Jolly v. U.S., No. 84-5594

• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)
• Writing for the Court: FLETCHER
• Citation: 764 F.2d 642
• Parties: -5455, 85-2 USTC P 9498 Allen W. JOLLY, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.
• Docket Number: No. 84-5594
• Decision Date: 25 June 1985

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764 F.2d 642 56 A.F.T.R.2d 85-5455, 85-2 USTC P 9498 Allen W. JOLLY, Plaintiff-Appellant,
v.
UNITED STATES of America, Defendant-Appellee. No. 84-5594. United States Court of Appeals,
Ninth Circuit. Argued and Submitted Sept. 5, 1984.
Decided June 25, 1985.

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Allen W. Jolly, pro se.

Carleton Powell, Washington, D.C., for defendant-appellee.

Appeal from the United States District Court for the Central District of California.

Before ELY ^*, FLETCHER, and REINHARDT, Circuit Judges.

FLETCHER, Circuit Judge:

Allen Jolly appeals from the district court's dismissal of his suit for refund of a frivolous-return penalty assessed by the Internal Revenue Service (IRS) pursuant to Internal Revenue Code section 6702, 26 U.S.C. Sec. 6702 (1982). We affirm.

I.

BACKGROUND

Jolly filed a Form 1040 for 1982 containing his name and address, but refused to supply his occupation, social security number, or any financial information. Instead, Jolly wrote on the form that he refused to supply the information on fifth amendment grounds. ¹ The IRS assessed a $500 penalty against Jolly pursuant to section 6702, on the grounds that his return did not contain a self-assessment and reflected a position that was frivolous or designed to delay or impede the administration of the tax laws. See 26 U.S.C. Sec. 6702(a); see also Boomer v. United States, 755 F.2d 696, 697 (8th Cir.1985) (per curiam); Betz v. United States, 753 F.2d 834, 835 (10th Cir.1985) (per curiam); Martinez v. IRS, 744 F.2d 71, 72 (10th Cir.1984) (per curiam). Jolly paid 15 percent of the penalty, or $75, as required by statute, and filed a refund claim. See 26 U.S.C. Sec. 6703(c) (1982). When the IRS disallowed his claim, Jolly filed this refund action. The district court ultimately dismissed Jolly's action, and he timely appealed.

Jolly raises three contentions on appeal: (1) that the Form 1040 he filed was not

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"frivolous" under Sec. 6702, because he validly withheld his personal and financial information based upon his fifth amendment privilege against self-incrimination; (2) that section 6702 is unconstitutional, because it was enacted as part of the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), which, Jolly claims, Congress passed in violation of the origination clause of the Constitution, U.S.Const. art. I, Sec. 7, cl. 1; and (3) that section 6703's requirement that taxpayers must pay 15 percent of their frivolous-return penalties before they are entitled to administrative and judicial review violates due process. ² We find all these claims to be without merit.

II.

FRIVOLOUSNESS OF JOLLY'S RETURN

Under section 6702, " '[t]he test for frivolousness is purely an objective one, under which we must evaluate the taxpayer's position in terms of its legal underpinnings.' " Jenney v. United States, 755 F.2d 1384, 1387 (9th Cir.1985) (quoting Kahn v. United States, 753 F.2d 1208, 1214 (3d Cir.1985) ). Jolly's position is that he is entitled to withhold all personal and financial information from the IRS based upon a blanket assertion of his fifth amendment rights.

The Supreme Court has ruled that raising a self-incrimination claim "against every question on the tax return" would be "virtually frivolous." Albertson v. Subversive Activities Control Board, 382 U.S. 70, 79, 86 S.Ct. 194, 199, 15 L.Ed.2d 165 (1965). Moreover, this court has held that a taxpayer may claim the fifth amendment privilege only when he faces "substantial hazards of self-incrimination that are real and appreciable, and [he has] reasonable cause to apprehend such danger." Edwards v. Commissioner, 680 F.2d 1268, 1270 (9th Cir.1982); accord, Zicarelli v. New Jersey State Commission of Investigation, 406 U.S. 472, 478, 92 S.Ct. 1670, 1675, 32 L.Ed.2d 234 (1972). Since Jolly asserted his fifth amendment privilege to virtually every question on his tax form, and since he offered no specific basis or evidence indicating his reasons for doing so, we conclude, consistent with other courts, that his blanket assertion of his fifth amendment privilege was "frivolous" under section 6702. See Paulson v. United States, 758 F.2d 61, 62 (2d Cir.1985) (per curiam); Boomer v. United States, 755 F.2d 696, 697 (8th Cir.1985) (per curiam); Betz v. United States, 753 F.2d 834, 835 (10th Cir.1985) (per curiam); Borgeson v. United States, 757 F.2d 1071, 1073 (10th Cir.1985) (per curiam); Brennan v. Commissioner, 752 F.2d 187, 189 (6th Cir.1984) (per curiam); Heitman v. United States, 753 F.2d 33, 34-35 (6th Cir.1984) (per curiam); Davis v. United States Government, 742 F.2d 171, 172 (5th Cir.1984) (per curiam); Martinez v. IRS, 744 F.2d 71, 72 (10th Cir.1984) (per curiam); Baskin v. United States, 738 F.2d 975, 977 (8th Cir.1984) (per curiam).

III.

ORIGINATION CLAUSE

Jolly's contention that section 6702 is invalid, because Congress enacted TEFRA in violation of the origination clause of the Constitution, is without merit in light of this court's decisions in Armstrong v. United States, 759 F.2d 1378, 1380-82 (9th

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Cir.1985), Harris v. United States Internal Revenue Service, 758 F.2d 456, 458 (9th Cir.1985), and Boday v. United States, 759 F.2d 1472, 1476 (9th Cir.1985). Accord Wardell v. United States, 757 F.2d 203, 205 (8th Cir.1985) (per curiam); Heitman, 753 F.2d at 35; Rowe, 583 F.Supp. at 1520; see also Flint v. Stone Tracy Co., 220 U.S. 107, 143, 31 S.Ct. 342, 346, 55 L.Ed. 389 (1911).

IV.

DUE PROCESS

Jolly also contends that his due process rights were violated because he was required under section 6703(c) to pay $75 of his $500 frivolous-return penalty before he was entitled to file a refund claim with the IRS and then obtain judicial review. He does not claim that the...