                         T.C. Memo. 2003-89



                       UNITED STATES TAX COURT



                 DANIEL E. DUNCAN, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 13979-02L.                Filed March 26, 2003.



     Daniel E. Duncan, 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 October 15, 1998, petitioner filed a Federal

income tax (tax) return for his taxable year 1997 (1997 return).

In his 1997 return, petitioner reported total income of $0, total

tax of $0, and claimed a refund of $560 of tax withheld.    Peti-

tioner attached to his 1997 return five Forms W-2, Wage and Tax

Statement (Form W-2), reporting wages, tips, and other compensa-

tion totaling $29,977.42.   Petitioner also attached a document to

his 1997 return (petitioner’s attachment to his 1997 return) that

contained statements, contentions, and arguments that the Court

finds to be frivolous and/or groundless.2

     On or about April 15, 1999, petitioner filed a tax return

for his taxable year 1998 (1998 return).    In his 1998 return,

petitioner reported total income of $0, total tax of $0, and

claimed a refund of $1,830.69 of tax withheld.    Petitioner

attached to his 1998 return three Forms W-2 reporting wages,


     2
      Petitioner’s attachment to his 1997 return is very similar
to the documents that certain other taxpayers with cases in the
Court attached to their tax returns. See, e.g., Copeland v.
Commissioner, T.C. Memo. 2003-46; Smith v. Commissioner, T.C.
Memo. 2003-45.
                                 - 3 -

tips, and other compensation totaling $34,719.   Petitioner also

attached a document to that return (petitioner’s attachment to

his 1998 return) that contained statements, contentions, and

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

less.3

     On July 2, 1999, and February 11, 2000, respectively,

respondent issued to petitioner notices of deficiency with

respect to his taxable years 1997 and 1998, which he received.

In the notice of deficiency (notice) relating to petitioner’s

taxable year 1997, respondent determined a deficiency in, an

addition under section 6651(a)(1) to, and an accuracy-related

penalty under section 6662 on, petitioner’s tax for that year in

the respective amounts of $5,273, $1,178.25, and $942.60.    In the

notice relating to petitioner’s taxable year 1998, respondent

determined a deficiency in, and an accuracy-related penalty under

section 6662 on, petitioner’s tax for that year in the respective

amounts of $4,482 and $530.26.

     Petitioner did not file a petition in the Court with respect

to the notice relating to his taxable year 1997.   Instead, on

July 15, 1999, in response to the notice with respect to peti-

tioner’s taxable year 1997, petitioner sent a letter (peti-



     3
      Petitioner’s attachment to his 1998 return is very similar
to the documents that certain other taxpayers with cases in the
Court attached to their tax returns. See, e.g., Copeland v.
Commissioner, supra; Smith v. Commissioner, supra.
                                 - 4 -

tioner’s July 15, 1999 letter) to the Internal Revenue Service

that contained statements, contentions, arguments, and requests

that the Court finds to be frivolous and/or groundless.4

     Petitioner did not file a petition in the Court with respect

to the notice relating to his taxable year 1998.

     On January 3, 2000, respondent assessed petitioner’s tax, as

well as an addition to tax, a penalty, and interest as provided

by law, for his taxable year 1997.       On August 28, 2000, respon-

dent assessed petitioner’s tax, as well as a penalty and interest

as provided by law, for his taxable year 1998.      (We shall refer

to those assessed amounts, as well as interest as provided by law

accrued after January 3, 2000, and August 28, 2000, respectively,

as petitioner’s unpaid liabilities for his taxable years 1997 and

1998.)

     On January 3, 2000, and August 28, 2000, respectively,

respondent issued to petitioner notices of balance due with

respect to petitioner’s unpaid liabilities for his taxable years

1997 and 1998.   On February 7, 2000, respondent issued a second

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

ity for his taxable year 1997.

     On April 4, 2001, respondent issued to petitioner a notice


     4
      Petitioner’s July 15, 1999 letter is very similar to the
letters that certain other taxpayers with cases in the Court sent
to the Internal Revenue Service in response to the notices issued
to them. See, e.g., Copeland v. Commissioner, supra; Smith v.
Commissioner, supra.
                               - 5 -

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

tax lien) with respect to his taxable years 1997 and 1998.   On or

about April 21, 2001, in response to the notice of tax lien,

petitioner filed Form 12153, Request for a Collection Due Process

Hearing (Form 12153 regarding notice of tax lien), and requested

a hearing with respondent’s Appeals Office (Appeals Office).

Petitioner attached, inter alia, several documents to Form 12153

regarding his notice of tax lien (petitioner’s attachments to

Form 12153 regarding notice of tax lien) that contained state-

ments, contentions, arguments, and requests that the Court finds

to be frivolous and/or groundless.5

     On June 23, 2001, 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 years 1997

and 1998.   On July 6, 2001, in response to the notice of intent

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

Due Process Hearing (Form 12153 regarding notice of intent to

levy), and requested a hearing with the Appeals Office.   Peti-

tioner attached, inter alia, several documents to Form 12153



     5
      Petitioner’s attachments to Form 12153 regarding notice of
tax lien contained statements, contentions, arguments, and
requests that are similar to the statements, contentions, argu-
ments, and requests contained in the attachments to Forms 12153
filed with the Internal Revenue Service by certain other taxpay-
ers with cases in the Court. See, e.g., Copeland v. Commis-
sioner, T.C. Memo. 2003-46; Smith v. Commissioner, T.C. Memo.
2003-45.
                                - 6 -

regarding notice of intent to levy (petitioner’s attachments to

Form 12153 regarding notice of levy) that contained statements,

contentions, arguments, and requests that the Court finds to be

frivolous and/or groundless.6

     On April 10, 2002, a settlement officer with the Appeals

Office (settlement officer) sent petitioner a letter (settlement

officer’s April 10, 2002 letter).    That letter stated in perti-

nent part:

     I have scheduled the Collection Due Process hearing you
     requested on this case for the time and date shown
     above [May 14, 2002]. * * *

         *      *       *        *       *       *       *

     Appeals’ jurisdiction to hear your case is specified in
     the Internal Revenue code [sic], Sections 6320 and
     6330, and the related federal regulations. Appeals
     will consider the appropriateness of the proposed
     collection action, spousal defenses, and collection
     alternatives. If you received a statutory notice of
     deficiency * * * you may not raise as an issue the
     amount or existence of the underlying assessment. * * *

     I am also enclosing Forms 2866, Certificate of Official
     Record, and Forms 4340, Certificate of Assessment for
     the Forms 1040EZ for the 1997 and 1998 tax years,
     * * *. These documents meet the verification require-
     ments under IRC §6330(c)(1). Your request for addi-
     tional information should be made under the Freedom of
     Information Act through the Disclosure Officer located
     at the Internal Revenue Service, 210 E. Earll, Phoenix,
     Arizona 85012.



     6
      Petitioner’s attachments to Form 12153 regarding notice of
intent to levy are similar to the types of attachments to Forms
12153 filed with the Internal Revenue Service by certain other
taxpayers with cases in the Court. See, e.g., Copeland v.
Commissioner, supra; Smith v. Commissioner, supra.
                               - 7 -

     I have reviewed the correspondence you attached to your
     requests for the collection due process hearings and
     would like to point out that the courts have previously
     ruled against your arguments, and in some instances,
     have imposed sanctions. I have verified the validity
     of the assessments through the review of the complete
     computer transcripts, the tax return files and related
     workpapers. I have no further legal obligation to
     consider any challenge to the validity of the assess-
     ment in the absence of independent proof that the
     assessment was defective in some manner. I am hopeful
     that you wish to discuss legitimate issues and alterna-
     tives for resolving your case at the upcoming hearing.
     I will have the original tax return for 1997 and 1998
     available for your review at the hearing * * *

     On May 3, 2002, the settlement officer sent petitioner

another letter.   That letter stated in pertinent part:

     I am writing to you regarding the upcoming collection
     due process hearing set for May 14, 2002 at 10:00 a.m.
     at the Las Vegas Appeals Office.

     There has been a recent change in the audio recording
     or stenographic recording of hearings before Appeals.
     This practice will no longer be permitted. Your corre-
     spondence with the request for the collection due
     process hearing does not state if you wish to record,
     however, I wanted to make you aware of this change in
     the event you had planned to record the hearing or hire
     someone to stenographically record the hearing.

     The recording of hearings has always been discretionary
     for Appeals under IRC §7521. You may still have a
     witness present at the hearing; however, this witness
     may not represent you or negotiate for you.

     Shortly before May 8, 2002, in response to the settlement

officer’s April 10, 2002 letter, petitioner sent the settlement

officer a letter (petitioner’s May 8, 2002 letter) indicating

that petitioner intended to attend the Appeals Office hearing

scheduled for May 14, 2002.   That letter also contained state-
                              - 8 -

ments, contentions, arguments, and requests that the Court finds

to be frivolous and/or groundless.7

     On May 14, 2002, the settlement officer held an Appeals

Office hearing with petitioner with respect to the notice of tax

lien and notice of intent to levy.    Prior to the Appeals Office

hearing, the settlement officer gave petitioner Form 4340,

Certificate of Assessments, Payments, and Other Specified Matters

(Form 4340), with respect to each of petitioner’s taxable years

1997 and 1998.

     On July 30, 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 the notice of determination stated in pertinent part:

     Verification of Legal and Procedural Requirements

     The Secretary has provided sufficient verification that
     the requirements of any applicable law or administra-
     tive procedure have been met.

     Certified account transcripts, Forms 4340, were re-
     quested and reviewed along with the administrative
     return files for 1997 and 1998. * * *

         *       *      *       *        *       *       *

     The collection due process hearing was held on May 14,


     7
      Petitioner’s May 8, 2002 letter contained statements,
contentions, arguments, and requests that are similar to the
types of statements, contentions, arguments, and requests con-
tained in the attachments to Forms 12153 filed with the Internal
Revenue Service by certain other taxpayers with cases in the
Court. See, e.g., Copeland v. Commissioner, T.C. Memo. 2003-46;
Smith v. Commissioner, T.C. Memo. 2003-45.
                         - 9 -

2002 * * *. This hearing was not audio or stenographi-
cally recorded. The taxpayer was advised prior to the
hearing by letter that no audio recording or steno-
graphic recording would be allowed per a directive
issued by the Acting Chief of Appeals dated 05/02/02.

   *       *       *       *       *       *         *

Issues Raised by the Taxpayer

   *       *       *       *       *       *         *

At the hearing Appeals attempted to review with the
taxpayer the certified transcripts, Forms 4340, the
return packages, the statutory notices of deficiency,
and the basis of assessments based on the wages re-
ported. The taxpayer only raised non-filer arguments
and stated that he had only attached the Forms W-2 to
claim a refund of the withholding. The taxpayer stated
that he did not believe that wages are income. The
taxpayer was advised that he had received the statutory
notices of deficiency for the 1997 and 1998 years for
the assessment of the individual income tax liabilities
and was precluded from raising this issue at the col-
lection due process hearing. * * *

When the taxpayer was asked if he wished to discuss
collection alternatives, he stated that he was inter-
ested in knowing if Appeals could point out the site
[sic] where the Internal Revenue Code stated that he
was liable for taxes. Due to the fact that the tax-
payer only continued to raise non-filer arguments and
in addition was not in filing compliance, collection
alternatives were not discussed. The taxpayer does not
believe that wages are income and does not believe that
the tax laws apply to him. The hearing was concluded.

Appeals did provide to the taxpayer recent court case
decisions on T. Pierson and R. Davis wherein the same
type of arguments were raised and the taxpayer was
advised that in some instances sanctions were being
imposed for raising these arguments.

The taxpayer raised no other non-frivolous issues.
                              - 10 -

     Balancing the Need for Efficient Collection with Tax-
     payer Concerns

     The requirements of all applicable laws and administra-
     tive procedures have been met. The courts have previ-
     ously addressed the taxpayers’ [sic] arguments, and
     Appeals does not have the authority for reconsideration
     of the matters.

     The assessments for income tax for 1997 and 1998 are
     valid and the Service followed proper procedures in
     making these assessments. The taxpayer received his
     statutory notices of deficiency and is precluded from
     raising this issue under the collection due process
     criteria.

     The taxpayer received his required notice and demand
     and the notice of intent to levy is appropriate. * * *
     Given the taxpayer’s history of non-compliance, I
     believe that collection action in the form of levy
     should be allowed to proceed.

     In addition, the filing of the NFTL was also appropri-
     ate and the proper procedures were followed in filing
     the lien. The lien will not be withdrawn or released.
     Due to the taxpayer’s non-compliance with the filing
     returns, no collection alternatives could be discussed.

     Lacking the taxpayer’s cooperation, the proposed col-
     lection action balances the need for efficient collec-
     tion of taxes with the taxpayer’s legitimate concern
     that any collection action be no more intrusive than
     necessary.

                            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

conclude that there are no genuine issues of material fact

regarding the questions raised in respondent’s motion.
                               - 11 -

     Where, as is the case here, the validity of the underlying

tax liability is not properly placed at issue, the Court will

review the determination of the Commissioner of Internal Revenue

for abuse of discretion.   Sego v. Commissioner, 114 T.C. 604, 610

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

     As was true of petitioner’s attachment to his 1997 return,

petitioner’s attachment to his 1998 return, petitioner’s July 15,

1999 letter, petitioner’s attachments to Form 12153 regarding

notice of tax lien, petitioner’s attachments to Form 12153

regarding notice of levy, and petitioner’s May 8, 2002 letter,

petitioner’s response to respondent’s motion (petitioner’s

response) contains contentions, arguments, and requests that the

Court finds to be frivolous and/or groundless.8

     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 actions as determined

in the notice of determination with respect to petitioner’s

taxable years 1997 and 1998.

     In respondent’s motion, respondent requests that the Court

require petitioner to pay a penalty to the United States pursuant


     8
      The contentions, arguments, and requests set forth in
petitioner’s response are very similar to the 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., Fink v.
Commissioner, T.C. Memo. 2003-61.
                              - 12 -

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-

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.9

     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 $2,500.

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

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




     9
      The record in this case reflects that the settlement offi-
cer gave petitioner, inter alia, a copy of the Court’s opinion in
Pierson v. Commissioner, 115 T.C. 576 (2000).
                              - 13 -

them to be without merit and/or irrelevant.10

     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.




     10
      We note that in petitioner’s response petitioner contends
that “the law (26USC 7521) [sic] clearly provides that Petitioner
had a right to tape the CDP hearing at issue” and that he “is
entitled to a summary judgment just on the ground that he was
denied the right to make a tape recording & a stenographic
recording.” We shall not address petitioner’s contention. That
is because, assuming arguendo that sec. 7521(a)(1) were applica-
ble in the case of an Appeals Office hearing under sec.
6320(b)(1) and/or sec. 6330(b)(1), the record does not establish
that petitioner complied with the requirement of sec. 7521(a)(1)
that he present respondent with his request to make an audio
recording of his Appeals Office hearing in advance of that
hearing.
