Professor fined by Tax Court for frivolous arguments

A Pennsylvania professor was fined $10,000 by the Tax Court on July 31 for repeated frivolous arguments about deductions on his tax returns.

Alvin Kanofsky, a physics professor at Lehigh University since 1967, was continuing to protest a federal tax lien for unpaid taxes for 1996, 1997, 1998 and 2000.

Kanofsky was ordered to pay the taxes in a 2006 Tax Court Memorandum decision, which was reaffirmed on appeal in 2008. He reappeared again before the court in the subsequent levy case in 2010.

Three attempts by Kanofsky to have the case heard by the Supreme Court were denied. In February of this year, the IRS requested a summary judgment because payment hadn’t been received and asked for a penalty to be imposed.

The unpaid taxes concerned Schedule C deductions that Kanofsky claimed had offset any tax liability for the years in question. The tax deficiency in this case totaled over $41,000, not including penalties.

At issue was a building he owned near Lehigh University, which he said he used for business purposes. Expenses he claimed included building repairs, mortgages and interest. He said all of his materials in the building had to be cleared out because he “ran into a worldwide scam.”

Many of the documents Kanofsky tried to show the court to support his claim were not admitted because of IRS objections. His appeals were based on what he called the Tax Court and IRS unfairly “suppressing” important information in the case.

Kanofsky said that he and his late brother were whistleblowers in a number of instances of fraud and that he has been subjected to retaliation because of the whistleblowing.

Earlier Kanofsky had filed suit related to taxes due for 2006 and 2007, of $26,033 and $45,433 respectively, which the U.S. Court of Appeals for the Third Circuit in 2013 agreed were owed to the IRS. The court held that “neither the Tax Court nor the IRS improperly obstructed petitioner’s presentation of evidence” and “allegations of fraud and corruption and his assertion of ‘whistleblower’ status were irrelevant to the merits of his case.”

“He did not explain to the Tax Court, and does not explain now, how events as disparate as the Sandusky prosecution or alleged corruption related to the Barnes Foundation have any bearing on his tax liability,” the Court of Appeals further stated.

In its summary decision on July 31, 2014, the Tax Court said, “Petitioner is no stranger to this court. He was warned in prior proceedings that his conduct could subject him to a penalty if he continued to repeat arguments he made in earlier cases.

“He has returned for a fourth time to this court, once again raising his arguments about fraud, corruption and whistleblowing activities. . . . He has repeatedly asserted irrelevant and meritless arguments. He designed his petition to delay the collection of the income taxes he owes.”

In rendering its decision, the Tax Court said it has unequivocally warned taxpayers about abusing procedural protections by pursuing frivolous actions for the purpose of delaying payment.

“Petitioner is a well-educated individual who admits that he understood cautions and warnings given by the court, yet he continues to reiterate the same irrelevant and groundless arguments. He has wasted the time and resources of both the [IRS] and the court.”

The court warned Kanofsky that additional penalties would be applied if he continued to raise “irrelevant, frivolous and groundless arguments or institutes or maintains further proceedings in this court to delay the payment of federal income tax lawfully assessed against him” (Alvin Sheldon Kanofsky v. Commissioner, T.C. Memo 2014-153, July 31, 2014).