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6330 - Annotations - Issues Raised at Hearings 2 Page 1 |
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Issues Raised at Hearings 2 Page1 |
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6330
Annotations: Issues Raised at Hearing- Levy Notice of Levy
and Right to Hearing: Issues Raised at Hearing Part 2 [] Robert E.
Adams, et al., Petitioners-Appellants v. Commissioner of Internal
Revenue, Respondent-Appellee. Taxpayers
could not challenge their underlying tax liability in a Collection
Due Process hearing, since they were sent proper statutory notices
of deficiency. The Tax Court did not err in rejecting the
taxpayers' argument that wages are not taxable income. A
married couple's tax protestor-type arguments were rejected by the
Court of Appeals, which also upheld the imposition of sanctions by
the Tax Court and imposed additional sanctions for the frivolous
appeal. The Tax Court did not err in rejecting the taxpayers'
argument that wages are not taxable income, or in imposing a
penalty of $1,000 for maintaining a frivolous action primarily for
delay. The Court of Appeals imposed an additional sanction of
$2,000 for the frivolous appeal. MEMORANDUM
**
[Dec. 56,071(M)]
Randy S. Quigley v. Commissioner. The
IRS did not abuse its discretion in determining to proceed with
collection of an individual's tax liability. The taxpayer was
precluded from challenging the underlying tax liability because he
had received a deficiency determination for the tax year at issue
and failed to petition for a redetermination. The taxpayer was
given the opportunity to discuss collection alternatives at a
Collection Due Process hearing, but raised only frivolous
arguments.
Sanctions
were imposed against an individual for instituting Tax Court
proceedings primarily for the purpose of delay. The taxpayer filed
a return claiming zero income and requested a refund of taxes
withheld from his wages. The taxpayer was warned that the types of
arguments he raised were frivolous under the guidelines set forth
in T.H. Pierson, Dec.
54,152, 115 T.C. 576, but chose to petition the Tax
Court anyway.
Randy
S. Quigley, pro se; Russell K. Stewart, for respondent. MEMORANDUM
OPINION CHIECHI,
Judge: This case is before the Court on respondent's motion for
summary judgment and to impose a penalty under section
66731
(respondent's motion). We shall grant respondent's motion. Background The
record establishes and/or the parties do not dispute the
following. Petitioner
resided in On
or about On
Petitioner
did not file a petition in the Court with respect to the notice of
deficiency relating to his taxable year 1999. Instead, on On
Respondent
issued to petitioner the notice and demand for payment required by
section
6303(a) with respect to petitioner's unpaid liability
for 1999. On
or about In
response to petitioner's Form 12153 and petitioner's attachment to
Form 12153, an Appeals officer with the Appeals Office (Appeals
officer) sent a letter to petitioner on Please
note that during my preliminary review of your "Request for a
Due Process Hearing" and other documents written by you, it
was observed that you are raising points that are frivolous and
without merit. Please
be advised the courts have consistently and repeatedly rejected
the arguments expressed in your letters and in many cases have
imposed sanctions. In Pierson v. Commissioner [Dec.
54, 152], * * * [115 T.C. 576 (2000)], the Court issued
fair warning of penalties under section
6673 to all those taxpayers who, in the future,
institute or maintain a lien or levy action primarily for delay or
whose position in such a proceeding is frivolous or groundless and
has in fact imposed a penalty in a number of such cases. (Please
see enclosed Exhibit A) [list of cases showing imposition of section
6673] Pursuant
to Sections
6320 and 6330 of the Internal Revenue Code, Section
6320(c) discusses matters considered at the hearing. Section
6330(c)(2)(B) precludes any challenge to the underlying
liability, at the hearing, for any period, if the person received
a statutory notice of deficiency or otherwise had an opportunity
to dispute the liabilities. The
Appeals officer enclosed with the Appeals officer's On
In
my numerous responses to the IRS I have re-quested to have a
hearing, as provided for in procedures and Regulations
(601.105(b)(1) thru 601.105(d)(2)(i)) but as of yet I have been
offered none. Now for exact purpose that the 'Restructuring and
Reform Act of 1998' was enacted into law, I am again being denied. A
hearing as called for in IRC
Sec 6330(b)(1) "if the person requests a hearing
under subsection (a)(3)(B), such hearing shall be held by the
Internal Revenue Service Office of Appeals.". Further more in
the US District Court Case of 'MESA OIL, INC., Plaintiff, v. In
response to petitioner's I've
received your call and letter requesting a face-to-face Hearing.
The items that you mention in your CDP request are items that: l
Courts have determined are frivolous or groundless, or l
Appeals does not consider. These are moral, religious, political,
constitutional, conscientious, or similar grounds. Examples
of arguments that are considered frivolous or groundless are
provided in "The Truth About Frivolous Tax Arguments" on
the IRS Internet website at http://www.irs.gov/pub/irs-utl/friv
tax.pdf. It is not a complete list of frivolous and groundless
arguments. I previously provided a list of cases in the Collection
Due Process forum in which the arguments you are raising were
considered frivolous and irrelevant. Appeals
does not provide a face-to-face conference if the only items you
wish to discuss are those mentioned above. You may, however, have
a telephone conference or discuss with us by correspondence any
relevant challenges to the filing of the notice of federal tax
lien or the proposed levy. If
you are still interested in receiving a face-to-face conference,
you must be prepared to discuss issues relevant to paying your tax
liability. These include, for example, offering other ways to pay
the taxes you owe, such as an installment agreement or offer in
compromise. The Internal Revenue Manual determines whether Appeals
can accept your proposal. If you wish to have a face-to-face
conference, please write me within 15 days from the date of this
letter or Petitioner
did not respond to the Appeals officer's On
Summary
of Determination l
A review of the administrative file indicated that all statutory
and administrative requirements that needed to be met with respect
to the Notice of Intent to Levy being issued were in fact met in
your case. l
All relevant issues raised by you were addressed. l
You suggested no collection alternatives. l
IRC
Sections 6320 and 6330 require that the Appeals Officer
consider whether any collection action balance the need for
efficient tax collection with the legitimate concern that any
collection action be no more intrusive than necessary. The
proposed levy action appears appropriate in that your liabilities
are based on your non-compliance with the tax laws and that you
continue attempting to circumvent the tax system with various time
worn frivolous arguments. An
attachment to the notice of determination stated in pertinent
part: Legal
and Procedural Requirements *
* * * * This
Appeals Officer has had no prior involvement with respect to these
liabilities; all relevant legal and procedural requirements were
reviewed and verified as being met also no spousal issues are
applicable. Validity
of the Assessment The
assessments for all tax years and liabilities therein are valid.
Various transcripts were reviewed and all assessments were
appropriate. For the Income Tax liability for tax year 1999 you
were issued a Notice of Deficiency on Based
on the above[,] Section
6330(c)(2)(B) precludes any challenge to the underlying
liability, at the hearing, for any period, if the person received
a statutory notice of deficiency or otherwise had an opportunity
to dispute the liabilities. For the income tax liability you
received the Notice of Deficiency. Challenges
to the Appropriateness of the Collection Actions Your
only challenge to the appropriateness of the collection actions is
documented in your request for the hearing and other documents
received by the Service. Those challenges are submitted below in
pertinent part: l
Quotations form [sic] Senator Roth's book "The Power to
Destroy" specifically page 73; l
Disputes the validity of the "Final Notice of Intent to Levy
and Notice of your Right to a Hearing" pursuant to IRC 6330,
because no one signed it. l
Verification from the Secretary that the requirements of any
applicable law or administrative procedure have been met.
Transcripts of any kind are not accept-able. And any claims that
the court have held that an unsigned, computer printout satisfies
the legal requirements will no [sic] be acceptable. That an
Appeals Officer "shall hew to the law", in
accordance with Reg. 601.106(f) that there is no Treasury
Regulation that state [sic] the appeals officers "shall
hew to court decisions"; l
Proof of Notice and Demand and proof that it is a statutory notice
and demand via a Treasury Decision or Regulation; l
There is no underlying liability --That "The index of the IR
Code lists some 60 taxes under the caption "Liability for
tax"; however he can find no entry for "income
taxes"; l
One (nonsensical) excuse the appeals officer might offer is that
the underlying liability is not at issue due to the fact that the
taxpayer received a Notice of Deficiency. The notice is invalid
since it was prepared and sent by a Service Center Employee and it
must be sent and determined by the Secretary unless there is a
delegation authority to do so IRC Sec.
6330(c)(2)(B) does not apply; l
Citation from Federal Crop Insurance v. Merrill, 332 l
Disputes the existence of an Income Tax Liability --The Tax
Court not being a court of law --has no jurisdiction to
consider such a question; l
There is no statute requiring him to pay the income taxes; *
* * * * None
of the above arguments are relevant for purposes of the hearing. Collection
Alternatives Considered You
have not suggested any viable alternatives. On In
response you wrote a letter dated On
Balancing
Efficient Collection and Intrusiveness IRC
Sec. 6330 requires that the Appeals Officer consider
whether any collection action balance the need for efficient tax
collection with the legitimate concern that any collection action
be no more intrusive than necessary. The levy action is
appropriate in that you have only made time worn arguments against
the tax laws to evade the payment of tax nor are you in compliance
with the filing of your returns. It is inappropriate to allow you
to ignore his [sic] tax obligations any longer. Petitioner
filed a petition with the Court with respect to the notice of
determination relating to petitioner's unpaid liability for 1999.
The petition contained statements, contentions, arguments, and
requests that the Court finds to be frivolous and/or groundless.8 Discussion The
Court may grant summary judgment where there is no genuine issue
of material fact and a decision may be rendered as a matter of
law. Rule 121(b); Sundstrand Corp. v. Commissioner [Dec.
48,191], 98 T.C. 518, 520 (1992), affd. [94-1
USTC ¶50,092], 17 F.3d 965 (7th Cir. 1994). We
conclude that there are no genuine issues of material fact
regarding the questions raised in respondent's motion. Petitioner
did not file a petition with the Court with respect to the notice
of deficiency that respondent issued to him relating to his
taxable year 1999. Where, as is the case here, the validity of the
underlying tax liability is not properly placed at issue, the
Court will review the determination of the Commissioner of the
Internal Revenue for abuse of discretion. Sego v. Commissioner
[Dec.
53,938], 114 T.C. 604, 610 (2000); Goza v.
Commissioner [Dec.
53,803], 114 T.C. 176, 182 (2000). As
was true of, inter alia, petitioner's 1999 return, petitioner's
attachment to his 1999 return, petitioner's attachment to Form
12153, and the petition, petitioner's position in petitioner's
response to respondent's motion (petitioner's response) is
frivolous and/or groundless.9 Based
upon our examination of the entire record before us, we find that
respondent did not abuse respondent's discretion in determining to
proceed with the collection action as determined in the notice of
determination with respect to petitioner's unpaid liability for
1999. In
respondent's motion, respondent requests that the Court require
petitioner to pay a penalty to the In
Pierson v. Commissioner [Dec.
54,152], 115 T.C. 576 (2000), we issued an unequivocal
warning to taxpayers concerning the imposition of a penalty under section
6673(a)(1) on those taxpayers who abuse the protections
afforded by sections
6320 and 6330 by instituting or maintaining actions
under those sections primarily for delay or by taking frivolous or
groundless positions in such actions. In the Appeals officer's We
have considered all of petitioner's statements, contentions,
arguments, and requests that are not discussed herein, and we find
them to be without merit and/or irrelevant.10 On the
record before us, we shall grant respondent's motion. To reflect
the foregoing, An
order granting respondent's motion and decision for respondent
will be entered.
[Dec. 55,970(M)]
Richard John Florance, Jr. v. Commissioner. An
Appeals officer's determination to proceed with collection against
an individual was sustained. The taxpayer who had received a
notice of deficiency was not entitled to raise the issue of his
underlying tax liability at the Collection Due Process hearing,
and he failed to propose any collection alternative at the hearing
because he did not believe that he owed any taxes.
An
individual, who filed numerous frivolous documents and motions
with the court and made tax-protestor type arguments, was liable
for sanctions. In one of his many filings, the taxpayer challenged
the notice of deficiency as inaccurate because it included $15,000
in wages the taxpayer had received but failed to include an
additional $37,000 in wages the taxpayer had received in the same
year. The taxpayer also objected to the capitalization of certain
letters of his name and to an address which used the an
abbreviation for the state's name. The court determined that the
taxpayer instituted and maintained the proceedings primarily for
delay and, therefore, imposed a $12,500 sanction. Richard
John Florance, Jr., pro se; Adam L. Flick, for respondent. MEMORANDUM
OPINION VASQUEZ,
Judge: This case is before the Court on respondent's motion for
summary judgment and to impose a penalty under section
6673.1 Background Petitioner
failed to file Federal income tax returns for 1994, 1995, and
1996. On
Additions to Tax
Sec. 6651 Sec. 6654 Year Deficiency (f) (a)
1994 $6,105 $1,561 --
1995 13,675 9,912 $714
1996 14,324 10,743 762
On
On
On
On
or about On
On
On
On
On
On
On
On
On
By
notice dated On
On
On
On
On
On
Petitioner
failed to appear at the hearing. Discussion I.
Motion for Summary Judgment Rule
121(a) provides that either party may move for summary judgment
upon all or any part of the legal issues in controversy. Full or
partial summary judgment may be granted only if it is demonstrated
that no genuine issue exists as to any material fact and a
decision may be rendered as a matter of law. Rule 121(b); Sundstrand
Corp. v. Commissioner [Dec.
48,191], 98 T.C. 518, 520 (1992), affd. [94-1
USTC ¶50,092] 17 F.3d 965 (7th Cir. 1994). We
conclude that there is no genuine issue as to any material fact
and that a decision may be rendered as a matter of law. II.
Determination To Proceed With Collection Section
6320 provides that the Secretary shall furnish the
person described in section
6321 with written notice (i.e., the hearing notice) of
the filing of a notice of lien under section
6323. Section
6320 further provides that the taxpayer may request
administrative review of the matter (in the form of a hearing)
within a 30-day period. The hearing generally shall be conducted
consistent with the procedures set forth in section
6330(c), (d),
and (e).
Sec.
6320(c). Section
6330(a) provides that the Secretary shall furnish
taxpayers with written notice of their right to a hearing before
any property is levied upon. Section
6330 further provides that the taxpayer may request
administrative review of the matter (in the form of a hearing)
within a prescribed 30-day period. Sec.
6330(a) and (b). Pursuant
to section
6330(c)(2)(A), a taxpayer may raise at the section
6330 hearing any relevant issue with regard to the
Commissioner's collection activities, including spousal defenses,
challenges to the appropriateness of the Commissioner's intended
collection action, and alternative means of collection. Sego v.
Commissioner [Dec.
53,938], 114 T.C. 604, 609 (2000); Goza v.
Commissioner [Dec.
53,803], 114 T.C. 176, 180 (2000). If a taxpayer
received a statutory notice of deficiency for the years in issue
or otherwise had the opportunity to dispute the underlying tax
liability, the taxpayer is precluded from challenging the
existence or amount of the underlying tax liability. Sec.
6330(c)(2)(B); Sego v. Commissioner, supra
at 610-611; Goza v. Commissioner, supra at 182-183. Petitioner
received the notice of deficiency for 1994, 1995, and 1996.
Accordingly, he cannot challenge his underlying liabilities. See sec.
6330(c)(2)(B); Sego v. Commissioner, supra
at 610-611; Goza v. Commissioner, supra at 182-183.
Therefore, we review respondent's determination for an abuse of
discretion. See Sego v. Commissioner, supra at 610. Petitioner
has failed to raise a spousal defense, make a valid challenge to
the appropriateness of respondent's intended collection action, or
offer alternative means of collection. These issues are now deemed
conceded. See Rule 331(b)(4). Accordingly,
we conclude that respondent did not abuse his discretion, and we
sustain respondent's determination to proceed with collection. III.
Section
6673 Section
6673(a)(1) authorizes this Court to require a taxpayer
to pay to the United States a penalty not to exceed $25,000 if the
taxpayer took frivolous or groundless positions in the proceedings
or instituted the proceedings primarily for delay. A position
maintained by the taxpayer is "frivolous" where it is
"contrary to established law and unsupported by a reasoned,
colorable argument for change in the law." Coleman v.
Commissioner [86-1
USTC ¶9401], 791 F.2d 68, 71 (7th Cir. 1986); see also
Hansen v. Commissioner [87-2
USTC ¶9402], 820 F.2d 1464, 1470 (9th Cir. 1987) (section
6673 penalty upheld because taxpayer should have known
claim was frivolous). Petitioner
filed frivolous documents and motions with the Court. Petitioner
has advanced shopworn arguments characteristic of tax-protester
rhetoric that has been universally rejected by this and other
courts.3 Wilcox
v. Commissioner [88-1
USTC ¶9387], 848 F.2d 1007 (9th Cir. 1988), affg. [Dec.
43,889(M)] T.C. Memo. 1987-225; Carter v. Commissioner [86-1
USTC ¶9279], 784 F.2d 1006, 1009 (9th Cir. 1986). We
will not painstakingly address petitioner's assertions "with
somber reasoning and copious citation of precedent; to do so might
suggest that these arguments have some colorable merit."
Crain v. Commissioner [84-2
USTC ¶9721], 737 F.2d 1417, 1417 (5th Cir. 1984). We
conclude petitioner's position was frivolous and groundless and
that petitioner instituted and maintained these proceedings
primarily for delay. Accordingly, pursuant to section
6673(a) we hold petitioner is liable for a $12,500
penalty. To
reflect the foregoing, An
appropriate order and decision will be entered. 1
Unless otherwise indicated, all section references are to the
Internal Revenue Code in effect for the years in issue, and all
Rule references are to the Tax Court Rules of Practice and
Procedure. [2005-1 USTC ¶50,287] Wendy J. Doing, Petitioner-Appellant v. Commissioner of Internal
Revenue, Respondent-Appellee. A
taxpayer who had been sent a notice of deficiency could not use a
Collection Due Process (CDP) hearing to challenge her underlying
tax liability. IRS Forms 4340, Certificates of Assessments,
Payments and Other Specified Matters, did not constitute
inadmissible hearsay and, in the absence of contrary evidence,
established her liability. Accordingly, the Tax Court properly
allowed the IRS to proceed with collection. MEMORANDUM
**
[2005-1 USTC ¶50,380] Daniel Holguin, Petitioner-Appellant v. Commissioner of Internal
Revenue, Respondent-Appellee. An
individual was not entitled to challenge his underlying tax
liability during his Collection Due Process (CDP) hearing because
a proper statutory notice of deficiency had been sent to him. The
IRS Appeals officer who conducted the CDP hearing properly
verified the existence and propriety of the tax assessments. An
individual's challenge to his Collection Due Process hearing was
without merit. Penalties were correctly imposed, because the
taxpayer had raised frivolous arguments with the intention of
delaying the proceedings. MEMORANDUM
**
[Dec.
55,135(M)] Daniel and Sally A.
Holguin v. Commissioner. [Code
Sec. 6330]
The
Tax Court lacked jurisdiction to review an adverse decision letter
issued separately to a married individual for three tax years
following an equivalent hearing. The taxpayer was not entitled to
an Appeals Office hearing because she failed to timely file her
hearing request. As a result, the government's motion to dismiss
for lack of jurisdiction was granted. [Code
Sec. 6330]
A
married taxpayer failed to show that a Collection Due Process
determination was based upon an abuse of discretion. The Court
rejected the taxpayer's frivolous arguments, which accompanied his
hearing request and zero-income returns for three tax years. As a
result, the IRS was permitted to proceed with its collection
action. [Code
Sec. 6673]
A
married taxpayer was liable for a delay penalty in the amount of
$1,600 because he instituted an appeal of his Collection Due
Process determination primarily for delay. The taxpayer's
zero-income returns filed for three tax years were invalid because
he scratched out the words "under penalty of perjury" on
his Form 1040. Moreover, documents containing frivolous arguments
were attached with his returns and request for hearing. Daniel
Holguin and Sally A. Holguin, pro sese. Alan J. Tomsic, for
the respondent. MEMORANDUM
OPINION CHIECHI,
Judge: This case is before the Court on respondent's motion for
summary judgment and to impose a penalty under section
66731 as to
petitioner Daniel Holguin (respondent's motion for summary
judgment as to Mr. Holguin) and respondent's motion to dismiss for
lack of jurisdiction and to strike as to petitioner Sally A.
Holguin (respondent's motion to dismiss for lack of jurisdiction
as to Ms. Holguin). (We shall refer collectively to both of those
motions as respondent's motions.) We shall grant respondent's
motions. Background The
record establishes and/or the parties do not dispute the
following. Petitioners
resided in On
In
their 1994 Form 1040, petitioners reported total income of $0 and
total tax of $0 and claimed a refund of $1,020 of tax withheld.
Petitioners attached to their 1994 Form 1040 two Forms W-2, Wage
and Tax Statement (Form W-2), reporting wages, tips, and other
compensation totaling $14,857.07. Petitioners also attached a
document to their 1994 Form 1040 (petitioners' attachment to their
1994 Form 1040) that contained statements, contentions, and
arguments that the Court finds to be frivolous and/or groundless.3 On
In
their 1995 Form 1040, petitioners reported total income of $0 and
total tax of $0 and claimed a refund of $1,052 of tax withheld.
Petitioners attached to their 1995 Form 1040 Form W-2, reporting
wages, tips, and other compensation of $17,121.94. Petitioners
also attached a document to their 1995 Form 1040 (petitioners'
attachment to their 1995 Form 1040) that contained statements,
contentions, and arguments that the Court finds to be frivolous
and/or groundless.5 On
In
their 1996 Form 1040, petitioners reported total income of $0 and
total tax of $0. Petitioners attached a document to their 1996
Form 1040 (petitioners' attachment to their 1996 Form 1040) that
contained statements, contentions, and arguments that the Court
finds to be frivolous and/or groundless.7 On
Mr.
Holguin did not file a petition in the Court with respect to the
notices relating to his taxable years 1994, 1995, and 1996. On
On
On
On
On
On
On
or about On
On
What
are the Issues? The
taxpayer requested a hearing under the provisions of I.R.C. section
6330 to contest the application of a notice of intent
to levy, Form 1058. Verification
of Legal and Procedural Requirements The
requirements of all applicable laws and administrative procedures
have been met: The
liabilities were assessed and notice and demand letters were
issued by regular mail to the taxpayer's last known address as
required under I.R.C. 6303, demonstrated by the forms 4340 in the
administrative file; There
was an assessed liability and a levy source determined by the
Revenue Officer at the time the notice of intent to levy was
issued to TP; The
notices required under I.R.C. 6330 were pro vided to TP on the
dates shown above in relation to the levy notice, L-1058; The
taxpayer responded by submitting a Form 12153, Request for a
Collection Due Process Hearing, to the Collection officer; The
taxpayer's appeal was timely, being mailed on ******* Both
certified transcripts, and non-literal transcripts were requested
and reviewed by this A.O. Copies of the certified transcripts were
provided to the taxpayer. A "face to face" CDP Hearing
was offered to TP. *** The meeting was held on Issues
Raised by the Taxpayer In
TP's appeal request, TP's arguments were plentiful but without
substance. They were of the type described by the Courts as
"frivolous." *** TP disputes the receipt of an official
notice of deficiency and other procedural errors based on TP's
personal views and conclusions of law. In my opinion, based on
Court decisions, those arguments have no merit. TP was provided
copies of court cases attesting to the fact that the courts are
tired of such arguments and could sanction TP if they were brought
forth in a judicial hearing. At
the time of the conference, TP did not make a claim he was an
"innocent spouse." *** Nor did TP provide any
non-frivolous argument as to the steps taken by the Collection
division to obtain payment. TP did attempt to offer questions
regarding procedures, but such questions were generally frivolous
and had no bearing on the outcome of the case. TP did not suggest
that he might become current in or correct his prior filings. Nor
did TP suggest any collection alternatives. MY
EVALUATION Review
of the information stated above and now present in the
administrative file shows the requirements of all applicable laws
and administrative procedures have been met. Assessments were
properly made. TP was billed for and did not pay amounts due. The
Compliance Division proceeded with enforced collection action and
it appears they should be allowed to continue with the action. Balancing
the Need for Efficient Collection with Taxpayer Concerns Given
that no timely, reasonable alternative to the proposed levy action
has been suggested and that TP has not presented anything more
than frivolous arguments in the matter, it is my opinion that the
proposed collection action balances the government's need for
efficient collection with the taxpayer's concern that any
collection action be no more intrusive than necessary. It is
therefore concluded that the action should be allowed to continue. On
The
taxpayer responded [to respondent's The
taxpayer's appeal was not timely, not being mailed until Discussion
Our
jurisdiction under sections 6320 and 6330 depends upon the
issuance of a valid notice of determination and a timely filed
petition. Moorhous v. Commissioner [Dec.
54,316], 116 T.C. 263, 269 (2001). Ms.
Holguin was not entitled to an Appeals Office hearing in the
instant case. That is because she did not timely request such a
hearing within 30 days from the date of respondent's Instead
of an Appeals Office hearing, respondent held an equivalent
hearing with respect to respondent's We
conclude that we do not have jurisdiction over Ms. Holguin.12 See sec.
6330(d)(1); Moorhous v. Commissioner, supra. We shall
grant respondent's motion to dismiss for lack of jurisdiction as
to Ms. Holguin. Respondent's
Motion for Summary Judgment as to Mr. Holguin The
Court may grant summary judgment where there is no genuine issue
of material fact and a decision may be rendered as a matter of
law. Rule 121(b); Sundstrand Corp. v. Commissioner [Dec.
48,191], 98 T.C. 518, 520 (1992), affd. [ 94-1
USTC ¶50,092] 17 F.3d 965 (7th Cir. 1994). We conclude
that there are no genuine issues of material fact regarding the
questions raised in respondent's motion for summary judgment as to
Mr. Holguin. Where,
as is the case here, the validity of the underlying tax liability
is not properly placed at issue, the Court will review the
determination of the Commissioner of Internal Revenue for abuse of
discretion. Sego v. Commissioner [Dec.
53,938], 114 T.C. 604, 610 (2000); Goza v.
Commissioner [Dec.
53,803], 114 T.C. 176, 181-182 (2000). As
was true of petitioners' attachment to their 1994 Form 1040,
petitioners' attachment to their 1995 Form 1040, petitioners'
attachment to their 1996 Form 1040, and petitioners' attachment to
Form 12153, petitioners' response to respondent's motion for
summary judgment as to Mr. Holguin (petitioners' response as to
Mr. Holguin) contains statements, contentions, and arguments that
the Court finds to be frivolous and/or groundless.13 Based
upon our examination of the entire record before us, we find that
respondent did not abuse respondent's discretion in determining to
proceed with the collection action as determined in the notice of
determination with respect to Mr. Holguin's unpaid liabilities for
1994, 1995, and 1996. In
respondent's motion for summary judgment as to Mr. Holguin,
respondent requests that the Court require Mr. Holguin to pay a
penalty to the United States pursuant to section
6673(a)(1). Section
6673(a)(1) authorizes the Court to require a taxpayer
to pay to the United States a penalty in an amount not to exceed
$25,000 whenever it appears to the Court, inter alia, that a
proceeding before it was instituted or maintained primarily for
delay, sec.
6673(a)(1)(A), or that the taxpayer's position in such
a proceeding is frivolous or groundless, sec.
6673(a)(1)(B). In
Pierson v. Commissioner [Dec.
54,152], 115 T.C. 576, 581 (2000), we issued an
unequivocal warning to taxpayers concerning the imposition of a
penalty under section
6673(a) on those taxpayers who abuse the protections
afforded by sections 6320 and 6330 by instituting or maintaining
actions under those sections primarily for delay or by taking
frivolous or groundless positions in such actions.14 In
the instant case, Mr. Holguin advances, we believe primarily for
delay, frivolous and/or groundless contentions, arguments, and
requests, thereby causing the Court to waste its limited
resources. We shall impose a penalty on Mr. Holguin pursuant to section
6673(a)(1) in the amount of $1,600. We
have considered all of petitioners' contentions, arguments, and
requests that are not discussed herein, and we find them to be
without merit and/or irrelevant. On
the record before us, we shall grant respondent's motion for
summary judgment as to Mr. Holguin. To
reflect the foregoing, An
appropriate order granting respondent's motion to dismiss for lack
of jurisdiction and to strike as to petitioner Sally A. Holguin
will be issued and an order granting respondent's motion for
summary judgment and to impose a penalty under section
6673 as to petitioner Daniel Holguin and decision as to
him will be entered for respondent.
[Dec. 56,135(M)]
Thiele L. Wetzel v. Commissioner. A
hearing officer did not abuse his discretion when he determined
not to withdraw a notice of federal tax lien filed against a tax
return preparer who failed to file returns for six years.
Furthermore, it was proper not to consider the existence or amount
of the preparer's tax liability at the hearing because the
preparer had received a notice of deficiency and, therefore, had a
prior opportunity to contest the liability. Finally, a $15,000
penalty proceeding primarily for delay was imposed under Code
Sec. 6673 because the preparer made numerous frivolous
tax-protestor arguments at the CDP hearing and before the Tax
Court. The court noted that the taxpayer was a professional return
preparer. Thus, he knew or should have known that his arguments
were frivolous and could result in a penalty. Thiele
L. Wetzel, pro se; Lorraine D. Massano, for respondent. MEMORANDUM
FINDINGS OF FACT AND OPINION COLVIN,
Judge: Respondent sent petitioner a Notice of Determination
Concerning Collection Action Under Section
6320 (the lien determination) in which respondent
determined that the notice of Federal tax lien regarding
petitioner's income tax liabilities for 1994-99 was appropriate
and would not be withdrawn. The
issues for decision are: 1.
Whether petitioner may dispute the existence or amount of his tax
liability for 1994-99. We hold that he may not. 2.
Whether respondent's determination was an abuse of discretion. We
hold that it was not. 3.
Whether petitioner is liable for a penalty under section
6673 for instituting proceedings primarily for delay
and for maintaining frivolous or groundless positions. We hold
that he is. Section
references are to the Internal Revenue Code. FINDINGS
OF FACT Some
of the facts have been stipulated and are so found. A.
Petitioner Petitioner
lived in B.
Respondent's Examination of Petitioner's 1994-99 Tax Years Respondent's
revenue agent notified petitioner that he had not filed Federal
income tax returns for 1994-99 and asked for information to
determine his tax liability for those years. To
reconstruct petitioner's income, respondent's revenue agent sent
letters to petitioner's accounting clients and asked them to
provide copies of canceled checks written to petitioner. The
revenue agent also sent copies of those letters to petitioner.
Petitioner demanded that the revenue agent stop contacting his
clients. Petitioner contended that the requests to his clients
were an unconstitutional invasion of his privacy. The
revenue agent issued summonses to petitioner's banks. Petitioner
wrote letters to the revenue agent stating that the summonses were
invalid for several reasons, including: (1) Issuance of the
summonses violated (a) the U.S. Constitution; (b) the Internal
Revenue Manual; and (c) the Internal Revenue Service Restructuring
and Reform Act of 1998 (RRA 1998); and (2) the revenue agent
failed to provide petitioner with (a) a Privacy Act statement; (b)
a certificate of service of summons; (c) proof of delegation of
authority; and (d) notice stating whether the documents sought by
the revenue agent were for a civil or criminal investigation. Respondent
sent petitioner proposed adjustments to his income tax for
1994-99, letters, notice of amounts due, and statements of
account. Those notices and statements showed amounts respondent
had concluded petitioner owed for 1994-99. Petitioner stamped
those letters, notices, and statements of account "Refused
for Fraud F.R.C.P. 9(b)" and returned them to respondent,
with an attachment in which he raised numerous frivolous
contentions, such as he was not a taxpayer, he had engaged in no
taxable activity, and respondent had not prepared proper
substitute for returns. Petitioner asked respondent to show him
the statute that made him liable for Federal income tax.
Respondent
sent and petitioner received a notice of deficiency for 1994-99
dated Year Income 1994 $34,067 1995 27,848 1996 30,639 1997 35,579 1998 30,772 1999 43,284 Respondent
determined that petitioner had income tax deficiencies and
liability for additions to tax as follows:
Additions to tax
Year Deficiencies Sec. 6651(f) Sec. 6654(a)
1994 $4,834 $3,625.50 $250.84 1995 3,214 2,410.50 174.26 1996 3,621 2,625.22 192.71 1997 4,853 3,518.42 259.63 1998 3,574 2,591.15 163.53 1999 6,796 4,927.10 328.88
Respondent
also determined that petitioner was liable for the addition to tax
for failure to pay under section
6651(a)(2) in amounts that could not be computed at the
time of the determination. Petitioner did not file a petition with
this Court. Petitioner
stamped the notice of deficiency "Refused for Fraud F.R.C.P.
9(b)" and returned it to respondent with an attachment in
which petitioner alleged: (1) The notice of deficiency was
fraudulent; (2) he did not receive notice of the examination; (3)
he is not liable for tax; and (4) respondent failed to prepare
proper substitutes for returns. On
Petitioner
timely requested a hearing under sections
6320 and 6330
on Petitioner
attached a letter to his hearing request in which he alleged: (1)
He had received no taxable income and had no taxable activity and
thus had no filing requirement; (2) respondent had not prepared
proper substitute for returns under section
6020(b) in that they were not signed by the Secretary
and were not on a form approved by the Office of Management and
Budget (OMB); (3) the lien was fabricated; and (4) the assessment
was unlawful. On
On
OPINION
Petitioner
contends that he had no taxable income or activities in 1994-99,
and thus he had no tax liability for those years. A
taxpayer may dispute the existence or amount of his or her tax
liability at a section
6330(b) hearing if he or she did not receive a notice
of deficiency or did not otherwise have an opportunity to dispute
the tax liability. Sec.
6330(c)(2)(B). Petitioner received the notice of
deficiency for 1994-99. Thus, petitioner may not dispute the
existence or amount of his tax liabilities for those years under sections
6320 and 6330.
B.
Whether Respondent's Determination Was an Abuse of Discretion Petitioner
contends that respondent's determination was an abuse of
discretion because: (1) He had no taxable income or activities;
(2) payment of Federal income tax is voluntary; (3) the assessment
was not proper; (4) the lien was premature; and (5) the conduct of
respondent's employee was fraudulent and subject to sanctions.1 We
disagree because: (1) Petitioner had taxable income; (2) payment
of Federal income tax is not voluntary; (3) respondent's
settlement officer verified that the requirements of applicable
law and administrative procedures had been met; (4) the certified
transcripts of petitioner's tax account for 1994-99 show that
assessment was proper and the lien was not premature; and (5)
there is no evidence that the conclusions of the settlement
officer are incorrect or that any sanctions against IRS personnel
are warranted. We
conclude that respondent's determination not to withdraw the
notice of Federal tax lien was not an abuse of discretion. C.
Whether Petitioner Is Liable for a Penalty Under Section 6673 Respondent
moved at trial to impose a penalty under section
6673 on grounds that petitioner made only frivolous
arguments and instituted these proceedings primarily for delay.
Petitioner responded to respondent's motion with frivolous
arguments. The
Court may impose a penalty of up to $25,000 if the taxpayer's
position or positions are frivolous or groundless or the
proceedings were instituted primarily for delay. Sec.
6673(a)(1)(B). A taxpayer's position is frivolous or
groundless if it is contrary to established law and unsupported by
a reasoned, colorable argument for change in the law. Coleman
v. Commissioner [86-1
USTC ¶9401], 791 F.2d 68, 71 (7th Cir. 1986); Gilligan
v. Commissioner [Dec.
55,731(M)], T.C. Memo. 2004-194. Petitioner
took frivolous positions at trial, including that (1) he was not a
taxpayer as defined by the Internal Revenue Code; (2) income from
his tax return preparation business was not taxable; (3) payment
of Federal income tax is voluntary; (4) he can only be taxed based
on substitutes for returns that qualify under section
6020(b) and that are on forms approved by OMB and
signed by the Secretary; and (5) no proper assessment was made
because respondent did not provide Form 23C. Respondent's
settlement officer warned petitioner that he might be held liable
for a penalty under section
6673. Petitioner continued to make frivolous arguments
in his petition, during pretrial proceedings, at trial, and in his
brief. A
taxpayer may be liable for a penalty under section
6673 if the taxpayer knew or should have known that his
or her claim or argument was frivolous. Hansen v. Commissioner
[87-2
USTC ¶9402], 820 F.2d 1464, 1470 (9th Cir. 1987); Nis
Family Trust v. Commissioner [Dec.
54,138], 115 T.C. 523, 544 (2000); Corcoran v.
Commissioner [Dec.
54,621(M)], T.C. Memo. 2002-18, affd. [2002-2
USTC ¶50,788] 54 Fed. Appx. 254 (9th Cir. 2002).
Petitioner is a professional tax return preparer who knew or
should have known that his arguments are frivolous. We conclude
that petitioner instituted and maintained these proceedings
primarily for delay. We
will impose a penalty under section
6673 in the amount of $15,000. To
reflect the foregoing, Respondent's
motion to impose a penalty under section
6673 will be granted, and decision will be entered for
respondent.
[Dec. 55,620(M)]
June H. Ginalski v. Commissioner. An
individual was precluded from challenging her underlying tax
liability during her Collection Due Process (CDP) hearing because
she received a notice of deficiency and had an opportunity at that
time to dispute her tax liability. An earlier Tax Court Summary
Opinion involving the same tax liability in which a decision was
entered was final and determinative as to that liability. The IRS
Appeals Officer did not abuse his discretion in refusing to
consider the merits of the underlying tax liabilities at a hearing
held in connection with collection. The fact that the taxpayer
might be able to show that the earlier holding was erroneous was
irrelevant. June
H. Ginalski, pro se; Rachel J. Zepeda, for respondent. MEMORANDUM
FINDINGS OF FACT AND OPINION GERBER,
Judge: This matter arises, under section
6320,1
out of respondent's filing of a Notice of Federal Tax Lien with
respect to petitioner's 1993 and 1994 income tax liabilities. The
sole issue presented for our consideration is whether petitioner
is entitled to question the underlying merits of her 1993 and 1994
income tax liabilities. FINDINGS
OF FACT1
June
H. Ginalski, petitioner, resided in The
Appeals officer refused to discuss the merits of the underlying
liabilities because petitioner had received a notice of deficiency
for her 1993 and 1994 tax years and had filed a petition with this
Court. After a trial on the merits of her 1993 and 1994 income
tax, it was held in a Tax Court Summary Opinion that the amounts
petitioner received during 1993 and 1994 from her divorce
proceeding were taxable to petitioner for those years. Pursuant to
this Court's decision, respondent assessed the 1993 and 1994
income tax liabilities, which are the liabilities for which notice
of lien has been filed. Respondent
issued a Notice of Determination Concerning Collection Action(s)
under Section
6320 and/or 6330,
and petitioner filed a timely petition with this Court. OPINION Section
6330 provides that, upon request and in the
circumstances described therein, a taxpayer has a right to a
"fair hearing". Sec.
6330(b). A "fair hearing" consists of the
following elements: (1) An impartial officer will conduct the
hearing; (2) the conducting officer will receive verification from
the Secretary that the requirements of applicable law and
administrative procedure have been met; (3) certain issues may be
heard such as spousal defenses and offers-in-compromise; and (4) a
challenge to the underlying liability may be raised if the
taxpayer did not receive a statutory notice of deficiency or
otherwise receive an opportunity to dispute such liability. Sec.
6330(c). In
that regard, section
6330(c)(2)(B) provides that a taxpayer may raise issues
concerning the underlying tax liability in a proceeding under section
6330 where the taxpayer did not receive a notice of
deficiency or otherwise have an opportunity to dispute the tax
liability. See Sego v. Commissioner [Dec.
53,938], 114 T.C. 604 (2000); Goza v. Commissioner
[Dec.
53,803], 114 T.C. 176 (2000). Because petitioner
received a notice of deficiency, petitioned this Court for relief,
and a final decision was entered, she was not entitled to contest
the merits of the underlying liability at her section
6330 hearing. Petitioner
contends that the Summary Opinion issued to her states on its face
that it is not appealable and that it is not precedent for any
other case. In particular, Summary Opinions of this Court contain
the caveat: "[The] case was heard pursuant to the provisions
of section
7463 of the Internal Revenue Code in effect at the time
that the petition was filed. The decision to be entered is not
reviewable by any other court, and this opinion should not be
cited as authority." Petitioner has mistakenly interpreted
that caveat to mean that the outcome of her Tax Court proceeding
involving the same taxable years (1993 and 1994) is not binding
with respect to her proceeding under sections 6320
and 6330.
Although this Court's decision for petitioner's 1993 and 1994 tax
years is not precedential for any other case, it is final and
determinative as it relates to petitioner's liability for those
years. It appears that petitioner believes that the limitation on
citing Summary Opinions as precedent deprives them of the effect
of res judicata. In any event, the fact that petitioner had an
opportunity to contest the merits of the 1993 and 1994 liabilities
triggers the limitation on raising such matters again before
Appeals or in this proceeding in our Court. See sec.
6330(c)(2)(B); Sego v. Commissioner, supra;
Goza v. Commissioner, supra. Petitioner
does not contend that there was an abuse of discretion on any
matter other than respondent's refusal to consider the underlying
merits of the 1993 and 1994 tax liabilities. Petitioner believes
that, if given the opportunity, she could show that respondent's
position and this Court's prior holding, with respect to the
underlying merits of the tax liability, are in error. Accordingly,
the sole question we consider is whether, in these circumstances,
respondent has abused his discretion in refusing to consider the
underlying merits of petitioner's tax liability for the years 1993
and 1994. Sections 6320
and 6330
provide for a hearing in connection with certain collection
activity by respondent, in this instance the filing of a Notice of
Federal Tax Lien. Under section
6330(c)(2)(B) a taxpayer may raise the merits of the
underlying liability if the taxpayer "did not receive any
statutory notice of deficiency for such tax liability or did not
otherwise have an opportunity to dispute such tax liability."
It is clear in this case that petitioner received a statutory
notice of deficiency and did have an opportunity to dispute such
tax liability. Under the statute, it does not matter whether
petitioner may now be able to show that the outcome or holding
resulting from that opportunity may have been in error. To
reflect the foregoing, Decision
will be entered for respondent. 1
Section references are to the Internal Revenue Code in effect for
the periods under consideration. [Dec. 55,351(M)]
Edwin E. and Bertalina Alvarez v. Commissioner. An
IRS Appeals officer's determination that the filing of a notice of
federal tax lien (NFTL) against married taxpayers was appropriate
was not an abuse of discretion. The taxpayers received a notice of
deficiency, the first page of which they attached to their prior
Tax Court petition. As a result, the taxpayers were not entitled
to challenge their underlying tax liability for one tax year at
issue. With respect to a later year in which they consented to
assessment, they did not challenge their underlying tax liability.
The taxpayers did not dispute that the only challenge at the
hearing was to the existence or amount of the earlier tax year's
liability. At trial, the taxpayers did not dispute the statement,
and no collection alternatives, challenges to the appropriateness
of the NFTL filing or spousal defenses were raised at the hearing
or at the trial. Edwin
E. Alvarez and Bertalina Alvarez, pro sese. Irene Scott
Carroll, for the respondent. MEMORANDUM
FINDINGS OF FACT AND OPINION GOEKE,
Judge: The petition in this case was filed under section
6330(d)1 in
response to a Notice of Determination Concerning Collection
Action(s) Under Section
6320 and/or 6330
(the notice of determination). The issue for decision is whether
the filing of a notice of federal tax lien (NFTL) was appropriate. FINDINGS
OF FACT Some
of the facts have been stipulated and are so found. The
stipulation of facts and the attached exhibits are incorporated
herein by this reference. Petitioners resided in On
On
On
OPINION Under
sections 6320 and 6330, a taxpayer is entitled to notice and an
opportunity for a hearing after an NFTL is filed by the
Commissioner in the process of collecting unpaid Federal taxes. Section
6330(c)(2) designates the issues that the taxpayer may
raise at the Appeals hearing. In lien actions, the taxpayer is
allowed to raise any relevant issue relating to the unpaid tax,
including spousal defenses, challenges to the appropriateness of
the NFTL filing, and alternatives to collection. Sec.
6330(c)(2)(A); sec. 301.6320-1(e)(1), Proced. &
Admin. Regs. The taxpayer "may also raise at the hearing
challenges to the existence or amount of the underlying tax
liability" if the taxpayer did not receive a notice of
deficiency or did not otherwise have an opportunity to dispute the
tax liability. Sec.
6330(c)(2)(B); sec. 301.6320-1(e)(1), Proced. &
Admin. Regs. Where
the existence or amount of the underlying tax liability is
properly at issue in the hearing, we review the matter de novo. Sego
v. Commissioner [Dec.
53,938], 114 T.C. 604, 610 (2000); Goza v.
Commissioner [Dec.
53,803], 114 T.C. 176, 181-182 (2000). Where the
existence or amount of underlying tax liability is not properly at
issue, we review the determination for abuse of discretion. Sego
v. Commissioner, supra at 610; Goza v. Commissioner,
supra at 181-182. With
respect to tax year 1996, petitioners received a notice of
deficiency as reflected by the fact that they attached the first
page of that notice to their prior petition to this Court.
Accordingly, petitioners are not entitled to challenge their
underlying tax liability for 1996. Petitioners consented to the
assessment of their 1998 tax and are not challenging their
underlying liability for that year. Therefore, we review the
Appeals officer's determination for abuse of discretion. The
notice of determination states that the only challenge at the
hearing was to the existence or amount of the 1996 tax liability.
At trial, petitioners did not dispute this statement, and no
collection alternatives, challenges to the appropriateness of the
NFTL filing, or spousal defenses were raised at the hearing or at
the trial. Accordingly, we hold that the Appeals officer's
determination that the filing of the NFTL was appropriate was not
an abuse of discretion. Decision
will be entered for respondent. 1
Unless otherwise indicated, all section references are to the
Internal Revenue Code currently in effect. [Dec.
54,550(M)] Barry
L. Moore v. Commissioner [Code Sec. 6330 ; Tax Court
Rule 121 ]
E.
Kenneth Wall, for the petitioner. Taylor Cortright, for the
respondent. MEMORANDUM
OPINION ARMEN,
Special Trial Judge: This
matter is before the Court on respondent's Motion for Partial
Summary Judgment, as supplemented, filed pursuant to Rule 121. 1 Respondent
contends that petitioner received notices of deficiency for each
of the taxable years 1987 and 1989 through 1995 and, therefore,
that petitioner is precluded by statute from contesting his
liability for the underlying taxes for those years in this
collection review proceeding. Summary
judgment is intended to expedite litigation and avoid unnecessary
and expensive trials. Fla. Peach Corp. v. Commissioner
[Dec. 44,689], 90 T.C. 678, 681 (1988). Rule 121 states that
either party may move, with or without supporting affidavits, for
a summary adjudication in the moving party's favor on all or any
part of the legal issues in controversy if the pleadings, answers
to interrogatories, depositions, admissions, and any other
acceptable materials, together with the affidavits, if any, show
that there is no genuine issue as to any material fact and that a
decision may be rendered as a matter of law. Rule 121(a) and (b); Sundstrand
Corp. v. Commissioner [Dec. 48,191], 98 T.C. 518, 520 (1992),
affd. [94-1 USTC ¶50,092] 17 F.3d 965 (7th Cir. 1994); Zaentz
v. Commissioner [Dec. 44,714], 90 T.C. 753, 754 (1988); Naftel
v. Commissioner [Dec. 42,414], 85 T.C. 527, 529 (1985). Rule
121(d), which addresses the adverse party's response to a motion
for summary judgment, states in pertinent part: When
a motion for summary judgment is made and supported as provided in
this Rule, an adverse party may not rest upon the mere allegations
or denials of such party's pleading, but such party's response, by
affidavits or as otherwise provided in this Rule, must set forth
specific facts showing that there is a genuine issue for trial. If
the adverse party does not so respond, then a decision, if
appropriate, may be entered against such party. King
v. Commissioner [Dec. 43,520], 87 T.C. 1213, 1217 (1986). The
moving party, however, bears the burden of proving that there is
no genuine issue of material fact, and factual inferences will be
read in a manner most favorable to the adverse party. Dahlstrom
v. Commissioner [Dec. 42,486], 85 T.C. 812, 821 (1985);
Jacklin v. Commissioner [Dec. 39,278], 79 T.C. 340, 344 (1982). As
explained in detail below, we shall grant respondent's motion. I.
Background A.
Notices Of Deficiency 1.
1987 and 1989 On
By
letter dated On
By
letter dated 2.
1990 Through 1992 On
By
letter dated February 17, 1995, John B. Kotmair, Jr. (Mr. Kotmair)
of By
letter dated On
Respondent
has no record that the notice of deficiency for 1990 through 1992
was returned to respondent by the U.S. Postal Service undelivered.
Petitioner failed to file a petition with the Court challenging
the notice of deficiency for 1990 through 1992. 3.
1988 and 1993 Through 1995 On
On
By
letter dated B.
Collection Procedures On
On
On
On
C.
Respondent's Motion for Partial Summary Judgment On
On
Counsel
for both parties appeared at the aforementioned motions session
and offered argument with respect to respondent's motion. During
the hearing, the Court questioned petitioner's counsel whether
petitioner denied that he actually received the notices of
deficiency in question or that he authored the letters to
respondent dated Petitioner's
written supplement includes assertions that respondent failed to
establish that petitioner actually received the notices of
deficiency and that respondent erred in mailing notices to the
DalRich Village address, which petitioner asserts was an address
for a Mail Boxes, Etc. business, instead of to petitioner's
residential address (which petitioner failed to specifically
identify). Petitioner failed to provide the Court with an
affidavit denying the pertinent allegations set forth in
respondent's motion. See Rule 121(e). II.
Discussion Section
6321 provides that if any person liable to pay any tax neglects or
refuses to pay the same after demand, the unpaid tax shall be a
lien in favor of the Section
6331(a) provides that, if any person liable to pay any tax
neglects or refuses to pay such tax within 10 days after notice
and demand for payment, the Secretary is authorized to collect
such tax by levy upon property belonging to the person. Section
6331(d) provides that the Secretary is obliged to provide the
person with notice before proceeding with collection by levy on
the person's property, including notice of the available
administrative appeals. In
the Internal Revenue Service Restructuring and Reform Act of 1998,
Pub. L. 105-206, sec. 3401, 112 Stat. 685, 746, Congress enacted
new sections 6320 (pertaining to liens) and 6330 (pertaining to
levies) to provide protections for taxpayers in tax collection
matters. These provisions generally provide that the Commissioner
cannot proceed with the collection of taxes by way of a lien or
levy on a person's property until the person has been given notice
of, and the opportunity for, an administrative review of the
matter (in the form of an Appeals Office hearing) and, if
dissatisfied, with judicial review of the administrative
determination in either the Tax Court or a Federal district court. In
Goza v. Commissioner [Dec. 53,803], 114 T.C. 176 (2000), we
explained that section 6330(c) provides for an Appeals Office
hearing to address collection issues such as spousal defenses, the
appropriateness of the Commissioner's intended collection action,
and possible alternative means of collection. Section
6330(c)(2)(B) provides that neither the existence nor the amount
of the underlying tax liability can be contested at an Appeals
Office hearing unless the taxpayer did not receive a notice of
deficiency for the taxes in question or did not otherwise have an
earlier opportunity to dispute such tax liability. The taxpayer in
Goza had received a notice of deficiency, yet failed to
file a petition for redetermination with the Court. When the
taxpayer subsequently attempted to use the Court's collection
review procedure as a forum to assert frivolous and groundless
constitutional arguments against the Federal income tax, the Court
dismissed the petition for failure to state a claim upon which
relief can be granted. Based
upon our review of the record in this case, we hold that there is
no dispute as to a material fact and that respondent is entitled
to partial summary judgment as a matter of law. The
record shows that petitioner wrote to respondent on The
record also shows that respondent mailed duplicate original
notices of deficiency for 1990 through 1992 by certified mail to
petitioner's last known address, including the N. Central address,
the The
record also shows that Mr. Kotmair wrote to respondent and
confirmed that petitioner actually received the notices of
deficiency for 1988 and 1993 through 1995. These notices were
mailed to petitioner at the Petitioner
failed to properly respond to respondent's Motion for Partial
Summary Judgment. In short, petitioner failed to allege specific
facts showing that there is a genuine issue for trial regarding
his receipt of the disputed notices of deficiency. Rule 121(d). In
the absence of any allegation denying receipt of the notices of
deficiency for 1987 and 1989 through 1995, the record establishes
that petitioner actually received each of those notices.
Therefore, consistent with section 6330(c)(2)(B), petitioner is
barred from contesting the existence or amount of his tax
liabilities for 1987 and 1989 through 1995 in this collection
review proceeding. See Goza v. Commissioner, supra. In
particular, petitioner's claim that the period of limitations for
assessment and collection has expired for the years in question
represents an impermissible challenge to the existence of the
underlying tax liability. Petitioner's claim constitutes an
affirmative defense that should have been raised in a petition for
redetermination filed pursuant to section 6213(a). See Rule 39; Badger
Materials, Inc. v. Commissioner [Dec. 26,339], 40 T.C. 1061,
1063 (1963). Consistent with section 6330(c), we hold that
petitioner may not raise such claim in this proceeding. To
reflect the foregoing, An
appropriate order will be issued granting respondent's Motion for
Partial Summary Judgment, as supplemented. 1
All Rule references are to the Tax Court Rules of Practice and
Procedure, and all section references are to the Internal Revenue
Code, as amended. 2
The gist of Mr. Kotmair's letter was that respondent lacked
authority to examine the taxable years 1990 through 1992 because
petitioner did not file income tax returns for those years. 3
The above-described "PRIVACY ACT RELEASE FORM AND POWER OF
ATTORNEY" identified John B. Kotmair, Jr., as a fiduciary for
Save-A-Patriot Fellowship and stated that petitioner was a member
of the group. Save-A-Patriot Fellowship has been identified as an
organization that is opposed to the Federal income tax. See Save-A-Patriot
Fellowship v. United States [97-1 USTC ¶50,229], 962 F. Supp.
695 (D. Md. 1996). 4
The gist of Mr. Kotmair's letter was that petitioner, "a
citizen of 5
Respondent erroneously stated in the supplement, filed 6
The disputed collection action does not include petitioner's tax
liability for 1988. 7
In addition, a copy of the notice of deficiency was mailed to Mr.
Kotmair. 8
The record also shows that by letters dated [2005-2 USTC ¶50,458] Wayne F. Currie, Plaintiff v. The Internal Revenue Service Commissioner
and Robertson K. Gray, Defendants. An
individual was statutorily precluded from challenging his
underlying tax liability at his Collection Due Process (CDP)
hearing because he had an opportunity to contest the merits of his
liability for unpaid payroll withholding taxes with the IRS prior
to his CDP hearing. The federal district court lacked jurisdiction
to review issues that had not been raised at the CDP hearing. ORDER HUNT,
JR., Judge: This matter is before the Court on Defendant Internal
Revenue Service Commissioner's Motion to Dismiss [13] and
Defendant Gray's Motion to Dismiss [14]. Plaintiff filed a
Response to Show Cause Order and Motion for Summary Judgment [16],
which the Court construes as a response to the pending motions to
dismiss. For the reasons set forth below, Defendant Internal
Revenue Service Commissioner's Motion to Dismiss [13] is GRANTED
and Defendant Gray's Motion to Dismiss [14] is also GRANTED. I.
BACKGROUND
II.
DISCUSSION
IRS
Commissioner's Motion to Dismiss Defendant
argues the Court should dismiss the instant complaint on three
different grounds: (1) lack of personal jurisdiction over the
named Defendant, the Internal Revenue Service Commissioner
pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure;
(2) insufficient service of process pursuant to Rule 12(b)(5) of
the Federal Rules of Civil Procedure; and failure to state a claim
upon which relief can be granted pursuant to Rule 12(b)(6). 6 The
Government's Rule 12(b)(6) Motion to Dismiss A district court may dismiss a complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations. Powell v. United States [ 91-2 USTC ¶50,514], 945 F.2d 374, 375 (11th Cir. 1991). In evaluating a motion to dismiss for failure to state a claim, a court must accept as true all allegations contained in the complaint and must view the complaint in the light most favorable to the plaintiff. Peterson v. A liberal reading of the complaint demonstrates that Plaintiff is attacking the determination of his underlying liability and seeking judicial review of the Collection Due Process Hearing that resulted in a Notice of Determination issued by the IRS on November 5, 2003. Before the IRS can issue a levy against a taxpayer's personal property to collect unpaid taxes, the IRS must first serve on the taxpayer a Final Notice of Intent to Levy. 26 U.S.C. §6330(a). Once receiving final notice, the taxpayer has the right to request a collection due process hearing conducted by the IRS Office of Appeals. At the collection due process hearing, the taxpayer may raise "any issue relating to the unpaid tax or the proposed levy," including "(i) appropriate spousal defenses; (ii) challenges to the appropriateness of collection actions; and (iii) offers of collection alternatives, which may include the posting of a bond, the substitution of other assets, an installment agreement, or an offer-in-compromise." 26 U.S.C. §6330(c)(2)(A). However, the taxpayer may only dispute "the existence or amount of the underlying tax liability for any tax period if the person did not receive any statutory notice of deficiency for such tax liability or did not otherwise have an opportunity to dispute such tax liability. According to Plaintiff, he is not the responsible party for the unpaid employment taxes at issue and seeks relief from all collection actions by the IRS, which, as previously mentioned, the Court construes as challenging his underlying liability. The appeals officer in the collection due process hearing refused to consider the merits of Plaintiff's challenges to his underlying liability, because the officer concluded that Plaintiff had prior opportunities to dispute the liability. See Defendant IRS Commissioner's Motion to Dismiss [13], Exhibit A-25 ("In fact, contrary to the taxpayer's statements during the conference, after inquiry was made as to if he had previously appealed liability, it appears that the taxpayer's account had also been in appeals previously prior to the actual assessment."). |