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Memorandum opinion · Judge Ashford · Filed 2026-08-19

U.S. Tax Court Opinions

T.C. Memo. 2026-71

Percy Squire v. Commissioner

Official textdawson.ustaxcourt.gov

United States Tax Court
T.C. Memo. 2026-71
PERCY SQUIRE,
Petitioner v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent

Docket No. 9737-24L. Filed August 19, 2026.

Percy Squire, pro se.
Gary R. Shuler and Lindsey L. Cacciatore, for respondent.
MEMORANDUM OPINION
ASHFORD, Judge: In this collection due process (CDP) case petitioner seeks review pursuant to sections 6320(c) and 6330(d)1 of a determination by the Internal Revenue Service (IRS) Independent Office of Appeals (Appeals) upholding (1) a proposed levy with respect to petitioner’s unpaid federal income tax liabilities for the 2011 and the 2018–20 taxable years (years at issue) and (2) the filing of a Notice of Federal Tax Lien (NFTL) with respect to petitioner’s unpaid federal income tax liabilities for the 2019 and 2020 taxable years. In this Opinion we decide whether Appeals abused its discretion in sustaining the collection actions. We also decide whether to grant respondent’s Motion to Impose a Penalty, wherein respondent moves this Court to impose a penalty pursuant to section 6673 against petitioner for 1 Unless otherwise indicated, statutory references are to the Internal Revenue Code, Title 26 U.S.C., in effect at all relevant times, regulation references are to the Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all relevant times, and Rule references are to the Tax Court Rules of Practice and Procedure.
Served 08/19/26
2
[*2] instituting these proceedings primarily for delay and/or because petitioner’s position is frivolous or groundless.

# Background

The parties submitted this case to the Court for decision without trial under Rule 122. The Court incorporates by reference the parties’ Stipulation of Facts and the attached Exhibits. Petitioner resided in Ohio when he filed his Petition with the Court.
Petitioner is an attorney admitted to practice before this Court.
He has a history of repeated filings with this Court.2 Petitioner’s federal 2 Petitioner has filed six other petitions with this Court (including three on behalf of his wholly owned limited liability company, Percy Squire Co., LLC (Percy Squire Co.)). On July 14, 2011, petitioner filed a petition challenging a Notice of Determination sustaining a proposed levy for federal payroll tax liabilities for certain taxable periods in 2007 and 2008 and federal unemployment tax liabilities for the 2007 and 2008 taxable years (Docket No. 16587-11L); in that case, the Court granted the Commissioner’s motion for summary judgment. Petitioner appealed that adverse decision to the U.S. Court of Appeals for the Sixth Circuit; however, in 2013 the Sixth Circuit dismissed his appeal for failure to prosecute. On March 5, 2012, petitioner filed a petition challenging a Notice of Determination sustaining a proposed levy for federal payroll tax liabilities for certain taxable periods in 2006 and 2009 (Docket No. 6044-12L); in that case, the Court dismissed the petition for lack of jurisdiction because it was untimely. On February 29, 2016, Percy Squire Co. filed a petition challenging a Notice of Determination sustaining a proposed levy for a federal payroll tax liability for a taxable period in 2010 and a federal unemployment tax liability for the 2010 taxable year, and sustaining the filing of an NFTL for federal payroll tax liabilities for certain taxable periods in 2010 and 2013–15 and federal unemployment tax liabilities for the 2009, 2010, 2013, and 2014 taxable years (Docket No. 4812-16L); in that case, the Court granted the Commissioner’s motion for summary judgment and warned Percy Squire Co. that “the Court may well impose a [section 6673] penalty should it or
Mr. Squire return to this Court without due cause to again unreasonably delay respondent from collecting petitioner’s tax liabilities in the future.” On July 17, 2019, petitioner filed a petition challenging a Notice of Determination sustaining a proposed levy for a federal income tax liability for the 2016 taxable year (Docket No. 13308-19L); in that case, the Court granted the Commissioner’s motion for summary judgment and sanctioned petitioner $5,000 pursuant to section 6673(a)(1). On January 21, 2021, Percy Squire Co. filed a petition challenging a Notice of Determination sustaining a proposed levy for federal employment tax liabilities for certain taxable periods in 2007 (Docket No. 1816-21L); in that case, it filed a motion to dismiss its petition, which this Court granted and in doing so “again warn[ed] petitioner against bringing new matters before this Court solely for delay.” Finally, on October 13, 2023, Percy Squire Co. filed a petition challenging a Notice of Determination sustaining a proposed levy and the filing of an NFTL for federal payroll tax liabilities for certain taxable periods in 2014– 21 and federal unemployment tax liabilities for the 2009 and the 2013–19 taxable years (Docket No. 16141-23L); that case is pending before this Court. See Percy Squire Co LLC v. Commissioner, T.C. Memo. 2026-72, filed this date.
3
[*3] income tax liabilities for the years at issue stem from reporting tax due on his federal income tax returns for the years at issue but not remitting payment for these liabilities when he filed those returns.
After assessment of the liabilities and notice and demand for payment of the balance due with respect to the liabilities, the IRS sent petitioner Letter 1058, Final Notice – Notice of Intent to Levy and Notice of Your Rights to a Hearing, dated February 1, 2023 (levy notice).
The levy notice advised petitioner that the IRS intended to levy to collect his outstanding tax liabilities for the years at issue, which, through February 11, 2023, totaled $158,810.20, and that he had a right to appeal the proposed collection action. The levy notice also advised petitioner that the IRS might file an NFTL at any time to protect its interest, and indeed the IRS also sent petitioner Letter 3172, Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320, dated February 7, 2023 (lien notice), advising him that an NFTL had been filed on February 7, 2023, with respect to his outstanding federal income tax liabilities for the 2019 and 2020 taxable years and that he had the right to request a hearing to appeal the collection action and discuss payment options.
In response to both the levy notice and the lien notice, the IRS received several submissions from petitioner. On February 21, 2023, the IRS received from petitioner a completed Form 656, Offer in Compromise; a completed Form 433–A, Collection Information Statement for Wage Earners and Self-Employed Individuals; a completed Form 433–B, Collection Information Statement for Businesses; and supporting documentation for these forms. On the Form 656 petitioner proposed to pay $24,000 to satisfy his liabilities for the years at issue, payable in monthly installments of $1,000 for 24 months (2023 OIC).3 As the reason for the 2023 OIC petitioner checked the box on the form indicating “Doubt as to Collectability—I do not have enough in assets and income to pay the full amount.” Petitioner also indicated on the form that paying more than the amount offered would create a financial hardship, stating:
3 Petitioner indicated on the Form 656 that the 2023 OIC encompassed his personal federal income tax liabilities for the 2005 and the 2007–20 taxable years.
Petitioner also checked boxes on the form regarding liabilities related to trust fund recovery penalties, federal payroll taxes, and federal unemployment taxes; those penalties and taxes are not at issue in this case.
4
I was unjustly suspended from the practice of law from
2011 through 2015. I submitted a previous OIC to the IRSc [sic] that I was induced bt [sic] the IRS to withdraw and the IRS reneged on its representation that collection activity would be terminated. My business experienced a very significant hardship and ;oss [sic] of revenue during the period 2020 and 2021 due to the COVID epidemic.
During the period 2017 through 202 [sic] I had to care for elderly parents.
On March 1, 2023, the IRS received from petitioner timely Forms 12153, Request for a Collection Due Process or Equivalent Hearing, one in response to the levy notice and the other in response to the lien notice (collectively, CDP hearing requests). On his CDP hearing requests petitioner did not challenge his underlying liabilities but did request the collection alternative of an offer-in-compromise. Additionally, on his CDP hearing request disputing the proposed levy petitioner indicated that he was unable to pay the liabilities because of financial hardship, and on his CDP hearing request disputing the lien notice petitioner indicated that he requested discharge of the lien.
An IRS representative acknowledged receipt of the 2023 OIC by letter dated March 10, 2023. The letter also advised petitioner to continue to make estimated tax payments for each quarter as they become due and make the payments as shown on his proposed payment schedule while the IRS was evaluating the 2023 OIC. Several days later, another IRS representative sent petitioner a letter dated March 15, 2023, informing him that the 2023 OIC had been transferred to an IRS office in Montgomery, Alabama, for investigation and that an offer specialist would contact him within 45 days.
By letter dated June 12, 2023, IRS Offer Specialist James Norton advised petitioner that the 2023 OIC could not continue to be processed on the basis of the information provided. Mr. Norton also advised petitioner to contact him within ten days to discuss the additional financial information required; and if he did not do so, then the 2023 OIC might be returned without further consideration and an NFTL might be filed to protect the IRS’s interest. After petitioner failed to contact Mr. Norton, the IRS sent petitioner a letter dated June 30, 2023, preliminarily rejecting the 2023 OIC. The letter stated that acceptance of the 2023 OIC would not be in the IRS’s best interest because
(1) properties had been placed in an irrevocable trust that petitioner had created (i.e., the Percy Squire Irrevocable Trust) in a possible attempt [*4]
5
[*5] to place them outside the reach of the IRS and (2) petitioner had ownership in multiple businesses that had tax compliance issues. The letter further informed petitioner that due to the fact he had submitted CDP hearing requests, the 2023 OIC would be forwarded to Appeals for a final determination.
Petitioner’s CDP hearing requests were ultimately assigned to Appeals Officer Trudy Strickland (AO Strickland). AO Strickland sent petitioner two letters dated August 21, 2023, one acknowledging receipt of his CDP hearing request pertaining to the 2011 and 2018 taxable years and the other acknowledging receipt of his CDP hearing request pertaining to the 2019 and 2020 taxable years. She also scheduled a telephone CDP hearing for September 20, 2023, and indicated that the scheduled hearing was his opportunity to discuss with her the reasons he disagreed with the proposed levy and the NFTL as the case may be or to discuss collection alternatives. Additionally, she outlined the issues she had to consider during the hearing and informed petitioner that in order for her to consider a collection alternative such as an offerin-compromise he must provide her the following within 14 days:
(1) proof that estimated tax payments have been paid in full for the year to date, (2) any additional information for consideration with respect to the 2023 OIC, and (3) a completed Form 14135, Application for Certificate of Discharge of Property from Federal Tax Lien.
On September 20, 2023, AO Strickland called petitioner for the scheduled CDP hearing, but petitioner did not answer. She left him a voicemail asking for a call back in order to conduct the hearing (and she advised that if he did not call her back she would issue a letter giving him an additional 14 days to contact her to hold the hearing and to provide the requested information). Later that day, AO Strickland received a voicemail from petitioner stating that he did not realize there was a hearing scheduled and wished to reschedule the hearing. AO Strickland tried to call petitioner back but he did not answer; she left him a voicemail informing him that she had rescheduled the hearing to September 26, 2023.
On September 25, 2023, petitioner sent a completed Form 14135 via facsimile to AO Strickland. As the basis for his lien discharge request, petitioner checked the box on the form for “Section 6325(b)(2)(B) Interest of the United States in the property to be 6 [*6] discharged has no value” and stated, “[g]iven age of taxpayer and liens request is to remove lien in order for children to inherit.”4 The telephone CDP hearing took place as rescheduled. During the hearing, AO Strickland discussed and reviewed the preliminary rejection of the 2023 OIC. As part of this discussion and review petitioner explained the circumstances regarding the irrevocable trust he had created. Ultimately, AO Strickland advised petitioner that the rejection of the 2023 OIC would be sustained but he could submit another offer-in-compromise with respect to his outstanding liabilities for the years at issue after his businesses’ tax compliance issues were resolved.
AO Strickland also discussed petitioner’s lien discharge request.
She advised petitioner that she had not received any supporting documents with his faxed Form 14135, including an appraisal and county valuation. In response petitioner stated that he had provided a mortgage statement and the lien notice but requested additional time to provide the additional information. AO Strickland gave him until October 10, 2023, and advised that if she did not receive the additional information, the NFTL would be sustained.
Finally, AO Strickland addressed with petitioner the collection alternative of an installment agreement. Petitioner stated that his lack of collectability limited him to an offer-in-compromise. AO Strickland reviewed the assets that petitioner had reported on the 2023 OIC (including four properties, three of which he had placed in the irrevocable trust). AO Strickland advised petitioner that once he provided the supporting documents pertaining to his lien discharge request, the documents could be used to determine whether he had any equity in his assets and in turn the feasibility of a partial payment installment agreement.
On October 9, 2023, AO Strickland received faxed information from petitioner pertaining to his lien discharge request. By letter dated October 10, 2023, AO Strickland acknowledged receipt of the new information and advised him that it was being forwarded to “Advisory [in the IRS Small Business/Self Employed Division] for its review and comment.” By letter dated January 11, 2024, an Advisory group manager informed petitioner that his request for lien discharge had 4 Although petitioner also indicated on the form that he was attaching additional information that might have a bearing on his request, no additional information was attached.
7
[*7] been denied because (1) he had not met the requirements for a discharge under section 6325(b)(2)(B) and (2) the necessary documents to consider a discharge had not been received. AO Strickland then sent petitioner a letter dated January 24, 2024, scheduling a telephone conference for February 7, 2024, to discuss the denial and the resolution of his CDP case.
On February 7, 2024, AO Strickland called petitioner for the followup conference but was unable to reach him. Consequently, she noted in her case activity record that she was closing the case. Her case activity record also reflected that she was sustaining the rejection of the 2023 OIC, sustaining the denial of petitioner’s lien discharge request, and sustaining the collection actions. The closing documents included an Appeals Offer in Compromise Rejection Memorandum dated March 6, 2024; the narrative section of this memorandum noted, in pertinent part, that petitioner’s total reasonable collection potential (RCP) had been determined by IRS Collection to be $591,652.42.
Appeals issued a Notice of Determination to petitioner dated May 15, 2024, sustaining the collection actions.5 Petitioner timely filed a Petition with this Court for review of the Notice of Determination.

# Discussion

# III. Respondent’s Motion for a Section 6673 Penalty

We now address whether to grant respondent’s Motion to Impose a Penalty. Respondent asserts that a penalty is appropriate because petitioner has instituted these proceedings primarily for delay under section 6673(a)(1)(A) and/or his position is frivolous or groundless under section 6673(a)(1)(B).
Section 6673(a)(1) authorizes this Court to impose a penalty up to $25,000 if, in pertinent part, a taxpayer has instituted or maintained proceedings before it primarily for delay or the taxpayer’s position in the proceeding is frivolous or groundless. See also Pierson v. Commissioner, 115 T.C. 576, 581 (2000) (warning that a section 6673 penalty will be imposed on those who institute or maintain a lien and/or levy action primarily for delay or whose position in such a proceeding is frivolous or groundless). The Court considers any relevant facts and circumstances in determining the appropriate amount of the penalty. See Leyshon v.
Commissioner, T.C. Memo. 2015-104, at *24–29 (outlining 12 nonexclusive factors that the Court has considered in determining whether to impose a section 6673 penalty), aff’d, 649 F. App’x 299 (4th
Cir. 2016).
“A taxpayer evidences a primary purpose of delay if he uses frivolous or groundless arguments to delay paying his taxes.” Blair v.
Commissioner, T.C. Memo. 2016-215, at *10; see also Kanofsky v.
Commissioner, T.C. Memo. 2015-34, at *9–10; Lang v. Commissioner, T.C. Memo. 2014-183, at *18. “A taxpayer’s position is frivolous if it is contrary to established law and unsupported by a reasoned, colorable argument for change in the law.” Rader v. Commissioner, 143 T.C. 376, 392 (2014) (quoting Goff v. Commissioner, 135 T.C. 231, 237 (2010)), aff’d in part, 616 F. App’x 391 (10th Cir. 2015). A taxpayer’s position is 12 [*12] “groundless” if it “ha[s] no ground or foundation: lacking cause or reason for support.” Keating v. Commissioner, T.C. Memo. 1985-312, 1985 Tax Ct. Memo LEXIS 329, at *13–14 (quoting Webster’s Third New International Dictionary Unabridged).
We agree with respondent that petitioner has instituted these proceedings primarily for delay and has taken positions that are frivolous or groundless. As previously noted, see supra note 2, petitioner is no stranger to this Court; his Petition here is the seventh petition he has filed with the Court in the last approximately 15 years. In several of these prior actions (all of which are lien and/or levy actions) he has been warned not to file an offer-in-compromise solely to delay collection and that for an offer-in-compromise to be granted he must be current in his estimated tax payments. In one such prior case, he was sanctioned $5,000 pursuant to section 6673. Furthermore, in the instant proceedings petitioner has continued to press arguments that are irrelevant and to rely on documents that are not part of the stipulated record.8 The Court’s prior warnings and sanction appear to have left petitioner undeterred, despite his being an attorney admitted to practice before this Court. Accordingly, we will grant respondent’s Motion to Impose a Penalty and impose a penalty of $10,000 against petitioner pursuant to section 6673. Petitioner should realize that if in the future he continues to persist in litigation for the primary purpose of delaying the collection of his federal tax liabilities (on either his own behalf or Percy Squire Co.’s), then he will be communicating to the Court that a $10,000 penalty is insufficient to affect his behavior and that the Court should instead consider imposing a much larger penalty, up to the maximum of $25,000. See Leyshon, T.C. Memo. 2015-104, at *33.
We have considered all of the arguments made by the parties and, to the extent they are not addressed herein, we find them to be moot, irrelevant, or without merit.
8 We note that petitioner’s arguments are not only irrelevant to this case but have also been previously rejected by this Court. For example, petitioner argues that his federal income tax liabilities for the years at issue arise out of a prior withdrawal of an offer-in-compromise in 2014. Petitioner made this same argument using the exact same offer-in-compromise from 2014 in Docket No. 13308-19L; that was the case in which he was sanctioned $5,000 pursuant to section 6673.
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[*13] To reflect the foregoing,
An appropriate order and decision will be entered.

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