T.C. Memo. 2003-210
UNITED STATES TAX COURT
ROBERT H. DEPUTY, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 8183-02L. Filed July 16, 2003.
Robert H. Deputy, pro se.
Minakshi Tyagi-Jayasinghe, for respondent.
MEMORANDUM OPINION
GERBER, Judge: Respondent, on March 10, 2003, moved for
summary judgment on two questions: (1) Whether respondent may
proceed with collection of various income taxes and penalties
assessed against petitioner and (2) whether petitioner is liable
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for a penalty under section 66731 because this proceeding was
instituted or maintained for delay and/or petitioner’s position
is frivolous. Petitioner filed responses and a hearing on the
summary judgment motion was held on March 31, 2003, at Los
Angeles, California.
Background
Respondent has assessed income tax deficiencies, penalties,
and additions to tax against petitioner for 1992 and 1997.
Respondent has also assessed $500 civil penalties for frivolous
returns under section 6702. A Form 1058, Final Notice--Notice of
Intent to Levy and Notice of Your Right to a Hearing, was sent to
petitioner on February 5, 2001, and he requested a section 6330
hearing.
Petitioner’s 1992 income tax return, which was filed in
early May 1995, reflected $19,758 in wage income and also
reported a $2,426 income tax liability. On August 2, 1995,
respondent issued a notice of deficiency determining additions to
tax in the amounts of $553.03 and $107.20, for late filing of the
return and failure to pay estimated tax, under sections 6651(a)
and 6654(a), respectively. On April 15, 1996, respondent mailed
a notice and demand for payment to petitioner, and on
1
All section references are to the Internal Revenue Code,
and all Rule references are to the Tax Court Rules of Practice
and Procedure, unless otherwise indicated.
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June 10, 1996, petitioner filed a demand for abatement and claim
for a refund of his 1992 taxes. No abatement or refund was made.
On April 15, 1998, petitioner filed a 1997 income tax return
on which he reflected $30,000 of income, but no taxable income,
and he sought a refund of $948.24 in withheld tax. Attached to
the 1997 return was a Form W-2, Wage and Tax Statement,
reflecting the payment of $30,012.65 of wage income to
petitioner. On December 22, 1998, respondent mailed a notice of
deficiency to petitioner determining a $3,514 income tax
deficiency and a $76.97 addition to tax under section 6651(a).
With respect to that notice, petitioner filed what was deemed an
imperfect petition, and this Court, on March 18, 1999, ordered
him to file a proper petition. Petitioner failed to do so, and
on August 18, 1999, his case concerning the 1997 tax year was
dismissed for lack of jurisdiction.
Petitioner requested a precollection hearing in response to
the notice of intent to collect, and the Appeals officer set a
hearing date. Petitioner failed to attend the scheduled
conference and, instead, asked for and was granted a rescheduled
date for the hearing. The hearing was held on March 21, 2001,
and it was tape recorded. At the hearing, the Appeals officer
provided petitioner with Forms 4340, Certificates of Assessments,
Payments, and Other Specified Matters.
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At the hearing, petitioner denied the existence of the
notices of deficiency, notices and demand, and other pertinent
documents on the grounds that they were either not personally
signed by the Secretary of the Treasury or that they were not on
the official form. His arguments were without substance and
based on selective readings and interpretations of cases,
statutes, and related materials. He also confronted the Appeals
officer with a copy of the Internal Revenue Code and challenged
him to show where in that document petitioner was required to pay
any tax. Petitioner also asked whether he could delegate to the
Appeals officer a power of attorney, so that petitioner could
assign the responsibility of filing petitioner’s income tax
returns to the Appeals officer. Petitioner did not raise any
spousal defenses or collection alternatives at the hearing.
After the hearing, respondent issued notice of intent to proceed
with collection.
In documents that petitioner submitted to respondent he made
protester arguments; i.e., that he was not subject to the income
tax because he was an American citizen and that only nonresident
aliens and Federal employees are subject to Federal tax.
Petitioner also sent in materials concerning Irwin Shiff, a
reputed tax protester.
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Discussion
Respondent seeks summary judgment with respect to whether he
may proceed to collect certain outstanding tax liabilities
against petitioner and whether petitioner should be held liable
for a penalty under section 6673. Rule 121 provides for summary
judgment to be employed as to part or all of the legal issues in
controversy if there is no genuine issue as to any material fact
and a summary adjudication may be rendered as a matter of law.
See also Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520
(1992), affd. 17 F.3d 965 (7th Cir. 1994). In that regard,
summary judgment is intended to expedite litigation and avoid
unnecessary and expensive trials. Fla. Peach Corp. v.
Commissioner, 90 T.C. 678, 681 (1988).
There is no genuine issue as to any material fact in this
case. Respondent, pursuant to section 6331(a) was seeking to
levy on petitioner’s property. In accord with sections 6330(a)
and 6331(d), respondent provided petitioner with final notice of
intent to levy, which also included notice of petitioner’s right
to an administrative appeal of respondent’s decision to collect
the tax. In that regard, the Commissioner cannot collect by levy
without the opportunity for a taxpayer to seek an administrative
review of the decision to proceed with collection, and/or the
opportunity for judicial review of the administrative
determination. Davis v. Commissioner, 115 T.C. 35, 37 (2000).
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Petitioner opted for an administrative appeal and, after
respondent’s decision to go forward with collection, sought
review by this Court. Petitioner did not file a petition for his
1992 tax year or perfect his petition for his 1997 tax year
following respondent’s issuance of the notices of deficiency.
Accordingly, petitioner is afforded review by this Court solely
on the question of abuse of discretion because the validity of
the underlying liabilities is not at issue. Sec. 6330(c)(2)(B);
Sego v. Commissioner, 114 T.C. 604, 610 (2000).
Because petitioner is not entitled to question the
underlying tax liability, his administrative hearing was limited
to collection issues, including spousal defenses, the
appropriateness of respondent’s intended collection action, and
possible alternatives to collection. Petitioner questioned the
appropriateness of respondent’s proposed collection action by
questioning whether the Appeals officer had satisfied the
verification requirement of section 6330(c)(1). Petitioner
contends that respondent used incorrect forms for the notice and
demand and otherwise failed to meet the requirement because the
Secretary did not personally verify the liability.
At the administrative Appeals conference, petitioner was
provided with a transcript of his tax accounts detailing the
information underlying the assessment of the taxes in question.
Petitioner does not question whether all of the steps had been
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taken or performed. In effect, he questions the authenticity of
the documents used by respondent to meet the statutory
requirements. Section 6330(c)(1) does not require the
Commissioner to rely on a particular document to satisfy the
verification requirement. Wagner v. Commissioner, T.C. Memo.
2002-180; see also Roberts v. Commissioner, 118 T.C. 365, 371
(2002), affd. 329 F.3d 1224 (11th Cir. 2003). In addition, it
has been held that “‘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 * * *
[section 6303].’” Hughes v. United States, 953 F.2d 531, 536
(9th Cir. 1992) (quoting Elias v. Connett, 908 F.2d 521, 525 (9th
Cir. 1990)). Accordingly, we find petitioner’s arguments to be
specious and without merit.
At the administrative hearing, petitioner was provided with
documents that satisfied respondent’s verification requirement.
From the transcript of the hearing, it is also clear that
petitioner did not raise any issue provided for in section
6330(c)(2). To the extent that petitioner made arguments, they
were spurious and without merit. Lunsford v. Commissioner, 117
T.C. 183 (2001); Davis v. Commissioner, supra.
Accordingly, we hold that respondent has not abused his
discretion in determining to proceed with collection as set forth
in the February 5, 2001, Final Notice--Notice of Intent to Levy
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and Notice of Your Right to a Hearing, sent to petitioner with
respect to his tax liabilities.
Finally, respondent has moved for a penalty under section
6673 on the ground that petitioner’s arguments are frivolous and
that he instituted and maintained this proceeding merely for
delay. Section 6673 provides that this Court may impose a
penalty, not to exceed $25,000, where it is found that a
taxpayer’s position in the proceeding is frivolous and/or that
the proceeding was instituted and maintained primarily for delay.
Section 6673 penalties may be imposed in a lien and levy case.
Pierson v. Commissioner, 115 T.C. 576, 580-581 (2000).
In addition to questioning the authenticity of respondent’s
documentation, petitioner has interposed protester arguments
which have, on numerous occasions, been rejected by the courts.
In order to support his arguments, petitioner has selectively
picked phrases out of context from statutes and rulings. In so
doing, petitioner chose to ignore more current or complete
statements of the law. In that same vein, petitioner has chosen
to ignore and/or not follow case precedent and interpretation of
the statutory law. In that regard, petitioner has insinuated
that he is subject only to legal precedent of the Supreme Court
and that legal precedent of lower courts (such as the United
States Tax Court) is binding only with respect to the particular
taxpayer who was the subject of a specific case.
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Under these circumstances we are convinced and hold that
petitioner’s position in this proceeding is frivolous and has
been interposed primarily to protest the tax laws of this country
and/or to delay collection activity by respondent. We note that
petitioner was made aware on several occasions that his arguments
were considered frivolous and without merit. Accordingly, we
hold that petitioner is liable for a $2,000 penalty under section
6673(a)(1).
To reflect the foregoing,
An appropriate order and
decision will be entered granting
respondent’s motion for summary
judgment.