a valid control number from the Office of Budget and Management as allegedly required by the Paperwork Reduction Act of 1995.
The Court of Appeals issued an opinion finding that the nineteen issues raised by Respondent in his brief, including the above issues, were “all frivolous.” The court also stated that Respondent “performed below the standard of a pro se litigant; we have serious doubt about his fitness to practice law.” United States v. Patridge, 507 F.3d 1092, 1093-1095 (7th Cir. 2007). The court noted that Respondent failed to follow court rules regarding requirements for the appendix to his brief. The court issued an order for Respondent to “show cause why he should not be fined $10,000 for his frivolous arguments and noncompliance with the Rules, and why he should not be suspended from practice until he demonstrates an ability to litigate an appeal competently and responsibly.” Respondent paid the fine and the court declined to suspend him.
In another
Respondent represented Lindsey Springer in an appeal before the United States Court of Appeals for the Tenth Circuit. The United States had filed a civil action against Springer seeking to reduce tax assessments to judgment and to foreclose on IRS liens. A judgment was entered against Springer and Springer appealed. Respondent filed a brief devoting a considerable portion of his brief arguing that the IRS has no authority to collect taxes outside of Washington, D.C. In addition, after a criminal indictment was returned against Springer, Respondent filed a motion to stay in the civil appeal, arguing that the IRS no longer legally existed. The Tenth Circuit Court of Appeals found that Respondent’s made “blatantly frivolous statements” in the motion to stay and the court entered an Order and Judgment in the case finding that Respondent’s arguments in his brief were “patently frivolous.”
Springer was convicted of tax evasion and failure to file a tax return. In his appeal from his criminal conviction, Respondent filed a brief again offering the same arguments and contending that the Treasury Secretary lacked the “jurisdiction and authority to enforce offenses concerning the Internal Revenue Laws” outside of the District of Columbia. The Tenth Circuit Court of Appeals found that Respondent’s arguments had previously been rejected as frivolous.
The Tenth Circuit Court of Appeals initiated disciplinary proceedings against Respondent based upon the frivolous arguments Respondent made in the Springer brief. In September 2011, the court suspended Respondent from practicing before it.
And
Frankie Sanders had not paid income taxes or filed returns between 1998 and 2010. In February 2012, the United States filed a petition to enforce an IRS summons against Sanders in the United States District Court for the Southern District of Illinois. In March 2012, Respondent filed a motion to dismiss arguing, as in the Springer case, that the United States could not proceed against Sanders because IRS district directors could only undertake collection functions within their geographic internal revenue districts and the Secretary of the Treasury had no authority to enforce tax laws outside the District of Columbia. The court denied the motion stating that Respondent had previously made the same arguments in prior cases before the court and the court had found them meritless. The court stated that it “refuses to expend further resources to repeat the same findings and conclusions here.”
On December 10, 2012, the United States District Court for the Southern District of Illinois suspended Respondent from the practice of law in that court and terminated Respondent’s representation of Sanders, stating that the court “need not allow [Respondent] to waste the valuable time of the Court nor subject additional clients to such worthless advocacy.”
The Administrator had sought a suspension of six months and until further court order. (Mike Frisch)