Taxpayer forfeits appeal after failing to challenge levy and lien
Harold P. Kupersmit v. Commissioner. United States Court of Appeals for the Third Circuit. No. 25-1350
If you fail to address the actual collection determination on appeal, the Court will affirm without reaching the merits.
Holding
The Third Circuit affirms the Tax Court’s order granting summary judgment to the Commissioner and upholding the IRS levy and federal tax lien, holding that the taxpayer forfeited appellate review by failing to raise relevant arguments.
Why It Matters
Routine but important procedural rule. Appellate courts will not consider issues not meaningfully argued in the opening brief. This case applies settled forfeiture principles.
Collection Due Process limits. When underlying liabilities are not properly at issue, the review focuses on abuse of discretion. Failure to engage that standard is fatal.
No forum expansion on appeal. The Court reiterates that it is a Court of review, not a first view. New claims and damage demands will be rejected.
Frivolous conduct continues to carry consequences. The record includes a §6702(a) frivolous return penalty and prior unsuccessful litigation over substitute returns.
This decision does not change substantive tax law. It reinforces procedural discipline in Collection Due Process litigation.
Key Facts
The IRS proposed a levy and filed a federal tax lien to collect:
Unpaid income tax and penalties for 2009 and 2012.
A civil penalty under §6702(a) for filing a frivolous 2017 return.
The taxpayer did not file returns for 2009 or 2012.
The IRS prepared substitute returns under §6020(b) and issued notices of deficiency.
The taxpayer previously challenged those deficiencies in Tax Court and lost.
The IRS assessed the liabilities.
In March 2023, the IRS Independent Office of Appeals sustained the collection actions.
The Tax Court granted summary judgment for the Commissioner and upheld the determination.
The Tax Court dismissed the remaining claims for lack of jurisdiction.
The taxpayer appealed to the Third Circuit.
Statutory Framework
§6330(d)(1) permits Tax Court review of Collection Due Process determinations.
§7482(a)(1) grants courts of appeals jurisdiction to review Tax Court decisions.
§6020(b) authorizes substitute returns when a taxpayer fails to file.
§6702(a) imposes a penalty for filing a frivolous return.
§6651(a)(1) and (2) impose failure to file and failure to pay penalties.
§6654(a) imposes estimated tax penalties.
When the underlying liability is not properly at issue in a Collection Due Process case, courts review the Appeals determination for abuse of discretion.
Arguments
Taxpayer argued:
The IRS mishandled earlier filings, including:
Issues with a 2007 return.
Allegedly inaccurate Forms 1099 for 2007 and 2008 brokerage income.
Improper treatment of gambling income and losses for 2008.
The federal tax lien was illegal.
The IRS committed fraud and other misconduct.
The administrative record was not genuine.
He sought $900 million in damages and release of all liens.
Government argued:
The taxpayer failed to challenge the bases on which the Tax Court upheld the collection determination.
He did not explain how the Appeals Office abused its discretion.
Irrelevant and new claims cannot be raised for the first time on appeal.
The judgment should be affirmed.
Court’s Reasoning
The Court applies plenary review to legal issues and summary judgment.
Because the underlying liability was not properly at issue, the review focuses on abuse of discretion.
The taxpayer’s brief does not address the grounds on which the Tax Court upheld the determination.
He does not explain how the Appeals Office abused its discretion.
His arguments concern unrelated tax years and earlier disputes.
Failure to raise relevant arguments in the opening brief constitutes forfeiture.
Appellate courts do not decide claims raised for the first time on appeal.
Requests for mandamus relief and damages are denied.
The Court concludes that the taxpayer forfeited appellate review.
Result
The Third Circuit affirms the Tax Court’s judgment and denies the taxpayer’s additional motions and requests for damages.
The Takeaway
This is a procedural loss, not a substantive tax ruling. If a taxpayer does not squarely challenge the Collection Due Process determination under the correct standard of review, the Court will affirm without revisiting the underlying history or entertaining new grievances.
Citations
§6020(b) — Substitute return authority.
§6330(d)(1) — Judicial review of Collection Due Process determinations.
§6702(a) — Frivolous return penalty.
§7482(a)(1) — Appellate jurisdiction over Tax Court decisions.
M.S. ex rel. Hall v. Susquehanna Twp. Sch. Dist., 969 F.3d 120 (3d Cir. 2020) — Forfeiture for failure to raise arguments in opening brief.
O’Hanlon v. Uber Techs., Inc., 990 F.3d 757 (3d Cir. 2021) — Court of review, not first view principle.