Green v. Comm'r ( 2003 )

JOHN J. GREEN, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent

Green v. Comm'r

No. 13977-01L

United States Tax Court

T.C. Memo 2003-264; 2003 Tax Ct. Memo LEXIS 264; 86 T.C.M. 355;

September 10, 2003, Filed

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Green v. Comm'r, T.C. Memo 2003-7, 2003 Tax Ct. Memo LEXIS 7">2003 Tax Ct. Memo LEXIS 7 (T.C., 2003)

">*264 Commissioner's motion for summary judgment granted. Court sua sponte assessed additional penalty against petitioner.

Jerry Arthur Jewett, for petitioner.

Robert T. Little, for respondent.

Haines, Harry A.

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HAINES

MEMORANDUM OPINION

HAINES, Judge: This case is before the Court on respondent's motion for summary judgment filed pursuant to Rule 121. ^{section 6651(a)(1) of $ 9,501, and an accuracy-related">*265 penalty under section 6662 of $ 7,601. The deficiency was based on respondent's determination that petitioner failed to report nonemployee compensation of $ 115,234.}

Petitioner did not file a petition with respect to the notice of deficiency. Instead, on September 13, 1999, petitioner sent a letter to the Internal Revenue Service which stated, in part:

   Nothing in the Privacy Act Notice 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.

On April 10, 2000, respondent assessed petitioner's tax, addition to tax, penalty, and interest for a total unpaid liability of $ 69,859, and mailed a notice of balance due to petitioner. 2003 Tax Ct. Memo LEXIS 264">*266 Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320. Petitioner filed Form 12153, Request for a Collection Due Process Hearing (request), on September 8, 2000. Attached to the request was a letter from petitioner repeating his frivolous arguments, including:

   I want to be given a copy of the Legislative, Treasury

   Department regulation which requires me to pay the $ 70,358.68 at

   issue and the legal authority that anybody at the IRS has to

   determine that figure and to threaten me with enforcement action

   if I don't pay that amount. In order to have that authority that

   IRS agent would have to have a delegation order from the

   secretary. I will expect to be given a copy of any such

   delegation order.

A hearing was held on June 19, 2001, which was recorded. Petitioner continued his frivolous arguments by stating:

   And, [the request] also raises the issues that I've just stated

   that number one the verification of the Secretary has not been

   given and there's not [sic] Record of Assessment because the

   Record of Assessment has to be made off of a return. ">*267 The only

   records that you have from me on a return is zero. How can you

   come up with other numbers?

           *   *   *   *   *   *   *

   I'm willing to write out a check and pay the entire amount if

   you can sit down right now and take the code book out and show

   me anyplace in the code book that makes me liable to pay this

   tax.

           *   *   *   *   *   *   *

   The point is that the only assessment that can be made is off of

   a return and the return that I gave you had zeros on it.

At the hearing, the settlement officer gave petitioner a literal transcript of assessments and notices. On October 5, 2001, a Form 4340, Certificate of Assessments, Payments, and Other Specified Matters, was mailed to petitioner.

On November 1, 2001, respondent issued a Notice of Determination Concerning Collection Action(s) Under Section 6320 and/ or 6330 which stated:

   A review of the case history indicates a valid assessment was

   made, notice and demand was provided and a neglect or refusal to

   pay occurred. In December of 1999 the taxpayer">*268 responded to a

   request for payment of the subject assessment with a letter

   questioning the governments' [sic] authority to assess and

   collect tax. The Federal Tax Lien was filed in accordance with

   established procedures.

   The Federal Tax Lien is sustained. Proper administrative

   procedures were followed by Service personnel. This

   recommendation balances the need for efficient tax

   administration. Mr. Green has not proposed alternatives to the

   lien.

On November 30, 2001, petitioner filed a petition with the Court in which he contended: (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) he had no underlying tax liability. In the petition, petitioner argued that he did not receive the following documents at the hearing: (1) Verification " that the requirements of any applicable law or administrative procedure have been met", for example, a copy of the statutory notice and demand for payment; (2) a copy of Form 23C, Summary Record of Assessment, and the "pertinent parts">*269 of the assessment etc. etc. etc."; (3) delegation of authority from the Secretary to the person (other than the Secretary) who signed the verification required under section 6330(c)(1); and (4) proof that notices of deficiency were sent to petitioner.

On December 14, 2001, petitioner filed a motion to dismiss for lack of jurisdiction. A hearing on the motion was held on March 11, 2002, with Judge Arthur Nims presiding. On January 8, 2003, this Court filed Green v. Comm'r, T.C. Memo 2003-7, holding that the Court had jurisdiction.

Respondent filed an answer to the petition on January 23, 2003. On May 7, 2003, respondent filed a motion for summary judgment for all legal issues in controversy. On May 22, 2003, Jerry Arthur Jewett (Mr. Jewett) executed Form 2848, Power of Attorney and Declaration of Representative, on behalf of petitioner.

On June 11, 2003, Mr. Jewett filed his entry of appearance and, on June 29, 2003, filed a reply to respondent's motion for summary judgment, which contained tax-protester boilerplate arguments, including:

   because petitioner assessed himself as owing "$  0.00" in

   subtitle A taxes for 1996, pursuant to section 6211, ">*270 and because

   * * * the Secretary has no authority to assess a different

   figure than the "$  0.00" which petitioner assessed himself

   as owing for 1996 subtitle A taxes, the Secretary had no

   authority to determine that there was a deficiency in respect of

   subtitle A taxes, pursuant to section 6212. Therefore, the

   "notice of deficiency" was a legal nullity for that

   reason, as well as because there is no evidence in the record to

   establish that the person who sent the document on behalf of the

   Secretary was delegated to do so by a delegation order published

   in the Federal Register as required by 5 USC section 553 and 44 USC

  section 1505.

             Discussion

Respondent contends that there is no dispute as to any material fact with respect to this collection action and that respondent's determination to proceed with collection of petitioner's outstanding tax for 1996 should be sustained as a matter of law.

Summary judgment is intended to expedite litigation and avoid unnecessary and expensive trials. Fla. Peach Corp. v. Commissioner, 90 T.C. 678">90 T.C. 678, 90 T.C. 678">681 (1988).">*271 The Court may grant summary judgment when there is no genuine issue of material fact and a decision may be rendered as matter of law. Rule 121(b); Sundstrand Corp. v. Commissioner, 98 T.C. 518">98 T.C. 518, 98 T.C. 518">520 (1992), affd. 17 F.3d 965">17 F.3d 965 (7th Cir. 1994); Zaentz v. Commissioner, 90 T.C. 753">90 T.C. 753, 90 T.C. 753">754 (1988). We conclude that there are no genuine issues of material fact regarding the questions raised in respondent's motion, and a decision may be rendered as a matter of law.

When, as is the case here, the taxpayer received a notice of deficiency and did not petition the Court, the validity of the underlying tax liability is not at issue, and the Court will review the notice of determination for abuse of discretion. Sego v. Commissioner, 114 T.C. 604">114 T.C. 604, 114 T.C. 604">610 (2000); Goza v. Commissioner, 114 T.C. 176">114 T.C. 176, 114 T.C. 176">181-182 (2000).

The arguments raised by petitioner are identical to the arguments raised by the taxpayer in Nestor v. Comm'r, 118 T.C. 162">118 T.C. 162, 118 T.C. 162">164 (2002), in which we held the arguments to be frivolous, 118 T.C. 162"> id. at 167. Nestor and the cases cited therein control our decision in the instant case, and we conclude petitioner's">*272 arguments are similarly frivolous and groundless. There is "no need to refute these arguments with somber reasoning and copious citation of precedent". Crain v. Commissioner, 737 F.2d 1417">737 F.2d 1417, 737 F.2d 1417">1417 (5th Cir. 1984).

Based upon our examination of the entire record before us, we hold that respondent did not abuse his discretion in determining to proceed with the collection action with respect to 1996. On the record before us, we shall grant respondent's motion for summary judgment.

Respondent does not ask the Court to impose a penalty on petitioner under section 6673(a)(1). The Court may sua sponte determine whether to impose such a penalty. Frank v. Comm'r, T.C. Memo 2003-88; Robinson v. Comm'r, T.C. Memo 2003-77; Keene v. Comm'r, T.C. Memo 2002-277; Schmith v. Comm'r, T.C. Memo 2002-252; Schroeder v. Comm'r, T.C. Memo 2002-190; Williams v. Comm'r, T.C. Memo 2002-111.

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 that the taxpayer's">*273 position in such a proceeding is frivolous or groundless. Sec. 6673(a)(1)(B). In Green v. Comm'r, supra, the Court directed petitioner to review cases in which taxpayers had asserted frivolous and groundless arguments. Moreover, the Court went on to specifically warn petitioner of the possible imposition of a penalty under section 6673(a)(1) should petitioner continue to advance frivolous arguments in the instant case. Id. After citing the cases that had imposed penalties against taxpayers advancing these types of arguments, including Roberts v. Comm'r, 118 T.C. 365">118 T.C. 365, 118 T.C. 365">372-373 (2002), affd. 329 F.3d 1224">329 F.3d 1224 (11th Cir. 2003), in which a $ 10,000 penalty was imposed, the Court stated: "Petitioner might therefore care to review those cases and consider whether it is in his best interest to persist in advancing such arguments." Green v. Comm'r, supra.

The taxpayer's arguments in Roberts were substantially similar to the frivolous arguments asserted by petitioner in the instant case. Despite the warning of this Court, petitioner has continued to assert these groundless arguments. Under the circumstances, we shall, on our">*274 own motion, impose a penalty on petitioner pursuant to section 6673(a)(1) in the amount of $ 5,000.

We shall not impose a penalty on Mr. Jewett because of his late entry into this case, but direct him to review the Court's comments in Brodman v. Comm'r, T.C. Memo 2003-230, and its companion cases.

Footnotes

• 1. Unless otherwise indicated, all section references are to the Internal Revenue Code, and all Rule references are to the Tax Court Rules of Practice and Procedure. Amounts are rounded to the nearest dollar.↩

• 2. Respondent had also assessed a $ 500 frivolous return penalty for 1997 which is not before the Court. See Van Es v. Commissioner, 115 T.C. 324">115 T.C. 324, 115 T.C. 324">328-329↩ (2000).

• 3. Dunham v. Comm'r, T.C. Memo. 2003-260; Brown v. Comm'r, T.C. Memo. 2003-261↩.