Report from Tax Court

By Kris Anne

January 10, 2011

It was a year to go down in the history books! The PN Paralegal team arrived at their hotel in Columbia, SC on Sunday night and settled in quickly so as to be bright eyed and bushy tailed for the first court session under the new PN leadership.

Monday morning came along with four inches of snow outside our hotel room, reports of record making snow falls across the state and a state of emergency declared by the Governor. Local news channels soon revealed that the Tax Court was to be closed for the day. This was later confirmed by phone calls from the court clerk to our clients. Our clients were granted a day of reprieve which they used to their advantage to prepare further for their cases.

Monday night brought some sleet and freezing rain and Tuesday morning brought a delayed court opening.

The paralegal team arrived early at the courthouse so they could get preferential seating—only to find a mostly empty courtroom. It was overheard that most non PN litigants had settled and one person remained in addition to the PN clients.

Judge Gustafson was overseeing this session and his biography tells us he was raised in SC. He most likely knew The Great One as Dr. Clarkson seemed to know all the lawyers that were from SC. Judge Gustafson was a fair Judge with a light sense of humor. He told one PN client, “I have nothing more important to do right now than to decide this case correctly.” He also seemed a bit familiar with the Scriptures as he commented on a petitioners’ lack of records for tithing, “Tithing is important.” He stated and then continued to reference Matthew 6:3 (But when thou doest alms, let not thy left hand know what thy right hand doeth.) but he had still wished Petitioner had records to record his tithing to substantiate his case. The Judge is unable to decide cases on his belief system, but must stick to the facts of the case and how the administrative law applies to each issue at hand.

Rick L was able to come to a mutual agreement with Counsel to remand his case back to the Appeals Dept. for a proper CDP Hearing. It was clear in Rick’s case that the Appeals Officer abused her discretion in not considering §6702(d). Rick had followed the bad advice of another patriot organization and filed a “zero return” which the PN adamantly tells people NOT to do. Judge Gustafson did warn Rick that he would need to be “in compliance” (i.e. file all required forms) before the hearing was held and that the hearing was to be scheduled in approximately 90 days. This is a winning situation for Rick as now he may be able to reduce the penalty that he rightly deserved (unfortunately) for filing that zero return. This is why the PN does NOT recommend filing zero returns, because there is no way to escape the penalty for doing so (other than privatizing your assets) and sometimes zero returns can lead to criminal prosecution.

Donna’s case was next and since she recently had carpel tunnel surgery, the Judge allowed her husband (Rick) to assist her with her paperwork. Her case was identical to Rick’s but for some reason the Senior Attorney (Johnny Craig Young) wanted to make an example out of her and refused to settle even though the circumstances were identical to Rick’s case which was just mutually agreed upon minutes earlier to be remanded. J. Craig Young is notorious for his brow beating and taking advantage of our eldest member, Patriot Henry. (See Mr. Young and Dr. Clarkson were arch enemies and no Tax Court session was complete without an altercation between the two of them. Well….the tradition lives on!

The Judge was doing his best to get the Junior lawyer in Donna’s case to agree to a mutual remand such as his co-worker had just done for Rick. It was clear from all the whispering between Mr. Young and the Jr lawyer that Mr. Young was holding up the progress of such an agreement. Each time it seemed certain there would be an agreement, Mr. Young would whisper something to the younger attorney and the sparring match would once again resume. Finally the Judge decided to take a five minute break. Perhaps in hopes of the two sides finally coming to an agreement in his absence…or maybe to take some aspirin!

While the Judge was out of the room, both lawyers descended upon Donna and her husband. The Jr counsel wanted to be sure Donna would be “in compliance” if the case were remanded, but Mr. Young could be heard saying things like, “I don’t know why you don’t have contact info for the man who told you to file a zero return.” And “I know you’re associated with the Patriot Network.” With each comment his voice escalated. The PN paralegals were in the back of the courtroom and could hear the situation getting out of control. Finally the senior, balding lawyer said something to the effect of, “I don’t believe a word you said” or “I think you’re lying.” Not being able to watch this abuse of justice a minute longer, I walked up to the bar that divided the audience from the parties of the lawsuit. Before I could say a word, Mr. Young barked at me “You go sit down!” Well, those of you who know me know that I take orders from no one save my husband!

I returned his bark with “No! You’re bullying these people.” I obviously upset the poor dear by not obeying his command to “sit”. He stomped around the table and wagged his finger in my face—“You get away from me!” he says. (Let’s remember who approached whom here—it wasn’t me that was irately stomping around the courtroom like a three year old having a temper tantrum!) I raised my voice to match his and retorted “Stop badgering these people!” Mr. Young still not pleased by my disobedience yelled “I’m going to have you removed!” I screamed back “You go right ahead!” I was suddenly having de ja vue of Dr. Clarkson being removed from the courtroom in 2008.

There were no grounds for having me removed and there are worse things to fear, so “fear” and intimidation were not among my emotions. Mr. Young then screamed for someone to go get the Marshall (who had also left the courtroom). I saw a few people scurry around and Mr. Young stomped back in front of Donna and proceeded to hurl more accusations against her.

Donna had previously filed an amended tax return for the year in question, although it was never processed by the IRS. We don’t know why, only bureaucratic slothfulness seems to be the answer. J. C Young told her it didn’t count as being filed since it was never processed by the IRS. He seems to have forgotten the common mail box rule. If the IRS says they mail you a document, then it is considered that you have received it unless it is returned by the post office. What is good for the goose is good for the gander!

(See our website for more information regarding the mailbox rule:

When Rick pointed out that no one knew why the amended return had not been processed, J.C. Young yelled at him to let Donna answer for herself. “It’s her case you need to be quiet” he said. To which Rick replied “I’m not going to let you badger my wife!”

The court clerk suddenly reappeared signaling the Judge was ready to return and Mr. Young hurriedly moved to his rightful position and stood at attention. I remained in the front row of the audience. The Judge no doubt heard the commotion in his chambers and rebuked the Counsel saying “I expect courtroom decorum to be observed even when I am not in the room.”

Mr. Young then wanted to get up and testify about how Donna was part of the Patriot Network and motioned to me saying “…and that’s one of it’s leaders sitting right there!” He continued stammering trying to close his case, “To say that the frivolous filing penalty is “frivolous” is a frivolous argument.” Donna had never once claimed the filing fee was unjustified or “frivolous,” she was merely trying to get a fair hearing with appeals to discuss a possible reduction in the amount the penalty as well as setting up a payment schedule and possibly having the fee put into non collectible status since she is now on disability and not working.

Since Mr. Young was not in agreement to remand, the decision was left to the Judge who found in Donna’s favor. The PN paralegal team feels certain that Donna stated her case clearly.

The Patriot Network Paralegal team is proud to uphold the great traditions of Dr. Clarkson who always did battle with J.C. Young and who won cases using the procedural method.

Overview of Tax Court 01/10/11

By Patriot Paralegal Kathy

The Tax Court day began with five clients of the Patriot Network. After the early morning hours passed and before the doors opened to the court room, a few clients settled their cases, happily, as well as relieved.

The "Cattle" (Calendar) call began promptly at 11:00 am with the Honorable Judge Gustafson presiding. The Docket consisted of six cases with one name being an unknown Plaintiff.

By the time we returned from lunch break it whittled down to only two cases which took up the remaining afternoon. Both cases had an interesting outcome. As a side note and as a first time Tax Court room observer, I did see that those clients who attended the Patriot Network Tax Court Seminars fared much better than those who did not. The IRS attorneys were polite, professional, and amenable. One of the older generation
Attorneys glared at us in the court room as we sat quietly in the rear to observe and take notes.

The first client, Patriot Larry of GA, began his hearing nervously before he took the stand, however, he did not convey that to anyone else. He seemed to project well and present his case in a somewhat extended way. Judge Gustafson was very patient and fair with our client. It took about an hour and the outcome was an extension of time for Larry to present more documentation.

The second case, Rick’s, resumed immediately with a joint motion to remand to the appeals division.

The third case, (Patriot Donna) began after a brief five minute break. The Attorney objected to her spouse assisting her; however the Judge granted his approval. Donna presented her case very well with the Judge actually seeming to rule in her favor right from the very beginning. She was organized with all her paperwork in her binder, and when the Judge would ask for a specific document she was able to retrieve it right away, which looked quite impressive. She was very nervous prior to presenting her testimony, however, once the hearing began, her nervousness seemed to vanish! She was clear and concise with her answers and replies. After the Judge decided some of the questioning by the IRS Attorney was irrelevant and he was about to make his decision to end the hearing, there was a brief five minute break. I am not even sure why this occurred, but that is when everything became rather interesting. I must say, I have been in many courtrooms in different states, and have never witnessed anything quite like this in person. It was something one might expect on a TruTV show titled "Disorder in The Court". Quite frankly, I was appalled by the following observed behavior from the lead IRS Attorney, who reminded me of Traxler from Greenville County, SC. (Maybe they are related somehow)!?!

During this five minute break. Attorney Eager and Attorney J.C. Young approached Donna and her husband at their table. Mr. Young began harassing Donna in a stern voice which quickly elevated louder and louder. His comments were accusing her of being a liar and he did not believe her and leaned in closer and closer to her and her husband. Both Rick and Donna stood their ground.

I turned to Paralegal Phoebe Anne and said that man was badgering her. Phoebe turned to our Executive Director, Kris Anne at about the same time and reiterated the same thing. Kris immediately stood up and went over to the railing and said to Mr. Young "You are badgering these people and you need to STOP!" His face and demeanor escalated to such an angry level. He stormed around the table (knocking cups and tape dispenser askew) and went up to the railing shaking his finger and yelling in a most agitated manner right up to our second most fearless leader's face! He shouted loudly and in a frenzied manner that she needed to get OUT that he would have her REMOVED from the court room and that she was the new leader of the Patriot Network.

He then shouted to "Send for the Marshall!". The obviously nervous clerk got up and ran back into the Judge's chambers. Then Attorney Eager seemed to take control of the situation in a much more professional manner and tone, as it should have been right
from the beginning before the embroiled outburst occurred from the seemingly unstable J.C. Young. We could hear comments from some of the IRS Attorneys and could see the looks of embarrassment on their faces.

It is absurd that this behavior is to be allowed, encouraged and embraced in any court room. When the Judge returned from his break he commented softly, yet sternly, that he expected court room demeanor whether he was in the court room or not. Attorney J.C. Young began sputtering how Donna was affiliated with the Tax Protester group The Patriot Network. The Judge told him that it was irrelevant, her affiliations were not part of this case and that was ENOUGH! Attorney J.C. Young then said in a not so convincing tone, "Sorry, your Honor".

Donna stated tearfully to the Judge that she was just “verbally assaulted by this man,” waving her hand in the direction of the IRS table. The Judge told her she needed to acquire a "thick skin". I am not so sure what he meant by that, because no client should endure that behavior by a so-called professional in the court room. The yelling was rather loud and I am quite certain that it was heard by the Judge in his Chambers.

At that time the case was concluded and we all stood up. Paralegal Phoebe then went over to the Marshall to let him know she wanted to file a complaint. Attorney J.C. Young rushed over and interjected "That was not the way it happened." The Marshall then asked the Attorney to step aside for the moment. We then, safely, exited the court room, still shaken somewhat by what had happened, but very proud of Patriot Donna. and her excellent handling of the situation.