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    Gene and Debra Webb v. Commissioner of Internal Revenue, 872 F.2d 380, 11th Cir. (1989)

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    The Tax Court found that Gene and Debra Webb failed to establish that their contributions to the Universal Life Church were deductible charitable contributions under Section 170(c)(2)(B). The Tax Court upheld deficiencies and additions determined by the IRS Commissioner and imposed $2,300 in damages for a frivolous proceeding. The Court of Appeals affirmed the Tax Court's decision, imposed additional sanctions of $1,500 against the Webbs, and ruled that double costs shall be taxed.

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    Gene and Debra Webb v. Commissioner of Internal Revenue, 872 F.2d 380, 11th Cir. (1989)

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    The Tax Court found that Gene and Debra Webb failed to establish that their contributions to the Universal Life Church were deductible charitable contributions under Section 170(c)(2)(B). The Tax Court upheld deficiencies and additions determined by the IRS Commissioner and imposed $2,300 in damages for a frivolous proceeding. The Court of Appeals affirmed the Tax Court's decision, imposed additional sanctions of $1,500 against the Webbs, and ruled that double costs shall be taxed.

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    Filed: 1989-05-05 Precedential Status: Precedential Citations: 872 F.2d 380 Docket: 88-3710

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    The Tax Court found that Gene and Debra Webb failed to establish that their contributions to the Universal Life Church were deductible charitable contributions under Section 170(c)(2)(B). The Tax Court upheld deficiencies and additions determined by the IRS Commissioner and imposed $2,300 in damages for a frivolous proceeding. The Court of Appeals affirmed the Tax Court's decision, imposed additional sanctions of $1,500 against the Webbs, and ruled that double costs shall be taxed.

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    17 views3 pages

    Gene and Debra Webb v. Commissioner of Internal Revenue, 872 F.2d 380, 11th Cir. (1989)

    Uploaded by

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    The Tax Court found that Gene and Debra Webb failed to establish that their contributions to the Universal Life Church were deductible charitable contributions under Section 170(c)(2)(B). The Tax Court upheld deficiencies and additions determined by the IRS Commissioner and imposed $2,300 in damages for a frivolous proceeding. The Court of Appeals affirmed the Tax Court's decision, imposed additional sanctions of $1,500 against the Webbs, and ruled that double costs shall be taxed.

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    of 3

    872 F.

    2d 380
    63 A.F.T.R.2d 89-1334, 89-1 USTC P 9326

    Gene and Debra WEBB, Petitioners-Appellants,


    v.
    COMMISSIONER OF INTERNAL REVENUE, RespondentAppellee.
    Nos. 88-3710, 88-3756 Non-Argument Calendar.

    United States Court of Appeals,


    Eleventh Circuit.
    May 5, 1989.

    Gene and Debra Webb, pro se.


    William F. Nelson, Chief Counsel, Internal Revenue Service, Washington,
    D.C., Gary R. Allen, Chief Appellate Sect., Tax Div., William S. Rose,
    Jr., Asst. Atty. Gen., Dept. of Justice, Richard Farber, David M. Moore,
    Washington, D.C., for respondent-appellee.
    Appeals from a Decision of the United States Tax Court.
    Before HILL, HATCHETT and EDMONDSON, Circuit Judges.
    PER CURIAM:

    In this frivolous tax appeal case, we affirm the Tax Court and impose
    sanctions.

    In 1982 and 1983, Gene and Debra Webb (the Webbs), residents of Longwood,
    Florida, reported adjusted gross income and claimed charitable contribution
    deductions on their federal income tax returns based on contributions to the
    Universal Life Church, Inc. (ULC).1 The Tax Commissioner audited the
    Webbs, disallowed the charitable contribution deductions, and determined
    income tax deficiencies and additions. The Webbs petitioned the Tax Court to
    review the Commissioner's determinations.

    The Tax Court sustained the deficiencies and additions determined by the
    Commissioner. The Tax Court found that the Webbs had failed to establish that
    they had made deductible charitable contributions to an organization qualified
    to receive such contributions under 26 U.S.C.A. Sec. 170(c)(2)(B).2 The Tax
    Court found the Webbs liable for $2,300 in damages under 26 U.S.C.A. Sec.
    6673.3

    The Commissioner's determination of a deficiency is presumed correct, and the


    taxpayer has the burden of proving it is incorrect. Taylor v. Commissioner of
    Internal Revenue, 771 F.2d 478, 479 (11th Cir.1985). The Tax Court's findings
    must stand unless clearly erroneous. Commissioner of Internal Revenue v.
    Duberstein, 363 U.S. 278, 291, 80 S.Ct. 1190, 1199-1200, 4 L.Ed.2d 1218
    (1960). The Tax Court found that the Webbs used the funds in the ULC chapter
    solely for their living expenses. The Webbs failed to demonstrate any charitable
    use of the money. Further, the Webbs made no contributions to ULC Modesto.
    The record supports the Tax Court's finding that the Webbs made no deductible
    charitable contributions to a qualified section 170(c)(2)(B) organization.

    Review of the Tax Court's imposition of statutory damages against a taxpayer is


    for abuse of discretion. Pollard v. Commissioner of Internal Revenue Service,
    816 F.2d 603, 604 (11th Cir.1987). The Tax Court assessed $2,300 against the
    Webbs for instituting and maintaining a frivolous and groundless proceeding
    primarily for delay. The Tax Court did not abuse its discretion by imposing
    damages against the Webbs.

    The Commissioner requests that we impose sanctions, including attorney's fees,


    against the Webbs for bringing these frivolous appeals. Where an appeal is
    frivolous, we may assess damages against the appellees, including reasonable
    attorney's fees and double costs. Fed.R.App.P. 38; 28 U.S.C.A. Sec. 1912; see
    Pollard v. CIR, at 605. In Pollard, we imposed $1,500 in sanctions without
    remanding the case for a determination of costs. Pollard v. CIR, at 605.
    Similarly, we award sanctions against the Webbs in the amount of $1,500 and
    double costs shall be taxed by the clerk. The judgment of the Tax Court is
    affirmed.

    AFFIRMED.

    In 1982, Gene Webb became an ordained minister in the Universal Life Church
    (ULC) of Modesto, California by mail. The Webbs opened a ULC chapter bank
    account under the name Universal Life Church, Inc. Debra maintained sole

    signatory authority over the account, and withdrew funds from personal
    accounts to deposit money in the ULC chapter account, allegedly as charitable
    contributions to ULC. Using the chapter account as a financial alter ego to their
    personal checking account, Debra wrote checks for the Webbs on the chapter
    account to pay personal bills and for personal living expenses
    2

    Title 26 U.S.C.A. Sec. 170(c)(2)(B) provides:


    (c) Charitable contribution defined.--For purposes of this section, the term
    'charitable contribution' means a contribution or gift to or for the use of-....
    (2) A corporation, trust, or community chest, fund, or foundation-....
    (B) organized and operated exclusively for religious, charitable, scientific,
    literary, or educational purposes, or to foster national or international amateur
    sports competition (but only if no part of its activities involve the provision of
    athletic facilities or equipment), or for the prevention of cruelty to children or
    animals[.]

    Title 26 U.S.C.A. Sec. 6673 provides:


    Whenever it appears to the Tax Court that proceedings before it have been
    instituted or maintained by the taxpayer primarily for delay, that the taxpayer's
    position in such proceeding is frivolous or groundless, or that the taxpayer
    unreasonably failed to pursue available administrative remedies, damages, in an
    amount not in excess of $5,000 shall be awarded to the United States by the
    Tax Court in its decision. Damages so awarded shall be assessed at the same
    time as the deficiency and shall be paid upon notice and demand from the
    Secretary and shall be collected as a part of the tax.

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