McGowan v. Comm'r

T.C. Memo. 2008-125

UNITED STATES TAX COURT

PATRICK J. MCGOWAN, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 7309-04L. Filed May 1, 2008.

P filed a petition for judicial review pursuant to
sec. 6330, I.R.C., in response to a determination by R
that levy action is appropriate.

Held: R’s determination to proceed with
collection by levy is sustained.

Patrick J. McGowan, pro se.

Michael A. Pesavento, for respondent.
 - 2 -

MEMORANDUM FINDINGS OF FACT AND OPINION

WHERRY, Judge: This case is before the Court on a petition

for judicial review of a Notice of Determination Concerning

Collection Action Under Section 6330.1 The issues for decision

are:

(1) Whether collection action for taxable years 1990, 1991,

and 1992 was suspended pursuant to section 6330(e)(1);

(2) whether respondent may proceed with collection by levy

of petitioner’s tax liabilities for the 1990, 1991, and 1992

taxable years; and

(3) whether to grant respondent’s motion to impose a penalty

under section 6673.

FINDINGS OF FACT

Some of the facts have been stipulated by the parties. The

stipulations, with accompanying exhibits, are incorporated herein

by this reference. At the time the petition was filed petitioner

resided in Jacksonville, Florida.

Petitioner has a 15-year history of not filing Federal

income tax returns and did not file returns for the years in

issue. See McGowan v. Commissioner, T.C. Memo. 2006-154.

1
Unless otherwise indicated, all section references are to
the Internal Revenue Code of 1986, as amended, and all Rule
references are to the Tax Court Rules of Practice and Procedure.
 - 3 -

Respondent issued a notice of deficiency2 on April 26, 1995, that

reflected deficiencies in income tax and additions to tax for the

taxable years and in the amounts as follows:

Addition to Tax
Year Deficiency Sec. 6651(a)(1)

1990 $1,767 $379.50
1991 1,616 242.25
1992 1,999 413.25

On December 21, 2001, respondent mailed to petitioner a

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

Hearing with regard to petitioner’s unpaid taxes for taxable

years 1990, 1991, and 1992. This notice was returned to

respondent as undeliverable. On April 11, 2002, petitioner

submitted to respondent Form 12153, Request for a Collection Due

Process Hearing. Respondent conducted an “equivalent hearing”

for petitioner on December 3, 2002, and issued to petitioner a

Decision Letter Concerning Equivalent Hearing Under Section 6330

on December 13, 2002, that sustained the levy action.

Although the decision letter informed petitioner that he

could not appeal respondent’s decision in court, petitioner filed

a petition with this Court on January 13, 2003. In response,

respondent filed a motion to dismiss the petition for lack of

2
The notice of deficiency was sent by certified mail to
petitioner’s last known address. However, respondent’s brief
concedes that petitioner did not “receive” the notice of
deficiency pursuant to sec. 6330(c)(2)(B).
 - 4 -

jurisdiction. A hearing on respondent’s motion was held. On

July 16, 2003, this Court dismissed petitioner’s case, docket

No. 665-03L, for lack of jurisdiction on the ground that the

Final Notice of Intent To Levy and Notice of Your Right to a

Hearing for the years in dispute was invalid because respondent

failed to mail the notice to petitioner at his last known address

as required by section 6330(a).

On August 4, 2003, respondent issued to petitioner a second

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

Hearing for petitioner’s unpaid taxes for taxable years 1990,

1991, and 1992. Petitioner requested an Appeals hearing by

submitting a timely Form 12153, which was mailed August 28, 2003,

and received by respondent on September 2, 2003. Petitioner’s

Form 12153 stated his disagreement with the levy as follows:

I want a face-to-face collection due process hearing.
In order to furnish a complete administrative record
for any reviewing court, I intend to record my
collection due process hearing as provided by IRC
section 7521(a) and Notice 89-51, this is the IRS
Office of Appeals 10 day notice of my intent to record.
See Keene v. Commissioner[.]

On January 22, 2004, respondent’s Jacksonville, Florida,

Appeals Office mailed to petitioner a letter informing petitioner

that because his Form 12153 was not timely, he was not entitled

to a section 6330 hearing but would receive an equivalent hearing

instead. The letter mistakenly stated that the Final Notice of

Intent to Levy and Notice of Your Right to a Hearing was issued
 - 5 -

on December 21, 2001. An invalid levy notice was mailed to

petitioner on that date; however, a new levy notice was mailed to

petitioner on August 4, 2003, and petitioner’s Form 12153 was

timely submitted. Attached to the letter were Forms 4340,

Certificate of Assessments, Payments, and Other Specified

Matters.

On February 12, 2004, Davida Parker (Ms. Parker), the

Appeals Officer assigned to petitioner’s case, mailed a letter to

petitioner that scheduled a telephone hearing for February 26,

2004, at 9:30 a.m.3 Ms. Parker called petitioner at the

scheduled date and time but petitioner was unavailable. On

February 26, 2004, Ms. Parker mailed to petitioner a letter

informing him that she would allow him 2 weeks to submit relevant

information regarding:

1. challenges to the appropriateness of collection
actions;

2. offers of collection alternatives; and

3. challenges to the existence or amount of the
underlying tax liability for any tax period if the
person did not receive any statutory notice of
deficiency for such tax liability or did not otherwise
have an opportunity to dispute such tax liability.

3
The letter referred to the scheduled telephone hearing as a
sec. 6330 hearing. The letter did not contain any reference to
an equivalent hearing. In response, on Feb. 24, 2004, petitioner
mailed to Ms. Parker a letter requesting clarification on whether
he would receive an administrative hearing or an equivalent
hearing, and whether he would have the right to judicial review
of the determination.
 - 6 -

On March 25, 2004, respondent issued to petitioner a Notice

of Determination Concerning Collection Action Under Section 6330

sustaining the levy action. Petitioner filed a timely petition

with this Court. Thereafter, respondent filed a motion to remand

this case to respondent’s Appeals Office for an Appeals hearing,

which this Court granted on January 17, 2006. A face-to-face

Appeals hearing with Ms. Parker was held on March 20, 2006.

During the hearing petitioner raised only frivolous tax-protester

arguments. Petitioner was provided with additional copies of

Forms 4340.

Respondent mailed to petitioner a Supplemental Notice of

Determination Concerning Collection Action Under Section 6330 on

March 23, 2006, which stated in pertinent part:

The Settlement Officer gave you a second copy of Form
4340, Certificate of Assessments, Payments and Other
Specified Matters and explained that we had requested,
on numerous occasions, a list of relevant issues and
collection alternatives. The Settlement Officer
advised you to make your requests for documents, those
you had not already received from Area Counsel’s
office, through the Freedom of Information Act.[4]

The Settlement Office did not agree to provide the
documents you demanded or debate the validity of the
assessment, the Service’s authority to prepare returns
for individuals who fail to voluntarily file income tax
returns, and other issues not relevant to you resolving

4
Petitioner repeatedly requested at his face-to-face Appeals
hearing verification from the Secretary that all applicable laws
or administrative procedures had been met, and Ms. Parker’s
“enforcement pocket commission” (i.e. her authority to enforce
collection action).
 - 7 -

your tax liability.[5] She advised you during the
hearing that the Notice of Intent to Levy would be
sustained and enforcement action approved.

* * * * * * *

To the best of our knowledge, with the information
available to us, we have determined that all applicable
laws, policies, regulations and procedures have been
followed by the Collection office[.]

A trial was held on February 5, 2007, in Jacksonville, Florida.

At trial petitioner raised frivolous tax-protester arguments and

pleaded the Fifth Amendment in response to many questions asked

by respondent’s counsel during cross-examination.6

5
Petitioner demanded to see Forms 1040 signed by him for the
years in issue (which did not exist), instead of substitutes for
return that the Commissioner prepared, and frivolously argued
that the Commissioner could not assess taxes without a Form 1040
signed by a taxpayer.
6
Respondent’s counsel objected to petitioner’s pleading the
Fifth Amendment in response to questions asked on cross-
examination regarding his employment and unreported income in
1990, 1991, 1992, and 1997. Respondent indicated at trial that
an “information item” had been submitted to the Criminal
Investigation Division (CID), but the CID had “not opened a case.
If they were to open up a case on Mr. McGowan, they would do so
for recent years, perhaps the last six years, somewhere in there,
but in no way, shape or form could Mr. McGowan be prosecuted for
1990, ‘91, or ‘92. The statute of limitations on criminal
matters generally is about six years.” The Court overruled
respondent’s objection for taxable year 1997. The Court reserved
judgment on respondent’s objection as to taxable years 1990,
1991, and 1992, after respondent asked the Court to strike all of
petitioner’s direct testimony for those taxable years because
petitioner “cannot testify on direct and then use the Fifth
Amendment as a shield to protect himself from cross-examination.”

The Fifth Amendment “protects against real dangers, not
remote and speculative possibilities.” Zicarelli v. N.J. State
Commn. of Investigation, 406 U.S. 472, 478 (1972). Furthermore,
(continued...)
 - 8 -

OPINION

I. Collection Action

A. General Rules

Pursuant to section 6331(a), if a taxpayer liable to pay

taxes fails to do so within 10 days after notice and demand for

6
(...continued)
“In a civil tax case, the taxpayer must accept the consequences
of asserting the Fifth Amendment and cannot avoid the burden of
proof by claiming the privilege and attempting to convert ‘the
shield * * * which it was intended to be into a sword’.” Lee v.
Commissioner, T.C. Memo. 2002-95 (quoting United States v.
Rylander, 460 U.S. 752, 758 (1983)), affd. 61 Fed. Appx. 471 (9th
Cir. 2003); see also Stang v. Commissioner, T.C. Memo. 2005-154,
affd. 202 Fed. Appx. 163 (9th Cir. 2006).

After the Court reserved judgment on respondent’s objection
and oral motion, petitioner did offer answers to respondent’s
questions, albeit answers consisting of “I don’t know” or
outright denials, which the Court did not find to be credible.
For example, when asked “Can you remember any employer that you
worked for during anytime during 1990, ‘91 or 1992, any of those
three years”, petitioner responded “No. I do not recall.” When
then asked “Do you remember working during those years”,
petitioner responded “I’m sure I must have”, but then denied
working for every employer that was mentioned.

Petitioner’s direct testimony was limited to complaints
about his Appeals hearing and the “illegal” application of his
1999 refund to his 1991 tax liability. See infra note 12.
Petitioner also made frivolous and meritless arguments regarding
the Secretary’s delegated authority under sec. 7701 and the
Commissioner’s authority to assess taxes without a signed Form
1040 by the taxpayer. The Court shall not address petitioner’s
arguments “with somber reasoning and copious citation of
precedent; to do so might suggest that these arguments have some
colorable merit.” Crain v. Commissioner, 737 F.2d 1417, 1417
(5th Cir. 1984).

As petitioner did not offer any relevant or credible
testimony on direct or cross-examination for the Court to
consider, the Court will overrule respondent’s objection, and
deny respondent’s oral motion to strike, as moot.
 - 9 -

payment, the Secretary is authorized to collect such tax by levy

upon the taxpayer’s property. Absent jeopardy, the Secretary is

obliged to provide the taxpayer with 30 days’ advance notice of

levy collection and of the administrative appeals available to

the taxpayer. Sec. 6331(d). Upon a timely request a taxpayer is

entitled to a collection hearing before the IRS Office of

Appeals. Sec. 6330(b)(1).

At the collection hearing the taxpayer may raise “any

relevant issue relating to the unpaid tax or the proposed levy,

including” appropriate spousal defenses, challenges to the

appropriateness of collection actions, and offers of collection

alternatives. Sec. 6330(c)(2)(A). The taxpayer may not contest

the validity of the underlying tax liability unless the taxpayer

did not receive a notice of deficiency for such tax liability or

did not otherwise have an opportunity to dispute such tax

liability. Sec. 6330(c)(2)(B).

In rendering a determination the Appeals officer must take

into consideration verification that “requirements of any

applicable law or administrative procedure have been met” and

relevant issues relating to the unpaid tax or proposed levy.

Relevant issues include “whether any proposed collection action

balances the need for the efficient collection of taxes with the

legitimate concern of the person that any collection action be no

more intrusive than necessary.” Sec. 6330(c)(3).
 - 10 -

The taxpayer is entitled to appeal the determination of the

Appeals Office if made on or before October 16, 2006, to the Tax

Court or a U.S. District Court, depending on the type of tax at

issue. Sec. 6330(d).7 Where the validity of the underlying tax

liability is properly at issue, the Court will review the matter

de novo. Sego v. Commissioner, 114 T.C. 604, 610 (2000); Goza v.

Commissioner, 114 T.C. 176, 181-182 (2000). The Court reviews

any other administrative determination regarding the proposed

levy action for an abuse of discretion. Sego v. Commissioner,

supra at 610; Goza v. Commissioner, supra at 182.

Respondent has conceded that the existence or amounts of

petitioner’s underlying tax liabilities are properly at issue.8

If the Court finds that petitioner is liable for the deficiencies

and additions to tax, then respondent’s administrative

determination sustaining the levy action will be reviewed for an

abuse of discretion. See Downing v. Commissioner, 118 T.C. 22,

31 (2002); Goodwin v. Commissioner, T.C. Memo. 2003-289.

7
Determinations made after Oct. 16, 2006, are appealable
only to the Tax Court. See Pension Protection Act of 2006, Pub.
L. 109-280, sec. 855, 120 Stat. 1019.
8
At trial respondent’s counsel stated: “The standard of
review to be used by the Court in addressing the deficiencies is
de novo. That means Respondent is not arguing in this proceeding
that Petitioner received a deficiency notice.”
 - 11 -

B. Section 6330(e)

Petitioner argued on brief that this Court is without

jurisdiction because “respondent * * * issued an invalid and

improper ‘final notice of intent to levy and your right to a

hearing’ * * * within 90 days of Judge Armen’s dismissal of [the

earlier Tax Court case at docket no.] 665-03L”. (Emphasis

omitted.) Section 6330(e) provides:

SEC. 6330(e) Suspension of Collections and Statute
of Limitations.--

(1) In general.--Except as provided in
paragraph (2), if a hearing is requested under
subsection (a)(3)(B), the levy actions which are
the subject of the requested hearing and the
running of any period of limitations under section
6502 (relating to collection after assessment),
section 6531 (relating to criminal prosecutions),
or section 6532 (relating to other suits) shall be
suspended for the period during which such
hearing, and appeals therein, are pending. In no
event shall any such period expire before the 90th
day after the day on which there is a final
determination in such hearing. Notwithstanding
the provisions of section 7421(a), the beginning
of a levy or proceeding during the time the
suspension under this paragraph is in force may be
enjoined by a proceeding in the proper court,
including the Tax Court. The Tax Court shall have
no jurisdiction under this paragraph to enjoin any
action or proceeding unless a timely appeal has
been filed under subsection (d)(1) and then only
in respect of the unpaid tax or proposed levy to
which the determination being appealed relates.
[Emphasis added.]

If a taxpayer does not request an Appeals hearing within 30

days of the mailing of the notice of determination, then the

period of limitations for section 6502 and collection action are
 - 12 -

not suspended.9 See sec. 6330(a)(2) and (3)(B). Petitioner did

not file a timely request for an Appeals hearing in response to

the original December 21, 2001, Final Notice of Intent to Levy

and Notice of Your Right to a Hearing, which was the subject of

the earlier case at docket no. 665-03L. See supra p. 3. As

noted above, his failure to make a timely request was likely

attributable to the fact that respondent failed to mail the

notice to petitioner at his last known address. Because section

6330(e)(1) suspends levy actions and the running of the

limitations period for collection after assessment only if a

taxpayer files a timely request for an Appeals hearing, levy

actions and the running of the limitations period for collection

for petitioner’s 1990, 1991, and 1992 taxable years were not

suspended by petitioner’s untimely request for an Appeals

hearing, which was made nearly 4 months after the mailing of the

invalid December 21, 2001, notice.10 Therefore, under the facts

9
Sec. 301.6330-1(g)(2), Q&A-G2, Proced. & Admin. Regs.
further provides that the period of limitation for sec. 6502 is
not suspended if the taxpayer does not request, or fails to
timely request, an Appeals hearing. Although this provision of
the regulation does not mention collection action, sec.
6330(e)(1) clearly specifies that the suspension of the statute
of limitations and the moratorium on collection action shall be
simultaneous.
10
Because respondent did not attempt to collect while the
matter was pending before the Court for a determination as to
whether the Dec. 21, 2001, notice was mailed to petitioner’s last
known address, we need not address whether any other provision or
legal principle would have restricted collection during that
(continued...)
 - 13 -

of this case, section 6330(e)(1) did not bar respondent from

issuing to petitioner a second Final Notice of Intent to Levy and

Notice of Your Right to a Hearing on August 4, 2003.11

As a practical matter, petitioner was not aggrieved in any

manner by respondent’s issuance of the Final Notice of Intent to

Levy and Notice of Your Right to a Hearing less than 90 days

after the Court’s July 16, 2003, decision. Once the Court

determined that respondent had mailed the first notice to the

wrong address, respondent moved quickly to correct that mistake

by issuing petitioner a new notice to which petitioner responded

by requesting an Appeals hearing. Petitioner--who has a long

history of failing to file Federal income tax returns and of

raising tax-protester arguments--was not wronged. In fact, he

received the new notice and the concomitant right to request and

10
(...continued)
time.
11
This outcome is consistent with cases in which there is a
defective notice of deficiency. An invalid notice of deficiency
does not suspend the running of the statute of limitations for
assessment. See Welch v. Schweitzer, 106 F.2d 885, 888 (9th Cir.
1939); Reddock v. Commissioner, 72 T.C. 21, 26 (1979); Rodgers v.
Commissioner, 57 T.C. 711, 713 (1972). In Reddock, the
Commissioner mailed an incorrectly addressed notice of deficiency
to the taxpayers that was returned as undelivered; the
Commissioner remailed the notice of deficiency to the taxpayers’
last known address after the expiration of the period of
limitations. Upon receipt of the second notice, the taxpayers
petitioned this Court. Their petition was filed within 90 days
of the mailing of the initial notice of deficiency. The Court
held that the incorrectly addressed notice of deficiency did not
suspend the running of the period of limitations despite the fact
that the petition was filed within 90 days of its mailing.
 - 14 -

receive an Appeals hearing sooner than he would have had section

6330(e)(1) applied.

C. De Novo Review of Underlying Tax Liabilities

1. Deficiencies

In general, the Commissioner’s determination of a deficiency

in the notice of deficiency is presumed correct, and the taxpayer

bears the burden of showing that such determination was in error.

See Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).

In unreported income cases, the Commissioner must come forward

with evidence establishing a minimal foundation, which may

consist of evidence linking the taxpayer to an income-producing

activity. Weimerskirch v. Commissioner, 596 F.2d 358, 360-361

(9th Cir. 1979), revg. 67 T.C. 672 (1977); Petzoldt v.

Commissioner, 92 T.C. 661, 689 (1989). If the Commissioner

introduces some evidence that the taxpayer received unreported

income, then the burden shifts to the taxpayer to show by a

preponderance of the evidence that the deficiency was arbitrary

or erroneous. Hardy v. Commissioner, 181 F.3d 1002, 1004 (9th

Cir. 1999), affg. T.C. Memo. 1997-97.

Respondent presented documentary evidence that indicated

petitioner received the following unreported income, totaling

$13,438, in taxable year 1990: (1) $5,320 in wages from Disc

Production Services; (2) $1,980 in wages from Disc Talent Group

Inc.; (3) $1,950 in nonemployee compensation from International
 - 15 -

TV & Motion Picture; (4) $1,803 in wages from Pacific Bell;

(5) $1,250 in nonemployee compensation from NBC Productions Inc.;

(6) $1,000 in nonemployee compensation from West & Co. Marketing

& Advertising; (7) $100 in rental income from NBC Productions

Inc.; and (8) $35 in interest from Great Western Bank.

Respondent presented similar evidence that petitioner

received the following unreported income, totaling $16,326, in

taxable year 1991: (1) $7,279 in wages from Bank of America

NT&SA; (2) $2,961 in wages from Susan Pages of California;

(3) $2,800 in wages from Columbia Pictures Industries; (4) $2,778

in wages from Pacific Bell; (5) $364 in wages from Security

Pacific National Bank; (6) $99 in wages from Orange National

Bank; (7) $31 in interest from Great Western Bank; and (8) $14 in

wages from Americana Portraits, Inc.

Respondent also presented evidence that petitioner received

the following unreported income, totaling $19,225, in taxable

year 1992: (1) $12,977 in wages from Susan Pages of California;

and (2) $6,248 in wages from Bank of America NT&SA.

The Court concludes, on the documentary evidence presented

by respondent, that respondent has established a minimal

foundation. See Weimerskirch v. Commissioner, supra at 361.

Accordingly, the burden shifts to petitioner. See Hardy v.

Commissioner, supra at 1004. Petitioner did not present any

evidence, or raise any relevant arguments, regarding his
 - 16 -

underlying tax liabilities for 1990, 1991, and 1992, other than

his uncorroborated testimony.12 He denied, or could not

remember, being employed by the specific employers listed above,

but we have found his testimony to be spurious and not credible.

Accordingly, the Court sustains respondent’s determination of

petitioner’s 1990, 1991, and 1992 income tax deficiencies.

2. Section 6651(a)(1) Addition to Tax

The Commissioner bears the burden of production in any court

proceeding with respect to an individual’s liability for

penalties or additions to tax. Sec. 7491(c). To meet this

burden, the Commissioner must present “sufficient evidence

indicating that it is appropriate to impose the relevant penalty”

or addition to tax. Higbee v. Commissioner, 116 T.C. 438, 446

(2001). In instances where an exception to the penalty or

addition to tax is afforded upon a showing of substantial

authority, reasonable cause, or similar provisions, the taxpayer

12
Petitioner’s only argument relating to his underlying tax
liabilities, although irrelevant for the years at issue, is that
he never received an overpayment refund for taxable year 1999
because it was “illegally” applied to his outstanding income tax
liability for taxable year 1991. On Apr. 28, 2003, petitioner
filed his 1999 Federal income tax return. On the basis of that
return, respondent assessed a tax of $5,989. On Sept. 15, 2003,
respondent abated the entire assessed amount, which generated an
overpayment refund of $2,084.61. Respondent applied the
overpayment refund to petitioner’s outstanding 1991 tax
liability. Pursuant to sec. 6402(a), the Commissioner may set
off any existing tax liability against any tax refunds due the
taxpayer. In other words, sec. 6402(a) provides that a taxpayer
is entitled to a tax refund only of the amount which exceeds any
outstanding tax liabilities.
 - 17 -

bears the burden of raising and prevailing on these issues. Id.

at 446-447.

Section 6651(a)(1) imposes a 5-percent addition to tax for

each month or portion thereof a required return is filed after

the prescribed due date, not to exceed 25 percent in the

aggregate, unless such failure to file timely is due to

reasonable cause and not due to willful neglect. Although not

defined in the Code, “reasonable cause” is described by the

regulations as the exercise of “ordinary business care and

prudence”. Sec. 301.6651-1(c)(1), Proced. & Admin. Regs.; see

also United States v. Boyle, 469 U.S. 241, 246 (1985).

“[W]illful neglect” is interpreted as a “conscious, intentional

failure or reckless indifference.” United States v. Boyle, supra

at 245.

Respondent has met the burden of production as respondent

has shown that petitioner did not file Federal income tax returns

for taxable years 1990, 1991, and 1992. Petitioner did not

present any evidence to suggest that his failure to file was due

to reasonable cause. Therefore, the Court sustains respondent’s

determination of the addition to tax pursuant to section

6651(a)(1) for taxable years 1990, 1991, and 1992.

D. Review for Abuse of Discretion

Because petitioner is liable for the deficiencies and

additions to tax for taxable years 1990, 1991, and 1992, the
 - 18 -

Court will review respondent’s administrative determination

sustaining the levy action for an abuse of discretion.

Petitioner has offered no evidence indicating that respondent

abused his discretion in sustaining the levy action. Other than

his section 6330(e)(1) argument, petitioner has offered only

frivolous and meritless tax-protester arguments regarding

respondent’s determination to proceed with levy action. See

supra notes 4, 5, and 6.

In the supplemental notice of determination respondent

determined that “To the best of our knowledge, with the

information available to us, we have determined that all

applicable laws, policies, regulations and procedures have been

followed by the Collection office.” The supplemental notice of

determination further states: “The Appeals Office believes that

collection by levy balances the need for the efficient collection

of taxes with your concerns as to the intrusiveness of the

action. * * * You offered no arguments that the proposed

collection action is more intrusive than necessary, nor have you

offered any collection alternatives.” The Court concludes that

respondent’s determination to proceed with collection by levy of

petitioner’s 1990, 1991, and 1992 tax liabilities was not an

abuse of discretion and respondent may proceed with collection.
 - 19 -

II. Section 6673 Penalty

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

penalty not in excess of $25,000 on a taxpayer for proceedings

instituted primarily for delay or in which the taxpayer’s

position is frivolous or groundless. “A petition to the Tax

Court, or a tax return, is frivolous if 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).

Respondent, on motion, has asked the Court to impose a

penalty under section 6673(a)(1). Petitioner is no stranger to

the section 6673 penalty as he was ordered to pay $5,000 to

respondent for asserting frivolous and meritless arguments in a

previous trial. See McGowan v. Commissioner, T.C. Memo. 2006-

154. In the instant case, although petitioner made frivolous and

meritless arguments, he did raise a substantive issue under

section 6330(e) that the Court addressed. Therefore, the Court

concludes, after considering the numerous procedural problems in

this case, that it is not appropriate to impose a penalty.

However, the Court explicitly admonishes petitioner that he may,

in the future, be subject to a penalty under section 6673 for any

proceedings instituted or maintained primarily for delay or for

any proceedings which are frivolous or groundless.
 - 20 -

The Court has considered all of petitioner’s and

respondent’s contentions, arguments, requests, and statements.

To the extent not discussed herein, the Court concludes that they

are meritless, moot, or irrelevant.

To reflect the foregoing,

An appropriate order and

decision will be entered.