EEOC v. Product Fabricators, Inc.

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 11-2805
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Daniel J. Dykema, *
*
Appellant, *
*
v. * Appeal from the United States
* Tax Court.
Commissioner of Internal Revenue, *
* [UNPUBLISHED]
Appellee. *
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Submitted: January 27, 2012
Filed: January 31, 2012
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Before MURPHY, ARNOLD and SHEPHERD, Circuit Judges.
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PER CURIAM.
Daniel Dykema appeals a decision of the tax court1 which dismissed his petition
challenging a notice of deficiency issued by the Commissioner of Internal Revenue,
upheld the assessments set forth in the notice of deficiency, and imposed sanctions
against him for asserting frivolous arguments. The Commissioner urges affirmance
and has moved for sanctions on appeal.
After careful review, we conclude that dismissal of Dykema’s petition was
appropriate for the reasons explained by the tax court. We also agree with the tax
1The Honorable Mark V. Holmes, United States Tax Court Judge.

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court that Dykema’s arguments below were frivolous, and we find no abuse of
discretion in the court’s imposition of sanctions.
As to the Commissioner’s motion for sanctions on appeal, we may award “just
damages” and single or double costs if we determine that an appeal is frivolous. See
Fed. R. App. P. 38; 28 U.S.C. § 1912. In the present appeal, Dykema has raised the
same tax-protestor arguments he asserted below, all of which have been repeatedly
rejected by the courts as frivolous. Cf. United States v. Gerads, 999 F.2d 1255, 1256
(8th Cir. 1993) (per curiam) (in government’s action to recover back taxes from tax
protestor defendants, noting that appellate court had previously held wages are within
Code’s definition of income, and rejecting defendants’ argument that they were not
citizens of United States but rather were citizens of “Republic of Minnesota” who
were not subject to income tax); see also United States v. Clayton, 506 F.3d 405, 412
(5th Cir. 2007) (per curiam) (noting that court previously had rejected as “patently
frivolous” and “absurd” argument that income derived from sources within United
States is non-taxable). In these circumstances, we conclude that sanctions are
appropriate. See Gerads, 999 F.2d at 1256-57 (granting government’s request that
court impose sanctions against appellants for bringing frivolous appeal based on
discredited, tax-protestor arguments).
Accordingly, we affirm the tax court’s judgment, see 8th Cir. R. 47B, and we
grant the Commissioner’s motion for sanctions in the amount of $5,000.
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