Davis v. Comm'r

T.C. Memo. 2007-160

UNITED STATES TAX COURT

CHESTER E. DAVIS, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 4284-06L. Filed June 20, 2007.

Chester E. Davis, pro se.

Kelley A. Blaine, for respondent.

MEMORANDUM OPINION

GERBER, Judge: On June 2, 2005, respondent advised

petitioner that a Notice of Federal Tax Lien (NFTL) had been

filed and of petitioner’s right to a hearing. Petitioner sought

a hearing and, ultimately, petitioned this Court on February 28,

2006, contesting respondent’s February 3, 2006, Notice of

Determination Concerning Collection Action(s) Under Section 6320
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and/or 6330 (Notice of Determination), advising that the filing

of the NFTL and proposed levy action for petitioner’s 2001 tax

liability was sustained. The parties filed cross-motions for

summary judgment and the issues presented for our consideration

are: (1) Whether there was an abuse of discretion in

respondent’s determination to sustain the filing of an NFTL

relating to petitioner’s 2001 tax liability and to proceed with

collection or levy action; and, (2) whether a penalty under

section 66731 should be imposed against petitioner for advancing

frivolous positions in this case.

Background

Petitioner failed to file a 2001 Federal income tax return,

and respondent sent petitioner a notice of deficiency determining

an income tax deficiency and additions to tax. Petitioner

received the deficiency notice but took no action in response to

respondent’s determination, and respondent assessed the income

tax deficiency and additions to tax. Thereafter, respondent sent

petitioner an NFTL on June 2, 2005. In response, petitioner

submitted a Form 12153, Request for a Collection Due Process

Hearing (hearing request), dated June 27, 2005.

1
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the period under
consideration, and all Rule references are to the Tax Court Rules
of Practice and Procedure.
 - 3 -

In his June 27, 2005, hearing request, petitioner stated

that he did not receive a valid notice of deficiency, but he did

not specifically explain why what he did receive was invalid.

Petitioner also advanced queries normally posed by “tax

protesters”, such as that the Appeals Officer did not “identify

the statute that makes * * * [him] ‘liable to pay’”. Petitioner

did not accept respondent’s certification of assessment and

payment and, instead, wished to see the original assessment

records and related documents. In addition to his response,

petitioner also sent the Appeals officer a package of materials,

including income tax forms on which zeros were placed in the

income and tax “boxes”.

Respondent’s Appeals officer declined to work or meet with

Jeffrey Hubacek, petitioner’s representative, because Mr. Hubacek

had been barred from practicing before the Internal Revenue

Service (IRS). The Appeals officer advised petitioner that she

would not offer him a face-to-face hearing because she found that

his arguments were either frivolous or involved issues which

could not be considered by the Appeals Office, such as objections

on moral or political grounds.

Instead of a face-to-face meeting, petitioner and the

Appeals officer engaged in a telephone conference on January 25,

2006. Prior to that conference, petitioner was sent a copy of a

Form 4340, Certificate of Assessments, Payments, and Other
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Specified Matters, for his 2001 tax year. During the conference,

petitioner renewed his requests for the underlying assessment

documents and that the Appeals officer provide petitioner with a

copy of the statute that made him liable to pay any income taxes.

On February 3, 2006, the Appeals Office issued the Notice of

Determination from which petitioner petitioned to this Court.

In petitioner’s hearing request, and in addition to his 2001

tax year, petitioner included numerous taxable years that were

not the subject of timely requests for a hearing. In that

regard, petitioner requested a hearing with respect to his 1999

and 2000 tax years, but the notices of intent to levy and Federal

tax lien filing for those years were sent to petitioner in 2004

(more than 1 year prior to petitioner’s hearing request).

Petitioner also requested a hearing with respect to his 1996,

1997, and 1998 tax years, but there was no balance of tax then

due and no pending collection or proposed collection action.

With respect to the 1999 and 2000 tax years, the Appeals officer

advised petitioner that they would be handled as “Equivalent

Hearings” (hearings without a right of appeal or review by this

Court).

Discussion

Issues for Consideration

The Petition and Amended Petition in this case, in essence,

contain the following allegations/issues: (1) Respondent’s
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determination should be declared invalid; (2) the Appeals officer

did not conduct a hearing that was in accord with the statute;

(3) petitioner was not provided with information and

documentation that he is entitled to as a matter of law; and (4)

the Appeals officer was not authorized to represent the Secretary

of the Treasury.

The specifics underlying these allegations/issues, as far as

the Court is able to follow petitioner’s logic and explanations,

are: (1) The Appeals officer wrongfully refused to allow

petitioner’s representative to represent his interests; (2) the

Appeals officer wrongfully refused petitioner a face-to-face

meeting; (3) the Appeals officer did not show petitioner a

delegation order from the Secretary of the Treasury entitling the

Appeals officer to act on the Secretary’s behalf; (4) the Appeals

officer did not show petitioner the underlying assessment

documents with respect to the Form 4340 provided to petitioner;

and (5) the Appeals officer did not provide petitioner with the

statute or law that would make petitioner subject to and/or

liable for Federal income tax.

These, in essence, are the matters raised by petitioner in

his pleadings and, accordingly, are the matters that we must

address. Lunsford v. Commissioner, 117 T.C. 183, 189 (2001);

Goza v. Commissioner, 114 T.C. 176 (2000).
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Summary Judgment

Both parties have filed motions for summary judgment so that

each ostensibly believes that this matter is ripe for resolution

as a matter of law. Summary judgment is appropriate if there is

no genuine issue of a material fact and a decision may be

rendered as a matter of law. Rule 121(b); Fla. Peach Corp. v.

Commissioner, 90 T.C. 678, 681 (1988). In this case there is no

apparent disagreement about the material facts and circumstances

in the controversy. Accordingly, this case is ripe for

resolution by means of summary judgment.

Petitioner’s Representative

Petitioner complains that his representative, Mr. Hubacek,

was not allowed to represent petitioner before the IRS or to

receive copies of any correspondence from respondent to

petitioner. In that regard, respondent’s representative, in her

affidavit attached to the summary judgment motion, stated that

Mr. Hubacek had been permanently barred from providing tax

services and/or representing taxpayers before the IRS. In that

regard, petitioner was not prevented from either finding another

representative or representing himself, as he did. Under these

circumstances, it was not an abuse of discretion to exclude Mr.

Hubacek from representing petitioner or receiving copies or

correspondence under a proffered power of attorney.
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Face-to-Face Meeting

Section 6320(a)(1) requires the Secretary to give persons

liable to pay taxes a written notice of the filing of an NFTL.

Section 6320(a)(3)(B) and (b)(1) provides that the notice shall

inform such persons of the right to request a hearing in

respondent's Appeals Office. Section 6320(c) provides that an

Appeals Office hearing generally shall be conducted consistently

with the procedures set forth in section 6330(c), (d), and (e).

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 against whom the

lien is filed may raise any relevant issues relating to the

unpaid tax or the lien, 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 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).

In the instant case, the record indicates that the only

issues petitioner raised throughout the section 6320

administrative process and in his petition to this Court were

frivolous and/or tax protester type arguments. We do not address

petitioner's frivolous arguments with somber reasoning and
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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).

For example, petitioner contended that the NFTLs are

“counterfeited securities”. Likewise, he contended that the

Notice of Determination was fraudulent because it does not carry

a proper number from the Office of Management and Budget.

Amongst others, he has also raised the well-worn argument that he

is not subject to or required to pay any income tax unless the

Commissioner or his agents can show him a statute that expressly

states that he is subject to tax.

To the extent petitioner complains that he did not receive a

face-to-face hearing, this Court has held that it is neither

necessary nor productive to remand cases to an Appeals Office for

face-to-face hearings when a taxpayer raises only frivolous

arguments. Lunsford v. Commissioner, supra at 189.

The arguments or information expressed by petitioner in the

telephonic conference were, at best, superficial and did not go

to the merits of the underlying 2001 tax liability. Instead and

true to form, petitioner posed the well-worn protester sophistry

that he would gladly pay the tax if someone could identify the

statute that makes him liable to pay. The only other matter

raised by petitioner was his request that the Appeals officer
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provide him with the underlying assessment document(s) referenced

in the Form 4340 certification that had been sent to him.

The Court has also reviewed all of the materials forwarded

to respondent by petitioner in connection with the administrative

proceeding and, likewise, found them to contain “protester type”

and frivolous arguments.

Petitioner did not make any justiciable arguments or present

any information that properly addressed the merits of the

underlying tax liability,2 the validity of the assessment, or the

conduct of the proceeding or compliance with section 6330

requirements. Accordingly, the fact that petitioner was not

offered a face-to-face hearing was, in this instance, not an

abuse of discretion.

Appeals Officer’s Authority

There is little need to dwell on petitioner’s argument that

the administrative proceeding was flawed because respondent’s

representatives did not show that they were properly authorized

to represent the interests of the Secretary of the Treasury. To

the extent that petitioner’s argument implies that only the

Secretary of the Treasury could conduct a proper proceeding it is

frivolous. In the context of whether there was an abuse of

2
With respect to the 2001 tax year, petitioner supplied the
Appeals officer with an income tax return that had zeros in all
pertinent boxes. He did not show or explain why respondent’s
determination with respect to that year (for which petitioner had
not previously filed a return) was in error.
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discretion or any meaningful procedural flaw attributable to any

failure of respondent’s representative to prove to petitioner

that they were authorized, we find that factor to be irrelevant.

See Nestor v. Commissioner, 118 T.C. 162, 166 (2002). This is

especially true in this case where petitioner’s arguments are

without substance and where he failed to present any meaningful

arguments or information bearing on the merits of the underlying

tax liability or respondent’s collection efforts.

Form 4340

Petitioner argues that under section 6330 he is entitled to

the underlying assessment documents and, ostensibly, that the

Form 4340 certification does not meet the statutory requirements.

The Appeals officer used Forms 4340, to verify the assessments.

We have held that “it was not an abuse of discretion for the

Appeals officer to use Forms 4340 for purposes of complying with

section 6330(c)(1).” Nestor v. Commissioner, supra at 166; see

also Davis v. Commissioner, 115 T.C. 35, 41 (2000); Lindsay v.

Commissioner, T.C. Memo. 2001-285, affd. 56 Fed. Appx. 800 (9th

Cir. 2003).

Section 6330(c)(1) does not require the Appeals officer to

provide taxpayers with a copy of a document verifying that the

requirements of any applicable law or administrative procedure

have been met. Section 301.6330-1(e)(1), Proced. & Admin. Regs.,

requires that the Appeals officer obtain verification before
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issuing the determination, not that he or she provide it to the

taxpayer. Further, there is no legal requirement that the

Appeals officer provide a taxpayer with copies of the delegations

of authority, assessment records, or other underlying documents

maintained by respondent with respect to a taxpayer’s account.

Nestor v. Commissioner, supra at 166. Accordingly, the Appeals

officer in this case sufficiently verified the 2001 tax

assessments and was not required to provide more.

The 2001 Tax Liability

A taxpayer may challenge the existence or amount of the

underlying tax, however, only if he 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 in 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. at 181-182.

In this case petitioner was not entitled to contest the

underlying tax liability for 2001, the only year that this Court

has jurisdiction to consider. Even if petitioner had been

entitled to contest the underlying tax liability, other than
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protester arguments, he presented nothing more than an income tax

return with a zero in each pertinent box. Accordingly,

respondent’s motion for summary judgment will be granted, and

petitioner’s cross-motion for summary judgment will be denied.

Section 6673 Penalty

Respondent has requested that the Court impose a penalty

under section 6673 on the ground that the arguments advanced by

petitioner to respondent and the Court are frivolous. Section

6673(a)(1) authorizes the Court to impose a penalty not in excess

of $25,000 when it appears to the Court that, inter alia,

proceedings have been instituted or maintained by the taxpayer

primarily for delay or that the position of the taxpayer in such

proceeding is frivolous or groundless. In Pierson v.

Commissioner, 115 T.C. 576, 581 (2000), we issued a warning

concerning the imposition of a penalty under section 6673(a)(1)

on those taxpayers abusing the protections afforded by sections

6320 and 6330 through the bringing of dilatory or frivolous lien

or levy actions. The Court has since repeatedly disposed of

cases premised on arguments akin to those raised herein summarily

and with imposition of the section 6673 penalty. See, e.g.,

Craig v. Commissioner, 119 T.C. 252, 264-265 (2002) (and cases

cited therein).

Petitioner’s arguments in this case are frivolous and

without substance. He has taken numerous unrelated legal
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concepts, most of which have been rejected by the courts, and

posed them as reasons why he is not compelled to report or pay

Federal income tax. He has wasted the time and tied up the

resources of the Government with matters that are without

substance or merit. Accordingly, a $2,000 penalty under section

6673 will be imposed against petitioner.3

To reflect the foregoing,

An appropriate order and

decision will be entered.

3
Petitioner is also involved in some manner in two other
cases, now pending before this Court. He is admonished not to
continue presenting the same frivolous arguments in those cases
or he may subject himself to additional penalties under sec.
6673.