                         T.C. Memo. 2003-114



                       UNITED STATES TAX COURT



                MICHAEL L. WIDNER, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 18852-02L.             Filed April 21, 2003.



     Michael L. Widner, pro se.

     Rollin G. Thorley, for respondent.



                         MEMORANDUM OPINION


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

dent’s motion for summary judgment and to impose a penalty under

section 66731 (respondent’s motion).   We shall grant respondent’s


     1
      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.
                                 - 2 -

motion.

                            Background

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

following.

     Petitioner resided in Las Vegas, Nevada, at the time he

filed the petition in this case.

     On or about April 15, 1999, petitioner filed a Federal

income tax (tax) return for his taxable year 1998 (1998 return).

In his 1998 return, petitioner reported total income of

$51,162.71, total tax of $11,034, and claimed total credits

against the total tax reported in that return not only for

Federal income tax withheld but also for Social Security tax and

Medicare tax withheld.   As a result, petitioner claimed a refund

of $927.16 in his 1998 return.    Petitioner attached to his 1998

return two Forms W-2, Wage and Tax Statement, and Form 1099-MISC,

Miscellaneous Income.

     On April 15, 1999, respondent credited the $927.16 refund

that petitioner claimed in his 1998 return against unpaid liabil-

ities with respect to his taxable years 1992 and 1993.

     On April 15, 1999, respondent reduced the total withholding

credit that petitioner claimed in his 1998 return by $3,592,

which respondent concluded was attributable to the Social Secu-

rity tax and Medicare tax withheld that petitioner erroneously

included in the total withholding credit claimed in that return.
                                 - 3 -

     On May 24, 1999, respondent assessed the tax that petitioner

reported in his 1998 return.2    On September 17, 2001, respondent

assessed an addition under section 6651(a)(2) to the unpaid

portion of such tax and interest as provided by law.    (We shall

refer to any such unpaid assessed amounts, as well as interest as

provided by law accrued after September 17, 2001, as petitioner’s

unpaid liability for 1998.)

     On September 17, 2001, respondent issued to petitioner a

notice of balance due with respect to petitioner’s unpaid liabil-

ity for his taxable year 1998.

     On April 8, 2002, respondent issued to petitioner a final

notice of intent to levy and notice of your right to a hearing

(notice of intent to levy) with respect to his taxable year 1998.

On or about April 28, 2002, in response to the notice of intent

to levy, petitioner filed Form 12153, Request for a Collection

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


     2
      On Oct. 19, 2001, respondent issued to petitioner a notice
of deficiency (notice) with respect to his taxable year 1998. In
that notice, respondent determined a deficiency of $815 in
petitioner’s tax for that year. Petitioner did not file a
petition with the Court with respect to that notice. On Apr. 29,
2002, respondent assessed the deficiency of $815 that respondent
determined in the notice relating to petitioner’s taxable year
1998. That deficiency is not part of the collection action as
determined in the notice of determination concerning the collec-
tion action for petitioner’s taxable year 1998 upon which this
case is based. Respondent indicates in respondent’s motion that
if respondent proposes to collect the deficiency of $815 that
respondent determined in the notice relating to petitioner’s
taxable year 1998, “Petitioner will be entitled to a separate CDP
hearing” with respect to any such proposed collection action.
                                   - 4 -

respondent’s Appeals Office (Appeals Office).         In that form,

petitioner stated that he intended to make an audio recording of

his Appeals Office hearing.       Petitioner attached, inter alia, a

document to Form 12153 (petitioner’s attachment to Form 12153)

that contained statements, contentions, arguments, and requests

that the Court finds to be frivolous and/or groundless.3

     On September 12, 2002, respondent’s Appeals officer (Appeals

officer) sent petitioner a letter (Appeals officer’s September

12, 2002 letter).       That letter stated in pertinent part:

     I have scheduled the hearing you requested on this case
     for the date and time shown above [October 3, 2002].
     * * *

          *         *       *        *       *         *       *

     As a final note, you should be aware that for many
     years the policy in Appeals was to allow tape or steno-
     graphic recordings of Appeals hearings. Effective May
     2, 2002, that policy changed. Such recordings are no
     longer allowed.

     On September 16, 2002, in response to the Appeals officer’s

September 12, 2002 letter, petitioner sent the Appeals officer a

letter.       That letter stated in pertinent part:

     Thank you for scheduling my Collections Due Process
     Hearing. Your letter states that you will not allow an
     audio or stenographic recording of the hearing. I must
     ask you to cite your legal authority for not allowing


     3
      Petitioner’s 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 Forms 12153 filed with the Internal Revenue
Service by certain other taxpayers with cases in the Court. See,
e.g., Flathers v. Commissioner, T.C. Memo. 2003-60.
                                - 5 -

     an accurate record of the hearing to be made by me. I
     received a copy of IRS Publication 1 (Your Rights as a
     taxpayer), which clearly states that I have a right to
     record such proceedings.

     On October 3, 2002, the Appeals officer held an Appeals

Office hearing with petitioner with respect to the notice of

intent to levy.    Cheryl Flathers (Ms. Flathers) accompanied

petitioner to that hearing.    Although petitioner and Ms. Flathers

both knew that the Appeals Office no longer allowed audio record-

ings of Appeals Office hearings, petitioner and/or Ms. Flathers

secretly made an audio recording of petitioner’s Appeals Office

hearing.4   At the Appeals Office hearing, the Appeals officer

gave petitioner Form 4340, Certificate of Assessments, Payments,

and Other Specified Matters (Form 4340), with respect to peti-

tioner’s taxable year 1998.

     On October 29, 2002, the Appeals Office issued to petitioner

a notice of determination concerning collection action(s) under

section 6320 and/or 6330 (notice of determination).    An attach-

ment to that notice stated in pertinent part:

     Verification of Legal and Procedural Requirements

     The requirements of all applicable laws and administra-
     tive procedures have been met:

            The liabilities were assessed and notice and


     4
      Ms. Flathers, who is no stranger to respondent’s Appeals
Office or the Court, made a secret recording of her own hearing
that respondent’s Appeals Office held with her pursuant to secs.
6320(b) and 6330(b) on May 16, 2002. Flathers v. Commissioner,
supra.
                         - 6 -

demand letters were issued by regular mail to the
taxpayer’s last known address as required under I.R.C.
6303, demonstrated by the forms 4340 in the administra-
tive file;
     There was an assessed liability and a levy source
determined by the Revenue Officer at the time the
notice of intent to levy was issued to TP;
     The notices required under I.R.C. 6330 were pro-
vided to TP on the dates shown above in relation to the
levy notice, L-1058;

   *       *       *       *       *       *       *

Both certified transcripts, and non-literal transcripts
were requested and reviewed by this A.O. Copies of the
certified transcripts were provided to the taxpayer.
Review of those documents and others in the administra-
tive file show that (a) TP did not receive a notice of
deficiency with respect to the underlying liability–-it
pertains to a math error correction of the withholding
taxes he had claimed so one was not required; * * *
(c) the tax to which the intent to levy related was
assessed properly since no notice of deficiency was
required; * * * (e) Notice and Demand was issued to
TP’s last known address; (f) TP failed to pay the
amount requested; and, (g) the collection officer
followed proper procedures in determinating a levy
should be initiated.

   *       *       *       *       *       *       *

Issues Raised by the Taxpayer

In his appeal request, TP provided a lengthy document
in which his interpretation of the law, his rights, and
why he did not owe the tax was offered. The arguments
are without substance and include many theories of the
type described by the Courts as “frivolous.” * * *

At the hearing, TP was provided many documents, includ-
ing court cases from the Tax Court and Ninth Circuit
Court of Appeals, sections of the I.R.C., statements
from self proclaimed tax protestors, and others in
which it was demonstrated that TP could be sanctioned
for even carrying on with his arguments. He was then
offered the opportunity to suggest payment alternatives
and to argue the appropriateness of the collection
action. He had nothing of substance to contribute. He
                                 - 7 -

     instead simply attempted to carry forward with his
     frivolous arguments, so the hearing was terminated.

        *       *        *        *          *   *       *

                             MY EVALUATION

     Review of the information stated above and now present
     in the administrative file shows the collection re-
     quirements for all applicable laws and administrative
     procedures have been met. Assessments were performed
     and notice and demand was made. The notice required by
     section 6330 of the I.R.C. was subsequently issued to
     TP, allowing him his appeal.

     However, there is information to show that not all the
     assessments were proper. Specifically, as indicated
     above the penalty under section 6651(a)(2) was added to
     the tax. That penalty is for the failure to pay the
     tax shown on a return when filed. * * * Here, the
     appropriate penalty is actually that under section
     6651(a)(3). That penalty is for failure to pay the
     liability when billed. * * * the penalty assessed under
     [section] 6651(a)(2) should be removed at this time.
     * * *

     Balancing the Need for Efficient Collection with Tax-
     payer Concerns

     Given that no timely, reasonable alternative to the
     proposed levy action has been suggested and that TP has
     not presented anything more than frivolous arguments in
     the matter, it is my opinion that the proposed collec-
     tion action balances the government’s need for effi-
     cient collection with the taxpayer’s concern that any
     collection action be no more intrusive than necessary.
     It is therefore concluded that the action should be
     allowed to continue.

                              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,

98 T.C. 518, 520 (1992), affd. 17 F.3d 965 (7th Cir. 1994).    We
                                - 8 -

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 tax 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).    Although petitioner

did not receive a notice of deficiency with respect to peti-

tioner’s unpaid liability for 1998,5 the Court finds the conten-

tions and arguments which petitioner advanced at his Appeals

Office hearing and advances in his response to respondent’s

motion (petitioner’s response) and which challenge the existence

or the amount of petitioner’s unpaid liability for 1998 to be

frivolous and/or groundless.6

     We now turn to the remaining issues that petitioner raised

at his Appeals Office hearing and in petitioner’s response with


     5
      See supra note 2.
     6
      The types of contentions, arguments, and requests in peti-
tioner’s response are similar to the types of contentions,
arguments, and requests set forth in responses by certain other
taxpayers with cases in the Court to motions for summary judgment
and to impose a penalty under sec. 6673 filed by the Commissioner
of Internal Revenue in such other cases. See, e.g., Flathers v.
Commissioner, T.C. Memo. 2003-60.
                               - 9 -

respect to the notice of determination, which we shall

review for abuse of discretion.   Sego v. Commissioner, supra;

Goza v. Commissioner, supra.   We find all those remaining issues

to be frivolous and/or groundless.

     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 with respect to

petitioner’s unpaid liability for 1998 except for the addition to

tax under section 6651(a)(2) assessed for that year,7 as deter-

mined in the notice of determination.

     In respondent’s motion, respondent requests that the Court

require petitioner to pay a penalty to the United States pursuant

to section 6673(a)(1).   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,

inter alia, that a proceeding before it was instituted or main-

tained primarily for delay, sec. 6673(a)(1)(A), or that the

taxpayer’s position in such a proceeding is frivolous or ground-

less, sec. 6673(a)(1)(B).

     In Pierson v. Commissioner, 115 T.C. 576, 581 (2000), we

issued an unequivocal warning to taxpayers concerning the imposi-


     7
      In the notice of determination, the Appeals Office deter-
mined that the assessment of the addition to tax under sec.
6651(a)(2) for petitioner’s taxable year 1998 was improper and
that respondent may not proceed with the proposed collection
action with respect to that addition to tax.
                              - 10 -

tion of a penalty under section 6673(a) on those taxpayers who

abuse the protections afforded by sections 6320 and 6330 by

instituting or maintaining actions under those sections primarily

for delay or by taking frivolous or groundless positions in such

actions.

     In the instant case, petitioner advances, we believe primar-

ily for delay, frivolous and/or groundless contentions, argu-

ments, and requests, thereby causing the Court to waste its

limited resources.   We shall impose a penalty on petitioner

pursuant to section 6673(a)(1) in the amount of $600.

     We have considered all of petitioner’s contentions, argu-

ments, and requests that are not discussed herein, and we find

them to be without merit and/or irrelevant.8

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

     To reflect the foregoing,

                                      An order granting respondent’s

                                 motion and decision will be entered

                                 for respondent.




     8
      In petitioner’s response to respondent’s motion, petitioner
argues that the Appeals Office erred in denying him the opportu-
nity to make an audio recording of his Appeals Office hearing
held on Oct. 3, 2002. The record establishes that petitioner
and/or Ms. Flathers made an audio recording of petitioner’s
Appeals Office hearing, and we shall not address petitioner’s
argument about the Appeals Office’s refusal to permit him to
record that hearing.
