T.C. Memo. 2008-153
UNITED STATES TAX COURT
KATHLEEN M. WOLCOTT, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 16103-07L. Filed June 12, 2008.
Kathleen M. Wolcott, pro se.
Beth A. Nunnink, for respondent.
MEMORANDUM OPINION
GOEKE, Judge: The instant matter is before the Court on
respondent’s motion for summary judgment and to impose a penalty
under section 6673. The issue for decision is whether
respondent’s Appeals Office abused its discretion in determining
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to proceed with the collection action with respect to
petitioner’s unpaid income tax liabilities for the taxable years
1999, 2000, and 2001. In addition respondent requests that the
Court impose a penalty in an appropriate amount, pursuant to
section 6673, on the ground that petitioner instituted these
proceedings primarily for delay and that petitioner’s position is
frivolous and groundless. As explained herein, we will grant
respondent’s motion.
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.
Background
At the time of filing the petition, petitioner resided in
Tennessee.
Petitioner’s Previous Tax Court Case
Petitioner failed to file income tax returns for the 1999,
2000, and 2001 tax years (the years at issue) and for the tax
year 2002. Respondent mailed petitioner notices of deficiency
for the tax years 1999, 2000, 2001, and 2002, but the notices of
deficiency for 1999, 2000, and 2001 were returned undelivered.
Petitioner did not allege that the notices of deficiency were not
mailed to her last known address. Petitioner did not file a
petition challenging the deficiencies, and on July 19, 2004,
respondent assessed the deficiencies along with additions to tax
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and interest. However, the record demonstrates that petitioner
received the notice of deficiency for 2002 but failed to file a
petition for redetermination challenging the notice.
On January 11, 2006, respondent’s Appeals Office issued to
petitioner: (1) A Decision Letter Concerning Equivalent Hearing
Under Section 6320 and/or 6330 concerning a proposed levy with
respect to petitioner’s 1999, 2000, and 2001 tax years (decision
letter); (2) a Notice of Determination Concerning Collection
Action(s) Under Section 6320 and/or 6330 as to a notice of
Federal tax lien for the 1999, 2000, and 2001 tax years; and (3)
a Notice of Determination Concerning Collection Action(s) Under
Section 6320 and/or 6330 concerning a lien and proposed levy with
respect to petitioner’s 2002 tax year.
On February 14, 2006, petitioner timely filed a petition,
Wolcott v. Commissioner, docket No. 3258-06L, challenging those
notices. However, the petition contained nothing but frivolous
and groundless arguments.
On March 24, 2006, respondent filed a motion to dismiss for
failure to state a claim upon which relief can be granted and to
impose a penalty under section 6673. Petitioner filed an
objection thereto. Respondent’s motion was heard, and during the
hearing the question arose whether the Court had jurisdiction
over the decision letter. The Court directed respondent to file
a report addressing the Court’s jurisdiction with regard to the
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decision letter and specifically whether the final notice of
intent to levy underlying the decision letter was mailed to
petitioner’s last known address. Respondent filed a status
report stating that a copy of the final notice of intent to levy
for 1999, 2000, and 2001 could not be found. Although a copy of
a certified mailing list was attached indicating that a document
was mailed to petitioner at Henderson, North Carolina, on
November 24, 2004, respondent was unable to provide the Court
with a copy of the last tax return that petitioner filed before
November 2004.
On July 14, 2006, the Court issued an order which dismissed
for lack of jurisdiction and deemed stricken so much of the
petition as pertained to the decision letter because respondent
did not make a determination under section 6330 in that he failed
to send the written notice required under section 6330(a) to
petitioner at her last known address.
On July 18, 2006, the Court entered an order of dismissal
and decision granting respondent’s motion to dismiss the case on
the ground that the petition failed to state a claim for relief
concerning respondent’s notices of determination pertaining to
the liens for 1999, 2000, 2001, and 2002 and the levy for 2002.
Although the Court found that petitioner was not liable for a
penalty pursuant to section 6673, the Court stated: “we
nevertheless will take this opportunity to admonish petitioner
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that the Court will consider imposing such a penalty should she
return to the Court and advance similar arguments in the future.”
Petitioner did not appeal, and on October 16, 2006, the decision
became final.
Petitioner’s Present Case
On August 9, 2006, respondent sent petitioner a Final
Notice, Notice of Intent to Levy and Notice of Your Right to a
Hearing, advising petitioner that respondent intended to levy to
collect the unpaid liabilities for the years at issue and that
petitioner could receive a collection hearing with respondent’s
Appeals Office.1
On September 8, 2006, petitioner sent respondent a Form
12153, Request for a Collection Due Process Hearing. On March
12, 2007, the settlement officer assigned to the case requested
information from petitioner and requested a telephone conference
with petitioner. On April 2, 2007, petitioner faxed a packet of
documents to the settlement officer raising the underlying
liability and expressing an interest in collection alternatives.
On April 3, 2007, the settlement officer offered a face-to-face
conference with petitioner and requested a Form 433-A, Collection
Information Statement for Wage Earners and Self-Employed
Individuals, to consider collection alternatives. Petitioner did
1
The Aug. 9, 2006, notice was within 90 days of our order of
July 14, 2006, but the notice does not violate sec. 6330(e). See
McGowen v. Commissioner, T.C. Memo. 2008-125.
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not respond to the settlement officer’s request, provide any
information regarding collection alternatives, or request a face-
to-face conference with the settlement officer. On June 12,
2007, respondent’s Appeals Office issued to petitioner a Notice
of Determination Concerning Collection Action(s) Under Section
6320 and/or 6330 (notice of determination).
On July 17, 2007, petitioner filed a petition with this
Court seeking relief from respondent’s notice of determination.
The reasons petitioner set forth were frivolous and groundless.
On April 2, 2008, respondent filed the motion for summary
judgment and to impose a penalty under section 6673. Petitioner
filed a notice of objection thereto.
Discussion
Summary Judgment
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 material fact and a
decision may be rendered as a matter of law. Rule 121(a) and
(b); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992),
affd. 17 F.3d 965 (7th Cir. 1994). The moving party bears the
burden of proving that there is no genuine issue of material
fact. Dahlstrom v. Commissioner, 85 T.C. 812, 821 (1985);
Jacklin v. Commissioner, 79 T.C. 340, 344 (1982). When a motion
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for summary judgment is made and supported as provided in Rule
121, the party opposing summary judgment must set forth specific
facts which show that a question of genuine material fact exists
and may not rely merely on allegations or denials in the
pleadings. Grant Creek Water Works, Ltd. v. Commissioner, 91
T.C. 322, 325 (1988); Casanova Co. v. Commissioner, 87 T.C. 214,
217 (1986).
Respondent argues that since the prior case (Wolcott v.
Commissioner, docket No. 3258-06L) involved petitioner and the
same years at issue as the present case, and because the Court
issued a final judgment as to the merits, section 6330(c)(2)(B)
prevents petitioner from raising the underlying liability in this
case because petitioner already had a chance to do so.
Petitioner may not raise the underlying tax liability in this
case because she has already had an opportunity to challenge it.
See sec. 6330(c)(2)(B). This Court reviews the Appeals Office’s
administrative determination with respect to nonliability issues
for an abuse of discretion. Goza v. Commissioner, 114 T.C. 176
(2000).
On the undisputed facts respondent did not abuse his
discretion in determining to proceed with the collection action
in the notice of determination with respect to the years at
issue.
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Section 6673 Penalty
As discussed earlier in the Court’s order of dismissal and
decision entered July 18, 2006, in Wolcott v. Commissioner,
docket No. 3258-06L, petitioner was admonished that the Court
would consider imposing a penalty should she return to this Court
and continue to advance frivolous arguments.
Section 6673(a)(1) authorizes this Court to require a
taxpayer to pay a penalty to the United States in an amount not
to exceed $25,000 whenever it appears that a taxpayer instituted
or maintained a proceeding in the Court primarily for delay or
that a taxpayer’s position in such a proceeding is frivolous or
groundless. Section 6673(a)(1) applies to collection
proceedings. See Pierson v. Commissioner, 115 T.C. 576 (2000);
Hoffman v. Commissioner, T.C. Memo. 2000-198.
Petitioner’s request for a hearing, her petition, and her
reply make arguments under the “public protection clause” of the
Paperwork Reduction Act. See United States v. Dawes, 951 F.2d
1189, 1193 (10th Cir. 1991) (“Congress enacted the PRA [Paperwork
Reduction Act] to keep agencies, including the IRS, from deluging
the public with needless paperwork. It did not do so to create a
loophole in the tax code.”); Wheeler v. Commissioner, 127 T.C.
200, 208 (2006) (“The Paperwork Reduction Act is not a defense *
* * nor does it create a loophole in the Code.”), affd. 521 F.3d
1289 (10th Cir. 2008). In addition, petitioner’s notice of
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objection contained statements, contentions, and arguments that
the Court finds to be frivolous and/or groundless. Petitioner
raises the same frivolous arguments that she raised in her prior
case. See Wolcott v. Commissioner, docket No. 3258-06L; supra
pp. 3-5.
Petitioner has failed to set forth any genuine issue of
material fact. In her petition, reply, and notice of objection
to respondent’s motion, petitioner raises the same frivolous
arguments. Petitioner’s actions establish that she is using the
collection proceedings primarily for delay.
We cautioned petitioner in her prior case that she might be
subject to a penalty if in the future she instituted or
maintained a proceeding in this Court primarily for delay or her
position in any such proceeding was frivolous or groundless. We
find that petitioner is liable for a penalty under section 6673
in the amount of $1,000.
To reflect the foregoing,
An appropriate order and
decision will be entered.