                         T.C. Memo. 2003-125



                       UNITED STATES TAX COURT



          DANIEL AND SALLY A. HOLGUIN, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 10215-02L.              Filed April 29, 2003.



     Daniel Holguin and Sally A. Holguin, pro sese.

     Alan J. Tomsic, 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

section 66731 as to petitioner Daniel Holguin (respondent’s



     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 -

motion for summary judgment as to Mr. Holguin) and respondent’s

motion to dismiss for lack of jurisdiction and to strike as to

petitioner Sally A. Holguin (respondent’s motion to dismiss for

lack of jurisdiction as to Ms. Holguin).      (We shall refer collec-

tively to both of those motions as respondent’s motions.)      We

shall grant respondent’s motions.

                            Background

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

following.

     Petitioners resided in Las Vegas, Nevada, at the time they

filed the petition in this case.

     On April 16, 1995, petitioners mailed to respondent Form

1040, U.S. Individual Income Tax Return (Form 1040), for their

taxable year 1994 (1994 Form 1040).      Above their signatures

appearing in their 1994 Form 1040, petitioners struck from the

jurat clause the words “Under penalties of perjury”.      Because

petitioners struck those words, respondent concluded that peti-

tioners’ 1994 Form 1040 was not a valid Federal income tax (tax)

return.2

     In their 1994 Form 1040, petitioners reported total income

of $0 and total tax of $0 and claimed a refund of $1,020 of tax

withheld.    Petitioners attached to their 1994 Form 1040 two Forms


     2
      On Jan. 15, 1998, respondent prepared a separate substitute
for return for each petitioner with respect to the taxable year
1994.
                               - 3 -

W-2, Wage and Tax Statement (Form W-2), reporting wages, tips,

and other compensation totaling $14,857.07.   Petitioners also

attached a document to their 1994 Form 1040 (petitioners’ attach-

ment to their 1994 Form 1040) that contained statements, conten-

tions, and arguments that the Court finds to be frivolous and/or

groundless.3

     On April 13, 1996, petitioners mailed to respondent Form

1040 for their taxable year 1995 (1995 Form 1040).   Above their

signatures appearing in their 1995 Form 1040, petitioners struck

from the jurat clause the words “Under penalties of perjury”.

Because petitioners struck those words, respondent concluded that

petitioners’ 1995 Form 1040 was not a valid tax return.4

     In their 1995 Form 1040, petitioners reported total income

of $0 and total tax of $0 and claimed a refund of $1,052 of tax

withheld.   Petitioners attached to their 1995 Form 1040 Form W-2,

reporting wages, tips, and other compensation of $17,121.94.

Petitioners also attached a document to their 1995 Form 1040

(petitioners’ attachment to their 1995 Form 1040) that contained

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


     3
      Petitioners’ attachment to their 1994 Form 1040 is very
similar to the documents that certain other taxpayers with cases
in the Court attached to their tax returns. See, e.g., Copeland
v. Commissioner, T.C. Memo. 2003-46; Smith v. Commissioner, T.C.
Memo. 2003-45.
     4
      On Jan. 15, 1998, respondent prepared a separate substitute
for return for each petitioner with respect to the taxable year
1995.
                                - 4 -

frivolous and/or groundless.5

     On April 13, 1997, petitioners mailed to respondent Form

1040 for their taxable year 1996 (1996 Form 1040).    Above their

signatures appearing in their 1996 Form 1040, petitioners struck

from the jurat clause the words “Under penalties of perjury”.

Because petitioners struck those words, respondent concluded that

petitioners’ 1996 Form 1040 was not a valid tax return.6

     In their 1996 Form 1040, petitioners reported total income

of $0 and total tax of $0.    Petitioners attached a document to

their 1996 Form 1040 (petitioners’ attachment to their 1996 Form

1040) that contained statements, contentions, and arguments that

the Court finds to be frivolous and/or groundless.7

     On March 27, 1998, respondent issued to petitioner Daniel

Holguin (Mr. Holguin) a separate notice of deficiency (notice)

with respect to each of his taxable years 1994, 1995, and 1996,

all of which he received.    In the notice with respect to Mr.

Holguin’s taxable year 1994, respondent determined a deficiency


     5
      Petitioners’ attachment to their 1995 Form 1040 is very
similar to the documents that certain other taxpayers with cases
in the Court attached to their tax returns. See, e.g., Copeland
v. Commissioner, supra; Smith v. Commissioner, supra.
     6
      On Jan. 15, 1998, respondent prepared a separate substitute
for return for each petitioner with respect to the taxable year
1996.
     7
      Petitioners’ attachment to their 1996 Form 1040 is very
similar to the documents that certain other taxpayers with cases
in the Court attached to their tax returns. See, e.g., Copeland
v. Commissioner, supra; Smith v. Commissioner, supra.
                                - 5 -

in, and an addition to tax under section 6651(a)(1) on, Mr.

Holguin’s tax for that year in the respective amounts of $3,017

and $508.    In the notice with respect to Mr. Holguin’s taxable

year 1995, respondent determined a deficiency in, and additions

to tax under sections 6651(a)(1) and 6654 on, Mr. Holguin’s tax

for that year in the respective amounts of $3,170, $530, and

$109.    In the notice with respect to Mr. Holguin’s taxable year

1996, respondent determined a deficiency in, and additions to tax

under sections 6651(a)(1) and 6654 on, Mr. Holguin’s tax for that

year in the respective amounts of $3,238, $810, and $172.

     Mr. Holguin did not file a petition in the Court with

respect to the notices relating to his taxable years 1994, 1995,

and 1996.

     On August 17, 1998, respondent assessed Mr. Holguin’s tax,

as well as additions to tax and interest as provided by law, for

each of his taxable years 19958 and 1996.9   (We shall refer to

any such unpaid assessed amounts, as well as interest as provided

by law accrued after August 17, 1998, as Mr. Holguin’s unpaid


     8
      On Sept. 1 and 16, 1998, July 20, 2000, and Oct. 26 and 31,
2000, respondent applied payments totaling $2,462.01 to Mr.
Holguin’s account with respect to his taxable year 1995. On
Sept. 1 and 16, 1998, respondent reduced the payments respondent
had applied to Mr. Holguin’s account with respect to his taxable
year 1995 by a total of $551.98.
     9
      On Oct. 31, Nov. 15, and Dec. 5, 2000, and Jan. 24, Feb.
22, Mar. 8, Apr. 23, and May 10, 2001, respondent applied pay-
ments totaling $1,803.78 to Mr. Holguin’s account with respect to
his taxable year 1996.
                                 - 6 -

liabilities for 1995 and 1996.)

     On August 17, 1998, respondent issued to Mr. Holguin a

notice of balance due with respect to Mr. Holguin’s unpaid

liabilities for 1995 and 1996.

     On August 31, 1998, respondent assessed Mr. Holguin’s tax,

as well as an addition to tax and interest as provided by law,

for his taxable year 1994.    (We shall refer to those assessed

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

August 31, 1998, as Mr. Holguin’s unpaid liability for 1994.)

     On August 31, 1998, respondent issued to Mr. Holguin a

notice of balance due with respect to Mr. Holguin’s unpaid

liability for 1994.

     On February 5, 1999, respondent issued to petitioner Sally

A. Holguin (Ms. Holguin) a final notice of intent to levy and

notice of your right to a hearing (notice of intent to levy) with

respect to Ms. Holguin’s taxable years 1994, 1995, and 1996.      (We

shall refer to the notice of intent to levy issued to Ms. Holguin

as respondent’s February 5, 1999 notice of intent to levy con-

cerning Ms. Holguin’s taxable years 1994, 1995, and 1996.)

     On October 4, 2001, respondent issued to Mr. Holguin a

notice of intent to levy with respect to Mr. Holguin’s taxable

years 1994, 1995, and 1996.    (We shall refer to the notice of

intent to levy issued to Mr. Holguin as respondent’s October 4,

2001 notice of intent to levy concerning Mr. Holguin’s taxable
                               - 7 -

years 1994, 1995, and 1996.)

     On or about November 2, 2001, in response to both respon-

dent’s February 5, 1999 notice of intent to levy concerning Ms.

Holguin’s taxable years 1994, 1995, and 1996 and respondent’s

October 4, 2001 notice of intent to levy concerning Mr. Holguin’s

taxable years 1994, 1995, and 1996, petitioners filed jointly

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

12153), and requested a hearing with respondent’s Appeals Office

(Appeals Office).   Mr. Holguin timely filed that form as to

respondent’s October 4, 2001 notice of intent to levy concerning

Mr. Holguin’s taxable years 1994, 1995, and 1996, but Ms. Holguin

did not timely file that form as to respondent’s February 5, 1999

notice of intent to levy concerning Ms. Holguin’s taxable years

1994, 1995, and 1996.   Petitioners attached a document to their

Form 12153 (petitioners’ attachment to Form 12153) that contained

statements, contentions, and arguments, that the Court finds to

be frivolous and/or groundless.10

     On April 18, 2002, respondent’s Appeals officer (Appeals

officer) held a hearing that constituted (1) an Appeals Office

hearing with Mr. Holguin with respect to respondent’s October 4,

2001 notice of intent to levy concerning his taxable years 1994,


     10
      Petitioners’ attachment to Form 12153 is similar to the
types of attachments to Forms 12153 filed with the Internal
Revenue Service by certain other taxpayers with cases in the
Court. See, e.g., Copeland v. Commissioner, T.C. Memo. 2003-46;
Smith v. Commissioner, T.C. Memo. 2003-45.
                              - 8 -

1995, and 1996 and (2) an equivalent hearing with respect to

respondent’s February 5, 1999 notice of intent to levy concerning

Ms. Holguin’s taxable years 1994, 1995, and 1996.11   Prior to

those hearings, the Appeals officer gave Mr. Holguin Form 4340,

Certificate of Assessments, Payments, and Other Specified Mat-

ters, with respect to each of Mr. Holguin’s taxable years 1994,

1995, and 1996.

     On April 30, 2002, the Appeals Office issued to Mr. Holguin

a notice of determination concerning collection action(s) under

section 6320 and/or 6330 (notice of determination).   An attach-

ment to the notice of determination stated in pertinent part:

     What are the Issues?

     The taxpayer requested a hearing under the provisions
     of I.R.C. section 6330 to contest the application of a
     notice of intent to levy, Form 1058.

     Verification of Legal and Procedural Requirements

     The requirements of all applicable laws and administra-
     tive procedures have been met:

          The liabilities were assessed and notice and
     demand letters were issued by regular mail to the
     taxpayer’s last known address as required under I.R.C.
     6303, demonstrated by the forms 4340 in the administra-
     tive file;
          There was an assessed liability and a levy source
     determined by the Revenue Officer at the time the
     notice of intent to levy was issued to TP;
          The notices required under I.R.C. 6330 were pro-
     vided to TP on the dates shown above in relation to the
     levy notice, L-1058;


     11
      Mr. Holguin represented Ms. Holguin at the equivalent
hearing held on Apr. 18, 2002.
                         - 9 -

     The taxpayer responded by submitting a Form 12153,
Request for a Collection Due Process Hearing, to the
Collection officer;
     The taxpayer’s appeal was timely, being mailed on
11/2/01-The taxpayer is entitled to judicial review;

     *       *       *       *       *       *       *

Both certified transcripts, and non-literal transcripts
were requested and reviewed by this A.O. Copies of the
certified transcripts were provided to the taxpayer. A
“face to face” CDP Hearing was offered to TP. * * * The
meeting was held on 4/18/2002. TP represented himself.

Issues Raised by the Taxpayer

In TP’s appeal request, TP’s arguments were plentiful
but without substance. They were of the type described
by the Courts as “frivolous.” * * * TP disputes the
receipt of an official notice of deficiency and other
procedural errors based on TP’s personal views and
conclusions of law. In my opinion, based on Court
decisions, those arguments have no merit. TP was
provided copies of court cases attesting to the fact
that the courts are tired of such arguments and could
sanction TP if they were brought forth in a judicial
hearing.

At the time of the conference, TP did not make a claim
he was an “innocent spouse.” * * * Nor did TP provide
any non-frivolous argument as to the steps taken by the
Collection division to obtain payment. TP did attempt
to offer questions regarding procedures, but such
questions were generally frivolous and had no bearing
on the outcome of the case. TP did not suggest that he
might become current in or correct his prior filings.
Nor did TP suggest any collection alternatives.

                     MY EVALUATION

Review of the information stated above and now present
in the administrative file shows the requirements of
all applicable laws and administrative procedures have
been met. Assessments were properly made. TP was
billed for and did not pay amounts due. The Compliance
Division proceeded with enforced collection action and
it appears they should be allowed to continue with the
action.
                                - 10 -

     Balancing the Need for Efficient Collection with Tax-
     payer Concerns

     Given that no timely, reasonable alternative to the
     proposed levy action has been suggested and that TP has
     not presented anything more than frivolous arguments in
     the matter, it is my opinion that the proposed collec-
     tion action balances the government’s need for effi-
     cient collection with the taxpayer’s concern that any
     collection action be no more intrusive than necessary.
     It is therefore concluded that the action should be
     allowed to continue.

     On May 22, 2002, respondent issued to Ms. Holguin a decision

letter concerning equivalent hearing under section 6320 and/or

6330 (decision letter).    That letter was not, and did not purport

to be, a determination letter.    An attachment to the decision

letter stated in pertinent part:

          The taxpayer responded [to respondent’s February
     5, 1999 notice of intent to levy concerning Ms.
     Holguin’s taxable years 1994, 1995, and 1996] by sub-
     mitting a Form 12153, Request for a Collection Due
     Process Hearing, to the Collection officer;
          The taxpayer’s appeal was not timely, not being
     mailed until 11/2/01-The taxpayer is not entitled to
     judicial review;

                              Discussion

Respondent’s Motion to Dismiss for
Lack of Jurisdiction as to Ms. Holguin

     Our jurisdiction under sections 6320 and 6330 depends upon

the issuance of a valid notice of determination and a timely

filed petition.     Moorhous v. Commissioner, 116 T.C. 263, 269

(2001).

     Ms. Holguin was not entitled to an Appeals Office hearing in

the instant case.    That is because she did not timely request
                               - 11 -

such a hearing within 30 days from the date of respondent’s

February 5, 1999 notice of intent to levy concerning her taxable

years 1994, 1995, and 1996, which notified her of her right to an

Appeals Office hearing.    See sec. 6330(a)(3)(B); sec. 301.6330-

1(c)(2), Q&A-C7, Proced. & Admin. Regs.

       Instead of an Appeals Office hearing, respondent held an

equivalent hearing with respect to respondent’s February 5, 1999

notice of intent to levy concerning Ms. Holguin’s taxable years

1994, 1995, and 1996.    See sec. 301.6330-1(i)(1), Proced. &

Admin. Regs.    Consequently, respondent issued a decision letter

to Ms. Holguin instead of a notice of determination.    Id.     That

letter was not, and did not purport to be, a determination under

section 6330(d).    See, e.g., Moorhous v. Commissioner, supra at

270.

       We conclude that we do not have jurisdiction over Ms.

Holguin.12   See sec. 6330(d)(1); Moorhous v. Commissioner, supra.

We shall grant respondent’s motion to dismiss for lack of juris-

diction as to Ms. Holguin.




       12
      We note that petitioners do not object to the Court’s
granting respondent’s motion to dismiss for lack of jurisdiction
as to Ms. Holguin.
                              - 12 -

Respondent’s Motion for
Summary Judgment as to Mr. Holguin

     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 for summary

judgment as to Mr. Holguin.

     Where, as is the case here, 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, 181-182 (2000).

     As was true of petitioners’ attachment to their 1994 Form

1040, petitioners’ attachment to their 1995 Form 1040, petition-

ers’ attachment to their 1996 Form 1040, and petitioners’ attach-

ment to Form 12153, petitioners’ response to respondent’s motion

for summary judgment as to Mr. Holguin (petitioners’ response as

to Mr. Holguin) contains statements, contentions, and arguments

that the Court finds to be frivolous and/or groundless.13


     13
      The statements, contentions, and arguments set forth in
petitioners’ response as to Mr. Holguin are similar to the types
of statements, contentions, and arguments set forth in responses
by certain other taxpayers with cases in the Court to motions for
summary judgment and to impose a penalty under sec. 6673 filed by
                                                   (continued...)
                              - 13 -

     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 Mr. Holguin’s

unpaid liabilities for 1994, 1995, and 1996.

     In respondent’s motion for summary judgment as to Mr.

Holguin, respondent requests that the Court require Mr. Holguin

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 primar-

ily for delay, sec. 6673(a)(1)(A), or that the taxpayer’s posi-

tion in such a proceeding is frivolous or groundless, sec.

6673(a)(1)(B).

     In Pierson v. Commissioner, 115 T.C. 576, 581 (2000), we

issued an unequivocal warning to taxpayers concerning the imposi-

tion 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




     13
      (...continued)
the Commissioner of Internal Revenue in such other cases.    See,
e.g., Smith v. Commissioner, T.C. Memo. 2003-45.
                              - 14 -

actions.14

     In the instant case, Mr. Holguin advances, we believe

primarily for delay, frivolous and/or groundless contentions,

arguments, and requests, thereby causing the Court to waste its

limited resources.   We shall impose a penalty on Mr. Holguin

pursuant to section 6673(a)(1) in the amount of $1,600.

     We have considered all of petitioners’ contentions, argu-

ments, 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

for summary judgment as to Mr. Holguin.

     To reflect the foregoing,


                                      An appropriate order granting

                                 respondent’s motion to dismiss for

                                 lack of jurisdiction and to strike

                                 as to petitioner Sally A. Holguin

                                 will be issued and an order grant-

                                 ing respondent’s motion for summary

                                 judgment and to impose a penalty

                                 under section 6673 as to petitioner

                                 Daniel Holguin and decision as to

                                 him will be entered for respondent.


     14
      The record in this case reflects that the Appeals officer
gave Mr. Holguin “copies of court cases attesting to the fact
that the courts are tired of such [frivolous] arguments and could
sanction” him.
- 15 -
