## Facts

- The IRS issued Shirley L. Johnson a notice of deficiency; she filed two pro se petitions in the U.S. Tax Court challenging the deficiency.
- Johnson later retained attorney Joe Alfred Izen, Jr., who designated Houston as the trial location even though Johnson lived in Indiana and had serious diabetes that made travel difficult.
- During discovery, Johnson failed to cooperate, first ignoring requests and then answering most interrogatories and document requests with a bare “Fifth Amendment” assertion.
- The Tax Court found a pattern of delay and noncompliance attributable to Izen, concluded he had unreasonably and vexatiously multiplied the proceedings, and ordered him personally to pay the government’s attorneys’ fees caused by the misconduct under 26 U.S.C. § 6673(a)(2).
- The Tax Court also dismissed Johnson’s petition for failure to prosecute; Izen appealed the personal sanctions order to the Seventh Circuit.

## Issues

1. Whether 26 U.S.C. § 6673(a)(2) is invalid on equal protection grounds because it allegedly exposes private attorneys, but not government lawyers, to fee sanctions.
2. Whether the Tax Court lacked a proper basis to find bad faith and vexatious multiplication of proceedings, including reliance on counsel’s conduct in other cases.
3. Whether sanctioning counsel based on discovery responses invoking the Fifth Amendment improperly penalizes the assertion of the privilege against self-incrimination.

## Decision

- The Seventh Circuit affirmed the Tax Court’s sanctions order against Izen.
- The court upheld § 6673(a)(2) as a valid, conduct-focused sanctions statute and rejected the equal protection challenge.
- The court held the record supported the Tax Court’s finding that Izen’s tactics unreasonably and vexatiously multiplied the proceedings.
- The court concluded the sanction addressed discovery obstruction and delay, not the mere representation of unpopular clients or a legitimate, particularized invocation of the Fifth Amendment.
- The court upheld the amount of the fee award as reasonably tied to the government’s added costs from the misconduct.

## Legal Principles

- Under 26 U.S.C. § 6673(a)(2), the Tax Court may order an attorney to pay excess costs, expenses, and attorneys’ fees reasonably incurred because of the attorney’s unreasonable and vexatious multiplication of proceedings.
- A sanctions regime aimed at compensating for added litigation costs and deterring abusive conduct in a specialized court does not violate equal protection if it has a rational basis.
- Bad faith may be inferred from repeated, unjustified discovery noncompliance and delay; a court may consider counsel’s broader pattern of similar conduct as context for intent and reasonableness.
- The Fifth Amendment may be asserted in civil discovery when properly grounded, but blanket, unexplained assertions used as an obstruction tactic may support sanctions when they prolong proceedings and increase costs.
- Sanctions must be tied to the additional fees and expenses caused by the sanctioned conduct, not to the client’s substantive positions or counsel’s choice of clients.

## Conclusion

The Seventh Circuit affirmed personal fee-shifting sanctions against taxpayer’s counsel under § 6673(a)(2), holding that prolonged discovery obstruction and delay constituted unreasonable and vexatious multiplication of proceedings, and rejecting constitutional and privilege-based objections where the sanction targeted misconduct rather than protected advocacy or legitimate Fifth Amendment use.


Johnson v. Comm’r, 289 F.3d 452 (7th Cir. 2002)