                         T.C. Memo. 2005-7



                      UNITED STATES TAX COURT



                   JOHN F. DALTON, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 16780-03L.             Filed January 24, 2005.


     John F. Dalton, pro se.

     A. Gary Begun, for respondent.



                        MEMORANDUM OPINION


     KROUPA, Judge:   This matter is before the Court on

respondent’s Motion for Summary Judgment, filed pursuant to Rule

121(a).1   Respondent contends that there is no dispute as to any



     1
      All section references are to the Internal Revenue Code in
effect for the years in issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure, as amended, unless
otherwise indicated.
                                - 2 -

material fact with respect to this collection review matter and

that respondent’s Notice of Determination Concerning Collection

Actions, upon which this case is based, should be sustained as a

matter of law.

     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 with respect to all or any part of the legal issues in

controversy “if the pleadings, answers to interrogatories,

depositions, admissions, and any other acceptable materials,

together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that a decision may be

rendered as a matter of law.”   Rule 121(a) and (b); Sundstrand

Corp. v. Commissioner, 98 T.C. 518, 520 (1992), affd. 17 F.3d 965

(7th Cir. 1994); Zaentz v. Commissioner, 90 T.C. 753, 754 (1988);

Naftel v. Commissioner, 85 T.C. 527, 529 (1985).    The moving

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

of material fact, and factual inferences will be read in a manner

most favorable to the party opposing summary judgment.    Dahlstrom

v. Commissioner, 85 T.C. 812, 821 (1985); Jacklin v.

Commissioner, 79 T.C. 340, 344 (1982).

     As explained in detail below, there is no genuine issue as

to any material fact in this case and a decision may be rendered
                                - 3 -

as a matter of law.   Accordingly, we shall grant respondent’s

Motion for Summary Judgment.

Background

     Petitioner submitted to respondent Federal income tax

returns for 1998 and 1999 in which he entered zeros on all lines

requesting information regarding his income.    Petitioner attached

to his tax return for 1998 a Form W-2, Wage and Tax Statement, in

which Smith Security Corp. reported that it paid petitioner wages

of $8,901.12 during 1998.    Petitioner also attached to his tax

return for 1998 a two-page statement raising frivolous and

groundless challenges to the Federal income tax.

     Respondent issued separate notices of deficiency to

petitioner for the taxable years 1998 and 1999 on February 16,

2001 (deficiency notices).    In the notice for 1998, respondent

determined a deficiency in income tax of $433 and an addition to

tax of $108.25 under section 6651(a)(1) for failure to file

timely.   The deficiency for 1998 was based on respondent’s

determination that petitioner failed to report $8,901 of wages

received from Smith Security Corp., $925 of a taxable

distribution received from Textron, Inc., and $18 of interest

received from NBD Bank.   In the notice for 1999, respondent

determined a deficiency in income tax of $2,254 and an addition

to tax of $563.50 under section 6651(a)(1).    The deficiency for

1999 was based on respondent's determination that petitioner
                                - 4 -

failed to report $9,587 of wages received from American

Protective, $4,523 of wages received from Smith Security Corp.,

$6,191 of a taxable distribution from John Hancock, $925 of a

taxable distribution received from BT Svcs. Tenn., $18 of

interest received from NBD Bank, and $843 of Social Security

payments.

     By separate letters to respondent dated February 20, 2001,

petitioner acknowledged receiving the deficiency notices and

questioned respondent’s authority to issue these notices.

Petitioner did not file a petition for redetermination with the

Court contesting the deficiency notices, however.

     Respondent mailed to petitioner a Final Notice - Notice of

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

Section 6330 (final notice) on July 12, 2002, with regard to

petitioner’s unpaid Federal income taxes for 1998 and 1999.    A

schedule attached to the final notice stated that petitioner owed

an assessed balance of $717.45 plus statutory additions of $69.95

for 1998 and an assessed balance of $3,402.77 for 1999.

     Petitioner timely filed with respondent a Request for a

Collection Due Process Hearing, which included frivolous

allegations that the proposed levy should be barred for several

reasons.    First, petitioner alleged that respondent purportedly

failed to issue to petitioner “valid” notices of deficiency

because the Internal Revenue Service (IRS) does not have the
                               - 5 -

authority to assess tax.   Petitioner also alleged that respondent

purportedly failed to enter valid assessments or produce a

“Summary Record of Assessment”.   In addition, petitioner alleged

that respondent failed to issue to petitioner a “statutory”

notice and demand for payment of the taxes in question.

     Petitioner attended an administrative hearing conducted by

Appeals Officer Kathleen Clark (Officer Clark) on March 18, 2003.

During the hearing, Officer Clark provided petitioner with copies

of Forms 4340, Certificate of Assessment, Payments, and Other

Specified Matters, regarding petitioner’s accounts for 1998 and

1999.   The Forms 4340 showed that respondent had timely assessed

the taxes and additions to tax determined in the deficiency

notices for 1998 and 1999, and statutory interest and penalties

for failure to pay the taxes due.   In addition, the Forms 4340

established that respondent had issued to petitioner a notice and

demand for payment of the assessed amounts for 1998 and 1999.

Both of the Forms 4340 included orthographic or numerical errors,

however, that had the effect of multiplying by one hundredfold

the total amounts due from petitioner for 1998 and 1999.

Specifically, although the line item entries in Forms 4340

included assessments that matched the total amounts listed as due

in the schedule attached to the final notice, the Forms 4340

erroneously stated that petitioner owed $71,745.45 and

$340,277.77 for 1998 and 1999, respectively.
                               - 6 -

     Respondent mailed to petitioner a Notice of Determination

Concerning Collection Action(s) Under Section 6320 and/or 6330

(determination notice) dated August 28, 2003.   The determination

notice recited that petitioner did not raise any issue of merit

during the administrative proceeding and the Appeals Office

determined that it was appropriate to proceed with the proposed

levy for 1998 and 1999.

     Petitioner timely filed with the Court a Petition for Lien

or Levy Action.2   In addition to challenging the determination

notice pertaining to the proposed levy for 1998 and 1999, the

petition included a challenge to the notice pertaining to the

collection of civil penalties imposed under section 6703

(frivolous return penalties) for 1997 and 1998.3

     Upon respondent’s notifying the Court that the Forms 4340

upon which the determination notice was issued contained errors,

we granted respondent’s motion to remand the case to respondent’s

Appeals Office for further consideration.   In particular,

respondent suggested that a remand would allow the Appeals Office


     2
      The petition was timely mailed to the Court on Sept. 25,
2003. At the time that the petition was filed, petitioner
resided in Taylor, Michigan.
     3
      Petitioner attempted to invoke the Court’s jurisdiction
with regard to a notice of determination pertaining to frivolous
return penalties even though the notice expressly stated that any
challenge to such notice should be filed in Federal District
Court. By Order dated Dec. 10, 2003, the Court granted
respondent’s motion to dismiss for lack of jurisdiction and to
strike as to the frivolous return penalties for 1997 and 1998.
                                 - 7 -

to evaluate and correct the errors in the Forms 4340 that were

provided to petitioner during the administrative hearing and

provide petitioner a further opportunity to offer collection

alternatives.

     During the remand, petitioner’s case was reassigned (at

petitioner’s request) from Officer Clark to Appeals Officer Linda

Kramer (Officer Kramer).    On October 12, 2004, Officer Kramer met

with petitioner for the purpose of conducting an administrative

hearing.   The hearing was terminated, however, when petitioner

informed Officer Kramer that he desired to obtain legal counsel.

In a letter to Officer Kramer dated October 22, 2004, petitioner

stated that he was relying on section 7521(b)(2) and Keene v.

Commissioner, 121 T.C. 8 (2003), to argue that the Appeals Office

was obliged to terminate his administrative hearing when

petitioner stated that he wished to consult with an attorney.

     The Appeals Office issued to petitioner a supplemental

determination notice on November 17, 2004.   In the supplemental

notice, the Appeals Office concluded that it was appropriate to

proceed with the proposed levy for 1998 and 1999.

     Respondent filed with the Court a status report on November

23, 2004, describing the various actions that were taken while

the matter was on remand.   Respondent filed a Motion for Summary

Judgment on November 24, 2004.    Respondent’s motion included as

exhibits Forms 4340 for 1998 and 1999, dated September 20, 2004.
                               - 8 -

The Forms 4340 show that respondent assessed (and petitioner

failed to pay) taxes, additions to tax, penalties, and statutory

interest for 1998 and 1999 in amounts that match those set forth

in the deficiency notices and in the final notice.

     The Court directed petitioner to file an objection to

respondent’s Motion for Summary Judgment by Order dated December

3, 2004.   The Court also directed petitioner by Order dated

December 7, 2004, to file a report with the Court describing his

efforts to retain counsel in this case.   Petitioner failed to

respond to either of these Orders.

Discussion

     Section 6331(a) provides that if any person liable to pay

any tax neglects or refuses to pay such tax within 10 days after

notice and demand for payment, the Secretary is authorized to

collect such tax by levy on the person's property.   Section

6331(d) provides that at least 30 days before enforcing

collection by levy on the person's property, the Secretary is

obliged to provide the person with a final notice of intent to

levy, including notice of the administrative appeals available to

the person.

     Section 6330 generally provides that the Commissioner cannot

proceed with collection by levy until the person has been given

notice and the opportunity for an administrative review of the

matter (in the form of an administrative hearing with the Office
                                - 9 -

of Appeals) and, if dissatisfied, with judicial review of the

administrative determination.    See Davis v. Commissioner, 115

T.C. 35, 37 (2000); Goza v. Commissioner, 114 T.C. 176, 179

(2000).

     Section 6330(c)(1) imposes an obligation on the Appeals

Office to obtain verification that the requirements of any

applicable law or administrative procedure have been met in each

case.    Section 6330(c)(2) prescribes the matters that a person

may raise during the administrative process.    In sum, section

6330(c)(2) provides that a person may raise collection issues

such as spousal defenses, the appropriateness of the

Commissioner's intended collection action, and possible

alternative means of collection.    Section 6330(c)(2)(B) provides

that the existence and amount of the underlying tax liability can

be contested only if the person did not receive a notice of

deficiency for the taxes in question or did not otherwise have an

earlier opportunity to dispute the tax liability.    See Sego v.

Commissioner, 114 T.C. 604, 609 (2000); Goza v. Commissioner,

supra.

     The record reflects that petitioner received the deficiency

notices for 1998 and 1999 yet petitioner consciously decided not

to file a petition for redetermination with the Court.

Consistent with section 6330(c)(2)(B), petitioner is barred from

challenging the existence or amount of his underlying tax
                                - 10 -

liabilities for 1998 and 1999 in this collection review

proceeding.   See Goza v. Commissioner, supra.    In conjunction

with this point, we note that petitioner’s assertion that he did

not receive “valid” notices of deficiency is frivolous and

groundless.   See, e.g., Nestor v. Commissioner, 118 T.C. 162, 166

(2002).   As the Appeals Court for the Fifth Circuit has remarked:

“We perceive no need to refute these arguments with somber

reasoning and copious citation of precedent; to do so might

suggest that these arguments have some colorable merit.”     Crain

v. Commissioner, 737 F.2d 1417 (5th Cir. 1984).

     The record demonstrates that the Appeals Office properly

verified that all applicable laws and administrative procedures

were followed in this matter.    It is well settled that section

6330(c)(1) does not require the Appeals Office to rely on a

particular form to satisfy the verification requirement, nor does

it require the Appeals Office to provide a taxpayer with a copy

of such verification.   Roberts v. Commissioner, 118 T.C. 365 n.10

(2002), affd. 329 F.3d 1224 (11th Cir. 2003); Nestor v.

Commissioner, supra at 166.     We have found that the Appeals

Office may verify an assessment by means of a transcript of

account such as the Forms 4340 attached to respondent’s motion.

Davis v. Commissioner, supra (Form 4340 is presumptive evidence

that an assessment was made against the taxpayer).
                               - 11 -

     The Forms 4340 attached to respondent’s Motion for Summary

Judgment contain all the information necessary to record an

assessment including identification of the taxpayer, the

character of the liability assessed, the taxable period, and the

amount of the assessment.   See sec. 301.6203-1, Proced. & Admin.

Regs.    Thus, the Appeals Office properly verified for purposes of

section 6330(c)(1) that all applicable laws and administrative

procedures have been met in this matter.4

     As noted earlier, petitioner failed to respond to the

Court’s Orders that directed him to file an objection to

respondent’s motion, and a report describing his efforts to

retain counsel in this case.   Considering all the circumstances,

including the “zero” returns that petitioner submitted to

respondent for the years in issue, the protest statement that

petitioner attached to his return for 1998, and the frivolous and

groundless arguments that petitioner raised in his request for an

administrative hearing, we are persuaded that petitioner’s sudden

desire to retain counsel while this matter was on remand amounted

to nothing more than a ploy to further delay collection of his

tax liabilities for 1998 and 1999.      In any event, based on




     4
      We conclude that any confusion arising from the
typographical errors in the Forms 4340 that were provided to
petitioner during his initial administrative hearing was obviated
by the corrected Forms 4340 attached to respondent’s Motion for
Summary Judgment.
                              - 12 -

petitioner’s failure to respond to the Court’s Orders, we

conclude that petitioner has abandoned the issue.

     Petitioner failed to raise a spousal defense, make a valid

challenge to the appropriateness of respondent's intended

collection action, or offer alternative means of collection.

These issues are now deemed conceded.   Rule 331(b)(4).   From the

entire record in this case, we conclude that the Appeals Office

did not abuse its discretion in determining that it was

appropriate to proceed with collection of petitioner's tax

liabilities for 1998 and 1999.

     As a final matter, we mention section 6673(a)(1), which

authorizes the Tax Court to require a taxpayer to pay to the

United States a penalty not in excess of $25,000 whenever it

appears that proceedings have been instituted or maintained by

the taxpayer primarily for delay or that the taxpayer's position

in such proceeding is frivolous or groundless.   The Court has

indicated its willingness to impose such penalties in collection

review cases.   Pierson v. Commissioner, 115 T.C. 576 (2000).

Although we do not impose a penalty on petitioner pursuant to

section 6673(a)(1) at this time, we admonish petitioner that the

Court will consider imposing such a penalty should he return to

the Court in the future and advance arguments similar to those

that we have identified as frivolous.
                        - 13 -

To reflect the foregoing,

                                 An appropriate order and

                            decision will be entered for

                            respondent.
