                  T.C. Summary Opinion 2006-89



                      UNITED STATES TAX COURT



                 KEITH M. FELDER, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 12794-05S.               Filed May 25, 2006.


     Keith M. Felder, pro se.

     Gordon P. Sanz, for respondent.




     DEAN, Special Trial Judge:     This case was heard pursuant to

the provisions of section 7463 of the Internal Revenue Code in

effect at the time the petition was filed.    Unless otherwise

indicated, subsequent section references are to the Internal

Revenue Code of 1986, as amended.    The decision to be entered is

not reviewable by any other court, and this opinion should not be

cited as authority.
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     The petition in this case was filed in response to a Notice

of Determination Concerning Collection Action(s) Under Section

6320 and/or 6330.   Pursuant to section 6330(d), petitioner seeks

review of respondent’s determination proposing levy action with

respect to his income tax liability for 2001.    The issue for

decision is whether respondent’s determination to proceed with

collection action was an abuse of discretion.

                              Background

     The stipulation of facts and the exhibits received into

evidence are incorporated herein by reference.    At the time the

petition in this case was filed, petitioner resided in

Friendswood, Texas.

     Petitioner filed a Federal income tax return for 2001

reporting as zero, wages, total income, and adjusted gross

income, yet claiming a refund of $13,049.60 of Federal tax

withheld.   He attached to the return a statement containing tax

protester arguments.   Respondent sent to petitioner a letter

advising him that the document he had sent as a Federal tax

return was frivolous and was subject to the frivolous return

penalty under section 6702.    Respondent also sent to petitioner a

so-called 30-day letter proposing for 2001 adjustments to income

and an addition to tax under section 6651 for failure to file

timely.
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     On December 10, 2003, respondent issued to petitioner a

statutory notice of deficiency, Letter Number 3219 (SC/SG),

determining for 2001 a deficiency and additions to tax.    On March

2, 2004, petitioner sent a letter to the Internal Revenue Service

Center at Ogden, Utah, in which he stated that he was responding

to “your Letter 3219 (SC/SG) dated 12/10/2003.”   In his

“response” to the notice of deficiency, petitioner expressed his

refusal to submit to “any IRS jurisdiction by responding to your

claim letter”.

     Petitioner timely replied to respondent’s notice of intent

to levy by requesting a hearing at the Internal Revenue Service

(IRS) Office of Appeals.   Enclosed with his request for a hearing

was a document entitled “Keith M. Felder’s Offer to Pay” (Offer).

Contained in the Offer is petitioner’s personal view of why he is

not subject to Federal income tax.

     Petitioner subsequently sent to the IRS on March 28, 2005, a

Form 1040, U.S. Individual Income Tax Return, for 2004 that was

intended to be a revised Federal tax return for 2001.   The form

reported interest, capital gains, IRA distributions, and adjusted

gross income, but no wages.   He requested a refund of $17,217.19

in Federal tax withheld.

     Petitioner also provided respondent with a Form 1040X,

Amended U.S. Individual Income Tax Return, for 2001 dated March

28, 2005, that reverted to reporting zero adjusted gross income,
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and claimed a refund of $18,915.07.     Petitioner attached to the

Form 1040X three Forms 4852, Substitute for Form W-2, Wage and

Tax Statement, or Form 1099-R, Distributions from Pensions,

Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance

Contracts, Etc.   Each of the Forms 4852 from Solomon Smith

Barney, Inc., E Trade Securities, Inc., and Digital Island, Inc.,

was signed by petitioner, and reported wages as zero.

     Petitioner replied to an Appeals offer of a telephonic

conference, declining the conference and stating that he had

documented his position that he was not an “employee” who had

received “wages”, citing section 3401(a) and (c).

                             Discussion

     Section 6330 provides that no levy may be made on a

taxpayer’s property or rights to property unless the Secretary

has notified him of his right to request a hearing with the IRS

Office of Appeals before the levy is made.    The taxpayer

requesting the hearing may raise any relevant issue with regard

to the Commissioner’s intended collection activities, including

spousal defenses, challenges to the appropriateness of the

Commissioner’s intended collection action, and alternative means

of collection.    Secs. 6320(b) and (c), 6330(c); see Sego v.

Commissioner, 114 T.C. 604, 609 (2000); Goza v. Commissioner, 114

T.C. 176, 180 (2000).
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       The taxpayer may raise challenges “to the existence or

amount of the underlying tax liability”, however, only if he “did

not receive any statutory notice of deficiency for such tax

liability or did not otherwise have an opportunity to dispute

such tax liability.”    Sec. 6330(c)(2)(B).   The hearing officer is

not, however, required to consider failure or refusal to comply

with tax laws due to moral, religious, political, Constitutional,

conscientious or similar grounds.    Sec. 601.106(b), Statement of

Procedural Rules.

       Where the validity of the tax liability is not properly part

of the appeal, the taxpayer may challenge the determination of

the Appeals officer for abuse of discretion.     Sego v.

Commissioner, supra at 609-610; Goza v. Commissioner, supra at

181-182.

       The only issues communicated by petitioner to Appeals were

“garden variety” tax protester arguments.     Petitioner testified

that the Forms 4852 showing zero wages that he submitted to the

IRS were offered to “dispute and correct” the Forms W-2, Wage and

Tax Statement, for 2001 sent by petitioner’s employers to the

IRS.    When asked by the Court how Federal tax had been withheld

if he had no wages, petitioner testified that tax was withheld

from his “compensation”.    He further testified that he was not an

employee or an independent contractor but was instead “a worker”.

As such, he concluded, the amounts reported by the payors of his
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“compensation” were erroneously reported as wages.

     Because petitioner received a statutory notice of deficiency

for the year for which collection is at issue here, he may not

raise his frivolous challenges to the existence or amount of the

underlying tax liability.   Sec. 6330(c)(2)(B).      Petitioner did

not raise any permitted argument with respect to spousal

defenses, challenges to the appropriateness of the Commissioner’s

intended collection action, or alternative means of collection.

                            Conclusion

     Respondent’s determination to proceed with collection action

was not an abuse of his discretion.

     Reviewed and adopted as the report of the Small Tax Case

Division.

     To reflect the foregoing.

                                              Decision will be entered

                                         for respondent.
