Davich v. Comm'r

T.C. Memo. 2002-255

UNITED STATES TAX COURT

ANTHONY M. DAVICH, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 458-02L. Filed October 7, 2002.

Anthony M. Davich, pro se.

Alan J. Tomsic and Karen Lynne Baker, 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, as supplemented, filed

pursuant to Rule 121.1 Respondent contends that there is no

1
Unless otherwise indicated, all section references are to
(continued...)
 - 2 -

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 1997 and 1998 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); see

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
(...continued)
the Internal Revenue Code, as amended, and all Rule references
are to the Tax Court Rules of Practice and Procedure.
 - 3 -

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, as supplemented.

Background

The record establishes and/or the parties do not dispute the

following:

A. Petitioner’s Form 1040 for 1997

On or about April 15, 1998, Anthony M. Davich (petitioner)

submitted to respondent a Form 1040, U.S. Individual Income Tax

Return, for the taxable year 1997. On the Form 1040, petitioner

listed his occupation as “entertainer”.

Petitioner entered zeros on all lines of the income portion

of the Form 1040, specifically including line 7 for wages, line

22 for total income, lines 32 and 33 for adjusted gross income,

and line 38 for taxable income. Petitioner also entered zeros on

line 39 for tax and on line 53 for total tax. Petitioner then

claimed a refund in the amount of $53, which was equal to the

amount of Federal income tax that had been withheld from his

wages.

Petitioner attached to his Form 1040 two Forms W-2, Wage and

Tax Statement, disclosing the payment of wages to him during the

taxable year in issue. The first Form W-2 was from ETN

Productions, Inc., of Las Vegas, Nevada; it disclosed the payment
 - 4 -

of wages to petitioner in the amount of $22,239.62 and the

withholding of Federal income tax in the amount of $53.18. The

second Form W-2 was from Riviera Operating Corp. of Las Vegas,

Nevada; it disclosed the payment of wages to petitioner in the

amount of $4,080.20 and the withholding of no Federal income tax.

Petitioner also attached to his Form 1040 a two-page

typewritten statement that stated, in part, as follows:

I, Anthony M. Davich am submitting this as part of my
1997 income tax return, even though I know that no
section of the Internal Revenue Code:

1) Establishes an income tax “liability” * * * ;

2) Provides that income taxes “have to be paid on
the basis of a return” * * * ;

3) In addition to the above, I am filing even
though the “Privacy Act Notice” as contained in a 1040
booklet clearly informs me that I am not required to
file. It does so in at least two places.

a) In one place, it states that I need only file a
return for “any tax” I may be “liable” for. Since no
Code Section makes me “liable” for income taxes, this
provision notifies me that I do not have to file an
income tax return.

* * * * * * *

6) Please note, that my 1997 return also
constitutes a claim for refund pursuant to Code Section
6402.

7) It should also be noted that I had “zero”
income according to The Supreme Court’s definition of
income (See Note #1) * * * .

8) I am also putting the IRS on notice that my
1997 tax return and claim or [sic] refund does not
constitute a “frivolous” return pursuant to Code
Section 6702. * * *
 - 5 -

* * * * * * *

10) In addition, don’t notify me that the IRS is
“changing” my return, since there is no statute that
allows the IRS to do that. You might prepare a return
(pursuant to Code Section 6020(b)), where no return is
filed, but as in this case, a return has been filed, no
statute authorizes IRS personnel to “change” that
return.

* * * * * * *

*Note #1: The word “income” is not defined in the
Internal Revenue Code. * * * But, as stated above, it
can only be a derivative of corporate activity. * * *

B. Petitioner’s Failure To File for 1998

Petitioner failed to file a return or submit to respondent a

Form 1040 for the taxable year 1998.

C. Respondent’s Deficiency Notice and Petitioner’s Response

On December 8, 1999, respondent (acting through James J.

Walsh, District Director in Phoenix, Arizona) issued a notice of

deficiency to petitioner for the taxable years 1997 and 1998. In

the notice, respondent determined deficiencies in petitioner’s

Federal income taxes, an addition to tax, and an accuracy-related

penalty as follows:

Addition to Tax Accuracy-related Penalty
Year Deficiency Sec. 6651(a)(1) Sec. 6662(a)
1997 $2,966 —–- $593
1998 9,914 $2,479 ---

Insofar as his ultimate tax liability was concerned,

respondent gave petitioner credit for the amounts withheld from

his wages. However, we note that the determination of a

statutory deficiency does not take such withheld amounts into
 - 6 -

account. See sec. 6211(b)(1).

The deficiencies in income taxes were based on respondent’s

determination that petitioner failed to report income determined

as follows:

1997 1998
Wages $26,319 $53,945
Interest income 236 53
Nonemployee compensation --- 125
26,555 54,123

By certified letter dated March 3, 2000, petitioner wrote to

respondent’s district office in Phoenix, Arizona, acknowledging

receipt of the notice of deficiency dated December 8, 1999, but

challenging respondent’s authority “to send me the ‘Notice’ in

the first place.” Petitioner sent copies of his letter by

certified mail to Lawrence H. Summers, Secretary of the Treasury,

and Charles O. Rossotti, Commissioner of Internal Revenue.

Petitioner knew that he had the right to contest

respondent’s deficiency determinations by filing a petition for

redetermination with this Court.2 However, petitioner chose not

to do so. Accordingly, on May 8, 2000, respondent assessed the

2
In this regard, petitioner’s letter dated Mar. 3, 2000,
stated as follows:

According to your “Deficiency Notice”, dated December
8, 1999 (cover sheet attached), there is an alleged
deficiency with respect to my 1997 and 1998 income
taxes of $3,559.00 and $12,393.00, respectively, and if
I wanted to “contest this determination... before
making payment,” I must “file a petition with the
United States Tax Court.”
 - 7 -

determined deficiencies, addition to tax, and accuracy-related

penalty, as well as statutory interest. On that same day,

respondent sent petitioner notices of balance due, informing him

that he had liabilities for 1997 and 1998 and requesting that he

pay them. Petitioner failed to pay the amounts owing.

By certified letter dated May 19, 2000, petitioner wrote to

respondent’s Service Center in Ogden, Utah, acknowledging receipt

of the notices of balance due dated May 8, 2000. In his letter,

petitioner stated, in part, as follows:

This is in reply to your unsigned letters of May
8, 2000 (attached) in which you notified me that “We
changed your account(s)”.

This letter is to put you on notice that there is
no Code Section in the Internal Revenue Code that
authorizes the IRS [to] “change” returns or “accounts”.

Income tax is based on “self-assessment”--see
Treasury Reg. [§]601.103. “Our income tax system is
voluntary and the Internal Revenue Service must
perforce rely on the self-assessment of the taxpayer.”
* * *

Thus it is clear from all of the evidence above
that ONLY I can make a “self-assessment” concerning
what my income tax liability might be for 1997 and
1998. Since I concluded that my 1997 and 1998 income
tax liability is “zero” for those years, I did not
“self-assess” myself with any income tax liability for
those years; therefore, no income tax liability is
shown on my 1997 or 1998 returns. This being the case
and in conformity with the meaning of a TC 150,[3] no
income tax liability can be assessed from my 1997 or

3
“TC 150" refers to transaction code 150 in respondent’s
computerized transcript of account. TC 150 represents the
assessment of tax as reported by a taxpayer on the taxpayer’s
return.
 - 8 -

1998 returns.

D. Respondent’s Final Notice and Petitioner’s Response

On October 10, 2000, respondent mailed to petitioner a Final

Notice--Notice of Intent to Levy and Notice of Your Right to a

Hearing in respect of his outstanding tax liabilities for 1997

and 1998.

On or about November 4, 2000, petitioner filed with

respondent Form 12153, Request for a Collection Due Process

Hearing. The request, which was accompanied by a typewritten

statement, included, inter alia, a challenge to the existence of

the underlying tax liabilities for 1997 and 1998, as well as

allegations that petitioner was never provided with a valid

notice of deficiency or notice and demand for payment and that

the Appeals officer had failed “to identify the statute that

makes me ‘liable to pay’ the taxes at issue”. 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 liabilities in question.

E. The Appeals Office Hearing

By letter dated May 30, 2001, Appeals Officer Richard J.

Sigler (the Appeals officer) acknowledged receipt of petitioner’s

request for an administrative hearing. The Appeals officer then

went on to state, in part, as follows:
 - 9 -

I have reviewed your administrative file and your
reasons for disagreeing with the Service Center
Director’s proposed enforcement action. It is my
determination that your reasons for disagreeing with
the proposed enforcement action are frivolous.

The Courts have consistently and repeatedly rejected
the arguments you have expressed and, in some cases,
they have imposed sanctions. In Pierson v.
Commissioner, * * * [115 T.C. 576 (2000)], the Court
issued fair warning of penalties under section 6673 to
all those taxpayers who, in the future, institute or
maintain a lien or levy action primarily for delay or
whose position in such a proceeding is frivolous or
groundless. In an opinion just issued by the Court in
Regina Davis, * * * [T.C. Memo. 2001-87], the Court
imposed a $4,000.00 penalty because the taxpayer was
making frivolous arguments.

By letter dated June 18, 2001, the Appeals officer sent to

petitioner copies of literal transcripts from respondent’s

individual master file (IMF) at the Martinsburg, West Virginia,

Computing Center of petitioner’s accounts for the taxable years

1997 and 1998.4

On July 30, 2001, petitioner attended an administrative

hearing in Las Vegas, Nevada, conducted by the Appeals officer.

Prior to the hearing, the Appeals officer reviewed transcripts

pertaining to petitioner’s accounts for the taxable years 1997

and 1998.

During the hearing, petitioner requested that the Appeals

officer identify the statutory provisions establishing

petitioner’s liability for Federal income tax and provide

4
A literal transcript is a transcript in “plain English”
with a minimum amount of “computerese”.
 - 10 -

verification that all applicable laws and administrative

procedures had been followed in the assessment and collection

process. Petitioner was informed that the transcripts previously

provided were sufficient to satisfy the verification requirement

of section 6330(c)(1). Petitioner also alleged that he never

received “the statutory notice and demand for payment”. In

response to the Appeals officer’s question whether petitioner

wished to discuss collection alternative, the following colloquy

occurred:

APPEALS OFFICER: * * * Do you want to discuss
collection alternatives?

PETITIONER: Yes. I’ll pay the amount you want
right now.

APPEALS OFFICER: Okay, by check? Are you going
to pay me with a check?

PETITIONER: Yep. You just cite for me the
regulation and statute that requires me to pay it [the
outstanding liabilities].

* * * * * * *

PETITIONER: Let the record show I’m willing to
pay the amount that’s at issue right now, if Mr. Sigler
[the Appeals officer] would just point out the statute
and regulation that requires me to pay the tax at
issue.

F. Respondent’s Notice of Determination

On September 21, 2001, respondent’s Appeals Office issued

to petitioner a Notice of Determination Concerning Collection

Action(s) Under Section 6320 and/or 6330 with regard to his tax

liabilities for 1997 and 1998. In the notice, the Appeals Office
 - 11 -

concluded that respondent’s determination to proceed with

collection by way of levy should be sustained.

G. Petitioner’s Petition

On January 7, 2002, petitioner filed with the Court a

Petition for Lien or Levy Action seeking review of respondent’s

notice of determination.5 The petition includes allegations

that: (1) The Appeals officer 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); (2) the Appeals officer failed to identify the

statutes making petitioner liable for Federal income tax; (3)

petitioner never received a “valid” notice of deficiency; i.e.,

one signed by the Secretary or someone with delegated authority

from the Secretary; (4) petitioner never received a notice and

demand for payment; and (5) petitioner was denied the opportunity

to challenge the existence or amount of his underlying tax

liability.

Petitioner attached to his petition several documents,

including copies of the cover page of the notice of deficiency

dated December 8, 1999, the Appeals officer’s May 30, 2001,

letter referencing the Pierson v. Commissioner, 115 T.C. 576

(2000) and Davis v. Commissioner, T.C. Memo. 2001-87 cases, the

5
At the time that the petition was filed, petitioner
resided in Las Vegas, Nevada.
 - 12 -

Appeals officer’s June 18, 2001, letter transmitting the literal

transcripts for 1997 and 1998, and the transcripts themselves.

H. Respondent’s Motion For Summary Judgment

On June 14, 2002, respondent filed his Motion For Summary

Judgment And To Impose A Penalty Under I.R.C. Section 6673.

Respondent contends that petitioner is barred under section

6330(c)(2)(B) from challenging the existence or amount of his

underlying tax liability in this collection review proceeding

because petitioner received a notice of deficiency for the taxes

in question. Respondent also contends that the Appeals officer’s

review of computer transcripts for petitioner’s accounts for the

taxable years 1997 and 1998 satisfied the verification

requirement of section 6330(c)(1). Finally, respondent contends

that petitioner’s behavior warrants the imposition of a penalty

under section 6673.

By letter dated June 25, 2002, respondent’s counsel provided

petitioner with a Form 4340, Certificate of Assessments,

Payments, and Other Specified Matters, pertaining to each of

petitioner’s accounts for the taxable years 1997 and 1998.

On July 9, 2002, petitioner filed an Objection to

respondent’s motion, alleging, inter alia, that the December 8,

1999, notice of deficiency was invalid because District Director

James J. Walsh “did not have any delegated authority to send out

the Deficiency Notice”, that he never received “the statutory
 - 13 -

notice and demand for payment”, and that no statute exists that

makes him liable for Federal income tax and “IRS agents have no

proper enforcement authority to collect the tax.”

On July 12, 2002, petitioner filed an Amended Objection to

respondent’s motion repeating allegations made in his July 9,

2002, Objection. Petitioner attached to his Amended Objection

copies of the Forms 4340 for 1997 and 1998, as well as copies of

the May 8, 2000, notices of balance due for 1997 and 1998.

Pursuant to notice, respondent’s motion was called for

hearing at the Court's motions session in Washington, D.C.

Petitioner did not attend the hearing; however, he did file a

written statement pursuant to Rule 50(c), which incorporated by

reference certain of his prior filings.

Following the hearing, respondent filed a supplement to his

motion. In the supplement, respondent discusses the authority of

a District Director to issue notices of deficiency pursuant to

section 6212. Thereafter, petitioner filed an Objection to

respondent’s supplement, again arguing that a District Director

has no authority to issue a notice of deficiency.

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
 - 14 -

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).

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
 - 15 -

review of the administrative determination in the Tax Court or a

Federal District Court, as may be appropriate.

A. Summary Judgment

Petitioner challenges the assessment made against him on the

ground that the notice of deficiency dated December 8, 1999, is

invalid. However, the record conclusively shows that petitioner

received the notice of deficiency and disregarded the opportunity

to file a petition for redetermination with this Court. See sec.

6213(a). It follows that section 6330(c)(2)(B) bars petitioner

from challenging the existence or amount of his underlying tax

liabilities in this collection review proceeding. See Nestor v.

Commissioner, 118 T.C. 162, 165-166 (2002).

Even if petitioner were permitted to challenge the validity

of the notice of deficiency, petitioner’s argument that the

notice is invalid because respondent’s District Director is not

properly authorized to issue notices of deficiency is frivolous

and groundless. See id.; Goza v. Commissioner, supra; see also

Kellogg v. Commissioner, 88 T.C. 167, 172 (1987), and the

statutory, regulatory, and case citations therein regarding a

District Director’s authority to issue notices of deficiency;

Lillis v. Commissioner, T.C. Memo. 1983-142 (same), affd. without

published opinion 740 F.2d 974 (9th Cir. 1984). Further, as the

Court of Appeals for the Fifth Circuit has remarked: "We perceive

no need to refute these arguments with somber reasoning and
 - 16 -

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); see Tolotti v. Commissioner,

T.C. Memo. 2002-86. Suffice it to say:

(1) Petitioner is a taxpayer subject to the Federal income

tax, see secs. 1(c), 7701(a)(1), (14);

(2) compensation for labor or services rendered constitutes

income subject to the Federal income tax, sec. 61(a)(1); United

States v. Romero, 640 F.2d 1014, 1016 (9th Cir. 1981); see also

sec. 61(a)(4);

(3) petitioner is required to file an income tax return,

sec. 6012(a)(1); and

(4) the Commissioner and his agents are authorized to

enforce the provisions of the Internal Revenue Code, see I.R.C.

chs. 78, 80.

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 prior to the administrative hearing on July 30, 2001, the

Appeals officer obtained and reviewed computerized transcripts of

account for petitioner’s taxable years 1997 and 1998.

Federal tax assessments are formally recorded on a record of

assessment. Sec. 6203. “The summary record, through supporting
 - 17 -

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); Weishan v. Commissioner, T.C. Memo. 2002-88; Lindsey v.

Commissioner, T.C. Memo. 2002-87; Tolotti v. Commissioner, supra;

Duffield v. Commissioner, T.C. Memo. 2002-53; Kuglin v.

Commissioner, T.C. Memo. 2002-51. In this regard, we observe

that the computerized transcripts of account 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.6

6
To the extent that petitioner may still be arguing that
the Appeals officer failed to provide him with a copy of the
verification, we note that sec. 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, the
Appeals officer provided petitioner with copies of literal
transcripts of account for the taxable years 1997 and 1998.
Indeed, petitioner attached copies of these transcripts as
exhibits to his petition. Moreover, respondent’s counsel
provided petitioner with copies of Forms 4340 for the taxable
years 1997 and 1998, and petitioner attached copies of these
(continued...)
 - 18 -

Petitioner has not alleged any irregularity in the

assessment procedure that would raise a question about the

validity of the assessment or the information contained in the

computerized transcripts of account. See Davis v. Commissioner,

115 T.C. 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 he never received a notice and

demand for payment of his tax liabilities for 1997 and 1998. 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.
* * *

In particular, the computerized transcripts of account on which

the Appeals officer relied during the administrative process, as

well as the Forms 4340, show that respondent sent petitioner

notices of balance due on the same date that respondent made

assessments against petitioner for the tax, addition to tax, and

6
(...continued)
forms to his Amended Objection to respondent’s motion.
 - 19 -

accuracy-related penalty determined in the notice of deficiency.

A notice of balance due constitutes a notice and demand for

payment within the meaning of section 6303(a). See, e.g., Hughes

v. United States, 953 F.2d 531, 536 (9th Cir. 1992); Newman v.

Commissioner, T.C. Memo. 2002-135; Weishan v. Commissioner,

supra; see also Hansen v. United States, 7 F.3d 137, 138 (9th

Cir. 1993). Notably, petitioner attached copies of the notices

of balance due dated May 8, 2000, as exhibits to his Amended

Objection to respondent’s motion.7

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.8

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 September 21, 2001.

7
We also reject petitioner’s argument that notice and
demand for payment was not in accord with a Treasury decision
issued in 1914 that required a Form 17 to be used for such
purpose. See Tapio v. Commissioner, T.C. Memo. 2002-141.
8
Petitioner stated to the Appeals officer at the
administrative hearing on July 30, 2001, that he would pay in
full his outstanding liabilities if the Appeals officer “would
just point out the statute and regulation that requires me to pay
the tax at issue.” The statutory citations sought by petitioner
are identified supra on p. 16 of this opinion.
 - 20 -

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, Pierson v.

Commissioner, 115 T.C. 576, 580-581 (2000), and has in fact

imposed a penalty in a number of such cases.9

We are convinced that petitioner instituted the present

proceeding primarily for delay. In this regard, it is clear that

9
E.g., Roberts v. Commissioner, 118 T.C. 365 (2002)
(imposing a penalty in the amount of $10,000); Schmith v.
Commissioner, T.C. Memo. 2002-252 (imposing a penalty in the
amount of $1,000); Schroeder v. Commissioner, T.C. Memo. 2002-190
(imposing sua sponte a penalty in the amount of $1,000); Wagner
v. Commissioner, T.C. Memo. 2002-180 (imposing a penalty in the
amount of $4,000); Perry v. Commissioner, T.C. Memo. 2002-165
(imposing a penalty in the amount of $2,500); Crow v.
Commissioner, T.C. Memo. 2002-149 (imposing a penalty in the
amount of $1,500); Smeton v. Commissioner, T.C. Memo. 2002-140
(imposing a penalty in the amount of $1,000); Newman v.
Commissioner, T.C. Memo. 2002-135 (imposing a penalty in the
amount of $1,000); Williams v. Commissioner, T.C. Memo. 2002-111
(imposing sua sponte a penalty in the amount of $1,000); Yacksyzn
v. Commissioner, T.C. Memo. 2002-99 (imposing a penalty in the
amount of $1,000); Watson v. Commissioner, T.C. Memo. 2001-213
(imposing a penalty in the amount of $1,500); Davis v.
Commissioner, T.C. Memo. 2001-87 (imposing a penalty in the
amount of $4,000).
 - 21 -

petitioner regards this proceeding as nothing but a vehicle to

protest the tax laws of this country and to espouse his own

misguided views, which we regard as frivolous and groundless.

E.g., Tolotti v. Commissioner, T.C. Memo. 2002-86. In short,

having to deal with this matter wasted the Court's time, as well

as respondent's, and taxpayers with genuine controversies may

have been delayed.

Also relevant is the fact that the petitioner was made aware

of the fact that he could be subject to a penalty for instituting

or maintaining a lien or levy action primarily for delay or for

advancing frivolous or groundless arguments in such an action.

In this regard, the Appeals officer’s letter dated May 30, 2001,

expressly advised petitioner of Pierson v. Commissioner, supra,

and Davis v. Commissioner, T.C. Memo. 2001-87.

Under the circumstances, we shall grant that part of

respondent’s motion that moves for the imposition of a penalty in

that we shall impose a penalty on petitioner pursuant to section

6673(a)(1) in the amount of $5,000.

In order to give effect to the foregoing,

An appropriate order granting

respondent's motion, as

supplemented, and decision for

respondent will be entered.