Pate v. Comm'r

T.C. Memo. 2007-132

UNITED STATES TAX COURT

RICHARD N. PATE, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 13649-06L. Filed May 29, 2007.

Richard N. Pate, pro se.

Elke B. Esbjornson, for respondent.

MEMORANDUM OPINION

THORNTON, Judge: This case is before the Court on

respondent’s motion for summary judgment and to impose a penalty

under section 6673.1

1
Unless otherwise indicated, all section references are to
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Background

The record reveals or the parties do not dispute the

following:

Petitioner failed to file a Federal income tax return for

2003. By notice of deficiency dated June 7, 2005, respondent

determined a deficiency in petitioner’s 2003 tax on the basis of

a substitute for return that respondent prepared; in the notice,

respondent also determined that petitioner was liable for

additions to tax pursuant to sections 6651(a)(1) and (2) and

6654(a). Petitioner received the notice of deficiency but did

not petition the Tax Court with respect to it.

On October 24, 2005, respondent assessed petitioner’s 2003

tax and additions thereto and issued him a notice of balance due

and demand for payment. On January 30, 2006, respondent mailed

petitioner a Notice of Intent to Levy and Notice of Your Right to

Hearing for 2003 as required under sections 6330 and 6331. On

1
(...continued)
the Internal Revenue Code, as amended, and all Rule references
are to the Tax Court Rules of Practice and Procedure.

Except in limited circumstances not relevant here, Rule 54
generally requires motions to be separately stated and not joined
together; we have permitted this joined motion to be filed in the
interests of judicial administration. See Stewart v.
Commissioner, 127 T.C. 109, 111 n.2 (2006). The Court has
proposed amending Rule 54 to clarify that motions should not be
joined together “Unless otherwise permitted by the Court”. Press
Release dated Jan. 16, 2007, p. 22.
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February 21, 2006, petitioner submitted a Form 12153, Request for

a Collection Due Process Hearing, raising frivolous and meritless

arguments.

By letter dated May 18, 2006, respondent’s Appeals

settlement officer advised petitioner that a telephonic hearing

was scheduled for June 8, 2006. The letter advised petitioner

that he would be allowed a face-to-face hearing on any relevant,

nonfrivolous issue, if petitioner responded within 14 days

describing such an issue. The letter also advised that if

petitioner desired to pursue collection alternatives, he should

provide specified materials, including petitioner’s unfiled

income tax returns for 1997, 2004, and 2005.

By facsimile transmission on June 8, 2006, petitioner

declined the telephonic hearing, demanding a face-to-face hearing

but providing no information about relevant issues.

By notice of determination dated June 15, 2006, respondent’s

Appeals Office sustained the proposed levy. As part of this

determination, the Appeals settlement officer reviewed a TXMODA

computer transcript to verify that the assessments for

petitioner’s 2003 taxes were properly accomplished and that

notice and demand for payment had been issued to petitioner on

the date of assessment.
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On July 17, 2006, while residing in Justin, Texas,

petitioner filed his petition. In the petition, the assignment

of error states in its entirety:

Set aside the notice of determination on the grounds
the Appeals Officer failed to verify the requirements
of all applicable law or administrative procedure were
met in determining the liability, thus creating an
abuse of discretion. Specifically, Respondent ignored
the requirements at IRC 6012 & 151(d) and the Paperwork
Reduction Act of 1995. Petitioner has not been
presented with a proper information collection request
displaying a currently valid OMB control number, and
the exemption amount is unspecified in law. There are
multiple violations of the 1995 PRA bearing upon the
making of a return, and Respondent ignores the 1995 Act
while adhering to the 1980 Act.

Discussion

Summary judgment is intended to expedite litigation and

avoid unnecessary and expensive trials. Fla. Peach Corp. v.

Commissioner, 90 T.C. 678, 681 (1988). Summary judgment may be

granted where there is no genuine issue of any material fact, and

a decision may be rendered as a matter of law. Rule 121(a) and

(b); see Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520

(1992), affd. 17 F.3d 965 (7th Cir. 1994); Zaentz v.

Commissioner, 90 T.C. 753, 754 (1988). The moving party bears

the burden of proving that there is no genuine issue of material

fact, and factual inferences will be read in a manner most

favorable to the party opposing summary judgment. Dahlstrom v.

Commissioner, 85 T.C. 812, 821 (1985); Jacklin v. Commissioner,
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79 T.C. 340, 344 (1982). When a motion for summary judgment is

made and properly supported, the adverse party may not rest upon

mere allegations or denials of the pleadings but must set forth

specific facts showing that there is a genuine issue for trial.

Rule 121(d).

Petitioner contends that respondent’s Form 1040, U.S.

Individual Income Tax Return, fails to display a valid Office of

Management and Budget (OMB) number as required by the Paperwork

Reduction Act of 1995 (PRA), 44 U.S.C. sections 3501-3520 (2000).

Consequently, petitioner contends, the Court should set aside the

notice of determination, because the Appeals settlement officer

did not verify that the requirements of the PRA had been

satisfied.2 Petitioner’s contention is without merit.

Section 6330(c)(1) requires, in the case of any hearing

conducted with respect to a proposed collection action, that the

Appeals officer “obtain verification from the Secretary that the

2
In his response to respondent’s motion for summary
judgment, petitioner does not renew the argument, alluded to in
his petition, that he is entitled to relief because the
“exemption amount is unspecified in law”. We deem petitioner to
have abandoned any such argument. In any event, insofar as we
are able to discern from the petition, it would appear that in
making this assignment of error petitioner sought to associate
himself with the recurring tax-protester argument that sec.
151(d) inadequately defines the exemption amount to permit a
taxpayer to be penalized for noncompliance. Such an argument is
frivolous. See, e.g., Pond v. Commissioner, T.C. Memo. 2005-255,
affd. 211 Fed. Appx. 749 (10th Cir. 2007).
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requirements of any applicable law or administrative procedure

have been met.” Explaining this provision, the legislative

history states: “the IRS is required to verify that all

statutory, regulatory, and administrative requirements for the

proposed collection action have been met.” H. Conf. Rept. 105-

599, at 264 (1998), 1998-3 C.B. 747, 1018 (emphasis added); see

Greene-Thapedi v. Commissioner, 126 T.C. 1, 6 (2006). Consistent

with this explanation, this and other Courts have repeatedly and

consistently construed the verification requirement to be met

where the Appeals officer secured formal or informal transcripts

showing that the taxes were properly assessed and that the

taxpayer had been properly notified of those assessments. See

Cox v. Commissioner, 126 T.C. 237, 255 (2006) (and cases cited

therein); see also Jones v. Commissioner, 338 F.3d 463 (5th Cir.

2003) (the verification requirement was satisfied where an

Appeals officer referred to a Form 4340, Certificate of

Assessments, Payments, and Other Specified Matters, to determine

that the IRS had followed legal and administrative procedures);

Roberts v. Commissioner, 329 F.3d 1224, 1228 (11th Cir. 2003)

(Form 4340 provides prima facie evidence that the IRS has

complied with its statutory duties), affg. 118 T.C. 365 (2002).

In particular, it has been repeatedly held that the requirements

of all applicable laws and administrative procedures were met as
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required by section 6330(c)(1) where the Appeals officer obtained

and reviewed a so-called TXMODA computer-generated transcript to

verify that assessments were properly made and that notice and

demand for payment had been issued to the taxpayer on the date of

assessment. See, e.g., Harp v. Commissioner, T.C. Memo. 2007-83;

Kubon v. Commissioner, T.C. Memo. 2005-71; Tornichio v.

Commissioner, T.C. Memo. 2002-291; Schroeder v. Commissioner,

T.C. Memo. 2002-190; Weishan v. Commissioner, T.C. Memo. 2002-88,

affd. 66 Fed. Appx. 113 (9th Cir. 2003).

Petitioner does not dispute that the Appeals settlement

officer reviewed a TXMODA computer transcript to verify that the

assessments for petitioner’s 2003 taxes were properly made and

that notice and demand for payment was issued to petitioner on

the date of assessment. Petitioner has not alleged, and the

record does not suggest, any irregularity in the assessment

procedure. We conclude that the Appeals settlement officer

properly verified that the requirements of applicable laws and

administrative procedures had been met, as required by section

6330(c)(1).

In his objection to respondent’s motion for summary

judgment, petitioner acknowledges that he “did not challenge the

underlying liability at the time of the petition”. Petitioner

now urges, however, that his underlying liability for a tax
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deficiency should be redetermined on the basis of a return he

alleges to have recently submitted; he also urges that additions

to tax should be abated because respondent has failed to show

that Form 1040 complies with the PRA. These late-raised issues

are not properly before the Court for decision. See Bartschi v.

Commissioner, T.C. Memo. 2002-268. More fundamentally, because

petitioner received a statutory notice of deficiency with respect

to 2003 but failed to petition this Court to redetermine the

deficiency, petitioner is not entitled to challenge his

underlying tax liability in this collection proceeding. See sec.

6330(c)(2)(B); Sego v. Commissioner, 114 T.C. 604, 610 (2000).

In any event, petitioner’s argument that the PRA may in some

manner negate statutory penalties for failure to file tax returns

and pay taxes is without merit. Because the requirement to file

tax returns and the imposition of penalties for failing to do so

represents a “legislative command, not an administrative

request”, the PRA provides no “escape hatch” from penalties for

failing to file tax returns. United States v. Hicks, 947 F.2d

1356, 1359 (9th Cir. 1991);3 accord James v. United States, 970

3
United States v. Hicks, 947 F.2d 1356 (9th Cir. 1991),
involved a criminal conviction for willful failure to file tax
returns. In an unpublished opinion, the Court of Appeals for the
Ninth Circuit held that the reasoning in Hicks applied equally to
a case involving civil penalties for failure to file returns, pay
income tax, and pay estimated taxes. Beam v. Commissioner, 1992
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F.2d 750, 753 n.6 (10th Cir. 1992) (“lack of an OMB number on IRS

notices and forms does not violate” the PRA) (citing United

States v. Hicks, supra); Salberg v. United States, 969 F.2d 379,

384 (7th Cir. 1992); United States v. Kerwin, 945 F.2d 92 (5th

Cir. 1991); United States v. Wunder, 919 F.2d 34, 38 (6th Cir.

1990); Wheeler v. Commissioner, 127 T.C. 200, 208 (2006) (“The

Paperwork Reduction Act is not a defense to the addition to tax

under section 6651(a)(1), nor does it create a loophole in the

Code”); Aldrich v. Commissioner, T.C. Memo. 1993-290 (and cases

cited therein).

Citing dicta in the unpublished, nonprecedential opinion of

Pond v. Commissioner, 211 Fed. Appx. 749 (10th Cir. 2007), affg.

T.C. Memo. 2005-255, petitioner suggests that 1995 amendments to

the PRA call into question these well-established judicial

precedents. Petitioner has identified, however, and we have

discovered nothing in the 1995 amendments to the PRA to suggest

that they had this purpose or effect.4

3
(...continued)
U.S. App. LEXIS 4237 (9th Cir. 1992), affg. T.C. Memo. 1990-304
and Warden v. Commissioner, T.C. Memo. 1990-321.
4
Although his contentions are vague, it appears that
petitioner may be alluding in part to 1995 amendments to 44
U.S.C. sec. 3512, which now provides in part: “Notwithstanding
any other provision of law, no person shall be subject to any
penalty for failing to comply with a collection of information
that is subject to this subchapter” if certain requirements of
(continued...)
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On the basis of our review of the record, we conclude that

there is no genuine dispute as to a material fact. Petitioner

has failed to make a valid challenge to the appropriateness of

respondent’s intended collection action or offer alternative

means of collection. In the absence of a valid issue for review,

we conclude that respondent is entitled to judgment as a matter

of law and sustain respondent’s collection actions.

Section 6673(a)(1) authorizes the Tax Court to require a

taxpayer to pay to the United States a penalty no greater than

$25,000 whenever it appears that proceedings have been instituted

or maintained by the taxpayer primarily for delay or that the

taxpayer’s position in such proceedings is frivolous or

groundless. Although we do not impose a section 6673 penalty

4
(...continued)
the PRA are not met. This provision, however, was merely a
recodification of a similar provision that had been contained in
44 U.S.C. sec. 3512 since the inception of the PRA in 1980; the
1995 amendments clarified the time and manner in which a 44
U.S.C. sec. 3512 defense could be asserted, and made other
clarifying changes, but did not fundamentally alter the scope or
purposes of this provision. See H. Conf. Rept. 104-99 at 36
(1995), reprinted at 1995 U.S.C.C.A.N. at 248-249; H. Rept. 104-
37, at 53 (1995), reprinted at 1995 U.S.C.C.A.N 164, 216 (“The
intended scope, purposes, and requirements of section 3512’s
current provisions on public enforcement of the Act’s information
collection clearance requirements are unchanged.”). As
previously discussed, numerous judicial precedents have
consistently construed 44 U.S.C. sec. 3512 as offering no
protection from statutory penalties for failure to pay taxes and
file tax returns; nothing in the 1995 amendments suggests any
different result.
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today, we strongly caution petitioner that should he continue to

press frivolous and groundless arguments on this Court in the

future, the Court may impose, even upon its own motion, a section

6673 penalty up to the $25,000 maximum allowable amount.

To reflect the foregoing,

An appropriate order

and decision will be entered.