F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
FEB 6 2003
TENTH CIRCUIT
PATRICK FISHER
Clerk
EARL DAVID SHAFFER,
Petitioner,
v. No. 02-9013
U.S. Tax Ct. No. 10829-00L
COMMISSIONER OF INTERNAL (U.S. Tax Court)
REVENUE,
Respondent.
ORDER AND JUDGMENT *
Before EBEL, LUCERO, and O’BRIEN, Circuit Judges.
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument.
*
This order and judgment is not binding precedent except under the
doctrines of law of the case, res judicata and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
Mr. Earl D. Shaffer, a petitioner appearing pro se 1, appeals a decision of
the United States Tax Court affirming a determination by the Internal Revenue
Service Office of Appeals to permit the Commissioner of the Internal Revenue
Service to proceed to collect by levy delinquent taxes owed by Mr. Shaffer. 2
Exercising jurisdiction under 26 U.S.C. § 7482(a), we affirm. 3
Mr. Shaffer, a former airline pilot for Northwest Airlines, took disability
retirement in 1982. Believing his disability retirement benefits to be excluded
from gross income under 26 U.S.C. § 104(a), and his other incidental income to
be sheltered by the standard deduction and personal exemption, Mr. Shaffer did
not file income tax returns for the years 1985 through 1995. The Internal
Revenue Service (IRS), based in large part on third-party information returns, 4
determined Mr. Shaffer’s tax liability for the years 1985 through 1995 and issued
a statutory notice of deficiency for each year.
1
We liberally construe a pro se appellate brief. Cummings v. Evans, 161
F.3d 610, 613 (10th Cir. 1998), cert. denied, 526 U.S. 1052 (1999).
2
The amount owed, as of the Notice of Intent to Levy (June 30, 1999),
totaled $125,650.17, which included delinquent taxes, penalties and interest.
3
We conclude Mr. Shaffer timely filed his notice of appeal. F ED . R. A PP . P.
13(a) and (b) require notice of appeal to be filed within ninety days of a final
decision, and the notice is considered filed on the postmark date. The Tax
Court’s decision was entered on March 26, 2002, and Mr. Shaffer’s notice was
postmarked June 21, 2002, well within ninety days.
4
See 26 U.S.C. § 6020(b), which provides authority for the Secretary to
execute a return.
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Mr. Shaffer contested in the Tax Court his tax liability for the years 1985
through 1990, but did not prevail. Shaffer v. Commissioner, 68 T.C.M. (CCH)
1455 (1994). In another contested action, Mr. Shaffer failed to upset his tax
liability for the years 1991 through 1993. U.S. Tax Court Docket No. 7833-96.
In both cases, he argued unsuccessfully that his disability payments did not
constitute taxable income. He did not appeal either decision. For the years 1994
and 1995, Mr. Shaffer did not challenge the notices of deficiency sent to him.
Thus, the amount Mr. Shaffer owes in taxes for the years 1985 through 1995 is
not at issue here.
On June 30, 1999, the IRS sent Mr. Shaffer a notice of intent to levy
against his property, informing him of his right to a “collection due process
hearing” with the Internal Revenue Service Office of Appeals under 26 U.S.C. §
6330. 5 Mr. Shaffer timely requested a hearing by letter in which he again asserted
5
The formal hearing procedures required under the Administrative
Procedure Act, 5 U.S.C. 551 et seq., do not apply to CDP [collection
due process] hearings . . . in that they are informal in nature and do
not require the Appeals officer or employee and the taxpayer, or the
taxpayer’s representative, to hold a face-to-face meeting. A CDP
hearing may, but is not required to, consist of a face-to-face meeting,
one or more written or oral communications between an Appeals
officer or employee and the taxpayer or the taxpayer’s representative,
or some combination thereof.
26 C.F.R. § 301.6330-1(d), Illustrative Answer D-6 (2002). While this language
did not appear in the illustrative language of the essentially identical provision of
the Code of Federal Regulations in effect for 2000, when Mr. Shaffer’s hearing
was conducted, we conclude it fairly represents the meaning of 26 C.F.R. §
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his disability payments were tax exempt. He also claimed a violation of his
constitutional rights, and he requested the sum of $2,000,000,000.00 in damages
for the turmoil occasioned by events in his personal life, the dispute over his
disability payments, and the collection action. The Office of Appeals
acknowledged receipt of his request for a hearing and responded to his litany of
complaints by highlighting the issues appropriate for a collection due process
hearing. On July 13, 2000, Mr. Shaffer made an offer to compromise his tax
liability for the sum of $50.00, an offer he withdrew on August 5, 2000. The
Office of Appeals corresponded with Mr. Shaffer on August 10, 2000, again
offering to confer with him on the issues reviewable in a § 6330 hearing. With no
further communication from Mr. Shaffer, the Office of Appeals issued a Notice of
Determination against him on September 19, 2000, authorizing the IRS to
continue its collection action by levy. Mr. Shaffer timely appealed this
determination to the Tax Court.
The Tax Court, concluding Mr. Shaffer’s underlying tax liability for the
years in question was not at issue, reviewed the administrative determination of
the Office of Appeals for abuse of discretion. Goza v. Commissioner, 114 T.C.
301.6330-1T(d) (2000). We further note that page two of I.R.S. Publication 1660
(Rev. 05-2000), in effect at the time of Mr. Shaffer’s hearing, provided similar
guidance: “Your hearing may be held either in person, by telephone or by
correspondence.”
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176, 181-82 (2000). We review de novo a legal decision of the Tax Court.
Twenty Mile Joint Venture, PND, Ltd. v. Commissioner, 200 F.3d 1268, 1275
(10th Cir. 1999). Thus, we consider anew whether the Office of Appeals abused
its discretion in authorizing the IRS to proceed with its levy action against Mr.
Shaffer’s property.
The requirements for a collection due process hearing are set out in 26
U.S.C. § 6330. First, “[t]he appeals officer shall at the hearing obtain verification
from the Secretary that the requirements of any applicable law or administrative
procedure have been met.” 26 U.S.C. § 6330(c)(1). Thereafter, the taxpayer
“may raise . . . any relevant issue relating to the unpaid tax . . . .” 26 U.S.C. §
6330 (c)(2)(A). 6 Raising the issue of underlying liability for the tax, however, is
precluded under certain circumstances:
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)(B). Finally, the appeals officer must consider “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
6
For example, “(i) appropriate spousal defenses; (ii) challenges to the
appropriateness of collection actions; and (iii) offers of collection alternatives . .
. .” 26 U.S.C. § 6330(c)(2)(A).
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more intrusive than necessary.” 26 U.S.C. § 6330(c)(3)(C).
In his appeal to the Tax Court, for the first time, and only by way of cross-
examination of the IRS’s sole witness, Mr. Shaffer questioned whether he had
received notice of deficiency for his tax liability for the years 1994 and 1995,
enabling him to dispute his liability for those years. The IRS’s records and
administrative practice sufficiently establish, however, the two notices of
deficiency were sent to him by certified mail and not returned as undeliverable.
The Office of Appeals correctly verified that other administrative and legal
requirements for issuance of intent to levy were met.
To the extent he chose to participate in the hearing he requested under §
6330, Mr. Shaffer pressed an argument, as he did in the Tax Court and as he does
here, questioning his liability for taxes based upon his belief disability payments
ought to be excluded from gross income. This issue is clearly precluded from §
6330 review where the taxpayer has received statutory notice of deficiency
enabling him to contest the liability. In addition, taxability of disability payments
is precluded from § 6330 review when “the issue was raised and considered . . .
in any other previous . . . judicial proceeding . . . .” 26 U.S.C. § 6330(c)(4)(A).
Mr. Shaffer raised this identical issue in the Tax Court proceedings in which he
contested his liability for the years 1985 through 1993.
After a careful review of the record, we conclude the Office of Appeals did
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not abuse its discretion in permitting the collection action to proceed against Mr.
Shaffer’s property. Mr. Shaffer raised no issues susceptible to debate. He has
embellished his idee fixe on the question of liability with constitutional arguments
based on the Sixth Amendment right to counsel, the Seventh Amendment right to
jury trial, the prohibition on ex post facto laws, due process and equal protection.
These arguments are meritless and unworthy of further discussion.
Judgment AFFIRMED.
Entered by the Court:
TERRENCE L. O’BRIEN
United States Circuit Judge
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