                        T.C. Memo. 2009-14



                      UNITED STATES TAX COURT



                THOMAS WANE MARETT, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 4048-06L.              Filed January 22, 2009.



     Thomas Wane Marett, pro se.

     J. Craig Young, for respondent.



                        MEMORANDUM OPINION


     WELLS, Judge:   This matter is before the Court on

respondent’s motion for summary judgment pursuant to Rule 121,

filed February 27, 2008, and respondent’s motion for penalty

pursuant to section 6673, also filed February 27, 2008.1   The


     1
      Unless otherwise indicated, all Rule references are to the
                                                   (continued...)
                                - 2 -

issues we must decide are:    (1) Whether respondent’s Appeals

Office abused its discretion in determining to proceed with the

collection of petitioner’s tax liability for taxable year 2000,

and (2) whether the Court should impose a penalty under section

6673.    For the reasons stated below, we shall grant respondent’s

motions.

                             Background

     At the time of filing the petition, petitioner resided in

South Carolina.    On May 17, 2004, respondent mailed a notice of

deficiency to petitioner for the taxable year 2000.    In the

notice of deficiency, respondent determined a deficiency in

income tax attributable to petitioner’s failure to report

nonemployee compensation, an IRA distribution, and interest

income.    Respondent also determined that petitioner was liable

for additions to tax under section 6651(a)(1) (failure to file a

return) and section 6654(a) (failure to pay estimated tax).      On

October 12, 2004, petitioner filed a petition for redetermination

with the Court.    On January 7, 2005, the Court entered an Order

of Dismissal for Lack of Jurisdiction on the ground that the

petition was not timely filed.2

     1
      (...continued)
Tax Court Rules of Practice and Procedure, and all section
references are to the Internal Revenue Code, as amended.
     2
      Petitioner’s motion to vacate was subsequently denied by
this Court, and petitioner’s appeal to the Court of Appeals for
                                                   (continued...)
                                - 3 -

     On May 23, 2005, respondent mailed to petitioner a Final

Notice of Intent to Levy and Notice of Your Right to a Hearing

Under Section 6330 regarding his unpaid tax for 2000.     On or

about June 14, 2005, petitioner timely submitted to respondent a

Form 12153, Request for a Collection Due Process Hearing.

Petitioner’s request stated:   “I request collection alternatives

including OIC and payment schedule.     Collection actions are

inappropriate.   Procedural defects by the IRS exist.”

     By letter dated September 12, 2005, respondent’s Appeals

Office in Charlotte, North Carolina, informed petitioner that his

case was assigned to that office for consideration and that the

review would proceed by telephone, mail, and/or personal

interview.   By letter dated September 15, 2005, petitioner

informed the Appeals Office that “we request a personal

interview/hearing, and do not wish to conduct this

interview/hearing via telephone.”   By letter dated October 24,

2005, Appeals Officer K. Keeley (Appeals Officer Keeley) informed

petitioner that she had received his request for a hearing, that

“items that you mentioned in your previous correspondences are

items that * * * are frivolous or groundless, or * * * are moral,

religious, political, constitutional, conscientious, or similar

grounds”.    Appeals Officer Keeley advised petitioner that he was


     2
      (...continued)
the Fourth Circuit was ultimately dismissed for failure to
prosecute.
                               - 4 -

not entitled to a face-to-face hearing on the basis of the items

set forth in his request for a section 6330 hearing.   Appeals

Officer Keeley further informed petitioner that she was

scheduling a conference for him on November 21, 2005, and that

petitioner should submit a collection information statement and

demonstrate that he was current in all Federal tax return filings

and deposit requirements before the hearing.3

     By letter dated November 2, 2005, petitioner again asserted

that he wanted to discuss collection alternatives and that he

wanted to bring all required documents to a face-to-face hearing.

The parties subsequently exchanged additional correspondence

debating whether petitioner was entitled to a face-to-face

hearing.

     On January 27, 2006, respondent sent to petitioner a Notice

of Determination Concerning Collection Action(s) Under Section

6320 and/or 6330 determining that it was appropriate to proceed

with the proposed levy.   On February 24, 2006, petitioner filed a

petition for lien or levy action with the Court.   Petitioner



     3
      Appeals Officer Keeley repeatedly advised petitioner that
the Internal Revenue Manual (IRM) requires that he be in
compliance with current filing and paying obligations in order to
be eligible for any collection alternatives. See, e.g.,
McCorkle v. Commissioner, T.C. Memo. 2003-34 (the Commissioner
properly rejected a proposed installment agreement because, as of
the date of the notice of determination, the taxpayer had not
filed a 2001 return and had not fully paid her 2001 income
taxes). IRM pt. 5.8.3.4.1 (Sept. 1, 2005) (offer-in-compromise);
IRM pt. 5.14.1.5.1 (July 12, 2005) (installment agreement).
                                - 5 -

stated that he was denied a proper administrative hearing under

section 6330.    On May 10, 2006, respondent filed a motion for

summary judgment (the first motion for summary judgment) and a

separate motion for penalty pursuant to section 6673.

     In denying respondent’s first motion for summary judgment,

we concluded that “Appeals Officer Keeley acted prematurely in

labeling as frivolous and groundless the issues raised in

petitioner’s hearing request”, given that a failure to pay

penalty of $805.77, assessed October 4, 2004, was not included in

the notice of deficiency dated May 17, 2004.4   We remanded the

instant case for further administrative proceedings before a new

Appeals officer who had no prior involvement with the matter and

ordered that petitioner be afforded a face-to-face hearing

pursuant to section 6330.    Additionally, we ordered the new

Appeals officer to verify that respondent properly assessed an

addition to tax for failure to pay under section 6651(a)(2) for

2000.    Petitioner was also warned of the potential for penalties:

            In remanding this case, we add a strong word
            of caution to petitioner who has been less
            than revealing in his dealings with the Appeals
            Office and the Court. We remind petitioner
            that he must be current in his Federal tax
            obligations, see, e.g., sec. 6012(a), in order
            to make an offer-in-compromise or to qualify
            for an installment agreement. In addition,
            petitioner should be prepared to submit to the
            Appeals Office complete and accurate financial
            information in support of a collection


     4
      Respondent conceded this point at the hearing on that
summary judgment motion.
                               - 6 -

          alternative. Should the Court subsequently
          determine that petitioner used these proceedings
          primarily for purposes of delay and/or to advance
          frivolous and groundless arguments, the Court
          will strongly consider imposing a penalty on
          petitioner pursuant to section 6673(a). See
          Pierson v. Commissioner, 115 T.C. 576 (2000).

     Upon remand, the case was assigned to Appeals Settlement

Officer Pat McCall (Settlement Officer McCall), an impartial

officer with no previous involvement with the unpaid taxes.     On

September 6, 2006, Settlement Officer McCall held a face-to-face

hearing with petitioner.   Petitioner appeared for the conference

with Robert Clarkson (Mr. Clarkson), his alleged

“representative”, and three other individuals (two alleged expert

witnesses who were “to testify and prove * * * [petitioner’s]

case” and an “assistant”).   Mr. Clarkson insisted that all four

individuals be allowed in the hearing with petitioner but was

repeatedly advised that petitioner could bring only two

individuals into the conference.5   Ultimately, petitioner

selected Mr. Clarkson and a second unnamed individual who



     5
      Mr. Clarkson was also advised on several occasions that he
was not permitted to represent petitioner, but he continued to
speak, offering only frivolous taxpayer arguments. We note that
Settlement Officer McCall did not abuse her discretion in
refusing to allow Mr. Clarkson to represent petitioner, as Mr.
Clarkson offered no proof that he was an attorney in good
standing, a certified public accountant, or an enrolled agent in
good standing. See Young v. Commissioner, T.C. Memo. 2003-6
(third party was not entitled to represent taxpayer in a sec.
6330 hearing because of noncompliance with Circular No. 230).
     Mr. Clarkson was removed from the courtroom during the Mar.
17, 2008, trial session of the Court in Columbia, South Carolina,
pursuant to an order of the Court.
                                 - 7 -

operated a tape recorder to accompany petitioner into the hearing

room.

     During the face-to-face hearing, Settlement Officer McCall

informed petitioner as follows:

             [A] procedural error was identified regarding
             the Statutory Notice of Deficiency issued for
             the 2000 1040: the Failure to Pay penalty in
             the amount of $805.77, assessed on October 4,
             2004, was not properly listed in the Statutory
             Notice of Deficiency dated May 17, 2004, and
             would be abated. No other procedural defects
             were found.

     During the hearing, Settlement Officer McCall provided

petitioner with the opportunity to produce evidence that he was

current with tax filings and to produce financial information in

support of any collection alternative that he wished to raise.

Although petitioner claimed to have relevant financial

information in his possession, petitioner refused to produce such

information without the assistance of his alleged expert

witnesses.    Petitioner was then advised that a supplemental

determination letter would be issued, and the conference was

adjourned.

     The supplemental notice dated September 15, 2006, stated as

follows:

           Appeals determined to abate the failure to pay
           penalty in the amount of $805.77, due to a pro-
           cedural error that omitted the penalty on the
           Statutory Notice of Deficiency. The [petitioner]
           did not file tax returns for 1999, 2003, 2004,
           and 2005, and, therefore, is not current with
           required tax filings and does not qualify for a
                              - 8 -

          collection alternative. He also failed to submit
          any financial information to the Service. The
          proposed levy is sustained.

     On February 27, 2008, respondent filed the motion for

summary judgment and the motion for penalties pursuant to section

6673.

                           Discussion

     Petitioner contends that respondent’s Appeals Office abused

its discretion in determining to proceed with the collection of

petitioner’s income tax liabilities for taxable year 2000.

Specifically, petitioner argues that respondent’s motion for

summary judgment should be denied because respondent would not

allow petitioner’s expert witnesses to testify at the section

6330 hearing before Settlement Officer McCall.

     Summary judgment is intended to expedite litigation and

avoid unnecessary and expensive trials.    Fla. Peach Corp. v.

Commissioner, 90 T.C. 678, 681 (1988).    Summary judgment may be

granted where there is no genuine issue of material fact and a

decision may be rendered as a matter of law.   Rule 121(b).      The

moving party bears the burden of proving that there is no genuine

issue of material fact, and factual inferences are viewed in a

light most favorable to the nonmoving party.     Craig v.

Commissioner, 119 T.C. 252, 260 (2002); Dahlstrom v.

Commissioner, 85 T.C. 812, 821 (1985).    The party opposing

summary judgment must set forth specific facts that show that a
                                 - 9 -

genuine question of material fact exists and may not rely merely

on allegations or denials in the pleadings.     Grant Creek Water

Works, Ltd. v. Commissioner, 91 T.C. 322, 325 (1988); Casanova

Co. v. Commissioner, 87 T.C. 214, 217 (1986).

     Section 6330 provides that no levy may be made on any

property or right to property of a person unless the Secretary

first notifies him or her in writing of the right to a hearing

before the Appeals Office.   The Appeals officer must verify at

the hearing that the applicable laws and administrative

procedures have been followed.    Sec. 6330(c)(1).   At the hearing,

the person requesting a hearing may raise any relevant issues

relating to the unpaid tax or the proposed levy, including

appropriate spousal defenses, challenges to the appropriateness

of collection actions, and collection alternatives.    Sec.

6330(c)(2)(A).   The person may challenge the existence or amount

of the underlying tax, however, only if he or she did not receive

any statutory notice of deficiency for the tax liability or did

not otherwise have an opportunity to dispute the tax liability.

Sec. 6330(c)(2)(B).

     Where the validity of the underlying tax liability is

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

Respondent argues, and the Court agrees, that section

6330(c)(2)(B) precludes petitioner from challenging the

underlying tax liabilities for taxable year 2000 because
                              - 10 -

petitioner received a notice of deficiency for that year and

failed to timely petition this Court.   Accordingly, the validity

of the underlying tax is not properly in issue, and the Court

will review respondent’s administrative determination for abuse

of discretion.   See Sego v. Commissioner, 114 T.C. 604, 610

(2000); Goza v. Commissioner, 114 T.C. 176, 181-182 (2000).

     As to petitioner’s claim that he is entitled to call

witnesses at a face-to-face hearing, this Court has noted on a

number of occasions that hearings conducted under section 6330

are informal proceedings, not formal adjudications.   Katz v.

Commissioner, 115 T.C. 329, 337 (2000); Davis v. Commissioner,

115 T.C. 35, 41 (2000).   There inheres no right to subpoena

witnesses and documents in connection with section 6330 hearings.

Nestor v. Commissioner, 118 T.C. 162, 166-167 (2002); Davis v.

Commissioner, supra at 41-42; see sec. 301.6330-1(d)(2), Q&A-D6,

Proced. & Admin. Regs.

     Petitioner did not avail himself of the opportunity afforded

to him at the hearing to produce evidence that he was current

with tax filings, and he failed to produce any financial

information for consideration.   Accordingly, we hold that no

genuine issue of material fact exists requiring trial and that

respondent is entitled to summary judgment.   Consequently, we

conclude that respondent’s Appeals Office did not abuse its
                              - 11 -

discretion in determining that respondent may proceed with the

collection of petitioner’s tax liabilities.

     Respondent requests that the Court require petitioner to pay

a penalty 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, or that the

taxpayer’s position in such a proceeding is frivolous or

groundless.   See sec. 6673(a)(1)(A) and (B).

     In Pierson v. Commissioner, 115 T.C. 576, 581 (2000), 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 by taking frivolous or groundless positions in such

actions.6

     We believe petitioner advances frivolous and/or groundless

contentions, arguments, and requests primarily for delay and in

direct contravention of the above-quoted warnings given to him by

the Court, thereby causing the Court to waste its limited



     6
      Respondent advised petitioner by letter dated Dec. 3, 2007,
that respondent intended to file a motion for penalty pursuant to
sec. 6673, and quoted therein our July 7, 2006, order cautioning
petitioner as to the possible imposition of a sec. 6673 penalty.
                               - 12 -

resources.    Consequently, we shall impose a penalty of $5,000 on

petitioner pursuant to section 6673(a)(1).

     We have considered all of petitioner’s statements,

contentions, arguments, and requests that are not discussed

herein and find them unnecessary to reach, without merit, or

irrelevant.

     On the basis of the record before us, we shall grant each of

respondent’s motions.

     To reflect the foregoing,


                                          An appropriate order and

                                     decision will be entered.
