T.C. Memo. 2004-194
UNITED STATES TAX COURT
JAMES G. GILLIGAN, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 14693-02L. Filed August 30, 2004.
James G. Gilligan, pro se.
Matthew A. Mendizabal, for respondent.
MEMORANDUM OPINION
VASQUEZ, Judge: This case is before the Court on
respondent’s motion for summary judgment and to impose a penalty
under section 66731 (motion for summary judgment).
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code, and all Rule references are to the Tax
Court Rules of Practice and Procedure.
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Background
Petitioner was born in Alameda, California. At the time he
filed the petition, petitioner maintained a post office box in
Campbell, California. Petitioner claims he was homeless during
this time and lived with friends in California, Nevada, and
Oregon.
For 1992, petitioner initially filed a Form 1040, U.S.
Individual Income Tax Return, and reported a tax liability of
$4,412.2 Petitioner did not remit payment with his return. On
December 6, 1993, the Internal Revenue Service (IRS) assessed
this amount. The IRS sent notice and demand for payment letters
to petitioner on May 2, 1994, and December 2, 1996. On or about
August 20, 1997, petitioner submitted a Form 1040NR, U.S.
Nonresident Alien Income Tax Return, for 1992 and reported a tax
liability of “N/A”.
For 1993, petitioner initially filed a Form 1040 and
reported a tax liability of $2,254. Petitioner did not remit
payment with his return. On November 28, 1994, the IRS assessed
this amount. The IRS sent notice and demand for payment letters
to petitioner on November 28, 1994, and December 2, 1996. On or
about August 20, 1997, petitioner submitted a Form 1040NR for
1993 and reported a tax liability of “N/A”.
On or about August 20, 1997, petitioner filed a Form 1040NR
2
All amounts are rounded to the nearest dollar.
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for 1994 and reported a tax liability of “N/A”. On May 26, 1998,
the IRS issued petitioner a notice of deficiency for 1994.
Petitioner failed to file a petition with the Court. On November
23, 1998, the IRS assessed a tax of $141. The IRS sent notice
and demand for payment letters to petitioner on November 23, and
December 14, 1998.
On or about August 20, 1997, petitioner filed a Form 1040NR
for 1996 and reported a tax liability of “N/A”. On August 11,
1998, the IRS issued petitioner a notice of deficiency for 1996.
Petitioner failed to file a petition with the Court. On February
8, 1999, the IRS assessed a tax of $574. The IRS sent notice and
demand for payment letters to petitioner on February 8 and March
1, 1999.
Petitioner made various alterations to the Forms 1040NR for
1992, 1993, 1994, and 1996. Petitioner crossed out “Income Tax”
on the title. For “country” he wrote “USA National, aka natural
born free Citizen Constitutionally, California/Republic”.
Petitioner wrote “N/A” on various lines of the forms requiring
information about himself and his income. Petitioner altered the
jurat on the forms before signing them. Under the box “Your
occupation in the United States” petitioner wrote “none” and made
various references to the United States Constitution. At the
bottom of the form, he typed “With expressed reservations of my
Unalienable Rights, of my Constitutional Privileges and
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Immunities (at 4:2:1), and the lesser UCC/Uniform Commercial Code
(at §1.207) ‘with reservation of all our rights’, for the
Record!”.
On December 17, 2001, the IRS sent petitioner a “Final
notice--notice of intent to levy and notice of your right to a
hearing” for 1992, 1993, 1994, and 1996. On January 8, 2002,
petitioner submitted a Form 12153, Request for a Collection Due
Process Hearing, with an 11-page attachment asserting frivolous
and meritless arguments.
On July 10, 2002, Appeals Officer Eric Johansen conducted a
section 6330 hearing (hearing) in person with petitioner.
Petitioner requested that the hearing be tape recorded; however,
the Appeals officer advised petitioner that the hearing could not
be tape recorded. At the hearing, petitioner did not raise any
spousal defenses. He did not propose any collection
alternatives. Petitioner refused to sign a Form 433-A,
Collection Information Statement for Wage Earners and Self-
Employed Individuals, despite his contentions that he was
unemployed and had no money to pay the tax liability.
On August 15, 2002, the IRS issued petitioner a Notice of
Determination Concerning Collection Action(s) under Section 6320
and/or 6330 (notice of determination) to proceed with collection.
On September 13, 2003, petitioner filed a petition with the
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Court. In the petition, petitioner advances frivolous and
meritless arguments.
On March 29, 2004, respondent filed a motion for summary
judgment and to impose a penalty under section 6673. On April
20, 2004, petitioner filed a lengthy opposition to respondent’s
motion containing frivolous and meritless arguments. On May 18,
2004, petitioner filed an amended affidavit in support of his
opposition to respondent’s motion for summary judgment containing
frivolous and meritless arguments. Also on May 18, 2004, the
Court heard oral argument on respondent’s motion.
At the oral argument, petitioner lost his temper and became
belligerent. Indeed, the Court repeatedly told petitioner to
“calm down” and warned petitioner that he would be held in
contempt of court if he had further outbursts. Petitioner
refused to answer the Court’s questions. Petitioner was
disruptive, noncooperative, and interrupted the Court and
respondent throughout the entire proceeding.
Discussion
A. Motions for Summary Judgment
Rule 121(a) provides that either party may move for summary
judgment upon all or any part of the legal issues in controversy.
Full or partial summary judgment may be granted only if it is
demonstrated that no genuine issue exists as to any material
fact, and a decision may be rendered as a matter of law. Rule
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121(b); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520
(1992), affd. 17 F.3d 965 (7th Cir. 1994).
We conclude that there is no genuine issue as to any
material fact and that a decision may be rendered as a matter of
law.
B. Section 6330
Section 6330 provides that the Secretary shall furnish the
person described in section 6331 with written notice (i.e., the
hearing notice) before a levy on any property or right to
property. Sec. 6330(a). Section 6330 further provides that
within a 30-day period the taxpayer may request administrative
review of the matter (in the form of a hearing). The hearing
generally shall be conducted consistent with the procedures set
forth in section 6330(b) and (c).
Pursuant to section 6330(c)(2)(A), a taxpayer may raise at
the section 6330 hearing any relevant issue with regard to the
Commissioner’s collection activities, including spousal defenses,
challenges to the appropriateness of the Commissioner’s intended
collection action, and alternative means of collection. Sego v.
Commissioner, 114 T.C. 604, 609 (2000); Goza v. Commissioner, 114
T.C. 176, 180 (2000). If a taxpayer received a statutory notice
of deficiency for the years in issue or otherwise had the
opportunity to dispute the underlying tax liability, the taxpayer
is precluded from challenging the existence or amount of the
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underlying tax liability. Sec. 6330(c)(2)(B); Sego v.
Commissioner, supra at 610-611; Goza v. Commissioner, supra at
182-183.
1. 1992 and 1993
Our jurisdiction under section 6330(d) allows us in a lien
or levy proceeding to redetermine an underlying tax liability
that is entirely self-assessed, although the liability is not a
deficiency. Montgomery v. Commissioner, 122 T.C. 1 (2004).
Section 6330(c)(2) provides that a taxpayer may raise any
“relevant” issue at the collection hearing. Petitioner made only
groundless and frivolous arguments.
Petitioner’s challenge to the existence of his tax liability
is meritless. The tax assessments generating the levy for 1992
and 1993 are based on the tax shown on returns petitioner filed
under penalties of perjury. See sec. 6201(a)(1).
Petitioner questioned the validity of those liabilities
during his hearing. Petitioner advanced frivolous arguments
during this hearing. Petitioner continued to advance his
groundless arguments in his petition, in his opposition to
summary judgment, and at the hearing on the motion. Despite
petitioner’s assertions to the contrary, there is no genuine
issue as to the existence of his 1992 and 1993 unpaid tax. And
because petitioner challenged only the existence of a law
requiring him to pay a Federal tax on his earnings and did not
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challenge the correctness of the amounts of income which he
reported on his 1992 and 1993 tax returns, there is no genuine
issue as to the amounts of petitioner’s underlying tax liability
for 1992 and/or 1993.
Petitioner advanced shopworn arguments characteristic of
tax-protester rhetoric that has been universally rejected by this
and other courts. Wilcox v. Commissioner, 848 F.2d 1007 (9th
Cir. 1988), affg. T.C. Memo. 1987-225; Carter v. Commissioner,
784 F.2d 1006, 1009 (9th Cir. 1986). We shall not painstakingly
address petitioner’s assertions “with somber reasoning and
copious citation of precedent; to do so might suggest that these
arguments have some colorable merit.” Crain v. Commissioner, 737
F.2d 1417, 1417 (5th Cir. 1984).
2. 1994 and 1996
The notices of deficiency for 1994 and 1996 were sent via
certified mail to petitioner’s post office box, the address
petitioner used on his returns and in his petition. These
notices of deficiency were not returned as undeliverable.
Respondent submitted a certified mailing list to confirm these
facts. Accordingly, in the absence of any evidence or argument
by petitioner to the contrary, petitioner is deemed to have
received these notices of deficiency. Sego v. Commissioner,
supra at 610-611.
Petitioner chose not to file a petition for redetermination
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in response to these notices of deficiency. Accordingly,
petitioner cannot contest the underlying deficiencies for 1994
and 1996. Sec. 6330(c)(2)(B); Sego v. Commissioner, supra; Goza
v. Commissioner, supra at 182-183. Claims that the limitation
period for assessment has expired are challenges to the
underlying tax liability. Boyd v. Commissioner, 117 T.C. 127,
130 (2001). Additionally, the assessments were timely made.
Therefore, petitioner cannot raise these claims in this
proceeding.
Where the validity of the underlying tax liability is not
properly in issue, we review the Commissioner’s determination for
an abuse of discretion. Sego v. Commissioner, supra at 610.
Petitioner appears to argue that the verification
requirement of section 6330 has not been met. Section 6330(c)(1)
does not require the Commissioner to rely on a particular
document to satisfy the verification requirement imposed therein.
E.g., Schnitzler v. Commissioner, T.C. Memo. 2002-159 (citing
five other cases to support this principle). We have repeatedly
held that the Commissioner may rely on Forms 4340, Certificate of
Assessments, Payments, and Other Specified Matters, or
transcripts of account to satisfy the verification requirement of
section 6330(c)(1). Hromiko v. Commissioner, T.C. Memo. 2003-
107; Schnitzler v. Commissioner, supra; Kaeckell v. Commissioner,
T.C. Memo. 2002-114; Obersteller v. Commissioner, T.C. Memo.
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2002-106; Weishan v. Commissioner, T.C. Memo. 2002-88; Lindsey v.
Commissioner, T.C. Memo. 2002-87, affd. 456 Fed. Appx. 802 (9th
Cir. 2003); Tolotti v. Commissioner, T.C. Memo. 2002-86, affd. 70
Fed. Appx. 971 (9th Cir. 2003); Duffield v. Commissioner, T.C.
Memo. 2002-53; Kuglin v. Commissioner, T.C. Memo. 2002-51. The
Appeals officer is not required to provide verification to
petitioner at the hearing. See Nestor v. Commissioner, 118 T.C.
162, 167 (2002); see also Holliday v. Commissioner, T.C. Memo.
2004-172.
Petitioner argues that the refusal by the Appeals officer to
permit petitioner to make an audio recording of the hearing was
improper. Commencing with petitioner’s filing of the Forms
1040NR, petitioner has made statements and requests and advanced
contentions and arguments that the Court has found to be
frivolous and/or groundless. Consequently, even though we held
in Keene v. Commissioner, 121 T.C. 8 (2003), that section
7521(a)(1) requires the Appeals Office to allow a taxpayer to
make an audio recording of a hearing, we conclude that (1) it is
not necessary and will not be productive to remand this case for
another hearing in order to allow petitioner to make such an
audio recording, see Lunsford v. Commissioner, 117 T.C. 183, 189
(2001), and (2) it is not necessary or appropriate to reject
respondent’s determination to proceed with the collection action
as determined in the notice of determination with respect to
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petitioner’s unpaid liability; see id.; see also Keene v.
Commissioner, supra at 19-20; Kemper v. Commissioner, T.C. Memo.
2003-195.
Petitioner has not alleged any irregularity in the
assessment procedure that would raise a question about the
validity of the assessments or the information contained in the
Forms 4340 or transcripts of account. See Davis v. Commissioner,
115 T.C. 35, 41 (2000); Mann v. Commissioner, T.C. Memo. 2002-48.
Appeals Officer Johansen stated in an affidavit that he verified
that all legal and administrative requirements for levy had been
met. He also considered whether the proposed levy balanced the
need for efficient collection of taxes with the legitimate
concern of the taxpayer that any collection action be no more
intrusive than necessary. Petitioner has failed to raise a
triable issue of fact concerning the Appeals officer’s review.
Accordingly, we hold that the Appeals officer satisfied the
verification requirement of section 6330(c)(1). Cf. Nicklaus v.
Commissioner, 117 T.C. 117, 120-121 (2001).
Petitioner has failed to raise a spousal defense, make a
valid challenge to the appropriateness of respondent’s intended
collection action, or offer alternative means of collection.
These issues are now deemed conceded. See Rule 331(b)(4).
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C. Section 6673
Section 6673(a)(1) authorizes the Court to require a
taxpayer to pay to the United States a penalty not to exceed
$25,000 if the taxpayer took frivolous positions in the
proceedings or instituted the proceedings primarily for delay. A
position maintained by the taxpayer is “frivolous” where it is
“contrary to established law and unsupported by a reasoned,
colorable argument for change in the law.” Coleman v.
Commissioner, 791 F.2d 68, 71 (7th Cir. 1986); see also Hansen v.
Commissioner, 820 F.2d 1464, 1470 (9th Cir. 1987) (section 6673
penalty upheld because taxpayer should have known claim was
frivolous).
At the hearing, the Court warned petitioner that the
arguments he was advancing were frivolous and groundless, and
that the arguments had been rejected by the Courts.
Our authority and willingness to impose penalties pursuant
to 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 are well
established. Cf. Pierson v. Commissioner, 115 T.C. 576, 581
(2000). Petitioner filed a frivolous petition with the Court.
Petitioner’s position, based on stale and meritless contentions,
is manifestly frivolous and groundless, and he has wasted the
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time and resources of the Court. We are convinced that
petitioner instituted and maintained these proceedings primarily
for delay. Accordingly, we shall impose a penalty of $5,000
pursuant to section 6673.
In reaching all of our holdings herein, we have considered
all arguments made by the parties, and to the extent not
mentioned above, we find them to be irrelevant or without merit.
To reflect the foregoing,
An appropriate order and
decision will be entered.