T.C. Memo. 2006-99
UNITED STATES TAX COURT
CHARLES A. SCHNELLER, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 14477-05L. Filed May 11, 2006.
Charles A. Schneller, pro se.
John W. Sheffield, for respondent.
MEMORANDUM OPINION
GOEKE, Judge: The petition in this case was filed in
response to a Notice of Determination Concerning Collection
Action(s) Under Section 6320 and/or 6330 (notice of
determination).1 At issue is (1) whether respondent abused his
1
Unless otherwise indicated, all section references are to
(continued...)
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discretion in allowing the collection action to proceed, and (2)
whether frivolous arguments advanced by petitioner warrant the
imposition by the Court of a section 6673(a) penalty. We hold
that respondent did not abuse his discretion and that a penalty
under section 6673 is not warranted at this time.
Background
At the time the petition in this case was filed, petitioner
resided in Kathleen, Georgia.
In the taxable year 2001, the year at issue, petitioner
earned income of approximately $70,000, mostly consisting of
wages he earned as an over-the-road driver for Frito-Lay North
America (Frito Lay). Petitioner stipulated receiving this
income. Petitioner did not file a Form 1040, U.S. Individual
Income Tax Return, for the taxable year 2001. Nor did petitioner
file Forms 1040 for the taxable years 2002 to 2004 even though
Frito Lay continued to report wages for those years. Respondent
prepared a substitute for return (SFR). The SFR reflected a
taxable income to petitioner of $72,182. On August 4, 2003,
respondent issued a notice of deficiency to petitioner for 2001.
Petitioner thereafter filed a petition with this Court, which was
dismissed on March 29, 2004, because petitioner never perfected
the petition as directed of the Court. In response to a notice
1
(...continued)
the Internal Revenue Code, as amended.
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of intent to levy, petitioner timely filed Form 12153, Request
for a Collection Due Process Hearing. On the Form 12153,
petitioner listed his reason for disagreeing with the proposed
levy action as “SFR Program--Math error, Disputed Income 26 USC
7214-7123-7491.” An Appeals officer contacted petitioner to
schedule a conference via telephone. Petitioner advised Appeals
that he was unwilling to communicate via telephone. Petitioner’s
hearing was held via correspondence. Petitioner did not offer
any collection alternatives, nor did he raise any spousal
defenses. On June 30, 2005, petitioner received a notice of
determination upholding the proposed levy action and subsequently
filed a timely petition in this Court. Petitioner was
cooperative throughout the stipulation and hearing process.
Discussion
Petitioner advances a plethora of tax protester arguments
that attack the underlying tax liability rather than respondent’s
collection actions. In particular, petitioner argues that the
exemption amount, pursuant to section 6012(a)(1)(A), is not
defined by statute, and that a lack of a valid control number
from the Office of Management and Budget (OMB), as required by
the Paperwork Reduction Act of 1980 (PRA), 44 U.S.C. secs. 3501-
3520 (2000), excuses a failure to file returns.
Where the validity of the underlying tax liability is
properly at issue, the Court will review the matter de novo.
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Where the validity of the underlying tax liability is not
properly at issue, however, the Court will review the
Commissioner’s administrative determination for an abuse of
discretion. Sego v. Commissioner, 114 T.C. 604, 610 (2000); Goza
v. Commissioner, 114 T.C. 176, 181 (2000).
Petitioner received a statutory notice of deficiency for the
year at issue, which is evidenced by his previous petition for
redetermination of deficiency with this Court, pursuant to
section 6213(a). Thus, his underlying tax liability is not
properly at issue in this proceeding. Accordingly, we review
respondent’s determination for an abuse of discretion. See Sego
v. Commissioner, supra at 610; Goza v. Commissioner, supra at
181.
Nevertheless, petitioner continues to assert frivolous
claims. See, e.g., Pond v. Commissioner, T.C. Memo. 2005-255
(rejecting taxpayer’s argument that exemption amount is not
defined by statute); Saxon v. Commissioner, T.C. Memo. 2006-52
(taxpayer’s contention that OMB control No. 1545-0074, on the
Form 1040 is invalid and does not comply with the requirements of
the PRA is groundless (citing James v. United States, 970 F.2d
750, 753 n.6 (10th Cir. 1992); United States v. Neff, 954 F.2d
698, 699 (11th Cir. 1992)). Petitioner does not challenge the
appropriateness nor the intended method of collection. Neither
does petitioner offer any alternative means of collection or
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raise any spousal defenses. Petitioner’s only argument relating
to respondent’s collection actions is that respondent abused his
discretion in relying on the Form 4340, Certificates of
Assessments, Payments, and Other Specified Matters, to verify the
assessment, an argument we have previously rejected. Davis v.
Commissioner, 115 T.C. 35, 40 (2000).2 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 actions. See
Sego v. Commissioner, supra at 612.
Respondent has asked the Court to impose a penalty under
section 6673(a). Although petitioner has presented frivolous
arguments, we find that petitioner’s cooperation in the
stipulation process mitigated the delay, and therefore we choose
not to impose the penalty at this time. However, petitioner is
warned that we may do so in the future if he continues to assert
such frivolous claims before this Court.
To reflect the foregoing,
Decision will be entered
for respondent.
2
Petitioner stated this argument in his Motion For
Production of Summary Record of Assessment, which this Court
denied on Apr. 18, 2006.