T.C. Memo. 2008-184
UNITED STATES TAX COURT
GARY CUMMINGS, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 21650-06L. Filed July 30, 2008.
Gary Cummings, pro se.
Nancy P. Klingshirn, for respondent.
MEMORANDUM OPINION
VASQUEZ, Judge: This case is before the Court on
respondent’s motion for summary judgment.
Petitioner failed to file Federal income tax returns for
2002 and 2003. Respondent issued statutory notices of deficiency
to petitioner determining deficiencies and additions to tax for
2002 and 2003. Petitioner received the notices of deficiency but
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did not petition the Court for a redetermination of the tax
deficiencies and additions to tax determined in the notices of
deficiency for 2002 and 2003 (notices of deficiency). After the
period for timely filing a petition with the Court regarding the
notices of deficiency elapsed, respondent assessed against
petitioner the amounts shown on the notices of deficiency.
Respondent mailed petitioner Letter 1058, Final Notice of
Intent to Levy and Notice of Your Right to a Hearing (levy
notice). The levy notice advised petitioner that respondent
intended to levy on petitioner’s property to secure payment of
his outstanding tax liabilities for 2002 and 2003. The levy
notice also explained that petitioner had a right to request a
hearing with respondent’s Office of Appeals (Appeals) to appeal
the proposed collection action and to discuss payment method
options by submitting a Form 12153, Request for a Collection Due
Process Hearing, with respect to the proposed levy.
Respondent mailed petitioner Letter 3172, Notice of Federal
Tax Lien Filing and Your Right to a Hearing Under IRC 6320, (lien
notice). The lien notice advised petitioner that respondent had
filed a notice of Federal tax lien (NFTL) with respect to
petitioner’s unpaid tax liabilities for 2002 and 2003. The lien
notice also explained that petitioner had a right to request a
hearing with Appeals to appeal the proposed collection action and
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to discuss payment method options by submitting a Form 12153 with
respect to respondent’s NFTL.
Petitioner timely filed two Forms 12153--one regarding the
levy notice and one regarding the lien notice. Petitioner’s
explanations of disagreement on both Forms 12153 were identical:
“INAPPROPRIATE COLLECTION ACTIVITY” and “INVALID ADMINISTRATIVE
RECORD”. Petitioner did not explain on the Form 12153 or attach
any statement to the Form 12153 explaining what inappropriate
collection activity had taken place or why the administrative
record was invalid.
Appeals acknowledged receipt of petitioner’s requests for a
hearing with respect to the levy notice and the lien notice for
2002 and 2003. By letter, Appeals advised petitioner (1) that
Appeals would not provide a face-to-face hearing if the only
items he wished to discuss were those determined by the courts to
be frivolous or groundless, (2) that he could receive a face-to-
face hearing on any relevant, nonfrivolous issues if he informed
Appeals in writing or by phone of such nonfrivolous issues, (3)
that Appeals scheduled a telephone conference for July 19, 2006,
and (4) that Appeals would not consider alternative collection
methods unless petitioner filed his 2004 and 2005 income tax
returns and completed collection information statements. The
letter further advised petitioner:
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Before you decide whether to petition a notice of
determination, you should know that the Tax Court is
empowered to impose monetary sanctions up to $25,000
for instituting or maintaining an action before it
primarily for delay or for taking a position that is
frivolous or groundless [Pierson v. Commissioner, 115
T.C. 576 (2000); Forbes v. Commissioner, T.C. Memo.
2006-10 ($20,000 penalty imposed); Aston v.
Commissioner, T.C. Memo. 2003-128 ($25,000 penalty
imposed)].
Petitioner responded to Appeals by letter and requested a
face-to-face hearing. Petitioner wrote that the issues that he
intended to raise at the hearing included:
Challenging the validity of the allegations as to
amounts allegedly owed due to the failure by the IRS to
follow its own administrative procedures, including
without limitation, violations of 26 USC 6065, pursuant
to 5 USC 556(d) and the Administrative Procedures Act;
Challenging whether or not a valid and properly
completed ASSESSMENT and DEFICIENCY exist.
As petitioner requested, Appeals provided him with a copy of
his administrative file for 2002. Appeals did not send
petitioner a copy of his administrative file for 2003 as he had
already obtained a copy through a Freedom of Information Act
request. Appeals offered to reschedule a telephone conference
with petitioner to discuss any relevant, nonfrivolous issues
regarding the $98,927.46 he owed (as of January 25, 2006) in tax,
penalties, and interest for 2002 and 2003.
Petitioner replied that Appeals’ assertion that the issues
he raised were “frivolous” was “a lie and you should know it.”
Additionally, petitioner wrote:
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Raising issues of IRS failure to follow its own
administrative procedures is absolutely a valid reason
and evokes a requirement for a face-to-face hearing.
Be advised that I refuse to accept your “offer” of a
telephone hearing and if you continue to fail or refuse
to grant me a face-to-face hearing, and should you
attempt to proceed with collection of a disputed
assessment without providing me a face-to-face hearing
to discuss your failure to follow your own
administrative procedures, then I will bring a lawsuit
against you in U.S. District Court. Under current law,
you can be fired for your failure to perform your
duties in accordance with Internal Revenue laws.
Subsequently, Appeals issued petitioner a Notice of
Determination Concerning Collection Action(s) Under Section 6320
and/or 6330 with respect to petitioner’s 2002 and 2003 taxable
years (notice of determination). Appeals determined that the
proposed levy and the NFTL were appropriate collection actions in
petitioner’s case.
Petitioner filed a petition challenging the notice of
determination. At the time he filed the petition, petitioner
resided in Ohio. Petitioner claimed inter alia: (1) “IRS has
other irregular and interesting preconditions such as filling out
forms and submitting a payment schedule. These requirements are
impossible since Petitioner does not know what the IRS wants
until he meets with it. Petitioner is not required to do these
and did not.”; (2) “The IRS illegally and wrongfully withheld a
hearing and has violated his statutory rights and administrative
due process rights to appear at a hearing.”; (3) “IRS was
notified that Petitioner challenged the validity of this alleged
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debt, of a related procedural deficiency (lack of required
certification, per 26 USC 6065) and of Petitioner’s demand for
proper certification of lawful assessment.”; (4) “The IRS refused
to acknowledge Petitioner’s demand, nor did it offer any evidence
of lawful verification of their assessment at any time.”; (5)
“Petitioner requested a face to face hearing within the legal
time period and therefore is entitled to an in-person hearing.”;
(6) “Under IRC 6330, Petitioner is entitled to a CDPH at a
location convenient to them [sic]. Taxpayer was not given the
opportunity to raise any relevant issue relating to the unpaid
tax or the proposed levy at a hearing in accordance with IRC
§6330.”; (7) and that the Internal Revenue Service violated
petitioner’s Fifth and Fourteenth Amendment rights.
Motion for Summary Judgment
Rule 121(a)1 provides that either party may move for summary
judgment upon all or any part of the legal issues in controversy.
Summary judgment may be granted if it is demonstrated that no
genuine issue exists as to any material fact and a decision may
be rendered as a matter of law. Rule 121(b); Sundstrand Corp. v.
Commissioner, 98 T.C. 518, 520 (1992), affd. 17 F.3d 965 (7th
Cir. 1994). We conclude that there is no genuine issue as to any
1
All Rule references are to the Tax Court Rules of
Practice and Procedure, and all section references are to the
Internal Revenue Code.
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material fact and that a decision may be rendered as a matter of
law.
Determination To Proceed With Collection
Section 6320(a)(1) provides that the Secretary shall furnish
the person described in section 6321 with written notice (i.e.,
the hearing notice) of the filing of a notice of lien under
section 6323. Section 6320(a) and (b) further provides that the
taxpayer may request administrative review of the matter (in the
form of a hearing) within a 30-day period. The hearing generally
shall be conducted consistent with the procedures set forth in
section 6330(c), (d), and (e). Sec. 6320(c).
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 prescribed 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(s), and alternative means of collection. Sego
v. Commissioner, 114 T.C. 604, 609 (2000); Goza v. Commissioner,
114 T.C. 176, 180 (2000). If a taxpayer received a statutory
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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 the notices of deficiency for 2002 and
2003. Accordingly, he cannot challenge his underlying
liabilities. See sec. 6330(c)(2)(B); Sego v. Commissioner, supra
at 610-611; Goza v. Commissioner, supra at 182-183. Therefore,
we review respondent’s determination for an abuse of discretion.
See Sego v. Commissioner, supra at 610.
Petitioner claims that Appeals did not verify the
assessments. Petitioner is wrong. Appeals verified the
assessment of petitioner’s taxes for 2002 and 2003, and
petitioner received a copy of his administrative file for 2002
and 2003.
Petitioner also argues that he was not required to file
collection information statements with Appeals, that he was
entitled to a face-to-face hearing, that Appeals illegally and
wrongfully withheld a hearing and violated his statutory rights
and administrative due process rights, and that the Internal
Revenue Service violated his Fifth and Fourteenth Amendment
rights. These are shopworn arguments characteristic of tax-
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protester rhetoric that has been universally rejected by this and
other courts. See Wilcox v. Commissioner, 848 F.2d 1007 (9th
Cir. 1988), affg. T.C. Memo. 1987-225; Carter v. Commissioner,
784 F.2d 1006, 1009 (9th Cir. 1986). We will not painstakingly
address these assertions “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).
At the hearing petitioner stated: “I don’t have collection
alternatives”. Petitioner has failed to raise a spousal defense
or make a valid challenge to the appropriateness of respondent’s
intended collection actions. These issues are now deemed
conceded. See Rule 331(b)(4).
Accordingly, we conclude that respondent did not abuse his
discretion, and we will grant respondent’s motion for summary
judgment sustaining respondent’s determination to proceed with
collection.
Section 6673
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 or groundless positions in
the proceedings or instituted the proceedings primarily for
delay. A position maintained by the taxpayer is “frivolous”
where it is “contrary to established law and unsupported by a
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reasoned, colorable argument for change in the law.” Coleman v.
Commissioner, 791 F.2d 68, 71 (7th Cir. 1986); see also Hansen v.
Commissioner, 820 F.2d 1464, 1470 (9th Cir. 1987) (section 6673
penalty upheld because taxpayer should have known claim was
frivolous).
Petitioner’s objection to respondent’s motion for summary
judgment, petition, Forms 12153, and correspondence with
respondent contain frivolous and groundless statements and
arguments. Petitioner’s answers to the Court’s questions at the
hearing on respondent’s motion for summary judgment were evasive
and/or nonresponsive. At the hearing the Court inquired as to
what issues petitioner wanted to raise in his section 6330 case.
Petitioner stated that he wanted a face-to-face hearing.
Additionally, the following colloquy took place:
THE COURT: The Court asked you what nonfrivolous
arguments you had --
MR. CUMMINGS: I’m not prepared, at this Court,
for such a thing. * * *
THE COURT: You’re not offering waht [sic] those
arguments were.
MR. CUMMINGS: I’m offering my nonfrivolous
issues, and that’s --
THE COURT: I’m sorry?
MR. CUMMINGS: I’m offering my nonfrivolous
issues.
THE COURT: I’m asking you, what are they?
MR. CUMMINGS: Inappropriate collection activity.
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THE COURT: Like what?
MR. CUMMINGS: I’m not prepared for that right
now.
THE COURT: And what else?
MR. CUMMINGS: And invalid administrative record.
THE COURT: And what’s your argument on that? Any
specifics?
MR. CUMMINGS: I want it on the record at a
collection due process hearing. I’m not prepared to
argue these matters before the Court today.
Additionally, the Court asked petitioner what collection
alternatives he wanted to raise. Petitioner tried to avoid
answering the question but eventually stated that he had none.
In the notice of determination petitioner was warned that
the Court is empowered to impose monetary sanctions up to $25,000
for instituting or maintaining an action before us that is
primarily for delay, frivolous, or groundless. Respondent cited
Pierson v. Commissioner, 115 T.C. 576 (2000), Forbes v.
Commissioner, T.C. Memo. 2006-10 ($20,000 penalty imposed), and
Aston v. Commissioner, T.C. Memo. 2003-128 ($25,000 penalty
imposed), to petitioner, warning him of the consequences he could
face for taking frivolous or groundless positions in these
proceedings or instituting the proceedings primarily for delay.
We conclude petitioner’s position was frivolous and
groundless and that he instituted and maintained these
proceedings primarily for delay. Appeals and the Court gave
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petitioner multiple opportunities to state any nonfrivolous
issues he wished to raise at a section 6330 hearing. Petitioner
repeatedly refused to state any nonfrivolous issues he would
assert.
Via raising frivolous and groundless arguments and
petitioning this Court, petitioner has sought to delay the
collection of a total of approximately $83,000 of deficiencies
and penalties for 2002 and 2003 (by February 2006 this amount,
including interest, totaled almost $100,000). Accordingly,
pursuant to section 6673(a) we hold petitioner is liable for a
$2,500 penalty.
To reflect the foregoing,
An appropriate order and
decision will be entered.