                         T.C. Memo. 2006-254



                       UNITED STATES TAX COURT



         DENIS J. FARIS AND CAROLYN M. FARIS, Petitioners v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 9542-05L.                Filed November 27, 2006.



     Denis J. Faris and Carolyn M. Faris, pro sese.

     Kelley A. Blaine, for respondent.



               MEMORANDUM FINDINGS OF FACT AND OPINION

     VASQUEZ, Judge:    Pursuant to section 6330(d),1 petitioners

seek review of respondent’s determination to proceed with

collection of their 1997 and 1998 income tax liabilities.      The



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

issues for decision are: (1) Whether respondent may proceed with

collection of petitioners’ 1997 and 1998 income tax liabilities;

and (2) whether petitioners are liable for a penalty pursuant to

section 6673.

                          FINDINGS OF FACT

     None of the facts have been stipulated.    At the time they

filed the petition, petitioners resided in Portland, Oregon.

     Petitioners timely filed Federal income tax returns for 1997

and 1998.

     Respondent sent notices of deficiency for 1997 and 1998 to

petitioners.2    Petitioners did not petition the Court for a

redetermination of the 1997 or 1998 deficiencies.

     On January 1 and July 23, 2001, respondent assessed the 1997

and 1998 deficiencies, respectively.

     On September 1, 2004, respondent sent petitioners a Final

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

(collection notice) with respect to petitioners’ 1997 and 1998

taxable years.    The collection notice showed unpaid taxes,

interest, and penalties for 1997 and 1998 of $9,696.48.

     On September 20, 2004, petitioners timely filed a Form

12153, Request for a Collection Due Process Hearing.


     2
        The notice of deficiency for 1998 was issued on Dec. 22,
2000. At trial, respondent was unable to produce a copy of the
notice of deficiency for 1997. However, petitioners admitted
that they received “a document entitled ‘Notice of Deficiency’”
from the Internal Revenue Service regarding 1997.
                                - 3 -

Petitioners attached to their Form 12153 an “Affidavit of

Material Facts” containing frivolous and groundless arguments,

questions and statements regarding, inter alia, their underlying

liability for income taxes, the legality of imposing income taxes

on individuals, and respondent’s authority to collect income

taxes.

     Settlement Officer John Malone was assigned to petitioners’

case.    In a letter dated February 4, 2005, the settlement officer

acknowledged receipt of petitioners’ Form 12153 and other

materials.    In that letter, the settlement officer informed

petitioners that the arguments they advanced were frivolous,

groundless, or arguments that Appeals Office employees may not

consider.    The letter also informed petitioners of the Appeals

Office policy of not granting face-to-face hearings if the only

items a taxpayer wishes to discuss are frivolous, groundless, or

arguments that Appeals Office employees may not consider.    In the

letter, the settlement officer scheduled a phone conference with

petitioners for March 10, 2005.

     On February 16, 2005, petitioners mailed a letter to the

settlement officer again requesting a face-to-face hearing and

stating that they would not be available for a phone conference

on March 10, 2005.    On the same day and on February 18, 2005,

petitioners submitted several “Freedom of Information Request[s]”
                               - 4 -

asking for extensive (and, in many cases, irrelevant)

documentation relating to their 1997 and 1998 tax years.

     On February 20, 2005, petitioners mailed another letter to

the settlement officer.   In that letter, petitioners again

advanced frivolous and groundless arguments.   Petitioners argued,

inter alia, that they are not required to file a tax return

without having been personally served with notice of such

requirement by the Secretary of the Treasury, that “there is no

statute that makes [us] liable for income tax”, that the income

tax applies only to Federal Government employees, and that

respondent lacks authority to assess or collect income taxes.

     On March 11, 2005, the settlement officer mailed a letter to

petitioners.   He noted that petitioners had not called him for

the March 10, 2005, hearing and that petitioners, at that point,

still had failed to raise an issue that could be considered by

the Appeals Office.   The letter advised petitioners to contact

the settlement officer by March 28, 2005, if they wished to

submit additional materials for his consideration or to

reschedule the phone conference.   The letter informed petitioners

that if the Appeals Office did not receive any further

information from petitioners, their case would be reviewed based

on the information in petitioners’ file.

     Petitioners replied in a letter dated March 19, 2005.    In

this letter, petitioners made several demands.   They demanded
                               - 5 -

that the settlement officer grant them a face-to-face hearing,

that, at the hearing, the settlement officer produce a multitude

of documents (many of which were, once again, irrelevant to the

section 6330 hearing), and that the settlement officer be

prepared to discuss at the hearing petitioners’ frivolous and

groundless arguments.   Petitioners did not offer a collection

alternative at any point in their correspondence with the

settlement officer.

     On April 21, 2005, respondent issued a Notice of

Determination Concerning Collection Action(s) Under Sections 6320

and/or 6330 (notice of determination) regarding petitioners’

unpaid 1997 and 1998 income tax liabilities.   In the notice of

determination, respondent determined that the proposed levy

should be sustained because petitioners had “failed to provide

[respondent] with an alternative collection that satisfies

[petitioners’] liabilities.”

     On May 23, 2005, petitioners timely filed a petition for

lien or levy action under section 6320(c) or 6330(d) appealing

respondent’s determination to proceed with collection of

petitioners’ 1997 and 1998 tax liabilities.    Petitioners asserted

that they had been denied a section 6330 hearing and repeated

several frivolous and groundless arguments they had raised in

their correspondence with the settlement officer.
                                - 6 -

                               OPINION

I.   Determination To Proceed With Collection

      Section 6330(a) provides that the Secretary shall furnish

taxpayers with written notice of their right to a hearing before

any property is levied upon.   Section 6330 further provides that

the taxpayer may request administrative review of the matter (in

the form of a hearing) within a prescribed 30-day period.     Sec.

6330(a) and (b).

      Pursuant to section 6330(c)(2)(A), a taxpayer may raise at

the section 6330 hearing any relevant issue with regard to the

Commissioner’s collection activities, including spousal defenses,

challenges to the appropriateness of the Commissioner’s intended

collection action, and alternative means of collection.      Sego v.

Commissioner, 114 T.C. 604, 609 (2000); Goza v. Commissioner, 114

T.C. 176, 180 (2000). If a taxpayer received a statutory notice

of deficiency for the year in issue or otherwise had the

opportunity to dispute the underlying tax liability, the taxpayer

is precluded from challenging the existence or amount of the

underlying tax liability.   Sec. 6330(c)(2)(B); Sego v.

Commissioner, supra at 610-611; Goza v. Commissioner, supra at

182-183.

      Aside from raising frivolous arguments regarding the

validity of the notices they received, petitioners admit that

they received notices of deficiency for 1997 and 1998.    Thus,
                               - 7 -

petitioners are precluded from challenging the existence or

amount of the underlying tax liabilities for 1997 and 1998.      See

sec. 6330(c)(2)(B); Sego v. Commissioner, supra; Goza v.

Commissioner, supra.   We review respondent’s determination for

abuse of discretion.   See Sego v. Commissioner, supra at 610.

     Petitioners state in their petition that they were denied

their right to a face-to-face hearing as provided in section

6330.   We have held that it would be unproductive and thus

unnecessary to remand a case for a face-to-face hearing if

petitioners merely want to advance frivolous arguments.    See

Lunsford v. Commissioner, 117 T.C. 183, 189 (2001); Stephens v.

Commissioner, T.C. Memo. 2005-183; Balice v. Commissioner, T.C.

Memo. 2005-161.

     In numerous letters to respondent, in their petition and in

their briefs, petitioners advanced shopworn arguments

characteristic of tax-protester rhetoric that has been

universally rejected by this and other courts.   Wilcox v.

Commissioner, 848 F.2d 1007 (9th Cir. 1988), affg. T.C. Memo.

1987-225; Carter v. Commissioner, 784 F.2d 1006, 1009 (9th Cir.

1986); Charczuk v. Commissioner, 771 F.2d 471 (10th Cir. 1985),

affg. T.C. Memo. 1983-433; Michael v. Commissioner, T.C. Memo.

2003-26; Knelman v. Commissioner, T.C. Memo. 2000-268, affd. 33

Fed. Appx. 346 (9th Cir. 2002).   We shall not painstakingly

address petitioners’ assertions “with somber reasoning and
                               - 8 -

copious citation of precedent; to do so might suggest that these

arguments have some colorable merit.”   Crain v. Commissioner, 737

F.2d 1417, 1417 (5th Cir. 1984).

      Petitioners have failed to make a valid challenge to the

appropriateness of respondent’s intended collection action, offer

alternative means of collection, or offer any spousal defenses.

These issues are now deemed conceded.   Rule 331(b)(4).

      Accordingly, we conclude that respondent did not abuse his

discretion, and we sustain respondent’s determination to proceed

with collection for 1997 and 1998.

II.   Section 6673(a)

      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 the taxpayer took frivolous positions in the

proceedings or instituted the proceedings primarily for delay.     A

position maintained by the taxpayer is “frivolous” if it is

“contrary to established law and unsupported by a reasoned,

colorable argument for change in the law.”   Coleman v.

Commissioner, 791 F.2d 68, 71 (7th Cir. 1986).

      In his correspondence with petitioners, the settlement

officer advised petitioners to read an IRS publication entitled

“The Truth About Frivolous Tax Arguments”, which explains the

defects in several of petitioners’ arguments.    The settlement

officer also sent petitioners a copy of Pierson v. Commissioner,
                                 - 9 -

115 T.C. 576 (2000), in which this Court issued an unequivocal

warning to taxpayers concerning the imposition of penalties

pursuant to 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.       At

trial, the Court advised petitioners that the arguments they were

advancing had been universally rejected by the courts that have

considered them.   Petitioners’ positions, based on stale and

meritless contentions, are manifestly frivolous and groundless.

This has caused the Court to waste limited resources.

Accordingly, we shall impose a penalty of $2,500 pursuant to

section 6673.

     To reflect the foregoing,

                                              Decision will be entered

                                         for respondent.
