Johnson v. Comm'r , 82 T.C.M. 4224 ( 2001 )

OPINION

Colvin, Judge:

On November 2, 2000, respondent sent petitioners a notice of determination concerning collection action(s) under sections 6320 and/or 6330¹ (the lien or levy determination), in which respondent determined to proceed with collection from petitioners of the frivolous return penalty for 1994, 1995, and 1996. In this opinion we decide:

(1) Whether we have jurisdiction under section 6330(d)(1)(A) to review respondent’s determination under sections 6320 and/or 6330 to proceed with a collection action following respondent’s assessment of the frivolous return penalty under section 6702 for 1994, 1995, and 1996. We hold that we do not. Van Es v. Commissioner, 115 T.C. 324, 328-329 (2000). Thus, we will dismiss this case for lack of jurisdiction.

(2) Whether we will decide whether the hearing requirement under section 6330(b) has been met. We hold that we will not. We will no longer follow Meyer v. Commissioner, 115 T.C. 417 (2000), to the extent that it holds to the contrary.

References to petitioner are to David J. Johnson.

Background

Petitioners lived in Milton, Florida, when they filed the petition in this case.

A. Petitioners’ Tax Returns

Petitioners filed returns for 1994, 1995, and 1996 in which they reported their wages as income. They later filed amended returns for those years in which they did not report any income and contended that wages and salary reported as income on their original returns are not taxable. In attachments to each of those amended returns, petitioners stated:

1. No section in the Internal Revenue Code makes petitioners liable for the income taxes at issue.

2. Income is not defined in the Internal Revenue Code.

3. The Supreme Court defines income as corporate profit.

4. Wages are not corporate profit; thus, petitioners have no income.

5. Section 61 is invalid because it defines “gross income” by using the word “income”.

6. Section 6702(b) states that the penalty imposed by subsection (a) shall be in addition to some other penalty being imposed, thus it cannot be imposed alone.

B. The Lien and Levy Proceeding

Petitioners received a “Final Notice — Notice of Intent to Levy & Your Notice of a Right to a Hearing” and filed a Form 12153, Request for a Collection Due Process Hearing, dated June 19, 2000. In their request for a hearing, petitioners asked that the Appeals officer have at the hearing: (1) The name of respondent’s employee who imposed the frivolous return penalty and his or her Federal ID number; (2) the delegation of authority from the Secretary authorizing persons to impose the frivolous return penalty; (3) official job descriptions of respondent’s employees who imposed the frivolous return penalty; (4) copies of the regulations that allow Internal Revenue Service (IRS) employees to impose the frivolous return penalty; and (5) copies of the Code section that makes petitioners liable for income tax.

By letter dated July 7, 2000, respondent’s Appeals officer, Gayla L. Owens (Owens), told petitioners that their case had been assigned to her. She asked them whether they wanted a face-to-face conference in Mobile, Alabama, which is respondent’s Appeals Office closest to their residence, or whether they preferred to handle the matter by telephone or correspondence.

By letter dated July 19, 2000, petitioner asked that the hearing not be scheduled before September 15, 2000, in part because he said he was obtaining documents under the Freedom of Information Act that he said he might need in the hearing. Petitioner also asked for copies of the Code section and implementing legislative regulations that establish his liability.

By letter dated July 26, 20Ó0, Owens scheduled a hearing for September 15, 2000, and again asked petitioner whether he preferred a face-to-face conference or to handle it by telephone. By letter dated August 18, 2000, petitioner told Owens that he would not attend a hearing for which he was not allowed to prepare, and that Owens had not responded to points he raised in earlier letters to her. In that same letter, petitioner stated, among other things, his views that: (1) The frivolous return penalties are illegal; (2) respondent’s employees are subject to punishment under section 7214(a) for violating the Internal Revenue Service Restructuring and Reform Act of 1998, Pub. L. 105-206, 112 Stat. 685; (3) the IRS is required to sue him for payment of the penalty; and (4) the IRS was harassing him. Petitioner also asked for a statement acknowledging that he did not question the constitutionality of the income tax when he filed his amended returns for the years in issue. He wrote in part:

Therefore, I am requesting that you comply with IRS Code Section 6065 and send me a statement which “is verified by a written declaration that is made under the penalties of perjury”. Your statement should include the following:

Acknowledgment that you have the following documents in your possession so that I can review them at the hearing:

a. Verification from the Secretary of the Treasury that the requirements of any applicable law or administrative procedure have been met. 6330(c)(1), 6703(a)

b. The Treasury Regulation which allows IRS employees to impose the “frivolous” penalty, and the Treasury Regulation which requires me to pay it. 6703(a)

c. The specific code section that makes me liable for the tax. 6330(c)(2)(B) (I am questioning the underlying liability.)

By letter dated September 6, 2000, Owens told petitioners that their claim that wages are not taxable income has been rejected by courts and is frivolous, and, thus, a return based on that theory is subject to the frivolous return penalty. Owens also told petitioners she would consider other items such as arranging for the payment of the penalty and asked petitioners to provide those items to her by September 21, 2000.

By letter dated September 22, 2000, petitioner said, among other things, that section 6330(c)(3) requires verification from the Secretary that requirements of applicable law and procedure have been met, and that he would not attend a hearing unless (1) Owens told petitioner in writing before the hearing, under penalty of perjury, that Owens had all of the documents petitioner had requested, and (2) Owens arranged for the attendance at the hearing by the person who declared petitioners’ Forms 1040X, Amended U.S. Individual Income Tax Return, to be frivolous and by the person who made the decision to levy upon petitioners’ property without a court order.

C. Respondent’s Notice of Determination

On November 2, 2000, respondent sent petitioners a notice of determination concerning collection actions in which respondent determined to proceed with collection from petitioners of the frivolous return penalty for 1994, 1995, and 1996 and told petitioners that they had 30 days to file a complaint in the appropriate U.S. District Court for a redeter-mination. The notice of determination appeared valid on its face. Petitioners timely filed in this Court an appeal of respondent’s determination. On January 2, 2001, petitioners filed with the Court an amended petition for lien or levy action under section 6320(c) or section 6330(d).

Discussion

A. Whether the Tax Court Has Jurisdiction To Review Respondent’s Determination Under Sections 6320 and 6330

We have previously held that we lack jurisdiction under section 6330(d)(1)(A) to review the Commissioner’s determination to collect by levy the frivolous return penalty under section 6702. Van Es v. Commissioner, 115 T.C. at 328-329. That case controls this issue, and thus we will dismiss this case for lack of jurisdiction.

B. Whether We Will Decide Whether Respondent Failed To Hold a Hearing as Required by Section 6330(b) in a Case in Which We Lack Jurisdiction To Review the Lien and Levy Determination

Petitioners contend that respondent’s determination is invalid because, according to petitioners, respondent failed to comply with the hearing requirement provided by section 6330(b)(1).

In Meyer v. Commissioner, 115 T.C. 417 (2000), as here, the taxpayers contended that we lacked jurisdiction to review the lien and levy determination on the ground that the section 6330(b) hearing requirement was not met. The Commissioner moved to dismiss for lack of jurisdiction on the grounds that we lacked jurisdiction over the underlying tax liability (frivolous return penalty), see Van Es v. Commissioner, supra, and that the petitions were not filed within the 30-day period prescribed by section 6330(d)(1)(A). We held in Meyer that we lacked jurisdiction on the ground that the determination letters were invalid because the Appeals Office did not provide the taxpayers with an opportunity for a hearing. Meyer v. Commissioner, supra at 422-423; see sec. 6330(b).

Here, we lack jurisdiction to review respondent’s lien and levy determination to proceed with collection of the frivolous return penalty. Van Es v. Commissioner, supra at 328-329. Because we lack jurisdiction to review respondent’s lien and levy determination to proceed with collection of the frivolous return penalty, we will not decide whether the hearing requirement under section 6330(b) was met. This is consistent with the principle that we need not decide whether a valid notice of deficiency was issued where we lack subject matter jurisdiction.² See Yuen v. Commissioner, 112 T.C. 123, 130 (1999) (we need not decide whether a document sent by the Commissioner is a final determination where we lack jurisdiction over a claim for interest abatement). We will no longer follow Meyer v. Commissioner, supra, to the extent it holds to the contrary.

The doctrine of stare decisis is important to this and other Federal courts. Hesselink v. Commissioner, 97 T.C. 94, 99-100 (1991). When we decided Meyer v. Commissioner, supra, lien and levy cases under section 6330 were new to this Court. After an additional year of experience with section 6330, we no longer believe it is appropriate for us to decide whether the hearing requirement was met in a case over which we lack subject matter jurisdiction. We conclude that stare decisis does not prevent us from reconsidering Meyer v. Commissioner, supra.

Accordingly,

An order will be entered granting respondent’s motion to dismiss for lack of jurisdic- . tion.

Reviewed by the Court.

Wells, Cohen, Swift, Gerber, Ruwe, Whalen, Laro, Gale, and Thornton, JJ., agree with this majority opinion. Chiechi, Foley, and Marvel, JJ., concur in result only.

1 Unless otherwise stated, references to secs. 6320 and 6330 are to the Internal Revenue Code in effect in 2000, and other section references are to the Internal Revenue Code in effect for the years in issue.

2 Although it is not necessary for the holding herein, we note that in Lunsford v. Commissioner, 117 T.C. 159 (2001), we held that we have jurisdiction under sec. 6330(d)(1)(A) when we have a facially correct notice of determination and a timely filed petition.