LINDSEY v. COMMISSIONER

T.C. Memo. 2002-87

UNITED STATES TAX COURT

STEPHEN AND PATRICIA LINDSEY, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 9014-00L. Filed April 2, 2002.

Stephen and Patricia Lindsey, pro sese.

Kerry H. Bryan, for respondent.

MEMORANDUM OPINION

ARMEN, Special Trial Judge: This matter is before the Court

on respondent’s Motion for Summary Judgment, as supplemented,

filed pursuant to Rule 121(a).1 Respondent contends that there

is no genuine issue as to any material fact and that respondent’s

1
All Rule references are to the Tax Court Rules of
Practice and Procedure. Unless otherwise indicated, all section
references are to the Internal Revenue Code, as amended.
 - 2 -

notice of determination should be sustained as a matter of law.

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, as supplemented.
 - 3 -

Background

On July 13, 1993, petitioners filed a petition for

redetermination with the Court (assigned docket No. 14904-93)

challenging a notice of deficiency that respondent issued to them

for the taxable year 1989. See sec. 6213(a). On May 17, 1995,

the Court entered a decision in docket No. 14904-93 pursuant to

agreement of the parties. The decision provided that petitioners

were liable for a deficiency in income tax in the amount of

$51,161 and an accuracy-related penalty under section 6662(a) in

the amount of $10,232.20.

On March 4, 1997, petitioners executed a Form 4549, Income

Tax Examination Changes, in which they agreed to deficiencies in

their Federal income taxes for 1991, 1992, and 1993 in the

amounts of $211,077, $258,223, and $192,048, respectively.

On March 4, 1999, respondent issued to petitioner Stephen

Lindsey a Final Notice/Notice of Intent to Levy and Notice of

Your Right to a Hearing. This notice stated that petitioner owed

Federal income tax, penalty, and interest for 1989, 1990, 1991,

1992, and 1993 in the amounts of $145,261.58, $278,199.30,

$393,398.51, $448,778.08, and $312,634.68, respectively, and that

respondent was preparing to collect the amounts due by levy. On

March 5, 1999, respondent issued to petitioner Patricia Lindsey a

Final Notice/Notice of Intent to Levy and Notice of Your Right to
 - 4 -

a Hearing that was identical to the final notice issued to her

husband.

On or about March 23, 1999, petitioners filed with

respondent a Form 12153, Request for a Collection Due Process

Hearing, in which they challenged the proposed collection action

on the ground that there was no valid summary record of

assessment.

On December 21, 1999, Settlement Officer Sherwin Cogan wrote

a letter to petitioners outlining the collection review process

and enclosing transcripts of account taken from respondent’s

Integrated Data Retrieval System (IDRS transcripts of account).

The IDRS transcripts of account listed by date and amount the

assessments made against petitioners for the taxable years 1989

through 1993.

On May 11, 2000, Settlement Officer Carl Carter conducted an

Appeals Office hearing with petitioners’ representative, Thomas

W. Roberts. During the hearing, Settlement Officer Carter

incorrectly stated that petitioners had executed agreements

during the examination process conceding adjustments to their tax

liabilities for the each of the years in dispute. Settlement

Officer Carter declined to provide Mr. Roberts with copies of any

such agreements during the Appeals Office hearing. However, on

May 15, 2000, Settlement Officer Carter wrote to Mr. Roberts and

provided him with a copy of the Form 4549 that petitioners
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executed on March 4, 1997, with respect to their tax liabilities

for 1991, 1992, and 1993.

Settlement Officer Carter retired from the Internal Revenue

Service on July 1, 2000, and petitioners’ case was transferred to

Settlement Officer Laurel Minder. In early August 2000,

Settlement Officer Minder prepared an Appeals transmittal

memorandum and case memorandum that stated in part:

Stephen and Patricia Lindsey signed the Form 4549
agreeing to the examination deficiencies for periods
ended 12/31/91, 12/31/92 and 12/31/93. The period
ended 12/31/89 does not indicate that the taxpayers
agreed to this examination deficiency. Review of IDRS
for the period ended 12/31/90 show that the taxpayers
signed form 870 with Examination on March 7, 1997
agreeing to this deficiency.[2] * * *

The taxpayers are also claiming that their tax status
is that of “non resident alien”. They claim that they
have no filing requirements or taxable income for the
above periods. * * *

The record does not include a copy of the Form 870 that

petitioners purportedly executed on March 7, 1997, with respect

to their tax liability for 1990.

On August 9, 2000, the Appeals Office issued to petitioners

a joint Notice of Determination Concerning Collection Action(s)

Under Section 6320 and/or 6330 stating that respondent would

2
Execution of Form 870, Waiver of Restrictions on
Assessment and Collection of Deficiency in Tax and Acceptance of
Overassessment, by a taxpayer signifies the taxpayer’s agreement
to adjustments proposed by the Commissioner and the taxpayer’s
consent to the immediate assessment of the resulting tax
liability.
 - 6 -

proceed with collection against petitioners for the taxable years

1989 through 1993. Petitioners filed with the Court a timely

Petition for Lien or Levy Action Under Code Section 6320(c) or

6330(d) challenging respondent’s notice of determination.3 The

petition includes allegations that respondent erred by failing

to: (1) 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 (2) identify

the assessment officer that prepared the Forms 23C, Summary

Record of Assessment, for the years in issue.

After respondent filed an answer to the petition, respondent

filed a Motion for Summary Judgment and Declaration, attaching

thereto Forms 4340, Certificate of Assessments, Payments, and

Other Specified Matters, for each of the years in issue.

Petitioners filed a response to respondent’s motion. Petitioners

assert that material issues of fact remain in dispute regarding

the documents that Settlement Officer Carter relied on at the

Appeals Office hearing to verify that the requirements of all

applicable laws and administrative procedures were met with

regard to the disputed assessments.

This matter was called for hearing at the Court's motions

sessions held in Washington, D.C., on November 14, 2001, December

3
At the time that the petition was filed, petitioners
resided in Garden Grove, California.
 - 7 -

5, 2001, and February 6, 2002. Counsel for respondent appeared

at the hearings and presented argument in support of respondent's

motion. No appearance was made by or on behalf of petitioners at

any of the hearings.

Respondent filed a supplement and a second supplement to his

Motion for Summary Judgment attaching thereto declarations

executed by Settlement Officers Carter and Minder and TXMODA

transcripts of account with regard to petitioners’ taxable years

1989 through 1993. Petitioners filed a supplemental response to

respondent’s Motion for Summary Judgment attaching thereto a

declaration executed by Mr. Roberts.

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 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.

Section 6330 generally provides that the Commissioner cannot

proceed with collection by way of a levy action until the person

has been given notice and the opportunity for an administrative
 - 8 -

review of the matter (in the form of an Appeals Office hearing)

and, if dissatisfied, with 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

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 the Tax Court or a Federal

District Court, as may be appropriate.

Petitioners do not challenge the existence or the amount of

their underlying tax liabilities for the years in question.

Petitioners simply assert that the settlement officer failed,

either before or during the Appeals Office hearing, to verify

that respondent made valid assessments against petitioners for

the taxes alleged to be due. We disagree.
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Federal tax assessments are formally recorded on a summary

record of assessment. Sec. 6203. The summary record 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.

Contrary to petitioners’ position, section 6330(c)(1) does

not require the Commissioner to rely on a particular document to

verify that the requirements of any applicable law or

administrative procedure have been met in a collection matter.

See Kuglin v. Commissioner, T.C. Memo. 2002-51. Nor is

respondent obliged to provide the taxpayer with a copy of the

verification. See Nestor v. Commissioner, 118 T.C. 162, 166

(2002).

The record in this case shows that the settlement officer

obtained and reviewed IDRS transcripts of account with regard to

petitioners’ taxable years 1989 through 1993 prior to the Appeals

Office hearing. The IDRS transcripts of account contained all

the information prescribed in section 301.6203-1, Proced. &

Admin. Regs. Kuglin v. Commissioner, supra. The record also

includes Forms 4340 and TXMODA transcripts that serve to

supplement and substantiate the information contained in the IDRS

transcripts of account. See Davis v. Commissioner, supra at 40-

41 (Form 4340 is presumptive evidence that an assessment was made
 - 10 -

against a taxpayer).

Petitioners have not alleged any irregularity in the

assessment process that would raise a question about the validity

of the assessments or the information contained in the

transcripts of account or the Forms 4340. Id.; Mann v.

Commissioner, T.C. Memo. 2002-48. Accordingly, we hold that the

settlement officer satisfied the verification requirement of

section 6330(c)(1). Cf. Nicklaus v. Commissioner, 117 T.C. 117,

120-121 (2001).

Petitioners have 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, we conclude that there is no

dispute as to a material fact and that respondent is entitled to

judgment as a matter of law sustaining the notice of

determination dated August 9, 2000.

Finally, we mention section 6673(a)(1), which 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
 - 11 -

cases. Pierson v. Commissioner, 115 T.C. 576 (2000). Although

we shall not impose a penalty upon petitioners pursuant to

section 6673(a)(1), we admonish petitioners that the Court will

consider imposing such a penalty should they return to the Court

and advance similar arguments in the future.

To reflect the foregoing,

An order granting respondent’s

motion for summary judgment, as

supplemented, and decision will be

entered.