T.C. Memo. 2005-186
UNITED STATES TAX COURT
JOHN J. DELGADO, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 14675-04L. Filed July 26, 2005.
John J. Delgado, pro se.
Monica J. Miller and Robert W. Dillard, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
VASQUEZ, Judge: Pursuant to section 6330(d),1 petitioner
seeks review of respondent’s determination regarding collection
of his 1998, 1999, and 2000 income tax liabilities.
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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FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. At the time he filed the
petition, petitioner resided in Altamonte Springs, Florida.
Petitioner submitted to the Internal Revenue Service Forms
1040A, U.S. Individual Income Tax Return, for 1998, 1999, and
2000. The Forms 1040A for 1998, 1999, and 2000 listed zeros for,
among other things, the amount of petitioner’s income, adjusted
gross income, taxable income, tax, total tax, and amount owed.
Attached to these Forms 1040A were frivolous and groundless
arguments about why petitioner was not liable to pay tax.
Respondent mailed petitioner statutory notices of deficiency for
1998, 1999, and 2000 on May 2, 2002, February 15, 2002, and
February 15, 2002, respectively. Petitioner received the
statutory notices of deficiency for 1998, 1999, and 2000.
Petitioner responded to each notice of deficiency with frivolous
and groundless arguments. Petitioner, however, did not petition
the Court regarding the statutory notices of deficiency for 1998,
1999, and 2000.
On September 30, 2002, February 17, 2003, and December 23,
2002, respondent assessed petitioner’s liabilities and mailed
petitioner notice and demand for payment for 1998, 1999, and
2000, respectively.
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On February 4, 2004, respondent sent petitioner a final
notice--notice of intent to levy and notice of your right to a
hearing regarding petitioner’s 1998, 1999, and 2000 tax years
(notice of levy).
On or about March 7, 2004, respondent received a Form 12153,
Request for a Collection Due Process Hearing, regarding
petitioner’s 1998, 1999, and 2000 tax years (hearing request).
The hearing request was postmarked February 27, 2004, and
respondent treated it as received timely. In the hearing
request, petitioner checked the box for notice of levy/seizure
and in the space to explain why he did not agree he wrote: “Not
Liable.”
On June 15, 2004, Settlement Officer J. Feist, from
respondent’s Tampa Appeals Office, mailed petitioner a letter
that scheduled a section 6330 hearing for June 24, 2004.
Settlement Officer Feist gave petitioner transcripts of his
account for the years in issue and offered petitioner an
opportunity for a face-to-face section 6330 hearing. In light of
the fact that petitioner raised frivolous arguments in the past,
however, Settlement Officer Feist instructed petitioner to write
by June 22, 2004, specific relevant issues before he would grant
a face-to-face section 6330 hearing. At that time, Settlement
Officer Feist also provided petitioner with a document entitled
“The Truth About Frivolous Tax Arguments” and a link to an IRS
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website containing this document.2 Settlement Officer Feist also
advised petitioner that he could not dispute his underlying
liabilities for the years in issue because he received notices of
deficiency for the years in issue.
On June 18, 2004, petitioner called Settlement Officer
Feist. Petitioner and Settlement Officer Feist agreed to
postpone the section 6330 hearing until July 8, 2004. During the
telephone call of June 18, 2004, petitioner requested a face-to-
face section 6330 hearing and to record the section 6330 hearing.
Settlement Officer Feist again noted petitioner’s previous
frivolous arguments, but left open the possibility for a face-to-
face and recorded section 6330 hearing if petitioner would
provide him with relevant issues he wished to discuss.
On or about June 21, 2004, respondent received a fax from
petitioner. In the fax, petitioner acknowledged the June 22,
2004, deadline for submission of relevant issues and stated that
he intended to have a face-to-face section 6330 hearing, bring
witnesses, and record the section 6330 hearing with a court
reporter and tape recorder.
2
This document concludes with six pages devoted to
penalties for pursuing frivolous tax arguments including citation
to sec. 6673 and citation to and discussion of numerous cases,
including sec. 6330 collection cases and other cases, where the
Court has imposed penalties on taxpayers for advancing frivolous
arguments.
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On July 2, 2004, Settlement Officer Feist called petitioner
because he had received a letter dated June 28, 2004, from
petitioner requesting feedback on the fax. As of July 2, 2004,
Settlement Officer Feist had not received from petitioner any
listing of relevant issues that petitioner wished to discuss at
the section 6330 hearing. During the call on that date
petitioner stated that he was out of town without access to his
files and he would call Settlement Officer Feist on July 6, 2004,
with the relevant issues he wished to discuss. Settlement
Officer Feist offered petitioner the opportunity for a
correspondence or telephonic section 6330 hearing on July 8,
2004, as petitioner had not provided him with any relevant issues
to discuss at the section 6330 hearing.
On July 7, 2004, Settlement Officer Feist received two phone
messages and a fax from petitioner. Petitioner raised issues
regarding respondent’s notices’ not having the force and effect
of law and respondent’s authority to send notices to him. That
same day, Settlement Officer Feist telephoned petitioner about
his aforementioned arguments and informed petitioner that all
laws and administrative procedures had been complied with.
Petitioner’s response was a frivolous argument, and Settlement
Officer Feist noted to petitioner that his argument was addressed
on page 42 of “The Truth About Frivolous Tax Arguments” that he
had provided to petitioner. Settlement Officer Feist denied
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petitioner’s request for a face-to-face and recorded section 6330
hearing, but he suggested that petitioner could and should submit
collection alternatives to him at the scheduled hearing time.
On July 8, 2004, Settlement Officer Feist called petitioner
to conduct a telephonic section 6330 hearing. During the section
6330 hearing, Settlement Officer Feist offered petitioner the
opportunity to raise relevant issues. Petitioner raised
additional frivolous arguments, including one answered on page 36
of “The Truth About Frivolous Tax Arguments.” Petitioner chose
not to offer a collection alternative. Petitioner insisted on a
face-to-face and recorded section 6330 hearing.
On July 12, 2004, respondent issued a Notice of
Determination Concerning Collection Action(s) Under Section 6320
and/or 6330 to petitioner regarding his 1998, 1999, and 2000 tax
years (notice of determination). In the notice of determination,
respondent determined that the filing of the notice of levy
should not be withdrawn.
As of July 15, 2004, petitioner’s unpaid liabilities for
1998, 1999, and 2000 were $2,041.57, $22,257.87, and $51,510.14,
respectively.
In the petition, petitioner’s only assignment of error was
that respondent did not allow or provide him a face-to-face
section 6330 hearing pursuant to the regulations under section
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6330, and that this also denied him the right to record the
section 6330 hearing.
The only issues that petitioner would raise, or would have
raised, if provided a face-to-face section 6330 hearing are
frivolous and groundless issues and arguments--e.g., that the
Commissioner had no authority to assess tax, that there is no
definition of an income tax or income, that there is no provision
in the Internal Revenue Code that makes him liable to pay taxes
or file returns, and that he wanted Settlement Officer Feist to
show him where in the Internal Revenue Code it provides that he
(petitioner) is liable to file returns--and he wanted to dispute
the amount of his underlying tax liability.3
OPINION
When the Commissioner issues a determination regarding a
disputed collection action, section 6330(d) permits a taxpayer to
seek judicial review with the Tax Court or a U.S. District Court,
as is appropriate. If the underlying tax liability is properly
at issue, we review that issue de novo. Sego v. Commissioner,
114 T.C. 604, 610 (2000); Goza v. Commissioner, 114 T.C. 176, 181
(2000). If the validity of the underlying tax liability is not
at issue, we review the Commissioner’s determination for abuse of
discretion. Sego v. Commissioner, supra at 610.
3
We note that until trial, and initially at trial,
petitioner refused to state what issues he would raise, or would
have raised, at a face-to-face sec. 6330 hearing.
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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. Id. at
609; Goza v. Commissioner, supra at 180. 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 underlying tax liability. Sec.
6330(c)(2)(B); Sego v. Commissioner, supra at 610-611; Goza v.
Commissioner, supra at 182-183.
A section 6330 hearing “may, but is not required to, consist
of a face-to-face meeting.” Sec. 301.6330-1(d)(2), Q&A-D6,
Proced. & Admin. Regs. If a taxpayer wants a face-to-face
section 6330 hearing, the taxpayer must be offered an opportunity
for such a section 6330 hearing at the Appeals office closest to
the taxpayer’s residence. Sec. 301.6330-1(d)(2), Q&A-D7, Proced.
& Admin. Regs.
Although respondent denied petitioner a face-to-face section
6330 hearing and the right to record the section 6330 hearing, we
conclude that it is not necessary and will not be productive to
remand this case to the Appeals Office for a face-to-face section
6330 hearing in order to allow petitioner to make his frivolous
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arguments or to record the section 6330 hearing. See Lunsford v.
Commissioner, 117 T.C. 183, 189 (2001); see also Kemper v.
Commissioner, T.C. Memo. 2003-195. Furthermore, we need not
remand this case so respondent can consider petitioner’s
challenge to his underlying liabilities as petitioner is
precluded from challenging his underlying liabilities for the
years in issue because he received notices of deficiency for the
years in issue. Sec. 6330(c)(2)(B); Sego v. Commissioner, supra
at 610-611; Goza v. Commissioner, supra at 182-183.
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).
After examination of the entire record before us, we
conclude that respondent did not abuse his discretion in
determining to proceed with the collection action as determined
in the notices of determination with respect to petitioner’s
unpaid liabilities for taxable years 1998, 1999, and 2000.
Section 6673(a)(1) authorizes this Court to require a
taxpayer to pay to the United States a penalty not to exceed
$25,000 if the taxpayer took frivolous or groundless 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
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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).
Petitioner has 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).
We conclude that petitioner’s position was frivolous and
groundless and that petitioner instituted and maintained these
proceedings primarily for delay. We take this opportunity to
warn petitioner that the Court will impose a penalty pursuant to
section 6673 if he returns to the Court and proceeds in a similar
fashion in the future.
To reflect the foregoing,
Decision will be entered
for respondent.