T.C. Memo. 2002-219
UNITED STATES TAX COURT
GINGER HARMORNICK, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 10230-00L. Filed September 3, 2002.
Ginger Harmornick, pro se.
Wendy S. Harris and Julie A. Pals, for respondent.
MEMORANDUM OPINION
ARMEN, Special Trial Judge: This matter is before the Court
on respondent’s Motion For Summary Judgment And To Impose A
Penalty Under I.R.C. Section 6673, filed February 8, 2002,
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pursuant to Rule 121.1 Respondent contends that there is no
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 liabilities for 1990 through 1993
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(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).
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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As explained in detail below, there is no genuine issue as
to any material fact, and a decision may be rendered as a matter
of law. Accordingly, we shall grant respondent’s motion for
summary judgment.
Background
The record establishes and/or the parties do not dispute the
following.
A. Petitioner’s Failure To File
Petitioner has a history of failing to file Federal income
tax returns. Specifically, petitioner failed to file Federal
income tax returns for 1990 through 1993, the four taxable years
in issue. The record suggests that petitioner also failed to
file Federal income tax returns for 1994 through 1999.
B. Respondent’s Notices of Deficiency
On May 17, 1994, respondent issued a notice of deficiency to
petitioner for 1990. In the notice, respondent determined a
deficiency in petitioner’s Federal income tax in the amount of
$3,121, an addition to tax under section 6651(a)(1) in the amount
of $585 for failure to file a tax return, and an addition to tax
under section 6654(a) in the amount of $148 for failure to pay
estimated tax. The deficiency in income tax was based on
respondent’s determination that petitioner failed to report
wages, unemployment compensation, and interest income as reported
to respondent by various third-party payors.
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On April 13, 1995, respondent issued separate notices of
deficiency to petitioner for 1991, 1992, and 1993. In the
notices, respondent determined deficiencies in, and additions to,
petitioner’s Federal income taxes as follows:
Additions to Tax
Year Deficiency Sec. 6651(a)(1) Sec. 6654(a)
1991 $198 $100 ---
1992 15,240 3,810 $663
1993 5,781 1,445 239
The deficiencies in income taxes were based on respondent’s
determination that petitioner failed to report nonemployee
compensation, interest income, and unemployment compensation as
reported to respondent by various third-party payors.
Respondent’s records reflect that the notices of deficiency
were not returned undelivered to respondent by the U.S. Postal
Service. Notably, petitioner has not denied that she received
the notices.
C. Assessment of Petitioner’s Liabilities
Petitioner did not file a petition for redetermination with
this Court challenging the notices of deficiency. See sec.
6213(a). Accordingly, on October 24, 1994, respondent assessed
the determined deficiency and additions to tax for 1990, as well
as statutory interest. On that same day, respondent sent
petitioner a notice of balance due, informing petitioner that she
had a liability for 1990 and requesting that she pay it.
Petitioner failed to do so. On November 13, 1995, respondent
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assessed the determined deficiencies and additions to tax for
1991, 1992, and 1993, as well as statutory interest. On that
same day, respondent sent petitioner notices of balance due,
informing petitioner that she had liabilities for 1991, 1992, and
1993, and requesting that she pay them. Petitioner failed to do
so.
D. Respondent’s Final Notice and Petitioner’s Response
On October 25, 1999, respondent sent petitioner a Final
Notice-–Notice of Intent to Levy and Notice of Your Right to a
Hearing (the Final Notice). The Final Notice was issued in
respect of petitioner’s outstanding liabilities for 1990 through
1993.
On November 23, 1999, petitioner submitted to respondent
Form 12153, Request for a Collection Due Process Hearing.
Petitioner’s request stated in pertinent part: “The basis of my
complaint is what I believe to be the lack of a valid summary
record of assessment pursuant to 26 CFR §301.6203-1.”
E. The Administrative Hearing
On June 22, 2000, Veronica Lindersmith of respondent’s
Appeals Office in Las Vegas, Nevada, conducted an administrative
hearing by way of a telephone conference with petitioner’s
representative, Thomas W. Roberts.2 By letter dated August 8,
2
The conference was conducted by telephone in order to
accommodate Mr. Roberts, whose office was located out of state.
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2000, the Appeals officer provided Mr. Roberts with copies of
Forms 4340 (Certificate of Assessments, Payments, and Other
Specified Matters) for each of the years 1990, 1991, 1992, and
1993. Copies of the Forms 4340 are attached to respondent’s
motion for summary judgment, which was served on petitioner.
F. Respondent’s Notice of Determination
On August 28, 2000, respondent sent petitioner a Notice of
Determination Concerning Collection Action(s) Under Section 6320
and/or 6330. The notice stated that the Appeals Office had
determined that it was appropriate for respondent to proceed with
the collection of petitioner’s outstanding tax liabilities for
1990 through 1993.
G. Petitioner’s Petition
On September 29, 2000, petitioner filed with the Court a
petition for lien or levy action seeking review of respondent’s
notice of determination.3 The petition includes allegations
that: (1) The Appeals officer failed to obtain proper
verification from the Secretary that the requirements of all
applicable laws and administrative procedures were met as
required by section 6330(c)(1); and (2) the Appeals officer
failed to provide petitioner with requested documents such as a
summary record of assessment.
3
At the time that the petition was filed, petitioner
resided in Henderson, Nevada.
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H. Respondent’s First Motion For Summary Judgment
On July 20, 2001, respondent filed a Motion For Summary
Judgment And To Impose A Penalty Under I.R.C. Section 6673.
Respondent’s motion was called for hearing in Las Vegas, Nevada,
on September 10, 2001. Petitioner appeared at the hearing and
informed the Court that she intended to file tax returns for the
years in issue. In response, counsel for respondent informed the
Court that if petitioner were in compliance and if she were to
concede the case, respondent would withdraw his request for the
imposition of a penalty under section 6673. Under the
circumstances, the Court denied respondent’s motion for summary
judgment in order to allow petitioner time to file her tax
returns.
I. Respondent’s Second Motion for Summary Judgment
Contrary to her representation to the Court, petitioner
failed to file tax returns for the years in issue or to work with
respondent’s counsel toward that end. As a result, on February
8, 2002, respondent filed a second Motion For Summary Judgment
And To Impose A Penalty Under I.R.C. Section 6673. It is this
motion that is before us at this time.
In his motion, respondent asserts 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 received the notices of deficiency dated May
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17, 1994, and April 13, 1995, she cannot challenge the existence
or amount of her underlying tax liabilities for 1990 through 1993
in this collection review proceeding. Respondent further
contends that the Appeals officer’s review of Forms 4340 with
regard to petitioner’s account for 1990 through 1993 satisfied
the verification requirement imposed under section 6330(c)(1).
The Court issued a notice of filing to petitioner directing
her to file an objection, if any, to respondent’s motion.
Petitioner failed to respond. Thereafter, pursuant to notice,
respondent’s motion was called for hearing at the Court's motions
session in Washington, D.C. Counsel for respondent appeared at
the hearing and presented argument in support of the pending
motion. Although there was no appearance by or on behalf of
petitioner at the hearing, she did file a 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
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.
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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).
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 tax 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.
A. Summary Judgment
Petitioner asserts that the Appeals officer failed to obtain
verification from the Secretary that the requirements of all
applicable laws and administrative procedures were met as
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required by section 6330(c)(1). The record shows otherwise. In
particular, the Appeals officer obtained and reviewed
transcripts of account (Forms 4340) with regard to petitioner’s
taxable years 1990 through 1993.
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.
Section 6330(c)(1) does not require the Commissioner to rely
on a particular document to satisfy the verification requirement
imposed therein. Roberts v. Commissioner, 118 T.C. 365, 371 n.10
(2002), on appeal (11th Cir. July 26, 2002); 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 Forms 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 has not alleged any irregularity in the
assessment procedure that would raise a question about the
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validity of the assessments or the information contained in the
Forms 4340. See Davis v. Commissioner, supra at 41; 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 also contends that the Appeals officer failed to
provide her with requested documents such as a summary record of
assessment. We note that section 6330(c)(1) does not require
that the Appeals officer provide the taxpayer with a copy of the
verification at the administrative hearing. Nestor v.
Commissioner, 118 T.C. 162, 166 (2002). In any event, as
previously discussed, the record shows that the Appeals officer
provided petitioner with Forms 4340 for all of the years in
issue.
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, we conclude that respondent
is entitled to judgment as a matter of law sustaining the notice
of determination dated August 28, 2000.4
4
Petitioner has not expressly challenged the existence or
amount of her underlying tax liabilities in this collection
review proceeding. However, to the extent that one might regard
(continued...)
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B. Imposition of a Penalty Under Section 6673
We turn now to that part of respondent’s motion that moves
for the imposition of a penalty on petitioner under section 6673.
As relevant herein, 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 penalty in lien and levy cases. See Pierson v.
Commissioner, 115 T.C. 576, 580-581 (2000).
4
(...continued)
petitioner’s statement at the hearing on Sept. 10, 2001, that she
intended to file tax returns for the years in issue as tantamount
to such a challenge, we note that a taxpayer’s receipt of a
notice of deficiency, coupled with the taxpayer’s failure to file
a petition for redetermination with this Court, bars the taxpayer
from challenging the existence or amount of his or her underlying
tax liability. Sec. 6330(c)(2)(B). In this regard, we note that
the notices of deficiency that were issued to petitioner were not
returned undelivered to respondent by the U.S. Postal Service,
and that petitioner has not denied that she received those
notices. In any event, petitioner has adduced nothing to create
a triable issue of fact regarding the existence or amount of any
of her underlying liabilities.
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In the present case, we shall give petitioner the benefit of
the doubt and not impose a penalty under section 6673.
Nevertheless, we admonish petitioner that the Court will consider
imposing such a penalty should she return to the Court in the
future and advance frivolous or groundless arguments or institute
or maintain an action primarily for delay.
In order to give effect to the foregoing,
An order and decision will be
entered granting respondent's motion for
summary judgment and denying
respondent's request for the imposition
of a penalty under section 6673(a).