T.C. Memo. 2005-132
UNITED STATES TAX COURT
ROBERT HOLLIDAY, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 18974-03L. Filed June 1, 2005.
P filed a petition for judicial review pursuant to
sec. 6330, I.R.C., in response to a determination by R
to proceed with collection by lien of assessed income
tax liabilities for 1991, 1992, and 1993. P filed
joint returns with his spouse for these years that
reported total income of “$0” and a total tax of “$0”
on all three of the returns, to which were attached
identical lengthy documents that contained contentions
and arguments that are frivolous and/or groundless. P
filed with the IRS a Request for a Due Process Hearing,
to which was attached a document raising several
reasons for P’s disagreement with a proposed IRS
collection action. P continues to pursue these issues,
all of which are refuted by the record and/or holdings
in prior cases.
Held: Remanding this matter to respondent’s
Appeals Office for recording would be neither necessary
nor productive.
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Held, further, R may proceed with collection of
balances due as determined in a Notice Of Determination
Concerning Collection Action(s) Under Section 6320
and/or 6330.
Robert Holliday, pro se.
Jonae A. Harrison, for respondent.
MEMORANDUM OPINION
NIMS, 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. Unless
otherwise indicated, all section references are to sections of
the Internal Revenue Code in effect for the years in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure. This case was submitted fully stipulated pursuant to
Rule 122, and the facts are so found. The stipulation of the
parties with accompanying exhibits is incorporated herein by this
reference.
Background
At the time the petition was filed in this case, petitioner
resided in Phoenix, Arizona.
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Petitioner failed to file timely Federal income tax returns
for 1991, 1992, and 1993. Respondent prepared a Substitute for
Return for each year pursuant to section 6020(b), and, on
November 9, 1995, respondent mailed to petitioner a notice of
deficiency for all taxable years. See Swanson v. Commissioner,
121 T.C. 111, 112 n.1 (2003). Petitioner and his spouse
subsequently filed joint returns in 2000 for the taxable years
1991, 1992, and 1993. Petitioner and his spouse reported total
income of “$0” and a total tax of “$0” on all of the returns.
The Hollidays also attached a lengthy document to each of the
returns that contained arguments that this Court has repeatedly
found to be frivolous and/or groundless, see, e.g., Copeland v.
Commissioner, T.C. Memo. 2003-46; Smith v. Commissioner, T.C.
Memo. 2003-45, and we find this also to be true in this case.
See also Holliday v. Commissioner, T.C. Memo. 2002-67, affd. 57
Fed. Appx. 774 (9th Cir. 2003).
On February 17, 2003, respondent issued to petitioner a
letter entitled “Notice of Federal Tax Lien Filing and Your Right
to a Hearing Under IRC 6320” relating to petitioner’s unpaid tax
liabilities for the aforementioned years. On March 22, 2003,
petitioner submitted Form 12153, Request for a Collection Due
Process Hearing, and attached a document which stated in part:
Notice of Lien - Explanation for Disagreement
Income. (1) There was a failure to determine a
deficiency; (2) There was a failure to issue a Notice of
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Deficiency; (3) There was a failure to generate an
assessment list; (4) There was a failure of the Commissioner
to certify and transmit the assessment list; (5) There was a
failure to record the assessment; (6) failure to provide
record of assessment; and, (7) failure to send Notice of
Assessment.
Petitioner later notified respondent that he intended to
audio record the administrative hearing. Respondent’s Appeals
officer advised petitioner that the hearing could not be
recorded.
On September 17, 2003, petitioner attempted to record the
scheduled administrative hearing at respondent’s offices in
Phoenix. The Appeals officer again informed petitioner that the
hearing could not be recorded but offered to conduct the hearing
without recording. Petitioner declined, and the hearing ended.
On October 2, 2003, respondent issued to petitioner a Notice
of Determination in which the Appeals officer recommended
proceeding with the lien.
Discussion
On November 6, 2003, petitioner filed a Petition for Lien or
Levy Action under section 6330(d). Citing this Court’s holding
in Keene v. Commissioner, 121 T.C. 8 (2003), petitioner contends
that respondent’s determination was an abuse of discretion
because the Appeals officer did not permit an audio recording of
the administrative hearing. Petitioner raised a similar
contention in response to a motion for summary judgment filed by
respondent before trial. For reasons stated in the Court’s order
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of October 4, 2004, we denied respondent’s motion, allowing the
case to proceed to trial. However, when afforded the opportunity
at the time of trial to present meritorious arguments permitted
under section 6330(c)(2), petitioner chose to submit the case
fully stipulated, reiterating only the frivolous protester
arguments previously rejected in our order of October 4, 2004.
Because the underlying tax liability is not in dispute, we
review the Appeals officer’s actions under an abuse of discretion
standard. Sego v. Commissioner, 114 T.C. 604, 610 (2000); Goza
v. Commissioner, 114 T.C. 176, 181-182 (2000). Under the abuse
of discretion standard, a determination will be affirmed unless
the respondent took action that was arbitrary or capricious,
lacked sound basis in fact, or was not justifiable in light of
the facts and circumstances. Mailman v. Commissioner, 91 T.C.
1079, 1084 (1988).
Before a lien may be placed on any property or right to
property, a taxpayer is entitled to notice of intent to file a
lien and notice of the right to a fair hearing before an
impartial officer of the IRS Appeals Office. Sec. 6320(a) and
(b). Taxpayers may raise challenges to “the appropriateness of
collection actions” and may make “offers of collection
alternatives, which may include the posting of a bond, the
substitution of other assets, an installment agreement, or an
offer-in-compromise”. Sec. 6330(c)(2)(A). The Appeals officer
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must consider those issues, verify that the requirements of
applicable law and administrative procedures have been met, and
consider “whether any proposed collection action balances the
need for the efficient collection of taxes with the legitimate
concern of the person [involved] that any collection action be no
more intrusive than necessary.” Sec. 6330(c)(3)(C).
Section 7521(a)(1) states that, upon the advance request of
the taxpayer, an Internal Revenue Service officer or employee
shall permit the taxpayer to make an audio recording of “any in-
person interview * * * relating to the determination or
collection of any tax”. As explained in our October 4, 2004,
order in this case, in Keene v. Commissioner, 121 T.C. 8, 19
(2003), this Court held that taxpayers are entitled, pursuant to
section 7521(a)(1), 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, again as noted in our October 4, 2004, order,
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.
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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, we 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. Petitioner, however, merely
continued to focus on the denial of a recorded hearing and
offered no substantive issues of merit.
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Hence, despite repeated warnings and opportunities, the only
contentions other than the recorded hearing issue advanced by
petitioner, i.e., the notice of deficiency and assessment issues
discussed below, are of a nature previously rejected by this and
other courts. 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.
Petitioner claims that there was a failure to issue a notice
of deficiency or a determination of a deficiency. However, while
a deficiency notice is not in the record, petitioner does not
seek to challenge respondent’s determination of his income tax
liability for the 3 years in issue and agrees that the standard
for review in this case is abuse of discretion. We deem this to
be a concession by petitioner that there was a deficiency notice
and a determination of a deficiency, notwithstanding petitioner’s
assertion to the contrary. Petitioner alleges irregularity in
respondent’s assessment procedure, but caselaw establishes that a
Form 4340, Certificate of Assessments, Payments, and Other
Specified Matters, included in the record for each year at issue,
satisfies the verification requirements under section 6330(c)(1)
and constitutes presumptive evidence that a tax has been validly
assessed. See Roberts v. Commissioner, 118 T.C. 365, 371 n.10
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(2002), affd. 329 F.3d 1224 (11th Cir. 2003); Davis v.
Commissioner, 115 T.C. 35 (2000). Respondent also properly
notified petitioner of the assessments by issuing a notice of
balance due for each taxable year. See, e.g., Hughes v. United
States, 953 F.2d 531, 536 (9th Cir. 1992).
Petitioner’s meritless arguments support the conclusion that
remanding this matter to respondent’s Appeals Office for
recording would be neither necessary nor productive, and we so
hold.
We have considered all of petitioner’s contentions and
arguments that we have not discussed, and we find them to be
without merit and irrelevant.
Further, we hold that respondent correctly determined that
collection efforts should proceed.
To reflect the foregoing,
Decision will be entered
for respondent.