T.C. Memo. 2006-203
UNITED STATES TAX COURT
JERRE MARVINE WOOD, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 16390-05L. Filed September 25, 2006.
Jerre Marvine Wood, pro se.
Jeffrey S. Luechtefeld, for respondent.
MEMORANDUM OPINION
WELLS, Judge: The instant case 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
petitioner’s tax liability for taxable year 2002. After
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considering respondent’s motion and petitioner’s response, as
supplemented, 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. 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 in effect for the year in issue.
Background
At the time of filing the petition in the instant case,
petitioner resided in Sarasota, Florida. Petitioner failed to
file a Federal income tax return or pay tax for taxable year
2002. Respondent prepared a substitute for return pursuant to
section 6020(b) and, on June 8, 2004, sent petitioner a notice of
deficiency showing a deficiency of $3,011.1 Petitioner failed to
petition this Court, and, accordingly, respondent assessed the
deficiency plus additions to tax pursuant to sections 6651(a)(1)
and 6654(a) and interest.
On February 19, 2005, respondent sent petitioner a Letter
1058, Final Notice of Intent to Levy and Notice of Your Right to
a Hearing. On March 11, 2005, petitioner sent respondent a Form
12153, Request for a Collection Due Process Hearing, and
1
Petitioner does not dispute that she received the notice of
deficiency. Accordingly, this issue is deemed conceded. See
Rule 331(b)(4).
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attachments which contained nothing but frivolous tax protester
arguments. On April 19, 2005, petitioner sent respondent a
letter captioned “Supplemental Letter to Request for Collection
Due Process Hearing”, in which petitioner continued to assert
frivolous arguments.
Respondent’s Appeals officer reviewed petitioner’s
correspondence and determined that all of petitioner’s
contentions were frivolous. On July 5, 2005, respondent’s
Appeals officer sent petitioner a letter in which respondent
notified petitioner that respondent had received petitioner’s
request for a section 6330 hearing and scheduled a telephone
conference for August 11, 2005, at 2:30 p.m. Respondent also
offered petitioner the opportunity to reschedule the telephone
conference and the opportunity to conduct the section 6330
hearing through correspondence. Respondent’s letter also
directed petitioner to an Internal Revenue Service (IRS)
publication, “The Truth About Frivolous Tax Arguments”, available
on the IRS’s Web site. In letters dated July 19, 23, 25, 27, and
30, 2005, petitioner continued to assert only frivolous tax
protester arguments.
On August 11, 2005, the date of the scheduled telephone
conference, respondent’s Appeals officer attempted to contact
petitioner but was unsuccessful. Following the unsuccessful
attempt to contact petitioner, respondent’s Appeals officer
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conducted petitioner’s section 6330 hearing based on the
correspondence received from petitioner. Respondent’s Appeals
officer determined that the proposed levy was appropriate and, on
August 17, 2005, sent petitioner a notice of determination.
Petitioner timely petitioned this Court pursuant to section 6330.
Respondent filed a motion for summary judgment and to impose a
penalty pursuant to section 6673 on August 21, 2006, and
petitioner filed a response and a supplemental response on
August 29, and September 13, 2006, respectively.
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
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 a genuine question of material fact exists and may not
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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 person unless the Secretary
first notifies him or her 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 person 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 person may
challenge the existence or amount of the underlying tax, however,
only if he or she did not receive any statutory notice of
deficiency for 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).
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Petitioner had the opportunity to challenge the correctness
of her tax liability for 2002 but instead chose not to petition
this Court in response to the June 8, 2004, notice of deficiency.
Therefore, petitioner’s underlying tax liability for 2002 is not
properly in issue, and we review respondent’s determination to
proceed with collection for an abuse of discretion.
The record in the instant case demonstrates that the only
issues petitioner raised throughout the section 6330
administrative process, in her petition to this Court, and in her
response, as supplemented, to respondent’s motion for summary
judgment and to impose a penalty pursuant to section 6673, 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
these arguments possess some degree of colorable merit. See
Crain v. Commissioner, 737 F.2d 1417, 1417 (5th Cir. 1984).
The record in the instant case demonstrates that
respondent’s Appeals officer was impartial, had no prior
involvement with petitioner, and verified that all applicable
laws and administrative procedures were followed. Accordingly,
we hold that respondent’s determination to proceed with the
proposed levy to collect petitioner’s tax liability for 2002 was
not an abuse of discretion and that no genuine issue of material
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fact exists requiring trial. Respondent is entitled to summary
judgment.
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; or (c) 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 was
warned that this Court could impose a penalty if she persisted in
raising frivolous tax protester arguments. Despite being warned,
petitioner raised frivolous arguments throughout the section 6330
administrative process, in her petition to this Court, and in her
response, as supplemented, to respondent’s motion. Accordingly,
we shall impose a $1,000 penalty on petitioner pursuant to
section 6673.
To reflect the foregoing,
An appropriate order and
decision will be entered.