T.C. Memo. 2003-6
UNITED STATES TAX COURT
JEFFREY M. YOUNG, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 1193-02L. Filed January 8, 2003.
Jeffrey M. Young, pro se.
Jeffrey C. Venzie, for respondent.
MEMORANDUM OPINION
RUWE, Judge: This matter is before us on respondent’s
motion for summary judgment under Rule 1211 and to impose a
penalty under section 6673. Respondent argues that no genuine
issue exists as to any material fact and that his determination
1
All Rule references are to the Tax Court Rules of Practice
and Procedure, and all section references are to the Internal
Revenue Code as amended.
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to maintain a notice of Federal tax lien filed under section 6323
should be sustained. At the time of filing the petition,
petitioner resided in Scranton, Pennsylvania.
Summary judgment is designed to expedite litigation and to
avoid unnecessary and expensive trials. Shiosaki v.
Commissioner, 61 T.C. 861, 862 (1974). A motion for summary
judgment is granted where the pleadings and other materials 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). The burden is on the moving party
to demonstrate that no genuine issue as to any material fact
remains and that he is entitled to judgment as a matter of law.
FPL Group, Inc. & Subs. v. Commissioner, 116 T.C. 73, 74-75
(2001). In all cases, the evidence is viewed in the light most
favorable to the nonmoving party. Bond v. Commissioner, 100 T.C.
32, 36 (1993). However, the nonmoving party is required “to go
beyond the pleadings and by” his “own affidavits, or by the
‘depositions, answers to interrogatories, and admissions on
file,’ designate ‘specific facts showing that there is a genuine
issue for trial.’” Celotex Corp. v. Catrett, 477 U.S. 317, 324
(1986); see also Rauenhorst v. Commissioner, 119 T.C. 157, 175
(2002); FPL Group, Inc. & Subs. v. Commissioner, 115 T.C. 554,
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560 (2000). Petitioner has not filed a response to respondent’s
motion as required by our order of October 2, 2002.
Petitioner filed Federal income tax returns for 1994, 1997,
1998, and 1999. Those returns reported taxes due; however,
petitioner did not pay the entire amount of the taxes shown on
his returns. Respondent assessed the taxes reported and also
assessed additions to tax and interest.
On April 4, 2001, respondent issued to petitioner a “Notice
of Federal Tax Lien Filing and Your Right to a Hearing Under IRC
6320”.2 The lien filing was made with respect to unpaid taxes
stated as follows:
Type of tax Period Amount
1040 12/31/1994 $698.69
1040 12/31/1997 189.34
1040 12/31/1998 3,450.59
1040 12/31/1999 1,466.73
Petitioner filed a Form 12153, Request for a Collection Due
Process Hearing, with respect to the lien filing. An attachment
to that Form 12153 states in pertinent part:
Summarizing, I am requesting a “Due Process
Hearing” as outlined Form 12153. [sic] I am
“challenging the appropriateness of (the) collection
action” as specified in 6330(c)(2)(A)(ii) since the IRS
denied all of my requests of the initial “examinations”
and “interviews” as provided in Publications 1 & 5. In
addition, no lien for taxes pursuant to Code Sections
6321 and 6322 is possible because no valid, underlying
2
Respondent filed a Form 668(Y)(c), Notice of Federal Tax
Lien, with the prothonotary of Lackawanna County, Scranton,
Pennsylvania.
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assessment was ever made. In addition, I never
received a statutory, “notice and demand” for payment
of the taxes at issue as required by Code Sections
6203, 6321, and 6331. If the appeals officer is going
to claim that a particular document sent to me by the
IRS was a “Notice and Demand” for payment, then I am
requesting that he also provide me with a T.D. or
Treasury Regulation, which identifies that specific
document as being the official, statutory “Notice and
Demand” for payment.
In addition, I am “challenging the existence of
the underlying tax liability” as I am authorized to do
in Code Section 6330(c)(2)(B). In addition, I did not
receive a (valid) notice of deficiency in connection
with any of the years at issue. I am also requesting
that the appeals officer have at the “Due Process
hearing” a copy of the “Summary Record of Assessment”
(Form 23 C) together with the “pertinent parts of the
assessment which set forth the name of the taxpayer,
the date of the assessment, the character of the
liability assessed, the taxable period, and the amount
assessed” as provided for in Treasury Regulation
301.6203-1.
In addition, I want to see proof that a purported
“Deficiency Notice” was actually sent to me. Also,
since Section 6330(c)(1) requires that “The appeals
officer shall at the hearing obtain verification from
the Secretary that the requirements of any applicable
law or administrative procedure have been met,” I am
requesting that the Appeals Officer have such
verification with him at the Appeals Conference.
However, if the verification called for by 6330(c)(1)
is signed by someone other then [sic] the Secretary
himself, than - in line with the Supreme Court’s
holding in Federal Crop Ins. Corp vs. Merril, 92L.ED.11
- I am requesting that the Appeals Officer also have a
Delegation Order from the Secretary delegating to that
the [sic] person the authority to prepare such a
“verification.”
Petitioner also submitted a supplement to the Form 12153 request
in which he requested that the Appeals officer have the following
documents at the Appeals hearing: (1) Verification from the
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Secretary; (2) proof that a notice and demand for payment was
sent to petitioner, a copy of the actual notice and demand that
was sent or a blank copy of the notice, and a Treasury decision
or Treasury regulation which identifies that notice as the
statutory notice and demand. In addition, petitioner raised
challenges to the “existence” of his underlying tax liabilities,
claiming that no “liability” for income taxes exists as a matter
of law.3 Further, petitioner claimed that there is no statute
requiring him “to pay” income taxes.
A hearing was held on September 19, 2001.4 In that
proceeding, petitioner did not raise any collection alternatives
or other relevant issues. Instead, petitioner insisted that he
did not receive a “statutory notice and demand” for payment.
Petitioner also argued:
there is no statutory liability in connection with
these taxes at issue, nor is there a provision that
states that I have to pay the taxes at issue, and in my
letter I said that if the appeals officer believes
otherwise, he need only identify the code section that
establishes such a liability and payment for taxes, and
I would immediately make arrangements to pay as
provided in code section 6330(C)(2) [sic] for whatever
the amount the appeals officer claims is due.
Frank Smigiel (Mr. Smigiel) accompanied petitioner to the Appeals
hearing. The Appeals officer did not permit Mr. Smigiel to
3
Petitioner stated that he was not disputing the “amount” of
his underlying tax liabilities.
4
Attached to the petition is a document that petitioner
claims to be a transcription of the Appeals hearing.
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represent petitioner at the Appeals hearing since he was not an
attorney in good standing, a certified public accountant, or an
enrolled agent in good standing. The Appeals officer allowed Mr.
Smigiel to stay at the hearing as a witness only. The Appeals
officer verified that all applicable laws and administrative
procedures had been met. In doing so, he reviewed the
information in the case file, petitioner’s Form 12153, the tax
correspondence, and the case history. The Appeals officer
reviewed the transcripts for 1994, 1997, 1998, and 1999 and
determined that the proper taxes were assessed, they remained
unpaid, and demand for payment had been made.
On October 5, 2001, the Internal Revenue Service (IRS)
Office of Appeals issued a notice of determination sustaining the
notice of Federal tax lien filing. The notice of determination
states in relevant part as follows:
Relevant Issues Presented by the Taxpayer
You do not believe that the filing of Notice of Federal
Tax Lien is appropriate. You were presented with
copies of certified transcripts but failed to show why
the lien should be withdrawn or offer alternatives to
this action. You engaged in repeated requests for
documents that were irrelevant, unnecessary or for
purposes of delay. You were given the opportunity to
resolve the liabilities or suggest alternatives but
chose not to.
You also objected that Mr. Frank Smigiel was not
allowed to represent you. Mr. Smigiel cannot represent
you before Appeals per Cir 230 and Rev. Proc. 81-38.
To represent you before Appeals, he must be an
Attorney, Certified Public Accountant or an Enrolled
Agent. Mr. Smigiel has none of these qualifications.
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In addition, during the period of the appeal, you have
incurred another liability and have failed to pay
estimated taxes as required by law. You have a long
history of noncompliance and the appeal appears
primarily for delay.
This appeal is limited to the filed Notice of Federal
Tax Lien.
III. Balancing Efficient Collection and Intrusiveness
Further delay would only result in increasing the
liabilities as you have done during the appeal. You
are not eligible for an installment agreement or an
offer in compromise due to your lack of compliance.
Although you have had opportunities to comply, you have
failed to do so. Therefore, it is recommended that the
actions by the Compliance [sic] be sustained, as
appropriate, after considering all of the facts,
circumstances and law. The filed Notice of Federal Tax
Lien shall remain in full force and effect.
Petitioner timely filed a petition with the Tax Court, in
which he alleged as error: (1) He did not receive the statutory
notice and demand for payment; (2) the Appeals officer did not
obtain and produce the verification from the Secretary as
provided in section 6330(c)(1); (3) the Appeals officer refused
to address challenges to the existence of petitioner’s underlying
tax liability; (4) the Appeals officer refused to allow Mr.
Smigiel to represent petitioner at the Appeals hearing; and (5)
the notice of determination is invalid because the Appeals
officer ended the hearing abruptly and did not allow petitioner
to “raise any issues as provided for in the law.” Petitioner
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states in his petition that he “is not challenging the
assessment”.
On September 30, 2002, respondent filed a motion for summary
judgment and to impose a penalty under section 6673. On October
2, 2002, we ordered petitioner to file a response to that motion
on or before November 13, 2002. Petitioner has not filed a
response to respondent’s motion as required by our order of
October 2, 2002. After reviewing the pleadings and the materials
in the record, we find that no genuine issue of material fact
exists and that respondent’s determination should be sustained as
a matter of law.
Under section 6330(c)(2)(B), a taxpayer may raise challenges
to the existence or amount of his underlying tax liability if he
did not receive a notice of deficiency or did not otherwise have
an opportunity to dispute the tax liability.5 Petitioner has not
raised any legitimate issues regarding his underlying tax
liabilities in his request for an Appeals hearing, in his
supplement to that request, in the course of the Appeals Office
proceedings, and in his petition filed with this Court. Instead,
petitioner challenges the “existence” of his underlying tax
liabilities on the basis that no Internal Revenue Code section
5
We avoid herein whether the self-reporting of taxes on a
return constitutes an opportunity to dispute those taxes for
purposes of sec. 6330(c)(2)(B). See Horn v. Commissioner, T.C.
Memo. 2002-207.
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makes him “liable” for income taxes or requires him “to pay”
income taxes. We have consistently rejected this type of
frivolous, tax-protester argument, and we perceive no reason, nor
are we required, to address such contentions. See, e.g., Crain
v. Commissioner, 737 F.2d 1417 (5th Cir. 1984); Keene v.
Commissioner, T.C. Memo. 2002-277; Hall v. Commissioner, T.C.
Memo. 2002-267. We address petitioner’s remaining contentions to
determine whether the Appeals officer abused his discretion. See
Nicklaus v. Commissioner, 117 T.C. 117, 120 (2001).
Section 6330(c)(1) requires the Appeals officer to verify
that the requirements of any applicable law or administrative
procedure have been met. However, section 6330(c)(1) does not
require the Appeals officer to rely on a particular document to
satisfy his verification function. Kuglin v. Commissioner, T.C.
Memo. 2002-51. Further, that section does not require the
Appeals officer to provide a copy of the verification that the
requirements of any applicable law or administrative procedure
have been met. Nestor v. Commissioner, 118 T.C. 162, 166 (2002).
In the instant case, the Appeals officer reviewed
transcripts of petitioner’s account for 1994, 1997, 1998, and
1999, as well as other relevant items in the case file. The
Appeals officer verified that all applicable laws and
administrative procedures had been met and that petitioner
received notice and demand for payment for the unpaid tax
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liabilities at issue. Copies of the certified transcripts were
provided to petitioner. Petitioner does not challenge the
validity of the assessments of taxes. Further, our review of the
Form 4340, Certificate of Assessments, Payments, and Other
Specified Matters, shows that the assessments were valid.6 We
perceive no irregularities in the assessment procedures. The
Form 4340 also indicates that multiple notices of balance due, as
well as the notice of intent to levy, were sent to petitioner for
each of the tax years at issue. Those notices satisfy the
requirements of section 6303(a). Tornichio v. Commissioner, T.C.
Memo. 2002-291.7
The Appeals officer did not abuse his discretion in refusing
to allow Mr. Smigiel to represent petitioner at the Appeals
hearing. The Appeals officer determined that Mr. Smigiel was not
an attorney in good standing, a certified public accountant, or
an enrolled tax return preparer in good standing. Accordingly,
6
A Form 4340, Certificate of Assessments, Payments, and
Other Specified Matters, provides at least presumptive evidence
that the taxes were validly assessed. Nicklaus v. Commissioner,
117 T.C. 117, 121 (2001). The Form 4340 herein contains all the
information prescribed in sec. 301.6203-1, Proced. & Admin.
Regs., including identification of the taxpayer, the character of
the liabilities assessed, the taxable periods, and the amounts of
the assessments.
7
Petitioner suggests that a Form 17 or Form 17A is the only
document that satisfies sec. 6303(a), seemingly relying upon a
1914 Treasury decision. We have previously rejected this
argument. Keene v. Commissioner, T.C. Memo. 2002-277; Davich v.
Commissioner, T.C. Memo. 2002-255; Tapio v. Commissioner, T.C.
Memo. 2002-141.
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under Treasury Department Circular No. 230, current version at 31
C.F.R. secs. 10.3 and 10.7 (2001), and Rev. Proc. 81-38, 1981-2
C.B. 592, Mr. Smigiel was not permitted to represent petitioner
before the IRS Appeals Office.
Finally, the notice of determination herein is valid on its
face. It is not invalid by reason of the Appeals officer’s
concluding the Appeals hearing “abruptly”. Moreover, the Appeals
officer did not terminate the hearing “abruptly” as petitioner
contends. The Appeals officer gave petitioner ample opportunity
to raise relevant issues relating to the notice of Federal tax
lien filing. However, petitioner insisted upon making frivolous
and groundless arguments. Only after petitioner continued to
repeat those same arguments and after he failed to raise any
relevant issues did the Appeals officer end the hearing. The
Appeals officer did not abuse his discretion in doing so.
Section 6673(a)(1) authorizes the Tax Court to require a
taxpayer to pay to the United States a penalty whenever it
appears that proceedings have been instituted or maintained by
the taxpayer primarily for delay or that the taxpayer’s position
in the proceeding is frivolous or groundless. Throughout the
proceedings in this case, petitioner has raised the same
arguments that we have previously and consistently rejected as
frivolous and groundless. Petitioner failed to file a response
to respondent’s motion for summary judgment as required by our
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order of October 2, 2002. Petitioner has failed to present any
legitimate arguments regarding the collection action at issue,
and the only reason we find for his instituting and maintaining
these proceedings is delay. Accordingly, we impose a penalty of
$500.
An appropriate order
and decision will be entered
for respondent.