                               T.C. Memo. 2015-34



                         UNITED STATES TAX COURT



               ALVIN SHELDON KANOFSKY, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 21821-13L.                         Filed February 26, 2015.


      Alvin Sheldon Kanofsky, pro se.

      Shari A. Salu, for respondent.



                           MEMORANDUM OPINION


      LAUBER, Judge: In this collection due process (CDP) case, petitioner

seeks review pursuant to section 6330(d)(1) of the determination by the Internal

Revenue Service (IRS or respondent) to uphold a notice of intent to levy.1 The


      1
       All statutory references are to the Internal Revenue Code in effect at all
relevant times, and all Rule references are to the Tax Court Rules of Practice and
                                                                       (continued...)
                                         -2-

[*2] IRS has moved for summary judgment under Rule 121, contending that there

are no disputed issues of material fact and that its determination to sustain the

collection action was proper as a matter of law. We agree and accordingly will

grant the motion. Having concluded that petitioner’s position in this case is frivo-

lous and that he instituted these proceedings primarily for delay, we will also im-

pose upon him under section 6673 a penalty of $20,000.

                                    Background

      The following facts are derived from the parties’ pleadings and motion pa-

pers, including attached affidavits and exhibits. Petitioner resided in Pennsylvania

when he filed his petition.

      On November 15, 2010, the IRS timely issued notices of deficiency for

2006 and 2007 and petitioner timely petitioned this Court. Following a trial, the

Court issued a bench opinion sustaining in full the deficiencies and additions to

tax determined by the IRS. Kanofsky v. Commissioner, docket No. 3774-11 (Mar.

21, 2012). A decision consistent with that opinion was issued on April 30, 2012.

The Court of Appeals for the Third Circuit affirmed that decision, Kanofsky v.

Commissioner, 520 Fed. Appx. 95, 96 (3d Cir. 2013), and the Supreme Court


      1
      (...continued)
Procedure.
                                         -3-

[*3] denied certiorari and petitioner’s subsequent petition for rehearing, Kanofsky

v. Commissioner, 134 S. Ct. 802 (2013), 134 S. Ct. 1367 (2014).

      Petitioner did not post a bond to stay assessment and collection. See sec.

7485(a). In an effort to collect the assessed tax, on March 20, 2013, the IRS sent

him a Final Notice of Intent to Levy and Notice of Your Right to a Hearing, and

he timely requested a CDP hearing. In his request, he did not indicate any desire

for a collection alternative and stated as his reason for disagreeing with the levy:

“Still in litigation, working on reducing amounts.”

      On July 16, 2013, a settlement officer (SO) from the IRS Appeals office

sent petitioner a letter scheduling a telephone CDP hearing for August 14, 2013.

This letter explained that if petitioner desired a collection alternative, he would

need to supply a completed Form 433-A, Collection Information Statement for

Wage Earners and Self Employed Individuals, together with supporting financial

data. The letter also noted that petitioner would need to bring himself into compli-

ance with his Federal tax obligations by filing signed returns for 2009-2012.

      Petitioner submitted no documentation to the SO during the next month and

did not call in for the scheduled CDP hearing. The SO telephoned him shortly

after the appointed time on August 14, 2013, but he did not answer the call. He

did not contact the SO, by telephone or otherwise, to reschedule the hearing or to
                                         -4-

[*4] request additional time to supply documents. The SO accordingly closed the

case and, on August 20, 2013, the IRS issued a Notice of Determination

Concerning Collection Action(s) under Section 6320 and/or 6330 sustaining the

levy.

        Petitioner timely sought review in this Court and, on July 29, 2014, the IRS

filed a motion for summary judgment. Petitioner responded to this motion on

September 3, 2014, contending (among other things) that the SO abused her dis-

cretion “because the case was still under consideration in the higher courts, as well

as Petitioner being continually under pressure from the community, and continu-

ally subjected to fraud and corruption.” He contends that “there are numerous dis-

puted issues of fact,” including “the blockage of the tax exempt status of Jewish

Non-Profit Groups and the Republican PAC Support Groups,” and he asserts that

the “flare up of the ISIS groups in the Middle East and the Israeli-Gaza and

Ukranian-Russian conflicts may have a bearing on the prosecution of this case.”

He asserts that he should be immune from any penalty for taking frivolous posi-

tions because he “has continued to be subjected to fraudulent and corrupt actions

by the community in a concerted effort to block his business activities” and

because he “is one of the major whistleblowers in the country.”
                                         -5-

[*5]                                  Discussion

A.     Summary Judgment and Standard of Review

       The purpose of summary judgment is to expedite litigation and avoid un-

necessary and time-consuming trials. Fla. Peach Corp. v. Commissioner, 90 T.C.

678, 681 (1988). The Court may grant summary judgment when there is no genu-

ine dispute as to any material fact and a decision may be rendered as a matter of

law. Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), aff’d, 17 F.3d

965 (7th Cir. 1994). Where the moving party properly makes and supports a mo-

tion for summary judgment, “an adverse party may not rest upon the mere allega-

tions or denials of such party’s pleading,” but must set forth specific facts, by affi-

davit or otherwise, showing that there is a genuine dispute for trial. Rule 121(d).

Petitioner’s response to the motion for summary judgment alleges no colorable

dispute as to any material fact, and we conclude that this case may be adjudicated

summarily.

       Section 6330(d)(1) does not prescribe the standard of review that this Court

should apply in reviewing an IRS administrative determination in a CDP case.

The general parameters for such review are marked out by our precedents. Where

the validity of the underlying tax liability is at issue, the Court reviews the IRS’

determination de novo. Goza v. Commissioner, 114 T.C. 176, 181-182 (2000).
                                         -6-

[*6] Where the underlying liability is not properly at issue, the Court reviews the

IRS’ determination for abuse of discretion. Id. at 182. Abuse of discretion exists

when a determination is arbitrary, capricious, or without sound basis in fact or law.

See Murphy v. Commissioner, 125 T.C. 301, 320 (2005), aff’d, 469 F.3d 27 (1st

Cir. 2006).

      A taxpayer may contest at a CDP hearing the existence or amount of his

underlying tax liability only if he did not receive a notice of deficiency for the tax

year in question or otherwise have a prior opportunity to dispute it. See sec.

6330(c)(2)(B). Petitioner not only received notices of deficiency for 2006 and

2007; he litigated his liabilities for those years, unsuccessfully, all the way to the

Supreme Court. Our decision in that case is now final. See sec. 7481(a)(2). Be-

cause petitioner had a prior opportunity to dispute and did dispute his underlying

tax liabilities for 2006 and 2007, he was barred from contesting those liabilities in

the CDP hearing and is likewise barred from contesting those liabilities here. We

therefore review the SO’s decision for abuse of discretion only.

B.    Abuse of Discretion

      We consider whether, in the course of making his determination, the SO:

(1) properly verified that the requirements of any applicable law or administrative

procedure were met; (2) considered any relevant issues petitioner raised; and (3)
                                         -7-

[*7] determined whether “any proposed collection action balances the need for the

efficient collection of taxes with the legitimate concern of the person that any

collection action be no more intrusive than necessary.” Sec. 6330(c)(3). It is clear

from our review of the record that the SO conducted a thorough review of the

transcripts of petitioner’s account and verified that the requirements of applicable

law and administrative procedure were followed. The SO properly balanced the

need for efficient collection of taxes with petitioner’s legitimate concern that the

collection action be no more intrusive than necessary.

      Petitioner did not raise any valid challenge to the appropriateness of the

proposed collection action. Indeed, he declined to submit any documents and

refused to participate in the CDP hearing that the IRS offered him. A settlement

officer does not abuse her discretion when she declines to consider collection

alternatives under these circumstances. See, e.g., Lance v. Commissioner, T.C.

Memo. 2009-129; Shanley v. Commissioner, T.C. Memo. 2009-17 (finding no

abuse of discretion when IRS issued notice of determination upon the taxpayer’s

failure to provide requested documentation within 14 days).

C.    Section 6673(a)(1) Penalty

      In his motion for summary judgment, respondent asks the Court to impose a

penalty on petitioner under section 6673(a)(1). That section authorizes this Court
                                         -8-

[*8] to require the taxpayer to pay to the United States a penalty not in excess of

$25,000 if it appears that the taxpayer has instituted or maintained proceedings

primarily for delay or the taxpayer’s position is frivolous or groundless. The

purpose of section 6673 is to compel taxpayers to conform their conduct to settled

tax principles and to deter the waste of judicial resources. See Coleman v. Com-

missioner, 791 F.2d 68, 71 (7th Cir. 1986); Salzer v. Commissioner, T.C. Memo.

2014-188.

      Petitioner is no stranger to this Court. He has been warned in prior proceed-

ings that his conduct would subject him to penalty if he continued to repeat the

same litany about fraud, corruption, and whistleblowing that he recites in this case

and has recited almost verbatim previously. During the trial of his 2006 and 2007

tax liabilities, the collection of which is at issue here, the Court explicitly warned

petitioner that his assertion of frivolous positions risked the imposition of a sig-

nificant penalty. The Court of Appeals for the Third Circuit has previously

warned petitioner that his “arguments based on obstruction of justice, corruption

and fraud committed by public figures in Pennsylvania and New Jersey,” as well

as his alleged “extensive whisteblower activity,” are “not relevant * * * and do not

advance his cause.” Kanofsky v. Commissioner, 424 Fed. Appx. 189, 191-192 (3d

Cir. 2011) (per curiam), aff’g T.C. Memo. 2010-46.
                                         -9-

[*9] In Kanofsky v. Commissioner, T.C. Memo. 2014-153, which involved re-

spondent’s efforts to collect petitioner’s assessed tax liabilities for 1996-2000, we

reviewed his extensive record of litigation in this Court and concluded as follows:

      Petitioner has abused the judicial process and delayed collection of
      his unpaid tax liabilities. Petitioner is a well-educated individual who
      admits that he understood cautions and warnings given by this Court,
      yet he continues to reiterate the same irrelevant and groundless
      arguments. He has wasted the time and resources of both respondent
      and this Court.

Id. at *19-*20. We concluded that a penalty under section 6673(a)(1) was amply

justified and required petitioner to pay a penalty of $10,000. We “warn[ed]

petitioner again that we will consider imposing additional penalties if he returns

and continues to raise irrelevant, frivolous, and groundless arguments or institutes

or maintains further proceedings in this Court to delay the payment of Federal

income tax lawfully assessed against him.” Id. at *20.

      That warning was issued on July 31, 2014. In responding to the instant mo-

tion for summary judgment on September 3, 2014, petitioner nevertheless repeated

the same tiresome series of groundless and irrelevant arguments. We find once

again that petitioner’s arguments are frivolous and that he has instituted this case

for the sole purpose of delaying the collection of his Federal tax liabilities. True
                                       - 10 -

[*10] to our word, we will accordingly require that he pay to the United States a

penalty under section 6673(a), this time in the amount of $20,000.

      To reflect the foregoing,



                                                An appropriate order and decision

                                      will be entered.
