Unpublished Disposition, 902 F.2d 1578 (9th Cir. 1988)

MEMORANDUM^** 

Kenneth L. Ketcherside appeals pro se the tax court's orders granting the Commissioner of Internal Revenue's (CIR) motions for dismissal of Ketcherside's petitions for failure to present evidence or otherwise properly prosecute his case,¹  and imposing damages against Ketcherside under I.R.C. Sec. 6673 in the total amount of $5,000. We review the tax court's dismissal for lack of prosecution and its award of Sec. 6673 damages for abuse of discretion. See Edelson v. C.I.R., 829 F.2d 828, 831 (9th Cir. 1987) (dismissals for failure to prosecute); Grimes v. C.I.R., 806 F.2d 1451, 1454 (9th Cir. 1986) (per curiam) (Sec. 6673 damages). We have jurisdiction pursuant to I.R.C. Sec. 7482. We affirm.

* Merits

Ketcherside failed to file his federal income tax returns for tax years 1980 through 1985. On August 14, 1987, the CIR issued Ketcherside a notice of deficiencies and additions to tax for tax years 1980 through 1984. On January 22, 1988, the CIR issued a second notice of deficiency for tax year 1985.

At trial, Ketcherside declined to testify under oath or to present evidence that the CIR's determination of his taxable income and income taxes for the years in issue was erroneous. Instead, Ketcherside asserted, and still contends on appeal, that the W-2 forms filed by his employers for each of the years in question operated as valid substitutes for tax returns. Based on this contention, he claims that the collection of penalties and taxes from him for the years in question is barred by the three-year statute of limitations applicable to tax assessments. See I.R.C. Sec. 6501(a). This argument is frivolous.

Where a taxpayer fails to file a tax return as required, the IRS may assess taxes against the taxpayer at any time. See I.R.C. Sec. 6501(c) (3); see also Rapp v. C.I.R., 774 F.2d 932, 935 (9th Cir. 1985). During the years in question, the CIR's regulations required Ketcherside to file a tax return on Form 1040 or 1040A. See Treas.Reg. Sec. 1.6012-1(a) (6) (1989). Because Ketcherside failed to do so, the three-year statute of limitations does not apply. See 26 U.S.C. § 6501(c) (3); see also Rapp, 774 F.2d at 935.

Ketcherside's reliance on former Treas.Reg. 601.2 (1946) is misplaced. That regulation was superseded in 1948 by Treas.Reg. Sec. 29.51-2(c) (1) (1948) which provided that tax returns shall be on Form 1040 or Form 1040A. Ketcherside's W-2 Forms therefore did not operate as tax returns and did not cause the statute of limitations to begin to run.

Ketcherside further contends that the tax court erred in failing to keep him informed of his constitutional rights throughout the trial. This contention is also without merit. It is not the role of the trial court to inject itself into the adversary process on behalf of one class of litigant. See Jacobsen v. Filler, 790 F.2d 1362, 1365 (9th Cir. 1986). Therefore, the tax court was under no obligation to assist Ketcherside through the trial, or to become an advocate for him. See id. at 1365 and n. 5 (citations omitted).

In his reply brief, Ketcherside asserts a number of arguments for the first time. He contends that (1) the payment of federal income taxes is voluntary; (2) the IRS discriminated against him by labeling him an "illegal tax protester;" and (3) the tax court erred in penalizing him for exercising his right to decline to testify under oath at trial. We decline to consider these arguments because Ketcherside waived them by raising them for the first time in his reply brief. See Ellingson v. Burlington Northern, Inc., 653 F.2d 1327, 1331-32 (9th Cir. 1981) (citations omitted).

Because Ketcherside failed to present evidence to show that the CIR's determinations were wrong, and declined to testify under oath at trial, the tax court did not abuse its discretion in granting the CIR's motions for dismissal for lack of prosecution. See Edelson, 829 F.2d at 831; T.C. Rule 123(a).

II

Sanctions

Given Ketcherside's failure to prosecute his petition properly and the frivolousness of his argument, the tax court did not abuse its discretion in assessing damages against him. See Larsen v. C.I.R., 765 F.2d 939, 941 (9th Cir. 1985) (per curiam) (citation omitted).

The CIR asks this court to impose sanctions on Ketcherside for pursuing a frivolous appeal. We have discretion to impose sanctions pursuant to 28 U.S.C. § 1912 and Fed. R. App. P. 38, even where the appellant appears pro se. See Grimes, 806 F.2d at 1454. Sanctions are appropriate when the appeal is frivolous, i.e., the result is obvious or the arguments are "wholly without merit." Wilcox v. C.I.R., 848 F.2d 1007, 1009 (9th Cir. 1988). Because Ketcherside's arguments before this court are frivolous, we impose sanctions against him in this appeal in the additional amount of $1,500.

AFFIRMED WITH SANCTIONS.