115 T.C. No. 25
UNITED STATES TAX COURT
HENRY HERMANUS VAN ES, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 1134-00L. Filed October 13, 2000.
With regard to P’s 1994 tax year, R assessed a tax
deficiency (along with penalties and interest) and
three sec. 6702, I.R.C., frivolous return penalties
(along with related interest), of which R collected a
portion. As to the uncollected portion of those
amounts, R issued a levy notice. Pursuant to sec.
6330(b), I.R.C., P requested an Appeals hearing from
R’s Appeals Office. After review, an Appeals officer
issued to P a notice of determination pursuant to sec.
6330, I.R.C., stating that the levy should proceed.
With respect to the Appeals officer’s determination, P
thereafter filed a petition with this Court challenging
the merits of R’s assessment of the (collected and
uncollected) frivolous return penalties and related
interest amounts.
Held, P is not entitled to the protections of sec.
6330, I.R.C., for amounts collected before the
effective date of the Internal Revenue Service
Restructuring and Reform Act of 1998, Pub. L. 105-206,
sec. 3401, 112 Stat. 685, 746-750.
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Held, further, the Court lacks jurisdiction to
review the Appeals officer’s determination that the
levy with regard to the uncollected frivolous return
penalties and related interest should proceed. See
Moore v. Commissioner, 114 T.C. 171 (2000).
Henry H. Van Es, pro se.
Thomas R. Mackinson, for respondent.
OPINION
VASQUEZ, Judge: Petitioner filed a petition in response to
respondent’s Notice of Determination Concerning Collection
Action(s) Under Section 6320 and/or 6330 (notice of
determination).1 In the petition, petitioner disputes
respondent’s assessment of section 6702 frivolous return
penalties (and related interest) and alleges that respondent has
violated his Fifth Amendment rights as a result of that
assessment. Because under section 6703 we lack jurisdiction to
review assessments of section 6702 frivolous return penalties,
respondent filed a motion to dismiss the petition for lack of
jurisdiction. Petitioner concedes the issue to the extent that
he can file a petition with a U.S. District Court within 30 days
of the dismissal of the instant case.2
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code as amended, and all Rule references are
to the Tax Court Rules of Practice and Procedure.
2
For purposes of respondent’s motion, petitioner does not
dispute various factual allegations that are part of the record.
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Background
At the time the petition was filed, petitioner resided in
San Francisco, California. The amounts for which petitioner
seeks relief relate to his 1994 tax year.
The Internal Revenue Service (IRS) assessed an income tax
deficiency (along with penalties and interest) and three section
6702 frivolous return penalties (and related interest) with
regard to petitioner’s 1994 tax return. On February 4, 1999,
after previously collecting and applying $1,019 to the
outstanding liability related to the section 6702 frivolous
return penalties and related interest (prior collection
activities), respondent issued a Notice of Intent to Levy and
Notice of Your Right to a Hearing (levy notice) to petitioner
with regard to the outstanding balance of the income tax
deficiency (and related penalties and interest) and the section
6702 frivolous return penalties (and related interest). See sec.
6330(a). In the levy notice, among other items, the IRS asserted
that petitioner had an outstanding balance of $500 for the
section 6702 frivolous return penalties and $59 for interest
related to those penalties. The outstanding balance for the 1994
tax year as presented in the levy notice is reproduced below:
Form Tax Unpaid Amount Additional
Number Period from Prior Notices Penalty & Interest Amount You Owe
1040 12/31/94 $1,227.91 $498.85 $1,726.76
civ pen 12/31/94 500.00 58.56 558.56
Pursuant to section 6330(b), petitioner requested a hearing
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(Appeals hearing) from the Internal Revenue Service Office of
Appeals (Appeals Office). Petitioner contested all amounts
listed in the levy notice by making constitutional arguments,
including the violation of his Fifth Amendment rights.
On December 17, 1999, an Appeals officer sent petitioner a
notice of determination pursuant to section 6330. In the notice
of determination, the Appeals officer determined that because
petitioner raised only constitutional issues (and did not raise
issues listed in section 6330(c)(2)(A)) with regard to the unpaid
amounts, the levy should proceed.
Petitioner thereafter appealed the Appeals officer's notice
of determination to this Court, using a preprinted “Petition”
form available to taxpayers seeking review of deficiency
determinations made by the Commissioner. Under the headings
“Amount of Deficiency Disputed” and “Addition to Tax (Penalty) if
any, Disputed”, petitioner wrote “All penalties and interest” and
“$1,000 + interest and penalties from date of assessment”,
respectively. Petitioner also provided an explanation for
instituting the suit:
All IRS forms submitted for the 1994 Tax year were
signed under “Reservation of Rights”. Two frivolous
tax return penalties were assessed against me. These
two penalties violate my 5th Amendment right. In
addition the statement attached to my 1994 return
stated clearly that the return was filed
“involuntarily”. Also violated was 42 USC 1983.
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Discussion
Section 6331(a) provides that, if any person liable to pay
any tax neglects or refuses to do so within 10 days after notice
and demand, the Secretary can collect such tax by levy upon
property belonging to such person. Pursuant to section 6331(d),
the Secretary is required to give the taxpayer notice of his
intent to levy and within that notice must describe the
administrative review available to the taxpayer, before
proceeding with the levy. See also sec. 6330(a).
Section 6330(b) describes the administrative review process,
providing that a taxpayer can request an Appeals hearing with
regard to a levy notice. At the Appeals hearing, the taxpayer
may raise certain matters set forth in section 6330(c)(2), which
provides in pertinent part as follows:
SEC. 6330(c). Matters Considered at Hearing.–-In
the case of any hearing conducted under this section--
* * * * * * *
(2) Issues at hearing.--
(A) In general.–-The person may raise
at the hearing any relevant issue relating to
the unpaid tax or the proposed levy,
including–-
(i) appropriate spousal
defenses;
(ii) challenges to the
appropriateness of collection
actions; and
(iii) offers of collection
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alternatives, which may include the
posting of a bond, the substitution
of other assets, an installment
agreement, or an offer-in-
compromise.
(B) Underlying liability.–-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.
Pursuant to section 6330(d)(1), within 30 days of the issuance of
the notice of determination, the taxpayer may appeal that
determination to this Court if we have jurisdiction over the
underlying tax liability. If we do not have jurisdiction over
the underlying tax liability, then the appeal is to be made to a
U.S. District Court. See sec. 6330(d)(1).
Respondent interprets the petition as seeking review of the
section 6702 frivolous return penalties and not the “unpaid
income tax assessment.” Petitioner does not object to that
interpretation of the petition. After reviewing the petition and
the record, we conclude that petitioner seeks review of all of
respondent’s collection activities with regard to the section
6702 frivolous return penalties assessed, including related
interest.
We view the references to “$1,000" and “two frivolous tax
return penalties” in the petition as petitioner’s attempt to
contest respondent’s prior collection activities which were not
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the subject of the levy notice or the notice of determination.
Because the prior collection activities were initiated and
completed before the effective date of section 6330, petitioner
is not entitled to the protections of that section for those
collection activities. See Internal Revenue Service
Restructuring and Reform Act of 1998, Pub. L. 105-206, sec. 3401,
112 Stat. 685, 746-750 (which created new section 6330 and
provided for an effective date of 180 days after July 22, 1998).
To the extent that the petition refers to respondent’s prior
collection activities, we dismiss that part of the petition for
lack of jurisdiction.
Pursuant to section 6330(d)(1), respondent moves to dismiss
the petition on the basis that we lack jurisdiction to review
respondent’s assessment of the uncollected section 6702 frivolous
return penalties. Section 6330(d)(1) provides the following:
SEC. 6330(d). Proceeding After Hearing.--
(1) Judicial review of determination.–-The person
may, within 30 days of a determination under this
section, appeal such determination–-
(A) to the Tax Court (and the Tax Court
shall have jurisdiction to hear such matter);
or
(B) if the Tax Court does not have
jurisdiction of the underlying tax liability,
to a district court of the United States.
If a court determines that the appeal was to an
incorrect court, a person shall have 30 days after the
court determination to file such appeal with the
correct court. [Emphasis added.]
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In Katz v. Commissioner, 115 T.C. ___, ___ (2000) (slip op. at
17), we interpreted the term “underlying tax liability” as
including any amounts owed by a taxpayer pursuant to the tax laws
that are the subject of the Commissioner’s collection activities.
Pursuant to our recent decision in Moore v. Commissioner,
114 T.C. 171 (2000), respondent argues that we do not have
jurisdiction over the underlying tax liability; i.e., the section
6702 frivolous return penalties. In Moore v. Commissioner, supra
at 175, we observed that our deficiency jurisdiction generally is
limited to the redetermination of income, estate, and gift taxes.
See secs. 6211, 6213(a). We interpreted section 6330(d)(1)(A)
and (B) as not expanding the Court’s jurisdiction beyond the
types of taxes over which the Court has jurisdiction. See Moore
v. Commissioner, supra at 175. We concluded that because we did
not have jurisdiction to redetermine Federal trust fund taxes
determined by the Commissioner under section 6672, we did not
have jurisdiction to review an Appeals officer’s determination
pursuant to section 6330 with regard to those taxes. See id.
Just as in Moore, in which we held that we did not have
jurisdiction to redetermine Federal trust fund taxes, we hold
that we do not, in the instant case, have jurisdiction to
redetermine the frivolous return penalties assessed pursuant to
section 6702. See sec. 6703(b) and (c); Hansen v. Commissioner,
T.C. Memo. 1996-158; Nephew v. Commissioner, T.C. Memo. 1989-32.
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Because we do not have jurisdiction over the assessment of the
section 6702 frivolous return penalties, we also dismiss for lack
of jurisdiction the part of the petition challenging the
collection of the outstanding amounts listed in the levy notice
for the frivolous return penalties and related interest.3
Pursuant to section 6330(d), petitioner has 30 days after the
entry of our order of dismissal to file his appeal with the
appropriate U.S. District Court.
To reflect the foregoing,
An appropriate order of
dismissal will be entered.
3
Petitioner does not make an argument that he is not
liable for the interest. Cf. Katz v. Commissioner, 115 T.C. ___,
___ (2000) (slip op. at 7-8, 19). We therefore interpret
petitioner’s challenge to respondent’s collection activities as
being based solely on petitioner’s view that the section 6702
frivolous return penalties were illegally assessed.