An Actual TP Win

[The Observer]

Contrary to what the tax deniers try to tell us about how the court system is stacked against them, the courts actually do follow procedures and the law in reaching their determination regarding the cases filed. Here is a case where the IRS didn't have their act together and the court is giving the TP another chance to present his case to Appeals.


JAMES BARNES,
Petitioner
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent

Release Date: FEBRUARY 22, 2010


UNITED STATES TAX COURT

Filed February 22, 2010

R determined to proceed with collection of P's income
tax liability for 2002 without allowing P to challenge
the underlying tax liability at a sec. 6330, I.R.C.,
hearing before the Office of Appeals. R moved for
summary judgment.

Held: Pursuant to sec. 6330(c)(2)(B), I.R.C., P
is entitled to raise the existence or amount of the
underlying tax liability at an Appeals hearing, unless
P has previously received a notice of deficiency
or otherwise had an opportunity to dispute the liability.
P did not receive the notice of deficiency for 2002,
and R has failed to allege or show that P deliberately
refused delivery of the notice of deficiency. R's
motion for summary judgment will be denied and this
case will be remanded to the Office of Appeals for
further hearing.
James Barnes, pro se.

Alisha M. Harper, for respondent.

MEMORANDUM OPINION

RUWE, Judge: The petition in this case was filed in response to a Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330 (notice of determination). 1 This case is before the Court on respondent's motion for summary judgment. We must decide whether the determination by respondent's Appeals Office to proceed with collection action with respect to petitioner's unpaid income tax liability for tax year 2002 was proper.

BACKGROUND

At the time the petition was filed, petitioner resided in Kentucky.

Respondent sent to petitioner a Letter 1058, Final Notice of Intent to Levy and Notice of Your Right to a Hearing, dated September 10, 2005, regarding petitioner's unpaid tax for 2002. Petitioner submitted to respondent a Form 12153, Request for a Collection Due Process Hearing, dated September 30, 2005. In the Form 12153 petitioner requested a face-to-face hearing (section 6330 hearing) and informed the Appeals Office that he would be audio recording the section 6330 hearing. Petitioner also indicated that one of the issues he wanted to address was whether respondent had followed proper procedures in making the assessment against him.

By letter dated December 20, 2005, respondent's Appeals Office acknowledged receipt of petitioner's request to audio record the section 6330 hearing but denied his request for a face-to-face conference, stating: "Face-to-face conferences are not allowed if the only items that a taxpayer raises are frivolous or groundless." Respondent did not identify which of petitioner's arguments were considered frivolous or groundless. 2

By letter dated January 9, 2006, petitioner asserted that he had relevant, nonfrivolous issues to discuss at the section 6330 hearing and that it had to be a face-to-face hearing so that he might audio record it. Petitioner also raised the issue of the underlying tax liability and stated: "I have no idea as to how or where the IRS got these numbers. [A]lthough you claim that I have had an opportunity to dispute the liability, I don't even recall ever receiving any notification or explanation from the IRS that explains how they came up with these numbers against me."

Almost 9 months later, respondent's Appeals Office sent to petitioner a letter dated September 30, 2006, which states, in pertinent part:

You requested a face-to-face conference in order
to dispute the underlying liability: A Notice of
Deficiency for tax year ended 12/2002 was mailed
to you on November 30, 2004 at * * * Louisville,
KY 402722342040. (You apparently elected not to claim
the Notice.) The Notice afforded you the opportunity
to dispute the liability in Tax Court prior to its
assessment. Therefore, you may not raise challenges
to the existence or amount of the tax liability specified
on the CDP Notice.

The Appeals Office does not provide a face-to-face
conference if the only items a taxpayer wishes to
discuss are frivolous or, may otherwise not be raised
in the hearing. During the hearing, we must consider
whether the IRS met all the requirements of any applicable
law or administrative procedure, and any non-frivolous
issues you wish to discuss. * * *

In response, by letter dated October 13, 2006, petitioner disputed the determination not to grant him a face-to-face conference and the determination that he had been given a prior opportunity to dispute his underlying tax liability. In a letter dated October 30, 2006, the Appeals officer stated that petitioner's request had been transferred to the nearest Appeals Office "for a face-to-face hearing." Thereafter, the newly assigned settlement officer (whose office was in South Bend, Indiana) sent to petitioner (at his Louisville, Kentucky, address) a followup letter, dated December 7, 2006, indicating that petitioner would not be allowed a face-to-face hearing and scheduling a telephone conference call for December 21, 2006. The letter did, however, advise petitioner that he might be allowed a face-to-face section 6330 hearing if he were to provide to the Appeals Office the nonfrivolous issue in writing within 14 days from the date of the letter.

By letter dated December 14, 2006, petitioner responded to the settlement officer, stating that he would not be able to participate in the telephone conference 3 and explaining again that he had no knowledge of ever receiving a notice of deficiency. The Appeals Office did not receive petitioner's letter until December 29, 2006. Before receipt of petitioner's letter, however, the settlement officer had sent to petitioner a letter dated December 21, 2006, which indicated that petitioner neither called for his scheduled telephone conference nor indicated that the date and/or time were inconvenient. The letter also afforded petitioner an additional 14 days to provide information for consideration by the Appeals Office before making a determination.

In response to the settlement officer's letter dated December 21, 2006, petitioner, in a letter dated January 3, 2007, took exception to the settlement officer's statement that petitioner had not indicated that the scheduled date for the telephone conference was inconvenient, but otherwise did not provide any further information for the Appeals Office to consider before making its determination.

Respondent's Appeals Office issued to petitioner a notice of determination dated March 7, 2007. On April 9, 2007, petitioner filed an incomplete petition in which he generally contested the determination made by the Appeals Office and requested assistance from the Court. In an amended petition, filed on October 12, 2007, petitioner alleged that "Respondent did not meet all the applicable requirements during the Collection Due Process Hearing" and that he was not allowed the "opportunity to challenge the liability of the assessed tax."

DISCUSSION

This case is before us on respondent's motion for summary judgment, to which petitioner objects. Summary judgment is intended to expedite litigation and avoid unnecessary and expensive trials. See FPL Group, Inc. v. Commissioner, 116 T.C. 73, 74 (2001). Rule 121(a) provides that either party may move for summary judgment upon all or any part of the legal issues in controversy. Full or partial summary judgment is appropriate where there is no genuine issue as to any material fact and a decision may be rendered as a matter of law. See Rule 121(b); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), affd. 17 F.3d 965 (7th Cir. 1994). Respondent, as the moving party, bears the burden of proving that no genuine issue exists as to any material fact and that he is entitled to judgment as a matter of law. See Bond v. Commissioner, 100 T.C. 32, 36 (1993); Naftel v. Commissioner, 85 T.C. 527, 529 (1985). In deciding whether to grant summary judgment, the factual materials and the inferences drawn from them must be considered in the light most favorable to the nonmoving party. See Bond v. Commissioner, supra at 36; Naftel v. Commissioner, supra at 529.

Section 6330(a)(1) provides that no levy may be made on any property or right to property of any person unless the Secretary has notified such person in writing of the right to a hearing under this section before such levy is made. The notice must include in simple and nontechnical terms the right of the person to request a hearing to be held by the Internal Revenue Service (IRS) Office of Appeals. Sec. 6330(a)(3). Section 6330(c) governs the conduct of a requested hearing. At the hearing the person may raise any relevant issue relating to the unpaid tax or the proposed levy, including appropriate spousal defenses, challenges to the appropriateness of collection actions, and offers of collection alternatives. Sec. 6330(c)(2)(A). Section 6330(c)(2)(B) further provides that the person may also raise at the hearing challenges to the existence or amount of the underlying tax liability for any tax period if the person did not receive any statutory notice of deficiency for the tax liability or did not otherwise have an opportunity to dispute the tax liability. Under section 6330(c)(2)(B), the receipt of a notice of deficiency, not its mailing, is the relevant event. 4 Kuykendall v. Commissioner, 129 T.C. 77, 80 (2007); Conn v. Commissioner, T.C. Memo. 2008-186.

Among the attachments to respondent's motion for summary judgment were a declaration by the settlement officer who handled petitioner's case in the Appeals Office, a copy of the notice of deficiency for 2002 dated November 30, 2004, and the envelope that respondent alleges contained the notice of deficiency mailed to petitioner on November 30, 2004. The face of the envelope shows that it was returned to respondent and was stamped unclaimed. Thus, there is no dispute that petitioner did not actually receive the notice of deficiency. Because it is undisputed that petitioner did not actually receive the notice of deficiency, he would normally have been entitled to challenge the underlying tax liability at the section 6330 hearing. See Kuykendall v. Commissioner, supra; Conn v. Commissioner, supra.

Even if the taxpayer did not actually receive the notice of deficiency, we have held that the taxpayer cannot dispute the underlying tax liability where there is a showing that he deliberately refused delivery of a notice of deficiency. Sego v. Commissioner, 114 T.C. 604 (2000). But absent sufficient evidence that a taxpayer deliberately refused delivery of the notice of deficiency, proof that the notice of deficiency was not actually received will be sufficient to entitle a taxpayer to dispute the underlying tax liability in a section 6330 proceeding. Conn v. Commissioner, supra; Calderone v. Commissioner, T.C. Memo. 2004-240; Tatum v. Commissioner, T.C. Memo. 2003-115; Carey v. Commissioner, T.C. Memo. 2002-209.

The notice of determination sent by the Appeals Office on March 7, 2007, alleged that the U.S. Postal Service attempted delivery but that petitioner failed to pick up the notice of deficiency and that petitioner's conduct "constituted deliberate refusal of delivery". In his answer to petitioner's amended petition, respondent alleges "that Respondent sent a notice of deficiency for the year 2002 to Petitioner at his current address on November 30, 2004 and that Petitioner refused to claim said notice from the postal service." However, in his motion for summary judgment, respondent has not alleged that petitioner deliberately refused delivery of the notice of deficiency. On the record before us, we cannot conclude that petitioner deliberately refused its delivery or otherwise had an opportunity to dispute the liability for 2002 so as to preclude him from challenging his underlying tax liability at a hearing before the IRS Office of Appeals.

Attached to respondent's motion for summary judgment were the settlement officer's declaration and 19 exhibits, including numerous items of correspondence between the Appeals Office and petitioner, a copy of the administrative file relating to the examination of petitioner's income tax liability for 2002, and various transcripts for several years. Many of the exhibits contained multiple unnumbered pages that seem to be in no particular order. Many of the documents in the administrative file and most of the documents labeled as transcripts of petitioner's account are full of abbreviations, alphanumeric codes, dates, and digits that are indecipherable and unintelligible without additional explanation. One page of the transcript related to the year 2002 that was intelligible shows entries for the substitute for return, withholding credits, and the tax assessment, all dated April 25, 2005. It also shows that the "Intent To Levy Collection Due Process Notice" was issued on September 10, 2005, and shows an entry dated September 19, 2005, for "Intent To Levy Collection Due Process Notice Return Receipt Signed 9-19/2005". Noticeably absent from this transcript is an entry for the issuance of a notice of deficiency.

One of the exhibits that respondent identified as the administrative file regarding the examination of petitioner's 2002 income tax liability included copies of the notice of deficiency dated November 30, 2004; the envelope in which it was allegedly mailed; a Form 12616, Correspondence Examination History Sheet, showing "11/30/04 Send 90day letter with report"; and a computer-generated printout for 2002 that shows "90-Day Statutory Notice 11/18/2004". 5 This seemingly conflicting information regarding the date of the notice of deficiency raises a question about its mailing date. The postmark on the photocopy of the envelope, which respondent alleges was returned to him unclaimed, is indecipherable as to its mailing date because of what appears to be a label that has been marked "other" as the reason it was returned to the sender. The envelope has two "windows"; one to reveal the name and address of petitioner that was typed on the enclosed notice of deficiency, the other titled "Certified Mail". The certified mail number that would appear in this "window" is printed on the notice of deficiency. This indicates to us that the certified mail number was placed on the notice of deficiency before it was put into the envelope for delivery to the Post Office. Absent from the documentation respondent presented is a U.S. Postal Service Form 3877, Certified Mailing List, showing the date on which the notice of deficiency was mailed. A properly completed Form 3877 certified mailing list reflecting Postal Service receipt represents direct documentary evidence of the date and fact of mailing. Coleman v. Commissioner, 94 T.C. 82, 90 (1990). 6

Also notably absent from the array of documents attached to respondent's motion for summary judgment is a Form 4340, Certificate of Assessments, Payments, and Other Specified Matters. The IRS Web site describes Form 4340 as follows:

The Certified Transcript Program (CERTS) produces
a common language transcript that gives the history
assessments and payments on taxpayers' accounts.
These transcripts are used in civil and criminal
court cases. Form 4340, Certificate of Assessments,
Payments, and Other Specified Matters, is used by
the government in litigation to certify extracts
from a taxpayer's account. * * * [http://www.irs.gov/privacy/arti
cle/0,,id=174281,00.html.]

Unlike many of the printouts from respondent's computer system that were attached to respondent's motion for summary judgment, a Form 4340 is normally a readable and understandable history of transactions and events concerning a taxpayer's account for a particular taxable period. See Tufft v. Commissioner, T.C. Memo. 2009-59. Form 4340 is "'generally regarded as being sufficient proof, in the absence of evidence to the contrary, of the adequacy and propriety of notices and assessments that have been made.'" Orum v. Commissioner, 123 T.C. 1, 9 (2004) (quoting Gentry v. United States, 962 F.2d 555, 557 (6th Cir. 1992)), affd. 412 F.3d 819 (7th Cir. 2005). Generally, courts have held that Form 4340 provides at least presumptive evidence that a tax has been validly assessed under section 6203. Davis v. Commissioner, 115 T.C. 35, 40 (2000) (citing Huff v. United States, 10 F.3d 1440, 1445 (9th Cir. 1993), Hefti v. IRS, 8 F.3d 1169, 1172 (7th Cir. 1993), Farr v. United States, 990 F.2d 451, 454 (9th Cir. 1993), Geiselman v. United States, 961 F.2d 1, 5-6 (1st Cir. 1992), Rocovich v. United States, 933 F.2d 991, 994 (Fed. Cir. 1991), United States v. Chila, 871 F.2d 1015, 1017 1018 (11th Cir. 1989), and United States v. Miller, 318 F.2d 637, 638-639 (7th Cir. 1963)).

A clear record of relevant transactions is very important in a section 6330 court proceeding. See Wright v. Commissioner, 381 F.3d 41 (2d Cir. 2004), vacating and remanding T.C. Memo. 2002 312. 7 This is especially true in cases submitted to the Court on a motion for summary judgment, where there is no opportunity to question witnesses about the meaning of coded computer transcripts that might otherwise be indecipherable or unintelligible to a reviewing court. The Chief Counsel for the IRS recognized this and has instructed his attorneys as follows:

A certified copy of an updated Form 4340 transcript
should also be submitted with all summary judgment
motions. The Form 4340 transcript has been consistently
requested by Tax Court judges in summary judgment
cases. Even though this transcript is prepared after
the issuance of the notice of determination, submission
of the Form 4340 is not a violation of the record
rule because it generally contains the same information
originally reviewed by the appeals or settlement
officer in making the CDP determination. See Bowman
v. Commissioner, T.C. Memo. 2007-114. * * * [Chief
Counsel Notice CC-2009-010 (Feb. 13, 2009).]

The Chief Counsel's instructions also state: "The Form 4340 should be reviewed thoroughly and any issues raised by entries on the Form 4340, or inconsistencies with other documents, should be explained in the motion." Id.

We have recognized that Appeals officers are not required to rely on any particular document, such as a Form 4340, when making their determinations. See Craig v. Commissioner, 119 T.C. 252, 261-262 (2002); Nestor v. Commissioner, 118 T.C. 162, 166-167 (2002). However, a Form 4340 generated after the determination by the Office of Appeals can properly be offered in subsequent court proceedings to explain information used by the Appeals officer. See Dinino v. Commissioner, T.C. Memo. 2009-284; Med. Practice Solutions, LLC v. Commissioner, T.C. Memo. 2009-214.

On the basis of the record before us, we will deny respondent's motion for summary judgment and remand this case to the Appeals Office for further hearing.

To reflect the foregoing,

An appropriate order will be issued.

FOOTNOTES:


/1/ Unless otherwise indicated, all section references are to the Internal Revenue Code as amended, and all Rule references are to the Tax Court Rules of Practice and Procedure.

/2/ It appears that petitioner did not file a return for 2002. Internal Appeals Office records indicate that the Appeals Office had identified petitioner as a "frivolous filer". Form 12153-A, Referral Request for CDP Hearing and Request for CDPTS Input, dated "11-2-5" indicates that petitioner "mentions frivolous arguments in the past, although DI does not show any frivolous filer information."

/3/ Petitioner's letter states in part:


Regretfully, I will not be able to participate in
this telephone conference. The Appeals Office where
my pre-scheduled hearing is to be held, is located
in Indiana, I currently reside in Kentucky. But I
am certain we can agree on a mutually convenient
date and location, sometime in the near future. Knowing
that I requested for a FACE-TO-FACE hearing, why
did the IRS appoint someone in the South Bend, IN
Office to conduct my CDP Hearing? The South Bend,
IN Office is miles away from my place of residence.
That's hours worth of driving alone, which I can
not afford. This is most inconvenient and unacceptable.
I find it hard to believe that the IRS does not have
a local office in Louisville, KY. Please understand
that I am NOT refusing to participate in my CDP Hearing.
I am just asking the IRS to assist in making this
process a little bit more convenient for me that
I may be able to attend the FACE-TO-FACE Hearing
that I initially requested.

/4/ By contrast, for purposes of assessing a deficiency in tax, a notice of deficiency mailed to the taxpayer at his last known address is sufficient regardless of receipt or nonreceipt. Sec. 6212(b); Pietanza v. Commissioner, 92 T.C. 729, 735-736 (1989), affd. without published opinion 935 F.2d 1282 (3d Cir. 1991); Shelton v. Commissioner, 63 T.C. 193 (1974); Tatum v. Commissioner, T.C. Memo. 2003-115 n.4.

/5/ The terms "notice of deficiency", "90-day letter", and "90-day statutory notice" are often used synonymously.

/6/ In Hoyle v. Commissioner, 131 T.C. ___, ___ (2008) (slip op. at 12), we stated:

We have held that exact compliance with Postal Service
Form 3877 mailing procedures raises a presumption
of official regularity in favor of the Commissioner
and is sufficient, absent evidence to the contrary,
to establish that the notice was properly mailed.
Coleman v. Commissioner, 94 T.C. 91 (1990); see
also United States v. Zolla, 724 F.2d 808, 810
(9th Cir. 1984). * * *

We also noted that Chief Counsel Notice CC-2006-019 (Aug. 18, 2006) states that when an Appeals officer identifies an irregularity in the assessment procedure, he may be required to examine underlying documents, such as the certified mailing list. Id. at ___ n.7 (slip op. at 15).

/7 In Wright v. Commissioner, 381 F.3d 41, 44 (2d Cir. 2004), vacating and remanding T.C. Memo. 2002-312, which was a sec. 6330 case, the Court of Appeals for the Second Circuit described the unsatisfactory record before it as follows:


Here, the record that has been presented to this
Court by Wright and the IRS is unhelpful. Wright's
initial 2002 complaint to the Tax Court expressed
bewilderment as to the nature of the tax balances
that have been calculated (and recalculated) against
him by the IRS. At oral argument and in its briefs,
the IRS seemed equally unsure about several basic
and crucial facts. The parties' confusion is understandable;
the relevant timeline and tax amounts have been reconstructed
using photocopied forms, computer screen printouts,
and dot-matrix printouts of tax account balances.
Many of these records have no supporting explanation
(and therefore are inscrutable to any non-employee
of the IRS), many are from time periods that are
not the same, and even the documents that are from
similar time periods often contain amounts that are
inexplicably contradictory.

[Doktor Avalanche]

Sometimes they get lucky.

I agree: the IRS truly dropped the ball on this one but watch those TPs laud this as complete and total victory.

[Pottapaug1938]

Sometimes they get lucky.

I agree: the IRS truly dropped the ball on this one but watch those TPs laud this as complete and total victory.

Yeah, just like the one I was reading about last night, when a German counterattack in April of 1945 pushed the Soviet Army out of a few German villages. That victory sure held up, didn't it? I guess, though, that if the positions that I took on tax issues were as devoid of genuine legal substance, effect and lasting results as are those pushed by the TP/TDers, I might take my ... ahem, "victories" anywhere I could get them.

[Arthur Rubin]

I don't know. I suppose ""I have no idea as to how or where the IRS got these numbers" isn't necessarily frivolous. I've gotten IRS notices to which that would be (part of) the appropriate response.

[Imalawman]

I don't know. I suppose ""I have no idea as to how or where the IRS got these numbers" isn't necessarily frivolous. I've gotten IRS notices to which that would be (part of) the appropriate response.

That is language from the Freedom Law School mantra. It is especially effective at first because it appears reasonable. Its based on the idea that many times the IRS skips the process of actually providing proof of the assessment. The IRS has the information, it just doesn't provide it to the taxpayer. Knowing that the IRS is largely running ragged these days, they hope that something like this happens and they eventually are able to weasel their way into a lower assessment or the IRS dropping the case.

I saw a few of these when I was a state AAG. They were annoying and took up lots of time, but since its ultimately, frivolous, the gov't always won.

[Judge Roy Bean]

Any large bureaucracy is going to be error prone to one degree or another as specialization divides tasks and roles into smaller and smaller pieces and communication becomes dispersed.

In some very large organizations where leadership isn't focused on stockholder/stakeholder value and performing in a competitive environment, you reach a point of stasis where finding and devoting additional resources toward improvement in performance does not produce cost-justifiable results. Most of these situations are seen in entities where the "customer" has no option to take their business elsewhere.

[LPC]

After remand to the IRS, another CDP hearing, another adverse determination, and another petition to the Tax Court, another victory: no sanctions.

James Barnes v. Commissioner, T.C. Memo. 2011-168, No. 8219-07L (7/13/2011).

JAMES BARNES,
Petitioner
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent

UNITED STATES TAX COURT

Filed July 13, 2011

James Barnes, pro se.

Alisha M. Harper, for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

RUWE, Judge: The petition in this case was filed in response to a Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330 (notice of determination).1 The issues for decision are whether respondent assessed the correct amount of petitioner's underlying income tax liability for 2002 and, if so, whether respondent abused his discretion in sustaining the notice of intent to levy for petitioner's unpaid income tax liability for the 2002 taxable year.

FINDINGS OF FACT

At the time the petition was filed, petitioner resided in Kentucky.

This case was the subject of a previous opinion denying respondent's motion for summary judgment, in which we found that respondent had failed to establish that petitioner's underlying income tax liability was not properly in issue. See Barnes v. Commissioner, T.C. Memo. 2010-30. Pursuant to that opinion, this Court ordered that petitioner's case be remanded to respondent's Office of Appeals for a hearing pursuant to section 6330 at respondent's Appeals Office closest to petitioner's residence. Following the issuance of the Court's order, petitioner's case was reassigned to one of respondent's settlement officers for a supplemental determination.

On March 19, 2010, the settlement officer received Substitute U.S. Postal Service Form 3877 confirming that on November 30, 2004, respondent mailed to petitioner a notice of deficiency for the 2002 tax year, which was addressed to petitioner at his last known address. The settlement officer also obtained Form 4340, Certificate of Assessments, Payments, and Other Specified Matters (certified transcript), for petitioner's income tax account for the 2002 tax year. The certified transcript indicates that respondent prepared a substitute return for petitioner, assessed tax against petitioner, and sent all necessary collection notices to petitioner for the 2002 tax year. The certified transcript also reflects that petitioner had $8,280 in Federal income tax withholding during 2002 from his employment with Progress Rail Services (Progress) and that petitioner made no other payments towards his 2002 income tax liability.

On March 29, 2010, the settlement officer sent to petitioner a letter scheduling a face-to-face conference at respondent's Office of Appeals in Louisville, Kentucky, on April 22, 2010, and requesting that petitioner provide a completed collection information statement and signed income tax returns for the taxable years 2007 and 2008. On April 9, 2010, the settlement officer received the March 29 letter in his office as undelivered mail bearing a notation that petitioner had moved. Later that day the settlement officer sent another letter to petitioner at his current address to schedule a face-to-face conference at respondent's Louisville Office of Appeals on April 22, 2010, and requesting that petitioner provide collection information and signed income tax returns for 2007 and 2008. Petitioner failed to appear for the meeting. On August 3, 2010, the settlement officer sent petitioner, by certified mail, another letter offering petitioner an opportunity for a face-to-face conference in respondent's Louisville Appeals Office on one of three alternative dates. The letter also requested that petitioner provide a collection information statement and signed income tax returns for the 2007, 2008, and 2009 taxable years. Petitioner signed for the August 3 letter on August 6, 2010, indicating its receipt.

On September 7, 2010, the settlement officer received from petitioner a letter, dated September 2, 2010, in which petitioner stated his preference that the collection due process (CDP) hearing for his 2002 taxable year be handled via correspondence. In petitioner's letter he also identified his current address and requested information concerning how respondent had determined petitioner's income tax liability for 2002.

On September 8, 2010, the settlement officer sent petitioner a letter by certified mail explaining that respondent had prepared a substitute return for petitioner for the 2002 tax year (since petitioner failed to file an income tax return) on the basis of wage information reported by Progress and a taxable distribution reported by National City Bank of Kentucky (National City). Enclosed with the letter were transcripts reflecting all income received by petitioner during 2002, including the income from Progress and National City. The settlement officer allowed petitioner until September 30, 2010, to provide any additional information concerning his 2002 income tax liability and any collection alternatives to be considered. Petitioner signed for the letter on September 13, 2010, and failed to offer any response. Petitioner did not present any evidence to show that he had not received the wage income from Progress or the distribution from National City or that respondent's determination of his 2002 income tax liability was incorrect.

On October 25, 2010, the settlement officer sent to petitioner a Supplemental Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330 (supplemental notice), which sustained respondent's notice of intent to levy. The supplemental notice states, in pertinent part:

SUMMARY AND DETERMINATION

The taxpayer requested a hearing with Appeals under the provisions of Internal Revenue Code Section 6330 as to the appropriateness of the issuance of a Notice of Intent to Levy. Appeals initial determination was that all legal and procedural requirements had been met, and the Issuance of the Notice of Intent to Levy had been appropriate. The taxpayer then petitioned the Tax Court, and the result was that the case was remanded to Appeals with instructions that the taxpayer be granted a face to face hearing at the Appeals office nearest his residence for the purpose of disputing the underlying liability.

Per the courts order [sic], Appeals offered the taxpayer a second supplemental Collection Due Process hearing at the Appeals Office in Louisville, Kentucky. The taxpayer opted to instead conduct the hearing via correspondence. In the exchange of correspondence, the Settlement Officer explained the basis for the tax assessment. The taxpayer, however, did not provide any information or evidence to show the liability was not correct. Therefore, Appeals determination remains that the legal and procedural requirements have been met, the assessment of the liability is sustained, and the issuance of the Notice of Intent to Levy was appropriate.

On January 24, 2011, the case was called for trial. At trial petitioner chose not to testify and failed to present any evidence disputing respondent's determination of his underlying income tax liability or the proposed collection action. The Court ordered the parties to file posttrial memoranda on or before March 21, 2011. On April 20, 2011, the Court received a letter from petitioner explaining that he would not comply with this Court's order to submit a legal brief because it would "provide some semblance of justification for the existence of this case, which * * * [he was] unwilling to do."

OPINION

In a section 6330 proceeding the Court reviews issues concerning a taxpayer's underlying tax liability on a de novo basis. Goza v. Commissioner, 114 T.C. 176, 181 (2000). Petitioner has the burden of proof regarding his underlying tax liability. See Rule 142(a); Smith v. Commissioner, T.C. Memo. 2008-229. Petitioner made no specific arguments and presented no evidence to bring into doubt the correctness of the underlying tax liability as calculated by respondent. We therefore uphold respondent's determination of petitioner's 2002 tax liability.

The Court reviews administrative determinations by respondent's Office of Appeals regarding nonliability issues for abuse of discretion. Hoyle v. Commissioner, 131 T.C. 197, 200 (2008); Goza v. Commissioner, supra. The determination of an Appeals officer must take into consideration: (1) The verification that the requirements of applicable law and administrative procedure have been met; (2) issues raised by the taxpayer; and (3) whether any proposed collection action balances the need for the efficient collection of taxes with the legitimate concern of the person that any collection be no more intrusive than necessary. Sec. 6330(c)(3); see also Hoyle v. Commissioner, supra; Lunsford v. Commissioner, 117 T.C. 183, 184 (2001).

In the amended petition, petitioner made unsupported claims that respondent: Did not meet all applicable requirements during petitioner's CDP hearing; did not provide petitioner a fair and impartial hearing; did not provide petitioner with requested documents or files; did not allow petitioner to dispute his underlying tax liability; did not allow petitioner to dispute any discrepancies; did not inform petitioner of his rights; and did not provide petitioner any evidence supporting respondent's underlying tax claim.

Pursuant to our prior opinion this case was remanded to respondent's Office of Appeals for further consideration. The settlement officer then offered petitioner the opportunity for a face-to-face conference in Louisville, Kentucky (the Appeals Office closest to petitioner's residence). After repeatedly requesting a face-to-face hearing and disputing respondent's determination not to grant him a face-to-face hearing, petitioner elected to conduct the remanded CDP hearing by correspondence.

The settlement officer informed petitioner how respondent had determined petitioner's assessed deficiency for 2002 and provided petitioner with documentation supporting respondent's determination. The settlement officer also offered petitioner the opportunity to provide information concerning petitioner's unpaid tax liability and any potential collection alternatives. Petitioner failed to provide the settlement officer with any such information. On the basis of the information the settlement officer reviewed during his consideration of petitioner's CDP hearing request, petitioner's failure to dispute the income information he was provided with in connection with the underlying tax liability, and petitioner's failure to qualify for collection alternatives, the settlement officer sent to petitioner a supplemental notice sustaining respondent's notice of intent to levy.

The settlement officer fully responded to petitioner's challenges to the proposed collection action during his consideration of petitioner's CDP hearing request. When petitioner questioned how respondent had determined his 2002 tax liability, the settlement officer sent petitioner a letter explaining the income information Progress and National City submitted to respondent, and provided petitioner with transcripts. Furthermore, the settlement officer verified that a notice of deficiency was mailed to petitioner at his last known address and that the assessment was properly made. The settlement officer also verified that the notice and demand for payment letter was mailed to petitioner at his last known address.

The settlement officer reviewed the available financial information regarding petitioner and concluded that collection by levy was appropriate. We find that the settlement officer complied with the requirements of section 6330(c)(3) by responding to the relevant issues petitioner raised and verifying that the requirements of applicable law and administrative procedure had been met. At trial petitioner offered no evidence to show that the settlement officer abused his discretion.

On the basis of the foregoing, we hold that the settlement officer did not abuse his discretion in sustaining the notice of intent to levy.

To reflect the foregoing,

Decision will be entered for respondent.

FOOTNOTE

1 Unless otherwise indicated, all section references are to the Internal Revenue Code as amended, and all Rule references are to the Tax Court Rules of Practice and Procedure.

END OF FOOTNOTE

[Quixote]

On April 20, 2011, the Court received a letter from petitioner explaining that he would not comply with this Court's order to submit a legal brief because it would "provide some semblance of justification for the existence of this case, which * * * [he was] unwilling to do."

I wonder what the petitioner thought he was saying.

[Famspear]

On April 20, 2011, the Court received a letter from petitioner explaining that he would not comply with this Court's order to submit a legal brief because it would "provide some semblance of justification for the existence of this case, which * * * [he was] unwilling to do."

I wonder what the petitioner thought he was saying.

Yes, that kind of statement provides a giggle -- somewhat similar to the hilarity that ensues when one of these wackadoosters goes to the trouble of suing the Commissioner in Tax Court -- and then turns around and argues that the Tax Court has no "jurisdiction."

[LPC]

On April 20, 2011, the Court received a letter from petitioner explaining that he would not comply with this Court's order to submit a legal brief because it would "provide some semblance of justification for the existence of this case, which * * * [he was] unwilling to do."

I wonder what the petitioner thought he was saying.

I read it as the tax denier version of the quote from Crain v. Commissioner in which the 5th Circuit said that "We perceive no need to refute these arguments with somber reasoning and copious citation of precedent; to do so might suggest that these arguments have some colorable merit."

Of course, for the petitioner to be unwilling to "provide some semblance of justification" for his own case is weird (one might even say self-defeating), but he was undoubtedly posturing that the IRS position was so absurd that he shouldn't have even been required to file a petition, and he certainly wasn't going to "play the game" any more than absolutely necessary.

It smells very much like Skankbeat's "neutral position," and we can all now see how successful it can be.

[Pantherphil]

Our judges appear to have the patience of Job. Had I been the judge on this case I would have been so angry over this litigant's waste of the IRS Appeals Office and the Court's time that I would have ordered maximum sanctions plus whatever costs I could possibly charge. Then I would have sent for JRB and his cattle prod. So long as no meaningful penalties are imposed for bringing frivolous arguments solely for purposes of delay we will continue to have to put up with this nonsense.