                         T.C. Memo. 2005-182



                       UNITED STATES TAX COURT



                DAWSON CRAIG LANE, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 17146-04L.             Filed July 25, 2005.



     Dawson Craig Lane, pro se.

     J. Craig Young, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     CHIECHI, Judge:    This case arises from a petition filed in

response to a notice of determination concerning collection

action(s) under section 63201 and/or 6330 (notice of determina-



     1
      All section references are to the Internal Revenue Code at
all relevant times. All Rule references are to the Tax Court
Rules of Practice and Procedure.
                                 - 2 -

tion).

     We must decide whether respondent may proceed with the

collection action as determined in the notice of determination

with respect to petitioner’s taxable year 2001.      We hold that

respondent may proceed with that collection action.      We must also

decide whether to grant respondent’s motion for a penalty under

section 6673.     We shall deny that motion.

                           FINDINGS OF FACT

     All of the facts have been stipulated by the parties and are

so found.2

     Petitioner resided in Knightdale, North Carolina, at the

time he filed the petition in this case.

     Petitioner and Victoria L. Lane (Ms. Lane), his spouse,

timely filed Form 1040A, U.S. Individual Income Tax Return (Form

1040A for 2001), for the taxable year 2001.      In Form 1040A for

2001, petitioner and Ms. Lane reported total income of $38,456,

taxable income of $18,031, total Federal income tax (tax) of

$2,704, and tax withheld of $651.62 and claimed an overpayment of

$651.62 and a refund of the same amount.       They did not remit any

payment with Form 1040A for 2001.

     Petitioner handwrote the following near the line in Form

1040A for 2001 on which he and Ms. Lane reported tax withheld of

$651.62:     “This money withheld despite protest!   See attached


     2
      This case was submitted pursuant to Rule 122.
                               - 3 -

letter.”   The letter attached to Form 1040A for 2001 was signed

by petitioner and asserted:

          Several years ago I became aware of the immoral
     activities that our government was involved in with my
     tax dollars. At that time I adjusted my life style so
     that I would not owe and taxes and therefore not be
     supporting this activity. However, last year I found
     it necessary to take a ‘normal’ job and thus have had
     to file the enclosed return this year. I have re-
     quested on the return that all money collected through
     payroll deductions be returned. As long as one child
     is murdered in the womb with tax dollars, or one young
     person is being taught premarital sex of OK in school
     or one family is being broken up for easy welfare money
     or any of the other inappropriate ways the government
     is encouraging sin, then I’m afraid that I can not
     contribute. As I see it our laws allow for people of
     faith (i.e. the Amish and the Mennonite) to be exempt
     from taxes on moral grounds and so I claim these exemp-
     tions. [Reproduced literally.]

     In determining the taxable income of $18,031 reported in

Form 1040A for 2001, petitioner and Ms. Lane claimed dependency

exemptions for their sons Caleb C. Lane (Caleb) and Joshua D.

Lane (Joshua), both of whom were at all relevant times citizens

and residents of the United States.    In claiming such exemptions,

petitioner and Ms. Lane stated “NONE” after each son’s name in

the space provided in Form 1040A for 2001 for “Dependent’s social

security number”.

     Respondent summarily disallowed the personal exemptions

claimed for Caleb and Joshua in Form 1040A for 2001, thereby

increasing (1) the taxable income shown in that form from $18,031

to $23,831 and (2) the total tax shown in that form from $2,704

to $3,574.   Respondent allowed a rate reduction credit of $600,
                               - 4 -

thereby decreasing the tax of $3,574 to $2,974.

     On May 27, 2002, respondent assessed petitioner’s3 tax of

$2,974 for 2001, as well as interest as provided by law on the

amount of such unpaid tax.4   Respondent also summarily determined

that petitioner is liable for 2001 for the addition to tax under

section 6651(a)(2).   (We shall refer to any unpaid assessed

amounts with respect to petitioner’s taxable year 2001, as well

as interest as provided by law accrued after May 27, 2002, as

petitioner’s unpaid liability for 2001.)

     Respondent issued to petitioner the notice and demand for

payment required by section 6303(a) with respect to petitioner’s

unpaid liability for 2001.

     On June 26, 2003, respondent sent petitioner a final notice

of intent to levy and notice of your right to a hearing (notice

of intent to levy) with respect to petitioner’s unpaid liability

for 2001.

     On July 21, 2003, in response to the notice of intent to

levy, petitioner filed Form 12153, Request for a Collection Due

Process Hearing, and requested a hearing with respondent’s

Appeals Office (Appeals Office).



     3
      Ms. Lane is not a petitioner in the instant case.   Herein-
after, we shall refer only to petitioner.
     4
      Respondent credited tax withheld of $651.62 against peti-
tioner’s tax of $2,974 for 2001, thereby resulting in an unpaid
balance of tax of $2,322.38.
                                - 5 -

     On November 24, 2003, a settlement officer with the Appeals

Office held a hearing with petitioner with respect to the notice

of intent to levy.    During that hearing, petitioner continued to

object on religious and moral grounds to paying tax.

     On April 27, 2004, petitioner sent a letter (petitioner’s

April 27, 2004 letter) to the Internal Revenue Service (IRS) in

Atlanta, Georgia.    That letter stated in pertinent part:

     For the last 3 years I have requested that all of my
     withholdings be returned on religious and moral
     grounds. Even though I have cited examples of groups
     that claim this type of exemption you continue to deny
     it and at the same time refuse to provide 1 code refer-
     ence to back up your claim that everyone must pay. To
     date you are still holding $1700 of my money.

          Enclosed you will find my 2003 return, including
     some of the documentation of my deductions which you
     have questioned in the past. Also, you will find
     amended returns for 2002 & 2001. It came to my atten-
     tion this year that the Child Tax Credit on line 49 did
     not refer to the Earned Income Credit as I had thought.
     It’s one of my long-standing opinions that our tax
     system itself is immoral and fraudulent since it’s
     impossible for anyone to know that they’ve paid the
     right amount. This error has proved my point, espe-
     cially since you were trying to collect $503.33 even
     though you owe me $421.17.

          As I see it the 2001 return shows I owe $859, but
     the 2002 & 2003 returns leave $1629 in unclaimed cred-
     its. Thus leaving more than enough to cover the debt
     and still restore the $652 paid in 2001. Add the $421
     (2002) and $621 (2003) and you owe me $1700. This
     won’t settle our dispute over our religious exemption
     issue but it will mean that none of my money has gone
     to fund abortions, and that is good enough for me now!

     Petitioner enclosed with petitioner’s April 27, 2004 letter

to the IRS Form 1040X, Amended U.S. Individual Income Tax Return
                                - 6 -

(Form 1040X for 2001), that he had prepared for his taxable year

2001.   In Form 1040X for 2001, petitioner claimed child tax

credits of $1,200 for his sons Caleb and Joshua.

     On August 10, 2004, the Appeals Office mailed to petitioner

a notice of determination.   The notice of determination stated in

pertinent part:

     Summary of Determination

     The intent to levy, as proposed by the Internal Revenue
     Service in its letter to you dated June 26, 2003, is
     sustained.

An attachment to the notice of determination stated in pertinent

part:

     Summary and Recommendation

        *         *     *         *      *       *       *

     The issue is whether you have a valid challenge to the
     appropriateness of the notice of intent to levy by the
     Internal Revenue Service. After conducting a hearing
     and taking into account your record of compliance, it
     is my recommendation that the intent to levy be sus-
     tained.

     Brief History

     The liability for the above identified tax period
     [2001] results from under withholding and insufficient
     estimated tax payments. In addition to the unpaid
     income tax liability, a portion of the balance due is
     composed of the statutory additions of the late payment
     penalty and interest. Your tax problems have continued
     to accumulate because, it has been determined that you
     have not filed income tax returns for the years 1997,
     1998, 1999, 2000, and 2002.

        *         *     *         *      *       *       *
                             - 7 -

Discussion and Analysis

1.    Verification of Legal and Procedural Requirements

You and your spouse timely filed your 2001 income tax
return on April 15, 2002. Income tax in the amount of
$2,974.00 was assessed for the 2001 tax period under
Internal Revenue Code Section 6201. Prepayment credits
from federal withholding taxes in the amount of $651.62
were credited to your account.

     *      *       *         *      *       *       *

A review of the transcript and administrative file
confirms that the taxes were assessed and Notice and
Demand was mailed to your last known address within 60
days of the assessment. The record shows that you did
not pay the liability within ten days after receipt of
Notice and Demand.

     *      *       *         *      *       *       *

All legal and procedural requirements for the proposed
levy have been satisfied.

2.    Issues Raised by You

At the time of the hearing with the Appeals Officer,
you indicated that although you have no objections to
filing a federal income tax return, you do object to
paying federal income taxes based on religious grounds.
You indicated that your own religious beliefs prevent
you from paying federal taxes. You also objected to
the payment of taxes based on the government’s use of
taxes to fund certain government programs that you
object to. Appeals does not have legal jurisdiction to
consider religious objections to the payment of taxes.

With regards to the unfiled tax returns for the years
1997, 1998, 1999, 2000 and 2002, you indicated that you
were not required to file income tax returns for these
periods because you believed that you failed to earn
enough income to file a tax return. Information to
support your belief was not provided.

No other issues, including possible collection alterna-
tives to the proposed levy action, were raised by you.
                               - 8 -

     3. Balancing Efficient Collection Actions with Con-
     cerns Over the Intrusiveness of the Proposed Collection
     Action

     Since you have not raised a valid challenge to the
     appropriateness of the proposed levy, and since you are
     unwilling to pay the assessment voluntarily, our judg-
     ment is that the levy action as proposed by compliance
     balances the Service’s need for efficient collection
     with your concerns over the intrusiveness of that
     action. Levy action may be taken consistent with the
     prior notice requirements of IRC Section 6331 to the
     extent that this liability remains unpaid.

     On March 1, 2005, petitioner sent a letter (petitioner’s

March 1, 2005 letter) to respondent’s counsel in the instant case

(respondent’s counsel).   Petitioner’s March 1, 2005 letter stated

in pertinent part:

          As I see it we have two separate points to deal
     with. The first, is my claim to an exemption from
     taxes for moral and religious grounds similar to the
     exemption granted the Amish and other groups. To date
     no one from the IRS has provided me with any law prov-
     ing that this exemption is not allowed.

          The second issue is in regard to the return I
     filed, so as not to be charged with ‘failure to file’
     while awaiting a resolution to the first issue and also
     to show the amount of withheld taxes I was asking to be
     returned. This is the area that the IRS has chosen to
     focus on. Here we have only two areas of contention.
     The first is my choice to file Head of Household (I
     have previously submitted a full explanation for my
     reasoning for this), your answer of “you can’t do
     that!” is inadequate to resolve this matter and was
     typical of the Bulwarian attitude that has brought us
     to this point. Finally, is the point of Social Secu-
     rity Numbers (SSN) for my children. Thank you for the
     case opinions you provided on this point. These fi-
     nally give us a place to build a discussion.

          You insisted that these cases proved that I needed
     SSN’s but these cases actually refer to Taxpayer Iden-
     tification Numbers (TIN). I find it especially inter-
                                 - 9 -

     esting in the Miller decision that the Judge recognizes
     “. . . their claim was cognizable under the Religious
     Freedom Restoration Act . . .” So without having to
     get into a long discussion of why I don’t want to get
     my children into that fraudulent system at least my
     right to stay out is confirmed. This same Judge goes
     on to support the IRS’s need for the TIN (not the SSN)
     for it’s work. If the SSN, which is provided by the
     Social Security Administration were the only number
     available I’d say you had me over a barrel, but since
     the IRS also issues TIN’s there remains an option. I
     saw at least six TIN categories listed on the IRS
     website. I saw none that seemed to fit my requirements
     but once the IRS offers the first alternative to a SSN
     the 14th Amendment kicks in and protects my right to
     chose that option. Therefore I picked the form that
     seemed closest to my needs and have included it for
     your submission. As a representative of the IRS you
     should be able to expedite the issuance of these num-
     bers and thus get this issue off the courts table.
     Please let me know if a different form or original
     documents are needed.

     Petitioner provided to respondent’s counsel with peti-

tioner’s March 1, 2005 letter two altered Forms W-7, Application

for IRS Individual Taxpayer Identification Number (Form W-7),

that petitioner had prepared on behalf of his sons Caleb and

Joshua, respectively.   At all relevant times, Form W-7 was to be

used “by individuals who are not U.S. citizens or permanent

residents.”   The alterations that petitioner made to those

respective Forms W-7 included crossing out (1) the word “Individ-

ual” in the name of that form and (2) the word “foreign” that

appeared in that form where the applicant was to provide such

applicant’s “foreign address”.

     On March 31, 2005, respondent’s counsel sent a letter

(respondent’s counsel’s March 31, 2005 letter) to petitioner with
                                - 10 -

respect to the instant case.     That letter stated in pertinent

part:

           This is in response to the issues you raised at
     our recent conference and in your letter dated March 1,
     2005.

          *       *       *       *       *       *       *

     Taxpayer Identification Number

          As you know, the IRS disallowed the dependency
     exemptions you claimed for your two children on your
     2001 return. You take the position that these exemp-
     tions should be allowed, and that, in addition, you
     should be allowed to claim the child tax credit pro-
     vided by I.R.C. § 24. During our conference, the
     undersigned correctly informed you that no such exemp-
     tions or credit could be allowed unless you obtained
     social security numbers (“SSN”), for your children and
     provided those SSN to the IRS. You refuse to obtain or
     provide such SSN.

          I.R.C. § 151(e) provides that no dependency exemp-
     tion is allowable “with respect to any individual
     unless the TIN of such individual is included on the
     return claiming the exemption.” See I.R.C. §
     7701(a)(41) (defining “TIN” as “the identifying number
     assigned to a person under section 6109”). Similarly,
     I.R.C. § 24(e) disallows any child tax credit “with
     respect to any qualifying child unless the taxpayer
     includes the name and taxpayer identification number of
     such qualifying child on the return of tax for the
     taxable year.”

             In your March 1, 2005, letter, you take the posi-
        tion that the TIN required by the above statutes need
        not be an SSN, and can be a TIN assigned by the IRS.
        With that letter, you included two altered IRS Forms W-
        7 (Application for IRS Individual Taxpayer Identifica-
        tion Number) requesting that the IRS assign TIN to your
        children. You altered these Forms W-7 by marking
        through both the word “Individual” in the caption, and
        the words “resident alien” beside “Dependent of U.S.
        citizen” beside block d. found in the “Reason you are
        submitting Form W-7” section. Your legal position
        concerning the use of EIN other than SSN is incorrect.
                          - 11 -

       I.R.C. § 6109(d) provides as follows:

       Use of social security account number

            The social security number issued to an indi-
       vidual for purposes of section 205(c)(2)(A) of the
       Social Security Act shall, except as otherwise
       specified under regulations of the Secretary, be
       used as the identifying number for such individual
       for purposes of this title [Title 26, the Internal
       Revenue Code].

     An individual thus may use a TIN other than an SSN
only when such use is expressly authorized by the
treasury regulations. Under those regulations, only
three types of TIN are used to identify individual
persons (who are not also employers): “Social security
numbers, IRS individual taxpayer identification num-
bers, and IRS adoption taxpayer identification num-
bers.” Treas. Reg. § 301.6109-1(a)(1)(ii). An IRS
individual taxpayer identification number (or “ITIN”)
generally is assigned only to a nonresident alien, but
in some cases, may be assigned to a resident alien.
See Treas. Reg. § 301.6109-1(g)(iii). Both of your
children are citizens and residents of the United
States, and therefore are ineligible for an ITIN. You
apparently concede as much by the manner in which you
altered each Form W-7. We note that Form W-7 expressly
states “Do not submit this form if you have, or are
eligible to obtain, a U.S. Social security number
(SSN”). As U.S. citizens and residents, your children
plainly are legally eligible to obtain SSN.

     Because your children have not been placed for
adoption, they are also ineligible for an IRS adoption
taxpayer identification number. See Treas. Reg.
§ 301.6109-3. Thus, under I.R.C. § 6109(d) and the
applicable regulations, SSN are the only possible EIN
for your children. The IRS has no legal authority to
assign your children EIN, and accordingly will take no
action on the altered Forms W-7 you sent to this of-
fice. The IRS also cannot waive the EIN requirements
of sections 151(e) and 24(e). In sum, your refusal to
provide SSN for your children to the IRS bars you from
claiming dependency exemptions or a child tax credit
for your children.

   *        *       *        *      *          *    *
                              - 12 -


     Motion for Damages

          In our previous letter to you dated January 11,
     2005, we cautioned you that if you continued to assert
     frivolous arguments, our office would file a motion
     asking the Court to impose damages under I.R.C. § 6673.
     Enclosed is a copy of a recent court opinion, Kilgore
     v. Commissioner, T.C. Memo. 2005-24 (filed February 15,
     2005). Kilgore is a collection due process case in
     which the Tax Court granted the IRS’s motion for dam-
     ages under section 6673, and ordered that taxpayer to
     pay the United States a penalty of $10,000. Our office
     is affording you one final opportunity to concede your
     case, and thereby avoid a possible award of substantial
     damages under section 6673. We urge you to read the
     Kilgore decision carefully before deciding how to
     proceed in your case. If you advise us, in writing, by
     April 15, 2005, that you are conceding your case, we
     will mail you an appropriate proposed Decision for the
     parties to sign and file with the Tax Court. Other-
     wise, we will proceed to prepare your case for trial,
     and will, at trial, file a motion seeking damages.

                              OPINION

     A taxpayer may raise challenges to the existence or the

amount of the taxpayer’s underlying tax liability if the taxpayer

did not receive a notice of deficiency or did not otherwise have

an opportunity to dispute the tax liability, sec. 6330(c)(2)(B),

including the tax liability reported in the return that such

taxpayer filed, Montgomery v. Commissioner, 122 T.C. 1 (2004).

     Respondent did not issue a notice of deficiency with respect

to petitioner’s taxable year 2001.     Nor did petitioner otherwise

have an opportunity to dispute his alleged tax liability for that

year.   We shall review respondent’s determination de novo.    Boyd

v. Commissioner, 117 T.C. 127, 131 (2001); Landry v. Commis-
                              - 13 -

sioner, 116 T.C. 60, 62 (2001).

     Respondent summarily disallowed the dependency exemptions

claimed for petitioner’s two sons in Form 1040A for 2001.     That

was because (1) section 151(e) provides that no dependency

exemption is allowable “with respect to any individual unless the

TIN of such individual is included on the return claiming the

exemption”, and (2) Form 1040A for 2001 that petitioner filed

stated “NONE” after the name of each of petitioner’s sons in the

space provided in that form for “Dependent’s social security

number”.   Respondent assessed the tax for petitioner’s taxable

year 2001 resulting from (1) respondent’s disallowance of the

personal exemptions claimed in Form 1040A for 2001 for peti-

tioner’s sons and (2) respondent’s allowance of a $600 rate

reduction credit.   Respondent’s assessment of that tax was proper

under section 6213(b)(1) and (g)(2)(H).5    That is because such

assessment arose out of a “mathematical or clerical error”.     See

sec. 6213(b)(1), (g)(2)(H).

     The definition of the term “mathematical or clerical error”

includes “an omission of a correct TIN required under * * *

section 151 (relating to allowance of deductions for personal

exemptions)”.   Sec. 6213(g)(2)(H).    The term “TIN” means “the

identifying number assigned to a person under section 6109."


     5
      Respondent’s summary determination that petitioner is
liable for 2001 for the addition to tax under sec. 6651(a)(2)
also was proper. See secs. 6665, 6213(b).
                               - 14 -

Sec. 7701(a)(41).

     Section 6109(d) provides:

     SEC. 6109.    IDENTIFYING NUMBERS.

          (d) Use of Social Security Account Number.--
     The social security account number issued to an indi-
     vidual for purposes of section 205(c)(2)(A) of the
     Social Security Act shall, except as shall otherwise be
     specified under regulations of the Secretary, be used
     as the identifying number for such individual for
     purposes of this title [26, U.S. Code, i.e., the Inter-
     nal Revenue Code].

     The regulations under section 6109 provide that an individ-

ual who is not an employer and who is required to furnish a TIN

must use a Social Security number unless the individual is not

eligible to obtain a Social Security number.    See sec. 301.6109-

1(a)(1)(ii)(A) and (B), Proced. & Admin. Regs.    Those regulations

further provide that “Any individual who is duly assigned a

social security number or who is entitled to a social security

number will not be issued an IRS individual taxpayer identifica-

tion number.”6    Sec. 301.6109-1(d)(4), Proced. & Admin. Regs.   An

     6
      Another type of TIN is an IRS adoption taxpayer identifica-
tion number. Sec. 301.6109-1(a)(1)(i), Proced. & Admin. Regs.
The term “IRS adoption taxpayer identification number” is defined
as

     a temporary taxpayer identifying number assigned by the
     Internal Revenue Service (IRS) to a child (other than an
     alien individual as defined in § 301.6109-1(d)(3)(i))
     who has been placed, by an authorized placement agency,
     in the household of a prospective adoptive parent for
     legal adoption. An ATIN [IRS adoption taxpayer identi-
     fication number] is assigned to the child upon applica-
     tion for use in connection with filing requirements
     under the Internal Revenue Code and the regulations
                                                   (continued...)
                               - 15 -

IRS individual taxpayer identification number is generally

identified in the records and database of the IRS as a number

belonging to a nonresident alien individual.7   Sec. 301.6109-

1(g)(1)(iii), Proced. & Admin. Regs.    During the year at issue,

each of petitioner’s sons was a citizen and resident of the

United States.

       We hold that, in order for petitioner to be entitled for the

taxable year 2001 to a personal exemption under section 151, see

sec. 151(a), (c), (e), and a child tax credit under section 24,

see sec. 24(a), (c), (e), for each of his sons, each of those

sons must have, and petitioner must provide to the IRS, a Social

Security number.    On the instant record, we find that neither of

petitioner’s sons has a Social Security number and that peti-

tioner failed to provide such a number for each such son to the

IRS.

       On the record before us, we hold that for the taxable year



       6
        (...continued)
       thereunder. * * *

Sec. 301.6109-3(a)(1), Proced. & Admin. Regs.

     The record does not establish that petitioner’s sons have
ever been placed for adoption.
       7
      In the event that the IRS were to determine at the time an
individual applies for an IRS individual taxpayer identification
number, or thereafter, that such individual is not a nonresident
alien individual, the IRS may require such individual to apply
for a Social Security number. Sec. 301.6109-1(g)(1)(iii),
Proced. & Admin. Regs.
                             - 16 -

2001 petitioner is not entitled to a personal exemption or a

child tax credit for either of his two sons.   We further hold

that petitioner’s refusal, apparently on moral or religious

grounds, to obtain from the Social Security Administration and to

provide to the IRS a Social Security number for each of his sons

does not excuse him from the requirements of sections 151(e) and

24(e) for the taxable year 2001.   See Miller v. Commissioner, 114

T.C. 511 (2000).

     Based upon our examination of the entire record before us,

we find that respondent may proceed with the collection action as

determined in the notice of determination with respect to peti-

tioner’s unpaid liability for 2001.

     We turn now to respondent’s motion for a penalty under

section 6673 (respondent’s motion).   Section 6673(a)(1) autho-

rizes the Court to require a taxpayer to pay the United States a

penalty in an amount not to exceed $25,000 whenever it appears to

the Court, inter alia, that a proceeding before it was instituted

or maintained primarily for delay, sec. 6673(a)(1)(A), or that

the taxpayer’s position in such proceeding is frivolous or

groundless, sec. 6673(a)(1)(B).

     Although we shall not impose a penalty under section

6673(a)(1) on petitioner in the instant case, we caution him that

he may be subject to such a penalty if in the future he insti-

tutes or maintains a proceeding in this Court primarily for delay
                              - 17 -

and/or his position in any such proceeding is frivolous or

groundless.   See Abrams v. Commissioner, 82 T.C. 403, 409-413

(1984); White v. Commissioner, 72 T.C. 1126, 1135-1136 (1979).

     We have considered all of the contentions, arguments, and

requests of petitioner that are not discussed herein, and we find

them to be without merit and/or irrelevant.

     To reflect the foregoing,


                                      An order denying respondent’s

                                 motion for penalty under section

                                 6673 and decision for respondent

                                 will be entered.
