                        T.C. Memo. 2004-192



                      UNITED STATES TAX COURT



            ROBERT & POLLY A. GATLOS, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 15827-03L.             Filed August 26, 2004.



     Robert and Polly A. Gatlos, pro sese.

     Jeffrey C. Venzie, for respondent.



                        MEMORANDUM OPINION

     MARVEL, Judge:   This matter is before the Court on

respondent’s motion for summary judgment, filed pursuant to Rule

121,1 and to impose a penalty under section 6673.

     Summary judgment is a procedure designed to expedite


     1
      All Rule references are to the Tax Court Rules of Practice
and Procedure, and all section references are to the Internal
Revenue Code in effect for the years at issue.
                               - 2 -

litigation and avoid unnecessary, time-consuming, and expensive

trials.   Fla. Peach Corp. v. Commissioner, 90 T.C. 678, 681

(1988).   Summary judgment may be granted with respect to all or

any part of the legal issues presented “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.”   Rule 121(a) and

(b); see Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520

(1992), affd. 17 F.3d 965 (7th Cir. 1994); Zaentz v.

Commissioner, 90 T.C. 753, 754 (1988).   The moving party bears

the burden of proving that there is no genuine issue of material

fact, and factual inferences will be read in a manner most

favorable to the party opposing summary judgment.   Dahlstrom v.

Commissioner, 85 T.C. 812, 821 (1985).   The facts material to the

Court’s disposition of the motion for summary judgment are stated

solely for purposes of deciding the motion and are not findings

of fact for this case.   See Sundstrand Corp. v. Commissioner,

supra at 520.

                            Background

     This is an appeal from respondent’s determination upholding

the proposed use of a levy to collect petitioners’ unpaid Federal

income tax liabilities for 1996 and 1999.   When the petition in
                               - 3 -

this case was filed, petitioners resided in Nottingham,

Pennsylvania.

     Petitioners timely filed joint Federal income tax returns

for 1996 and 1999 showing balances due.   Respondent assessed the

income tax liabilities shown on the returns as well as interest

and the additions to tax for failure to pay tax under section

6651(a)(2).

     Petitioners made some payments that were applied to their

1996 and 1999 tax liabilities but did not pay the liabilities in

full.   Following the receipt of a communication from petitioners

in which petitioners claimed that they were not liable for any

income tax, respondent sent petitioners a Letter 1058, Final

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

Hearing, dated July 2, 2002, with respect to their unpaid 1996

and 1999 tax liabilities.   The final notice was issued and signed

by Michael C. Sutton, a revenue officer, who was a GS-11 employee

of the Internal Revenue Service on the date the final notice was

issued.

     On July 30, 2002, respondent received a “Claim for Relief

From Alleged Notice of Lien or Levy” from petitioners in which

petitioners asserted various frivolous arguments.   Because of the

frivolous nature of petitioners’ arguments, respondent initially

refused to treat the claim as a timely request for a hearing

under section 6330 and initiated a levy action against
                                 - 4 -

petitioners.   However, respondent subsequently determined that

petitioners’ claim was a timely request for a section 6330

hearing and released the levy.

     By letter dated May 19, 2003, Appeals Officer Paula Stanton

advised petitioners that she had scheduled the requested hearing

for June 3, 2003, at 10 a.m.   In that letter, Appeals Officer

Stanton warned petitioners that “I cannot consider issues

concerning the constitutionality of tax laws.”

     Petitioners did not attend the hearing scheduled for June 3,

2003, and did not contact Appeals Officer Stanton to schedule a

new hearing.   By letter dated June 3, 2003, and labeled “FINAL

OPPORTUNITY”, Appeals Officer Stanton warned petitioners that if

she did not hear from them on or before June 13, 2003, she would

issue a determination letter based on current information.

     By letter dated June 30, 2003, Appeals Officer Stanton

rescheduled the hearing requested by petitioners for July 8,

2003.   On July 8, 2003, the hearing was held.    Petitioner Polly

Gatlos participated in the hearing.      At the hearing, Mrs. Gatlos

challenged the constitutionality of the Internal Revenue Code and

refused to discuss collection alternatives.     Petitioners raised

no relevant issue at the July 8 hearing.

     On August 11, 2003, respondent issued a Notice of

Determination Concerning Collection Action(s) Under Section 6320

and/or 6330 (the notice of determination).     In the notice of
                                - 5 -

determination, respondent determined, in pertinent part, as

follows:

     1.    The presiding appeals officer had had no prior

involvement with respect to the unpaid liabilities.

     2.    Respondent sent the notices required by sections 6330

and 6331(d).

     3.    Petitioners did not raise any spousal defenses or

request a collection alternative.    The only argument raised by

petitioners at the hearing was that the Internal Revenue Code is

unconstitutional.

     4.    The proposed levy balances respondent’s need for

efficient tax collection with the taxpayers’ legitimate concern

that any collection be no more intrusive than necessary.

     On September 15, 2003,2 this Court filed petitioners’

petition in which petitioners contested the determination made by

respondent in the notice of determination dated August 11, 2003.

In their petition, petitioners gave the following reasons for

seeking relief:

     Section 7608(a) of the Internal Revenue Code only
     provides Revenue Officers with the authority to enforce
     subtitle E taxes, (liquor, tobacco and fire arms,)
     while the “Enforcement of laws relating to internal
     revenue other than subtitle E” taxes are delegated (in
     7608(b)) to “Any criminal investagator [sic] of the
     Intelligence Division or of the Internal Security
     Division. Since the person executing the Notice of


     2
      The envelope in which the petition was mailed was
postmarked Sept. 8, 2003.
                               - 6 -

      Lien does not fall into the category of IRS agent as
      defined in 26 U.S.C. 7608(b), he can have no delegated
      authouity [sic] to issue Notices of Liens with the
      respect to income taxes. Revenue Code Sec. 6331(a)
      “AUTHORITY OF THE SECRETARY” “levy may be made upon the
      accrued salary and wages of any officer, employee or
      elected official of the United States” We are not one
      of the person(s) listed in the code. (No Commissioner
      signature).

      On June 15, 2004, “RESPONDENT’S MOTION FOR SUMMARY JUDGMENT

AND TO IMPOSE A PENALTY UNDER I.R.C. § 6673" was filed.   By order

dated June 29, 2004, we required petitioners to file a response

to respondent’s motion by July 20, 2004.   Petitioners failed to

file a response.

                            Discussion

A.   Section 6330

      Section 6330(a) provides that no levy may be made on any

property or right to property of any person unless the Secretary3

has notified such person in writing of the right to a hearing



      3
      Sec. 7701(a)(11)(B) provides: “The term ‘Secretary’ means
the Secretary of the Treasury or his delegate.” Sec.
7701(a)(12)(A) provides:

                (A) In general.--The term “or his delegate”--

                     (i) when used with reference to the
                Secretary of the Treasury, means any officer,
                employee, or agency of the Treasury
                Department duly authorized by the Secretary
                of the Treasury directly, or indirectly by
                one or more redelegations of authority, to
                perform the function mentioned or described
                in the context; and
                               - 7 -

before the levy is made.   If the person makes a request for a

hearing, a hearing shall be held before an impartial officer or

employee of the Internal Revenue Service Office of Appeals.    Sec.

6330(b)(1).   At the hearing, a taxpayer may raise any relevant

issue, including appropriate spousal defenses, challenges to the

appropriateness of the collection action, and collection

alternatives.   Sec. 6330(c)(2)(A).    Additionally, at the hearing,

a taxpayer may contest the existence or amount of the underlying

tax liability if the taxpayer did not receive a notice of

deficiency for the tax in question or did not otherwise have an

earlier opportunity to dispute the tax liability.    Sec.

6330(c)(2)(B); see also Sego v. Commissioner, 114 T.C. 604, 609

(2000).

     Following a hearing, the Appeals Office must make a

determination whether the proposed levy action may proceed.    In

so doing, the Appeals Office is required to take into

consideration the verification presented by the Secretary, the

issues raised by the taxpayer, and whether the proposed levy

action appropriately balances the need for efficient collection

of taxes with a taxpayer’s concerns regarding the intrusiveness

of the proposed levy action.   Sec. 6330(c)(3).   The determination

of the Appeals officer under section 6330, except a determination

regarding the underlying tax liability that is made pursuant to

section 6330(c)(2)(B), is reviewed for abuse of discretion.      Sego
                                 - 8 -

v. Commissioner, supra at 610.    Where the underlying tax

liability is properly at issue, the Court reviews any

determination regarding the underlying tax liability de novo.

Id.

      A hearing officer may rely on a computer transcript or Form

4340, Certificate of Assessments, Payments and Other Specified

Matters, to verify that a valid assessment was made and that a

notice and demand for payment was sent to the taxpayer in

accordance with section 6303.     Nestor v. Commissioner, 118 T.C.

162, 166 (2002).   Absent a showing of irregularity, a transcript

that shows such information is sufficient to establish that the

procedural requirements of section 6330 have been met.       Id. at

166-167.

      In this case, the undisputed facts set forth in respondent’s

motion, declarations in support of the motion, and attached

exhibits establish that respondent has satisfied the requirements

of section 6330.   Appeals Officer Stanton, who had had no prior

involvement with respect to the unpaid tax liabilities before the

section 6330 hearing as required by section 6330(b)(3), verified

that proper assessments were made as reflected on computer

transcripts attached to the motion for summary judgment and in

the notice of determination, and that the requisite notices had

been sent to the petitioners.    Appeals Officer Stanton also

considered petitioners’ argument and rejected it as not relevant
                               - 9 -

and frivolous.   Following the hearing, Appeals Officer Stanton

made a determination upholding the proposed levy action after

concluding that the proposed levy action appropriately balanced

the need for efficient collection of taxes with petitioners’

concerns regarding the intrusiveness of the proposed levy action.

Sec. 6330(c)(3).

     In their petition, petitioners asserted three less-than-

clear arguments in support of their contention that respondent’s

determination was erroneous:

     (1) The revenue officer who executed a related notice of

lien was not delegated authority to issue a notice of lien with

respect to income taxes under section 7608(b).

     (2) Petitioners were not subject to levy under section

6331(a).

     (3) The Commissioner of Internal Revenue did not sign a

document the identity of which petitioners did not specify.

We address these arguments briefly below.

           Authority To Issue Final Notice of Intent To Levy

     Petitioners’ argument has no merit for several reasons.

First, the relevant notice is the final notice of intent to levy,

not a notice of lien that was not the subject of the notice of

determination.   Second, the Secretary or his delegate (including

the Commissioner) is authorized to issue a final notice of intent

to levy.   Craig v. Commissioner, 119 T.C. 252, 263 (2002) (citing
                             - 10 -

sections 7701(a)(11)(B) and (12)(A)(i), 7803(a)(2)).    The

Commissioner’s authority to issue a final notice of intent to

levy has been delegated to GS-9 and above revenue officers.

Everman v. Commissioner, T.C. Memo. 2003-137 (citing Delegation

Order No. 191 (Rev. 2; Oct. 1, 1999) (Rev.3; June 11, 2001)).

Michael C. Sutton, the revenue officer who issued the final

notice of intent to levy to petitioners on July 2, 2002, was

classified as a GS-11 at the time he issued the notice.    The

notice of intent to levy in this case was valid as it was issued

to petitioners by a revenue officer with delegated authority to

do so.

          Petitioners Are Persons Subject to Levy

     Petitioners’ argument that they are not persons subject to

levy under section 6331(a) is also without merit.   Section

6331(a) specifically authorizes the Secretary to collect unpaid

taxes from any person by levy upon all property and rights to

property belonging to such person.    Section 7701(a)(1) defines

“person” to include an individual.    Petitioners are individuals

under section 7701(a)(1) and, therefore, are subject to levy

under section 6331(a).

          No Signature by Commissioner

     Although petitioners’ argument is unclear, we shall

interpret the cryptic reference, “no Commissioner signature”, to

mean that the final notice of intent to levy was invalid because
                                - 11 -

it was not signed by the Commissioner.     Again, petitioners’

argument has no merit.

       This Court has repeatedly rejected the argument that the

Commissioner is required to sign a final notice.     See, e.g.,

Craig v. Commissioner, 119 T.C. at 263.     There is no statutory

requirement that a final notice of intent to levy must be signed.

Everman v. Commissioner, supra.     Moreover, even though there is

no statutory requirement that the notice be signed, the final

notice of intent to levy in this case was issued and executed by

Revenue Officer Michael Sutton to whom the Commissioner had

delegated the requisite authority.

       The petition does not set forth any other assignments of

error with respect to the notice of determination.     Any other

argument made by petitioners before or during the hearing was

frivolous, was not raised in the petition, and/or is deemed to be

conceded.    Rule 331(b)(4).   We conclude, therefore, that there

are no genuine issues of material fact and that respondent is

entitled to the entry of a decision in this case as a matter of

law.

B.   Section 6673 Penalty

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

taxpayer to pay to the United States a penalty, not to exceed

$25,000, if it appears that the taxpayer has instituted or

maintained a proceeding primarily for delay, or that the
                              - 12 -

taxpayer’s position is frivolous or groundless.    Section

6673(a)(1) applies to proceedings under section 6330.    Pierson v.

Commissioner, 115 T.C. 576, 581 (2000).    In proceedings under

section 6330, we have imposed the penalty on taxpayers who have

raised frivolous and groundless arguments with respect to the

legality of the Federal tax laws.   See, e.g., Roberts v.

Commissioner, 118 T.C. 365, 372-373 (2002), affd. 329 F.3d 1224

(11th Cir. 2003); Eiselstein v. Commissioner, T.C. Memo. 2003-22;

Yacksyzn v. Commissioner, T.C. Memo. 2002-99.

     In this case, the record for purposes of respondent’s motion

clearly establishes that the only arguments made by petitioners

during the administrative processing of this case were frivolous

and/or groundless.   In their “Claim for Relief From Alleged

Notice of Lien or Levy”, petitioners argued, among other things,

that they are not liable for income tax, and they challenged the

Secretary’s delegation of authority to IRS employees to collect

unpaid taxes.   In their letter to respondent dated December 28,

2002, petitioners again raised several frivolous arguments

including an argument that their tax liabilities were invalid

because the Sixteenth Amendment does not authorize a direct,

nonapportioned income tax on citizens.    At the hearing, Mrs.

Gatlos again raised frivolous arguments regarding the

constitutionality of the income tax.   In their petition,

petitioners continued to assert frivolous and/or groundless
                              - 13 -

arguments.   After respondent filed his motion for summary

judgment and we issued an order requiring petitioners to respond,

petitioners did not comply with our order and did not file the

required response.

     Petitioners’ conduct as summarized in this opinion

demonstrates that this proceeding was instituted and maintained

primarily for delay.   Moreover, every argument made by

petitioners during the administrative appeal and in this Court

was frivolous and/or groundless.   Consequently, a penalty under

section 6673(a)(1) is warranted.   We shall require petitioners to

pay to the United States a penalty under section 6673(a)(1) of

$2,000.

                                         An appropriate order and

                                    decision will be entered.
