                         T.C. Memo. 2002-251



                       UNITED STATES TAX COURT



                  MICHAEL E. NESTOR, Petitioner v.
            COMMISSIONER OF INTERNAL REVENUE, Respondent*



     Docket No. 5372-00L.               Filed October 1, 2002.



     Michael E. Nestor, pro se.

     David C. Holtz, for respondent.



         SUPPLEMENTAL MEMORANDUM FINDINGS OF FACT AND OPINION


     COLVIN, Judge:    Petitioner filed the petition in this case

under section 6330(d) seeking our review of respondent’s

determination that collection by levy was appropriate.      The sole

issue for decision is whether respondent’s determination to


     *
       This Memorandum Opinion supplements Nestor v.
Commissioner, 118 T.C. 162 (2002).
                               - 2 -

proceed with collection with respect to petitioner’s tax years

1990-91 was an abuse of discretion.    We hold that it was not.

     Section references are to the Internal Revenue Code as

amended.

                         FINDINGS OF FACT

     Petitioner resided in California when he filed the petition

in this case.

A.   Petitioner’s Tax Returns and the Notices of Deficiency

     Petitioner filed purported Federal income tax returns for

1990-96 in May 1997, and he timely filed a purported 1997 return.

On each return, he reported that he had no wages, other income,

or tax liability.   After petitioner filed those tax returns and

before October 1999 (when respondent issued the notice of intent

to levy discussed at paragraph B, below), respondent assessed the

frivolous return penalty under section 67021 for 1990-97.

     Respondent issued notices of deficiency to petitioner for

each of his 1990-97 tax years determining deficiencies and

additions to tax as follows:




     1
        We will dismiss for lack of jurisdiction the portion of
this case that relates to the frivolous return penalties for tax
years 1990-91. Van Es v. Commissioner, 115 T.C. 324, 328-329
(2000).
                               - 3 -

                                        Additions to tax
         Year     Deficiency        Sec. 6651(a)    Sec. 6654

         1990       $2,006           $493.00        $129.46
         1991        1,834            455.75         104.73
         1992        2,201            550.25          -0-
         1993        2,021            493.75          -0-
         1994        1,954            254.02          -0-
         1995        2,899            202.93          -0-
         1996        2,951             29.49         156.93
         1997        2,996             89.88          -0-

     Petitioner received the notices of deficiency for 1992-97,

but not for 1990 or 1991.

B.   The Lien and Levy Proceeding

     On October 21, 1999, respondent issued to petitioner a

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

relating to petitioner’s 1990-97 tax years.    On November 17,

1999, petitioner filed a Form 12153, Request for a Collection Due

Process Hearing, for tax years 1990-982 and contended that: (1)

There was no valid assessment of taxes; (2) he did not receive

the statutory notice and demand for payment of the taxes at

issue; (3) he did not receive a valid notice of deficiency; and

(4) the amount of the underlying tax liability was incorrect.

C.   The Section 6330 Hearing and Respondent’s Notice of
     Determination

     On December 28, 1999, respondent’s Appeals Office conducted

a hearing in petitioner’s case for tax years 1990-97.


     2
        The record is silent as to why petitioner requested a
hearing with respect to tax year 1998. Because respondent’s
notice of intent to levy did not include 1998, that year was not
at issue at the hearing.
                               - 4 -

Petitioner attended the hearing.   He was not given an opportunity

to challenge his underlying tax liability for 1990-97 at the

hearing.   At the hearing, petitioner did not challenge the

appropriateness of the intended method of collection, offer an

alternative means of collection, or raise a spousal defense to

collection.

     On April 7, 2000, respondent sent petitioner a Notice of

Determination Concerning Collection Action(s) Under Sections 6320

and/or 6330 (the lien or levy determination), in which respondent

determined to proceed with collection of deficiencies in

petitioner’s income tax, additions to tax, interest, and the

frivolous return penalty for 1990-97.   On May 8, 2000, petitioner

filed a petition for lien or levy action under section 6320(c) or

6330(d).

D.   The Prior Proceedings and Remand of Petitioner’s 1990-91 Tax
     Years

     In Nestor v. Commissioner, 118 T.C. 162 (2002), we held that

petitioner may not contest his underlying tax liability for tax

years 1992-97 because he received notices of deficiency for those

years, section 6330(c)(2)(B), and that respondent’s determination

to proceed with collection with respect to petitioner’s tax years

1992-97 was not an abuse of discretion.   However, because

petitioner did not receive the notices of deficiency for 1990 or

1991 and was not given an opportunity to challenge his underlying

tax liability for those years at the Appeals Office hearing, we
                              - 5 -

issued an order remanding petitioner’s tax years 1990-91 to the

Commissioner to provide an opportunity for a hearing pursuant to

section 6330(b) relating to petitioner’s Federal income tax

liability for 1990-91.

     In our order remanding petitioner’s 1990-91 tax years to

respondent, we stated:

          Petitioner’s litigation position so far in this
     case prompts us to question whether he will use the
     hearing ordered herein to raise bona fide issues
     relating to his underlying tax liability for 1990 and
     1991. If he uses that hearing only to raise frivolous
     issues, like those rejected in Nestor v. Commissioner,
     118 T.C. [162] (2002), we will consider an appropriate
     dispositive motion made by respondent and imposition of
     a penalty of up to $25,000 under section 6673.

     We also ordered the parties to file a status report with the

Court concerning petitioner’s 1990-91 tax years.

E.   The Opportunity for a Hearing Relating to Petitioner’s
     1990-91 Tax Years

     On May 7, 2002, respondent’s Appeals Office sent petitioner

a letter stating that the section 6330(b) hearing relating to

petitioner’s 1990-91 tax years was scheduled for May 23, 2002.

On May 17, 2002, petitioner called respondent’s Appeals officer

and said he could not attend a hearing on May 23, 2002.   He asked

that the hearing be rescheduled for October 12, 2002.   The

Appeals officer told petitioner that he would reschedule the

hearing for a date on or before June 28, 2002, the date the

parties were due to file the status report ordered by the Court.

Petitioner stated that he would call the Appeals Office on May
                                 - 6 -

23, 2002.   He did not do so, nor did he attend the hearing on May

23, 2002.   Respondent filed a report with the Court in which

respondent reported that petitioner did not propose an alternate

date for a hearing other than October 12, 2002, nor did he

otherwise correspond with the Appeals officer.

     We ordered petitioner to respond to respondent’s report and

to show cause why the circumstances reported by respondent do not

provide a sufficient basis to enter a decision for respondent.

Petitioner’s response consisted of copies of the order to show

cause, sections 601.102 through 601.105, Statement of Procedural

Rules, and an index from the Code of Federal Regulations.     He

affixed to the pages five self-sticking, removable notes

containing the following statements:      “Requested a postponement

to later date and was denied.    Michael Nestor”, “Enclosed is

material I would use at a hearing”, “No substitute return was

ever offered by IRS.   Surprise, surprise”, “Still can’t find law

that requires me to pay an income tax”, and “If you can find the

law please mail it to me.   Thank you”.

                                OPINION

A.   Background

     Respondent made a determination under section 6330 for tax

years 1990-97, and petitioner filed a timely petition for review.

Thus, we have jurisdiction under section 6330(d)(1)(A) to review

respondent’s determination to proceed with collection of income
                               - 7 -

tax and additions to tax for petitioner’s tax years 1990-91.3

Johnson v. Commissioner, 117 T.C. 204, 209 (2001); Lunsford v.

Commissioner, 117 T.C. 159, 164-165 (2001).4

     In Nestor v. Commissioner, supra, petitioner was provided an

Appeals Office hearing relating to 1990-97 at which he raised

only frivolous arguments.   We held that respondent’s

determination to proceed with collection of the tax liabilities

assessed against petitioner for 1992-97 was not an abuse of

discretion.   By order, we remanded petitioner’s 1990-91 tax years

because he did not receive notices of deficiency for 1990-91 and

at the hearing did not have an opportunity to contest the

underlying tax liabilities for 1990-91.    Sec. 6330(c)(2)(B).

B.   Whether Respondent’s Determination To Proceed With
     Collection as to 1990-91 Was an Abuse of Discretion

     Petitioner previously made frivolous arguments in the

proceedings conducted with respect to his 1992-97 years.    See

Nestor v. Commissioner, supra at 167.     He did not challenge the

appropriateness of respondent’s intended method of collection,



     3
        Although respondent determined to proceed with collection
as to petitioner’s 1990-97 tax years, we consider here only
petitioner’s 1990-91 tax years. We addressed petitioner’s 1992-
97 tax years in Nestor v. Commissioner, 118 T.C. 162 (2002).

     4
        At the time of trial in this case, it appeared that
respondent’s failure to offer a hearing was a jurisdictional
defect. Meyer v. Commissioner, 115 T.C. 417 (2000). However,
after trial, this Court ruled that it would no longer follow
Meyer. Lunsford v. Commissioner, 117 T.C. 159 (2001).
                               - 8 -

offer an alternative means of collection, or make any bona fide

claim that collection was not appropriate.    His conduct

throughout those proceedings was designed to delay resolution of

his 1992-97 tax years.   Thus, we warned petitioner in the order

remanding his 1990-91 tax years that, if he continued to raise

frivolous issues in the hearing on the 1990-91 tax years, we

would consider imposition of a penalty under section 6673.

     On remand, petitioner was offered but did not attend a

hearing relating to his 1990-91 tax years.    Instead, he tried to

delay the hearing for 5 months.   He made no attempt to challenge

the existence or amount of the underlying tax deficiencies for

1990-91, and he did not otherwise contact respondent regarding

his 1990-91 tax years.   His response to the order to show cause

was nonresponsive and contained the same frivolous contentions he

raised in Nestor v. Commissioner, supra.     It is clear that

petitioner instituted and maintained this proceeding solely for

delay, and that he does not intend to properly prosecute his

1990-91 tax years.

     Petitioner has given no bona fide basis for his objection to

the collection action.   We conclude that respondent’s

determination to proceed with collection of the tax liabilities

assessed against petitioner for 1990-91 was not an abuse of

discretion.
                               - 9 -

C.   Whether To Impose a Penalty Under Section 6673

     We consider on our own motion whether this Court should

impose a penalty against petitioner under section 6673(a).    The

Court may require the taxpayer to pay a penalty to the United

States of not more than $25,000 if the taxpayer instituted or

maintained proceedings primarily for delay, if the taxpayer’s

position is frivolous or groundless, or if the taxpayer

unreasonably failed to pursue administrative remedies.    Sec.

6673.

     In remanding petitioner’s 1990-91 years, we warned him that,

if he used the hearing to raise only frivolous issues as he did

in Nestor v. Commissioner, supra, we would consider an

appropriate dispositive motion and imposition of a penalty under

section 6673.   Despite this, petitioner persisted in maintaining

frivolous positions in his response to the order to show cause,

and he sought to delay a hearing relating to his 1990-91 tax

years.   Petitioner’s attempt to delay the hearing for 5 months,

his failure to reschedule it, and his continuing to make

frivolous arguments show that petitioner maintained this

proceeding primarily for delay, his positions in this proceeding

are frivolous and groundless, and he unreasonably failed to

pursue administrative remedies.   Sec. 6673(a)(1).   We do not

countenance the use of this Court, and lien and levy procedures

under section 6330, by taxpayers to pursue frivolous arguments
                             - 10 -

and to delay their inevitable reckoning with respondent.

Accordingly, we award a penalty to the United States under

section 6673 in the amount of $5,000.   See Roberts v.

Commissioner, 118 T.C. 365, 373 (2002) (Court imposed a $10,000

penalty under section 6673(a) on taxpayer who instituted or

maintained action under section 6330 primarily for delay); Davis

v. Commissioner, T.C. Memo. 2001-87 (Court imposed a $4,000

penalty under section 6673(a) for frivolous and groundless

arguments in lien and levy case).

     Accordingly,

                                         An appropriate order and

                                    decision will be entered.
