T.C. Memo. 2004-204
UNITED STATES TAX COURT
KEVIN THOMPSON, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 3947-03L. Filed September 8, 2004.
Kevin Thompson, pro se.
John F. Driscoll, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
GOEKE, Judge: This case arises from respondent’s issuance
of a Notice of Determination Concerning Collection Action(s)
Under Section 6320 and/or 6330 for petitioner’s taxable year
1997. Respondent has filed both a notice of Federal tax lien
filing and a notice of intent to levy against petitioner for his
1997 unpaid tax liability. The issues for decision are: (1)
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Whether petitioner is entitled to a new Appeals Office hearing
because he was not permitted to make an audio or stenographic
recording of his hearing; and (2) whether respondent’s
determination to sustain the notice of intent to levy and the
notice of Federal tax lien filing for petitioner’s unpaid 1997
tax liability was an abuse of discretion. Because petitioner has
not raised any relevant issues relating to the unpaid tax
liability, we hold that a new hearing is not necessary and
respondent’s determination to proceed with collection was not an
abuse of discretion.
FINDINGS OF FACT
On April 30, 1998, petitioner filed his 1997 Federal income
tax return. On the 1997 return, petitioner reported his total
income as zero and his total tax due as zero. The return claimed
a refund of $1,086.82. On May 12, 2000, respondent issued a
notice of deficiency to petitioner determining a deficiency of
$6,023 and additions to tax under sections 6651(a)(1)1 and
6654(a) of $1,493 (the 1997 liability). On May 13, 2000,
petitioner sent a letter to respondent asserting various
frivolous and groundless arguments challenging respondent’s
determination and the validity of the notice of deficiency.
Petitioner did not petition this Court with respect to the notice
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code as amended.
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of deficiency. On October 9, 2000, respondent assessed the
deficiency, additions to tax, and interest. On October 9 and
November 13, 2000, respondent sent petitioner notices of balance
due with respect to the 1997 liability. Petitioner responded to
the November 13, 2000, notice of balance due with a letter
containing frivolous and groundless arguments challenging the
deficiency and the additions to tax.
On February 19, 2001, respondent issued a notice of intent
to levy to petitioner. On February 26, 2001, petitioner replied
in a letter containing frivolous and groundless challenges to the
1997 deficiency and additions to tax. On February 26, 2002,
respondent filed a notice of Federal tax lien with the Clerk of
Superior Court, Haralson County, Georgia. On March 1, 2002,
respondent issued to petitioner a Notice of Federal Tax Lien
Filing and Your Right to a Hearing Under IRC 6320 with respect to
the 1997 liability. On March 4, 2002, respondent sent to
petitioner a Final Notice--Notice of Intent to Levy and Notice of
Your Right to a Hearing. On March 28, 2002, petitioner filed
Form 12153, Request for a Collection Due Process Hearing, and
attached five pages of frivolous and groundless arguments
challenging the 1997 liability and the validity of the various
notices respondent had sent him.
Petitioner exchanged several letters with the Internal
Revenue Service (IRS) Appeals officer assigned to his case to
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schedule his hearing. In a letter dated August 4, 2002,
petitioner informed the Appeals officer that he intended to audio
record his hearing and bring a court reporter to make a
stenographic recording of the hearing. On August 15, 2002, the
Appeals officer sent petitioner a letter informing him that as of
May 2, 2002, the Appeals Office no longer allowed taxpayers to
make audio or stenographic recordings of hearings. The Appeals
officer also sent him a copy of a Memorandum for All Appeals Area
Directors dated May 2, 2002, from the Acting Chief of the Office
of Appeals outlining the new policy. See Keene v. Commissioner,
121 T.C. 8, 12 (2003), for the text of the memorandum.
On September 9, 2002, petitioner’s hearing was held.
Petitioner was not permitted to audio record or stenograph the
hearing. At the hearing, the Appeals officer provided petitioner
with a copy of Form 4340, Certificate of Assessments, Payments,
and Other Specified Matters, for his 1997 year. The Appeals
officer also explained to petitioner that he could offer
collection alternatives at his hearing, which would be considered
only if he was current in his filing requirements for years other
than 1997. On September 10, 2002, the Appeals officer sent
petitioner a letter addressing some issues raised during the
hearing and a copy of Delegation Order No. 196 (Rev. 4), which
delegates the authority to sign notices of Federal tax liens to
IRS Compliance Managers. Petitioner replied in a letter dated
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September 15, 2002, continuing to challenge the validity of
respondent’s notice of Federal tax lien filing, notice of intent
to levy, and notice of deficiency. On October 25, 2002, the
Appeals officer issued a Notice of Determination Concerning
Collection Action(s) Under Section 6320 and/or 6330 (notice of
determination), sustaining the proposed levy action and the
notice of Federal tax lien filing for the 1997 liability. The
notice of determination stated that petitioner was not in
compliance with his filing requirements for certain years other
than 1997. Petitioner timely filed a petition with this Court.
At the time he filed his petition, petitioner resided in
Buchanan, Georgia.
OPINION
Petitioner’s primary argument is that the refusal by the
Appeals Office to permit him to make an audio recording of his
September 9, 2002, Appeals Office hearing was improper pursuant
to this Court’s holding in Keene v. Commissioner, supra. In
Keene, we held that section 7521(a)(1) requires the IRS to allow
taxpayers to audio record hearings held pursuant to sections 6320
and 6330. The Court remanded the taxpayer’s case to the Appeals
Office for a hearing in part because as a result of the
taxpayer’s not being allowed to audio record his hearing, the
taxpayer had chosen not to have a hearing. Id. at 19. However,
in Kemper v. Commissioner, T.C. Memo. 2003-195, issued on the
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same day as Keene, we held that it was not necessary to remand
the taxpayers’ case to the Appeals Office for a second hearing
even though the taxpayers were not permitted to record their
hearing. The Court found that all the taxpayers’ arguments,
other than their section 7521 argument, were frivolous or
groundless arguments that the Court had previously rejected. The
Court found that a new hearing was unnecessary because the
pleadings were sufficient to enable the Court to address all of
the non-section 7521 issues raised by the taxpayers. In Keene,
the Court distinguished Kemper by making it clear that its remand
of the Keene case to the Appeals Office was the result of the
pleadings’ being limited to the section 7521 issue, the
Commissioner’s acknowledgment that remand would be the proper
remedy if the taxpayer prevailed, and the fact that the taxpayer
had not received an Appeals Office hearing before trial. Keene
v. Commissioner, supra at 19-20.
Aside from petitioner’s assertion that he should have been
allowed to audio record his hearing, petitioner has raised only
contentions, arguments, and questions that this Court has
previously found to be frivolous and/or groundless. Unlike the
taxpayers in Keene, petitioner did receive a hearing, and the
Appeals officer’s notes of that hearing are a part of the record.
At trial the Court provided petitioner an opportunity to raise
any relevant issues that he might have raised at the hearing,
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such as spousal defenses or collection alternatives, but he chose
not to do so. Instead, petitioner stated that his position was
summarized in his request for a hearing, which is part of the
record and contains five pages of frivolous and groundless
arguments. Petitioner’s posttrial brief also fails to raise any
relevant issues. Consequently, even though we held in Keene that
section 7521(a)(1) requires the Appeals Office to allow a
taxpayer to make an audio recording of a hearing, we conclude
that it is not necessary and would not be productive to remand
this case to the Appeals Office for another hearing in order to
allow petitioner to make such an audio recording. See Lunsford
v. Commissioner, 117 T.C. 183, 189 (2001). The record is
sufficient for us to address petitioner’s arguments without an
additional hearing.
Petitioner admits that he received the notice of deficiency
issued to him for 1997 but claims that the notice of deficiency
is invalid because it was not signed by the Secretary of the
Treasury himself or his delegate. We reject petitioner’s
contention. The Secretary’s authority to issue notices of
deficiency was delegated to the Service Center Directors.
Delegation Order No. 77 (Rev. 28), effective May 17, 1996; secs.
301.6212-1(a), 301.7701-9(b), Proced. & Admin. Regs.; see also
Nestor v. Commissioner, 118 T.C. 162, 165 (2002). The notice of
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deficiency petitioner received was signed by the Service Center
Director in Atlanta. Therefore, we conclude that petitioner did
receive a valid notice of deficiency for 1997.
Petitioner also contends that the final notice of intent to
levy and the notice of Federal tax lien filing that he received
are invalid because they were not signed by the Secretary as
required by sections 6330(a)(1) and 6320(a)(1). We disagree.
For purposes of sections 6330(a) and 6320(a), the Secretary
delegated the authority to issue notices of levy or lien to
certain IRS employees. Secs. 7701(a)(11)(B) and (12)(A)(i),
7803(a)(2); see also secs. 301.6330-1(a)(1), 301.6320-1(a)(1),
Proced. & Admin. Regs. The authority to levy on taxpayers’
property was delegated to the “Automated Collection Branch
Chiefs” in Delegation Order No. 191 (Rev. 2), effective Oct. 1,
1999. Wilson v. Commissioner, T.C. Memo. 2002-242. Consistent
with this delegation of authority, the final notice of intent to
levy in this case, which was executed by the chief of the
Automated Collection Branch in Kansas City, Missouri, was valid.
See Wilson v. Commissioner, supra. The authority to sign notices
of Federal tax lien was delegated to the compliance managers
responsible for collection matters in Delegation Order No. 196
(Rev. 4), effective Oct. 4, 2000. Hathaway v. Commissioner, T.C.
Memo. 2004-15. Petitioner’s Notice of Federal Tax Lien Filing
and Your Right to a Hearing Under Section 6320 was executed by
the Compliance Technical Support Territory Manager for Kansas
City, Missouri, and was valid.
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Section 6330(c)(2)(B) provides that a taxpayer may challenge
the existence or amount of his underlying tax liability if the
taxpayer “did not receive any statutory notice of deficiency for
such tax liability or did not otherwise have an opportunity to
dispute such tax liability.” Because petitioner received a
notice of deficiency for 1997, he may not challenge his
underlying tax liability for that year in either an Appeals
Office hearing or this Court. See id.
Petitioner next argues that the assessment against him was
invalid. The Appeals officer provided petitioner with a copy of
the Form 4340, a computer-generated transcript of petitioner’s
account. Absent a showing by the taxpayer of some irregularity
in the assessment procedure that would raise a question about the
validity of the assessments, a Form 4340 is presumptive evidence
that a tax has been validly assessed. Davis v. Commissioner, 115
T.C. 35, 40 (2000). Petitioner has not shown, or even alleged,
any irregularities in respondent’s assessment procedures that
would cast doubt on the accuracy of the Form 4340 or the validity
of the assessment.
Petitioner next argues that the Appeals officer did not
produce verification from the Secretary that the requirements of
any applicable law or administrative procedures were met.
Section 6330(c)(1) requires the Appeals officer to obtain such
verification, but it does not require the Appeals officer to
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provide the verification to the taxpayer. Nestor v.
Commissioner, supra at 166; sec. 301.6330-1(e)(1), Proced. &
Admin. Regs. As stated above, the Appeals officer did review
Form 4340 for petitioner’s 1997 account. This was sufficient to
fulfill the requirement of section 6330(c)(1). See Nestor v.
Commissioner, supra at 166.
Petitioner next contends that he did not receive a valid
notice and demand for payment for 1997 as required by section
6303(a). However, the Form 4340 reviewed by the Appeals officer
showed that notices of balance due were sent to petitioner on
October 9 and November 13, 2000. Petitioner’s response to the
November 13, 2000, notice of balance due is proof that he
received it. A notice of balance due constitutes the notice and
demand for payment required by section 6303(a). Standifird v.
Commissioner, T.C. Memo. 2002-245, affd. 72 Fed. Appx. 729 (9th
Cir. 2003); see also Tornichio v. Commissioner, T.C. Memo. 2002-
291.
Section 6673(a) authorizes this Court to impose a penalty of
up to $25,000 if a taxpayer institutes or maintains proceedings
that are primarily for delay, or if the taxpayer’s position is
frivolous or groundless. While we shall not impose a penalty
under section 6673(a) today, we admonish petitioner that we will
consider imposing such a penalty in the future if he continues to
make frivolous and groundless arguments in this Court.
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In conclusion, petitioner was given an opportunity to raise
relevant issues at his hearing, at trial, and on brief. In his
correspondence with the Appeals Office petitioner maintained
frivolous and groundless arguments. Petitioner has not raised a
spousal defense, made a valid challenge to the appropriateness of
the collection action, or offered any collection alternatives.
We hold that a remand for a new hearing is unnecessary, and that
respondent’s determination to proceed with collection was not an
abuse of discretion.
Decision will be entered
for respondent.