Quigley 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 (respondent's motion). We shall grant respondent's motion.

Background

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

Petitioner resided in Harleysville, Pennsylvania, at the time he filed the petition in this case.

On or about April 11, 2000, petitioner filed a Federal income tax (tax) return for his taxable year 1999 (1999 return). In his 1999 return, petitioner reported total income of $ 0 and total tax of $ 0 and claimed a refund of $ 4,168.99 of tax withheld.² Petitioner attached to his 1999 return Form W-2, Wage*152 and Tax Statement, reporting wages, tips, and other compensation of $ 58,436.12. Petitioner also attached a document to his 1999 return (petitioner's attachment to his 1999 return) that contained statements, contentions, arguments, and requests that the Court finds to be frivolous and/or groundless. ³

*153 On July 29, 2002, respondent issued to petitioner a notice of deficiency (notice of deficiency) with respect to his taxable year 1999, which he received. In that notice, respondent determined a deficiency in, and an accuracy-related penalty under section 6662(a) on, petitioner's tax for his taxable year 1999 in the respective amounts of $ 11,038 and $ 2,207.60. ⁴

Petitioner did not file a petition in the Court with respect to the notice of deficiency relating to his taxable year 1999. Instead, on October 22, 2002, in response to the notice of deficiency, petitioner sent a letter (petitioner's October 22, 2002 letter) to the Internal Revenue Service (IRS) that contained statements, contentions, arguments, and requests that the Court finds to be frivolous and/or groundless. ⁵

*154 On February 3, 2003, respondent assessed petitioner's tax for his taxable year 1999. ⁶ (We shall refer to that unpaid assessed amount, as well as interest as provided by law, as petitioner's unpaid liability for 1999.)

Respondent issued to petitioner the notice and demand for payment required by section 6303(a) with respect to petitioner's unpaid liability for 1999.

On or about July 4, 2003, respondent issued to petitioner a final notice of intent to levy and notice of your right to a hearing (notice of intent to levy) with respect to petitioner's taxable year 1999. On or about July 25, 2003, in response to the notice of intent to levy, petitioner filed Form 12153, Request for a Collection Due Process Hearing (Form 12153), and requested a hearing with respondent's Appeals Office (Appeals Office) with respect to his taxable year 1999. Petitioner attached a document to his Form 12153 (petitioner's attachment to Form 12153) that contained statements, contentions, arguments, and requests that*155 the Court finds to be frivolous and/or groundless. ⁷

In response to petitioner's Form 12153 and petitioner's attachment to Form 12153, an Appeals officer with the Appeals Office (Appeals officer) sent a letter to petitioner on January 5, 2004 (Appeals officer's January 5, 2004 letter), which stated in pertinent part:

Please note that during my preliminary review of your



"Request for a Due Process Hearing" and other documents



written by you, it was observed that you are raising points that

are frivolous and without merit.

Please be advised*156 the courts have consistently and repeatedly

rejected the arguments expressed in your letters and in many



cases have imposed sanctions. In Pierson v. Commissioner

[Dec. 54, 152], * * * [115 T.C. 576 (2000)], the Court issued

fair warning of penalties under section 6673 to all those

taxpayers who, in the future, institute or maintain a lien or



levy action primarily for delay or whose position in such a



proceeding is frivolous or groundless and has in fact imposed a

penalty in a number of such cases. (Please see enclosed Exhibit

A) [list of cases showing imposi-tion of section 6673]

Pursuant to Sections 6320 and 6330 of the Internal Revenue Code,

Section 6320(c) discusses matters considered at the hearing.

Section 6330(c)(2)(B) precludes any challenge to the underlying

liability, at the hearing, for any period, if the person

received a statutory notice of deficiency or otherwise had an

opportunity to dispute the liabilities.

The Appeals officer enclosed with the Appeals officer's January 5, 2004 letter*157 a copy of a TXMODA transcript with respect to petitioner's taxable year 1999.

On February 4, 2004, petitioner sent a letter (petitioner's February 4, 2004 letter) to respondent's Appeals Office, which stated in pertinent part:

In my numerous responses to the IRS I have requested to have a



hearing, as provided for in procedures and Regulations

(601.105(b)(1)thru 601.105(d)(2)(i)) but as of yet I have been

offered none. Now for exact purpose that the

'Restructuring and Reform Act of 1998 '

was enacted into law, I am again being denied.

A hearing as called for in IRC Sec 6330(b)(1) "if the person

requests a hearing under subsection (a)(3)(B), such hearing

shall be held by the Internal Revenue Service Office of

Appeals.". Further more in the US District Court Case of

'Mesa Oil, Inc. v. United States, 2000 U.S. Dist. LEXIS 20580,

Defendant. Civil Action No. 00-B-851', Nov. 21, 2000 wherein I



quote " Tax Law: Federal Tax Administration & Procedure: Tax

Liabilities & Credits: Levy & Distraint (IRC secs. 6331-6344,

7429) With*158 respect to a hearing concerning the proposed levy of

a taxpayer's property, the taxpayer is to have a meaningful

hearing, followed by judicial review. IRC Sec

6330(d)(1)(B).". A hearing where I can present evidence, ask

questions and view the verification documents called for in the

law. [Reproduced literally.]

In response to petitioner's February 4, 2004 letter and a prior telephone call that petitioner made on a date not disclosed by the record, the Appeals officer sent a letter to petitioner on February 6, 2004 (Appeals officer's February 6, 2004 letter), which stated in pertinent part:

I've received your call and letter requesting a face-to-face

Hearing. The items that you mention in your CDP request are

items that:

Courts have determined are frivolous or groundless, or

Appeals does not consider. These are moral, religious,

political, constitutional, conscientious, or similar

grounds.

Examples of arguments that are considered frivolous or

groundless are provided in "The Truth About Frivolous Tax

Arguments" *159 on the IRS Internet website at http://www.irs.

gov/pub/irs-utl/friv tax.pdf. It is not a complete list of

frivolous and groundless arguments. I previously provided a list

of cases in the Collection Due Process forum in which the

arguments you are raising were considered frivolous and

irrelevant.

Appeals does not provide a face-to-face conference if the only

items you wish to discuss are those mentioned above. You may,

however, have a telephone conference or discuss with us by

correspondence any relevant challenges to the filing of the

notice of federal tax lien or the proposed levy.

If you are still interested in receiving a face-to-face

conference, you must be prepared to discuss issues relevant to

paying your tax liability. These include, for example,

offering other ways to pay the taxes you owe, such as an

installment agreement or offer in compromise. The Internal

Revenue Manual determines whether Appeals can accept your

proposal. If you wish to have a face-to-face conference, please

write me within 15 days from the date of this*160 letter or February

23, 2004 and describe the legitimate issues you will discuss.

Petitioner did not respond to the Appeals officer's February 6, 2004 letter.

On April 8, 2004, the Appeals Office issued to petitioner a notice of determination concerning collection action(s) under section 6320 and/or 6330 (notice of determination). The notice of determination stated in pertinent part:

Summary of Determination

A review of the administrative file indicated that all

statutory and administrative requirements that needed to

be met with respect to the Notice of Intent to Levy being

issued were in fact met in your case.

All relevant issues raised by you were addressed.

You suggested no collection alternatives.

IRC Sections 6320 and 6330 require that the Appeals

Officer consider whether any collection action balance

the need for efficient tax collection with the legitimate

concern that any collection action be no more intrusive

*161 than necessary. The proposed levy action appears

appropriate in that your liabilities are based on your

non-compliance with the tax laws and that you continue

attempting to circumvent the tax system with various time

worn frivolous arguments.

An attachment to the notice of determination stated in pertinent part:

Legal and Procedural Requirements

*   *   *   *   *   *   *

This Appeals Officer has had no prior involvement with respect

to these liabilities; all relevant legal and procedural

requirements were reviewed and verified as being met also no

spousal issues are applicable.

Validity of the Assessment

The assessments for all tax years and liabilities therein are

valid. Various transcripts were reviewed and all assessments

were appropriate. For the Income Tax liability for tax year 1999

you were issued a Notice of Deficiency on 7/29/2003 [sic]. You

did not petition the Tax Court for redetermination and the tax

was appropriately assessed*162 by default procedures.

Based on the above[,] Section 6330(c)(2)(B) precludes any

challenge to the underlying liability, at the hearing, for any

period, if the person received a statutory notice of deficiency

or otherwise had an opportunity to dispute the liabilities. For

the income tax liability you received the Notice of Deficiency.

*   *   *   *   *   *   *

Challenges to the Appropriateness of the Collection

Actions

Your only challenge to the appropriateness of the actions is

documented in your request for the hearing and other documents

received by the Service. Those challenges are submitted below in

pertinent part:

Quotations form [sic] Senator Roth's book "The Power

to Destroy" specifically page 73;

Disputes the validity of the "Final Notice of Intent

to Levy and Notice of your Right to a Hearing"

pursuant to IRC 6330, because no one signed it.

Verification from the Secretary that the requirements*163 of

any applicable law or administrative procedure have been

met. Transcripts of any kind are not acceptable. And any

claims that the court have held that an unsigned,

computer printout satisfies the legal requirements will

no [sic] be acceptable. That an Appeals Officer

"shall hew to the law", in accordance with

Reg. 601.106(f) that there is no Treasury Regulation that

state [sic] the appeals officers "shall hew to

court decisions";

Proof of Notice and Demand and proof that it is a

statutory notice and demand via a Treasury Decision or

Regulation;

There is no underlying liability -- That "The index

of the IR Code lists some 60 taxes under the caption

"Liability for tax"; however he can find no entry

for "income taxes";

One (nonsensical) excuse the appeals officer might offer

is that the underlying liability is not at issue due to

 *164 the fact that the taxpayer received a Notice of

Deficiency. The notice is invalid since it was prepared

and sent by a Service Center Employee and it must be sent

and determined by the Secretary unless there is a

delegation authority to do so IRC Sec. 6330(c)(2)(B) does

not apply;

Citation from Federal Crop Insurance v. Merrill, 332 U.

S. 380;

Disputes the existence of an Income Tax Liability --

The Tax Court not being a court of law -- has no

jurisdiction to consider such a question;

There is no statute requiring him to pay the income

taxes;

*   *   *   *   *   *   *

None of the above arguments are relevant for purposes of the

hearing.

Collection Alternatives Considered

You have not suggested any viable alternatives. On January 5,

2004 (note: typo error on letter has 2003) you were sent a

contact letter informing*165 you that the hearing was being

conducted by correspondence and telephone, you were advised that

your irrelevant, frivolous, meritless arguments were not

acceptable and that the hearing was being limited to discussions

of alternatives to the proposed levy. You were further notified

that you were not in compliance with the filing of your 2000,

2001, and 2002 tax returns. You were directed to forward

completed returns for these years along with financial

statements.

In response you wrote a letter dated February 4, 2004 insisting

upon a "hearing where I can present evidence, ask questions

and view the verification documents called for in the law.

Awaiting your response for the date and time of such in person

hearing."

On February 6, 2004 this Appeals Officer responded to your

correspondence informing you of the conditions under which you

would be given an in person hearing, otherwise we would continue

with correspondence or by telephone. You did not respond to this

letter.

Balancing Efficient Collection and Intrusiveness

*166   IRC Sec. 6330 requires that the Appeals Officer consider whether

any collection action balance the need for efficient tax

collection with the legitimate concern that any collection

action be no more intrusive than necessary. The levy action is

appropriate in that you have only made time worn arguments

against the tax laws to evade the payment of tax nor are you in

compliance with the filing of your returns. It is inappropriate

to allow you to ignore his [sic] tax obligations any longer.

Petitioner filed a petition with the Court with respect to the notice of determination relating to petitioner's unpaid liability for 1999. The petition contained statements, contentions, arguments, and requests that the Court finds to be frivolous and/or groundless. ⁸

*167 Discussion

The Court may grant summary judgment where there is no genuine issue of material fact and a decision may be rendered as a matter of law. Rule 121(b); Sundstrand Corp. v. Commissioner, 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.

Petitioner did not file a petition with the Court with respect to the notice of deficiency that respondent issued to him relating to his taxable year 1999. Where, as is the case here, the validity of the underlying tax liability is not properly placed at issue, the Court will review the determination of the Commissioner of the Internal Revenue for abuse of discretion. Sego v. Commissioner, 114 T.C. 604, 610 (2000); Goza v. Commissioner, 114 T.C. 176, 182 (2000).

As was true of, inter alia, petitioner's 1999 return, petitioner's attachment to his 1999 return, petitioner's attachment to Form 12153, and the petition, petitioner's position in petitioner's response to respondent's motion (petitioner's response) is frivolous and/or groundless. ⁹

*168 Based upon our examination of the entire record before us, we find that respondent did not abuse respondent's discretion in determining to proceed with the collection action as determined in the notice of determination with respect to petitioner's unpaid liability for 1999.

In respondent's motion, respondent requests that the Court require petitioner to pay a penalty to the 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 ground-less, sec. 6673(a)(1)(B).

In Pierson v. Commissioner, 115 T.C. 576 (2000), we issued an unequivocal warning to taxpayers concerning the imposition of a penalty under section 6673(a)(1) on those taxpayers who abuse the protections afforded by sections 6320 and 6330 by instituting or maintaining actions under those sections primarily for delay or by taking frivolous or groundless positions in such actions. *169 In the Appeals officer's January 5, 2004 letter, the Appeals officer advised petitioner that "the courts have consistently and repeatedly rejected the arguments expressed in your letters and in many cases have imposed sanctions." In that letter, the Appeals officer also advised petitioner of the holding in Pierson v. Commissioner, supra, and provided petitioner with a list of other cases in which a penalty under section 6673(a)(1) had been imposed. Nonetheless, in the instant case, petitioner alleged in the petition and advances in petitioner's response, we believe primarily for delay, frivolous and/or groundless statements, contentions, arguments, and requests, thereby causing the Court to waste its limited resources. We shall impose a penalty on petitioner pursuant to section 6673(a)(1) in the amount of $ 1,000.

We have considered all of petitioner's statements, contentions, arguments, and requests that are not discussed herein, and we find them to be without merit and/or irrelevant. ¹⁰

*170 On the record before us, we shall grant respondent's motion.

To reflect the foregoing,

An order granting respondent's motion and decision for respondent will be entered.