Varela v. Commissioner of Internal Revenue

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS APR 23 2026 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

RUBEN T. VARELA, No. 24-7853 D.C. No. Petitioner - Appellant, 19399-23L v. MEMORANDUM* COMMISSIONER OF INTERNAL REVENUE,

Respondent - Appellee.

Appeal from a Decision of the United States Tax Court

Submitted April 22, 2026**

Before: LEE, DESAI, and JOHNSTONE, Circuit Judges.

Ruben T. Varela appeals pro se from the Tax Court’s summary judgment

upholding a penalty under 26 U.S.C. § 6702(a) and its order sua sponte imposing a

penalty under 26 U.S.C. § 6673(a). We have jurisdiction under 26 U.S.C.

§ 7482(a)(1). We review de novo. Sollberger v. Comm’r, 691 F.3d 1119, 1123

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). (9th Cir. 2012). We affirm.

The Tax Court properly granted summary judgment because Varela failed to

raise a genuine dispute of material fact as to whether he was not liable for the

frivolous filing penalty. See 26 U.S.C. § 6702(a) (setting forth the requirements

for the frivolous tax return penalty); Olson v. United States, 760 F.2d 1003, 1005

(9th Cir. 1985) (stating that the Ninth Circuit has “rejected the idea that a person is

liable for tax only if he benefits from a governmental privilege”); see also 26

U.S.C. § 6751(b)(1) (requiring written supervisor approval for penalties); Urb. v.

Comm’r, 964 F.2d 888, 890 (9th Cir. 1992) (holding that IRS “compliance with the

[Internal Revenue Manual’s] requirements is not mandatory”). Varela’s

contentions, including that Moore v. United States, 602 U.S. 572 (2024) limits

income taxes to privileged activities and that the IRS was required to make a

substitute return before imposing a frivolous tax return penalty, are meritless.

The Tax Court did not abuse its discretion by imposing a $1,000 penalty

against Varela under 26 U.S.C. § 6673(a) for presenting frivolous arguments

despite the Tax Court’s warnings. See Wolf v. Comm’r, 4 F.3d 709, 716 (9th Cir.

1993) (setting forth the standard of review and concluding that the Tax Court was

within its discretion to impose a penalty under § 6673 against a taxpayer who

pursued frivolous arguments after a warning).

We do not consider issues that are not specifically and distinctly argued in

2 24-7853 the opening brief. See Roley v. Google LLC, 40 F.4th 903, 911 (9th Cir. 2022).

AFFIRMED.

3 24-7853