T.C. Memo. 2002-189
UNITED STATES TAX COURT
GLEN A. BLAIR, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 2891-02L. Filed August 5, 2002.
Glen A. Blair, pro se.
Alan J. Tomsic and Karen Baker, for respondent.
MEMORANDUM OPINION
PANUTHOS, Chief Special Trial Judge: This matter is before
the Court on respondent’s motion for summary judgment filed
pursuant to Rule 121.1 Respondent contends that there is no
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.
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dispute as to any material fact with respect to this levy action,
and that respondent’s determination to proceed with collection of
petitioner’s outstanding tax liability for 1997 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).
As explained in detail below, there is no genuine issue as
to any material fact, and a decision may be rendered as a matter
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of law. Accordingly, we shall grant respondent’s motion for
summary judgment.
Background
On or about April 27, 1998, Glen A. Blair (petitioner) and
his wife, Kay Blair, submitted to respondent a joint Form 1040A,
U.S. Individual Income Tax Return, for 1997. Petitioner entered
zeros on every line of the income sections of the Form 1040A,
reported no tax due, and claimed a refund in the amount of
$5,158.39 equal to the amount of Federal income tax withheld from
his wages. A Form W-2, Wage and Tax Statement, attached to the
Form 1040A indicates that Union Oil Company of California paid
petitioner wages in the amount of $45,183.73 during 1997.
On June 16, 2000, respondent issued a notice of deficiency
to petitioner determining a deficiency of $8,263 in his Federal
income tax for 1997 and an accuracy-related penalty under section
6662(a) in the amount of $620.32. The deficiency was based on
respondent’s determination that petitioner failed to report the
wage income reported to respondent by Union Oil Co.
On July 4, 2000, petitioner wrote a letter to the Director
of respondent’s Service Center in Ogden, Utah, acknowledging
receipt of the notice of deficiency for 1997, but challenging the
Director’s authority to issue such notices. Although petitioner
knew that he had the right to contest respondent’s deficiency
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determination by filing a petition for redetermination with this
Court, petitioner chose not to do so.
On October 30, 2000, respondent entered assessments against
petitioner for the deficiency and accuracy-related penalty
determined in the notice of deficiency for 1997 described above.
Respondent also entered an assessment against petitioner for
statutory interest. On October 30, 2000, and December 4, 2000,
respondent issued to petitioner notices of balance due informing
petitioner that he owed tax for 1997 and requesting that he pay
such amount. Petitioner failed to pay the amount owing.
On February 22, 2001, respondent mailed to petitioner a
Final Notice-–Notice of Intent to Levy and Notice of Your Right
to a Hearing with regard to his tax liability for 1997. On
February 24, 2001, petitioner filed with respondent a Form 12153,
Request for a Collection Due Process Hearing. Petitioner’s
request included a challenge to the validity of the assessments
and assertions that respondent failed to serve petitioner with a
valid notice and demand for payment or a valid notice of
deficiency. Petitioner also requested verification from the
Secretary that all applicable laws and administrative procedures
were followed with regard to the assessment and collection of the
tax liability in question.
On November 13, 2001, Appeals Officer Douglas DeSoto
conducted an Appeals Office hearing in this matter that
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petitioner attended. During the hearing, the Appeals officer
provided petitioner with a Form 4340, Certificate of Assessments,
Payments, and Other Specified Matters, with regard to his account
for 1997. A copy of the Form 4340, dated October 22, 2001, is
part of the record in this case.
On January 8, 2002, respondent issued to petitioner a Notice
of Determination Concerning Collection Action(s) Under Section
6320 and/or 6330. The notice stated that the Appeals Office
determined that it was appropriate to proceed with the collection
of petitioner’s outstanding tax liability for 1997. On February
5, 2002, petitioner filed with the Court a petition for lien or
levy action seeking review of respondent’s notice of
determination.2
As indicated, respondent filed a motion for summary judgment
asserting that there is no dispute as to a material fact and that
respondent is entitled to judgment as a matter of law. In
particular, respondent contends that, because petitioner
acknowledges that he received the notice of deficiency for 1997,
he cannot challenge the existence or amount of his underlying tax
liability for that year in this proceeding. Respondent further
asserts that the Appeals officer’s review of the transcript of
account for 1997 satisfied the verification requirement imposed
2
At the time that the petition was filed, petitioner
resided in Las Vegas, Nevada.
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under section 6330(c)(1) and demonstrates that petitioner was
issued a notice and demand for payment.
Petitioner filed an objection to respondent’s motion
repeating the various challenges first raised in his request for
an administrative hearing. Thereafter, pursuant to notice,
respondent’s motion was called for hearing at the Court's motions
session in Washington, D.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
notice and demand for payment, the Secretary is authorized to
collect such tax by levy on the person’s property. Section
6331(d) provides that at least 30 days before enforcing
collection by 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 levy 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, 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).
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Section 6330(c) prescribes the matters that 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.
Petitioner challenges the assessments entered against him on
the ground that the notice of deficiency for 1997 is invalid.
However, the record shows that petitioner received the notice of
deficiency and disregarded the opportunity to file a petition for
redetermination with the Court. It follows that section
6330(c)(2)(B) generally bars petitioner from challenging the
existence or amount of his underlying tax liability for 1997 in
this collection review proceeding.
Even if petitioner were permitted to challenge the validity
of the notice of deficiency, petitioner’s argument that the
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notice is invalid because respondent’s Service Center director is
not properly authorized to issue notices of deficiency is
frivolous and groundless. See Nestor v. Commissioner, 118 T.C.
162 (2002); Smeton v. Commissioner, T.C. Memo. 2002-140; Coleman
v. Commissioner, T.C. Memo. 2002-132. 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 might suggest that these arguments have
some colorable merit.” Crain v. Commissioner, 737 F.2d 1417,
1417 (5th Cir. 1984).
We likewise reject petitioner’s argument 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 by section 6330(c)(1). The record shows
that the Appeals officer obtained and reviewed a transcript of
account (Form 4340) with regard to petitioner’s taxable year
1997.
Federal tax assessments are formally recorded on a record of
assessment. Sec. 6203. “The summary record, through supporting
records, shall 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.
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Section 6330(c)(1) does not require the Commissioner to rely
on a particular document to satisfy the verification requirement
imposed therein. Weishan v. Commissioner, T.C. Memo. 2002-88;
Lindsey v. Commissioner, T.C. Memo. 2002-87; Tolotti v.
Commissioner, T.C. Memo. 2002-86; Duffield v. Commissioner, T.C.
Memo. 2002-53; Kuglin v. Commissioner, T.C. Memo. 2002-51. In
this regard, we observe that the Form 4340 on which the Appeals
officer relied contained all the information prescribed in
section 301.6203-1, Proced. & Admin. Regs. See Weishan v.
Commissioner, supra; Lindsey v. Commissioner, supra; Tolotti v.
Commissioner, supra; Duffield v. Commissioner, supra; Kuglin v.
Commissioner, supra.
Petitioner also contends that he never received a notice and
demand for payment for 1997. The requirement that the Secretary
issue a notice and demand for payment is set forth in section
6303(a) which provides in pertinent part:
SEC. 6303(a). General Rule.-–Where it is not
otherwise provided by this title, the Secretary shall,
as soon as practicable, and within 60 days, after the
making of an assessment of a tax pursuant to section
6203, give notice to each person liable for the unpaid
tax, stating the amount and demanding payment thereof.
* * *
The Form 4340 that respondent provided to the Court shows that
notices of balance due were issued to petitioner on October 30,
2000, and December 4, 2000. A notice of balance due constitutes
a notice and demand for payment within the meaning of section
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6303(a). See, e.g., Hughes v. United States, 953 F.2d 531, 536
(9th Cir. 1992); Weishan v. Commissioner, supra.
Petitioner has not alleged any irregularity in the
assessment procedure that would raise a question about the
validity of the assessments or the information contained in the
Form 4340. See Nestor v. Commissioner, supra at 167; Mann v.
Commissioner, T.C. Memo. 2002-48. 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). Under the
circumstances, we conclude that respondent is entitled to
judgment as a matter of law sustaining the notice of
determination dated January 8, 2002.
As a final matter, 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 cases. Pierson v. Commissioner, 115 T.C. 576 (2000).
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Although we shall not impose a penalty on petitioner pursuant to
section 6673(a)(1) in the present case, we admonish petitioner
that the Court will consider imposing such a penalty should he
return to the Court in the future and advance similar arguments.
To reflect the foregoing,
An order and decision will
be entered granting respondent’s
motion for summary judgment.