                         T.C. Memo. 2006-138



                       UNITED STATES TAX COURT



                GEOFFREY K.J. YUEN, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 11747-04L.                Filed July 5, 2006.



     Geoffrey K.J. Yuen, pro se.

     Rollin G. Thorley, for respondent.



                         MEMORANDUM OPINION


     VASQUEZ, Judge:    This case is before the Court on

respondent’s motion for summary judgment.

                             Background

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

filed the petition, petitioner resided in Las Vegas, Nevada.
                                - 2 -

     Petitioner submitted Forms 1040, U.S. Individual Income Tax

Return, for 1999 and 2000 to respondent.    Petitioner listed zero

as the amount of his wages, total income, adjusted gross income,

taxable income, and total tax on both returns.    Petitioner

attached two pages to the Forms 1040 reciting statements,

contentions, and arguments that the Court finds to be frivolous

and/or groundless.

     Respondent sent petitioner statutory notices of deficiency

for the 1999 and 2000 tax years on December 21, 2001, and June

12, 2002, respectively.    Respondent determined a $13,510

deficiency and a $2,701 penalty pursuant to section 6662(a)1 for

1999 and a $56,218 deficiency and a $11,243.60 penalty pursuant

to section 6662(a) for 2000.    Petitioner received the notices of

deficiency and sent respondent letters challenging respondent’s

authority to issue the notices but did not petition the Court for

redetermination of the deficiencies or penalties with respect to

1999 or 2000.   On September 16, 2002, and December 2, 2002,

respondent assessed the 1999 and 2000 tax liabilities and

penalties, respectively.

     On November 20, 2003, respondent mailed to petitioner a

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

Hearing concerning petitioner’s 1999 and 2000 liabilities.     On or

     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.
                               - 3 -

about December 19, 2003, petitioner timely filed a Form 12153,

Request for a Collection Due Process Hearing, in which petitioner

recited statements, contentions, arguments, and requests that the

Court finds to be frivolous and/or groundless.    On May 6, 2004, a

hearing was held.   Petitioner did not propose any collection

alternatives at the hearing.

     On June 2, 2004, respondent issued a Notice of Determination

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

petitioner regarding his 1999 and 2000 tax years (notice of

determination).   In the notice of determination, respondent

determined that the proposed collection action was appropriate

and to proceed with collection.

     On July 6, 2004, petitioner timely filed a petition for lien

or levy action under Code section 6320(c) or 6330(d) seeking

review of respondent’s determination to proceed with collection

of petitioner’s 1999 and 2000 tax liabilities.2   Except for an

argument under section 7521(a)(1), the petition contains

statements, contentions, arguments, and questions that the Court

     2
        Attached to the petition are copies of a notice of
determination regarding respondent’s levy action for petitioner’s
unpaid tax liabilities for the 1999 and 2000 tax years, and a
Decision Letter Concerning Equivalent Hearing Under Sec. 6320
and/or 6330 regarding respondent’s lien action for petitioner’s
unpaid liabilities for the 1999 and 2000 tax years. In an order
dated Jan. 5, 2005, this Court granted respondent’s motion to
dismiss for lack of jurisdiction with respect to sec. 6320 for
the taxable years 1999 and 2000 on the ground that no notice of
determination was issued regarding respondent’s lien action
because petitioner failed to file a timely request for an Appeals
Office hearing.
                                - 4 -

finds to be frivolous and/or groundless.     With respect to section

7521(a)(1), petitioner alleges in the petition that the Appeals

officer denied petitioner’s request to record the Appeals Office

hearing, thereby violating petitioner’s right to due process.

                             Discussion

I.    Motion for Summary Judgment

       Rule 121(a) provides that either party may move for summary

judgment upon all or any part of the legal issues in controversy.

Summary judgment may be granted if it is demonstrated that no

genuine issue exists as to any 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 is no genuine issue as to any

material fact and that a decision may be rendered as a matter of

law.

II.    Determination To Proceed With Collection

       Section 6331(a) provides that, if any person liable to pay

any tax neglects or refuses to do so within 10 days after notice

and demand, the Secretary can collect such tax by levy upon

property belonging to such person.      Pursuant to section 6331(d),

the Secretary is required to give the taxpayer notice of his

intent to levy and within that notice must describe the

administrative review available to the taxpayer, before

proceeding with the levy.    See also sec. 6330(a).
                                 - 5 -

     Section 6330(b) describes the administrative review process

whereby a taxpayer can request an Appeals hearing with regard to

a levy notice.   At the Appeals hearing, the taxpayer may raise

certain matters set forth in section 6330(c)(2), which provides

in pertinent part:

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

                   *    *    *    *      *   *   *

          (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.

Pursuant to section 6330(d)(1), within 30 days of the issuance of

the notice of determination, the taxpayer may appeal that
                                - 6 -

determination to this Court if we have jurisdiction over the

underlying tax liability.    Van Es v. Commissioner, 115 T.C. 324,

328 (2000).

     Although section 6330 does not prescribe the standard of

review that the Court is to apply in reviewing the Commissioner’s

administrative determinations, we have stated that, where the

validity of the underlying tax liability is properly at issue,

the Court will review the matter on a de novo basis.    Sego v.

Commissioner, 114 T.C. 604, 610 (2000); Goza v. Commissioner, 114

T.C. 176, 181 (2000).   Where the validity of the underlying tax

liability is not properly at issue, however, the Court will

review the Commissioner’s administrative determination for abuse

of discretion.   Sego v. Commissioner, supra; Goza v.

Commissioner, supra.

     Petitioner does not dispute that he received the notices of

deficiency for 1999 and 2000.   Accordingly, he cannot challenge

his underlying liability.   See sec. 6330(c)(2)(B); Sego v.

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

182-183.   Therefore, we review respondent’s determination for an

abuse of discretion.    See Sego v. Commissioner, supra at 610.
                               - 7 -

     As was true of petitioner’s attachments to his Forms 1040,

petitioner’s attachment to Form 12153, and petitioner’s petition

except for an argument under section 7521(a)(1), petitioner’s

response to respondent’s motion for summary judgment contains

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

frivolous and/or groundless.

     Under section 7521(a)(1), a taxpayer has the right to make

an audio recording of a section 6330 hearing.    Keene v.

Commissioner, 121 T.C. 8, 16, 19 (2003).    However, it is not

necessary or productive to remand this case to respondent’s

Appeals Office merely to provide petitioner a recorded hearing

where he previously attended and participated in a section 6330

hearing.   Id.; Holliday v. Commissioner, T.C. Memo. 2005-240;

Durrenberger v. Commissioner, T.C. Memo. 2004-44; Kemper v.

Commissioner, T.C. Memo. 2003-195; see also Lunsford v.

Commissioner, 117 T.C. 183, 189 (2001).

     Petitioner participated in a section 6330 hearing, albeit an

unrecorded one.   Remanding this case to Appeals, and thus

allowing petitioner to continue to advance the same frivolous

arguments, would not be productive.    For these reasons, we

conclude that any error made by respondent in not allowing

petitioner to record the hearing was harmless.    See Kemper v.

Commissioner, supra.
                                - 8 -

       Petitioner has failed to raise a spousal defense, make a

valid challenge to the appropriateness of respondent’s intended

collection action, or offer alternative means of collection.

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 1999 and 2000.

III.    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 the taxpayer took frivolous positions in proceedings

or instituted the proceedings primarily for delay.    In Pierson v.

Commissioner, 115 T.C. 576, 581 (2000), we issued an unequivocal

warning to taxpayers concerning the imposition of a penalty

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 and/or groundless positions in such actions.

A position maintained by the taxpayer is “frivolous” where 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); see also Hansen v.

Commissioner, 820 F.2d 1464, 1470 (9th Cir. 1987) (section 6673
                                 - 9 -

penalty upheld because taxpayer should have known claim was

frivolous).

     In a previous appearance before this Court, petitioner made

similar frivolous tax-protester arguments.       In that case,

involving prior tax years, we imposed a penalty pursuant to

section 6673 on for advancing frivolous arguments in this Court.

Yuen v. Commissioner, docket No. 15296-03L.

     In the petition and at trial, petitioner raised frivolous

arguments and contentions that we have previously rejected and

which we conclude were interposed primarily for delay.       This has

caused the Court to waste limited resources.       Accordingly, on our

own motion, we shall impose a penalty of $5,000 pursuant to

section 6673.

     To reflect the foregoing,

                                              An appropriate order and

                                         decision will be entered.
