                         T.C. Memo. 2005-107



                       UNITED STATES TAX COURT



                   ALAN L. POE, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 20950-03L.             Filed May 12, 2005.



     Alan L. Poe, pro se.

     Michelle M. Lippert, for respondent.



                         MEMORANDUM OPINION


     CHIECHI, Judge:    This case is before the Court on respon-

dent’s motion for summary judgment and to impose a penalty under
                                - 2 -

section 66731 (respondent’s motion).2     We shall grant respon-

dent’s motion.

                             Background

     The record establishes and/or the parties do not dispute the

following.

     Petitioner resided in Toledo, Ohio, at the time he filed the

petition in this case.

     On June 2, 2000, respondent received from petitioner a

Federal income tax (tax) return for his taxable year 1999 (1999

return).    In his 1999 return, petitioner reported total income of

$0, total tax of $0, and claimed a refund of $2,777.49 of tax

withheld.    Petitioner attached to his 1999 return Form W-2, Wage

and Tax Statement, reporting wages, tips, and other compensation

totaling $49,643.38.   Petitioner also attached a document to his

1999 return (petitioner’s attachment to his 1999 return) that

contained statements, contentions, arguments, and requests that

the Court finds to be frivolous and/or groundless.3




     1
      All section references are to the Internal Revenue Code in
effect at all relevant times. All Rule references are to the Tax
Court Rules of Practice and Procedure.
     2
      Although the Court ordered petitioner to file a response to
respondent’s motion, petitioner failed to do so.
     3
      Petitioner’s attachment to his 1999 return is very similar
to the documents that certain other taxpayers with cases in the
Court attached to their tax returns. See, e.g., Flathers v.
Commissioner, T.C. Memo. 2003-60; Copeland v. Commissioner, T.C.
Memo. 2003-46; Smith v. Commissioner, T.C. Memo. 2003-45.
                                - 3 -

     On February 5, 2001, respondent refunded or credited4 to

petitioner the entire refund (i.e., $2,777.49) that he claimed in

his 1999 return, plus interest thereon.

     On February 6, 2002, respondent issued to petitioner a

notice of deficiency (notice) with respect to his taxable year

1999.    In that notice, respondent determined a deficiency in, an

addition under section 6651(a)(1) to, and an accuracy-related

penalty under section 6662(a) on petitioner’s tax for his taxable

year 1999 in the respective amounts of $9,319, $1,761, and

$1,864.

     Petitioner did not file a petition in the Court with respect

to the notice relating to his taxable year 1999.

     On July 22, 2002, respondent assessed petitioner’s tax, as

well as an addition to tax under section 6651(a)(1), a penalty

under section 6662(a), and interest as provided by law, for his

taxable year 1999.    (We shall refer to those unpaid assessed

amounts, as well as interest as provided by law accrued after

July 22, 2002, as petitioner’s unpaid liability for 1999.)

     On July 22, 2002, respondent issued to petitioner a notice

of balance due with respect to petitioner’s unpaid liability for

1999.    On August 26, 2002, respondent issued to petitioner


     4
      Respondent credited $500 of the refund claimed in peti-
tioner’s 1999 return in payment of a frivolous return penalty
under sec. 6702 that respondent imposed on petitioner with
respect to his 1999 return.
                                - 4 -

another notice of balance due with respect to that unpaid liabil-

ity.

       On November 5, 2002, respondent issued to petitioner a final

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

(notice of intent to levy) with respect to, inter alia, his

taxable year 1999.    On or about December 2, 2002, in response to

the notice of intent to levy, petitioner filed Form 12153,

Request for a Collection Due Process Hearing (Form 12153), and

requested a hearing with respondent’s Appeals Office (Appeals

Office) with respect to, inter alia, his taxable year 1999.

Petitioner attached a document to his Form 12153 (petitioner’s

attachment to Form 12153) that contained statements, contentions,

arguments, and requests that the Court finds to be frivolous

and/or groundless.5

       On September 8, 2003, a settlement officer with respondent’s

Appeals Office held a hearing (Appeals Office hearing) with

petitioner with respect to the notice of intent to levy.   At the

Appeals Office hearing, the settlement officer gave petitioner a

copy of Form 4340, Certificate of Assessments, Payments, and

Other Specified Matters (Form 4340), with respect to petitioner’s

       5
      Petitioner’s attachment to Form 12153 contained statements,
contentions, arguments, and requests that are similar to the
statements, contentions, arguments, and requests contained in the
attachments to Forms 12153 filed with the Internal Revenue
Service by certain other taxpayers with cases in the Court. See,
e.g., Flathers v. Commissioner, supra; Copeland v. Commissioner,
supra.
                                - 5 -

taxable year 1999.   At that hearing, the settlement officer also

gave petitioner a copy of Pierson v. Commissioner, 115 T.C. 576

(2000), and explained the warning of the Court in that Opinion

with respect to section 6673(a)(1).

     On November 4, 2003, the Appeals Office issued to petitioner

a notice of determination concerning collection action(s) under

section 6320 and/or 6330 (notice of determination).   That notice

of determination stated in pertinent part:

     Summary of Determination

     Appeals determination is that Compliance is upheld. No
     relief is granted. You were given an opportunity to
     prepare and file corrected returns and provide a com-
     pleted Collection Information Statement. You failed to
     file corrected returns. You did not provide any finan-
     cial information on which consideration of alternatives
     could be based. You raised only frivolous arguments
     and were given a copy of Pierson v. Commissioner.

An attachment to that notice of determination stated in pertinent

part:

                     SUMMARY AND RECOMMENDATION

     You requested a Collection Due Process (CDP) Hearing
     with Appeals under the provisions of IRC §6330.
          -The determination of Appeals is that the proposed
          collection actions are appropriate and are upheld.
          No relief is granted.

        *       *        *       *       *        *       *

     VERIFICATION OF LEGAL AND PROCEDURAL REQUIREMENTS:

     The statute of limitations has been suspended since
     12/09/2002. The Settlement Officer had no involvement
     in your case prior to the assignment for the CDP Hear-
     ing.
                         - 6 -


IRC §6331 provides that if any person liable to pay any
tax neglects or refuses to pay the same within 10 days
after notice and demand, it shall be lawful for the
Secretary to collect such tax (and such further sum as
shall be sufficient to cover the expenses of the levy)
by levy upon all property and rights to property (ex-
cept such property as is exempt under section 6334)
belonging to such person or on which there is a lien
provided in this chapter for the payment of such tax.

IRC §6330 CDP appeal procedures require that IRS must,
in addition to notice and demand and IRC §6331(d),
provide the taxpayer with a written notification of his
or her right to (a CDP) Appeal of the proposed levy
action. This notice was sent to you on 11/05/2002.

Based on the best information available, the require-
ments of all laws, regulations and procedures have been
met during the assessment and collection phases of this
dispute.

SPECIFIC ISSUES RAISED BY THE TAXPAYER:

In this case, you dispute the underlying liabilities
* * *

The Settlement Officer requested and reviewed the
original documents submitted as Form 1040 for the year
in question, along with a detailed transcript of the
account. The Settlement Officer also secured and
reviewed Certified Transcripts, Forms 4340, of this
account. A copy of the transcript was provided to you
at the hearing as evidence of the correctness of the
assessment. The files and transcript show Notice and
Demand were properly made.

At the hearing you were given the opportunity to dis-
cuss or submit alternatives to the collection actions
such as an Installment Agreement under IRC §6159 or an
Offer In Compromise under IRC §7122. Instead, you
chose to spend your time at the hearing bringing up
frivolous issues.

You made the statement that, “...this can not be frivo-
lous... .” This mere assertion is not supported by the
facts or by law. The courts have consistently ruled
that arguments of this nature are considered frivolous.
                         - 7 -

You correctly point out that IRC §61 defines income.
More precisely, §61 defines Gross Income. * * *

     Sec. 61. Gross Income defined.
     (a) General definition.
        Except as otherwise provided in this subtitle,
        gross income means all income from whatever
        source derived, including (but not limited to)
        the following items:
               (1) Compensation for service, including
               fees, commissions, fringe benefits, and
               similar items;

Wages are considered to be compensation for services.

The U.S. Tax Court has recently ruled on documents and
positions that are substantially identical to the ones
you have put forward. (See Christopher Kiley v. Com-
missioner, T.C. Memo 2002-315; No. 6676-02L (27 Dec.
2002)) A copy of this case was provided to you at the
hearing. In Kiley v. Commissioner, the U.S. Tax Court
ruled that the return filed with all -0-‘s and using
substantially identical language in the attachments was
clearly frivolous. The Court went further and assessed
a substantial penalty under IRC §6673 for taking the
Court’s time with arguments that have been long settled
as a matter of law.

A copy of the Court’s warning as provided for in
Pierson v. Commissioner was also given to you at the
Hearing and explained.

No spousal defenses were raised. The only challenges
you raised as to the appropriateness of the collection
actions were couched in terms of arguments that have
previously been identified as frivolous.

You offered no alternatives to the proposed enforced
collection actions.

BALANCING EFFICIENT COLLECTION AND INTRUSIVENESS:

The determination of Appeals is that the proposed
collection action balances the need for efficient
collection of taxes with the intrusiveness of the
action since the liabilities are due and owing and the
notices of proposed enforced collection action were
legally proper. You were notified that the documents
                                - 8 -

     you filed were frivolous and chose to ignore the clear
     warning issued in writing.

     Before you decide whether to petition this notice of
     determination, you should know that the Tax Court is
     empowered to impose monetary sanctions up to $25,000.00
     for instituting or maintaining an action before it
     primarily for delay or for taking a position that is
     frivolous or groundless. (See the copy of Pierson v.
     Commissioner * * * that was provided at the Hearing.)
     It is our view that the positions you have taken have
     no merit and are groundless.

     Petitioner filed a petition with the Court with respect to

the notice of determination relating to petitioner’s unpaid

liability for 1999.   The petition contains statements,

contentions, arguments, and requests that the Court finds to be

frivolous and/or groundless.6

                            Discussion

     The Court may grant summary judgment where there is no

genuine issue of 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 are no genuine issues of material fact

regarding the questions raised in respondent’s motion.

     Petitioner did not file a petition with the Court with

respect to the notice of deficiency that respondent issued to him

relating to his taxable year 1999.      Where, as is the case here,

     6
      The frivolous and/or groundless statements, contentions,
arguments, and requests in petitioner’s petition are similar to
the frivolous and/or groundless statements, contentions,
arguments, and requests in petitions filed by certain other
taxpayers with cases in the Court. See, e.g., Copeland v.
Commissioner, T.C. Memo. 2003-46.
                               - 9 -

the validity of the underlying tax liability is not properly

placed at issue, the Court will review the determination of the

Commissioner of Internal Revenue for abuse of discretion.     Sego

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

114 T.C. 176, 182 (2000).

     Based upon our examination of the entire record before us,

we find that respondent did not abuse respondent’s discretion in

determining to proceed with the collection action as determined

in the notice of determination with respect to petitioner’s

unpaid liability for 1999.

     In respondent’s motion, respondent requests that the Court

require petitioner to pay a penalty to the United States pursuant

to section 6673(a)(1).   Section 6673(a)(1) authorizes the Court

to require a taxpayer to pay to 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 a proceeding is frivolous or

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

     In Pierson v. Commissioner, 115 T.C. at 581, we issued an

unequivocal warning to taxpayers concerning the imposition of a

penalty under section 6673(a) on those taxpayers who abuse the

protections afforded by sections 6320 and 6330 by instituting or

maintaining actions under those sections primarily for delay or
                             - 10 -

by taking frivolous or groundless positions in such actions.      At

the Appeals Office hearing, the settlement officer gave

petitioner a copy of Pierson and explained the warning of the

Court in that Opinion with respect to section 6673(a)(1).

Nonetheless, in the instant case, petitioner advanced in the

petition, we believe primarily for delay, frivolous and/or

groundless statements, contentions, arguments, and requests,

thereby causing the Court to waste its limited resources.    We

shall impose a penalty on petitioner pursuant to section

6673(a)(1) in the amount of $2,000.

     We have considered all of petitioner’s statements,

contentions, arguments, and requests that are not discussed

herein, and we find them to be without merit and/or irrelevant.

     On the record before us, we shall grant respondent’s motion.

To reflect the foregoing,


                                      An order granting respondent’s

                              motion and an appropriate decision

                              will be entered.
