                        T.C. Memo. 2003-16



                      UNITED STATES TAX COURT



         BENJAMIN B. AND CAROLYN M. HAINES, Petitioners v.
            COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 8296-02L.              Filed January 21, 2003.



     Benjamin B. and Carolyn M. Haines, pro sese.

     Hieu C. Nguyen, for respondent.



                        MEMORANDUM OPINION


     GERBER, Judge:   Respondent, in a motion filed on November

20, 2002, moved for summary judgment on the questions of whether

he may proceed with collection and whether a section 66731



     1
       All section references are to the Internal Revenue Code in
effect for the year in issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure, unless otherwise
indicated.
                                - 2 -

penalty should be imposed against petitioners.    Respondent

alleges that the section 6330 prerequisites have been met and

that he should be allowed to proceed with collection of

petitioners’ assessed and outstanding tax liability.    With

respect to the penalty, respondent contends that petitioners

instituted this proceeding primarily for delay and that their

position in the proceeding is frivolous and groundless.

     Petitioners’ objection to respondent’s motion for summary

judgment was filed on December 10, 2002.    In essence, petitioners

contend that, although respondent has sent certain documents to

them, those documents are not acceptable because they do not meet

the standards that petitioners contend exist.

Background

     Petitioners resided in Lakewood, California, at the time

their petition was filed.    Petitioners’ 1998 Federal income tax

return was filed on April 15, 1999.     Petitioners filed an income

tax return on which they entered zeros in all pertinent boxes for

the reporting of income, and they claimed a standard deduction

and two exemptions.   They also reported $7,726 of income tax

withholding and, because they reported zero income, claimed an

overpayment in the amount of the withheld tax.    On that same

return, petitioners reflected their occupations as “Graphic

Artist” and “Dialysis”.     Attached to petitioners’ return is a
                               - 3 -

typical protester explanation of why they were not required to

report income or pay Federal tax.

     On March 17, 2000, respondent mailed a notice of deficiency

to petitioners determining a $9,608 income tax deficiency for

1998, based on petitioners’ income (ostensibly wages) reported to

respondent by several third-party sources, including Gambro

Healthcare, Inc.; Kevin Keep; Mohan Dialysis Center; and Screen

Art, Inc.   Respondent also determined an addition to tax under

section 6651(a)(2) and a penalty under section 6662(a) for

petitioners’ 1998 tax year.   Petitioners acknowledged receipt of

the deficiency notice in a March 30, 2000, letter to respondent

and, among other similar protester statements, indicated that

“Nothing in the Privacy Act or in the above statutes informs me

that I have to ‘comply’ with, or pay attention to, letters and/or

alleged ‘determinations’ sent to me by various and sundry

employees of the IRS.”

     Petitioners, however, failed to petition this Court with

respect to the notice of deficiency.   Respondent assessed the

income tax deficiency, addition to tax, and penalty; provided

petitioners with notice and demand; and because petitioners

failed to pay, on April 26, 2001, issued a Form Letter 1058,

Final Notice--Final Notice of Intent to Levy and Notice of Your

Right to a Hearing.   On May 30, 2001, respondent received a Form

12153, Request for a Collection Due Process Hearing, from
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petitioners.    On April 3, 2001, a face-to-face hearing was held

with two Appeals officers and petitioners.    During the hearing,

petitioners were provided with a Form 4340, Certificate of

Assessments and Payment, for their 1998 tax year.

      At the hearing, which was recorded and transcribed,

petitioners asked the Appeals officers whether they had obtained

verification from the Secretary of the Treasury that the

requirements of the applicable laws and procedures had been met.

The Appeals officers explained that the requested information was

on the Form 4340 provided to petitioners.    The Appeals officers

also provided petitioners with audit documents reflecting the

details underlying the deficiency determination and assessment

for 1998.    Petitioners then engaged the Appeals officers in a

discussion of the assessment and the information contained on

Form 4340.    Petitioners’ comments during that discussion focused

on whether the Commissioner could assess tax if taxpayers did not

consent or report the amounts in their returns.    Petitioners also

questioned the validity of the various notifications they

received on the grounds that they were not signed by the

Secretary or by some person who it was shown was authorized to do

so.   They also made the argument that respondent was required to

use certain forms and that respondent’s failure to do so rendered

notifications to them without effect.    Finally, petitioners

questioned whether the Appeals officers could “point to” anything
                                 - 5 -

in the Internal Revenue Code that required petitioners to pay

Federal tax.     Petitioners did not discuss any collection

alternatives or raise any of the other subjects set forth in

section 6330(c)(2) regarding the issues that may be raised at a

section 6330 hearing.

        On April 23, 2002, respondent issued a Notice of

Determination Concerning Collection Action(s) Under Section 6320

and/or 6330.

Discussion

        Respondent seeks summary judgment with respect to whether he

may proceed to collect certain outstanding tax liabilities

against petitioners and whether petitioners should be held liable

for a penalty under section 6673.     Rule 121 provides for summary

judgment for part or all of the legal issues in controversy if

there is no genuine issue as to any material fact.     Sundstrand

Corp. v. Commissioner, 98 T.C. 518, 520 (1992), affd. 17 F.3d 965

(7th Cir. 1994).     In that regard, summary judgment is intended to

expedite litigation and avoid unnecessary and expensive trials.

Fla. Peach Corp. v. Commissioner, 90 T.C. 678, 681 (1988).

     There is no genuine issue as to any material fact in this

case.     The matters raised in the pleadings are susceptible to

resolution by means of summary judgment. Respondent, pursuant to

section 6331(a), seeks to levy on petitioners’ property.      In

accord with section 6331(d), respondent provided petitioners with
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a final notice of intent to levy, which also included notice of

petitioners’ right to an administrative appeal of respondent’s

determination to collect the tax.    In that regard, the

Commissioner cannot collect unpaid tax by levy without the

opportunity for a taxpayer to seek an administrative review of

the determination to proceed with collection, and/or the

opportunity for judicial review of the administrative

determination.   Davis v. Commissioner, 115 T.C. 35, 37 (2000).

     Petitioners did not file a petition following their receipt

of the notice of deficiency, so the validity of the underlying

liability was not properly at issue in the administrative

hearing, and is not at issue here.     Accordingly the Court will

review the administrative determination for abuse of discretion.

Sec. 6330(c)(2)(B); Sego v. Commissioner, 114 T.C. 604, 610

(2000).

     Because petitioners were not entitled to question the

underlying tax liability, their administrative hearing was

limited to collection issues, including spousal defenses, the

appropriateness of respondent’s intended collection action, and a

possible alternative to collection.     Petitioners disputed the

appropriateness of respondent’s proposed collection action by

questioning whether the Appeals officer had satisfied the

verification requirement of section 6330(c)(1).     Petitioners also

raised questions about whether respondent met various statutory
                               - 7 -

requirements prerequisite to collection.   Petitioners contend

that respondent used incorrect forms for the notice and demand

and otherwise failed to meet the requirements because of the lack

of personal verification by the Secretary or a person shown to be

authorized to exercise the Secretary’s authority.

     At the Appeals hearing, petitioners were provided with a

transcript of their account, which detailed information

underlying the assessment of the tax in question.   Petitioners do

not question whether all of the steps had been taken or

performed.   In effect, they dispute the genuineness or

authenticity of the documents respondent used to meet the

statutory requirements.

     Petitioners contend that the Form 4340 is insufficient to

prove the validity of the assessment that was made against them

for their 1998 tax year.   Form 4340 has been generally accepted

by courts to show that a valid assessment has been made within

the meaning of section 6203.   Hefti v. IRS, 8 F.3d 1169 (7th Cir.

1993); Farr v. United States, 990 F.2d 451, 454 (9th Cir. 1993);

Geiselman v. United States, 961 F.2d 1 (1st Cir. 1992); Davis v.

Commissioner, supra.   Petitioners have raised superficial

questions and made conclusory allegations regarding the

assessment (such as whether respondent used the proper form), but

they have shown no actual irregularity in the assessment process.
                                 - 8 -

See Nicklaus v. Commissioner, 117 T.C. 117, 121 (2001); Berkey v.

IRS, 88 AFTR 2d 01-6530, 2001-2 USTC par. 50,708 (E.D. Mich.

2001).

     Petitioners also complain that they did not receive notice

and demand.   This contention is similar to others by petitioners;

they question not whether they actually received the various

notifications from respondent, but whether respondent used the

particular form that petitioners argue must be used for the

notice and demand to be valid.    In that regard, section

6330(c)(1) does not require the Commissioner to rely on a

particular document to satisfy the verification requirement.

Wagner v. Commissioner, T.C. Memo. 2002-180; see also Roberts v.

Commissioner, 118 T.C. 365, 371 (2002).    In addition, it has been

held that “‘the form on which a notice and assessment and demand

for payment is made is irrelevant as long as it provides the

taxpayer with all the information required under * * * [section

6303].’”   Hughes v. United States, 953 F.2d 531, 536 (9th Cir.

1991) (quoting Elias v. Connett, 908 F.2d 521, 525 (9th Cir.

1990)); Planned Invs., Inc. v. United States, 881 F.2d 340, 344

(6th Cir. 1989).

     In addition, respondent is not required to prove receipt by

petitioners of notice and demand, but need only show that the

notice and demand was sent to petitioners’ last known address.

United States v. Chila, 871 F.2d 1015, 1019 (11th Cir. 1989);
                              - 9 -

Pursifull v. United States, 849 F. Supp. 597, 601 (S.D. Ohio

1993), affd. 19 F.3d 19 (6th Cir. 1994).

     Finally, Form 4340 may be relied upon to show that notice

and demand was mailed to a taxpayer.   Hansen v. United States, 7

F.3d 137, 138 (9th Cir. 1993); United States v. Chila, supra.

Respondent’s failure to produce a copy of the notice and demand

document is not conclusive, “because the notices are computer

generated and do not exist in hard copy.”     Pursifull v. United

States, supra at 601; Bassett v. United States, 782 F. Supp. 113,

117 (M.D. Ga. 1992).   Accordingly, we hold respondent did not

abuse his discretion with respect to the determination to proceed

with collection, and we will grant so much of respondent’s motion

as moves for summary judgment on that issue.

     Respondent has also moved for summary judgment on whether

petitioners are liable for a penalty under section 6673 on the

ground that their arguments are frivolous and that they

instituted and maintained this proceeding primarily for delay.

Section 6773 provides that this Court may impose a penalty, not

to exceed $25,000, where it is found that a taxpayer’s position

in the proceeding is frivolous and/or that the proceeding was

instituted and maintained primarily for delay.    Section 6673

penalties may be imposed in a lien and levy case.     Pierson v.

Commissioner, 115 T.C. 576, 580-581 (2000).
                              - 10 -

     In addition to questioning the authenticity of respondent’s

documentation, petitioners have interposed protester arguments

which have, on numerous occasions, been rejected by the courts.

In order to support their arguments, petitioners have selectively

picked phrases out of context from statutes and/or rulings.      In

so doing, petitioners have chosen to ignore more current or

complete statements of the law.    Petitioners have ignored the

rules and regulations and contend that they are not required to

comply with or pay attention to respondent’s letters and

determinations.   Petitioners’ arguments are superficial and

without substance.

     Under these circumstances we are convinced and hold that

petitioners’ position in this proceeding is frivolous and has

been interposed primarily to protest the tax laws of this country

and/or to delay collection activity by respondent.    Accordingly,

we hold that petitioners are liable for a $2,000 penalty under

section 6673(a)(1).

     To reflect the foregoing,



                                      An appropriate order and

                                 decision will be entered granting

                                 respondent’s motion for summary

                                 judgment.
