                       T.C. Memo. 2002-88



                     UNITED STATES TAX COURT



          WAYNE A. AND MARYKAY WEISHAN, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 10025-01L.           Filed April 4, 2002.



     Wayne A. and Marykay Weishan, pro sese.

     Karen Lynne Baker, Alan C. Levine, and Wendy S. Harris, for

respondent.



                       MEMORANDUM OPINION


     PANUTHOS, Chief Special Trial Judge:   This matter is before

the Court on respondent’s motion to dismiss for failure to state

a claim upon which relief may be granted and to impose a penalty
                                - 2 -

under section 6673.1   Because respondent has presented matters

outside of the pleadings, we treat respondent’s motion to dismiss

as a motion for summary judgment pursuant to Rule 121.   See Rule

40.

      Summary judgment is intended to expedite litigation and

avoid unnecessary and expensive trials.    Fla. Peach Corp. v.

Commissioner, 90 T.C. 678, 681 (1988).    Summary judgment may be

granted with respect to all or any part of the legal issues in

controversy “if the pleadings, answers to interrogatories,

depositions, admissions, and any other acceptable materials,

together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that a decision may be

rendered as a matter of law.”   Rule 121(a) and (b); Sundstrand

Corp. v. Commissioner, 98 T.C. 518, 520 (1992), affd. 17 F.3d 965

(7th Cir. 1994); Zaentz v. Commissioner, 90 T.C. 753, 754 (1988);

Naftel v. Commissioner, 85 T.C. 527, 529 (1985).    The moving

party bears the burden of proving that there is no genuine issue

of material fact, and factual inferences will be read in a manner

most favorable to the party opposing summary judgment.    Dahlstrom

v. Commissioner, 85 T.C. 812, 821 (1985); Jacklin v.

Commissioner, 79 T.C. 340, 344 (1982).




      1
        Section references are to sections of the Internal
Revenue Code, as amended, and Rule references are to the Tax
Court Rules of Practice and Procedure.
                                - 3 -

       We are satisfied that there is no genuine issue as to any

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

law.    As explained in detail below, we shall grant respondent’s

motion for summary judgment, although we shall deny respondent’s

request for the imposition of a penalty under section 6673(a).

Background

       On June 18, 1999, respondent issued a notice of deficiency

to petitioners determining a deficiency of $9,817 in their

Federal income tax for 1997 and an accuracy-related penalty in

the amount of $496.40.    On July 26, 1999, petitioners wrote a

letter to respondent that stated in pertinent part:    “Before I

file, pay, or take action with respect to your ‘Notice’ I must

first establish whether or not it was sent pursuant to law,

whether or not it has the ‘force and effect of law’, and whether

you have any authority to send me such ‘Notice’ in the first

place.”    Petitioners did not file a petition for redetermination

with the Court challenging the notice of deficiency.

       On December 27, 1999, respondent mailed a letter to

petitioners informing them that their account for 1997 had been

changed to reflect assessments for the adjustments set forth in

the above-described notice of deficiency and the imposition of

statutory interest of $425.92, reduced by a credit for

withholding taxes of $7,335.18, leaving a balance due of

$3,404.94.    The letter included a request that petitioners pay
                               - 4 -

the amount due by January 17, 2000.    On January 9, 2000,

petitioners wrote a letter to respondent challenging respondent’s

December 27, 1999, letter as a “bootleg, fraudulent document”.

     On July 22, 2000, respondent mailed to petitioners a Final

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

The notice stated that petitioners owed taxes and statutory

additions totaling $3,738.23 for 1997, and that respondent was

preparing to collect the amount due by levy.

     Petitioners filed with respondent a Request for a Collection

Due Process Hearing that included allegations that respondent was

barred from proceeding with collection because petitioners were

not served with a valid notice of deficiency or notice and demand

for payment.   Petitioners also challenged the validity of the

underlying assessment and requested that respondent provide them

with a copy of a summary record of assessment.

     On May 9, 2001, the Appeals Office issued a letter to

petitioners informing them that their administrative hearing was

scheduled for June 11, 2001.   Along with the letter, the Appeals

Office provided petitioners with a transcript of their account

for 1997 that showed that a credit was posted to petitioners’

account for withheld taxes of $7,335.18 on April 15, 1998.    The

transcript of account also showed that petitioners filed their

1997 tax return reporting a tax liability of zero on September 7,

1998, and three assessments were entered against petitioners for
                                 - 5 -

tax, penalties, and interest of $9,817.80, $496.40, and $425.92,

respectively, on December 27, 1999.

     Petitioners attended the Appeals Office hearing conducted on

June 11, 2001.   During the hearing, petitioners challenged the

validity of the notice of deficiency dated June 18, 1999,

asserted that they did not receive a notice and demand for

payment under section 6303(a), and argued that the transcript of

account (described above) was insufficient to satisfy the

verification requirement imposed upon the Appeals Office under

section 6330(c)(1).   On July 12, 2001, respondent issued to

petitioners a Notice of Determination Concerning Collection

Action(s) Under Section 6320 and/or 6330 stating that respondent

would proceed with collection.

     On August 10, 2001, petitioners filed with the Court a

petition for review of respondent’s notice of determination.   The

petition included the same allegations and arguments that

petitioners raised at the Appeals Office hearing.   In response to

the petition, respondent filed a motion to dismiss for failure to

state a claim upon which relief may be granted and to impose a

penalty under section 6673.   Respondent contends that, because

the record shows that petitioners received the notice of

deficiency dated June 18, 1999, petitioners are barred under

section 6330(c)(2)(B) from challenging the notice of deficiency

and/or their underlying tax liability in this proceeding.
                               - 6 -

Respondent further asserts that respondent’s letter to

petitioners dated December 27, 1999, served as a notice and

demand for payment under section 6303(a), and that the transcript

of account provided to petitioners in advance of the Appeals

Office hearing satisfied the verification requirement imposed

under section 6330(c)(1).

     This matter was called for hearing at the Court’s motions

session held in Washington, D.C.   Counsel for respondent appeared

at the hearing and presented argument in support of respondent’s

motion.   Although no appearance was made by or on behalf of

petitioners at the hearing, petitioners did file with the Court a

written statement pursuant to Rule 50(c).

Discussion

     Section 6330 generally provides that the Commissioner cannot

proceed with the collection of taxes by way of a levy on a

person’s property until the person has been given notice of and

the opportunity for an administrative review of the matter.

Under section 6330(d), judicial review of the administrative

determination may be obtained in either the Tax Court or Federal

District Court.

     In Goza v. Commissioner, 114 T.C. 176 (2000), we explained

that section 6330 provides for administrative and judicial review

with respect to collection issues such as spousal defenses, the

appropriateness of the Commissioner’s intended collection action,
                               - 7 -

and possible alternative means of collection.   Section

6330(c)(2)(B) provides that neither the existence nor the amount

of the underlying tax liability can be contested at an Appeals

Office hearing unless the taxpayer did not receive a notice of

deficiency for the taxes in question or did not otherwise have an

earlier opportunity to dispute such tax liability.   The taxpayer

in Goza had received a notice of deficiency, yet failed to file a

petition for redetermination with the Court.    When the taxpayer

subsequently attempted to use the Court’s collection review

procedure as a forum to assert frivolous and groundless

constitutional arguments against the Federal income tax, the

Court dismissed the petition for failure to state a claim upon

which relief can be granted.

     As was the case in Goza v. Commissioner, supra, petitioners

received a notice of deficiency for the year in issue and failed

to file a timely petition for redetermination with the Court.    It

follows that section 6330(c)(2)(B) bars petitioners from

challenging the existence or amount of their underlying tax

liability in this collection review proceeding.   Even if

petitioners were permitted to challenge their underlying tax

liability, their argument that respondent cannot assess an amount

in excess of that reported in their tax return is frivolous and

groundless.
                               - 8 -

     We likewise reject petitioners’ assertion that the Appeals

officer failed to verify that all applicable laws and procedures

were complied with as required under section 6330(c)(1).     First,

the record shows that the letter that respondent issued to

petitioners dated December 27, 1999, served as a notice and

demand for payment.   In particular, the letter informed

petitioners that changes had been made to their account for 1997

and requested that they pay the amount due by January 17, 2000.

The issuance of this letter corresponded with the date of

assessment of tax, penalties, and interest as reflected in the

transcript of account that respondent provided to petitioners

before the Appeals Office hearing.     We hold that the letter

constituted a notice and demand for payment within the meaning of

section 6303(a).   See, e.g., Hughes v. United States, 953 F.2d

531, 536 (9th Cir. 1992).

     We also reject petitioners’ assertion that the Appeals

officer’s reliance on a transcript of account was insufficient

verification from the Secretary that the requirements of all

applicable laws and administrative procedures were met as

required under section 6330(c)(1).     Petitioners assert that they

are entitled to a copy of a record of assessment.

     Federal tax assessments are formally recorded on a summary

record of assessment.   Sec. 6203.   The summary record of

assessment must “provide identification of the taxpayer, the
                               - 9 -

character of the liability assessed, the taxable period, if

applicable, and the amount of the assessment.”   Sec. 301.6203-1,

Proced. & Admin. Regs.

     Section 6330(c)(1) does not require the Commissioner to rely

upon a particular document (i.e., the summary record itself

rather than a transcript of account) to satisfy the verification

requirement imposed therein.   Kuglin v. Commissioner, T.C. Memo.

2002-51.   In this regard, we note that the transcript of account

that the Appeals officer relied upon in this case contained all

the information prescribed in section 301.6203-1, Proced. &

Admin. Regs.   Id.

     Petitioners have not demonstrated any irregularity in the

assessment procedure that would raise a question about the

validity of the assessments or the information contained in the

transcript of account.   See Mann v. Commissioner, T.C. Memo.

2002-48.   Accordingly, we hold that the Appeals officer satisfied

the verification requirement imposed under section 6330(c)(1).

     Petitioners have 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).   In the

absence of a valid issue for review, and there being no dispute
                              - 10 -

as to a material fact, it follows that respondent is entitled to

judgment as a matter of law sustaining the notice of

determination dated July 12, 2001.

     Section 6673(a)(1) authorizes the Tax Court to require a

taxpayer to pay to the United States a penalty not in excess of

$25,000 whenever it appears that proceedings have been instituted

or maintained by the taxpayer primarily for delay or that the

taxpayer’s position in such proceeding is frivolous or

groundless.   The Court has indicated its willingness to impose

such penalties in collection review cases.     Pierson v.

Commissioner, 115 T.C. 576 (2000).     Although we shall not impose

a penalty upon petitioners pursuant to section 6673(a)(1), we

admonish petitioners that the Court will consider imposing such a

penalty should they return to the Court and advance similar

arguments in the future.

     To reflect the foregoing,

                                      An order and decision will be

                                 entered granting respondent’s

                                 motion for summary judgment and

                                 denying respondent’s request for

                                 the imposition of a penalty

                                 pursuant to section 6673(a).
