                        T.C. Memo. 2010-10



                      UNITED STATES TAX COURT



                RONALD E. MUELLER, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 10223-08L.             Filed January 14, 2010.



     Ronald E. Mueller, pro se.

     Adam L. Flick, for respondent.



                        MEMORANDUM OPINION


     PARIS, Judge:   On April 2, 2008, respondent mailed to

petitioner a Notice of Determination Concerning Collection

Action(s) Under Section 6320 and/or 6330 (notice of

determination) regarding petitioner’s 2003 income tax liability.

In response to that notice, and pursuant to sections 6320 and
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6330(d)1, petitioner timely petitioned this Court for review of

respondent’s determination that a notice of Federal tax lien

(NFTL) was an appropriate method of collection.   At the time of

filing the petition, petitioner resided in the State of Texas.

     The issue for decision is whether respondent abused his

discretion in upholding the filing of a NFTL.

                            Background

     Petitioner did not file a tax return for tax year 2003;

thus, on March 28, 2005, respondent prepared a substitute for

return for petitioner’s 2003 taxable year under section 6020(b).

On December 7, 2005, respondent mailed a notice of deficiency to

petitioner, determining a deficiency of $44,847.12 and additions

to tax of $10,090.60, $2,466.59, and $1,157.19 under sections

6651(a)(1) and (2) and 6654, respectively.   Petitioner did not

file a petition with this Court in response to the notice of

deficiency for tax year 2003.   On August 28, 2006, respondent

assessed the deficiency and additions to tax, with interest, and

issued petitioner a notice of balance due and demand for payment

of his 2003 tax liabilities.

     On April 27, 2007, respondent filed a notice of Federal tax

lien against petitioner.   On May 2, 2007, respondent mailed a

Notice of Federal Tax Lien Filing and Your Right to a Hearing



     1
      Section references are to the Internal Revenue Code of
1986, as amended.
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Under IRC 6320 to petitioner.    On June 20, 2007, respondent

received a timely filed Form 12153, Request for a Collection Due

Process Hearing (CDP) from petitioner.     In the request,

petitioner contested the underlying tax liability for 2003 by

claiming that he was not required to file a tax return for that

year or pay any amount in income tax, despite receiving several

payments for services performed as the manufacturer of ceramic

dental devices, because the payment of income tax and the

reporting of income are voluntary.

     On October 19, 2007, respondent’s Appeals Office mailed

petitioner a letter requesting that petitioner submit any

information that he wanted considered at his CDP hearing to the

Appeals Office by December 4, 2007.     The Appeals Office later

extended this deadline to February 4, 2008, at petitioner’s

request.   The letter also explained what issues would be

discussed at the meeting and what the Appeals Office would review

in making the determination.    Because petitioner had not filed

income tax returns for tax years 2000 through 2007, the letter

also requested petitioner’s unfiled income tax returns for those

years.

     Petitioner responded to the Appeals Office’s correspondence

on January 31, 2008, with a letter reiterating the grounds stated

in the CDP hearing request for contesting the underlying

liability for 2003.   In that letter petitioner also requested a
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face-to-face CDP hearing, and submitted Internal Revenue Service

(IRS) transcripts, instead of the requested unfiled income tax

returns, for his 2000 through 2003 tax years, but not years 2004

through 2007.   On March 4, 2008, the Appeals Office informed

petitioner by letter that he would not be offered a face-to-face

hearing because petitioner failed to provide requested documents

and had failed to file any tax returns for 2000 through 2007.

The letter informed petitioner that if petitioner did not submit

the requested documents by March 18, 2008, the Appeals Office

would make the determination based solely on the administrative

record.

     Petitioner did not provide any additional information, and

on April 2, 2008, the Appeals Office mailed a notice of

determination to petitioner explaining that because all the

requirements of applicable law and administrative procedure were

met, and because petitioner raised only frivolous arguments and

failed to provide any of the information that the Appeals Office

requested in order to consider any collection alternatives or

other relevant issues, a lien was an appropriate method for

collection.

                            Discussion

     Under section 6321, if a person liable for a tax fails to

pay it after demand, the unpaid amount, including any interest

and additions to tax, becomes a lien in favor of the United
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States “upon all property and rights to property, whether real or

personal, belonging to such person.”    The lien arises when the

tax is assessed.   Sec. 6322.   Section 6323 explains that the IRS

may file a notice of Federal tax lien to protect its lien against

subsequent creditors and purchasers of the taxpayer’s property.

     A taxpayer may appeal the filing of a notice of Federal tax

lien to the IRS under section 6320 by requesting an

administrative hearing.   The taxpayer is afforded the opportunity

for judicial review of a determination sustaining the notice of

Federal tax lien in the U.S. Tax Court pursuant to section

6330(d).   Petitioner has chosen to seek judicial review of

respondent’s determination.

     Petitioner contests the underlying tax liability.    However,

under section 6330(c)(2)(B), a taxpayer may challenge the

existence or amount of the underlying tax liability only if he

did not receive a statutory notice of deficiency for the tax

liability or did not otherwise have an opportunity to dispute the

tax liability.   Respondent sent a notice of deficiency to

petitioner for his 2003 tax year on December 7, 2005.    Petitioner

does not deny receiving the notice of deficiency, and the Court

finds that he did in fact receive it.    Therefore, petitioner is

precluded from challenging the underlying liability for tax year

2003.
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     Petitioner being precluded from challenging the underlying

liability, the Court reviews respondent’s determination to see

whether there has been an abuse of discretion.   See Lunsford v.

Commissioner, 117 T.C. 183, 185 (2001) (citing Nicklaus v.

Commissioner, 117 T.C. 117, 120 (2001)).   The Court has described

the abuse of discretion standard as meaning “arbitrary,

capricious, or without sound basis in fact or law.”   Giamelli v.

Commissioner, 129 T.C. 107, 111 (2007) (citing Woodral v.

Commissioner, 112 T.C. 19, 23 (1999)).   Utilizing this standard,

this Court does not find that respondent’s settlement officer

abused his discretion.   Respondent simply used the available

methods under the Internal Revenue Code for protecting the United

States’ claims against subsequent creditors.   Petitioner was

uncooperative, had not filed any tax returns for tax years 2000

through 2007, and raised only frivolous arguments2, such as

income reporting and payment are voluntary, to contest the

underlying tax liability.




     2
      Petitioner argues that he was not required to file a tax
return for 2003 because he received no income, despite receiving
payments from multiple sources for services performed.
Petitioner also argues that the duty to file a tax return and pay
taxes is voluntary. The requirement to file an income tax return
and pay tax is clearly set forth in the Internal Revenue Code.
These arguments are completely frivolous, and the Court will not
waste any time addressing them further.
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Conclusion

     Based on the record, the Court holds that the Appeals Office

did not abuse its discretion in determining that respondent’s

filing of a NFTL was an appropriate collection action.

     Finally, in reaching the conclusions described herein, the

Court has considered all arguments made, and, to the extent not

mentioned above, finds them to be moot, irrelevant, or without

merit.

     To reflect the foregoing,


                                           Decision will be entered

                                      for respondent.
