                        T.C. Memo. 2011-127



                       UNITED STATES TAX COURT



           WARREN THOMAS BARRY, ET AL.,1 Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket Nos.    4754-07L, 5026-07L, Filed June 7, 2011.
                   25882-08L.



     Warren Thomas Barry, pro se.

     Sheri Redeker Barry, pro se.

     Miriam C. Dillard, for respondent.




     1
      Cases of the following petitioner are consolidated herewith
for the purpose of this opinion: Sheri Redeker Barry, docket
Nos. 5026-07L and 25882-08L.
                                - 2 -

                         MEMORANDUM OPINION


     WELLS, Judge:    The instant cases are before the Court on

respondent’s motions for summary judgment pursuant to Rule 121.2

The issue we must decide is whether petitioners Warren Thomas

Barry and Sheri Redeker Barry (Mr. Barry and Ms. Barry,

respectively) are entitled to a face-to-face collection due

process hearing in each of these cases.

                             Background

     The facts set forth below are based upon examination of the

pleadings, moving papers, responses, and attachments.     At the

time they filed their petitions, petitioners resided in Florida.3

Docket No. 25882-08L:    Ms. Barry’s 1988, 1989, 1990, 1991, and
1992 Tax Years

     Ms. Barry failed to file income tax returns for her 1988,

1989, 1990, 1991, and 1992 tax years.     Respondent therefore

prepared returns for Ms. Barry pursuant to section 6020(b).

Respondent subsequently sought to collect by levy Ms. Barry’s

liabilities for those years.    Ms. Barry submitted a request for a

collection due process hearing.    Respondent issued a notice of


     2
      Unless otherwise indicated, section references are to the
Internal Revenue Code of 1986, as amended, and Rule references
are to the Tax Court Rules of Practice and Procedure.
     3
      At the   time of the instant motions, Mr. Barry was
incarcerated   at the Federal Correctional Institution in Miami,
Florida, and   Ms. Barry was incarcerated at the Federal
Correctional   Institution in Coleman, Florida.
                              - 3 -

determination, and Ms. Barry sought review of that determination

in this Court in the case at docket No. 8458-00L.   That case was

decided on September 30, 2003, when the Court entered a

stipulated decision sustaining respondent’s determination.

     Respondent subsequently mailed to Ms. Barry a Notice of

Federal Tax Lien and Your Right to a Hearing with respect to her

1988, 1989, 1990, 1991, and 1992 tax years, and Ms. Barry

responded by requesting a collection due process hearing.    In a

letter attached to her request, dated April 25, 2005, Ms. Barry

contended that the Internal Revenue Service (IRS) is entitled to

impose an income tax only on Federal employees and those who

reside in the District of Columbia or other parts of the “Federal

Zone”, including “IRS Districts”.   Ms. Barry argued that because

she has never resided in such an area, the IRS has no

jurisdiction to impose an income tax on her.   In closing her

letter, Ms. Barry wrote:

     It is high time that Americans secure their Rights from
     vicious, malicious, and deceptive government agents who are
     acting above the law and blatantly disregard their Oath of
     Office. * * *. I am tired of those in public office making
     threats, false claims of debt, and false claims of being one
     who is made liable by mailing presentments that lack any
     reference to an Implementing Regulation(s) which must be
     published in the Federal Register as mandated by enacted
     federal law on the IRS.

     You ma’am, are a liar, a cheat, and a defrauder. By your
     actions, you have willfully disregarded and violated enacted
     federal law which is evident by your fraudulent Notice of
     Federal Tax Lien for all to see.
                               - 4 -

Respondent’s Appeals Office informed Ms. Barry that the Appeals

Office considered the arguments she advanced in her request for a

collection due process hearing to be frivolous or groundless and

that Ms. Barry would not be entitled to a face-to-face hearing

unless she was prepared to discuss issues related to the

collection of her tax liability.   Ms. Barry subsequently sent

respondent’s Appeals Office a number of other letters contesting

respondent’s determination, none of which substantively addressed

any collection issues or alternatives.    The Appeals Office

eventually denied Ms. Barry’s request for a face-to-face hearing

and issued Ms. Barry a Notice of Determination Concerning

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

determination) dated October 7, 2008.

     In its notice of determination, the Appeals Office explained

that the only arguments Ms. Barry advanced were frivolous or

groundless and that Ms. Barry never proposed any collection

alternatives or discussed the payment of her tax liabilities.

The notice of determination also stated that the Appeals Office

had verified that requirements of all applicable laws and

administrative procedures had been met.    Ms. Barry timely filed a

petition with this Court.

Docket No. 5026-07L:   Ms. Barry’s 1993, 1995, 1996, 1997, 1998,
and 1999 Tax Years

     Ms. Barry also failed to file income tax returns for her

1993, 1995, 1996, 1997, 1998, and 1999 tax years.    Respondent
                               - 5 -

therefore prepared returns for Ms. Barry pursuant to section

6020(b).   Respondent subsequently sought to collect by levy Ms.

Barry’s liabilities for those years.   Ms. Barry submitted a

request for a collection due process hearing.   Respondent issued

a notice of determination, and Ms. Barry sought review of that

determination in this Court at docket No. 8458-00L.   As noted

above, the case at that docket number was decided on September

30, 2003, when the Court entered a stipulated decision sustaining

respondent’s determination.

     Respondent subsequently mailed to Ms. Barry a Notice of

Federal Tax Lien and Your Right to a Hearing for those years, and

Ms. Barry requested a collection due process hearing.   The

Appeals Office conducted a telephone hearing on May 19, 2005.    In

a letter dated June 22, 2005, Ms. Barry asked for the opportunity

to submit collection alternatives, asked for verification that

all procedural requirements had been met, and contended that all

the actions taken by the IRS against her were void because the

IRS had not enacted “substantive regulations” applicable to Ms.

Barry.   However, Ms. Barry’s letter did not actually propose any

collection alternatives.   After additional correspondence,

respondent issued a notice of determination dated June 29, 2005,

which explained that because the Appeals Office considered all of

the arguments Ms. Barry raised to be frivolous, Ms. Barry was not

entitled to the face-to-face hearing she had requested.   The
                               - 6 -

notice of determination also stated that the Appeals Office had

verified that requirements of all applicable laws and

administrative procedures had been met.

     After receiving respondent’s notice of determination, Ms.

Barry filed a complaint in the U.S. District Court for the Middle

District of Florida (the District Court) seeking review of

respondent’s notice of determination.     On June 12, 2006, the

District Court dismissed Ms. Barry’s case, holding that the

District Court lacked jurisdiction to review respondent’s notice

of determination pursuant to section 6330(d)(1).4    See Redeker-

Barry v. United States, 97 AFTR 2d 2006-3097, 2006-2 USTC par.

50,459 (M.D. Fla. 2006).   Ms. Barry appealed the District Court’s

ruling, but the Court of Appeals for the Eleventh Circuit

affirmed the District Court.   See Redeker-Barry v. United States,

476 F.3d 1189 (11th Cir. 2007).

     Ms. Barry subsequently timely filed a petition with this

Court.




     4
      The then-applicable version of sec. 6330(d)(1) granted
exclusive jurisdiction of Ms. Barry’s case to the Tax Court
because of our jurisdiction over the underlying tax liability;
i.e., income tax. Sec. 6330(d)(1) was amended by the Pension
Protection Act of 2006, Pub. L. 109-280, sec. 855(a), 120 Stat.
1019, effective for determinations made more than 60 days after
Aug. 17, 2006, which granted the Tax Court exclusive jurisdiction
over all collection due process appeals, regardless of whether we
have jurisdiction over the underlying tax liability.
                                - 7 -

Docket No. 4754-07L:   Mr. Barry’s 2000, 2001, and 2002 Tax Years

     Mr. Barry filed an income tax return for his 2000 tax year

on which he reported zero income and zero liability.5   Mr. Barry

failed to file income tax returns for 2001 and 2002.    Respondent

therefore prepared returns for Mr. Barry’s 2000, 2001, and 2002

tax years pursuant to section 6020(b).   Respondent subsequently

mailed to Mr. Barry a Notice of Intent to Levy and Notice of Your

Right to a Hearing.    Respondent also mailed to Mr. Barry Notices

of Filing of Federal Tax Lien and Your Right to a Hearing.   Mr.

Barry requested a collection due process hearing with respect to

the lien notices.

     Mr. Barry requested a face-to-face collection due process

hearing with respondent’s Appeals Office.   However, the Appeals

Office informed Mr. Barry that it considered the issues raised in

his request for a hearing to be frivolous and that he would not

be granted a face-to-face hearing unless he provided the Appeals

Office with written notice of the specific relevant issues he

wished to raise at the hearing.   The Appeals Office also mailed

Mr. Barry a copy of the IRS publication “The Truth About

Frivolous Tax Arguments”.   In reply, Mr. Barry wrote a letter in



     5
      Pursuant to sec. 6702, the IRS imposed a frivolous return
penalty on Mr. Barry for reporting zero income and zero tax
liability on his 2000 tax return. Mr. Barry challenged that
penalty in the District Court, which upheld the penalty. See
Barry v. United States, 101 AFTR 2d 2008-1460, 2008-1 USTC par.
50,293 (M.D. Fla. 2008).
                               - 8 -

which he contended that because he was not a Federal employee, he

was not liable to pay the income tax.    In that letter, he also

argued that the IRS’ actions in taxing him were void because

those actions were taken without “substantive regulations”.

Mr. Barry’s letter requested an opportunity for a face-to-face

hearing to discuss collection alternatives, but he proposed no

collection alternatives.   The Appeals Office denied Mr. Barry’s

request for a face-to-face hearing and issued a notice of

determination dated August 9, 2005, in which it explained that,

because Mr. Barry had proposed no collection alternatives and had

advanced only frivolous arguments, he was not entitled to a face-

to-face hearing.   The notice of determination also stated that

the Appeals Office had verified that requirements of all

applicable laws and administrative procedures had been met.

     After receiving the notice of determination, Mr. Barry filed

a complaint in the District Court seeking review of the notice of

determination.   The District Court dismissed Mr. Barry’s

complaint on April 19, 2006, holding that it lacked jurisdiction

to review the notice of determination.    See Barry v. United

States, 97 AFTR 2d 2006-2174, 2007-1 USTC par. 50,368 (M.D. Fla.

2006).   On January 31, 2007, the Court of Appeals for the

Eleventh Circuit affirmed the District Court.    See Barry v.

United States, 215 Fed. Appx. 933 (11th Cir. 2007).
                               - 9 -

     Mr. Barry subsequently filed a petition with this Court.

Respondent moved to dismiss Mr. Barry’s case, contending that his

petition was not timely.   However, in an order dated July 1,

2008, we denied respondent’s motion.     In that order, we warned

Mr. Barry that this Court has repeatedly rejected the arguments

Mr. Barry raised in his petition and in his arguments before

respondent’s Appeals Office.   We also warned him that we would

consider his continued maintenance of those arguments as grounds

for imposing a penalty under section 6673.

                            Discussion

     Rule 121(a) allows a party to move “for a summary

adjudication in the moving party’s favor upon all or any part of

the legal issues in controversy.”    Rule 121(b) directs that a

decision on such a motion shall be rendered “if the pleadings,

answers to interrogatories, depositions, admissions, and any

other acceptable materials, together with the affidavits, if any,

show that there is no genuine issue as to any material fact and

that a decision may be rendered as a matter of law.”     The moving

party bears the burden of demonstrating that no genuine issue of

material fact exists and that the moving party is entitled to

judgment as a matter of law.   Sundstrand Corp. v. Commissioner,

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

Summary judgment is appropriate in the instant case because the

relevant facts are not in dispute.     The legal issue we must
                              - 10 -

decide is whether petitioners are entitled to face-to-face

collection due process hearings.

     Section 6320(a) and (b) provides that a taxpayer shall be

notified in writing by the Secretary of the filing of a notice of

Federal tax lien and provided with an opportunity for an

administrative hearing.   An administrative hearing under section

6320 is conducted in accordance with the procedural requirements

of section 6330.   Sec. 6320(c).   If an administrative hearing is

requested, the hearing is to be conducted by the Office of

Appeals.   Secs. 6320(b)(1), 6330(b)(1).   At the hearing, the

Appeals officer conducting it must verify that the requirements

of any applicable law or administrative procedure have been met.

Sec. 6330(c)(1).

     A taxpayer may raise any relevant issue at the hearing,

including challenges to “the appropriateness of collection

actions” and may make “offers of collection alternatives, which

may include the posting of a bond, the substitution of other

assets, an installment agreement, or an offer-in-compromise.”

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

or amount of the underlying tax liability, including a liability

reported on the taxpayer’s original return, if the taxpayer “did

not receive any statutory notice of deficiency for such tax

liability or did not otherwise have an opportunity to dispute
                              - 11 -

such tax liability.”   Sec. 6330(c)(2)(B); see also Montgomery v.

Commissioner, 122 T.C. 1, 5-6 (2004).

     Following the hearing, the Appeals officer must determine

whether the proposed collection action should proceed.       In making

the determination the Appeals officer shall take into

consideration:   (1) Whether the requirements of any 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)(3).

     In determining whether the requirements of any applicable

law or administrative procedure have been met, an Appeals officer

is not required to rely on any particular document.        Craig v.

Commissioner, 119 T.C. 252, 261-262 (2002).    In evaluating a

taxpayer’s arguments, an Appeals officer is not required to

consider irrelevant or frivolous arguments.     Elias v.

Commissioner, T.C. Memo. 2009-236; Moline v. Commissioner, T.C.

Memo. 2009-110, affd. 363 Fed. Appx. 675 (10th Cir. 2010);

Summers v. Commissioner, T.C. Memo. 2006-219.

     Although a section 6330 hearing may consist of a

face-to-face conference, a proper hearing may also occur by

telephone or by correspondence under certain circumstances.           Katz
                              - 12 -

v. Commissioner, 115 T.C. 329, 337-338 (2000); sec.

301.6330-1(d)(2), Q&A-D6, Proced. & Admin. Regs.    Section 6330

hearings have generally been informal.     Davis v. Commissioner,

115 T.C. 35, 41 (2000).   We have held that it is not an abuse of

discretion for an Appeals officer to deny a taxpayer’s request

for a face-to-face hearing where the taxpayer has raised only

frivolous or groundless arguments.     Elias v. Commissioner, supra;

see also Lunsford v. Commissioner, 117 T.C. 183, 189 (2001).

     This Court has jurisdiction to review an Appeals officer’s

determination.   Sec. 6330(d)(1).    Where the taxpayer’s underlying

liability was not properly at issue in the hearing, we review the

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

T.C. 604, 610 (2000); Goza v. Commissioner, 114 T.C. 176, 181-182

(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).

     In each of the instant cases, respondent’s Appeals Office

verified that respondent followed all applicable laws and

administrative procedures.   The record in each case establishes

that, as required by section 6330(c), in making its determination

the Appeals Office properly balanced the need for the efficient

collection of tax with petitioners’ legitimate concerns that
                              - 13 -

collection be no more intrusive than necessary.   Throughout their

extensive correspondence with respondent’s Appeals Office,

petitioners failed to raise any nonfrivolous arguments and failed

to offer any collection alternatives.   Petitioners have not shown

why it would be unfair or unduly intrusive to proceed with the

collection actions.

     Petitioners filed notices of objection to respondent’s

motions for summary judgment (notices of objection) that are

identical in all material respects.    In each of those notices of

objection, petitioners assert that they abandon the arguments

made in their petitions regarding their rights to a face-to-face

hearing before respondent’s Appeals Office.   Instead, petitioners

each claim that he or she is willing, upon his or her release

from prison, to “prepare original returns for the years at issue

* * * and at that time, request collection alternatives.”

However, petitioners note that they “[reserve] an argument for

appeal regarding the authority of the Commissioner to administer

tax laws outside the District of Columbia without internal

revenue districts.”   Petitioners then devote five out of the six

pages of their notices of objection to an argument that the IRS

lacks jurisdiction to administer tax laws outside the District of

Columbia.

     Petitioners’ good faith in claiming that they are willing to

prepare original tax returns and to discuss collection
                              - 14 -

alternatives is belied by their unwillingness to actually abandon

the same frivolous arguments they have continued to press since

the beginning of these proceedings despite warnings that such

arguments are frivolous.   Moreover, the time for petitioners to

prepare those returns and suggest collection alternatives is long

past.

     On the basis of the foregoing, we conclude that it would not

have been productive for respondent to schedule face-to-face

hearings.   Accordingly, we hold that it was not an abuse of

discretion for respondent to determine that it was appropriate to

sustain the notices of Federal tax lien, and no genuine issue of

material fact exists requiring trial.   We shall therefore grant

respondent’s motions for summary judgment.   We have considered

all of petitioners’ arguments, and to the extent not addressed

herein, we conclude that they are moot, irrelevant, or without

merit.

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

taxpayer to pay to the United States a penalty not in excess of

$25,000 whenever it appears that proceedings have been instituted

or maintained by the taxpayer primarily for delay or that the

taxpayer’s position in such proceedings is frivolous or

groundless.   In our order dated July 1, 2008, we warned Mr. Barry

that we have frequently imposed the section 6673 penalty on

taxpayers who have continued to advance arguments similar to
                               - 15 -

those he has made throughout these proceedings.   Despite the fact

that petitioners received similar warnings from respondent’s

Appeals Office and despite the fact that the District Court and

the Court of Appeals for the Eleventh Circuit rejected similar

arguments advanced by petitioners during their criminal trials,

see United States v. Barry, 371 Fed. Appx. 3 (11th Cir. 2010);

United States v. Barry, No. 2:08-CR-56-FTM-99SPC (M.D. Fla. June

22, 2009), petitioners continued to advance the same frivolous

arguments before this Court.   Accordingly, we shall impose a

penalty pursuant to section 6673 of $20,000 in the case at docket

No. 4754-07L, and $10,000 in each case at docket Nos. 5026-07L

and 25882-08L.

     To reflect the foregoing,


                                         Appropriate orders and

                                    decisions will be entered for

                                    respondent.
