T.C. Memo. 2006-88
UNITED STATES TAX COURT
BRADLEY W. BEAN, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 1881-05L. Filed April 26, 2006.
Bradley W. Bean, pro se.
Louise R. Forbes, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
HAINES, Judge: Petitioner filed the petition in this case
in response to a Notice of Determination Concerning Collection
Actions(s) Under Section 6320 and/or 6330 (notice of
determination) for 1999 and 2000 (years in issue).1 Pursuant to
1
Unless otherwise indicated, all section references are to
(continued...)
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section 6330(d), petitioner seeks review of respondent’s
determination. The issues for decision are whether respondent
abused his discretion in sustaining the filing of a Federal tax
lien and whether the Court should impose a penalty under section
6673(a).
FINDINGS OF FACT
At the time the petition was filed, petitioner resided in
Methuen, Massachusetts.
On April 25, 2000, respondent received petitioner’s 1999
Federal income tax return. Petitioner reported tax withheld of
$2,235, claimed a refund of $2,235, and entered zeros on all
other lines. Petitioner attached to the return a two-page letter
disputing the constitutionality of the Federal income tax laws
and claiming that no law made him liable to pay tax. Respondent
informed petitioner that his 1999 return could not be filed.
On June 29, 2001, respondent received petitioner’s 2000
Federal income tax return. Petitioner reported tax withheld of
$895, claimed a refund of $895, and entered zeros on all other
lines. Petitioner attached to the return a two-page letter
identical to the letter attached to his 1999 return.
1
(...continued)
the Internal Revenue Code, as amended. All amounts are rounded
to the nearest dollar.
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On October 11, 2001, respondent sent petitioner a letter
stating that his 2000 return could not be filed. Respondent
informed petitioner that his claims had been repeatedly rejected
as frivolous and without merit, and that he could be subject to a
penalty under section 6702 of $500 for filing a frivolous return.
To avoid the assessment of the penalty and to prevent a notice of
deficiency from being issued, respondent advised petitioner to
file an amended return within 30 days.
On November 20, 2001, petitioner sent a letter to respondent
demanding to see “if you have the authority to determine whether
anyone’s tax return is ‘frivolous’”. Petitioner requested a
meeting with respondent to “present my case or defense by oral
and documented evidence, and submit rebuttal evidence, and
conduct such cross-examination as may be required for a full and
true disclosure of the facts”.
On May 15, 2002, respondent sent petitioner two letters
indicating that respondent could not process petitioner’s 1999 or
2000 Federal income tax return. Respondent informed petitioner
that penalties under section 6702 would be assessed and returns
would be prepared for him. Respondent prepared substitutes for
returns for petitioner using information provided by third
parties.
On September 18, 2002, respondent sent petitioner notices of
deficiency for 1999 and 2000. For 1999, respondent determined a
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deficiency in petitioner’s Federal income tax of $5,421 and
additions to tax under sections 6651(a)(1) and 6654(a) of $752
and $133, respectively. For 2000, respondent determined a
deficiency in petitioner’s Federal income tax of $8,421 and
additions to tax under sections 6651(a)(1) and 6654(a) of $1,882
and $397, respectively.
On November 12, 2002, petitioner sent a letter to respondent
acknowledging receipt of the notices of deficiency. In the
letter, petitioner stated that before filing a petition with the
Tax Court or doing anything else with respect to the notices, “I
must first establish whether or not it was sent pursuant to law,
whether or not it has the ‘force and effect of law,’ and whether
you had any authority to send me the notice in the first place.”
Petitioner did not file a petition with this Court in
response to the notices of deficiency.
On September 5, 2003, respondent sent petitioner a Notice of
Federal Tax Lien Filing and Your Right to a Hearing Under IRC
6320. The notice of filing informed petitioner that a Federal
tax lien on all of his property had attached to secure payment of
the outstanding Federal income tax deficiencies for 1999 and
2000. The notice further informed petitioner of his right to a
hearing and under what circumstances the lien could be removed.
In response to the notice, petitioner mailed a Form 12153,
Request for a Collection Due Process Hearing, to respondent on
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October 3, 2003. In the request, petitioner states: “IRS does
not follow procedures. I request a certificate of assessment for
the amount that IRS claims I owe.”
On three occasions, respondent sent petitioner letters
informing him that his arguments have previously been determined
to be frivolous.2 Respondent advised petitioner that he was not
entitled to a face-to-face hearing unless he informed respondent
of any specific and relevant issues he wished respondent to
consider. If petitioner did not raise any relevant issues,
respondent stated that the hearing would be conducted over the
telephone or through correspondence.
In response to the first two letters, petitioner sent
additional requests for a face-to-face hearing.3 Petitioner did
not raise any relevant issues, but instead informed respondent
that he would tape record the hearing and would be accompanied by
a court reporter and a witness. Petitioner also requested that
respondent bring several documents to the hearing, including a
summary record of assessment, the tax returns on which the
assessment was based, and the notice and demand for payment.
On September 27, 2004, respondent scheduled a telephone
conference with petitioner for October 20, 2004. Respondent
2
Respondent’s letters were dated May 12, June 7, and Sept.
27, 2004.
3
Petitioner’s requests were dated May 27 and June 18,
2004.
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informed petitioner that if he did not participate, a
determination would be made on the basis of the administrative
record. Petitioner did not participate in the telephone
conference and made no attempt to reschedule.
On October 20, 2004, respondent sent petitioner a letter
advising him that a determination would be made by November 12,
2004. Respondent requested that petitioner submit any additional
documentation that he wished considered in making the
determination.
Petitioner sent respondent a letter on October 27, 2004,
again requesting a face-to-face hearing. Petitioner stated that
a telephone conference was unacceptable because “Documents cannot
be produced over the telephone, nor can an accurate record of
such a meeting.” Petitioner did not raise any additional
arguments in the letter.
Petitioner did not provide respondent with any additional
documentation to consider before making the determination.
On December 28, 2004, respondent sent petitioner a Notice of
Determination Concerning Collection Actions Under Section 6320
and/or 6330 with respect to the years in issue. In the notice of
determination, respondent states:
A review of the administrative file indicates that
statutory and administrative requirements that needed
to be met with respect to the filing of the Notice of
Federal Tax Lien were in fact met in this case.
* * * * * * *
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The taxpayer raised issues that are either frivolous,
groundless, or otherwise not considered by appeals. He
did not qualify for a face to face conference, and did
not avail himself of the opportunity for a telephone
hearing or a hearing via correspondence. He requested
various documents, but did not propose a viable
collection alternative or otherwise participate in the
offered telephone hearing. The Notice of Federal Tax
Lien will remain in full force and effect until
satisfied or unenforceable. This analysis indicates
that this action is now necessary to provide for the
efficient collection of the taxes despite the potential
intrusiveness of enforced collection.
In response to the notice of determination, petitioner filed
his petition with this Court on January 28, 2005.
On December 2, 2005, respondent filed a motion for summary
judgment, asking the Court to find as a matter of law that
respondent’s determination sustaining the filing of a Federal tax
lien was not an abuse of his discretion and that a penalty under
section 6673(a)(1) should be imposed against petitioner. The
Court denied respondent’s motion.
OPINION
Section 6321 imposes a lien in favor of the United States on
all property and rights to property of a taxpayer liable for
taxes when a demand for payment of the taxes has been made and
the taxpayer fails to pay those taxes. Section 6320(a) provides
that the Secretary shall furnish the taxpayer with written notice
of a Federal tax lien within 5 business days after the notice of
lien is filed. Section 6320 further provides that the taxpayer
may request an Appeals hearing within 30 days beginning on the
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day after the 5-day period described above. Sec. 6320(a)(3)(B)
and (b)(1). Section 6320(c) provides that the Appeals hearing
generally shall be conducted consistent with the procedures set
forth in section 6330.
Section 6330(c) provides for review with respect to
collection issues such as spousal defenses, the appropriateness
of the Commissioner’s proposed collection actions, and the
possibility of collection alternatives. Sec. 6330(c)(2)(A). The
taxpayer may also challenge the amount of the underlying tax
liability if a statutory notice of deficiency was not received or
the taxpayer did not otherwise have an opportunity to dispute the
tax liability. Sec. 6330(c)(2)(B).
Pursuant to section 6330(d)(1), within 30 days of the
issuance of a notice of determination, the taxpayer may appeal
the determination to this Court if we have jurisdiction over the
underlying tax liability. Where the validity of the underlying
tax liability is properly at issue, the Court will review the
matter de novo. Sego v. Commissioner, 114 T.C. 604, 610 (2000);
Goza v. Commissioner, 114 T.C. 176, 181 (2000). Where the
validity of the underlying tax liability is not properly at
issue, however, the Court will review the Commissioner’s
determination for an abuse of discretion. Sego v. Commissioner,
supra at 610; Goza v. Commissioner, supra at 181.
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Petitioner received statutory notices of deficiency for the
years in issue, and thus his underlying tax liability is not
properly at issue. Accordingly, we review respondent’s
determination for an abuse of discretion. See Sego v.
Commissioner, supra at 610; Goza v. Commissioner, supra at 181.
Petitioner argues that respondent abused his discretion by
not allowing petitioner a face-to-face 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); Ho v. Commissioner, T.C. Memo. 2006-41. Taxpayers are
generally entitled to a face-to-face hearing at the Appeals
Office nearest their residence. Sec. 301.6330-1(d)(2), Q&A D6
and D7, Proced. & Admin. Regs. Where the taxpayer declines to
participate in a proffered face-to-face hearing, hearings may be
conducted by telephone or correspondence. Katz v. Commissioner,
supra at 337-338; Ho v. Commissioner, supra; sec. 301.6330-
1(d)(2), Q&A-D6 and D7, Proced. & Admin. Regs. Furthermore, once
the taxpayer has been given reasonable opportunity for a hearing
but has failed to avail himself of that opportunity, we have
approved the making of a determination to proceed with collection
based on the Commissioner’s review of the case file. See, e.g.,
Ho v. Commissioner, supra; Taylor v. Commissioner, T.C. Memo.
2004-25, affd. 130 Fed. Appx. 934 (9th Cir. 2005); Leineweber v.
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Commissioner, T.C. Memo. 2004-17; Armstrong v. Commissioner, T.C.
Memo. 2002-224. Thus, a face-to-face hearing is not invariably
required.
Respondent sent three letters to petitioner stating that he
would be allowed a face-to-face hearing if he would advise
respondent of the relevant issues he wished to discuss.
Petitioner responded to two of those letters, but did not raise
any relevant issues. Petitioner was also given the opportunity
to have a telephone hearing but did not participate.
Additionally, petitioner did not submit any documentation to
respondent to be considered in an administrative review of his
file.
Because no hearing had been conducted, 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 to identify any relevant issues he wished to raise that
could warrant further consideration of the merits of his case by
respondent or this Court. Petitioner, however, failed to offer
any relevant issues of merit.
In the light of the above and in consideration of
petitioner’s frivolous arguments, discussed infra, a face-to-face
hearing in this case would not have been, nor would it be,
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productive. See Lunsford v. Commissioner, 117 T.C. 183, 189
(2001); Ho v. Commissioner, supra.
Additionally, petitioner argues that respondent abused his
discretion by failing to verify that all administrative
procedures have been met. However, in the notice of
determination, the Appeals officer verified that all requirements
of applicable law and administrative procedure had been met, and
he properly balanced the need for efficient collection against
the intrusiveness of the collection action. Petitioner points to
nothing that indicates respondent failed to follow applicable law
and administrative procedure.
Petitioner further argues that respondent abused his
discretion by failing to make a notice and demand for payment.
However, the Forms 4340 indicate that notices and demands for
payment were made.
Petitioner also raises various tax-protester arguments,
including: (1) The income tax is unconstitutional; (2) he is not
a U.S. citizen, but instead “an American man living on the soil
of Massachusetts”; (3) letters received from respondent do not
include signatures or “Publication No. 594”; and (4) he has not
been provided with proof that the person(s) who issued the notice
of Federal tax lien had the authority to do so. Petitioner’s
arguments have been rejected by this Court and other courts, and
“We perceive no need to refute these arguments with somber
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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); see
Holliday v. Commissioner, T.C. Memo. 2005-240; Duffield v.
Commissioner, T.C. Memo. 2002-53; Kuglin v. Commissioner, T.C.
Memo. 2002-51.
Petitioner has not presented any evidence or arguments to
convince us that respondent abused his discretion. As a result,
we hold respondent’s determination was not an abuse of
discretion, and respondent may proceed with the proposed
collection action.
Section 6673(a)(1) authorizes the Court to require a
taxpayer to pay the United States a penalty in an amount not to
exceed $25,000 whenever it appears to the Court the taxpayer’s
position is frivolous or groundless. Sec. 6673(a)(1)(B).
Respondent has asked the Court to impose a penalty against
petitioner under section 6673(a).
There is no evidence that petitioner has previously been a
litigant in this Court. However, the Court warned petitioner
that if he continued to raise only frivolous arguments, a penalty
could be imposed. Despite the warning, petitioner continued to
assert only frivolous arguments. As a result, we hold that a
penalty of $1,500 against petitioner is awarded to the United
States pursuant to section 6673(a)(1).
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In reaching our holdings herein, we have considered all
arguments made, and, to the extent not mentioned above, we find
them to be moot, irrelevant, or without merit.
To reflect the foregoing,
An appropriate Order
and decision will be entered.