Opinion
10878-16 7671-17
04-11-2023
LUMINITA ROMAN ET AL., Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Emin Toro Judge
These consolidated cases are calendared for trial during the Court's April 24, 2023, Los Angeles, California, special trial session. Now before us is petitioner Gabriel L. Roman's Motion to Withdraw Petition filed on March 30, 2023 (Doc. 132, 10878-16; Doc. 111, 7671-17). For the reasons stated below, we will deny the Motion.
Background
We provided an extensive discussion of the factual background of these cases in our Order served on November 18, 2020. We do not repeat that discussion here and focus instead only on matters relevant to addressing the pending Motion.
In early 2017, the Internal Revenue Service (IRS) issued Mr. Roman a Notice of Deficiency for his 2013 tax year. On April 5, 2017, Mr. Roman challenged the determinations in the Notice of Deficiency by timely filing a Petition with our Court. His case was assigned Docket No. 7671-17.
On February 14, 2018, Mr. Roman filed a Motion to Dismiss for Lack of Jurisdiction (Doc. 20, 7671-17), challenging the validity of the Notice of Deficiency. After holding hearings on Mr. Roman's Motion and a similar one filed by Luminita Roman, the Court (Carluzzo, S.T.J.) determined by Bench Opinion that the Court has jurisdiction over this case. By Order served on December 27, 2018, the Court denied the Motions filed by Mr. Roman and Ms. Roman. On December 29, 2018, the Romans filed an objection to the December 27, 2018 Order (Doc. 48, 7671-17). The Court (Carluzzo, S.T.J.) recharacterized the objection as a motion to reconsider and denied it by Order served on February 5, 2019. The Romans subsequently filed two other documents objecting to the decision to deny their Motions to Dismiss for Lack of Jurisdiction (Docs. 50 & 53, 7671-17). The Court (Toro, J.) denied the relief sought in these later documents by Order served on November 18, 2020. That Order fully evaluated the various arguments the Romans had offered. We specifically note that we considered and addressed the Romans' claims that the Notices of Deficiency issued to Mr. and Ms. Roman were invalid. We concluded the claims lacked merit and that the Court had jurisdiction over the cases. (We note parenthetically that the Pretrial Memorandum the Romans filed on April 3, 2023, lists as issues 1 and 3 the validity of the Notices and lists as issue 5 the Court's jurisdiction. The Court observes that the issues have been fully addressed in the Order served on November 18, 2020, and are no longer unresolved. The issues will not be addressed further at trial. If the Romans continue to disagree with the resolution of these issues, they remain free to seek appellate review of the Court's rulings after the Court enters decisions in these cases. But we will not permit trial time to be devoted to rehashing arguments that we have already considered at length and resolved, even if the Romans may disagree with the Court's rulings or be of the view that the Court has not resolved issues that have plainly been ruled upon.)
Unless otherwise indicated, all statutory references are to the Internal Revenue Code, Title 26 U.S.C. (Code), in effect at all relevant times, and all Rule references are to the Tax Court Rules of Practice and Procedure. Parenthetical references to "Doc." are to documents as they are numbered in the docket record of this case.
Mr. Roman filed another Motion to Dismiss on May 7, 2019, (Doc. 60, 7671-17) where he sought to voluntarily withdraw his case from our Court. By Order served on May 10, 2019, the Court (Marvel, J.) denied Mr. Roman's Motion to Dismiss, noting that when (as here) the Court properly has jurisdiction over a deficiency proceeding, a petition may not be withdrawn with or without prejudice, and the Court is required to enter a decision specifying the amount of the deficiency. See I.R.C. § 7459(d); Settles v. Commissioner, 138 T.C. 372, 374 (2012); see also May 10, 2019, Order (collecting authorities).
In the Motion now before us, Mr. Roman once again seeks to withdraw his Petition from our Court. Mr. Roman makes various arguments in support of his Motion, including the following: (1) he suffers from various physical and psychological ailments that make litigating his case dangerous to his health, (2) he filed the Petition under the undue influence of attorneys from the IRS Office of Chief Counsel, (3) the Tax Court is unconstitutional, (4) the Commissioner of Internal Revenue ("Commissioner") is a corporate agent and cannot engage in litigation with the Romans, and (5) he wants a jury trial. Respondent filed a Response to Mr. Roman's Motion on April 7, 2023.
Discussion
I. Withdrawing a Petition in a Deficiency Proceeding
As the Court explained to Mr. Roman in the May 8, 2019, Order, in a deficiency proceeding where this Court has jurisdiction, the Court must enter a decision specifying the amount of the deficiency, if any, for the taxable year at issue. See I.R.C. § 7459(d); Estate of Ming v. Commissioner, 62 T.C. 519, 521-22 (1974). The Court has already determined that it has jurisdiction over Mr. Roman's case. Therefore, we cannot dismiss Mr. Roman's case, as he desires, without also entering a final decision.
As this Court explained in Estate of Ming,
if we were to grant petitioners' motion [to dismiss], we would be required to enter a decision finding deficiencies in petitioners' taxes for the years involved in the amounts determined by respondent in the notice of deficiency. This would clearly negate the objective of petitioners' motion to withdraw without prejudice and would preclude the petitioners' efforts to litigate this case on its merits in a District Court.62 T.C. at 522-23 (emphasis added). So, to the extent that Mr. Roman wishes to have his case dismissed from our Court so he can seek an alternative forum to challenge his tax liability, such a dismissal would not produce the results he seeks. As we do not understand Mr. Roman's Motion to be advocating for a decision to be entered against him, we will not enter such a decision here.
Nevertheless, we remind Mr. Roman that if he no longer wishes to prosecute this case, he is free to contact counsel for the Commissioner to discuss preparing a stipulated decision document resolving all issues in the case as reflected in the Notice of Deficiency. Alternatively, he can file a motion that the case be dismissed for his own failure to properly prosecute and that decision be entered sustaining the determinations made in the Notice of Deficiency, a motion that respondent states he would not oppose.
II. Mr. Roman's Arguments
A. Capacity to Litigate
Mr. Roman argues we should permit him to withdraw his Petition because his current physical and psychological ailments make litigating this case dangerous to his health. Because Mr. Roman is a pro se litigant, we review his submission liberally with an eye to determining the substance of his arguments. See Gray v. Commissioner, 138 T.C. 295, 298 (2012). Under this standard, we construe Mr. Roman's argument to be that we should dismiss his case because he lacks the requisite capacity to continue litigating it. And to the extent Mr. Roman makes such an argument, we conclude that Mr. Roman is not entitled to the relief he seeks.
In general, Rule 60(a) provides that a case shall be brought by the person against whom a deficiency or liability has been asserted or by a fiduciary entitled to institute a case on behalf of such person. Mr. Roman is the person against whom the deficiency is asserted by the IRS, he brought this case on his own behalf in 2017, and he has been actively involved in litigating it since then. To the extent Mr. Roman now argues that he lacks capacity to carry on his suit based on the various physical and psychological ailments he cites in his Motion, he has presented insufficient evidence of the types of ailments that prevent one from litigating on his own behalf. See Rule 60 ("The capacity of an individual, other than one acting in a fiduciary or other representative capacity, to engage in litigation in the Court shall be determined by the law of the individual's domicile."); Cal. Civ. P. Code § 372(a) (West 2023) (discussing individuals who "lack[] legal capacity to make decisions"); see also Cal. Prob. Code §§ 810-12 (West).
Under California law, there is generally a presumption that all persons have capacity to make decisions and to be responsible for their acts and decisions. Cal. Prob. Code § 810. Mr. Roman has not presented evidence that a California court has found him incompetent, incapacitated, or otherwise unable to represent himself in a legal proceeding. And there is no evidence that he "is totally without understanding, or is of unsound mind, or suffers from one or more mental deficits so substantial that, under the circumstances, [he] should be deemed to lack the legal capacity to perform a specific act." Cal. Prob. Code § 810(c); see also Cal. Civ. P. Code § 372(a)(4). Therefore, we conclude that any argument by Mr. Roman that he lacks capacity to litigate on his own behalf lacks merit.
Moreover, even if Mr. Roman were to demonstrate that he lacks capacity to litigate his case, he would not be entitled to the relief he now seeks-i.e., withdrawal of his Petition. See I.R.C. § 7459(d); Rule 60. Instead, we generally look to state law to determine who could litigate the claim on the incapacitated individual's behalf or have a next friend or guardian ad litem continue the litigation. See Rule 60(d); see also, e.g., Estate of Galloway, 103 T.C. 700, 704 (1994) (applying California law to appoint a special administrator to represent the interests of a deceased taxpayer in Tax Court proceedings); Eiges v. Commissioner, 101 T.C. 61, 67 (1993) (applying Florida law to recognize infant litigant's parents as next friend for the purposes of Tax Court proceeding); Campos v. Commissioner, T.C. Memo. 2003-193, 2003 WL 21500019 (applying California law to appoint taxpayer's spouse as next friend for purposes of Tax Court proceeding); see also Davis v. Walker, 745 F.3d 1303 (9th Cir. 2014) (vacating district court's decision to stay proceedings until evidence is presented that the litigant was restored to competency and remanding to determine if a guardian ad litem should be appointed to litigate the case). Furthermore, any argument that Mr. Roman lacked capacity to file the Petition in the first place lacks support.
B. Mr. Roman's Other Arguments
Mr. Roman makes a number of other arguments in support of his Motion that we now reject. First, Mr. Roman alleges that attorneys with the IRS Office of Chief Counsel exerted undue influence over him when he filed his Petition to commence this case. However, Mr. Roman has offered minimal allegations and nothing beyond naked assertions to explain how any conduct by IRS personnel unduly influenced him to file his Petition six years ago. See Tokarski v. Commissioner, 87 T.C. 74, 77 (1986) ("[W]e are not required to accept the self-serving testimony of petitioner . . . as gospel.") Therefore, we find this argument to be without merit.
Second, Mr. Roman argues that this Court and the Internal Revenue Code are unconstitutional. Courts have repeatedly rejected these arguments as frivolous. See Freytag v. Commissioner, 501 U.S. 868, 890-91 (1991) (holding Tax Court is constitutional); Edwards v. Commissioner, 680 F.2d 1268, 1270 (9th Cir. 1982) (same). Therefore, we will not "refute [this] argument[] with somber reasoning and copious citation of precedent" as doing so "might suggest that [it has] some colorable merit." Crain v. Commissioner, 737 F.2d 1417, 1417 (5th Cir. 1984). Instead, we mention it here only to make clear that we will not grant Mr. Roman's Motion on such grounds. (We note parenthetically that the Pretrial Memorandum the Romans filed on April 3, 2023, lists as issue 7 the constitutionality of the Internal Revenue Code. We observe that this Order fully resolves this issue, so we will not address it any further at trial, nor will we spend any further Court time entertaining such frivolous arguments.)
Third, and in relation to his constitutional arguments, Mr. Roman appears to assert that the Commissioner is an agent of a corporation and cannot sue or otherwise engage in a dispute with himself as "a living natural man or woman." Pet'r's Mot. to Withdraw 3. As an initial matter, the Commissioner of Internal Revenue, who is the named party in all cases before our Court, is a person, and the IRS is not a corporation, so Mr. Roman's contention is based on an incorrect factual premise. Moreover, the Commissioner has been delegated the authority by the Secretary of the Treasury to administer and enforce the internal revenue laws, as permitted by the Code. See DelPonte v. Commissioner, 158 T.C., slip op. at 10 (May 5, 2022) ("The Secretary has of course for decades delegated to the Commissioner the responsibility of administering and enforcing the internal revenue laws . . ."); see also Treas. Order 150-10 (Apr. 22, 1982). In short, Mr. Roman's argument is wholly meritless and does not warrant further discussion. (Again, we note parenthetically that the Pretrial Memorandum the Romans filed on April 3, 2023, lists as issue 6 the status of the Commissioner as a corporate agent. We observe that this Order fully resolves this issue, so we will not address it any further at trial, nor will we spend any further Court time entertaining such frivolous arguments.)
Finally, to the extent Mr. Roman argues that this Court is unconstitutional because it does not conduct jury trials, Mr. Roman is mistaken. It is well-established that a taxpayer does not have the right to a jury trial to challenge his federal tax liability in the Tax Court. See Cupp v. Commissioner, 65 T.C. 68, 86 (1975); see also Wickwire v. Reinecke, 275 U.S. 101, 105-06 (1927) ("the right of the petitioner to a jury in such a case is not to be found in the Seventh Amendment to the Constitution"); Dawn v. Commissioner, 675 F.2d 1077, 1079 (9th Cir.1982), aff'g T.C. Memo.1979- 479; Olshausen v. Commissioner, 273 F.2d 23, 27 (9th Cir. 1959), aff'g and remanding T.C. Memo. 1958-85. In filing a Petition with our Court, Mr. Roman sought to take advantage of a pre-payment forum for challenging the deficiency determinations made against him by the Commissioner instead of first paying the liability in full and pursuing a refund suit in federal district court. See I.R.C. §§ 6511, 7422. That Mr. Roman may now regret his decision to bring a case in our Court is not grounds for granting the relief he seeks. Olshausen v. Commissioner, 273 F.2d at 27 ("Having Docket No.: 10878-16 & 7671-17 Page 6 of 6 taken advantage of the deficiency notice procedure by filing a petition in the Tax Court without paying the tax first, petitioner now makes the claim that he was deprived thereby of a jury trial. Such deprivation was due to his own act. If he desired a jury trial, he should have paid the tax first and then sued for a refund in the district court. There is no right to a jury trial without paying first as a statutory matter (Flora v. United States, 1958, 357 U.S. 63 . . .) and no right to a jury trial at all in tax matters as a constitutional requirement (Wickwire v. Reinecke, 1929, 275 U.S. 101 . . .).").
We have considered all of Mr. Roman's arguments and, to the extent not discussed above, conclude they are irrelevant, moot, or without merit.
We also wish to call the Romans' attention to I.R.C. § 6673, which empowers our Court to impose a penalty of up to $25,000 whenever it appears that the taxpayer's position in a proceeding is frivolous or groundless. We warn the Romans that we will consider imposing a penalty against them under section 6673 should they continue to raise frivolous arguments, like those discussed above, in future proceedings in these cases or others before our Court.
Upon due consideration and for cause, it is hereby ORDERED that Mr. Roman's Motion to Withdraw (Doc. 132, 10878-16; Doc. 111, 7671-17) is denied.