                        T.C. Memo. 2005-71



                      UNITED STATES TAX COURT



                  W. JAMES KUBON, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 1795-04L.            Filed April 4, 2005.


     W. James Kubon, pro se.

     Gavin L. Greene, for respondent.



                        MEMORANDUM OPINION


     HAINES, Judge:   This case is before the Court on

respondent’s motion for summary judgment filed pursuant to Rule

121 and to impose a penalty under section 6673.1




     1
        Unless otherwise indicated, all section references are to
the Internal Revenue Code, as amended, and all Rule references
are to the Tax Court Rules of Practice and Procedure.
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                            Background

     At the time of the filing of the petition, petitioner

resided in San Jose, California.

     On his 1999 tax return, petitioner reported zero income and

requested a full refund of all taxes withheld.   Petitioner

attached to his tax return two pages of tax-protester boilerplate

which asserted that no section of the Internal Revenue Code made

him liable for income taxes.   Petitioner’s Form W-2, Wage and Tax

Statement, reported that petitioner received wages of $163,908.87

from Web TV Networks, Inc., in 1999.

     On July 12, 2002, respondent sent petitioner a notice of

deficiency for 1999 to 560 Hobie Lane, San Jose, California

95127.   Petitioner resided at this address from July 12, 2002 to

January 30, 2004.   Petitioner failed to petition the Court to

review the notice of deficiency.

     On April 7, 2003, respondent issued to petitioner a Final

Notice--Notice of Intent to Levy and Notice of Your Right to a

Hearing.   On April 14, 2003, petitioner mailed respondent a Form

12153, Request for a CDP Hearing, and attached a page of tax-

protester arguments, which disputed the validity of and requested

that the Appeals officer have at the hearing copies of documents

pertaining to, among other things, the underlying tax liability,

the assessment, the notice and demand for payment, and the
                                - 3 -

verification from the Secretary that the requirements of any

applicable law or procedure had been met.

     On September 12, 2003, respondent sent petitioner a letter

to request that petitioner complete a Form 433A, Collection

Information Statement for Individuals, to assist in considering

collection alternatives.   Petitioner did not complete and return

the Form 433A to respondent.

     On October 6, 2003, respondent sent petitioner a letter

outlining respondent’s policy at the time of not granting face-

to-face hearings to individuals raising only frivolous arguments.

A telephonic interview was offered and scheduled for November 5,

2003.   On October 22, 2003, petitioner responded to the October

6, 2003, letter by stating:    “to summarize your position you are

NOT going to allow me to have a hearing that I can record and you

will NOT permit me to bring up relevant issues that I covered in

my CDP request”.   Petitioner refused to participate in a

telephonic interview with respondent.

     On December 31, 2003, respondent issued to petitioner a

Notice of Determination Concerning Collection Action(s) Under

Section 6320 and/or 6330 (notice of determination) with regard to

1999.   The notice of determination stated:

          Appeals considered whether the collection action taken
     or proposed balances the need for the efficient collection
     of the taxes with the legitimate concern of the taxpayer
     that any collection action be no more intrusive than
     necessary. We find that enforced collection action is not
     more intrusive than necessary because the Automated
                              - 4 -

     Collection System and Appeals attempted to solicit Mr.
     Kubon’s cooperation in proposing an alternative to enforced
     collection actions. Mr. Kubon has not voluntarily filed
     income tax returns for 2000, 2001 or 2002. Mr. Kubon failed
     to provide any financial information, and did not propose an
     acceptable collection alternative. The Internal Revenue
     Service may proceed with enforced collection actions.

On January 30, 2004, petitioner filed with the Court a Petition

for Lien or Levy Action Under Code Section 6320(c) or 6330(d), in

which petitioner disputes the notice of determination because he

was allegedly denied a section 6330 hearing.

     On September 1, 2004, respondent filed a Motion for Summary

Judgment and To Impose Penalty Under Section 6673, in which

respondent moves for summary adjudication in respondent’s favor

in this case for all of the legal issues in controversy and

requests that the Court impose a penalty pursuant to section 6673

because petitioner instituted these proceedings solely for the

purpose of delay and advanced only frivolous arguments.

Accompanying the motion for summary judgment, respondent filed a

declaration of Settlement Officer Colleen Cahill (Ms. Cahill),

which states that she reviewed petitioner’s TXMODA transcript for

1999 as part of her verification that all legal and

administrative requirements for levy had been met.    Respondent

attached to Ms. Cahill’s declaration the TXMODA transcript that

Ms. Cahill reviewed and the Form 4340, Certificate of

Assessments, Payments, and Other Specified Matters, for
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petitioner’s 1999 tax year.    Petitioner filed an objection to the

motion for summary judgment.

     On September 7, 2004, petitioner filed with the Court a

motion for remand, in which petitioner requested that we remand

the case to the Appeals Office for a section 6330 hearing to be

held.   Respondent filed a response to petitioner’s motion for

remand requesting that the Court deny petitioner’s motion for

remand because the failure to allow an audio recording at the

scheduled section 6330 hearing was harmless error.

     On November 3, 2004, we issued an Order granting

petitioner’s motion for remand and remanding the case to

respondent’s Appeals Office for the purpose of affording

petitioner a section 6330 hearing that might be recorded by

either or both parties pursuant to our holding in Keene v.

Commissioner, 121 T.C. 8 (2003).    We also ordered the parties to

file status reports with the Court on or before January 18, 2005,

and ordered that respondent’s motion for summary judgment be held

in abeyance.   The Order also warned petitioner:

          As in Keene v. Commissioner, supra at 19, we admonish
     petitioner that if he persists in making frivolous and
     groundless tax-protester arguments in any further
     proceedings with respect to this case, rather than raising
     relevant issues, as specified in section 6330(c)(2), the
     Court will consider granting respondent’s motion for summary
     judgment. In such an instance, the Court would also be in a
     position to impose a penalty under section 6673(a)(1).

     On December 30, 2004, respondent filed with the Court a

status report, which stated that an Appeals officer had a face-
                                - 6 -

to-face meeting with petitioner on December 3, 2004, and

petitioner continued to raise only frivolous arguments.

Respondent reported that petitioner raised the following

arguments:   (1) Whether respondent had issued a valid notice of

deficiency; (2) whether wages are taxable income; (3) whether

respondent is required to show that the requirements of any

applicable law or administrative procedure had been met; (4)

whether respondent is required to provide documentation of

delegation orders from the Secretary; (5) whether the underlying

assessment is valid; and (6) whether petitioner received a valid

notice and demand.   The Court also filed petitioner’s status

report that confirmed that a section 6330 hearing was held on

December 3, 2004.    In the status report, petitioner argued that

the hearing was not impartial, that petitioner’s arguments are

not frivolous, and that respondent has not addressed “apparent

irregularities in the Irs’ [sic] assessment procedures.”

                             Discussion

     Summary judgment is intended to expedite litigation and

avoid unnecessary and expensive trials.    Fla. Peach Corp. v.

Commissioner, 90 T.C. 678, 681 (1988).    The Court may grant

summary judgment when there is no genuine issue of material fact

and a decision may be rendered as matter of law.   Rule 121(b);

Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), affd.

17 F.3d 965 (7th Cir. 1994); Zaentz v. Commissioner, 90 T.C. 753,
                               - 7 -

754 (1988).   We conclude that there are no genuine issues of

material fact regarding the questions raised in respondent’s

motion for summary judgment, and a decision may be rendered as a

matter of law.

     Section 6331(a) provides that, if any person liable to pay

any tax neglects or refuses to do so within 10 days after notice

and demand, the Secretary can collect such tax by levy upon

property belonging to such person.     Pursuant to section 6331(d),

the Secretary is required to give the taxpayer notice of his

intent to levy and within that notice must describe the

administrative review available to the taxpayer before proceeding

with the levy.   See also sec. 6330(a).

     Section 6330(b) describes the administrative review process,

providing that a taxpayer can request a hearing with the Appeals

Office with regard to a levy notice.     At the section 6330

hearing, the taxpayer may raise certain matters set forth in

section 6330(c)(2), which include appropriate spousal defenses,

challenges to the appropriateness of collection actions, and

offers of collection alternatives.     Further, a taxpayer may

dispute the underlying tax liability for any tax period if the

taxpayer did not receive a notice of deficiency for such tax

liability or did not otherwise have an opportunity to dispute

such tax liability.   Sec. 6330(c)(2)(B).
                               - 8 -

     Pursuant to section 6330(d)(1), within 30 days of the

issuance of the notice of determination, the taxpayer may appeal

that determination to this Court if we have jurisdiction over the

underlying tax liability.   Van Es v. Commissioner, 115 T.C. 324,

328-329 (2000).

     Although section 6330 does not prescribe the standard of

review that the Court is to apply in reviewing the Commissioner’s

administrative determinations, we have stated that, where the

validity of the underlying tax liability is properly at issue,

the Court will review the matter de novo.   Where the validity of

the underlying tax liability is not properly at issue, however,

the Court will review the Commissioner’s administrative

determination for abuse of discretion.    Sego v. Commissioner, 114

T.C. 604, 610 (2000); Goza v. Commissioner, 114 T.C. 176, 181

(2000).

1.   Challenges to Underlying Tax Liability

     Petitioner presents a challenge to the underlying tax

liability with regard to the validity of the notice of

deficiency.   Respondent provided a Form 3877, Certified Mailing

List, which reports that respondent sent petitioner by certified

mail a notice of deficiency for 1999 on July 12, 2002, to 560

Hobie Lane, San Jose, California 95127.   The parties stipulated

that petitioner resided at this address from July 12, 2002 to

January 30, 2004.   We conclude that petitioner received a notice
                               - 9 -

of deficiency at his last known address for 1999.   See sec.

6212(a) and (b).

     Accordingly, because petitioner received a notice of

deficiency for 1999 and did not petition this Court for a

redetermination, petitioner is precluded from challenging his

underlying tax liability for 1999 in this collection action.

Sec. 6330(c)(2)(B).

2.   Wages Are Not Income

     Petitioner argues that his wages are not taxable income.

His arguments are indistinguishable from those that have been

uniformly rejected, and no further discussion of them is

warranted.   See United States v. Connor, 898 F.2d 942, 943 (3d

Cir. 1990); Coleman v. Commissioner, 791 F.2d 68, 70 (7th Cir.

1986); Sauers v. Commissioner, 771 F.2d 64, 66 (3d Cir. 1985),

affg. T.C. Memo. 1984-367; Connor v. Commissioner, 770 F.2d 17,

20 (2d Cir. 1985); Biermann v. Commissioner, 769 F.2d 707, 708

(11th Cir. 1985); Waters v. Commissioner, 764 F.2d 1389, 1389

(11th Cir. 1985); Perkins v. Commissioner, 746 F.2d 1187, 1188

(6th Cir. 1984), affg. T.C. Memo. 1983-474; Knighten v.

Commissioner, 702 F.2d 59, 60 (5th Cir. 1983); Funk v.

Commissioner, 687 F.2d 264, 264 (8th Cir. 1982), affg. T.C. Memo.

1981-506.
                               - 10 -

3.   Verification of Assessment Procedure

     We conclude that Ms. Cahill obtained verification from the

Secretary that the requirements of all applicable laws and

administrative procedures were met as required by section

6330(c)(1).   Ms. Cahill obtained and reviewed a TXMODA transcript

of account for petitioner’s 1999 taxable year before the

scheduled hearing.

     Federal tax assessments are formally recorded on a record of

assessment.   Sec. 6203.   “The summary record, through supporting

records, shall provide identification of the taxpayer, the

character of the liability assessed, the taxable period, if

applicable, and the amount of the assessment.”   Sec. 301.6203-1,

Proced. & Admin. Regs.

     Section 6330(c)(1) does not require the Commissioner to rely

on a particular document to satisfy the verification requirement.

Roberts v. Commissioner, 118 T.C. 365, 371 n.10 (2002), affd. 329

F.3d 1224 (11th Cir. 2003); Kaeckell v. Commissioner, T.C. Memo.

2002-114.   In this regard, the TXMODA transcript of account on

which Ms. Cahill relied contained all of the information

prescribed in section 301.6203-1, Proced. & Admin. Regs.    See

Schroeder v. Commissioner, T.C. Memo. 2002-190; Weishan v.

Commissioner, T.C. Memo. 2002-88, affd. 66 Fed. Appx. 113 (7th

Cir. 2003); Lindsey v. Commissioner, T.C. Memo. 2002-87, affd. 56

Fed. Appx. 802 (9th Cir. 2003); Tolotti v. Commissioner, T.C.
                              - 11 -

Memo. 2002-86, affd. 70 Fed. Appx. 971 (9th Cir. 2003); Duffield

v. Commissioner, T.C. Memo. 2002-53; Kuglin v. Commissioner, T.C.

Memo. 2002-51.

     Petitioner has not alleged any irregularity in the

assessment procedure that would raise a question about the

validity of the assessments or the information contained in the

transcript of account relied on by Ms. Cahill.   See Davis v.

Commissioner, 115 T.C. 35, 41 (2000); Mann v. Commissioner, T.C.

Memo. 2002-48.   Accordingly, we conclude that there is no

question that the Appeals officer satisfied the verification

requirement of section 6330(c)(1).

4.   Delegation Order

     Petitioner's allegations regarding the authority of the

individual issuing the notice of intent to levy are meritless.

The Secretary or his delegate (including the Commissioner) may

issue collection notices, and authority to issue notices

regarding liens and to levy upon property has in turn been

delegated to specified collection and compliance personnel.

Secs. 6320(a), 6330(a), 7701(a)(11)(B) and 12(A)(i), 7803(a)(2);

secs. 301.6320-1(a)(1), 301.6330-1(a)(1), Proced. & Admin. Regs.;

Delegation Order No. 191 (Rev. 3, June 11, 2001); Delegation

Order No. 196 (Rev. 4, Oct. 4, 2000); see also Craig v.

Commissioner, 119 T.C. 252, 263 (2002); Everman v. Commissioner,

T.C. Memo. 2003-137.
                               - 12 -

5.   Receipt of Notice and Demand

     Petitioner also argues that respondent failed to send

petitioner a statutory notice and demand for the unpaid tax.    As

shown in the record of the case, a notice and demand was sent to

petitioner.   The transcripts, i.e., TXMODA and Form 4340, report

that the first notice and demand was sent on December 9, 2002.

The transcripts also report that another notice and demand was

sent on February 24, 2003.   There is no question that respondent

sent a notice and demand to petitioner; therefore, petitioner’s

argument must fail.

     Petitioner makes no other arguments against the validity of

the notice of determination.   In particular, petitioner fails to

make a valid challenge to the appropriateness of respondent’s

intended collection action, raise a spousal defense, or offer

alternative means of collection.    We conclude that respondent did

not abuse his discretion in determining that collection should

proceed and that respondent is entitled to judgment as a matter

of law.

6.   Section 6673 Penalty

     Section 6673(a)(1) authorizes the Court to require a

taxpayer to pay to the United States a penalty in an amount not

to exceed $25,000 whenever it appears to the Court that the

taxpayer’s position in the proceeding is frivolous or groundless.

Sec. 6673(a)(1)(B).
                             - 13 -

     The parties stipulated that petitioner has been provided

with a copy of an IRS Notice which outlines common frivolous

arguments and has been advised by respondent that the Court may

require a taxpayer to pay a penalty up to $25,000 pursuant to

section 6673 if it appears to the Court that proceedings have

been instituted or maintained by the taxpayer primarily for delay

or that the taxpayer’s position is frivolous or groundless.

     In our November 3, 2004, Order, we gave petitioner the

opportunity to present proper issues, as specified in section

6330(c)(2), during his section 6330 hearing.   We warned

petitioner, however, that if he persisted in making frivolous and

groundless arguments, with respect to this case, the Court would

be in a position to impose a penalty under section 6673(a)(1).

Petitioner ignored the Court’s warning and simply pursued his

arguments, which the Court has held to be frivolous, groundless,

and meritless in numerous cases.   Under the circumstances, we

shall grant respondent’s motion and impose a penalty on

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

$10,000.
                             - 14 -

     We have considered all of petitioner’s contentions,

arguments, and requests that are not discussed herein, and we

conclude that they are without merit or irrelevant.

     To reflect the foregoing,


                                        An appropriate order and

                                   decision will be entered.
