T.C. Memo. 2002-268
UNITED STATES TAX COURT
CARLIN BARTSCHI AND JOYCE A. BARTSCHI, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 12729-01L. Filed October 22, 2002.
Carlin Bartschi and Joyce A. Bartschi, pro sese.
Anne W. Durning, for respondent.
MEMORANDUM OPINION
LARO, Judge: Petitioners, while residing in Gilbert,
Arizona, petitioned the Court under section 6330(d) to review
respondent’s determination as to his proposed levy upon
petitioners’ property. Respondent proposed the levy to collect
Federal income taxes of approximately $19,884.28 for 1993,
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$80,453.10 for 1995 and 6,617.30 for 1997.1 Currently, the case
is before the Court on respondent’s motion for summary judgment
under Rule 121 and to impose a penalty under section 6673(a).
Petitioners have filed with the Court a response to respondent’s
motion.2
We shall grant respondent’s motion for summary judgment and
shall impose a $2,500 penalty against petitioners. Unless
otherwise noted, section references are to the applicable
versions of the Internal Revenue Code. Rule references are to
the Tax Court Rules of Practice and Procedure.
Background
Petitioners filed Federal income tax returns for 1993, 1995,
and 1997, and respondent assessed the Federal income tax
liabilities shown on those returns. Respondent assessed the 1993
liability on May 16, 1994, the 1995 liability on March 10, 1997,
and the 1997 liability on December 28, 1998.
On November 7, 1999, respondent mailed to petitioners a
letter, “Final Notice - Notice of Intent to Levy and Notice of
1
We use the term “approximately” because these amounts were
computed before the present proceeding and have since increased
on account of interest.
2
As part of their response, petitioners challenge as
improper a declaration of respondent’s counsel that accompanied
respondent’s motion for summary judgment. The declaration
describes certain documents contained in respondent’s
administrative file, all of which were submitted to the Court as
part of respondent’s motion for summary judgment. We find
petitioners’ challenge disingenuous.
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Your Right to a Hearing” (final notice). The final notice
informed petitioners of (1) respondent’s intent to levy upon
their property pursuant to section 6331 and (2) petitioners’
right under section 6330 to a hearing with respondent’s Office of
Appeals (Appeals). Enclosed with the final notice was a copy of
Form 12153, Request for a Collection Due Process Hearing. On
December 6, 1999, petitioners mailed to respondent a Form 12153
requesting the referenced hearing. Petitioners attached to the
form an explanation of their disagreement with the proposed levy.
The explanation stated:
Income. (1) There was a failure to generate an
assessment list; (2) There was a failure of the
Commissioner to certify and transmit the assessment
list (3) There was a failure to record the assessment;
(4) failure to provide record of assessment; and,
(5) failure to send Notice of Assessment.
On May 4, 2000, the Appeals officer sent to Carlin Bartschi
(Mr. Bartschi) a letter informing him that Appeals had scheduled
the requested face-to-face hearing for May 19, 2000. The Appeals
officer also sent a copy of this letter to Joyce Bartschi. On
May 13, 2000, Mr. Bartschi, a medical doctor, responded to the
Appeals officer with a letter requesting that Appeals reschedule
the hearing for the last week of July. Mr. Bartschi stated in
his letter that he and his wife would be out of town on May 19,
2000. Mr. Bartschi also stated in his letter that petitioners
could subsequently be requesting an even later hearing date
because they were: (1) Waiting on responses to their requests
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for records made under the Freedom of Information Act, 5 U.S.C.
sec. 552 (2000), records he stated were necessary to prove the
disagreements set forth in petitioners’ request for the hearing,
and (2) anticipating challenging in court a statement by the
Appeals officer that only an attorney, certified public
accountant, or enrolled agent could represent them at the
hearing.
On May 18, 2000, the Appeals officer mailed to petitioners a
letter stating that the hearing had been rescheduled for June 20,
2000. The letter also stated that, if petitioners desired, the
Appeals officer would reschedule the hearing for a date before,
but not after, June 20, 2000. The letter informed petitioners
that the Appeals officer would make his determination on the
basis of the information in the file if petitioners were unable
to attend a face-to-face hearing before June 21, 2000. Enclosed
with the letter were certified transcripts, Forms 4340,
Certificate of Assessments and Payments, of petitioners’ accounts
for 1993, 1995, and 1997, and a copy of Circular 230 which, the
letter stated, “presents the Regulations governing practice
before the Internal Revenue Service.”
On June 3, 2000, Mr. Bartschi responded to the Appeals
officer’s latest correspondence with a letter requesting again
that the Appeals officer reschedule the hearing for the last week
of July. This letter stated that petitioners were anticipating
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making several Freedom of Information requests due, in part, to
the documents enclosed with the May 18, 2000, letter. This
letter also stated that petitioners had contacted someone to
represent them at the hearing but that this person had not as of
yet agreed to represent them and had informed them that he could
not represent them until after July 15, 2000.
Appeals never responded to Mr. Bartschi’s June 3, 2000,
letter, or held a face-to-face hearing with either petitioner.
Instead, on the basis of the above-mentioned letters and attached
documents, Appeals issued to petitioners on July 13, 2000, a
Notice of Determination Concerning Collection Action(s) Under
Section 6320 and/or 6330 for 1993, 1995, and 1997. This notice
reflected the determination of Appeals to sustain the proposed
levy and advised petitioners that this Court is the proper forum
in which to file a petition should petitioners decide to seek
judicial review of the determination.
On August 11, 2000, petitioners filed a Complaint with the
United States District Court for the District of Arizona. The
Court dismissed that Complaint on September 5, 2001, for lack of
subject matter jurisdiction. Bartschi v. Tracy, 88 AFTR 2d
2001-6223, 2001-2 USTC par. 50,672 (D. Ariz. 2001).
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Discussion
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). The moving party bears the burden of proving
that there is no genuine issue of material fact, and factual
inferences are drawn 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).
Petitioners have raised no genuine issue as to any material
fact. Accordingly, we conclude that this case is ripe for
summary judgment.
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 may 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 must 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 a hearing before Appeals) and, if
dissatisfied, with judicial review of the administrative
determination. Davis v. Commissioner, 115 T.C. 35, 37 (2000);
Goza v. Commissioner, 114 T.C. 176, 179 (2000). In the event of
such a judicial review, the Court’s standard of review depends on
whether the underlying tax liability is at issue. The Court
reviews a taxpayer’s liability under the de novo standard where
the validity of the underlying tax liability is at issue. The
Court reviews other administrative determinations for abuse of
discretion. Sego v. Commissioner, 114 T.C. 604, 610 (2000). A
taxpayer’s underlying tax liability may be at issue if he or she
“did not receive any statutory notice of deficiency for such tax
liability or did not otherwise have an opportunity to dispute
such tax liability.” Sec. 6330(c)(2)(B).
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Petitioners assert in their petition two allegations of
error in the Appeals officer’s determination.3 First,
petitioners argue 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). We disagree with this argument.
Section 6330(c)(1) does not require the Appeals officer to rely
upon a particular document (e.g., the summary record itself
rather than transcripts of account) in order to satisfy this
verification requirement. Kuglin v. Commissioner, T.C. Memo.
2002-51; see also Weishan v. Commissioner, T.C. Memo. 2002-88.
Nor does it mandate that the Appeals officer actually give a
taxpayer a copy of the verification upon which the Appeals
officer relied. Sec. 6330(c)(1); sec. 301.6330-1(e)(1), Proced.
& Admin. Regs.; see also Nestor v. Commissioner, 118 T.C. 162
(2002). Given the additional fact that petitioners were actually
given copies of the relevant Forms 4340, which are a valid
verification that the requirements of any applicable law or
administrative procedure have been met, Roberts v. Commissioner,
118 T.C. 365 (2002); Mudd v. Commissioner, T.C. Memo. 2002-204;
Howard v. Commissioner, T.C. Memo. 2002-81; Mann v. Commissioner,
3
Petitioners attempted to raise in their response to
respondent’s motion for summary judgment new issues as to the
Appeals officer’s determination. Those issues are frivolous.
Moreover, they are not properly before the Court for decision.
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T.C. Memo. 2002-48, we hold that: (1) The assessments were
valid, Kuglin v. Commissioner, supra; see also Duffield v.
Commissioner, T.C. Memo. 2002-53, and (2) the Appeals officer
satisfied the verification requirement of section 6330(c)(1),
Yacksyzn v. Commissioner, T.C. Memo. 2002-99; cf. Nicklaus v.
Commissioner, 117 T.C. 117, 120-121 (2001). Petitioners have not
demonstrated in this proceeding any irregularity in the
assessment procedure that would raise a question about the
validity of the assessment or the information contained in Forms
4340. See Mann v. Commissioner, supra.
Second, petitioners argue that the Appeals officer made his
determination without affording them a hearing. Respondent
replies that petitioners “were given ample opportunity for a
face-to-face hearing.”
Because petitioners allege that a hearing under section 6330
was not properly held, the question arises whether this Court
should remand the case to Appeals to hold the hearing. Such a
question is the subject of Lunsford v. Commissioner, 117 T.C. 183
(2001). There, the Court declined to remand the case to Appeals
to hold a hearing at which to consider the taxpayer’s arguments.
The Court stated that the Court believed it neither “necessary or
productive” to do so because “the only arguments that * * * [the
taxpayers] presented to this Court were based on legal
propositions which we have previously rejected.” Id. at 189.
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The same is true here. Apart from their contention about
being denied a hearing, petitioners’ only argument in this
proceeding, as gleaned from the allegations of error that they
set forth in their petition, is that the Appeals officer did not
perform the required verification. For the reasons stated above,
we have rejected that argument in accordance with our firmly
established jurisprudence. Thus, as was true in Lunsford v.
Commissioner, supra, and pursuant thereto, we consider it neither
necessary or productive to remand this case to Appeals to hold a
hearing. We sustain respondent’s determination as to the
proposed levy as a permissible exercise of discretion.
We now turn to the requested penalty under section 6673.
Section 6673(a)(1) authorizes the 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. We have repeatedly indicated our willingness to
impose such penalties in lien and levy review proceedings.
Roberts v. Commissioner, supra. Moreover, we have imposed
penalties in such proceedings when the taxpayer raised frivolous
and groundless arguments. Yacksyzn v. Commissioner, supra;
Watson v. Commissioner, T.C. Memo. 2001-213; Davis v.
Commissioner, T.C. Memo. 2001-87.
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In accordance with the firmly established law set forth
above, we conclude that petitioners’ positions in this proceeding
are frivolous.4 We also conclude from the facts of this case
that petitioners have instituted and maintained this proceeding
primarily for delay.5 Accordingly, pursuant to section 6673, we
require them to pay to the United States a penalty of $2,500.
We have considered all arguments and have found those
arguments not discussed herein to be irrelevant and/or without
merit. To reflect the foregoing,
An appropriate order and
decision will be entered for
respondent.
4
We also note that we recognize petitioners’ response to
respondent’s motion for summary judgment as generally a
repetition of the same language set forth in similar responses
filed in this Court by other taxpayers challenging a lien or
proposed levy.
5
The fact that petitioners are not indifferent to wasting
the judiciary’s resources in an attempt to delay the respondent’s
collection of their tax liability is further evidenced by their
having commenced an action first in Federal District Court.
Petitioners commenced that action there after having received a
notice of determination which recited that this Court, not a
District Court, is the proper forum in which to litigate this
matter.