KEENE v. COMMISSIONER

T.C. Memo. 2002-277

UNITED STATES TAX COURT

CURTIS B. KEENE, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 6361-02L. Filed November 1, 2002.

Curtis B. Keene, pro se.

Alan J. Tomsic and Scott A. Hovey, for respondent.

MEMORANDUM OPINION

ARMEN, 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 dispute as to

any material fact with respect to this levy action and that

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.
 - 2 -

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).

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.
 - 3 -

Background

A. Petitioner’s Form 1040 for 1997

On or about August 25, 1998, Curtis B. Keene (petitioner)

and his wife Fanny Keene2 submitted to respondent a joint Form

1040, U.S. Individual Income Tax Return, for the taxable year

1997. On the Form 1040, petitioner listed his occupation as

“parts representative”, and his wife listed her occupation as

“assembler”.

Petitioner entered zeros on applicable lines of the income

portion of his 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 $2,342.02,

which was equal to the amount of Federal income tax that had been

withheld from wages.

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

and Tax Statement, disclosing the payment of wages to him and his

wife during 1997. The first Form W-2 was from APCO Equipment

Corp. of Las Vegas, Nevada; it disclosed the payment of wages to

petitioner in the amount of $24,464.61 and the withholding of

Federal income tax in the amount of $854.35. The second Form W-2

2
Fanny Keene did not file with the Court a petition for
lien or levy action. See infra G. Accordingly, she is not a
party to the present proceeding.
 - 4 -

was from Express Service, Inc. of Oklahoma City, Oklahoma; it

disclosed the payment of wages to petitioner in the amount of

$717.79 and the withholding of no Federal income tax. The third

Form W-2 was from Host International, Inc. of Bethesda, Maryland;

it disclosed the payment of wages to Fanny Keene in the amount of

$18,355.65 and the withholding of Federal income tax in the

amount of $1,487.67. Together, the three Forms W-2 disclosed the

payment of wages to petitioner and his wife in the amount of

$43,538.05 and the withholding of Federal income tax in the

amount of $2,342.02.

Petitioner also attached to his Form 1040 a three-page

typewritten statement that stated, in part, as follows:

We are submitting this letter as an attachment to what
is commonly referred to as a 1997 “income tax” return
or as a 1997 “Form 1040" return. As an attachment this
letter becomes a part of our 1997 return. This letter
is not to be separated from the return as it is a part
and parcel there of.

Voluntary Compliance
Over the course of the last year it has come to our
attention the so called “Income Tax” is based on a
system of voluntary compliance and is not compulsory.
* * * [N]owhere does the Internal Revenue Code
establish an “Income Tax” liability based solely on
wages received from any employer. Therefore, any tax
assessment and payment, based on such, must be made
voluntarily, if at all.

Return not Required in our Situation
The Internal Revenue Code itself also provides that an
“Income Tax” return need not be filed unless there is
an established liability. Once again, since the
Internal Revenue Code establishes no liability only for
wages received from any employer, there is no
requirement to file a return for them. So, clearly,
 - 5 -

the filing of a return, as well as the paying of any
taxes based strictly on wages received from an employer
is completely voluntary. * * *

In addition, we are filing this return despite the fact
that the Privacy Act Notice clearly informs us that we
are not required to file any return. First, the
Privacy Act states that we need file only for “any tax”
that we are ”liable”. Once again no IR Code section
makes us liable for any tax based only on wages
received from an employer. Ergo we need not file.
* * *

Regarding the Information Provided on this Non-
Voluntary Return
The information we have provided on the attached non-
voluntary return is true, correct and accurate to the
best of our knowledge and belief. We had zero income
for 1997. In addition we now realize that we had zero
income for all previous years in which we filed.
Although, for all these previous years, we were not
aware of the voluntary nature of the “income tax” based
only on wages received from an employer and
consequently we mistakenly filed returns thinking that
such alleged taxes were mandatory. * * *

* * * * * * *

Also, note that there are numerous court rulings that
do define the term “income” within the context of
income taxes. Generally, the courts have established
that “income” is a gain or increase arising from
corporate activities. * * *

Past IRS Irregularities and the attached return
We simply know that we have no liability and have filed
this return as a protective and self defensive measure
against the widely noted mistakes and abuses of power
by the IRS.

The IRS has also routinely “changed” filer’s returns.
Please note that there is no statute that allows that
to be done. Any attempt to “change” our return would
be illegal since there is no legislative Statute on
which to base such a change. * * *
 - 6 -

Due Process
Since an “income tax” based solely on wages earned is
voluntary no further issues should be, or even need to
be raised. * * *

* * * * * * *

Sincerely,

/s/ Curtis B. Keene /s/ Fanny Keene

B. Petitioner’s Form 1040 for 1998

On or about August 18, 1999, petitioner and his wife Fanny

Keene submitted to respondent a joint Form 1040, U.S. Individual

Income Tax Return, for the taxable year 1998. On the Form 1040,

petitioner listed his occupation as “parts salesman”, and his

wife listed her occupation as “assembler”.

Petitioner entered zeros on every line of the income portion

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

22 for total income, lines 33 and 34 for adjusted gross income,

and line 39 for taxable income. Petitioner also entered zeros on

line 40 for tax and on line 56 for total tax. Petitioner did not

claim any Federal income tax withheld from wages; accordingly, no

refund was claimed.3

Petitioner did not attach to his Form 1040 any Forms W-2,

Wage and Tax Statement. However, he did attach the same three-

page typewritten statement that he attached to his Form 1040 for

3
The notice of deficiency for 1998 (see infra C) indicates
that $124 was withheld from wages. See infra note 4.
 - 7 -

1997. See supra A.

C. Respondent’s Deficiency Notices and Petitioner’s

Response

On June 16, 2000, respondent (acting through Deborah S.

Decker, Director of respondent’s Service Center in Ogden, Utah)

issued separate joint notices of deficiency to petitioner and his

wife for the taxable years 1997 and 1998. In the notices,

respondent determined deficiencies in Federal income taxes, an

addition to tax under section 6651(a)(1) for failure to timely

file, and accuracy-related penalties under section 6662(a) and

(b)(1) for negligence or disregard of rules or regulations, as

follows:

Accuracy-related
Addition to Tax Penalty
Year Deficiency1 Sec. 6651(a)(1) Sec. 6662(a), (b)(1)
1997 $4,699 $117.85 $471.40
1998 2,792 ––- 533.60
1
Insofar as their ultimate tax liabilities were concerned, respondent
gave petitioner and his wife credit for the amounts withheld from wages.
However, we note that the determination of a statutory deficiency does not
take such withheld amounts into account. See sec. 6211(b)(1).

The deficiency in income tax for 1997 was based on

respondent’s determination that petitioner and his wife failed to

report income in the aggregate amount of $43,536, consisting of

wages in the amounts of $24,464, $717, and $18,355. See supra A.

The deficiency in income tax for 1998 was based on

respondent’s determination that petitioner and his wife failed to

report income in the aggregate amount of $29,119, consisting of
 - 8 -

wages ($26,374), nonemployee compensation ($2,272), and

unemployment compensation ($473).

By certified letters each dated September 16, 2000,

petitioner wrote to respondent’s Service Center in Ogden, Utah,

acknowledging receipt of each of the notices of deficiency dated

June 16, 2000, but questioning, inter alia, “whether or not you

had any authority to even send me this ‘deficiency notice’” and

asking that “you identify which code section it is that

establishes the tax liability upon which you determined these

* * * deficiencies.” In his letters, petitioner also asserted

that “It is clear that your Notice of Deficiency is incorrect,

illegitimate and most likely fraudulent * * * .”

Petitioner knew that he had the right to contest

respondent’s deficiency determinations for 1997 and 1998 by

filing a petition for redetermination with this Court.4 However,

petitioner chose not to do so. Accordingly, on October 30, 2000,

respondent assessed the determined deficiencies, addition to tax,

and accuracy-related penalties, as well as statutory interest.

On that same day, respondent sent petitioner and his wife a

4
In this regard, each of petitioner’s letters dated Sept.
16, 2000, stated as follows:

I recently received a “Deficiency Notice” dated June
16th, 2000 * * * . According to you there is an
alleged deficiency with respect to this tax period
* * * . You also stated that IF, I wanted to “contest
this deficiency before making payment,” then I must
“file a petition with the United States Tax Court.”
 - 9 -

notice of balance due, informing them that they had liabilities

for 1997 and 1998 and requesting that they pay those liabilities.

Petitioner and his wife failed to pay the amounts owing.

On April 16, 2001, respondent sent petitioner and his wife a

second notice regarding their liabilities for 1997 and 1998.

Once again, petitioner and his wife failed to pay the amounts

owing.

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

On September 5, 2001, respondent mailed to petitioner and

his wife a Final Notice--Notice of Intent to Levy and Notice of

Your Right to a Hearing (the final notice) in respect of their

outstanding tax liabilities for 1997 and 1998. Petitioner

received the final notice on September 7, 2001.

On October 1, 2001, petitioner filed with respondent a Form

12153, Request for a Collection Due Process Hearing, for each of

the taxable years 1997 and 1998.5 The requests, each of which

was accompanied by a lengthy cover letter dated October 1, 2001,

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

underlying tax liabilities,6 as well as allegations that

5
Neither request was executed by petitioner’s wife, nor
did either purport to be filed on her behalf.
6
For example, the requests allege that “there is no
statute requiring me ‘to pay’ the income taxes at issue” and that
“No law authorizes the IRS to claim that I owe more in income
taxes than the ‘zero’ I reported on my * * * income tax return.”
In this regard, the requests also assert that
(continued...)
 - 10 -

petitioner never received any notice and demand for payment.

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

On February 6, 2002, petitioner attended an administrative

hearing in Las Vegas, Nevada, conducted by Appeals Officer Thomas

Lee Tracy (the Appeals officer). Prior to the hearing, the

Appeals officer reviewed transcripts of petitioner’s accounts for

1997 and 1998, as well as the original assessment files for those

years, and, by letter dated December 20, 2001, furnished

petitioner with copies of literal transcripts of his accounts for

6
(...continued)

* * * I am not disputing the “amount” of the alleged
income tax “liability”, but the very “existence” of an
income tax “liability” as a matter of law. The Tax
Court, not being a court of law, has no jurisdiction to
even consider such a question.

In addition, the requests boast:

If * * * the appeals officer can point out such a
statute [i.e., “any statute that requires me ‘to pay’
income taxes”] at my DP [due process] hearing, I will
make arrangements to pay whatever amount the appeals
officer claims is due for my * * * income taxes.-and
the IRS won’t have to resort to seizures under Section
6331 to get it. Nor will there be any need for me to
appeal an adverse determination to Tax Court. So the
only reason for the appeals officer not to identify any
such statute is because no such statute exists.
 - 11 -

those years.7

At the hearing, petitioner acknowledged receiving the

transcripts that the Appeals officer had previously mailed to

him. Nevertheless, petitioner alleged that those transcripts

were unreliable because they failed to reflect that notices of

deficiency for 1997 and 1998 had been sent to him. Petitioner

also complained that he was being denied the right to separate

hearings for each of the two taxable years in issue; he also

insisted on revisiting the audit phase of his case and

challenging the existence or amount of his underlying tax

liabilities. The Appeals officer explained that because

petitioner had actually received notices of deficiency for 1997

and 1998 but had not filed a petition for redetermination with

the Tax Court, petitioner was precluded from challenging the

existence or amount of his underlying tax liabilities for those

years at the hearing. The Appeals officer also explained that

his review of petitioner’s transcripts of account for 1997 and

1998 was sufficient to satisfy the verification requirement of

section 6330(c)(1) that all applicable laws and administrative

procedures had been followed in the assessment and collection

process. Ultimately, after repeatedly offering to consider any

collection alternatives that petitioner might care to offer, and

7
A literal transcript is a transcript in “plain English”
with a minimum amount of “computerese”.
 - 12 -

being rebuffed, the Appeals officer terminated the hearing.

However, before doing so, the Appeals officer provided petitioner

with a copy of this Court’s opinion in Pierson v. Commissioner,

115 T.C. 576 (2000), advising that “It warns of bringing

frivolous arguments before the court.”

F. Respondent’s Notice of Determination

On February 14, 2002, 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

concluded that respondent’s determination to proceed with

collection by way of levy should be sustained.

G. Petitioner’s Petition

On March 21, 2002, petitioner filed with the Court a

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

notice of determination.8 The petition includes the following

allegations: (1) The Appeals officer failed to obtain

verification from the Secretary that the requirements of

applicable law or administrative procedure were met as required

under section 6330(c)(1); (2) statutes making petitioner liable

for Federal income tax were not identified; (3) petitioner was

denied the opportunity to challenge the existence or amount of

8
At the time that the petition was filed, petitioner
resided in Las Vegas, Nevada.
 - 13 -

his underlying tax liabilities; and (4) petitioner never received

a notice and demand for payment for the liabilities in issue.

Petitioner attached to his petition many documents,

including copies of: (1) The literal transcripts of his accounts

for 1997 and 1998, (2) his letters dated September 16, 2000,

acknowledging receipt of the notices of deficiency for 1997 and

1998, and (3) the notice of deficiency for 1998.

H. Respondent’s Motion For Summary Judgment

As stated, respondent filed a Motion For Summary Judgment.

Respondent contends, inter alia, that petitioner is barred under

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

his underlying tax liabilities in this collection review

proceeding because petitioner received notices of deficiency for

the taxes in question. Respondent also contends that the Appeals

officer’s review of transcripts of petitioner’s accounts for 1997

and 1998 satisfied the verification requirement of section

6330(c)(1).

Respondent also filed a Declaration in support of the motion

for summary judgment. Attached to the Declaration are Forms

4340, Certificate of Assessments, Payments and Other Specified

Matters, in respect of petitioner’s accounts for 1997 and 1998.

Each Form 4340 shows, inter alia, an assessment on October 30,

2000, the issuance of a notice of balance due on that same date,

the issuance of a subsequent collection notice on April 16, 2001,
 - 14 -

and the issuance of the final notice of intent to levy on

September 5, 2001. See supra C and D.

Petitioner filed an Objection to respondent’s motion.

Thereafter, pursuant to notice, respondent’s motion was called

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

Although petitioner did not attend the hearing, he submitted two

“Motions Session Documents”, the first of which was filed as a

Supplement to his Objection9 and the second of which was filed as

his Rule 50(c) Statement.

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.

9
Petitioner’s Supplement is virtually identical to his
Objection.
 - 15 -

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 challenges the assessments made against him on

October 30, 2000, on the grounds: (1) The notices of deficiency
 - 16 -

dated June 16, 2000, were “seriously flawed” in that they were

issued at a time when “no assessed liability against the

petitioner even existed” and that (2) such notices were otherwise

“premature”. However, the record shows that petitioner received

the notices 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 existence

or amount of his underlying tax liabilities, his arguments that

the notices were “seriously flawed” and otherwise “premature” are

frivolous and groundless. See Monaco v. Commissioner, T.C. Memo.

1998-284 (categorically rejecting the argument that the

Commissioner may not determine a deficiency without first making

an assessment); see also Corcoran v. Commissioner, T.C. Memo.

2002-18 (rejecting the argument that the issuance of a notice of

deficiency may not precede a 30-day letter or an administrative

hearing); Trueblood v. Commissioner, T.C. Memo. 1997-524 (same);

Ruff v. Commissioner, T.C. Memo. 1990-521 (same). Likewise, the

argument that petitioner may still be making regarding the

authority of respondent’s service center director to issue

deficiency notices is frivolous and groundless. See Nestor v.
 - 17 -

Commissioner, supra at 165; Goza v. Commissioner, supra.

Further, 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).

Suffice it to say that petitioner is a taxpayer subject to the

Federal income tax, see secs. 1(a)(1), 7701(a)(1), (14), and that

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. 86

regarding the taxability of unemployment compensation.

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 transcripts of

petitioner’s accounts for 1997 and 1998.

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.
 - 18 -

Section 6330(c)(1) does not require the Commissioner to rely

on a particular document (e.g., the summary record itself rather

than transcripts of account) to satisfy the verification

requirement imposed therein. Roberts v. Commissioner, 118 T.C.

365, 371 n.10 (2002); Standifird v. Commissioner, T.C. Memo.

2002-245; 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 literal transcripts furnished to petitioner and

the Forms 4340 attached to respondent’s Declaration contained all

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

Admin. Regs.10 See Weishan v. Commissioner, supra; Lindsey v.

Commissioner, supra; Tolotti v. Commissioner, supra; Duffield v.

10
The record does not definitively disclose the type of
transcript that the Appeals officer reviewed prior to the
administrative hearing on Feb. 6, 2002. The Appeals officer may
have reviewed the literal transcripts that he furnished to
petitioner or, more likely given the fact that such transcripts
are typically prepared for use by taxpayers unfamiliar with IRS
computer codes, he may have reviewed TXMOD-A transcripts. See
Schroeder v. Commissioner, T.C. Memo. 2002-190 n.3, for a
description of such transcripts. In any event, we regard the
matter to be irrelevant. See Hack v. Commissioner, T.C. Memo.
2002-243 (“The use of computer-generated transcripts of account
is a valid verification that the requirements of any applicable
law or administrative procedure have been met.”); Hauck v.
Commissioner, T.C. Memo. 2002-184 (“We have repeatedly held that
the Commissioner may rely on transcripts of account to satisfy
the verification requirement of section 6330(c)(1).”).
 - 19 -

Commissioner, supra; Kuglin v. Commissioner, supra.11

Petitioner has not alleged any irregularity in the

assessment procedure that would raise a legitimate question about

the validity of the assessments or the information contained in

the literal transcripts or the Forms 4340.12 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:

11
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); sec. 301.6330-1(e)(1),
Proced. & Admin Regs. In any event, the Appeals officer provided
petitioner with literal transcripts of his accounts for 1997 and
1998, and respondent’s counsel provided petitioner with Forms
4340 for those years.
12
Petitioner argues that the literal transcripts are
suspect because they do not reflect the issuance of the notices
of deficiency dated June 16, 2000. However, there is nothing to
suggest that the issuance of a notice of deficiency is an event
that the Commissioner records in a transcript of a taxpayer’s
account. In any event, there is no question that deficiency
notices for 1997 and 1998 were in fact sent by respondent and
received by petitioner.
 - 20 -

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 Forms 4340 show that respondent sent

petitioner notices of balance due on the same date that

respondent made assessments against petitioner for the taxes,

addition to tax, and accuracy-related penalties determined in the

notices 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); Schaper v. Commissioner, T.C. Memo. 2002-203;

Weishan v. Commissioner, supra; see also Hansen v. United States,

7 F.3d 137, 138 (9th Cir. 1993). In addition, other notices were

sent to petitioner, at least one of which (the final notice,

discussed supra D) petitioner received; likewise, petitioner

received the Forms 4340. Such notices and forms were sufficient

to constitute notice and demand within the meaning of section

6303(a) because they informed petitioner of the amount owed and

requested payment.13 Standifird v. Commissioner, supra; Hack v.

13
Thus, we reject petitioner’s argument, which we regard
as frivolous and groundless, 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 Davich v.
Commissioner, T.C. Memo. 2002-255; Tapio v. Commissioner, T.C.
Memo. 2002-141.
 - 21 -

Commissioner, T.C. Memo. 2002-244; Hack v. Commissioner, T.C.

Memo. 2002-243; see Elias v. Connett, 908 F.2d 521, 525 (9th Cir.

1990) (“The form on which a notice of assessment and demand for

payment is made is irrelevant as long as it provides the taxpayer

with all the information required under 26 U.S.C. § 6303(a).”).

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 February 14, 2002.

B. Imposition of a Penalty 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, supra at 580-581, and has in fact imposed a penalty

in many such cases.14

14
E.g., Roberts v. Commissioner, 118 T.C. 365 (2002)
(imposing a penalty in the amount of $10,000); Bartschi v.
(continued...)
 - 22 -

In the present case, respondent has not specifically

requested imposition of a penalty under section 6673(a)(1).

However, in a collection review case, the Court may impose such a

penalty on its own motion. E.g., Nestor v. Commissioner, T.C.

Memo. 2002-251; Schroeder v. Commissioner, T.C. Memo. 2002-190;

Williams v. Commissioner, T.C. Memo. 2002-111.

14
(...continued)
Commissioner, T.C. Memo. 2002-268 (imposing a penalty in the
amount of $2,500); Land v. Commissioner, T.C. Memo. 2002-263
(imposing a penalty in the amount of $5,000); Davich v.
Commissioner, T.C. Memo. 2002-255 (imposing a penalty in the
amount of $5,000); Schmith v. Commissioner, T.C. Memo. 2002-252
(imposing a penalty in the amount of $1,000); Nestor v.
Commissioner, T.C. Memo. 2002-251 (imposing a penalty in the
amount of $5,000); Standifird v. Commissioner, T.C. Memo. 2002-
245 (imposing a penalty in the amount of $7,500); Hack v.
Commissioner, T.C. Memo. 2002-244 (imposing a penalty in the
amount of $2,000); Hack v. Commissioner, T.C. Memo. 2002-243
(same); Horejs v. Commissioner, T.C. Memo. 2002-241 (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); Hauck v. Commissioner, T.C. Memo. 2002-184 (imposing a
penalty in the amount of $10,000); 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).
 - 23 -

We are convinced that petitioner instituted the present

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

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. 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 petitioner was informed of

the provisions of section 6673 as applicable to collection review

proceedings such as the present one. In this regard, petitioner

was provided at the administrative hearing on February 6, 2002,

with a copy of this Court’s opinion in Pierson v. Commissioner,

supra, in which the Court indicated its willingness to impose the

section 6673 penalty in lien and levy cases.

Under the circumstances, we shall, on our own motion, impose

a penalty on petitioner pursuant to section 6673(a)(1) in the

amount of $5,000.

C. Conclusion

We have considered all of petitioner’s arguments that are

not discussed herein, and we find them to be without merit and/or

irrelevant.
 - 24 -

In order to give effect to the foregoing,

An order granting respondent's

motion and decision for respondent,

including a penalty on petitioner

under section 6673(a)(1), will be

entered.