T.C. Memo. 2005-246
UNITED STATES TAX COURT
GERALD W. KOZACK, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 13381-04L. Filed October 24, 2005.
Gerald W. Kozack, pro se.
Robert W. Dillard, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
COLVIN, Judge: Respondent sent petitioner a Notice Of
Determination Concerning Collection Action(s) under Section 63301
(Levy), in which respondent determined to proceed with collection
1
Unless otherwise stated, section references are to the
Internal Revenue Code.
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by levy of petitioner’s income tax liability for 2000. We
sustain respondent’s determination for reasons discussed below.
FINDINGS OF FACT
1. Petitioner
Petitioner resided in Florida when he filed his petition.
Petitioner was a professional pilot in 2000 and had the following
amounts of income:
Payor Amount Description
Bombardier Aerospace Corp. $68,305 Nonemployee compensation
Bombardier Aerospace Corp 58,045 Wages
PE Corp. NY 1,333 Nonemployee compensation
Florida Agency for Workforce 825 Unemployment compensation
Innovation
Natl. Financial Services LLC 362 Dividends
Bank of America 281 Interest
Space Coast Credit UN 145 Interest
First National Bank of
Suffield 140 Interest
Total 129,436
2. Petitioner’s Form 1040 for 2000
On August 17, 2001, petitioner submitted a Form 1040, U.S.
Individual Income Tax Return, for 2000 to respondent. In it, he
stated that his filing status was married filing separately. He
entered zeros on the lines provided for reporting his income and
tax and requested a refund of $9,316. Petitioner attached to the
Form 1040 a document in which he claimed, inter alia, that: (a)
No section of the Internal Revenue Code makes him liable for
income tax; (b) no section of the Internal Revenue Code requires
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that income taxes be paid on the basis of a return; (c) the
“Privacy Act Notice” contained in the Form 1040 booklet does not
require petitioner to file a return; (d) no statute allows the
Internal Revenue Service (IRS) to change petitioner’s return; and
(e) petitioner had no income because income can be derived only
from corporate activity.
3. Petitioner’s Letter to Respondent
In response to a letter from respondent dated October 15,
2002, containing proposed income tax examination changes,
petitioner, in an undated letter to respondent, contended, for
example, that: (a) Only petitioner can assess his tax liability;
and (b) Federal employees are not permitted to change his return
without proper authority. He asked respondent to provide: (a)
Any documents relating to the determination that his return was
not correct; (b) the regulation that requires petitioner to
“seriously treat” the adjustments proposed to his 2000 return;
(c) the statute and regulation that allow respondent to change
his 2000 return; and (d) the delegation order authorizing
respondent’s representative to act on respondent’s behalf.
4. Notice of Deficiency
On March 26, 2003, respondent sent petitioner a notice of
deficiency for 2000 in which respondent determined a $39,669
deficiency in petitioner’s Federal income tax. Respondent also
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determined that petitioner is liable for additions to tax of
$7,588 for failure to timely file under section 6651(a)(1) and
$1,566 for failure to pay estimated tax under section 6654.
Petitioner wrote to respondent on June 18, 2003, and
acknowledged that he had received the notice of deficiency. In
the letter, petitioner questioned whether the notice of
deficiency was valid and whether respondent’s representative had
authority to send the notice of deficiency.
Petitioner did not file a petition in the Tax Court for
2000. Respondent assessed tax and additions to tax for
petitioner’s 2000 tax year on October 20, 2003.
5. Respondent’s Notice of Intent To Levy and Petitioner’s
Request for a Hearing
On December 13, 2003, respondent issued to petitioner a
Notice of Intent to Levy and Notice of Your Right to a Hearing
relating to his 2000 tax liability. Petitioner requested a
hearing. In his request, petitioner contended that: (a) No
statute requires him to pay income tax; (b) no law authorizes
respondent to claim that he owes any income tax for 2000; (c) the
“IRS Decoding Manual” establishes that he owes no income tax for
2000; and (d) the Secretary has not authorized any action for the
collection of taxes and penalties as required by section 7401.
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On April 20, 2004, respondent’s Appeals Office sent
petitioner a copy of Form 4340, Certificate of Assessments,
Payments and Other Specified Matters, for 2000 and told him that:
(a) Petitioner could not challenge his underlying tax liability
as determined by respondent because he had previously been given
the opportunity to dispute it, and (b) the Appeals Office does
not consider challenges based on constitutional, religious,
political, or moral grounds.
On June 2, 2004, Settlement Officer Joe M. Breazeale
(Breazeale) reviewed respondent’s administrative file and
telephoned petitioner. Petitioner requested a face-to-face
hearing. Breazeale told petitioner that he would not offer him a
face-to-face hearing unless he had nonfrivolous issues to
discuss. In a telephone call on June 10, 2004, Breazeale told
petitioner that petitioner could not challenge his underlying tax
liability because he had received the notice of deficiency and
failed to petition the Tax Court. Breazeale and petitioner also
discussed the process for an offer-in-compromise. Petitioner
told Breazeale he would call him on June 18, 2004, and tell him
how he wanted to proceed. Petitioner did not contact Breazeale
on June 18, 2004, or thereafter.
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6. Notice of Determination and Petition
On June 25, 2004, respondent sent petitioner a notice of
determination with respect to the levy for 2000. Petitioner
timely filed a petition to review that determination with this
Court.
OPINION
Petitioner contends that respondent’s determination to
proceed with collection by levy was an abuse of discretion
because respondent failed to provide petitioner an opportunity
for a face-to-face hearing. We disagree.
Where the taxpayer’s underlying tax liability is not at
issue, we review the Commissioner’s administrative determination
under section 6330 for abuse of discretion.2 Goza v.
Commissioner, 114 T.C. 176 (2000). Treasury regulations state
that if a taxpayer wants a face-to-face hearing, the taxpayer
must be offered an opportunity for a hearing at the Appeals
Office closest to the taxpayer’s residence. Sec. 301.6330-
1(d)(2), Q&A-D7, Proced. & Admin. Regs. However, in Lunsford v.
2
Petitioner contends that he is not liable for income tax
for 2000. A taxpayer may dispute his or her underlying tax
liability at the sec. 6330 hearing if he or she did not receive a
notice of deficiency or did not otherwise have an opportunity to
dispute the tax liability. Sec. 6330(c)(2)(B). Petitioner may
not dispute the underlying tax liability because he received a
notice of deficiency.
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Commissioner, 117 T.C. 183, 189 (2001), the Court declined to
remand the case to the Appeals Office for a hearing because the
taxpayer could not prevail on any of the issues he had raised in
the proceeding. As a result, we held that it was neither
necessary nor productive to remand the case to the Appeals
Office. Id.; see Kemper v. Commissioner, T.C. Memo. 2003-195
(remand to record face-to-face hearing denied); see also Keene v.
Commissioner, 121 T.C. 8, 19-20 (2003).
The same reasoning applies here. During the trial,
petitioner stated that his only arguments for overturning
respondent’s determination were those stated in his request for a
collection due process hearing and a letter petitioner wrote to
the Director of the Internal Revenue Service Center on June 18,
2003, challenging the Government’s authority to issue a notice of
deficiency to him. Petitioner cannot prevail on any of those
arguments. His arguments about respondent’s assessment
procedures are frivolous. We conclude that it is not necessary
and would not be productive to remand the case to the Appeals
Office to hold a face-to-face hearing. Thus, respondent may
proceed with a levy with respect to petitioner’s 2000 tax year.
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To reflect the foregoing,
Decision will be
entered for respondent.