                         T.C. Memo. 2003-195



                       UNITED STATES TAX COURT



         GEORGE R. KEMPER AND KAREN S. KEMPER, Petitioners v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 17050-02L.              Filed July 8, 2003.



     George R. Kemper and Karen S. Kemper, pro sese.

     Wendy S. Harris, 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 (respondent’s motion).    We shall grant 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.

                          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.

     Sometime between December 30, 1996, and January 6, 1997,

petitioners filed jointly a Federal income tax (tax) return for

their taxable year 1995 (1995 joint return).    In their 1995 joint

return, petitioners reported total income of $0 and total tax of

$0 and claimed a refund of $7,618.21 of tax withheld.    Petition-

ers attached to their 1995 joint return two Forms W-2, Wage and

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

compensation totaling $46,259.    Petitioners also attached a

document to their 1995 joint return (petitioners’ attachment to

their 1995 joint return) that contained statements, contentions,

and arguments that the Court finds to be frivolous and/or ground-

less.2

     On or about April 15, 1997, petitioners filed jointly a tax

return for their taxable year 1996 (1996 joint return).    In their

1996 joint return, petitioners reported total income of $0 and


     2
      Petitioners’ attachment to their 1995 joint return 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.
                                - 3 -

total tax of $0 and claimed a refund of $5,415.97 of tax with-

held.    Petitioners attached to their 1996 joint return four Forms

W-2 reporting wages, tips, and other compensation totaling

$53,581.     Petitioners also attached a document to their 1996

joint return (petitioners’ attachment to their 1996 joint return)

that contained statements, contentions, and arguments that the

Court finds to be frivolous and/or groundless.3

     On or about April 15, 1998, petitioners filed jointly a tax

return for their taxable year 1997 (1997 joint return).    In their

1997 joint return, petitioners reported total income of $0 and

total tax of $0 and claimed a refund of $1,742.50 of tax with-

held.    Petitioners attached to their 1997 joint return Form W-2

reporting wages, tips, and other compensation of $60,124.

Petitioners also attached a document to their 1997 joint return

(petitioners’ attachment to their 1997 joint return) that con-

tained statements, contentions, and arguments that the Court

finds to be frivolous and/or groundless.4

     On or about April 14, 1999, petitioners filed jointly a tax

return for their taxable year 1998 (1998 joint return).    In their


     3
      Petitioners’ attachment to their 1996 joint return 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.
     4
      Petitioners’ attachment to their 1997 joint return 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.
                                 - 4 -

1998 joint return, petitioners reported total income of $0 and

total tax of $0 and claimed a refund of $119.62 of tax withheld.

Petitioners attached to their 1998 joint return four Forms W-2

reporting wages, tips, and other compensation totaling

$58,497.84.

     On May 21, 1999, respondent issued to petitioners three

notices of deficiency with respect to their taxable years 1995,

1996, and 1997, respectively, and on April 7, 2000, respondent

issued to them a fourth notice of deficiency (notice) with

respect to their taxable year 1998, all of which they received.

In the notice relating to petitioners’ taxable year 1995, respon-

dent determined a deficiency in, an addition under section

6651(a)(1) to, and an accuracy-related penalty under section

6662(a) on petitioners’ tax for that year in the respective

amounts of $11,831.50, $1,053.32, and $842.60.   In the notice

relating to petitioners’ taxable year 1996, respondent determined

a deficiency in, and an accuracy-related penalty under section

6662(a) on, petitioners’ tax for that year in the respective

amounts of $9,345 and $785.80.    In the notice relating to peti-

tioners’ taxable year 1997, respondent determined a deficiency

in, and an accuracy-related penalty under section 6662(a) on,

petitioners’ tax for that year in the respective amounts of

$7,405 and $1,132.60.   In the notice relating to petitioners’

taxable year 1998, respondent determined a deficiency in, and an
                               - 5 -

accuracy-related penalty under section 6662(a) on, petitioners’

tax for that year in the respective amounts of $8,754 and

$1,726.88.

     Petitioners did not file a petition in the Court with

respect to the respective notices relating to their taxable years

1995, 1996, 1997, and 1998.

     On December 13, 1999, respondent assessed petitioners’ tax,

as well as a penalty under section 6662(a) and interest as

provided by law, for each of their taxable years 1996 and 1997.

(We shall refer to those assessed amounts, as well as interest as

provided by law accrued after December 13, 1999, as petitioners’

unpaid liabilities for 1996 and 1997.)

     On December 13, 1999, respondent issued to petitioners a

notice of balance due with respect to petitioners’ unpaid liabil-

ities for 1996 and 1997.

     On December 27, 1999, respondent assessed petitioners’ tax,

as well as an addition to tax under section 6651(a)(1), a penalty

under section 6662(a), and interest as provided by law, for their

taxable year 1995.   (We shall refer to those assessed amounts, as

well as interest as provided by law accrued after December 27,

1999, as petitioners’ unpaid liability for 1995.)

     On December 27, 1999, respondent issued to petitioners a

notice of balance due with respect to petitioners’ unpaid liabil-

ity for 1995.
                                - 6 -

     On September 11, 2000, respondent assessed petitioners’ tax,

as well as a penalty under section 6662(a) and interest as

provided by law, for their taxable year 1998.     (We shall refer to

those assessed amounts, as well as interest as provided by law

accrued after September 11, 2000, as petitioners’ unpaid liabil-

ity for 1998.)

     On September 11, 2000, respondent issued to petitioners a

notice of balance due with respect to petitioners’ unpaid liabil-

ity for 1998.

     On August 27, 2001, respondent issued to petitioners a final

notice of intent to levy and notice of your right to a hearing

(notice of intent to levy) with respect to (1) petitioners’

taxable years 1989, 1990, and 1991, (2) petitioners’ unpaid

liabilities for 1995, 1996, 1997, and 1998, and (3) a frivolous

return penalty under section 6702 with respect to petitioners’

taxable year 1999.    That notice showed in pertinent part:

                           Unpaid Amount    Additional
    Form           Tax         from          Penalty         Amount
   Number        Period    Prior Notices   and Interest     You Owe
   1040     12/31/1989      $11,373.42     $13,944.62     $25,318.04
   1040     12/31/1990        7,542.93       9,628.18      17,171.11
   1040     12/31/1991          525.47         730.83       1,256.30
   1040     12/31/1995        8,266.10       2,155.31      10,421.41
   1040     12/31/1996        5,875.85       1,739.85       7,615.70
   1040     12/31/1997        7,742.80       2,389.62      10,132.42
   1040     12/31/1998       11,649.53       2,042.94      13,692.47
  CIVPEN    12/31/1999          500.00          46.01          546.01

     On or about September 24, 2001, in response to the notice of
                                 - 7 -

intent to levy, petitioners filed Form 12153, Request for a

Collection Due Process Hearing (Form 12153), and requested a

hearing with respondent’s Appeals Office (Appeals Office) with

respect to petitioners’ taxable year 1991, petitioners’ unpaid

liabilities for 1995, 1996, 1997, and 1998, and the frivolous

return penalty under section 6702 with respect to petitioners’

taxable year 1999.     In that form, petitioners stated that they

intended to make an audio recording of their Appeals Office

hearing.     Petitioners attached a document to their Form 12153

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

ments, contentions, arguments, and requests that the Court finds

to be frivolous and/or groundless.5

     In response to petitioners’ Form 12153, a settlement officer

with the Appeals Office (settlement officer) sent a letter dated

July 23, 2002, which stated in pertinent part:

     I have scheduled the hearing you requested on this case
     for the date and time shown above [August 29, 2002].
     * * *

         *        *       *        *       *       *       *

     I have requested certified transcripts showing the
     assessments, and plan to have copies for you at the
     hearing. * * * Further, no audio or stenographic re-
     cordings are allowed on Appeals cases effective as of


     5
      Petitioners’ attachment to Form 12153 contained statements,
contentions, arguments, and requests that are very similar to the
statements, contentions, arguments, and requests contained in the
attachments to Forms 12153 filed with the Internal Revenue
Service by certain other taxpayers with cases in the Court. See,
e.g., Flathers v. Commissioner, T.C. Memo. 2003-60.
                                 - 8 -

     May 2, 2002 and forward. Therefore you [sic] request
     to tape record and/or bring a court reporter * * * is
     denied.

     On August 29, 2002, a settlement officer held an Appeals

Office hearing with petitioner George R. Kemper (Mr. Kemper) with

respect to the notice of intent to levy.6   At the Appeals Office

hearing, the settlement officer gave Mr. Kemper Form 4340,

Certificate of Assessments, Payments, and Other Specified Matters

(Form 4340), with respect to each of petitioners’ taxable years

1995, 1996, 1997, and 1998.

     On September 26, 2002, the Appeals Office issued a notice of

determination concerning collection action(s) under section 6320

and/or 6330 (notice of determination) to Mr. Kemper and a sepa-

rate notice of determination to Ms. Kemper.   (We shall refer

collectively to those two notices as petitioners’ notices of

determination.)   An attachment to each such notice of determina-

tion stated in pertinent part:

     Verification of Legal and Procedural Requirements

     The Secretary has provided sufficient verification that
     all legal and procedural requirements have been met.
     Appeals has reviewed computer transcripts verifying the
     assessment.

     Assessments were made and the taxpayer was issued
     notice and demand letters by regular mail, to the
     taxpayer’s last known address, as required under IRC
     6303. He neglected or refused to pay. The notices
     required under IRC 6331(d) and IRC 6330 were combined


     6
      Petitioner Karen S. Kemper (Ms. Kemper) did not appear at
the Appeals Office hearing held on Aug. 29, 2002.
                         - 9 -

in Letter 1058, dated 08/27/2001, which was mailed
certified to the taxpayer’s last known address. The
taxpayer responded with Form 12153, Request for a
Collection Due Process Hearing, which was received and
date stamped 09/28/2001.

The taxpayer appeared in person for his Collection Due
Process hearing, his spouse chose not to come to the
hearing. Settlement Officer Mike Freitag conducted the
hearing. Settlement Officer Donna Fisher was also in
attendance.

At the hearing the taxpayer was asked if he had any
recording devices. He said he did not have one. He
was again reminded that no recording of Appeals’ hear-
ings is allowed.

   *       *       *       *       *       *       *

Issues Raised by the Taxpayer

   *       *       *       *       *       *       *

The IRS * * * sent statutory notices of deficiency
dated May 21, 1999 to the taxpayers at their last known
address asserting a deficiency for the taxable years
1995, 1996, and 1997. The taxpayers received the
notices of deficiency in time to petition the Tax Court
for a redetermination of the deficiencies. They did
not file a timely petition to Tax Court, but responded
to the notices with a letter dated 08/18/1999 with
their same non-filer arguments. The tax was properly
assessed.

The IRS * * * sent statutory notices of deficiency
dated 04/07/2000 to the taxpayers at their last known
address asserting a deficiency for the taxable year
1998. The taxpayers received the notices of deficiency
in time to petition the Tax Court for a redetermination
of the deficiencies. They did not file a timely peti-
tion to Tax Court * * *

After being shown one of the notices of deficiencies,
he stated he did receive them. Appeals then stated
that as he received those notices and failed to peti-
tion the tax court, he could not argue the liability at
the hearing.
                          - 10 -

   *        *       *       *       *       *       *

They filed bankruptcy on 01/31/2002, and the bankruptcy
was closed 06/12/2002. * * * Income tax liabilities for
1989, 1990, and 1991 are dischargeable per the Bank-
ruptcy Code rules.

When the taxpayers were mailed Letter 1058, Final
Notice-Notice of Intent to Levy and Notice of Your
Right to a Hearing, the taxpayers responded with Form
12153, attaching several pages of non-filer arguments.

At the hearing the taxpayer was explained the Appeals
process and he stated that he had been through several
hearings before and that they were a waste of time.

At the hearing Appeals provided the following docu-
ments:

       a)   A copy of the memorandum of 5/2/02 stating
            audio and stenographic recordings of Appeals
            cases will no longer be allowed;
       b)   Copies of the form 2866 to which the forms
            4340, Certificate of Assessment, are annexed
            for the period in dispute;
       c)   A copy of the pamphlet “Why do I have to Pay
            Taxes”;
       d)   A copy of “The Truth About Frivolous Tax
            Arguments”;
       e)   A list of I.R.C. code sections defining in-
            come, who must file, etc.;

When Appeals tried to explain that the court could
impose sanctions, he stated, “that no court case was
like his.” When Appeals again explained that sanctions
could indeed be imposed for the same types of arguments
the taxpayer was raising, he didn’t say anything.

The taxpayer was asked if he were interested in collec-
tion alternatives such as an offer in compromise, or an
installment agreement, and was reminded that all re-
turns due to date must be appropriately filed for the
offer to be considered, or for an installment agree-
ment, but he is not in filing compliance and was un-
willing to discuss collection alternatives. When asked
if all returns had been filed, he replied that he filed
what he felt were appropriate returns.
                                - 11 -

     The taxpayer raised no non-frivolous issues. The
     information previously submitted by the taxpayers was
     reviewed, and in that material Karen Kemper raised no
     non-filer issues.

     Balancing the Need for Efficient Collection with Tax-
     payer Concerns

     The requirements of all applicable laws and administra-
     tive procedures have been met. The taxpayers received
     their required notices. At the hearing, Appeals raised
     collection alternatives with George Kemper, but he was
     not interested. Given the taxpayers’ continued non-
     compliance, the government should be allowed to proceed
     with its proposed enforcement action, its intent to
     levy on tax periods 1995, 1996, 1997 and 1998. Lacking
     the taxpayers’ cooperation, the proposed collection
     action balances the need for efficient collection with
     the taxpayer’s concern that any collection action be no
     more intrusive than necessary. [Reproduced literally]

     On October 29, 2002, petitioners filed a petition with the

Court for review of petitioners’ notices of determination only

insofar as those notices relate to petitioners’ unpaid liabili-

ties for 1995, 1996, 1997, and 1998.     Except for an argument

under section 7521(a)(1), the petition contains statements,

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

frivolous and/or groundless.7    With respect to section

7521(a)(1), petitioners allege in the petition that the Appeals

Office refused to allow them to make an audio recording of the

Appeals Office hearing held on August 29, 2002, and that that


     7
      The frivolous and/or groundless statements, contentions,
arguments, and questions in petitioners’ petition are very
similar to the frivolous and/or groundless statements, conten-
tions, arguments, and questions in petitions filed by certain
other taxpayers with cases in the Court. See, e.g., Keown v.
Commissioner, T.C. Memo. 2003-69.
                              - 12 -

refusal was improper under that section.

                            Discussion

     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.8   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.

     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’ respective attachments to their

1995 joint return, their 1996 joint return, and their 1997 joint

return, petitioners’ attachment to Form 12153, and petitioners’

petition except for an argument under section 7521(a)(1), peti-

tioners’ response to respondent’s motion (petitioners’ response)


     8
      The only matters raised in petitioners’ petition and the
only questions raised in respondent’s motion relate to
petitioners’ unpaid liabilities for 1995, 1996, 1997, and 1998
over which we have jurisdiction. Neither the petition nor
respondent’s motion relates to the frivolous return penalty under
sec. 6702 regarding petitioners’ taxable year 1999 over which we
do not have jurisdiction, Van Es v. Commissioner, 115 T.C. 324,
328-329 (2000), or to petitioners’ taxable years 1989, 1990, and
1991. Consequently, our discussion hereinafter is limited to
petitioners’ unpaid liabilities for 1995, 1996, 1997, and 1998.
                             - 13 -

contains statements, contentions, and arguments that the Court

finds to be frivolous and/or groundless.9

     We turn to petitioners’ argument under section 7521(a)(1)

that the refusal by the Appeals Office to permit petitioners to

make an audio recording of the Appeals Office hearing held on

August 29, 2002, was improper.    Throughout the period commencing

with petitioners’ filing their 1995 joint return with respondent

and ending with their filing petitioners’ response with the

Court, petitioners have made statements and requests and advanced

contentions, arguments, and questions that the Court has found to

be frivolous and/or groundless.   Consequently, even though we

held in Keene v. Commissioner, 121 T.C. __ (2003), that section

7521(a)(1) requires the Appeals Office to allow a taxpayer to

make an audio recording of an Appeals Office hearing held pursu-

ant to section 6330(b), we conclude that (1) it is not necessary

and will not be productive to remand this case to the Appeals



     9
      The frivolous and/or groundless statements, contentions,
and arguments in petitioners’ response are similar to the types
of frivolous and/or groundless statements, contentions, and
arguments 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 the Commissioner of Internal Revenue in
such other cases. See, e.g., Smith v. Commissioner, T.C. Memo.
2003-45.

     Although not altogether clear, petitioners’ response may
also be raising the argument under sec. 7521(a) advanced in the
petition that respondent’s refusal to allow petitioners to make
an audio recording of the Appeals Office hearing held on Aug. 29,
2002, was improper.
                              - 14 -

Office for another hearing under section 6330(b) in order to

allow petitioners to make such an audio recording, see Lunsford

v. Commissioner, 117 T.C. 183, 189 (2001), and (2) it is not

necessary or appropriate to reject respondent’s determination to

proceed with the collection action as determined in the notices

of determination with respect to petitioners’ unpaid liabilities

for taxable years 1995, 1996, 1997, and 1998, see id.

     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 notices of determination with respect to petitioners’

unpaid liabilities for taxable years 1995, 1996, 1997, and 1998.

     In respondent’s motion, respondent requests that the Court

require petitioners to pay a penalty to the United States pursu-

ant 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, sec. 6673(a)(1)(A), or that the

taxpayer’s position in such a proceeding is frivolous or ground-

less, 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
                               - 15 -

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.

     In the instant case, petitioners advance, we believe primar-

ily for delay, frivolous and/or groundless contentions, argu-

ments, requests, and questions, thereby causing the Court to

waste its limited resources.     We shall impose a penalty on

petitioners pursuant to section 6673(a)(1) in the amount of

$8,500.

     On the record before us, we shall grant respondent’s motion.

     To reflect the foregoing,


                                      An order granting respondent’s

                                 motion and decision will be entered

                                 for respondent.
