                         T.C. Memo. 2003-72



                       UNITED STATES TAX COURT



   G. ROBERT LYMAN AND SHARI LEE WRIGHT LYMAN, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 10371-02L.                Filed March 13, 2003.



     G. Robert Lyman and Shari Lee Wright Lyman, pro sese.

     Wendy S. Harris, for respondent.



                         MEMORANDUM OPINION


     CHIECHI, Judge:    This case is before the Court on

respondent’s motion for summary judgment and to impose a penalty

under section 6673 (respondent’s motion).1    We shall grant



     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 -

respondent’s motion.

                             Background

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

following.

     Petitioners’ mailing address was in Moapa, Nevada, at the

time they filed the petition in this case.

     On or about April 14, 1998, petitioners filed jointly a

Federal income tax (tax) return for their taxable year 1997 (1997

joint return).   In their 1997 joint return, petitioners reported

total income of $0, total tax of $0, and claimed a refund of

$1,102.51 of tax withheld.   Petitioners attached to their 1997

joint return two Forms W-2, Wage and Tax Statement, reporting

wages, tips, and other compensation totaling $47,639.38.   Peti-

tioners also attached a document to their 1997 joint return

(petitioners’ attachment to their 1997 joint return) that con-

tained statements, contentions, and arguments that the Court

finds to be frivolous and/or groundless.2

     On April 15, 1999, petitioners filed jointly a tax return

for their taxable year 1998 (1998 joint return).   In their 1998

joint return, petitioners reported total income of $0 and total

tax of $0.   Petitioners attached a document to their 1998 joint


     2
      Petitioners’ attachment to their 1997 joint 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 -

return (petitioners’ attachment to their 1998 joint return) that

contained statements, contentions, and arguments that the Court

finds to be frivolous and/or groundless.3

     On February 18, 2000, respondent issued to petitioners a

notice of deficiency (notice) with respect to their taxable year

1997, and on March 10, 2000, respondent issued to them a notice

with respect to their taxable year 1998, both of which they

received.   In the notice relating to petitioners’ taxable year

1997, respondent determined a deficiency in, and an accuracy-

related penalty under section 6662(a) on, petitioners’ tax for

that year in the respective amounts of $6,452.10 and $1,069.92.

In the notice relating to petitioners’ taxable year 1998, respon-

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

under section 6662(a) on, petitioners’ tax for that year in the

respective amounts of $6,086 and $1,217.20.

     Petitioners did not file a petition in the Court with

respect to the notice relating to their taxable year 1997 or the

notice relating to their taxable year 1998.

     On July 31, 2000, and August 28, 2000, respectively, respon-

dent assessed petitioners’ tax, as well as any penalties and

interest as provided by law, for their taxable years 1997 and



     3
      Petitioners’ attachment to their 1998 joint 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 -

1998.    (We shall refer to those assessed amounts, as well as

interest provided by law accrued after July 31, 2000, and August

28, 2000, respectively, as petitioners’ unpaid liability for each

of their taxable years 1997 and 1998.)

     On July 31, 2000, and August 28, 2000, respectively, respon-

dent issued to petitioners notices of balance due with respect to

petitioners’ unpaid liabilities for their taxable years 1997 and

1998.    On September 4, 2000, and October 2, 2000, respectively,

respondent issued additional notices of balance due with respect

to such unpaid liabilities.

     On July 24, 2001, respondent issued to petitioners a final

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

(notice of intent to levy) with respect to their unpaid liability

for their taxable year 1998.    On July 31, 2001, respondent issued

to petitioners a notice of Federal tax lien filing and your right

to a hearing (notice of tax lien) with respect to petitioners’

unpaid liability for each of their taxable years 1997 and 1998.

     On or about August 30, 2001, in response to the notice of

intent to levy and the notice of tax lien, petitioners filed Form

12153, Request for a Collection Due Process Hearing (Form

12153),4 and requested a hearing with respondent’s Appeals Office



     4
      Petitioner Shari Lee Wright Lyman (Ms. Lyman) did not sign
Form 12153 that petitioner G. Robert Lyman (Mr. Lyman) filed with
respondent. On Apr. 5, 2002, respondent accepted a ratification
of that form by Ms. Lyman.
                                - 5 -

(Appeals Office).   Petitioners attached a document to their Form

12153 (petitioners’ attachment to Form 12153) that contained

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

frivolous and/or groundless.5

     On February 25, 2002, a settlement officer with the Appeals

Office (settlement officer) sent petitioners a letter.   That

letter stated in pertinent part:

     Per our recent telephone conversation I have scheduled
     the Collection Due Process hearing you requested on
     this case for the time and date shown above [April 5,
     2002] * * *

     Appeals’ jurisdiction to hear your case is specified in
     the Internal Revenue Code, 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 enclosing the most recent copies of literal tran-
     scripts of your account for the above years [1997 and
     1998] and plan to have updated transcripts for you at
     the hearing. Your request for additional documents is
     properly made under the Freedom of Information Act.
     You will need to send your request to the Disclosure
     Officer at [the] Internal Revenue Service, 210 E.
     Earll, Phoenix, Arizona 85012.

     I have reviewed the correspondence you attached to your
     request for the collection due process hearing and


     5
      Petitioners’ attachment to Form 12153 contained statements,
contentions, arguments, and requests that are 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., Copeland v. Commissioner, T.C. Memo. 2003-46; Smith v.
Commissioner, T.C. Memo. 2003-45.
                              - 6 -

     would like to point out that the courts have previously
     ruled against your arguments, and in some instances,
     have imposed sanctions. I am hopeful that you wish to
     discuss legitimate issues and alternatives for resolv-
     ing your case at the hearing.

     On April 5, 2002, the settlement officer held an Appeals

Office hearing with petitioners with respect to the notice of

intent to levy relating to petitioners’ taxable year 1998 and the

notice of tax lien relating to their taxable years 1997 and 1998.

At the Appeals Office hearing, the settlement officer gave

petitioners, inter alia, Form 4340, Certificate of Assessments,

Payments, and Other Specified Matters, with respect to each of

their taxable years 1997 and 1998.

     On May 16, 2002, the Appeals Office issued to Mr. Lyman a

notice of determination concerning collection action(s) under

section 6320 and/or 6330 (notice of determination) with respect

to the notice of intent to levy relating to taxable year 1998 and

issued to Ms. Lyman a separate notice of determination with

respect to that notice of intent to levy.   On May 16, 2002, the

Appeals Office also issued to Mr. Lyman a notice of determination

with respect to the notice of tax lien relating to taxable years

1997 and 1998 and issued to Ms. Lyman a separate notice of

determination with respect to that notice of tax lien.   An

attachment to each of those four notices of determination stated

in pertinent part:
                         - 7 -

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 liabilities for
these years were based upon an examination of the
taxpayer’s zero income, zero tax due returns that were
filed. The taxes have been assessed and remain unpaid.

* * * On 2/18/00 a statutory notice of deficiency was
issued to the taxpayers for the 1997 year to the tax-
payers last known address. On 3/10/00 a statutory
notice of deficiency was issued to the taxpayers for
the 1998 year to the taxpayers last known address.
* * * The taxpayers did not petition Tax Court. The
taxpayers are precluded from raising the liability as
an issue as they were previously provided an opportu-
nity to dispute the assessment of tax and did not do
so. The taxes were assessed on 07/31/00 and 08/28/00
respectively.

A notice and demand letter was issued by regular mail
on 7/31/00 for the 1997 year and on 08/28/00 for the
1998 year to the taxpayer’s last known address as
required under IRC §6303. Letter 1058, meeting the
notice condition imposed by IRC §6331(d) and IRC 6330,
was dated 07/24/01 and sent to the taxpayer’s last
known address by certified mail for the 1998 year only.
The Letter 3172, meeting the notice condition imposed
by IRC §6320 was dated 07/31/01 and sent to the tax-
payer’s last known address by certified mail for the
1997 and 1998 years. The taxpayers responded timely
with a Request for a Collection Due Process Hearing,
Form 12153, received on 08/30/01.

The collection due process hearing was held on April 5,
2002. * * *

Settlement Officer Renee Swall has had no prior involvement
with respect to these liabilities.

Issues Raised by the Taxpayer

On the Form 12153 the taxpayer listed the 1997 and 1998
                         - 8 -

years and marked the NFTL block. However, attached to
the Form 12153 is the Letter 1058, Notice of Intent to
Levy. Also attached to the Form 12153 are two pages of
constitutional arguments. As part of their argument
the taxpayers requested copies of verification from the
Secretary, copies of position descriptions, and other
documents. * * *

   *       *       *       *       *       *       *

At the hearing certified transcripts, Forms 4340, were
provided to the taxpayers. I attempted to review with
the taxpayers the 1997 and 1998 return files and the
certified transcripts. The taxpayers continued to
raise only frivolous arguments, such as requesting
position descriptions for those who signed documents
such as the Form 4340 and requesting the verification
that I was to provide to them that any applicable law
or administrative procedure had been met per IRC
§6330(c)(1). * * * The taxpayers raised no relevant
issues at the hearing. They did state that they could
raise the issue of the underlying assessments, however,
the taxpayers were advised that they received the
statutory notices of deficiency and could not raise
this issue. The taxpayers did not dispute the fact
that they had received the statutory notices of defi-
ciency. * * *

During the hearing the taxpayers were asked if they
would like to discuss collection alternatives such as
an installment agreement. The taxpayers indicated that
they would write a check for payment of the taxes if I
could provide the code section that required them to
pay taxes. The taxpayers do not believe that wages are
income and do not believe that the tax laws apply to
them. * * *

I did provide to the taxpayers copies of court cases on
T. Pierson and R. Davis, along with the Publication
2105, Why Do I Have to Pay Taxes, and a handout, The
Truth About Frivolous Tax Arguments.

The taxpayers raised no other non-frivolous issues.

Balancing the Need for Efficient Collection with Tax-
payer Concerns.

The requirements of all applicable laws and administra-
                               - 9 -

     tive procedures have been met. The courts have previ-
     ously addressed the taxpayers’ arguments, and Appeals
     does not have the authority for reconsideration of the
     matters.

     The assessments are valid and the Service followed
     proper procedures in making the assessments. The
     taxpayers received their required notices and the
     notice of intent to levy is appropriate. The filing of
     the Notice of Federal Tax Lien was also appropriate to
     protect the Government’s interest. The taxpayer was
     given an opportunity at the hearing to arrange for
     payment of the taxes. The taxpayer refused to discuss
     collection alternatives. Given the taxpayer’s history
     of non-compliance, I believe that collection action in
     the form of levy should be allowed to proceed. Lacking
     the taxpayer’s cooperation, 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.
     [Reproduced literally.]

                            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.

     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 petitioners’ attachment to their 1997 joint
                              - 10 -

return, petitioners’ attachment to their 1998 joint return, and

petitioners’ attachment to Form 12153, petitioners’ response

contains contentions, arguments, and requests that the Court

finds to be frivolous and/or groundless.6

     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 petitioners’ notices of determination with respect to peti-

tioners’ taxable years 1997 and 1998.

     In respondent’s motion, respondent requests that the Court

require petitioners to pay a penalty to the United States pursu-

ant 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

maintained 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-


     6
      The contentions, arguments, and requests set forth in
petitioners’ 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., Smith v.
Commissioner, T.C. Memo. 2003-45.
                              - 11 -

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.7

     In the instant case, petitioners advance, 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 petitioners

pursuant to section 6673(a)(1) in the amount of $3,000.

     We have considered all of petitioners’ contentions, argu-

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

them to be without merit and/or irrelevant.

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

     To reflect the foregoing,

                                      An appropriate order granting

                                 respondent’s motion and decision

                                 will be entered for respondent.




     7
      The record in this case reflects that the settlement offi-
cer gave petitioners, inter alia, a copy of the Court’s opinion
in Pierson v. Commissioner, 115 T.C. 576 (2000).
