Jonah B. Addis
12140-20
| Tax Ct. | Mar 28, 2022Background
- In 2017 Addis filed a late 2014 return reporting $0 income and seeking a refund, attaching Forms 4852 and 8888; IRS third-party data showed $42,795 of 2014 income.
- The IRS identified Addis’s return positions as frivolous under Notice 2010-33 and assessed a $5,000 penalty under §6702, then issued a Notice of Intent to Levy and a CDP notice.
- Addis requested a CDP hearing and repeatedly advanced positions the IRS deems frivolous (taxes don’t apply, not a U.S. citizen, religious objections) and submitted an incomplete Form 656 offering $0.
- The CDP hearing proceeded by correspondence; the settlement officer warned Addis, requested a complete Form 656, and ultimately sustained the proposed levy because the Form 656 was incomplete and Addis persisted in frivolous positions.
- Addis petitioned the Tax Court under §6330; the Court reviewed whether the settlement officer abused his discretion in sustaining the levy and whether Addis had meaningfully challenged the §6702 penalty.
- The Court held the officer did not abuse discretion, declined to impose a §6673 sanction now, but warned against future frivolous litigation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Addis raised a "meaningful challenge" to the §6702 penalty at the CDP hearing | Addis argued taxes don’t apply to him, he earned no taxable income, religious exemptions, and noncitizen status | These positions are frivolous per IRS Notice 2010-33 and thus not a proper, meaningful challenge under §6330/§6702 | Addis did not raise a meaningful challenge; de novo review not triggered; abuse-of-discretion standard applies |
| Whether the settlement officer abused his discretion in sustaining the levy/§6702 penalty | Officer failed to verify procedures, consider issues, or properly balance collection vs. intrusion | Officer verified applicable requirements, declined to consider frivolous matters, and balanced collection needs appropriately | No abuse of discretion; determination sustaining levy upheld |
| Whether Addis’s 2013 identity theft claim required relief or altered the §6702 penalty analysis | Identity theft caused the 2014 return issues and should affect penalty/collection | Identity theft was not raised at CDP, is procedurally defaulted, and is unrelated to why §6702 was imposed for frivolous positions | Not before the Court; even if considered, it did not excuse filing frivolous positions; no relief granted |
| Whether the Court should impose sanctions under §6673 | (Implicit) Addis contested sanctions | Commissioner sought sanctions for frivolous positions and delay | Court declined to impose §6673 sanction now but warned Addis future frivolous filings will likely be sanctioned |
Key Cases Cited
- Callahan v. Commissioner, 130 T.C. 44 (2008) (de novo review of underlying liability is available only if taxpayer raised a meaningful challenge at CDP)
- Hoyle v. Commissioner, 131 T.C. 197 (2008) (court may review whether settlement officer satisfied verification requirement)
- Robinette v. Commissioner, 123 T.C. 85 (2004) (scope of Tax Court review of CDP determinations is not limited to the administrative record)
- Magana v. Commissioner, 118 T.C. 488 (2002) (issues not raised before the settlement officer are generally not considered on CDP review)