Emil P. Tolotti, Jr. v. Commissioner
Docket No. 3011-01L, TC Memo. 2002-86, 83 TCM 1436, Filed
April 1, 2002
[Appealable, barring stipulation to the contrary, to CA-9.--CCH.]
Sec. 1 ]
Individuals subject to tax: Summary judgment: Frivolous claims.--In the
absence of a genuine issue of material fact, the IRS was entitled to
summary judgment with respect to its determination to proceed with
collection of a pro se individual's tax liabilities. The taxpayer's
contentions that he was not liable for federal income taxes and that his
income was not taxable were frivolous.
Sec. 6323 ; Tax Court Rule 121 ]
Notice of federal tax lien: Individuals subject to tax: Collection due
process: Verification requirements: Tax Court Rules: Summary
judgment.--In the absence of a genuine issue of material fact, the IRS
was entitled to summary judgment with respect to its determination to
proceed with collection of a pro se individual's tax liabilities.
Regardless of whether the IRS met state (
) certification requirements, the form and content of the Notice of
Federal Tax Lien sent to the taxpayer was controlled by federal law and
was valid pursuant to Code
Sec. 6323 .
Sec. 6330 ]
Notice of federal tax lien: Collection due process: Verification
requirements.--A pro se individual who received a notice of deficiency
for the tax year at issue and failed to challenge the notice by filing a
Tax Court petition, was barred from challenging the amount of his
underlying tax liability in a collection review proceeding. Moreover,
computer transcripts and a copy of Form 4340, Certificate of Assessments
and Payments, was sufficient to meet the verification requirements of Code
Sec. 6330(c)(1) .--CCH
P. Tolotti, Jr., pro se. Sheara L. Gelman, for the
Trial Judge: This matter is before the Court on respondent's Motion for
Summary Judgment, as supplemented, filed pursuant to Rule 121(a). 1
Respondent contends that there is no dispute as to any material fact
with respect to this collection review matter and that respondent's
determination (that the filing of the Notice of Federal Tax Lien for
liabilities owing for the taxable year 1995 is appropriate) should be
sustained as a matter of law.
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).
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, as supplemented.
April 15, 1996
, petitioner filed a Form 1040, U.S. Individual Income Tax Return, for
the taxable year 1995. Petitioner entered zero on virtually every line
of the form and claimed a refund in the amount of $19,212. Petitioner
attached a declaration to the form in which he stated that he is a
"Union State (Nevada) citizen by birth who lives outside any
federal enclave", not a citizen or resident of the United States as
defined in the Internal Revenue Code, and that as a
"non-taxpayer", he is not liable for Federal income tax. In
the declaration, petitioner also stated that "No IRC section
establishes 'liability' for an 'income' tax applicable to me or my
activities" and that "No IRC section requires me to pay an
May 8, 1998
, respondent issued a notice of deficiency to petitioner. In the notice,
respondent determined a deficiency of $2,299 in petitioner's Federal
income tax for 1995, an addition to tax under section 6654(a) in the
amount of $124.51, and an accuracy-related penalty under section 6662(a)
in the amount of $459.80. The deficiency in income tax was based on
respondent's determination that petitioner failed to report (1) a
taxable pension distribution in the amount of $21,669 received from the
U.S. Office of Personnel Management and (2) taxable dividends in the
amount of $46 received from several payors.
July 22, 1998
, John B. Kotmair, Jr. (Mr. Kotmair) of
, wrote a letter to respondent on behalf of petitioner. In the letter,
Mr. Kotmair stated that petitioner had received the foregoing notice of
deficiency, and that such notice was invalid because it was not signed
under penalties of perjury and because it did not explain petitioner's
1998, petitioner executed a document entitled "PRIVACY ACT RELEASE
FORM AND POWER OF ATTORNEY", by which petitioner granted Mr.
Kotmair the authority to "represent, inquire of and procure from
the Internal Revenue Service any and all of the records, pertaining to
income taxes, *** regarding the following years: 1980 through and
including 1998." 2
The record indicates that Mr. Kotmair wrote two additional letters to
respondent on petitioner's behalf. Petitioner did not file a petition
for redetermination with the Court challenging the notice of deficiency.
April 27, 2000
, respondent filed with the Washoe County Recorder in
, a Form 668(Y), Notice of Federal Tax Lien. The Notice of Federal Tax
Lien states that petitioner has an outstanding Federal income tax
liability of $1,688.79 for the taxable year 1995. The signature block on
the Notice of Federal Tax Lien contains a facsimile signature.
May 3, 2000
, respondent mailed to petitioner a Notice of Federal Tax Lien Filing
and Your Right to a Hearing Under IRC 6320. On
June 2, 2000
, petitioner filed with respondent a Request for a Collection Due
Process Hearing that included allegations challenging the existence and
amount of petitioner's tax liability for 1995 on the ground that
petitioner was not informed of the statutory provisions imposing
liability on him. Petitioner also argued that the Notice of Federal Tax
Lien Filing was invalid because it did not include an original
July 10, 2000
, Appeals Officer Donna Fisher conducted an Appeals Office hearing in
this matter that petitioner attended. Prior to the hearing, Appeals
Officer Fisher reviewed an individual master file transcript dated April
4, 2000, and a computer transcript known as TXMODA dated June 30, 2000,
regarding petitioner's account for the 1995 taxable year. The
transcripts indicated that respondent made assessments against
October 19, 1998
, for the tax, addition to tax, and accuracy-related penalty set forth
in the notice of deficiency dated
May 8, 1998
, and for statutory interest. In addition, the transcripts indicated
that on October 19 and
November 9, 1998
, respondent issued to petitioner a notice and demand for payment of the
Appeals Office hearing, petitioner requested that the Appeals officer
identify the statutory provisions establishing petitioner's liability
for Federal income tax. Petitioner was informed that although he would
be permitted to raise any valid challenge he might have to the specific
amounts of income that were reported to respondent by third-party
payors, he would not be permitted to raise constitutional challenges to
his underlying tax liability for 1995. The Appeals officer terminated
the hearing after petitioner declined to discuss alternatives to
16, 2001, respondent issued to petitioner a Notice of Determination
Concerning Collection Action(s) Under Section 6320 and/or 6330 stating
that respondent's determination (that the filing of the Notice of
Federal Tax Lien for liabilities owing for the taxable year 1995 is
appropriate) should be sustained. On
March 2, 2001
, petitioner filed with the Court an imperfect Petition for Lien or Levy
Action seeking review of respondent's notice of determination. 3
On April 6, 2001, petitioner filed an amended petition including the
following allegations: (1) The Notice of Federal Tax Lien was not
certified as required by the Uniform Federal Tax Lien Registration Act
as adopted by the State of Nevada; (2) the Appeals officer conducted a
sham hearing; (3) petitioner was denied a fair hearing by an impartial
Appeals officer; (4) the Appeals officer failed to obtain verification
from the Secretary that the requirements of any applicable law or
istrative procedure were met as required under section 6330(c)(1); (5)
the Appeals officer failed to identify the statutes (a) making
petitioner liable for Federal income tax; (b) authorizing respondent's
agents to enforce the Internal Revenue Code; and (c) permitting
respondent to file a Notice of Federal Tax Lien; (6) respondent falsely
claimed that petitioner earned foreign source income during 1995 and
respondent failed to identify the specific source of such income; and
(7) petitioner was denied the opportunity to challenge (a) the
appropriateness of the collection action; and (b) the existence or
amount of his underlying tax liability.
an answer to the amended petition, respondent filed a Motion for Summary
Judgment asserting that there is no dispute as to a material fact and
that respondent is entitled to judgment as a matter of law. In
particular, respondent contends that because petitioner received a
notice of deficiency for 1995, petitioner is barred under section
6330(c)(2)(B) from challenging the existence or amount of his tax
liability in this proceeding. Respondent further asserts that the
Appeals officer's review of the individual master file transcript dated
April 4, 2000, and the TXMODA computer transcript dated June 30, 2000,
satisfied the verification requirement imposed under section 6330(c)(1).
Petitioner filed an Objection to respondent's motion.
was called for hearing at the Court's motions sessions held in
November 21, 2001
January 23, 2002
. Counsel for respondent appeared at the hearings and presented argument
in support of respondent's motion. Respondent filed a Supplement to
Motion for Summary Judgment attaching thereto: (1) A copy of Form 4340,
Certificate of Assessments, Payments and Other Specified Matters, with
respect to petitioner's 1995 tax year; (2) a declaration by Appeals
Officer Fisher; (3) a copy of the TXMODA computer transcript for
petitioner's 1995 tax year; and (4) a transcript of the Appeals Office
hearing. Respondent also filed a Second Supplement to Motion for Summary
Judgment attaching thereto a certified copy of the Notice of Federal Tax
Lien filed with the Washoe County Recorder in
. Although no appearance was made by or on behalf of petitioner at
either of the hearings, petitioner did file with the Court a written
statement pursuant to Rule 50(c) and a response to respondent's motion,
imposes a lien in favor of the
on all property and rights to property of a person when a demand for the
payment of taxes has been made and the person fails to pay those taxes.
Such a lien arises when an assessment is made. Sec. 6322. Section
6323(a) requires the Secretary to file notice of Federal tax lien if
such lien is to be valid against any purchaser, holder of a security
interest, mechanic's lienor, or judgment lien creditor. Lindsay v.
54,529(M) , T.C. Memo. 2001-285.
provides that the Secretary shall furnish the person described in
section 6321 with written notice of the filing of a lien under section
6323. Such notice 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
istrative review of the matter (in the form of an Appeals Office
hearing) within 30 days beginning on the day after the 5-day period
described above. Section 6320(c) provides that the Appeals Office
hearing generally shall be conducted consistent with the procedures set
forth in sections 6330(c), (d), and (e).
6330(c) provides for review with respect to 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 person did not receive a notice of deficiency or did not
otherwise have an earlier opportunity to dispute such tax liability. Goza
v. Commissioner [Dec.
53,803 ], 114 T.C. 176 (2000). Section 6330(d) provides for judicial
review of the
istrative determination in the Tax Court or
Federal District Court
contends that respondent's Motion for Summary Judgment, as supplemented,
should be denied on the ground that material issues of fact remain in
dispute with regard to the statutory basis for his tax liability and the
integrity of the Appeals Office hearing. As our summary of the amended
petition reveals, petitioner's primary position is that the assessment
made against him is invalid because respondent failed to demonstrate
that he is liable for Federal income taxes.
argument is untenable for two reasons. First, there is no dispute in
this case that petitioner received the notice of deficiency dated
May 8, 1998
, and disregarded the opportunity to file a petition for redetermination
with this Court. Under the circumstances, section 6330(c)(2)(B) bars
petitioner from challenging the existence or the amount of his
underlying tax liability for 1995 in this collection review proceeding.
In addition to
the bar imposed by section 6330(c)(2)(B), petitioner's arguments that he
is not liable for Federal income tax and that he did not receive amounts
taxable as income during 1995 are frivolous and groundless. Goza v.
Commissioner, supra. Petitioner asserts that respondent failed to
identify the statutory provisions: (1) Making petitioner liable for
Federal income tax; (2) authorizing respondent's agents to enforce the
Internal Revenue Code; and (3) permitting respondent to file a Notice of
Federal Tax Lien. Petitioner also maintains that respondent erroneously
determined that petitioner earned "foreign source" income
during 1995 and respondent failed to identify the specific source of
such income. 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, 1417 (5th Cir.
next asserts that respondent cannot proceed with collection on the
ground that the Notice of Federal Tax Lien filed with the Washoe County
Recorder in Reno, Nevada, was not certified as required under Nev. Rev.
Stat. Ann. sec. 108.829 (Michie 2001). 4
We note that the Notice of Federal Tax Lien in question was filed on
Form 668(Y) and bears a facsimile signature.
law in this matter is misplaced. It is well settled that the form and
content of a Notice of Federal Tax Lien is controlled by Federal law.
v. Union Cent. Life Ins. Co. [62-1 USTC ¶9103], 368 U.S. 291,
294 (1961). In this regard, section 6323(f)(3) provides:
Form.--The form and content of the notice referred to in subsection (a)
shall be prescribed by the Secretary. Such notice shall be valid
notwithstanding any other provision of law regarding the form or content
of a notice of lien.
with section 6323(f)(3), section 301.6323(f)-1(d)(1), Proced. &
Admin. Regs., provides:
Form--(1) In general. The notice referred to in §301.6323(a)-(1) shall
be filed on Form 668, "Notice of Federal Tax Lien under Internal
Revenue Laws". Such notice is valid notwithstanding any other
provision of law regarding the form or content of a notice of lien. For
example, omission from the notice of lien of a description of the
property subject to the lien does not affect the validity thereof even
though State law may require that the notice contain a description of
the property subject to the lien.
Based upon the
plain language of section 6323(f)(3) and the underlying regulation
(quoted above), we hold that the Notice of Federal Tax Lien in question
is valid notwithstanding any additional provision that may exist under
Nevada State law.
We also reject
petitioner's assertions that the Appeals officer was not impartial
and/or conducted a sham hearing. Such assertions are belied by the
record. See sec. 6330(b)(3).
next contends that the Appeals officer failed to obtain verification
from the Secretary that the requirements of all applicable laws and
istrative procedures were met as required by section 6330(c)(1). We
reject petitioner's contention inasmuch as the record establishes that
the Appeals officer obtained and reviewed transcripts of account with
regard to petitioner's taxable year 1995. The record also includes a
Form 4340 that substantiates the information contained in the
transcripts of account. See Davis v. Commissioner [Dec.
53,969 ], 115 T.C. 35, 40-41 (2000) (Form 4340 is presumptive
evidence that an assessment was made against the taxpayer).
assessments are formally recorded on a summary record of assessment.
Sec. 6203. The summary must "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.
6330(c)(1) does not require the Commissioner to rely on a particular
document to satisfy the verification requirement imposed therein. Kuglin
v. Commissioner [Dec.
54,661(M) ], T.C. Memo. 2002-51. In this regard, we note that the
transcripts of account on which the Appeals officer relied in this case
contained all the information prescribed in section 301.6203-1, Proced.
& Admin. Regs.
Moreover, the Form 4340 substantiates the information contained in the
transcripts of account.
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 or the Form 4340.
; Mann v. Commissioner [Dec.
54,658(M) ], T.C. Memo. 2002-48. Accordingly, we hold that the
Appeals officer satisfied the verification requirement of section
6330(c)(1). Cf. Nicklaus v. Commissioner [Dec.
54,477 ], 117 T.C. 117, 120-121 (2001).
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.
Rule 331(b)(4). In the absence of a valid issue for review, we conclude
that respondent is entitled to judgment as a matter of law sustaining
the notice of determination dated
February 16, 2001
mention section 6673(a)(1), which 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 penalties in collection review cases. Pierson
v. Commissioner [Dec.
54,152 ], 115 T.C. 576 (2000). Although we shall not impose a
penalty on petitioner pursuant to section 6673(a)(1) in the present
case, we admonish petitioner that the Court will consider imposing such
a penalty should he return to the Court in the future and advance
arguments similar to those that we have identified as frivolous.
To reflect the
granting respondent's motion for summary judgment, as supplemented, and
decision will be entered.
All Rule references are to the Tax Court Rules of Practice and
Procedure. Unless otherwise indicated, all section references are to the
Internal Revenue Code, as amended.
The above-described "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).
At the time that the petition was filed, petitioner resided in
Nev. Rev. Stat. Ann. sec. 108.829 (Michie 2001) provides in pertinent
of notices of liens, certificates or other notices affecting federal
liens by the Secretary of the Treasury of the United States or his
delegate *** entitles them to be filed and no other attestation,
certification or acknowledgment is necessary.
USTC ¶50,647] Lorentz Opdahl, Plaintiff v.
United States of America
District Court, D.C., 98-0262 (TPJ),
Dist. LEXIS 14098.
[Code Sec. 6323 ]
Tax liens: Notice: Uncertified notice.--Notices of tax liens
challenged by a pro se taxpayer that were in standard IRS form
and filed in the taxpayer's state of residence, but which were not
certified, were valid. The IRS was not required to certify the notices
under applicable state (
) law to enforce them.
[Code Sec. 7122 ]
Compromise agreements: Writing requirement: Proper form.--A pro
se taxpayer failed to prove that he had reached an enforceable
settlement agreement with the IRS. He did not allege that he submitted
an offer on the proper IRS forms, he could not produce a written offer
or acceptance of an offer, and no written offer or acceptance existed in
the IRS file.
[Code Secs. 6103 and 7431 ]
Disclosures: Necessary to collection activity exemption.--An
allegation made by a pro se taxpayer, who was challenging notices
of tax liens, that the IRS made unauthorized disclosures of his return
information was rejected. Limited information concerning the taxpayer's
tax deficiencies that was included in the notices of lien and levies was
necessary to IRS collection activities.
[Code Sec. 7433 ]
Damages: Unauthorized collection: Statute of limitations.--A
damage claim made by a pro se taxpayer for allegedly unauthorized
collection was barred because it exceeded the two-year statute of
limitations. The taxpayer had reasonable opportunities to discover the
essential elements of a possible cause of action for the unauthorized
collection as early as four years prior to filing his lawsuit.
[Code Sec. 7421 ]
Anti-Injunction Act: Application of statute.--Claims for
declaratory and injunctive relief made by a pro se taxpayer to
prevent the IRS from seizing his property were barred under the
Opdahl, Hudson, S.D., pro se. Samuel Alvin Mitchell, Pat S.
Genis, Department of Justice, Washington, D.C. 20530, for defendant.
pending before the Court are the parties' cross motions for summary
judgment and plaintiff's motion for partial summary judgment. Plaintiff,
Lorentz Opdahl, challenges tax liens and levies filed against him by the
Internal Revenue Service ("IRS"). He contends that the liens
and levies are invalid because they were not properly
"certified." He also contends that he reached an agreement
with the IRS to settle all of his outstanding tax liabilities for
$289,000, but that the IRS has failed to honor that compromise. 1
His amended complaint seeks the return of property allegedly seized by
the IRS, an injunction to prevent the IRS from seizing his property, a
declaration that a settlement exists between him and the IRS, and a
determination that the IRS made unauthorized disclosures and committed a
wrongful collection pursuant to 26 U.S.C. §7431 & 7433.
concludes that the notices of tax liens are valid under 26 U.S.C. §6323(f)
and Rev. Rul. 71-466, 1971-s C.B. 409. The notices are in standard IRS
form and were filed in Mr. Opdahl's state(s) of residence, as required
by 26 U.S.C. §6323(f). Notices of tax lien need not be
"certified" under state law, as plaintiff contends. See
26 U.S.C. §6323(f)(3) ("The form and content of the notice
referred to in subsection (a) shall be prescribed by the Secretary. Such
notice shall be valid notwithstanding any other provision of law
regarding the form or content of a notice of lien.").
Mr. Opdahl has
not proved that he had an enforceable settlement agreement with the
. The parties agree that any alleged settlement between Mr. Opdahl and
was made orally, not in writing. 26 U.S.C. §7122 governs the settlement
of tax liabilities and provides that "the Secretary [of Treasury]
may compromise any civil or criminal case arising under the internal
revenue laws prior to reference to the Department of Justice for
prosecution or defense. . . . " Section 7122 "is the exclusive
method by which tax cases may be compromised." Brooks v. United
States [87-2 USTC ¶9626], 833 F.2d 1136, 1145 (4th Cir. 1987) (citing
Botany Worsted Mills v.
[1 USTC ¶348], 278 U.S. 282, 288-89, 73 L.Ed. 379, 49 S.Ct. 129
(1929) (prior version of statute)). Although §7122 does not on its face
require an agreement to be in writing, it is clear from the case law
that all settlement offers must be in writing pursuant to Treas. Reg. §301.7122-1
and must otherwise comply with the requirements of 26 U.S.C. §7122. See
Boulez v. Commissioner of Internal Revenue [87-1 USTC ¶9177], 258
U.S. App. D.C. 90, 810 F.2d 209, 212 (D.C. Cir. 1987) ("We agree
with Boulez that the statute does not of its own accord forbid oral
compromise agreements, but conclude that the regulation, which requires
that all compromises be reduced to writing, has the force and effect of
law, and that the Director [of International Operations of the IRS]
lacked authority to waive it."). Treasury Regulation §301.7122-1
(1987), which was in effect at the time of the purported settlement in
the instant case, provided:
respect to offers in compromise--
of offers. Offers in compromise shall be submitted on forms prescribed
by the Internal Revenue Service which may be obtained from district
directors of internal revenue, and should generally be accompanied by a
remittance representing the amount of the compromise offer or a deposit
if the offer provides for future installment payments. . . .
Acceptance. An offer in compromise shall be considered accepted only
when the proponent thereof is so notified in writing.
Reg. §301.7122-1(d) (1987) (emphasis added); see also Boulez
[87-1 USTC ¶9177], 810 F.2d at 213 n.33. Mr. Opdahl does not allege
that he submitted any offer on proper IRS forms, he has not produced a
written acceptance of the offer, and the IRS file contains no written
offer or acceptance. See Def's Rule 108 Statement, P16 and
Declaration of Crystal Foster, PP3-4. Plaintiff admits that the
settlement was not written but contends that under the common law,
"nothing was needed in writing, the moment the tender for payment
was accepted," otherwise the property should have been returned. See
Pl's Response at P16. Such an argument was addressed and dismissed in
Brooks, which held that "the exclusivity of §7122 prevents the
application of general contract rules to enforce apparent agreements
between the IRS and taxpayers." Brooks [87-2 USTC ¶9626],
833 F.2d at 1147. Thus, the Court concludes that there was no valid
settlement in this case.
wrongful disclosure claims under 26 U.S.C. §7431 also fail. To bring a
cause of action under 26 U.S.C. §7431, plaintiff must show that a
employee disclosed taxpayer's tax return information in violation of 26
U.S.C. §6103, which forbids the disclosure of tax return information
"except as authorized by this title." 26 U.S.C. §6103(a). One
of the exceptions is 26 U.S.C. §6103(k)(6), which authorizes internal
revenue officers in connection with their official duties relating to
any collection activity to disclose return information "to the
extent that such disclosure is necessary in obtaining information, which
is not otherwise reasonably available, with respect to the correct
determination of tax, liability for tax, or the amount to be collected
or with respect to the enforcement of any other provision of this
title." Federal courts have held that disclosure of return
information in notices of levy is "necessary to the collection
activity" and thus falls within the §6103(k)(6) exemption. Farr
v. United States [93-1 USTC ¶50,229], 990 F.2d 451, 455 (9th Cir.
1993); see also Long v.
[92-2 USTC ¶50,431], 972 F.2d 1174, 1180 (10th Cir. 1993)
("It is undisputed that §6103(k)(6) authorizes an IRS employee to
disclose tax return information in the issuance of liens and levies.
Thus, the general rule is that liens and levies do not constitute
unauthorized disclosures under §6103."). The limited information
concerning plaintiff's tax deficiencies included in the notices of lien
and levies was "necessary to the collection activity" and did
not violate 26 U.S.C. §7431.
claim for unauthorized collection of $120,000 under 26 U.S.C. §7433 is
barred by the statute of limitations, which provides that an action
"may be brought only within two years after the date the right of
action accrues." 26 U.S.C. §7433(d)(3). A right of action accrues
when the taxpayer has had "reasonable opportunity to discover all
essential elements of a possible cause of action." Treas. Reg. §301.7433-1(g)(2).
Plaintiff had a reasonable opportunity through his criminal trial and
other proceedings to discover that the IRS had not credited his tax
account for the $120,000 he allegedly paid to an IRS agent. Moreover, as
early as 1994, plaintiff filed civil suits to recover this money,
indicating he knew that it had not been credited to his account. He did
not file the instant case until
February 2, 1998
, well over two years after he had reasonable opportunity to discover
all elements of the potential claim. 2
requests for declaratory and injunctive relief are barred by statute. See
26 U.S.C. §7421 & 28 U.S.C. §2201(a). 3
foregoing reasons and for substantially the reasons raised in
defendant's opposition to plaintiff's motion for partial summary
judgment, it is, this 16th day of August, 2001.
defendant's motion for summary judgment  is granted; and it is
ORDERED, that judgment is entered for the defendant; and it is
ORDERED, that plaintiff's motion for summary judgment  is denied;
and it is
ORDERED, that plaintiff's motion for partial summary judgment  is
Some of the background facts of this alleged compromise are contained in
the Eleventh Circuit's opinion in United States v. Opdahl, 930
F.2d 1530 (11th Cir. 1991), which overturned plaintiff's bribery
The Court observes that many of plaintiff's claims under 26 U.S.C. §7431,
discussed supra, are also barred by the statute of limitations.
Plaintiff's amended complaint does not dispute the calculation of the
tax assessment, so those claims are not before the Court. To the extent
that plaintiff raises such claims in his briefing, the Court observes
that the Secretary of the Treasury (or his designee) is authorized to
make tax assessments pursuant to 26 U.S.C. §6201, and the assessments
are presumed correct. See Welch v. Helvering [3 USTC ¶1164], 290
U.S. 111, 115, 78 L.Ed. 212, 54 S.Ct. 8 (1933). The burden is on the
taxpayer to offer evidence to show that the Commissioner's determination
is invalid, which plaintiff has not done. See Helvering v. Taylor
[35-1 USTC ¶9044], 293 U.S. 507, 515, 79 L.Ed. 623, 55 S.Ct. 287
(1935). The only evidence plaintiff offers to rebut the assessments is a
hand-written page of figures that plaintiff claims represents his
accountant's calculation of plaintiff's tax liability for 1976 to 1985.
This unidentified document is insufficient to rebut the IRS assessments.
This same reasoning also applies to plaintiff's motion for partial
summary judgment, which challenges the validity of an IRS assessment for
tax year 1983 but offers no evidence in support thereof.
USTC ¶50,514] Stephen James Larrew, Plaintiff v.
United States of America
District Court, No.
, Dallas Div., Civ. 3:01-CV-350-M,
Secs. 6065 and 6323 ]
Tax liens: Conflicts of law: Removal: Certification of lien: State
law: Verification by IRS.--The removal of an individual's suit
challenging a tax lien to federal court was proper. Code
Sec. 6323 did not require that the IRS certify the tax lien under
) law, but merely that it file the lien according to state law. Because
the form and content of the tax lien involved a federal question,
removal was proper. Moreover, Code
Sec. 6065 did not require the IRS to verify the lien; the statute
applies to notices submitted by taxpayers, not to notices issued by IRS
The Court has
before it Plaintiff's Motion to Dismiss and Remand, filed on
March 16, 2001
in the above-entitled case. Having considered the motion, the response,
the reply thereto, and the applicable law, this Court is of the opinion
that the motion should be DENIED. The Court also has before it a summary
judgment motion, filed by the
in its response to Plaintiff's Motion to Dismiss and Remand. No response
was made by Plaintiff to that motion. Having considered the applicable
authorities, the Court determines that the motion for summary judgment
is meritorious and should be GRANTED, but only to the extent indicated
October 19, 1998
, the Internal Revenue Service filed a Notice of Tax Lien in the
property records. The Notice is attached to the "Motion for
Judicial Review of Documentation or Instrument Purporting to Create a
Lien," which Plaintiff filed in the 116th Judicial District Court
of Dallas County, Texas (and which is attached to the "United
States' Notice of Supplement to the Record from State Court," filed
herein on February 21, 2001). Plaintiff alleged that the County Clerk
should not have filed the Notice of Federal Tax Lien because it did not
contain the requisite certification required by state law, and therefore
should not be accorded lien status. Although not originally named, the
removed this case to this Court. Plaintiff asserts that this case was
improperly removed and should be remanded to state court. He claims that
removal is improper because his suit in state court required a
determination exclusively under
law and the
was not named in his suit as a party in interest.
States in its Notice of Removal purported to remove this case pursuant
to 28 U.S.C. §§1441, 1442(a)(1) and 1444, "because said action in
State Court: (a) involves a determination under 28 U.S.C. §2410 for
quite [sic] title to property in which the United States asserts a lien;
and (b) involves a determination under 28 U.S.C. §§1331 and 1346(e) of
questions of federal tax law."
contends that 26 U.S.C. §6323(f), which sets out the place and form for
filing a federal tax lien, provides that the notice of such tax lien
shall be filed "under State laws," and that, therefore, no
federal question is here presented. Having reviewed §6323(f)(1)(A), it
is apparent that "under State laws," which appears in §6323(f)(1)(A),
actually refers to the place for filing, not the form of filing.
It is §6323(f)(3) which prescribes the form:
The form and
content of the notice referred to in subsection (a) shall be prescribed
by the Secretary. Such notice shall be valid notwithstanding any other
provision of law regarding the form or content of a notice of lien.
court in Bertelt v. United States (In re Bertelt), 206
B.R. 579 (Bankr. M.D. Fla. 1996) specifically dealt with the issue now
before this Court. There, the debtor sought a determination that no
liens existed on his property, alleging that the notices of liens were
procedurally defective because, among other things, they were not
certified as required by
at 581. The court in Bertelt stated that ". . . the federal
law supersedes any other law, including state law, relating to the
content and form of . . . [the] notice."
at 583. See also In re O'Gorman-Sykes [2000-1 USTC ¶50,174], 245
B.R. 815, 818 (Bankr. E.D. Va. 1999). The court in Bertelt
further stated that the federal law is "accurately stated" in
Revenue Ruling 71-466:
Acknowledgment of notices of tax liens . . . would, therefore, not
appear to be essential, inasmuch as there are no Federal statutory
provisions specifically requiring acknowledgment of such instruments.
at 584. See also United States v.
Letscher [99-2 USTC ¶50,947], 83 F.Supp.2d 367, 377-78 (S.D.N.Y.
1999). The court in Bertelt held that the notices were properly
filed. Bertelt, 206 B.R. at 586.
correctly notes that the cases cited above rely on Revenue Ruling
71-466, but he is incorrect when he asserts that 26 U.S.C. §6065
invalidated Revenue Ruling 71-466 with respect to tax lien notice
requirements. Section 6065 states:
otherwise provided by the Secretary, any return, declaration, statement,
or other document required to be made under any provision of the
internal revenue laws or regulations shall contain or be verified by a
written declaration that it is made under the penalties of perjury.
6065 does not apply to notices issued by IRS agents. Morelli v.
Alexander [96-1 USTC ¶50,292], 920 F.Supp. 556, 558 (S.D.N.Y.
1996). The Notice of Federal Tax Lien here is such a notice.
federal law clearly governs the validity of the Notice of Federal Tax
Lien filed by the Internal Revenue Service on Mr. Larrew's property, and
because this Court has original jurisdiction of cases involving a
federal question, Plaintiff's Motion to Dismiss and Remand is DENIED.
Further, because, as a matter of law, a Notice of Federal Tax Lien need
not contain any state law certification or acknowledgment, and because
that is the only issue presented in the Plaintiff's original filing,
Defendant's summary judgment motion is GRANTED to that extent. All other
relief sought by the Defendant is DENIED, without prejudice to being
asserted in any other appropriate action.
This matter is
now finally concluded. All costs of court are taxed against the
¶50,350] Frank Krueger, Petitioner v. Sharon Kennedy, Chippewa County
Register of Deeds, Michael Hayes Dettmer, United States Attorney, for
the Western District of Michigan, and Oksana Xenos, District Counsel for
the Internal Revenue Service, Respondents
District Court, West.
, No. Div., 2:96-CV-109, 3/20/98, Adopting and remanding the Magistrate
Judge's Report and Recommendation at 98-1
Secs. 6321 and 6323 ]
Lien for taxes, validity of: Creation of lien: Priority: Conflicts of
law.--An individual's claim that notices of federal tax liens
recorded against his property were invalid under state (Michigan) law
was dismissed because federal law governed the form and content of the
notices. The notices were properly certified in accordance with federal
law because they were filed on Form 668 and signed by facsimile
signature of a revenue officer. Even if the notices had not been
properly certified, the taxpayer lacked standing to challenge the
certification because he did not qualify as a member of one of the
classes protected under Code
Sec. 6323(a) . Union Central Life Insurance Co., SCt (62-1
USTC ¶9103) , followed.
Lien for taxes, validity of: Notice of lien.--An individual's
allegation that he did not receive a tax assessment or a notice and
demand for payment was remanded to the Magistrate for further
consideration of postdecision papers filed by the government. Those
documents included an affidavit and exhibits demonstrating that notice
and demand for payment had been sent to the taxpayer.
ADOPTING IN PART MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION
The Court has
before it Petitioner Frank Krueger's ("Krueger") Response To
Magistrate's Decision and Respondent United States' Objection To Report
And Recommendation, in which the parties each object to certain portions
of Magistrate Judge Timothy P. Greeley's report and recommendation in
this matter. In this case, Krueger, acting pro se, filed a
petition for writ of mandamus asking that Respondent Sharon Kennedy
("Kennedy"), Register of Deeds for
, be ordered to remove several federal tax liens recorded against
Krueger's property. Krueger's asserted ground for removal of the liens
was that they failed to comply with M.C.L. §211.664. The Magistrate
Judge found that Krueger's claim regarding the invalidity of the notices
of lien should be dismissed because the notices complied with federal
law and Krueger did not have standing to challenge the form of notice.
However, the Magistrate Judge found that the case should not be
dismissed because an issue remained regarding whether Krueger receive a
tax assessment or notice and demand for payment.
The Court has
conducted a de novo review as required by 28 U.S.C. §636(b)(1)
and concludes that the Magistrate Judge correctly found that Krueger's
claim regarding the invalidity of the notices of lien under Michigan law
should be dismissed because federal law governs the form and content of
the notice. See United States v. Union Central Life Ins Co. [62-1
USTC ¶9103], 368 U.S. 291, 294, 82 S.Ct. 349, 351 (1961). With regard
to the Magistrate Judge's conclusion that dismissal was not proper, the
Court notes that the Government has addressed Krueger's allegation that
he did not receive an assessment or notice and demand for payment in its
objection to the Report and Recommendation. In addition, the Government
has also submitted the affidavit of John Lindquist, which includes
several exhibits that show notice and demand for payment was sent to
Krueger. The Magistrate Judge did not have the benefit of these
documents at the time he issued his Report and Recommendation.
Therefore, the Court will remand this matter to the Magistrate Judge for
consideration of the post-decision papers filed by the Government.
foregoing reasons, the Court will adopt the Magistrate Judge's Report
and Recommendation in part on Krueger's claim that the notices of lien
failed to comply with M.C.L. §211.664. The Court will remand the case
to the Magistrate Judge for further consideration of whether Krueger's
claim that he did not receive a tax assessment or notice and a demand
for payment should be dismissed, in light the Government's post-decision
consistent with this Opinion will be entered.