Conforte v. C.I.R., Nos. 81-7573

CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)
Writing for the CourtBefore MERRILL; WALLACE
Citation692 F.2d 587
Parties82-2 USTC P 9659 Sally CONFORTE, Petitioner-Appellant, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee. Joseph CONFORTE, Petitioner-Appellant, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee.
Decision Date05 November 1982
Docket Number81-7576,Nos. 81-7573

Page 587

692 F.2d 587
82-2 USTC P 9659
Sally CONFORTE, Petitioner-Appellant,
v.
COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee.
Joseph CONFORTE, Petitioner-Appellant,
v.
COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee.
Nos. 81-7573, 81-7576.
United States Court of Appeals,
Ninth Circuit.
Argued and Submitted Aug. 10, 1982.
Decided Nov. 5, 1982.

Page 588

Bruce I. Hochman, Beverly Hills, Cal., for petitioner-appellant.

Farley P. Katz, Washington, D.C., argued, Michael L. Paup, Farley P. Katz, Washington, D.C., on brief, for respondent-appellee.

Petition to Review a Decision of The Tax Court of the United States.

Before MERRILL, Senior Circuit Judge, KASHIWA * and WALLACE, Circuit Judges.

WALLACE, Circuit Judge:

Joseph and Sally Conforte appeal from a decision of the tax court sustaining tax deficiencies and penalties which had been assessed against them for the calendar years 1973 through 1976. Conforte v. Commissioner, 74 T.C. 1160 (1980). Jurisdiction is based on 26 U.S.C. Sec. 7482. They question the tax court's failure to limit their tax payments at the 50 percent maximum rate and its application of fraud penalties. In addition, the government has moved to dismiss the appeal of Joseph Conforte on the ground that he is a fugitive from justice. As to Sally Conforte's appeal we affirm in part, reverse in part, and remand. The motion to dismiss the appeal of Joseph Conforte is conditionally granted.

I

The Confortes, who were husband and wife during the years in question, owned and operated the Mustang Ranch Brothel (Mustang Ranch), a legal house of prostitution located in and licensed by Storey County, Nevada. For each of the years 1973 through 1976, the Confortes filed a Form 1040, U.S. Individual Income Tax Return, which reflected only their names, addresses, social security numbers, filing status (married, filing a joint return), exemptions, an amount designated as taxable income and computations of income and self-employment tax. In none of the returns did they

Page 589

indicate amounts or descriptions for gross income and deductions. Instead, they attached to each form a statement asserting that they were under investigation by various governmental agencies, that their tax returns would be scrutinized by such agencies with a view to securing information that would lead to criminal prosecution, and that they were therefore asserting their fifth amendment privilege against self-incrimination in refusing to set forth the details of income and expense. They concluded each document by stating that the amount shown on the return as taxable income was believed by them to be a correct amount, but that if determined through appropriate process to be incorrect, they would comply with that determination.

In late 1977, the Internal Revenue Service (the Service) initiated an examination of the Confortes' income tax liability for the years 1973 through 1976. Based on projections of their income and expenses during this period, statutory notices of deficiencies and penalties were issued. The Confortes petitioned the tax court to redetermine the deficiencies and penalties found by the Commissioner.

Subsequently, the grand jury in the district of Nevada returned a ten count indictment against the Confortes for willfully attempting to evade or defeat federal employment taxes during the years 1974 through 1976. The charges arose out of the operation of the Mustang Ranch. Thereafter, the government moved in the Nevada district court for an ex parte order disclosing the records of the grand jury investigation of the Confortes for use by the Service in litigating the tax court suit. That same day, the district court entered an ex parte order releasing the grand jury materials to the Service. After receiving notice of the order, the Confortes appealed directly to this court. We dismissed the appeal on the ground that the Confortes were not parties to the proceeding in which the disclosure order had been issued and thus did not have standing to appeal. In re Proceedings Before the Federal Grand Jury for the District of Nevada, 643 F.2d 641 (9th Cir. 1981). The Confortes then brought a motion in the tax court to suppress the use of all material obtained from the grand jury. The motion was denied.

The tax court found against the Confortes and they appealed. The following issues are presented: (1) whether the appeal of Joseph Conforte should be dismissed because he is a fugitive from justice; (2) whether the income tax forms filed by the Confortes constitute "returns" for purposes of (i) calculating the fraud penalty pursuant to 26 U.S.C. Sec. 6653(b) and (ii) qualifying for the 50 percent maximum tax on earned income under 26 U.S.C. Sec. 1348; and (3) whether the tax court correctly denied the motion to suppress use of the grand jury material.

II

Both Confortes were tried on the charge of willfully attempting to evade federal employment taxes, and were convicted on four of the ten counts. Joseph Conforte is currently a fugitive from justice with respect to his conviction. The question presented is whether a fugitive from justice in a criminal case should be allowed to prosecute an appeal in a civil case.

The Supreme Court held in Molinaro v. New Jersey, 396 U.S. 365, 366, 90 S.Ct. 498, 499, 24 L.Ed.2d 586 (1970), that an individual who seeks to invoke the processes of the law while flouting them has no entitlement "to call upon the resources of the Court for determination of his claims." See United States v. Commanding Officer, 496 F.2d 324, 326 (1st Cir. 1974). Joseph Conforte's attempts to distinguish the application of this rule are unpersuasive. First, he argues that Molinaro applies only to appeals of criminal convictions. Although Molinaro involved an appeal from a criminal conviction, there is no indication in the Court's decision that the rule stated has any less vitality in civil cases. To the contrary, as the Service points out, and as other courts have recognized, the rule should apply with greater force in civil cases where an individual's liberty is not at stake. Cf. Broadway v. City of Montgomery, Alabama, 530 F.2d

Page 590

657 (5th Cir. 1976) (court refused to hear an appeal from a fugitive who sought damages and injunctive relief from an allegedly illegal state wire tap); United States v. Commanding Officer, supra (court refused to hear a petition for a writ of habeas corpus seeking injunctive and declaratory relief from a specific Army regulation since the petitioner was in flight from custody); Doyle v. United States Department of Justice, 494 F.Supp. 842, 845 (D.D.C.1980), aff'd, 668 F.2d 1365 (D.C.Cir.1981), cert. denied, --- U.S. ----, 102 S.Ct. 1636, 71 L.Ed.2d 870 (1982) ("If the courts may invoke their inherent equitable powers to refuse to entertain appeals from fugitives who are seeking to overturn criminal convictions, they surely may do so likewise with respect to those fugitives who merely seek relief under the Freedom of Information Act.").

Joseph Conforte also argues that Molinaro applies to civil cases only where a fugitive seeks relief based upon a claim related to his prior criminal conviction. This argument is derived from the statement in Doyle v. United States Department of Justice that Doyle's Freedom of Information Act suit was "not devoid of relationship to the sentence he is evading." 668 F.2d at 1365. We need not decide whether Molinaro demands such a nexus requirement since in this case we have no difficulty concluding that Joseph Conforte's previous conviction for attempted evasion of employment taxes and his tax court appeal are each related components of a general tax evasion scheme.

Conforte further argues that the Molinaro rule applies only where review is discretionary with the court. The appeal in Molinaro was brought under 28 U.S.C. Sec. 1257 which states that particular judgments or decrees "may be reviewed by the Supreme Court ...." (emphasis added). However, as we observed in Johnson v. Laird, 432 F.2d 77 (9th Cir. 1970), in discussing the basis of the Supreme Court's decision in Smith v. United States, 94 U.S. 97, 24 L.Ed. 32 (1876) (a case upon which the Court in Molinaro relied):

We recognize the difference between appeals to this court and discretionary writs of certiorari. We do not believe, however, that the Supreme Court's decision in Smith ... was based solely on the discretionary nature of writs of certiorari. Rather, we feel that the decision in Smith rests upon the inherent discretion of any court to refuse to hear the claim of a litigant who indicates that he will comply with that court's decree only if it is favorable.

432 F.2d at 79 (emphasis in original). Although Johnson v. Laird does not mention Molinaro, we have applied the Molinaro rule to a non-discretionary appeal. United States v. Wood, 550 F.2d 435, 438 (9th Cir. 1976).

Joseph Conforte's appeal is dismissed. If within 56 days he submits himself to the jurisdiction of the District Court of Nevada, he may move to reinstate his appeal.

III

Sally Conforte does not challenge the imposition of a fraud penalty under 26 U.S.C. Sec. 6653(b). She contends, however, that in calculating the penalty the tax court impermissibly failed to give her credit for the tax she acknowledged was due on her tax form and which she actually paid. Section 6653(b) provides that "[i]f any part of any underpayment ... is due to fraud, there shall be added to the tax an amount equal to 50 percent of the underpayment." For our purposes, the term underpayment is defined in section 6653(c) as a deficiency as...

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120 practice notes
  • Kluger v. Comm'r of Internal Revenue, Docket No. 26124-83.
    • United States
    • United States Tax Court
    • September 11, 1984
    ...Miller Brewing Co., 687 F.2d 1079 (7th Cir. 1982), vacated in part, 717 F.2d 1136 (7th Cir. 1983) and Conforte v. Commissioner, 692 F.2d 587 (9th Cir. 1982), affg. in part, revg. and remanding in part, [83 T.C. 317] 74 T.C. 1160 (1980), in support of his contention that this Court is withou......
  • Frank v. Yates, No. 1:11–CV–01175 LJO GSA HC.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • August 7, 2012
    ...United States v. $129,374 in U.S. Currency, 769 F.2d 583, 587–88 (9th Cir.1985) (civil forfeiture proceeding); Conforte v. Comm'r, 692 F.2d 587, 589 (9th Cir.1982) (appeal from decision of tax court arising from criminal conviction for tax fraud); Sapoundjiev v. Ashcroft, 376 F.3d 727, 729 ......
  • Prevot, In re, Nos. 94-5854
    • United States
    • United States Courts of Appeals. United States Court of Appeals (6th Circuit)
    • September 7, 1995
    ...U.S. v. Persico, 853 F.2d 134, 136 (2d Cir.1988); Brinlee v. U.S., 483 F.2d 925, 926 (8th Cir.1973). See also Conforte v. Commissioner, 692 F.2d 587, 590 (9th Cir.1982), stay denied, 459 U.S. 1309, 103 S.Ct. 663, 74 L.Ed.2d 588 (1983). B. Disentitlement of access to appellate courts. The do......
  • U.S. v. Forty-Five Thousand Nine Hundred Forty Dollars ($45,940) in U.S. Currency, FORTY-FIVE
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • July 11, 1984
    ...fugitive. Recently, Justice Rehnquist, acting as Circuit Justice, in refusing to stay the applicant's dismissal in Conforte v. C.I.R., 692 F.2d 587, 589-90 (9th Cir.1982) stated that "[w]hile this Court has never extended the 'fugitive from justice' rule beyond the facts of Molinaro and Smi......
  • Request a trial to view additional results
120 cases
  • Kluger v. Comm'r of Internal Revenue, Docket No. 26124-83.
    • United States
    • United States Tax Court
    • September 11, 1984
    ...Miller Brewing Co., 687 F.2d 1079 (7th Cir. 1982), vacated in part, 717 F.2d 1136 (7th Cir. 1983) and Conforte v. Commissioner, 692 F.2d 587 (9th Cir. 1982), affg. in part, revg. and remanding in part, [83 T.C. 317] 74 T.C. 1160 (1980), in support of his contention that this Court is withou......
  • Frank v. Yates, No. 1:11–CV–01175 LJO GSA HC.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • August 7, 2012
    ...United States v. $129,374 in U.S. Currency, 769 F.2d 583, 587–88 (9th Cir.1985) (civil forfeiture proceeding); Conforte v. Comm'r, 692 F.2d 587, 589 (9th Cir.1982) (appeal from decision of tax court arising from criminal conviction for tax fraud); Sapoundjiev v. Ashcroft, 376 F.3d 727, 729 ......
  • Prevot, In re, Nos. 94-5854
    • United States
    • United States Courts of Appeals. United States Court of Appeals (6th Circuit)
    • September 7, 1995
    ...U.S. v. Persico, 853 F.2d 134, 136 (2d Cir.1988); Brinlee v. U.S., 483 F.2d 925, 926 (8th Cir.1973). See also Conforte v. Commissioner, 692 F.2d 587, 590 (9th Cir.1982), stay denied, 459 U.S. 1309, 103 S.Ct. 663, 74 L.Ed.2d 588 (1983). B. Disentitlement of access to appellate courts. The do......
  • U.S. v. Forty-Five Thousand Nine Hundred Forty Dollars ($45,940) in U.S. Currency, FORTY-FIVE
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • July 11, 1984
    ...fugitive. Recently, Justice Rehnquist, acting as Circuit Justice, in refusing to stay the applicant's dismissal in Conforte v. C.I.R., 692 F.2d 587, 589-90 (9th Cir.1982) stated that "[w]hile this Court has never extended the 'fugitive from justice' rule beyond the facts of Molinaro an......
  • Request a trial to view additional results
1 books & journal articles
  • ELIMINATING THE FUGITIVE DISENTITLEMENT DOCTRINE IN IMMIGRATION MATTERS.
    • United States
    • Notre Dame Law Review Vol. 97 Nbr. 3, March 2022
    • March 1, 2022
    ...justify an appellate sanction of dismissal."). (46) Pesin v. Rodriguez, 244 F.3d 1250, 1251 (11th Cir. 2001). (47) Conforte v. Comm'r, 692 F.2d 587, 588 (9th Cir. (48) D.T. v. P.B., 106 N.Y.S.3d 733, 738 (N.Y. Fam. Ct. 2019) (dismissing motion to vacate sequestration order based on fugitive......

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