                         T.C. Memo. 2003-80



                       UNITED STATES TAX COURT



                  LUIS A. CORTES, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 13154-02L.             Filed March 19, 2003.



     Luis A. Cortes, pro se.

     Rollin G. Thorley, for respondent.



                         MEMORANDUM OPINION


     CHIECHI, Judge:    This case is before the Court on respon-

dent’s motion for summary judgment and to impose a penalty under

section 66731 (respondent’s motion).   We shall grant respondent’s



     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 -

motion.

                           Background

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

following.

     Petitioner resided in Henderson, Nevada, at the time he

filed the petition in this case.

     On or about April 15, 1996, petitioner filed a Federal

income tax (tax) return for his taxable year 1995 (1995 return).

In his 1995 return, petitioner reported total income of $0, total

tax of $0, and claimed a refund of $2,143 consisting of tax

withheld of $49 and an earned income credit of $2,094.   On April

29, 1996, respondent offset the $2,143 refund that petitioner

claimed in his 1995 return against a nontax liability.

     On March 25, 1998, respondent issued to petitioner a notice

of deficiency (notice) with respect to his taxable year 1995,

which he received.   In that notice, respondent determined a

deficiency in, and an accuracy-related penalty under section

6662(a) on, petitioner’s tax for his taxable year 1995 in the

respective amounts of $508 and $102.

     Petitioner did not file a petition in the Court with respect

to the notice relating to his taxable year 1995.

     On September 7, 1998, respondent assessed petitioner’s tax,

as well as a penalty and interest as provided by law, for his

taxable year 1995.   (We shall refer to those assessed amounts, as
                                - 3 -

well as interest as provided by law accrued after September 7,

1998, as petitioner’s unpaid liability for 1995.)

     On February 9, September 7, October 12, and December 28,

1998, and April 12, 1999, respondent issued to petitioner sepa-

rate notices of balance due with respect to petitioner’s unpaid

liability for 1995.

     On or about April 15, 2000, petitioner filed a tax return

for his taxable year 1999 (1999 return).   In his 1999 return,

petitioner reported total income of $9,269 and total tax of

$3,872.   When petitioner filed his 1999 return, he did not pay

the amount of tax that he owed for that year.

     On May 22, 2000, respondent assessed petitioner’s tax, as

well as any penalties and interest as provided by law, for his

taxable year 1999.    (We shall refer to those assessed amounts, as

well as interest as provided by law accrued after May 22, 2000,

as petitioner’s unpaid liability for 1999.)

     On May 22, 2000, respondent issued to petitioner a notice of

balance due with respect to petitioner’s unpaid liability for

1999.   On June 26, 2000, respondent issued a second notice of

balance due with respect to such unpaid liability.

     On August 31, 2000, respondent issued to petitioner a final

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

(notice of intent to levy) with respect to his taxable years 1995

and 1999.   That notice showed in pertinent part:
                                - 4 -

    Type        Period       Assessed      Statutory
   of Tax       Ending        Balance      Additions     Total
   1040A      12-31-1995      $462.53      $105.63       $568.16
   1040       12-31-1999     3,946.11       234.32      4,180.43

     On or about September 28, 2000, in response to the notice of

intent to levy, petitioner filed Form 12153, Request for a

Collection Due Process Hearing (Form 12153), and requested a

hearing with respondent’s Appeals Office (Appeals Office).

Petitioner attached a document to his Form 12153 (petitioner’s

attachment to Form 12153) that contained statements, contentions,

arguments, and requests that the Court finds to be frivolous

and/or groundless.2

     On February 28, 2001, respondent’s Appeals officer (Appeals

officer) held an Appeals Office hearing with petitioner with

respect to the notice of intent to levy.    On May 8, 2001, the

Appeals officer held a second Appeals Office hearing (May 8, 2001

hearing) with petitioner with respect to the notice of intent to

levy.    At the May 8, 2001 hearing, petitioner provided the

Appeals officer with a copy of Form 1040X, Amended U.S. Individ-

ual Income Tax Return, for his taxable year 1999 (amended 1999

return).    In his amended 1999 return, petitioner reported total


     2
      Petitioner’s 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.
                              - 5 -

income of $0 and total tax of $0.

     On a date not disclosed by the record, but before respondent

issued a notice of determination concerning collection action(s)

under section 6320 and/or 6330 (notice of determination), the

Appeals officer provided petitioner with a certified transcript

of his account with respect to each of his taxable years 1995 and

1999.

     On July 11, 2001, the Appeals Office issued to petitioner a

notice of determination with respect to petitioner’s unpaid

liability for each of his taxable years 1995 and 1999.   An

attachment to the notice of determination stated in pertinent

part:

     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 transcripts
     were requested and reviewed and copies provided to you.

     Notice and demand was issued by regular mail for the
     above years to your last known address, as required
     under IRC 6303. The Final Notice of Intent to Levy
     (Letter 1058) was sent by certified mail dated August
     31, 2000. You responded timely with a request for a
     Collection Due Process Hearing.

     This Appeals Officer has had no prior involvement with
     respect to these liabilities.

     Issues Raised by the Taxpayer

     The case file shows you were audited for 1995, issued a
     statutory notice for 1995 and choose [sic] not to file
     a petition for 1995 contesting the tax liability. In
     addition the case file shows you filed a 1040 for 1999.
     At the hearing held on May 8, 2000 [sic] you provided
                               - 6 -

     me with a copy of an amended return for 1999 claiming
     you had no statutory income to report and are entitled
     to a refund.

     Attached to the Form 12153, Request for a Collection
     Due Process Hearing you attached a page disputing the
     authority of the Service to assess and collect income
     tax. At the hearing you stated you did not believe you
     received the Statutory Notice of Deficiency issued for
     1995 yet per the records in the file the address the
     statutory notice was sent to you was your last known
     address. No evidence was provided to show it was not
     your last known address. You did not petition so the
     amount per the statutory notice was assessed. The
     assessment is valid. As for the 1999 1040 it was
     originally filed with income tax owing. An assessment
     was made based on the 1040 filed. The assessment is
     valid.

     At the hearing, the Appeals Officer attempted to dis-
     cuss collection alternatives but you stated that your
     collection alternative would be to full [sic] pay if it
     could be proven to you that you owed it. You did not
     raise any other collection alternatives.

     Balancing Efficient Collection

     You received all required notices. You were given the
     opportunity at the hearing to arrange for payment of
     the liability but you neglected to do so. You have
     neglected or refused to pay. It is Appeals determina-
     tion that the government should be allowed to proceed
     with its proposed enforcement action, its intent to
     levy. Lacking your cooperation, the proposed collec-
     tion action balances the need for efficient collection
     with your concern that any collection action be no more
     intrusive than necessary.

                            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
                               - 7 -

conclude that there are no genuine issues of material fact

regarding the questions raised in respondent’s motion.

     A taxpayer may raise challenges to the existence or the

amount of the taxpayer’s underlying tax liability if the taxpayer

did not receive a notice of deficiency or did not otherwise have

an opportunity to dispute the tax liability.   Sec. 6330(c)(2)(B).

Where the validity of the underlying tax liability is properly

placed 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, 181-182 (2000).

     With respect to petitioner’s taxable year 1995, petitioner

received a notice of deficiency, but he did not file a petition

with respect to that notice.   On the instant record, we find that

petitioner may not challenge the existence or the amount of

petitioner’s unpaid liability for 1995.

     With respect to petitioner’s taxable year 1999, petitioner

did not receive a notice of deficiency.   The record in this case

establishes that petitioner filed a 1999 return in which he

reported total income of $9,269 and total tax of $3,872.   When

petitioner filed his 1999 return, he did not pay the amount of

tax that he owed for that year.   Respondent based petitioner’s

assessment with respect to his taxable year 1999 on petitioner’s

1999 return.   At the Appeals Office hearing, petitioner provided

the Appeals officer with a copy of an amended 1999 return in
                               - 8 -

which he reported total income of $0 and total tax of $0.

Petitioner argued to the Appeals Office that he had no “statutory

income to report” and is not “liable to pay” petitioner’s unpaid

liability for 1999.   The Court finds those arguments to be

frivolous and groundless.

     We now turn to the remaining issues that petitioner raised

in petitioner’s response (petitioner’s response) to respondent’s

motion with respect to petitioner’s notice of determination,

which we shall review for abuse of discretion.   Sego v. Commis-

sioner, supra; Goza v. Commissioner, supra.   As was true of

petitioner’s attachment to Form 12153, petitioner’s response

contains contentions, arguments, and requests that the Court

finds to be frivolous and/or groundless.3

     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 action as determined

in the notice of determination with respect to petitioner’s

taxable years 1995 and 1999.

     In respondent’s motion, respondent requests that the Court

require petitioner to pay a penalty to the United States pursuant


     3
      The contentions, arguments, and requests set forth in
petitioner’s 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.
                               - 9 -

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 main-

tained 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-

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.

     In the instant case, petitioner advances, we believe primar-

ily for delay,4 frivolous and/or groundless contentions, argu-

ments, and requests, thereby causing the Court to waste its

limited resources.   We shall impose a penalty on petitioner

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



     4
      We note that the notice of determination issued to peti-
tioner informed him that if he wanted to dispute the determina-
tion in court, he had to file a petition in this Court. Contrary
to that direction, on Aug. 10, 2001, petitioner filed a petition
in the United States District Court for the District of Nevada
(United States District Court) seeking review of the notice of
determination. On July 11, 2002, the United States District
Court dismissed petitioner’s case for lack of jurisdiction.
                             - 10 -

     We have considered all of petitioner’s 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 order granting respondent’s

                                 motion and decision will be entered

                                 for respondent.
