                         T.C. Memo. 2001-213




                       UNITED STATES TAX COURT



                    ROY WATSON, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 3609-00L.                  Filed August 10, 2001.



     Roy Watson, pro se.

     Pamela J. Sewell, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION

     HALPERN, Judge:    This case is based on a petition filed

under section 6330(d) for review of a determination made by

respondent’s Office of Appeals (Appeals) that respondent’s action

to collect certain taxes may proceed.    By Notice of Determination

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

dated February 24, 2000 (the notice), Appeals determined that
                                - 2 -

respondent’s Collection Division be allowed to proceed with

appropriate action to collect from petitioner certain income

taxes for 1991 and 1992.    Petitioner asks us to review such

determination.

     Unless otherwise indicated, all section references are to

the Internal Revenue Code presently in effect.

                           FINDINGS OF FACT

     At the time the petition was filed, petitioner resided in

Provo, Utah.

     On September 28, 1994, respondent mailed a notice of

deficiency (the notice of deficiency) to petitioner, determining

deficiencies in, and additions to, his Federal income taxes for

petitioner’s taxable (calendar) years 1991 and 1992.     On

October 18, 1994, petitioner received the notice of deficiency

and signed the domestic return receipt, Postal Service Form 3811,

which accompanied the notice of deficiency.

     On March 13, 1995, respondent assessed taxes, an estimated

tax penalty, and late filing penalty in the amounts of $10,138,

$581, and $2,535, respectively, for 1991.     Also, on March 13,

1995, respondent assessed taxes, an estimated tax penalty, and

late filing penalty in the amounts of $10,394, $453, and $2,599,

respectively, for 1992.

     On June 15, 1999, respondent mailed a final notice of intent

to levy to petitioner.    That notice states that petitioner owed
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taxes, penalties, and interest totaling $26,169.72 and $25,040.72

for 1991 and 1992, respectively.

     On July 15, 1999, petitioner submitted requests for

collection due process hearings for 1991 and 1992 (the requests).

In the requests, petitioner states his basis for the hearing as

follows:    “I deny that I had ‘income’ for the year of 1991 [1992]

that is the subject of A tax.”

     On January 31, 2000, in response to the requests, Appeals

Officer Jose Gonzales sent a letter to petitioner (the letter).

Among other things, the letter informs petitioner that, since

petitioner had received the notice of deficiency, petitioner

could not, under section 6330, appeal his tax liability for 1991

and 1992.   The paragraph of the letter preceding the valediction

states:

          If you wish to make arrangements to pay the tax
     for 1991 and 1992 please provide Forms 433A and/or 433B
     or if you have other collection alternatives you would
     like to discuss, such as Installment Agreements or
     Offer-In-Compromise, contact me by February 15, 2000.
     This will be your opportunity for a hearing. For the
     reasons stated above I will not discuss the liabilities
     for 1991 and 1992 unless it pertains to filing correct
     returns due to IRC §6330(c)(2)(B). If I receive no
     response I will send a determination letter providing
     your judicial rights. I can be reached at the
     telephone number shown above.

Petitioner did not reply to the letter or otherwise contact

Appeals Officer Gonzales prior to February 15, 2000.

     On February 24, 2000, respondent mailed the notice to

petitioner.   In part, the notice states:   “We have reviewed the
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proposed collection action for the period(s) shown above.    This

letter is your legal Notice of Determination, as required by

law.”   The notice includes the following “Summary of

Determination”:   “It is Appeals’ decision that Collection be

allowed to proceed with the appropriate collection action.”

Accompanying the notice is the following explanation:

     Attachment - 3193

               ENCLOSURE TO NOTICE OF DETERMINATION

                           ROY A. WATSON

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

     Your request for a hearing with Appeals was made under
     IRC §6330 to prevent appropriate collection action.
     You state in your request that you deny that you had
     income for 1991 and 1992 that is subject to tax. Tax
     was assessed for the years 1991 and 1992 under IRC
     §6020(b) because you failed to voluntarily file income
     tax returns. You were provided an opportunity to
     dispute the assessments. You responded with
     arguments previously determined by the courts to be
     frivolous. IRC §6330(c)(2)(B) precludes you from
     raising liability as an issue at your hearing. You
     were offered the opportunity for a hearing with Appeals
     to discuss alternative collection proposals and the
     filing of corrected returns for the years at issue.
     You did not respond.

     Without further cooperation, it is Appeals decision
     that 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.

     In the petition, petitioner assigns the following errors:
                               - 5 -

      the Service was willfully negligent when it failed to
      provide an Pre-Determination Evidentiary hearing and
      make available to me:

             a.) presentment of copies of all evidence used
           by the government against me;

             b.) meaningful hearing on all of the facts of
           this case;

             c.) notification of procedure, forms, or
           opportunity to refute the evidence against me
           (which is also the making of contentions of
           factual nature);

             d.) hearing before an independent and impartial
           hearing officer; and

             e.) opportunity to confront and cross-examine
           all adverse witnesses, for the creation of a
           complete defense and administrative record to
           support any subsequent appeal.


                              OPINION

I.   Section 6331

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

any tax neglects or refuses to pay such tax within 10 days after

notice and demand for payment, the Secretary is authorized to

collect such tax by levy upon property belonging to the taxpayer.

Section 6331(d) provides that the Secretary is obliged to provide

the taxpayer with notice, including notice of the administrative

appeals available to the taxpayer, before proceeding with

collection by levy on property of the taxpayer.
                                - 6 -

II.   Section 6330

      Section 6330 generally provides that respondent cannot

proceed with collection of taxes by way of levy on a taxpayer’s

property until the taxpayer has been given notice of and the

opportunity for an administrative review of the matter (in the

form of a section 6330(b) hearing).1    Section 6330(e) provides

for the suspension of the period of limitations on collection

while the hearing and any appeals are pending, and, in no event

shall such period of limitations expire before the 90th day after

the day on which there is a final determination in the hearing.

      Section 6330(c) prescribes the matters that may be raised by

the taxpayer at a section 6330(b) hearing.    In pertinent part,

section 6330(c)(2)(B) provides:    “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”.

      Section 6330(d) provides for judicial review of the

determination resulting from the section 6330(b) hearing.




      1
          In pertinent part, section 6330(a)(1) provides:

      No levy may be made on any property or right to
      property of any person unless the Secretary has
      notified such person in writing of their right to a
      hearing under this section before such levy is made.
      * * *
                                   - 7 -

III.    Petitioner’s Claims

       A.   Meaningful Hearing

       In the petition, petitioner claims that he was not afforded

a meaningful hearing on all of the facts of the case, apparently

because respondent erred in failing to allow petitioner the right

to examine documents, present his case as he saw fit, and cross-

examine witnesses.     In Davis v. Commissioner, 115 T.C. 35, 41-42

(2000), we rejected similar claims, finding that, in providing to

a person the right to request a section 6330(b) hearing, Congress

intended an informal administrative hearing, of the type that,

traditionally, had been conducted by appeals and was prescribed

by section 601.106(c), Statement of Procedural Rules.          We held

that the right to a section 6330(b) hearing does not include the

right to subpoena witnesses.       Id. at 42.     We stated:   “The nature

of the administrative Appeals process does not include the taking

of testimony under oath or the compulsory attendance of

witnesses.”     Id.   at 41-42.   We concluded that the taxpayer could

have a meaningful hearing without being accorded rights to

subpoena witnesses and documents.          Id.   Petitioner has failed to

demonstrate that he is entitled to any relief on account of his

claim that respondent erred in failing to allow him the right to

examine documents, present his case as he saw fit, and cross-

examine witnesses.
                                - 8 -

     B.    Hearing Before an Independent and Impartial Hearing
           Officer

     In the petition, petitioner claims he was not afforded a

hearing before an independent and impartial hearing officer.     If

petitioner’s complaint is that Appeals Officer Gonzales was not

independent and impartial, see sec. 6330(b)(3), petitioner did

not pursue that issue at trial.    Therefore, we assume, that he

has abandoned that issue, and we shall not further discuss it.

See, e.g., Bernstein v. Commissioner, 22 T.C. 1146, 1152 (1954),

affd. 230 F.2d 603 (2d Cir. 1956); Lime Cola Co. v. Commissioner,

22 T.C. 593, 606 (1954).

     C.    No Harm in Fact

     Moreover, as to any other complaint of petitioner with

respect to the notice, we note that, at trial, the Court had an

extended discussion with petitioner concerning the exact nature

of the claim that brought him to this Court.    Petitioner agreed

more than once that he had been afforded the opportunity for a

hearing.    His only claim was that he had no tax liability because

his indebtedness to the Internal Revenue Service had been assumed

by the Federal government:

          MR. WATSON: That House Joint Resolution 192 of
     June 5th and 6th, 1933, which was the suspension of the
     gold standard specie which kept the nation stable only
     discharged the debt, not pay debt.

          Under House Joint Resolutions, all debts, public
     and private, the Government agreed to assume.
                                  - 9 -

          THE COURT: So your basic position is that your
     debt to the Internal Revenue Service was assumed by the
     Federal Government?

          MR. WATSON: That is correct, through that
     resolution. And I believe in good faith that all
     matters have been brought to a conclusion by accord and
     satisfaction by the presentation to the agency, the
     Internal Revenue Service, for them to present the 1040-
     ESs [Forms 1040-ES: Estimated Tax Payment Vouchers]
     for payment through the Secretary of the Department of
     Transportation or the Secretary of the Department of
     Treasury and that would close the matter.

          THE COURT:     Sir, let me see if I understand your
     position.

                  *      *    *       *   *   *     *

     your position is that declarations of estimated tax by
     a taxpayer received by the IRS * * * should be
     presented to the Secretary of Transportation or the
     Secretary of Treasury for payment?

           MR. WATSON:    Yes, sir.

          THE COURT:     And that would discharge your tax
     liability?

           MR. WATSON:    Yes, sir.

          THE COURT: And that’s why you don’t owe anything
     to the Government?

           MR. WATSON:    Yes, sir.

           THE COURT:    That’s your case; right?

           MR. WATSON:    Yes, sir.

     D.   Section 6330(c)(2)(B)

     Petitioner can only challenge the underlying tax liability

if he did not receive the notice of deficiency.         See sec.

6330(c)(2)(B).
                                 - 10 -

      Petitioner claims that he did not receive the notice of

deficiency.    By letter dated November 18, 1994, however,

petitioner acknowledges receiving correspondence from respondent

dated September 28, 1994, the date of the notice of deficiency.

With respect to that correspondence, petitioner states:

“[H]owever, I am not a person required to file.”      Respondent also

has a return receipt from the U.S. Postal Service showing receipt

by petitioner of the notice of deficiency.      That receipt shows a

signature in petitioner’s name.      Petitioner denies that he signed

the receipt.    Petitioner offers no explanation for the signature.

We do not believe petitioner when he claims that he did not sign

the receipt and did not receive the notice of deficiency.      We

have found that petitioner did receive the notice of deficiency.

      E.   Conclusion

      We have reviewed the notice in light of petitioner’s claims

and we find no error.      We deny petitioner any relief.

IV.   Section 6673(a)(1)

      In pertinent part, section 6673(a)(1) provides a penalty of

up to $25,000 if proceedings before the Tax Court have been

instituted or maintained by the taxpayer primarily for delay or

the taxpayer’s position in the proceeding is frivolous or

groundless.    In the petition and in communications to respondent

and this Court, petitioner insists that he has no tax liability

notwithstanding that he has paid nothing to respondent.      He
                               - 11 -

insists that he has submitted to respondent declarations of

estimated tax, which should be presented to the Secretary of

Transportation for payment, which would discharge petitioner’s

tax liability.   Petitioner’s argument is a frivolous tax-

protester argument.   In addition, petitioner adopted tactics at

trial, such as initially refusing to state his name, that delayed

this proceeding.   At the conclusion of the trial, at petitioner’s

request, the Court left the record open for any support of

petitioner’s legal position that he could provide.    Petitioner

submitted a document entitled “Letter of Correction” (the letter

of correction) that we have filed as such.    The letter of

correction claims:    “An error was made by submitting a 1040ES

form and is therefore canceled by this letter of correction.”

Attached to the letter of correction is a copy of respondent’s

trial memorandum bearing repeated stampings by petitioner

stating:

     Accepted for value $51,210.44. This property is Exempt
     from Levy and account is prepaid.

     Please adjust this account and release the proceeds;
     products, accounts; and fixtures and release the order
     or orders of the court to Me immediately.

     Date February 16, 2001
     Employer ID # 530149347
     Endorsement [signed] Roy-Allen: Watson

Whatever credit we might give petitioner for the implied

concession in the letter of correction that petitioner owes tax

is negated by the attachment to that letter, which makes no
                             - 12 -

sense, and seems just another frivolous argument or groundless

claim.

     Because of petitioner’s frivolous and groundless arguments,

and his tactics, which we conclude petitioner engaged in only to

delay these proceedings, the Court imposes on petitioner a

penalty under section 6673(a) of $1,500.    See Hoffman v.

Commissioner, T.C. Memo. 2000-198.


                                           Decision will be entered

                                     for respondent.
