                        T.C. Memo. 2006-100



                      UNITED STATES TAX COURT



               NORMAN P. SCHNELLER, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 7578-05L.              Filed May 11, 2006.



     Norman P. Schneller, pro se.

     John W. Sheffield, for respondent.



                        MEMORANDUM OPINION


     GOEKE, Judge:   The petition in this case was filed in

response to a Notice of Determination Concerning Collection

Action(s) Under Section 6320 and/or 6330 (notice of

determination).1   At issue is (1) whether respondent abused his


     1
      Unless otherwise indicated, all section references are to
                                                   (continued...)
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discretion in allowing the collection action to proceed, and (2)

whether frivolous arguments advanced by petitioner warrant the

imposition by this Court of a section 6673(a) penalty.       We hold

that respondent did not abuse his discretion and that a penalty

under section 6673 is not warranted at this time.

                             Background

     At the time the petition in this case was filed, petitioner

resided in McDonough, Georgia.

     In the taxable year 2001, the year at issue, petitioner

earned income of approximately $200,000, mostly consisting of

wages he earned as director of sales of the Caribbean of Block

Drug, Company, Inc.   Petitioner stipulated receiving this income.

Petitioner did not file a Form 1040, U.S. Individual Income Tax

Return, for the taxable year 2001.       Respondent prepared a

substitute for return (SFR).   The SFR reflected a taxable income

to petitioner of $205,593.   On January 14, 2004, respondent

issued a notice of deficiency to petitioner for 2001.       Petitioner

concedes that he received the notice of deficiency.       In response

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

Request for a Collection Due Process Hearing.       On the Form 12153,

petitioner listed his reason for disagreeing with the proposed

levy action as “SFR Program--Math error.”       Attached to the Form



     1
      (...continued)
the Internal Revenue Code, as amended.
                               - 3 -

12153 was a letter requesting “early referral to appeals.”

Petitioner did not offer any collection alternatives nor any

spousal defenses.   An Appeals officer contacted petitioner to

schedule a conference via telephone.     The Appeals officer spoke

with petitioner at the appointed time, and petitioner was given

an opportunity to discuss the issues.    Petitioner stated that he

did not want to discuss the issues and wanted a response by mail.

On March 21, 2005, petitioner received a notice of determination

upholding the proposed levy action.

     Petitioner filed a timely petition in this Court and was

cooperative throughout the stipulation and hearing process.

                            Discussion

     Petitioner advances a plethora of tax protester arguments

that attack the underlying tax liability rather than respondent’s

collection actions.   In particular, petitioner argues that the

exemption amount, pursuant to section 6012(a)(1)(A), is not

defined by statute, and that a lack of a valid control number

from the Office of Management and Budget (OMB), as required by

the Paperwork Reduction Act of 1980 (PRA), 44 U.S.C. secs. 3501-

3520 (2000), excuses a failure to file returns.

     Where the validity of the underlying tax liability is

properly at issue, the Court will review the matter de novo.

However, where the validity of the underlying tax liability is

not properly at issue, the Court will review the Commissioner’s
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administrative determination for an abuse of discretion.      Sego v.

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

TC 176, 181-182 (2000).

       Although petitioner received a statutory notice of

deficiency for the taxable year 2001, he did not avail himself of

the opportunity to file a petition for redetermination of the

deficiency with this Court pursuant to section 6213(a).

Consistent with section 6330(c)(2)(B), petitioner therefore was

precluded from contesting his liability for the underlying taxes

before the Appeals Office.    Goza v. Commissioner, supra at 182-

183.    Therefore, the validity of petitioner's underlying tax

liability is not properly at issue in this proceeding.      Id. at

183.

       Nevertheless, petitioner continues to assert frivolous

claims.    See, e.g., Pond v. Commissioner, T.C. Memo. 2005-255

(rejecting taxpayer’s argument that exemption amount is not

defined by statute); Saxon v. Commissioner, T.C. Memo. 2006-52

(taxpayer’s contention that OMB control No. 1545-0074, on the

Form 1040 is invalid and does not comply with the requirements of

the PRA is groundless (citing James v. United States, 970 F.2d

750, 753 n.6 (10th Cir. 1992); United States v. Neff, 954 F.2d

698, 699 (11th Cir. 1992)).    Petitioner does not challenge the

appropriateness nor the intended method of collection.      Nor does

petitioner offer any alternative means of collection or raise any
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spousal defenses.       Petitioner’s only argument relating to

respondent’s collection actions is that respondent abused his

discretion in relying on the Form 4340, Certificates of

Assessments, Payments, and Other Specified Matters, to verify the

assessment, an argument we have previously rejected.          Davis v.

Commissioner, 115 T.C. 35, 40 (2000).2         Petitioner has not

presented any evidence or arguments to convince us that

respondent abused his discretion.       As a result, we hold

respondent’s determination was not an abuse of discretion, and

respondent may proceed with the proposed collection action.         See

Sego v. Commissioner, supra at 612.

     Respondent urges us to impose a section 6673 penalty.

Although petitioner’s arguments are frivolous, we find that

petitioner’s cooperation in the stipulation process mitigated the

delay, and therefore we choose not to impose the penalty at this

time.       However, petitioner is warned that we may do so in the

future if he continues to assert such frivolous claims before

this Court.

     To reflect the foregoing,

                                                Decision will be entered

                                           for respondent.




        2
      Petitioner stated this argument in his Motion For
Production of Summary Record of Assessment, which this Court
denied on Apr. 18, 2006.
