Mr. Florance appears to be making a name for himself in the halls of the U.S. Tax Court. He was the recipient of not one, but two decisions from the Tax Court yesterday.
The facts are almost identical in each case, the only real difference is the year at issue. In the first case Mr. Florance failed to file his tax return for 2003, and in the second case he failed to file for 2005. The IRS assessed a deficiency, to which Mr. Florance asserts he is not liable for because "he did not consent to becoming a taxpayer and therefore is not subject to the income tax laws of the United States." This might be my favorite frivolous argument yet.
In response to Mr. Florance's assertion, the IRS filed a motion to dismiss and asked the Court to impose section 6673 penalties. Section 6673 penalties are reserved for frivolous arguments and "proceedings instituted primarily for delay." The Tax Court can impose up to $25,000 in penalties.
The best part is at the motion to dismiss hearing for the 2003 tax return. Mr. Florance did not show up. The IRS wins right? Well, not here because the IRS asked the Court to dismiss its own motion. Turns out, the IRS found more of Mr. Florance's unreported income and they needed additional time to assess higher deficiencies.
After the factual background is presented, the Tax Court begins its discussion with:
"Mr. Florance is no stranger to this Court, In Florance v. Commissioner, T.C. Memo. 2005-60, affd. 174 Fed. Appx. 200 (5th Cir. 2006) and Florance v. Commissioner, T.C. Memo. 2005-61, affd. 174 Fed. Appx. 200 (5th Cir. 2006). Florance asserted similar tax defier arguments for the 1994 through 1997 tax years and was sanctioned by this Court under section 6673 in the respective amounts of $10,000 and $12,500. In this case he asks us to consider his frivolous arguments once again."
Mr. Florance loses. The Tax Court imposes a $15,000 section 6673 penalty for the 2003 tax year, and a $17,500 section 6673 penalty for the 2005 tax year.
Here is the opinion for the 2003 tax return
Here is the opinion for the 2005 tax return