                                       JAMES BRUCE THORNBERRY AND LAURA ANNE THORNBERRY,
                                              PETITIONERS v. COMMISSIONER OF INTERNAL
                                                       REVENUE, RESPONDENT
                                                        Docket No. 580–10L.                       Filed April 19, 2011.

                                                  The IRS issued notices of intent to levy and notices of Fed-
                                               eral tax lien filing to Ps for unpaid income taxes assessed for
                                               2000, 2001, and 2002 and a civil penalty under sec. 6702,
                                               I.R.C., assessed for 2007. Ps timely requested an administra-
                                               tive hearing under secs. 6320 and 6330, I.R.C. Ps set forth the
                                               grounds for their request in an attachment they downloaded
                                               from the Internet. The IRS Office of Appeals (Appeals Office)
                                               sent letters to Ps stating that the Appeals Office had deter-
                                               mined Ps’ request for a hearing consisted of frivolous positions
                                               that meet the requirements of sec. 6702(b)(2)(A)(i) and (ii),
                                               I.R.C., and, therefore, the Appeals Office was disregarding the
                                               request. The letters stated that the Appeals Office was
                                               returning Ps’ request to the IRS collection office and that
                                               ‘‘Collection may proceed with collection action as if the
                                               hearing request was never submitted.’’ Held: The statements
                                               in the Appeals Office letters that the IRS collection office
                                               could proceed with collection action are determinations for
                                               purposes of sec. 6330(d)(1), I.R.C. Held, further, sec. 6330(g),
                                               I.R.C., denies further administrative or judicial review of the
                                               portions of a request for an administrative hearing under sec.
                                               6320 or 6330, I.R.C., that the Appeals Office determined are
                                               frivolous but it does not deny judicial review of that deter-
                                               mination. Held, further, this Court has jurisdiction to review
                                               the determination under sec. 6330(g), I.R.C., issued to peti-
                                               tioners in response to their timely request for a hearing
                                               pursuant to secs. 6320 and 6330, I.R.C. Held, further,
                                               respondent’s motion to dismiss for lack of jurisdiction will be
                                               denied.

                                        James Bruce Thornberry and Laura Anne Thornberry,
                                      pro se.
                                        James R. Bamberg, for respondent.



                                      356




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                                      (356)                         THORNBERRY v. COMMISSIONER                                         357


                                                                                     OPINION

                                        DAWSON, Judge: This collection case is before the Court on
                                      respondent’s motion to dismiss for lack of jurisdiction on the
                                      ground that the Internal Revenue Service (IRS) Office of
                                      Appeals (the Appeals Office) did not issue petitioners a notice
                                      of determination pursuant to section 6320 or 6330. 1
                                      Respondent contends that the Appeals Office determined
                                      that petitioners’ requests for an administrative hearing in
                                      their entirety met the requirements of section 6702(b)(2)(A)(i)
                                      or (ii) and, pursuant to section 6330(g), treated the requests
                                      as if they were never submitted. Respondent further con-
                                      tends that a determination under section 6330(g) is not sub-
                                      ject to any review by this Court.

                                                                                  Background
                                         The IRS sent petitioners Notices of Intent to Levy and
                                      Notice of Your Right to a Hearing (levy notices) regarding
                                      petitioners’ unpaid Federal income tax liabilities for 2000,
                                      2001, and 2002 and an unpaid section 6702 penalty assessed
                                      against Mr. Thornberry for 2007. Shortly thereafter, the IRS
                                      issued to petitioners Notices of Federal Tax Lien Filing and
                                      Your Right to a Hearing Under IRC 6320 (lien notices)
                                      informing them that notices of Federal tax lien had been
                                      filed for their unpaid Federal income tax liabilities for 2000,
                                      2001, and 2002 and for the unpaid section 6702 penalty
                                      assessed for 2007.
                                         Petitioners timely sent to the Appeals Office Forms 12153,
                                      Request for a Collection Due Process or Equivalent Hearing,
                                      requesting a hearing regarding the lien notices and levy
                                      notices for petitioners’ unpaid Federal income tax liabilities
                                      for 2000, 2001, and 2002 and Mr. Thornberry’s unpaid sec-
                                      tion 6702 penalty for 2007. Petitioners checked almost every
                                      box on the Forms 12153, with a statement ‘‘SEE ATTACHED
                                      PAGES’’. Petitioners thereby indicated that they (1) requested
                                      an installment agreement or an offer-in-compromise as a
                                      collection alternative, (2) requested subordination, discharge,
                                      or withdrawal of the lien, and (3) indicated that other
                                      grounds for disagreement with the filing of the lien notices
                                      and levy notices were set forth in the attachments to the
                                           1 Section   references are to the Internal Revenue Code.




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                                      forms. Petitioners had obtained the attachment from the Web
                                      site of an organization with a history of promoting frivolous
                                      arguments and activities that delay or impede the adminis-
                                      tration of the Federal tax laws. Each attachment lists 23
                                      boilerplate items of which, 21 were checked and 2 were
                                      unchecked. The list was printed from the Web site that way;
                                      i.e., the 21 items were not checked by petitioners. By the
                                      checked items, petitioners, inter alia, (1) purported to assert
                                      that collection action would place an undue hardship on
                                      them and they requested collection alternatives; (2) pur-
                                      ported to assert that they qualified for subordination and
                                      requested that the notice of lien be withdrawn; and (3) pur-
                                      ported not to have received notices of deficiency for the
                                      assessed income taxes or the section 6702 penalty and had
                                      not otherwise had an opportunity to contest the tax liabilities
                                      and requested reconsideration of the income tax deficiencies
                                      and the section 6702 penalty. The checked items also pur-
                                      ported to withdraw any constitutional, moral, political, reli-
                                      gious, or conscientious arguments that petitioners might pre-
                                      viously have made and withdrew any legal positions that are
                                      classified and published by the IRS as frivolous or groundless,
                                      including any arguments that the courts have determined
                                      are frivolous or groundless.
                                         A settlement officer in the Appeals Office sent petitioners
                                      a boilerplate Letter 4380, Appeals Received Your Request for
                                      a Collection Due Process and/or Equivalent Hearing,
                                      addressing statements in their requests for a hearing related
                                      to unpaid Federal income tax liabilities for 2000, 2001, and
                                      2002 and the section 6702 penalty for 2007 (the SO Letter
                                      4380). The settlement officer stated that he had reviewed
                                      petitioners’ requests for a hearing and determined that their
                                      disagreement was either (1) a specified frivolous position
                                      identified by the IRS in Notice 2008–14, 2008–1 C.B. 310, or
                                      (2) a frivolous reason not specified in Notice 2008–14, supra,
                                      but reflecting a desire to delay or impede Federal tax
                                      administration, or (3) a moral, religious, political, constitu-
                                      tional, conscientious, or similar objection reflecting a desire
                                      to delay or impede Federal tax administration (collectively,
                                      the frivolous issues). The settlement officer did not specify
                                      which statements or individual grounds listed in petitioners’
                                      requests or the attachments thereto were frivolous issues or
                                      otherwise identify anything in the request, the attachment,




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                                      (356)                    THORNBERRY v. COMMISSIONER                                           359


                                      petitioners’ administrative file, or petitioners’ conduct that
                                      reflected a desire to delay or impede Federal tax administra-
                                      tion. The SO Letter 4380 informed petitioners that they
                                      could amend their hearing requests by withdrawing the
                                      frivolous issues and raising any legitimate issues. The SO
                                      Letter 4380 stated that legitimate issues include:
                                      • Collection alternatives to levy such as full payment of the liability,
                                      installment agreement, or offer-in-compromise. Although they may not nec-
                                      essarily be considered an ‘‘alternative’’ to a notice of lien filing, these
                                      collection options may also be discussed at a lien hearing.
                                      • Challenges to the appropriateness of collection action. If this is a lien
                                      hearing, you may ask us to determine if the notice of lien filing was appro-
                                      priate and if you qualify for a lien withdrawal or other lien options, such
                                      as subordination.
                                      •    Spousal defenses, when applicable.
                                      • Liability challenges, i.e., whether you owe the amount due, but only if
                                      you did not receive a statutory notice of deficiency or have not otherwise
                                      had an opportunity to dispute your liability with Appeals.

                                         The settlement officer requested that, within 30 days of the
                                      date of the SO Letter 4380, petitioners either (1) amend their
                                      requests in writing to state a legitimate issue and withdraw
                                      the frivolous issues or (2) withdraw their entire hearing
                                      requests. He informed petitioners that, if they submitted a
                                      legitimate reason for their dispute, he would send a con-
                                      ference letter scheduling their hearing, in which case he
                                      would need (1) a completed Form 433–A, Collection Informa-
                                      tion Statement for Wage Earners and Self-Employed Individ-
                                      uals (collection information statement), with proof of income
                                      and expenses and (2) their Federal income tax returns for
                                      2006 and 2007.
                                         The settlement officer warned petitioners that if they did
                                      not withdraw the frivolous issues and submit legitimate
                                      ones, he would disregard their hearing requests and return
                                      their case to the IRS collection office that had referred it to
                                      Appeals and the IRS could impose a $5,000 penalty pursuant
                                      to section 6702(b). Finally, the settlement officer advised
                                      petitioners that ‘‘if Appeals disregards your CDP hearing, you
                                      will not be able to file with the Tax Court for a judicial
                                      review of our disregard determination.’’
                                         Petitioners responded to the SO Letter 4380 in a letter in
                                      which they asserted that they had raised legitimate issues,




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                                      none of which were frivolous, and stated that they did not
                                      withdraw any of their numerous grounds for requesting a
                                      hearing.
                                        A team manager in the Appeals Office sent petitioners two
                                      boilerplate letters titled ‘‘Appeals is disregarding your
                                      request for a Collection Due Process and/or Equivalent
                                      Hearing’’ (collectively, the determination letters). The first,
                                      dated December 7, 2009, addressed petitioners’ request for a
                                      hearing regarding the unpaid Federal income tax liabilities
                                      for 2000, 2001, and 2002. The second, dated December 17,
                                      2009, addressed the hearing request regarding the section
                                      6702 penalty for 2007 and was in all other respects identical
                                      to the December 7 letter.
                                        The determination letters stated that petitioners did not
                                      respond to the SO Letter 4380 with a legitimate reason or
                                      withdraw the frivolous issues within the specified timeframe.
                                      The determination letters again listed the legitimate issues
                                      that could be raised in a hearing that were previously set
                                      forth in the SO Letter 4380. The determination letters
                                      informed petitioners that, under the authority of section
                                      6330(g), the Appeals Office was disregarding their request for
                                      an administrative hearing because it had determined that
                                      their disagreement is:
                                      • a ‘‘specified frivolous position’’, identified by the IRS in Notice 2008–14
                                      (for Notice 2008–14, refer to the IRS Internet website at http://
                                      www.irs.gov/newsroom/article/0..id=177519,00.html); or
                                      • a reason that is not a ‘‘specified frivolous position,’’ but is a frivolous
                                      reason reflecting a desire to delay or impede federal tax administration; or
                                      • a moral, religious, political, constitutional, conscientious, or similar
                                      objection to the imposition or payment of federal taxes that reflects a
                                      desire to delay or impede the administration of federal tax laws.

                                      The determination letters stated that the Appeals Office was
                                      returning petitioners’ requests to the IRS collection office and
                                      that ‘‘Collection may proceed with collection action as if the
                                      hearing request was never submitted.’’ The determination
                                      letters did not specify which statements or individual
                                      grounds listed in petitioners’ requests or the attachments
                                      thereto were frivolous issues or otherwise identify anything
                                      in the request, the attachment, or petitioners’ administrative
                                      file or conduct that reflected a desire to delay or impede Fed-
                                      eral tax administration.




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                                      (356)                    THORNBERRY v. COMMISSIONER                                           361


                                         Petitioners timely filed their petition under section
                                      6330(d)(1) seeking review of the determination that the IRS
                                      collection office could proceed with collection. They assert
                                      that they were denied a proper hearing under section 6330.
                                      Petitioners resided in Florida when they filed their petition.
                                         Respondent filed the motion to dismiss for lack of jurisdic-
                                      tion on the ground that the Appeals Office has made no
                                      determination concerning collection action or any other deter-
                                      mination that would confer jurisdiction on this Court with
                                      respect to petitioners’ taxable years 2000, 2001, 2002, and
                                      2007. Respondent contends that the Appeals Office deter-
                                      mined that all of petitioners’ requests for an administrative
                                      hearing met the requirements of section 6702(b)(2)(A)(i) or
                                      (ii) and, pursuant to section 6330(g), treated the requests as
                                      if they were never submitted. Respondent further contends
                                      that a determination under section 6330(g) is not subject to
                                      any review by this Court.

                                                                                Discussion
                                      I. Collection Procedures Generally
                                        Section 6321 imposes a lien in favor of the United States
                                      upon all property and rights to property belonging to a per-
                                      son who is liable for Federal taxes and neglects or refuses to
                                      pay them after demand for payment has been made. If a tax-
                                      payer liable for Federal taxes fails to pay the taxes within 10
                                      days after notice and demand, the Secretary may collect the
                                      tax by levy on the taxpayer’s property. Sec. 6331.
                                        Section 6320(a)(1) requires the Secretary to give a taxpayer
                                      written notice that a tax lien has been filed upon that tax-
                                      payer’s property (lien notice). Section 6330(a)(1) requires the
                                      Secretary to give a taxpayer written notice that the Commis-
                                      sioner intends to levy upon the taxpayer’s property (levy
                                      notice). The notices must inform the taxpayer of the right to
                                      request a hearing in the Appeals Office (the administrative
                                      hearing). Secs. 6320(a)(3)(B), (b)(1), 6330(a)(3)(B), (b)(1).
                                        The taxpayer must make a timely request for an adminis-
                                      trative hearing in response to a lien or levy notice, stating
                                      the grounds for the requested hearing. Secs. 6320(a)(3)(B),
                                      (b)(1), 6330(a)(3)(B), (b)(1). Upon request, the taxpayer is
                                      entitled to a fair hearing conducted by an impartial officer




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                                      from the Appeals Office. Secs. 6320(b), 6330(b); Mason v.
                                      Commissioner, 132 T.C. 301, 315 (2009).
                                         During the administrative hearing the Appeals officer is
                                      required by statute to verify that the requirements of any
                                      applicable law or administrative procedure have been met,
                                      sec. 6330(c)(1), (3), and must do so regardless of whether the
                                      taxpayer raised it at the hearing, Hoyle v. Commissioner, 131
                                      T.C. 197, 200–203 (2008). During the administrative hearing
                                      the taxpayer may raise any relevant issue, including appro-
                                      priate spousal defenses, challenges to the appropriateness of
                                      collection actions, and collection alternatives. Sec.
                                      6330(c)(2)(A). The taxpayer may raise challenges to the exist-
                                      ence or amount of the underlying tax liability if he/she did
                                      not receive a notice of deficiency for that liability or did not
                                      otherwise have an opportunity to dispute it. Sec.
                                      6330(c)(2)(B).
                                         However, the taxpayer may not raise an issue that meets
                                      either of the requirements of section 6702(b)(2)(A)(i) or (ii);
                                      i.e., is based on a position which the Secretary has identified
                                      as frivolous under section 6702(c) or reflects a desire to delay
                                      or impede the administration of Federal tax laws. Sec.
                                      6330(c)(4)(B). If the Appeals officer determines that any por-
                                      tion of the taxpayer’s request for a hearing meets a section
                                      6702(b)(2)(A)(i) or (ii) requirement, he may treat that portion
                                      as if it were never submitted. Sec. 6330(g).
                                         After the administrative hearing is completed, the Appeals
                                      Office issues a written notice of determination indicating
                                      whether the notice of Federal tax lien should remain and/or
                                      whether the proposed levy may proceed. Sec. 6330(c)(3);
                                      secs. 301.6320–1(e)(3), Q&A–E8, 301.6330–1(e)(3), Q&A–E8,
                                      Proced. & Admin. Regs. The Appeals officer must base his
                                      determination on the verification that all legal and proce-
                                      dural requirements have been followed, the issues properly
                                      raised by the taxpayer had been addressed, and whether any
                                      proposed collection action balances the need for the efficient
                                      collection of taxes with the taxpayer’s legitimate concern that
                                      any collection action be no more intrusive than necessary.
                                      Sec. 6330(c)(3).
                                         The taxpayer may, within 30 days of a determination made
                                      by the Appeals Office under section 6330, appeal that deter-
                                      mination to the Tax Court, and the Court will have jurisdic-




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                                      (356)                    THORNBERRY v. COMMISSIONER                                           363


                                      tion with respect to the matter. Sec. 6330(d)(1); sec.
                                      301.6330–1(f)(1), Proced. & Admin. Regs.
                                         Where the validity of the underlying tax liability is at
                                      issue in a collection review proceeding, the Court will review
                                      that issue de novo. Hoyle v. Commissioner, supra; Davis v.
                                      Commissioner, 115 T.C. 35, 39 (2000). Generally, we review
                                      other issues regarding the collection action determined by
                                      the Appeals Office for abuse of discretion. Goza v. Commis-
                                      sioner, 114 T.C. 176 (2000). However, section 6330(g) pro-
                                      vides the following limitation on the scope of the Court’s
                                      review:
                                      Notwithstanding any other provision of this section, if the Secretary deter-
                                      mines that any portion of a request for a hearing under this section or sec-
                                      tion 6320 meets the requirement of clause (i) or (ii) of section 6702(b)(2)(A),
                                      then the Secretary may treat such portion as if it were never submitted
                                      and such portion shall not be subject to any further administrative or
                                      judicial review. [Emphasis added.]

                                      Thus, pursuant to section 6330(g), if the Appeals Office
                                      determined that a portion of the taxpayer’s request for the
                                      hearing is based on a position identified by the Secretary as
                                      frivolous under section 6702(c) or reflects a desire to delay or
                                      impede the administration of Federal tax laws and treated
                                      that portion as if it were never submitted, the Court may not
                                      review that portion of the request.
                                      II. Jurisdiction
                                         Respondent contends that the Court must dismiss this case
                                      for lack of jurisdiction on the ground respondent has made
                                      no determination concerning collection action or any other
                                      determination that would confer jurisdiction on this Court
                                      with respect to petitioners’ taxable years 2000, 2001, 2002,
                                      and 2007. Respondent also contends that the determination
                                      letters, titled ‘‘Appeals is disregarding your request for a
                                      Collection Due Process and/or Equivalent Hearing’’, are not
                                      determinations that would confer jurisdiction on this Court.
                                         Our jurisdiction under section 6330(d)(1) depends upon the
                                      issuance of a valid notice of determination and a timely peti-
                                      tion for review. Sarrell v. Commissioner, 117 T.C. 122, 125
                                      (2001); Offiler v. Commissioner, 114 T.C. 492, 498 (2000);
                                      Goza v. Commissioner, supra at 182. When the Appeals
                                      Office has issued a decision letter to the taxpayer in response




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                                      to a timely request for a hearing, the ‘‘decision’’ regarding the
                                      collection action reflected in the decision letter may be a
                                      ‘‘determination’’ for purposes of section 6330(d)(1). Craig v.
                                      Commissioner, 119 T.C. 252, 259 (2002); Lunsford v.
                                      Commissioner, 117 T.C. 159, 164 (2001). The name or label
                                      of a document does not control whether the document con-
                                      stitutes a determination, and a written notice to proceed with
                                      the collection action may constitute a determination confer-
                                      ring jurisdiction on this Court under section 6330(d)(1).
                                      Lunsford v. Commissioner, supra at 164; see also Craig v.
                                      Commissioner, supra at 259 (a form decision letter issued
                                      after an ‘‘equivalent hearing’’ constituted a determination
                                      conferring jurisdiction under section 6330(d)(1)).
                                         Petitioners timely requested a hearing in response to the
                                      lien notices and the levy notices pursuant to sections
                                      6320(a)(3)(B) and 6330(a)(3)(B), and the Appeals Office
                                      issued the determination letters to petitioners in response to
                                      their requests for a hearing. The Appeals Office stated in
                                      those letters that ‘‘Collection may proceed with the collection
                                      action’’; i.e., the IRS collection office could proceed with the
                                      proposed levy to collect petitioners’ unpaid Federal income
                                      taxes for 2000, 2001, and 2002 and the section 6702 penalty
                                      for 2007 and the notice of Federal tax lien should remain for
                                      those unpaid liabilities.
                                         The fact that determination letters were titled ‘‘Appeals is
                                      disregarding your request for a Collection Due Process and/
                                      or Equivalent Hearing’’, rather than ‘‘Notice of Determina-
                                      tion’’, does not negate the fact that petitioners received a
                                      ‘‘determination’’ within the meaning of section 6330(d)(1).
                                      The different names assigned to the documents are merely a
                                      distinction without a difference when it involves our jurisdic-
                                      tion to review the determination after a hearing was timely
                                      requested. Craig v. Commissioner, supra at 258.
                                         Respondent asserts that the Appeals Office determined
                                      that petitioners’ entire request for an administrative hearing
                                      met the requirements of section 6702(b)(2)(A)(i) or (ii) and,
                                      pursuant to section 6330(g), treated the request as if it were
                                      never submitted. Essentially, respondent’s position is that
                                      because the Appeals Office treated petitioners’ request in toto
                                      as if it were never submitted, the determination to proceed
                                      with collection was not in response to a request for an
                                      administrative hearing. Respondent asserts that the Appeals




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                                      (356)                    THORNBERRY v. COMMISSIONER                                           365


                                      Office’s determination regarding petitioners’ request is not
                                      subject to any judicial review by this Court pursuant to sec-
                                      tion 6330(g).
                                         We have jurisdiction to determine whether we have juris-
                                      diction. Cooper v. Commissioner, 135 T.C. 70 (2010);
                                      Hambrick v. Commissioner, 118 T.C. 348 (2002); Pyo v.
                                      Commissioner, 83 T.C. 626, 632 (1984); Kluger v. Commis-
                                      sioner, 83 T.C. 309, 314 (1984).
                                         Section 6330 was amended to add subsection (g) and sub-
                                      section (c)(4)(B) by the Tax Relief and Health Care Act of
                                      2006, Pub. L. 109–432, div. A, sec. 407, 120 Stat. 2960, in
                                      conjunction with the amendment of section 6702 to increase
                                      the penalty for filing frivolous returns from $500 to $5,000
                                      and to impose a new $5,000 penalty on specified frivolous
                                      submissions. The legislative history, S. Rept. 109–336, at 49–
                                      50 (2006), explains:
                                                                                PRESENT LAW
                                        The Code provides that an individual who files a frivolous income tax
                                      return is subject to a penalty of $500 imposed by the IRS. 58 The Code also
                                      permits the Tax Court 59 to impose a penalty of up to $25,000 if a taxpayer
                                      has instituted or maintained proceedings primarily for delay or if the tax-
                                      payer’s position in a proceeding is frivolous or groundless. 60
                                                                        REASONS FOR CHANGE
                                         The Committee believes that frivolous returns and submissions consume
                                      resources at the IRS and in the courts that can better be utilized in
                                      resolving legitimate disputes with taxpayers. Expanding the scope of the
                                      penalty to cover all taxpayers and tax returns promotes fairness in the tax
                                      system. The Committee believes that adopting this provision will improve
                                      effective tax administration.
                                                                     EXPLANATION OF PROVISION
                                         The provision modifies the penalty on frivolous returns by increasing the
                                      amount of the penalty to up to $5,000 and by applying it to all taxpayers
                                      and to all types of Federal taxes.
                                         The provision also modifies present law with respect to certain submis-
                                      sions that raise frivolous arguments or that are intended to delay or
                                      impede tax administration. The submissions to which the provision applies
                                      are requests for a collection due process hearing, installment agreements,
                                      offers-in-compromise, and taxpayer assistance orders. First, the provision
                                      permits the IRS to disregard such requests. Second, the provision permits
                                      the IRS to impose a penalty of up to $5,000 for such requests, unless the
                                      taxpayer withdraws the request after being given an opportunity to do so.




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                                        The provision requires the IRS to publish a list of positions, arguments,
                                      requests, and submissions determined to be frivolous for purposes of these
                                      provisions.
                                                                            EFFECTIVE DATE
                                        The provision applies to submissions made and issues raised after the
                                      date on which the Secretary first prescribes the required list of frivolous
                                      positions.
                                           58 Sec.
                                                6702.
                                           59 Because
                                                    the Tax Court is the only pre-payment forum available to tax-
                                      payers, it addresses most of the frivolous, groundless, or dilatory argu-
                                      ments raised in tax cases.
                                        60 Sec. 6673(a).


                                         Section 6702(b) imposes a $5,000 penalty on any person
                                      who submits a ‘‘specified submission’’ that constitutes a
                                      ‘‘specified frivolous submission’’. Specified submissions
                                      include requests for an administrative hearing under sections
                                      6320 and 6330 and applications for an installment agreement
                                      under section 6159, an offer-in-compromise under section
                                      7122, or a taxpayer assistance order under section 7811. Sec.
                                      6702(b)(2)(B). A specified submission is a ‘‘specified frivolous
                                      submission’’ if any portion of the submission (i) is based on
                                      a position which the Secretary has identified as frivolous
                                      under section 6702(c) or (ii) reflects a desire to delay or
                                      impede the administration of Federal tax laws. Sec.
                                      6702(b)(2)(A). Section 6702(c) requires the Secretary to pre-
                                      scribe and periodically revise a list of positions which the
                                      Secretary has identified as being frivolous for purposes of
                                      section 6702(c).
                                         Section 6702(b)(3) provides a taxpayer who has submitted
                                      a specified frivolous submission the opportunity to avoid the
                                      imposition of the $5,000 penalty by withdrawing the submis-
                                      sion within 30 days after the Secretary provides the taxpayer
                                      with notice that the submission is a specified frivolous
                                      submission. If the request is not withdrawn, the IRS will
                                      assess the penalty imposed by section 6702(b) and may do so
                                      without issuing a statutory notice of deficiency. Sec. 6703(b).
                                      Because the taxpayer does not receive a statutory notice of
                                      deficiency before a penalty under section 6702(b) is assessed,
                                      the taxpayer may challenge his liability for the penalty in an




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                                      (356)                    THORNBERRY v. COMMISSIONER                                           367


                                      administrative hearing under section 6320 or 6330. 2
                                      Callahan v. Commissioner, 130 T.C. 44, 49–50 (2008). In any
                                      proceeding involving the issue of whether any person is liable
                                      for a penalty under section 6702, the Secretary has the bur-
                                      den of proof with respect to that issue. Sec. 6703(a).
                                         Sections 6702(b) and 6330(g) were enacted together and
                                      should be interpreted and applied in pari materia. See
                                      Espinosa v. Commissioner, 107 T.C. 146, 152–153 (1996).
                                      Section 6703(a) provides that in any proceeding involving the
                                      issue of whether any person is liable for a penalty under sec-
                                      tion 6702, the Secretary has the burden of proof with respect
                                      to that issue. In such a proceeding, the Secretary has the
                                      burden of proving that a portion of the submission is based
                                      on a position identified by the Secretary as frivolous under
                                      section 6702(c) or reflects a desire to delay or impede the
                                      administration of Federal tax laws. Section 6703(a) clearly
                                      contemplates judicial review of a determination by the
                                      Appeals Office that a specified submission, including a
                                      request for an administrative hearing under sections 6320
                                      and 6330, is a specified frivolous submission. Consequently,
                                      while section 6330(g) prohibits judicial review of the portion
                                      of a request for an administrative hearing that the Appeals
                                      Office determined is based on an identified frivolous position
                                      or reflects a desire to delay, it does not prohibit judicial
                                      review of that determination by the Appeals Office.
                                         If the Appeals Office determines that a portion of the tax-
                                      payer’s request for an administrative hearing is based on a
                                      position identified by the Secretary as frivolous under section
                                      6702(c) or reflects a desire to delay or impede the adminis-
                                      tration of Federal tax laws and issues a notice of determina-
                                      tion to proceed with collection and the taxpayer timely peti-
                                      tions for review, we have jurisdiction under section
                                      6330(d)(1) to review the determination. If we sustain that
                                      determination, we may not further review the frivolous por-
                                      tion of the taxpayer’s request.
                                         Thus, we have jurisdiction in this case to decide whether
                                      the Appeals Office determined that all portions of petitioners’
                                      requests for an administrative hearing meet the require-
                                         2 Alternatively, a taxpayer who has paid all or a requisite portion of the penalty may challenge

                                      it in a refund suit.




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                                      ments of clause (i) or (ii) of section 6702(b)(2)(A) and properly
                                      treated the entire request as if it were never submitted.
                                         Section 6330(g) permits the Secretary to treat only that
                                      portion of a request for an administrative hearing that is
                                      based on a position which the Secretary has identified as
                                      frivolous under section 6702(c) 3 or reflects a desire to delay
                                      or impede the administration of Federal tax laws as if it had
                                      not been submitted.
                                         Effective for petitioners’ request for an administrative
                                      hearing, the list of positions the Secretary has identified as
                                      frivolous for purposes of section 6702(c) is published in
                                      Notice 2008–14, supra. 4 In addition to the Secretary’s list of
                                      frivolous positions, Notice 2008–14, 2008–1 C.B. at 313,
                                      states:
                                        Returns or submissions that contain positions not listed above, which on
                                      their face have no basis for validity in existing law, or which have been
                                      deemed frivolous in a published opinion of the United States Tax Court or
                                      other court of competent jurisdiction, may be determined to reflect a desire
                                      to delay or impede the administration of Federal tax laws and thereby sub-
                                      ject to the $5,000 penalty.

                                         Section 6330(g) requires that before the Appeals Office
                                      may treat a portion of the request as if it had not been sub-
                                      mitted, an Appeals officer must make a specific determina-
                                      tion that a portion of a taxpayer’s request for a hearing
                                      either is based on a position listed in Notice 2008–14, supra,
                                      or reflects a desire to delay or impede the administration of
                                      Federal tax laws. If the Appeals officer makes such a deter-
                                      mination, it will notify the taxpayer of the specific deter-
                                      mination; and judicial review of the portion of the request
                                      specifically determined to be frivolous or reflecting a desire
                                      to delay or impede the administration of Federal tax laws
                                      will be prohibited.
                                         If a taxpayer submits a request for an administrative
                                      hearing pursuant to section 6320 or 6330 and the Appeals
                                         3 The importance of the Secretary’s identifying the frivolous positions and publishing the list

                                      of those positions cannot be overstated. Indeed, Congress specifically delayed the effective date
                                      of secs. 6702(b) and 6330(g) until after the date on which the Secretary first prescribed the re-
                                      quired list of frivolous positions.
                                         4 The Secretary first published the list on Mar. 16, 2007, in Notice 2007–30, 2007–1 C.B. 883,

                                      effective for submissions made between Mar. 16, 2007, and Jan. 14, 2008. In accordance with
                                      sec. 6702(c), the Secretary revised the list in Notice 2008–14, 2008–1 C.B. 310, effective for sub-
                                      missions made between Jan. 15, 2008, and Apr. 7, 2010, and again in Notice 2010–33, 2010–
                                      17 I.R.B. 609, effective for submissions made after Apr. 7, 2010. Notice 2008–14, supra, was in
                                      effect when petitioners submitted their requests for an administrative hearing.




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                                      Office determines that a portion of the request is based on
                                      a position identified by the Secretary as frivolous under sec-
                                      tion 6702(c) or reflects a desire to delay or impede the
                                      administration of Federal tax laws, the Appeals Office must
                                      notify the taxpayer of that determination before assessing
                                      the $5,000 penalty imposed by section 6702(b). The taxpayer
                                      may then avoid the penalty by withdrawing the frivolous or
                                      desire-to-delay portion of the request. The ability to with-
                                      draw the offending portion of a request for an administrative
                                      hearing under section 6320 or 6330 is crucial because the
                                      request must be timely. Thus, the notification should provide
                                      enough information to allow the taxpayer to identify the por-
                                      tion or portions of the request that need to be withdrawn.
                                         A taxpayer who is notified that a portion of the request is
                                      based on a position identified by the Secretary as frivolous
                                      under section 6702(c) can easily identify the offending por-
                                      tion by reference to the Secretary’s published list. However,
                                      a taxpayer who is notified that an unspecified portion of the
                                      request, while not based on a published frivolous position,
                                      reflects a desire to delay or impede the administration of
                                      Federal tax laws may not be able to identify and withdraw
                                      that portion without further explanation.
                                         Here the parties’ use of boilerplate forms has undermined
                                      the purposes of sections 6330(g) and 6702(b). Petitioners
                                      were required to set forth their grounds for the issues they
                                      wished to raise at their administrative hearing. Instead, they
                                      attached a prechecked laundry list of items they obtained
                                      from the Web site of an organization known to promote frivo-
                                      lous arguments and activities that delay or impede the
                                      administration of Federal tax laws. While some items may
                                      apply to petitioners’ case, many do not, and some read as gib-
                                      berish.
                                         On the other hand, the settlement officer was required to
                                      make a specific determination that portions of petitioners’
                                      requests for a hearing either are based on positions listed in
                                      Notice 2008–14, supra, or reflect a desire to delay or impede
                                      the administration of Federal tax laws. The boilerplate deter-
                                      mination letters sent to petitioners stated that the Appeals
                                      Office had determined that petitioners’ disagreement was:




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                                      • a ‘‘specified frivolous position’’, identified by the IRS in Notice 2008–14
                                      (for Notice 2008–14, refer to the IRS Internet website at http://
                                      www.irs.gov/newsroom/article/0..id=177519,00.html); or
                                      • a reason that is not a ‘‘specified frivolous position,’’ but is a frivolous
                                      reason reflecting a desire to delay or impede federal tax administration; or
                                      • a moral, religious, political, constitutional, conscientious, or similar
                                      objection to the imposition or payment of federal taxes that reflects a
                                      desire to delay or impede the administration of federal tax laws.

                                         However, petitioners did not raise in their requests any
                                      ‘‘specified frivolous position’’ identified by the IRS in Notice
                                      2008–14, supra, nor did they raise any moral, religious, polit-
                                      ical, constitutional, conscientious, or similar objection.
                                      Indeed, the attachments stated that petitioners specifically
                                      withdrew any constitutional, moral, political, religious, or
                                      conscientious arguments that they may have previously
                                      made and any legal positions that are classified and pub-
                                      lished by the IRS as frivolous or groundless, including any
                                      arguments that the courts have determined are frivolous or
                                      groundless.
                                         Moreover, petitioners raised issues in their requests
                                      similar to those that the determination letters specified were
                                      legitimate issues that could be raised. The legitimate issues
                                      included collection alternatives to levy, including an install-
                                      ment agreement or an offer-in-compromise. Petitioners
                                      requested an installment agreement and an offer-in-com-
                                      promise as collection alternatives on page 2 of their requests
                                      and in the attachments to the requests. They agreed to pro-
                                      vide the requested financial information and to obey the tax
                                      laws.
                                         The legitimate issues also included challenges to the
                                      appropriateness of collection action. Petitioners asserted that
                                      collection action was inappropriate and that collection would
                                      be intrusive and place an undue hardship on them. The
                                      determination letters stated that in a lien hearing legitimate
                                      issues included requests that the settlement officer deter-
                                      mine whether the notice of lien filing was appropriate and
                                      whether petitioners qualified for a lien withdrawal or other
                                      lien options, such as subordination. In the attachments, peti-
                                      tioners requested that the notice of lien be withdrawn and
                                      asserted they qualified for subordination.
                                         The determination letters specified that legitimate issues
                                      also included challenges to the underlying tax liability, but




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                                      only if petitioners had not received a statutory notice of defi-
                                      ciency or otherwise had an opportunity to dispute their liabil-
                                      ities with Appeals. In the attachment, petitioners stated that
                                      they did not receive a notice of deficiency, that they had not
                                      otherwise had an opportunity to contest the liabilities, and
                                      that they wanted to do so in a ‘‘CDP hearing’’. They requested
                                      a reconsideration of the deficiency and agreed to furnish com-
                                      pleted forms and file what the law requires.
                                         Petitioners stated in the attachments that they had not
                                      received a notice of deficiency for the assessment of the sec-
                                      tion 6702 penalty. They asserted that they had not otherwise
                                      had an opportunity to contest the liabilities and that they
                                      wanted to do so in a ‘‘CDP hearing’’. As we previously
                                      observed, deficiency procedures do not apply to the section
                                      6702 penalty. Sec. 6703(b); see sec. 6330(c)(2)(B). Because no
                                      notice of deficiency was sent with respect to the section 6702
                                      penalty, Mr. Thornberry was entitled to contest the assessed
                                      penalty at a hearing. See, e.g., Blaga v. Commissioner, T.C.
                                      Memo. 2010–170; Rice v. Commissioner, T.C. Memo. 2009–
                                      169. Consequently, he could properly assert that ground in
                                      his request for a hearing.
                                         The determination letters do not specifically identify any
                                      statement in petitioners’ requests or any paragraph in the
                                      attachment that reflects a desire to delay or impede Federal
                                      tax administration. The determination letters do not explain
                                      the basis upon which the Appeals Office determined that
                                      petitioners’ requests reflect a desire to delay or impede Fed-
                                      eral tax administration. We think that it was improper for
                                      the Appeals Office to treat those portions of petitioners’
                                      requests that set forth issues identified as legitimate in the
                                      determination letters as if they were never submitted with-
                                      out explaining how the requests reflect a desire to delay or
                                      impede Federal tax administration.
                                         Respondent argues that the Appeals Office properly dis-
                                      regarded petitioners’ requests because petitioners obtained
                                      the attachment from the Web site of an organization that
                                      advocates tax avoidance activities as well as the frustration
                                      and delay of the IRS’ efforts to collect taxes. However, neither
                                      the SO Letter 4380 nor the determination letters make any
                                      reference to the source of the attachments to petitioners’
                                      requests, nor do they inform petitioners of the reason the




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                                      attachment reflects an intent merely to delay the collection
                                      of the tax.
                                         We think some of the grounds set forth in the attachments
                                      apply to petitioners and fall within the legitimate reasons set
                                      forth in the SO Letter 4380; e.g., petitioners properly may
                                      raise challenges to the section 6702 penalty, which was
                                      assessed without the issuance of a notice of deficiency. On its
                                      face the SO Letter 4380 was contradictory and did not iden-
                                      tify the portions of the request that needed to be withdrawn.
                                      The letter did not advise petitioners to withdraw those por-
                                      tions of the request that did not apply to their case; e.g., that
                                      the notice of filing of the notice of tax lien was not sent
                                      within 5 days of filing the notice of tax lien. The SO Letter
                                      4380 did not explain why the otherwise legitimate reasons
                                      did not apply in petitioners’ case; e.g., whether the settle-
                                      ment officer verified that notices of deficiency were properly
                                      mailed to petitioners’ last known address and were not
                                      returned undelivered to the IRS.
                                         We are unable to ascertain from the SO Letter 4380 and
                                      the determination letters the basis for the settlement officer’s
                                      determination that petitioners’ requests for an administra-
                                      tive hearing to contest the lien notices and the levy to collect
                                      their unpaid income taxes reflect an intent or a desire to
                                      delay or impede the administration of Federal tax laws.

                                                                                Conclusion
                                         The delay in resolving this case has been caused by both
                                      parties’ using boilerplate ‘‘one size fits all’’ forms. Thus, in
                                      these circumstances, this Court has jurisdiction, and
                                      respondent’s motion to dismiss for lack of jurisdiction will be
                                      denied. For the reasons stated herein, we conclude that the
                                      settlement officer could not treat petitioners’ entire request
                                      as if it were never submitted. Section 6330(g) requires the
                                      Appeals Office to determine the specific portions of peti-
                                      tioners’ request for a hearing that are regarded as frivolous
                                      or reflect a desire to delay or impede the administration of
                                      Federal tax laws, leaving for hearing only the legitimate and
                                      bona fide issues petitioners raised. The Appeals Office has
                                      not yet done this. Petitioners, on the other hand, have set
                                      forth in their administrative hearing request a litany of
                                      recitations lifted from an Internet Web site, many of which




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                                      tend to show an attempt to delay or impede the administra-
                                      tion of Federal tax laws. We have in this Opinion notified
                                      petitioners that merely attaching a list downloaded from the
                                      Internet that includes grounds that clearly do not apply to
                                      their case without identifying specific issues and grounds rel-
                                      evant to their hearing request does not satisfy the require-
                                      ments of sections 6320(b)(1) and 6330(b)(1). Accordingly, the
                                      Court will require petitioners to identify the specific issues
                                      and the grounds they wish to raise before taking further
                                      action in this case.
                                         To reflect the foregoing,
                                                                                 An appropriate order will be issued.

                                                                               f




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