T.C. Memo. 2003-88
UNITED STATES TAX COURT
RICHARD H. FRANK AND TAMMY J. FRANK, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 3659-01L. Filed March 26, 2003.
Richard H. Frank and Tammy J. Frank, 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 (respondent’s motion). We
shall grant respondent’s motion.
Background
The record establishes and/or the parties do not dispute the
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following.
Petitioners resided in Las Vegas, Nevada, at the time they
filed the petition in this case.
On or before April 1, 1998, petitioners filed jointly a
Federal income tax (tax) return for their taxable year 1997 (1997
joint return). In their 1997 joint return, petitioners reported
total income of $0, total tax of $0, and claimed a refund of
$5,839.56 of tax withheld. Petitioners attached to their 1997
joint return Form W-2, Wage and Tax Statement, reporting wages,
tips, and other compensation of $78,556.14 and two Forms 1099-
MISC, Miscellaneous Income, reporting other income totaling
$7,600. Petitioners also attached a document to their 1997 joint
return (petitioners’ attachment to their 1997 joint return) that
contained statements, contentions, and arguments that the Court
finds to be frivolous and/or groundless.1
On October 7, 1999, respondent applied a payment of $35.96
to petitioners’ account with respect to their taxable year 1997.
On November 17, 1999, respondent issued to petitioners a
notice of deficiency (notice) with respect to their taxable year
1997, which they received. In that notice, respondent determined
a deficiency in, and an accuracy-related penalty under section
1
Petitioners’ attachment to their 1997 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.
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6662(a)2 on, petitioners’ tax for that year in the respective
amounts of $15,447 and $1,921.49.
Petitioners did not file a petition in the Court with
respect to the notice relating to their taxable year 1997.
Instead, on February 12, 2000, in response to the notice, peti-
tioners sent a letter (petitioners’ February 12, 2000 letter) to
the Internal Revenue Service that contained statements, conten-
tions, arguments, and requests that the Court finds to be frivo-
lous and/or groundless.3
On May 8, 2000, respondent assessed petitioners’ tax, as
well as a penalty and interest as provided by law, for their
taxable year 1997. (We shall refer to any such unpaid assessed
amounts, as well as interest as provided by law accrued after May
8, 2000, as petitioners’ unpaid liability for 1997.)
Respondent issued to petitioners the notice and demand for
payment required by section 6303(a) with respect to petitioners’
unpaid liability for 1997.
On August 17, 2000, respondent issued to petitioners a final
notice of intent to levy and notice of your right to a hearing
2
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.
3
Petitioners’ February 12, 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.
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(notice of intent to levy) with respect to their taxable year
1997. On or about September 13, 2000, in response to the notice
of intent to levy, petitioners filed Form 12153, Request for a
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 December 7, 2000, respondent’s Appeals officer (Appeals
officer) sent a letter to petitioner Richard H. Frank (Mr. Frank)
and a separate letter to petitioner Tammy J. Frank (Ms. Frank).
(We shall refer collectively to those two letters as the Appeals
officer’s December 7, 2000 letters). Those letters stated in
pertinent part:
I have received your request for a Due Process
Hearing. You disagree with Collection’s proposed
intent to levy; you state in your Form 12153,... “I am
challenging the appropriateness of (the) collection
action as specified in 6330(c)(2)(A)(ii) since the IRS
denied all my requests for the initial examinations and
interviews as provided for in Publications 1 & 5. [sic]
I have enclosed a copy of your transcript, which sup-
ports the validity of the assessment.
4
Petitioners’ attachment to Form 12153 contained statements,
contentions, arguments, and requests that are 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.
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* * * * * * *
A statutory notice of deficiency was issued to
your last known address on November 17, 1999 for 1997
but you failed to act upon this statutory notice. You
failed to petition the United States Tax Court for
redetermination. Thus, under IRC §6330(c)(2)(B), you
are precluded from challenging the underlying liability
for 1997 because you had a previous opportunity to
dispute such liability.
* * * I have scheduled a telephonic conference for
Wednesday, December 20, 2000 at 1:00 p.m. MST. * * *
* * * * * * *
If you have any questions, you may contact me at
the telephone number shown above any time before your
scheduled hearing.
Petitioners did not respond to the Appeals officer’s Decem-
ber 7, 2000 letters. Nor did petitioners advise the Appeals
officer that they objected to the telephonic hearing scheduled on
December 20, 2000, and wanted a face-to-face hearing.
On December 20, 2000, the Appeals officer held a telephonic
Appeals Office hearing with Mr. Frank with respect to the notice
of intent to levy.5 Prior to the Appeals Office hearing, the
Appeals officer gave petitioners a literal transcript of account
(so-called MFTRAX) with respect to their taxable year 1997.
On February 13, 2001, the Appeals Office issued a notice of
determination concerning collection action(s) under section 6320
and/or 6330 (notice of determination) to Mr. Frank and a separate
5
Ms. Frank did not participate in the telephonic Appeals
Office hearing held on Dec. 20, 2000.
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notice of determination to Ms. Frank. (We shall refer collec-
tively to those two notices as petitioners’ notices of determina-
tion). An attachment to each such notice of determination
stated:
! The Secretary has provided sufficient verification
that the requirements of any applicable law or
administrative procedure have been met.
! Your request for a hearing with Appeals was made
under IRC §6330 to prevent appropriate collection
action. You filed your 1997 tax return, reported
zero income and claimed a $5,839.56 refund. You
were issued a Statutory Notice of Deficiency for
1997 on November 17, 1999 and given the opportu-
nity to dispute the liability with the United
States Tax Court; you failed to do so. A tele-
phone [sic] hearing was held with you on December
20, 2000 to discuss alternative collection propos-
als for 1997. You failed to discuss or make any
alternative collection proposals for 1997.
! Without further cooperation, it is Appeals deci-
sion that the proposed collection action balances
the need for efficient collection of taxes with
the taxpayer’s [sic] legitimate concern that any
collection action be no more intrusive than neces-
sary.
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
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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 1997 joint
return, petitioners’ February 12, 2000 letter, and petitioners’
attachment to Form 12153, petitioners’ response to respondent’s
motion (petitioners’ response) contains statements, contentions,
arguments, and requests that the Court finds to be frivolous
and/or groundless.6
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 petitioners’ notices of determination with respect to peti-
tioners’ taxable year 1997.
Although respondent does not ask the Court to impose a
penalty on petitioners under section 6673(a)(1), the Court will
sua sponte determine whether to impose such a penalty. 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
6
The statements, contentions, arguments, and requests set
forth in petitioners’ response are similar to the statements,
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.
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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 proceed-
ing is frivolous or groundless, 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-
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 $3,500.
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.7
7
We shall address petitioners’ allegation in the petition
that they “did not receive the Collection Due Process Hearing
Required by Internal Revenue Code Section 6330". That is be-
cause, according to petitioners, “The telephone [sic] hearing did
not meet the requirements of the law” as they were entitled to a
“face to face hearing as required by law”. The record estab-
lishes that the Appeals officer scheduled an Appeals Office
telephonic hearing for Dec. 20, 2000. The record also estab-
(continued...)
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On the record before us, we shall grant respondent’s motion.
To reflect the foregoing,
An order granting respondent’s
motion and decision will be entered
for respondent.
7
(...continued)
lishes that petitioners never advised the Appeals officer that
they objected to the telephonic hearing scheduled for that date
and requested a face-to-face hearing. In fact, neither Mr. Frank
nor Ms. Frank responded to the Appeals officer’s December 7, 2000
letters scheduling a telephonic hearing. Although the record
does not disclose why Ms. Frank did not participate in the
telephonic hearing scheduled by the Appeals officer, Mr. Frank
participated in that hearing. On the record before us, we reject
any contention of petitioners that sec. 6330 entitled them to a
face-to-face hearing in the instant case.