T.C. Memo. 2003-70
UNITED STATES TAX COURT
WILLIAM A. SWANN AND JUDITH A. SWANN, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 8803-02L. Filed March 13, 2003.
William A. Swann and Judith A. Swann, pro sese.
Wendy S. Harris, for respondent.
MEMORANDUM OPINION
CHIECHI, Judge: This case is before the Court on respon-
dent’s motion for summary judgment and to impose a penalty under
section 66731 (respondent’s motion). We shall grant respondent’s
1
All section references are to the Internal Revenue Code in
effect at all relevant times. All Rule references are to the Tax
Court Rules of Practice and Procedure.
- 2 -
motion.
Background
The record establishes and/or the parties do not dispute the
following.
Petitioners resided in Las Vegas, Nevada, at the time they
filed the petition in this case.
On April 15, 1999, petitioners filed jointly a Federal
income tax (tax) return for their taxable year 1998 (1998 joint
return). In their 1998 joint return, petitioners reported total
income of $0, total tax of $0, and claimed a refund of $915.18 of
tax withheld. Petitioners attached to their 1998 joint return
Form W-2, Wage & Tax Statement, reporting wages, tips, and other
compensation of $24,724.88. Petitioners also attached a document
to their 1998 joint return (petitioners’ attachment to their 1998
joint return) that contained statements, contentions, and argu-
ments that the Court finds to be frivolous and/or groundless.2
On July 14, 2000, respondent issued to petitioners a notice
of deficiency (notice) with respect to their taxable year 1998,
which they received. In that notice, respondent determined a
deficiency in, and an accuracy-related penalty under section
6662(a) on, petitioners’ tax for their taxable year 1998 in the
2
Petitioners’ attachment to their 1998 joint return is very
similar to the documents that certain other taxpayers with cases
in the Court attached to their tax returns. See, e.g., Copeland
v. Commissioner, T.C. Memo. 2003-46; Smith v. Commissioner, T.C.
Memo. 2003-45.
- 3 -
respective amounts of $9,707 and $1,755.56.
Petitioners did not file a petition in the Court with
respect to the notice relating to their taxable year 1998.
Instead, on July 20, 2000, in response to the notice, petitioners
sent a letter (petitioners’ July 20, 2000 letter) to the Internal
Revenue Service that contained statements, contentions, argu-
ments, and requests that the Court finds to be frivolous and/or
groundless.3
On May 7, 2001, respondent assessed petitioners’ tax, as
well as any penalties and interest as provided by law, for their
taxable year 1998. (We shall refer to those assessed amounts, as
well as interest as provided by law accrued after May 7, 2001, as
petitioners’ unpaid liability for 1998.)
Respondent issued to petitioners the notice and demand for
payment required by section 6303(a) with respect to petitioners’
unpaid liability for 1998.
On August 23, 2001, respondent issued to petitioners a final
notice of intent to levy and notice of your right to a hearing
(notice of intent to levy) with respect to their taxable year
1998. On or about September 23, 2001, in response to the notice
of intent to levy, petitioners filed Form 12153, Request for a
3
Petitioners’ July 20, 2000 letter is very similar to the
letters that certain other taxpayers with cases in the Court sent
to the Internal Revenue Service in response to the notices issued
to them. See, e.g., Copeland v. Commissioner, supra; Smith v.
Commissioner, supra.
- 4 -
Collection Due Process Hearing (Form 12153), and requested a
hearing with respondent’s Appeals Office (Appeals Office).
Petitioners attached a document to their Form 12153 (petitioners’
attachment to Form 12153) that contained statements, contentions,
arguments, and requests that the Court finds to be frivolous
and/or groundless.4
On March 12, 2002, a settlement officer with the Appeals
Office (settlement officer) held an Appeals Office hearing with
petitioners with respect to the notice of intent to levy. At the
Appeals Office hearing, the settlement officer gave petitioners a
literal transcript of account (so-called MFTRAX) with respect to
their taxable year 1998.
On April 17, 2002, the Appeals Office issued to petitioners
a notice of determination concerning collection action(s) under
section 6320 and/or 6330 (notice of determination). An attach-
ment to the notice of determination stated in pertinent part:
Verification of Legal and Procedural Requirements
The Secretary has provided sufficient verification that
all legal and procedural requirements have been met.
Computer transcripts have been reviewed by Appeals,
verifying the assessments.
4
Petitioners’ attachment to Form 12153 contained statements,
contentions, arguments, and requests that are very similar to the
statements, contentions, arguments, and requests contained in the
attachments to Forms 12153 filed with the Internal Revenue
Service by certain other taxpayers with cases in the Court. See,
e.g., Copeland v. Commissioner, supra; Smith v. Commissioner,
supra.
- 5 -
The assessment was made, and notice and demand was
issued by regular mail to the taxpayers’ last known
address, as required under IRC 6303. The notices
required under IRC 6331(d) and IRC 6330 were combined
in Letter 1058, dated 08/23/2001, which was mailed
certified to the taxpayers’ last known address. The
taxpayers responded with Form 12153, Request for a
Collection Due Process Hearing, which was timely re-
ceived and was postmarked 09/20/2001. The taxpayers
are entitled to judicial review. This is a levy issue
only.
A MFTRAX transcript was reviewed, and a copy was pro-
vided to the taxpayers at the face-to-face Collection
Due Process hearing held on 03/12/2002. In attendance
were the taxpayer, a taxpayer witness, Settlement
Officer Donna Fisher, and Settlement Officer Renee
Swall. * * * The hearing was audio-recorded by the
taxpayer and Settlement Officer Donna Fisher.
Settlement Officer Donna Fisher has had no prior in-
volvement with respect to this tax liability.
Issues Raised by the Taxpayer
The taxpayers disagree with the assessment. They filed
a zero income, zero tax due return, attaching several
pages of non-filer arguments and a Form W-2 showing
taxable wages of $24,724.88. They also had additional
taxable income, bringing their total income to $52,556
for tax year 1998. Their return was examined, and they
were issued a statutory notice of deficiency, dated
07/14/2000, for additional tax of $9,707 plus penalty
and interest. They responded to the notice of defi-
ciency with a letter dated 07/20/2000. This letter
raised no relevant arguments, and they did not petition
the tax court. Since they had a previous opportunity
to dispute the assessment, they were precluded under
the Collection Due Process procedures from raising as
an issue the amount or existence of the underlying
assessment.
The taxpayers raised no non-filer arguments.
Collection alternatives were raised with the taxpayers.
They indicated they would full [sic] pay the tax if it
could be proven to them that they are liable for it.
However, the non-filer arguments attached to their 1998
- 6 -
return include, in part, their statement “... we know
that no section of the Internal Revenue Code:
1) Establishes an income tax ‘liability’...” In es-
sence, this argument is repeated again in their attach-
ment to their Form 12153. Therefore, further discus-
sion was considered non-productive. In addition, since
the taxpayers are not in filing compliance for tax year
2000, they are not now eligible for an offer or an
installment agreement.
Balancing the Need for Efficient Collection with Tax-
payer Concerns
The requirements of all applicable laws and administra-
tive procedures have been met. The assessment is
valid. Given the taxpayers [sic] continued lack of
compliance with the tax laws, a levy or levies on their
property and/or rights to property would not be consid-
ered more intrusive than necessary when balancing the
taxpayers’ concerns with the government’s need for
efficient collection of the taxes.
Discussion
The Court may grant summary judgment where there is no
genuine issue of material fact and 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). We
conclude that there are no genuine issues of material fact
regarding the questions raised in respondent’s motion.
Where, as is the case here, the validity of the underlying
tax liability is not properly placed at issue, the Court will
review the determination of the Commissioner of Internal Revenue
for abuse of discretion. Sego v. Commissioner, 114 T.C. 604, 610
(2000); Goza v. Commissioner, 114 T.C. 176, 181-182 (2000).
As was true of petitioners’ attachment to their 1998 joint
- 7 -
return, petitioners’ July 20, 2000 letter, and petitioners’
attachment to Form 12153, petitioners’ response contains conten-
tions, arguments, and requests that the Court finds to be frivo-
lous and/or groundless.5
Based upon our examination of the entire record before us,
we find that respondent did not abuse respondent’s discretion in
determining to proceed with the collection action as determined
in the notice of determination with respect to petitioners’
taxable year 1998.
In respondent’s motion, respondent requests that the Court
require petitioners to pay a penalty to the United States pursu-
ant to section 6673(a)(1). Section 6673(a)(1) authorizes the
Court to require a taxpayer to pay to the United States a penalty
in an amount not to exceed $25,000 whenever it appears to the
Court, inter alia, that a proceeding before it was instituted or
maintained primarily for delay, sec. 6673(a)(1)(A), or that the
taxpayer’s position in such a proceeding is frivolous or ground-
less, sec. 6673(a)(1)(B).
In Pierson v. Commissioner, 115 T.C. 576, 581 (2000), we
issued an unequivocal warning to taxpayers concerning the imposi-
5
The contentions, arguments, and requests set forth in
petitioners’ response are very similar to the contentions,
arguments, and requests set forth in responses by certain other
taxpayers with cases in the Court to motions for summary judgment
and to impose a penalty under sec. 6673 filed by the Commissioner
of Internal Revenue in such other cases. See, e.g., Smith v.
Commissioner, T.C. Memo. 2003-45.
- 8 -
tion of a penalty under section 6673(a) on those taxpayers who
abuse the protections afforded by sections 6320 and 6330 by
instituting or maintaining actions under those sections primarily
for delay or by taking frivolous or groundless positions in such
actions.
In the instant case, petitioners advance, we believe primar-
ily for delay, frivolous and/or groundless contentions, argu-
ments, and requests, thereby causing the Court to waste its
limited resources. We shall impose a penalty on petitioners
pursuant to section 6673(a)(1) in the amount of $2,500.
We have considered all of petitioners’ contentions, argu-
ments, and requests that are not discussed herein, and we find
them to be without merit and/or irrelevant.
On the record before us, we shall grant respondent’s motion.
To reflect the foregoing,
An appropriate order granting
respondent’s motion and decision
will be entered for respondent.