T.C. Memo. 2005-90
UNITED STATES TAX COURT
DAVID A. LEHMANN, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 3386-04L. Filed April 25, 2005.
P filed a petition for judicial review pursuant to
sec. 6330, I.R.C., in response to a determination by R
that levy action was appropriate.
Held: Because P has advanced groundless
complaints in dispute of the notice of intent to levy,
R’s determination to proceed with collection action is
sustained.
Held, further, a penalty under sec. 6673, I.R.C.,
is due from P and is awarded to the United States in
the amount of $2,500.
David A. Lehmann, pro se.
Jonae A. Harrison, for respondent.
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MEMORANDUM FINDINGS OF FACT AND OPINION
WHERRY, Judge: This case arises from a petition for
judicial review filed in response to a Notice of Determination
Concerning Collection Action(s) Under Section 6320 and/or 6330.1
The issues for decision are: (1) Whether an oral motion by
petitioner to dismiss should be granted, and if not, (2) whether
respondent may proceed with collection action as so determined,
and (3) whether the Court, sua sponte, should impose a penalty
under section 6673.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulations of the parties, with accompanying exhibits, are
incorporated herein by this reference.
Petitioner did not file Federal income tax returns for the
years 1993, 1994, 1995, 1996, and 1997. Petitioner was at all
relevant times throughout this period and through the time of
trial married to and residing with his wife, Barbara J. Lehmann
(Ms. Lehmann). Ms. Lehmann likewise did not file Federal income
tax returns for the 1993 through 1997 years. On January 26,
1999, respondent received from petitioner a letter dated January
22, 1999, in which petitioner stated: “From now on all letters
1
Unless otherwise indicated, section references are to
the Internal Revenue Code of 1986, as amended, and Rule
references are to the Tax Court Rules of Practice and Procedure.
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will be sent to: c/o 2219 West Deer Valley Road #203, Phoenix,
Arizona 85027-1919. This address will serve as my ‘last known
address’ for all purposes unless and until I provide you with
another address.” The letter was sent in petitioner’s name only
and did not mention or identify his wife.
On October 12, 2000, two notices of deficiency were issued
to petitioner with respect to the years in issue, one for 1993
through 1995 and one for 1996 and 1997.2 The notices were sent
to the West Deer Valley address indicated in petitioner’s letter,
and duplicate originals were sent to an address on file with
respondent at 3040 East McRae Way, Phoenix, Arizona 85027-4916.3
Both sets were returned as “undeliverable, forwarding order
expired”. Petitioner did not file a petition with this Court in
response to the notices of deficiency, and respondent assessed
2
As will be discussed in greater detail infra in text,
separate notices of deficiency for the 1993 through 1997 years
were issued to Ms. Lehmann. Ms. Lehmann contested those notices
in this Court at docket No. 1008-01. An order of dismissal and
decision was entered in that case on Apr. 10, 2002, and was
affirmed by the Court of Appeals for the Ninth Circuit. Lehmann
v. Commissioner, 63 Fed. Appx. 412 (9th Cir. 2003). This Court
takes judicial notice of facts established by the official record
in that action.
3
The record contains one original from each set, i.e., the
notice for 1993 through 1995 showing the West Deer Valley address
and the notice for 1996 and 1997 showing the East McRae Way
address. The notice of determination consistently in two places
explains the circumstances surrounding issuance of the duplicate
original notices, and, taking into account the fact that they
were issued on the same date and to the same taxpayer, and signed
by the same reviewer, the Court is satisfied that duplicate
notices were indeed mailed to each address on Oct. 12, 2000.
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the taxes, additions to tax, and interest for all 5 years on
March 19, 2001. Notices of balance due were sent to petitioner
on that date, as well as on April 23, 2001.
Subsequently, on September 16, 2002, respondent issued to
petitioner a Final Notice--Notice of Intent to Levy and Notice of
Your Right to a Hearing, with regard to the 1993 through 1997
years. Respondent on October 22, 2002, received from petitioner
a Form 12153, Request for a Collection Due Process Hearing,
setting forth his disagreement with the proposed collection
action, as follows:
(1) There was a failure to determine a deficiency; (2)
There was a failure to issue a Notice of Deficiency;
(3) Any Notice of Deficiency was void as it included
income subject to Final Partnership Administrative
Adjustments under TEFRA; (4) There was a failure to
generate an assessment list; (5) There was a failure of
the Commissioner to certify and transmit the assessment
list; (6) There was a failure to record the assessment;
(7) failure to provide record of assessment; and, (8)
failure to send Notice of Assessment.
By a letter dated January 29, 2003, the settlement officer
to whom petitioner’s case had been assigned scheduled a hearing
for February 19, 2003, in Phoenix, Arizona. The letter enclosed
copies of Forms 4340, Certificate of Assessments, Payments and
Other Specified Matters, for each of the years in issue.
Petitioner appeared for the scheduled conference on
February 19, 2003, accompanied by a stenographer and James
Chisholm, who was identified as a witness. The settlement
officer advised petitioner that recording and stenography were no
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longer permitted at collection hearings. He further informed
petitioner that they could either proceed without recordation or
that a determination could be made based on the information in
petitioner’s file. Petitioner declined to proceed and instead
submitted to the settlement officer a document entitled
“Declaration of David Lehmann”, which the settlement officer
understood petitioner to say asserted the only issues he intended
to present. The declaration contained the following five
statements, the fourth of which duplicated the second:
1. I received the Notice of Intent to Levy and
Notice of Right to a Hearing.
2. I did not receive the Notices of Deficiency
for any of the years 1993 through 1997.
3. My wife Barbara Lehmann received Notices of
Deficiency for the years 1993 through 1997, dated
October 12, 2000 and petitioned Tax Court.
4. I did not receive the Notices of Deficiency
for any of the years 1993 through 1997.
5. I did not receive any of the income attributed
to my wife in the Notices of Deficiency sent to her.
Respondent, on March 11, 2003, then issued to petitioner the
aforementioned Notice of Determination Concerning Collection
Action(s) Under Section 6320 and/or 6330 sustaining the proposed
levy action.
Petitioner’s petition disputing the notice of determination
was filed on February 25, 2004, and reflected an address in New
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River, Arizona.4 In the petition, petitioner largely repeated
contentions made in his Form 12153 and additionally assigned
error on the grounds that he was prohibited from recording the
collection hearing. Petitioner then prayed that this Court issue
an order requiring respondent to show cause why the determination
should not be vacated; find the determination arbitrary,
capricious, not supported by the evidence, an abuse of
discretion, and contrary to law; vacate the March 11, 2003,
determination; and award petitioner costs and fees incurred in
the prosecution of this action.5
On September 20, 2004, respondent filed a motion for summary
judgment pursuant to Rule 121. Petitioner was directed to file
any response to respondent’s motion on or before October 1, 2004.
However, upon review of the record, the Court noted certain
internal inconsistencies that rendered summary judgment
inappropriate.6 By order dated September 30, 2004, the Court
4
Petitioner initially filed a complaint in the U.S.
District Court for the District of Arizona on Apr. 10, 2003. The
complaint was dismissed for lack of subject matter jurisdiction
on Jan. 21, 2004. Petitioner’s petition to this Court arrived in
an envelope bearing a postmark of Feb. 20, 2004. See sec.
6330(d)(1).
5
The Court notes that to the extent that the petition seeks
reasonable administrative and/or litigation costs pursuant to
sec. 7430, any such claim is premature and will not be further
addressed. See Rule 231.
6
Principally, the exhibits accompanying respondent’s motion
for summary judgment contained conflicting dates for issuance of
(continued...)
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denied the motion for summary judgment but warned petitioner as
follows:
At the same time, the Court cautions petitioner
that some, but not all, of the various issues advanced
by petitioner during the administrative process have
been repeatedly rejected by this and other courts or
are refuted by the documentary record. Moreover,
maintenance of similar frivolous arguments has served
as grounds for imposition of penalties under section
6673. We admonish petitioner that if he persists in
making frivolous and groundless tax protester arguments
in any further proceedings with respect to this case,
rather than raising relevant issues, as specified in
section 6330(c)(2), the Court would be in a position to
impose a penalty under section 6673(a)(1). * * *
Several days later, on October 8, 2004, the Court received
from petitioner his response to respondent’s motion. Therein,
petitioner principally reiterated his position that, on account
of the refusal to permit recording of the collection hearing, the
underlying notice of determination should be vacated and his case
remanded. He asked that the Court deny respondent’s motion for
summary judgment. The response was filed for the record, and the
case proceeded to trial.
6
(...continued)
the underlying notices of deficiency and did not include copies
of the notices themselves. For instance, the notice of
determination stated at one point that the notices of deficiency
were issued on Jan. 10, 2001, and at another point gave a date of
mailing of Oct. 12, 2000. As later became clear at trial,
certain of the references were inadvertently made to the “Last
Day to File a Petition With the United States Tax Court” date
stamped on the front of the notices of deficiency, rather than
the issuance date, also stamped on the front.
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The case was called from the calendar of the trial session
of the Court in Phoenix, Arizona, on October 18, 2004.
Petitioner at that time submitted a pretrial memorandum that
incorporated by reference the legal arguments stated in
petitioner’s earlier response to respondent’s motion for summary
judgment but offered no additional reasoning. Petitioner’s
pretrial memorandum was filed with the Court after respondent
indicated no objection to late filing. The case was then heard
on October 19, 2004, and both petitioner and his wife testified.
At the close of trial, petitioner stated: “All I have to
say is I move to have this case dismissed on the grounds that
they weren’t prepared.” Presumably, the basis for this statement
is that, as a predicate to the admission into evidence as
business records of copies of the statutory notices of deficiency
underlying the assessments, counsel for respondent requested a
brief recess to procure the testimony of a revenue agent. This
request was granted, and a revenue agent testified as to the
manner in which the documents in petitioner’s administrative file
were maintained in the regular course of business.
OPINION
I. Oral Motion To Dismiss
As a threshold matter, the Court briefly addresses
petitioner’s motion to dismiss this case on grounds of
respondent’s lack of preparedness. Although we agree that
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counsel for respondent might have been more ready, based on our
September 30, 2004, order, to address inquiries from the Court
regarding the notices of deficiency, the need formally to
introduce the documents into evidence may have been
unanticipated. Counsel quickly responded to the situation by
procuring the testimony of a revenue agent. Only very minimal
delay ensued, and we do not perceive that petitioner was
prejudiced thereby. The Court is aware of no precedent for
employing dismissal in such circumstances.
The Court further is satisfied that the testimony of the
agent laid a proper foundation for admission of the notices of
deficiency under rules 901 and 803(6) of the Federal Rules of
Evidence. See also sec. 7453; Rule 143(a). Petitioner’s oral
motion to dismiss shall be denied.
II. Collection Action
A. General Rules
Section 6331(a) authorizes the Commissioner to levy upon all
property and rights to property of a taxpayer where there exists
a failure to pay any tax liability within 10 days after notice
and demand for payment. Sections 6331(d) and 6330 then set forth
procedures generally applicable to afford protections for
taxpayers in such levy situations. Section 6331(d) establishes
the requirement that a person be provided with at least 30 days’
prior written notice of the Commissioner’s intent to levy before
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collection may proceed. Section 6331(d) also indicates that this
notification should include a statement of available
administrative appeals. Section 6330(a) expands in several
respects upon the premise of section 6331(d), forbidding
collection by levy until the taxpayer has received notice of the
opportunity for administrative review of the matter in the form
of a hearing before the Internal Revenue Service Office of
Appeals. Section 6330(b) grants a taxpayer who so requests the
right to a fair hearing before an impartial Appeals officer.
Section 6330(c) addresses the matters to be considered at
the hearing:
SEC. 6330(c). Matters Considered at Hearing.--In
the case of any hearing conducted under this section--
(1) Requirement of investigation.--The
appeals officer shall at the hearing obtain
verification from the Secretary that the
requirements of any applicable law or
administrative procedure have been met.
(2) Issues at hearing.--
(A) In general.--The person may raise at
the hearing any relevant issue relating to
the unpaid tax or the proposed levy,
including--
(i) appropriate spousal defenses;
(ii) challenges to the
appropriateness of collection actions;
and
(iii) offers of collection
alternatives, which may include the
posting of a bond, the substitution of
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other assets, an installment agreement,
or an offer-in-compromise.
(B) Underlying liability.--The person
may also raise at the hearing challenges to
the existence or amount of the underlying tax
liability for any tax period if the person
did not receive any statutory notice of
deficiency for such tax liability or did not
otherwise have an opportunity to dispute such
tax liability.
Once the Appeals officer has issued a determination
regarding the disputed collection action, section 6330(d) allows
the taxpayer to seek judicial review in the Tax Court or the U.S.
District Court, depending upon the type of tax. In considering
whether taxpayers are entitled to any relief from the
Commissioner’s determination, this Court has established the
following standard of review:
where the validity of the underlying tax liability is
properly at issue, the Court will review the matter on
a de novo basis. However, where the validity of the
underlying tax liability is not properly at issue, the
Court will review the Commissioner’s administrative
determination for abuse of discretion. [Sego v.
Commissioner, 114 T.C. 604, 610 (2000).]
B. Analysis
1. Appeals Hearing
Hearings conducted under section 6330 are informal
proceedings, not formal adjudications. Katz v. Commissioner, 115
T.C. 329, 337 (2000); Davis v. Commissioner, 115 T.C. 35, 41
(2000). There exists no right to subpoena witnesses or documents
in connection with section 6330 hearings. Roberts v.
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Commissioner, 118 T.C. 365, 372 (2002), affd. 329 F.3d 1224 (11th
Cir. 2003); Nestor v. Commissioner, 118 T.C. 162, 166-167 (2002);
Davis v. Commissioner, supra at 41-42. Taxpayers are entitled to
be offered a face-to-face hearing at the Appeals Office nearest
their residence. Where the taxpayer declines to participate in a
proffered face-to-face hearing, hearings may also be conducted
telephonically or by correspondence. Katz v. Commissioner, supra
at 337-338; Dorra v. Commissioner, T.C. Memo. 2004-16; sec.
301.6330-1(d)(2), Q&A-D6 and D7, Proced. & Admin. Regs.
Furthermore, once a taxpayer has been given a reasonable
opportunity for a hearing but has failed to avail himself or
herself of that opportunity, we have approved the making of a
determination to proceed with collection based on the Appeals
officer’s review of the case file. See, e.g., Taylor v.
Commissioner, T.C. Memo. 2004-25; Leineweber v. Commissioner,
T.C. Memo. 2004-17; Armstrong v. Commissioner, T.C. Memo. 2002-
224; Gougler v. Commissioner, T.C. Memo. 2002-185; Mann v.
Commissioner, T.C. Memo. 2002-48. Thus, a face-to-face meeting
is not invariably required.
Regulations promulgated under section 6330 likewise
incorporate many of the foregoing concepts, as follows:
Q-D6. How are CDP hearings conducted?
A-D6. * * * CDP hearings * * * are informal in
nature and do not require the Appeals officer or
employee and the taxpayer, or the taxpayer’s
representative, to hold a face-to-face meeting. A CDP
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hearing may, but is not required to, consist of a face-
to-face meeting, one or more written or oral
communications between an Appeals officer or employee
and the taxpayer or the taxpayer’s representative, or
some combination thereof. * * *
Q-D7. If a taxpayer wants a face-to-face CDP
hearing, where will it be held?
A-D7. The taxpayer must be offered an opportunity
for a hearing at the Appeals office closest to
taxpayer’s residence or, in the case of a business
taxpayer, the taxpayer’s principal place of business.
If that is not satisfactory to the taxpayer, the
taxpayer will be given an opportunity for a hearing by
correspondence or by telephone. If that is not
satisfactory to the taxpayer, the Appeals officer or
employee will review the taxpayer’s request for a CDP
hearing, the case file, any other written
communications from the taxpayer (including written
communications, if any, submitted in connection with
the CDP hearing), and any notes of any oral
communications with the taxpayer or the taxpayer’s
representative. Under such circumstances, review of
those documents will constitute the CDP hearing for the
purposes of section 6330(b). [Sec. 301.6330-1(d)(2),
Q&A-D6 and D7, Proced. & Admin. Regs.]
This Court has cited the above regulatory provisions with
approval. See, e.g., Taylor v. Commissioner, supra; Leineweber
v. Commissioner, supra; Dorra v. Commissioner, supra; Gougler v.
Commissioner, supra.
With respect to the instant matter, the record reflects that
petitioner was provided with an opportunity for a face-to-face
hearing on February 19, 2003. The hearing did not proceed when
petitioner was not permitted to record the meeting. On July 8,
2003, in Keene v. Commissioner, 121 T.C. 8, 19 (2003), this Court
held that taxpayers are entitled, pursuant to section 7521(a)(1),
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to audio record section 6330 hearings. The taxpayer in that case
had refused to proceed when denied the opportunity to record, and
we remanded the case to allow a recorded Appeals hearing. Id.
In contrast, we have distinguished, and declined to remand,
cases where the taxpayer had participated in an Appeals Office
hearing, albeit unrecorded, and where all issues raised by the
taxpayer could be properly decided from the existing record.
E.g., id. at 19-20; Frey v. Commissioner, T.C. Memo. 2004-87;
Durrenberger v. Commissioner, T.C. Memo. 2004-44; Brashear v.
Commissioner, T.C. Memo. 2003-196; Kemper v. Commissioner, T.C.
Memo. 2003-195. Stated otherwise, cases will not be remanded to
Appeals, nor determinations otherwise invalidated, merely on
account of the lack of a recording when to do so is not necessary
and would not be productive. See, e.g., Frey v. Commissioner,
supra; Durrenberger v. Commissioner, supra; Brashear v.
Commissioner, supra; Kemper v. Commissioner, supra; see also
Lunsford v. Commissioner, 117 T.C. 183, 189 (2001). A principal
scenario falling short of the necessary or productive standard
exists where the taxpayers rely on frivolous or groundless
arguments consistently rejected by this and other courts. See,
e.g., Frey v. Commissioner, supra; Brashear v. Commissioner,
supra; Kemper v. Commissioner, supra.
Because no hearing had been conducted at all in petitioner’s
case and the record contained certain factual ambiguities, we
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declined to grant respondent’s motion for summary judgment. The
record as it then existed did not foreclose the possibility that
petitioner might have raised valid arguments had a hearing been
held. Accordingly, we provided petitioner an opportunity before
the Court at the trial session in Phoenix to identify any
legitimate issues he wished to raise that could warrant further
consideration of the merits of his case by the Appeals Office or
this Court.
At trial, the comments of petitioner and his wife focused
almost exclusively on petitioner’s assertion that he did not
receive the notices of deficiency and on corollary matters
regarding his address. However, as will be explained in greater
detail below, petitioner failed to raise any legitimate
substantive issues requiring or justifying additional review
under the framework of section 6330. The record therefore does
not indicate that any purpose would be served by remand or
additional proceedings. The Court concludes that all pertinent
issues relating to the propriety of the collection determination
can be decided through review of the materials before it.
2. Review of Underlying Liabilities
The evidentiary record establishes that statutory notices
determining deficiencies with respect to the 1993, 1994, 1995,
1996, and 1997 taxable years were issued to petitioner.
Respondent’s records indicate that the notices were returned as
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undeliverable, forwarding order expired. Petitioner asserts that
he never received the notices, and at trial he and his wife
testified regarding their various addresses.
In particular, petitioner acknowledged that he wrote and
signed the January 22, 1999, letter communicating the West Deer
Valley address. He also failed to identify any subsequent
communication providing the Internal Revenue Service with a
superseding address. Ms. Lehmann testified explicitly that no
superseding letter had been sent to supply new or updated
information. Thus, the notices of deficiency were sent in a
manner in compliance with, and valid under, section 6212 and
corresponding regulations,7 requiring that a notice of deficiency
be sent to a taxpayer’s last known address. Sec. 6212(a) and
(b)(1).
Concerning issues bearing on receipt for purposes of section
6330, petitioner initially stated that West Deer Valley was his
address as of January 22, 1999. Then he said he probably moved
at about that time. Next, he testified that it had been over 8
years since he and his wife had lived at either the West Deer
Valley address or the East McRae Way address. Finally, he stated
explicitly that they had “been living at our address we’re at now
since 1996.”
7
See supra note 3.
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In this connection, the Court notes that the address used by
petitioner on his petition and on other papers filed with the
Court throughout this proceeding is 48412 North Black Canyon Hwy
#252, New River, Arizona 85087. However, the address reflected
on the notices of deficiency issued to petitioner’s wife on
October 12, 2000, and with respect to which a Tax Court petition
was filed at docket No. 1008-01, was 22444 North 23rd Avenue or
Lane,8 Phoenix, Arizona 85027. This address was used by
Ms. Lehmann throughout that proceeding, from March of 2001 to
September of 2002. At trial in the instant case, Ms. Lehmann
testified that she and petitioner lived together during the 1993
through 1997 period and at the time her earlier Tax Court
proceedings were underway. She stated that petitioner was aware
of those proceedings and discussed them with her. There is also
indication in the testimony that petitioner and his wife employed
post office boxes at various times, and it is unclear precisely
which of the addresses used pertain to boxes as opposed to
residences.
Although section 6330(c)(2)(B) generally entitles taxpayers
to raise the issue of underlying liability if they did not
receive a notice of deficiency or otherwise have an opportunity
8
One notice used “Ave.”, while the other used “Lane”. Lane
was employed on the majority of the documents filed during the
proceedings, but the parties indicated at the 2002 trial in that
case that avenue was more correct.
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to dispute the liability, the Court has held that taxpayers
cannot defeat actual receipt by deliberately refusing delivery of
a statutory notice. Sego v. Commissioner, 114 T.C at 610-611;
Tatum v. Commissioner, T.C. Memo. 2003-115; Carey v.
Commissioner, T.C. Memo. 2002-209; Baxter v. Commissioner, T.C.
Memo. 2001-300. Here, the testimony given at trial suggests that
petitioner’s communication of the West Deer Valley address to the
Internal Revenue Service in January of 1999, and subsequent
failure to notify of any new addresses, may have been a
deliberate preemptive attempt to prevent delivery of any notice
of deficiency. The substantial nature of the relevant tax
deficiencies, exceeding $250,000 for each of the years in issue,
further enhances the likelihood of this scenario. To the extent
that the West Deer Valley address had been outdated for 8 years
or “since 1996” at the time of trial in October of 2004, the 1999
letter would have been inaccurate when written. Petitioner would
reasonably be considered in such circumstances to have
deliberately repudiated his opportunity to contest the notices of
deficiency in this Court and likewise now to be precluded from
challenging his underlying liability in this proceeding.
Nonetheless, even if petitioner were entitled to contest his
underlying liabilities at this juncture, he has at no time
offered even a scintilla of evidence that would show error in
respondent’s determinations. He declined at trial to address in
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any way the merits of the deficiencies, despite being warned as
follows:
you wanted to record your hearing and were not
permitted to do so, so you didn’t participate in the
hearing. This trial is being recorded. This is your
chance, your only chance unless I remand the case, to
present any and all issues that you wish to raise with
respect to your 6330 hearing. And that will be on the
record.
Thus, even a de novo review would not avail petitioner, and,
moreover, he has now forfeited his chance to suggest any
meritorious issues worthy of remand.
3. Review for Abuse of Discretion
Petitioner has also made various arguments relating to
aspects of the assessment and collection procedures that we
review for abuse of discretion. Action constitutes an abuse of
discretion under this standard where arbitrary, capricious, or
without sound basis in fact or law. Woodral v. Commissioner, 112
T.C. 19, 23 (1999).
Federal tax assessments are formally recorded on a record of
assessment in accordance with section 6203. The Commissioner is
not required to use Form 23C in making an assessment. Roberts v.
Commissioner, 118 T.C. at 369-371. Furthermore, section
6330(c)(1) mandates neither that the Appeals officer rely on a
particular document in satisfying the verification requirement
nor that the Appeals officer actually give the taxpayer a copy of
the verification upon which he or she relied. Craig v.
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Commissioner, 119 T.C. 252, 262 (2002); Nestor v. Commissioner,
118 T.C. at 166.
A Form 4340, for instance, constitutes presumptive evidence
that a tax has been validly assessed pursuant to section 6203.
Davis v. Commissioner, 115 T.C. at 40 (and cases cited thereat).
Consequently, 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
reflecting that tax liabilities were assessed and remain unpaid
is sufficient to support collection action under section 6330.
Id. at 40-41. We have specifically held that it is not an abuse
of discretion for an Appeals officer to rely on Form 4340, Nestor
v. Commissioner, supra at 166; Davis v. Commissioner, supra at
41, or a computer transcript of account, Schroeder v.
Commissioner, T.C. Memo. 2002-190; Mann v. Commissioner, T.C.
Memo. 2002-48, to comply with section 6330(c)(1).
Here, the record contains a Form 4340 for each of the years
at issue, indicating that assessments were made for the year and
that taxes remain unpaid. Petitioner has failed to cite any
irregularities with respect to the Forms 4340 introduced into
evidence that would cast doubt on the information recorded
thereon.
In addition to the specific dictates of section 6330, the
Secretary, upon request, is directed to furnish to the taxpayer a
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copy of pertinent parts of the record of assessment setting forth
the taxpayer’s name, the date of assessment, the character of the
liability assessed, the taxable period, if applicable, and the
amounts assessed. Sec. 6203; sec. 301.6203-1, Proced. & Admin.
Regs. A taxpayer receiving a copy of Form 4340 has been provided
with all the documentation to which he or she is entitled under
section 6203 and section 301.6203-1, Proced. & Admin. Regs.
Roberts v. Commissioner, supra at 370 n.7. This Court likewise
has upheld collection action where taxpayers were provided with
literal transcripts of account (so-called MFTRAX). See, e.g.,
Frank v. Commissioner, T.C. Memo. 2003-88; Swann v. Commissioner,
T.C. Memo. 2003-70. The January 29, 2003, letter to petitioner
from the settlement officer enclosed copies of Forms 4340 for
each year.
Petitioner has also denied receiving the “Notices of
Assessment”, presumably alluding to the notice and demand for
payment that section 6303(a) establishes should be given within
60 days of the making of an assessment. However, a notice of
balance due constitutes a notice and demand for payment within
the meaning of section 6303(a). Craig v. Commissioner, supra at
262-263. The Forms 4340 indicate that petitioner was sent
notices of balance due for the tax years involved, and petitioner
has never denied receiving these notices.
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Thus, with respect to those issues enumerated in section
6330(c)(2)(A) and subject to review in collection proceedings for
abuse of discretion, petitioner has not raised any spousal
defenses, valid challenges to the appropriateness of the
collection action, or collection alternatives. As this Court has
noted in earlier cases, Rule 331(b)(4) states that a petition for
review of a collection action shall contain clear and concise
assignments of each and every error alleged to have been
committed in the notice of determination and that any issue not
raised in the assignments of error shall be deemed conceded. See
Lunsford v. Commissioner, 117 T.C. at 185-186; Goza v.
Commissioner, 114 T.C. 176, 183 (2000). For completeness, we
have addressed various points advanced by petitioner during the
administrative process or before us in Phoenix, but no
meritorious items were pursued even in those proceedings.
Accordingly, the Court concludes that respondent’s determination
to proceed with collection of petitioner’s tax liabilities was
not an abuse of discretion.
III. Section 6673 Penalty
Section 6673(a)(1) authorizes the Court to require the
taxpayer to pay a penalty not in excess of $25,000 when it
appears to the Court that, inter alia, proceedings have been
instituted or maintained by the taxpayer primarily for delay or
that the taxpayer’s position in such proceeding is frivolous or
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groundless. In Pierson v. Commissioner, 115 T.C. 576, 581
(2000), the Court warned that taxpayers abusing the protections
afforded by sections 6320 and 6330 through the bringing of
dilatory or frivolous lien or levy actions will face sanctions
under section 6673. The Court has since repeatedly disposed of
cases premised on arguments akin to those raised herein summarily
and with imposition of the section 6673 penalty. See, e.g.,
Craig v. Commissioner, 119 T.C. at 264-265 (and cases cited
thereat).
With respect to the instant matter, we are convinced that
petitioner instituted and maintained this proceeding primarily
for delay. Throughout the administrative process and in his
petition, petitioner advanced contentions and demands previously
and consistently rejected by this and other courts. While his
procedural stance concerning recording was correct and his
contentions regarding nonreceipt of the notices of deficiency
initially gave us pause, his testimony and that of his wife
revealed that these matters in petitioner’s circumstances posed
no legitimate basis for contesting the collection determination.
Hence, petitioner ignored the Court’s explicit warning that any
further proceedings would be justified only in the face of
relevant and nonfrivolous issues. Moreover, petitioner was
expressly alerted to the potential use of sanctions in his case.
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Yet he appeared at the trial session in Phoenix without any
legitimate evidence or argument in support of his position.
Petitioner therefore received fair warning but has persisted
in frivolously disputing respondent’s determination. The Court
concludes that a penalty of $2,500 should be awarded to the
United States in this case. To reflect the foregoing,
An appropriate order and
decision will be entered.