Holguin v. Comm'r

MEMORANDUM OPINION

CHIECHI, Judge: This case is before the Court on respondent's motion for summary judgment and to impose a penalty under section 6673¹ as to petitioner Daniel Holguin (respondent's motion for summary judgment as to Mr. Holguin) and respondent's motion to dismiss for lack of juristiction and to strike as to petitioner Sally A. Holguin (respondent's motion to dismiss for lack of jurisdiction as to Ms. Holguin). (We shall refer collectively to both of those motions as respondent's motions.) We shall grant respondent's motions.

The record establishes and/or the parties do not dispute the following.

Petitioners resided in Las Vegas, Nevada, at the time they filed the petition in this case.

On April 16, 1995, petitioners mailed to respondent Form 1040, U. S. Individual Income Tax Return (Form 1040), for their taxable year 1994 (1994 Form 1040). Above their signatures appearing in their 1994 Form 1040, petitioners struck from the jurat clause the words "Under penalties of perjury". Because petitioners struck those words, respondent concluded*125 that petitioners' 1994 Form 1040 was not a valid Federal income tax (tax) return. ²

In their 1994 Form 1040, petitioners reported total income of $ 0 and total tax of $ 0 and claimed a refund of $ 1,020 of tax withheld. Petitioners attached to their 1994 Form 1040 two Forms W-2, Wage and Tax Statement (Form W-2), reporting wages, tips, and other compensation totaling $ 14,857.07. Petitioners also attached a document to their 1994 Form 1040 (petitioners' attachment to their 1994 Form 1040) that contained statements, contentions, and arguments that the Court finds to be frivolous and/or groundless. ³

*126 On April 13, 1996, petitioners mailed to respondent Form 1040 for their taxable year 1995 (1995 Form 1040). Above their signatures appearing in their 1995 Form 1040, petitioners struck from the jurat clause the words "Under penalties of perjury". Because petitioners struck those words, respondent concluded that petitioners' 1995 Form 1040 was not a valid tax return. ⁴

In their 1995 Form 1040, petitioners reported total income of $ 0 and total tax of $ 0 and claimed a refund of $ 1,052 of tax withheld. Petitioners attached to their 1995 Form 1040 Form W-2, reporting wages, tips, and other compensation of $ 17,121.94. Petitioners also attached a document to their 1995 Form 1040 (petitioners' attachment to their 1995 Form 1040) that contained statements, contentions, and arguments that the Court finds to be frivolous and/or groundless. ⁵

*127 On April 13, 1997, petitioners mailed to respondent Form 1040 for their taxable year 1996 (1996 Form 1040). Above their signatures appearing in their 1996 Form 1040, petitioners struck from the jurat clause the words "Under penalties of perjury". Because petitioners struck those words, respondent concluded that petitioners' 1996 Form 1040 was not a valid tax return. ⁶

In their 1996 Form 1040, petitioners reported total income of $ 0 and total tax of $ 0. Petitioners attached a document to their 1996 Form 1040 (petitioners' attachment to their 1996 Form 1040) that contained statements, contentions, and arguments that the Court finds to be frivolous and/or groundless. ⁷

*128 On March 27, 1998, respondent issued to petitioner Daniel Holguin (Mr. Holguin) a separate notice of deficiency (notice) with respect to each of his taxable years 1994, 1995, and 1996, all of which he received. In the notice with respect to Mr. Holguin's taxable year 1994, respondent determined a deficiency in, and an addition to tax under section 6651(a)(1) on, Mr. Holguin's tax for that year in the respective amounts of $ 3,017 and $ 508. In the notice with respect to Mr. Holguin's taxable year 1995, respondent determined a deficiency in, and additions to tax under sections 6651(a)(1) and 6654 on, Mr. Holguin's tax for that year in the respective amounts of $ 3,170, $ 530, and $ 109. In the notice with respect to Mr. Holguin's taxable year 1996, respondent determined a deficiency in, and additions to tax under sections 6651(a)(1) and 6654 on, Mr. Holguin's tax for that year in the respective amounts of $ 3,238, $ 810, and $ 172.

Mr. Holguin did not file a petition in the Court with respect to the notices relating to his taxable years 1994, 1995, and 1996.

On August 17, 1998, respondent assessed Mr. Holguin's tax, as well as additions to tax and interest as provided by law, for*129 each of his taxable years 1995 ⁸ and 1996. ⁹ (We shall refer to any such unpaid assessed amounts, as well as interest as provided by law accrued after August 17, 1998, as Mr. Holguin's unpaid liabilities for 1995 and 1996).

On August 17, 1998, respondent issued to Mr. Holguin a notice of balance due with respect to Mr. Holguin's unpaid liabilities for 1995 and 1996.

On August 31, 1998, respondent assessed Mr. Holguin's tax, as well as an addition to tax and interest as provided by law, for his taxable year 1994. (We shall refer to those assessed amounts, as well as interest as provided by law accrued after August 31, 1998, as Mr. Holguin's unpaid liability for 1994.)

On August 31, 1998, respondent issued to Mr. Holguin a notice of balance due with respect to Mr. Holguin's unpaid liability for 1994.

On February 5, 1999, respondent issued to petitioner Sally A. Holguin (Ms. Holguin) a final notice of intent to levy and notice of your right to a hearing (notice of intent to levy) with respect to Ms. Holguin's taxable years 1994, 1995, and 1996. (We shall refer to the notice of intent to levy issued to Ms. Holguin as respondent's February 5, 1999 notice of intent to levy concerning Ms. Holguin's taxable years 1994, 1995, and 1996.)

On October 4, 2001, respondent issued to Mr. Holguin a notice of intent to levy with respect to Mr. Holguin's taxable years 1994, 1995, and 1996. *130 (We shall refer to the notice of intent to levy issued to Mr. Holguin as respondent's October 4, 2001 notice of intent to levy concerning Mr. Holguin's taxable years 1994, 1995, and 1996.)

On or about November 2, 2001, in response to both respondent's February 5, 1999 notice of intent to levy concerning Ms. Holguin's taxable years 1994, 1995, and 1996 and respondent's October 4, 2001 notice of intent to levy concerning Mr. Holguin's taxable years 1994, 1995, and 1996, petitioners filed jointly Form 12153, Request for a Collection Due Process Hearing (Form 12153), and requested a hearing with respondent's Appeals Office (Appeals Office). Mr. Holguin timely filed that form as to respondent's October 4, 2001 notice of intent to levy concerning Mr. Holguin's taxable years 1994, 1995, and 1996, but Ms. Holguin did not timely file that form as to respondent's February 5, 1999 notice of intent to levy concerning Ms. Holguin's taxable years 1994, 1995, and 1996. Petitioners attached a document to their Form 12153 (petitioners' attachment to Form 12153) that contained statements, contentions, and arguments, that the Court finds to be frivolous and/or groundless. ¹⁰

*131 On April 18, 2002, respondent's Appeals officer (Appeals officer) held a hearing that constituted (1) an Appeals Office hearing with Mr. Holguin with respect to respondent's October 4, 2001 notice of intent to levy concerning his taxable years 1994, 1995, and 1996 and (2) an equivalent hearing with respect to respondent's February 5, 1999 notice of intent to levy concerning Ms. Holguin's taxable years 1994, 1995, and 1996. ¹¹ Prior to those hearings, the Appeals officer gave Mr. Holguin Form 4340, Certificate of Assessments, Payments, and Other Specified Matters, with respect to each of Mr. Holguin's taxable years 1994, 1995, and 1996.

On April 30, 2002, the Appeals Office issued to Mr. Holguin a notice of determination concerning collection action(s) under section 6320 and/or 6330 (notice of determination). An attachment to the notice of determination stated in pertinent part:

   What are the Issues?

  *132 The taxpayer requested a hearing under the provisions of I.R.C.

  section 6330 to contest the application of a notice of intent to

   levy, Form 1058.

   Verification of Legal and Procedural Requirements

   The requirements of all applicable laws and administrative

   procedures have been met:

     The liabilities were assessed and notice and demand letters

   were issued by regular mail to the taxpayer's last known address

   as required under I.R.C. 6303, demonstrated by the forms 4340

   in the administrative file;

     There was an assessed liability and a levy source

   determined by the Revenue Officer at the time the notice of

   intent to levy was issued to TP;

     The notices required under I.R.C. 6330 were provided to TP

   on the dates shown above in relation to the levy notice, L-1058;

     The taxpayer responded by submitting a Form 12153, Request

   for a Collection Due Process Hearing, to the Collection officer;

     The taxpayer's appeal was timely, being mailed on 11/2/01-

*133    The taxpayer is entitled to judicial review;

           *   *   *   *   *   *   *

   Both certified transcripts, and non-literal transcripts were

   requested and reviewed by this A. O. Copies of the certified

   transcripts were provided to the taxpayer. A "face to

   face" CDP Hearing was offered to TP. * * * The meeting was

   held on 4/18/2002. TP represented himself.

   Issues Raised by the Taxpayer

   In TP's appeal request, TP's arguments were plentiful but

   without substance. They were of the type described by the Courts

   as "frivolous." * * * TP disputes the receipt of an

   official notice of deficiency and other procedural errors based

   on TP's personal views and conclusions of law. In my opinion,

   based on Court decisions, those arguments have no merit. TP was

   provided copies of court cases attesting to the fact that the

   courts are tired of such arguments and could sanction TP if they

   were brought forth in a judicial hearing.

   At the time of the conference, TP did not make a claim he was an

   "innocent spouse." * *134 * * Nor did TP provide any non-

   frivolous argument as to the steps taken by the Collection

   division to obtain payment. TP did attempt to offer questions

   regarding procedures, but such questions were generally

   frivolous and had no bearing on the outcome of the case. TP did

   not suggest that he might become current in or correct his prior

   filings. Nor did TP suggest any collection alternatives.

MY EVALUATION

   Review of the information stated above and now present in the

   administrative file shows the requirements of all applicable

   laws and administrative procedures have been met. Assessments

   were properly made. TP was billed for and did not pay amounts

   due. The Compliance Division proceeded with enforced collection

   action and it appears they should be allowed to continue with

   the action.

   Balancing the Need for Efficient Collection with Taxpayer

   Concerns

   Given that no timely, reasonable alternative to the proposed

   levy action has been suggested and that TP has not presented

   anything more than frivolous*135 arguments in the matter, it is my

   opinion that the proposed collection action balances the

   government's need for efficient collection with the taxpayer's

   concern that any collection action be no more intrusive than

   necessary. It is therefore concluded that the action should be

   allowed to continue.

On May 22, 2002, respondent issued to Ms. Holguin a decision letter concerning equivalent hearing under section 6320 and/or 6330 (decision letter). That letter was not, and did not purport to be, a determination letter. An attachment to the decision letter stated in pertinent part:

     The taxpayer responded [to respondent's February 5, 1999



   notice of intent to levy concerning Ms. Holguin's taxable years

   1994, 1995, and 1996] by submitting a Form 12153, Request for a

   Collection Due Process Hearing, to the Collection officer;



     The taxpayer's appeal was not timely, not being mailed



   until 11/2/01-The taxpayer is not entitled to judicial review;

             Discussion

Respondent's Motion to Dismiss for Lack of Jurisdiction as to Ms. Holguin

Our jurisdiction*136 under sections 6320 and 6330 depends upon the issuance of a valid notice of determination and a timely filed petition. Moorhous v. Commissioner, 116 T.C. 263, 269 (2001).

Ms. Holguin was not entitled to an Appeals Office hearing in the instant case. That is because she did not timely request such a hearing within 30 days from the date of respondent's February 5, 1999 notice of intent to levy concerning her taxable years 1994, 1995, and 1996, which notified her of her right to an Appeals Office hearing. See sec. 6330(a)(3)(B); sec. 301.6330-1(c)(2), Q& A-C7, Proced. & Admin. Regs.

Instead of an Appeals Office hearing, respondent held an equivalent hearing with respect to respondent's February 5, 1999 notice of intent to levy concerning Ms. Holguin's taxable years 1994, 1995, and 1996. See sec. 301.6330-1(i)(1), Proced. & Admin. Regs. Consequently, respondent issued a decision letter to Ms. Holguin instead of a notice of determination. Id. That letter was not, and did not purport to be, a determination under section 6330(d). See, e.g., Moorhous v. Commissioner, supra at 270.

We conclude that we do not have jurisdiction over Ms. Holguin. ¹² See sec. 6330(d)(1); *137 Moorhous v. Commissioner, supra. We shall grant respondent's motion to dismiss for lack of jurisdiction as to Ms. Holguin.

Respondent's Motion for Summary Judgment as to Mr. Holguin

The Court may grant summary judgment where there is no genuine issue of material fact and a decision may be rendered as a matter of law. Rule 121(b); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), affd. 17 F.3d 965 (7th Cir. 1994). We conclude that there are no genuine issues of material fact regarding the questions raised in respondent's motion for summary judgment as to Mr. Holguin.

Where, as is the case here, the validity of the underlying tax liability is not properly placed at issue, the Court will review the determination of the Commissioner of Internal Revenue for abuse of discretion. Sego v. Commissioner, 114 T.C. 604, 610 (2000);*138 Goza v. Commissioner, 114 T.C. 176, 181-182 (2000).

As was true of petitioners' attachment to their 1994 Form 1040, petitioners' attachment to their 1995 Form 1040, petitioners' attachment to their 1996 Form 1040, and petitioners' attachment to Form 12153, petitioners' response to respondent's motion for summary judgment as to Mr. Holguin (petitioners' response as to Mr. Holguin) contains statements, contentions, and arguments that the Court finds to be frivolous and/or groundless. ¹³

Based upon our examination of the entire record before us, we find that respondent*139 did not abuse respondent's discretion in determining to proceed with the collection action as determined in the notice of determination with respect to Mr. Holguin's unpaid liabilities for 1994, 1995, and 1996.

In respondent's motion for summary judgment as to Mr. Holguin, respondent requests that the Court require Mr. Holguin to pay a penalty to the United States pursuant to section 6673(a)(1). Section 6673(a)(1) authorizes the Court to require a taxpayer to pay to the United States a penalty in an amount not to exceed $ 25,000 whenever it appears to the Court, inter alia, that a proceeding before it was instituted or maintained primarily for delay, sec. 6673(a)(1)(A), or that the taxpayer's position in such a proceeding is frivolous or groundless, sec. 6673(a)(1)(B).

In Pierson v. Commissioner, 115 T.C. 576, 581 (2000), we issued an unequivocal warning to taxpayers concerning the imposition of a penalty under section 6673(a) on those taxpayers who abuse the protections afforded by sections 6320 and 6330 by instituting or maintaining actions under those sections primarily for delay or by taking frivolous or groundless positions in such actions. ¹⁴

*140 In the instant case, Mr. Holguin advances, we believe primarily for delay, frivolous and/or groundless contentions, arguments, and requests, thereby causing the Court to waste its limited resources. We shall impose a penalty on Mr. Holguin pursuant to section 6673(a)(1) in the amount of $ 1,600.

We have considered all of petitioners' contentions, arguments, and requests that are not discussed herein, and we find them to be without merit and/or irrelevant.

On the record before us, we shall grant respondent's motion for summary judgment as to Mr. Holguin.

To reflect the foregoing,

An appropriate order granting respondent's motion to dismiss for lack of jurisdiction and to strike as to petitioner Sally A. Holguin will be issued and an order granting respondent's motion for summary judgment and to impose a penalty under section 6673 as to petitioner Daniel Holguin and decision as to him will be entered for respondent.