Swann v. Comm'r ( 2003 )

WILLIAM A. SWANN AND JUDITH A. SWANN, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent

Swann v. Comm'r

No. 8803-02L

United States Tax Court

T.C. Memo 2003-70; 2003 Tax Ct. Memo LEXIS 69; 85 T.C.M. (CCH) 1006;

March 13, 2003, Filed

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Order granting respondent's motion for summary judgment was entered for respondent.

William A. Swann and Judith A. Swann, pro sese.

Wendy S. Harris, for respondent.

Chiechi, Carolyn P.

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CHIECHI

MEMORANDUM OPINION

CHIECHI, Judge: This case is before the Court on respondent's motion for summary judgment and to impose a penalty under section 6673^{*70 be frivolous and/or groundless. section 6662(a) on, petitioners' tax for their taxable year 1998 in the respective amounts of $ 9,707 and $ 1,755.56.}

Petitioners did not file a petition in the Court with respect to the notice relating to their taxable year 1998. Instead, on July 20, 2000, in response to the notice, petitioners sent a letter (petitioners' July 20, 2000 letter) to the Internal Revenue Service that contained statements, contentions, arguments, and requests that the Court finds to be frivolous and/or groundless. section 6303(a) with respect to petitioners' unpaid liability for 1998.

On August 23, 2001, respondent issued to petitioners a final notice of intent to levy and notice of your right to a hearing (notice of intent to levy) with respect to their taxable year 1998. On or about September 23, 2001, in response to the notice of intent to levy, petitioners filed Form 12153, Request for a Collection Due Process Hearing (Form 12153), and requested a hearing with respondent's Appeals Office (Appeals Office). Petitioners attached a document to their Form 12153 (petitioners' attachment to Form 12153) that contained statements, contentions, arguments, and requests that the Court finds to be frivolous and/or groundless. *73 hearing, the settlement officer gave petitioners a literal transcript of account (so-called MFTRAX) with respect to their taxable year 1998.

On April 17, 2002, the Appeals Office issued to petitioners a notice of determination concerning collection action(s) under section 6320 and/or 6330 (notice of determination). An attachment to the notice of determination stated in pertinent part:

   Verification of Legal and Procedural Requirements

   The Secretary has provided sufficient verification that all

   legal and procedural requirements have been met. Computer

   transcripts have been reviewed by Appeals, verifying the

   assessments.

   The assessment was made, and notice and demand was issued by

   regular mail to the taxpayers' last known address, as required

   under IRC 6303. The notices required under IRC 6331(d) and

  IRC 6330 were combined in Letter 1058, dated 08/23/2001, which was

   mailed certified to the taxpayers' last known address. The

   taxpayers responded with Form 12153, Request for a Collection

   Due Process Hearing, which was timely received and was

   postmarked 09/20/2001. The taxpayers are entitled to judicial

   review. This is a levy issue only.

   A MFTRAX transcript was reviewed, and a copy was provided to the

   taxpayers at the face-to-face Collection Due Process hearing

   held on 03/12/2002. In attendance were the taxpayer, a taxpayer

   witness, Settlement Officer Donna Fisher, and Settlement Officer

   Renee Swall. * * * The hearing was audio-recorded by the

   taxpayer and Settlement Officer Donna Fisher.

   Settlement Officer Donna Fisher has had no prior involvement

   with respect to this tax liability.

   Issues Raised by the Taxpayer

   The taxpayers disagree with the assessment. They filed a zero

   income, zero tax due return, attaching several pages of non-

   filer arguments and a Form W-2 showing taxable wages of

  $ 24,724.88. They also had additional taxable income, bringing

   their total income to $ 52,556 for tax year 1998. Their return

   was examined, and they were issued a statutory notice of

   deficiency, dated 07/14/2000, for additional tax of $ 9,707 plus

   penalty and interest. They responded to the notice of deficiency

   with a letter dated 07/20/2000. This letter raised no relevant

   arguments, and they did not petition the tax court. Since they

   had a previous opportunity to dispute the assessment, they were

   precluded under the Collection Due Process procedures from

   raising as an issue the amount or existence of the underlying

   assessment.

   The taxpayers raised no non-filer arguments.

   Collection alternatives were raised with the taxpayers. They

   indicated they would full [sic] pay the tax if it could be

   proven to them that they are liable for it. However, the non-

   filer arguments attached to their 1998 return include, in part,

   their statement ". . . we know that no section of the

  Internal Revenue Code: 1) Establishes an income tax 'liability'

   . . . " In essence, this argument is repeated again in their

   attachment to their Form 12153. Therefore, further discussion

   was considered non-productive. In addition, since the taxpayers

   are not in filing compliance for tax year 2000, they are not now

   eligible for an offer or an installment agreement.

   Balancing the Need for Efficient Collection with Taxpayer

   Concerns

   The requirements of all applicable laws and administrative

   procedures have been met. The assessment is valid. Given the

   taxpayers [sic] continued lack of compliance with the tax laws,

   a levy or levies on their property and/or rights to property

   would not be considered more intrusive than necessary when

   balancing the taxpayers' concerns with the government's need for

   efficient collection of the taxes.

               Discussion

The Court may grant summary judgment where there is no genuine issue of material fact and a decision may be rendered as a matter of law. Rule 121(b); Sundstrand Corp. v. Commissioner, 98 T.C. 518">98 T.C. 518, 520 (1992), affd. 17 F.3d 965">17 F.3d 965 (7th Cir. 1994). We conclude that there are no genuine issues of material fact regarding the questions raised in respondent's motion.

Where, as is the case here, the validity of the underlying tax liability is not properly placed at issue, the Court will review the determination of the Commissioner of Internal Revenue for abuse of discretion. Sego v. Commissioner, 114 T.C. 604">114 T.C. 604, 610 (2000); Goza v. Commissioner, 114 T.C. 176">114 T.C. 176, 181-182 (2000).

As was true of petitioners' attachment to their 1998 joint return, petitioners' July 20, 2000 letter, and petitioners' attachment to Form 12153, petitioners' response contains contentions, arguments, and requests that the Court finds to be frivolous and/or groundless. ^{*78 action as determined in the notice of determination with respect to petitioners' taxable year 1998.}

In respondent's motion, respondent requests that the Court require petitioners to pay a penalty to the United States pursuant to section 6673(a)(1). Section 6673(a)(1) authorizes the Court to require a taxpayer to pay to the United States a penalty in an amount not to exceed $ 25,000 whenever it appears to the Court, inter alia, that a proceeding before it was instituted or maintained primarily for delay, sec. 6673(a)(1)(A), or that the taxpayer's position in such a proceeding is frivolous or groundless, sec. 6673(a)(1)(B).

In Pierson v. Commissioner, 115 T.C. 576">115 T.C. 576, 581 (2000), we issued an unequivocal warning to taxpayers concerning the imposition of a penalty under section 6673(a) on those taxpayers who abuse the protections afforded by sections 6320 and 6330 by instituting or maintaining actions under those sections primarily for delay or by taking frivolous or groundless positions in such actions.

In the instant case, petitioners advance, we believe primarily for delay, frivolous and/or groundless contentions, arguments, and requests, thereby causing the Court to waste its limited resources. We shall impose a penalty on petitioners pursuant to section 6673(a)(1) in the amount of $ 2,500.

We have considered all of petitioners' contentions, arguments, and requests that are not discussed herein, and we find them to be without merit and/or irrelevant.

On the record before us, we shall grant respondent's motion.

To reflect the foregoing,

An appropriate order granting respondent's motion and decision will be entered for respondent.

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Footnotes

• 1. All section references are to the Internal Revenue Code in effect at all relevant times. All Rule references are to the Tax Court Rules of Practice and Procedure. ↩

• 2. Petitioners' attachment to their 1998 joint return is very similar to the documents that certain other taxpayers with cases in the Court attached to their tax returns. See, e.g., Copeland v. Comm'r, T.C. Memo 2003-46">T.C. Memo 2003-46; Smith v. Comm'r, T.C. Memo 2003-45">T.C. Memo 2003-45↩.

• 3. Petitioners' July 20, 2000 letter is very similar to the letters that certain other taxpayers with cases in the Court sent to the Internal Revenue Service in response to the notices issued to them. See, e.g., Copeland v. Comm'r, supra; Smith v. Comm'r, supra.↩

• 4. Petitioners' attachment to Form 12153 contained statements, contentions, arguments, and requests that are very similar to the statements, contentions, arguments, and requests contained in the attachments to Forms 12153 filed with the Internal Revenue Service by certain other taxpayers with cases in the Court. See, e.g., Copeland v. Comm'r, supra; Smith v. Comm'r, supra.↩

• 5. The contentions, arguments, and requests set forth in petitioners' response are very similar to the contentions, arguments, and requests set forth in responses by certain other taxpayers with cases in the Court to motions for summary judgment and to impose a penalty under sec. 6673 filed by the Commissioner of Internal Revenue in such other cases. See, e.g., Smith v. Comm'r, T.C. Memo 2003-45">T.C. Memo 2003-45↩.