6330 Annotations: Judicial Review of Appeals Determinations: Appeal Filed in Wrong Court- Levy

Notice of Levy and Right to Hearing: Judicial Review of Appeals Determinations: Appeal Filed in Wrong Court

[2001-2 USTC ¶50,507] Earl Sherod, Plaintiff v. Commissioner of Internal Revenue, Defendant

U.S. District Court, Dist. Utah , Cent. Div., 2:00CV411K, 4/4/2001 , 2001 U.S. Dist. LEXIS 6331.

[Code Secs. 6330 and 7402 ]

Jurisdiction: Redetermination: Collection due process hearing: Tax Court v. federal district court: Service of process.--Jurisdiction was lacking over a pro se individual's suit seeking a redetermination of his tax liabilities prior to the government's issuance of a tax levy. The government had no record of being served with the petition for judicial review; thus, the suit was dismissed for insufficiency of service of process. Moreover, the taxpayer improperly filed his suit in a federal district court. Pursuant to Code Sec. 6330 , the Tax Court has exclusive jurisdiction to review taxpayer challenges to an IRS administrative decision at a collection due process hearing. Because the taxpayer filed his appeal with the wrong court, he had 30 days from the date of the suit's dismissal in which to appeal the adverse collection decision with the Tax Court.

Earl G. Sherod, Orem, Utah., pro se. Anita Machhar, Department of Justice, Washington, D.C. 20530, for defendant.

ORDER AFFIRMING REPORT & RECOMMENDATION

KIMBALL, District Judge:

This matter is before the court on Defendant's Motion to Dismiss Plaintiff's petition for review of a determination by the Internal Revenue Service. This case was assigned to United States District Court Judge Dale A. Kimball, who then referred it to United States Magistrate Judge Samuel Alba under 28 U.S.C. §636(b)(1)(B). On March 15, 2001 , Judge Alba issued a Report and Recommendation, recommending that the United States ' motion to dismiss for lack of subject matter jurisdiction be granted and that plaintiff be given notice that he has thirty days from entry of any order affirming the magistrate's recommendation to file an appeal with the Tax Court. No objection has been filed to the Report and Recommendation.

The court has reviewed the file de novo. The court approves and adopts the Magistrate Judge's Report and Recommendation in its entirety. Accordingly, this case is hereby DISMISSED for lack of subject matter jurisdiction and Plaintiff is notified that he has thirty days from the date of this order to file his appeal with the Tax Court.

REPORT AND RECOMMENDATION

PROCEDURAL HISTORY

ALBA, Magistrate Judge: A complaint was initially filed in this case on May 18, 2000 , and the matter was assigned to United States District Judge Dale A. Kimball. (File Entry #1.) On May 19, 2000 , an order of reference was signed by Judge Dale A. Kimball, pursuant to 18 U.S.C. §636(b)(1)(B), and the matter was referred to Magistrate Judge Samuel Alba. (File Entries #2 and #3.) On August 30, 2000 , a motion was filed by defendant Commissioner of the Internal Revenue Service to dismiss the case for lack of subject matter jurisdiction, alleging that the case had been improperly filed in the United States District Court and should be filed in the Tax Court. (File Entry #4.) On September 26, 2000 , the undersigned magistrate signed an order to show cause directed to the plaintiff to respond in writing on or before October 15, 2000 , to show cause why defendant's motion to dismiss should not be granted. Plaintiff was put on notice that failure to respond would be taken as an indication that the plaintiff did not wish to continue to prosecute this matter and the motion to dismiss would be granted. (File Entry #5.)

On October 13, 2000 , plaintiff filed with the court a request for transfer for want of jurisdiction and a request for an evidentiary hearing. Specifically, the plaintiff requested that the action was "mistakenly filed into 'United States District Court,' and petitioner requests transfer to the ' United States district court.' " (File Entry #6.) A notice of hearing was mailed to the parties scheduling the matter for oral argument on the defendant's motion to dismiss the case for lack of subject matter jurisdiction for November 16, 2000 , at 9:00 am . (File Entry #8.) On that date, the plaintiff appeared pro se and Anita Machhar, counsel for the Department of Justice, appeared for the defendant. The court heard arguments from the parties and ordered a transcript of the proceedings. The transcript was prepared and is attached to this Report and Recommendation.

LEGAL ANALYSIS

The thrust of the government's argument is that the petition has been filed in the wrong court. The government also argues that the plaintiff in this matter has improperly served the United States . The court would deal with these issues individually.

Rule 4 of the Federal Rules of Civil Procedure describes the method in which service of a complaint is to be properly made. Specifically, Rule 4(i) outlines the procedures to be followed when serving the United States . This portion of the rule provides that a summons and a complaint must be delivered personally or sent by certified or registered mail to the United States Attorney for the District in which the action is brought, and by serving a copy of the summons and complaint by registered or certified mail to the Attorney General of the United States in Washington, D. C. A review of the certificate of service appended to the petition for judicial review filed by plaintiff in this matter, discloses that the petition for judicial review was served on the Clerk of the Court, Markus B. Zimmer, at 350 South Main Street, Salt Lake City, Utah 84101, and upon Wilcy Davis, Associate Chief Rocky Mountain Appeals, c/o Lavada J. Harmon, I.D. 84-00937, 1244 Spear Boulevard, Denver, Colorado 80204-3581. (File Entry #1.)

Ms. Machhar, on behalf of the government at oral argument, represented to the court that she had contacted the United States Attorney's office and they had no record of being served with the petition for judicial review by the plaintiff in this matter. (Tr. at p. 5.) Based on the above, the petition filed by plaintiff in this matter should be dismissed for insufficiency of service of process, pursuant to Rule 12(b)(5) of the Federal Rules of Civil Procedure.

The government also argues that the petition filed in this case has been filed in the wrong court. The Internal Revenue Service Restructuring and Reform Act of 1998 includes two new provisions, codified at 26 U.S.C. §§6320 and 6330 to provide additional protections for taxpayers. Section 6320 deals with liens, and §6330 with levies. At issue before this court is §6330, which provides that prior to the issuance of an administrative tax levy, the IRS must give the taxpayer notice of and the opportunity for an administrative review of the matter in the form of an appeals office due process hearing. Id. at §6330(a)(b). Subsections (c) and (d) of the statute outline the issues that can be raised in such a hearing and the means for obtaining judicial review if the taxpayer is dissatisfied with the determination made at that hearing. By letter dated April 20, 2000 , the IRS informed Mr. Sherod after receiving such a hearing, pursuant to 26 U.S.C. §6330 of its determination. (Exhibit A to File Entry #1, the Petition for Judicial Review.)

Title 26 U.S.C. §6330(d)(1) provides that a taxpayer may seek judicial review of any determination by filing a petition with the tax court within thirty days of the determination being made. It is clear that plaintiff is challenging his income tax liability as determined by the IRS and therefore under 26 U.S.C. §6330(d)(1)(B) the Tax Court has exclusive jurisdiction. Johnson v. CIR [2000-2 USTC ¶50,591], 86 A.F.T.R.2d 2000-5225(1). Or, June 21, 2000 ). The petition for judicial review which has been filed with this court has been done so improperly. This court lacks subject matter jurisdiction and under Rule 12(b)(1) of the Federal Rules of Civil Procedure, this matter should be dismissed.

It is important to note, however, that the taxpayer still has a remedy if this court finds that he has filed with the incorrect court. 26 U.S.C. §6330(d) provides "If a court determines that the appeal was to an incorrect court, a person shall have 30 days after the court determination to file such appeal with the correct court." This court hereby recommends to the United States District Court that upon adoption of this Report and Recommendation the taxpayer should be given notice that he has thirty days from the date of dismissal of his action in this court to file an appeal with the Tax Court.

RECOMMENDATION

Based on the foregoing, it is hereby recommended that the United States ' motion to dismiss be granted and that the taxpayer, plaintiff, be notified that he has thirty days from the entry of such dismissal in this court in which to file his appeal with the Tax Court.

Copies of the foregoing Report and Recommendation are being mailed to the parties who are hereby notified of their right to object to the same. The parties are further notified that they must file any objections to the Report and Recommendation with the clerk of the district court, pursuant to 28 U.S.C. §636(b), with ten (10) days after receiving it. Failure to file objections may constitute a waiver of those objections on subsequent appellate review.

[2001-2 USTC ¶50,703] Elliot P. Geller, Plaintiff v. United States of America , Defendant

U.S. District Court, So. Dist. Ohio , East. Div., at Columbus , C2-00-1116, 9/25/2001

[Code Secs. 6330 and 7442 ]

District court: Jurisdiction: Collection Due Process hearing: Appeal to incorrect court.--The government was entitled to partial dismissal of a pro se individual's appeal of determinations made at his administrative collection due process (CDP) hearing that he failed to properly file in the Tax Court. The taxpayer sought judicial review of an adverse decision at the CDP hearing that disposed of his objections to IRS collection actions. Although his complaint set forth claims for tax years not raised at the administrative hearing due to his clerical error, even if the error were corrected under liberal pro se pleading standards, his appeal to the district court was improper. The taxpayer had 30 days after the determination that his appeal was made to the incorrect court to file it with the Tax Court.

[Code Sec. 6330 ]

Collection Due Process hearing: Procedures: Abuse of discretion.--An individual failed to allege facts to support a finding that an Appeals officer at his Collection Due Process (CDP) hearing abused his discretion. Notices of determination received by the taxpayer indicated that the IRS complied with applicable law and procedures, and that the objections raised by the taxpayer were properly considered. The Appeals officer also found that collection by levy was appropriate under the circumstances. There was no evidence of error by the Appeals officer, and his judgment was affirmed.

OPINION AND ORDER GRANTING DEFENDANT'S MOTIONS TO DISMISS

MARBLEY, District Judge:

This matter comes before the Court on the Defendant's Motion for Partial Dismissal and for Judgment Affirming the Administrative Decision of the Appeals Officer of the Internal Revenue Service (IRS). The Plaintiff, Elliott P. Geller, proceeding pro se, seeks judicial review of an adverse IRS decision that disposed of his objections to IRS collection efforts. The Defendant, the United States of America , has moved for partial dismissal of the Plaintiff's Complaint, arguing that this Court lacks subject matter jurisdiction to hear the action because the Complaint sets forth claims for tax years not raised at the administrative hearing. As to the remainder of the Complaint, the Defendant seeks judgment affirming the IRS's administrative determinations.

For the following reasons, the Defendant's Motion For Partial Dismissal is GRANTED and the administrative decision of the Internal Revenue Service is AFFIRMED.

I. FACTUAL AND PROCEDURAL BACKGROUND

Since the Court is considering the Defendant's Motion for Partial Dismissal, it will view the facts in the light most favorable to the Plaintiff.

Section 6331 of Title 26 of the United States Code provides, inter alia, that if any person liable to pay any tax neglects or refuses to do so within 10 days after notice and demand for payment, the IRS is authorized to collect such tax by levy upon property belonging to the taxpayer. 26 U.S.C. §6331 (1994). Before proceeding with the collection by way of levy, however, the IRS must provide the taxpayer notice of the right to a hearing on the matter. Id. §6330(a).

The taxpayer has a right, within 30 days of the section 6330 notice, to request a hearing with the IRS Office of Appeals. Id. §6330(a)(3)(B). At the hearing, the taxpayer may raise any issue relevant to the unpaid tax and the proposed levy, including challenges to the propriety of the levy and offers of collection alternatives. Id. §6330(c)(2). The impartial IRS Appeals Officer who conducts the hearing must then formulate his or her determination based on: (1) the verification that the requirements of any applicable law or administrative procedure have been met; (2) the issues raised by the taxpayer; and (3) the proper balance between the need for efficient tax collection and the legitimate concern that any collection action be no more intrusive than necessary. See id. §6330(c)(3).

Following the hearing, the Appeals Officer sends a Notice of Determination to the taxpayer that summarizes the matters raised during the hearing and responds to any offers or objections made by the taxpayer. If the taxpayer is dissatisfied with the administrative determination, he may seek judicial review within 30 days of the Notice being issued either in the Tax Court or the appropriate United States District Court, if the Tax Court does not have jurisdiction over the underlying tax liability. 26 U.S.C. §6330(d)(1). Review must be limited to matters actually raised at the administrative hearing. Temp. Treas. Reg. §301.6330-1T(f) (2001).

Here, after the Plaintiff received an IRS Notice of Intent to Levy, dated July 29, 1999 , he sought and obtained an administrative hearing. Following the hearing, the Appeals Officer of the Columbus , Ohio , Appeals Office issued Notices of Determination sustaining the IRS's planned collection activities and rejecting the Plaintiff's objections. Specifically, the Plaintiff received two separate Notices of Determination detailing the government's plan to levy upon the Plaintiff's property in order to satisfy his outstanding tax obligations, which include payroll taxes for various quarterly tax periods, a penalty for failure to file information returns, and income tax liabilities for the tax periods ending in 1993 and 1995. The Notice addressing Plaintiff's non-income tax liabilities informed him that an appeal of those matters should be directed to the appropriate United States District Court. The second Notice, which addressed the income tax liabilities for 1993 and 1995, instructed the Plaintiff to appeal to the United States Tax Court.

On September 25, 2000 , the Plaintiff filed the present complaint. Without alleging any specific factual or legal error by the Appeals Officer, the Plaintiff seeks re-determination of the IRS's administrative decision to levy on his property. The Plaintiff raises several non-income tax liabilities for review by referencing all of the matters ruled upon by the Appeals Officer. He also raises for review income tax periods ending on December 31, 1993 and December 31, 1983 , by hand writing them on the face of the Complaint.

II. STANDARDS OF REVIEW

At the outset, the Court notes that, with respect to a Rule 12(b)(1) motion, the pleadings of a pro se litigant are held to "less stringent standards than formal pleadings drafted by lawyers." Haines v. Kerner, 404 U.S. 519, 520 (1972); Williams v. Browman, 981 F.2d 901, 903 (6th Cir. 1992) (recognizing the rule that pro se pleadings should be construed more liberally than pleadings drafted by lawyers). The Court will, therefore, view Plaintiff's pro se complaint pursuant to this less stringent standard.

A. SUBJECT MATTER JURISDICTION

It is well-settled that "where subject matter jurisdiction is challenged under Rule 12(b)(1), . . . the plaintiff has the burden of proving jurisdiction in order to survive the motion." Rogers v. Stratton Indus., 798 F.2d 913, 915 (6th Cir. 1986). In the context of a Rule 12(b)(1) motion, "[a] court may dismiss a complaint only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Hishon v. King & Spaulding, 467 U.S. 69, 73 (1984). Thus, a Rule 12(b)(1) motion to dismiss will be granted only if, taking as true all facts alleged by the plaintiff, the court is without subject matter jurisdiction to hear the claim.

B. ADMINISTRATIVE DETERMINATION

While Section 6330(d) clearly provides for judicial review of the IRS's administrative determinations, the statute is silent with respect to the standard of review that the reviewing court must apply. The issue is discussed, however, in the conference report accompanying the IRS Restructuring Act. In cases where the validity of the tax liability itself was properly at issue in the hearing, the administrative determination will be reviewed by the appropriate court on a de novo basis. Where the validity of the underlying tax liability is not properly part of the appeal, the taxpayer may challenge the determination for abuse of discretion. H.R. CONF. REP. NO. 105-599, at 266 (1998); Goza v. Comm'r of Internal Revenue [CCH Dec. 53,803], 114 T.C. 176, 181-182 (2000) (concluding that a court must review the IRS officer's determinations using an abuse of discretion standard when the validity of the tax liability itself is not at issue); MRCA Information Services v. United States [2000-2 USTC ¶50,683], 145 F.Supp.2d 194, 199 (D. Conn. 2000) (same).

In his Complaint, the Plaintiff has alleged no facts specifically challenging the validity of his tax liability. The Court assumes, therefore, that Plaintiff's Complaint is based on a dispute over the IRS's proposed collection tactics, not the underlying liability. To resolve a collection dispute, the appropriate standard of review is abuse of discretion. Under the abuse of discretion standard, a determination will be affirmed unless the Court is left with a "definite and firm conviction" that a clear error of judgment has occurred. Cincinnati Insurance Company v. Byers, 151 F.3d 574, 578 (6th Cir. 1998).

III. DISCUSSION

The Court will separately consider the government's Motion for Partial Dismissal and its request that the IRS's administrative determinations be affirmed.

A. MOTION FOR PARTIAL DISMISSAL

A reviewing court may only consider issues raised at the taxpayer's administrative hearing. 26 C.F.R. §301.6330-1T(f) (2001). Here, the Defendant moves for partial dismissal, asserting that this Court lacks subject matter jurisdiction to review the handwritten claims contained in the Plaintiff's Complaint because they refer to tax periods not covered by the Notices of Determination. The Plaintiff counters that through mere clerical error, 1985 was written instead of 1995.

Normally, a clerical error would not be sufficient to defeat a pro se complaint. Even under the liberal standard by which they are reviewed, however, pro se complaints must satisfy basic pleading essentials, such as subject matter jurisdiction. Wells v. Brown, 891 F.2d 591, 594 (6th Cir. 1989) (dismissing a pro se complaint brought under §1983 because the plaintiffs failed to specify in the complaint that they were suing state defendants in their individual capacities). In this case, even if the clerical error is corrected, thus changing the Complaint to seek review of the income tax periods ending December 31, 1993 and December 31, 1995 , the Plaintiff's appeal is not properly before this Court. The Tax Court has jurisdiction over income tax issues and liabilities. Temp. Treas. Reg. §301.6330-1T(f)(2). Because 26 U.S.C. §6330(d)(1) makes appeal to the district court proper only when the Tax Court lacks jurisdiction of the underlying liability, this appeal should have been made to the Tax Court, not to this Court. See Diefenbaugh v. Weiss, 234 F.3d 1267 (6th Cir. 2000) (unpublished opinion) (holding that if the §6330 appeal involves income tax issues, the district court does not have jurisdiction to hear the case). Additionally, the Notice of Determination covering those income tax periods explicitly stated that a petition for re-determination must be filed with the Tax Court.

This Court notes, however, that the Plaintiff is not without recourse. Section 6330(d)(1) provides that if a court determines that an appeal was made to the incorrect court, a person shall have 30 days after the court determination to file such appeal with the correct court. 26 U.S.C. §6330.

Accordingly, as to tax periods ending December 31, 1993 and December 31, 1995 , this Court lacks subject matter jurisdiction and the Defendant's Motion For Partial Dismissal is GRANTED.

B. ADMINISTRATIVE HEARING DETERMINATIONS

As for the remainder of the Complaint, the Plaintiff has not alleged any facts to support a finding of abuse of discretion. As previously discussed, the Appeals Officer must base his decision on three factors: (1) the verification that the requirements of any applicable law or administrative procedure have been met; (2) the issues raised by the taxpayer; and (3) the balance between the need for efficient tax collection and the legitimate concern of the person that any collection action be no more intrusive than necessary. 26 U.S.C. §6330(c)(3).

The Notices of Determination received by the Plaintiff indicate that the IRS complied with applicable law and procedures. Specifically, the Notice reflects that the requirements regarding notice to the taxpayer, the taxpayer's opportunity to raise relevant objections at a hearing, and the absence of any prior involvement by the Appeals Officer were all considered and found in compliance with section 6330. The Notices of Determination further reflect that the objections raised by the Plaintiff at his administrative hearing were duly considered. In fact, the Plaintiff does not dispute that he was afforded an opportunity to raise objections at the administrative hearing or that his claims were fairly considered.

Although a levy upon property may be an intrusive collection tactic, the Appeals Officer considered the Plaintiff's objections and balanced his concerns against the need for efficient tax collection. The Appeals Officer found that the tax liability was correct and that the collection method was appropriate under the circumstances. Furthermore, the Notice of Determination specifically states that the Plaintiff was given an opportunity to offer alternative collection methods and failed to do so.

On the facts of this case, the Court finds it impossible to conclude that the Appeals Officer committed clear legal error. Because there is no evidence of error in judgment by the Appeals Officer, nor any specific allegation by the Plaintiff that would support a finding of abuse of discretion, the Judgment of the Appeals Officer is hereby AFFIRMED.

IV. CONCLUSION

For the foregoing reasons, Defendant's Motions For Dismissal is GRANTED, and the and judgment of IRS administrative Appeals Officer is AFFIRMED.

IT IS SO ORDERED.

[2002-1 USTC ¶50,194] Dogwood Forest Rest Home, Inc., Plaintiff v. United States of America, Defendant Faiger M. Blackwell, d/b/a Occasions, and Blackwell Chapman Inc., Plaintiffs v. United States of America, Defendant

U.S. District Court, Mid. Dist. N.C., 1:00CV370, 12/28/2001, 181 F. Supp. 2d 554, 181 FSupp2d 554

[Code Secs. 6330 and 6404 ]

Jurisdiction: Appeal from Collection Due Process hearing: Abatement of interest: District court v. Tax Court.--The propriety of the IRS's refusal, following a Collection Due Process hearing, to abate interest on delinquent taxes owed by a group of corporations could not be determined by the federal district court. The Tax Court has exclusive jurisdiction to review interest abatement issues.

[Code Secs. 6651 and 6656 ]

Penalties, civil: Corporations: Failure to file returns: Failure to timely make tax deposits: IRS refusal to abate penalties: Reliance on accountant: Reasonable cause: Willful neglect: Appeal from Collection Due Process hearing.--Three corporations unsuccessfully challenged the IRS's refusal, following a Collection Due Process hearing, to abate penalties imposed against them due to their failure to file corporate returns and make tax deposits. The entities' purported reliance on the accountant hired to oversee their business records and file their returns did not relieve them of liability for the penalties. Through their shareholder, they retained control over the accountant's actions and had the authority to oversee his work and terminate his employment if necessary. Although they might not have exhibited willful neglect in relying on the accountant, they lacked reasonable cause for failing to timely file returns and deposit taxes because they did not exercise ordinary business care and prudence. R.W. Boyle (SCt), 85-1 USTC ¶13,602 , followed.

MEMORANDUM OPINION

TILLEY, District Judge:

This case is before the Court on Defendant's Motion for Summary Judgment [Doc. #13]. For the reasons set forth below, the Defendant's motion is GRANTED.

I.

The facts in the light most favorable to the plaintiff are as follows. ¹ Faiger Blackwell established two assisted living facilities, Dogwood Forest and Blackman Chapman, and a banquet facility, Occasions, in North Carolina . Mr. Blackwell was the sole shareholder of these three businesses during all times relevant to the instant litigation.

In 1993, Mr. Blackwell engaged the services of Maurice Hamilton as the accountant for his businesses. Mr. Hamilton was a certified public accountant in Raleigh , North Carolina . Mr. Hamilton was supposed to keep the business records and ensure that all tax returns and deposits were timely made. In an effort to facilitate Mr. Hamilton's work, Mr. Blackwell granted Mr. Hamilton power of attorney and gave Mr. Hamilton a rubber stamp with Mr. Blackwell's signature. Mr. Blackwell trusted that Mr. Hamilton would file the proper paperwork to keep the taxes current. Because Mr. Hamilton had the authority to stamp tax returns, Mr. Blackwell did not see any 941 forms from 1995 through 1998. Instead, Mr. Blackwell relied on Mr. Hamilton to calculate and file all tax liabilities.

In 1997, Mr. Hamilton advised Mr. Blackwell to hire an in-house accountant to ensure that Mr. Hamilton was receiving all necessary paperwork. Mr. Blackwell subsequently hired Ann Holland to assist Mr. Hamilton. Ms. Holland, an accountant herself, was supposed to ensure that Mr. Hamilton received all necessary information to calculate and file taxes. Mr. Blackwell believed that Mr. Hamilton and Ms. Holland were working together to file all necessary tax documents and pay all necessary tax liabilities. During Ms. Holland's employment, Mr. Hamilton retained his power of attorney and was charged with filing and stamping the business tax returns and deposits.

Unfortunately, Mr. Hamilton and Ms. Holland did not file the appropriate tax returns and did not make the required tax deposits. Due to Mr. Hamilton's failure to file tax returns and deposits, Dogwood Forest , Blackman Chapman and Occasions were all delinquent for tax liabilities for several years. By 1998, Dogwood Forest was indebted for employment tax liabilities for the last quarter of 1995, the last quarter of 1996, the first three quarters of 1997 and the first three quarters of 1998. Furthermore, Dogwood Forest was delinquent in its unemployment tax liability for 1997. Blackwell Chapman was similarly delinquent, with an unpaid employment tax liability for the last quarter of 1995, the last quarter of 1996, the first three quarters of 1997, and the first three quarters of 1998. Blackwell Chapman was also delinquent in its unemployment tax liabilities for 1997. Finally, Occasions was indebted for employment tax liabilities for the second and third quarters of 1996 and the last three quarters of 1997. Occasions was also indebted for its unemployment tax liabilities during 1996 and 1997. ²

Mr. Blackwell was ignorant of these tax liabilities until August, 1998 when an Internal Revenue Service (IRS) official visited him at his office. The official informed Mr. Blackwell about the delinquencies and advised him of his obligation to pay the liabilities. Mr. Blackwell contacted Mr. Hamilton who assured Mr. Blackwell that all necessary returns and deposits had been made. After Mr. Hamilton failed to provide Mr. Blackwell with the financial records to demonstrate proper filing and payments, Mr. Blackwell became suspicious. Mr. Blackwell repeatedly attempted to get financial records from Mr. Hamilton to no avail and hired an outside employment agency and began leasing his employees. Furthermore, Mr. Blackwell hired Mr. Cooper to oversee the financial records and, eventually, Mr. Burke as the new accountant.

Although Mr. Blackwell was surprised by the revelation that his businesses were delinquent in filing tax returns and depositing unemployment taxes, he did not immediately take action to pay the liabilities. As a result, the IRS issued notices of intent to levy to Dogwood Forest , Blackwell Chapman and Occasions on January 26, 1999 . At the time the notices were sent, Dogwood Forest 's indebtedness totaled $195,792.26, Blackwell Chapman's indebtedness totaled $208,154.01, and Occasions indebtedness totaled $68,397.13. These totals include liabilities, interest, and penalties.

In response to the notices, all three businesses requested a Collection Due Process on February 25, 1999 pursuant to 26 U.S.C. §§6651 and 6656. In the request, each business stated that:

"The Taxpayer disagrees with the Notice of Levy and requests a hearing regarding the same because such action would impose a severe hardship on the Taxpayer and would substantially impede the Taxpayer's ability to garner the resources necessary to liquidate the taxes ultimately determined to be due and owing to the Internal Revenue Service. In addition, the Taxpayer hereby requests (sic) the opportunity to explain the extenuating circumstances which led to the Taxpayer owing certain amount to the Internal Revenue Service, which extenuating circumstances the Taxpayer believes will demonstrate a reasonable basis for an offer in compromise."

The severe hardship that the businesses reference apparently involves Mr. Blackwell's ability to procure a loan to pay the tax liabilities. See Faiger Blackwell Dep. at 55-56.

The Collection Due Process hearings were all held together on November 24, 1999 . During the hearings, the plaintiffs requested an abatement of the penalties and interest for the tax liability. The plaintiffs did not, however, challenge the merits of the underlying case, only the propriety of the interest and penalty assessments. On March 13, 14 and 16 of 2000, the IRS issued Notices of Determination regarding the plaintiff's challenges to the penalties and interest and use of a levy to collect the taxes and liabilities. The IRS declined to abate the interest and penalties and determined that a levy was not unduly intrusive and was commensurate with the need to efficiently collect the tax liabilities.

Dogwood Forest , Blackwell Chapman and Occasions timely filed complaints on April 12 and 13 of 2000 for review of the IRS's determinations. Plaintiffs contended that they had reasonable cause for not timely filing and depositing the taxes because Mr. Hamilton's failure to complete his duties. Upon filing the complaints, the plaintiffs paid a substantial amount of the tax liabilities. On December 21, 2001 , the court consolidated the cases.

II.

Before the IRS may levy to collect tax liabilities, taxpayers have the right to an administrative hearing. 26 U.S.C.A. §6330 (West Supp. 2001). The taxpayer may challenge the levy as the appropriate collection method and may also challenge the existence or amount of the liability if the hearing was the first opportunity for the taxpayer to challenge the existence or amount. 26 U.S.C. §§6330(c)(2)(a) and (c)(2)(B) (West 2001). In the instant case, the plaintiffs did have an administrative hearing in which they unsuccessfully attempted to persuade the IRS to abate the penalties and interest. The plaintiffs subsequently filed this case to review the IRS's administrative decision pursuant to §6330(d)(1) which states that such decisions are subject to judicial review. §6330(d)(1) states that a district court of the United States has jurisdiction over such a dispute if the Tax Court does not have jurisdiction, 26 U.S.C.A. §6330(d)(1) (West Supp. 2001).

Although the United States does not challenge this court's jurisdiction over abatement of penalties, ³ it does assert that the Tax Court has sole jurisdiction over abatement of interest issues. 26 U.S.C. §6404(i) states:

"[t]he Tax Court shall have jurisdiction over any action brought by a taxpayer who meets the requirements referred to in section 7430(c)(4)(A)(ii) to determine whether the Secretary's failure to abate interest under this section was an abuse of discretion, and may order an abatement, if such action is brought within 180 days after the date of the mailing of the Secretary's final determination not to abate such interest."

26 U.S.C. §6404(i) (West Supp. 2001).

The United States contends that, due to this statutory provision, the Tax Court has exclusive jurisdiction over abatement of interest issues. The United States ' position gains support not only from the text of the statute, but also from a myriad of district court and Tax Court decisions. See Estate of Kunze v. Commissioner [2000-2 USTC ¶50,848], 233 F.3d 948, 950 (7th Cir. 2000) (stating that "Internal Revenue Code §6404 grants the Tax Court jurisdiction to review abatement of interest denials"); Beall v. United States [2001-2 USTC ¶50,590], 170 F.Supp.2d 709, 711 (E.D. Tex. 2001) (stating that "[t]he plain language of 6404(i) evidences that Congress intended to address the lack of judicial review of IRS decisions not to abate interest by vesting exclusive jurisdiction to undertake such a review in the hands of the Tax Court" and analyzing the legislative history in support of this proposition); Leutner v. United States [2001-1 USTC ¶50,200], 2000 WL 33180215 at *2 (D. Md. Dec. 19, 2000 ) (stating that "a taxpayer who has filed a request for abatement and received an administrative denial of that claim [is required] to file a suit in the United States Tax Court"); Davies v. United States [2001-1 USTC ¶50,175; 2001-1 USTC ¶60,391], 124 F.Supp.2d 717, 719-21 (D. Me. 2000) (recognizing that the Tax Court has sole jurisdiction over reviewal of abatement of interest pursuant to §6404(i)); Estate of Wenner v. Commissioner [CCH Dec. 54,335], 116 T.C. 284, 286 (2001) (stating that §6404(i) "clearly grants the [Tax] Court jurisdiction to review the Commissioner's failure to abate interest under all subsections of section 6404"); Katz v. Commissioner [CCH Dec. 54,081], 115 T.C. 329, 330 (2000) (recognizing the Tax Court's jurisdiction over interest abatement cases). Accordingly, the review of the IRS's determination not to abate interest is properly within the jurisdiction of the Tax Court and not within the subject matter jurisdiction of this court.

III.

Defendant filed its motion for summary judgment on June 28, 2001 . Plaintiffs, however, did not respond within the required thirty day period. Local Rule 56.1(d). As of this date, far beyond the thirty-day period, Plaintiffs have not filed any formal pleadings regarding Defendant's motion for summary judgment. As such, the motion will be treated as uncontested. Id.

An uncontested motion for summary judgment is not automatically granted. Campbell v. Hewitt, Coleman & Assocs., Inc., 21 F.3d 52, 55 (4th Cir. 1994) (stating that although "the non-moving party runs a great risk by not responding [to a motion for summary judgment], such positive action is not required in all instances because the court still may only grant summary judgment if appropriate"); Custer v. Pan Am. Life Ins. Co., 12 F.3d 410, 416 (4th Cir. 1993). Instead, the court must still determine whether the moving party is entitled to judgment as a matter of law. Custer, 13 [12] F.3d at 416; Taliaferro v. Associates Corp. of N. Am., 112 F.Supp.2d 483, 486 n.1 (D. S.C. 1999). While a court must still analyze motions for summary judgment with no response, the moving party's facts are deemed uncontroverted. Custer, 13 [12] F.3d at 416.

Summary judgment is only proper when, viewing the facts in the light most favorable to the non-moving party, there is no genuine issue of any material fact and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(e); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Cox v. County of Prince William , 249 F.3d 295, 299 (4th Cir. 2001). Summary judgment requires a determination of the sufficiency of the evidence, not a weighing of the evidence. Anderson v. Liberty Lobby, 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). An issue is genuine if a reasonable jury, based on the evidence, could find in favor of the non-moving party. Anderson, 477 U.S. at 248; Cox, 249 F.3d at 299. The materiality of a fact depends on whether the existence of the fact could cause a jury to reach different outcomes. Anderson, 477 U.S. at 248; Cox, 249 F.3d at 299; Solers, Inc. v. Hartford Cas. Ins. Co., 146 F.Supp.2d 785, 791 (E.D. Va 2001). The party opposing the motion may not rest upon its pleadings but must instead provide evidence or point to evidence already on the record that would be sufficient to support a jury verdict in its favor. Anderson, 477 U.S. at 248. This evidence must be properly authenticated pursuant to Rule 56(e). Orsi v. Kirkwood , 999 F.2d 86, 92 (4th Cir. 1993).

IV.

26 U.S.C. §6330(d) provides judicial review of the IRS's administrative determinations without providing the standard of judicial review. 26 U.S.C.A. §6330(d) (West Supp. 2001). It appears, however, in light of the legislative history of §6330(d) and numerous district and tax court cases that the standard of review differs based on what part of the IRS administrative determination is being challenged. When a taxpayer challenges the validity of the tax liability itself, such as in this case where the plaintiffs challenge the refusal to abate penalties, courts should use a de novo standard of review. See Geller v. United States [2001-2 USTC ¶50,703], 2001 WL 1346669 at *2-3 (S.D. Ohio Sept. 26, 2001 ); Jon H. Berkey, P.C. v. Department of the Treasury [2001-2 USTC ¶50,708], 2001 WL 1397680 at *3-4 (E.D. Mich. Sept. 20, 2001 ); Pikover v. United States [2001-2 USTC ¶50,702], 2001 WL 1346670 at *3 (C.D. Cal. Aug. 21, 2001 ); Mesa Oil, Inc. v. United States [2001-1 USTC ¶50,130], 2000 WL 1745280 at *2 (D. Colo. Nov. 21, 2000 ); MCRA [MRCA] Info. Servs. v. United States [2000-2 USTC ¶50,683], 145 F.Supp.2d 194, 199 (D. Conn. 2000); Sego v. Commissioner [CCH Dec. 53,938], 114 T.C. 604, 610 (2000) (stating that "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"). Plaintiff's claims should be analyzed under the de novo standard because they are not challenging the levy itself but the refusal to abate penalties based on reasonable cause.

Plaintiffs contest the IRS's determination because they contend that they had reasonable cause due to Mr. Hamilton's failure to file the appropriate tax returns and deposit the unemployment taxes. The IRS does have the authority to assess penalties against taxpayers for late filings and failure to deposit pursuant to 26 U.S.C. §§6651 and 6656. Both §§6651 and 6656, however, contain an escape clause if the taxpayer did not exhibit willful neglect and can demonstrate reasonable cause for the failure to file and/or deposit taxes. 26 U.S.C.A. §§6651(a) and 6656(a) (West 1986 & Supp. 2001). In order to avoid the penalties, taxpayers must demonstrate both reasonable cause and a lack of willful neglect. United States v. Boyle [85-1 USTC ¶13,602], 469 U.S. 241, 245, 105 S.Ct. 687, 689-90 (1985). Reasonable cause is defined as "ordinary business care and prudence." Id. at 246, [85-1 USTC ¶13,602], 105 S.Ct. at 690; 26 C.F.R. §301.6551-1(c)(1). ⁴ Boyle defined willful neglect as "a conscious, intentional failure or reckless indifference." Id. at 245, [85-1 USTC ¶13,602], 105 S.Ct. at 687. Furthermore, the issue of what elements are required for reasonable cause is a question of law for the court to decide. Id. at 249 n.8, [85-1 USTC ¶13,602], 105 S.Ct. at 692 n.8.

In Boyle, the Court addressed the issue of whether reliance on an attorney is reasonable cause against failure to file a tax return for estate taxes. Boyle noted the importance of filing taxes on time, stating that "[p]rompt payment of taxes is imperative to the Government, which should not have to assume the burden of unnecessary and ad hoc determinations." Id. at 249, [85-1 USTC ¶13,602], 105 S.Ct. at 691-92. Boyle also noted that the duty to timely file taxes rested on the taxpayer, even if the taxpayer had relied on the advice of an attorney or other professional agent. Id. at 250, [85-1 USTC ¶13,602], 105 S.Ct. at 692 (stating that the fact that "the attorney, as the executor's agent, was expected to attend to the matter does not relieve the principal of his duty to comply with the statute"). Boyle held that a taxpayer's reliance on an agent to timely file a tax return could not excuse the taxpayer from late filing payments, strongly stating that "[i]t requires no special training or effort to ascertain a deadline and make sure that it is met. The failure to make a timely filing of a tax return is not excused by the taxpayer's reliance on an agent, and such reliance is not 'reasonable cause' for a late filing. . . . " Id. at 252, [85-1 USTC ¶13,602], 105 S.Ct. at 693. Although Boyle dealt with an individual taxpayer, its holding also applies to corporate taxpayers. See Valen Mfg. [96-2 USTC ¶50,407], 90 F.3d at 1193; Conklin Bros. of Santa Rosa, Inc. v. United States [93-1 USTC ¶50,116], 986 F.2d 315, 317 (9th Cir. 1993); Mason Motors Co. v. United States [98-2 USTC ¶50,763], 8 F.Supp.2d 1177, 1179-80 (D. Minn. 1998).

In light of Boyle, it is clear that Plaintiffs are not excused from the penalties resulting from their failure to file tax returns late and failure to make timely deposits. Even though Plaintiffs likely did not exhibit willful neglect, the facts do not support a finding of reasonable cause. Boyle clearly stated that reliance on agents does not excuse a taxpayer from penalties for late filings. Boyle [85-1 USTC ¶13,602], 469 U.S. at 252, 105 S.Ct. at 693. In the context of corporate taxpayers, courts have stated that ordinary business prudence, the standard for reasonable cause, is not enough to demonstrate reasonable cause if the corporation was not also disabled from complying with the deadlines. See Valen Mfg. [96-2 USTC ¶50,407], 90 F.3d at 1193; Conklin [93-1 USTC ¶50,116], 986 F.2d at 318 (citing Boyle [85-1 USTC ¶13,602], 469 U.S. at 248 n.6); Mason Motors at 1180. A corporation is not disabled from complying with tax deadlines if it retains control over the agent responsible for tax liabilities. See Valen Mfg. at 1194. Conklin at 318, Mason Motors, 8 F.Supp.2d at 318-19. Here, Mr. Blackwell did retain control over Mr. Hamilton's actions and had the authority to oversee Mr. Hamilton's work and terminate his employment if necessary. Plaintiffs thus did have control over its agent Mr. Hamilton and thus have no reasonable cause for failing to timely file and deposit the appropriate tax liabilities. ⁵

V.

For the reasons stated above, Defendant's motion for summary judgment is GRANTED.

¹ The facts are viewed in the light most favorable to the non-moving party, the plaintiff, even though the plaintiff has not responded to the motion for summary judgment. As discussed in III, infra, the facts as proffered by Defendant are uncontroverted but still must be viewed in the light most favorable to the plaintiff.

² Occasions was also subject to a civil penalty for failing to file Forms W-2 and W-3 during the 1997 tax year although the United States concedes that it may not levy to collect this civil penalty.

³ Prior courts have determined that district courts have jurisdiction over FICA/Social Security tax issues, unemployment tax issues or withholding tax issues. See Jon H. Berkey, P.C. v. Department of the Treasury [2001-2 USTC ¶50,708], 2001 WL 1397680 at *2 (E.D. Mich. Sept. 20, 2001 ).

⁴ Although Boyle only involved reasonable cause under 26 U.S.C. §6651(a)(1), the term should be analyzed similarly under §§6651(a)(2) and 6656 because the term is used identically in those sections. See Del Commercial Props. v. Commissioner [2001-2 USTC ¶50,474], 251 F.3d 210, 218 (D.C. Cir. 2001) (stating that "[b]ecause the same terms are used in §6651(a)(1) and 6656(a) to define the circumstances in which a taxpayer is not required to pay additions, we see no reason why 'reasonable cause' and 'willful neglect' should not be interpreted consistently"); East Wind Indus., Inc. v. United States [99-2 USTC ¶50,968], 196 F.3d 499, 504 n. 5 (3rd Cir. 1999) (stating that "[t]he Court's analysis in Boyle addressed penalties for failure to file tax returns under section 6651(a)(1). The language concerning the standard for failure to file a return is identical to the language in sections 6651(a)(2) and 6656 for failure to pay and to deposit. We see no reason why the Court's analysis under section 6651(a)(1) should not guide our analysis of sections 6651(a)(2) and 6656"); Valen Mfg. Co. v. United States [96-2 USTC ¶50,407], 90 F.3d 1190, 1193 n.1 (6th Cir. 1996) (stating that "[a]lthough Boyle involved only a §6651(a)(1) violation, the language of the 'reasonable cause' exception in §§6652(a)(2) and 6656(a) is identical and should be given the same construction").

⁵ Disability was not found in Valen Mfg., Conklin, or Mason Motors, but the court in In the Matter of American Biomaterials Corp. [92-1 USTC ¶50,194], 954 F.2d 919 (3rd Cir. 1992), did find that a corporate taxpayer had reasonable cause for tax delinquencies when the officers in charge of the corporation embezzled, hence interfering the corporation from fulfilling its tax obligations. Biomaterials, however, is inapposite to the instant case because it involved a situation in which the corporation had no control over the board members to force the tax payments. Mr. Blackwell, however, had control over both Mr. Hamilton and Ms. Holland despite Mr. Hamilton's power of attorney because Mr. Blackwell could have overseen the accountants' work and terminated their employment if he found it unsatisfactory, as he ultimately did.

[2002-1 USTC ¶50,249] Andrew Johnson, Plaintiff v. United States , Defendant

U.S. District Court, Dist. Utah , No. Div., 1:00cv0149 ST, 1/25/2001

[Code Sec. 6330 ]

Assessment and collection: Collection Due Process hearing: Request for appeal denied: Jurisdiction: Tax Court v. district court: Leave to appeal granted.--A federal district court lacked jurisdiction to review the IRS's refusal to allow an individual to participate in a Collection Due Process (CDP) hearing. The taxpayer objected to the IRS's application of administrative levies in satisfaction of allegedly unpaid balances on past income tax assessments. Because his challenge involved issues of income tax liability, the Tax Court was the appropriate venue for review of the CDP determination. He was given 30 days in which to file his appeal with the Tax Court.

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS

STEWART, District Judge:

Plaintiff has asked the Court to review the decision by the Internal Revenue Service ("IRS") not to allow Plaintiff to participate in a Collection Due Process (CDP) heating before the Appeals Office of the IRS. Plaintiff objects to the IRS application of administrative levies in order to satisfy what the IRS alleges are unpaid balances on past income tax assessments. Defendant has filed a motion to dismiss, arguing inter alia that the Court does not have jurisdiction in this case. Having reviewed the briefs by the parties submitted in support of these motions, the relevant law, and being fully advised of the issues presented, the Court hereby enters the following order.

26 U.S.C. §6330(d)(1) provides for judicial review of a CDP determination. However, 26 U.S.C. §6330(d)(1) also provides that review be conducted by the Tax Court, unless the Tax Court does not have jurisdiction, in which case the appeal goes to a district court. Because Plaintiff is contesting issues of income tax liability, the Tax Court--not the district Court--has jurisdiction to hear Plaintiff's appeal. 26 U.S.C. §6214(a); 26 C.F.R. §301.6330-1T(f)(Q.-F3, A.-F3); see also, Hart v. Internal Revenue Service [2001-1 USTC ¶50,328], 2001 WL 3936999 (E.D. Pa. 2001) (dismissing case for failure to file with Tax Court). The Court, therefore, does not have jurisdiction to hear Plaintiff's complaint, and Defendant's motion to dismiss for lack of subject matter jurisdiction under Fed. R. Civ. P. 12(b)(1) is GRANTED.

26 U.S.C §6330(d)(1) provides that if a court determines that an appeal was made to an incorrect court, a party shall have 30 days after the court determination to file such appeal with the correct court." Accordingly, Plaintiff has 30 days to file his appeal with the Tax Court.

SO ORDERED.

[2003-1 USTC ¶50,257] William H. Roeder, Plaintiff v. Frank A. Andreacchi and Terri Beach, Defendants.

U.S. District Court, So. Dist. Fla. , West Palm Beach ; 02-80844-CIV-RYSKAMP/VITUNAC, January 10, 2003 .

[ Code Sec. 6330]

Jurisdiction: Collection Due Process: Notice of determination: Judicial review. --

Jurisdiction was lacking over an individual's lawsuit appealing a notice of determination issued after his Collection Due Process hearing because the Tax Court had exclusive jurisdiction over income tax liability claims pursuant to Code Sec. 6330. The court rejected the taxpayer's attempt to recharacterize taxes imposed upon wages as employment taxes and his request for a determination of tax liability as a Constitutional claim for denial of due process.

ORDER GRANTING DEFENDANTS' MOTION TO DISMISS

RYSKAMP, District Judge: THIS CAUSE comes before the Court pursuant to Defendants' Motion to Dismiss the Complaint, filed November 13, 2002 [DE 5]. This Motion is now ripe for adjudication.

I. BACKGROUND

Plaintiff seeks judicial relief with regard to the alleged conduct of Defendants in the course of a Collections Due Process ("CDP") proceeding. The Internal Revenue Service sent letters to Plaintiff on November 27, 1998 and December 14, 1998 with regard to his tax liability for 1996 and 1997. Both letters offered Plaintiff the opportunity to seeks Appeals Office review of the IRS's findings. On February 5, 1999 , the IRS issued Plaintiff a Notice of Deficiency for tax years 1996 and 1997, affording him the chance to petition for Tax Court review of his liability. Plaintiff acknowledged receipt of the letter. (Compl. Ex. E, p. 4.) Plaintiff did not file a petition with the Tax Court, however.

On November 24, 2001 , Plaintiff was issued a "Final Notice of Intent to Levy and Notice of Your Right to Hearing" pertaining to tax deficiencies assessed against him for the tax years 1996 and 1997. On December 17, 2001 , Plaintiff requested a CDP hearing with the Appeals Office, which scheduled a hearing conference for July 24, 2002 with Defendant Andreacchi. Plaintiff advanced tax-protestor arguments at the hearing. On August 8, 2002 , Defendant Beach issued a Notice of Determination concerning the collection action and informed Plaintiff of his right to request review by the Tax Court.

Plaintiff filed this suit on September 9, 2002 , requesting declaratory relief that Defendants violated his Due Process rights and that the finding of tax liability for 1996 and 1997 was erroneous. Plaintiff also seeks injunctive relief, requesting that Defendants be required to substantiate the tax assessments against him or provide him a fair hearing regarding the assessments, to provide documentation of the 1996 and 1997 assessments, to comply with 26 U.S.C. §6330(b)(1) and (c)(1) and the Fifth Amendment of the United States Constitution, and to suspend collection efforts against him for 1996 and 1997. Defendants move for dismissal of the Complaint.

II. DISCUSSION

I.R.C. §6330(d) allows the appeal of CDP determinations to the Tax Court or the District Court "if the Tax Court does not have jurisdiction of the underlying tax liability." The Complaint alleges that the Tax Court does not have jurisdiction because the underlying tax is an employment tax. Courts have consistently rejected arguments recharacterizing taxes imposed upon wages as employment taxes, however. True v. Comm'r [ 2000-2 USTC ¶50,634], 198 [108] F.Supp.2d 1361, 1364 (S.D. Fla. 2000). See also Rowlee v. Comm'r [ CCH Dec. 40,228], 80 T.C. 1111, 1121 (1983). Plaintiff, attempting to overcome this jurisdictional hurdle, argues that his claim is not for a determination of tax liability, but a Constitutional claim for denial of due process. Nevertheless, his complaint requests an order that Defendants erred when they imposed tax liability on him for 1996 and 1997, thereby demonstrating that this action is, indeed, a dispute about tax liability. This Court lacks jurisdiction over this matter therefore and rules that Plaintiff must bring his case to the Tax Court. Dismissal of this action will not prejudice Plaintiff, as he has 30 days from the date of this order to file his appeal with the Tax Court as provided for in I.R.C. §6330(d)(2).

III. CONCLUSION

For the reasons stated herein, and after consideration of the motions and the pertinent portions of the record, it is hereby

ORDERED AND ADJUDGED that Defendants' Motion to Dismiss the Complaint, filed November 13, 2002 [DE 5] is GRANTED. The Clerk of Court shall CLOSE this case and DENY any pending motions as MOOT.

DONE AND ORDERED.

[2005-1 USTC ¶ 50,289] Leslie E. White, Plaintiff-Appellant v United States of America, Defendant-Respondent.

U.S. Court of Appeals, 6th Circuit; 03-6010, December 16, 2004 .

Affirming DC Tenn., 2003-1 USTC ¶50,259.

[ Code Sec. 6330]

District court jurisdiction: Collection Due Process hearing. --

An individual's claims involving the appropriateness of a Collection Due Process (CDP) hearing were dismissed for lack of subject matter jurisdiction. Only the Tax Court has jurisdiction over claims regarding the procedural due process of a CDP hearing.

[ Code Sec. 6673]

Sanctions and costs awarded: Appeals. --

The government's motion for sanctions was granted where the individual's appeal was frivolous. Claims based on a taxpayer's assertion that wages are not income and not taxable by the IRS have been consistently rejected as frivolous and sanctionable.

[ Code Sec. 6702]

Penalties, civil: Frivolous returns. --

An individual's claim challenging the imposition of the penalty for filing a frivolous tax return was properly dismissed. The deficiencies in the tax return were based on the frivolous assertion that wages are not taxable income. .

Before: Guy and Cole, Circuit Judges, and Tarnow , District Judge. ^*

ORDER

Tarnow, District Judge: Leslie E. White appeals pro se from a district court judgment dismissing a civil action that he had filed challenging the procedures used to assess his income tax liability and the imposition of a frivolous return penalty. His appeal has been referred to a panel of this court pursuant to Rule 34(j)(1), Rules of the Sixth Circuit. Upon examination, the panel unanimously agrees that oral argument is not needed in this case. Fed. R. App. P. 34(a).

White primarily alleged: 1) that the Internal Revenue Service ("IRS") failed to conduct an appropriate collection due process hearing under 26 U.S.C. §§6320 and 6330; and 2) that the IRS improperly imposed a $500 penalty against him under 26 U.S.C. §6702, for filing a frivolous personal income tax return. The district court dismissed White's first claim for lack of jurisdiction on January 10, 2003. It awarded summary judgment to the government regarding his remaining claim on June 11, 2003, as that claim was based on the frivolous assertion that wages are not taxable income. The district court subsequently granted White's motion for reconsideration; however, it declined to reverse any of its prior rulings.

White alleges that the IRS violated its own procedures by failing to hold an appropriate hearing. The Sixth Circuit has held that "[t]he tax court has jurisdiction over income tax issues and liabilities ... [t]hus, if the §6330 proceeding involves income tax issues, the district court does not have jurisdiction to consider the case." Diefenbaugh v. White [ 2000-2 USTC ¶50,839], No. 00-3344, 2000 WL 1679510, at *1 (6th Cir. Nov.10, 2000); see also 26 U.S.C. §6330(d)(1). The tax court also has jurisdiction over claims involving the procedural due process of a collection due process hearing. See, e.g., Tornichio v. United States [ 2002-1 USTC ¶50,411], No. 5:02 CV 0351, 2002 WL 508325, at *3 (N. D. Ohio Mar. 18, 2002). Thus, the court properly dismissed the claim for lack of subject matter jurisdiction. See Fed. R. Civ. P. 12(b)(1).

White now argues that the IRS violated the Administrative Procedure Act by failing to provide him with the requested documents and information at his hearing. See generally 5 U.S.C. §706. This claim was not clearly raised in his complaint, and we will not reach it for the first time on appeal. See Barker v. Shalala, 40 F.3d 789, 793-94 (6th Cir. 1994).

In his second claim, White challenged the government's imposition of a $500 penalty under 26 U.S.C. §6702, for filing a frivolous tax return. The district court properly dismissed this claim because the deficiencies in White's income tax return were based on the frivolous assertion that wages are not taxable income. It is well-settled that wages are taxable income within the meaning of 26 U.S.C. §61(a). See Sisemore v. United States [ 86-2 USTC ¶9576], 797 F.2d 268, 271 (6th Cir. 1986); Perkins v. Comm'r [ 84-2 USTC ¶9898], 746 F.2d 1187, 1188 (6th Cir. 1984). Since the pro se appellant has vigorously indicated his sincere intent to follow the law, he should be advised that, where the Supreme Court is silent on a matter, the decisions of the lower courts have the weight of law in their respective jurisdictions. Thus, the district court properly awarded summary judgment to the government on White's challenge to the penalty because his underlying assertion lacked an arguable basis in law.

The government now moves for a lump sum sanction in the amount of $6,000, arguing that White's appeal is frivolous and that $6,900 approximates the amount of expenses that it has incurred in similar appeals. See generally Fed. R. App. P. 38; Schoffner v. Comm'r [ 87-1 USTC ¶9198], 812 F.2d 292, 293 (6th Cir. 1987). Claims based upon a taxpayer's assertion that wages are not income and not taxable by the IRS have been consistently rejected by courts as frivolous and sanctionable. See, e.g., Perkins [ 84-2 USTC ¶9898], 746 F.2d at 1188-89. However, a recent decision from our court has indicated that $4,000 is a reasonable penalty for persisting in this type of frivolous appeal. See, e.g., Sawukaytis v. Comm'r [ 2004-1 USTC ¶50,238], No. 02-2431, 2004 WL 1376612, at *5 (6th Cir. June 16, 2004).

Accordingly, the district court's judgment is affirmed and the government's motion for sanctions is granted in the amount of $4,000. Rule 34(j)(2)(C), Rules of the Sixth Circuit.

^* The Honorable Arthur J. Tarnow, United States District Judge for the Eastern District of Michigan, sitting by designation.

[2003-1 USTC ¶50,259] Leslie E. White, Plaintiff v. United States of America , Defendant.

U.S. District Court, Mid. Dist. Tenn., Nashville Div.; 3:02-0417, 250 FSupp2d 919, January 10, 2003 .

[ Code Sec. 6330]

District court jurisdiction: Collection Due Process hearing.

A federal district court lacked subject matter jurisdiction over an individual's challenge to a Collection Due Process (CDP) determination made regarding his tax liability. Pursuant to Code Sec. 6330(d)(1), jurisdiction over judicial review of income tax liability is conferred on the Tax Court. The taxpayer's argument that the conditions of Code Sec. 6330(d) were not satisfied because the IRS did not comply with the tax code and regulations before and at the CDP hearing was rejected. The statutory provision relates to the proceeding after hearing, and not to the CDP hearing itself or to any of the notices required prior to the hearing.

[ Code Secs. 6330 and 6702]

District court jurisdiction: Collection Due Process hearing: Penalties, civil: Frivolous returns. --

A federal district court had jurisdiction over an individual's challenge to the imposition of a frivolous return penalty that was upheld following a Collection Due Process hearing. In such cases, jurisdiction lies with the district court, rather than with the Tax Court.

ORDER

ECHOLS, District Judge: Before the Court are the following: (1) Defendant's Motion to Dismiss (Docket Entry No. 3), followed by (2) Defendant's Praecipe Withdrawing Defendant's Motion to Dismiss (Docket Entry No. 9); and (3) Defendants' Motion for Partial Dismissal (Docket Entry No. 11), to which Plaintiff responds in opposition. In its initial Motion to Dismiss (Docket Entry No. 3), Defendant sought dismissal of this action under Federal Rule of Civil Procedure 4(i)(1) for Plaintiff's failure to obtain summonses and serve the Complaint on the Internal Revenue Service ("IRS") and the Attorney General of the United States. Later, it was determined that Plaintiff had properly served all required parties, and Defendant filed the pending Praecipe to withdraw its prior Motion to Dismiss. Accordingly, Defendant's Motion to Dismiss (Docket Entry No. 3) is DEEMED WITHDRAWN.

For the reasons stated in the Memorandum contemporaneously entered herewith, Defendant's latest Motion for Partial Dismissal (Docket Entry No. 11) is GRANTED. Accordingly, Plaintiff's claims under 26 U.S.C. §6330 challenging the Collection Due Process Hearing by the I.R.S. and Plaintiff's 1997 income tax liability are hereby DISMISSED, and Plaintiff is granted thirty (30) days from the date of entry of this Order within which to appeal the IRS Appeals Office determination with the United States Tax Court pursuant to 26 U.S.C. §6330(d)(1)(B).

This case involves a discrepancy over a $500 assessment by the Internal Revenue Service. It is not the type of case that requires case management for a year or two. The case is hereby referred to the Magistrate Judge who is directed to conduct a "case management conference" to determine what discovery, if any, is required, set abbreviated deadlines for filing motions, and set a trial date to commence no later than July 22, 2003. The Magistrate Judge is directed to coordinate the setting of a trial date with Judge Echols' Courtroom Deputy.

It is so ORDERED.

MEMORANDUM

Before the Court are the following: (1) Defendant's Motion to Dismiss (Docket Entry No. 3), followed by (2) Defendant's Praecipe Withdrawing Defendant's Motion to Dismiss (Docket Entry No. 9); and (3) Defendants' Motion for Partial Dismissal (Docket Entry No. 11), to which Plaintiff responds in opposition. In its initial Motion to Dismiss (Docket Entry No. 3), Defendant sought dismissal of this action under Federal Rule of Civil Procedure 4(i)(1) for Plaintiff's failure to obtain summonses and serve the Complaint on the Internal Revenue Service ("IRS") and the Attorney General of the United States. Later, it was determined that Plaintiff had properly served all required parties, and Defendant filed the pending Praecipe to withdraw its prior Motion to Dismiss. Accordingly, Defendant's Motion to Dismiss (Docket Entry No. 3) shall be DEEMED WITHDRAWN. For the reasons explained below, Defendant's Motion for Partial Dismissal shall be GRANTED.

I.

Plaintiff, Leslie E. White, was informed by the IRS that he owes personal income taxes for the 1997 tax year. In addition, the IRS has assessed a "frivolous return penalty" against Plaintiff under 26 U.S.C. §6702. Plaintiff initiated this cause of action against the United States on April 25, 2002 under 26 U.S.C. §6330(d)(1) requesting that this Court set aside the collective due process hearing ("CDPH") determination and seeking declaratory relief, reimbursement for costs, and punitive damages. Plaintiff contends that the IRS did not conduct a CDPH in accordance with Sections 6320 and 6330, and Treasury Regulations 301.6320-IT and 301.6330-IT. Plaintiff also contends that the frivolous return penalty imposed by the IRS was unsupported by any evidence.

II.

It is well settled that a court's task in analyzing the sufficiency of a complaint for the purpose of a motion to dismiss is necessarily narrow and limited. The issue is not whether a claimant will ultimately prevail, but "whether the claimant is entitled to offer evidence to support the claims. Indeed it may appear on the face of the pleadings that recovery is very remote and unlikely but this is not the test." Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). The standard in reviewing a motion to dismiss for lack of subject matter jurisdiction is identical to the standard in reviewing a motion to dismiss for failure to state a claim upon which relief may be granted. A court must review the complaint in the light most favorable to the non-moving party, construing all of the allegations in his or her favor. Id. A complaint should not be dismissed under Rule 12(b)(6) of the Federal Rules of Civil Procedure "unless it appears beyond doubt that [the non-moving party] can prove no set of facts in support of [his or her] claim which would entitle [him or her] to relief." Id. (quoting Conley v. Gibson, 355 U.S. 41, 45 (1957)).

Pro se litigants' complaints are to be read particularly liberally, and are to be held to a less stringent standard than those drafted by attorneys. The complaints of pro se litigants should not be dismissed unless it is apparent beyond doubt that no set of facts can be proved in support of the claim entitling the litigant to relief. Haines v. Kerner, 404 U.S. 519, 520 (1972).

III.

Taking the allegations in Plaintiff's Complaint as true for purposes of Defendant's Motion for Partial Dismissal, the Court finds the following facts: Plaintiff was issued a Notice of Deficiency from the IRS on June 22, 1999, for the tax year ending December 31, 1997. Plaintiff was assessed a frivolous return penalty of $500 on September 13, 1999 for filing a frivolous income tax return in 1997, pursuant to 26 U.S.C. §6702. Plaintiff was issued a Final Notice of Intent to Levy from the IRS on June 23, 2001. Pursuant to 26 U.S.C. §6330(b), Plaintiff filed a request for a CDPH. Prior to the CDPH, Plaintiff informed Mr. Scott Biggs, the IRS Settlement Officer who was to be present at the CDPH, that he questioned the validity of the Notice of Deficiency. Plaintiff requested by letter that Mr. Biggs bring to the CDPH a copy of his 1997 tax return and the Summary Record of Assessment, and documented proof of the basis for the income tax deficiency and frivolous return penalty.

The CDPH took place on March 5, 2002. At the hearing, IRS Settlement Officer Biggs, did not provide any of the aforementioned documentation and proof requested by Plaintiff. Mr. Biggs also was unable to inform Plaintiff as to which specific officer or employee of the IRS imposed the $500 frivolous return penalty, and whether that person was authorized to impose such penalties. Plaintiff alleges that Mr. Biggs' failure to provide the requested documentation at the CDPH violated 26 C.F.R. 301.6320-1, and that as of the filing of his Complaint Plaintiff never received a valid Notice of Deficiency as required by 26 U.S.C. §6330(a). Following the CDPH, the IRS mailed Plaintiff a Notice of Determination Concerning Collection Action(s) under Section 6320 and/or 6330 on March 28, 2002. The attachment to the Notice of Determination stated that the IRS deemed the levy action under Section 6330 appropriate. The letter stated that if Plaintiff wished to dispute the income tax liability determination in court, he should file a petition with the United States Tax Court within thirty days. Instead, Plaintiff filed a Complaint with this Court within the required time period.

IV.

Defendant United States now moves to dismiss the portion of Plaintiff's Complaint concerning the CDPH and Plaintiff's 1997 income tax liability under Section 6330 for lack of subject matter jurisdiction, pursuant to Federal Rule of Civil Procedure 12(b)(1). Section 6330(d)(1) confers jurisdiction of judicial review of income tax liability on the Tax Court.

The person may, within 30 days of a determination under this section, appeal such determination --(A) to the Tax Court (and the Tax Court shall have jurisdiction to hear such matter); or (B) if the Tax Court does not have jurisdiction of the underlying tax liability, to a district court of the United States.

If a court determines that the appeal was to an incorrect court, a person shall have 30 days after the court determination to file such appeal with the correct court.

26 U.S.C. §6330(d)(1).

The Sixth Circuit has held that "[t]he Tax Court has jurisdiction over income tax issues and liabilities ... [t]hus, if the §6330 proceeding involves income tax issues, the district court does not have jurisdiction to consider the case." Diefenbaugh v. White [ 2000-2 USTC ¶50,839], No. 00-3344, 2000 WL 1679510, at *1 (6th Cir. Nov. 10, 2000). Furthermore, a procedural due process claim is also properly brought in the Tax Court. Very few courts have expressly addressed this issue, but those that have hold that the Tax Court has jurisdiction over claims involving a CDPH, and district courts do not. In one case, Tornichio v. United States, the plaintiff sought to assert a claim against the IRS, asserting that his procedural due process rights were violated at his CDPH. Tornichio [ 2002-1 USTC ¶50,411], No. 5:02 CV 0351, 2002 WL 508325 (N.D. Ohio Mar. 18, 2002) The court held that "[d]istrict courts have no jurisdiction over civil claims challenging taxes unless litigants first pay the assessed tax and then raise these claims in a refund suit." Tornichio at *3 (citing 26 U.S.C. §7421(a)). Addressing the proper jurisdiction for review of a procedural due process violation at a CDPH, one court held that "the proper jurisdiction for judicial review of a Collection Due Process Hearing is the United States Tax Court." Johnson v. C.I.R. [ 2000-2 USTC ¶50,592], No. 99-6250-TC, 2000 WL 1041191 at *4 (D. Or. June 21, 2000).

Plaintiff asserts that the Tax Court does not have jurisdiction over his income tax liability claims and procedural due process claims arising from the CDPH, because Rule of Tax Court Procedure 330(b) states that "[t]he Court shall have jurisdiction of a lien or levy action under this Title when the conditions of Code Section 6320(c) or 6330(d), as applicable, have been satisfied." R. Tax Ct. P. 330(b). Plaintiff avers that the conditions of Code Section 6330(d) have not been satisfied, because the IRS did not comply with the Internal Revenue Code and Treasury Regulations before and at the CDPH. The Court finds, however, that Section 6330(d) relates to the "proceeding after hearing," not the CDPH itself or any of the notices required prior to the CDPH. Even when taking the allegations in Plaintiff's Complaint as true, the IRS's non-compliance does not vest jurisdiction over Plaintiff's tax liability and due process claims in this Court.

The Court notes, however, that it does have subject matter jurisdiction over Plaintiff's challenge to the $500 frivolous return penalty assessed under section 6702. This section imposes a penalty if a person files an income tax return that "does not contain information on which the substantial correctness of the self-assessment may be judged," or appears on its face to be "substantially incorrect," which is due to the taxpayer taking a position that is "frivolous" or "desire (which appears on the purported return) to delay or impede the administration of Federal income tax laws." 26 U.S.C. §6702(a)(1), (2).

In a frivolous return penalty case, jurisdiction lies with the district court, rather than the tax court. "[U]nder section 6703 [the tax court] lack[s] jurisdiction to review assessments of section 6702 frivolous return penalties...." Van Es v. Commissioner [ CCH Dec. 54,080], 115 T.C. 324, 325 (2000). A person "must bring suit in district court to determine his liability for [a section 6702] penalty." 26 U.S.C. §6703(c)(2). See Colton v. Gibbs [ 90-1 USTC ¶50,262], 902 F.2d 1462 (9th Cir. 1990); Reinhardt v. I.R.S., 2002 WL 1095351 at *4 (E.D. Cal. May 24, 2002) ("[i]n the case of a frivolous return penalty under 26 U.S.C. §6702, the district court is the proper reviewing court."). Plaintiff has appropriately filed his Complaint in this Court with respect to his challenge to the frivolous return penalty under section 6702.

V.

Based on the foregoing reasons, the Court finds that it does not have subject matter jurisdiction over Plaintiff's income tax liability claims and procedural due process claims arising under 26 U.S.C. §6330. Because the tax court has jurisdiction over these claims, they are dismissed pursuant to 28 U.S.C. §1406. Plaintiff shall have thirty (30) days from the date of entry of this Memorandum and the accompanying Order to appeal the IRS Appeals Office determination with the Tax Court, pursuant to 26 U.S.C. §6330(d)(1)(B).

An appropriate Order shall be entered.

[2003-1 USTC ¶50,296] Marko Porter, Plaintiff-Appellant v. United States of America , Defendant-Appellee.

U.S. Court of Appeals, 9th Circuit; 02-15977, 56 FedAppx 362, February 14, 2003 .

Unpublished opinion affirming an unreported DC Ariz. decision.

[ Code Sec. 6330]

Notice of levy and right to hearing: Judicial review of appeals determinations: Appeal filed in wrong court. --

Jurisdiction was lacking over an individual's lawsuit appealing a notice of determination issued after his Collection Due Process hearing because the Tax Court had exclusive jurisdiction over income tax liability claims pursuant to Code Sec. 6330.

Before: Leavy, Fernandez and Berzon, Circuit Judges. ^*

¬ Caution: The court has designated this opinion as NOT FOR PUBLICATION. Consult the Rules of the Court before citing this case.®

MEMORANDUM ^**

Marko Porter appeals pro se the district court's judgment dismissing, for lack of jurisdiction, his action seeking review of an Internal Revenue Service determination that lien and levy actions could proceed against him. We have jurisdiction pursuant to 28 U.S.C. §1291. We review de novo a dismissal for lack of subject-matter jurisdiction. Brady v. U.S., 211 F.3d 499, 502 (9th Cir.), cert. denied, 531 U.S. 1037 (2000). We affirm.

Under the Internal Revenue Code, the district court has jurisdiction over an appeal from a collections due process hearing only if the Tax Court lacks jurisdiction over the underlying tax liability. See 26 U.S.C. §6330(d)(1). Because Porter's collections hearing was based on his liability for unpaid income tax, the Tax Court has exclusive jurisdiction over his appeal. See Goza v. Commissioner [ CCH Dec. 53,803], 114 T.C. 176, 182 (2000).

The clerk shall amend the docket to reflect the caption above.

AFFIRMED.

^* This panel unanimously finds this case suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2).

^** This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Circuit Rule 36-3.

[2004-1 USTC ¶50,207] Lori Lynn Render, Plaintiff v. Internal Revenue Service, Defendant.

U.S. District Court, East. Dist. Mich. , So. Div.; 02-73305, March 12, 2004 .

[ Code Sec. 6330]

Notice of levy and right to hearing: Judicial review of appeals determinations: Appeal filed in wrong court. --

The district court had jurisdiction to review an individual's premature challenge to an adverse Collection Due Process determination. Upon receiving an unfavorable Notice of Determination, the taxpayer commenced an appeal in the Tax Court. The IRS responded by filing a motion to dismiss, arguing that the Tax Court lacked jurisdiction over the taxpayer's underlying tax liability, and that the proper forum for the taxpayer's challenge was the district court. The taxpayer did not respond to the motion, but commenced the case in the district court. The district court concluded that there was no conceivable strategic advantage to be gained through the taxpayer's course of action. Accordingly, it was assumed that she acted out of an innocent, but mistaken, belief that the IRS's motion was "writing on the wall," foretelling the certain progression of the matter to the district court.

OPINION AND ORDER DENYING DEFENDANT'S MOTION TO DISMISS

I. INTRODUCTION

ROSEN, District Judge: Plaintiff Lori Lynn Render, proceeding pro se, commenced this suit in this Court on August 14, 2002 , challenging a determination by the Defendant Internal Revenue Service ("IRS") that Plaintiff is liable for a Trust Fund Recovery Penalty ("TFRP") assessed against her as an officer of Renbro Corporation. ¹ Defendant has responded by bringing a motion to dismiss this case for lack of jurisdiction, citing Plaintiff's commencement of this suit before the beginning of the 30-day statutory period for filing. For the reasons set forth below, the Court denies Defendant's motion.

II. FACTUAL AND PROCEDURAL BACKGROUND

For present purposes, the underlying basis for Plaintiff's challenge is largely immaterial, and only the procedural background is relevant to Defendant's motion. On August 1, 2001 , the IRS issued to Plaintiff a "Final Notice --Notice of Intent to Levy and Notice of Your Right to a Hearing" in which Plaintiff was advised that the IRS intended to assert a federal tax lien against her property to collect $40,069.64 in unpaid taxes. Plaintiff timely responded to this notice within 30 days, submitting an August 20, 2001 request for a collection due process hearing.

This hearing was held on January 24, 2002 , and Plaintiff was notified about three months later that her administrative appeal was denied. Specifically, on April 22, 2002 , the IRS Appeals Office issued a "Notice of Determination" advising Plaintiff of the unfavorable outcome of her appeal. This letter further stated:

If you want to dispute this determination in court, you have 30 days from the date of this letter to file a complaint in the appropriate United States District Court for a redetermination.

The time limit for filing your complaint (30 days) is fixed by law. The courts cannot consider your appeal if you file late. If the court determines that you made your complaint to the wrong court, you will have 30 days after such determination to file with the correct court.

If you do not file a complaint with the court within 30 days from the date of this letter, your case will be returned to the originating IRS office for action consistent with the determination summarized below....

(Defendant's Motion, Ex. D, 4/22/2002 Notice of Determination at 1.)

Plaintiff acted promptly in response to this notice, albeit in the wrong forum. In particular, on May 21, 2002 , within the 30-day limit, Plaintiff commenced an appeal in U.S. Tax Court, requesting a "court date for redetermination" of the IRS's unfavorable decision. (Defendant's Motion, Ex. E.) The IRS responded by filing a July 19, 2002 motion to dismiss, arguing that the Tax Court lacked jurisdiction over Plaintiff's underlying tax liability, and that the proper forum for Plaintiff's challenge was the U.S. District Court.

On July 24, 2002 , the Tax Court issued a "Notice of Filing," alerting Plaintiff that the IRS had filed a motion to dismiss for lack of jurisdiction, and setting a deadline of August 13, 2002 for Plaintiff to file a response to this motion. Plaintiff did not respond to this motion, however. Instead, she commenced this case in this Court on August 14, 2002 , once again challenging the unfavorable decision of the IRS Appeals Office.

The Tax Court ruled on the IRS's unopposed motion on September 24, 2002 , holding that it lacked jurisdiction over Plaintiff's underlying tax liability. The Tax Court concluded, therefore, that Plaintiff had appealed "to the incorrect court," and it reminded Plaintiff of the statutory provision granting her "a 30-day period for filing an appeal with the correct Federal District Court ." (Defendant's Motion, Ex. G, Tax Court 9/24/2002 Order.)

By the time of this Tax Court ruling, of course, Plaintiff had already commenced this action. Through its present motion, Defendant argues that this premature filing operated to divest this Court of subject matter jurisdiction to hear this case. Accordingly, Defendant requests dismissal of this action under Fed. R. Civ. P. 12(b)(1).

III. ANALYSIS

The procedural record in this case establishes beyond dispute that Plaintiff's initial court challenge to the IRS's determination, while timely, was commenced in the wrong forum --specifically, the Tax Court rather than the District Court. It is equally evident, however, that this initial misfiling was not fatal to Plaintiff's challenge. Rather, as indicated in the above-quoted materials sent to Plaintiff by the IRS Appeals Office and the Tax Court, section 6330(d)(1) of the Internal Revenue Code expressly provides an opportunity to cure a submission to the wrong court:

Judicial review of determination. --The person may, within 30 days of a determination under this section, appeal such determination --

(A) to the Tax Court (and the Tax Court shall have jurisdiction with respect to such matter); or

(B) if the Tax Court does not have jurisdiction of the underlying tax liability, to a district court of the United States .

If a court determines that the appeal was to an incorrect court, a person shall have 30 days after the court determination to file such appeal with the correct court.

26 U.S.C. §6330(d)(1).

In its present motion, Defendant seizes upon the statutory language providing that the 30-day opportunity to cure commences only "after" a court determination that a challenge has been made in the wrong court. Here, it is undisputed that Plaintiff did not commence her present appeal within this 30-day statutory window. Rather, by the time the Tax Court ruled on September 24, 2002 that Plaintiff's appeal was properly directed to the District Court, Plaintiff already had brought the present action, and she did not take any steps within the 30-day period after the Tax Court's ruling to "restart" this suit (whatever that might entail) or commence a new appeal.

In arguing that Plaintiff's premature filing is insufficient to preserve her right to judicial review, Defendant relies on notions of sovereign immunity. In particular, it is a familiar principle that "[t]he United States, as sovereign, is immune from suit save as it consents to be sued ..., and the terms of its consent to be sued in any court define that court's jurisdiction to entertain the suit." United States v. Mitchell, 445 U.S. 535, 538, 100 S.Ct. 1349, 1351 (1980) (internal quotations and citation omitted). Moreover, the plaintiff bears the burden of establishing that the federal government has given its consent to be sued. Whittle v. United States , 7 F.3d 1259, 1262 (6th Cir. 1993).

The courts have construed §6330(d)(1) of the Internal Revenue Code as a limited waiver of sovereign immunity in favor of taxpayers who disagree with the outcome of a collection due process hearing. See, e.g., Thompson v. United States [ 2003-1 USTC ¶50,350], 2003 WL 1874743, at *1 (N.D. Ga. Feb. 11, 2003); Wagner v. United States [ 2002-2 USTC ¶50,713], 2002 WL 31476652, at *2 (D. Nev. Aug. 15, 2002). As such, any suit must be brought in strict compliance with the terms of the statute, including its 30-day limit for seeking judicial review. See McNeil v. United States [ 2002-1 USTC ¶50,415], 2002 WL 507821, at *4 (W.D. Mich. Mar. 7, 2002). This 30-day limit has consistently been held to be jurisdictional in nature. See, e.g., McNeil [ 2002-1 USTC ¶50,415], 2002 WL 507821, at *1-*2; Walz v. United States [ 2002-1 USTC ¶50,377], 2002 WL 523880, at *2 (D. Minn. Mar. 22, 2002); McCune v. Commissioner of Internal Revenue [ CCH Dec. 53,988], 115 T.C. 114, 117 (2000). Accordingly, Defendant argues that subject matter jurisdiction is lacking here by virtue of Plaintiff's failure to commence this suit strictly within the 30-day period following the Tax Court's September 24, 2002 ruling that Plaintiff had initially filed in the wrong court.

As a threshold matter, the Court observes that Defendant has failed to cite any authority for the precise proposition it advances in this case. All of the decisions cited in Defendant's motion involved filings after the 30-day period set forth in §6330(d)(1). See, e.g., McNeil [ 2002-1 USTC ¶50,415], 2002 WL 507821, at *1; Walz [ 2002-1 USTC ¶50,377], 2002 WL 523880, at *1-*2; McCune [ CCH Dec. 53,988], 115 T.C. at 115-16. Neither Defendant nor this Court's own research has disclosed a case in which a suit brought before the commencement of the statutory 30-day period has been dismissed for lack of subject matter jurisdiction.

Indeed, Defendant candidly acknowledges that the most analogous authority tends to suggest that Plaintiff's premature filing should be accepted as sufficient to preserve her right to judicial review. In particular, under Federal Rule of Appellate Procedure 4(a)(2), a premature notice of appeal may be treated, under appropriate circumstances, as "filed on the date of and after the entry" of the underlying judgment or order being appealed. The Supreme Court has explained that this provision is "intended to protect the unskilled litigant who files a notice of appeal from a decision that he reasonably but mistakenly believes to be a final judgment, while failing to file a notice of appeal from the actual final judgment." FirsTier Mortgage Co. v. Investors Mortgage Ins. Co., 498 U.S. 269, 276, 111 S.Ct. 648, 652-53 (1991).

This rationale seemingly is applicable here, where a pro se Plaintiff reasonably could have viewed the IRS's motion to dismiss in the Tax Court as a strong indication that she had filed in the wrong court, and that the District Court instead was the proper forum. Rather than opposing or concurring in the IRS's motion, and then waiting for a Tax Court ruling on this matter, Plaintiff commenced the present suit in this Court, which all are agreed is the proper forum for judicial review of the challenged IRS determination. By the time the Tax Court confirmed that Plaintiff should pursue the matter before the District Court, this action had already been commenced. An unskilled litigant such as Plaintiff readily could have concluded that no further steps were necessary to heed the Tax Court's warning of a "30-day period for filing an appeal with the correct Federal District Court ." (Defendant's Motion, Ex. G, 9/24/2002 Tax Court Order.)

Nonetheless, Defendant suggests two reasons why the principle embodied in Fed. R. App. P. 4(a)(2) should be deemed inapplicable here. First, Defendant argues that the liberality reflected in this Rule should not carry over to the context of sovereign immunity, where waivers of this immunity are to be strictly construed. Yet, the Supreme Court recognized in FirsTier Mortgage that appellate jurisdiction is not an open-ended and boundlessly malleable dominion, and that the courts are not free to construe the Federal Rules of Appellate Procedure in a way that expands their jurisdiction beyond statutory limits. See FirsTier Mortgage, 498 U.S. at 274-75, 111 S.Ct. at 652. Rather, the Court interpreted Rule 4(a)(2) as merely permitting the "relat[ion] forward" of a premature notice of appeal of a decision that subsequently is embodied in an appealable judgment or order. 498 U.S. at 275, 111 S.Ct. at 652. Likewise, Plaintiff here merely seeks the relation forward of a premature appeal which, if filed within the statutory 30-day period following the Tax Court's ruling, unquestionably would lie within this Court's subject matter jurisdiction.

Defendant next contends that Plaintiff's premature commencement of this case is not the sort of "reasonable mistake" by an "unskilled litigant" that is contemplated in Rule 4(a)(2). In FirsTier Mortgage, for example, the Court observed that this Rule would not "permit[] a notice of appeal from a clearly interlocutory decision --such as a discovery ruling or a sanction order under Rule 11 of the Federal Rules of Civil Procedure --to serve as a notice of appeal from the final judgment," because "[a] belief that such a[n interlocutory] decision is a final judgment would not be reasonable." FirsTier Mortgage, 498 U.S. at 276, 111 S.Ct. at 653. Defendant maintains that Plaintiff's premature filing here is akin to the unreasonable mistake posited in FirsTier Mortgage, where the Tax Court had not yet issued any sort of ruling or decision on the IRS's motion to dismiss, but had merely issued a notice reflecting the filing of the IRS's motion and setting a date for Plaintiff to respond. Defendant contends that this Tax Court notice was hardly the sort of "writing on the wall" that obviously presaged a forthcoming order of dismissal.

The Court is not persuaded by this attempted analogy to FirsTier Mortgage's example of an unreasonable mistake. The Supreme Court's hypothetical presented a truly "apples to oranges" scenario, where an appeal from a purely interlocutory decision is pressed into service as an appeal from a subsequent final judgment. In such a situation, it would "catch the appellee by surprise" to allow appellate review of the judgment. FirsTier Mortgage, 498 U.S. at 276, 111 S.Ct. at 653. Here, in contrast, there is a much closer fit between the issue raised in the IRS's motion to dismiss --i.e., that the Tax Court lacked jurisdiction over Plaintiff's appeal --and the Tax Court's subsequent order of dismissal, which adopted the position set forth in the IRS's motion. While the federal government plainly cannot be deemed to have waived its sovereign immunity whenever there is an absence of prejudice or surprise, there is no concern or claim here that Plaintiff's premature commencement of this suit engendered any form of uncertainty or surprise as to the nature or scope of her appeal.

Moreover, the entire set of circumstances here is indicative of an unskilled litigant's mistaken judgment about the proper course of action. Upon reviewing the IRS's motion to dismiss in the Tax Court and determining that it was well-founded, a seasoned litigant undoubtedly would have stipulated to the dismissal of the Tax Court proceeding, and only then commenced an action in the District Court. Instead, Plaintiff skipped over these usual steps, and proceeded directly to this Court. There was no conceivable strategic advantage to be gained through this course of action, so it can only be assumed that Plaintiff acted out of an innocent but mistaken belief that the IRS's motion was the writing on the wall, foretelling the certain progression of this matter to the District Court. This case, in short, seems to fit comfortably within FirsTier Mortgage's discussion of a "reasonable mistake" by an "unskilled litigant."

Admittedly, though, FirsTier Mortgage is relevant here only by analogy, and offers no direct guidance on the specific issue presented in Defendant's motion. Accordingly, the Court returns to the language of §6330(d)(1) itself, which affords a 30-day period "after [a] court determination" to re-file an appeal "with the correct court." Plaintiff undeniably failed to comply with the strict terms of this statute, as she did not wait until "after" the Tax Court's ruling to commence suit in this Court. Just as clearly, however, Plaintiff's course of action comported with the obvious intent of the statute --namely, to provide only a limited window of opportunity to cure a mistaken filing with the wrong court. Presumably, Plaintiff had no argument to offer against the IRS's contention that the Tax Court lacked jurisdiction over her appeal. No statutory purpose would have been advanced if Plaintiff had awaited a formal Tax Court ruling on this point before commencing this action.

More importantly, practical considerations weigh decisively against the position urged in Defendant's motion. Even conceding that Plaintiff was mistaken in prematurely filing this suit before the Tax Court had acted upon the IRS's motion to dismiss, Defendant wholly fails to suggest what Plaintiff might have done to correct this error. Would it have sufficed, for example, for Plaintiff to have filed some sort of amended pleading in this case within the statutory 30-day period after the Tax Court's ruling? Or, would Plaintiff instead have been required to dismiss this case entirely, and then immediately commence another suit within the 30-day window? In this Court's view, either of these curative actions, or any other that might be imagined, would exalt form over substance, resulting in needless filings that would leave the parties in precisely the same position they now occupy. The Court declines to construe §6330(d)(1) as rigidly demanding such meaningless procedural formalities.

Indeed, even if the Court were to grant Defendant's motion, the parties might soon find themselves in precisely the same situation. Any such dismissal for lack of subject matter jurisdiction necessarily would be without prejudice. In that event, a persuasive argument could be made that the statutory 30-day period of limitation would have been tolled while this suit was pending. Section 6330 itself, for example, mandates the suspension of various periods of limitation while certain proceedings, including appeals, are pending. See 26 U.S.C. §6330(e)(1); cf. O'Neill v. United States [ 95-1 USTC ¶50,039], 44 F.3d 803 (9th Cir. 1995) (according the IRS the benefit of a similar tolling provision where a period of limitation expired during a Tax Court proceeding which was dismissed for lack of jurisdiction). Arguably, then, even if Defendant's motion were granted, Plaintiff would still have a full 30-day opportunity to re-file her appeal with this Court. This confirms the Court's view that Plaintiff's appeal under §6330(d)(1) is not defeated by her premature filing.

In so ruling, the Court recognizes that even pro se litigants are bound to adhere to all statutory limitations and requirements that Congress has seen fit to impose. The Court certainly would not condone, for example, simultaneous filings in the Tax and District Courts that are intended to "cover all the bases." The circumstances presented here, however, simply do not give rise to any such suspicions of deliberate manipulation, and in no way suggest that Plaintiff sought to bypass the process mandated in §6330(d)(1). Rather, the most that can be said is that Plaintiff should have expressly concurred in the IRS's motion in the Tax Court, and then awaited a formal order of dismissal in that proceeding before commencing this suit. These circumstances bespeak an innocent error by an unskilled litigant, and the Court declines to construe §6330(d)(1) so rigidly as to defeat Plaintiff's right of appeal as a result of an honest mistake that has caused no conceivable prejudice to the opposing party.

IV. CONCLUSION

For the reasons set forth above,

NOW, THEREFORE, IT IS HEREBY ORDERED that Defendant's December 18, 2002 Motion to Dismiss is DENIED.

¹ Although Plaintiff named the IRS as the Defendant, the United States is the proper party. See, e.g., Carelli v. Internal Revenue Service [ 82-1 USTC ¶9131], 668 F.2d 902, 904 (6th Cir. 1982); Deleeuw v. Internal Revenue Service [ 88-2 USTC ¶9403], 681 F.Supp. 402, 403-04 (E.D. Mich. 1987).

[2005-1 USTC ¶50,220] Donald Torczon, Plaintiff-Appellant v. Les Lucas, et al., Defendants-Appellees.

U.S. Court of Appeals, 9th Circuit; 04-35473, January 13, 2005 .

Unpublished opinion affirming an unreported DC-Ida. decision.

[ Code Sec. 6330]

Tax Court jurisdiction: Income tax liability. --

A federal district court properly dismissed an individual's complaint against the IRS for lack of subject matter jurisdiction. The Tax Court has exclusive jurisdiction over the income tax liability underlying the complaint.

Before: Beezer, Hall and Silverman, Circuit Judges. ^*

¬ Caution: The court has designated this opinion as NOT FOR PUBLICATION. Consult the Rules of the Court before citing this case.®

MEMORANDUM ^**

Donald Torczon appeals pro se the district court's dismissal for lack of subject matter jurisdiction of his complaint against an Internal Revenue Service ("IRS") Appeals Officer and an unnamed IRS employee regarding the IRS' attempted collection by levy of Torczon's previously assessed federal income tax liability for 1998.

The district court properly concluded that it lacked jurisdiction over Torczon's complaint, because the Tax Court has exclusive jurisdiction over the income tax liability underlying the complaint. 26 U.S.C. §6330(d)(1). Torczon's remaining contentions lack merit.

AFFIRMED.

^* This panel unanimously finds this case suitable for decision without oral argument. Fed. R. App. P. 34(a)(2).

^** This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Circuit Rule 36-3.

[Dec. 55,947(M)] Mardi Rustam v. Commissioner.

Dkt. No. 3316-04L , TC Memo. 2005-42, March 7, 2005 .

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

[Code Secs. 6330 and 6672]
Notice of lien: Notice of levy: Collection Due Process: Determinations: Tax Court: District Court: Jurisdiction. --

The Tax Court lacked jurisdiction to determine the liability of an individual with respect to penalties imposed by Code Sec. 6672. The federal district court or the Court of Federal Claims have jurisdiction to determine a taxpayer's liability under that section. The Tax Court rejected the taxpayer's argument that the IRS had waived the jurisdictional issue by stating on the notice of determination sent to him that the proper method for disputing the determination was to file a petition with the Tax Court.

[Code Sec. 7430]
Notice of lien: Notice of levy: Collection Due Process: Determinations: Tax Court: District Court: Jurisdiction. --

The individual was not entitled to reasonable litigation costs because he failed to prove that he substantially prevailed on an issue in controversy or that he satisfied the $2 million net worth limitation. Moreover, the IRS's position was substantially justified because it correctly argued that the Tax Court lacked jurisdiction to review its determination to collect the employment tax penalty from the taxpayer.

Stephen M. Lopez, for petitioner; John D. Faucher, for respondent.

MEMORANDUM OPINION

WELLS, Judge: This case is before the Court on respondent's motion to dismiss for lack of jurisdiction and petitioner's motion for award of reasonable litigation costs.¹ Unless otherwise noted, all section references are to the Internal Revenue Code, as amended, and all Rule references are to the Tax Court Rules of Practice and Procedure.

Background

At the time of filing his petition, petitioner resided in Toluca Lake , California .

On January 21, 2004 , respondent's Appeals Office issued a Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330, determining that a proposed levy to recover a section 6672 trust fund penalty liability with respect to petitioner's 1997 tax year was appropriate.² The first page of the notice of determination stated:

If you want to dispute this determination in court, you must file a petition with the United States Tax Court for a redetermination within 30 days from the date of this letter.

* * * * * * *

The time limit for filing your petition is fixed by law. The courts cannot consider your case if you file late. If the court determines that you made your petition to the wrong court, you will have 30 days after such determination to file with the correct Court. [Emphasis added.]

Petitioner subsequently petitioned this Court for review pursuant to section 6330(d). Petitioner contended that he was not liable for the underlying tax liability because he was not a "responsible person" for purposes of collecting, accounting for, and paying over taxes as required by sections 6671 and 6672.

Before answering the petition, respondent filed a motion to dismiss for lack of jurisdiction pursuant to section 6330(d)(1)(B) and Rule 53. In response, petitioner filed an opposition. Subsequently, petitioner filed a motion for award of reasonable litigation costs. On October 13, 2004 , the parties presented oral arguments before this Court with regard to respondent's motion to dismiss for lack of jurisdiction and petitioner's motion for award of reasonable litigation costs.

Discussion

Motion To Dismiss for Lack of Jurisdiction

Section 6330 provides persons liable for tax with the right to a hearing with the Commissioner's Appeals Office before the Secretary may levy upon the property of such persons.³ The determination of the Commissioner's Appeals Office is subject to judicial review, pursuant to section 6330(d)(1):

SEC. 6330(d). Proceeding After Hearing. --

(1) Judicial review of determination. --The person may, within 30 days of a determination under this section, appeal such determination --

(A) to the Tax Court (and the Tax Court shall have jurisdiction with respect to such matter); or

(B) if the Tax Court does not have jurisdiction of the underlying tax liability, to a district court of the United States .

If a court determines that the appeal was to an incorrect court, a person shall have 30 days after the court determination to file such appeal with the correct court.

The jurisdiction of this Court to review administrative determinations with respect to levy actions, therefore, is limited to actions in which we have jurisdiction of the underlying tax liability. See sec. 6330(d)(1)(B).

Petitioner does not argue that this Court has jurisdiction over the underlying section 6672 liability that is the subject of respondent's collection action. Rather, petitioner contends that respondent waived the right to challenge this Court's jurisdiction by stating on the notice of determination that the proper method for disputing the determination was to file a petition with this Court.

Petitioner's contention is without merit. We previously have held that this Court lacks jurisdiction to determine the liability of taxpayers with respect to penalties imposed by section 6672. Moore v. Commissioner [Dec. 53,802], 114 T.C. 171, 175 (2000); Medeiros v. Commissioner [Dec. 38,485], 77 T.C. 1255, 1260 (1981); Wilt v. Commissioner [Dec. 32,151], 60 T.C. 977, 978 (1973). In Moore v. Commissioner, supra at 175, we stated: "Section 6672(c)(2) contemplates that the Federal District Court or the Court of Federal Claims shall have jurisdiction to determine a taxpayer's liability for a penalty imposed under that section. The Tax Court does not have jurisdiction".⁴

The right to question the jurisdiction of this Court cannot be waived by the actions or inactions of a party. David Dung Le, M.D., Inc. v. Commissioner [Dec. 53,859], 114 T.C. 268 (2000), affd. [2002-1 USTC ¶50,112] 22 Fed. Appx. 837 (9th Cir. 2001). Consequently, respondent did not waive the right to challenge our jurisdiction over the underlying tax liability by instructing petitioner that the proper method for disputing the determination was for petitioner to file a petition with this Court.

For the foregoing reasons, we conclude that this Court lacks jurisdiction over the underlying section 6672 penalty in the instant case and that respondent's motion to dismiss must be granted.⁵ Petitioner, however, is not necessarily without remedy. Pursuant to section 6330(d), petitioner has 30 days to file an appeal with the appropriate U.S. District Court.

Motion for Reasonable Litigation Costs

Section 7430(a) provides that the prevailing party in a court proceeding brought by or against the United States in connection with the determination or collection of a tax, interest, or penalty may recover reasonable litigation costs.⁶ Section 7430(c)(4)(A) defines "prevailing party" as follows:

(4) Prevailing Party. --

(A) In general. --The term "prevailing party" means any party in any proceeding to which subsection (a) applies (other than the United States or any creditor of the taxpayer involved) --

(i) which --

(I) has substantially prevailed with respect to the amount in controversy, or

(II) has substantially prevailed with respect to the most significant issue or set of issues presented, and

(ii) which meets the requirements of the 1st sentence of section 2412(d)(1)(B) of title 28, United States Code (as in effect on October 22, 1986 ) except to the extent differing procedures are established by rule of court and meets the requirements of section 2412(d)(2)(B) of such title 28 (as so in effect).

Section 7430(c)(4)(A)(ii) effectively limits the award of litigation costs to parties with net worth of $2 million or less.⁷ Stieha v. Commissioner [Dec. 44,269], 89 T.C. 784, 790 (1987). Consequently, to qualify as the prevailing party pursuant to section 7430(c)(4), a party must, inter alia, (1) "substantially prevail" with respect to either the amount in controversy or the most significant issue or set of issues presented, and (2) satisfy the $2 million net worth limitation. The taxpayer bears the burden of proving that the foregoing two requirements have been satisfied. Rule 232(e); Minahan v. Commissioner [Dec. 43,746], 88 T.C. 492, 497 (1987).

Section 7430(c)(4)(B) provides the following exception to the definition of "prevailing party":

(B) Exception if United States establishes that its position was substantially justified. --

(i) General rule. --A party shall not be treated as the prevailing party in a proceeding to which subsection (a) applies if the United States establishes that the position of the United States in the proceeding was substantially justified.

Consequently, a party that satisfies the section 7430(c)(4)(A) definition of prevailing party is not treated as the prevailing party if the United States establishes that its position in the proceeding was substantially justified. Sec. 7430(c)(4)(B)(i).

"Reasonable litigation costs" include reasonable court costs and reasonable attorney's fees.⁸ Such costs and fees must be based on prevailing market rates. Sec. 7430(c)(1)(B). Attorney's fees, generally, are capped at $125 per hour, with an adjustment for inflation. Sec. 7430(c)(1).

We understand petitioner's position to be that he substantially prevailed with respect to the most significant issue or set of issues presented pursuant to section 7430(c)(4)(A)(i)(II). Without elaboration, petitioner contends that he prevailed with respect to respondent's motion to dismiss or with respect to petitioner's own motion for reasonable litigation costs. Petitioner makes no contention as to whether the position of respondent was substantially justified or whether petitioner satisfied the net worth requirements of section 7430(c)(4)(A)(ii). Petitioner requests litigation costs of $5,078.10, which represents 15.25 hours of service billed at $325 per hour, together with various miscellaneous costs.⁹ Petitioner does not contend, however, that special factors justify the payment of attorney's fees at a rate higher than that prescribed by section 7430(c)(1).

We will deny petitioner's motion. The only issue presented by respondent's motion to dismiss for lack of jurisdiction is whether this Court has jurisdiction over the collection of petitioner's section 6672 penalty liability.¹⁰ See sec. 7430(c)(7). As noted above, petitioner did not substantially prevail with respect to that issue.¹¹ Furthermore, petitioner failed to demonstrate that his net worth does not exceed $2 million, pursuant to section 7430(c)(4)(A)(ii). Consequently, petitioner is not the prevailing party in the proceeding before us.

Even if petitioner were the prevailing party, respondent's position in the motion to dismiss for lack of jurisdiction was substantially justified; as we held above, we lack jurisdiction with respect to respondent's attempt to collect the section 6672 penalty from petitioner. See Moore v. Commissioner [Dec. 53,802], 114 T.C. 171 (2000). Consequently, petitioner is not the prevailing party in the proceeding before us.

For the foregoing reasons, petitioner is not entitled to an award of reasonable litigation costs by this Court.¹²

Conclusion

We conclude that respondent's motion to dismiss must be granted because this Court lacks jurisdiction over respondent's collection of the underlying section 6672 liability from petitioner. We further conclude that petitioner's motion for costs must be denied because petitioner is not the prevailing party.¹³ We have considered all remaining arguments and, to the extent not addressed above, conclude that they are irrelevant or without merit.

To reflect the foregoing,

An order and order of dismissal for lack of jurisdiction will be entered, and petitioner's motion for award of litigation costs as amended will be denied.

¹ The parties appeared via video conference from Los Angeles, Cal., presenting oral arguments on the instant motions to the Court sitting in Washington, D.C.

² SEC. 6672. FAILURE TO COLLECT AND PAY OVER TAX, OR ATTEMPT TO EVADE OR DEFEAT TAX.

(a) General Rule. --Any person required to collect, truthfully account for, and pay over any tax imposed by this title who willfully fails to collect such tax, or truthfully account for and pay over such tax, or willfully attempts in any manner to evade or defeat any such tax or the payment thereof, shall, in addition to other penalties provided by law, be liable to a penalty equal to the total amount of the tax evaded, or not collected, or not accounted for and paid over. No penalty shall be imposed under section 6653 or part II of subchapter A of chapter 68 for any offense to which this section is applicable.

³ SEC. 6330. NOTICE AND OPPORTUNITY FOR HEARING BEFORE LEVY.

(a) Requirement of Notice Before Levy. --

(1) In general. --No levy may be made on any property or right to property of any person unless the Secretary has notified such person in writing of their right to a hearing under this section before such levy is made. * * *

* * * * * * *

(b) Right to Fair Hearing. --

(1) In general. --If the person requests a hearing * * *, such hearing shall be held by the Internal Revenue Service Office of Appeals.

⁴ Whereas sec. 6672(c)(2) imposes procedural requirements for refund suits in U.S. District Courts and the U.S. Court of Federal Claims, sec. 6672 makes no reference to the jurisdictional authority of this Court. Sec. 6672(c)(2) provides:

(2) Suit must be brought to determine liability for penalty. --If, within 30 days after the day on which his claim for refund with respect to any penalty under subsection (a) is denied, the person described in paragraph (1) fails to begin a proceeding in the appropriate United States district court (or in the Court of Claims) for the determination of his liability for such penalty, paragraph (1) shall cease to apply with respect to such penalty, effective on the day following the close of the 30-day period referred to in this paragraph.

⁵ Petitioner also contends that respondent's motion to dismiss is premature because respondent failed to notify petitioner or petitioner's counsel before the filing of the motion pursuant to Rule 50(a), leaving petitioner with no opportunity to object to the motion. This contention lacks merit. Rule 50(a) provides:

(a) Form and Content of Motion: An application to the Court for an order shall be by motion in writing, which shall state with particularity the grounds therefor and shall set forth the relief or order sought. The motion shall show that prior notice thereof has been given to each other party or counsel for each other party and shall state whether there is any objection to the motion. If a motion does not include such a statement, the Court will assume that there is an objection to the motion.

Where notice of a motion is not provided, objection to the motion is assumed by this Court. Id. Accordingly, petitioner's objection to respondent's motion to dismiss was assumed, and petitioner has been permitted ample opportunity to voice the objection to this Court.

⁶ Sec. 7430(a) provides in part:

SEC. 7430. AWARDING OF COSTS AND CERTAIN FEES.

(a) In General. --In any * * * court proceeding which is brought by or against the United States in connection with the determination, collection, or refund of any tax, interest, or penalty under this title, the prevailing party may be awarded a judgment or a settlement for --

*******

(2) reasonable litigation costs incurred in connection with such court proceeding.

⁷ Rule 231(b)(4) requires that a motion for award of reasonable litigation costs contain a statement, supported by an affidavit of the moving party, that the moving party meets the net worth requirement.

⁸ SEC. 7430(c). Definitions. --For purposes of this section --

(1) Reasonable litigation costs. --The term "reasonable litigation costs" includes --

(A) reasonable court costs, and

(B) based upon prevailing market rates for the kind or quality of services furnished --

(i) the reasonable expenses of expert witnesses in connection with a court proceeding, except that no expert witness shall be compensated at a rate in excess of the highest rate of compensation for expert witnesses paid by the United States,

(ii) the reasonable cost of any study, analysis, engineering report, test, or project which is found by the court to be necessary for the preparation of the party's case, and

(iii) reasonable fees paid or incurred for the services of attorneys in connection with the court proceeding, except that such fees shall not be in excess of $125 per hour unless the court determines that an increase in the cost of living or a special factor, such as the limited availability of qualified attorneys for such proceeding, the difficulty of the issues presented in the case, or the local availability of tax expertise, justifies a higher rate.

In the case of any calendar year beginning after 1996, the dollar amount referred to in clause (iii) shall be increased by an amount equal to such dollar amount multiplied by the cost-of-living adjustment determined under section 1(f)(3) for such calendar year, by substituting "calendar year 1995" for "calendar year 1992" in subparagraph (B) thereof. If any dollar amount after being increased under the preceding sentence is not a multiple of $10, such dollar amount shall be rounded to the nearest multiple of $10.

⁹ In addition to billing petitioner $325 per hour for 15.25 hours of service, petitioner's counsel states that he advanced costs of $60 for filing the petition and $30.85 for postage, copying, and faxes. Petitioner's counsel added anticipated court parking costs of $17 and the $14 cost of "Federal Express Filing" the amended motion to the litigation cost total.

¹⁰ We note that respondent has not yet filed an answer in this case. Consequently, respondent's only position with respect to petitioner's sec. 6672 liability is that this Court lacks jurisdiction over the issue. See sec. 7430(c)(7).

¹¹ Although petitioner contends that he prevailed with respect to the motion for litigation costs, that argument is circular, and we will not consider it.

¹² We also note that sec. 7430(c)(1) permits the award of attorney's fees in excess of the prescribed limitation only where a special factor justifies a higher rate. Petitioner's claimed rate of $325 per hour far exceeds the prescribed limitation, and petitioner has not demonstrated any special factor justifying such a rate. See sec. 7430(c)(1)(B)(iii).

¹³ We sympathize with petitioner's argument that respondent's notice of determination erroneously directed him to this Court. We do not know whether petitioner will refile this case in the District Court. If he does, we express no view herein as to whether he would substantially prevail on the sec. 6672 issue and otherwise qualify for an award of litigation costs. However, if he is otherwise entitled to such an award, we do not intend our holding that he did not substantially prevail on the jurisdictional issue in this Court to affect whether the District Court includes costs petitioner incurred in this Court in an award under sec. 7430.