A taxpayer sought to dismiss his own case in the Tax Court after reconsidering his beliefs and the risk of more penalties over repeated challenges of tax deficiencies.
The IRS didn’t object to Tax Court Judge David Gustafson granting the motion to dismiss the case in Supinger v. Commissioner.
According to the judge, Jack Supinger’s April 2 motion noted how he “had time to reflect on his current thoughts and beliefs on the issue at hand” and that he has had “a radical change of mind and realizes his errors.”
The case was the latest of three petitions brought before the court to challenge deficiencies for the 2017, 2018, and 2019 tax years arising from Supinger’s failure to report any money received from any source. His only entries were for federal income tax withheld by his employers.
Supinger received $88,083 from one employer in 2019. He maintained that he wasn’t a U.S. resident or citizen, and therefore no “equitable contract existed” between him and the IRS for a debt, which was the same argument made regarding his 2017 and 2018 tax liabilities.
The IRS noted in its March 19 pretrial memorandum that Gustafson previously warned Supinger against frivolous arguments in the 2021 Tax Court proceeding (Dkt. No. 10957-20) regarding his 2017 tax year, saying he could become liable for a penalty of up to $25,000.
The judge ultimately held Supinger liable for deficiency- and accuracy-related penalties for the 2017 tax year and imposed a $5,000 penalty under section 6673 for maintaining frivolous or groundless positions.
The court didn’t impose a higher frivolous penalty based on the IRS conceding that there was a duplicative Form W-2 and that the taxpayer was polite in his conduct and hadn’t previously made frivolous contentions in court or been penalized for doing so.
The court also didn’t impose a lower penalty because Supinger was warned multiple times for making frivolous arguments, and he refused to answer basic questions about his employment status and compensation. The taxpayer also dodged, evaded, and obfuscated, which demonstrated bad faith, the judge said.
Supinger appealed that... to read more please subscribe to NovaTax.