T.C. Memo. 2006-213
UNITED STATES TAX COURT
JOHN N. SWEENEY, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 21167-05L. Filed October 3, 2006.
John N. Sweeney, pro se.
Monica J. Miller, for respondent.
MEMORANDUM OPINION
WELLS, Judge: The instant case is before the Court on
respondent’s motion for summary judgment pursuant to Rule 1211
and to impose a penalty pursuant to section 6673. The issue we
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.
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must decide is whether respondent’s Appeals Office abused its
discretion in determining to proceed with collection of
petitioner’s tax liability for taxable years 1999, 2001, and
2002. For the reasons stated below, we shall grant respondent’s
motion for summary judgment and to impose a penalty pursuant to
section 6673.
Background
At the time of filing the petition in the instant case,
petitioner resided in Melbourne, Florida. Petitioner failed to
file Federal income tax returns or pay tax for taxable years 1999
through 2003. Respondent sent petitioner a notice of deficiency
for each year. Petitioner petitioned this Court regarding
taxable year 2003. That case is at docket No. 14262-05.
Petitioner failed to petition this Court regarding any other
taxable years, and accordingly, respondent assessed deficiencies
plus section 6651(a)(1) and 6654(a) additions to tax and interest
for taxable years 1999, 2001, and 2002. Petitioner’s current
liabilities, including interest through the trial date of October
16, 2006, for the years in issue are $38,324.42, $66,315.10, and
$72,286.30, respectively.
On March 28, 2005, respondent sent petitioner a Letter 1058,
Final Notice of Intent to Levy and Notice of Your Right to a
Hearing, with respect to the years in issue in the instant case.
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On April 19, 2005, petitioner sent respondent a Form 12153,
Request for a Collection Due Process Hearing.
Respondent’s Appeals officer reviewed petitioner’s
correspondence and determined that all of petitioner’s
contentions were frivolous. On July 25, 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 17, 2005, at 3 p.m. The letter advised
petitioner that the underlying liabilities could not be raised at
the hearing because petitioner had received statutory notices of
deficiency.2 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.
Finally, the letter advised petitioner of this Court’s authority
to impose a sanction of up to $25,000 pursuant to section 6673.
Petitioner did not respond to this letter and failed to
participate in the scheduled phone conference. On August 22,
2005, respondent sent petitioner a letter again requesting that
petitioner contact respondent and provide any additional
2
Petitioner denies receiving a statutory notice of
deficiency. However, this is only because petitioner claims to
have received “non-statutory” notices of deficiency.
Accordingly, the fact of receipt is deemed conceded.
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information petitioner wished to have considered in the hearing.
The letter requested a response by September 7, 2005.
On September 13, 2005, petitioner sent respondent a letter
captioned “LEGAL NOTICE”, in which petitioner asserted only
frivolous arguments. Petitioner also sent a second letter
containing frivolous arguments. All of the arguments petitioner
raised in those letters were also raised in the 12-page amended
petition filed with this Court in petitioner’s deficiency case at
docket No. 14262-05. On October 6, 2005, this Court struck, sua
sponte, paragraphs 5 through 50 and 78 through 139 of the
petition in that case as frivolous and advised petitioner
regarding section 6673(a)(1).
Based on the administrative file and correspondence,
respondent’s Appeals officer determined that the proposed levy
was appropriate and sent petitioner a notice of determination.
Petitioner timely petitioned this Court pursuant to section 6330.
Petitioner’s lengthy petition and reply to respondent’s answer
raise only frivolous arguments. Respondent filed a motion for
summary judgment and to impose a penalty pursuant to section 6673
on August 18, 2006.
Discussion
Summary judgment is intended to expedite litigation and
avoid unnecessary and expensive trials and may be granted where
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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
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,
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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).
Petitioner had the opportunity to challenge the correctness
of his tax liability for 1999, 2001, and 2002 but instead chose
not to petition this Court in response to the notices of
deficiency regarding those years. Therefore, petitioner’s
underlying tax liability for 1999, 2001, and 2002 is not properly
in issue, and we review respondent’s determination to proceed
with collection for an abuse of discretion.
The record demonstrates that the only issues petitioner
raised throughout the section 6330 administrative process and in
his petition to this Court 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
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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 1999,
2001, and 2002 was not an abuse of discretion and that no genuine
issue of material 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 he persisted in
raising frivolous tax protester arguments. Despite being warned,
petitioner raised frivolous arguments throughout the section 6330
administrative process, in his petition to this Court, in his
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reply to respondent’s answer, and in his response to respondent’s
motion for summary judgment. 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.