                        T.C. Memo. 2007-298



                      UNITED STATES TAX COURT



               JAMES KERR SCHLOSSER, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 23356-06L.           Filed October 1, 2007.



     James Kerr Schlosser, pro se.

     Kristina L. Rico, for respondent.



                        MEMORANDUM OPINION


     RUWE, Judge:   This case is before the Court on respondent’s

motion for summary judgment and to impose a penalty under section

6673.1



     1
       Unless otherwise indicated, all section references are to
the Internal Revenue Code, as amended, and all Rule references
are to the Tax Court Rules of Practice and Procedure.
                                - 2 -

                             Background

     Respondent sent to petitioner a Final Notice - Notice of

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

of Federal Tax Lien Filing and Your Right to a Hearing Under IRC

6320 with respect to unpaid tax that had previously been assessed

for the 1994 tax year.    Petitioner timely requested a hearing

with respect to each notice.

     In a letter dated August 17, 2006, acknowledging

petitioner’s hearing requests, respondent’s Appeals officer

advised petitioner that a telephonic hearing was scheduled for

September 21, 2006, at 12:30 p.m.    The letter advised petitioner

that the issues raised in his hearing requests are those that

courts have determined are frivolous.     However, the Appeals

officer advised petitioner that he would be allowed a face-to-

face hearing on any relevant, nonfrivolous issue, or a hearing

via correspondence, if petitioner appropriately requested such a

hearing within 14 days.    The letter also advised petitioner that

if he desired to pursue alternative collection methods, he should

provide a Form 433-A, Collection Information Statement for Wage

Earners and Self-Employed Individuals, and a signed tax return

for the 2005 tax period.    Petitioner did not call respondent at

the scheduled time for the hearing, nor did he indicate in a

timely fashion that such date and/or time was inconvenient.
                              - 3 -

     On October 13, 2006, respondent’s Appeals Office issued to

petitioner a Notice of Determination Concerning Collection

Action(s) Under Section 6320 and/or 6330 (notice of

determination) sustaining the proposed levy and lien filing.

Petitioner timely filed a petition with this Court to dispute the

notice of determination relying on the following alleged facts:

          a) The Federal Income Tax system for individual
     tax purposes is based upon a self-assessed system and
     is 100%voluntary [sic].

          b) After self-assessment, the Petitioner had found
     that he had no federal tax liability for the calendar
     year 1994.

          c) The Petitioner did file a Statement in lieu of
     a Federal Income Tax Form 1040.

          d) The Petitioner is not required by Law to file a
     Tax Form 1040.

          e) The Petitioner is an Inhabitant of Pennsylvania
     state/commonwealth, a Republic, one of the Fifty States
     of the Union, also known as, the united states of
     America.

          f) The Petitioner is not self-employed or
     gainfully employed for that matter.

          g) The Petitioner is not an agent, servant,
     officer, director, or employee of the government, nor
     is he subject to the Public Salary Tax Act of 1939.

          h) The Petitioner is not required by Law to file
     any tax forms, as he has no income form [sic] ‘any
     source derived therefrom’ by legal definition indicated
     in the Code.

          i) The Petitioner is not in the military.

          j) The Petitioner is not subject to the
     jurisdiction of the United States a foreign corporation
to the Fifty States of the Union, as evidenced in 28
                              - 4 -

U.S.C.A. §§3002(2) and (15)(A) and the Clearfield Doctrine.

     The Clearfield Doctrine. Wherein the United States
     Supreme Court held:
          “Governments descend to the level of a mere
          private corporation, and take on the
          characteristics of a mere private citizen....
          Where private corporate commercial paper
          [Federal Reserve Bank Notes*, from a private
          Banking Corporation, known as the Fed] and
          securities [checks] is concerned....for
          purposes of suit, such corporations are
          regarded as entities entirely separate from
          government.” Clearfield, supra. (Emphasis
          added).

     *Federal Reserve Bank Notes are ‘obligations of the
     United States’ (a foreign corporation to the Fifty
     States of the Union), see 18 U.S.C.A. §8. These
     Federal Reserve Bank Notes are not money, they merely
     circulate as a medium of exchange, they are deemed fiat
     money or flat money, ‘worthless pieces of paper’, as
     indicated in H.J.R. 192, June 5, 1933, this statement
     was made by Congressman McFadden from the state of
     Pennsylvania.

          In another U.S. Supreme Court case, United States
     vs. Burr, 309 U.S. 242, the Court held:

          “When governments enter the world of
          commerce, they are subject to the same
          burdens as any private firm or corporation.”

          k) The Petitioner has at all times acted in good
     faith in connection with his duties and obligations
     concerning tax matters. Therefore, the claim for
     penalties under the Code referenced above is misplaced.

          l) The Petitioner has relied on his interpretation
     of the Law, the Tax Codes, and United States Supreme
     Court Decisions to form the basis of his decision
     making, therefore, there is no deliberate willfulness
     on his part to evade any tax or fail to file any tax
     alleged due and owing.

          m) The Petitioner denies any claim that the
     Commissioner asserts that he owes any tax or penalty
                                - 5 -

       for the calendar year ending December 31, 1994, or any
       year for that matter.

            n) The Petitioner has been irreparably harmed and
       injured in his reputation and good name by these false
       and erroneously [sic] accusations and his [sic] has
       incurred out-of-pocket expenses to dispute these claims
       asserted by the Commissioner.

       Respondent has filed a motion for summary judgment in which

he alleges that petitioner’s position is based on frivolous

allegations and arguments.    In his motion, respondent also moves

that this Court impose a penalty under section 6673 because

petitioner has instituted these proceedings primarily for the

purpose of delay and petitioner’s position is frivolous and

groundless.    In response to respondent’s motion for summary

judgment, petitioner relies on the same type of allegations and

positions that were contained in his above-quoted petition.

                             Discussion

       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 where there is no genuine issue of any material fact, and

a decision may be rendered as a matter of law.     Rule 121(a) and

(b).    The moving party bears the burden of proving that there is

no genuine issue of material fact.      Dahlstrom v. Commissioner, 85

T.C. 812, 821 (1985); Naftel v. Commissioner, 85 T.C. 527, 529

(1985).    When a motion for summary judgment is made and properly

supported, the adverse party may not rest upon mere allegations
                               - 6 -

or denials of the pleadings but must set forth specific facts

showing that there is a genuine issue for trial.     Rule 121(d).

     Section 6330(a) provides that no levy may be made on any

property or right to property of any person unless the Secretary

first notifies him or her in writing of the right to a hearing

before the Appeals Office.2   At the hearing, a taxpayer may raise

any relevant issues including appropriate spousal defenses,

challenges to the appropriateness of collection actions, and

offers of collection alternatives.     Sec. 6330(c)(2)(A).   Under

certain circumstances, the person may also challenge the

existence or amount of the underlying tax liability.     Sec.

6330(c)(2)(B).

     In Lunsford v. Commissioner, 117 T.C. 183, 185-186 (2001),

we stated:

          Our Rules require petitioners to specify the facts
     upon which they rely for relief under section 6330. A
     petition filed under section 6330 must contain “Clear
     and concise lettered statements of the facts on which
     the petitioner bases each assignment of error”. Rule
     331(b)(5). * * *

     In the petition and the response to respondent’s motion for

summary judgment, petitioner has advanced nothing but frivolous

and meritless arguments with respect to his underlying tax

liability for 1994.   We shall not painstakingly address

petitioner’s assertions “with somber reasoning and copious


     2
       Similar hearing rights are provided to contest the filing
of a Federal tax lien under sec. 6320.
                                 - 7 -

citation of precedent; to do so might suggest that these

arguments have some colorable merit.”    Crain v. Commissioner, 737

F.2d 1417 (5th Cir. 1984).

     On the basis of our review of the record, we conclude that

there is no genuine issue as to a material fact.   In the absence

of a valid issue for review, we conclude that respondent is

entitled to judgment as a matter of law and sustain respondent’s

collection actions.

     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 proceedings have been instituted or maintained by

the taxpayer primarily for delay or the taxpayer’s position is

frivolous or groundless.   Petitioner’s position is frivolous and

groundless and has caused this Court to waste limited resources.

Accordingly, we hold that petitioner is liable for a $1,000

penalty pursuant to section 6673(a).

     To reflect the foregoing,


                                          An appropriate order and

                                     decision will be entered.
