Moore v. Comm'r

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).
 - 11 -

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.