T.C. Memo. 2007-200
UNITED STATES TAX COURT
KEVIN M. MOORE, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 17901-06L. Filed July 23, 2007.
Kevin M. Moore, pro se.
Monica J. Miller and Laura A. Price, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
VASQUEZ, Judge: Pursuant to section 6330(d),1 petitioner
seeks review of respondent’s determination to proceed with
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code, and all Rule references are to the Tax
Court Rules of Practice and Procedure.
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collection of his 1997, 1998, 1999, 2000, 2001, and 2002 income
tax liabilities.
Confronted with petitioner’s refusal to work toward a
stipulation of facts, on March 7, 2007, respondent filed a motion
to show cause why proposed facts in evidence should not be
accepted as established pursuant to Rule 91(f). Respondent
attached to his motion a proposed stipulation of facts and
exhibits.
On March 9, 2007, the Court issued an order to show cause
under Rule 91(f), requiring petitioner to file a response on or
before March 29, 2007, as to why matters set forth in
respondent’s motion should not be deemed admitted. Additionally,
the Court ordered that if petitioner’s response was evasive or
not fairly directed to the proposed stipulation or portion
thereof, that matter or portion thereof would be deemed
stipulated for purposes of the pending case, and an order would
be entered accordingly, pursuant to Rule 91(f).
On April 2, 2007, petitioner filed a response to the Court’s
order to show cause.
On April 4, 2007, the Court made absolute its order to show
cause under Rule 91(f), and ordered that the facts and evidence
set forth in respondent’s proposed stipulation of facts were
deemed established.
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FINDINGS OF FACT
Accordingly, pursuant to Rule 91(f), the facts set forth in
the Rule 91(f) motion are deemed stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. At the time he filed the
petition, petitioner resided in Tampa, Florida.
Petitioner failed to timely file Federal income tax returns
for 1997, 1998, 1999, 2000, 2001, and 2002. On October 17, 2003,
respondent sent petitioner statutory notices of deficiency for
1997, 1999, and 2000. On February 4, 2004, respondent sent
petitioner a statutory notice of deficiency for 2001. Respondent
determined deficiencies in and additions to petitioner’s Federal
income tax as follows:2
Additions to Tax
Year Deficiency Sec. 6651(a)(1) Sec. 6654(a)
1997 $52,911 $11,905 $2,851
1999 28,242 5,454 1,294
2000 53,465 12,030 2,876
2001 51,134 15,852 2,024
Petitioner received the notices of deficiency and chose not to
petition this Court.
On March 29, 2006, respondent sent petitioner a Final
Notice--Notice of Intent to Levy and Notice of Your Right to a
Hearing with respect to petitioner’s 1997, 1998, 1999, 2000,
2001, and 2002 taxable years (levy notice). The levy notice
2
Amounts are rounded to the nearest dollar.
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listed petitioner’s total outstanding liabilities as of that date
as $79,614, $37,697, $18,099, $67,404, $64,011, and $55,670, for
1997, 1998, 1999, 2000, 2001, and 2002, respectively (a total of
$322,495).
On April 20, 2006, petitioner sent respondent a Form 12153,
Request for a Collection Due Process Hearing, regarding his 1997,
1998, 1999, 2000, 2001, and 2002 tax years. The only reason
petitioner provided on the Form 12153 for respondent not to
proceed with collection was “Does not make sufficient money to
help support myself.”
On June 29, 2006, petitioner had a face-to-face section 6330
hearing with Settlement Officer James Feist. Among other things,
petitioner requested that Settlement Officer Feist “provide
evidence verifying the U.S. Individual Income Tax/Forms 1040 and
Form 433-A in question are in compliance with the specifications
of the PAPERWORK REDUCTION ACT (PRA) and have been issued current
and valid control numbers from the Office of Management and
Budget.” The only nonfrivolous issue petitioner raised at the
hearing was financial hardship.
On or about July 12, 2006, petitioner mailed Settlement
Officer Feist a copy of Rev. Rul. 2006-21, 2006-1 C.B. 745,
regarding frivolous tax returns. This revenue ruling states that
arguments regarding the Paperwork Reduction Act--including that
the Paperwork Reduction Act allegedly relieves taxpayers of the
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duty to file income tax returns--have no merit and are frivolous.
The revenue ruling, under the heading “CIVIL AND CRIMINAL
PENALTIES”, notes that in addition to several other potential
penalties, taxpayers may be liable for “a penalty of up to
$25,000 under section 6673 if the taxpayer makes frivolous
arguments in the United States Tax Court.” Id., 2006-1 C.B. at
746. On the face of the revenue ruling petitioner wrote that he
had read the revenue ruling. Petitioner attached a document
containing frivolous and groundless arguments to the revenue
ruling.
On August 3, 2006, respondent issued a Notice of
Determination Concerning Collection Action(s) Under Section 6320
and/or 6330 (notice of determination) to petitioner regarding his
1997, 1998, 1999, 2000, 2001, and 2002 tax years. In the notice
of determination, respondent determined that the proposed
collection action was appropriate, petitioner failed to submit a
viable collection alternative, and collection should proceed. In
an attachment to the notice of determination, respondent referred
petitioner to “The Truth About Frivolous Tax Arguments” and
provided an Internet address to access the document.
On May 16, 2007, the Court held a trial in this matter.
That same day, the Court filed respondent’s and petitioner’s
pretrial memoranda. In his pretrial memorandum, petitioner
stated that he did not intend to call any witnesses.
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Petitioner’s pretrial memorandum contained frivolous and
groundless arguments. Respondent’s pretrial memorandum again
warned petitioner about the section 6673 penalty for making
frivolous arguments to the Court.
On May 18, 2007, petitioner filed a statement containing
frivolous and groundless arguments. Petitioner’s statement also
contained disparaging and disrespectful statements directed to
the Court. That same day, petitioner filed a voluminous document
entitled “Petitioner’s Motions” which was replete with frivolous
and groundless tax-protester arguments.
On May 30, 2007, the Court denied “Petitioner’s Motions”.
OPINION
I. Determination To Proceed With Collection
Section 6330(a) provides that the Secretary shall furnish
taxpayers with written notice of their right to a hearing before
any property is levied upon. Section 6330 further provides that
the taxpayer may request administrative review of the matter (in
the form of a hearing) within a 30-day period. Sec. 6330(a) and
(b).
Pursuant to section 6330(c)(2)(A), a taxpayer may raise at
the section 6330 hearing any relevant issue with regard to the
Commissioner’s collection activities, including spousal defenses,
challenges to the appropriateness of the Commissioner’s intended
collection action, and alternative means of collection. Sego v.
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Commissioner, 114 T.C. 604, 609 (2000); Goza v. Commissioner, 114
T.C. 176, 180 (2000). If a taxpayer received a statutory notice
of deficiency for the years in issue or otherwise had the
opportunity to dispute the underlying tax liability, the taxpayer
is precluded from challenging the existence or amount of the
underlying tax liability. Sec. 6330(c)(2)(B); Sego v.
Commissioner, supra at 610-611; Goza v. Commissioner, supra at
182-183.
Petitioner received notices of deficiency for 1997, 1999,
2000, and 2001. Accordingly, he cannot challenge his underlying
liabilities for those years. See sec. 6330(c)(2)(B); Sego v.
Commissioner, supra at 610-611; Goza v. Commissioner, supra at
182-183.
At trial, the Court gave petitioner several opportunities to
present evidence regarding his underlying liabilities for 1998
and 2002. The Court asked petitioner several times whether he
wanted to address his deficiencies or underlying liabilities.
When asked by the Court whether he had anything to say about his
deficiencies or underlying liabilities, petitioner answered “No.”
Accordingly, we review respondent’s determination for 1997, 1998,
1999, 2000, 2001, and 2002 for an abuse of discretion. See Sego
v. Commissioner, supra at 610.
Settlement Officer Feist conducted a thorough review of the
financial information that petitioner provided to him. Upon the
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basis of: (1) Petitioner’s financial information, (2)
petitioner’s having taken no significant voluntary action (as
suggested) towards resolving his tax situation, and (3)
petitioner’s having paid only $111 (via withholding) and $4,000
(via a 1999 estimated tax payment) towards assessed taxes of
$184,733 for 1997 through 2003, respondent determined that
petitioner did not submit a viable collection alternative.
At trial, the Court asked petitioner several times whether
he wanted to put on any evidence or had any evidence to submit
regarding respondent’s determination. Petitioner did not take
advantage of any of the repeated opportunities the Court
presented to him.
Petitioner has failed to raise a spousal defense, make a
valid challenge to the appropriateness of respondent’s intended
collection action, or offer a viable alternative means of
collection. These issues are now deemed conceded. See Rule
331(b)(4). Accordingly, we conclude that respondent did not
abuse his discretion, and we sustain respondent’s determination
to proceed with collection.
II. Section 6673(a)
Section 6673(a)(1) authorizes this Court to require a
taxpayer to pay to the United States a penalty not to exceed
$25,000 if the taxpayer took frivolous positions in the
proceedings or instituted the proceedings primarily for delay. A
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position maintained by the taxpayer is “frivolous” where it is
“contrary to established law and unsupported by a reasoned,
colorable argument for change in the law.” Coleman v.
Commissioner, 791 F.2d 68, 71 (7th Cir. 1986).
At trial, the Court repeatedly advised petitioner to address
the issues in, and present evidence regarding, his case. Instead
of presenting evidence or addressing the merits of his case,
petitioner belligerently shouted, yelled, and screamed irrelevant
questions repeatedly at the Court. Petitioner repeatedly
interrupted the Court and directed disrespectful statements to
the Court. Additionally, rather than directing his attention to
his case or the Court, petitioner shouted and called out to
approximately a dozen persons in the gallery disrespectful and
irrelevant remarks impugning the integrity of the Court.
In Pierson v. Commissioner, 115 T.C. 576, 581 (2000), we
issued an unequivocal warning to taxpayers concerning the
imposition of penalties pursuant to section 6673(a) on those
taxpayers who abuse the protections afforded by sections 6320 and
6330 by instituting or maintaining actions under those sections
primarily for delay or by taking frivolous or groundless
positions in such actions. Petitioner filed multiple frivolous
documents with the Court. Petitioner’s position, based on stale
and meritless contentions, is manifestly frivolous and
groundless, and he has wasted the time and resources of this
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Court. We are convinced that petitioner instituted and
maintained these proceedings primarily for delay. Although the
amount is scarcely sufficient,3 we shall impose a penalty of
$25,000 pursuant to section 6673.
III. Additional Sanctions
As we stated in Williams v. Commissioner, 119 T.C. 276, 281-
282 (2002) (citations omitted):
all courts are vested with the inherent “power to
impose silence, respect, and decorum, in their
presence, and submission to their lawful mandates”. It
is established that this Court has
inherent power and authority to regulate and
supervise proceedings before it so as to
insure the integrity of its processes. The
Court's inherent power extends to regulate
both conduct before it and conduct beyond its
confines. The Court has recognized its
authority to maintain the integrity of its
proceedings and its ability to provide relief
for a party's misconduct.
In addition to our inherent power, section 7456(c), as
pertinent to this case, provides that
The Tax Court and each division thereof shall
have power to punish by fine or imprisonment,
at its discretion, such contempt of its
authority, and none other, as--
(1) misbehavior of any person in its
presence or so near thereto as to obstruct
the administration of justice; * * *
3
We note that the original version of the sec. 6673
penalty dates back to 1926; however, Congress has not raised the
amount of the sec. 6673 penalty since 1989. See Omnibus Budget
Reconciliation Act of 1989, Pub. L. 101-239, sec. 7731(a), 103
Stat. 2400. For a discussion of the history of sec. 6673, see
Wilkinson v. Commissioner, 71 T.C. 633 (1979).
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In Williams, as is the case herein, a $25,000 penalty under
section 6673 was imposed because of the taxpayer’s obvious
pattern of delay and extensive waste of the resources of the
court system and the Government. Id. at 282. In Williams, we
considered whether it would be appropriate to impose a sanction
on the taxpayer in addition to the $25,000 section 6673 penalty
for his institution or maintenance of the proceeding for purposes
of delay. Id.
We stated: “contempt of court may be civil or criminal,
depending upon the purpose being served. ‘[C]ivil contempt is
coercive and remedial in character whereas criminal contempt is
punitive to vindicate the authority of the Court.’” Id. at 282-
283 (citations omitted). Because of the possibility of a
monetary fine being imposed as a criminal sanction, the taxpayer
was provided with an opportunity to show cause why such a fine
should not be imposed. Id. at 283.
Although petitioner’s actions herein were contemptuous, we
shall not reward petitioner by delaying this matter any further.
Perhaps petitioner will see the error of his ways. Should he
return to the Court, however, and proceed similarly (e.g., by
engaging in belligerent or disrespectful misbehavior in the
presence of the Court to obstruct the administration of justice),
petitioner is on notice that the Court will consider imposing
appropriate sanctions pursuant to section 7456(c), in addition to
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the penalty provided by section 6673, to impress upon him that
such misbehavior will not be tolerated by this Court.
To reflect the foregoing,
An appropriate decision
will be entered.