McNally v. U.S.
| Decision Date | 28 May 1986 |
| Citation | 793 F.2d 1292 |
| Parties | Unpublished Disposition NOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit. ANNE K. McNALLY Plaintiff-Appellant, v. UNITED STATES OF AMERICA, Defendant-Appellee. 85-3492 |
| Court | U.S. Court of Appeals — Sixth Circuit |
AFFIRMED
N.D.Ohio
ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO
Before: LIVELY, Chief Judge; WELLFORD and NELSON, Circuit Judges.
Plaintiff and taxpayer Anne K. McNally appeals from a final order of the district court granting summary judgment to the defendant United States in an action brought pursuant to 26 U.S.C. Sec. 6703 to challenge a $500 'frivolous return' penalty assessed by the Internal Revenue Service (IRS) under 26 U.S.C. Sec. 6702 for striking the jurat from her federal income tax return for 1982. Taxpayer brought this suit seeking a refund of the $75 she paid to the IRS as partial payment on the assessment made pursuant to 26 U.S.C. Sec. 6702. On cross-motions for summary judgment, the district court denied taxpayer's motion for partial summary judgment and granted the government's motion for summary judgment.
Taxpayer filed a federal income tax return (Form 1040A) for 1982, seeking a refund of $1. 1 Taxpayer did not, however, sign the return under penalty of perjury as required by the pertinent provisions of the Internal Revenue Code and the Treasury Regulations issued thereunder. Although the return was signed, taxpayer lined through the jurat printed on the Form 1040A above the signature block. The jurat reads:
I have read this return and any attachments filed with it. Under penalties of perjury, I declare that to the best of my knowledge and belief, the return and attachments are correct and complete.
Taxpayer also lined through that portion of the opening section of the Form 1040A dealing with the election to contribute to the presidential election campaign fund and added a note on page two of the form, asking '[w]hat % of income in taxes is Reagan's constituency actually paying?' Shortly after filing her 1982 tax return, taxpayer received a refund check. On March 28, 1984, taxpayer filed her 1983 tax return.
On April 9, 1984, the IRS assessed at $500 penalty against taxpayer pursuant to 26 U.S.C. Sec. 6702. The 'Statement of Tax Due,' explained that she had been 'assessed a penalty under section 6702 of the Internal Revenue Code for filing a frivolous tax return,' and apprised her of the procedural steps necessary to contest the assessment. The notice, however, failed to state the tax year for which the penalty had been imposed or the specific grounds for the penalty. Taxpayer subsequently made several written requests for copies of her returns for the tax years 1981, 1982, and 1983, but the IRS indicated that it was unable at the time promptly to supply copies of her returns. On May 4, 1984, without any further specific inquiry concerning the penalty, taxpayer paid 15 percent of the penalty and filed a claim for refund with the IRS pursuant to 26 U.S.C. Sec. 6703, requesting a hearing and complaining that the statement of tax due did not specify the grounds for the penalty or the tax year to which it applied. In any event, McNally claimed that the penalty was applied improperly and violated her rights to free speech, due process, and equal protection. In its June 26, 1984, letter denying her claim without a hearing, the IRS stated that the assessment of the frivolous return penalty applied to taxpayer's 1982 return and that it was based on the striking of the jurat on that return.
Taxpayer then filed a complaint, seeking a refund. The government filed a motion to dismiss, or in the alternative for summary judgment, in response. Plaintiff pointed out that, for many years, she has written critical notes in the margins of her tax returns complaining about the tax structure or government policies. She asserts that she has attached letters, poems, and newspaper clippings to her returns. Her tax returns, however, have indicated her income, exemptions, deductions, and total tax liability. She claims that she has frequently crossed out the jurat before signing and dating her return, and that the IRS always processed her returns. She asserts that IRS has never informed her that she may not lawfully strike the jurat.
Plaintiff contends on appeal that 26 U.S.C. Sec. 6702 does not apply to her conduct in striking the jurat from her 1982 return. Under Sec. 6702, 2 the IRS may impose a $500 penalty on any individual who files 'what purports to be' a tax return which (1) 'does not contain information on which the substantial correctness of the self-assessment may be judged' (2) 'due to . . . a position which is frivolous.' Other provisions of the tax code indicate that a taxpayer is prohibited from altering a jurat on a return. See 26 U.S.C. Secs. 6061 and 6065. Section 6061 provides that 'any return, statement, or other document required to be made under any provision of the internal revenue laws or regulations shall be signed in accordance with forms or regulations prescribed by the Secretary.' Similarly, section 6065 provides that 'any return, declaration, statement, or other document required to be made under any provision of the internal revenue laws or regulations shall contain or be verified by a written declaration that is made under the penalties of perjury.'
We agree with the district court's conclusion that plaintiff's conduct falls directly within the prohibitions of the statute. First, by striking the jurat, the plaintiff refused to certify that the entries on the form were correct, as required by statute. Without this certification the IRS could not properly process the return or assess the substantial correctness of her self-assessment. Second, the plaintiff struck the jurat 'due to . . . a position that is frivolous,' because the requirements of verification or a certification under penalty of perjury on returns and documents filed with the IRS has been expressly upheld by the Supreme Court. See Zellerbach Paper Co. v. Helvering, 293 U.S. 172 (1934); Lucas v. Pilliod Lumber Co., 281 U.S. 245 (1930). There is simply no legal foundation for plaintiff's action in striking the jurat.
Plaintiff argues that her conduct does not come within the purview of Sec. 6702 because her striking of the jurat simply was not 'due to . . . a position.' Plaintiff has alleged no cause or justification for her striking of the jurat. Filing of a tax return requires an assertion that it is correctly and properly completed in accordance with law. The district court did not err in concluding that the plaintiff raised no genuine issue of fact and that as a matter of law her conduct was due to a frivolous position that the jurat was unnecessary to filing the required lawful return.
In a recent unpublished opinion, this court has clearly held that the filing of an unverified return falls within the scope of Sec. 6702. Taratuta v. United States, No. 84-1654, slip op. at 2-3 (6th Cir. Mar. 14, 1986). Every other court faced with the same question has ruled that Sec. 6702 applies to the filing of a return with a stricken jurat. See, e.g., Mosher v. IRS, 775 F.2d 1292, 1294-95 (5th Cir. 1985), cert. denied, ---- S.Ct. ----, No. 85-1552 (April 21, 1986); Borgeson v. United States, 757 F.2d 1071, 1073 (10th Cir. 1985); Green v. United States, 593 F. Supp. 1341, 1343-44 (N.D. Ind. 1984).
Plaintiff next argues that she was denied due process by the failure of the notice sent by the IRS on April 9, 1984, to indicate the specific basis and the relevant tax year for which the IRS had imposed a penalty. 3 Plaintiff essentially argues that she was without sufficient information to address the merits of the assessment at the administrative stage. As the district court noted, the procedures provided under 26 U.S.C. Sec. 6703 for review of a Sec. 6702 penalty assessment have been uniformly upheld as constitutional, despite the failure to provide for a pre-deprivation hearing. Brennan v. Commissioner, 752 F.2d 187, 189 (6th Cir. 1985); Heitman v. Commissioner, 753 F.2d 33, 35 (6th Cir. 1985); Jolly v. United States, 764 F.2d 642, 645-47 (9th Cir. 1985); Borgeson v. United States, 757 F.2d 1071, 1073 (10th Cir. 1985); Martinez v. United States, 744 F.2d 71, 72-73 (10th Cir. 1984); Anderson v. United States, 754 F.2d 1270, 1272 (5th Cir. 1985); Kahn v. United States, 753 F.2d 1208, 1217-22 (5th Cir. 1985); Baskin v. United States, 738 F.2d 975, 977 (8th Cir. 1984).
Under other circumstances not present here, the failure of IRS to provide a taxpayer with such basic information as the tax year involved or the specific factual basis for the imposition of a penalty under Sec. 6702 might deprive a taxpayer of due process. On the facts of this case, we find that the requirements of due process were satisfied. We note particularly that the plaintiff taxpayer made no request of the IRS for further specific information regarding the specific tax year at issue or the specific basis of the penalty, and that the provisions of Sec. 6703 provided plaintiff with a prompt post-deprivation opportunity fully and fairly to litigate the merits of the assessment with full knowledge of the basis for the penalty. Taxpayer knew that Sec. 6702 had only become effective during 1982 and may be presumed to have known that she had struck the jurat on each return she had filed since the effective date (i.e., her 1982 and 1983 returns).
Plaintiff also argues that the district court erred in dismissing her claim of selective enforcement based on 'her history of First Amendment activity in connection with her tax returns.' Plaintiff presents two related claims, as did the defendant in Wayte v. United States, 105 S. Ct. 1524 (1985). First, pl...
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