                          T.C. Memo. 2003-70



                       UNITED STATES TAX COURT



         WILLIAM A. SWANN AND JUDITH A. SWANN, Petitioners v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 8803-02L.               Filed March 13, 2003.



     William A. Swann and Judith A. Swann, pro sese.

     Wendy S. Harris, 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.

     Petitioners resided in Las Vegas, Nevada, at the time they

filed the petition in this case.

     On April 15, 1999, petitioners filed jointly a Federal

income tax (tax) return for their taxable year 1998 (1998 joint

return).   In their 1998 joint return, petitioners reported total

income of $0, total tax of $0, and claimed a refund of $915.18 of

tax withheld.   Petitioners attached to their 1998 joint return

Form W-2, Wage & Tax Statement, reporting wages, tips, and other

compensation of $24,724.88.   Petitioners also attached a document

to their 1998 joint return (petitioners’ attachment to their 1998

joint return) that contained statements, contentions, and argu-

ments that the Court finds to be frivolous and/or groundless.2

     On July 14, 2000, respondent issued to petitioners a notice

of deficiency (notice) with respect to their taxable year 1998,

which they received.   In that notice, respondent determined a

deficiency in, and an accuracy-related penalty under section

6662(a) on, petitioners’ tax for their taxable year 1998 in the


     2
      Petitioners’ attachment to their 1998 joint return is very
similar to the documents that certain other taxpayers with cases
in the Court attached to their tax returns. See, e.g., Copeland
v. Commissioner, T.C. Memo. 2003-46; Smith v. Commissioner, T.C.
Memo. 2003-45.
                                   - 3 -

respective amounts of $9,707 and $1,755.56.

        Petitioners did not file a petition in the Court with

respect to the notice relating to their taxable year 1998.

Instead, on July 20, 2000, in response to the notice, petitioners

sent a letter (petitioners’ July 20, 2000 letter) to the Internal

Revenue Service that contained statements, contentions, argu-

ments, and requests that the Court finds to be frivolous and/or

groundless.3

     On May 7, 2001, respondent assessed petitioners’ tax, as

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

taxable year 1998.      (We shall refer to those assessed amounts, as

well as interest as provided by law accrued after May 7, 2001, as

petitioners’ unpaid liability for 1998.)

     Respondent issued to petitioners the notice and demand for

payment required by section 6303(a) with respect to petitioners’

unpaid liability for 1998.

     On August 23, 2001, respondent issued to petitioners a final

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

(notice of intent to levy) with respect to their taxable year

1998.       On or about September 23, 2001, in response to the notice

of intent to levy, petitioners filed Form 12153, Request for a


        3
      Petitioners’ July 20, 2000 letter is very similar to the
letters that certain other taxpayers with cases in the Court sent
to the Internal Revenue Service in response to the notices issued
to them. See, e.g., Copeland v. Commissioner, supra; Smith v.
Commissioner, supra.
                              - 4 -

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

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

Petitioners attached a document to their Form 12153 (petitioners’

attachment to Form 12153) that contained statements, contentions,

arguments, and requests that the Court finds to be frivolous

and/or groundless.4

     On March 12, 2002, a settlement officer with the Appeals

Office (settlement officer) held an Appeals Office hearing with

petitioners with respect to the notice of intent to levy.    At the

Appeals Office hearing, the settlement officer gave petitioners a

literal transcript of account (so-called MFTRAX) with respect to

their taxable year 1998.

     On April 17, 2002, the Appeals Office issued to petitioners

a notice of determination concerning collection action(s) under

section 6320 and/or 6330 (notice of determination).   An attach-

ment to the notice of determination stated in pertinent part:

     Verification of Legal and Procedural Requirements

     The Secretary has provided sufficient verification that
     all legal and procedural requirements have been met.
     Computer transcripts have been reviewed by Appeals,
     verifying the assessments.



     4
      Petitioners’ attachment to Form 12153 contained statements,
contentions, arguments, and requests that are very 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, supra; Smith v. Commissioner,
supra.
                         - 5 -

The assessment was made, and notice and demand was
issued by regular mail to the taxpayers’ last known
address, as required under IRC 6303. The notices
required under IRC 6331(d) and IRC 6330 were combined
in Letter 1058, dated 08/23/2001, which was mailed
certified to the taxpayers’ last known address. The
taxpayers responded with Form 12153, Request for a
Collection Due Process Hearing, which was timely re-
ceived and was postmarked 09/20/2001. The taxpayers
are entitled to judicial review. This is a levy issue
only.

A MFTRAX transcript was reviewed, and a copy was pro-
vided to the taxpayers at the face-to-face Collection
Due Process hearing held on 03/12/2002. In attendance
were the taxpayer, a taxpayer witness, Settlement
Officer Donna Fisher, and Settlement Officer Renee
Swall. * * * The hearing was audio-recorded by the
taxpayer and Settlement Officer Donna Fisher.

Settlement Officer Donna Fisher has had no prior in-
volvement with respect to this tax liability.

Issues Raised by the Taxpayer

The taxpayers disagree with the assessment. They filed
a zero income, zero tax due return, attaching several
pages of non-filer arguments and a Form W-2 showing
taxable wages of $24,724.88. They also had additional
taxable income, bringing their total income to $52,556
for tax year 1998. Their return was examined, and they
were issued a statutory notice of deficiency, dated
07/14/2000, for additional tax of $9,707 plus penalty
and interest. They responded to the notice of defi-
ciency with a letter dated 07/20/2000. This letter
raised no relevant arguments, and they did not petition
the tax court. Since they had a previous opportunity
to dispute the assessment, they were precluded under
the Collection Due Process procedures from raising as
an issue the amount or existence of the underlying
assessment.

The taxpayers raised no non-filer arguments.

Collection alternatives were raised with the   taxpayers.
They indicated they would full [sic] pay the   tax if it
could be proven to them that they are liable   for it.
However, the non-filer arguments attached to   their 1998
                               - 6 -

     return include, in part, their statement “... we know
     that no section of the Internal Revenue Code:
     1) Establishes an income tax ‘liability’...” In es-
     sence, this argument is repeated again in their attach-
     ment to their Form 12153. Therefore, further discus-
     sion was considered non-productive. In addition, since
     the taxpayers are not in filing compliance for tax year
     2000, they are not now eligible for an offer or an
     installment agreement.

     Balancing the Need for Efficient Collection with Tax-
     payer Concerns

     The requirements of all applicable laws and administra-
     tive procedures have been met. The assessment is
     valid. Given the taxpayers [sic] continued lack of
     compliance with the tax laws, a levy or levies on their
     property and/or rights to property would not be consid-
     ered more intrusive than necessary when balancing the
     taxpayers’ concerns with the government’s need for
     efficient collection of the taxes.

                            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

conclude that there are no genuine issues of material fact

regarding the questions raised in respondent’s motion.

     Where, as is the case here, the validity of the underlying

tax liability is not properly placed at issue, the Court will

review the determination of the Commissioner of Internal Revenue

for abuse of discretion.   Sego v. Commissioner, 114 T.C. 604, 610

(2000); Goza v. Commissioner, 114 T.C. 176, 181-182 (2000).

     As was true of petitioners’ attachment to their 1998 joint
                               - 7 -

return, petitioners’ July 20, 2000 letter, and petitioners’

attachment to Form 12153, petitioners’ response contains conten-

tions, arguments, and requests that the Court finds to be frivo-

lous and/or groundless.5

     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 petitioners’

taxable year 1998.

     In respondent’s motion, respondent requests that the Court

require petitioners to pay a penalty to the United States pursu-

ant 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

maintained 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-


     5
      The contentions, arguments, and requests set forth in
petitioners’ 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.
                                 - 8 -

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, petitioners advance, we believe primar-

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

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

limited resources.   We shall impose a penalty on petitioners

pursuant to section 6673(a)(1) in the amount of $2,500.

     We have considered all of petitioners’ 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 appropriate order granting

                                 respondent’s motion and decision

                                 will be entered for respondent.
