House v. United States, IRS

• Decision Date: 03 August 1984
• Docket Number: No. G83-930 CA7.,G83-930 CA7.
• Citation: 593 F. Supp. 139
• Parties: Scott L. HOUSE and Cynthia L. House, Plaintiffs, v. UNITED STATES of America, INTERNAL REVENUE SERVICE, Defendant.
• Court: U.S. District Court — Western District of Michigan

593 F. Supp. 139

Scott L. HOUSE and Cynthia L. House, Plaintiffs, v. UNITED STATES of America, INTERNAL REVENUE SERVICE, Defendant.

No. G83-930 CA7.

United States District Court, W.D. Michigan, S.D.

August 3, 1984.

Scott L. House, in pro per.

John A. Smietanka, U.S. Atty. by Julie Ann Woods, Asst. U.S. Atty., Grand Rapids, Mich., Seth G. Heald, Trial Atty., Tax Div., Dept. of Justice, Washington, D.C., for defendant.

OPINION RE MOTION FOR SUMMARY JUDGMENT

HILLMAN, District Judge.

Plaintiffs bring this action pursuant to 26 U.S.C. § 6703(c)(2) challenging the assessment of an income tax penalty against them with respect to their 1982 income tax return.¹

Plaintiffs, Scott and Cynthia House, filed a 1982 Form 1040 joint income tax return dated March 30, 1983. This form was accompanied by four W-2 wage and tax statements for 1980. The only information provided on the form was plaintiffs' city and state of residence, their signatures, and the date. No information was provided on any of the 71 numbered lines. On 28 of these lines, as well as on those requesting the names, street address, social security numbers, and occupations of the filers, there appears an asterisk referring to the following message in the right margin of each page of the form:

"This means specific objection is made under the 5th Amendment, U.S. Constitution. Similar objection is made to the question under the 1st, 4th, 7th, 8th, 9th, 10th, 13th, 14th, and 16th Amendments for civil issues."

At the top of each page of the form appears the following: "I offer to amend or re-file this return exactly as you wish it, if you will please show me how to do so without waiving my Constitutional rights." In addition, the following message appears in the right margin of the second page of the form:

"I do not understand this return nor the laws that may apply to me. Signature is involuntarily given under threat of statutory punishment and has not been given freely as to admission of requirement to file this form. I request complete immunity per 18 USC 6002 & 6004 before waiving any Constitutional or natural rights, including the Fifth Amendment guarantee of not being a witness against myself."

Pursuant to 26 U.S.C. § 6702, the Internal Revenue Service declared their return to be frivolous within the meaning of the statute and assessed a civil penalty of $500 against both plaintiffs.² In accordance with 26 U.S.C. § 6703(c)(1), plaintiffs paid 15% of the penalty and filed a claim for refund of that amount with the Internal Revenue Service. This claim was denied. Plaintiffs then brought this action challenging the assessment of the penalty. 26 U.S.C. § 6703(c)(2).

Presently before the court is defendant's motion for summary judgment. On a motion for summary judgment, the movant bears the burden of showing conclusively that no genuine issue of material fact exists, and that the moving party is entitled to summary judgment as a matter of law. Smith v. Hudson, 600 F.2d 60 (6th Cir. 1979); Tee-Pak, Inc. v. St. Regis Paper Co., 491 F.2d 1193 (6th Cir.1974); Fed.R. Civ.P. 56(c). In determining whether there are issues of fact requiring a trial, "the inferences to be drawn from the underlying facts contained in the affidavits, attached exhibits and depositions must be viewed in the light most favorable to the party opposing the motion." United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962). A court may not resolve disputed questions of fact in a summary judgment decision. If a disputed question of fact remains, the district court should deny the motion and proceed to trial. United States v. Articles of Device, 527 F.2d 1008, 1011 (6th Cir.1976).

In support of its motion for summary judgment, defendant asserts that plaintiffs' fifth amendment claim is spurious, that their purported return is frivolous within the meaning of section 6702, and that the penalty was properly assessed as a matter of law.

Plaintiffs advance several arguments opposing this motion. First, they claim that the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), which added sections 6702 and 6703 to the Internal Revenue Code, is unconstitutional because it violates the origination clause of article I, section 7 of the United States Constitution. Second, they claim that section 6702 is unconstitutional and void for vagueness because it provides no guidance as to the meaning of the word "frivolous" as used in the statute. Third, they argue that the provision of section 6703 requiring partial payment of the penalty before allowing taxpayers to contest its assessment violates plaintiffs' right to due process guaranteed by the fifth amendment to the United States Constitution. Finally, in direct opposition to the motion, plaintiffs assert that their fifth amendment self-incrimination claim is legitimate and that, therefore, their return is not frivolous within the meaning of section 6702.

For the following reasons, I am satisfied that plaintiffs' challenges to the constitutionality of TEFRA generally and the pertinent statutory provisions specifically are without merit, that plaintiffs' purported return is frivolous within the meaning of section 6702, and that the civil penalty was properly assessed.

Section 6702 of the Internal Revenue Code provides:

"§ 6702. Frivolous income tax return

(a) Civil penalty. — If —

(1) any individual files what purports to be a return of the tax imposed by subtitle A but which —

(A) does not contain information on which the substantial correctness of the self-assessment may be judged, or

(B) contains information that on its face indicates that the self-assessment is substantially incorrect; and

(2) the conduct referred to in paragraph (1) is due to —

(A) a position which is frivolous, or

(B) a desire (which appears on the purported return) to delay or impede the administration of Federal income tax laws, then such individual shall pay a penalty of $500."

This section was added to the Internal Revenue Code by section 326(a) of TEFRA, Public Law No. 97-248.

Plaintiffs first assert that TEFRA is unconstitutional because it was passed in violation of the origination clause of article I, section 7 of the United States Constitution. That clause provides: "All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills."

Most of the provisions of TEFRA were first introduced in the United States Senate as an amendment to a House-sponsored bill (H.R. 4961). However, TEFRA was not a Senate-sponsored bill. The United States District Court for the Eastern District of Michigan confronted precisely this claim and concluded:

"... the Court finds that the Act did originate in the House of Representatives. Nothing in the relevant clause indicates that the Senate may not amend a revenue raising bill by a wholesale substitution of the text of that bill. See Flint v. Stone Tracey Co., 220 U.S. 107 31 S.Ct. 342, 55 L.Ed. 389 3 AFTR 2834 (1911) .... Therefore, the court concludes that the Tax Equity and Fiscal Responsibility Act of 1982 was enacted in accordance with Art. I, § 7, cl. 1 of the United States Constitution."

Frent v. United States, 571 F.Supp. 739, 742 (1983). Likewise, I am satisfied that TEFRA does not violate the origination clause of the United States Constitution.

Plaintiffs next assert that 26 U.S.C. § 6702 is unconstitutionally vague because it provides no guidance as to the meaning of the word "frivolous" as used in the statute. This challenge on vagueness grounds lacks merit for two reasons. First, I am satisfied that "frivolous" is a word in common usage, clear in its meaning, and its use in section 6702 does not make the statute unconstitutionally vague. Second, the statute's application to plaintiffs' conduct in the instant case is sufficiently clear that they lack standing to challenge it for vagueness.

A statute is void for vagueness when it forbids or requires the doing of an act in terms so vague "that men of common intelligence must necessarily guess at its meaning and differ as to its application." Zwickler v. Koota, 389 U.S. 241, 249, 88 S.Ct. 391, 396, 19 L.Ed.2d 444 (1967), quoting Connally v. General Construction Co., 269 U.S. 385, 391, 46 S.Ct. 126, 127, 70 L.Ed. 322 (1926). As the Sixth Circuit has stated, when a statute does not concern criminal conduct or first amendment freedoms, "the court must be fairly lenient in evaluating a claim of vagueness." Doe v. Staples, 706 F.2d 985, 988 (6th Cir. 1983), cert. denied, ___ U.S. ___, 104 S.Ct. 1301, 79 L.Ed.2d 701 (1984). "No word has an intrinsic content. It gets meaning and contour from its context, from its association, and from its commonly understood usage." McAlpine v. Reese, 309 F.Supp. 136, 138-139 (E.D.Mich.1970). The Eighth Circuit has also stated that the requirement of reasonable certainty "does not preclude the use of ordinary terms to express ideas which find adequate interpretation in common usage and understanding." Horn v. Burns and Roe, 536 F.2d 251, 255 (8th Cir.1976). Accordingly, the Sixth Circuit has described the standard of vagueness in statutes not involving criminal conduct or first amendment freedoms as follows:

"`To constitute a deprivation of due process, it must be "so vague and indefinite as really to be no rule or standard at all." A.B. Small Co. v. American Sugar Refining Co., 267 U.S. 233 at 239, 45 S.Ct. 295 at 297 69 L.Ed. 589 (1925). To paraphrase, uncertainty in this statute is not enough for it to be unconstitutionally vague; rather, it must be substantially incomprehensible.'"

Doe v. Staples, 706 F.2d at 988, quoting Exxon Corp. v. Busbee, 644 F.2d 1030, 1033 (5th Cir.), cert. denied, 454 U.S. 932, 102 S.Ct. 430, 70 L.Ed.2d 239 (1981). Webster's Third New International Dictionary defines "frivolous" as "of little weight or importance: having no basis in law or fact."

In light of the foregoing, I find that 26 U.S.C. §...