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V.
CONCLUSION IT
IS THEREFORE ORDERED that the JUDGMENT
IN CIVIL CASE Decision
by Court. This action
came to be considered by the Court. The issues have been
considered and a decision has been rendered. IT
IS ORDERED AND ADJUDGED that the defendants' motion to dismiss is
GRANTED. Judgment is hereby entered in favor of the defendants,
Internal Revenue Service, Jerry Andrews and Veronica Lindersmith
and against the plaintiffs Ron and Roslind Kintzler. [2001-2
USTC ¶50,702] Mikhail Pikover, Plaintiff v.
MANELLA,
District Judge: Mikhail
Pikover ("Plaintiff") seeks judicial review of the
Internal Revenue Service's decision to file a federal tax lien
against him. Defendant moves for summary judgment on the grounds
that there is no genuine issue of material fact. II.
FACTS On
The
IRS assessed $24,715,559 against Plaintiff for the unpaid excise
taxes Plaintiff
appeals the Notice of Determination to this court pursuant to 26
U.S.C. §§6320(c) & 6330(d), which provide due process
protections for taxpayers in tax collection actions. 2 See Goza
v. Commissioner of Internal Revenue [CCH Dec. 53,803], 114
T.C. 176, 179 (T.C. 2000) (Cohen, CJ). Section 6320 generally
provides that the IRS cannot proceed with the collection of taxes
by way of a lien on a taxpayer's property until the taxpayer has
been given notice of and the opportunity for an administrative
review of the matter. See id. Defendant
filed a motion for summary judgment III.
SUMMARY JUDGMENT ANALYSIS Summary
judgment is appropriate when "the pleadings, depositions,
answers to interrogatories, and admissions on file, together with
the affidavits, if any, show that there is no genuine issue as to
any material fact and that the moving party is entitled to
judgment as a matter of law." Fed. R. Civ. P. 56(c). Summary
judgment is "properly regarded not as a disfavored procedural
shortcut, but rather as an integral part of the Federal Rules as a
whole, which are designed 'to secure the just, speedy and
inexpensive determination of every action.' " Celotex
Corporation v. Catrett, 477 In
a trio of 1986 cases, the Supreme Court clarified the applicable
standards for summary judgment. See Celotex, supra; Anderson
v. Liberty Lobby, Inc., 477 If
the moving party meets its initial burden, the "adverse party
may not rest upon the mere allegations or denials of the adverse
party's pleadings, but the adverse 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." Fed.
R. Civ. P. 56(e). When assessing whether the non-moving party has
raised a genuine issue, the court must believe the evidence and
draw all justifiable inferences in the non-movant's favor. Anderson,
477 [w]hen
the moving party has carried its burden under Rule 56(c), its
opponent must do more than simply show that there is some
metaphysical doubt as to the material facts. . . . Where the
record taken as a whole could not lead a rational trier of fact to
find for the nonmoving party, there is no "genuine issue for
trial." To
be admissible for purposes of summary judgment, declarations or
affidavits must be based on personal knowledge, must set forth
"such facts as would be admissible in evidence," and
must show that the declarant or affiant is competent to testify
concerning the facts at issue. Fed. R. Civ. P. 56(e). Declarations
on information and belief are insufficient to establish a factual
dispute for purposes of summary judgment. See B.
Standard of Review Section
6330(d) does not specify the standard of review a district court
should apply to an appeal of a Notice of Determination. The
legislative record indicates that the court should conduct a de
novo review "where the validity of the tax liability was
properly at issue at the administrative hearing." H. Conf.
Rept. 105-599, 105th Cong. 2d Sess. 266 (1998). The court reviews
a Notice of Determination for abuse of discretion where the amount
of the underlying tax liability is not properly part of the
appeal. Plaintiff's
underlying tax liability was not properly part of the collection
hearing at issue. Section 6330(c) provides for an administrative
hearing to address collection issues, such as spousal defenses,
the appropriateness of an intended collection action, and possible
alternative means of collection. Sego [CCH Dec. 53,938],
114 T.C. at 609. The existence and amount of Plaintiff's tax
liability may not be contested at the collection hearing unless:
1) the taxpayer did not receive notice of a deficiency for the
taxes in question; or 2) the taxpayer did not otherwise have an
earlier opportunity to dispute such tax liability. The
record in this case clearly demonstrates that Plaintiff received
notice of his tax liability. The Ninth Circuit has held that
notice is satisfied upon informing the taxpayer of the amount due
and demanding payment of the tax. Hughes v. United States
[92-1 USTC ¶50,086], 953 F.2d 531, 536 (9th Cir. 1992). The IRS
initially notified Plaintiff of this matter Plaintiff
also had opportunities to dispute the tax liability. Plaintiff was
charged and convicted of conspiring to evade the taxes at issue.
Additionally, Plaintiff protested his tax liability to the IRS and
appealed the assessment to the Manhattan Appeals Office of the
IRS. The
validity of Plaintiff's tax liability was not properly at issue
during the collection hearing and is therefore not part of this
appeal. Accordingly, the court reviews the hearing officer's
decision to file a tax lien for an abuse of discretion. Abuse of
discretion may be found only if there is no evidence to support
the challenged decision or if the decision was based on an
improper understanding of the law. Song Jook Suh v. C.
Review of the Tax Lien A
federal tax lien arises automatically when: 1) a tax assessment
has been made; 2) the taxpayer has been given notice of the
assessment and payment was demanded within sixty (60) days of the
assessment; and 3) the taxpayer failed or refused to pay the
amount assessed within ten (10) days after the notice and demand.
26 U.S.C. §§6203, 6303(a), 6321. See also United States v.
Templeman [2000-1 USTC ¶50,364], 111 F.Supp.2d 85, 90 (D.N.H.
2000). The hearing officer must verify that the requirements of
any applicable law or administrative procedure have been met. 26
U.S.C. §6330(c)(1). First,
the hearing officer determined that a tax assessment had been
made. The hearing officer determined that Plaintiff had pled
guilty to conspiracy to defraud the Plaintiff
argues that the assessment was barred by the statute of
limitations. However, taxes may be assessed "at any
time" in cases involving fraud. 26 U.S.C. §6501(c)(2).
Plaintiff's criminal convictions establish fraud pursuant to the
doctrine of collateral estoppel. See Blohm v. Commissioner of
Internal Revenue [93-2 USTC ¶50,518], 994 F.2d 1542, 1554
(11th Cir. 1993). Second,
The hearing officer determined that Plaintiff had been given
notice of the assessment and related demands for payment. The
hearing officer's finding is clearly supported by the record, as
discussed supra. The record also indicates that the Notices
of Assessment were issued within sixty (60) days of the assessment
on Finally,
the hearing officer determined that Plaintiff had failed to pay
the amount within ten (10) days of the demand. Snyder Decl. ¶¶8-10.
The IRS sent Plaintiff two Notices of Assessment, neither of which
resulted in Plaintiff's payment. The hearing officer also
concluded that Plaintiff was unwilling to consider repayment
terms, as he disputed the underlying liability giving rise to the
tax. Plaintiff
cites no evidence to dispute these findings. 5 Plaintiff
merely argues in his opposition that he did not receive notice of
his tax liability prior to imposition of the lien. 6 The record
clearly contradicts his assertion. IV.
CONCLUSION Defendant's
motion for summary judgment is GRANTED. IT
IS SO ORDERED. 1
Stipulations and admissions in the pleadings are generally binding
on the parties. See American Title Ins. Co. v. Lacelaw Corp.,
861 F.2d 224, 226 (9th Cir. 1988) (citations omitted). 2
26 U.S.C. §6320 applies to tax liens while 26 U.S.C. §6330
applies to tax levies. Section 6320(c) provides for judicial
review as delineated by Section 6330(d). 3
Although Plaintiff argues that he first received written notice of
the tax liability 4
The Notices of Assessment were issued April 26 and 5
Plaintiff argues that he is not liable for the taxes because he
had no connection with the operation of the business known as
Ampetrol, Inc. However, this court does not have jurisdiction to
reach the merits of this argument. 6
Plaintiff's assertions are unsupported by any sworn declaration by
Plaintiff himself. [Dec.
54,577] Francisco and
Angela Aguirre v. Commissioner [Code Secs. 6320 and
6330 ]
Francisco
and Angela Aguirre, pro se. David C. Holtz, for the
respondent. OPINION COLVIN,
Judge: This
matter is before the Court on respondent's motion for summary
judgment. For reasons stated below, we will grant respondent's
motion. All
section references are to the Internal Revenue Code as amended,
and all Rule references are to the Tax Court Rules of Practice and
Procedure. Background Petitioners
are married and lived in Petitioners
filed joint returns for 1992, 1993, and 1994. Respondent examined
petitioners' 1992, 1993, and 1994 returns in 1995. On Consent
to Assessment and Collection--I do not wish to exercise my appeal
rights with the Internal Revenue Service or to contest in United
States Tax Court the findings in this report. Therefore, I give my
consent to the immediate assessment and collection of any increase
in tax and penalties, and accept any decrease in tax and penalties
shown above, plus any additional interest as provided by law. I
understand that this report is subject to acceptance by the
District Director. In
1999, respondent sent to petitioners a Notice of Intent to Levy
and Notice of Your Right to a Hearing relating to petitioners'
1992-94 tax years. Petitioners then filed a Form 12153, Request
for a Collection Due Process Hearing, for those tax years. 1 Petitioners
requested the hearing solely to dispute the correctness of their
underlying tax liabilities. On Respondent
filed a motion for summary judgment on Discussion A.
Contentions of the Parties Respondent
contends, inter alia, that petitioners waived their right to
challenge collection of their tax liability for 1992-94 because
they signed Form 4549 consenting to the immediate assessment and
collection of their tax liability for those years. In
their petition, petitioners stated as a basis for relief only
that: We
disagree with the determination, because although we were present
at the time of the original audit, many of our deductions were
disallowed when they were correct. We have been requesting an
audit reconsideration to present general ledegers [sic] and
documents properly organized in order to verify our deductions in
a cohesive manner. B.
Summary Judgment 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). We may grant summary
judgment if the pleadings, answers to interrogatories,
depositions, admissions, affidavits, and any other acceptable
materials show that 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); Zaentz
v. Commissioner [Dec. 44,714], 90 T.C. 753, 754 (1988). The
moving party bears the burden of proving that there is no genuine
issue of material fact. Dahlstrom v. Commissioner [Dec.
42,486], 85 T.C. 812, 821 (1985); Jacklin v. Commissioner
[Dec. 39,278], 79 T.C. 340, 344 (1982). C.
Analysis No
genuine issues of material fact preclude us from deciding this
matter. Rule 121(b). We conclude that respondent is entitled to
summary judgment. First, by signing Form 4549, petitioners
consented to the immediate assessment and collection of their tax
liability for 1992-94. See Hudock v. Commissioner [Dec.
33,519], 65 T.C. 351, 363 (1975) (Form 4549 is evidence of the
taxpayer's consent to the immediate assessment and collection of
the proposed deficiency). Petitioners cannot now challenge the tax
liability to which they have consented. Petitioners
signed the Form 4549 in 1995, before enactment in 1998 2 of sections
6320 and 6330, which provide procedures for an Appeals Office
hearing and judicial review of collection actions. However, our
deficiency jurisdiction existed in 1995. By signing the Form 4549,
petitioners explicitly waived the right to contest in the Tax
Court their tax liability for the years included in the Form 4549.
Petitioners thus expressly waived the opportunity to obtain
prepayment judicial review of their tax liability for those years.
Petitioners requested the section 6330 hearing and filed their
petition in this case solely to dispute the correctness of their
underlying tax liabilities. The fact that section 6330 now
provides an opportunity to contest tax liability for taxpayers who
did not receive a notice of deficiency, sec. 6330(c)(2)(B),
provides no consolation to petitioners who themselves made the
choice not to receive such notice, see Sego v. Commissioner
[Dec. 53,938], 114 T.C. 604, 611 (2000) (taxpayers who
deliberately refused to accept delivery of the notices of
deficiency repudiated the opportunity to contest the notices of
deficiency in the Tax Court). Second,
by failing to file a response to respondent's motion and to attend
the calendar call, or have someone appear on their behalf,
petitioners waived their right to contest the motion. Rule 121(d);
Lunsford v. Commissioner, 117 T.C.--(2001). Accordingly,
we will grant respondent's motion for summary judgment. An
appropriate order and decision will be entered. 1
The record does not indicate whether respondent conducted a
hearing in petitioners' case. 2
Secs. 6320 and 6330 were enacted as part of the Internal Revenue
Service Restructuring and Reform Act of 1998, Pub. L. 105-206,
sec. 3401, 112 Stat. 685, 746. [Dec.
54,669(M)] Gene C. Smith
v. Commissioner
Gene
C. Smith, pro se. Joanne B. Minsky, for the respondent. MEMORANDUM
FINDINGS OF FACT AND OPINION LARO,
Judge: Petitioner
petitioned the Court under section 6330(d). 1 We decide
herein whether his income tax as assessed by respondent for 1985,
1986, 1987, and 1988 should be reduced to take into account
additional amounts which petitioner alleges are deductible in
determining that tax. We hold it should not. FINDINGS
OF FACT Most
facts were stipulated. We incorporate herein by this reference the
parties' stipulation of facts and the accompanying exhibits.
Petitioner resided in Petitioner
failed to file timely Federal income tax returns for 1985, 1986,
1987, and 1988. He filed returns for those years on various dates
in 1999. On
Respondent
issued a Notice of Determination to petitioner on You
failed to file your 1985, 1986, 1987, and 1988 Federal individual
income tax returns and substitute returns were prepared by the
Atlanta Service Center based on information obtained from third
parties. You
failed to petition the Tax Court after statutory notices of
deficiency were mailed to you. The
only legal requirements before taking general collection
enforcement actions are the notice and demand, the notice of
intent to levy, and the notice of right to collection due process
hearing. With the best information available, it is determined the
requirements of various applicable law and administrative
procedures have been met. All legal and procedural requirements
and the levies proposed were appropriate under the circumstances. OPINION Where
the validity of the underlying tax liability is properly at issue
in an appeal brought under section 6330(d), the Court will review
the taxpayer's liability under the de novo standard. Where the
underlying liability is not at issue, the Court will review the
Commissioner's administrative determination for abuse of
discretion. Sego v. Commissioner [Dec. 53,938], 114 T.C.
604, 610 (2000). To determine which standard of review applies,
the Court must decide whether petitioner's underlying tax
liability is at issue. A taxpayer may challenge "the
existence or amount of the underlying tax liability for any tax
period 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." Sec.
6330(c)(2)(B). Petitioner's
sole allegation in his petition is that respondent's determination
is incorrect in that it fails to reflect certain deductions.
Petitioner alleged in his opening statement that the notices of
deficiency were not mailed to his last known address and that he
did not receive the notices of deficiency. Respondent asserts that
petitioner's underlying tax liability is not before the Court.
Respondent contends that there is no evidence petitioner did not
receive the notices of deficiency. The
parties ask the Court to decide primarily whether petitioner
received a notice of deficiency for any of the subject years. If
he did, he would be precluded from challenging his underlying tax
liability for the related year or years. We need not and do not
decide that issue. Assuming arguendo that petitioner did not
receive a notice of deficiency for any of the subject years and
thus was entitled to challenge his underlying tax liability for
each of those years, he has not established that he is entitled to
any of the additional deductions which he claims. Petitioner did
not provide at trial any evidence, in the form of either testimony
or documentation, to support his claim to any additional
deduction. In fact, he chose to present no evidence at all other
than by way of the stipulated facts and exhibits, none of which
adequately supports his claim. Given that petitioner set forth in
his petition no allegation that respondent abused his discretion,
that petitioner has not claimed that the proposed method of
collection is inappropriate, that petitioner has not offered any
alternative means of collection, and that petitioner has raised no
spousal defenses, we hold for respondent. See Lunsford v.
Commissioner [Dec. 54,553], 117 T.C. 183 (2001). Accordingly, Decision
will be entered for respondent. 1
Section references are to the Internal Revenue Code applicable to
the relevant years. [2002-1
USTC ¶50,224] Delbert Remole and Frances Remole, Plaintiffs v.
Internal Revenue Service, sued as The United States Department of
Treasury, Internal Revenue Service, Defendant
MCCUSKEY,
District Judge: On
It
is undisputed that plaintiff Frances Remole (" Plaintiff
Delbert Remole ("Delbert") did request a Section 6330
hearing before the IRS. However, Delbert has only attacked the
amount of unpaid tax liability not the merits of the tax
assessment. Delbert had an opportunity to dispute the tax
assessment in the appeal process before the IRS but failed to
avail himself of that opportunity. Consequently, the merits of
Delbert's tax liability, including the amount of the liability,
were not properly the subject of a collection due process hearing.
Accordingly, those issues are not subject to review by this Court
in a Section 6330(d) judicial review proceeding. 26 U.S.C. §6330(d).
In addition, Delbert has asked this Court to consider documents
that were not furnished to the IRS appeals officer during the
collection due process hearing. As such, those documents are not
part of the administrative record and cannot be considered by this
Court. For
the reasons stated, this Court dismisses the action as to IT
IS HEREBY ORDERED: 1.
Defendant's Motion to Dismiss (#6) the claims filed by plaintiff
Frances Remole is GRANTED. 2.
Defendant's Motion for Summary Judgment against plaintiff Delbert
Remole is GRANTED. This case is
terminated. [2002-1
USTC ¶50,278] E. Steven Wald, Plaintiff v.
E.
Steven Wald, Delray Beach, Fla. 33446-3741, pro se. Deborah
M. Morris, Department of Justice, Washington, D.C. 20530, for
defendant. ORDER
GRANTING DEFENDANT'S MOTION TO DISMISS GOLD,
District Judge: THIS
CAUSE is before the
court upon the Statement
of Facts 2 Wald,
a taxpayer and resident of At
some time in the late 1990s, Metacor and some of Wald's other
corporations filed for bankruptcy. The I.R.S. filed claims in the
other bankruptcies for $4,039.55. Although the I.R.S. was informed
of Metacor's bankruptcy and was provided copies of bankruptcy
records, it did not file a claim in conjunction with Metacor's
bankruptcy. Compl. at ¶11, 12. As a result, the debts of
Metacor's unsecured creditors were paid, but the I.R.S. never
received any proceeds from Metacor's bankruptcy proceedings. Following
administrative proceedings and a hearing with the I.R.S. Office of
Appeals, the I.R.S. determined that Wald was responsible for the
alleged nonpayment of Metacor's employment taxes. The I.R.S.
Office of Appeals sustained the I.R.S.'s Notice of Intent to Levy
a civil penalty assessment in the amount of $42,011.71. Analysis In
its motion to dismiss, the United States has identified three
grounds for dismissal of Wald's complaint: (1) count I of Wald's
complaint, which is pursuant to 26 U.S.C. §6330, fails to state a
claim upon which relief can be granted; (2) the court lacks
jurisdiction to redetermine Wald's tax liability; 3 and (3)
Wald's request for equitable relief violates the Anti-Injunction
Act, 26 U.S.C. §7421. Each of these points is addressed below. I.
Standard for Motion to Dismiss To
warrant dismissal of a complaint under Rule 12(b)(6) of the
Federal Rules of Civil procedure, it must be "clear that no
relief could be granted under any set of facts that could be
proved consistent with the allegations." Blackston v.
Alabama, 30 F.3d 117, 120 (11th Cir. 1994) (quoting Hishon
v. King & Spalding, 467 II.
Failure to State a Claim in Count I In
count I of his complaint, Wald requests "judicial review and
redetermination" of the I.R.S.'s determination of his tax
liability in the amount of $42,011.71. Specifically, Wald claims
that the I.R.S.'s appeals officer's determination was not
supported by competent evidence, failed to consider the
determination by the I.R.S. field officer that Metacor payments
had been earmarked for the tax funds, and denied Wald access to
any of the relevant evidence that contributed to his final
decision. Wald
brings count I of his complaint pursuant to 26 U.S.C. §6330(d)(1).
Section 6330 provides a taxpayer for notice and an opportunity for
a hearing before a levy by the I.R.S. Office of Appeals. 26 U.S.C.
§6330(a)-(b). The appeals officer's determination is subject to
judicial review by the Tax Court or a district court, if the Tax
Court does not have jurisdiction. 26 U.S.C. §6330(d). During the
hearing before the appeals officer, a taxpayer may raise the
following issues: (A)
In general.-- (i)
appropriate spousal defenses; (ii)
challenges to the appropriateness of collection actions; and (iii)
offers of collection alternatives. . . . (B)
Underlying liability.--The person may also raise at the hearing
challenges to 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. 26
U.S.C. §6330(c)(2). Count
I of Wald's complaint fails to state a claim upon which relief can
be granted because it does not properly raise any of the issues
listed in §6330(c)(2). It is undisputed that Wald does not raise
any spousal defenses or collection alternatives. Instead, what is
at issue is whether Wald has stated a cognizable challenge to the
appropriateness of the collection action or his underlying
liability. By questioning the sufficiency of the evidence and the
Appeals Officers' alleged failure to consider the field officer's
determination that a tax payment had been made, Wald has raised
the issue of his underlying tax liability. According to 26 U.S.C.
§6330(c)(2)(B), the taxpayer can challenge the existence or
amount of the underlying tax liability only if he or she "did
not receive any statutory notice of deficiency for such tax
liability" or "did not otherwise have an opportunity to
dispute such tax liability." The complaint is devoid of any
allegation that Wald did not receive notice of his tax liability
or that he did not have an opportunity to dispute his liability.
In fact, the Notice of Determination Wald attaches to his
complaint prevent such a finding. See Compl, Ex. 3. Because
it appears that Wald received notices of his deficiency and had an
opportunity to challenge the I.R.S.'s determinations, he cannot
challenge his underlying liability pursuant to 26 U.S.C. §6330(d)(1).
See Fossen v. Comm. of Int. Rev. [2001-1 USTC ¶50,263], 4
Fed. Appx. 526 (9th Cir. 2001) (holding that plaintiff could not
raise challenge to underlying tax liability under 26 U.S.C. §6330(c)(2)(B)
because he had received statutory notices of tax deficiency). To
the extent that Wald seeks to challenge the appropriateness of the
collection action by arguing that the evidence was incompetent or
that he lacked access to relevant evidence, judicial review of
those questions is precluded because Wald did not raise those
issues before the appeals officer. The Notice of Determination by
the Office of Appeals, which Wald attaches to his complaint,
indicates that he challenged only the existence and the amount of
the underlying tax liability, not the appropriateness of the
collection action or any other issues. See Compl, Ex. 3 at
4-5. The complaint does not contradict this exhibit. Because Wald
cannot raise issues in this court that he did not raise below, the
allegations regarding the competence or access to evidence must be
dismissed. III.
Failure to State a Claim in Count II In
count II of his complaint, as amended in his response to the
United States's motion, Wald requests relief under 26 U.S.C. §6672(c)(2).
At the outset, the court notes that Wald cannot seek relief under
this provision because it is not intended to create a cause of
action for taxpayers. Section 6672 authorizes the I.R.S. to assess
a penalty against a responsible person who willfully fails to pay
over withholding taxes. 26 U.S.C. §6672(a). Its purpose is to
protect the government against losses, not to afford relief to
taxpayers against whom penalties have been assessed. See Ross
v. The
provision under which Wald seeks relief reads as follows: Suit
must be brought to determine liability for penalty.--If, within 30
days after the day on which is claim for refund with respect to
any penalty under subsection (a) is denied, the person described
in paragraph (1) fails to begin a proceeding in the appropriate
United States district court (or in the Court of Claims) for the
determination of his liability for such penalty, effective on the
day following the close of the 30-day period referred to in this
paragraph. 26
U.S.C. §6672(c)(2). Nothing in this provision suggests that it
was intended to create a cause of action for taxpayers.
Additionally, §6672(c)(1), to which §6672(c)(2) refers, applies
only to taxpayers who have filed bonds with respect to liability
for tax penalties. Wald's complaint does not allege that he has
filed such a bond. For these reasons, 26 U.S.C. §6672(c)(2) is
further inapplicable to this case. Cf. Glass v. Int. Rev. Svc.
[2001-2 USTC ¶50,747], 21 Fed. Appx. 870, 871 (10th Cir. 2001)
("District courts have no jurisdiction over civil claims
challenging taxes unless litigants first pay the assessed tax and
then raise these claims in a refund suit."). As such, count
II of Wald's complaint must be dismissed. IV.
Anti-Injunction Act Bars Count III In
count III of his complaint, Wald requests an equitable
determination that the penalty assessed against him should be
abated. In effect, he requests that the court enjoin the tax
assessment. The It
is clear that, in count III of his complaint, Wald requests that
the I.R.S.'s collection be restrained, yet none of the exceptions
listed in this provision apply to this case. 4 Wald
erroneously claims that his action falls under sections 6330(e)(1)
and 6672(c), which are among the exceptions listed in 26 U.S.C. §7421(a).
As discussed in the preceding subsection, §6672(c) is
inapplicable because it deals with situations where a bond has
been filed, and none has been filed in this case. Moreover, this
provision does not create a cause of action for a taxpayer such as
Wald. Section 6330(e)(i) is related to the suspension of
collection actions while a collection due process request is still
pending. In this case, the complaint alleges that the collection
due process determination has been completed. Therefore, §6330(e)(i)
cannot apply. Because none of the exceptions listed in 26 U.S.C.
§7421(a) are satisfied, Wald's "equitable action for
abatement" cannot be entertained, and count III must be
dismissed. It
is therefore: ORDERED
AND ADJUDGED THAT: 1.
The 2.
The Clerk of the Court shall CLOSE this case. 3.
All pending motions are DENIED AS MOOT. DONE
AND ORDERED. 1
In his original complaint, Wald sought relief in count II pursuant
to 26 U.S.C. §6672(b)(2), but, in response to the I.R.S.'s
motion, Wald indicated that count II should be amended to seek
relief under 26 U.S.C. §6672(c)(2). 2
The following facts are derived from Wald's complaint and the
exhibits attached to the complaint. 3
In its reply to Wald's response, the 4
In Enochs v. Williams Packing & Navigation Co. [62-2
USTC ¶9545], 370 U.S. 1, 82 S.Ct. 1125 (1962), the Supreme Court
recognized a judicial exception to §7421, which also is
inapplicable here. The Court concluded that the Anti-Injunction
Act bars a suit to enjoin a tax penalty (1) unless under no
circumstances can the United States prevail and (2) if equity
jurisdiction otherwise exists. [2002-2
USTC ¶50,499] Donald D. Hoffman, Plaintiff v.
BRYAN,
District Judge: This
matter comes before the court on the SUMMARY
JUDGMENT STANDARD Summary
judgment is proper only if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any
material fact and the moving party is entitled to judgment as a
matter of law. Fed.R.Civ.P. 56(c). The moving party is entitled to
judgment as a matter of law when the nonmoving party fails to make
a sufficient showing on an essential element of a claim in the
case on which the nonmoving party has the burden of proof. Celotex
Corp. v. Catrett, 477 The
determination of the existence of a material fact is often a close
question. The court must consider the substantive evidentiary
burden that the nonmoving party must meet at trial--e.g., a
preponderance of the evidence in most civil cases. Anderson,
477 PROCEDURAL
AND FACTUAL HISTORY On
Attached
to the Form 1040 was a document that stated in relevant part: I,
Donald D. Hoffman, am submitting this as part of my 1997
income tax return even though I know that no section of the
Internal Revenue Code: (1)
Establishes an income tax "liability" * * * (5)
Section 6103(h) and (l) provides [sic] that all return information
can be used against me to determine and impose both civil and
criminal fines. Therefore, I do not see how any law can compel me
to provide information to the government that can be used against
me in this manner, consistent with my Fifth Amendment right not to
be compelled to be a witness against myself. * * * (6)
With respect to the information I included in my return, I wish to
point out that the courts have ruled that "A(1040) form with
'zeroes' inserted in the space provided . . . qualifies as a
return." * * * (7)
Please note that my 1997 return also constitutes a claim for
refund pursuant to Code Section 6402. (8)
* * * Therefore, since I had no Earnings in 1997, that would have
been taxable as "income" under the Corporation Excise
Tax Act of 1909, I can only swear to having "zero"
income in 1997. (9)
I am also putting the IRS on notice that my 1997 tax return and
claim for refund does not constitute a "frivolous"
return pursuant to Code Section 6702. * * * (10)
Moreover, since no assessment for 1997 income taxes (as provided
in Chapter 63) has ever been made against me, the IRS has no legal
basis to hold the S10,400.00 of my money that it is now holding
for 1997 income taxes. * * * (13)
In addition, I will hold IRS employees who disregard the statutes,
court decisions, Privacy Act Notice provisions and other
references contained in this document accountable pursuant to 26
USC 7214 and 18 USC 241. Section 7214 makes it a crime for IRS
agents to seek to extract "other or greater sums than
authorized by law" and to engage in "extortion and
willful oppression under color of law." To the extent that
IRS employees capriciously, wantonly and arbitrarily disregard the
court decisions, statutes and other references contained in this
document, they will be in criminal violation of these statutes,
and you are accordingly being put on such notice. * * * On
On
On
On
DISCUSSION 26
U.S.C. §6702(a) provides for the immediate assessment of a civil
penalty of $500 against any individual who files what purports to
be a return of income tax where (1) the document filed either does
not contain information on which the substantial correctness of
the self-assessment may be judged or contains information that on
its face indicates that the self-assessment is substantially
incorrect; and (2) such conduct arises either from a position
which is frivolous or from a desire which appears on the purported
return to delay or impede the administration of Federal income tax
laws. 26
U.S.C. §6330 provides the procedures for administrative
collection actions. The law requires that (1) the IRS give 30
days' written notice of the taxpayer's right to a CDP hearing
before making a levy; (2) a hearing be conducted by an officer or
employee who has no prior involvement with the subject tax
liability; (3) the Appeals Office obtain verification from the IRS
that the requirements of any applicable law or administrative
procedure have been met; (4) the taxpayer may raise any relevant
issue relating to the unpaid tax or the proposed levy at the CDP
hearing, including challenges to the appropriateness of collection
actions and offers of collection alternatives; (5) the taxpayer
may challenge the existence or amount of the underlying tax
liability under some circumstances; and (6) the final
determination by the Appeals Officer shall take into consideration
(a) the verification that applicable law and administrative
procedures have been met, (b) the issues raised by the taxpayer,
and (c) whether any proposed collection action balances the need
for the efficient collection of taxes with the legitimate concern
of the person that any collection action be no more intrusive than
necessary. See 26 U.S.C. §6330(a), (b)(1),(c), (c)(2)(B),
and (c)(3)(C). A
taxpayer may appeal the determination of the Appeals Office to the
Tax Court or to a federal district court, whichever has
jurisdiction over the underlying tax liability. 26 U.S.C. §6330(d).
For frivolous return penalties under 26 U.S.C. §6702, the federal
district court has jurisdiction. See 26 C.F.R. &
301.6330-1(f)(2)(Q-F3 and A-F3); Hart v. IRS, 87 A.F.T.R.
2d 2001-1531, 2001-1
USTC ¶50,328 (E.D. Pa. 2001); Johnson v.
Commissioner [CCH
Dec. 54,554] , 117 T.C. 204 (2001). A
review of the record shows that plaintiff voluntarily filed the
tax return at issue. He participated in a hearing that was
conducted by an Appeals Officer who had no previous involvement
with the unpaid civil penalty at issue. The Appeals Officer
verified that plaintiff actually received the first notice and
demand for payment of the penalty, dated A
review of the record supports the final determination of the
Appeals Office. The Form 1040 in this case satisfies both prongs
of 26 U.S.C. §6702(a). First, it does not contain information on
which the substantial correctness of the self-assessment may be
judged. It contains zeroes or is blank except for plaintiff's
name, address, signature, occupation and the alleged
overpayment/refund due of $10,400. Second, the document attached
to the Form 1040 shows that the information was omitted due to a
position which is frivolous or from a desire, which appears on the
purported return, to delay or impede the administration of Federal
income tax laws. See Bradley v. United States [87-1
USTC ¶9336] , 817 F.2d 1400, 1404 (9th Cir. 1987) (a
position taken in a tax return is frivolous when the position has
no basis in fact or law). Plaintiff
appears to argue that the court cannot look to the merits of his
1997 Form 1040, and therefore, that the IRS determination to
assess the frivolous filing penalty is without basis. This is not
the case. The return's lack of merit is relevant to the imposition
of the frivolous return penalty. Plaintiff
maintains that there is no such thing as a frivolous return, and
that he made a return when he filed the Form 1040 and the attached
document. Whether plaintiff filed a return is not the issue. The
issue is whether the return was frivolous. There is ample evidence
to support the determination of the Appeals Office that it was. Plaintiff
raises several arguments in this appeal, and those arguments are
addressed as follows: Inadequacy
of Notice. Plaintiff
contends that the notice entitling him to a CDP hearing was not
sent to him by the Secretary of the Treasury and there was no
proof that the person who sent the notice had been properly
delegated to do so. Plaintiff received the notice, signed by a
representative of the IRS. The Secretary of the Treasury properly
delegated his authority pursuant to statute and regulation to IRS
employees. See 26 U.S.C. §7701(a)(11)(A); 26 U.S.C. §7701(a)(12)(A)(i):
Treas. Reg. §301.7701-9 (26 C.F.R.); Delegation Order 193 (Rev.
6), Dkt. 14, Exh.A. This argument is frivolous and without merit. Adequacy
of Supporting Documentation.
Plaintiff contends that the IRS has never produced a document
supporting imposition of the penalties at issue. He does not
believe that a computer transcript is adequate to verify an
assessment. However, an Appeals Officer may rely on computer
transcripts that contain the requisite information in order to
verify an assessment. See Lunsford v. Commissioner [CCH
Dec. 54,553] , 117 T.C. 159 (2001). In this case, the
Appeals Officer relied on an IRS computer printout that showed
that $500 tax penalty assessment. Dkt. 10, Exh. B. Plaintiff has
not shown that the tax assessment on the computer printout was in
error. This argument is frivolous and without merit. Persons
Authorized to Determine and Impose Penalties. Plaintiff claims that the IRS offered no proof that those who
determined and imposed the penalties were authorized to do so.
Plaintiff was afforded notice of the imposition of a penalty by an
employee of the IRS. He was afforded the opportunity to appeal
that decision, which he did. This claim is frivolous and without
merit. Statutory
Notice and Demand by Payment.
Plaintiff contends that he was never sent the required Statutory
Notice and Demand for payment with regard to the penalties at
issue. Plaintiff received notice of the assessment and an
opportunity to appeal that assessment. Plaintiff contends that he
should have received a Form 17 A, rather than the notice he
received. Form 17 A relates to assessment of unpaid income tax.
Dkt. 12, Exh. 9. Notice and demand is not required to be sent on
any particular form so long as the requisite information is
included. Hughes v. United States [92-1
USTC ¶50,086] , 953 F.2d 531, 536 (9th Cir. 1991).
Notice and demand is not required to be sent on a For 17 or Form
17A. Schiff v. United States, 71A A.F.T.R. 2d 93-3271, 89-2 USTC ¶9551 (D.
Conn. 1989). This argument is frivolous and without merit. Regulation
Requiring Plaintiff to Pay Penalty.
Plaintiff contends that no Treasury Department regulation requires
that plaintiff pay the penalties at issue and defendant has not
produced any such regulation. 26 U.S.C. §6702(a) provides the
statutory authority for assessing the penalty. This argument is
frivolous and without merit. To the extent that plaintiff contends
that the IRS did not comply with 26 U.S.C. §6751, that argument
is without merit because the penalty at issue in this case was
assessed Underlying
Liability for Income Tax.
Plaintiff contends that no statute establishes an underlying
liability for the income tax to which the penalties relate, and
that the IRS has not identified any such statute. Plaintiff's
underlying tax liability is not an issue in this case, although he
consistently tried to make it so at the appeals hearing and before
this court. Plaintiff's remedy with regard to the underlying tax
liability would have been to file a petition with the Tax Court to
contest the proposed deficiency in tax before he received his CDP
notice. This argument is frivolous and without merit. CDP
Hearing. Plaintiff
contends that the IRS presented no verification at the CDP hearing
that applicable laws or administrative procedures have been met.
As discussed above, plaintiff received the proper notices and the
opportunity to appeal the $500 frivolous filing penalty. An
Appeals Officer conducted a hearing in compliance with applicable
statutes and regulations. The
Therefore,
it is hereby ORDERED
that The
Clerk is directed to send uncertified copies of this Order to all
counsel of record and to any party appearing pro se at said
party's last known address. [Dec.
54,717] Richard T. Wagner and
Margie Wagner v. Commissioner [Code
Secs. 6320 and 7459; Tax Court Rules 13 and 41]
Ps
petitioned the Court under sec.
6320(c), I.R.C., to review a notice of a Federal tax
lien placed upon their property for 1991 and 1996 Federal income
taxes. Ps contend that they are entitled to carry back to 1991 a
net operating loss that they incurred in 1994. Ps now move the
Court to dismiss this case. Held: We shall grant Ps' motion. Estate
of Ming v. Commissioner [Dec.
32,686], 62 T.C. 519 (1974), distinguished. Keith
H. Johnson, for the petitioners. William R. McCants, for the
respondent. OPINION LARO,
Judge: Petitioners
petitioned the Court under section
6320(c) to review a notice of a Federal tax lien placed
upon their property. The lien arose from an assessment of Federal
income taxes of $412,787.15 and $844.16 for 1991 and 1996,
respectively. Petitioners now, after being served with
respondent's answer and respondent's motion for summary judgment,
move the Court to dismiss this case without prejudice to their
right to seek in Federal District Court a determination that they
incurred a net operating loss (NOL) in 1994 that may be carried
back to 1991.1 We shall
grant petitioners' motion.2 Unless
otherwise noted, section references are to the Internal Revenue
Code in effect for the relevant years, Rule references are to the
Tax Court Rules of Practice and Procedure, and rule references are
to the Federal Rules of Civil Procedure. Petitioners resided in The
parties agree that the Court may dismiss this case pursuant to
petitioners' request.3 We
distinguish this dismissal from our jurisprudence that holds that
taxpayers may not withdraw a petition under section
6213 to redetermine a deficiency. That jurisprudence
stems from the seminal case of Estate of Ming v. Commissioner [Dec.
32,686], 62 T.C. 519 (1974). In
Estate of Ming, the taxpayers moved the Court to allow them
to withdraw their petition for a redetermination of their 1964,
1965, and 1966 Federal income taxes. Presumably, they made their
motion so that they could refile their lawsuit in District Court.
We denied the motion. We noted that, whenever this Court dismisses
a case on a ground other than lack of jurisdiction, we are
generally required by section
7459(d)4 to enter
a decision finding that the deficiency in tax is the amount
determined in the notice of deficiency. In
Estate of Ming v. Commissioner, supra at 521-522, we also
relied on our opinion in Dorl v. Commissioner [Dec.
31,284], 57 T.C. 720 (1972), affd. [74-2
USTC ¶9826] 507 F.2d 406 (2d Cir. 1974), which held
that a taxpayer may not remove a case from this Court in order to
refile it in District Court. We observed in Dorl that the
filing of a petition in this Court gives us exclusive jurisdiction
under section
6512(a), which acts to bar a refund suit in the
District Court for the same tax and the same year. We noted that
this observation was supported by the legislative history
accompanying the enactment of the predecessors of sections 6512(a)
and 7459(d). That history states that, when a taxpayer petitions
the Board of Tax Appeals, the Board's decision, once final,
settles the taxpayer's tax liability for the year in question even
if the decision resulted from a dismissal requested by the
taxpayer. Estate of Ming v. Commissioner, supra at 522. We
believe that our holding in Estate of Ming is inapplicable
to the setting at hand where petitioners have petitioned this
Court under section
6320(c). Section
7459(d) applies specifically to a petition that is
filed for a redetermination of a deficiency and makes no mention
of a petition that is filed under section
6320(c) to review a collection action. Section
6320 was added to the Code as part of the Internal
Revenue Service Restructuring and Reform Act of 1998, Pub. L.
105-206, sec.
3401, 112 Stat. 685, 746, and that act made no
amendment to section
7459(d), which finds its roots in section
906(c) of the Revenue Act of 1926, ch. 27, 44 Stat.
107. Nor do we know of any provision in the Code that would
require us, upon a dismissal of a collection action filed under section
6320(c), to enter a decision for the Commissioner
consistent with the underlying notice of determination. Whereas
the relevant legislative history supported our holding in Dorl
v. Commissioner, supra, we are unaware of any legislative
history that would support a holding contrary to that which we
reach herein. Our
granting of petitioners' motion is supported by rule 41(a)(2),5 which we
consult given the absence in our Rules of a specific provision as
to this matter.6 See Rule
1. Under rule 41(a)(2), a plaintiff is not entitled as a matter of
right to a dismissal after the defendant has served a motion for
summary judgment but is allowed such a dismissal in the sound
discretion of the court. Pontenberg v. The
statutory period in which petitioners could refile their lawsuit
in this Court appears to have expired. Section
6330(d)(1) requires that a petition to this Court be
filed within 30 days of the determination that is the subject of section
6320. See also sec.
6320(c). The rule is deeply embedded in the
jurisprudence of Federal law that the granting of a motion to
dismiss without prejudice is treated as if the underlying lawsuit
had never been filed. Monterey Dev. Corp. v. Lawyer's Title
Ins. Corp., 4 F.3d 605, 608 (8th Cir. 1993); Brown v.
Hartshorne Pub. Sch. Dist., 926 F.2d 959, 961 (10th Cir.
1991); Robinson v. Willow Glen Acad., 895 F.2d 1168, 1169
(7th Cir. 1990); Long v. Board of Pardons and Paroles, 725
F.2d 306 (5th Cir. 1984); Cabrera v. Municipality of Bayamon,
622 F.2d 4, 6 (1st Cir. 1980); Humphreys v. United States,
272 F.2d 411, 412 (9th Cir. 1959); A.B. Dick Co. v. Marr,
197 F.2d 498, 502 (2d Cir. 1952); Md. Cas. Accordingly,
in the exercise of the Court's discretion, and after weighing the
relevant equities including the lack of a clear legal prejudice to
respondent, we shall grant petitioners' motion. In accordance with
the foregoing, An
appropriate order of dismissal will be entered granting
petitioners' motion to dismiss. 1
Respondent argued in his motion for summary judgment that res
judicata barred petitioners from establishing an NOL in 1994 that
could be carried back to 1991. The Court determined petitioners'
income tax liability for 1991 in Estate of Wagner v.
Commissioner [Dec.
52,883(M)], T.C. Memo. 1998- 338. [Dec.
54,764(M)] Gene and Ciao
Newman v. Commissioner [Code Sec. 6303 ; Tax Court
Rule 331 ]
Gene
and Ciao Newman, pro sese. Wendy S. Harris and Karen Lynne
Baker, for the respondent. MEMORANDUM
OPINION ARMEN,
Special Trial Judge: This
matter is before the Court on respondent's Motion For Summary
Judgment And To Impose A Penalty Under I.R.C. Section 6673, as
supplemented. 1 Respondent
contends that there is no dispute as to any material fact with
respect to this lien and levy action and that respondent's
determination to proceed with collection of petitioners'
outstanding tax liabilities for the taxable years 1993 through
1997 should be sustained as a matter of law. 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). Summary judgment may be
granted with respect to 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). The
moving party 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 party opposing summary judgment. 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, there is no genuine issue as to any
material fact, and a decision may be rendered as a matter of law.
Accordingly, we shall grant respondent's motion for summary
judgment. Background A.
Petitioners' Tax Returns Petitioner
Gene Newman (petitioner) failed to file Federal income tax returns
for the taxable years 1993 and 1994. The record shows that
respondent prepared substitutes for returns for petitioner for the
taxable years 1993 and 1994. See sec. 6020(b). 2.
Taxable Years 1995, 1996, and 1997 On
or about Petitioners
attached to their Forms 1040 for 1995, 1996, and 1997 various
Forms W-2, Wage and Tax Statements, disclosing the payment of
wages to petitioners during the taxable years in issue. By way of
example, petitioners attached three Forms W-2 to their Form 1040
for 1996. The first Form W-2 for 1996 was from Leonard's Machine
Shop in Petitioners
also attached to their Forms 1040 for 1995, 1996, and 1997 a
typewritten statement. The typewritten statement that petitioners
attached to their Form 1040 for 1996, which statement is
essentially identical to the statements that petitioners attached
to their other Forms 1040, stated, in part, as follows: We
are submitting this statement as part of our 1996 income tax
return. Even
though we know that no section of the Internal Revenue Code: 1)
established an income tax "liability" * * * ; 2)
provides that income taxes "have to be paid on the basis of a
return" * * * . *
* * * * * * In
addition to the above, we are filing even though: 3.
The "Privacy Act Notice" that the face of this return
directs us to, states that we need only file a return for
"any tax" we may be "liable" for, and since no
Code section makes us "liable" for income taxes, this
Notice notifies us that we do not have to file an income tax
return. *
* * * * * * It
should also be noted that we had "zero" income according
to the Supreme Court's definition of income * * * . The
word "income" is not defined in the Internal Revenue
Code * * * but, as stated above, it can only be a derivative of
corporate activity. B.
Respondent's Deficiency Notices and Petitioners' Responses On
On
On
On
On
On
Respondent
subsequently made assessments against petitioners for the
deficiencies, additions to tax, and accuracy-related penalties
determined in the above-described notices of deficiency.
Respondent also made assessments against petitioners for statutory
interest. On the same day that the assessments were made,
respondent issued to petitioners notices of balance due informing
petitioners that they owed taxes for the years in question and
requesting that they pay such amounts. Petitioners failed to pay
the amounts owing. C.
Respondent's Collection Notices and Petitioners' Response On
On
On
D.
The Appeals Office Hearing On
E.
Respondent's Notices of Determination On
Also
on F.
Petitioners' Petition and Motion To Dismiss On
Concurrently
with the filing of their petition, petitioners filed a Motion to
Dismiss for Lack of Jurisdiction in which they asked the Court to
"declare invalid the 'Determination' at issue, since the
appeals officer issued the 'Determination' without conducting the
CDP hearing as requested by petitioner according to law."
Petitioners attached to their motion a Memorandum of Law in which
they repeated many of the allegations in the petition. Petitioners
also alleged: there
is no Code Section that authorizes IRS employees to attribute to
petitioners more taxes then [sic] they reported on their tax
returns. Since income taxes are based on
"self-assessment," petitioners can only owe in taxes,
the amount reported on their tax returns, which, in this case,
were correctly reported as "zero." By
Order dated G.
Respondent's Motion for Summary Judgment As
stated, respondent filed a Motion For Summary Judgment And To
Impose A Penalty Under I.R.C. Section 6673. Respondent contends
that petitioners are barred under section 6330(c)(2)(B) from
challenging the existence or amount of their underlying tax
liabilities in this proceeding because petitioners received
notices of deficiency for the taxes in question. Respondent also
contends that the Appeals officer's review of the Forms 4340,
which forms were provided to petitioners during the Appeals Office
hearing, satisfied the verification requirement of section
6330(c)(1). Finally, respondent contends that petitioners'
behavior warrants the imposition of a penalty under section 6673. Petitioners
filed an Objection to respondent's motion. Thereafter, pursuant to
notice, respondent's motion was called for hearing at the Court's
motions session in Discussion Section
6321 imposes a lien in favor of the Section
6320 provides that the Secretary shall furnish the person
described in section 6321 with written notice of the filing of a
notice of lien under section 6323. The notice required by section
6320 must be provided not more than 5 business days after the day
of the filing of the notice of lien. Sec. 6320(a)(2). Section 6320
further provides that the person may request administrative review
of the matter (in the form of an Appeals Office hearing) within 30
days beginning on the day after the 5-day period. Section 6320(c)
provides that the Appeals Office hearing generally shall be
conducted consistent with the procedures set forth in section
6330(c), (d), and (e). 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 on the person's property. Section 6331(d) provides that at
least 30 days before enforcing collection by levy on the person's
property, the Secretary is obliged to provide the person with a
final notice of intent to levy, including notice of the
administrative appeals available to the person. Section
6330 generally provides that the Commissioner cannot proceed with
collection by levy until the person has been given notice 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. See Section
6330(c) prescribes the matters that a person may raise at an
Appeals Office hearing. In sum, section 6330(c) provides that a
person may raise 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 the existence and amount of the
underlying tax liability can be contested at an Appeals Office
hearing only if the person did not receive a notice of deficiency
for the taxes in question or did not otherwise have an earlier
opportunity to dispute the tax liability. See Sego v.
Commissioner [Dec. 53,938], 114 T.C. 604, 609 (2000); Goza
v. Commissioner, supra. Section 6330(d) provides for judicial
review of the administrative determination in the Tax Court or a A.
Summary Judgment Petitioners
argue that the assessments made against them are invalid because
respondent failed to demonstrate that petitioners are subject to
the Federal income tax. Petitioners' argument fails for two
reasons. First, there is no dispute in this case that petitioners
received notices of deficiency with regard to the years in issue
and that they ignored the opportunity to file a petition for
redetermination with this Court. See sec. 6213(a). Under the
circumstances, section 6330(c)(2)(B) bars petitioners from
challenging the existence or the amount of their underlying tax
liabilities for the years 1993 through 1997 in this collection
review proceeding. In
addition to the bar imposed by section 6330(c)(2)(B), petitioners'
arguments that they are not subject to the Federal income tax are
frivolous and groundless. See Nestor v. Commissioner [Dec.
54,655], 118 T.C. 162, 165 (2002); Goza v. Commissioner, supra.
As the Court of Appeals for the Fifth Circuit has remarked:
"We perceive no need to refute these arguments 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 (5th Cir.
1984). Suffice it to say that petitioners are taxpayers who are
subject to the Federal income tax on their wages and other sources
of income. See secs. 1(a), (d); 61(a)(1), (3), (4), (7), (11); 72;
85; 408(d); 7701(a)(1), (14). Petitioners
next argue that the Appeals officer failed to obtain verification
from the Secretary that the requirements of all applicable laws
and administrative procedures were met as required by section
6330(c)(1). We reject petitioners' argument because the record
establishes that the Appeals officer obtained and reviewed
transcripts of account (Forms 4340) for petitioners' taxable years
1993 through 1997. Federal
tax assessments are formally recorded on a record of assessment.
Sec. 6203. "The summary record, through supporting records,
shall provide identification of the taxpayer, the character of the
liability assessed, the taxable period, if applicable, and the
amount of the assessment." Sec. 301.6203-1, Proced. &
Admin. Regs. Section
6330(c)(1) does not require the Commissioner to rely on a
particular document to satisfy the verification requirement
imposed therein. Roberts v. Commissioner [Dec. 54,733], 118
T.C. †, †, n.10 (2002); Weishan v. Commissioner [Dec.
54,704(M)], T.C. Memo. 2002-88; Lindsey v. Commissioner
[Dec. 54,703(M)], T.C. Memo. 2002-87; Tolotti v. Commissioner
[Dec. 54,702(M)], T.C. Memo. 2002-86; Duffield v. Commissioner
[Dec. 54,663(M)], T.C. Memo. 2002-53; Kuglin v. Commissioner
[Dec. 54,661(M)], T.C. Memo. 2002-51. In this regard, we observe
that the transcripts of account on which the Appeals officer
relied, and which she furnished to petitioners during the hearing,
contained all the information prescribed in section 301.6203-1,
Proced. & Admin. Regs. See Weishan v. Commissioner, supra;
Lindsey v. Commissioner, supra; Tolotti v. Commissioner,
supra; Duffield v. Commissioner, supra; Kuglin v.
Commissioner, supra. 3 We
likewise reject petitioners' assertion, first raised during the
Appeals Office hearing, that they never received a notice and
demand for payment for the amounts in dispute. In particular,
during the Appeals Office hearing, petitioners argued that a
notice of balance due does not constitute a notice and demand for
payment. The
requirement that the Secretary issue a notice and demand for
payment is set forth in section 6303(a), which provides in
pertinent part: SEC.
6303(a). General Rule.--Where it is not otherwise provided by this
title, the Secretary shall, as soon as practicable, and within 60
days, after the making of an assessment of a tax pursuant to
section 6203, give notice to each person liable for the unpaid
tax, stating the amount and demanding payment thereof. The
transcripts of account that the Appeals officer provided to
petitioners during the Appeals Office hearing show that respondent
issued to petitioners notices of balance due on the same date that
respondent made assessments against petitioners for the taxes,
additions to taxes, and penalties in dispute in this case. We hold
that such notices of balance due constitute notices and demand for
payment within the meaning of section 6303(a). See, e.g., Hughes
v. United States [92-1 USTC ¶50,086], 953 F.2d 531, 536 (9th
Cir. 1992); Weishan v. Commissioner, supra; see also Hansen
v. United States, 7 F.3d 137, 138 (9th Cir. 1993). Petitioners
have not alleged any irregularity in the assessment procedure that
would raise a question about the validity of the assessments or
the information contained in the transcripts of account. See Petitioners
have failed to raise a spousal defense, make a valid challenge to
the appropriateness of respondent's intended collection actions,
or offer alternative means of collection. These issues are now
deemed conceded. Rule 331(b)(4). In the absence of a justiciable
issue for review, we conclude that respondent is entitled to
judgment as a matter of law sustaining the notices of
determination dated B.
Imposition of a Penalty Under Section 6673 We
turn now to that part of respondent's motion that moves for the
imposition of a penalty under section 6673. As
relevant herein, section 6673(a)(1) authorizes the Tax Court to
require a taxpayer to pay to the United States a penalty not in
excess of $25,000 whenever it appears that proceedings have been
instituted or maintained by the taxpayer primarily for delay or
that the taxpayer's position in such proceeding is frivolous or
groundless. The Court has indicated its willingness to impose such
penalty in lien and levy cases, Pierson v. Commissioner
[Dec. 54,152], 115 T.C. 576, 580-581 (2000), and has in fact
imposed a penalty in several such cases, Roberts v.
Commissioner [Dec. 54,733], 118 T.C. -- (2002) (imposing a
penalty in the amount of $10,000); Yacksyzn v. Commissioner
[Dec. 54,716(M)], T.C. Memo. 2002-99 (imposing a penalty in the
amount of $1,000); Watson v. Commissioner [Dec. 54,448(M)],
T.C. Memo. 2001-213 (imposing a penalty in the amount of $1,500). We
are convinced petitioners instituted the present proceeding
primarily for delay. In this regard, it is clear that petitioners
regard this proceeding as nothing other than as a vehicle to
protest the tax laws of this country and to espouse their own
misguided views, which we regard as frivolous and groundless. In
short, having to deal with this matter wasted the Court's time, as
well as respondent's. Under
the circumstances, we shall grant that part of respondent's motion
that moves for the imposition of a penalty in that we shall impose
a penalty on petitioners pursuant to section 6673(a)(1) in the
amount of $1,000. In
order to give effect to the foregoing, An
order granting respondent's motion, as supplemented, and decision
for respondent will be entered. 1
Unless otherwise indicated, all section references are to the
Internal Revenue Code, as amended, and all Rule references are to
the Tax Court Rules of Practice and Procedure. 2
At the time that the petition was filed, petitioners resided in 3
In their motion to dismiss, see supra p. 11, petitioners
alleged that the Appeals officer did not provide them with a copy
of the verification. We note that sec. 6330(c)(1) does not require
the Appeals officer to provide the taxpayer with a copy of the
verification at the administrative hearing. Nestor v.
Commissioner [Dec. 54,655], 118 T.C. 162, 166 (2002). In any
event, as stated above, the Appeals officer did, in fact, provide
petitioners with Forms 4340, Certificates of Assessments,
Payments, and Other Specified Matters for the years 1993 through
1997. [Dec.
54,797(M)] Thomas &
Iris Tilley v. Commissioner
Knox
Kent Lively III, for the petitioners. Blake Ferguson and J. Craig
Young, for the respondent. MEMORANDUM
OPINION PAJAK,
Special Trial Judge: This
case comes before the Court on respondent's Motion To Dismiss For
Lack Of Jurisdiction, and on petitioners' cross-motion to dismiss.
Section references are to the Internal Revenue Code as amended. On
The
notice of determination for the 1991 and 1992 income taxes was
sent to petitioners at their last known address, Petitioners
filed one petition for review of respondent's notices of
determination relating to the Federal income taxes for the taxable
years 1991, 1992, 1994, and 1995. Petitioners resided in The
30-day period provided by section 6330(d)(1) for timely filing a
petition for review of the notices of determination with this
Court expired on Petitioners
do not contest the foregoing facts. Respondent's
position is that the petition was not filed with the Court within
the time prescribed by sections 6330(d)(1) or 7502. Petitioners'
position is that respondent did not provide petitioners with an
opportunity for a hearing as required by section 6330 and
therefore that this Court should dismiss this case because
petitioners claim the notices of determination are invalid. There
is no dispute that the Court lacks jurisdiction in this case. Section
6330 provides in part as follows: SEC.
6330(a). Requirement Of Notice Before Levy.-- (1)
In General.--No levy may be made on any property or right to
property of any person unless the Secretary has notified such
person in writing of their right to a hearing under this section
before such levy is made. Such notice shall be required only once
for the taxable period to which the unpaid tax specified in
paragraph (3)(A) relates. (2)
Time And Method For Notice.--The notice required under paragraph
(1) shall be-- ******* (C)
sent by certified or registered mail, return receipt requested, to
such person's last known address; not less than 30 days before the
day of the first levy with respect to the amount of the unpaid tax
for the taxable period. (3)
Information Included With Notice.--The notice required under
paragraph (1) shall include in simple and nontechnical terms-- (A)
the amount of unpaid tax; (B)
the right of the person to request a hearing during the 30-day
period under paragraph (2); and ******* (b)
Right To Fair Hearing.-- (1)
In General.--If the person requests a hearing under subsection
(a)(3)(B), such hearing shall be held by the Internal Revenue
Service Office of Appeals. (2)
One Hearing Per Period.--A person shall be entitled to only one
hearing under this section with respect to the taxable period to
which the unpaid tax specified in subsection (a)(3)(A) relates. On
This
case has been referred to our office. I
will write or call you soon to arrange a mutually satisfactory
date for a conference. If
you need to contact me in the meantime, you may write me at the
address below or call me at the telephone number shown above.
Please enclose a copy of this letter with any written
correspondence. On
During
the telephone conference, Mr. Wilson asked Mr. Tilley if he wanted
a face-to-face meeting. As Mr. Wilson testified: "I asked him
at the beginning of the conference whether he wanted a
face-to-face meeting. He said, Not at this time. And at the end of
the conference, I asked him if he had any questions for me, and he
did not ask for a person-to-person hearing at that time." Mr.
Wilson also said: "Well, after I explained that if there were
no other issues, I'd be issuing a determination letter, at which
time he [Mr. Tilley] indicated it would be fine just to go ahead
and send the transcripts with the determination letter instead of
separately, or earlier." It
is obvious from the record that Mr. Tilley and the Appeals officer
did in fact discuss the case over the telephone and that the
Appeals officer heard and considered Mr. Tilley's arguments. In Katz
v. Commissioner [Dec. 54,081], 115 T.C. 329, 337-338 (2000),
this Court held that where the taxpayer and the Appeals officer
had a telephone conference about the taxpayer's arguments, the
taxpayer had received an Appeals hearing as provided in section
6320(b) in the circumstances of that case. On
On
Because
the notices of determination were valid, we consider respondent's
motion. Petitioners acknowledge in their cross-motion to dismiss
that a petition from a notice of determination must be filed
within 30 days of such a determination. The undisputed facts
underlying respondent's motion and set forth above compel us to
conclude that this petition was untimely under section 6330(d)(1)
or 7502, and this case must be dismissed for that reason. An
appropriate Order and Order of Dismissal will be entered. [Dec.
55,020(M)] Jan Lister v.
Commissioner. [Code
Sec. 6330]
The
IRS was allowed to proceed with collection of an individual's tax
liabilities because the taxpayer failed to provide any factual
basis to support a conclusion that the IRS's determination to
proceed with a levy was an abuse of discretion. Since the taxpayer
received notices of deficiency for the years at issue but did not
petition the Tax Court at that time, her only recourse in the
collection proceeding was to show that a levy action was
inappropriate or another collection action was more appropriate.
However, her only contentions were undocumented assertions that
she was unable to pay the tax liabilities and that she was
entitled to a refund. [Code
Sec. 6673]
The
delay penalty was not imposed on an individual whose Court filings
were confused and often unintelligible. Although her assertions
were reminiscent of tax protester rhetoric, not all of the
arguments contained in those filings were frivolous or groundless
on their face. The individual claimed to be impoverished and
nothing in the record established that her claim was frivolous.
The administrative record also did not indicate that the taxpayer
had been informed that her arguments were frivolous and might
result in the imposition of a penalty. Jan
Lister, pro se. Donald E. Edwards, for the respondent. MEMORANDUM
OPINION MARVEL,
Judge: This matter is before the Court on respondent's motion for
summary judgment, filed pursuant to Rule 121, and to impose a
penalty under section
6673.1
Respondent contends that there is no dispute as to any material
fact regarding this levy action and that respondent's
determination to proceed with collection of petitioner's
outstanding Federal income tax liabilities for 1993 and 1994 by
levy should be sustained as a matter of law. Summary
adjudication is a procedure designed to expedite litigation and
avoid unnecessary, time-consuming, and expensive trials. Fla.
Peach Corp. v. Commissioner [Dec.
44,689], 90 T.C. 678, 681 (1988). Summary adjudication
may be granted with respect to all or any part of the legal issues
presented "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); see 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). The moving party
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 party opposing summary adjudication. Dahlstrom
v. Commissioner [Dec.
42,486], 85 T.C. 812, 821 (1985). As
explained in detail below, there is no genuine issue as to any
material fact, and a decision may be rendered as a matter of law.
Consequently, we shall grant that part of respondent's motion as
moves for summary adjudication under Rule 121. Background The
record establishes and/or the parties do not dispute the following
facts.2 Petitioner
resided in Petitioner
failed to file her Federal income tax return for 1993. On Petitioner
also failed to file her Federal income tax return for 1994. On On
Claimant
never received cash. Claimant received bills of credit. Claimant
provides noteable service. Claimant unable to meet cash demands.
Claimant DNA is 75+ years. Claimant did not file 1993 and 1994
1040A. Civil penalties don't apply. See 1040 & Sched. R. Attached
to the Form 12153 was a Form 1040, U.S. Individual Income Tax
Return, for the period "Jan. 1, 1993, ending By
letter dated Based
on your statement on the Form 12153, you are disputing the
proposed levy action and that you had any taxable income for the
periods in question. Based upon my review of the case
administrative file and reviewing a transcript of the account in
question it indicates assessments and balances due for the tax
periods ending Ms.
Dodson also advised petitioner of collection alternatives but
pointed out that two of those alternatives, an installment
agreement and the offer in compromise, required that the
taxpayer's filing obligations be current. Ms. Dodson emphasized
that petitioner had not filed Federal income tax returns for any
of the years 1995 through 2000. She advised petitioner that before
the Service could evaluate any collection alternative, petitioner
must submit current financial information, must indicate the
monthly installment payment petitioner believed she could afford,
and must file all delinquent tax returns. Ms. Dodson requested
that petitioner submit the requested information by Petitioner
did not supply the information enumerated in Ms. Dodson's Claimant
waives personal appearance. Claimant has not waived 60 day due
process and the administration is in default. Claimant is verily
aggrieved. The IRS, OTC has all the books and records that
indicate that Claimant has no gainful activity. Claimant filed IRS
1040 and OTC 511 beginning Although
the Appeals Office in By
letter dated On
1.
All legal and procedural requirements for the issuance of the
Notice of Intent to Levy had been met. 2.
Prior to the Appeals officer's consideration of the issues raised
by petitioner, the Appeals officer had had no previous involvement
with respect to petitioner's 1993 and 1994 income tax liabilities. 3.
None of the issues raised by petitioner were meritorious. 4.
Petitioner did not raise any spousal defenses. 5.
Petitioner was not entitled to challenge the underlying
liabilities for 1993 and 1994 because she had received notices of
deficiency for those years. 6.
The proposed levy action balanced the need for efficient
collection of taxes with the legitimate concern of the taxpayer
that the collection action be no more intrusive than necessary and
was appropriate under the circumstances. Petitioner
mailed a letter dated In
her original petition, petitioner alleged, among other things,
that she had no money and requested that the Court send her a form
petition and "Pauper's Affidavit". Petitioner did not
make any allegations in either her original petition or in her
amended petition that the proposed levy was improper, nor did she
raise any justiciable issue regarding the collection of the
assessed liabilities other than a general assertion that she had
no money. On
Respondent's
notice of determination addressed only respondent's proposed levy
action with respect to the taxable years 1993 and 1994.
Petitioner's original petition referenced only 1993 and 1994. In
her amended petition, however, petitioner identified the periods
at issue as 1993 through the present. In order to avoid any
confusion regarding the periods at issue, we consider, on our own
initiative, our jurisdiction over years other than 1993 and 1994. It
is well settled that questions of jurisdiction may be raised by
either party or the Court at any stage of a proceeding. Moorhous
v. Commissioner [Dec.
54,316], 116 T.C. 263, 272 (2001) (citing Smith v.
Commissioner [Dec.
47,113], 96 T.C. 10, 13-14 (1991)). Our jurisdiction
under section
6330(d) "is dependent on the issuance of a valid
notice of determination and a timely petition for review." Offiler
v. Commissioner [Dec.
53,912], 114 T.C. 492, 498 (2000). If the Appeals
Office did not make a determination with respect to a particular
taxable period under section
6330, the absence of a determination is grounds for
dismissal of a petition regarding such period. See id. In
this case, petitioner's amended petition covered the period from
1993 to the present. Respondent's determination under section
6330, however, only addressed 1993 and 1994, the only
years as to which respondent issued final notices of intent to
levy. Respondent issued no notices of intent to levy and made no
determination under section
6330 for years after 1994. We hold, therefore, that we
lack jurisdiction under section
6330 over any taxable years other than 1993 and 1994. II.
Respondent's Motion Section
6330(a) provides that no levy may be made on any
property or right to property of any person unless the Secretary
has notified such person in writing of their right to a hearing
before the levy is made. If the person makes a request for a
hearing, a hearing shall be held by the Internal Revenue Service
Office of Appeals.Sec.
6330(b)(1). At the hearing, a taxpayer may contest the
existence and amount of the underlying tax liability only if the
taxpayer did not receive a notice of deficiency for the tax in
question or did not otherwise have an earlier opportunity to
dispute the tax liability. Sec.
6330(c)(2)(B); see also Sego v. Commissioner [Dec.
53,938], 114 T.C. 604, 609 (2000). Following
a hearing, the Appeals Office must make a determination whether
the proposed levy action may proceed. In so doing, the Appeals
Office is required to take into consideration the verification
presented by the Secretary, the issues raised by the taxpayer, and
whether the proposed collection action appropriately balances the
need for efficient collection of taxes with a taxpayer's concerns
regarding the intrusiveness of the proposed collection action. Sec.
6330(c)(3). The taxpayer may petition the Tax Court or,
in limited cases, a If
the taxpayer files a timely petition for judicial review, the
applicable standard of review depends on whether the underlying
tax liability is at issue. Where the underlying tax liability is
properly at issue, the Court reviews any determination regarding
the underlying tax liability de novo. The Court reviews any other
administrative determination regarding the proposed levy action
for abuse of discretion. Sego v. Commissioner, supra
at 610. 1.
Petitioner's Underlying Tax Liabilities for 1993-94 In
her original petition and in her amended petition, petitioner has
asserted various arguments, most of which are confused and
sometimes unintelligible. As best we understand them, however, the
arguments appear to be directed to the existence of the underlying
tax liabilities for 1993 and 1994 and are summarized below: a.
Petitioner never received wages because wagering on the job is
illegal. b.
Petitioner did not receive any payments in cash or property; she
received only Federal Reserve notes, which are not cash, property,
or assets of any kind. c.
The U.S. Government owes petitioner money in the form of
allowances and credits to which she is entitled which the
Government has failed and refused to pay. Each of the above-described arguments challenges the existence or amount of the underlying tax liabilities for 1993 and 1994. See sec. 6330(c)(2)(B). |