                         T.C. Memo. 2010-18



                      UNITED STATES TAX COURT



                    GINN DOOSE, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 29738-08L.             Filed February 1, 2010.



     Ginn Doose, pro se.

     Catherine G. Chang, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     COHEN, Judge:   This case was commenced in response to a

notice of determination concerning collection action with respect

to petitioner’s liabilities for 2002, 2004, and 2005.    The issue

for decision is whether the determination to proceed with a levy

was an abuse of discretion.   All section references are to the

Internal Revenue Code.
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                           FINDINGS OF FACT

     Some of the facts have been stipulated, and the stipulated

facts are incorporated in our findings by this reference.

Petitioner resided in California at the time her petition was

filed.   For many years, she has been in an ongoing dispute with

the Internal Revenue Service (IRS) about whether her tax

liability for 1990 had been determined correctly.    During 1990,

petitioner was involved in bankruptcy proceedings; she argues

that the assessment of tax for that year was precluded by the

bankruptcy and later barred by the statute of limitations.

     During 2002, 2003, 2004, 2005, and 2007, petitioner’s wages

as a sales associate at WalMart were garnished to pay the

disputed 1990 liability.    According to petitioner, the levy for

the 1990 tax finally terminated in September 2007.

     On her Federal income tax returns for 2002, 2004, and 2005,

petitioner deducted from her reported wages the amounts that had

been garnished to pay the disputed liability for 1990.   She

claimed as withheld taxes amounts deducted from her wages for

Social Security and Medicare.    As a result, she claimed a refund

for each year, but the refunds were never paid.

     Based on the wages reported by petitioner’s employer and

shown on forms and worksheets attached to each return, the IRS

corrected petitioner’s reported tax liability, disallowing the

deductions of garnished amounts and the claimed withholdings.
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The amounts in dispute were assessed as mathematical errors for

2002 and 2005.    A notice of deficiency was sent for 2004.

Petitioner contends that her mail has been tampered with since

1988 and that she did not receive the notice of deficiency or

many of the notices mailed to her before and during the IRS

Appeals process described below.

     On June 23, 2008, the IRS sent to petitioner a Final Notice,

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

with respect to the corrected tax liabilities for 2002, 2004, and

2005.   Petitioner denies that she received the notice, but she

did acknowledge receipt and respond to the notice in a Form

12153, Request for a Collection Due Process or Equivalent

Hearing, dated June 26, 2008.    Although telephone calls and

correspondence followed, petitioner denies receiving much of the

correspondence.

     Petitioner completed and faxed to the Appeals conferee

financial information on a Form 433-A, Collection Information

Statement for Wage Earners and Self-Employed Individuals.     The

Appeals conferee reviewed the information and concluded, applying

national and local standards, that petitioner had $367 per month

to pay toward her Federal tax liabilities and suggested that she

request an installment agreement.    By letter dated October 24,

2008, petitioner insisted that the garnishments were illegal and

that she wished to have the issue “decided in Court”.
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     Petitioner claimed in her October 24, 2008, letter that she

had filed suit against the IRS and the Attorney General and that

the suit was “ordered to go to trial”.    Docket records of the

U.S. District Courts for the Northern District of California and

for the Central District of California disclose that 19 cases

commenced in those courts by petitioner against defendants

including Government entities between 1991 and 2007 were closed

as of October 24, 2008.   One case in the Central District was

pending but was not set for trial.     It was dismissed on March 19,

2009.

                              OPINION

     During her communications with the Appeals conferee, during

pretrial proceedings, during trial, and in her posttrial brief,

petitioner has insisted that her 1990 tax was collected illegally

and that she had a right to the deductions claimed on her 2002,

2004, and 2005 returns.   She has persisted in this claim

notwithstanding being advised to the contrary by the Appeals

conferee, respondent’s counsel, and the Court during trial.    She

insists on relitigating her dispute about 1990, although she has

been advised repeatedly that the Court lacks jurisdiction over

issues involving that year.   The arguments that she makes in this

case about the effect of the bankruptcy and the statute of

limitations applicable to that year are patently lacking in

merit.   We mention them only because she has rejected the rulings
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of other courts throughout the years in which her dispute with

the IRS has continued, and we have no illusion that she will

change her course in this case.

     The errors in petitioner’s arguments are shown by the well-

established authorities cited in respondent’s pretrial memorandum

and ignored by petitioner.   The applicable authorities were

summarized in Chambers v. Commissioner, T.C. Memo. 2000-218,

affd. 17 Fed. Appx. 688 (9th Cir. 2001), as follows:

          It is well established that income from personal
     services must be included in the gross income of the
     person who renders the services. See Lucas v. Earl,
     281 U.S. 111 (1930). Even if a taxpayer delivers the
     payor’s check to a third party before cashing the
     check, income earned by the taxpayer for services
     rendered must be included in gross income. See United
     States v. Allen, 551 F.2d 208 (8th Cir. 1977).
     Moreover, if the taxpayer caused the check to be issued
     directly to the third party, the taxpayer must include
     the compensation in gross income. See Hicks v.
     Commissioner, T.C. Memo. 1982-200, affd. 718 F.2d 1110
     (9th Cir. 1983).

          Lack of control over the earnings does not justify
     exclusion of earnings from the employee’s gross income
     used to pay an obligation of the employee. See Tucker
     v. Commissioner, 69 T.C. 675, 678 (1978). An
     employer’s payment of an obligation of the taxpayer is
     equivalent to the taxpayer’s receipt of the income in
     the amount paid. See Old Colony Trust Co. v.
     Commissioner, 279 U.S. 716 (1929); Minor v.
     Commissioner, T.C. Memo. 1998-237. Where the transfer
     of funds at least partially discharges a legal
     obligation of the taxpayer, the transfer is equivalent
     to receipt by the taxpayer. See Helvering v. Horst,
     311 U.S. 112, 116 (1940). The fact that the transfer
     is involuntary, such as by garnishment, has no
     significance. See Vorwald v. Commissioner, T.C. Memo.
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     1997-15 (taxpayer was required to include in income as
     a distribution from his IRA amounts transferred from
     his IRA to his former spouse in a garnishment
     proceeding).

There is no reasonable dispute in this case concerning

petitioners’ underlying liabilities.

     When she requested a hearing under section 6330, petitioner

might have offered collection alternatives, including the

installment arrangement suggested by the Appeals officer or an

offer-in-compromise.   See sec. 6330(c).   If she had pursued such

alternatives, her ability to pay would have been considered and

might have been negotiated.   See secs. 6343(a)(1)(D) (providing

for release of a levy creating an economic hardship), 7122(d)(2)

(providing for compromise depending on allowances for basic

living expenses).

     Although petitioner has suggested that she would suffer

economic hardship and be unable to pay her basic living expenses

if the levy is allowed to proceed, her pursuit of erroneous

arguments has distracted her from a possibly meritorious issue,

and she has failed to establish her eligibility for relief on

that ground.   Cf. Vinatieri v. Commissioner, 133 T.C. ___ (2009).

Given her unrelenting pursuit of meritless arguments, a remand in

this case would not be productive.

     To show an abuse of discretion, petitioner must establish

that the action of the Appeals conferee was arbitrary,

capricious, or without foundation in fact or law.   See Giamelli
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v. Commissioner, 129 T.C. 107, 111 (2007); Woodral v.

Commissioner, 112 T.C. 19, 23 (1999).    It was not unreasonable

for the Appeals conferee to send the notice of determination in

response to petitioner’s persistence in her erroneous arguments

and her refusal to address collection alternatives, and we cannot

conclude that there was an abuse of discretion.    In view of the

foregoing,


                                        Decision will be entered

                                for respondent.
