                  T.C. Summary Opinion 2010-161



                       UNITED STATES TAX COURT



              TOM J. KUECHENMEISTER, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 19839-09S.              Filed October 27, 2010.



     Tom Kuechenmeister, pro se.

     James L. Gessford, Christina L. Cook, and Jack Forsberg, for

respondent.



     VASQUEZ, Judge:    This case was heard pursuant to the

provisions of section 7463 of the Internal Revenue Code (Code) in

effect when the petition was filed.1   Pursuant to section

7463(b), the decision to be entered is not reviewable by any


     1
        Unless otherwise indicated, all section references are to
the Code, and all Rule references are to the Tax Court Rules of
Practice and Procedure.
                                 - 2 -

other court, and this opinion shall not be treated as precedent

for any other case.

     Pursuant to section 6330(d)(1), petitioner seeks judicial

review of respondent’s determination to proceed with a proposed

levy to collect petitioner’s unpaid Federal income tax

liabilities for 2006 and 2007.    The matter is presently before

the Court on respondent’s motion for summary judgment filed

pursuant to Rule 121 and to impose a penalty under section

6673(a)(1).

     We conclude that there is no genuine issue as to any

material fact, and respondent is entitled to summary judgment as

a matter of law.

     Petitioner resided in South Dakota when the petition was

filed.

                            Background

     In 2006 and 2007 petitioner was a truck driver for A&A

Express, Inc. (A&A Express), working as an independent

contractor.   During that time he received gross receipts totaling

approximately $144,000, an amount reflected on the Forms 1099-

MISC, Miscellaneous Income, A&A Express issued to him.2

Petitioner filed Federal income tax returns for both years and




     2
        Petitioner’s taxable income was $1,709 in 2006 and
$10,463 in 2007.
                               - 3 -

reported taxes owed of $1,794 for 2006 and $4,101 for 2007.3

Although he admits receiving the amounts listed on both Forms

1099-MISC, petitioner has made only one payment towards his 2006

Federal income tax liability ($1,472.67 on June 29, 2007) and has

failed to make any payments towards his 2007 Federal income tax

liability.4

     On January 21, 2009, respondent mailed petitioner a Letter

1058, Final Notice of Intent to Levy and Notice of Your Right to

a Hearing (levy notice).   The levy notice advised petitioner that

respondent intended to levy on petitioner’s property to secure

payment of his outstanding tax liabilities for 2006 and 2007.

The levy notice also explained that petitioner had a right to

request a hearing with respondent’s Office of Appeals (Appeals)

to appeal the proposed collection action and to discuss payment

method options by submitting Form 12153, Request for a Collection

Due Process or Equivalent Hearing.

     Petitioner timely submitted Form 12153, on which he

explained that he disagreed with the proposed levy because the


     3
        Petitioner calculated his tax liability for each year by
using the Form 1099-MISC provided by A&A Express and Schedule C,
Profit or Loss From Business. He also calculated his self-
employment tax for each year and included those amounts on his
2006 and 2007 Federal income tax returns.
     4
        The Internal Revenue Service (IRS) assessed the amounts
reported as owed on petitioner’s 2006 and 2007 Federal income tax
returns along with additions to tax and interest on May 28, 2007,
and June 2, 2008, respectively.
                                - 4 -

“IRS * * * [failed] to provide * * * [a] definition of what

percentage of wages apply to income”.    He also attached a letter

describing the inability of “the 1040 form and others [to]

provide me with correctly determining what my gain is that is

recognized and realized”.

     On April 23, 2009, Appeals mailed petitioner an introductory

letter naming Monica L. Garcia (Ms. Garcia) as the Appeals

officer.   On April 29, 2009, Ms. Garcia sent petitioner a letter

notifying him that she could not schedule his requested

collection due process hearing (CDP hearing) at that time because

his reasons for disagreeing with the intent to levy were

considered frivolous positions.    Petitioner was given 30 days to

either withdraw his request for a CDP hearing or amend it by

including a nonfrivolous argument.

     On May 11, 2009, petitioner mailed two letters to Ms.

Garcia.    The first letter was a Freedom of Information Act

request asking Ms. Garcia to provide petitioner with information

relating to the authority of the IRS to tax him and the

definition of income.5   The second letter was titled “Request for

Hearing” and stated that he desired a CDP hearing based on what




     5
        Specifically, petitioner asked Ms. Garcia to provide him
with: (1) The statute that allows the IRS to tax a U.S. citizen;
(2) the statute that authorizes the IRS “to determine a zero
basis on a citizen’s personal labor”; and (3) the definition of
income (“Not gross income or taxable income, only income”).
                                - 5 -

his true amounts of income were for 2006 and 2007.6   Ms. Garcia

treated petitioner’s second letter as raising a nonfrivolous

issue and sent petitioner a letter scheduling a telephone

conference for July 7, 2009.7

     On June 26, 2009, petitioner mailed Ms. Garcia a letter

informing her that the telephone conference would be unnecessary

because she was not impartial and unbiased.8   Ms. Garcia did not

receive the letter before July 7, 2009, and phoned petitioner as

scheduled.   Petitioner told her that he owed no taxes and that a

hearing was no longer necessary because she was not impartial.

Ms. Garcia again explained to petitioner that his tax liabilities

resulted from the Federal income tax returns he submitted and if

he felt that they were inaccurate, he could amend them.

     On July 10, 2009, Ms. Garcia received a faxed copy of

petitioner’s June 26, 2009, letter, along with a second letter

from petitioner stating that if Ms. Garcia still wanted to have


     6
        Petitioner included with the second letter his January
and December bank statements for 2006 and 2007. Petitioner
concluded that “an accurate accounting of * * * [his] income” is
calculated by subtracting his account balance at the beginning of
the year from his account balance on Dec. 31.
     7
        Ms. Garcia’s letter stated that “The liabilities are
based on self assessed tax returns you filed. To change any
information on your original tax returns, you should file an
amended return on Form 1040X”.
     8
        Petitioner’s letter also included many of the same
frivolous arguments he had previously made, including that he was
not liable for any tax under the Code and respondent inaccurately
measures gain.
                                 - 6 -

the CDP hearing petitioner would participate, but it could take

place no earlier than August 25, 2009.     Petitioner’s second

letter also informed Ms. Garcia that he would not amend his

Federal income tax returns because no Federal income tax returns

were required to be filed in the first place.

      On July 22, 2009, Ms. Garcia mailed petitioner a Notice of

Determination Concerning Collection Action(s) Under Section 6320

and/or 6330 (notice of determination) sustaining the proposed

levy.     The notice of determination stated that petitioner made

arguments that the IRS considered frivolous and refused to amend

his Federal income tax returns when given the opportunity.9

        Petitioner challenged respondent’s notice of determination

by filing a petition containing numerous arguments this Court has

found frivolous.     Respondent subsequently filed a motion for

summary judgment and to impose a penalty under section 6673.

Respondent’s motion was heard on June 7, 2010.

                              Discussion

I.   Summary Judgment

      The purpose of summary judgment is to expedite litigation

and avoid costly, time-consuming, and unnecessary trials.        Fla.



      9
        The notice of determination also stated that Ms. Garcia
had: (1) Verified that respondent had satisfied any applicable
law or procedure with respect to the proposed levy and (2)
balanced the competing interests of efficient collection with
petitioner’s concern that the collection activity be no more
intrusive than necessary.
                                - 7 -

Peach Corp. v. Commissioner, 90 T.C. 678, 681 (1988).     The Court

may grant summary judgment where there is no genuine issue as to

any material fact and a decision may be rendered as a matter of

law.    Rule 121(b); Sundstrand Corp. v. Commissioner, 98 T.C. 518,

520 (1992), affd. 17 F.3d 965 (7th Cir. 1994).

       The party moving for summary judgment bears the burden of

proving that there is no genuine issue of material fact, and all

facts are viewed in the light most favorable to the nonmoving

party.    Dahlstrom v. Commissioner, 85 T.C. 812, 821 (1985).

However, the nonmoving party may not rest on the mere allegations

or denials of the moving party’s pleadings; rather, the nonmoving

party must set forth specific facts showing there is a genuine

issue for trial.    Rule 121(d); Dahlstrom v. Commissioner, supra

at 820-821.

II.    Determination To Proceed With Collection

       Section 6330(a) provides that no levy may be made on any

property of a taxpayer unless the Secretary has first notified

the taxpayer in writing of his right to a section 6330 hearing.

If the taxpayer properly requests a hearing under section

6330(a), the taxpayer is entitled to a hearing before an

impartial Appeals officer.    Sec. 6330(b).   During the hearing the

taxpayer may raise any relevant issue related to the unpaid tax

or proposed levy, including challenges to the appropriateness of

the collection action and offers of collection alternatives.
                               - 8 -

Sec. 6330(c)(2)(A).   The taxpayer may also challenge the

underlying tax liability if the taxpayer did not receive a

statutory notice of deficiency or did not otherwise have a prior

opportunity to dispute the tax liability.     Sec. 6330(c)(2)(B).

     Following the hearing the Appeals officer must determine

whether the proposed collection activity should proceed.     In

making the determination the Appeals officer shall take into

consideration:   (1) Whether the requirements of all applicable

law or administrative procedure have been satisfied; (2) any

relevant issues raised by the taxpayer during the section 6330

hearing; and (3) whether the proposed collection action balances

the need for efficient collection of taxes with the taxpayer’s

legitimate concern that any collection action be no more

intrusive than necessary.   Sec. 6330(c).

     Where the underlying tax liability is properly at issue, the

Court decides the issue of liability de novo.     Sego v.

Commissioner, 114 T.C. 604, 610 (2000).     Where the underlying tax

liability is not at issue, we review the determination for abuse

of discretion.   Id.; Goza v. Commissioner, 114 T.C. 176, 182

(2000).   An Appeals officer’s determination will not be an abuse

of discretion unless the determination is arbitrary, capricious,

or without sound basis in fact or law.      Giamelli v. Commissioner,

129 T.C. 107, 111 (2007); Freije v. Commissioner, 125 T.C. 14, 23

(2005); Woodral v. Commissioner, 112 T.C. 19, 23 (1999).     In
                                - 9 -

evaluating a taxpayer’s arguments, an Appeals officer is not

required to consider irrelevant or frivolous arguments.

     Petitioner’s challenge to the amount of his underlying tax

liabilities is meritless.    See Hathaway v. Commissioner, T.C.

Memo. 2004-15.    He does not dispute the accuracy of the income

which he reported on his 2006 and 2007 Federal income tax

returns.   Respondent also told petitioner numerous times that he

could amend his Federal income tax returns if he felt that they

were inaccurate, and petitioner refused to do so.

     Despite petitioner’s request to cancel his scheduled CDP

hearing, Ms. Garcia called petitioner as scheduled and gave him

an opportunity to provide a legitimate reason why his underlying

tax liabilities were incorrect and the proposed levy should not

proceed.   Petitioner advanced frivolous arguments before ending

the phone call.    He continued to advance his groundless arguments

in his petition, trial memoranda, and testimony.

     There is no genuine issue as to the existence of his

underlying tax liabilities, and because petitioner challenged

only the existence of a law requiring him to pay a tax on his

earnings and did not challenge the correctness of the amounts of

income which he reported on his 2006 and 2007 Federal income tax

returns, there is no genuine issue as to the amount of his

underlying tax liabilities.   See id.
                               - 10 -

       In making her determination that the collection action

should proceed, Ms. Garcia verified that the requirements of any

applicable law or administrative procedure had been met.

Additionally, petitioner raised no relevant issues for Ms. Garcia

to consider and failed to offer any collection alternatives.

Finally, petitioner made no legitimate arguments that Ms. Garcia

abused her discretion.    Rather, his arguments related to the

definition and calculation of income, arguments this Court has

long held to be frivolous and associated with tax protesters.

See Abrams v. Commissioner, 82 T.C. 403, 407 (1984).

       Under these circumstances, Ms. Garcia’s determination to

proceed with the collection of petitioner’s 2006 and 2007 Federal

income tax liabilities was not arbitrary, capricious, or without

sound basis in fact or law and was therefore not an abuse of her

discretion.    Consequently, respondent’s motion for summary

judgment will be granted.

III.    Section 6673 Penalty

       Respondent also asked the Court to impose a penalty on

petitioner under section 6673(a)(1).    Section 6673(a)(1)

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

States a penalty not to exceed $25,000 if the taxpayer took

frivolous or groundless positions in the proceedings or

instituted the proceedings primarily for delay.    We choose not to

impose a penalty on petitioner but take this opportunity to warn
                              - 11 -

him that the Court may impose a penalty pursuant to section

6673(a)(1) if he returns to the Court and proceeds in a similar

fashion in the future.   See Pierson v. Commissioner, 115 T.C. 576

(2000).

     To reflect the foregoing,


                                         An appropriate order and

                                    decision will be entered.
