T.C. Memo. 2003-17
UNITED STATES TAX COURT
JAN LISTER, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 9173-02L. Filed January 21, 2003.
Jan Lister, pro se.
Donald E. Edwards, for respondent.
MEMORANDUM OPINION
MARVEL, Judge: This matter is before the Court on
respondent’s motion for summary judgment, filed pursuant to Rule
121, and to impose a penalty under section 6673.1 Respondent
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
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contends that there is no dispute as to any material fact
regarding this levy action and that respondent’s determination to
proceed with collection of petitioner’s outstanding Federal
income tax liabilities for 1993 and 1994 by levy should be
sustained as a matter of law.
Summary adjudication is a procedure designed to expedite
litigation and avoid unnecessary, time-consuming, and expensive
trials. Fla. Peach Corp. v. Commissioner, 90 T.C. 678, 681
(1988). Summary adjudication may be granted with respect to all
or any part of the legal issues presented “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). 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 adjudication. Dahlstrom
v. Commissioner, 85 T.C. 812, 821 (1985).
As explained in detail below, there is no genuine issue as
to any material fact, and a decision may be rendered as a matter
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of law. Consequently, we shall grant that part of respondent’s
motion as moves for summary adjudication under Rule 121.
Background
The record establishes and/or the parties do not dispute the
following facts.2
Petitioner resided in Tulsa, Oklahoma, on the date
petitioner filed her petition in this case.
Petitioner failed to file her Federal income tax return for
1993. On January 18, 1996, respondent mailed a statutory notice
of deficiency to petitioner, in which he determined that
petitioner was liable for an income tax deficiency and additions
to tax for 1993. Petitioner received the notice of deficiency
but did not petition this Court with respect to the notice of
deficiency. Subsequently, respondent assessed the income tax
deficiency, additions to tax, and interest against petitioner on
July 22, 1996.
Petitioner also failed to file her Federal income tax return
for 1994. On October 22, 1996, respondent mailed a statutory
notice of deficiency to petitioner in which he determined that
petitioner was liable for an income tax deficiency and additions
to tax for 1994. Petitioner received the notice of deficiency
2
The facts material to the Court’s disposition of the motion
for summary judgment are stated solely for purposes of deciding
the motion and are not findings of fact for this case. See
Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), affd.
17 F.3d 965 (7th Cir. 1994)
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but did not petition this Court with respect to the notice of
deficiency. Subsequently, respondent assessed the income tax
deficiency, additions to tax, and interest against petitioner on
August 19, 1997.
On December 17, 2001, respondent mailed to petitioner a
Final Notice - Notice of Intent to Levy and Notice of Your Right
to a Hearing (Letter 1058) covering the taxable years 1993 and
1994 after identifying a potential levy source. On December 29,
2001, petitioner timely submitted Form 12153, Request for a
Collection Due Process Hearing, to respondent requesting a
hearing under section 6330. On Form 12153, petitioner identified
the taxable periods at issue as “beginning Jan. 1, 1993, ending
Dec. 31, 2001” and supplied the following reasons for contesting
the proposed collection action:
Claimant never received cash. Claimant received bills
of credit. Claimant provides noteable service.
Claimant unable to meet cash demands. Claimant DNA is
75+ years. Claimant did not file 1993 and 1994 1040A.
Civil penalties don’t apply. See 1040 & Sched. R.
Attached to the Form 12153 was a Form 1040, U.S. Individual
Income Tax Return, for the period “Jan. 1, 1993, ending Dec. 31,
2001” containing handwritten entries claiming no gross income, no
taxable income, no tax payments, and no tax due. On the Form
1040, petitioner wrote on line 61 (used for entering the amount
of tax overpaid), the word “UNKNOWN” and wrote “MAXIMUM” on line
62 (used to quantify the tax refund due).
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By letter dated April 5, 2002, Appeals Officer Brenda J.
Dodson advised petitioner that she had been assigned petitioner’s
case, and she explained the objective of a hearing under section
6330. Ms. Dodson also stated the following with respect to
petitioner’s explanation of her disagreement with the proposed
collection action set forth in Form 12153:
Based on your statement on the Form 12153, you are
disputing the proposed levy action and that you had any
taxable income for the periods in question. Based upon
my review of the case administrative file and reviewing
a transcript of the account in question it indicates
assessments and balances due for the tax periods ending
December 31, 1993 and December 31, 1994. You were
afforded the opportunity to dispute the tax assessments
upon issuance of the Notice of Deficiency. This notice
afforded you 90 days to petition the United States Tax
Court to contest the proposed tax determination. You
did not exercise this right, prompting a default
resulting in the assessments. Since you did not
petition the United States Tax Court during this 90-day
period you are not entitled to any further hearing
relating to the amount of the liability for the 1993 or
1994 year under the Collection Due Process Hearing
procedures.
Ms. Dodson also advised petitioner of collection alternatives but
pointed out that two of those alternatives, an installment
agreement and the offer in compromise, required that the
taxpayer’s filing obligations be current. Ms. Dodson emphasized
that petitioner had not filed Federal income tax returns for any
of the years 1995 through 2000. She advised petitioner that
before the Service could evaluate any collection alternative,
petitioner must submit current financial information, must
indicate the monthly installment payment petitioner believed she
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could afford, and must file all delinquent tax returns. Ms.
Dodson requested that petitioner submit the requested information
by April 24, 2002, and stated that she would contact petitioner
to schedule the hearing under section 6330 after she had an
opportunity to review the information petitioner submitted.
Petitioner did not supply the information enumerated in Ms.
Dodson’s April 5, 2002, letter. Instead, petitioner sent a
letter dated April 10, 2002, to the Internal Revenue Service in
Oklahoma City, OK and Kansas City, MO, the pertinent part of
which stated as follows:
Claimant waives personal appearance. Claimant has not
waived 60 day due process and the administration is in
default. Claimant is verily aggrieved. The IRS, OTC
has all the books and records that indicate that
Claimant has no gainful activity. Claimant filed IRS
1040 and OTC 511 beginning January 1 1993 ending
December 31, 2001 no Federal income. Claimant never
received cash and the administration books and records
do indicate no cash receipts before the tax and liens.
Claimant is unable to do gainful work.
Although the Appeals Office in Oklahoma City received the letter
on April 12, 2002, the record is silent as to when Ms. Dodson
actually received and reviewed the letter.
By letter dated April 25, 2002, Ms. Dodson advised
petitioner that she had not received petitioner’s response to the
April 5, 2002, letter and set a new deadline of May 9, 2002, for
submitting the requested information. Ms. Dodson warned
petitioner that she would make a determination based on the
existing administrative record if she did not receive
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petitioner’s response by May 9, 2002. Petitioner responded in a
letter to Ms. Dodson dated April 30, 2002. Although several
exhibits were attached to the letter, none of the exhibits
supplied the information requested by Ms. Dodson. Petitioner’s
April 30, 2002, letter demanded that respondent pay her “all
allowances, credits, standard deductions, benefits 1993 through
2001.”
On May 9, 2002, the Appeals Office issued a Notice of
Determination Concerning Collection Action(s) under Section 6320
and/or 6330 in which it determined the following:
1. All legal and procedural requirements for the issuance
of the Notice of Intent to Levy had been met.
2. Prior to the Appeals officer’s consideration of the
issues raised by petitioner, the Appeals officer had had no
previous involvement with respect to petitioner’s 1993 and 1994
income tax liabilities.
3. None of the issues raised by petitioner were
meritorious.
4. Petitioner did not raise any spousal defenses.
5. Petitioner was not entitled to challenge the underlying
liabilities for 1993 and 1994 because she had received notices of
deficiency for those years.
6. The proposed levy action balanced the need for efficient
collection of taxes with the legitimate concern of the taxpayer
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that the collection action be no more intrusive than necessary
and was appropriate under the circumstances.
Petitioner mailed a letter dated May 19, 2002, to this Court
which this Court treated as a timely, but imperfect, petition
appealing respondent’s determination for 1993 and 1994. This
Court then mailed petitioner an order requiring her to file a
proper amended petition. On June 17, 2002, this Court received
and filed petitioner’s amended petition, which purported to cover
the period from “1993 through present”.
In her original petition, petitioner alleged, among other
things, that she had no money and requested that the Court send
her a form petition and “Pauper’s Affidavit”. Petitioner did not
make any allegations in either her original petition or in her
amended petition that the proposed levy was improper, nor did she
raise any justiciable issue regarding the collection of the
assessed liabilities other than a general assertion that she had
no money.
On November 25, 2002, respondent filed a motion for summary
judgment and to impose a penalty under section 6673. In that
motion, respondent contends that he is entitled to summary
adjudication as a matter of law, and he supports his contention
with a declaration from Appeals Officer Dodson, signed under
penalties of perjury, and related exhibits. Respondent also
moves for the imposition of a penalty under section 6673 because
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he alleges that petitioner instituted this proceeding primarily
for delay and her position is frivolous and groundless. By order
dated November 27, 2002, we directed petitioner to file a
response to respondent’s motion on or before December 27, 2002.
Petitioner’s response, which we received on December 18, 2002,
and filed as of that date, merely asserts that she is unable to
pay and appears to maintain that respondent owes her money.
Petitioner, however, did not support her contentions with any
documentation of her alleged inability to pay or of her
entitlement to a refund.
Discussion
I. Jurisdiction
Respondent’s notice of determination addressed only
respondent’s proposed levy action with respect to the taxable
years 1993 and 1994. Petitioner’s original petition referenced
only 1993 and 1994. In her amended petition, however, petitioner
identified the periods at issue as 1993 through the present. In
order to avoid any confusion regarding the periods at issue, we
consider, on our own initiative, our jurisdiction over years
other than 1993 and 1994.
It is well settled that questions of jurisdiction may be
raised by either party or the Court at any stage of a proceeding.
Moorhous v. Commissioner, 116 T.C. 263, 272 (2001) (citing Smith
v. Commissioner, 96 T.C. 10, 13-14 (1991)). Our jurisdiction
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under section 6330(d) “is dependent on the issuance of a valid
notice of determination and a timely petition for review.”
Offiler v. Commissioner, 114 T.C. 492, 498 (2000). If the
Appeals Office did not make a determination with respect to a
particular taxable period under section 6330, the absence of a
determination is grounds for dismissal of a petition regarding
such period. See id.
In this case, petitioner’s amended petition covered the
period from 1993 to the present. Respondent’s determination
under section 6330, however, only addressed 1993 and 1994, the
only years as to which respondent issued final notices of intent
to levy. Respondent issued no notices of intent to levy and made
no determination under section 6330 for years after 1994. We
hold, therefore, that we lack jurisdiction under section 6330
over any taxable years other than 1993 and 1994.
II. Respondent’s Motion
A. Summary Adjudication
Section 6330(a) provides that no levy may be made on any
property or right to property of any person unless the Secretary
has notified such person in writing of their right to a hearing
before the levy is made. If the person makes a request for a
hearing, a hearing shall be held by the Internal Revenue Service
Office of Appeals. Sec. 6330(b)(1). At the hearing, a taxpayer
may contest the existence and amount of the underlying tax
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liability only if the taxpayer 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. Sec.
6330(c)(2)(B); see also Sego v. Commissioner, 114 T.C. 604, 609
(2000).
Following a hearing, the Appeals Office must make a
determination whether the proposed levy action may proceed. In
so doing, the Appeals Office is required to take into
consideration the verification presented by the Secretary, the
issues raised by the taxpayer, and whether the proposed
collection action appropriately balances the need for efficient
collection of taxes with a taxpayer’s concerns regarding the
intrusiveness of the proposed collection action. Sec.
6330(c)(3). The taxpayer may petition the Tax Court or, in
limited cases, a Federal District Court for judicial review of
the Appeals Office’s determination. Sec. 6330(d).
If the taxpayer files a timely petition for judicial review,
the applicable standard of review depends on whether the
underlying tax liability is at issue. Where the underlying tax
liability is properly at issue, the Court reviews any
determination regarding the underlying tax liability de novo.
The Court reviews any other administrative determination
regarding the proposed levy action for abuse of discretion. Sego
v. Commissioner, supra at 610.
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1. Petitioner’s Underlying Tax Liabilities
for 1993-94
In her original petition and in her amended petition,
petitioner has asserted various arguments, most of which are
confused and sometimes unintelligible. As best we understand
them, however, the arguments appear to be directed to the
existence of the underlying tax liabilities for 1993 and 1994 and
are summarized below:
a. Petitioner never received wages because wagering on the
job is illegal.
b. Petitioner did not receive any payments in cash or
property; she received only Federal Reserve notes, which are not
cash, property, or assets of any kind.
c. The U.S. Government owes petitioner money in the form of
allowances and credits to which she is entitled which the
Government has failed and refused to pay.
Each of the above-described arguments challenges the existence or
amount of the underlying tax liabilities for 1993 and 1994. See
sec. 6330(c)(2)(B).
The undisputed facts in this case establish that petitioner
received a notice of deficiency for each of the years 1993 and
1994. Petitioner did not file any petition in this Court seeking
a redetermination of the proposed deficiencies. As a result,
upon the expiration of the statutory restriction on assessment
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set forth in section 6213(a), respondent assessed the disputed
liabilities.
A taxpayer may contest his or her underlying tax liability
in a section 6330 proceeding only if he or she did not receive a
notice of deficiency for the taxes at issue or did not otherwise
have an opportunity to dispute the tax liability. Sec.
6330(c)(2)(B). Petitioner received notices of deficiency for
1993 and 1994. Consequently, petitioner, as a matter of law, was
not entitled to dispute the existence or amount of the underlying
tax liabilities for those years in a section 6330 proceeding.
2. The Appropriateness of the Proposed Collection
Action
Petitioner does not allege that the administrative
proceeding in this case was defective. She alleges only that she
has no money. We interpret petitioner’s allegation as a
contention that the liabilities are uncollectible due to her
inability to pay.
We begin by noting that the material facts are not in
dispute. Petitioner has unpaid Federal income tax liabilities
for 1993 and 1994. Respondent issued a notice of intent to levy
to petitioner and advised her of her right to request a section
6330 hearing. Because petitioner had received notices of
deficiency for the years at issue, petitioner was not entitled to
contest the underlying liabilities. Sec. 6330(c)(2)(B).
Petitioner’s only recourse was to demonstrate that the proposed
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levy action was inappropriate, another collection alternative was
more appropriate, an appropriate spousal defense applied, or some
other relevant issue adversely affected respondent’s proposed
collection activity. Sec. 6330(c)(2). Nevertheless,
petitioner’s only contentions before the Appeals Office and
before this Court regarding the appropriateness of respondent’s
proposed collection action were that she is disabled and unable
to pay any liability and that she is entitled to a refund of
allowances and credits. Petitioner waived her right to appear
personally at the hearing under section 6330 and submitted no
information whatsoever to either the Appeals Office or this Court
documenting her assertion that she is unable to pay the subject
liabilities or that she is entitled to any refunds or credits.
Petitioner supplied us with no factual record on which we
could conclude that the Appeals Office’s determination permitting
the levy to proceed was an abuse of discretion. Consequently, we
shall grant respondent’s motion as to the summary adjudication
under Rule 121.
B. Respondent’s Request for Section 6673 Penalty
We turn now to that part of respondent’s motion that seeks a
penalty against petitioner under section 6673. Section 6673(a)
authorizes this Court to impose a penalty not in excess of
$25,000 on any taxpayer who institutes or maintains proceedings
in this Court primarily for delay, asserts a position in such
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proceeding that is frivolous or groundless, or unreasonably
failed to pursue administrative remedies.
While we acknowledge respondent’s concerns regarding
petitioner’s arguments in this case, we are unable to conclude on
this record that petitioner instituted or maintained these
proceedings primarily for delay or that petitioner unreasonably
failed to pursue available administrative remedies. Petitioner
timely filed her petition in this case and has not taken any
steps to unduly prolong this proceeding. She has responded to
this Court’s orders by filing a timely response to respondent’s
motion, and she has even prepared and submitted a trial
memorandum required by the Court’s standing pretrial order issued
on October 10, 2002. In addition, at the administrative level,
petitioner made several attempts to communicate with respondent
although the letters that she sent were confused, uninformative,
and not helpful in determining whether a levy was an appropriate
collection activity. The letters reflected a profound confusion
on the part of petitioner regarding her entitlement to refunds
and credits arising from such things as the personal exemption
and the credit for the disabled and elderly. We are not prepared
on this record to equate petitioner’s apparent confusion with a
deliberate attempt on her part to delay or obfuscate.
We also note that the record fails to establish that all of
petitioner’s claims were frivolous or groundless. While
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petitioner’s filings were confused, often unintelligible, and
sometimes reminiscent of protester rhetoric, not all of the
arguments contained in those filings were frivolous or groundless
on their face. Petitioner’s principal claim was that she is
impoverished. In fact, she may well be. Unfortunately,
petitioner did nothing to prove her financial condition at the
section 6330 hearing before the Appeals Office. Although we have
no record before us to review for abuse of discretion, that same
lack of a record forecloses any conclusion we might otherwise
have reached that petitioner’s claim of poverty was either
frivolous or groundless.3 Consequently, we shall deny that part
of respondent’s motion that seeks a penalty under section 6673.
We warn petitioner, however, that most of her arguments in this
case were, to the extent that we understood them, of the type
that might justify the imposition of a section 6673 penalty if
petitioner were to assert those arguments again in another
judicial proceeding in this Court.
Conclusion
We hold that the material facts are not in dispute and that
respondent is entitled to a summary adjudication as a matter of
law. We further hold that respondent correctly determined that
3
We also note that the administrative record contains no
indication that respondent warned petitioner that her arguments
were frivolous or groundless or that her arguments might result
in the imposition of a sec. 6673 penalty.
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collection by levy should proceed. We shall grant that part of
respondent’s motion seeking summary adjudication, deny that part
of respondent’s motion requesting the imposition of a penalty
under section 6673, and enter a decision upholding respondent’s
proposed collection action.
To reflect the foregoing,
An appropriate order and
decision will be entered.