T.C. Memo. 2000-320
UNITED STATES TAX COURT
ROBERT C. MacELVAIN, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 16631-99L. Filed October 13, 2000.
Robert C. MacElvain, pro se.
John F. Driscoll and Kerry Bryan, for respondent.
MEMORANDUM OPINION
ARMEN, Special Trial Judge: This matter is before the Court
on respondent's Motion for Partial Summary Judgment, filed
pursuant to Rule 121.1 As explained below, we shall grant
respondent's motion.
1
All Rule references are to the Tax Court Rules of
Practice and Procedure, and all section references are to
sections of the Internal Revenue Code, as amended.
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Background
From 1984 through 1990, petitioner commenced four cases in
this Court for the redetermination of deficiencies in Federal
income taxes and additions to tax for each of the four taxable
years 1980 through 1983. See sec. 6213(a). A description of
each of those four cases follows herein:
A. Taxable Year 1980
On June 15, 1984, respondent issued a notice of deficiency
to petitioner determining a deficiency of $576,896 in his Federal
income tax for 1980. Respondent also determined that petitioner
was liable for an addition to tax under section 6653(a) for
negligence or intentional disregard of rules and regulations.
On October 29, 1984, petitioner filed a petition with the
Court (assigned docket No. 37347-84) contesting the notice of
deficiency for 1980.2 In February 1986, shortly before
petitioner's case was scheduled for trial, petitioner entered
into a stipulated decision with respondent agreeing to a
deficiency in income tax and an addition to tax under section
6653(a) for 1980 in the amounts of $190,291 and $9,515,
respectively. Petitioner subsequently filed a motion to vacate
the stipulated decision. In MacElvain v. Commissioner, T.C.
2
The petition was timely filed within the 150-day period
prescribed by sec. 6213(a).
There is no support in the record for petitioner's assertion
that he did not file a petition for 1980 until May 22, 1986.
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Memo. 1987-366, the Court denied petitioner's motion to vacate.
Petitioner did not file any notice of appeal in docket No.
37347-84. Accordingly, the Court's decision in that docket has
long been final. See secs. 7481(a)(1), 7483.
B. Taxable Year 1981
On August 19, 1988, respondent issued a notice of deficiency
to petitioner determining a deficiency of $205,662 in his Federal
income tax for 1981. Respondent also determined that petitioner
was liable for additions to tax for such year under section
6653(a)(1) and (2) for negligence or intentional disregard of
rules and regulations.
On November 16, 1988, petitioner filed a timely petition
with the Court (assigned docket No. 29751-88) contesting the
notice of deficiency for 1981. On July 20, 1989, the Court
entered an Order of Dismissal and Decision, sustaining
respondent's determinations for 1981 on the ground that
petitioner had failed to properly prosecute his case and had
failed to comply with a prior order of the Court. The Court
subsequently denied petitioner's Motion to Vacate its order of
dismissal.
Petitioner did not file any notice of appeal in docket No.
29751-88. Accordingly, the Court's decision in that docket has
long been final. See secs. 7481(a)(1), 7483.
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C. Taxable Year 1982
On June 12, 1989, respondent issued a notice of deficiency
to petitioner determining a deficiency in and additions to his
Federal income tax for 1982. On September 5, 1989, petitioner
filed a timely petition with the Court (assigned docket No.
21830-89) contesting the notice of deficiency for 1982. On May
17, 1991, the Court entered a stipulated decision that petitioner
was liable for a deficiency in income tax in the amount of
$36,016, an addition to tax under section 6653(a)(1) in the
amount of $1,800.80, an addition to tax under section 6653(a)(2)
in an amount equal to 50 percent of the interest due on the
deficiency, and an addition to tax under section 6661 for
substantial understatement of liability in the amount of
$9,004.00.
Petitioner did not file any notice of appeal in docket No.
21830-89. Accordingly, the Court's decision in that docket has
long been final. See secs. 7481(a)(1), 7483.
D. Taxable year 1983
On June 15, 1990, respondent issued a notice of deficiency
to petitioner determining a deficiency of $167,381 in his Federal
income tax for 1983. Respondent also determined that petitioner
was liable for additions to tax under section 6653(b)(1) and (2)
for fraud and under section 6661 for substantial understatement
of liability.
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Although petitioner contends that he did not receive the
notice of deficiency for 1983, the record shows that he did.3 On
September 12, 1990, petitioner filed an imperfect petition with
the Court (assigned docket No. 20618-90). On January 10, 1991,
the Court entered an Order of Dismissal for Lack of Jurisdiction
in that docket on the ground that petitioner had failed to file a
proper amended petition or pay the requisite filing fee within
the time prescribed by the Court. Although the Court, pursuant
to its normal procedure, has destroyed all of its records in
docket No. 20618-90 with the exception of the above-referenced
order of dismissal, both the Court’s docket record and
respondent's records show that the Court served respondent with a
copy of the petition on September 17, 1990. Respondent’s records
also show that attached as an exhibit to the copy of the petition
served on respondent were the first two pages of the notice of
deficiency dated June 15, 1990. In serving petitions on
respondent, see Rule 21(b)(1), it has long been the Court’s
practice to photocopy and serve at least the letter portion of
any notice of deficiency that accompanies the petition.
Petitioner did not file any notice of appeal from the
Court’s order of dismissal. Accordingly, such order has long
3
We note that the notice of deficiency for 1983 was mailed
to petitioner at the same Eufaula, Alabama, address that
petitioner had used in the docketed cases described above for
1981 and 1982 and the same address that petitioner is using in
the instant case.
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been final. See secs. 7481(a)(1), 7483.
E. District Court Collection Suit
In or about March 1996, the United States commenced a civil
action against petitioner in the U.S. District Court for the
Middle District of Alabama. The action, which sought to reduce
the Government’s tax claims for 1980 through 1982 to judgment,
prayed that the Court find the “defendant, Robert C. MacElvain,
indebted to the United States in the amount of $2,091,477.76, as
of March 18, 1996, for unpaid federal income tax liabilities for
calendar years 1980, 1981, and 1982, plus further accruals of
interest and statutory additions thereon according to law, and
that judgment be entered in favor of plaintiff United States of
America for that amount.”
Petitioner participated actively in the foregoing action,
asserting a variety of defenses, specifically including the
statute of limitations.
In April 1997, the District Court entered judgment in favor
of the United States and against petitioner “for unpaid taxes,
interest, penalties and lien fees for the years 1980, 1981 and
1982 * * * in the amount of $2,091,477.76 plus interest and
statutory additions as allowed by law”.4
4
The District Court’s judgment made clear that the sum of
$2,091,477.76 represented “the amount due and payable through
March 18, 1996" and did not include “additional interest,
penalties or fees which may have accrued since that time.”
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F. Administrative Collection Matters
On January 29, 1999, respondent mailed a final notice of
intent to levy to petitioner. See sec. 6331. The notice states
that petitioner owes taxes, interest, and penalties for the years
and in the amounts as follows:
Year Amount
1980 $ 793,308.52
1981 1,632,232.54
1982 278,290.41
1983 1,278,878.58
1984 175,098.63
1985 404,236.97
1986 196,256.57
The notice also states that respondent is preparing to collect
these amounts and that petitioner would be given 30 days to
request an Appeals Office hearing.
Petitioner timely requested a hearing with respondent's
Appeals Office. In particular, petitioner argued that “the time
for making an assessment for all the periods listed on your
'NOTICE OF INTENT TO LEVY' was negated on May 8, 1987".
On September 29, 1999, the Appeals Office issued a Notice of
Determination Concerning Collection Actions to petitioner stating
that respondent would proceed with collection. The determination
letter makes reference to petitioner's challenge to the validity
of the assessments and states that, because petitioner had an
earlier opportunity to dispute the underlying tax liabilities,
that issue would not be addressed by the Appeals Office.
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G. Commencement of the Present Case
On October 27, 1999, petitioner filed with the Court a
petition for review of respondent's determination to proceed with
collection.5 The petition includes an allegation that petitioner
is not liable for the underlying taxes because of the expiration
of the period of limitations on assessment for the years in issue
and government fraud.
After filing an answer to the petition, respondent filed a
Motion for Partial Summary Judgment. Respondent contends that,
because petitioner received notices of deficiency for the taxable
years 1980, 1981, 1982, and 1983 (and therefore was presented
with an earlier opportunity to contest his tax liabilities for
those years), petitioner is precluded by statute from contesting
the underlying taxes for those years in this proceeding.
Petitioner filed an opposition to respondent's motion.
This matter was called for hearing at the Court's motions
session in Washington, D.C., on September 6, 2000. Counsel for
respondent appeared at the hearing and offered argument in
support of respondent's motion. Petitioner appeared at the
hearing and offered argument in opposition to respondent's
motion. Petitioner also offered the testimony of a witness,
5
The petition was filed pursuant to Title XXXII of the
Court’s Rules of Practice and Procedure governing Lien and Levy
Actions.
At the time that the petition was filed, petitioner resided
in Eufaula, Alabama.
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Victoria Osborn. The Court rejected Ms. Osborn's proposed
testimony after a brief voir dire revealed that she did not have
any firsthand knowledge regarding petitioner's above-described
Tax Court cases assigned docket Nos. 37347-84, 29751-88, 21830-
89, and 20618-90.
Discussion
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 upon property belonging to the taxpayer.
Section 6331(d) provides that the Secretary is obliged to provide
the taxpayer with notice before proceeding with collection by
levy on the taxpayer's property, including notice of the
administrative appeals available to the taxpayer.
In the Internal Revenue Service Restructuring and Reform Act
of 1998, Pub. L. 105-206, sec. 3401, 112 Stat. 685, 746, Congress
enacted new sections 6320 (pertaining to liens) and 6330
(pertaining to levies) to provide protections for taxpayers in
tax collection matters. Section 6330 generally provides that the
Commissioner cannot proceed with the collection of taxes by way
of a levy on a taxpayer's property until the taxpayer has been
given notice of, and the opportunity for, an administrative
review of the matter (in the form of an Appeals Office hearing);
if dissatisfied with the outcome of such hearing, the taxpayer
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may seek judicial review of the administrative determination in
either the Tax Court or a Federal District Court, during which
review the suspension of the levy continues.
Section 6330(c)(2)(B) provides that the existence or the
amount of the underlying tax liability can be contested at an
Appeals Office hearing if the taxpayer did not receive a notice
of deficiency for the taxes in question or did not otherwise have
an earlier opportunity to dispute such tax liability. Section
6330(d)(1)(A) provides that a taxpayer may file a petition for
review of the Commissioner's administrative determination with
the Tax Court if the Court has jurisdiction of the underlying tax
liability.
Summary judgment is intended to expedite litigation and
avoid unnecessary and expensive trials. See Florida Peach Corp.
v. Commissioner, 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(b); Sundstrand Corp. v.
Commissioner, 98 T.C. 518, 520 (1992), affd. 17 F.3d 965 (7th
Cir. 1994); Zaentz v. Commissioner, 90 T.C. 753, 754 (1988);
Naftel v. Commissioner, 85 T.C. 527, 529 (1985).
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In Goza v. Commissioner, 114 T.C. 176 (2000), we explained
that section 6330(c) provides for an Appeals Office hearing to
address collection issues such as spousal defenses, the
appropriateness of the Commissioner's intended collection
activities, and possible alternative means of collection. The
taxpayer in Goza had received a notice of deficiency, yet failed
to file a petition for redetermination with the Court. When the
taxpayer subsequently attempted to use the Court's procedures
governing Lien and Levy Actions as a forum to assert frivolous
and groundless constitutional arguments against the Federal
income tax, we cited the statutory limitation imposed under
section 6330(c)(2)(B) and dismissed the petition for failure to
state a claim upon which relief could be granted.6
Based on our review of the record in this case, we hold that
there is no dispute as to a material fact and that respondent is
entitled to partial summary judgment as a matter of law. In
particular, the record in the instant case shows that petitioner
received notices of deficiency for the taxable years 1980, 1981,
1982, and 1983. Morever, petitioner filed petitions with the
Court contesting those notices. As previously discussed, those
petitions were disposed of either by stipulated decision, order
6
In Goza v. Commissioner, 114 T.C. 176 (2000), the
Commissioner moved to dismiss for failure to state a claim before
filing an answer. In the present case, respondent did not move
for partial summary judgment until well after the case was at
issue within the meaning of Rule 38.
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of dismissal and decision, or order of dismissal for lack of
jurisdiction. Under the circumstances, section 6330(c)(2)(B)
clearly bars petitioner from contesting the existence or amount
of his tax liabilities for those years before the Appeals Office
or the Court.7 Petitioner failed to raise a spousal defense or
challenge respondent's proposed levy by offering a less intrusive
means for collecting the taxes in either the Appeals Office
hearing or in his Lien and Levy Action petition filed with the
Court. See sec. 6330(c)(2)(A). These issues are now deemed
conceded. See Rule 331(b)(4).
Petitioner has failed to state a justiciable claim for
relief in this Lien and Levy proceeding with respect the taxable
years 1980, 1981, 1982, and 1983. Petitioner's claim that the
period of limitations for assessment expired on May 8, 1987, for
these years constitutes a challenge to the existence of the
underlying tax liabilities. Section 6330(c)(2)(B) precludes
review of those tax liabilities in this proceeding.8
7
Petitioner’s liabilities for the taxable years 1980
through 1982 are established by the Court’s decisions entered in
docket Nos. 37347-84, 29751-88, and 21830-89, which decisions are
all final. The doctrine of res judicata precludes petitioner
from relitigating his liabilities for those years. See, e.g.,
Krueger v. Commissioner, 48 T.C. 824, 829-830 (1967).
8
We note that petitioner’s “defense” of the statute of
limitations appears to ignore a number of statutory provisions,
among them sec. 6501(c)(1), providing for an unlimited period of
limitations in the case of a false or fraudulent return with the
intent to evade tax, and sec. 6503, providing for the suspension
of running of the period of limitations under various
circumstances, including the issuance of a notice of deficiency.
(continued...)
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In view of the foregoing, we hold that respondent's
determinations to proceed with collection for the taxable years
1980, 1981, 1982, and 1983 are correct. Accordingly, we shall
grant respondent's Motion for Partial Summary Judgment.
To reflect the foregoing,
An appropriate order
will be issued granting
respondent’s Motion for Partial
Summary Judgment.
8
(...continued)
We also note that the District Court considered, and
rejected, a statute of limitations defense that petitioner
asserted in the civil collection action described supra.