T.C. Memo. 2009-7
UNITED STATES TAX COURT
JOHN CHARLES VUCKOVICH, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 26456-07L. Filed January 12, 2009.
John Charles Vuckovich, pro se.
J. Robert Cuatto, for respondent.
MEMORANDUM OPINION
HALPERN, Judge: This case is before us to review a Notice
of Determination Concerning Collection Action(s) under Section
6320 and/or 6330 (the notice) issued by respondent’s Appeals
Office (Appeals). The notice concerns petitioner’s 1999, 2000,
and 2002 Federal income tax liabilities, and it sustains an
Appeals officer’s determination that a notice of Federal tax lien
for those years should stand. We review the notice pursuant to
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sections 6320(c) and 6330(d)(1).1 Respondent has moved for
summary judgment and to impose a section 6673 penalty (the
motion). Petitioner objects (the response). We shall grant the
motion in both respects.
We may grant summary judgment “if the pleadings, answers to
interrogatories, depositions, admissions, and any other
acceptable materials, together with the affidavits, if any, show
that there is no genuine issue as to any material fact and that a
decision may be rendered as a matter of law.” Rule 121(b). In
pertinent part, Rule 121(d) provides: “When a motion for summary
judgment is made and supported * * *, an adverse party may not
rest upon the mere allegations or denials of such party’s
pleading, but such party’s response * * * must set forth specific
facts showing that there is a genuine issue for trial.”
In support of the motion, respondent relies on the
pleadings, the declaration of J. Robert Cuatto, an attorney
assigned to defend the notice, and respondent’s proposed
stipulation of facts, which we shall take as true because
petitioner had the opportunity to object but did not do so.2
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.
2
After receiving respondent’s proposed stipulation of
facts, petitioner sent a letter to respondent stating: “I am in
the process of reviewing your proposed Stipulation of Facts, and
preparing a response to certain proposed facts.” Petitioner
(continued...)
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Background
Petitioner failed to file Federal income tax returns for
1999, 2000, and 2002; respondent determined deficiencies in, and
additions to, tax for those years, and, following petitioner’s
failure either to pay the tax and additions or to challenge
respondent’s determinations in this Court, respondent assessed
those deficiencies and additions (the assessments). Petitioner
did not pay the assessments, and, on July 6, 2006, respondent
notified petitioner that (1) he had filed a Federal tax lien with
respect to the assessments and (2) petitioner had a right to
appeal that action. In response, petitioner submitted to the
Internal Revenue Service (IRS) IRS Form 12153, Request for a
Collection Due Process Hearing, alleging that the notice of
Federal tax lien constituted “an inappropriate collection action”
2
(...continued)
failed to send the promised response, however, and respondent
moved for petitioner to show cause why the proposed stipulation
of facts should not be accepted as established. We ordered
petitioner to show cause. In response to our order, petitioner
conceded that he did not “dispute” the proposed stipulation of
facts. In his subsequent response to the motion for summary
judgment, petitioner argues that “not disputing, does not convert
to agreement”. Petitioner is wrong. Rule 91(f)(2) provides that
in responding to an order to show cause, where a party disputes
any matter, the party shall set forth the reasons for his
dispute. Because petitioner failed to set forth any dispute with
respondent’s proposed facts, we accept them as true. See, e.g.,
Console v. Commissioner, T.C. Memo. 2001-232 (accepting as true
proposed facts where taxpayer “failed to respond to the substance
of our order”), affd. 85 Fed. Appx. 869 (3d Cir. 2003); Brookbank
v. Commissioner, T.C. Memo. 1999-51 (accepting as true proposed
facts where taxpayer filed “frivolous response” to our order),
affd. without published opinion 215 F.3d 1325 (6th Cir. 2000).
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and disputing “[t]he existence or amount of the tax, since I did
not receive a notice of deficiency and did not otherwise have an
opportunity to dispute the tax liability.”3
An Appeals official, Settlement Officer Michael Freitag,
then wrote to petitioner on January 26, 2007, informing him that
he would schedule a telephone conference for February 28, 2007,
and that (1) to dispute his tax liabilities for 1999, 2000, and
2002, petitioner needed to submit original signed tax returns for
those years and (2) for Appeals to consider collection
alternatives for those years, petitioner needed to submit signed
tax returns for 2003, 2004, and 2005, since he had not filed
returns for those years, along with a completed IRS Form 433-A,
Collection Information Statement. Petitioner neither contacted
Mr. Freitag to reschedule the meeting nor submitted any
documents. Petitioner missed the telephone conference, and Mr.
Freitag scheduled another. Before the date of the second
scheduled telephone conference, petitioner requested a face-to-
face conference. Another Appeals official, Settlement Officer
Paul Baker, then wrote petitioner, scheduling a face-to-face
conference for June 14, 2007, and requesting a completed
Collection Information Statement, the six tax returns described
above, and a seventh signed tax return for 2006 (which return had
3
Respondent sent the three statutory notices of deficiency
to petitioner’s last known address. Unable to deliver or forward
them, the post office returned all three to respondent.
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since become due). Mr. Baker warned petitioner that, if he did
not participate in the conference or submit the requested
documents, Appeals would make a determination on the basis of the
available evidence. Petitioner submitted no documents.
Petitioner and Mr. Baker each rescheduled the face-to-face
conference twice. After setting September 25, 2007, as the fifth
date for the conference, Mr. Baker wrote petitioner informing him
that both parties had to adhere to that date. In a letter dated
September 21, 2007, petitioner requested that Appeals
indefinitely postpone the conference because petitioner had
“decided to seek legal representation regarding this matter * * *
[and so far had] been unsuccessful in finding affordable
representation.” Petitioner then failed to attend the
conference. In a letter dated September 26, 2007, Mr. Baker
denied petitioner’s request for a postponement, restating that
“both you and the [Internal Revenue] Service had to adhere to the
specified date and time” of the conference. Noting that
petitioner had submitted none of the requested documents, Mr.
Baker granted petitioner an additional 10 days to do so. Mr.
Baker warned that, if petitioner did not submit the necessary tax
returns, Appeals would make a determination on the basis of the
available evidence. After petitioner again failed to submit the
requested documents, Appeals issued the notice. The notice
contains the following “Summary of Determination”:
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Since you have not provided any information for us to
consider your challenge to the tax assessments, it
shall be assumed that the liabilities are correct.
Also, since you have not filed your Forms 1040 for
2003, 2004, 2005 and 2006, no alternatives such as an
Installment Agreement can be considered at this time.
Therefore, Appeals sustains in full the filing of the
Notice of Federal Tax Lien, because the lien balances
the need for the efficient collection of taxes with
your legitimate concern that any collection action be
no more intrusive than necessary.
Petitioner timely filed the petition, assigning error to the
notice on the grounds that he did not receive a fair hearing
because Appeals “set an arbitrary drop dead date” for a hearing
and violated section 6330 by requiring statements and collection
information not associated with 1999, 2000, and 2002. Petitioner
also claims: “IRS offers no evidence that they obtained
verification from the Secretary that the requirements of any
applicable law or administrative procedure had been met as
required by Sec. 6330.” Finally, petitioner claims the right to
challenge the existence of the underlying liabilities for tax.
After petitioner filed the petition, respondent’s counsel
(counsel) scheduled a conference with petitioner for February 29,
2008, “to discuss this case and attempt to resolve all issues
short of trial.” Counsel also requested that petitioner submit
all documents related to petitioner’s income tax liabilities for
the years in issue. Petitioner responded that he was unable not
only to attend the conference but also to provide the requested
documents by that date. Petitioner promised to contact counsel
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by March 17, 2008, to reschedule the conference. When counsel
rescheduled the conference for March 13, 2008, petitioner
objected, restating his promise to contact counsel by March 17,
2008. When petitioner failed to contact counsel by his self-
imposed deadline, counsel rescheduled the conference for April
24, 2008. Petitioner did not attend the conference and did not
send counsel any documents. Counsel then sent petitioner a copy
of the proposed stipulation of facts. When petitioner failed to
provide a substantive response, respondent moved for, and we
issued, an order requiring petitioner to show cause why the facts
proposed to be stipulated should not be accepted as established.
In response to our order, petitioner conceded that he did not
“dispute” the stipulation of facts. Respondent then filed the
motion.
Discussion
I. Summary Judgment
A. Introduction
Respondent asks for summary judgment in his favor on the
grounds that, considering the issues that petitioner had raised
in his request for a section 6330 hearing, and taking into
account that petitioner failed to participate in that hearing,
Appeals was justified in determining to proceed on the basis of
Settlement Officer Paul Baker’s (1) verification that the
requirements of any applicable law or administrative procedure
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had been met, (2) consideration of whether the proposed
collection action balanced the need for efficient collection of
taxes with the legitimate concern that such action be no more
intrusive than necessary, and (3) consideration of the issues
petitioner had raised. See sec. 6330(c)(3). Petitioner opposes
the motion for summary judgment.
B. Verification
Because it is set forth in respondent’s proposed stipulation
of facts that, “[d]uring [p]etitioner’s * * * [section 6330]
hearing, the settlement officer verified that all legal and
administrative procedures were followed”, we shall take that to
be true. That would seem to satisfy the requirements of section
6330(c)(1) and (3)(A): “The appeals officer shall at the
[section 6330] hearing obtain verification from the Secretary
that the requirements of any applicable law or administrative
procedure have been met.” Moreover, we have held: “Section
6330(c)(1) does not require the Appeals officer to give the
taxpayer a copy of the verification that the requirements of any
applicable law or administrative procedure have been met.”
Nestor v. Commissioner, 118 T.C. 162, 166 (2002).
C. Balancing the Need for Efficient Collection of Taxes
Petitioner’s request for a section 6330 hearing was based on
his claim that respondent’s lien was not an appropriate
collection action and his challenge to the existence and amount
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of the tax. Respondent’s two settlement officers requested tax
returns for the years in issue to consider petitioner’s tax
liabilities for those years and collection information and
returns for subsequent years to consider collection alternatives.
Petitioner was warned at least twice that, if he did not submit
the requested documents, Appeals would proceed on the basis of
the available evidence. Petitioner was given a final 10 days to
submit the documents. Petitioner did not attend scheduled
conferences, did not respond to correspondence, did not submit
the requested documents, and attempted to postpone his hearing
indefinitely to obtain legal counsel, which, as of yet, he has
not obtained. There is no requirement that Appeals issue a
notice of determination within a certain time. See Gazi v.
Commissioner, T.C. Memo. 2007-342; sec. 301.6320-1(e)(3), Q&A-E9,
Proced. & Admin. Regs. Given petitioner’s conduct and the
information available, Settlement Officer Baker did not abuse his
discretion by determining that the proposed collection action
balanced the need for the efficient collection of taxes with the
legitimate concern of petitioner that any collection action be no
more intrusive than necessary. See sec. 6330(c)(3)(C); Castillo
v. Commissioner, T.C. Memo. 2004-238 (applying abuse of
discretion standard to review of section 6330(c)(3)(C)
determination).
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D. Issues Petitioner Raised
Petitioner raised his liability for the unpaid tax as a
defense to respondent’s collection action. Petitioner had not
filed returns for 1999, 2000, and 2002, and the settlement
officers assigned to petitioner’s case asked for original signed
returns to consider his tax liability for those years. Since
petitioner did not provide those returns or any other information
with respect to his liability, Settlement Officer Baker
determined on the basis of the information before him that the
assessments must be correct. Appeals determined the assessments
were correct, and we see no error in that determination.
Moreover, even if Appeals erred in that respect, petitioner has
failed to support his assignment of error with a sufficient
specificity of fact as to his liabilities for 1999, 2000, and
2002 for us to consider those liabilities. See Poindexter v.
Commissioner, 122 T.C. 280, 285 (2004), affd. 132 Fed. Appx. 919
(2d Cir. 2005).
E. Conclusion
We shall grant summary judgment and sustain the notice on
the premises stated.
II. Section 6673 Penalty
Under section 6673(a)(1), this Court may require a taxpayer
to pay a penalty not in excess of $25,000 if the taxpayer has
instituted or maintained a proceeding primarily for delay. We
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see no reason for this case other than delay. Indeed, delay
attributable to petitioner is manifest at almost every stage of
this proceeding. He never provided any information necessary to
support his objections, choosing instead to ask for postponement
after postponement. Petitioner has had almost 2 years to submit
to the settlement officers or counsel the necessary tax returns
to show error in the assessments and still he has not done so.
From the beginning, petitioner has refused to cooperate with
respondent. For example, petitioner did not respond to
respondent’s proposed stipulation of facts until we ordered him
to show cause. After replying that he did not “dispute” the
proposed stipulation, petitioner resorted to word games by
claiming that “not disputing, does not convert to agreement”.
Petitioner has failed to report income for at least 7 years. He
deserves a substantial penalty for initiating this proceeding.
We shall, therefore, require petitioner to pay a penalty under
section 6673(a)(1) of $2,500.
To reflect the foregoing,
An appropriate order will
be issued, and decision will
be entered for respondent.