Frivolous Appeals to Delay Collection Actions Bring
Stiff Tax Court Penalties
From IRS Web Site article IR-2003-28, March 11,
— Thirty-eight persons who attempted to delay
tax collections by pursuing frivolous court cases
ended up with $126,000 in penalties during the last
two years. The Internal Revenue Service warns that
the Tax Court may impose sanctions of up to $25,000
on those who misuse their right to a court review
of IRS collection procedures merely to stall their
have rights that they should invoke when appropriate,”
said IRS Chief Counsel B. John Williams. “But
those who would abuse those rights to stall tax
collections should realize that they may incur substantial
IRS Restructuring and Reform Act of 1998 set forth
various taxpayer rights related to tax liens or
levies, including the right to seek judicial review.
While an appeal is pending, the IRS usually may
not enforce collection.
December 2000, the Tax Court warned taxpayers that
it would impose penalties against those who “institute
or maintain a lien or levy action primarily for
delay or whose position in such a proceeding is
frivolous or groundless” (Pierson v. Commissioner,
115 T.C. 581). Such positions contend that the income
tax is not valid, that the person or type of income
is not subject to the tax, or espouse other arguments
that the Court has previously rejected as baseless.
Court has repeatedly stated that frivolous cases
waste its limited resources and delay the resolution
of other taxpayers’ genuine controversies.
Using its authority under Internal Revenue Code
Section 6673, it is levying increasingly severe
penalties on those pursuing such cases.