                         T.C. Memo. 2005-98



                       UNITED STATES TAX COURT



            NICHOLAS & CARRIE COZZENS, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 258-03L.              Filed May 4, 2005.



     Nicholas and Carrie Cozzens, pro sese.

     Michelle M. Lippert, for respondent.



                         MEMORANDUM OPINION


     CHIECHI, Judge:    This case is before the Court on respon-

dent’s motion for summary judgment (respondent’s motion).1   We

shall grant respondent’s motion.




     1
      Although the Court ordered petitioners to file a response
to respondent’s motion, petitioners failed to do so.
                                 - 2 -

                              Background

     The record establishes and/or the parties do not dispute the

following.2

     On or about March 17, 2000, petitioners filed a Federal

income tax (tax) return for each of their taxable years 1998

(1998 return) and 1999 (1999 return).      In their 1998 return,

petitioners reported, inter alia, total income of $76,031,

taxable income of $63,308, total tax of $12,671, and tax due of

$5,031.54.    Petitioners did not remit any payment with their 1998

return.   In their 1999 return, petitioners reported, inter alia,

total income of $70,589, taxable income of $57,447, total tax of

$11,546, and tax due of $5,121.16.       Petitioners did not remit any

payment with their 1999 return.

     On April 24, 2000, respondent assessed petitioners’ tax as

reported in each of their tax returns for 1998 and 1999, as well

as additions to tax under sections 6651(a) and 6654(a)3 and

interest as provided by law for each of their taxable years 1998

and 1999.     (We shall refer to any such unpaid assessed amounts,

as well as interest as provided by law accrued after April 24,

2000, as petitioners’ respective unpaid liabilities for 1998 and



     2
      The record does not disclose petitioners’ residence or
mailing address at the time they filed the petition in this case.
     3
      All section references are to the Internal Revenue Code in
effect at all relevant times. All Rule references are to the Tax
Court Rules of Practice and Procedure.
                                 - 3 -

1999.)

     On April 24, 2000, respondent issued to petitioners a notice

of balance due with respect to petitioners’ respective unpaid

liabilities for 1998 and 1999.    On October 8, 2001, respondent

issued to petitioners another notice of balance due with respect

to such unpaid liabilities.

     On January 31, 2002, respondent issued to petitioners a

notice of Federal tax lien filing and your right to a hearing

(notice of tax lien) with respect to their taxable years 1998 and

1999.

     On or about February 25, 2002, in response to the notice of

tax lien, petitioners mailed Form 12153, Request for a Collection

Due Process Hearing (Form 12153), and requested a hearing with

respondent’s Appeals Office (Appeals Office).    Petitioners

attached a document to their Form 12153 (petitioners’ attachment

to Form 12153) that contained statements, contentions, arguments,

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

less.4

     By letter dated October 31, 2002 (October 31, 2002 letter),

a settlement officer with respondent’s Appeals Office (settlement


     4
      Petitioners’ attachment to Form 12153 contained statements,
contentions, arguments, and requests that are very similar to the
statements, contentions, arguments, and requests contained in the
attachments to respective Forms 12153 filed with the Internal
Revenue Service by certain other taxpayers who commenced proceed-
ings in the Court. See, e.g., Guerrier v. Commissioner, T.C.
Memo. 2002-3.
                               - 4 -

officer) informed petitioners that he had scheduled a hearing

(Appeals Office hearing) with them on November 27, 2002, with

respect to the notice of tax lien.

     In response to the settlement officer’s October 31, 2002

letter, petitioners’ authorized representative sent a letter

dated November 19, 2002 (November 19, 2002 letter) to the settle-

ment officer.   The November 19, 2002 letter stated in pertinent

part:

          I am in receipt of your letters dated 10-31-02,
     and copies of those letters are attached as part of
     this letter.

          Also enclosed is a copy of the August 8, 2002
     letter I sent the IRS concerning the various issues
     relating to the denial of my client’s right to record
     the hearing, as authorized by 26 USC §7521(a) * * *.

        *       *       *        *      *       *       *

          In addition, in my August 8, 2002, letter, I
     demanded that the IRS appeals officer conducting the
     hearing and issuing the decision provide me with a copy
     of his pocket commission and a copy of the delegation
     of authority from the Secretary of the Treasury autho-
     rizing him to conduct the hearing and issue the deci-
     sion. You have not provided me with those documents.

        *       *       *        *      *       *       *

          In view of these facts, then, my clients have
     authorized me to advise you that they will not attend
     the “hearing” you propose to conduct on November 27,
     2002 in Cincinnati, Ohio.

          However, you are hereby instructed to consider, in
     your deliberations concerning the issues raised by my
     clients all of the papers which have been submitted to
     date concerning these matters, including the August 8,
     2002 letter, the February 25, 2002 letter which insti-
     tuted the appeal, the June 17, 2002 letter, and the
                              - 5 -

     July 24, 2002 letter.

        *       *       *       *         *       *       *

          Since the IRS refuses to comply with the clear
     requirements of the law and the orders of the Federal
     District Court, we have no choice but to take these
     actions. My clients have nothing to compromise or
     adjust: they do not owe the taxes and penalties at
     issue because no law makes them liable for them, as
     noted in our earlier letters.

     Petitioners refused to attend the Appeals Office hearing

that the settlement officer had scheduled on November 27, 2002.

However, the settlement officer exchanged correspondence with

petitioners and/or their authorized representative and had

telephonic discussions with them.     On December 6, 2002, based

upon such correspondence and discussions as well as, inter alia,

certain other information, including petitioners’ 1998 return and

1999 return, the notice of tax lien, petitioners’ Form 12153,

petitioners’ attachment to Form 12153, and respondent’s Form

4340, Certification of Assessment and Payments, for each of their

taxable years 1998 and 1999, the Appeals Office issued to peti-

tioners a notice of determination concerning collection action(s)

under section 6320 and/or 6330 (notice of determination).     That

notice stated in pertinent part:

     The determination of Appeals is that the filed Notice
     of Federal Tax Lien was an appropriate collection
     action. Before you decide whether to petition this
     notice of determination, you should know that the
     Courts are empowered to impose monetary sanctions up to
     $25,000 for instituting or maintaining an action before
     it primarily for delay or for taking a position that is
     frivolous or groundless. Pierson v. Commissioner, 115
                              - 6 -

     T.C. No. 576 (2000). It is our view that the positions
     you have taken have no merit and are groundless.

An attachment to the notice of determination stated in pertinent

part:

                    SUMMARY AND RECOMMENDATION

        *       *       *       *       *        *      *

     Are the taxpayers entitled to relief under IRC § 6320
     from the filed Notice of Lien?

     No, the taxpayers did not provide any justification for
     withdrawal, nor offer any collection alternatives.

                         BRIEF BACKGROUND

     The income tax return for 1998 was filed under filing
     status Married Filing Joint. The return was signed and
     dated on 03/17/2000 by both taxpayers. The return
     showed a balance due of $ 5,031.54 at the time of
     filing. The tax was the result of insufficient with-
     holding and failure to make estimated tax payments.

     The income tax return for 1999 was filed under filing
     status Married Filing Joint. The return was signed and
     dated on 03/17/2000 by both taxpayers. The return
     showed a balance due of $ 5,121.16 at the time of
     filing. The tax was the result of insufficient with-
     holding and failure to make estimated tax payments.

     On 01/09/2002, the taxpayers called Internal Revenue to
     ask for an installment agreement. The request was for
     the years 12/1996, 12/1997, 12/1998, 12/1999 and
     12/2000.

     IRS responded on 01/18/2002 by establishing an agree-
     ment for $ 400 per month.

     The taxpayers defaulted on their agreement and on
     06/24/2002; the Internal Revenue gave formal notice of
     intent to terminate the agreement.
                             - 7 -

                    DISCUSSION AND ANALYSIS

        1.   Verification of legal and procedural require-
ments

Liens:

IRC § 6321 provides for a statutory lien when     a tax-
payer neglects or refuses to pay after notice     and
demand. To be made choate, and valid against      third
parties, a notice of lien must be recorded in     the
proper place for filing.

  •     Transcripts show that the taxes remain unpaid and
        a notice was recorded.

IRC § 6320 requires IRS to give notice to a taxpayer in
writing, within 5-days after filing a notice of lien,
of the taxpayer’s right to request a hearing before an
Appeals Officer. The request is timely if made during
the 30-days following the end of the 5-day notification
period.

Transcripts show a notice was issued and the taxpayer’s
request for a hearing was timely.

Therefore, the Office of Appeals will affirm that:

  •     Under IRC § 6330(b)(3), this settlement officer
        has had no prior involvement with respect to the
        unpaid tax.

  •     Under IRC § 6330(c)(1) the requirements of any
        applicable law or administrative procedures have
        been met.

        2.   What were the Issues raised by the taxpayer?

The Hearing

The taxpayers are represented by Jerry Jewett.

A face-to-face hearing was scheduled for 11/27/02. In
a letter of 11/19/2002, the representative stated the
taxpayers would not attend the hearing nor was there a
request for a rescheduled hearing; therefore, no hear-
ing was held.
                            - 8 -

The issues discussed below are those presented Form
12153, Request for a Collection Due Process Hearing.

Issue number one

The taxpayers did not agree with the filed Notice of
Federal Tax Lien. Their stated reason:

.... the IRS has not complied with applicable laws and
administrative procedures, the collection procedures
are inappropriate and illegal, and Mr. and Mrs. Cozzens
have no liability for the taxes and penalties at issue.

My Comments

Notice and Demand was [sic] made on 04/24/2000 for both
balance due periods at issue. The taxes remained
unpaid; subsequently, a Notice of Federal Tax Lien was
recorded on 02/07/2002 and the taxpayers notified of
their right to a hearing.

Administrative procedures were followed and the tax
liabilities remain unpaid.

Furthermore, IRC § 6323(j) gives the Internal Revenue
the authority to withdraw a Notice of Federal Tax Lien
under * * * [certain] circumstances * * *

   *         *       *        *      *        *       *

The taxpayers do not meet any of the criteria described
in IRC § 6323(j), nor did they offer any relevant
reason why the lien should be withdrawn.

There were no other issues raised by the taxpayer.

       3.   Has the need for efficient tax collection been
            balanced with taxpayer’s concern that the
            proposed collection action be no more
            intrusive than necessary?

IRC § 6330 requires that the Office of    Appeals consider
whether any collection action balances    the need for
efficient collection of taxes with the    taxpayers’
legitimate concern that any collection    be no more
intrusive than necessary.

Our determination is to deny relief, and sustain the
                                - 9 -

     filed Notice of Federal Tax Lien. This determination
     was made because the taxpayers failed to raise any
     relevant issue, offer a collection alternative, or
     present any reason to justify withdrawal. Therefore,
     the determination by Appeals balances the need for
     efficient collection of taxes with the taxpayer’s
     legitimate concern that any collection action be no
     more in [sic] intrusive than necessary.

     In response to the notice of determination, petitioners

filed with the Court a petition with attachments that we consider

to be part of the petition.    Except for an argument under section

7521(a)(1), the petition and the attachments thereto contained

statements, contentions, arguments, and requests that the Court

finds to be frivolous and/or groundless.5   With respect to sec-

tion 7521(a)(1), petitioners alleged that the Appeals Office

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

Office hearing that the settlement officer had scheduled on

November 27, 2002, and that that refusal was improper under that

section.

                              Discussion

     The Court may grant summary judgment where there is no

genuine issue of material fact and a decision may be rendered as

a matter of law.   Rule 121(b); Sundstrand Corp. v. Commissioner,



     5
      The frivolous and/or groundless statements, contentions,
arguments, and requests in petitioners’ petition and the attach-
ments to that petition are very similar to the frivolous and/or
groundless statements, contentions, arguments, and requests in
the respective petitions filed with the Court by certain other
taxpayers. See, e.g., Guerrier v. Commissioner, T.C. Memo. 2002-
3.
                              - 10 -

98 T.C. 518, 520 (1992), affd. 17 F.3d 965 (7th Cir. 1994).      We

conclude that there are no genuine issues of material fact

regarding the questions raised in respondent’s motion.

     A taxpayer may raise challenges to the existence or the

amount of the taxpayer’s underlying liability if the taxpayer did

not receive a notice of deficiency or did not otherwise have an

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

Where the validity of the underlying tax liability is properly

placed at issue, the Court will review the matter on a de novo

basis.   Sego v. Commissioner, 114 T.C. 604, 610 (2000); Goza v.

Commissioner, 114 T.C. 176, 181-182 (2000).     Where the validity

of the underlying tax liability is not properly placed at issue,

the Court will review the determination of the Commissioner of

the Internal Revenue for abuse of discretion.     Sego v. Commis-

sioner, supra; Goza v. Commissioner, supra at 182.

     Respondent based the assessment with respect to each of

petitioners’ taxable years 1998 and 1999 on the total tax shown

in petitioners’ return for each such year.    In the notice of

determination, the Appeals Office concluded that petitioners took

positions that “have no merit and are groundless.”    Petitioners

do not claim here that the amount of tax reported in their return

for each of their taxable years 1998 and 1999 is not correct.

Instead, they advance statements, contentions, arguments, and

requests in the petition and the attachments to that petition
                              - 11 -

that we have found to be frivolous and/or groundless.

     We turn now to petitioners’ argument under section

7521(a)(1) that the refusal by the Appeals Office to permit

petitioners to make an audio recording of the Appeals Office

hearing that the settlement officer scheduled on November 27,

2002, was improper.   Before they filed the petition in this case,

petitioners made statements and requests and advanced contentions

and arguments that the Court has found to be frivolous and/or

groundless.   In the petition and the attachments thereto, peti-

tioners persisted in advancing such frivolous and/or groundless

statements, contentions, arguments, and requests.   Consequently,

even though we held in Keene v. Commissioner, 121 T.C. 8, 19

(2003), that section 7521(a)(1) requires the Appeals Office to

allow a taxpayer to make an audio recording of an Appeals Office

hearing under section 6330(b), we conclude that (1) it is not

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

Appeals Office for a hearing under section 6320(b) in order to

allow petitioners to make such an audio recording, see Lunsford

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

necessary or appropriate to reject respondent’s determinations to

proceed with the collection action as determined in the notice of

determination with respect to petitioners’ respective unpaid
                               - 12 -

liabilities for 1998 and 1999, see id.6

     Based upon our examination of the entire record before us,

we find that respondent did not abuse respondent’s discretion in

determining to proceed with the collection action as determined

in the notice of determination with respect to petitioners’

taxable years 1998 and 1999.

     Although respondent does not ask the Court to impose a

penalty on petitioners under section 6673(a)(1), we now consider

sua sponte whether the Court should impose a penalty on petition-

ers under that section.    Section 6673(a)(1) authorizes the Court

to require a taxpayer to pay a penalty to the United States in an

amount not to exceed $25,000 whenever it appears that a taxpayer

instituted or maintained a proceeding in the Court primarily for

delay or that a taxpayer's position in such a proceeding is

frivolous or groundless.

     Although we shall not impose a penalty under section

6673(a)(1) on petitioners in the instant case, we caution them

that they may be subject to such a penalty if in the future they

institute or maintain a proceeding in this Court primarily for

delay and/or their position in any such proceeding is frivolous

or groundless.   See Abrams v. Commissioner, 82 T.C. 403, 409-413

(1984); White v. Commissioner, 72 T.C. 1126, 1135-1136 (1979).

     We have considered all of petitioners’ statements, conten-


     6
      See Kemper v. Commissioner, T.C. Memo. 2003-195.
                             - 13 -

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

and, to the extent we have not found them to be frivolous and/or

groundless, we find them to be without merit and/or irrelevant.

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

     To reflect the foregoing,



                                      An order granting respondent's

                                 motion and an appropriate decision

                                 will be entered.
