OPINION

I. Oral Motion To Dismiss

As a threshold matter, the Court briefly addresses petitioner's motion to dismiss this case on grounds of respondent's lack of preparedness. Although we agree that counsel for respondent might have been more ready, based on our September 30, 2004 , order, to address inquiries from the Court regarding the notices of deficiency, the need formally to introduce the documents into evidence may have been unanticipated. Counsel quickly responded to the situation by procuring the testimony of a revenue agent. Only very minimal delay ensued, and we do not perceive that petitioner was prejudiced thereby. The Court is aware of no precedent for employing dismissal in such circumstances.

The Court further is satisfied that the testimony of the agent laid a proper foundation for admission of the notices of deficiency under rules 901 and 803(6) of the Federal Rules of Evidence. See also sec. 7453; Rule 143(a). Petitioner's oral motion to dismiss shall be denied.

II. Collection Action

A. General Rules

Section 6331(a) authorizes the Commissioner to levy upon all property and rights to property of a taxpayer where there exists a failure to pay any tax liability within 10 days after notice and demand for payment. Sections 6331(d) and 6330 then set forth procedures generally applicable to afford protections for taxpayers in such levy situations. Section 6331(d) establishes the requirement that a person be provided with at least 30 days' prior written notice of the Commissioner's intent to levy before collection may proceed. Section 6331(d) also indicates that this notification should include a statement of available administrative appeals. Section 6330(a) expands in several respects upon the premise of section 6331(d), forbidding collection by levy until the taxpayer has received notice of the opportunity for administrative review of the matter in the form of a hearing before the Internal Revenue Service Office of Appeals. Section 6330(b) grants a taxpayer who so requests the right to a fair hearing before an impartial Appeals officer.

Section 6330(c) addresses the matters to be considered at the hearing:

SEC. 6330(c). Matters Considered at Hearing. --In the case of any hearing conducted under this section --

(1) Requirement of investigation. --The appeals officer shall at the hearing obtain verification from the Secretary that the requirements of any applicable law or administrative procedure have been met.

(2) Issues at hearing. --

(A) In general. --The person may raise at the hearing any relevant issue relating to the unpaid tax or the proposed levy, including --

(i) appropriate spousal defenses;

(ii) challenges to the appropriateness of collection actions; and

(iii) offers of collection alternatives, which may include the posting of a bond, the substitution of other assets, an installment agreement, or an offer-in-compromise.

(B) Underlying liability. --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 such tax liability or did not otherwise have an opportunity to dispute such tax liability.

Once the Appeals officer has issued a determination regarding the disputed collection action, section 6330(d) allows the taxpayer to seek judicial review in the Tax Court or the U.S. District Court, depending upon the type of tax. In considering whether taxpayers are entitled to any relief from the Commissioner's determination, this Court has established the following standard of review:

where the validity of the underlying tax liability is properly at issue, the Court will review the matter on a de novo basis. However, where the validity of the underlying tax liability is not properly at issue, the Court will review the Commissioner's administrative determination for abuse of discretion. [Sego v. Commissioner [Dec. 53,938], 114 T.C. 604, 610 (2000).]

B. Analysis

1. Appeals Hearing

Hearings conducted under section 6330 are informal proceedings, not formal adjudications. Katz v. Commissioner [Dec. 54,081], 115 T.C. 329, 337 (2000); Davis v. Commissioner [Dec. 53,969], 115 T.C. 35, 41 (2000). There exists no right to subpoena witnesses or documents in connection with section 6330 hearings. Roberts v. Commissioner [Dec. 54,733], 118 T.C. 365, 372 (2002), affd. [2003-1 USTC ¶50,359] 329 F.3d 1224 (11th Cir. 2003); Nestor v. Commissioner [Dec. 54,896(M)], 118 T.C. 162, 166-167 (2002); Davis v. Commissioner, supra at 41-42. Taxpayers are entitled to be offered a face-to-face hearing at the Appeals Office nearest their residence. Where the taxpayer declines to participate in a proffered face-to-face hearing, hearings may also be conducted telephonically or by correspondence. Katz v. Commissioner, supra at 337-338; Dorra v. Commissioner [Dec. 55,517(M)], T.C. Memo. 2004-16; sec. 301.6330-1(d)(2), Q&A-D6 and D7, Proced. & Admin. Regs. Furthermore, once a taxpayer has been given a reasonable opportunity for a hearing but has failed to avail himself or herself of that opportunity, we have approved the making of a determination to proceed with collection based on the Appeals officer's review of the case file. See, e.g., Taylor v. Commissioner [Dec. 55,528(M)], T.C. Memo. 2004-25; Leineweber v. Commissioner [Dec. 55,518(M)], T.C. Memo. 2004-17; Armstrong v. Commissioner [Dec. 54,865(M)], T.C. Memo. 2002-224; Gougler v. Commissioner [Dec. 54,824(M)], T.C. Memo. 2002-185; Mann v. Commissioner [Dec. 54,658(M)], T.C. Memo. 2002-48. Thus, a face-to-face meeting is not invariably required.

Regulations promulgated under section 6330 likewise incorporate many of the foregoing concepts, as follows:

Q-D6. How are CDP hearings conducted?

A-D6. * * * CDP hearings * * * are informal in nature and do not require the Appeals officer or employee and the taxpayer, or the taxpayer's representative, to hold a face-to-face meeting. A CDP hearing may, but is not required to, consist of a face-to-face meeting, one or more written or oral communications between an Appeals officer or employee and the taxpayer or the taxpayer's representative, or some combination thereof. * * *

Q-D7. If a taxpayer wants a face-to-face CDP hearing, where will it be held?

A-D7. The taxpayer must be offered an opportunity for a hearing at the Appeals office closest to taxpayer's residence or, in the case of a business taxpayer, the taxpayer's principal place of business. If that is not satisfactory to the taxpayer, the taxpayer will be given an opportunity for a hearing by correspondence or by telephone. If that is not satisfactory to the taxpayer, the Appeals officer or employee will review the taxpayer's request for a CDP hearing, the case file, any other written communications from the taxpayer (including written communications, if any, submitted in connection with the CDP hearing), and any notes of any oral communications with the taxpayer or the taxpayer's representative. Under such circumstances, review of those documents will constitute the CDP hearing for the purposes of section 6330(b). [Sec. 301.6330-1(d)(2), Q&A-D6 and D7, Proced. & Admin. Regs.]

This Court has cited the above regulatory provisions with approval. See, e.g., Taylor v. Commissioner, supra; Leineweber v. Commissioner, supra; Dorra v. Commissioner, supra; Gougler v. Commissioner, supra.

With respect to the instant matter, the record reflects that petitioner was provided with an opportunity for a face-to-face hearing on February 19, 2003 . The hearing did not proceed when petitioner was not permitted to record the meeting. On July 8, 2003 , in Keene v. Commissioner [Dec. 55,213], 121 T.C. 8, 19 (2003), this Court held that taxpayers are entitled, pursuant to section 7521(a)(1), to audio record section 6330 hearings. The taxpayer in that case had refused to proceed when denied the opportunity to record, and we remanded the case to allow a recorded Appeals hearing. Id.

In contrast, we have distinguished, and declined to remand, cases where the taxpayer had participated in an Appeals Office hearing, albeit unrecorded, and where all issues raised by the taxpayer could be properly decided from the existing record. E.g., id. at 19-20; Frey v. Commissioner [Dec. 55,601(M)], T.C. Memo. 2004-87; Durrenberger v. Commissioner [Dec. 55,552(M)], T.C. Memo. 2004-44; Brashear v. Commissioner [Dec. 55,215(M)], T.C. Memo. 2003-196; Kemper v. Commissioner [Dec. 55,214(M)], T.C. Memo. 2003-195. Stated otherwise, cases will not be remanded to Appeals, nor determinations otherwise invalidated, merely on account of the lack of a recording when to do so is not necessary and would not be productive. See, e.g., Frey v. Commissioner, supra; Durrenberger v. Commissioner, supra; Brashear v. Commissioner, supra; Kemper v. Commissioner, supra; see also Lunsford v. Commissioner [Dec. 54,553], 117 T.C. 183, 189 (2001). A principal scenario falling short of the necessary or productive standard exists where the taxpayers rely on frivolous or groundless arguments consistently rejected by this and other courts. See, e.g., Frey v. Commissioner, supra; Brashear v. Commissioner, supra; Kemper v. Commissioner, supra.

Because no hearing had been conducted at all in petitioner's case and the record contained certain factual ambiguities, we declined to grant respondent's motion for summary judgment. The record as it then existed did not foreclose the possibility that petitioner might have raised valid arguments had a hearing been held. Accordingly, we provided petitioner an opportunity before the Court at the trial session in Phoenix to identify any legitimate issues he wished to raise that could warrant further consideration of the merits of his case by the Appeals Office or this Court.

At trial, the comments of petitioner and his wife focused almost exclusively on petitioner's assertion that he did not receive the notices of deficiency and on corollary matters regarding his address. However, as will be explained in greater detail below, petitioner failed to raise any legitimate substantive issues requiring or justifying additional review under the framework of section 6330. The record therefore does not indicate that any purpose would be served by remand or additional proceedings. The Court concludes that all pertinent issues relating to the propriety of the collection determination can be decided through review of the materials before it.

2. Review of Underlying Liabilities

The evidentiary record establishes that statutory notices determining deficiencies with respect to the 1993, 1994, 1995, 1996, and 1997 taxable years were issued to petitioner. Respondent's records indicate that the notices were returned as undeliverable, forwarding order expired. Petitioner asserts that he never received the notices, and at trial he and his wife testified regarding their various addresses.

In particular, petitioner acknowledged that he wrote and signed the January 22, 1999 , letter communicating the West Deer Valley address. He also failed to identify any subsequent communication providing the Internal Revenue Service with a superseding address. Ms. Lehmann testified explicitly that no superseding letter had been sent to supply new or updated information. Thus, the notices of deficiency were sent in a manner in compliance with, and valid under, section 6212 and corresponding regulations,⁷ requiring that a notice of deficiency be sent to a taxpayer's last known address. Sec. 6212(a) and (b)(1).

Concerning issues bearing on receipt for purposes of section 6330, petitioner initially stated that West Deer Valley was his address as of January 22, 1999 . Then he said he probably moved at about that time. Next, he testified that it had been over 8 years since he and his wife had lived at either the West Deer Valley address or the East McRae Way address. Finally, he stated explicitly that they had "been living at our address we're at now since 1996."

In this connection, the Court notes that the address used by petitioner on his petition and on other papers filed with the Court throughout this proceeding is 48412 North Black Canyon Hwy #252 , New River , Arizona 85087 . However, the address reflected on the notices of deficiency issued to petitioner's wife on October 12, 2000 , and with respect to which a Tax Court petition was filed at docket No. 1008-01, was 22444 North 23rd Avenue or Lane,⁸ Phoenix, Arizona 85027. This address was used by Ms. Lehmann throughout that proceeding, from March of 2001 to September of 2002. At trial in the instant case, Ms. Lehmann testified that she and petitioner lived together during the 1993 through 1997 period and at the time her earlier Tax Court proceedings were underway. She stated that petitioner was aware of those proceedings and discussed them with her. There is also indication in the testimony that petitioner and his wife employed post office boxes at various times, and it is unclear precisely which of the addresses used pertain to boxes as opposed to residences.

Although section 6330(c)(2)(B) generally entitles taxpayers to raise the issue of underlying liability if they did not receive a notice of deficiency or otherwise have an opportunity to dispute the liability, the Court has held that taxpayers cannot defeat actual receipt by deliberately refusing delivery of a statutory notice. Sego v. Commissioner [Dec. 53,938], 114 T.C at 610-611; Tatum v. Commissioner [Dec. 55,125(M)], T.C. Memo. 2003-115; Carey v. Commissioner [Dec. 54,849(M)], T.C. Memo. 2002-209; Baxter v. Commissioner [Dec. 54,545(M)], T.C. Memo. 2001-300. Here, the testimony given at trial suggests that petitioner's communication of the West Deer Valley address to the Internal Revenue Service in January of 1999, and subsequent failure to notify of any new addresses, may have been a deliberate preemptive attempt to prevent delivery of any notice of deficiency. The substantial nature of the relevant tax deficiencies, exceeding $250,000 for each of the years in issue, further enhances the likelihood of this scenario. To the extent that the West Deer Valley address had been outdated for 8 years or "since 1996" at the time of trial in October of 2004, the 1999 letter would have been inaccurate when written. Petitioner would reasonably be considered in such circumstances to have deliberately repudiated his opportunity to contest the notices of deficiency in this Court and likewise now to be precluded from challenging his underlying liability in this proceeding.

Nonetheless, even if petitioner were entitled to contest his underlying liabilities at this juncture, he has at no time offered even a scintilla of evidence that would show error in respondent's determinations. He declined at trial to address in any way the merits of the deficiencies, despite being warned as follows:

you wanted to record your hearing and were not permitted to do so, so you didn't participate in the hearing. This trial is being recorded. This is your chance, your only chance unless I remand the case, to present any and all issues that you wish to raise with respect to your 6330 hearing. And that will be on the record.

Thus, even a de novo review would not avail petitioner, and, moreover, he has now forfeited his chance to suggest any meritorious issues worthy of remand.

3. Review for Abuse of Discretion

Petitioner has also made various arguments relating to aspects of the assessment and collection procedures that we review for abuse of discretion. Action constitutes an abuse of discretion under this standard where arbitrary, capricious, or without sound basis in fact or law. Woodral v. Commissioner [Dec. 53,206], 112 T.C. 19, 23 (1999).

Federal tax assessments are formally recorded on a record of assessment in accordance with section 6203. The Commissioner is not required to use Form 23C in making an assessment. Roberts v. Commissioner [Dec. 54,733], 118 T.C. at 369-371. Furthermore, section 6330(c)(1) mandates neither that the Appeals officer rely on a particular document in satisfying the verification requirement nor that the Appeals officer actually give the taxpayer a copy of the verification upon which he or she relied. Craig v. Commissioner [Dec. 54,933], 119 T.C. 252, 262 (2002); Nestor v. Commissioner [Dec. 54,896(M)], 118 T.C. at 166.

A Form 4340, for instance, constitutes presumptive evidence that a tax has been validly assessed pursuant to section 6203. Davis v. Commissioner [Dec. 53,969], 115 T.C. at 40 (and cases cited thereat). Consequently, absent a showing by the taxpayer of some irregularity in the assessment procedure that would raise a question about the validity of the assessments, a Form 4340 reflecting that tax liabilities were assessed and remain unpaid is sufficient to support collection action under section 6330. Id. at 40-41. We have specifically held that it is not an abuse of discretion for an Appeals officer to rely on Form 4340, Nestor v. Commissioner, supra at 166; Davis v. Commissioner, supra at 41, or a computer transcript of account, Schroeder v. Commissioner [Dec. 54,829(M)], T.C. Memo. 2002-190; Mann v. Commissioner [Dec. 54,658(M)], T.C. Memo. 2002-48, to comply with section 6330(c)(1).

Here, the record contains a Form 4340 for each of the years at issue, indicating that assessments were made for the year and that taxes remain unpaid. Petitioner has failed to cite any irregularities with respect to the Forms 4340 introduced into evidence that would cast doubt on the information recorded thereon.

In addition to the specific dictates of section 6330, the Secretary, upon request, is directed to furnish to the taxpayer a copy of pertinent parts of the record of assessment setting forth the taxpayer's name, the date of assessment, the character of the liability assessed, the taxable period, if applicable, and the amounts assessed. Sec. 6203; sec. 301.6203-1, Proced. & Admin. Regs. A taxpayer receiving a copy of Form 4340 has been provided with all the documentation to which he or she is entitled under section 6203 and section 301.6203-1, Proced. & Admin. Regs. Roberts v. Commissioner, supra at 370 n.7. This Court likewise has upheld collection action where taxpayers were provided with literal transcripts of account (so-called MFTRAX). See, e.g., Frank v. Commissioner [Dec. 55,096(M)], T.C. Memo. 2003-88; Swann v. Commissioner [Dec. 55,078(M)], T.C. Memo. 2003-70. The January 29, 2003 , letter to petitioner from the settlement officer enclosed copies of Forms 4340 for each year.

Petitioner has also denied receiving the "Notices of Assessment", presumably alluding to the notice and demand for payment that section 6303(a) establishes should be given within 60 days of the making of an assessment. However, a notice of balance due constitutes a notice and demand for payment within the meaning of section 6303(a). Craig v. Commissioner, supra at 262-263. The Forms 4340 indicate that petitioner was sent notices of balance due for the tax years involved, and petitioner has never denied receiving these notices.

Thus, with respect to those issues enumerated in section 6330(c)(2)(A) and subject to review in collection proceedings for abuse of discretion, petitioner has not raised any spousal defenses, valid challenges to the appropriateness of the collection action, or collection alternatives. As this Court has noted in earlier cases, Rule 331(b)(4) states that a petition for review of a collection action shall contain clear and concise assignments of each and every error alleged to have been committed in the notice of determination and that any issue not raised in the assignments of error shall be deemed conceded. See Lunsford v. Commissioner [Dec. 54,553], 117 T.C. at 185-186; Goza v. Commissioner [Dec. 53,803], 114 T.C. 176, 183 (2000). For completeness, we have addressed various points advanced by petitioner during the administrative process or before us in Phoenix , but no meritorious items were pursued even in those proceedings. Accordingly, the Court concludes that respondent's determination to proceed with collection of petitioner's tax liabilities was not an abuse of discretion.

III. Section 6673 Penalty

Section 6673(a)(1) authorizes the Court to require the taxpayer to pay a penalty not in excess of $25,000 when it appears to the Court that, inter alia, proceedings have been instituted or maintained by the taxpayer primarily for delay or that the taxpayer's position in such proceeding is frivolous or groundless. In Pierson v. Commissioner [Dec. 54,152], 115 T.C. 576, 581 (2000), the Court warned that taxpayers abusing the protections afforded by sections 6320 and 6330 through the bringing of dilatory or frivolous lien or levy actions will face sanctions under section 6673. The Court has since repeatedly disposed of cases premised on arguments akin to those raised herein summarily and with imposition of the section 6673 penalty. See, e.g., Craig v. Commissioner [Dec. 54,933], 119 T.C. at 264-265 (and cases cited thereat).

With respect to the instant matter, we are convinced that petitioner instituted and maintained this proceeding primarily for delay. Throughout the administrative process and in his petition, petitioner advanced contentions and demands previously and consistently rejected by this and other courts. While his procedural stance concerning recording was correct and his contentions regarding nonreceipt of the notices of deficiency initially gave us pause, his testimony and that of his wife revealed that these matters in petitioner's circumstances posed no legitimate basis for contesting the collection determination. Hence, petitioner ignored the Court's explicit warning that any further proceedings would be justified only in the face of relevant and nonfrivolous issues. Moreover, petitioner was expressly alerted to the potential use of sanctions in his case. Yet he appeared at the trial session in Phoenix without any legitimate evidence or argument in support of his position.

Petitioner therefore received fair warning but has persisted in frivolously disputing respondent's determination. The Court concludes that a penalty of $2,500 should be awarded to the United States in this case. To reflect the foregoing,

An appropriate order and decision will be entered.

¹ Unless otherwise indicated, section references are to the Internal Revenue Code of 1986, as amended, and Rule references are to the Tax Court Rules of Practice and Procedure.

² As will be discussed in greater detail infra in text, separate notices of deficiency for the 1993 through 1997 years were issued to Ms. Lehmann. Ms. Lehmann contested those notices in this Court at docket No. 1008-01. An order of dismissal and decision was entered in that case on Apr. 10, 2002, and was affirmed by the Court of Appeals for the Ninth Circuit. Lehmann v. Commissioner [2003-1 USTC ¶50,509], 63 Fed. Appx. 412 (9th Cir. 2003). This Court takes judicial notice of facts established by the official record in that action.

³ The record contains one original from each set, i.e., the notice for 1993 through 1995 showing the West Deer Valley address and the notice for 1996 and 1997 showing the East McRae Way address. The notice of determination consistently in two places explains the circumstances surrounding issuance of the duplicate original notices, and, taking into account the fact that they were issued on the same date and to the same taxpayer, and signed by the same reviewer, the Court is satisfied that duplicate notices were indeed mailed to each address on Oct. 12, 2000.

⁴ Petitioner initially filed a complaint in the U.S. District Court for the District of Arizona on Apr. 10, 2003. The complaint was dismissed for lack of subject matter jurisdiction on Jan. 21, 2004. Petitioner's petition to this Court arrived in an envelope bearing a postmark of Feb. 20, 2004. See sec. 6330(d)(1).

⁵ The Court notes that to the extent that the petition seeks reasonable administrative and/or litigation costs pursuant to sec. 7430, any such claim is premature and will not be further addressed. See Rule 231.

⁶ Principally, the exhibits accompanying respondent's motion for summary judgment contained conflicting dates for issuance of the underlying notices of deficiency and did not include copies of the notices themselves. For instance, the notice of determination stated at one point that the notices of deficiency were issued on Jan. 10, 2001, and at another point gave a date of mailing of Oct. 12, 2000. As later became clear at trial, certain of the references were inadvertently made to the "Last Day to File a Petition With the United States Tax Court" date stamped on the front of the notices of deficiency, rather than the issuance date, also stamped on the front.

⁷ See supra note 3.

⁸ One notice used "Ave.", while the other used "Lane". Lane was employed on the majority of the documents filed during the proceedings, but the parties indicated at the 2002 trial in that case that avenue was more correct.

[Dec. 56,012(M)] Randal W. Howard v. Commissioner.

Dkt. No. 8719-03L , TC Memo. 2005-100, May 9, 2005 .

[Appealable, barring stipulation to the contrary, to CA-9]

[Code Sec. 6330]
Collection Due Process hearings: Standard of review: Abuse of discretion: Tax protestors.

An IRS Appeals officer did not abuse his discretion when he determined to proceed with collection against an individual who made groundless tax-protestor type arguments at his Collection Due Process (CDP) hearing. The Appeals officer properly verified that all applicable laws and administrative collection procedures were followed. In addition, the taxpayer had received notices of deficiency for all of the tax years at issue and had filed petitions for redetermination challenging those notices. Therefore, he was barred under Code Sec. 6330(c)(2)(B) from contesting his underlying tax liability at his CDP hearing and, since there was no just cause to delay the collection process, the IRS was permitted to proceed with its levy.

[Code Sec. 6673]
Penalties, civil: Tax protestors: Actions maintained primarily for delay: Delay penalty.

A taxpayer who maintained an action primarily to delay the collection of his unpaid tax liabilities was fined $10,000. The taxpayer's arguments were devoid of any merit and wasted judicial resources. Moreover, the taxpayer's conduct in his earlier deficiency cases, along with his actions in this case, demonstrated that the taxpayer used the CDP hearing procedures primarily for delay. Since this was the taxpayer's third case that resulted in a Code Sec. 6673 penalty, the penalty imposed against the taxpayer was increased to $10,000.

Randal W. Howard, pro se; Cameron M. McKesson and Robin M. Ferguson, for respondent.

P filed a petition for judicial review pursuant to sec. 6330, I.R.C., in response to a determination by R that levy action was appropriate.

Held: Because P has advanced groundless complaints in dispute of the notice of intent to levy, R's determination to proceed with collection action is sustained.

Held, further, because the underlying tax liability is not at issue and R has shown good cause, suspension on levy action is lifted pursuant to sec. 6330(e)(2), I.R.C.

Held, further, a penalty under sec. 6673, I.R.C., is due from P and is awarded to the United States in the amount of $10,000.

MEMORANDUM OPINION

WHERRY, Judge: Petitioner invoked the Court's jurisdiction under section 6330 in response to a Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330 regarding his unpaid Federal income taxes for 1983 and 1993 to 1995.¹ Respondent's Office of Appeals (Appeals Office) had determined that it was appropriate to collect petitioner's unpaid taxes pursuant to a proposed levy. After the case was docketed, respondent on September 20, 2004 , filed a motion for summary judgment, and petitioner filed a declaration in opposition to respondent's motion on October 18, 2004 . The Court held a hearing on the motion for summary judgment on October 18, 2004 , and took the matter under advisement. Thereafter, on March 10, 2005 , respondent filed a motion to permit levy pursuant to section 6330(e)(2).

Summary judgment is intended to expedite litigation and avoid unnecessary and expensive trials. Fla. Peach Corp. v. Commissioner [Dec. 44,689], 90 T.C. 678, 681 (1988) . Summary judgment may be granted with respect to all or any part of the legal issues in controversy "if the pleadings, answers to interrogatories, depositions, admissions, and any other acceptable materials, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that a decision may be rendered as a matter of law." Rule 121(b); Sundstrand Corp. v. Commissioner [Dec. 48,191], 98 T.C. 518, 520 (1992), affd. [94-1 USTC ¶50,092] 17 F.3d 965 (7th Cir. 1994); Zaentz v. Commissioner [Dec. 44,714], 90 T.C. 753, 754 (1988); Naftel v. Commissioner [Dec. 42,414], 85 T.C. 527, 529 (1985). The moving party bears the burden of proving that there is no genuine issue of material fact, and factual inferences will be read in a manner most favorable to the party opposing summary judgment. Dahlstrom v. Commissioner [Dec. 42,486], 85 T.C. 812, 820-821 (1985); Jacklin v. Commissioner [Dec. 39,278], 79 T.C. 340, 344 (1982).

Based upon our review of the record, we conclude that there is no genuine issue as to any material fact and that respondent is entitled to judgment as a matter of law. As discussed in greater detail below, we shall grant respondent's motion for summary judgment, enter a decision sustaining the notice of determination upon which this case is based, and impose a penalty on petitioner pursuant to section 6673. In addition, respondent has shown good cause for lifting the suspension of the proposed levy, and we shall grant respondent's motion to permit levy.

Background²

Petitioner has filed several petitions for redetermination with the Court in a long-running protest against the Federal income tax.

Taxable Years 1983 and 1984

On January 2, 1990 , the Court dismissed petitioner's case at docket No. 27411-88 for lack of prosecution and entered a decision sustaining deficiencies and additions to tax (including additions to tax under section 6651(a)(1) for failure to file a tax return) that respondent determined against petitioner for the taxable years 1983 and 1984.

Taxable Years 1987 and 1988

On February 13, 1998 , the Court entered a decision at docket No. 20474-90 sustaining deficiencies and additions to tax that respondent determined against petitioner for the taxable years 1987 and 1988. The Court concluded that petitioner had raised nothing but "classic protester arguments". Howard v. Commissioner [Dec. 52,566(M)], T.C. Memo. 1998-57.³

Taxable Years 1993, 1994, and 1995

On October 24, 2000 , the Court entered a decision at docket No. 18627-97 sustaining deficiencies and additions to tax (including additions to tax under section 6651(a)(1) for failure to file a tax return) that respondent determined against petitioner for the taxable years 1993, 1994, and 1995. The Court's decision included an increased deficiency for 1993.⁴ The Court also imposed a penalty upon petitioner pursuant to section 6673(a) after concluding that petitioner "knowingly and repeatedly advocated frivolous and groundless positions." Howard v. Commissioner [Dec. 53,961(M)], T.C. Memo. 2000-222.

Taxable Year 1996

On April 5, 2002 , the Court entered a decision at docket No. 6546-00 sustaining the deficiency and additions to tax that respondent determined against petitioner for the taxable year 1996. Citing the Court's two earlier Memorandum Opinions (referred to above) and characterizing petitioner's arguments as "frivolous and wholly without merit", the Court imposed a penalty upon petitioner pursuant to section 6673(a). Howard v. Commissioner [Dec. 54,701(M)], T.C. Memo. 2002-85.

Petitioner did not file an appeal in respect of any of the Court's decisions cited above. Each of those decisions is now final. Sec. 7481(a).

Petitioner's Bankruptcy Proceedings

On June 14, 1991 , petitioner filed a bankruptcy petition under chapter 13 of the Bankruptcy Code with the U.S. Bankruptcy Court for the District of Arizona. On July 24, 1996 , the bankruptcy court issued an order dismissing petitioner's case. This order was affirmed on appeal to the U.S. District Court for the District of Arizona on September 9, 1997 .

On December 6, 1996 , petitioner filed a bankruptcy petition under chapter 7 of the Bankruptcy Code with the U.S. Bankruptcy Court for the District of Arizona. On April 7, 1997 , the bankruptcy court entered an order of discharge in petitioner's case.

On April 16, 1999 , petitioner filed a bankruptcy petition under chapter 13 of the Bankruptcy Code with the U.S. Bankruptcy Court for the District of Arizona. On April 20, 1999 , the bankruptcy court entered an order granting the Commissioner's motion for relief from the automatic stay, see 11 U.S.C. sec. 362(a) (2000), regarding petitioner's tax liabilities for 1993, 1994, and 1995. On April 27, 1999 , the bankruptcy court dismissed petitioner's case.

Assessments/Collection Actions for 1983 and 1993 to 1995

On May 10, 1990 , respondent entered assessments against petitioner for the income tax and additions to tax for the taxable year 1983 as set forth in the Court's decision at docket No. 27411-88, as well as statutory interest. On May 10, 1990 , and June 11, 1990 , respondent issued to petitioner notices of balance due for the year 1983.⁵ Petitioner failed to remit to respondent the amount due.

On April 30, 2001 , respondent entered assessments against petitioner for the income taxes and additions to tax for the years 1993, 1994, and 1995 as set forth in the Court's decision at docket No. 18627-97, as well as statutory interest. On April 30, 2001 , respondent issued to petitioner notices of balance due for the years 1993, 1994, and 1995. Petitioner failed to remit to respondent the amounts due.

On December 17, 2001 , respondent issued to petitioner a Final Notice of Intent to Levy and Notice of Your Right to a Hearing requesting that petitioner pay his outstanding income taxes for the years 1983 and 1993 to 1995. On January 9, 2002 , petitioner submitted to respondent a Form 12153, Request for Collection Due Process Hearing, challenging the validity of the assessments for the years in issue. With regard to the taxable year 1983, petitioner asserted that his liability for that year was either paid in full or discharged in bankruptcy.

On May 1, 2003 , petitioner appeared at respondent's Appeals Office for an administrative hearing under section 6330. The administrative hearing was aborted when petitioner was informed that he would not be permitted to make an audio recording of the hearing.

On May 6, 2003 , the Appeals Office issued to petitioner a Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330 which stated that the Appeals Office determined that the proposed levy action was appropriate. The notice of determination stated that the Appeals Office rejected petitioner's claim that his tax liability for 1983 was discharged in bankruptcy on the ground that such taxes were not subject to discharge because petitioner failed to file a valid tax return for 1983. The notice of determination further stated that petitioner was provided with transcripts of account for the years 1983 and 1993 to 1995, that petitioner's remaining arguments were frivolous, and that petitioner was not eligible to offer an alternative collection method because he was not current in filing his tax returns for later years.

Petitioner filed with the Court on June 9, 2003 , a timely petition for lien and levy action.⁶ In the petition, petitioner alleged that the notice of determination should be overturned on the grounds that (1) the Appeals Office failed to verify that all applicable laws and administrative procedures were satisfied, and (2) petitioner's tax liabilities for the years in issue were discharged in bankruptcy.

After filing an answer to the petition, respondent filed a motion for summary judgment. Respondent asserted that the Appeals Office properly verified that all applicable laws and administrative procedures were met with regard to the assessments and proposed collection actions in dispute. In support of this assertion, respondent attached to his motion Forms 4340, Certificate of Assessments, Payments, and Other Specified Matters, for the taxable years 1983 and 1993 to 1995. Respondent also asserted that petitioner's tax liabilities were not discharged by the bankruptcy court.

This case was called for Hearing at the Court's October 18, 2004 , trial session in Phoenix , Arizona . At the start of the hearing, petitioner filed a declaration in opposition to respondent's motion, which stated in pertinent part that petitioner was not permitted to make an audio recording of his administrative hearing (the recording issue). In response to petitioner's Declaration, counsel for respondent asserted that petitioner failed to inform the Appeals Office in advance of the administrative hearing that he intended to make an audio recording⁷ and that petitioner failed to raise the recording issue in his petition.

Petitioner countered that the Court's holding in Keene v. Commissioner [Dec. 55,213], 121 T.C. 8, 19-20 (2003), controls with regard to the recording issue and the matter should be remanded to the Appeals Office for further proceedings. Petitioner also asserted that the Court should reject respondent's argument that petitioner's tax liabilities were not discharged by the bankruptcy court on the ground that respondent failed to prove that petitioner did not file tax returns for the years in issue. At the close of the hearing, the Court took the motion under advisement and indicated to the parties that if the motion for summary judgment were not granted the case would be rescheduled for a later trial.

Following the hearing, on March 10, 2005 , respondent filed with the Court a motion to permit levy pursuant to section 6330(e)(2).

Discussion

I. Collection Actions

A. Lien and Levy

Sections 6320 (pertaining to Federal tax liens) and 6330 (pertaining to levies) establish procedures for administrative and judicial review of certain collection actions. As an initial matter, the Commissioner is required to provide a taxpayer with written notice that a Federal tax lien has been filed and/or that the Commissioner intends to levy; the Commissioner is also required to explain to the taxpayer that such collection actions may be challenged on various grounds at an administrative hearing. See Davis v. Commissioner [Dec. 53,969], 115 T.C. 35, 37 (2000); Goza v. Commissioner [Dec. 53,803], 114 T.C. 176, 179 (2000).

Section 6330(c)(1) imposes on the Appeals Office an obligation to obtain verification that "the requirements of any applicable law or administrative procedure have been met." Section 6330(c)(2) prescribes the matters that a person may raise at an administrative hearing. Section 6330(c)(2)(A) provides that a person may raise issues such as spousal defenses, the appropriateness of the Commissioner's intended collection action, and possible alternative means of collection. See Sego v. Commissioner [Dec. 53,938], 114 T.C. 604, 609 (2000); Goza v. Commissioner, supra. In addition, section 6330(c)(2)(B) establishes the circumstances under which a person may challenge the existence or amount of his or her underlying tax liability. Section 6330(c)(2)(B) provides:

Issues at hearing. --

* * *

(B) Underlying liability. 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 such tax liability or did not otherwise have an opportunity to dispute such tax liability.

When the Appeals Office issues a Notice Of Determination Concerning Collection Action(s) to a taxpayer following an administrative hearing, section 6330(d)(1) provides that the taxpayer has 30 days following the issuance of such notice to file a petition for review with the Tax Court or, if the Tax Court does not have jurisdiction over the underlying tax liability, with a Federal District Court. See Offiler v. Commissioner [Dec. 53,912], 114 T.C. 492, 497-498 (2000).

Petitioner received notices of deficiency for the taxable years 1983 and 1993 to 1995 and filed petitions for redetermination with the Court challenging those notices. It follows that petitioner is barred under section 6330(c)(2)(B) from challenging the existence or amount of his underlying tax liabilities for 1983 and 1993 to 1995 in this proceeding.⁸ See Goza v. Commissioner, supra at 180-181.

Petitioner's conduct in his earlier deficiency cases at docket Nos. 27411-88, 20474-90, 18627-97, and 6546-00, coupled with his actions in this proceeding, clearly demonstrates that petitioner exploited the collection review procedures primarily for the purpose of delay. As discussed below, petitioner's arguments have absolutely no merit.⁹

Petitioner contends that the Appeals Office failed to verify that all applicable laws and administrative procedures were met. However, the Forms 4340 attached to respondent's Motion for Summary Judgment show that respondent (1) properly assessed the tax liabilities that respondent intends to collect from petitioner, and (2) properly notified petitioner of those assessments by way of notices of balance due. See, e.g., Hughes v. United States [92-1 USTC ¶50,086], 953 F.2d 531, 535-536 (9th Cir. 1992).

Numerous cases establish that no particular form of verification of an assessment is required, that no particular document need be provided to a taxpayer at an administrative hearing conducted under section 6330, and that a Form 4340 (such as those included in this record) and other transcripts of account satisfy the verification requirements of section 6330(c)(1). See Roberts v. Commissioner [Dec. 54,733], 118 T.C. 365, 371 n.10 (2002), affd. [2003-1 USTC ¶50,359] 329 F.3d 1224 (11th Cir. 2003); Nestor v. Commissioner [Dec. 54,655], 118 T.C. 162, 166 (2002); Lunsford v. Commissioner [Dec. 54,553], 117 T.C. 183 (2001).

Petitioner also asserted that his tax liabilities for 1983 and 1993 to 1995 were discharged by the bankruptcy court. The Court has jurisdiction in a collection review proceeding to determine whether the unpaid tax liabilities in dispute were discharged in a bankruptcy proceeding. Washington v. Commissioner [Dec. 55,072], 120 T.C. 114, 120-121 (2003).

The record reflects that, on December 6, 1996 , petitioner voluntarily filed a bankruptcy petition under chapter 7 of the Bankruptcy Code. Although the bankruptcy court issued an order of discharge in that case, petitioner's unpaid tax liabilities for 1983 and 1993 to 1995 were not discharged because petitioner failed to file tax returns for those years. See 11 U.S.C. sec. 523(a)(1)(B)(i) (2000); Swanson v. Commissioner [Dec. 55,280], 121 T.C. 111, 124-125 (2003).

Petitioner's assertion that respondent's motion should be denied on the ground respondent failed to demonstrate that petitioner did not file tax returns for the years in issue is wholly misguided. In particular, at docket No. 27411-88, the Court entered a decision sustaining respondent's determination that petitioner was liable for the addition to tax under section 6651(a)(1) (failure to file a tax return) for 1983. In conjunction with the Court's decision at docket No. 27411-88, we observe that petitioner's Form 4340 for 1983 reflects that the notice of deficiency that respondent issued to petitioner for that year was predicated upon respondent's preparation of a substitute for return. We have held that a substitute for return does not constitute a return of the taxpayer for purposes of 11 U.S.C. sec. 523(a)(1)(B). See Swanson v. Commissioner, supra at 123-124.

In addition, at docket No. 18627-97, the Court entered a decision sustaining respondent's determination that petitioner was liable for additions to tax under section 6651(a)(1) (failure to file a tax return) for the taxable years 1993, 1994, and 1995. Specifically, we held that (1) the tax return that petitioner submitted to respondent for 1993 was invalid, and (2) petitioner failed to submit to respondent a tax return for 1994 or 1995. Howard v. Commissioner [Dec. 53,961(M)], T.C. Memo. 2000-222. Our decisions at docket Nos. 27411-88 and 18627-97 are final and may not be challenged in this proceeding. Sec. 7481(a).

Petitioner has not alleged any irregularity in the assessment procedure that would raise a question about the validity of the assessments or the information contained in the Forms 4340. Moreover, petitioner has failed to raise a spousal defense, make a valid challenge to the appropriateness of respondent's intended collection action, or offer alternative means of collection. These issues are now deemed conceded. Rule 331(b)(4).

The record reflects that the Appeals Office properly verified that all applicable laws and administrative procedures governing the assessment and collection of petitioner's unpaid tax liabilities were met. Accordingly, we hold that the Appeals Office did not abuse its discretion in determining to proceed with collection against petitioner.

B. Levy Upon Appeal

We turn now to respondent's Motion to Permit Levy. As recently discussed in Burke v. Commissioner [Dec. 55,994], 124 T.C. __, __ (2005) (slip op. at 11-13), section 6330(e)(1) sets forth the general rule that respondent may not proceed with collection by levy if an administrative hearing is timely requested under section 6330(a)(3)(B) and while any appeals from such administrative hearing are pending. Section 6330(e)(2) provides an exception to the suspension of the levy imposed under subsection (e)(1) if the person's underlying tax liability is not at issue in the appeal and the Court determines that good cause is shown not to suspend the levy.

We have already concluded that petitioner is barred under section 6330(c)(2)(B) from challenging the existence or amount of his underlying tax liabilities for 1983 and 1993 to 1995 in this proceeding. See Goza v. Commissioner [Dec. 53,803], 114 T.C. at 180. In addition, respondent has shown good cause why the levy should no longer be suspended. In short, as was the case in Burke v. Commissioner, supra, petitioner has used the collection review procedure primarily as a device to needlessly delay collection. Petitioner is no stranger to the Court. As outlined above, he abused the Court's procedures in the deficiency cases at docket Nos. 20474-90, 18627-97, and 6546-00. Petitioner's arguments in this case lacked any merit. Considering all the circumstances, we see no justification for further delaying the collection process. Accordingly, we shall grant respondent's Motion to Permit Levy.

II. Section 6673 Penalty

Section 6673(a)(1) authorizes the Tax Court to require a taxpayer to pay to the United States a penalty not in excess of $25,000 whenever it appears that proceedings have been instituted or maintained by the taxpayer primarily for delay or that the taxpayer's position in such proceeding is frivolous or groundless. We warned taxpayers in Pierson v. Commissioner [Dec. 54,152], 115 T.C. 576, 581 (2000), that abusing the procedural protections afforded by sections 6320 and 6330 by pursuing frivolous lien or levy actions for purposes of delaying the tax payment process would result in sanctions under section 6673(a). As previously mentioned, the Court has imposed penalties on petitioner under section 6673(a) in the prior deficiency proceedings.

As discussed above, petitioner prosecuted this case primarily to delay collection of his unpaid tax liabilities. Petitioner's arguments were devoid of any merit and caused a needless waste of judicial resources. Taxpayers who promptly pay their taxes should not have to bear the cost of Government and tax collection associated with citizens who are unwilling to obey the law or shoulder their assigned share of the Government's cost. This is the third case for this petitioner to result in a section 6673 penalty, the most recent of which, at docket No. 6546-00, imposed a penalty of $7,500. It is appropriate that the amount of such penalty increase where petitioner continues to abuse the judicial process. Accordingly, the Court concludes a section 6673 penalty of $10,000 shall be awarded to the United States in this case.

To reflect the foregoing,

An order and decision will be entered granting respondent's motion to permit levy and motion for summary judgment, and a decision will be entered for respondent which includes the imposition of a penalty under section 6673(a).

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

² The record reflects and/or the parties do not dispute the following background facts.

³ With respect to the taxable years 1989, 1990, and 1991, a case filed by petitioner with this Court and assigned docket No. 18627-97 was dismissed because it was not timely filed. Howard v. Commissioner [Dec. 52,840(M)], T.C. Memo. 1998-300.

⁴ In Howard v. Commissioner [Dec. 53,961(M)], T.C. Memo. 2000-222, we held that a tax return that petitioner had submitted to respondent for 1993 was invalid because it was not properly executed. Although respondent conceded that he improperly entered an assessment of $2,696 against petitioner based upon such return, respondent proved at trial that petitioner was liable for a total deficiency of $5,832, including the $2,696 amount, and a total sec. 6651(a)(1) addition to tax of $1,458.

⁵ The record reflects that respondent subsequently abated all of the originally assessed additions to tax for 1983. The record also shows that in 1991 respondent collected a small portion of the amount due from petitioner for 1983 by levy.

⁶ At the time the petition was filed, petitioner resided in Tucson, Arizona.

⁷ See sec. 7521(a), which provides that an officer or employee of the Internal Revenue Service "shall, upon advance request of such taxpayer, allow the taxpayer to make an audio recording of * * * [an in-person] interview at the taxpayer's own expense and with the taxpayer's own equipment."

⁸ The Court further notes that res judicata would appear to provide an alternative basis for our holding on this point.

⁹ Under the circumstances, petitioner has given us no reason to believe that remanding this matter to respondent's Appeals Office would be productive or otherwise advance the policies underlying sec. 6330. Consistent with our reasoning in Keene v. Commissioner [Dec. 55,213], 121 T.C. 8, 19-20 (2003), and in Kemper v. Commissioner [Dec. 55,214(M)], T.C. Memo. 2003-195, we conclude that a remand is unwarranted.

[Dec. 56,001(M)] David A. Lehmann v. Commissioner.

Dkt. No. 3386-04L , TC Memo. 2005-90, April 25, 2005 .

[Appealable, barring stipulation to the contrary, to CA-9]

[Code Sec. 6303]
Collection proceedings: Notice and demand for payment.

Although an individual may not have received notice and demand for payment required under Code Sec. 6303, he did not deny receiving notices of balance due for the tax years at issue. These notices constituted notice and demand for payment within the meaning of Code Sec. 6303(a).

[Code Sec. 6330]
Collection proceedings: Abuse of discretion: Receipt of notice of deficiency: CDP hearings: Recording.

The IRS's determination to proceed with collection of an individual's tax liabilities was not an abuse of discretion, since the individual did not raise any of the issues that are subject to review in collection proceedings. Although Code Sec. 6330(c)(2)(B) generally entitles taxpayers to raise the issue of an underlying liability if they did not receive a notice of deficiency or otherwise have an opportunity to dispute the liability, the individual here, who did not receive notices of deficiency, was not entitled to proactively prevent delivery of the notices by giving an old address and subsequently failing to inform the IRS of new addresses. Furthermore, although the Appeals officer had refused to allow a stenographer to record the Collection Due Process hearing, whereupon the individual refused to proceed, the Tax Court declined to remand the case. No purpose would be served by a remand or additional hearings; instead, the Tax Court reviewed issues related to the propriety of the collection determination by reviewing the materials before it.

[Code Sec. 6673]
Penalties, civil: Delay penalty: Repeated warnings.

A $2,500 penalty for instituting and maintaining a proceeding primarily for delay was imposed on an individual. The individual appeared at trial with no legitimate evidence or argument in support of his position, despite having been warned that any further proceedings would be justified only in the face of relevant and nonfrivolous issues. He was also aware that sanctions could be applied.

David A. Lehmann, pro se; Jonae A. Harrison, for respondent.

P filed a petition for judicial review pursuant to sec. 6330, I.R.C., in response to a determination by R that levy action was appropriate.

Held: Because P has advanced groundless complaints in dispute of the notice of intent to levy, R's determination to proceed with collection action is sustained.

Held, further, a penalty under sec. 6673, I.R.C., is due from P and is awarded to the United States in the amount of $2,500.

MEMORANDUM FINDINGS OF FACT AND OPINION

WHERRY, Judge: This case arises from a petition for judicial review filed in response to a Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330.¹ The issues for decision are: (1) Whether an oral motion by petitioner to dismiss should be granted, and if not, (2) whether respondent may proceed with collection action as so determined, and (3) whether the Court, sua sponte, should impose a penalty under section 6673.

FINDINGS OF FACT

Some of the facts have been stipulated and are so found. The stipulations of the parties, with accompanying exhibits, are incorporated herein by this reference.

Petitioner did not file Federal income tax returns for the years 1993, 1994, 1995, 1996, and 1997. Petitioner was at all relevant times throughout this period and through the time of trial married to and residing with his wife, Barbara J. Lehmann (Ms. Lehmann). Ms. Lehmann likewise did not file Federal income tax returns for the 1993 through 1997 years. On January 26, 1999 , respondent received from petitioner a letter dated January 22, 1999 , in which petitioner stated: "From now on all letters will be sent to: c/o 2219 West Deer Valley Road #203, Phoenix, Arizona 85027-1919. This address will serve as my 'last known address' for all purposes unless and until I provide you with another address." The letter was sent in petitioner's name only and did not mention or identify his wife.

On October 12, 2000 , two notices of deficiency were issued to petitioner with respect to the years in issue, one for 1993 through 1995 and one for 1996 and 1997.² The notices were sent to the West Deer Valley address indicated in petitioner's letter, and duplicate originals were sent to an address on file with respondent at 3040 East McRae Way, Phoenix, Arizona 85027-4916.³ Both sets were returned as "undeliverable, forwarding order expired". Petitioner did not file a petition with this Court in response to the notices of deficiency, and respondent assessed the taxes, additions to tax, and interest for all 5 years on March 19, 2001 . Notices of balance due were sent to petitioner on that date, as well as on April 23, 2001 .

Subsequently, on September 16, 2002 , respondent issued to petitioner a Final Notice --Notice of Intent to Levy and Notice of Your Right to a Hearing, with regard to the 1993 through 1997 years. Respondent on October 22, 2002 , received from petitioner a Form 12153, Request for a Collection Due Process Hearing, setting forth his disagreement with the proposed collection action, as follows:

(1) There was a failure to determine a deficiency; (2) There was a failure to issue a Notice of Deficiency; (3) Any Notice of Deficiency was void as it included income subject to Final Partnership Administrative Adjustments under TEFRA; (4) There was a failure to generate an assessment list; (5) There was a failure of the Commissioner to certify and transmit the assessment list; (6) There was a failure to record the assessment; (7) failure to provide record of assessment; and, (8) failure to send Notice of Assessment.

By a letter dated January 29, 2003 , the settlement officer to whom petitioner's case had been assigned scheduled a hearing for February 19, 2003 , in Phoenix , Arizona . The letter enclosed copies of Forms 4340, Certificate of Assessments, Payments and Other Specified Matters, for each of the years in issue.

Petitioner appeared for the scheduled conference on February 19, 2003 , accompanied by a stenographer and James Chisholm, who was identified as a witness. The settlement officer advised petitioner that recording and stenography were no longer permitted at collection hearings. He further informed petitioner that they could either proceed without recordation or that a determination could be made based on the information in petitioner's file. Petitioner declined to proceed and instead submitted to the settlement officer a document entitled "Declaration of David Lehmann", which the settlement officer understood petitioner to say asserted the only issues he intended to present. The declaration contained the following five statements, the fourth of which duplicated the second:

1. I received the Notice of Intent to Levy and Notice of Right to a Hearing.

2. I did not receive the Notices of Deficiency for any of the years 1993 through 1997.

3. My wife Barbara Lehmann received Notices of Deficiency for the years 1993 through 1997, dated October 12, 2000 and petitioned Tax Court.

4. I did not receive the Notices of Deficiency for any of the years 1993 through 1997.

5. I did not receive any of the income attributed to my wife in the Notices of Deficiency sent to her.

Respondent, on March 11, 2003 , then issued to petitioner the aforementioned Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330 sustaining the proposed levy action.

Petitioner's petition disputing the notice of determination was filed on February 25, 2004 , and reflected an address in New River, Arizona.⁴ In the petition, petitioner largely repeated contentions made in his Form 12153 and additionally assigned error on the grounds that he was prohibited from recording the collection hearing. Petitioner then prayed that this Court issue an order requiring respondent to show cause why the determination should not be vacated; find the determination arbitrary, capricious, not supported by the evidence, an abuse of discretion, and contrary to law; vacate the March 11, 2003 , determination; and award petitioner costs and fees incurred in the prosecution of this action.⁵

On September 20, 2004 , respondent filed a motion for summary judgment pursuant to Rule 121. Petitioner was directed to file any response to respondent's motion on or before October 1, 2004 . However, upon review of the record, the Court noted certain internal inconsistencies that rendered summary judgment inappropriate.⁶ By order dated September 30, 2004 , the Court denied the motion for summary judgment but warned petitioner as follows:

At the same time, the Court cautions petitioner that some, but not all, of the various issues advanced by petitioner during the administrative process have been repeatedly rejected by this and other courts or are refuted by the documentary record. Moreover, maintenance of similar frivolous arguments has served as grounds for imposition of penalties under section 6673. We admonish petitioner that if he persists in making frivolous and groundless tax protester arguments in any further proceedings with respect to this case, rather than raising relevant issues, as specified in section 6330(c)(2), the Court would be in a position to impose a penalty under section 6673(a)(1). * * *

Several days later, on October 8, 2004 , the Court received from petitioner his response to respondent's motion. Therein, petitioner principally reiterated his position that, on account of the refusal to permit recording of the collection hearing, the underlying notice of determination should be vacated and his case remanded. He asked that the Court deny respondent's motion for summary judgment. The response was filed for the record, and the case proceeded to trial.

The case was called from the calendar of the trial session of the Court in Phoenix , Arizona , on October 18, 2004 . Petitioner at that time submitted a pretrial memorandum that incorporated by reference the legal arguments stated in petitioner's earlier response to respondent's motion for summary judgment but offered no additional reasoning. Petitioner's pretrial memorandum was filed with the Court after respondent indicated no objection to late filing. The case was then heard on October 19, 2004 , and both petitioner and his wife testified.

At the close of trial, petitioner stated: "All I have to say is I move to have this case dismissed on the grounds that they weren't prepared." Presumably, the basis for this statement is that, as a predicate to the admission into evidence as business records of copies of the statutory notices of deficiency underlying the assessments, counsel for respondent requested a brief recess to procure the testimony of a revenue agent. This request was granted, and a revenue agent testified as to the manner in which the documents in petitioner's administrative file were maintained in the regular course of business.

OPINION

I. Oral Motion To Dismiss

As a threshold matter, the Court briefly addresses petitioner's motion to dismiss this case on grounds of respondent's lack of preparedness. Although we agree that counsel for respondent might have been more ready, based on our September 30, 2004 , order, to address inquiries from the Court regarding the notices of deficiency, the need formally to introduce the documents into evidence may have been unanticipated. Counsel quickly responded to the situation by procuring the testimony of a revenue agent. Only very minimal delay ensued, and we do not perceive that petitioner was prejudiced thereby. The Court is aware of no precedent for employing dismissal in such circumstances.

The Court further is satisfied that the testimony of the agent laid a proper foundation for admission of the notices of deficiency under rules 901 and 803(6) of the Federal Rules of Evidence. See also sec. 7453; Rule 143(a). Petitioner's oral motion to dismiss shall be denied.

II. Collection Action

A. General Rules

Section 6331(a) authorizes the Commissioner to levy upon all property and rights to property of a taxpayer where there exists a failure to pay any tax liability within 10 days after notice and demand for payment. Sections 6331(d) and 6330 then set forth procedures generally applicable to afford protections for taxpayers in such levy situations. Section 6331(d) establishes the requirement that a person be provided with at least 30 days' prior written notice of the Commissioner's intent to levy before collection may proceed. Section 6331(d) also indicates that this notification should include a statement of available administrative appeals. Section 6330(a) expands in several respects upon the premise of section 6331(d), forbidding collection by levy until the taxpayer has received notice of the opportunity for administrative review of the matter in the form of a hearing before the Internal Revenue Service Office of Appeals. Section 6330(b) grants a taxpayer who so requests the right to a fair hearing before an impartial Appeals officer.

Section 6330(c) addresses the matters to be considered at the hearing:

SEC. 6330(c). Matters Considered at Hearing. --In the case of any hearing conducted under this section --

(1) Requirement of investigation. --The appeals officer shall at the hearing obtain verification from the Secretary that the requirements of any applicable law or administrative procedure have been met.

(2) Issues at hearing. --

(A) In general. --The person may raise at the hearing any relevant issue relating to the unpaid tax or the proposed levy, including --

(i) appropriate spousal defenses;

(ii) challenges to the appropriateness of collection actions; and

(iii) offers of collection alternatives, which may include the posting of a bond, the substitution of other assets, an installment agreement, or an offer-in-compromise.

(B) Underlying liability. --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 such tax liability or did not otherwise have an opportunity to dispute such tax liability.

Once the Appeals officer has issued a determination regarding the disputed collection action, section 6330(d) allows the taxpayer to seek judicial review in the Tax Court or the U.S. District Court, depending upon the type of tax. In considering whether taxpayers are entitled to any relief from the Commissioner's determination, this Court has established the following standard of review:

where the validity of the underlying tax liability is properly at issue, the Court will review the matter on a de novo basis. However, where the validity of the underlying tax liability is not properly at issue, the Court will review the Commissioner's administrative determination for abuse of discretion. [Sego v. Commissioner [Dec. 53,938], 114 T.C. 604, 610 (2000).]

B. Analysis

1. Appeals Hearing

Hearings conducted under section 6330 are informal proceedings, not formal adjudications. Katz v. Commissioner [Dec. 54,081], 115 T.C. 329, 337 (2000); Davis v. Commissioner [Dec. 53,969], 115 T.C. 35, 41 (2000). There exists no right to subpoena witnesses or documents in connection with section 6330 hearings. Roberts v. Commissioner [Dec. 54,733], 118 T.C. 365, 372 (2002), affd. [2003-1 USTC ¶50,359] 329 F.3d 1224 (11th Cir. 2003); Nestor v. Commissioner [Dec. 54,896(M)], 118 T.C. 162, 166-167 (2002); Davis v. Commissioner, supra at 41-42. Taxpayers are entitled to be offered a face-to-face hearing at the Appeals Office nearest their residence. Where the taxpayer declines to participate in a proffered face-to-face hearing, hearings may also be conducted telephonically or by correspondence. Katz v. Commissioner, supra at 337-338; Dorra v. Commissioner [Dec. 55,517(M)], T.C. Memo. 2004-16; sec. 301.6330-1(d)(2), Q&A-D6 and D7, Proced. & Admin. Regs. Furthermore, once a taxpayer has been given a reasonable opportunity for a hearing but has failed to avail himself or herself of that opportunity, we have approved the making of a determination to proceed with collection based on the Appeals officer's review of the case file. See, e.g., Taylor v. Commissioner [Dec. 55,528(M)], T.C. Memo. 2004-25; Leineweber v. Commissioner [Dec. 55,518(M)], T.C. Memo. 2004-17; Armstrong v. Commissioner [Dec. 54,865(M)], T.C. Memo. 2002-224; Gougler v. Commissioner [Dec. 54,824(M)], T.C. Memo. 2002-185; Mann v. Commissioner [Dec. 54,658(M)], T.C. Memo. 2002-48. Thus, a face-to-face meeting is not invariably required.

Regulations promulgated under section 6330 likewise incorporate many of the foregoing concepts, as follows:

Q-D6. How are CDP hearings conducted?

A-D6. * * * CDP hearings * * * are informal in nature and do not require the Appeals officer or employee and the taxpayer, or the taxpayer's representative, to hold a face-to-face meeting. A CDP hearing may, but is not required to, consist of a face-to-face meeting, one or more written or oral communications between an Appeals officer or employee and the taxpayer or the taxpayer's representative, or some combination thereof. * * *

Q-D7. If a taxpayer wants a face-to-face CDP hearing, where will it be held?

A-D7. The taxpayer must be offered an opportunity for a hearing at the Appeals office closest to taxpayer's residence or, in the case of a business taxpayer, the taxpayer's principal place of business. If that is not satisfactory to the taxpayer, the taxpayer will be given an opportunity for a hearing by correspondence or by telephone. If that is not satisfactory to the taxpayer, the Appeals officer or employee will review the taxpayer's request for a CDP hearing, the case file, any other written communications from the taxpayer (including written communications, if any, submitted in connection with the CDP hearing), and any notes of any oral communications with the taxpayer or the taxpayer's representative. Under such circumstances, review of those documents will constitute the CDP hearing for the purposes of section 6330(b). [Sec. 301.6330-1(d)(2), Q&A-D6 and D7, Proced. & Admin. Regs.]

This Court has cited the above regulatory provisions with approval. See, e.g., Taylor v. Commissioner, supra; Leineweber v. Commissioner, supra; Dorra v. Commissioner, supra; Gougler v. Commissioner, supra.

With respect to the instant matter, the record reflects that petitioner was provided with an opportunity for a face-to-face hearing on February 19, 2003 . The hearing did not proceed when petitioner was not permitted to record the meeting. On July 8, 2003 , in Keene v. Commissioner [Dec. 55,213], 121 T.C. 8, 19 (2003), this Court held that taxpayers are entitled, pursuant to section 7521(a)(1), to audio record section 6330 hearings. The taxpayer in that case had refused to proceed when denied the opportunity to record, and we remanded the case to allow a recorded Appeals hearing. Id.

In contrast, we have distinguished, and declined to remand, cases where the taxpayer had participated in an Appeals Office hearing, albeit unrecorded, and where all issues raised by the taxpayer could be properly decided from the existing record. E.g., id. at 19-20; Frey v. Commissioner [Dec. 55,601(M)], T.C. Memo. 2004-87; Durrenberger v. Commissioner [Dec. 55,552(M)], T.C. Memo. 2004-44; Brashear v. Commissioner [Dec. 55,215(M)], T.C. Memo. 2003-196; Kemper v. Commissioner [Dec. 55,214(M)], T.C. Memo. 2003-195. Stated otherwise, cases will not be remanded to Appeals, nor determinations otherwise invalidated, merely on account of the lack of a recording when to do so is not necessary and would not be productive. See, e.g., Frey v. Commissioner, supra; Durrenberger v. Commissioner, supra; Brashear v. Commissioner, supra; Kemper v. Commissioner, supra; see also Lunsford v. Commissioner [Dec. 54,553], 117 T.C. 183, 189 (2001). A principal scenario falling short of the necessary or productive standard exists where the taxpayers rely on frivolous or groundless arguments consistently rejected by this and other courts. See, e.g., Frey v. Commissioner, supra; Brashear v. Commissioner, supra; Kemper v. Commissioner, supra.

Because no hearing had been conducted at all in petitioner's case and the record contained certain factual ambiguities, we declined to grant respondent's motion for summary judgment. The record as it then existed did not foreclose the possibility that petitioner might have raised valid arguments had a hearing been held. Accordingly, we provided petitioner an opportunity before the Court at the trial session in Phoenix to identify any legitimate issues he wished to raise that could warrant further consideration of the merits of his case by the Appeals Office or this Court.

At trial, the comments of petitioner and his wife focused almost exclusively on petitioner's assertion that he did not receive the notices of deficiency and on corollary matters regarding his address. However, as will be explained in greater detail below, petitioner failed to raise any legitimate substantive issues requiring or justifying additional review under the framework of section 6330. The record therefore does not indicate that any purpose would be served by remand or additional proceedings. The Court concludes that all pertinent issues relating to the propriety of the collection determination can be decided through review of the materials before it.

2. Review of Underlying Liabilities

The evidentiary record establishes that statutory notices determining deficiencies with respect to the 1993, 1994, 1995, 1996, and 1997 taxable years were issued to petitioner. Respondent's records indicate that the notices were returned as undeliverable, forwarding order expired. Petitioner asserts that he never received the notices, and at trial he and his wife testified regarding their various addresses.

In particular, petitioner acknowledged that he wrote and signed the January 22, 1999 , letter communicating the West Deer Valley address. He also failed to identify any subsequent communication providing the Internal Revenue Service with a superseding address. Ms. Lehmann testified explicitly that no superseding letter had been sent to supply new or updated information. Thus, the notices of deficiency were sent in a manner in compliance with, and valid under, section 6212 and corresponding regulations,⁷ requiring that a notice of deficiency be sent to a taxpayer's last known address. Sec. 6212(a) and (b)(1).

Concerning issues bearing on receipt for purposes of section 6330, petitioner initially stated that West Deer Valley was his address as of January 22, 1999 . Then he said he probably moved at about that time. Next, he testified that it had been over 8 years since he and his wife had lived at either the West Deer Valley address or the East McRae Way address. Finally, he stated explicitly that they had "been living at our address we're at now since 1996."

In this connection, the Court notes that the address used by petitioner on his petition and on other papers filed with the Court throughout this proceeding is 48412 North Black Canyon Hwy #252 , New River , Arizona 85087 . However, the address reflected on the notices of deficiency issued to petitioner's wife on October 12, 2000 , and with respect to which a Tax Court petition was filed at docket No. 1008-01, was 22444 North 23rd Avenue or Lane,⁸ Phoenix, Arizona 85027. This address was used by Ms. Lehmann throughout that proceeding, from March of 2001 to September of 2002. At trial in the instant case, Ms. Lehmann testified that she and petitioner lived together during the 1993 through 1997 period and at the time her earlier Tax Court proceedings were underway. She stated that petitioner was aware of those proceedings and discussed them with her. There is also indication in the testimony that petitioner and his wife employed post office boxes at various times, and it is unclear precisely which of the addresses used pertain to boxes as opposed to residences.

Although section 6330(c)(2)(B) generally entitles taxpayers to raise the issue of underlying liability if they did not receive a notice of deficiency or otherwise have an opportunity to dispute the liability, the Court has held that taxpayers cannot defeat actual receipt by deliberately refusing delivery of a statutory notice. Sego v. Commissioner [Dec. 53,938], 114 T.C at 610-611; Tatum v. Commissioner [Dec. 55,125(M)], T.C. Memo. 2003-115; Carey v. Commissioner [Dec. 54,849(M)], T.C. Memo. 2002-209; Baxter v. Commissioner [Dec. 54,545(M)], T.C. Memo. 2001-300. Here, the testimony given at trial suggests that petitioner's communication of the West Deer Valley address to the Internal Revenue Service in January of 1999, and subsequent failure to notify of any new addresses, may have been a deliberate preemptive attempt to prevent delivery of any notice of deficiency. The substantial nature of the relevant tax deficiencies, exceeding $250,000 for each of the years in issue, further enhances the likelihood of this scenario. To the extent that the West Deer Valley address had been outdated for 8 years or "since 1996" at the time of trial in October of 2004, the 1999 letter would have been inaccurate when written. Petitioner would reasonably be considered in such circumstances to have deliberately repudiated his opportunity to contest the notices of deficiency in this Court and likewise now to be precluded from challenging his underlying liability in this proceeding.

Nonetheless, even if petitioner were entitled to contest his underlying liabilities at this juncture, he has at no time offered even a scintilla of evidence that would show error in respondent's determinations. He declined at trial to address in any way the merits of the deficiencies, despite being warned as follows:

you wanted to record your hearing and were not permitted to do so, so you didn't participate in the hearing. This trial is being recorded. This is your chance, your only chance unless I remand the case, to present any and all issues that you wish to raise with respect to your 6330 hearing. And that will be on the record.

Thus, even a de novo review would not avail petitioner, and, moreover, he has now forfeited his chance to suggest any meritorious issues worthy of remand.

3. Review for Abuse of Discretion

Petitioner has also made various arguments relating to aspects of the assessment and collection procedures that we review for abuse of discretion. Action constitutes an abuse of discretion under this standard where arbitrary, capricious, or without sound basis in fact or law. Woodral v. Commissioner [Dec. 53,206], 112 T.C. 19, 23 (1999).

Federal tax assessments are formally recorded on a record of assessment in accordance with section 6203. The Commissioner is not required to use Form 23C in making an assessment. Roberts v. Commissioner [Dec. 54,733], 118 T.C. at 369-371. Furthermore, section 6330(c)(1) mandates neither that the Appeals officer rely on a particular document in satisfying the verification requirement nor that the Appeals officer actually give the taxpayer a copy of the verification upon which he or she relied. Craig v. Commissioner [Dec. 54,933], 119 T.C. 252, 262 (2002); Nestor v. Commissioner [Dec. 54,896(M)], 118 T.C. at 166.

A Form 4340, for instance, constitutes presumptive evidence that a tax has been validly assessed pursuant to section 6203. Davis v. Commissioner [Dec. 53,969], 115 T.C. at 40 (and cases cited thereat). Consequently, absent a showing by the taxpayer of some irregularity in the assessment procedure that would raise a question about the validity of the assessments, a Form 4340 reflecting that tax liabilities were assessed and remain unpaid is sufficient to support collection action under section 6330. Id. at 40-41. We have specifically held that it is not an abuse of discretion for an Appeals officer to rely on Form 4340, Nestor v. Commissioner, supra at 166; Davis v. Commissioner, supra at 41, or a computer transcript of account, Schroeder v. Commissioner [Dec. 54,829(M)], T.C. Memo. 2002-190; Mann v. Commissioner [Dec. 54,658(M)], T.C. Memo. 2002-48, to comply with section 6330(c)(1).

Here, the record contains a Form 4340 for each of the years at issue, indicating that assessments were made for the year and that taxes remain unpaid. Petitioner has failed to cite any irregularities with respect to the Forms 4340 introduced into evidence that would cast doubt on the information recorded thereon.

In addition to the specific dictates of section 6330, the Secretary, upon request, is directed to furnish to the taxpayer a copy of pertinent parts of the record of assessment setting forth the taxpayer's name, the date of assessment, the character of the liability assessed, the taxable period, if applicable, and the amounts assessed. Sec. 6203; sec. 301.6203-1, Proced. & Admin. Regs. A taxpayer receiving a copy of Form 4340 has been provided with all the documentation to which he or she is entitled under section 6203 and section 301.6203-1, Proced. & Admin. Regs. Roberts v. Commissioner, supra at 370 n.7. This Court likewise has upheld collection action where taxpayers were provided with literal transcripts of account (so-called MFTRAX). See, e.g., Frank v. Commissioner [Dec. 55,096(M)], T.C. Memo. 2003-88; Swann v. Commissioner [Dec. 55,078(M)], T.C. Memo. 2003-70. The January 29, 2003 , letter to petitioner from the settlement officer enclosed copies of Forms 4340 for each year.

Petitioner has also denied receiving the "Notices of Assessment", presumably alluding to the notice and demand for payment that section 6303(a) establishes should be given within 60 days of the making of an assessment. However, a notice of balance due constitutes a notice and demand for payment within the meaning of section 6303(a). Craig v. Commissioner, supra at 262-263. The Forms 4340 indicate that petitioner was sent notices of balance due for the tax years involved, and petitioner has never denied receiving these notices.

Thus, with respect to those issues enumerated in section 6330(c)(2)(A) and subject to review in collection proceedings for abuse of discretion, petitioner has not raised any spousal defenses, valid challenges to the appropriateness of the collection action, or collection alternatives. As this Court has noted in earlier cases, Rule 331(b)(4) states that a petition for review of a collection action shall contain clear and concise assignments of each and every error alleged to have been committed in the notice of determination and that any issue not raised in the assignments of error shall be deemed conceded. See Lunsford v. Commissioner [Dec. 54,553], 117 T.C. at 185-186; Goza v. Commissioner [Dec. 53,803], 114 T.C. 176, 183 (2000). For completeness, we have addressed various points advanced by petitioner during the administrative process or before us in Phoenix , but no meritorious items were pursued even in those proceedings. Accordingly, the Court concludes that respondent's determination to proceed with collection of petitioner's tax liabilities was not an abuse of discretion.

III. Section 6673 Penalty

Section 6673(a)(1) authorizes the Court to require the taxpayer to pay a penalty not in excess of $25,000 when it appears to the Court that, inter alia, proceedings have been instituted or maintained by the taxpayer primarily for delay or that the taxpayer's position in such proceeding is frivolous or groundless. In Pierson v. Commissioner [Dec. 54,152], 115 T.C. 576, 581 (2000), the Court warned that taxpayers abusing the protections afforded by sections 6320 and 6330 through the bringing of dilatory or frivolous lien or levy actions will face sanctions under section 6673. The Court has since repeatedly disposed of cases premised on arguments akin to those raised herein summarily and with imposition of the section 6673 penalty. See, e.g., Craig v. Commissioner [Dec. 54,933], 119 T.C. at 264-265 (and cases cited thereat).

With respect to the instant matter, we are convinced that petitioner instituted and maintained this proceeding primarily for delay. Throughout the administrative process and in his petition, petitioner advanced contentions and demands previously and consistently rejected by this and other courts. While his procedural stance concerning recording was correct and his contentions regarding nonreceipt of the notices of deficiency initially gave us pause, his testimony and that of his wife revealed that these matters in petitioner's circumstances posed no legitimate basis for contesting the collection determination. Hence, petitioner ignored the Court's explicit warning that any further proceedings would be justified only in the face of relevant and nonfrivolous issues. Moreover, petitioner was expressly alerted to the potential use of sanctions in his case. Yet he appeared at the trial session in Phoenix without any legitimate evidence or argument in support of his position.

Petitioner therefore received fair warning but has persisted in frivolously disputing respondent's determination. The Court concludes that a penalty of $2,500 should be awarded to the United States in this case. To reflect the foregoing,

An appropriate order and decision will be entered.

¹ Unless otherwise indicated, section references are to the Internal Revenue Code of 1986, as amended, and Rule references are to the Tax Court Rules of Practice and Procedure.

² As will be discussed in greater detail infra in text, separate notices of deficiency for the 1993 through 1997 years were issued to Ms. Lehmann. Ms. Lehmann contested those notices in this Court at docket No. 1008-01. An order of dismissal and decision was entered in that case on Apr. 10, 2002, and was affirmed by the Court of Appeals for the Ninth Circuit. Lehmann v. Commissioner [2003-1 USTC ¶50,509], 63 Fed. Appx. 412 (9th Cir. 2003). This Court takes judicial notice of facts established by the official record in that action.

³ The record contains one original from each set, i.e., the notice for 1993 through 1995 showing the West Deer Valley address and the notice for 1996 and 1997 showing the East McRae Way address. The notice of determination consistently in two places explains the circumstances surrounding issuance of the duplicate original notices, and, taking into account the fact that they were issued on the same date and to the same taxpayer, and signed by the same reviewer, the Court is satisfied that duplicate notices were indeed mailed to each address on Oct. 12, 2000.

⁴ Petitioner initially filed a complaint in the U.S. District Court for the District of Arizona on Apr. 10, 2003. The complaint was dismissed for lack of subject matter jurisdiction on Jan. 21, 2004. Petitioner's petition to this Court arrived in an envelope bearing a postmark of Feb. 20, 2004. See sec. 6330(d)(1).

⁵ The Court notes that to the extent that the petition seeks reasonable administrative and/or litigation costs pursuant to sec. 7430, any such claim is premature and will not be further addressed. See Rule 231.

⁶ Principally, the exhibits accompanying respondent's motion for summary judgment contained conflicting dates for issuance of the underlying notices of deficiency and did not include copies of the notices themselves. For instance, the notice of determination stated at one point that the notices of deficiency were issued on Jan. 10, 2001, and at another point gave a date of mailing of Oct. 12, 2000. As later became clear at trial, certain of the references were inadvertently made to the "Last Day to File a Petition With the United States Tax Court" date stamped on the front of the notices of deficiency, rather than the issuance date, also stamped on the front.

⁷ See supra note 3.

⁸ One notice used "Ave.", while the other used "Lane". Lane was employed on the majority of the documents filed during the proceedings, but the parties indicated at the 2002 trial in that case that avenue was more correct.

[Dec. 56,156(M)] John R. Forrest v. Commissioner.

Dkt. No. 10270-03L , TC Memo. 2005-228, September 29, 2005 .

[Appealable, barring stipulation to the contrary, to CA-4]

[Code Secs. 6330 and 6673]
Collection Due Process hearing : Issues raised at hearing: Tax-protestor type arguments: Penalty imposed. --

The IRS's determination to proceed with a levy to collect an individual's outstanding tax liabilities for four tax years was upheld. The individual had litigated the underlying tax liability for the years at issue; therefore, he could not raise the existence or amount of that liability at a subsequent Collection Due Process (CDP) hearing. Moreover, the only argument the individual made at his CDP hearing was that the federal income tax is unconstitutional. Further, the court imposed a $2,500 delay penalty on the individual. The individual was expressly warned by the IRS that his constitutional argument was groundless and that his persistence might result in a penalty. Related case: J.R. Forrest, 76 TCM 677, Dec. 52,915(M), TC Memo. 1998-369.

John R. Forrest, pro se; Mary Ann Waters, for respondent.

MEMORANDUM OPINION

GALE, Judge: This case is before us on respondent's motion for summary judgment on the question of whether he may proceed with a levy to collect petitioner's outstanding liabilities for income taxes for the taxable years 1991, 1992, 1993, and 1994, and whether a penalty should be imposed on petitioner pursuant to section 6673(a)(1).¹ Petitioner filed a response to respondent's motion, and a hearing was held thereon. Although petitioner's response initially disputed whether respondent had correctly computed interest and penalties for the years at issue, petitioner conceded at the hearing that the computations were correct.

Summary judgment is intended to expedite litigation and avoid unnecessary and expensive trials. Fla. Peach Corp. v. Commissioner [Dec. 44,689], 90 T.C. 678, 681 (1988). Summary judgment may be granted with respect to all or part of the legal issues in controversy "if the pleadings, answers to interrogatories, * * * together with the affidavits, if any, show that there is no genuine issue as to any material fact and that a decision may be rendered as a matter of law". Rule 121(a) and (b); Sundstrand Corp. v. Commissioner [Dec. 48,191], 98 T.C. 518, 520 (1992), affd. [94-1 USTC ¶50,092] 17 F.3d 965 (7th Cir. 1994). The moving party bears the burden of proving that there is no genuine issue of material fact, and factual inferences are drawn in a manner most favorable to the party opposing summary judgment. Dahlstrom v. Commissioner [Dec. 42,486], 85 T.C. 812, 821 (1985); Jacklin v. Commissioner [Dec. 39,278], 79 T.C. 340, 344 (1982).

Background

The parties have stipulated or otherwise do not dispute the following.

At the time of filing the petition in the instant case, petitioner resided in Grimstead , Virginia . Petitioner is a college graduate.

On November 15, 1996 , respondent sent petitioner a notice of deficiency, determining Federal income tax deficiencies for the taxable years 1991, 1992, 1993, and 1994. Petitioner received the notice of deficiency.

On February 7, 1997 , petitioner timely filed a petition with this Court for a redetermination of the deficiency.

On October 9, 1998 , this Court issued an opinion in petitioner's case, see Forrest v. Commissioner [Dec. 52,915(M)], T.C. Memo. 1998-369, followed by entry of decision on October 30, 1998 , sustaining the 1991-94 deficiencies in full and imposing a $500 penalty under section 6673(a)(1) upon petitioner for making frivolous arguments.

Respondent issued a Notice of Balance Due for each of the years 1991 through 1994 on April 26, 1999 .

On May 27, 2002 , respondent sent petitioner a Letter 1058, Final Notice--Intent to Levy and Notice of Your Right to a Hearing, advising petitioner that respondent intended to levy and collect unpaid income tax liabilities for 1991, 1992, 1993, and 1994. Petitioner timely submitted to respondent a Form 12153, Request for a Collection Due Process Hearing, covering the foregoing years. On the Form 12153, petitioner alleged that the proposed levy was invalid for the following reasons:

The United States of America has no valid Constitutional authority to levy any income tax, or self-employment tax, or interest or penalties on those taxes. The 16th Amendment, which appears to grant such authority, is contrary and repugnant to the 10th amendment which allocated 100 percent of all possible rights and powers at the time of its adoption. Any increase in Federal power at the expense of either individual rights or states rights is a violation of the 10th amendment.

On May 20, 2003 , a face-to-face meeting with petitioner was held by an Appeals officer.

On May 29, 2003 , respondent issued a Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330, with respect to petitioner's unpaid liabilities for 1991, 1992, 1993, and 1994. The notice of determination noted that petitioner offered no collection alternatives and presented arguments concerning the underlying tax liabilities that could not be considered, given that petitioner had received a statutory notice of deficiency with respect to the liabilities. The notice concluded that the proposed levy properly balanced the efficient collection of the liabilities with any concerns regarding the intrusiveness of the action and that respondent could proceed with collection. The notice also advised petitioner of the Tax Court's authority to impose a penalty under section 6673 where litigants advance frivolous or groundless positions and of the Appeals officer's view that the positions petitioner had taken in his hearing request and at the hearing were groundless.

On June 30, 2003 , petitioner filed a petition with this Court seeking review of the Appeals officer's determination.

Discussion

Section 6331(a) authorizes the Secretary to levy upon property and property rights of a taxpayer liable for taxes who fails to pay those taxes within 10 days after notice and demand for payment is made. Section 6331(d) provides that the levy authorized in section 6331(a) may be made with respect to any unpaid tax only if the Secretary has given written notice to the taxpayer 30 days before the levy. Section 6330(a) requires the Secretary to send a written notice to the taxpayer of the amount of the unpaid tax and of the taxpayer's right to a section 6330 hearing at least 30 days before any levy is begun.

If a section 6330 hearing is requested, the hearing is to be conducted by Appeals, and, at the hearing, the Appeals officer conducting it must verify that the requirements of any applicable law or administrative procedure have been met. Sec. 6330(b)(1) and (c)(2). The taxpayer may raise at the hearing "any relevant issue relating to the unpaid tax or the proposed levy". Sec. 6330(c)(2)(A). The taxpayer may also raise challenges to the existence or amount of the underlying tax liability at the hearing, but only if the taxpayer did not receive a statutory notice of deficiency with respect to the underlying tax liability or did not otherwise have an opportunity to dispute that liability. Sec. 6330(c)(2)(B).

At the conclusion of the hearing, the Appeals officer must determine whether and how to proceed with collection and shall take into account (i) the verification that the requirements of any applicable law or administrative procedure have been met, (ii) the relevant issues raised by the taxpayer, (iii) challenges to the underlying tax liability by the taxpayer, where permitted, and (iv) whether any proposed collection action balances the need for the efficient collection of taxes with the legitimate concern of the taxpayer that the collection action be no more intrusive than necessary. Sec. 6330(c)(3).

We have jurisdiction to review the Appeals officer's determination where we have jurisdiction over the type of tax involved in the case. Sec. 6330(d)(1)(A); see Iannone v. Commissioner [Dec. 55,618], 122 T.C. 287, 290 (2004). Generally, we may consider only those issues that the taxpayer raised during the section 6330 hearing. See sec. 301.6330-1(f)(2), Q&A-F5, Proced. & Admin. Regs.; see also Magana v. Commissioner [Dec. 54,765], 118 T.C. 488, 493 (2002). Where the underlying tax liability is properly at issue, we review the determination de novo. E.g., Goza v. Commissioner [Dec. 53,803], 114 T.C. 176, 181-182 (2000). Where the underlying tax liability is not at issue, we review the determination for abuse of discretion. Id. at 182. Whether an abuse of discretion has occurred depends upon whether the exercise of discretion is without sound basis in fact or law. See Ansley-Sheppard-Burgess Co. v. Commissioner [Dec. 50,547], 104 T.C. 367, 371 (1995).

In the instant case, it is undisputed that petitioner received a notice of deficiency with respect to the outstanding liabilities for 1991, 1992, 1993, and 1994. Petitioner timely petitioned this Court for a redetermination of the asserted deficiencies, and an opinion and decision ensued which sustained the 1991-94 deficiencies in full and imposed a section 6673 penalty on petitioner. See Forrest v. Commissioner [Dec. 52,915(M)], T.C. Memo. 1998-369. Consequently, petitioner was precluded from disputing the underlying tax liabilities for 1991-94 at his hearing and herein, see sec. 6330(c)(2)(B), and our earlier decision would in any event be res judicata.

The only argument petitioner maintains in opposition to respondent's motion is his contention, raised in his hearing and in the petition, that the liabilities at issue may not be collected because the Federal income tax is unconstitutional.² More specifically, petitioner contends that the 16th Amendment authorizing a direct tax on income is itself unconstitutional because it violates the 10th Amendment. Even if petitioner's argument contained a scintilla of merit (which it does not), it would be unavailing in this proceeding because petitioner is precluded at this point from disputing the underlying tax liabilities. Sec. 6330(c)(2)(B).

The foregoing being petitioner's only argument, and there being no genuine issue as to any material fact, see Rule 121(a) and (b), we conclude that respondent is entitled to summary judgment in his favor on the issue of whether he may proceed with the proposed levy.

In his motion, respondent also seeks imposition on petitioner of a penalty under section 6673(a)(1). We have previously warned taxpayers that penalties under section 6673 may be imposed in lien and levy actions where frivolous or groundless positions are taken. See, e.g., Roberts v. Commissioner [Dec. 54,733], 118 T.C. 365, 372-373 (2002), affd. [2003-1 USTC ¶50,359] 329 F.3d 1224 (11th Cir. 2003); Pierson v. Commissioner [Dec. 54,152], 115 T.C. 576, 581 (2000). Petitioner's argument that the Federal income tax is unconstitutional because the 16th Amendment violates the 10th amendment is patently frivolous,³ and all other arguments he raised at various points in the proceeding are similarly groundless. He was expressly warned in the notice of determination that his constitutional argument was groundless and might result in a penalty under section 6673 in any Tax Court proceeding. He persisted with the argument throughout this proceeding, even after respondent's counsel provided him with authority holding the argument groundless. Moreover, petitioner previously received a $500 penalty under section 6673(a)(1) for making groundless arguments in the deficiency proceeding covering the liabilities at issue herein.

Petitioner's groundless arguments and contumacious conduct have wasted the time and resources of respondent and this Court. While a more substantial penalty may be warranted, we shall impose a penalty pursuant to section 6673(a)(1) of $2,500, in light of the relatively modest size of the liabilities at issue. Petitioner is hereby warned, however, that should he advance frivolous or groundless arguments in this Court in the future, more severe penalties may be imposed.

To reflect the foregoing,

An appropriate order and decision will be entered for respondent.

¹ Unless otherwise noted, all section references are to the Internal Revenue Code of 1986, as amended, and all Rule references are to the Tax Court Rules of Practice and Procedure.

² Petitioner also argued in his petition that he did not receive notice of the assessment of the liabilities at issue, but did not renew that argument in his opposition to respondent's motion. Assuming arguendo the argument has not been abandoned, this claim is unavailing. The notice of intent to levy, receipt of which by petitioner is undisputed, was sufficient to satisfy the notice requirements of sec. 6303(a). Hughes v. United States [92-1 USTC ¶50,086], 953 F.2d 531, 536 (9th Cir. 1992); Standifird v. Commissioner [Dec. 54,889(M)], T.C. Memo. 2002-245, affd. [2003-2 USTC ¶50,652] 72 Fed. Appx. 729 (9th Cir. 2003).

Finally, petitioner argued, for the first time at the hearing on respondent's motion, that sec. 6330 did not apply to this case because the statute was enacted after the deficiencies for 1991-94 had been determined and assessed. Even if petitioner were permitted to raise the issue at this point, it is devoid of merit. Sec. 6330 applies to collection actions commenced 180 days after its July 22, 1998, enactment, or Jan. 18, 1999. The collection action in this case commenced on May 27, 2002.

³ See, e.g., Harrell v. Commissioner [99-2 USTC ¶50,810], 191 F.3d 456 (7th Cir. 1999), affg. without published opinion [Dec. 52,735(M)] T.C. Memo. 1998-207.