                        T.C. Memo. 2004-228



                     UNITED STATES TAX COURT



               BENEDICT JOHN CASEY, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 812-02L.             Filed October 7, 2004.


     Benedict John Casey, pro se.

     Daniel N. Price, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     THORNTON, Judge:   Pursuant to section 6330(d), petitioner

seeks review of an Appeals Office determination sustaining

respondent’s proposed levy to collect his unpaid 1992 Federal

income taxes.1


     1
       Unless otherwise indicated, section references are to the
Internal Revenue Code, as amended. Rule references are to the
Tax Court Rules of Practice and Procedure.
                               - 2 -

                        FINDINGS OF FACT2

     The parties have stipulated certain facts which we

incorporate herein by this reference.   When petitioner filed his

petition, he resided in Liberty Hill, Texas.

Petitioner’s 1992 Tax Return

     On his 1992 Federal income tax return, petitioner reported

$3,681 of gross income and claimed a $294.59 refund.   On this

return, petitioner listed his address as 7262 Madeira Drive, Fort

Worth, Texas 76112 (the Madeira Drive address), which was also

his parents’ address.

Respondent’s Examination of the 1992 Tax Return

     By letter dated August 17, 1994, and addressed to the

Madeira Drive address, respondent notified petitioner that,

according to third-party information reports, petitioner had

received $10,744 of nonemployee compensation that was not

reported on his 1992 tax return.   The letter requested petitioner

to provide information about this matter within 30 days.




     2
       Petitioner failed to file an opening or reply brief.
Consequently, the Court did not have available either
petitioner’s proposed findings of fact or any objections he might
have had to respondent’s proposed findings of fact. Although we
might deem petitioner to have conceded respondent’s proposed
findings of fact, see Rule 151(e)(3); Estate of Jung v.
Commissioner, 101 T.C. 412, 413 n.2 (1993), we instead base our
findings of fact on the record before us.
                               - 3 -

     By letter dated September 10, 1994, and showing the Madeira

Drive address, petitioner requested additional time to respond to

this request.   On April 4, 1995, respondent received from

petitioner a purported Schedule C, Profit or Loss From Business,

listing his principal business as “Property Inspector”, showing

$8,416 of previously unreported income from “Gross receipts or

sales”, and claiming $2,672.72 of previously unclaimed business

expenses, including alleged expenses for travel, film, pager, and

“walking shoes”.

Notice of Deficiency

     By notice of deficiency dated May 17, 1995, and mailed to

the Madeira Drive address, respondent adjusted petitioner’s

income to include $10,744 of nonemployee compensation and

determined a $2,782 deficiency in petitioner’s 1992 Federal

income tax and a $556 accuracy-related penalty pursuant to

section 6662.   In the notice of deficiency, respondent allowed

petitioner no business expense deduction.   The notice of

deficiency contained instructions for filing a petition with the

Tax Court, and indicated that any Tax Court petition should be

filed within 90 days (i.e., by August 15, 1995).

     On June 15, 1995, respondent received from petitioner

correspondence, stating:   “Here are the copies of milege [sic], &

film & pager & auto care for 92 tax return.”   Included in this

correspondence, along with handwritten mileage logs and
                                 - 4 -

photocopied invoices, was the first page of the aforementioned

notice of deficiency.

     In a letter to petitioner dated August 1, 1995, and mailed

to the Madeira Drive address, the chief of respondent’s

examination division indicated that the information petitioner

had submitted on June 15, 1995, had been considered but did not

support a change to the adjustments previously proposed.     The

letter noted that if petitioner disagreed with these findings, he

could petition the Tax Court, pursuant to the instructions

contained in the notice of deficiency.3

        Petitioner did not petition the Tax Court to challenge the

determinations in the notice of deficiency.

Collection Activity

     Respondent sent petitioner a Final Notice--Notice of Intent

to Levy and Notice of Your Right to a Hearing, dated November 30,

2000.     On Form 12153, Request for a Collection Due Process

Hearing, dated December 20, 2000, and showing an address of 2314

Parker Lane #11, Austin, Texas (the Parker Lane #11 address),

petitioner requested an Appeals Office hearing.4    On the Form

12153, the only issue that petitioner raised with respect to the


     3
       As previously noted, the notice of deficiency indicated an
Aug. 15, 1995, deadline for petitioner to petition the Tax Court.
     4
       The address listed on the Form 12153 is simply “2314
Parker Ln. # 11”, without a city or State designation. On cross
examination, petitioner acknowledged that the address listed on
the Form 12153 is in Austin, Texas.
                                - 5 -

proposed collection action was respondent’s rejection of his

proffered mileage records.

     In June 2001, petitioner moved from the Parker Lane #11

address to Leander, Texas.    Petitioner did not notify respondent

or the Appeals Office of this address change but requested the

United States Postal Service to forward his mail.

     By letter dated October 11, 2001, and addressed to

petitioner at the Parker Lane #11 address, respondent’s Austin

Service Center acknowledged receiving petitioner’s Form 12153 and

stated that someone in the Appeals Office would contact

petitioner about his request for a hearing.    Petitioner

acknowledges receiving this letter.

     By letter dated October 18, 2001, and addressed to the

Parker Lane #11 address (the October 18 letter), Appeals Officer

Sue Cody (Cody) informed petitioner that his Appeals Office

hearing was scheduled for November 6, 2001.    The United States

Postal Service returned this letter marked “RETURN TO SENDER/NO

FORWARD ORDER ON FILE/UNABLE TO FORWARD”.

     Cody then sent petitioner another letter, dated October 31,

2001 (the October 31 letter), to 2314 Parker Lane #1, Austin (the

Parker Lane #1 address).5    In this letter, Cody informed



     5
       According to Cody’s “Case Activity Records” as contained
in respondent’s administrative file, the Parker Lane #1 address
was suggested by information contained in respondent’s
Information Data Retrieval System transcripts for petitioner.
                               - 6 -

petitioner that the Appeals Office hearing was scheduled for

November 27, 2001.   This letter was not returned.

     Cody’s October 18 and 31 letters stated identically that

because petitioner had failed to file a petition in the Tax Court

challenging the notice of deficiency, he had “no further judicial

review of the items in the notice of deficiency”.    Cody

indicated, however, that she would informally review petitioner’s

request at the hearing.   Petitioner did not appear for the

scheduled Appeals Office hearing.   Cody was unsuccessful in

reaching petitioner at the telephone number shown on petitioner’s

Form 12153.

     On December 13, 2001, respondent sent petitioner

substantially identical notices of determination to the Parker

Lane #1 address and the Parker Lane #11 address.6    Petitioner

admits receiving both transmittals.

     The notices of determination correctly state the tax year in

question as being 1992.   Identical attachments to each notice of

determination describe the issue as relating to petitioner’s 1992

tax year, but in discussing verification of legal and procedural

requirements, each attachment incorrectly refers twice to

petitioner’s 1998 tax year and once to petitioner’s 1998 account.


     6
       The only differences between the two notices of
determination, apart from petitioner’s address, is that they
(appropriately) list different certified mail numbers and appear
to bear nonidentical original signatures by “J.T. Benton, Team
Manager”.
                                - 7 -

Each attachment indicates that the only issue raised by

petitioner was the disallowance of his claimed mileage expenses

and states in pertinent part:

     The only issue raised by the taxpayer is the fact that
     his mileage was not allowed * * *

     Since taxpayer was issued a Statutory Notice of
     Deficiency and did not petition Tax Court, this issue
     cannot be considered in connection to the CDP hearing.
     Taxpayer is not entitled to judicial review of the
     items in the Statutory Notice per IRC sec.
     6330(c)(2)(B). However, I offered to review his
     records and consider his request for adjustment as an
     audit reconsideration, apart from the CDP [collection
     due process] hearing.

     Taxpayer never responded to my letters or telephone
     calls.

               *    *    *      *       *   *   *

     Taxpayer indicated in his request for a CDP hearing
     that he didn’t agree with the balance due because the
     agent didn’t allow him business miles. I offered
     taxpayer an audit reconsideration, apart from the CDP
     hearing, but taxpayer did not call or make the
     schedule[d] conference. His “mileage records” do not
     support an adjustment without further explanation and
     clarification.

     It appears taxpayer has a history of dropping the ball
     – making some contact – then not responding. This
     happened during the examination, with collection, and
     now in appeals.

     The levy balances the need for the efficient collection
     of taxes with the legitimate concern of Benedict John
     Casey that any collection action be no more intrusive
     than necessary, because he has failed to cooperate in
     proving the liability is incorrect and failed to offer
     any collection alternative.
                                  - 8 -

                                 OPINION

I.    Petitioner’s Contentions

       In his petition, petitioner raises numerous technical and

procedural complaints about respondent’s determination to proceed

with collection action.    Petitioner filed no posttrial brief.    In

his pretrial memorandum, petitioner distilled his complaints into

these three issues:    (1) Whether the Appeals Office failed to

offer petitioner the hearing that he requested pursuant to

section 6330(b)(1); (2) whether this Court may redetermine his

1992 underlying income tax liability; and (3) whether the notices

of determination are invalid because they contain some incorrect

references to petitioner’s 1998 tax year and account.7

II.    Whether the Appeals Office Failed To Offer Petitioner a
       Hearing

       If a taxpayer fails to pay any Federal tax liability within

10 days of notice and demand, the Secretary is authorized to

collect the tax by levy on the taxpayer's property.    Sec.

6331(a).    At least 30 days before taking collection action, the

Secretary must provide the taxpayer with a final notice of intent

to levy that describes, among other things, the availability of

administrative appeal.    Sec. 6331(d).


       7
       We have carefully considered all issues raised in the
petition. We construe most of them as falling within the ambit
of the three issues identified above, and we address them in that
context. The other issues raised in the petition are without
merit, moot, or irrelevant; in any event, we deem petitioner to
have abandoned such other issues.
                                - 9 -

     Upon request, the taxpayer is entitled to an administrative

hearing before the Appeals Office of the IRS.   Sec. 6330(b)(1).

A face-to-face hearing is not invariably required:   If a taxpayer

is given a reasonable opportunity for a hearing but fails to take

advantage of it, the Appeals Office may make a determination on

the basis of the case file.    See, e.g., Leineweber v.

Commissioner, T.C. Memo. 2004-17; Armstrong v. Commissioner, T.C.

Memo. 2002-224; sec. 301.6330-1(d)(2), Q&A-D6 and D7, Proced. &

Admin. Regs.

     Respondent sent petitioner a letter, dated October 11, 2001,

and addressed to the Parker Lane #11 address, advising petitioner

that he would soon be contacted regarding his hearing.    A short

time later, Appeals Officer Cody mailed petitioner a letter,

dated October 18, 2001, and also addressed to the Parker Lane #11

address, scheduling the hearing.   This letter was returned to

sender with a notation that the United States Postal Service was

unable to forward it.

     The nub of petitioner’s complaint, as we understand it, is

that once the October 18 letter was returned, the Appeals Office

was on notice that Parker Lane #11 was no longer petitioner’s

current address.   Construed broadly, petitioner’s argument seems

to be that the Appeals Office failed to exercise due diligence in

discovering his new address.
                              - 10 -

     Petitioner does not dispute, however, that he received the

October 11 letter, which was also mailed to the Parker Lane #11

address.   If nothing else, the October 11 letter should have

alerted petitioner that he needed to update his address with

respondent.8   Moreover, after the October 18 letter was returned,

the Appeals officer re-sent the correspondence to the Parker Lane

#1 address, as suggested by transcripts in respondent’s

administrative file.   This letter was not returned.   We believe

it most likely that petitioner received it (despite his

allegation to the contrary), just as he admits receiving the

notice of determination that the Appeals Office mailed to the

Parker Lane #1 address a short time later in December 2001.

     But even if petitioner did not receive the October 18

letter, we are not persuaded that the Appeals Office was at

fault, especially considering that petitioner moved from the

address he listed on his Form 12153 without informing respondent.

Cody’s attempt to contact petitioner at two different addresses,

one supplied by petitioner himself and the other suggested by

respondent’s records, demonstrates reasonable effort in these

circumstances, rather than a defect in the hearing process.



     8
       It may be that petitioner’s receipt of the Oct. 11, 2001,
letter lulled him into believing that all mail sent to him at the
Parker Lane #11 address would be successfully forwarded to him.
We are unpersuaded by petitioner’s suggestion that it was somehow
respondent’s fault that the Oct. 18, 2001, letter was not
forwarded to him.
                               - 11 -

     Moreover, the only issue petitioner raised in his Form 12153

related to his underlying 1992 tax liability.    As discussed

below, petitioner was not entitled to raise this issue at the

Appeals Office hearing.

III. Petitioner’s Challenge to His Underlying Tax Liability

     A taxpayer may challenge the validity of his underlying tax

liability in an Appeals hearing conducted pursuant to section

6330 only if the taxpayer “did not receive any statutory notice

of deficiency for such tax liability or did not otherwise have an

opportunity to dispute such tax liability."    Sec. 6330(c)(2)(B).

     Petitioner claims he did not receive the notice of

deficiency in time to petition the Tax Court.    We are unpersuaded

by petitioner’s claim.    On the basis of all the evidence, we

conclude that petitioner received the notice of deficiency

sometime before June 15, 1995, which was the date respondent

received petitioner’s correspondence enclosing, among other

things, the first page of the notice of deficiency.

     Petitioner insists that he enclosed no part of the notice of

deficiency in the correspondence that respondent received

June 15, 1995.   He speculates that someone at the Internal

Revenue Service must have shuffled the first page of the notice

of deficiency into the file containing his correspondence.      We

are unpersuaded by petitioner’s theory, which is supported by

nothing other than petitioner’s speculation.    After observing
                              - 12 -

petitioner’s demeanor at trial, his lackadaisical attitude in his

dealings with respondent and this Court, and his propensity for

blaming others for his troubles, we do not regard petitioner as a

credible witness, particularly in regard to this matter.     In any

event, there is no evidence to suggest that the notice of

deficiency could not be delivered to the Madeira address to which

it was addressed or that it was ever returned to respondent.

      On the basis of all the evidence, we conclude that

petitioner actually received the notice of deficiency dated

May 17, 1995, sometime before June 15, 1995–-well in time to

petition the Tax Court.   Accordingly, pursuant to section

6330(c)(2)(B), petitioner is precluded from challenging his

underlying tax liability in this proceeding.9

IV.   Validity of the Notices of Determination

      The notices of determination correctly state in their

headings that the instant collection proceeding relates to

petitioner’s tax period that ended December 1992.   Identical

attachments to each notice of determination also state in their

initial paragraphs: “The balance due at issue is for Mr. Casey’s

1992 individual tax (from 1040) for 1992.”   In discussing


      9
       Notwithstanding the preclusion rule of sec. 6330(c)(2)(B),
Appeals Officer Cody offered to consider petitioner’s mileage
records informally. Cody’s offer of informal consideration,
which evinces good faith on her part, does not entitle petitioner
to dispute his underlying tax liability in this proceeding. See
Behling v. Commissioner, 118 T.C. 572, 578-579 (2002); sec.
301.6330-1(e)(3), Q&A-E11, Proced. & Admin. Regs.
                              - 13 -

verification of legal and procedural requirements, however, the

attachments refer twice to petitioner’s 1998 tax year and once to

petitioner’s 1998 account.   Petitioner seizes upon these

misstatements as establishing the invalidity of the notices of

determination and infirmities in the administrative process.

      When read in the context of other information in the

notices, which makes it clear that the notices relate to

petitioner’s 1992 tax year, and of other materials in the

administrative file, the references to petitioner’s 1998 tax year

are plainly typographical errors, as Appeals Officer Cody

declares in her affidavit, which is in evidence.10

     The evidence shows that Cody reviewed, among other things,

respondent’s final notice of intent to levy, the transcripts of

petitioner’s account, and the case history leading up to the

collection action in question.   Her review of the transcripts and

other materials satisfies the section 6330(c)(1) requirement that

the hearing officer “obtain verification from the Secretary that

the requirements of any applicable law or administrative



     10
       For instance, the attachment to each notice of
determination states: “IDRS shows an assessment of tax, penalty
and applicable interest made on the 1998 tax period”. The next
sentence, however, states: “This assessment was made on
10/16/1995.” This latter date corresponds with the date that
petitioner was sent the statutory notice of balance due for his
1992 taxes, as indicated by the plain-language transcript of
petitioner’s 1992 account that is in evidence.
                               - 14 -

procedure have been met”.   See, e.g., Yacksyzn v. Commissioner,

T.C. Memo. 2002-99.

     In the attachment to each notice of determination, Appeals

Officer Cody states:   “I have had no prior involvement with this

taxpayer concerning the 1998 tax period before this CDP case.”

On the basis of this statement, which misstates the tax period in

question, petitioner alleges that respondent failed to show that

the Appeals officer was “impartial” with respect to this

collection proceeding as required by section 6330(b)(3).    As

previously indicated, we attach little significance to the

typographical error regarding the tax period in question.     For

purposes of section 6330(b)(3), an “impartial” officer is one

“who has had no prior involvement with respect to the unpaid tax

specified in subsection (a)(3)(A) before the first hearing under

this section or section 6320.”   See Perez v. Commissioner, T.C.

Memo. 2002-274.   Petitioner has presented no evidence that

Appeals Officer Cody was previously involved in his case.     We

conclude that the section 6330(b)(3) impartiality requirement was

satisfied in this case.

V.   Conclusion

     Petitioner has not made a valid challenge to the

appropriateness of the proposed collection action or offered any

collection alternatives.    The Appeals officer did not act in an

arbitrary or capricious way, or in an unlawful or unreasonable
                              - 15 -

manner, in sustaining respondent’s proposed collection action,

and accordingly did not abuse her discretion.    See Lunsford v.

Commissioner, 117 T.C. 183, 185 (2001).    We sustain respondent’s

proposed collection action.

VI.   Petitioner’s Motion for Sanctions Against Respondent

      During trial, petitioner orally moved to impose sanctions on

counsel for respondent.   In support of his motion, petitioner

asserted vaguely that “it was my belief that all of his

[respondent’s counsel’s] communications were vexatious and, at

that time, tactically not in my favor.”    He complained broadly

that respondent’s counsel burdened him with an “inundation of

paperwork.”   Although the Court invited petitioner to address his

motion on brief, petitioner failed to file any brief.

      Section 6673(a)(2) allows the Tax Court in its discretion to

sanction an attorney admitted to practice before the Court if the

attorney has “unreasonably or vexatiously multiplied the

proceedings”.   See Harper v. Commissioner, 99 T.C. 533 (1992)

(imposing sanctions under section 6673(a)(2) on the taxpayer’s

counsel for repeated and egregious conduct during the discovery

process that caused significant delay); Dixon v. Commissioner,

T.C. Memo. 2000-116 (imposing sanctions on counsel for the IRS

for intentionally misleading the Court).

      Petitioner’s motion for sanctions is without basis or merit.

The record does not suggest that respondent’s counsel has engaged
                              - 16 -

in sanctionable conduct.   The record does show that petitioner

has been uncooperative in complying with respondent’s reasonable

requests to prepare this case for trial pursuant to this Court’s

Rules and orders.   Petitioner failed to respond to respondent’s

numerous pretrial letters seeking informal disclosure of

information.   After respondent implemented formal discovery

procedures, petitioner still refused to cooperate and ignored the

Court’s December 12, 2003, Order that he comply with respondent’s

motion to compel discovery of documents.   Instead of meaningful

communication or cooperation in preparing for trial, what

respondent received from petitioner, over a period beginning in

September 2002, and continuing until shortly before trial, was a

series of vexatious cartoon-like messages.11




     11
       For instance, on Jan. 23, 2004, respondent’s counsel
received from petitioner a sheet of paper bearing the handwritten
message, “SURRENDER, DANIEL”, with a smiley-face voice balloon
that says “You mean, I am not the all-powerful Oz?”. Days before
the scheduled Feb. 2, 2004, trial, respondent’s counsel received
from petitioner a similar missive that bore the handwritten
message, “February 2, 2004: The Day You See The Shadow Of
Defeat.”, with a smiley-face voice balloon that says “Is it
Groundhog Day again?”
                              - 17 -

     If anyone has engaged in sanctionable conduct in this

proceeding, it is petitioner.12   We strongly caution him against

proceeding in bad faith in future litigation before this Court.



                                    Decision will be entered

                              for respondent, and an appropriate

                              order will be issued denying

                              petitioner’s motion for sanctions.




     12
       In fact, by Order dated Jan. 16, 2004, this Court
sanctioned petitioner for failing to comply with its Dec. 12,
2003, Order to comply with respondent’s request for production of
documents.
