                        T.C. Memo. 2003-278



                      UNITED STATES TAX COURT



                MICHAEL W. BETHEA, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 7957-02L.           Filed September 24, 2003.


     Michael W. Bethea, pro se.

     Linda J. Wise and Robert W. West, for respondent.



                        MEMORANDUM OPINION


     WHERRY, Judge:   This case is before the Court on

respondent’s motion for summary judgment pursuant to Rule 121 and

to impose a penalty under section 6673.   The instant proceeding

arises from a petition for judicial review filed in response to a

Notice of Determination Concerning Collection Actions(s) Under
                               - 2 -

Section 6320 and/or 6330.1   The issues for decision are:

(1) Whether respondent may proceed with collection action as so

determined, and (2) whether the Court should impose a penalty

under section 6673.

                             Background

     Petitioner filed a Form 1040, U.S. Individual Income Tax

Return, for the 1997 taxable year.     On the return, petitioner

reported $9,254 of wage income, as reflected in an attached Form

W-2, Wage and Tax Statement.   He then entered “0” on all other

lines of the return with the exception of showing $902.11 in

Federal income tax withheld, $18,850 in 1997 estimated tax

payments, and a corresponding $19,752.11 as the total payments,

amount overpaid, and amount to be refunded to him.     Petitioner

also enclosed with the 1997 return a typed statement challenging

his duty to file returns and to pay tax.

     Respondent computed petitioner’s tax liability on the basis

of the Form W-2 income and assessed the resultant $476.2


     1
       Unless otherwise indicated, section references are to the
Internal Revenue Code, as amended, and Rule references are to the
Tax Court Rules of Practice and Procedure.
     2
       Given that petitioner’s return reported his wages and
attached the supporting Form W-2 but showed zero in tax,
respondent apparently calculated and assessed the tax pursuant to
sec. 6213(b)(1) as arising from a mathematical or clerical error.
The record does not reflect that petitioner ever requested an
abatement of this assessment, see sec. 6213(b)(2), or otherwise
disputed the assessment either before the Office of Appeals or in
the instant judicial proceeding. Accordingly, the propriety of
                                                   (continued...)
                                - 3 -

Respondent then applied the reported $19,752.11 in estimated tax

and withholding credits as follows:

     1997 income   tax liability                        $476.00
     Credited to   unpaid balance on 1988 income tax   8,564.17
     Credited to   unpaid balance on 1989 income tax   7,417.17
     Refunded to   petitioner                          3,294.77

     Thereafter, on November 19, 1999, respondent issued to

petitioner a notice of deficiency for the 1997 year.    The notice

reflected a deficiency of $23,909, stemming from $65,245 in

unreported income shown on Forms 1099, and an accuracy-related

penalty under section 6662(a) of $4,782.    In response, petitioner

mailed to respondent a letter dated January 28, 2000,

acknowledging his right to file a petition with the Tax Court but

stating, among other things:    “Before I file, pay, or do anything

with respect to this ‘Notices’ I must first establish whether or

not it was sent pursuant to law, whether [sic] not is [sic] has

the ‘force and effect or [sic] law,’ and whether (GWEN A. KRAUSS)

Director of the IRS Service Center had any authority to send me

the Notice in the first place.”

     Petitioner did not file with the Court a petition contesting

the deficiency notice.    On April 17, 2000, respondent assessed

the $23,909 deficiency and the $4,782 penalty, as well as

$4,920.09 of interest, and sent to petitioner a notice of the


     2
      (...continued)
the $476 assessment is not before us. We therefore construe
petitioner’s arguments as pertaining solely to the subsequent
assessment discussed hereafter.
                                - 4 -

balance due.    An additional notice of balance due was sent on

May 22, 2000.

     On July 29, 2000, respondent issued to petitioner a Final

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

Hearing with respect to the unpaid liabilities for 1997.

Petitioner returned to respondent a completed and signed Form

12153, Request for a Collection Due Process Hearing, with an

attachment in which he disputed, among other things, his receipt

and/or the validity of the underlying tax liability, the notice

of deficiency, the assessment, and the notice and demand for

payment.

     A hearing was conducted on March 19, 2002.    Both prior to

and at the hearing, petitioner was provided with copies of Form

4340, Certificate of Assessments, Payments, and Other Specified

Matters.   Petitioner’s arguments at the hearing challenged the

collection action on grounds of liability, claiming a lack of

authority on the part of the Internal Revenue Service to assess

and collect the tax.    Following the hearing, on March 29, 2002,

respondent issued to petitioner the Notice of Determination

Concerning Collection Actions(s) Under Section 6320 and/or 6330

sustaining the proposed levy.

     Petitioner’s petition disputing respondent’s notice of

determination was filed on April 29, 2002, and reflected an

address in Fort Walton Beach, Florida.    The petition raises
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contentions regarding:   (1) The underlying tax liability and,

more specifically, the validity of the notice of deficiency and

authority of the issuing agent; (2) the validity of the

assessment; (3) petitioner’s receipt of a statutory notice and

demand for payment; and (4) the requisite “verification from the

Secretary that the requirements of any applicable law or

administrative procedure have been met”.   Respondent prepared and

filed an answer to the petition and subsequently filed the

subject motion for summary judgment and to impose a section 6673

penalty.

                            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 he or she 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).   Facts are viewed in the light most favorable to the
                                  - 6 -

nonmoving party.     Id.   However, where a motion for summary

judgment has been properly made and supported by the moving

party, the opposing party may not rest upon mere allegations or

denials contained in that party’s pleadings but must by

affidavits or otherwise set forth specific facts showing that

there is a genuine issue for trial.       Rule 121(d).   The Court has

considered the pleadings and other materials in the record and

concludes that there is no genuine justiciable issue of material

fact in this case.

I.   Collection Action

     Section 6331(a) authorizes the Commissioner to levy upon all

property and rights to property of a taxpayer where there exists

a failure to pay any tax liability within 10 days after notice

and demand for payment.     Sections 6331(d) and 6330 then set forth

procedures generally applicable to afford protections for

taxpayers in such levy situations.        Section 6331(d) establishes

the requirement that a person be provided with at least 30 days’

prior written notice of the Commissioner’s intent to levy before

collection may proceed.     Section 6331(d) also indicates that this

notification should include a statement of available

administrative appeals.     Section 6330(a) expands in several

respects upon the premise of section 6331(d), forbidding

collection by levy until the taxpayer has received notice of the

opportunity for administrative review of the matter in the form
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of an Appeals Office hearing.   Section 6330(b) grants a taxpayer

who so requests the right to a fair hearing before an impartial

Appeals officer.

     Section 6330(c) addresses the matters to be considered at

the hearing:

          SEC. 6330(c). Matters Considered at Hearing.--In
     the case of any hearing conducted under this section--

                 (1) Requirement of investigation.--The
          appeals officer shall at the hearing obtain
          verification from the Secretary that the
          requirements of any applicable law or
          administrative procedure have been met.

                   (2) Issues at hearing.--

                      (A) In general.--The person may raise at
                   the hearing any relevant issue relating to
                   the unpaid tax or the proposed levy,
                   including--

                           (i) appropriate spousal defenses;

                           (ii) challenges to the
                      appropriateness of collection actions;
                      and

                           (iii) 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.

                      (B) Underlying liability.--The person
                   may also raise at the hearing challenges to
                   the existence or amount of the underlying
                   tax liability for any tax period if the
                   person did not receive any statutory notice
                   of deficiency for such tax liability or did
                   not otherwise have an opportunity to
                   dispute such tax liability.
                                - 8 -

     Once the Appeals officer has issued a determination

regarding the disputed collection action, section 6330(d) allows

the taxpayer to seek judicial review in the Tax Court or a

District Court.    In considering whether taxpayers are entitled to

any relief from the Commissioner’s determination, this Court has

established the following standard of review:

     where the validity of the underlying tax liability is
     properly at issue, the Court will review the matter on
     a de novo basis. However, where the validity of the
     underlying tax liability is not properly at issue, the
     Court will review the Commissioner’s administrative
     determination for abuse of discretion. [Sego v.
     Commissioner, 114 T.C. 604, 610 (2000).]

     A.   Review of Underlying Liability

     Petitioner apparently seeks to challenge in this case the

existence of his underlying liability on grounds that the notice

of deficiency he received was invalid due to lack of a delegation

of authority from the Secretary to the Director of the Service

Center who issued the notice.    This contention, however is

without merit.    As this Court has explained:

     The Secretary or his delegate may issue notices of
     deficiency. Secs. 6212(a), 7701(a)(11)(B) and
     (12)(A)(i). The Secretary’s authority to issue notices
     of deficiency was delegated to the District Director
     and also to the Director of the Service Center * * *. *
     * * secs. 301.6212-1(a), 301.7701-9(b), Proced. &
     Admin. Regs. * * * [Nestor v. Commissioner, 118 T.C.
     162, 165 (2002).]

     Accordingly, because petitioner received a valid notice of

deficiency and did not timely petition for redetermination, he is
                               - 9 -

precluded under section 6330(c)(2)(B) from disputing his

underlying tax liability in this proceeding.

     B.   Review for Abuse of Discretion

     Petitioner also makes various arguments relating to aspects

of the assessment and collection procedures that we review for

abuse of discretion.   Petitioner claims that no valid assessment

supports the proposed levy and asserts that he should have been

provided with a copy of Form 23C, Summary Record of Assessment,

and with proof of the “filed return” from which the assessment

emanated.   Again, these arguments have been repudiated.

     Federal tax assessments are formally recorded on a record of

assessment in accordance with section 6203.    Upon request, the

Secretary is directed to furnish to the taxpayer a copy of

pertinent parts of the record of assessment setting forth the

taxpayer’s name, the date of assessment, the character of the

liability assessed, the taxable period, if applicable, and the

amounts assessed.   Id.; sec. 301.6203-1, Proced. & Admin. Regs.

A Form 4340 constitutes presumptive evidence that a tax has been

validly assessed pursuant to section 6203.     Davis v.

Commissioner, 115 T.C. 35, 40 (2000) (and cases cited thereat).

     Absent a showing by the taxpayer of some irregularity in the

assessment procedure that would raise a question about the

validity of the assessments, a Form 4340 reflecting that tax

liabilities were assessed and remain unpaid is sufficient to
                                - 10 -

support collection action under section 6330.    Id. at 40-41.    Nor

is the Commissioner required to use Form 23C in making an

assessment.    Roberts v. Commissioner, 118 T.C. 365, 369-371

(2002), affd. 329 F.3d 1224 (11th Cir. 2003).    Furthermore, a

taxpayer receiving a copy of Form 4340 has been provided with all

the documentation to which he or she is entitled under section

6203 and section 301.6203-1, Proced. & Admin. Regs.    Roberts v.

Commissioner, supra at 370 n.7.

     Here, petitioner has cited no irregularities that would cast

doubt on the information recorded in the Form 4340, and he was

furnished with copies of this document both prior to and at the

hearing.    Additionally, arguments substantially identical to his

statements concerning “filed returns” have been summarily

rejected.   See, e.g., Fink v. Commissioner, T.C. Memo. 2003-61.

We conclude that petitioner’s complaints regarding the assessment

are meritless.

     Petitioner also alleges not to have received the notice and

demand for payment that section 6303(a) establishes should be

given within 60 days of the making of an assessment.    However, a

notice of balance due constitutes a notice and demand for payment

within the meaning of section 6303(a).    Craig v. Commissioner,

119 T.C. 252, 262-263 (2002).    The Form 4340 indicates that

petitioner was sent at least two such notices of balance due, on

April 17 and May 22, 2000.
                              - 11 -

     Finally, petitioner advances several contentions phrased in

terms of the prescribed verification that the requirements of any

applicable law or administrative procedure were met.    These

claims are to a certain degree interrelated with his arguments

couched in terms of the assessment.    To the extent that there

exists a different emphasis, suffice it to say that section

6330(c)(1) mandates neither that the Appeals officer rely on a

particular document in satisfying the verification requirement

nor that the Appeals officer actually give the taxpayer a copy of

the verification upon which he or she relied.    Craig v.

Commissioner, supra at 262; Nestor v. Commissioner, supra at 166.

Moreover, we have specifically held that it is not an abuse of

discretion for an Appeals officer to rely on Form 4340 to comply

with section 6330(c)(1).   Nestor v. Commissioner, supra at 166;

Davis v. Commissioner, supra at 41.

     Thus, with respect to those issues enumerated in section

6330(c)(2)(A) and subject to review in collection proceedings for

abuse of discretion, petitioner has not raised any spousal

defenses, valid challenges to the appropriateness of the

collection action, or collection alternatives.    As this Court has

noted in earlier cases, Rule 331(b)(4) states that a petition for

review of a collection action shall contain clear and concise

assignments of each and every error alleged to have been

committed in the notice of determination and that any issue not
                              - 12 -

raised in the assignments of error shall be deemed conceded.     See

Lunsford v. Commissioner, 117 T.C. 183, 185-186 (2001); Goza v.

Commissioner, 114 T.C. 176, 183 (2000).   Accordingly, the Court

concludes that respondent’s determination to proceed with

collection of petitioner’s tax liabilities was not an abuse of

discretion.

II.   Section 6673 Penalty

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

taxpayer to pay a penalty not in excess of $25,000 when it

appears to the Court that, inter alia, proceedings have been

instituted or maintained by the taxpayer primarily for delay or

that the taxpayer’s position in such proceeding is frivolous or

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

we warned that taxpayers abusing the protections afforded by

sections 6320 and 6330 through the bringing of dilatory or

frivolous lien or levy actions will face sanctions under section

6673.   We have since repeatedly disposed of cases premised on

arguments akin to those raised herein summarily and with

imposition of the section 6673 penalty.   See, e.g., Craig v.

Commissioner, supra at 264-265 (and cases cited thereat).

      With respect to the instant matter, we are convinced that

petitioner instituted this proceeding primarily for delay by

advancing contentions previously and consistently rejected by

this and other courts.   We note that during petitioner’s hearing
                              - 13 -

before Appeals, the officer provided petitioner with a copy of

Davis v. Commissioner, supra, and Thompson v. IRS, 57 AFTR 2d 86-

1450, 86-1 USTC par. 9420 (E.D. Cal. 1986), and explained how

those cases reflected a rejection of positions similar to

petitioner’s.   Hence, petitioner received fair warning but has

persisted in disputing respondent’s determination.     The Court

concludes that a penalty of $2,000 should be awarded to the

United States in this case.   We will grant respondent’s motion.

     To reflect the foregoing,


                                         An appropriate order

                                    granting respondent’s motion

                                    and decision for respondent

                                    will be entered.
