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Frivolous Appeal – Sanctions

By: Derek Hawkins//March 20, 2022//

Frivolous Appeal – Sanctions

By: Derek Hawkins//March 20, 2022//

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7th Circuit Court of Appeals

Case Name: Samuel Wegbreit, et al., v. Commissioner of Internal Revenue

Case No.: 20-1306

Officials: SYKES, Chief Judge, and BRENNAN and ST. EVE, Circuit Judges.

Focus: Frivolous Appeal – Sanctions

Samuel and Elizabeth Wegbreit sheltered several million dollars of income in a life‐insurance policy held by a sham trust. The IRS caught on to the Wegbreits’ scheme and issued a deficiency notice showing that they owed millions in back taxes. The Wegbreits challenged the notice in the tax court. After discovery revealed a series of suspicious documents and transactions relating to the Wegbreits’ finances, the IRS added civil fraud allegations. The tax court agreed with the IRS, finding that the Wegbreits underreported their income by nearly $15 million and engaged in a pattern of conduct intended to defraud the government.

We affirm. The Wegbreits’ rambling brief spans 78 pages yet somehow develops only two coherent arguments remotely related to the tax court’s decision. And those two arguments are baseless: the Wegbreits stipulated them away in the tax court. We therefore order John E. Rogers, the Wegbreits’ attorney, to show cause why he should not be sanctioned under Rule 38 for filing this frivolous appeal.


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Derek A Hawkins is Corporate Counsel, at Salesforce.


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