Trohimovich v. Commissioner, 77 T. C. 252 (1981)

Deliberate refusal to comply with court orders can result in criminal contempt and imprisonment, even when based on unfounded legal theories.

Summary

Stanley Trohimovich was adjudged in criminal contempt by the United States Tax Court for refusing to produce requested financial records in a tax deficiency case. Despite multiple court orders, Trohimovich claimed these were invalid due to his belief in the unconstitutionality of the 17th Amendment and other baseless legal theories. The court found his actions were intentional and disruptive, leading to a 30-day imprisonment sentence to vindicate the court’s authority. This case underscores the importance of compliance with court orders and the potential consequences of non-compliance, even when rooted in frivolous legal arguments.

Facts

Stanley Trohimovich and his brother Richard operated Grays Harbor Motors, a Volvo dealership. They filed joint tax returns for 1974 and 1975 that listed only constitutional provisions instead of financial details. The IRS, unable to access their records, used indirect methods to determine their tax liabilities. When summoned to produce records for a Tax Court trial, Trohimovich refused, citing unfounded legal theories including the invalidity of the 17th Amendment and alleged criminal actions by the IRS. Despite multiple court orders, he persisted in non-compliance, leading to a contempt hearing.

Procedural History

The Trohimoviches filed petitions in the Tax Court in 1978 to redetermine tax deficiencies for 1974 and 1975. After initial refusals to produce records, Stanley’s case was dismissed for failure to prosecute. Subsequent court orders and subpoenas to produce records for the other petitioners’ cases were also ignored. On May 15, 1981, Stanley was cited for contempt, and a hearing was set for July 21, 1981, resulting in his adjudication for criminal contempt and a 30-day imprisonment sentence.

Issue(s)

1. Whether Stanley Trohimovich’s refusal to comply with court orders to produce financial records constitutes criminal contempt?

Holding

1. Yes, because Trohimovich’s refusal was intentional, knowing, and deliberate, aimed at delaying the case and disrupting the court’s proceedings, justifying a finding of criminal contempt.

Court’s Reasoning

The court reasoned that Trohimovich’s refusal to comply with its orders was a deliberate act to obstruct the case. The court emphasized that criminal contempt serves a punitive purpose to vindicate the court’s authority, unlike civil contempt which is coercive. Trohimovich’s legal theories, including the invalidity of the 17th Amendment and claims of IRS criminality, were deemed frivolous and had been previously rejected by courts. The court noted that obedience to lawful orders is required even if later found invalid, citing Norman Bridge Drug Co. v. Banner and Maness v. Meyers. Trohimovich’s actions were seen as a deliberate attempt to delay tax liability determination and disrupt the legal process.

Practical Implications

This decision underscores the serious consequences of non-compliance with court orders, even when based on unfounded legal theories. It reinforces the principle that court orders must be obeyed until properly challenged and reversed. For legal practitioners, it highlights the need to advise clients on the risks of contempt proceedings and the importance of producing evidence when ordered. The case also illustrates the Tax Court’s authority to enforce its orders and the potential for criminal sanctions in cases of deliberate non-compliance. Subsequent cases may reference Trohimovich to emphasize the punitive nature of criminal contempt and the requirement for litigants to adhere to court directives.