T.C. Memo. 2002-93
UNITED STATES TAX COURT
DEBRA L. CHASE, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 7206-01L. Filed April 8, 2002.
Debra L. Chase, pro se.
Sheara L. Gelman, for respondent.
MEMORANDUM OPINION
PANUTHOS, Chief Special Trial Judge: This matter is before
the Court on the parties cross-motions for summary judgment
pursuant to Rule 121(a).1
1
Rule references are to the Tax Court Rules of Practice
and Procedure. Unless otherwise indicated, section references
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Summary judgment is intended to expedite litigation and
avoid unnecessary and expensive trials. Fla. 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(a) and (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). The moving
party bears the burden of proving that there is no genuine issue
of material fact, and factual inferences will be read in a manner
most favorable to the party opposing summary judgment. Dahlstrom
v. Commissioner, 85 T.C. 812, 821 (1985); Jacklin v.
Commissioner, 79 T.C. 340, 344 (1982).
We are satisfied that there is no genuine issue as to any
material fact and that a decision may be rendered as a matter of
law. As explained in detail below, we shall grant respondent’s
motion for summary judgment and deny petitioner’s motion for
summary judgment.
are to sections of the Internal Revenue Code, as amended.
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Background
Petitioner failed to file tax returns for 1995 and 1996. On
March 12, 1999, respondent issued notices of deficiency to
petitioner determining deficiencies in and additions to her
Federal income taxes for 1995 and 1996. Respondent determined
that petitioner failed to report wage income during the years in
question based upon information provided to respondent by third-
party payors.
On July 5, 2000, respondent mailed to petitioner a Final
Notice of Intent to Levy and Notice of Your Right to a Hearing.
On July 31, 2000, petitioner filed with respondent a Request for
a Collection Due Process Hearing that included a request that
respondent provide petitioner with a summary record of
assessment, and any documents showing that petitioner is liable
for a specific tax.
On September 18, 2000, Appeals Officer Gerald D. Sackett
wrote a letter to petitioner enclosing transcripts of her
accounts to demonstrate that tax assessments had been entered
against her for 1995 and 1996. Petitioner’s case was
subsequently transferred to Appeals Officer Nancy D. Johnson.
Appeals Officer Johnson concluded that it was unclear whether
petitioner received the notices of deficiency dated March 12,
1999, and, therefore, informed petitioner that she would be
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permitted to offer documentation to the Appeals Office
challenging the amount of the wage income attributed to her in
the notices of deficiency.
In early February 2001, Appeals Officer Johnson conducted an
administrative hearing in petitioner’s case. By letter to
petitioner dated February 22, 2001, Appeals Officer Johnson
provided petitioner with “certificates of official record”, i.e.,
Forms 4340, Certificate of Assessments, Payments, and Other
Specified Matters, dated February 2, 2001, and informed
petitioner that she should immediately submit any additional
information regarding her case. Petitioner did not provide the
Appeals Office with any additional information.
The Forms 4340 show that, on August 9, 1999, respondent
entered assessments against petitioner for taxes and additions to
taxes set forth in the notices of deficiency for 1995 and 1996,
and statutory interest and penalties for failure to pay the
taxes. In addition, on August 9, September 13, and October 18,
1999, respondent issued to petitioner Notices of Balance Due for
1995 and 1996.
On April 26, 2001, the Appeals Office issued to petitioner a
Notice of Determination Concerning Collection Action(s) Under
Section 6320 and/or 6330 stating that respondent would proceed
with collection against petitioner for 1995 and 1996. The notice
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of determination stated in pertinent part that the Secretary had
complied with all applicable laws and administrative procedures
in the examination, assessment, and collection actions taken in
the matter, the Appeals officer assigned to the matter had no
prior involvement with respect to petitioner’s tax liabilities,
and the Appeals Office would not consider petitioner’s challenge
to the existence of her tax liabilities because her arguments
were based on political, constitutional, conscientious, or
similar grounds.
Petitioner filed with the Court a Petition for Lien or Levy
Action Under Code Section 6320(c) or 6330(d) seeking review of
respondent’s notice of determination.2 Petitioner subsequently
filed an amended petition that included allegations that
respondent failed to obtain verification from the Secretary that
the requirements of any applicable law or administrative
procedure were met as required under section 6330(c)(1) and
respondent failed to consider whether petitioner is liable for
Federal income taxes.
After respondent filed an answer to the amended petition,
petitioner filed a motion for summary judgment asserting that
there is no dispute as to a material fact and petitioner is
2
At the time the petition was filed, petitioner was
residing in Allen, Tex.
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entitled to judgment as a matter of law. Petitioner maintains
that respondent’s notice of determination is arbitrary and
capricious and that the Appeals officer failed to consider
properly petitioner’s assertion that she did not receive income
from a taxable source during 1995 and 1996.
Respondent filed an objection to petitioner’s motion.
Respondent also filed a motion for summary judgment. Respondent
contends that petitioner failed to raise any valid claims with
respect to the existence or amount of her tax liabilities for
1995 and 1996. Respondent further asserts that the Appeals
officer properly verified that the requirements of all applicable
laws and administrative procedures were met with regard to the
assessment and collection actions taken in this case. Petitioner
filed an objection to respondent’s motion.
This matter was called for hearing at the Court’s motions
session held in Washington, D.C. Counsel for respondent appeared
at the hearing and presented argument in support of respondent’s
motion. No appearance was made by or on behalf of petitioner at
the hearing, nor did petitioner file with the Court a written
statement pursuant to Rule 50(c).
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
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notice and demand for payment, the Secretary is authorized to
collect such tax by levy upon the person’s property. Section
6331(d) provides that, at least 30 days before enforcing
collection by way of a levy on the person’s property, the
Secretary is obliged to provide the person with a final notice of
intent to levy, including notice of the administrative appeals
available to the person.
Sections 6320 and 6330 generally provide that the
Commissioner cannot proceed with collection by way of a lien or
levy action until the person has been given notice and the
opportunity for an administrative review of the matter (in the
form of an Appeals Office hearing), and, if dissatisfied, the
person has an opportunity for judicial review of the
administrative determination. See Davis v. Commissioner, 115
T.C. 35, 37 (2000); Goza v. Commissioner, 114 T.C. 176, 179
(2000).
Section 6330(c) prescribes the matters a person may raise at
an Appeals Office hearing. In sum, section 6330(c) provides that
a person may raise collection issues such as spousal defenses,
the appropriateness of the Commissioner’s intended collection
action, and possible alternative means of collection. Section
6330(c)(2)(B) provides that the existence and amount of the
underlying tax liability can be contested at an Appeals Office
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hearing only if the person did not receive a notice of deficiency
for the taxes in question or did not otherwise have an earlier
opportunity to dispute the tax liability. See Sego v.
Commissioner, 114 T.C. 604, 609 (2000); Goza v. Commissioner,
supra. Section 6330(d) provides for judicial review of the
administrative determination in either the Tax Court or Federal
District Court.
Petitioner challenges the existence of the asserted tax
liabilities for 1995 and 1996 on the grounds that she did not
receive income from a taxable source and respondent failed to
demonstrate that she is liable for Federal income taxes.
Although respondent determined that the income in question is
attributable to taxable wages, petitioner never identified the
alleged nontaxable source of the income, nor did she expressly
deny receiving the wages in question. The record shows that
Appeals Officer Johnson gave petitioner every opportunity to
produce documentation in support of her position.
Petitioner’s arguments that she is not subject to Federal
income taxes and that she did not earn taxable income during 1995
and 1996 are frivolous and groundless. Goza v. Commissioner,
supra. As the Court of Appeals for the Fifth Circuit has
remarked: “We perceive no need to refute these arguments with
somber reasoning and copious citation of precedent; to do so
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might suggest that these arguments have some colorable merit.”
Crain v. Commissioner, 737 F.2d 1417, 1417 (5th Cir. 1984).
Petitioner next contends that the Appeals officer failed to
obtain verification from the Secretary that the requirements of
all applicable laws and administrative procedures were met as
required under section 6330(c)(1). We reject petitioner’s
argument inasmuch as the record shows that the Appeals officer
obtained, reviewed and provided petitioner with copies of Forms
4340 with regard to petitioner’s account for 1995 and 1996.
Federal tax assessments are formally recorded on a record of
assessment. Sec. 6203. The summary record of assessment,
through supporting records, must “provide identification of the
taxpayer, the character of the liability assessed, the taxable
period, if applicable, and the amount of the assessment.” Sec.
301.6203-1, Proced. & Admin. Regs. We have held that Forms 4340
are presumptive evidence on which an Appeals officer may rely to
verify that an assessment was made against a person for purposes
of sections 6320 and 6330. Davis v. Commissioner, 115 T.C. 35,
40-41 (2000); see Nestor v. Commissioner, 118 T.C. 162, 166-167
(2002).
Petitioner has not demonstrated any irregularity in the
assessment procedure that would raise a question about the
validity of the assessments or the information contained in the
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Forms 4340. Davis v. Commissioner, supra at 41. Accordingly, we
hold that the Appeals officer satisfied the verification
requirement of section 6330(c)(1). Cf. Nicklaus v. Commissioner,
117 T.C. 117, 120-121 (2001).
Petitioner has failed to raise a spousal defense, make a
valid challenge to the appropriateness of respondent’s intended
collection action, or offer alternative means of collection.
These issues are now deemed conceded. Rule 331(b)(4). In the
absence of a valid issue for review, and there being no dispute
as to a material fact, it follows that respondent is entitled to
judgment as a matter of law sustaining the notice of
determination dated April 26, 2001.
Section 6673(a)(1) authorizes the Tax Court to require a
taxpayer to pay to the United States a penalty not in excess of
$25,000 whenever it appears that proceedings have been instituted
or maintained by the taxpayer primarily for delay or that the
taxpayer’s position in such proceeding is frivolous or
groundless. The Court has indicated its willingness to impose
such penalties in collection review cases. Pierson v.
Commissioner, 115 T.C. 576 (2000). Although we shall not impose
a penalty upon petitioner pursuant to section 6673(a)(1), we
admonish petitioner that the Court will consider imposing such a
penalty should she return to the Court and advance similar
arguments in the future.
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To reflect the foregoing,
An order and decision will be
entered granting respondent’s
motion for summary judgment and
denying petitioner’s motion for
summary judgment.