Gary Pansier v. CIR, No. 15-1386 (7th Cir. 2015)

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NONPRECEDENTIAL DISPOSITION To be cited only in accordance with Fed. R. App. P. 32.1 United States Court of Appeals For the Seventh Circuit Chicago, Illinois 60604 Submitted September 22, 2015* Decided September 25, 2015 Before FRANK H. EASTERBROOK, Circuit Judge MICHAEL S. KANNE, Circuit Judge DIANE S. SYKES, Circuit Judge No. 15 1386 GARY LEE PANSIER and JOAN RENEE PANSIER, Petitioners Appellants, v. COMMISSIONER OF INTERNAL REVENUE, Respondent Appellee. Appeal from the United States Tax Court. No. 3143 13L Mary Ann Cohen, Judge. O R D E R Gary and Joan Pansier appeal from the tax court’s decision to uphold the Internal Revenue Service’s determination sustaining proposed levies to collect unpaid tax liabilities and rejecting their offer in compromise. Because the tax court correctly concluded that the IRS acted within its discretion when it rejected the Pansiers’ settlement offer, we affirm. * After examining the briefs and records, we have concluded that oral argument is unnecessary. Thus these appeals are submitted on the briefs and records. See FED. R. APP. P. 34(a)(2)(C). No. 15 1 1386 Pa age 2 The Pansiers T s have been n in a protra acted battle e with the IR RS over tax x liabilities that date bac ck two deca ades. See In re Pansier, 4 451 F. App’ ’x 593 (7th Cir. 2011); United States v. Pansier, 576 F.3d 72 26, 728 (7th Cir. 2009). In 2009 the e agency be egan its late est attempt to collect o on those liab bilities. In 2 2012 the Pan nsiers subm mitted an “o offer in com mpromise,” ” see 26 U. .S.C. § 7122 2, offering to o pay $13,3 365.55 to set ttle their de ebt. They su ubmitted w with their set ttlement off fer a financi ial statemen nt listing th heir income e and expen nses, as wel ll as eight no otices from t the IRS war rning them m that the ag gency inten nded to levy y their asset ts based on n debts for tax years 1999 through h 2006. The notices differed sub T bstantially in the calcu ulated figur res. The tw wo most rece ent notices— —from 2005 5 and 2006— —calculated d the amoun nt due to in nclude the c current bala ance, penalty, and interest. For exam mple, the ac ccount sum mmary for 2 2006 shows that the Pansiers s owed $6,7 764.24: But the a amount due in the six other notic ces exclude es the balan nce and pen nalties and calculate es only accr rued interest. The acco ount summ mary for 200 04, for instance, specifi ies that the Pansiers ow we only $79 9.37: No. 15 1 1386 Pa age 3 In n January 2013 the IRS S’s Office of f Appeals re ejected the P Pansiers’ of ffer based o on its belief th hat they had d altered sev veral of the e notices to require pay yment of on nly the accr rued interest. IRS compu uter records s, an appea als officer sa aid, “confir rm that the amounts reflected d on these n notices are i inaccurate.” ” Analysis of the copie es, the offic cer continue ed, confirme ed that “the e actual bal lance due a amounts we ere removed d and chan nged to refle ect only the e computer generated accrued int terest as the e current ba alance due. .” This was done, th he officer ad dded, “by completely e eliminating g the ‘Curre ent Balance e Due’ and ‘Penalty y’ figures fro om each no otice and replacing the e ‘Amount D Due’ with t the comput ter generate ed ‘Interest’ amount.” The officer r noted that t “[t]he font t used for th he altered ‘Amoun nt Due’ figu ures does no ot match th he computer r font used for the actu ual ‘Interes st’ figures” and explai ined that “s similar tacti ics used by y the taxpay yer that resu ulted in a ta ax fraud co onviction w were used in n the submi ission of the e offer in co ompromise docume entation”—a an apparen nt reference to Gary Pa ansier’s con nviction for tax fraud, see Pansi ier, 576 F.3d d 726. The o officer conc cluded that accepting t the Pansier rs’ offer was s not in the go overnment’ ’s best inter rest. See INT TERNAL REV VENUE MANUAL § 5.8.7.7.1 (explain ning that agency can reje ect settleme ent offer as not in best t interest of f government). The Pansiers T s petitioned d the tax court, disputi ing the age ency’s decis sion to (1) sustain t the levies to o their unpaid tax liab bilities for 1 995 throug gh 1998 and d (2) collect unpaid t tax liabilitie es for 1999 t through 200 06. The Pan nsiers assert ted that the e agency abused its discre etion by rej jecting their r offer, and d they denie ed altering the documents. The tax cour T rt concluded that the a agency did not act “arb bitrarily or capricious sly” in rejecti ing the sett tlement offe er. It assum med that the e tax forms had not bee en altered ( (the originals s had not been introdu uced into th he record) b but determi ined that th he settlemen nt No. 15 1386 Page 4 officer did not act unreasonably in concluding that the Pansiers had deliberately misrepresented their total liabilities in their offer. The court pointed to Gary Pansier’s “history of submitting false documents and the settlement officer’s verification of the amounts actually due far in excess of the amounts shown on the forms,” as well as the Pansiers’ pattern in prior disputes with the IRS of being “unwilling to accept any disagreement with their strongly held convictions that they were right.” The court also noted that the Pansiers had engaged in “hostile, obstructive, and frivolous conduct at every stage of the proceedings” and rejected the Pansiers’ suggestion “that the settlement officer could have persuaded them to change their position or should have engaged in further attempts to do so.” The court later denied the Pansiers’ motion to vacate or revise the decision. On appeal, the Pansiers argue that the tax court erroneously concluded that the IRS did not abuse its discretion when it refused to negotiate a settlement. In their view, the settlement officer’s conclusion that they altered the notices in an effort to sway him to accept the offer is irrational and clearly erroneous. The tax court correctly concluded that the IRS did not abuse its discretion in rejecting the settlement offer based on ample evidence that the Pansiers had altered documents. The amount of the Pansiers’ tax liabilities that is recorded on the notices is nearly $90,000 less than the amount that they actually owe, as reflected in the IRS’s records. Moreover, the Pansiers admitted to the tax court that they had altered the forms they submitted with their offer by inserting the interest amount in the “Amount Due” boxes on the notices and changing the title of the financial statement. And in light of Gary Pansier’s previous conviction for filing false IRS forms, it was reasonable for the agency to scrutinize the documents submitted with the offer. Given the IRS’s reasonable conclusion that the Pansiers submitted falsified documents, the IRS acted within its discretion in rejecting the offer as not in the government’s best interest. See INTERNAL REVENUE MANUAL § 1.2.14.1.15(2) (allowing agency to reject offer that “might in any way be detrimental to the Government’s interests”); Kindred v. Comm r of Internal Revenue, 454 F.3d 688, 696 (7th Cir. 2006) (“The decision to entertain, accept or reject an offer in compromise is squarely within the discretion of the appeals officer and the IRS in general.”); cf. TREAS. REG. § 301.7122 1(e)(5)(i) (allowing IRS to reopen case after acceptance of settlement offer where “[f]alse information or documents are supplied in conjunction with the offer”). The Pansiers also contend that the tax court violated the rule announced in SEC v. Chenery Corp., 332 U.S. 194 (1947), by basing its decision on grounds other than those No. 15 1386 Page 5 relied upon by the settlement officer—specifically by ruling against them because they had engaged in ”hostile, obstructive, and frivolous conduct.” To the extent that the tax court relied upon this ground as a basis for its decision, however, it was an alternative and independent ground. The principal ground for its decision was the Pansiers’ submission of questionable documents—the same rationale relied on by the agency. Any error the tax court committed in relying also on the alternative ground is harmless. See Parker v. Astrue, 597 F.3d 920, 924 (7th Cir. 2010); Sahara Coal Co. v. Office of Workers Comp. Programs, U.S. Dep t of Labor, 946 F.2d 554, 558 (7th Cir. 1991). The Pansiers raise numerous other challenges to the tax court’s rulings and the IRS’s rejection of their offer. We have considered these arguments and conclude that none has merit. The Pansiers are frequent litigants and in the tax court’s view have “rejected or ignored the holdings of the District Court, the bankruptcy court, the Court of Appeals, and [the tax court].” This appeal is yet another in a frivolous and protracted attempt to avoid paying their tax liabilities. We order the Pansiers to show cause within 14 days why this court should not sanction them with a fine, the nonpayment of which may lead to a circuit wide filing bar under In re City of Chicago, 500 F.3d 582, 585–86 (7th Cir. 2007), and Support Systems International, Inc. v. Mack, 45 F.3d 185, 186–87 (7th Cir. 1995). AFFIRMED.

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