T.C. Memo. 2011-213
UNITED STATES TAX COURT
MERRITT LEE D’ARCY, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 13758-10L. Filed August 31, 2011.
Merritt Lee D’Arcy, pro se.
James R. Bamberg and Mark J. Tober, for respondent.
MEMORANDUM OPINION
VASQUEZ, Judge: Pursuant to section 6330(d)(1),1 petitioner
sought review of the Commissioner’s determination to proceed with
a proposed levy to collect petitioner’s unpaid Federal income tax
for 2004, 2005, and 2006 (years at issue). This case is before
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code (Code), and all Rule references are to
the Tax Court Rules of Practice and Procedure.
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us on respondent’s motion for summary judgment under Rule 121, to
which petitioner objects. We conclude that there is no genuine
issue as to any material fact, and respondent is entitled to a
decision as a matter of law.
Background
Petitioner did not file a Federal income tax return for
2004, 2005, or 2006. Consequently, on November 26, 2008, the
Internal Revenue Service (IRS) prepared a substitute for return
for each year. On May 4, 2009, the IRS mailed petitioner a
notice of deficiency for each of the years at issue.2 Petitioner
did not file a petition with the Court contesting the deficiency
determinations, and on September 14, 2009, the IRS assessed the
tax liabilities for those years. Petitioner failed to pay the
assessed tax liabilities, and on December 28, 2009, the IRS sent
petitioner Letter 1058, Final Notice of Intent to Levy and Notice
of Your Right to a Hearing.
2
The notices of deficiency are not part of the record.
However, respondent attached to his motion for summary judgment
Forms 4340, Certificate of Assessments, Payments, and Other
Specified Matters for petitioner’s income tax accounts for the
years at issue stating that “additional tax assessed by
examination audit deficiency per default of 90 day letter”.
Respondent also attached to his motion for summary judgment
Substitute U.S. Postal Service Forms 3877 confirming that on May
4, 2009, the IRS mailed to petitioner at his last known address
(which is also his current address of record) notices of
deficiency for the years at issue. Petitioner does not deny
receiving the notices of deficiency.
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On January 4, 2010, petitioner submitted Form 12153, Request
for a Collection Due Process or Equivalent Hearing (CDP hearing
request). Petitioner’s CDP hearing request stated that he
disagreed with the IRS’ proposed collection activity because he
is a “nontaxpayer”. Petitioner attached a “rebuttal letter” to
his CDP hearing request declaring, among other statements, that
his “abode and dwelling is geographically located in the Republic
of Florida * * * entirely outside of Federal legislative
jurisdiction” and he has not been provided evidence that “the
Internal Revenue Code is ‘law’”. He did not request a collection
alternative.
On March 16, 2010, petitioner and Settlement Officer
Florence Barba (Ms. Barba) of the IRS Office of Appeals (Appeals)
sent letters to each other. Petitioner’s letter requested a
face-to-face CDP hearing instead of a telephone conference. Ms.
Barba’s letter notified petitioner that she had received his CDP
hearing request and scheduled a telephone conference for April
13, 2010. She explained that he had raised only frivolous
arguments in his CDP hearing request and would not be allowed a
face-to-face conference unless within 30 days he withdrew, in
writing, his frivolous arguments and filed all required tax
returns.3 Ms. Barba further explained that in order for her to
3
Petitioner’s 2007 and 2008 Federal income tax returns had
not been filed. Petitioner’s 2009 Federal income tax return was
not yet due.
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consider alternative collection methods, petitioner had to
provide her with Form 433-A, Collection Information Statement for
Wage Earners and Self-Employed Individuals, and all supporting
documentation.
Petitioner did not participate in his scheduled telephone
conference with Ms. Barba, and she mailed petitioner a letter
notifying him that he had missed his telephone conference and
still had not provided her with Form 433-A or any other
information needed for her to consider collection alternatives.
On April 23, 2010, more than 30 days after Ms. Barba’s March 16,
2010, letter, petitioner mailed her a letter stating that he had
withdrawn his frivolous arguments in a letter sent to her on
April 1, 2010, but since it appeared that she had not received
it, his April 23, 2010, letter constituted his agreement to waive
his frivolous arguments. His letter also stated that he did not
need to file Federal income tax returns for the years at issue
because his taxable income was below the amount for which filing
a tax return is required, and since he did not owe any tax “there
is no offer for payment of same”.
On May 20, 2010, Ms. Barba mailed petitioner a Notice of
Determination Concerning Collection Action(s) Under Section 6320
and/or 6330 (notice of determination) sustaining the proposed
levy. The notice of determination stated that petitioner did not
offer any collection alternatives and disagreed that he owed
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Federal income tax for the years at issue. The notice of
determination further stated that petitioner’s request for a
face-to-face conference could not be granted because he did not
withdraw his frivolous arguments within 30 days of receiving Ms.
Barba’s request to do so or file his Federal income tax returns
for 2007 and 2008.
On June 16, 2010, petitioner filed a petition4 with the
Court in which he argued: “I have determined that I have not had
sufficient taxable income to require the filing of a return” and
“the IRS had no reason to charge interest” and “no reason to
penalize me.” On March 18, 2011, respondent filed a motion for
summary judgment arguing that petitioner’s opportunity to
challenge the underlying tax liability had passed and petitioner
had raised only frivolous arguments in his CDP hearing request
and correspondence with Ms. Barba.
On April 7, 2011, petitioner filed his objection to
respondent’s motion for summary judgment. Petitioner’s objection
argued that the Government lacked standing, acted in bad faith,
failed to state a claim upon which relief could be granted, and
filed its motion for summary judgment “for the purpose of
defrauding this petitioner out of a fair and impartial hearing on
the merits of the issues that have been placed before it on the
4
Petitioner resided in Florida at the time he filed his
petition.
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petition.” On April 25, 2011, we held a hearing on respondent’s
motion for summary judgment.
Discussion
I. Summary Judgment
Rule 121(a) 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 issue as to any
material fact and that a decision may be rendered as a matter of
law.
II. Determination To Proceed With Collection
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
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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 notice of
deficiency for the year 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 argues that the amounts respondent determined to
be his underlying tax liabilities for the years at issue are
incorrect. The IRS issued petitioner a notice of deficiency for
each year at issue. Petitioner does not deny receiving the
notices of deficiency, and respondent attached to his motion for
summary judgment Forms 3877 confirming that the IRS had mailed
each notice of deficiency to petitioner’s last known address
(which is also petitioner’s current address of record).
Therefore petitioner is precluded from challenging the existence
or amounts of the underlying tax liabilities. See sec.
6330(c)(2)(B); Sego v. Commissioner, supra at 610-611; Goza v.
Commissioner, supra at 182-183.
Where, as here, the amounts of petitioner’s underlying tax
liabilities are not at issue, we review the Commissioner’s
determination for abuse of discretion. Petitioner did not
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request that Ms. Barba consider collection alternatives, failed
to provide her with the financial information that she requested
or file all required tax returns, and raised only frivolous
arguments in his CDP hearing request and correspondence with Ms.
Barba. Accordingly, the Commissioner did not abuse his
discretion in determining that collection activity should
proceed.
We take this opportunity to warn petitioner that the Court
may impose a penalty pursuant to section 6673(a)(1) if he returns
to the Court and proceeds in a similar fashion in the future.
See Pierson v. Commissioner, 115 T.C. 576 (2000).
To reflect the foregoing,
An appropriate order and
decision will be entered.