T.C. Memo. 2006-161
UNITED STATES TAX COURT
MARC A. CLAMPITT, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 1555-06L. Filed August 14, 2006.
Marc A. Clampitt, pro se.
Daniel N. Price, for respondent.
MEMORANDUM OPINION
WELLS, Judge: This matter is before the Court on
respondent’s motion for summary judgment pursuant to Rule 121 and
to impose a penalty pursuant to section 6673. The issue we must
decide is whether respondent’s Appeals Office abused its
discretion in determining to proceed with collection of
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petitioner’s tax liability for taxable year 1998. After
considering respondent’s motion and petitioner’s response, we
conclude that there remain no issues of material fact that
require trial or hearing. For the reasons stated below, we shall
grant respondent’s motion for summary judgment and to impose a
penalty pursuant to section 6673.1 Unless otherwise indicated,
all Rule references are to the Tax Court Rules of Practice and
Procedure, and all section references are to the Internal Revenue
Code, as amended.
Background
At the time of filing the petition in the instant case,
petitioner resided in Pflugerville, Texas. During 1998,
petitioner worked as a self-employed real estate agent but did
not timely file a Federal income tax return for that year or pay
any tax. Revenue Agent Lynn Smalls (Ms. Smalls) contacted
petitioner during the course of examining his 1998 taxable year.
Petitioner hired a return preparer to complete his 1998 tax
return and submitted to Ms. Smalls on January 18, 2005, a return
showing a $19,389 tax. Petitioner did not remit any payment with
his return and had no withholding credits. Ms. Smalls accepted
1
Respondent also filed a motion to permit levy pursuant to
sec. 6330(e)(1). We do not need to address that motion because
we conclude, for reasons stated below, that respondent’s
determination to proceed with collection of petitioner’s 1998 tax
liabilities was not an abuse of discretion and therefore shall
grant respondent’s motion for summary judgment.
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petitioner’s return as filed and made the appropriate assessments
of tax, additions to tax, and interest.
On or about May 24, 2005, petitioner filed a purported
amended tax return for 1998 on which he claimed that his self-
employment income, reported on Schedule C, Profit or Loss From
Business, was not taxable, and he reported no tax liability.
Ms. Smalls informed petitioner that his purported amended return
provided no basis for changing his original 1998 return submitted
on January 18, 2005. Petitioner supported his purported amended
return citing numerous typical frivolous tax protester type
arguments.
On June 18, 2005, respondent sent petitioner a Final Notice
of Intent to Levy and Your Right to a Hearing, advising
petitioner that respondent intended to collect by levy
petitioner’s unpaid tax liability for 1998. In a letter dated
June 28, 2005, petitioner requested a section 6330 hearing with
respondent’s Appeals Office, raising numerous frivolous tax
protester type arguments. In letters dated September 30 and
October 18, 2005, petitioner again raised his frivolous tax
protester arguments and attached copies of his frivolous amended
return claiming he did not owe tax for 1998.
Petitioner’s section 6330 hearing was assigned to Settlement
Officer Robert Bethea (Mr. Bethea). In a letter dated November
7, 2005, Mr. Bethea warned petitioner that his claims were
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frivolous and directed petitioner to a publication entitled “The
Truth About Frivolous Tax Arguments” available on the Internal
Revenue Service’s Web site. Petitioner quickly responded to Mr.
Bethea, and in a letter dated November 11, 2005, raised his
frivolous tax protester arguments and attached his frivolous
amended return claiming he did not owe taxes for 1998.
Petitioner also informed Mr. Bethea in this letter: “I have
responded to you with this letter so a telephone conference is
not necessary.” Mr. Bethea considered the documents petitioner
sent during the section 6330 administrative process, concluded
that petitioner’s contentions were frivolous and that petitioner
did not offer any collection alternatives, and on December 22,
2005, sent petitioner a Notice of Determination Concerning
Collection Action(s) Under Section 6320 and/or 6330, sustaining
the proposed levy to collect petitioner’s 1998 tax liabilities.
Petitioner timely petitioned this Court. On May 18, 2006,
respondent filed the instant motion for summary judgment and to
impose a penalty pursuant to section 6673. On June 15, 2006,
petitioner filed a response.
Discussion
Summary judgment is intended to expedite litigation and
avoid unnecessary and expensive trials and may be granted where
there is no genuine issue of material fact and a decision may be
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rendered as a matter of law. Rule 121(a) and (b); Fla. Peach
Corp. v. Commissioner, 90 T.C. 678, 681 (1988). The moving party
bears the burden of proving that there is no genuine issue of
material fact, and factual inferences are viewed in a light most
favorable to the nonmoving party. Craig v. Commissioner, 119
T.C. 252, 260 (2002); Dahlstrom v. Commissioner, 85 T.C. 812, 821
(1985); Jacklin v. Commissioner, 79 T.C. 340, 344 (1982). The
party opposing summary judgment must set forth specific facts
that show that a genuine question of material fact exists and may
not rely merely on allegations or denials in the pleadings.
Grant Creek Water Works, Ltd. v. Commissioner, 91 T.C. 322, 325
(1988); Casanova Co. v. Commissioner, 87 T.C. 214, 217 (1986).
Section 6330 provides that no levy may be made on any
property or right to property of a taxpayer unless the Secretary
first notifies him in writing of the right to a hearing before
the Appeals Office. The Appeals officer must verify at the
hearing that the applicable laws and administrative procedures
have been followed. Sec. 6330(c)(1). At the hearing, the
taxpayer may raise any relevant issues relating to the unpaid tax
or the proposed levy, including appropriate spousal defenses,
challenges to the appropriateness of collection actions, and
collection alternatives. Sec. 6330(c)(2)(A). The taxpayer may
challenge the existence or amount of the underlying tax, however,
only if he did not receive any statutory notice of deficiency for
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the tax liability or did not otherwise have an opportunity to
dispute the tax liability. Sec. 6330(c)(2)(B).
Where the validity of the underlying tax liability is
properly in issue, the Court will review the matter de novo.
Where the validity of the underlying tax is not properly at
issue, however, the Court will review the Commissioner’s
administrative determination for abuse of discretion. Sego v.
Commissioner, 114 T.C. 604, 610 (2000); Goza v. Commissioner, 114
T.C. 176, 181-182 (2000).
A taxpayer may challenge a self-assessed liability reported
on his return where he has not had the opportunity to dispute the
liability. Montgomery v. Commissioner, 122 T.C. 1, 9 (2004).
However, section 6330(c)(2) only allows the taxpayer to raise
“any relevant issue relating to the unpaid tax or the proposed
levy”, not “any” issue. Frivolous challenges to the underlying
liability are not “relevant issues”. Hathaway v. Commissioner,
T.C. Memo. 2004-15.
In the instant case, the record indicates that the only
issues petitioner raised throughout the section 6330
administrative process, in his petition to this Court, and in his
response to respondent’s motions for summary judgment, were
frivolous tax protester type arguments. We do not address
petitioner’s frivolous arguments with somber reasoning and
copious citations of precedent, as to do so might suggest that
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these arguments possess some degree of colorable merit. See
Crain v. Commissioner, 737 F.2d 1417, 1417 (5th Cir. 1984).
Petitioner had the opportunity to challenge the correctness of
his tax liability for 1998 but instead chose not to do so.
Therefore petitioner’s underlying tax liability for 1998 was not
properly in issue. Accordingly, we hold that no genuine issue of
material fact exists requiring trial and that respondent is
entitled to summary judgment. Respondent’s determination to
proceed with the proposed levy to collect petitioner’s tax
liability for 1998 was not an abuse of discretion.
Section 6673(a)(1) provides that this Court may require the
taxpayer to pay a penalty not in excess of $25,000 whenever it
appears to this Court: (a) The proceedings were instituted or
maintained by the taxpayer primarily for delay; (b) the
taxpayer’s position is frivolous or groundless; (c) or the
taxpayer unreasonably failed to pursue available administrative
remedies. Respondent has moved that the Court impose a penalty
in the instant case. The record indicates that petitioner
received several warnings that this Court could impose a penalty
if he persisted in raising his frivolous tax protester arguments.
Despite being warned, petitioner raised his frivolous arguments
throughout the section 6330 administrative process, in his
petition to this Court, and in his response to respondent’s
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motion. Accordingly, we shall impose a $10,000 penalty on
petitioner pursuant to section 6673.
To reflect the foregoing,
An appropriate order and
decision will be entered.