2004 Tax Ct. Memo LEXIS 89">*89 Decision will be entered for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
CHIECHI, Judge : Petitioners filed the petition in this case in response to a notice of determination concerning collection action(s) under
We must decide whether respondent abused respondent's discretion in determining to proceed with the collection action as determined in the notice of determination with respect to petitioners' taxable years 1996, 1997, and 1999. We hold that respondent did not abuse respondent's discretion.
FINDINGS OF FACT
Many of the facts have been stipulated and are so found.
Petitioners resided in Newport News, Virginia, at the time they filed the petition in this case.
During 1996, petitioner Gerald L. Frey (Mr. Frey) received wages of $ 37,849.88 from Blackhawk Industries, Inc. (Blackhawk Industries), and petitioner Jessica P. Frey (Ms. Frey) received wages totaling $ 20,799.48 from Smithfield Apartments Corp. (Smithfield Apartments) and Bailey Enterprises, Inc. 2004 Tax Ct. Memo LEXIS 89">*90 (Bailey Enterprises). During 1997, Mr. Frey received wages of $ 45,961 from Blackhawk Industries, and Ms. Frey received wages totaling $ 21,998 from Smithfield Apartments and Bailey Enterprises. During 1999, Mr. Frey received wages totaling $ 35,630.92 from the Virginia Department of Transportation (Virginia Transportation Department), Employment Services, Inc. (ESI), and ECPI College of Technology (ECPI College) and unemployment compensation of $ 1,596.
Although Mr. Frey received wages during the years at issue as well as unemployment compensation during 1999 and Ms. Frey received wages during 1996 and 1997, petitioners did not report such wages and unemployment compensation in any Federal income tax return (return) that they submitted to the Internal Revenue Service (IRS).
On or about August 17, 1998, respondent prepared a substitute for return for petitioners' taxable year 1996.
On October 30, 1998, respondent issued a notice of deficiency to petitioners with respect to their taxable year 1996. In that notice, respondent determined that for 1996 petitioners had a deficiency of $ 6,332, an addition to Federal income tax (tax) under
On June 7, 1999, respondent assessed petitioners' tax of $ 6,332, as well as additions to tax under
On June 7, 1999, respondent issued to petitioners a notice of balance due with respect to petitioners' unpaid liability for 1996.
On November 22, 1999, respondent received from petitioners Form 1040, U.S. Individual Income Tax Return, for their taxable year 1996 (1996 Form 1040). The 1996 Form 1040 that petitioners2004 Tax Ct. Memo LEXIS 89">*92 submitted to the IRS did not contain petitioners' original signatures but contained copies of petitioners' signatures dated November 1, 1999. In their 1996 Form 1040, petitioners reported total income of $ 0, total tax of $ 0, and claimed a refund of $ 3,839.28 of tax withheld. Petitioners attached to their 1996 Form 1040 respective Forms W-2, Wage and Tax Statements (Forms W-2), issued by Blackhawk Industries, Smithfield Apartments, and Bailey Enterprises showing wages, tips, and other compensation totaling $ 58,649.36. Petitioners also attached to their 1996 Form 1040 a document (petitioners' attachment to their 1996 Form 1040), which stated in pertinent part:
I, Gerald L and Jessica P Frey, am submitting this as part of my
1996 income tax return, even though I know that no section of
the Internal Revenue Code:
1) Establishes an income tax "liability" as, for
example,
respect to wagering, alcohol, and tobacco taxes;
2) Provides that income taxes "have to be paid on the
basis of a return" -- as, for example, Code Sections
2004 Tax Ct. Memo LEXIS 89">*93
taxes; I am filing anyway because I know the government has
prosecuted others for failing to file income tax returns by
(erroneously) invoking
Therefore, this return is not being filed voluntarily but
is being filed out of fear that if I did not file this
return I could also be (illegally) prosecuted for failure
to file an income return for the year 1996.
3) In addition to the above, I am filing even though the
"Privacy Act Notice" as contained in a 1040 booklet
clearly informs me that I am not required to file. It does
so in at least two places.
a) In one place, it states that I need only file a
return for "any tax" I may be "liable"
for. Since no Code Section makes me "liable"
for income taxes, this provision notifies me that I do
not have to file an income tax return.
2004 Tax Ct. Memo LEXIS 89">*94 b) In another place, it directs me to
"Whenever in the judgment of the Secretary it is
necessary, he may require any person by notice served
on such person; or by regulations, to make such
returns, render such statements, or keep such records,
as the Secretary deems sufficient to show whether or
not such person is liable for the tax under this
title." Since the Secretary of the Treasury did
not "serve" me with any such "notice"
and since no legislative regulation exists requiring
anyone to file an income tax return, I am again
informed by the "Privacy Act Notice" that I am
not required to file an income tax return.
4) With respect to the information I included in my return,
I wish to point out that the courts have ruled that: "A
(1040) form with 'zeros' inserted in2004 Tax Ct. Memo LEXIS 89">*95 the space provided . .
. qualified as a return." See
Vegas bankruptcy court held that "Zeroes entered on a
Form 1040 constitutes a return."
5) Please note that my 1996 return also constitutes a claim
for refund pursuant to
6) It should also be noted that I had "zero" income
according to the Supreme Court's definition of income (See
Note #1) * * * since I had no earnings in 1996, that would
have been taxable as "income" under the
Corporation Excise Tax Act of 1909, I can only swear to having
"zero" income in 1996. Obviously, since I know the
legal definition of "income", if I were to swear to
having received any other amount of "income," I
would be2004 Tax Ct. Memo LEXIS 89">*96 committing perjury under both
either statute, I can only swear to have "zero"
income for 1996.
7) I am also putting the IRS on notice that my 1996 tax
return and claim for refund can not be considered
"frivolous" on any basis -- pursuant to
requires me to make a "self-assessment."
Therefore, how can I be charged with a penalty for not
doing something -- allegedly incorrectly -- that no
statute requires me do at all? * * *
* * * * * * *
11) Should the Service disagree with the figures and
amounts shown on my tax return and claim for refund, then I
demand an office or field audit to discuss these
differences * * *. In addition, if any
"determination" is made that changes in my return
are warranted, 2004 Tax Ct. Memo LEXIS 89">*97 I demand to be notified as to where and
when I may "inspect" the "text of any
written determination and any background file documents
relating to such a determination" as provided by
*Note #1: The word "income is not defined in
the Internal Revenue Code.
. But, as stated above, it can only be a
derivative of corporate activity. The Supreme Court has held
this numerous times. * * * [Reproduced literally.]
Respondent did not process and file petitioners' 1996 Form 1040 as a tax return. That was because respondent determined that that document was frivolous.
On or about November 13, 2000, respondent prepared a substitute for return for petitioners' taxable year 1997.
On a date not disclosed by the record, respondent issued a notice of deficiency to petitioners with respect to their taxable year 1997. Petitioners did not file a petition in the Court with respect to that notice.
On June 5, 2001, respondent received from petitioners Form 1040A, U. 2004 Tax Ct. Memo LEXIS 89">*98 S. Individual Income Tax Return, for their taxable year 1997 (1997 Form 1040A). The 1997 Form 1040A that petitioners submitted to the IRS contained petitioners' original signatures dated May 30, 2001, and copies of petitioners' signatures dated November 1, 1999. In their 1997 Form 1040A, petitioners reported total income of $ 0, total tax of $ 0, and claimed a refund of $ 5,122.83 of tax withheld. Petitioners did not attach to their 1997 Form 1040A any Forms W-2. Petitioners attached to their 1997 Form 1040A a document (petitioners' attachment to their 1997 Form 1040A), which was identical to petitioners' attachment to their 1996 Form 1040 except that petitioners' attachment to their 1997 Form 1040A made references to their taxable year 1997 while petitioners' attachment to their 1996 Form 1040 made references to their taxable year 1996.
Respondent did not process and file petitioners' 1997 Form 1040A as a tax return. That was because respondent determined that that document was frivolous.
On August 13, 2001, respondent assessed petitioners' tax of $ 8,035, as well as additions to tax under
On August 13, 2001, respondent issued to petitioners a notice of balance due with respect to petitioners' unpaid liability for 1997.
On or about April 15, 2000, respondent received from petitioners Form 1040 for their taxable year 1999 (1999 Form 1040). In their 1999 Form 1040, petitioners reported total income of $ 0 and total tax of $ 0. Petitioners attached to their 1999 Form 1040 (1) respective Forms W-2 issued by the Virginia Transportation Department, ESI, and ECPI College showing wages, tips, and other compensation paid to Mr. Frey totaling $ 35,630.92 and (2) Form 1099- G, Statement for Recipients of Certain Government Payments, showing unemployment compensation paid to him of $ 1,596. Respondent processed and filed petitioners' 1999 Form 1040 as a tax return.
On June 15, 2001, respondent issued a notice of deficiency to petitioners with respect to their taxable year 1999. In that notice, respondent determined that for 1999 petitioners had a deficiency of $ 3,356. Petitioners2004 Tax Ct. Memo LEXIS 89">*100 did not file a petition in the Court with respect to the notice of deficiency relating to their taxable year 1999.
Instead, on September 1, 2001, in response to that notice, petitioners sent a letter to Gwen A. Krauss, Director, IRS Service Center. That letter stated in pertinent part:
Your Deficiency Notice dated 6/15/01
According to your "Deficiency Notice" of above date
(Attachment 1), there is an alleged deficiency with respect to
my 1999 income tax of $ 3,356.00, and if I wanted to "contest
this deficiency before making payment," I must "file a
petition with the United States Tax Court." Before I file,
pay, or do anything with respect to your "Notice," I
must first establish whether or not it was sent pursuant to law,
whether or not it has the "force and effect of law," and
whether you had any authority to send me the notice in the first
place.
* * * * * * *
Let me further point out that IR Code
identified in the 1040
2004 Tax Ct. Memo LEXIS 89">*101 "comply with regulations." Nothing in the
"comply" with, or pay attention to, letters and/or
alleged "determinations" sent to me by various and
sundry employees of the IRS.
Please note that
determines that there is a deficiency in respect of any tax
. . . he is authorized to send notice of such deficiency, etc.,
etc., etc." However, the "Notice" I received was not
sent by the Secretary, but by Gwen A Krauss, who is identified
as being the Director of the IRS Service Center in Chamblee,
Georgia, and I have no way of knowing whether she has been
delegated by the Secretary to send out such notices on the
Secretary's behalf. So before I do anything at all with respect
to your "Notice," I would have to see a Delegation Order
from the Secretary of the Treasury delegating to Gwen A Krauss
the authority to send out Deficiency Notices.
In addition, I would also like you to send me (or identify for
me) the legislative regulations2004 Tax Ct. Memo LEXIS 89">*102 that you claim implement
from the IRS Procedures Manual (MT 1218-196, and page P-6-40),
which points out that the IRS is required to "make available
to all taxpayers comprehensive, accurate, and timely information
on the requirements of tax law and regulations." So,
pursuant to this provision from your Procedures Manual, I am
asking that you identify (" make available") for me the
legislative regulations that you claim implement both
them.
Without your furnishing me with these documents and information,
I will be unable to "ascertain" (pursuant to the
Federal Crop decision) whether the individual who sent me
the Deficiency Notice was authorized to do so, and whether I am
legally required to take any notice of it. I am obviously
unwilling to "take the risk" referred to by the Supreme
Court in the above cited case. [Reproduced literally.]
On February 4, 2002, respondent assessed petitioners' tax of $ 3,356, as well as2004 Tax Ct. Memo LEXIS 89">*103 interest as provided by law of $ 520.25, for their taxable year 1999. (We shall refer to those assessed amounts, as well as interest as provided by law accrued after February 4, 2002, as petitioners' unpaid liability for 1999.)
On February 4, 2002, respondent issued to petitioners a notice of balance due with respect to petitioners' unpaid liability for 1999.
On June 21, 2002, 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 1996 and a separate notice of intent to levy with respect to their taxable years 1997 and 1999.
On or about July 20, 2002, in response to the notice of intent to levy with respect to their taxable year 1996, petitioners filed Form 12153, Request for a Collection Due Process Hearing (Form 12153), and requested a hearing with respondent's Appeals Office (Appeals Office). On the same date, in response to the notice of intent to levy with respect to their taxable years 1997 and 1999, petitioners filed Form 12153 and requested a hearing with the Appeals Office. Petitioners attached, inter alia, a document to their Form 12153 with respect to their taxable2004 Tax Ct. Memo LEXIS 89">*104 year 1996 (petitioners' attachment to their 1996 Form 12153) and a document to their Form 12153 with respect to their taxable years 1997 and 1999 (petitioners' attachment to their 1997 and 1999 Form 12153). Petitioners' attachment to their 1996 Form 12153 and petitioners' attachment to their 1997 and 1999 Form 12153 were identical and set forth, inter alia, the same types of statements, contentions, arguments, requests, and questions that petitioners set forth in petitioners' attachment to their 1996 Form 1040 and petitioners' attachment to their 1997 Form 1040A. In addition, petitioners' attachment to their 1996 Form 12153 and petitioners' attachment to their 1997 and 1999 Form 12153 stated in pertinent part:
1) * * * at my CDP hearing I demand that the appeals officer
have at the hearing the delegation order from the
Secretary of the Treasury delegating to the
Operations Manager, Automated Collection System the authority to
notify me to my right for a CDP hearing * * *.
* * * * * * *
b) * * * I am requesting that you have at the CDP hearing *
* * 2004 Tax Ct. Memo LEXIS 89">*105 a "delegation" order, emitting directly from
the Secretary, authorizing the IRS employee who signed for
him (them), the authority to impose and file such notices
of liens against us.
c) In lieu of having such a "delegation order," I
am requesting that you have the job description of IRS
employee(s) and the individual who signed the notice at
issue for him to see if any such authority is included in
their job description.
* * * * * * *
2) The document also says that "We have made a demand
for payment of this liability." (Emphasis added)
a) Please note (as explained in paragraph 4 herein), we
claim we never received such a "demand" for
payment.
1) If you claim otherwise, than I demand that you have
at the CDP hearing the Form Number of the document
that you claim was sent to us as constituting the
"demand" referred to in paragraph 2) 2004 Tax Ct. Memo LEXIS 89">*106 above.
2) Since the Code Section establishing the
"liability" referred to above is also not
identified, I am requesting that you specifically
identify the Code Section establishing * * *
3) VERIFICATION FROM THE SECRETARY
I also expect you to have at the CDP hearing
"verification from the Secretary that the requirements of
any applicable law or administrative procedure have been
met." That is the specific statement from the Secretary (or
his delegate) that THE LAW requires you to have. PLEASE BE
ADVISED THAT
VERIFICATION BE "PRESENTED" TO US. Please don't
tell us at the CDP hearing that in lieu of having that specific
document from the Secretary as required by law to be
"presented" to us, that you have some unsigned, IRS
transcript. * * * I will not accept any claim of yours that
"the courts have held that an unsigned, computer printout
satisfies the legal requirements of
"verification (from the Secretary) . . . that the
requirements of any applicable law or administrative procedure
have been met," stated in the law. * * *
4) Also, pursuant to
any income taxes there has to be an assessment based on a
"return or list." I filed a return showing no taxes due.
Therefore, I don't see how the IRS could have made a lawful
assessment from a return showing no income taxes due and
owing, unless the IRS prepared another 1040 showing a
different amount due. Therefore, at my CDP hearing, I am
demanding that the following items be produced and made
available to us:
a) Proof of assessment. * * * Please have a form 4340 at
my CDP hearing certifying that such an assessment has been
made.
* * * * * * *
6) We claim there is no underlying, statutory liability in
connection with the income taxes at issue.
a) In addition, we are challenging the "existence"
of2004 Tax Ct. Memo LEXIS 89">*108 the underlying tax liability as the law (
specifically permit us to do. If the appeals officer
believes otherwise, he need only identify for us the Code
Section that establishes such a liability * * *. The * * *
IR Code * * * that we will bring to the CDP hearing lists
some 40 taxes under the caption "Liability for
tax"; however, I cannot find an entry for "income
taxes." * * *
* * * * * * *
b) The issue of the "existence" of the
"underlying tax liability" is certainly relevant as
to whether or not we owe the income taxes at issue. Since
the legal "existence" of an income tax liability is
such an easy thing to establish * * * why wouldn't the
appeals officer simply identify such a Code section if it
exists? The only possible reason for him not doing so,
is if that no such Code section does exist.
c) One2004 Tax Ct. Memo LEXIS 89">*109 (nonsensical) excuse the appeals officer might offer
* * * is to claim that he is not going to get into this
issue because we allegedly got a notice of deficiency and
so we had an "opportunity to dispute such a tax
liability" as mentioned in
However, we never had such an opportunity. Attached, as
Exhibit D, is a copy of the "deficiency notice"
[1999] we received. It was prepared and sent out by Gwen
Krauss who is identified as Director of the Customer
Service Center, Chamblee Georgia. However, Code Section
"determines that there is a deficiency" and that
"he is authorized to send such notice." * * *
Therefore, after receiving those Deficiency Notices from
Gwen Krauss * * * we wrote her * * * asking her to supply
us with her delegation of authority from the Secretary to
send out such Notices (pursuant to Code Sections
letter. We have since received proof that Gwen Krauss
has no such delegation of authority. Therefore, the
Deficiency Notices we received from her were invalid -- and
we are barred from petitioning Tax Court from invalid
Deficiency Notices. Beside, we are not challenging the
"amount" of the alleged "deficiency": we
are challenging its "existence," as a matter of
law. However, since Tax Court is not a court of law (See
Court would have no jurisdiction to consider the legal
question of whether or not the Internal Revenue Code
establishes an income tax "liability" as a matter
of law.
* * * * * * *
7) We claim there is no statute requiring us "to pay"
the income taxes at issue.
Another relevant issue is "Whether or not there is a
statute requiring us 'to pay' the income taxes at issue?"
2004 Tax Ct. Memo LEXIS 89">*111 Code
any tax" can there be "a lien in favor of the United
States." Therefore, before there can be a "lien in favor
of the United States" there must be a statutory requirement
"to pay" the income taxes at issue. The Index of the
Code we will bring to our CDP hearing contains a Section
entitled "Payment of tax." (Attached as Exhibit H) It
contains over 60 entries. * * * however, there is no entry we
can find for "income taxes." It is therefore our
belief that there is no law requiring us "to pay" income
taxes, and this certainly is a "relevant issue" that is
appropriately raised at a CDP hearing -- since, if the appeals
officer can not identify any statute that requires us "to
pay" income taxes, how can he approve an IRS lien on
our property in connection with a tax the payment for which he
can not find shown in any law?
* * * * * * *
8) We maintain that there is no law that authorizes the IRS
to claim that we owe more in income taxes2004 Tax Ct. Memo LEXIS 89">*112 * * * than the
"zeros" we reported on our income tax returns for those
years [1996, 1997, and 1999].
* * *
respect to taxes "payable by stamp," the Secretary is
authorized "to estimate the amount of tax which has been
omitted to be paid" by stamp. However, we cannot find
any provision in
Section that authorizes the Secretary (let alone the IRS) to
similarly "estimate the amount of tax" which we
allegedly omitted from our 1996[, 1997, and 1999] tax returns.
Therefore it is our contention that no law authorizes the
Secretary (let alone any IRS agent) to determine that we owe
more in income taxes than the "zeros" we reported on our
1996[, 1997, and 1999] income tax returns. * * *
* * * * * * *
This is also to remind you that I will be tape recording
the CDP hearing and I will have a court reporter present. I will
also have a witness present. [Reproduced literally; fn. refs.
2004 Tax Ct. Memo LEXIS 89">*113 omitted.]
On October 21, 2002, the settlement officer sent a letter to petitioners with respect to their taxable years 1996, 1997, and 1999. That letter stated in pertinent part:
Your Collection Due process appeal request has been assigned to
me for consideration.
I will contact you as soon as I am able to review your file and
determine if we can resolve your case by correspondence or phone
in lieu of a personal conference. If a personal conference is
needed, I will schedule a meeting with you or your
representative.
* * * * * * *
In order for your appeal to be considered, you must be in [sic]
current in filing tax returns. If you have not done so, please
file the delinquent return(s) immediately. * * *
On October 23, 2002, the settlement officer sent a letter to petitioners with respect to their taxable years 1996, 1997, and 1999. That letter stated in pertinent part:
HEARING IN PERSON OR BY TELEPHONE
o IN PERSON should you prefer to discuss the
case in person, I have scheduled2004 Tax Ct. Memo LEXIS 89">*114 a conference for
November 6, 2002 at 10:00 AM * * *
o TELEPHONE HEARING If you prefer a telephone
hearing, please call me at * * *
o CONFIRM WITHIN 7 DAYS please call me within
7 days of the date of this letter to confirm whether you
will appear. If the date is not convenient, I will be
happy to reschedule the hearing.
* * * * * * *
Please see the tax transcripts and important
information enclosed concerning your hearing.
On October 31, 2002, the settlement officer sent a letter to petitioners with respect to their taxable years 1996, 1997, and 1999. That letter stated in pertinent part:
This letter is to confirm that your hearing date is changed to
November 20 at 10:00 AM. per your request.
* * * Our records also indicate that you have not filed
your 1998 and 2001 income tax returns. If you have filed them,
please provide your copy of the returns.
On November 13, 2002, petitioners sent the settlement officer a letter. 2004 Tax Ct. Memo LEXIS 89">*115 That letter stated in pertinent part:
We have requested a Collection Due Process Hearing as
provided for in
scheduled for November 20, 2002. We are writing to make clear
our position as relates to the harassment, threats of seizures
and liens by the IRS.
Based on these omissions we are contacting the Taxpayer
Advocate for resolution of these options.
Further, we are requesting an impartial officer, for the up
coming Due Process Hearing. This request in based on the
partiality of the current officer in indicating that we must be
current in filing tax returns for our appeal to be considered.
This is blatantly false. * * *
We intend to record the hearing and have a witness in
attendance.
* * * * * * *
It is clear that before any appeals officer can recommend
the seizure of any property pursuant to
that statute) 2004 Tax Ct. Memo LEXIS 89">*116 that person has to be statutorily "liable to
pay" the taxes at issue, and only after he "neglects or
refuses to pay the same within 10 days after notice and
demand," can his property be subject to seizure. Therefore,
apart from the appeals officer having to identify the statute
that makes me "liable to pay" the taxes at issue, he
needs to have a copy of the statutory "notice
and demand" which I "neglected" and
"refused" to pay. In addition, we can't be
"liable" to pay an income tax, if the tax in question
has never been assessed against me as required by Code Sections
our assessments. And since (as provided by Code Section
be based on filed returns, I will have to see a copy of
the return from which any claimed assessment is based.
In lieu of producing these specific documents "verification
from the Secretary (of the Treasury) that the requirements of
any applicable law or administrative procedure have been
2004 Tax Ct. Memo LEXIS 89">*117 met," will be acceptable. But the appeals officer better
have either the specific documents as identified above, or
"verification from the Secretary." If the appeals
officer cannot produce neither document, than no Due Process
Hearing should be scheduled until he has those documents in
hand. If the appeals officer recommends "enforcement of
collection action including levy," without having produced
these specific documents, then it will be obvious that the
appeals officer is simply attempting to thwart and
circumvent the Code
continue its practice of making the illegal seizures uncovered
by the Senate Finance Committee * * * which
THE "DUE PROCESS HEARING" was designed to
eliminate.
Summarizing: We requested a "Due Process Hearing"
as outlined in Form 12153. We are "challenging the
appropriateness of (the) collection action" as specified in
the initial "examinations" and "interviews" as
provided for in Publications 12004 Tax Ct. Memo LEXIS 89">*118 & 5. In addition, no lien for
taxes pursuant to Code
because no valid, underlying assessment was ever made. In
addition, we never received the statutory "notice and
demand" for payment of the taxes at issue as required by
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 Treas. Reg.
which identifies that specific document as being the official,
statutory "Notice and Demand" for payment.
In addition, we are "challenging the existence of the
underlying tax liability" as we are authorized to do in Code
notice of deficiency in connection with any of the years at
issue. We are also requesting that the appeals officer have at
the "Due Process Hearing" a copy of the "Summary
Record of Assessment" (Form 22 C) together with the
"pertinent parts of the assessment which2004 Tax Ct. Memo LEXIS 89">*119 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
Also you are reminded that the
Secretary (or someone with delegated authority from him)
that the requirements of any applicable law or administrative
procedures have been met." So unless you have, at the very
least, that document, you should not even schedule a Due Process
Hearing. * * * [Reproduced literally; fn. ref. omitted.]
On November 16, 2002, petitioners sent a letter to "Internal Revenue Service Appeals Office Supervisor". In that letter, petitioners stated in pertinent part:
This is to indicate irregularities in our requested Due Process
Hearing. According to
single year is at issue for each hearing/appeal. Yet we are
confronted with a partial (prejudiced) appeals officer for the
following reasons:
1. 2004 Tax Ct. Memo LEXIS 89">*120 Multiple years of [sic] combined into a single session,
we are only allotted one hearing/appeal per year in
question.
2. The hearing/appeals officer is making demands outside of
current". Which is blatantly incorrect and harassing.
On November 20, 2002, respondent's settlement officer held an Appeals Office hearing with petitioners regarding the respective notices of intent to levy with respect to their taxable year 1996 and their taxable years 1997 and 1999. James Cain accompanied petitioners to the Appeals Office hearing. The settlement officer did not allow petitioners to make an audio recording of the Appeals Office hearing.
On November 26, 2002, the settlement officer sent a letter to petitioners (settlement officer's November 26, 2002 letter) with respect to their taxable years 1996, 1997, and 1999. That letter stated in pertinent part:
This letter is pertaining to your letter dated 11-13-2002 and
the hearing on 11-20-2002. I will attempt here to address the
points raised in your appeals request and also discuss2004 Tax Ct. Memo LEXIS 89">*121 those
matters that can be considered under this process.
Manual
Internal Revenue Service cannot consider arguments based on
moral, religious, political, constitutional, conscientious or
similar grounds. Formal appeal procedures do not extend to these
types of arguments.
On the issue of impartiality, the statute defines impartiality
as "prior involvement with respect to the same unpaid
tax." You have not alledged [sic], and I, the Settlement
Officer have had no such prior involvement with your unpaid tax
liability. With regards to your request of the delegation
authority of an IRS official, please see the attachment listing
court cases showing the courts presume that the IRS official(s)
have properly discharged their official duties if there is no
clear evidence to the contrary. The burden of proof is upon you
to prove that I am not an impartial officer.
Your 1996 and 1997 taxes have not been discharged by the
2004 Tax Ct. Memo LEXIS 89">*122 Bankruptcy Court. You can contact your bankruptcy attorney for
more information.
Your request for appeal on form 12153 is a Collection Due
Process (CDP) Appeals. The three key points that Appeals can
consider in a CDP hearing involve items such as those listed
below:
1. Applicable administrative procedures
2. Relevant issues such as innocent spouse, collection
alternatives and underlying liability.
3. Efficient collection measures versus intrusiveness.
Based upon a review of your case file, I find no error in the
part of the Service in sending you the proper notices of an
outstanding liability. The records indicated that notices were
issued for all of the years reflecting a balance due and asking
you either pay in full or call the IRS to discuss payment
arrangements. To date, no agreement has been instituted.
The underlying liability appears to be correct. The assessments
were based on your income and withholdings. You have not pointed
to any errors and you have been unwilling to discuss2004 Tax Ct. Memo LEXIS 89">*123 collection
alternatives which include full payment, monthly payment, offer
in compromise etc.
Please respond within 2 weeks of the date of this letter if you
have valid issues or want to propose a payment resolution. If I
do not receive a timely response, I will proceed with the
issuance of a decision letter that will sustain the levy action.
On November 27, 2002, the IRS Team Manager for Area 2, General Appeals, wrote a letter to petitioners. That letter stated in pertinent part:
This is in response to your letter dated November 16, 2002 that
was addressed to this office. I apologize for not responding
earlier but I have been away from the office.
In your letter you are concerned about the fact that the
Settlement Officer who met with you considered more than one
year (return) at the meeting and that she asked about subsequent
filings of Federal tax returns. You also ask that this matter be
reassigned. There is nothing wrong with the Settlement Officer's
handling of either of these items. I, therefore, will not
reassign this matter to another2004 Tax Ct. Memo LEXIS 89">*124 Appeals or Settlement Officer.
There is nothing wrong with the Settlement Officer considering
all of the tax periods before Appeals at one hearing. In
addition, taxpayers must be current in the filing of their
Federal tax returns before we can offer collection alternatives
to help them. Thus, the Settlement Officer was merely asking
about subsequent filings to see if she could offer collection
alternatives to you for the amounts owed in the periods under
our jurisdiction. Both actions are appropriate.
In addition, I would urge you to "step back and look at the
course of action" you are taking. The returns you have filed
showing nothing but zeros, and the arguments you have made, have
no merit whatsoever. The arguments you are making are frivolous
and make no sense. In fact, if you pursue these arguments in the
courts, the Court will, in all probability, and should, assert
it's own penalty for filing a frivolous lawsuit. The court cases
clearly support the Service's position on the issues you raise
and indicate that the courts are tired of these2004 Tax Ct. Memo LEXIS 89">*125 types of
illogical issues.
I strongly urge you to move away from the destructive path you
are following, file proper tax returns as required by law, and
make arrangements to pay the taxes you owe for the schools you
attend, the roads you ride on, the military that defends you,
the courts that protect your legitimate rights, and the freedoms
you enjoy. Please look at the arguments you are making and ask
yourself if they make any sense. Read the court cases cited by
the Settlement Officer in the attachment (copy attached) to her
letter to you dated November 26, 2002 and evaluate the merits of
the arguments you are making. If you do not take steps to
correct the situation, it will become more and more burdensome
with larger, unpaid liabilities increased by interest and
penalties.
I cannot recommend that you seek the advice of an expert.
However, if you go to any reputable Attorney or Certified Public
Accountant in your area, I am confident that they will tell you
that your arguments are not correct and they will recommend that
2004 Tax Ct. Memo LEXIS 89">*126 you quickly take corrective action. Neither the IRS, nor the
Courts, nor the Congress, nor any reputable professional will
support the arguments you are making.
My comments are not intended to offend you in any way. They are
made out of my concern for individuals and intended to provide
you with assistance. I hope this addresses the concerns
contained in your letter dated November 16, 2002.
Finally, I have enclosed a copy of a relatively new court case
(Steven R. Smith, United States District Court of Nevada,
2002 TNT 223-17) in which the taxpayer makes arguments similar
to those you have made about Delegation Orders, etc. As you can
see, the Court decides the case in favor of the Government.
On December 10, 2002, in response to the settlement officer's November 26, 2002 letter to petitioners, petitioners sent a letter to the settlement officer (petitioners' December 10, 2002 letter). Petitioners' December 10, 2002 letter stated in pertinent part:
In response to your letter of November 26, 2002, and based upon
your invitation to do so, we raise these valid issues in2004 Tax Ct. Memo LEXIS 89">*127 regard
to your statements and exhibits:
1. We did not raise any arguments based on moral,
religious, political, constitutional, conscientious or
similar grounds, so we will not help you to pretend that we
did.
2. On the issue of impartiality, your letter of November
26th proves that you are NOT impartial to the proposed
collection action:
a.) We did not raise any arguments whatsoever. We
asked for the documents that the laws describe, which
must be present before a determination can be made by
you to proceed with collection by distraint.
We cite as a valid issue: The Statute, IR Code
determination. The determination by an appeals
officer under this subsection shall take into
consideration-A.) the verification presented under
paragraph (1),; B.) the issues raised under paragraph (2),
which is "any relevant2004 Tax Ct. Memo LEXIS 89">*128 issue relating to the
unpaid tax or proposed levy" . . .
b.) You state * * * "Based upon a review of your
case file, I find no error in the part of the Service
in sending you the proper notices of an outstanding
liability", yet, you do not name by what Statute
we are made liable and you do not present for us the
documents which support the assessments with the
authority of the Service employees that were involved
in making such assessments. You state that notices of
balance due were issued . . . Well, IR Code Section
refused to pay 10 days following the Notice and Demand
for Payment. Seven Statutes and various IRS
Publications refer to the requirement for the Notice
and demand for payment. We find no authority referring
to a "notice of balance due". We did not
2004 Tax Ct. Memo LEXIS 89">*129 receive a statutory Notice and Demand for payment.
c.) You state in your letter * * * "The underlying
liability appears to be correct. The assessments were
based on your income and withholdings." The
underlying liability is based upon what statute? Where
did you find a liability for the income tax in the
Internal Revenue Code? * * * we are contesting not
only the existence and the amount of the underlying
liability for the taxes and penalties at issue, but,
also the authority of the Revenue Officers who changed
our returns and who sent out the Final Notice giving
rise to our opportunity to a Collection Due Process
Hearing -- our right to a fair and impartial hearing
conducted by an impartial appeals officer who has
fulfilled the requirement of the investigation as
provided for in IR Code
2004 Tax Ct. Memo LEXIS 89">*130 indeed conduct that impartial investigation, you
should be able to provide us with the documents you
inspected to verify the validity and accuracy of the
assessments. * * * We have requested the documentation
that the law provides that we may see.
d.) Further, the exhibits attached to your letter are
totally irrelevant to our case. They, too, point to
your bias toward the government. First of all, the
definition of Gross Income does not make one liable
for the tax. The issue of the
the Constitution is not a relevant issue to be raised
when all we are asking for is proof that the
verification from the Secretary requirement has been
fulfilled; that the Notice and Demand for payment
requirement as been met; that the assessments are
valid and accurately determined and recorded pursuant
to2004 Tax Ct. Memo LEXIS 89">*131 some statute by authorized Internal Revenue Service
personnel; and, that you have personally acquired
verification from somebody other than yourself that
all of the administrative procedures and applicable
laws have been met. Verification means, a formal
written statement. * * * We are in the dark as to what
happened on our case, as all of the notices came
without reference to any delegation orders or other
legal basis for their issuance. Many of them were not
even signed! Why wouldn't you want us to see the
authority for these notices if indeed they are
"Statutory", as you claim them to be?
3. Finally, you stated in your letter that we have not
pointed to any errors and that we have been unwilling to
discuss collection alternatives . . . and, then you
threatened to proceed with an issuance of a letter that
will sustain the levy action. We cannot fathom2004 Tax Ct. Memo LEXIS 89">*132 what premise
you found to base those statements on. It is absurd! You
have not provided one document required of you by the law,
and, until you do, you have nothing more than a
wish for our property. Here are the errors you
have ignored thus far that we have clearly outlined in
previous correspondences and at our "Collection Due
Process Hearing":
A.) The FINAL NOTICE we received was not sent out by
the Secretary or his delegate. * * *
B.) We did not receive the Statutory Notice and demand
for the unpaid tax from the Secretary or his delegate.
* * *
C.) The assessments were not made by authorized IRS
personnel. We know this because no where in the Code
is there any mention of IRS agents having the
authority to make a return for income taxes, and no
where in the Internal Revenue Manual does it speak of
the authority2004 Tax Ct. Memo LEXIS 89">*133 of IRS agents to make 1040 Forms or to
do anything with respect to returns of income tax.
* * *
D.) Another very relevant issue we have raised and
that goes to prove the fact that you have not been
impartial to the proceedings thus far is that we have
asked for you to cite the Statute in the Internal
Revenue Code that provides for the payment of the
income tax. Now, whether or not there is a law that
requires the payment of the income tax cannot be
deemed frivolous or merit less. * * * [Reproduced
literally.]
On November 5, 2002, John W. Raymond (Mr. Raymond), an attorney, sent a letter (Mr. Raymond's November 5, 2002 letter) to the settlement officer with respect to petitioners' chapter 7 bankruptcy case. That letter stated in pertinent part:
Reference the attached letter dated October 21, 2002 which
you sent to Gerald and Jessica Frey. Be advised that Gerald and
Jessica Frey filed a Chapter2004 Tax Ct. Memo LEXIS 89">*134 7 Bankruptcy, Case No. 02-51961-
DHA, in the United States Bankruptcy Court, Eastern District of
Virginia, Newport News Division, on July 3, 2002. Internal
Revenue Service was a listed creditor and was sent Notice of the
bankruptcy filing by the bankruptcy court.
Debtors received their bankruptcy Discharge on October 10
[sic], 2002. (copy of Order attached) Their liability for tax
debts for calendar year 1996 and 1997 were discharged in the
bankruptcy.
The "bankruptcy discharge" referred to in Mr. Raymond's November 5, 2002 letter is an order dated October 12, 2002 (U.S. Bankruptcy Court's October 12, 2002 order) of the United States Bankruptcy Court, Eastern District of Virginia (U.S. Bankruptcy Court). That order stated as follows:
It appearing that the debtor(s) is/are entitled to a
discharge,
IT IS ORDERED:
The debtor(s) is/are granted a discharge under
The U.S. Bankruptcy Court's October 12, 2002 order further stated: " SEE BACK SIDE OF THIS ORDER FOR IMPORTANT INFORMATION ". The2004 Tax Ct. Memo LEXIS 89">*135 back side of that order stated in pertinent part:
Debts that are Not Discharged
Some of the common types of debts which are not discharged
in a chapter 7 bankruptcy case are:
a. Debts for most taxes;
On December 9, 2002, Mr. Raymond sent a letter to an IRS bankruptcy specialist (Mr. Raymond's December 9, 2002 letter). That letter stated in pertinent part:
You and I discussed the above matter on November 19, 2002.
You informed me that the 1996 and 1997 taxes had not been
discharged in the Freys' bankruptcy as a substitute return had
been filed by the IRS for the Freys and the Freys did not file
the returns until November 13, 2000. The Freys state that they
filed the returns prior to November 2000.
The Freys inform me that they received the 09-20-1999
Notice Number CP 504 on September 30, 1999. The Notice had been
mailed to a prior address so the Freys did not get it for ten
days. Mr. Frey called Mrs. Lee (as noted on page two of exhibit
A) of the IRS and was informed by Mrs. Lee that the IRS had no
returns2004 Tax Ct. Memo LEXIS 89">*136 for 1996 and 1997. Mrs. Lee advised the Freys to mail
the returns to IRS, Attn: ASFR, Philadelphia, PA 19255.
The Freys had previously filed the returns but complied
with Mrs. Lee's directions. The returns were still packed with
their household goods because of the Freys' move. The Freys
found the returns (copies attached) dated them 11-1-99 and
mailed the returns to the ASFR address given by Mrs. Lee.
The Freys received nothing further from the IRS until 2001
when the Freys were advised that the IRS had not received the
1997 return. The Freys dated the 1997 returns 5-30-01 and mailed
them to the IRS.
It appears to me that the taxes should have been discharged
in the bankruptcy based on the 1999 filing date.
On January 14, 2003, the IRS bankruptcy specialist to whom Mr. Raymond had sent Mr. Raymond's December 9, 2002 letter sent a letter to Mr. Raymond. That letter stated in pertinent part:
This is in regards to correspondence we received on
December 11, 2002. In your correspondence you provided copies of
tax returns2004 Tax Ct. Memo LEXIS 89">*137 for years 1996 and 1997. I have reviewed the
information you have provided and have made these determinations
base[d] on the information. Tax year 1996 will be processed as
the original filed return and if excepted [sic] as filed, there
will not be any balance due. The tax return 1996 that you
provided shows and [sic] overpayment of $ 3,839.28. The Refund
Expiration Date for 1996 is April 15, 2000, therefore, the
above-mentioned debtor's will not receive the overpayment. The
information provided for tax year 1997, I could find no evidence
that the return was filed or received prior to the date that
Internal Revenue Service made the assessment of August 13, 2001.
Tax year 1997 still remains to be nondischargeable as we had
determined at discharge.
On January 23, 2003, the Appeals Office issued to petitioners a notice of determination with respect to their taxable years 1996, 1997, and 1999. That notice of determination stated in pertinent part:
Summary of Determination
The determination of the Appeals Office is to sustain the
decision to issue the Final2004 Tax Ct. Memo LEXIS 89">*138 Notice of Intent To Levy/Seizure.
The assessment is valid and the actions were appropriate.
You did not respond to this office's request for information and
made no proposals to resolve the delinquent liability. The case
is being returned to the Compliance Office for appropriate
collection actions.
An attachment to the notice of determination stated in pertinent part:
Summary of the issues and brief back ground:
* * * You filed a timely request for a hearing with Appeals
under the provisions of
of propsong a levy action to secure payment for the above listed
tax liabilities [with respect to petitioners' taxable years
1996, 1997, and 1999]. You claimed your gross income was not
taxable and your tax assessments were illegal and not valid. A
hearing was held with you on 11-20-2002. The hearing was
terminated when you claimed the Settlement Officer had no
authority to conduct the hearing. The issues you raised were
later responded by correspondence from the Settlement Officer
2004 Tax Ct. Memo LEXIS 89">*139 and the Appeals Team Manager
Verification of Applicable Law and Administrative
Procedures
With the best information available, the requirements of various
applicable law or administrative procedures have been met.
Internal Revenue Code (IRC)
Internal Revenue Service (IRS) notify a taxpayer at least 30
days before a Notice of Levy can be issued. The tax transcript
shows that this notice was mailed to you * * *
* * * * * * *
You were given the opportunity to raise any relevant issue
related to the unpaid tax of the proposed levy at the hearing *
* *
This Settlement Officer has had no prior involvement with
respect to this tax liability.
Relevant Issues Presented by the Taxpayer
Records show you filed the 1996, 1997 and 1999 tax returns
claiming zero income even though you attached forms W-2 with the
returns showing your gross income * * *. The tax assessments
were made based on these incomes. The Final2004 Tax Ct. Memo LEXIS 89">*140 Notice pertaining to
the unpaid balance of these tax periods was sent to you on 06-
20-2002. You were also advised by the Settlement Officer that
the 1996 and 1997 tax liabilities were not discharged by the
bankruptcy court. You made frivolous claims such as the IRS
agents had no authority to make income tax assessments, the
gross income were not taxable and the assessments were illegal.
You were provided with the tax transcripts demonstrating the
fact of assessment. The transcripts show the same essential
information found on a Form 4340, Certificate of Assessments and
Payments. * * *
* * * * * * *
Under
amount of the underlying tax liability can be contested at an
Appeals Office hearing unless the taxpayer did not receive a
notice of deficiency for the tax in question or did not
otherwise have an earlier opportunity to dispute such tax
liability. Records indicated the notices of deficiency were
mailed to you * * *. You received a notice2004 Tax Ct. Memo LEXIS 89">*141 of deficiency, but
yet failed to file a petition for redetermination with the
Court. Therefore, your issue of the underlying tax liability
cannot be considered by the Appeals Office under the CDP appeal.
Balancing Efficient Tax Collection with Concern Regarding
Intrusiveness
Appeals has verified, or received verification, that applicable
laws and administrative procedures have been met; has considered
the issues raised; and has balanced the proposed collection with
legitimate concern that such action be no more intrusive than
necessary by
Collection alternatives include full payment, installment
agreement, offer in compromise and currently uncollectible due
to financial hardship. At the hearing and subsequent
correspondence, you did not raise a spousal defense or challenge
the Compliance's proposed levy action by offering a less
instrusive collection alternative. As of this date, you have not
provided the information for us to determine your ability to pay
and submitted no resolution2004 Tax Ct. Memo LEXIS 89">*142 to your tax liability.
The Appeals Office believes that the Compliance Office's
decision to issue the Final Notice was appropriate and sustains
the action in full. The case is being returned to Compliance for
appropriate collection actions. [Reproduced literally.]
On February 20, 2003, petitioners filed with the Court a petition for review of the notice of determination with respect to their taxable years 1996, 1997, and 1999 and attached to the petition certain exhibits. The petition and most of those exhibits contained the same types of statements, contentions, arguments, and questions that petitioners set forth in petitioners' attachment to their 1996 Form 1040, petitioners' attachment to their 1997 Form 1040A, petitioners' attachment to their 1996 Form 12153, petitioners' attachment to their 1997 and 1999 Form 12153, and the various letters described above that petitioners sent to the IRS with respect to their taxable years 1996, 1997, and 1999.
On May 29, 2003, the Court issued an Order (Court's May 29, 2003 Order) in which, inter alia, the Court indicated that it had reviewed the petition and the exhibits attached thereto and found the2004 Tax Ct. Memo LEXIS 89">*143 petition and certain of those exhibits to contain statements, contentions, arguments, and questions that the Court found to be frivolous and/or groundless. In that Order, the Court reminded petitioners about
OPINION
A taxpayer may raise challenges to the existence or the amount of a taxpayer's underlying tax liability if the taxpayer did not receive a notice of deficiency or did not otherwise have an opportunity to dispute the tax liability.
The record establishes that respondent issued to petitioners respective notices of deficiency relating to their taxable years 1996, 1997, 1999 2 and that they did not file a petition with the Court with respect to any of such notices. On the instant record, we find that petitioners may not challenge the existence or the amount of petitioners' unpaid liability for 1996, petitioners' unpaid liability for 1997, and petitioners' unpaid liability for 1999. See
Where, as is the case here, the validity of the underlying tax liability for each of the years 1996, 1997, and 1999 is not properly placed at issue, the Court will review the determination of the Commissioner for abuse of discretion.
We turn to the issues that petitioners raised in petitioners' attachment to their 1996 Form 12153, in petitioners' attachment to their 1997 and 1999 Form 12153, in the letters that petitioners sent to the IRS with respect to their taxable years 1996, 1997, and 1999, at their Appeals Office hearing, and in the petition and the exhibits attached to the petition, which we shall review for abuse of discretion. We find petitioners' attachment to their 1996 Form 12153, petitioners' attachment to their 1997 and 1999 Form 12153, the various letters that petitioners sent to the IRS with respect to their taxable years 1996, 1997, and 1999, and the matters that petitioners raised at their Appeals Office hearing to be frivolous and/or groundless. 3 In the Court's May 29, 2003 Order, we found that petitioners' petition and certain exhibits attached thereto contained statements, contentions, arguments, and questions that were frivolous and/or groundless. We conclude that the following allegations in petitioners' petition raise valid issues that we shall address: Petitioners' allegation that the Appeals Office improperly refused to allow them to make an2004 Tax Ct. Memo LEXIS 89">*145 audio recording of their Appeals Office hearing, as required by
We consider first petitioners' position that the refusal by the Appeals Office to permit them to make an audio recording of the Appeals Office hearing held on November 20, 2002, was improper under
We next consider petitioners' position that the U.S. Bankruptcy Court discharged petitioners' unpaid liability for 1996 and petitioners' unpaid liability for 1997. 5An individual debtor is not to be discharged in a bankruptcy proceeding from certain specified categories of2004 Tax Ct. Memo LEXIS 89">*147 debt.
(a) A discharge under
or
individual debtor from any debt --
(1) for a tax * * * --
* * * * * * *
(B) with respect to which a return, if required --
(i) was not filed; * * *
In the instant case, respondent did not process and file as tax returns the 1996 Form 1040 and the 1997 Form 1040A which respondent received from petitioners and in which petitioners reported total income of $ 0 and total tax of $ 0. That was because respondent determined that2004 Tax Ct. Memo LEXIS 89">*148 those documents were frivolous. 6An individual debtor is not discharged in a bankruptcy proceeding from a debt for tax with respect to which a return is not filed.
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 years 1996, 1997, and 1999.
Although respondent does not ask the Court to impose a2004 Tax Ct. Memo LEXIS 89">*149 penalty on petitioners under
In
On the record before us, we find that petitioners have advanced, we believe primarily for delay, frivolous and/or groundless statements, contentions, arguments, requests, and questions with respect to their taxable years 1996, 1997, and 1999, thereby causing the Court to waste its limited resources in addressing such matters. As a result of petitioners' position and actions in the instant case with respect to those taxable years, we shall impose a penalty on them pursuant to
We have considered all of petitioners' statements, contentions, arguments, requests, and questions that are not discussed herein, and we find them to be without merit and/or irrelevant.
To reflect the foregoing,
Decision will be entered for respondent.
Footnotes
1. All section references are to the Internal Revenue Code in effect at all relevant times.↩
2. With respect to petitioners' taxable year 1996, the transcripts of account that a representative of respondent prepared relating to that year reflected that respondent issued a notice of deficiency to petitioners with respect to their taxable year 1996. With respect to petitioners' taxable year 1997, the transcripts of account that a representative of respondent prepared relating to that year did not reflect that respondent issued a notice of deficiency to petitioners with respect to their taxable year 1997. However, the revenue agent who testified on behalf of respondent at the trial in this case indicated that transcripts of account do not necessarily reflect such information. Indeed, although the record in the instant case contains a copy of the notice of deficiency that respondent issued with respect to petitioners' taxable year 1999, the transcripts of account that a representative of respondent prepared relating to that year did not reflect that respondent issued such a notice to petitioners. The notice of determination with respect to petitioners' taxable years 1996, 1997, and 1999, as well as the settlement officer's history sheet or case activity records relating to those years, reflected that respondent issued respective notices of deficiency with respect to those years. In this connection, it is noteworthy that, in petitioners' attachment to petitioners' 1996 Form 12153 and petitioners' attachment to petitioners' 1997 and 1999 Form 12153, as well as in various letters described above that petitioners sent to the IRS with respect to their taxable years 1996, 1997, and 1999, petitioners did not complain that they did not receive notices of deficiency with respect to 1996, 1997, and 1999. Instead, they argued in those documents that they did not receive valid notices of deficiency for any of those years because the notices of deficiency that they received were not signed by the Commissioner of Internal Revenue (Commissioner) or a properly authorized delegate of the Commissioner. Finally, we note that we did not find credible Mr. Frey's testimony that he did not receive notices of deficiency with respect to 1996, 1997, and 1999. Such testimony is inconsistent with other testimony of Mr. Frey that he may have received such notices and is contrary to other evidence in the record.↩
3. We also find petitioners' attachment to their 1996 Form 1040 and petitioners' attachment to their 1997 Form 1040A to be frivolous and/or groundless.↩
4. See
Kemper v. Comm'r, T.C. Memo. 2003-195↩ .5. Petitioners did not argue at their Appeals Office hearing that the U.S. Bankruptcy Court discharged petitioners' unpaid liability for 1999.↩
6. We have recently observed: "The majority of courts, including this Court, have held that, generally, a return that contains only zeros is not a valid return."
Cabirac v. Comm'r, 120 T.C. 163">120 T.C. 163 , 120 T.C. 163">169↩ (2003).