                        T.C. Memo. 2009-186


                      UNITED STATES TAX COURT



               WILLIAM H. STOCKTON, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 18575-07L.          Filed August 19, 2009.



     William H. Stockton, pro se.

     Olivia J. Hyatt, for respondent.



                        MEMORANDUM OPINION


     JACOBS, Judge:   The dispute between the parties concerns

respondent’s enforced collection actions taken (the filing of a

lien) and proposed to be taken (intent to levy) against

petitioner to collect unpaid Federal income tax liabilities,

additions to tax, and associated interest for 1998, 1999, 2000,

2001, 2002, and 2003, as well as section 6702 frivolous return
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penalties imposed for 1998, 2001, and 2002.   The issue is whether

to sustain respondent’s determination to proceed with those

proposed collection activities.

     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

     The stipulation of facts and the attached exhibits are

incorporated herein by this reference.    At the time he filed his

petition, petitioner resided in North Carolina.

     The tax liabilities involved herein are the result of tax

deficiencies, additions to tax, and associated interest for tax

years 1998-2003, inclusive, and frivolous return penalties for

years 1998, 2001, and 2002 that respondent determined with

respect to returns petitioner prepared or with respect to

substitute returns respondent prepared on behalf of petitioner

pursuant to section 6020(b).   The record does not enable us to

state with certainty the years for which respondent prepared

substitute returns.

     Notices of deficiency with respect to his income tax were

timely mailed to petitioner as follows:   On March 20, 2001, for

years 1998 and 1999; on February 3, 2003, for year 2000; on

February 27, 2004, for years 2001 and 2002; and on May 10, 2005,

for year 2003.
                                - 3 -

Petitioner admitted that he received each of the aforementioned

notices of deficiency.

     Petitioner did not judicially contest respondent’s

determinations as set forth in the several notices of deficiency.

Consequently, respondent assessed deficiencies in income tax,

additions to tax under sections 6651(a)(1) and (2) and 6654, and

associated interest for each of the years at issue.    Respondent

also assessed frivolous return penalties pursuant to section 6702

for 1998, 2001, and 2002.   Thereafter, respondent   sent

petitioner a notice and demand for payment of the deficiencies,

additions to tax, penalties, and associated interest.

     On May 5, 2006, respondent sent petitioner written notice

that he intended to levy on petitioner’s assets to collect

petitioner’s unpaid income tax liabilities, additions to tax, and

associated interest for 2000-03.   On May 16, 2006, respondent

sent petitioner written notice of the filing of a Federal tax

lien with respect to petitioner’s unpaid income tax liabilities,

additions to tax, and associated interest for 1998-2003 and the

section 6702 frivolous return penalties for 1998, 2001, and 2002.

     On June 6, 2006, respondent received from petitioner a

request for a collection hearing (section 6330 hearing) with

respect to both the notice of intent to levy and the notice of

Federal tax lien filing.    On June 15, 2006, respondent received

another request from petitioner for a section 6330 hearing with
                                - 4 -

respect to both notices.    In his hearing request petitioner

wrote:

     I request collection alternatives, including OIC and payment
     schedule. Collection actions are inappropriate. Procedural
     defects by Internal Revenue Service exist. I want to see
     copies of the 90-day letter, Notice and Demand Letter (Form
     17-A), also Summary Record of Assessment (Form 23-C) or
     replacement form, RACS Report and my form 4340 “Certificate
     of Assessment and Payments” and proof that they were sent.
     I contest the existence or the amount of the tax, because I
     did not receive a Notice of Deficiency. I also request
     proof of verification from the Secretary that all applicable
     law and administrative procedures have been met pursuant to
     IRC 6330. I am also notifying the Service of my intention
     to make an audio recording of the hearing pursuant to IRC
     7521.

     The matter was assigned to Settlement Officer Rosemary

Coleman.   On June 13, 2007, Settlement Officer Coleman sent

petitioner a letter acknowledging receipt of his requests for a

section 6330 hearing.   The letter informed petitioner that his

request for a hearing regarding the filing of the lien was timely

and that the legal collection period with respect to the lien

filing would be suspended.    The letter went on to state that

petitioner’s challenge to the proposed levy was not timely in

that it was not received or postmarked within 30 days of the

notice of intent to levy.    Therefore, Settlement Officer Coleman

stated that petitioner could not have a section 6330 hearing with

respect to the proposed levy.    Instead, Settlement Officer

Coleman offered petitioner an “equivalent hearing”.    Petitioner

was informed that the legal collection period would not be

suspended, and levy action would not be prohibited.
                                - 5 -

     Settlement Officer Coleman further informed petitioner that

he could not challenge his tax liabilities because he had

received notices of deficiency for all periods involved but had

not petitioned the Tax Court with respect thereto.    Moreover,

petitioner was advised that the issues he raised “are those that

Courts have determined are frivolous or Appeals does not

consider.”   The letter advised petitioner that because the only

issues he raised were frivolous, he was not entitled to a face-

to-face hearing.    Instead, petitioner was offered a telephone

hearing to be held on July 11, 2007, at 10 a.m.   Petitioner was

informed that he would be allowed a face-to-face conference with

respect to any nonfrivolous issue, provided respondent was

advised of the nonfrivolous issue in writing or by telephone call

to Settlement Officer Coleman within 14 days from the date of the

letter.   Petitioner was further informed that if he wished to

discuss alternatives to the lien and intended levy, he first had

to (1) complete Form 433-A, Collection Information Statement for

Wage Earners and Self-Employed Individuals, and (2) file as yet

unfiled Federal income tax returns for years 2004-06.

     On June 28, 2007, petitioner responded to Settlement Officer

Coleman’s letter.   Petitioner did not identify any relevant,

nonfrivolous issues he wished to discuss at the collection

hearing, such as collection alternatives.    Petitioner denied that

his request for a hearing with respect to the levy was untimely.
                                - 6 -

Additionally, petitioner stated that he had a right to a face-to-

face hearing with witnesses and that he intended to record the

hearing.   In response, on July 3, 2007, Settlement Officer

Coleman sent petitioner a letter reiterating her position that

petitioner did not qualify for a face-to-face hearing and

informed petitioner that his conference call remained scheduled

for July 11, 2007, at 10 a.m.

     Petitioner did not contact Settlement Officer Coleman at the

designated time for his telephone conference.   Consequently,

respondent’s Appeals Office mailed petitioner a Notice of

Determination Concerning Collection Action(s) Under Section 6320

and/or 6330 (notice of determination), on July 20, 2007.    The

notice of determination conceded that petitioner had timely filed

his request for a section 6330 hearing for both the lien and the

levy, and it addressed both issues.1

     The notice of determination sustained the lien and the

proposed levy actions.   An attachment to the notice, by

Settlement Officer Coleman, noted that she had reviewed the

administrative file and verified that the requirements of all

applicable law and administrative procedure had been met and that



     1
      The notice stated that the levy hearing request was
originally treated as untimely, but upon review it was discovered
that the due date was on a Sunday and that the request was
received the following Monday. Therefore, the request was
treated as timely.
                                - 7 -

the lien and levy actions appropriately balanced the need for

efficient collection of taxes with the taxpayer’s concerns that

the levy be no more intrusive than necessary.    The attachment

stated that petitioner had not raised any collection alternatives

and that he had not complied with his filing obligations.

     Thereafter, petitioner timely filed a petition for review

with this Court.    In his petition, petitioner asserted the

following assignments of error:

          1. Petitioner requested a face-to-face hearing and
     respondent denied petitioner’s lawful request;
          2. Congress set forth three preconditions for a section
     6330 hearing: (1) Petitioner must make a request, (2)
     within 30 days, and (3) must state the purpose of the
     hearing which includes collection alternatives, procedure
     irregularities, spousal relief and tax liabilities in some
     cases. Petitioner has met all three preconditions;
          3. respondent’s “interesting” requirements to send in
     documents in advance of the hearing are “impossible since
     Petitioner does not know what the IRS wants until she [sic]
     meets with the IRS. Petitioner is not required to do these,
     and did not”;
          4. respondent illegally denied a face-to-face meeting,
     violating petitioner’s statutory and administrative rights;
          5. the Appeals settlement officer was not a person
     authorized to hold a section 6330 hearing.

     At trial petitioner continued to maintain that he was

entitled to a face-to-face hearing and that a telephone hearing

was insufficient.    When asked why he never responded to

respondent’s letter stating he might qualify for a face-to-face

hearing if he submitted, in writing, a list of nonfrivolous

issues, Form 433-A, and his unfiled tax returns, petitioner
                                 - 8 -

stated:    “I don’t feel like I need to provide those documents or

provide those things until I go to the hearing.”        Continuing,

petitioner stated:

           I don’t feel like I need to respond to that because,
      first of all, I’m not told to listen what an IRS employee
      tells me to do. I don’t know that she has the authority to
      do that, to make these rules up. You know, I basically feel
      like she needed to state a statute and say here’s what the
      law says you need to do--I don’t know.

                               Discussion

A.   Standard of Review

      This case involves review of respondent’s determination to

proceed with collection by way of lien and levy with respect to

petitioner’s unpaid income tax liabilities, additions to tax, and

associated interest for 1998-2003 as well as collection of

petitioner’s section 6702 frivolous return penalties for 1998,

2001, and 2002.

      Collection hearings concerning liens, as well as those

concerning levies, are conducted in accordance with section

6330(c).   See sec. 6320(c).    After the Commissioner issues a

notice of determination following an administrative hearing, the

taxpayer has the right to petition this Court for judicial review

of the Commissioner’s determination.        Sec. 6330(d)(1).   Our

review of the Commissioner’s determination is subject to the

provisions of section 6330.
                               - 9 -

      A taxpayer is precluded from contesting the existence or

amount of the underlying tax liability if he received a notice of

deficiency for the tax year(s) in question or otherwise had an

opportunity to dispute the underlying tax liability.      Sec.

6330(c)(2)(B).   In such a case, we review the Commissioner’s

determination for abuse of discretion.     Sego v. Commissioner, 114

T.C. 604, 610 (2000); Goza v. Commissioner, 114 T.C. 176 (2000).

An abuse of discretion is defined as any action that is

unreasonable, arbitrary or capricious, clearly unlawful, or

lacking sound basis in fact or law.     Thor Power Tool Co. v.

Commissioner, 439 U.S. 522, 532-533 (1979); Woodral v.

Commissioner, 112 T.C. 19, 23 (1999).    If the taxpayer did not

receive a notice of deficiency or did not have an opportunity to

dispute the underlying tax liability, we review the liability de

novo where it is properly placed in issue.     Davis v.

Commissioner, 115 T.C. 35, 39 (2000).

B.   Petitioner’s Income Tax Liability, Additions to Tax, and
     Statutory Interest for Tax Years 1998-2003

      Petitioner received notices of deficiency for 1998, 1999,

2000, 2001, 2002, and 2003 with respect to his unpaid income tax

liabilities, additions to tax, and accrued interest.      He did not

petition this Court for redetermination of respondent’s

determinations; consequently, respondent assessed the tax due.

Petitioner is thus precluded from raising his income tax

liabilities in this proceeding, and in that regard we review for
                               - 10 -

abuse of discretion respondent’s determination with respect to

both the notice of Federal tax lien and the notice of intent to

levy.

     Petitioner maintains that respondent erred (i.e., abused his

discretion) in denying him the requested face-to-face section

6330 hearing.    Although a section 6330 hearing may consist of a

face-to-face conference, a proper hearing may also occur by

telephone or by correspondence under certain circumstances.      See

Katz v. Commissioner, 115 T.C. 329, 337-338 (2000); sec.

301.6330-1(d)(2), Q&A-D6, Proced. & Admin. Regs.     Section 6330

hearings have historically been informal.      Davis v. Commissioner,

supra at 41.    We have held that it is not an abuse of discretion

if an Appeals settlement officer denies a taxpayer’s request for

a face-to-face section 6330 hearing after determining that the

hearing would not be productive because of the taxpayer’s

frivolous or groundless arguments.      See Huntress v. Commissioner,

T.C. Memo. 2009-161; Summers v. Commissioner, T.C. Memo. 2006-

219; Ho v. Commissioner, T.C. Memo. 2006-41.     Moreover, we have

held it is not an abuse of discretion to proceed with collection

where the taxpayer has not filed all required tax returns for

prior years.    See Summers v. Commissioner, supra; Collier v.

Commissioner, T.C. Memo. 2004-171.

     The record demonstrates that a face-to-face conference would

not have been productive.    Petitioner’s meeting request contained
                              - 11 -

a blanket request for a collection alternative and a request to

see copies of various procedural documents.    Petitioner did not

propose any specific collection alternative, explain why he

qualified for a collection alternative, or file required Federal

income tax returns for 2004-06.

     Respondent granted petitioner several opportunities to have

a telephone collection hearing.    Moreover, petitioner was

informed that he could qualify for a face-to-face hearing

provided he first identified those relevant nonfrivolous issue(s)

he intended to discuss.   Despite these opportunities, petitioner

failed to respond and waived his right to a face-to-face hearing.

Under these circumstances, it was not an abuse of discretion for

Settlement Officer Coleman to conclude that a face-to-face

hearing would not be productive.    See Clark v. Commissioner, T.C.

Memo. 2008-155; Summers v. Commissioner, supra; see also Lunsford

v. Commissioner, 117 T.C. 183 (2001).

     Petitioner refers to three cases in his petition to support

his claim that “the law requires an in-person hearing.”    None of

the cases does so.

     In the first of these cases, Marett v. Commissioner, T.C.

Memo. 2009-14, it was noted that this Court had previously

remanded the case to the Commissioner’s Appeals Office for a

supplemental hearing because the Commissioner had failed to

address the fact that a failure to pay penalty assessed against
                                - 12 -

the taxpayer had not been included in the notice of deficiency.

Petitioner’s position is distinguishable from the taxpayer’s

position in Marett.     Unlike the taxpayer in Marett, petitioner

never stated a specific issue to discuss with respondent.

     Petitioner next refers to the case of Shell v. Commissioner,

docket No. 20188-05L.    We note that petitioner does not appear to

be citing an opinion (none was issued), but rather to an order

denying the Commissioner’s motion for summary judgment.     And

pursuant to Rule 50(g), Court orders are not treated as

precedent, except as may be relevant for purposes of establishing

the law of the case, res judicata, collateral estoppel, or other

similar doctrine, none of which applies in this matter.2

     Finally, petitioner cites Nelson v. Commissioner, T.C. Memo.

2009-108.   In Nelson, at a hearing before the Court, the

Commissioner moved to have the matter remanded to the

Commissioner’s Appeals Office for a face-to-face meeting because

the taxpayer’s representative had been in an accident that

rendered him a quadriplegic and the accident prevented the

taxpayer from providing the materials that would have entitled

him to a face-to-face meeting.    The circumstances in Nelson are

clearly distinguishable from petitioner’s position.


     2
      Similarly, Rule 152(c) provides that opinions stated orally
in accordance with Rule 152(a) shall not be relied upon as
precedent, except as may be relevant for purposes of establishing
the law of the case, res judicata, collateral estoppel, or other
similar doctrine.
                                 - 13 -

C.   Petitioner’s Section 6702 Frivolous Return Penalty for Tax
     Years 1998, 2001, and 2002

      Petitioner was assessed frivolous return penalties pursuant

to section 6702 for 1998, 2001, and 2002.    In other cases we have

held that we have jurisdiction to review a notice of

determination issued to a taxpayer under section 6330 with

respect to the section 6702 frivolous return penalty, effective

for determinations made after October 16, 2006.    See Callahan v.

Commissioner, 130 T.C. 44 (2008); Rice v. Commissioner, T.C.

Memo. 2009-169.

      Because no notice of deficiency was issued with respect to

the section 6702 frivolous return penalty, petitioner was

entitled to raise the issue at his section 6330 hearing.

However, petitioner failed to raise this issue on Form 12153,

Request for a Collection Due Process Hearing, and he did not

raise it in his June 28, 2007, letter, to Settlement Officer

Coleman.   By not raising or bringing this issue to the attention

of Settlement Officer Coleman, petitioner is precluded from

raising this issue before us.3    See Giamelli v. Commissioner, 129

T.C. 107, 114 (2007); Magana v. Commissioner, 118 T.C. 488, 493



      3
      Petitioner’s first and only mention of the sec. 6702
frivolous return penalty was in a document submitted at trial
titled “Supplement to Petition for Lien or Levy Action
(Collection Action) Supplement to Petition for Re-Determination
of Notice of Determination on CDPH.” We took this document into
the record only as a statement of petitioner’s position
(petitioner’s position statement).
                               - 14 -

(2002); Davis & Associates LLC v. Commissioner, T.C. Memo. 2008-

292; secs. 301.6320-1(f)(2), Q&A-F5, 301.6330-1(f)(2), Q&A-F5,

Proced. & Admin. Regs.

      Moreover, petitioner failed to inform Settlement Officer

Coleman of any ground on which the section 6702 frivolous return

penalties should be set aside were the penalties susceptible to

challenge on the merits.   The only mention of the section 6702

frivolous return penalties is in petitioner’s position statement

submitted at trial, which simply states that he “requests a

hearing on the 6702 penalty.   Necessary forms and instructions

are requested.”

D.   Other Matters Considered at the Section 6330 Hearing

      Section 6330(c)(3) provides that the settlement officer must

verify that the requirements of applicable law and administrative

procedure have been met and consider whether any proposed

collection action balances the need for the efficient collection

of taxes with the legitimate concern of the taxpayer that any

collection be no more intrusive than necessary.   The notice of

determination states that Settlement Officer Coleman verified

that the requirements of all applicable law and administrative

procedure were met and determined that the proposed levy action

appropriately balanced the need for efficient collection of taxes

with petitioner’s concerns that the levy be no more intrusive
                              - 15 -

than necessary.   Consequently, we are satisfied that the mandate

of section 6330(c)(3) has been met.

     We have considered all of petitioner’s arguments, and to the

extent not discussed herein, conclude they are irrelevant,

and/or without merit.

     To reflect the foregoing,


                                         Decision will be entered

                                    for respondent.
