T.C. Memo. 2010-14
UNITED STATES TAX COURT
GEORGE B. HEBERT, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 29220-08L. Filed January 26, 2010.
George B. Hebert, pro se.
Daniel P. Ryan, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
GOEKE, Judge: The issue for decision is whether respondent
abused his discretion in sustaining a proposed levy action
against petitioner to collect unpaid income tax assessments for
2002, 2003, and 2006 in addition to a civil penalty for taxable
year 2003. Petitioner argues that respondent abused his
discretion by refusing to provide him with a face-to-face
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collection due process (CDP) hearing. For the reasons stated
herein, we find respondent did not abuse his discretion.
FINDINGS OF FACT
Some of the facts are stipulated and are so found. The
stipulation of facts and the attached exhibits are incorporated
herein by reference. Petitioner resided in Massachusetts at the
time he filed his petition.
On May 6, 2008, respondent issued petitioner a Letter 1058,
Final Notice of Intent To Levy and Notice of Your Right to a
Hearing (the notice). The notice included an account summary
outlining income tax due of $10,693 for 2002, $515 for 2003, and
$5,938 for 2006 and a section 6672 civil penalty of $667 for the
period ending in 2003. Petitioner timely filed a Form 12153,
Request for a Collection Due Process or Equivalent Hearing. His
request included a demand for verification from the Secretary
that the requirements of any applicable law or administrative
procedure were met, a request for copies of notice and demand
regarding the assessments listed in the notice, and other
arguments unrelated to the substantive merits of the assessed
liabilities. Petitioner was provided with documentation of the
liabilities in question and was sent the above-referenced notice
of intent to levy. At trial petitioner admitted receiving the
notices and demand but alleged they were not properly executed.
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In a letter dated August 18, 2008, respondent offered
petitioner a telephone CDP hearing scheduled for September 22,
2008. Respondent’s letter stated that the issues petitioner
raised in his CDP hearing request were frivolous and advised him
that he would not be allowed a face-to-face hearing if he raised
only frivolous issues. Petitioner did not subsequently provide
the Appeals officer with a nonfrivolous issue or submit an
additional request for a face-to-face hearing. On September 22,
2008, petitioner failed to contact the Appeals officer for his
scheduled telephone conference.
Respondent sent petitioner a letter dated September 22,
2008, informing him of the impending determination and again
requesting information to assist the Appeals officer with his
decision. Petitioner again failed to contact the Appeals officer
following respondent’s request for information.
On October 24, 2008, respondent issued petitioner two
Notices of Determination Concerning Collection Action(s) Under
Section 6320 and/or 6330 (notices of determination) sustaining
the proposed levies for income tax liabilities incurred during
2002, 2003, and 2006 of $10,693, $515, and $5,938 respectively
and for a section 6672 civil penalty of $667 incurred for the
period ending in 2003. On December 1, 2008, petitioner filed his
petition contesting these determinations. On November 2, 2009,
trial was held in Boston, Massachusetts.
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OPINION
The issues we consider arise from respondent’s
determinations to proceed with levy action under section 6330.
Specifically, we must decide: (1) Whether petitioner was granted
an opportunity for a hearing within the meaning of section 6330;
(2) whether the Appeals officer verified under section 6330(c)(1)
that the requirements of any applicable law or administrative
procedure were met and whether he wrongfully denied petitioner
copies of documents; and (3) whether respondent’s determination
to proceed with the proposed collection activity was an abuse of
discretion. For the reasons stated herein, we find respondent
did not abuse his discretion in sustaining the proposed levy
action.
This collection review proceeding was filed pursuant to
section 6330. Section 6330(d) grants the Court jurisdiction to
review determinations made by an Appeals officer to proceed with
collection via levy. Where the validity of the underlying tax
liability is properly at issue, the Court will apply a de novo
standard of review. Sego v. Commissioner, 114 T.C. 604, 610
(2000). However, where the validity of the underlying tax
liability is not properly at issue, the Court will review the
Commissioner’s administrative determination for abuse of
discretion. Id. At trial petitioner stated he was not making a
claim that he did not owe the tax liabilities. Accordingly, we
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review respondent’s determination for abuse of discretion. Abuse
of discretion is proven by showing that the Commissioner
exercised his discretion arbitrarily, capriciously, or without
sound basis in fact or law. Woodral v. Commissioner, 112 T.C.
19, 23 (1999).
Before the Commissioner may proceed to levy on a taxpayer’s
property or right to property, the taxpayer must be notified, in
writing, of the Commissioner’s intent and of the taxpayer’s right
to a hearing. Secs. 6330(a), 6331(d). Section 6330(b)(1) and
(3) provides that if a person requests a hearing, that hearing
shall be held before an impartial officer or employee of the IRS
Office of Appeals. At the hearing a taxpayer may raise any
relevant issue, including challenges to the appropriateness of
the collection action. Sec. 6330(c)(2)(A). A taxpayer who
raises only frivolous arguments is not entitled to a face-to-face
CDP hearing. Lunsford v. Commissioner, 117 T.C. 183, 189 (2001).
Further, a face-to-face meeting is not required to satisfy the
hearing requirement under section 6330(b). Katz v. Commissioner,
115 T.C. 329, 338 (2000) (concluding that telephone
communications between a taxpayer and an Appeals officer over the
phone constituted an Appeals hearing); sec. 301.6330-1(d)(2),
Q&A-D6, Proced. & Admin. Regs.
Generally, a taxpayer’s failure to raise an issue during a
CDP hearing will bar our consideration of that issue. Giamelli
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v. Commissioner, 129 T.C. 107, 112-113 (2007); Magana v.
Commissioner, 118 T.C. 488, 493 (2002). However, the Appeals
officer’s mandated verification under section 6330(c)(1) that the
requirements of any applicable law or administrative procedure
have been met is subject to our review without regard to a
challenge by the taxpayer at the hearing. Hoyle v. Commissioner,
131 T.C. , (2008) (slip op. at 11).
Petitioner argues he was denied a CDP hearing because he did
not receive a face-to-face hearing. The record indicates that
respondent provided petitioner with several opportunities to
raise nonfrivolous arguments as to why respondent’s levy should
not be sustained. Petitioner was notified by letter dated August
18, 2008, scheduling his telephone hearing, that he would have a
face-to-face hearing if he had any nonfrivolous issues.
Petitioner did not respond to this offer and ultimately failed to
contact the Appeals officer on the scheduled date of his
telephone CDP hearing. Petitioner chose not to reschedule his
hearing. Respondent did not abuse his discretion in denying
petitioner a face-to-face hearing because he raised only
frivolous issues. See Lunsford v. Commissioner, supra at 189;
Katz v. Commissioner, supra at 338.
Petitioner alternatively argues that the Appeals officer
failed to properly verify that the requirements of any applicable
law or administrative procedure were met as required by section
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6330. Petitioner’s argument includes a request to view certain
documents, including copies of assessments and notices and
demand, because his copies of these documents are not
legitimately signed by the Secretary. Section 6330 does not
require that an Appeals officer rely upon a particular document
in order to satisfy this requirement. Sec. 6330(c)(1); Craig v.
Commissioner, 119 T.C. 252, 262 (2002). The Forms 4340,
Certificates of Assessments, Payments, and Other Specified
Matters, which were submitted in the record at trial are valid
verification that the requirements of any applicable law or
administrative procedure have been met. See Craig v.
Commissioner, supra at 262. There is no requirement under the
internal revenue laws or the regulations that the Appeals officer
give the taxpayer a copy of the delegation of authority from the
Secretary to the person who signed the verification required
under section 6330(c)(1). Nestor v. Commissioner, 118 T.C. 162,
166-167 (2002).
The record indicates that the Appeals officer verified that
the requirements of any applicable law or administrative
procedure were met. Respondent gave petitioner documents
verifying certificates of assessments, payments, and other
specified matters for the years at issue, including copies of the
relevant Forms 4340. Petitioner decided not to discuss or
otherwise review these documents at trial.
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We find that respondent did not abuse his discretion in his
determination to proceed with the levy. Throughout the period
leading up to petitioner’s scheduled hearing, petitioner was
uncooperative and failed to respond to the Appeals officer’s
requests for information. The Appeals officer was prepared to
discuss petitioner’s concerns over the phone and offered
petitioner a face-to-face conference if he had any nonfrivolous
issues. The Appeals officer was deliberate throughout his
interactions with petitioner and verified that the requirements
of any applicable law and administrative procedure were met.
Accordingly, we hold there was no abuse of discretion in
respondent’s determination to proceed with collection of
petitioner’s 2002, 2003, and 2006 tax liabilities and the civil
penalty for 2003. Section 6673(a)(1) authorizes the Court to
impose a penalty not in excess of $25,000 whenever it appears the
taxpayer’s position in a proceeding is frivolous or groundless.
We strongly warn petitioner that he may be subject to a section
6673 penalty in a future case if he persists in maintaining
proceedings to delay or to advance frivolous arguments.
To reflect the foregoing,
Decision will be entered
for respondent.