                              T.C. Memo. 2019-112



                         UNITED STATES TAX COURT



                DERRICK BARRON TARTT, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 4973-18L.                         Filed September 3, 2019.



      Derrick Barron Tartt, pro se.

      Mayer Y. Silber and Kerrington A. Hall, for respondent.



                           MEMORANDUM OPINION


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

seeks review pursuant to sections 6320(c)1 and 6330(d) of the determination by 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
Procedure. We round all monetary amounts to the nearest dollar.
                                          -2-

[*2] Internal Revenue Service (IRS or respondent) to uphold the filing of a notice

of Federal tax lien (NFTL). The IRS initiated the collection action with respect to

petitioner’s Federal income tax liabilities for 2013-2015. He contends that he is

not obligated to pay the tax liabilities he reported on those returns because of

claims he has advanced against the U.S. Government in unrelated litigation.

Finding petitioner’s arguments frivolous, we will grant respondent’s motion for

summary judgment and sustain the collection action.

                                     Background

      The following facts are derived from the parties’ motion papers, including

the declaration and exhibits accompanying respondent’s motion. See Rule 121(b).

Petitioner resided in Florida when he filed his petition.

A.    Petitioner’s Unrelated Litigation

      In December 2000 petitioner filed substantially identical complaints against

a hospital and a medical practice, alleging employment discrimination. The U.S.

District Court for the Northern District of Illinois dismissed the first case for fail-

ure to state a claim and failure to prosecute, and it dismissed the second on res

judicata grounds. The U.S. Court of Appeals for the Seventh Circuit affirmed both

judgments. See Tartt v. Nw. Cmty. Hosp., 453 F.3d 817 (7th Cir. 2006).
                                        -3-

[*3] Petitioner then filed a complaint alleging that the participants in the preced-

ing lawsuits--including the defendants, their attorneys, the presiding judges, and

the U.S. Government--had joined in a conspiracy to deprive him of employment

benefits. The Court of Appeals summarily affirmed the dismissal of that action

and imposed sanctions on petitioner for frivolous filings. See Tartt v. Magna

Health Sys., No. 17-1023, 2017 WL 4772538 (7th Cir. Feb. 14, 2017).

B.    Proceedings in This Case

      For 2013, 2014, and 2015 petitioner filed Federal income tax returns re-

porting taxable income of $159,712, $171,307, and $292,524, respectively. He

calculated the tax due on these amounts but did not pay any portion of the balance

due. For each year the IRS assessed the tax shown as due, additions to tax under

sections 6651 and 6654, and interest. As of May 2017 petitioner’s aggregate un-

paid tax liabilities for 2013-2015 exceeded $217,000.

      In an effort to collect these unpaid liabilities the IRS filed an NFTL and, on

May 2, 2017, issued petitioner a Notice of Federal Tax Lien Filing and Your Right

to a Hearing. He timely requested a CDP hearing, stating that he could not pay the

balance and that he had “a Federal lawsuit in which the Government has denied

due process of law that has resulted in loss of millions.” He made no reference to

his 2013-2015 tax liabilities (or anything else relevant to the NFTL filing) but as-
                                        -4-

[*4] serted that he would seek certiorari from the Court of Appeals’ judgment

affirming the dismissal of his conspiracy claims.

      His case was assigned to a settlement officer (SO) from the IRS Appeals Of-

fice. The SO verified that the assessments had been properly made, that the IRS

had timely sent notice and demand for payment to petitioner’s last known address,

that there remained a balance due, and that the NFTL filing otherwise complied

with applicable law and administrative procedure. The SO acknowledged receipt

of petitioner’s hearing request and scheduled a telephone conference for August

30, 2017. The SO advised him that she could not consider a collection alternative

unless he submitted a Form 433-A, Collection Information Statement for Wage

Earners and Self-Employed Individuals, with supporting financial information.

      Petitioner did not respond to these communications. Nor did he call the SO

at the time of the hearing (or at any other time). The SO then sent him a “last

chance” letter, offering him an additional 14 days to submit the requested informa-

tion and anything else he wished her to consider. Fifteen days later, the SO re-

ceived a letter from petitioner in which he stated: “It’s my position that the United

States owes more than owed, therefore, [I] will not pay any debt to the United

States until the debt owed is settle[d] through the courts or settlement.” He did not
                                         -5-

[*5] otherwise address his tax liabilities for 2013-2015 and supplied no

information bearing on his entitlement to a collection alternative.

      Having received no relevant information from petitioner, the SO began to

close the case on the basis of information in the administrative file. While doing

so she noted that petitioner lived in a federally declared disaster area. She called

petitioner and left a voice message asking that he contact her if he wished to

schedule additional CDP proceedings. He never responded. On February 5, 2018,

after the disaster area designation was lifted, the SO closed the case.

      On February 15, 2018, the IRS issued petitioner a notice of determination

sustaining the NFTL filing, and he timely petitioned this Court for review. As the

basis for his position he stated: “I dispute the IRS determination letter due to con-

spiracy of the Northern District of Illinois * * * and 7th Circuit Court of Appeals,

State of Illinois, several Federal agencies including the Departments of Treasury,

Defense, Justice, Labor and Commerce, and several corporations * * * to deny

rights and benefits of military and civilian employment that far exceeds any debt

ow[ed] any federal agency.” On April 18, 2019, respondent filed a motion for

summary judgment, to which petitioner responded on June 7, 2019. His response

reiterates his conspiracy claims without addressing the facts or law relevant to

disposition of respondent’s motion.
                                         -6-

[*6]                                  Discussion

A.     Summary Judgment

       The purpose of summary judgment is to expedite litigation and avoid costly,

time-consuming, and unnecessary trials. Fla. Peach Corp. v. Commissioner, 90

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

genuine dispute as to any 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),

aff’d, 17 F.3d 965 (7th Cir. 1994). In deciding whether to grant summary judg-

ment, we construe factual materials and inferences drawn from them in the light

most favorable to the nonmoving party. Sundstrand Corp., 98 T.C. at 520. How-

ever, the nonmoving party may not rest upon mere allegations or denials of his

pleadings but instead must set forth specific facts showing that there is a genuine

dispute for trial. Rule 121(d); see Sundstrand Corp., 98 T.C. at 520. We conclude

that there are no material facts in dispute and that this case is appropriate for sum-

mary adjudication.

B.     Standard of Review

       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.

But our case law tells us what standard to adopt. Where the taxpayer’s underlying
                                         -7-

[*7] tax liability is properly before us, we review the SO’s determination de novo.

Goza v. Commissioner, 114 T.C. 176, 181-182 (2000). In all other respects we

review the IRS’ decision for abuse of discretion only. Id. at 182. Abuse of dis-

cretion exists when a determination is “arbitrary, capricious, or without sound

basis in fact or law.” Murphy v. Commissioner, 125 T.C. 301, 320 (2005), aff’d,

469 F.3d 27 (1st Cir. 2006); Holloway v. Commissioner, T.C. Memo. 2007-175,

94 T.C.M. (CCH) 25, 28, aff’d, 322 F. App’x 421 (6th Cir. 2008).

C.    Underlying Tax Liability

      A taxpayer may dispute the existence or amount of his underlying liability

in a CDP case if he “did not receive any statutory notice of deficiency for such tax

liability or did not otherwise have an opportunity to dispute * * * [it].” Sec.

6330(c)(2)(B). Having self-reported his tax liabilities for 2013-2015, petitioner

was entitled to challenge them before the SO. But to mount a proper challenge he

was required to present the SO with evidence that his correct tax liabilities for

2013-2015 were different from the amounts that he reported. See Moriarty v.

Commissioner, T.C. Memo. 2017-204, 114 T.C.M. (CCH) 441, 443 (“‘An issue is

not properly raised if the taxpayer fails * * * to present to Appeals any evidence

* * * after being given a reasonable opportunity’ to do so.” (quoting section

301.6330-1(f)(2), Q&A-F3, Proced. & Admin. Regs.)), aff’d per order, 2018 WL
                                        -8-

[*8] 4924349 (6th Cir. Sept. 19, 2018); Ligman v. Commissioner, T.C. Memo.

2015-79, 109 T.C.M. (CCH) 1405, 1406 (holding that taxpayer did not properly

challenge his self-reported liability when he presented the SO with no evidence

regarding it).

      In some circumstances a taxpayer may properly challenge his underlying tax

liability by showing that it should be reduced by application of an overpayment

tax credit existing in his account for another year. E.g., Weber v. Commissioner,

138 T.C. 348, 360 (2012); Landry v. Commissioner, 116 T.C. 60, 62 (2001); see

Dixon v. Commissioner, 141 T.C. 173, 184 (2013) (discussing applicable standard

of review). But a taxpayer may do this only where “a credit from another tax year

indisputably exists.” Del-Co W. v. Commissioner, T.C. Memo. 2015-142, 110

T.C.M. (CCH) 119, 120. “[W]e do not have jurisdiction under section 6330 to

‘determine an overpayment of an unrelated liability.’” Id. (quoting Weber, 138

T.C. at 366).

      At the CDP hearing petitioner did not contend (or supply evidence) that his

reported 2013-2015 tax liabilities were incorrect. Nor did he allege that he has an

“available credit” from another year that could be applied to reduce those liabi-

lities. See Weber, 138 T.C. at 372. Rather, he wishes to offset against those lia-
                                          -9-

[*9] bilities a monetary judgment that he seeks in litigation deemed frivolous by

every court to consider the question.

      We lack jurisdiction to consider petitioner’s collateral attack on his 2013-

2015 tax liabilities. Neither the SO nor we have authority to second-guess the de-

cisions of the courts that have ruled against him. Even if we had such jurisdiction,

no legal authority exists for offsetting, against an assessed Federal tax liability, a

claim against the Government in a totally unrelated matter. Because petitioner has

not raised a proper challenge to his underlying tax liabilities, we review the SO’s

determination for abuse of discretion only.

D.    Abuse of Discretion

      In determining whether the SO abused her discretion we consider whether

she: (1) properly verified that the requirements of any applicable law or admin-

istrative procedure had been met, (2) considered any relevant issues petitioner

raised, and (3) determined whether the “collection action balances the need for the

efficient collection of taxes with the legitimate concern of * * * [petitioner] that

any collection action be no more intrusive than necessary.” See sec. 6330(c)(3).

Our review of the record establishes that the SO clearly satisfied all three require-

ments.
                                         - 10 -

[*10] The SO did not abuse her discretion by declining to consider a collection

alternative and closing this case. Petitioner initially indicated interest in a collec-

tion alternative, but he did not offer one; nor did he supply any of the financial in-

formation necessary to enable the SO to consider one. We have consistently held

that it is not an abuse of discretion for an Appeals officer to reject collection alter-

natives and sustain collection action where (as here) the taxpayer has repeatedly

failed, after being given sufficient opportunities, to make an offer or supply the

necessary forms and information. See, e.g., Solny v. Commissioner, T.C. Memo.

2018-71, at *10; Gentile v Commissioner, T.C. Memo. 2013-175, 106 T.C.M.

(CCH) 75, 77, aff’d, 592 F. App’x 824 (11th Cir. 2014).

E.    Frivolous Position Penalty

      Section 6673(a)(1) authorizes this Court to impose a penalty not in excess

of $25,000 “[w]henever it appears to the Tax Court” that a taxpayer has instituted

or maintained a proceeding “primarily for delay” or has taken a position that 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. Commissioner, 791 F.2d 68, 71 (7th Cir. 1986);

Bruhwiler v. Commissioner, T.C. Memo. 2016-18, 111 T.C.M. (CCH) 1071, 1074.
                                       - 11 -

[*11] Petitioner’s arguments are frivolous, and he has wasted considerable re-

sources of respondent and this Court. His conduct is thus deserving of a penalty.

But this appears to be his first appearance in the Tax Court, and we have not yet

had the occasion to advise him of the risk he faced. While we will refrain from

imposing sanctions now, we warn him that we will be less generous in the future.

      To reflect the foregoing,


                                                Decision will be entered for

                                      respondent.
