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SEC.
6330. NOTICE AND [Dec.
55,947(M)] Mardi Rustam v. Commissioner. 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. 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 On
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 Discussion
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 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. 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 (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 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 (i)
General rule. --A party shall not be treated as the prevailing
party in a proceeding to which subsection (a) applies if the Consequently,
a party that satisfies the section
7430(c)(4)(A) definition of prevailing party is not
treated as the prevailing party if the "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 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.
[2005-1 USTC ¶50,274] Darrel R. Meadows, Petitioner-Appellant v. Commissioner of Internal
Revenue, Respondent-Appellee. The
Tax Court did not abuse its discretion when it refused to
determine whether the IRS violated a bankruptcy court's automatic
stay when it applied a sum of money paid by a debtor's wife (to
satisfy a nominee lien on property she owned) to a tax liability
of the debtor that was later discharged in bankruptcy. The debtor,
instead, wanted the money applied to other tax liabilities that
were not discharged. The debtor had appealed to the Tax Court
after receiving an adverse result in a Collection Due Process
hearing. The Tax Court, however, declined to exercise jurisdiction
over the case and, instead, decided to defer the matter to the
expertise and authority of the bankruptcy court. This was proper
due to the complex issues of bankruptcy law that were involved. H.
Washington, 120 T.C. 114, Dec.
55,072, distinguished. . I.
FACTUAL AND PROCEDURAL BACKGROUND
II.
DISCUSSION
it
is possible that taxpayers will present this Court with more
difficult questions that may be better suited for consideration by
the Bankruptcy Court. Under such circumstances, this Court may
defer to a Bankruptcy Court to decide the matter. Such deference
would not be premised upon any concerns that we lack
jurisdictional capacity to consider the issue. Rather it would be
based upon considerations of comity and judicial efficiency,
combined with our recognition that this Court does not deal with
bankruptcy matters with the expertise that a Bankruptcy Court
possesses.
[Dec. 56,008(M)]
Myong Soo Kim and Sung Me Hwang v. Commissioner. The
Tax Court had jurisdiction over a petition for review of a notice
of determination even though the taxpayers filed their request for
a Collection Due Process (CDP) hearing late. The court rejected
the IRS's argument that, since the taxpayers filed their CDP
hearing request late, they were only entitled to an equivalent
hearing. Thus, the notice of determination was issued in error and
was, therefore, invalid. However, the court had general
jurisdiction over the type of tax involved, the taxpayers'
received a notice of determination, and the taxpayers' petition
for review was timely filed. Therefore, the court had jurisdiction
over the taxpayers' petition. Despite these facts, the taxpayer's
were not entitled to relief under Code
Sec. 6330 because they filed their request for a CDP
hearing late. Myong
Soo Kim and Sung Me Hwang, pro sese; Lisa M. Oshiro, for
respondent. MEMORANDUM
FINDINGS OF FACT AND OPINION MARVEL,
Judge: This matter is before the Court on respondent's motion to
dismiss for lack of jurisdiction, as supplemented, on the ground
that respondent issued an invalid notice of determination
concerning a collection action under section
6330.1 FINDINGS
OF FACT Petitioners
resided in On
On
On
On
On
OPINION
Section
6331(a) provides that if any taxpayer liable to pay any
tax neglects or refuses to pay such tax within 10 days after
notice and demand for payment, then the Secretary is authorized to
collect such tax by levy upon the taxpayer's property. Section
6331(d) provides that, at least 30 days before
enforcing collection by way of a levy, the Secretary is obliged to
provide the taxpayer with a written notice of his intent to levy
and of the administrative appeal available to the taxpayer. Sec.
6331 (d) (4) (C) . Section
6330(a) requires the Secretary to send written notice
to the taxpayer of his right to request a hearing with Appeals (section
6330 hearing) before a levy is made. Section
6330(a)(2) provides that the prescribed notice must be
provided not less than 30 days before the day of the first levy,
and section
6330(a)(3)(B) provides that the notice must inform the
taxpayer that he has the right to request a section
6330 hearing during the 30-day period under section
6330(a)(2). See sec. 301.6330-1(c), Q&A-C3, Proced.
& Admin. Regs. The taxpayer's request for the section
6330 hearing must be submitted in writing. Sec.
301.6330-1(c)(2), Q&A-C1, Proced. & Admin. Regs. If the
written request is properly addressed, with postage prepaid, and
is postmarked within the applicable 30-day response period, in
accordance with section
7502, the request will be considered timely even if it
is not received by the IRS office that issued the notice until
after the 30-day response period. Sec. 301.6330-1(c)(2),
Q&A-C4, Proced. & Admin. Regs. If
a section
6330 hearing is conducted, the taxpayer may raise any
relevant matter set forth in section
6330(c)(2) at the hearing, and the Appeals officer
shall make a "determination" as to those matters. Sec.
6330(c)(3). Appeals will issue its determination in the
form of a notice of determination setting forth its findings and
decisions. Sec. 301.6330-1(e)(3), Q&A-E8, Proced. & Admin.
Regs. When Appeals issues the notice of determination, the
taxpayer has 30 days following the issuance to file a petition for
review of the determination with this Court or a A
taxpayer who fails to timely request a section
6330 hearing is not entitled to a section
6330 hearing but may nevertheless request an
administrative hearing with Appeals that is referred to as an
"equivalent hearing". Sec. 301.6330-1(i)(1), Proced.
& Admin. Regs.; see also sec. 301.6330-1(c)(2), Q&A-C7,
Proced. & Admin. Regs. The equivalent hearing generally
follows Appeals's procedures for a section
6330 hearing, and Appeals will consider the same issues
it would have considered at a section
6330 hearing on the same matter. Sec. 301.6330-1(i)(1)
and (2), Q&A-I1, Proced. & Admin. Regs. Rather than issue
a notice of determination after an equivalent hearing, however,
Appeals will issue a decision letter. Sec. 301.6330-1(i)(1),
Proced. & Admin. Regs. A decision letter generally contains
the same information required to be in a notice of determination,
except that it ordinarily states in regard to most issues that a
taxpayer may not seek judicial review of the decision. Craig v.
Commissioner [Dec.
54,933], 119 T.C. 252, 258-259 (2002); see also sec.
301.6330-1(i)(2), Q&A-I4 and I5, Proced. & Admin. Regs. If
the Court has general jurisdiction over the type of tax involved,
a valid notice of determination and a timely filed petition are
the only requirements for the exercise of its jurisdiction under section
6330(d)(1). Lunsford v. Commissioner [Dec.
54,553], 117 T.C. 159, 161 (2001); Sarrell v.
Commissioner [Dec.
54,494], 117 T.C. 122, 125 (2001). Section
6330 does not authorize judicial review of an Appeals
decision made with respect to an equivalent hearing, and the
absence of a determination by Appeals is grounds for dismissal of
a petition that purports to be based on section
6330. Kennedy v. Commissioner [Dec.
54,315], 116 T.C. 255, 261 (2001); Offiler v.
Commissioner [Dec.
53,912], 114 T.C. 492, 498 (2000); sec.
301.6330-1(i)(2), Q&A-I5, Proced. & Admin Regs. II.
The Parties' Contentions The
parties do not dispute that the Court has general jurisdiction
over the Federal income taxes involved,4 and
respondent concedes that the petition was timely filed. Respondent
contends, however, that the notice of determination was issued in
error and is invalid because petitioners did not timely request a section
6330 hearing, that the hearing that was offered
petitioners was an equivalent hearing and not a section
6330 hearing, and that respondent should have issued a
decision letter instead of a notice of determination. Respondent
argues that Even
if Appeals erroneously issued a notice of determination to a
taxpayer who filed his/her hearing request late, the mere fact the
taxpayer was issued a notice of determination cannot confer
jurisdiction on the Tax Court * * *, any more than a decision
letter issued to the taxpayer can deprive the Court of
jurisdiction under section
6330(d). Although
petitioners object to respondent's motion, they do not
specifically contend that the notice of determination is valid.
Instead, petitioners argue that their case should not be
dismissed, and they challenge the existence and amounts of the
income tax liabilities underlying the notice of determination.
A.
Jurisdiction Respondent
relies on Craig v. Commissioner, supra, to support
his argument for dismissal. In Craig, the taxpayer timely
requested a section
6330 hearing, but Appeals mistakenly conducted an
equivalent hearing and subsequently issued a decision letter. Respondent's
reliance on Craig is misplaced. In Craig, Appeals
did not issue a notice of determination. Instead, Appeals issued a
decision letter that, on its face, did not establish a basis for
our jurisdiction. As a result, in order to ascertain whether
Appeals had made the determination required by section
6330, we examined both the decision letter and the
timeliness of the taxpayer's request for a section
6330 hearing to arrive at our conclusion that the
Appeals decision letter contained the determination required by section
6330. Craig does not stand for the proposition
that we may look behind a facially valid notice of determination
in response to the Commissioner's contention that the notice of
determination was erroneously issued. See Lunsford v.
Commissioner, supra. In
Lunsford, we were presented with the issue of whether a
facially valid notice of determination was sufficient to confer
jurisdiction over a section
6330 proceeding in which no section
6330 hearing had been held before the notice of
determination had been issued. The taxpayer in Lunsford had
timely requested a section
6330 hearing, but no administrative hearing of any kind
had been conducted. Whether
there was an appropriate hearing opportunity, or whether the
hearing was conducted properly * * *, or whether any of the other
nonjurisdictional provisions of section
6330 were properly followed, will all be factors that
we must take into consideration under section
6330 in deciding such cases. But none of these factors
should preclude us from exercising our jurisdiction under section
6330(d), in order to resolve the underlying dispute in
a fair and expeditious manner. Lunsford
v. Commissioner, supra
at 164. Accordingly, we held that if Appeals issues a notice of
determination that clearly embodies the Appeals officer's
determination concerning collection by way of levy and the
taxpayer timely files a petition contesting the determination,
then regardless of whether the taxpayer was given an appropriate
hearing opportunity, we have jurisdiction to review the
determination. Although
neither Lunsford nor Craig is exactly on point, the
facts of this case more closely resemble those of Lunsford
than Craig. Petitioners requested a section
6330 hearing, but no Appeals hearing was conducted.
Appeals then issued a notice of determination. The notice of
determination is valid on its face, in that it was mailed to the
last known address of petitioners, it clearly contains the
determination of Appeals that the requirements of section
6330 have been met and that the levy action should be
sustained, and it informs petitioners that they may appeal the
determination to this Court. There is nothing in the notice of
determination that leads us to conclude that the notice is
invalid. Therefore, regardless of whether Appeals should have
issued a decision letter, a notice containing the determination of
Appeals was issued, and it is this determination that triggers our
jurisdiction under section
6330(d), if, as here, we have general jurisdiction over
the type of tax involved and a timely petition for review has been
filed. B.
Petitioners' Claim to Section 6330 Relief Although
we reject respondent's argument that we must dismiss this case for
lack of jurisdiction, it is nevertheless apparent that petitioners
are not entitled to relief under section
6330. We shall treat respondent's motion as a motion
for summary judgment5 under
Rule 121, and we shall grant respondent's motion as
recharacterized because there is no genuine issue as to any
material fact, and a decision may be rendered as a matter of law. The
undisputed relevant facts establish that petitioners failed to
timely request a section
6330 hearing within the 30-day period provided by section
6330(a)(2). Sec. 301.6330-1(c)(1), Proced. & Admin.
Regs. Respondent issued the NILs on Section
6330 requires a taxpayer to timely request a section
6330 hearing. Sec.
6330(a)(3); sec. 301.6330-1(c)(1) and (2), Q&A-C3,
C5-C7, Proced. & Admin. Regs.; see also Craig v.
Commissioner [Dec.
54,933], 119 T.C. at 257; Kennedy v. Commissioner
[Dec.
54,315], 116 T.C. at 262; Offiler v.
Commissioner [Dec.
53,912], 114 T.C. at 497. Petitioners did not do so. Section
6330 does not authorize the Commissioner to waive the
time restrictions imposed therein, nor does it authorize the
Commissioner to lengthen or shorten the 30-day period for
requesting a section
6330 hearing. Moorhous v. Commissioner [Dec.
54,316], 116 T.C. 263, 270 n.5 (2001); Kennedy v.
Commissioner, supra at 262. In
this case, because petitioners did not timely request a section
6330 hearing, petitioners were not entitled to such a
hearing and were not offered one. Consequently, we shall grant
respondent's deemed motion for summary judgment. IV.
Conclusion Although
we deny respondent's motion insofar as it asks us to dismiss this
case for lack of jurisdiction, it is clear that petitioners are
not entitled to relief under section
6330. We have treated respondent's motion as a motion
for summary judgment, and we shall grant respondent's motion
because petitioners did not timely request a section
6330 hearing. An
appropriate order and decision will be entered. 1
Unless otherwise indicated, all section references are to the
Internal Revenue Code in effect at the time the petition in this
case was filed, and all Rule references are to the Tax Court Rules
of Practice and Procedure. [Dec. 56,064(M)]
Gregory Meeker v. Commissioner. An
individual's petition requesting review of several IRS Appeals
decisions was dismissed for lack of jurisdiction. The IRS sent the
individual notices of intent to levy with information regarding
the collection due process procedures for various tax years.
However, the individual failed to file a timely request for a
Collection Due Process hearing for any of the tax years at issue.
Since a decision letter issued after an equivalent hearing is not
a determination letter under Code
Secs. 6320 or 6330,
the court lacked jurisdiction to review the IRS's decision.
The
court did not impose the Code
Sec. 6673(a)(1) penalty even though an individual's
petition, objection, and motions were replete with tax-protester
rhetoric that has been universally rejected, his position was
frivolous and the proceedings were instituted primarily for delay.
The court did, however, warn the individual that the penalty would
be imposed if he returned with similar arguments in the future.
The
Tax Court lacked jurisdiction to review the IRS's decision to
impose a frivolous return penalty under Code
Sec. 6702. The Tax Court's jurisdiction to review IRS
determinations regarding collection matters is limited to cases
where the court has jurisdiction over the underlying tax
liability. Therefore, that portion of the individual's petition
was dismissed, and the individual was given 30 days to file an
appeal of the Code
Sec. 6702 penalty with the appropriate federal district
court.
An
individual's tax court petition requesting review of several IRS
Appeals decisions was dismissed for failure to state a claim upon
which relief could be granted. The individual's petition, and
other documents he presented to the court, contained frivolous and
groundless tax protestor-type arguments. Tax Court Rule 34(b)(4)
requires that petitions contain clear and concise statements
describing all of the errors the IRS made when determining the
disputed deficiency, additions to tax and/or penalties. In
addition, a petitioner must support these statements of error with
facts. Since the individual failed to comply with these rules, the
court dismissed his petition under Tax Court Rule 123. Gregory
Meeker, pro se; Lauren B. Epstein, for respondent. MEMORANDUM
OPINION VASQUEZ,
Judge: This case is before the Court on respondent's motion to
dismiss for failure to state a claim upon which relief could be
granted. On
On
On
On
or about On
During
August 2004, petitioner and respondent conducted by correspondence
a section
6330 hearing regarding (1) the notice of lien regarding
income taxes for 1999, 2000, and 2001 and penalty pursuant to section
6702 for 1999 and 2000, and (2) the proposed levy
regarding income taxes for 1999 and 2000. During August 2004,
petitioner and respondent conducted by correspondence an
equivalent hearing regarding the proposed levy regarding income
taxes for 2001. On
On
On
On
On
Petitioner
attempted to file several other documents with the Court that the
Office of the Clerk of the Court returned to petitioner as
unfilable. The returned documents included a "motion to set
aside defaults" and a "verified motion to enforce
default against IRS by summary judgement". These documents
contained frivolous and groundless arguments. At
the hearing on respondent's motion, petitioner stated:
"Basically, the only thing I have before the Court, and the
only thing that's --as far as I'm concerned, is the default I have
against them [the Internal Revenue Service] for not answering my
First Amendment complaint." Petitioner further stated:
"What I'm saying is they [the Internal Revenue Service] don't
have jurisdiction to issue anything to me. I'm not under their
jurisdiction".
A
decision letter is not a determination letter pursuant to section
6320 or 6330.
See Kennedy v. Commissioner [Dec.
54,315], 116 T.C. 255, 263 (2001); Offiler v.
Commissioner [Dec.
53,912], 114 T.C. 492, 495 (2000). Respondent did not
issue a determination letter to petitioner sufficient to invoke
the Court's jurisdiction to review the notice of intent to levy
for 2001. Kennedy v. Commissioner, supra. Insofar as the
petition filed herein purports to be a petition for review
pursuant to section
6330(d) of the notice of intent to levy for 2001, we
shall dismiss the petition as to the notice of intent to levy for
2001 for lack of jurisdiction on the ground that respondent did
not make a determination pursuant to section
6330 regarding the notice of intent to levy for 2001
because petitioner failed to file a timely request for an Appeals
Office hearing pursuant to section
6330(a)(2) and (3)(B)
and (b).
The
Court's jurisdiction to review the Commissioner's determinations
respecting collection matters is limited to cases where the
underlying tax liability is of a type over which the Court
normally has jurisdiction. See Accordingly,
we shall dismiss the petition as to the notice of Federal tax lien
regarding the section
6702 penalty for 1999 and 2000 on the ground that we
lack jurisdiction to review respondent's determinations regarding
the section
6702 penalty. Johnson v. Commissioner, supra; Van Es
v. Commissioner, supra. Pursuant to section
6330(d), petitioner has 30 days after the entry of our
order to file his appeal with the appropriate U.S. District Court
regarding the notice of determination that pertains to the notice
of Federal tax lien for the section
6702 penalty for 1999 and 2000. III.
Notice of Deficiency and Income Tax Notices of Determination Rule
34(b)(4) requires that a petition filed in this Court shall
contain clear and concise assignments of each and every error that
the taxpayer alleges to have been committed by the Commissioner in
the determination of the deficiency and the additions to tax or
penalties in dispute. Rule 34(b)(5) further requires that the
petition shall contain clear and concise lettered statements of
the facts on which the taxpayer bases the assignments of error. Funk
v. Commissioner [Dec.
55,719], 123 T.C. 213, 215 (2004); Jarvis v.
Commissioner [Dec.
38,959], 78 T.C. 646, 658 (1982); Stearman v.
Commissioner [Dec.
55,944(M)], T.C. Memo. 2005-39. Any issue not raised in
the pleadings is deemed to be conceded. Rule 34(b)(4); Funk v.
Commissioner, supra; Jarvis v. Commissioner, supra at 658
n.19; Gordon v. Commissioner [Dec.
36,748], 73 T.C. 736, 739 (1980); Stearman v.
Commissioner, supra. Further, the failure of a party to plead
or otherwise proceed as provided in the Court's Rules may be
grounds for the Court to hold such party in default, either on the
motion of another party or on the initiative of the Court. Rule
123(a); Stearman v. Commissioner, supra; Ward v. Commissioner
[Dec.
54,779(M)], T.C. Memo. 2002-147. The Court also may
dismiss a case and enter a decision against a taxpayer for his
failure properly to prosecute or to comply with the Rules of this
Court. Rule 123(b); Stearman v. Commissioner, supra; Ward v.
Commissioner, supra. We
agree with respondent that petitioner has failed to state a claim
upon which relief can be granted. See Funk v. Commissioner,
supra at 216-217; Stearman v. Commissioner, supra.
Accordingly we shall dismiss petitioner's case and enter a
decision sustaining respondent's determinations contained in the
notice of deficiency for 20023 and
respondent's determinations sustaining the notice of intent to
levy for 1999 and 2000 and the notice of Federal tax lien
regarding income taxes for 1999, 2000, and 2001.4 Rules
34(a), 123; Funk v. Commissioner, supra at 218; Stearman v.
Commissioner, supra. IV.
Section 6673 Section
6673(a)(1) authorizes this Court to require a taxpayer
to pay to the United States a penalty not to exceed $25,000 if the
taxpayer took frivolous or groundless positions in the proceedings
or instituted the proceedings primarily for delay. A position
maintained by the taxpayer is "frivolous" where it is
"contrary to established law and unsupported by a reasoned,
colorable argument for change in the law." Coleman v.
Commissioner [86-1
USTC ¶9401], 791 F.2d 68, 71 (7th Cir. 1986); see also
Hansen v. Commissioner [87-2
USTC ¶9402], 820 F.2d 1464, 1470 (9th Cir. 1987) (section
6673 penalty upheld because taxpayer should have known
claim was frivolous). Petitioner's
petition, objection, and motion to enforce Rule 36 are replete
with tax-protester rhetoric, including but not limited to
arguments regarding the 16th Amendment. The same is true for (1)
the two documents received at the hearing on respondent's motion
that the Court previously refused to file and (2) petitioner's
arguments at the hearing on respondent's motion. Petitioner
has advanced shopworn arguments characteristic of tax-protester
rhetoric that has been universally rejected by this and other
courts. Wilcox v. Commissioner [88-1
USTC ¶9387], 848 F.2d 1007 (9th Cir. 1988), affg. [Dec.
43,889(M)], T.C. Memo. 1987-225; Carter v.
Commissioner [86-1
USTC ¶9279], 784 F.2d 1006, 1009 (9th Cir. 1986). We
shall not painstakingly address petitioner's assertions "with
somber reasoning and copious citation of precedent; to do so might
suggest that these arguments have some colorable merit." Crain
v. Commissioner [84-2
USTC ¶9721], 737 F.2d 1417, 1417 (5th Cir. 1984). We
conclude that petitioner's position was frivolous and groundless
and that petitioner instituted and maintained these proceedings
primarily for delay. We take this opportunity to warn petitioner
that the Court will impose a penalty pursuant to section
6673 if he returns to the Court and proceeds in a
similar fashion in the future. To
reflect the foregoing, An
appropriate order of dismissal and decision will be entered. 1
Unless otherwise indicated, all section references are to the
Internal Revenue Code, and all Rule references are to the Tax
Court Rules of Practice and Procedure. [Dec. 56,066(M)]
David Broomfield v. Commissioner. An
incarcerated individual's untimely challenge to a notice of
determination was dismissed. The Commissioner is entitled to treat
an address given in a return under audit, or in the return most
recently filed, as the taxpayer's last known address, absent clear
and concise notification by the individual that some other address
should be used. Therefore, even though the taxpayer was
incarcerated, and the Commissioner had some knowledge of the
incarceration, notice sent to his last known address was
sufficient. David
Broomfield, pro se; Mark D. Petersen, for respondent. MEMORANDUM
OPINION GALE,
Judge: This case is before the Court on respondent's motion to
dismiss for lack of jurisdiction on the ground that the petition
was not filed within the time prescribed by section
6330(d)(1).1
Petitioner filed an objection to respondent's motion. The parties
then filed seriatim responses to petitioner's objection. A hearing
was held on respondent's motion. Petitioner, who is incarcerated,
did not appear but instead submitted a statement under Rule 50(c).
Respondent offered the testimony of the settlement officer who
handled petitioner's request for a hearing under section
6330. We base our findings on the facts that are not in
dispute, petitioner's submissions, and various documents from
petitioner's administrative file in the record. We rely on
respondent's witness's testimony only to the extent it contains
admissions or establishes the foundation for admitting the
material in petitioner's administrative file. Background Petitioner
was incarcerated at Oakhill Correctional Institution in On
On
Petitioner
advised the settlement officer of his belief that he was due a
refund with respect to his 1991 tax year and of his desire to file
a corrected return for 1991. (Petitioner claimed to have filed
previously for 1991.) Petitioner requested that the settlement
officer provide him a return form for completion and filing.
Petitioner further requested return forms for 1997 and 2001 so
that he could become current in his filing obligations. In the
course of this discussion, petitioner advised the settlement
officer that he would be going to jail. On
the day after their telephone conversation (November 6, 2002), the
settlement officer mailed a letter to petitioner at the Wanda
Avenue address which enclosed return forms for 1991 and 1997
through 2001, and set a On
Petitioner
did not submit the completed returns or any other materials by the
December 11 deadline. On
On
On
Discussion Section
6330 establishes the procedures for administrative and
judicial review of actions to collect by levy. Section
6330(a) provides that no levy may be made on any
property or right to property of any person unless the Secretary
has notified such person in writing of the right to a hearing
before the levy is made. If
a hearing is requested, it is held by the Internal Revenue Service
Office of Appeals. Sec.
6330(b). Following the hearing, the Appeals officer
will issue a written determination setting forth his findings and
decisions. Sec. 301.6330-1(e)(3)(Q&A-E8)(i), Proced. &
Admin. Regs. Section
6330(d)(1) provides that a person may, within 30 days
of a determination,2 appeal
the determination to the Tax Court or, if the Tax Court does not
have jurisdiction over the underlying tax liability, to a Federal
District Court. The
Tax Court is a court of limited jurisdiction, and we may exercise
our jurisdiction only to the extent authorized by Congress. Naftel
v. Commissioner [Dec.
42,414], 85 T.C. 527, 529 (1985). The Court's
jurisdiction under section
6330 depends on the issuance of a valid notice of
determination and the filing of a timely petition for review. See Sarrell
v. Commissioner [Dec.
54,494], 117 T.C. 122, 125 (2001); Offiler v.
Commissioner [Dec.
53,912], 114 T.C. 492, 498 (2000). It follows that when
a petition is not timely filed, we are obliged to dismiss the case
for lack of jurisdiction. See McCune v. Commissioner [Dec.
53,988], 115 T.C. 114, 118 (2000). In
his motion, respondent argues that the petition is untimely and
that the Court therefore lacks jurisdiction. Petitioner maintains
that his incarceration and subsequent transfers within the Although,
section
6330(d) does not specify the means by which the
Commissioner is required to give notice of a determination made
under section
6330, we have held that use of the method authorized in
section
6212(a) and (b)
for notices of deficiency is sufficient. Weber v. Commissioner
[Dec.
55,588], 122 T.C. 258, 261-262 (2004). Thus, if a
notice of determination is sent by certified or registered mail to
the taxpayer at his last known address, it is sufficient and valid
for purposes of commencing the 30-day period in which the petition
must be filed, regardless of whether the taxpayer actually
receives the notice in time to petition the Court. Respondent
sent the notice of determination, dated The
Court of Appeals for the Seventh Circuit, where an appeal in this
case would ordinarily lie, has indicated that a taxpayer's last
known address is the address which in light of the circumstances
the Commissioner reasonably believes is the address at which the
taxpayer wishes to be reached at the time the notice of deficiency
is sent. Eschweiler v. United States [91-2
USTC ¶50,505], 946 F.2d 45, 49-50 (7th Cir. 1991); Goulding
v. United States [
91-1 USTC ¶50,185], 929 F.2d 329, 331 (7th Cir. 1991).
The Commissioner may rely on the address found in the return being
audited5 or the
most recent address in his files, unless there is "'clear and
concise notification from the taxpayer directing the Commissioner
to use a different address.'" Goulding v. The
burden falls on the taxpayer to give clear and concise
notification to the Commissioner of a change in address. Eschweiler
v. United States, supra at 48; Goulding v. When
the taxpayer is incarcerated, we and other courts have generally
held that the Commissioner is entitled to treat an address given
in the return under audit, or in the return most recently filed,
as the last known address, even where the Commissioner has some
knowledge of the incarceration, absent clear and concise
notification by the taxpayer that the place of incarceration or
some other address should be used. See, e.g., Cohen v. United
States [62-1
USTC ¶9202], 297 F.2d 760 (9th Cir. 1962); Snell v.
Commissioner, [Dec.
49,332(M)], T.C. Memo. 1993-470, affd. without
published opinion [95-1
USTC ¶50,174], 50 F.3d 16 (9th Cir. 1995); Agustin
v. Commissioner [Dec.
48,091(M)], T.C. Memo. 1992-167; Tirado v.
Commissioner [Dec.
36,425(M)], T.C. Memo. 1979-448; cf. United States
v. Eisenhardt [77-2
USTC ¶9565], 437 F. Supp. 247 (D. Md. 1977) (last
known address was place of incarceration where taxpayer advised
Commissioner of place and commencement date of incarceration). The
exceptions have generally arisen where the knowledge that the
Commissioner possesses regarding the taxpayer's incarceration is
quite specific and there is an infirmity in the last known address
on which the Commissioner seeks to rely. See DiViaio v.
Commissioner [76-2
USTC ¶9545], 539 F.2d 231 (D.C. Cir. 1976)(notice not
sent to last known address where Commissioner aware that taxpayer
had been incarcerated in Atlanta penitentiary for 2 years and
mailed notice to warden there for service on taxpayer); Keeton
v. Commissioner [Dec.
36,966], 74 T.C. 377 (1980)(Commissioner participated
in prosecution resulting in taxpayers' conviction for Federal tax
crimes, therefore taxpayers' whereabouts in Federal prison system
readily available to Commissioner; address on which Commissioner
relied not given on returns for years involved); O'Brien v.
Commissioner [Dec.
32,700], 62 T.C. 543 (1974)(deficiency determined as a
result of Commissioner's agent's interview of taxpayer in jail;
neither address on which Commissioner relied had been provided by
taxpayer). For
the reasons discussed below, we conclude that the As
the Wanda Avenue address was both the address reported in
petitioner's most recently filed return and that listed in his
request for a hearing under section
6330, we conclude that it was his last known address as
of the commencement of his section
6330 hearing.7 The
question becomes whether petitioner's informing the settlement
officer of his pending incarceration caused any change in the
address that respondent was entitled to rely on as the last known
address when the notice of determination was mailed. We conclude,
in the circumstances of this case, that it does not. According
to the settlement officer's case notes and correspondence with
petitioner, in a telephone conference conducted on We
do not believe petitioner was unaware that his incarceration would
commence on The
caselaw concerning last known address generally places the burden
on the taxpayer to apprise the Commissioner through clear and
concise notification of any change of address, including
circumstances where the taxpayer has been incarcerated. See Cohen
v. United States [62-1
USTC ¶9202], 297 F.2d 760 (9th Cir. 1962); Snell v.
Commissioner [Dec.
49,332(M)], T.C. Memo. 1993-470; Agustin v.
Commissioner [Dec.
48,091(M)], T.C. Memo. 1992-167; Tirado v.
Commissioner [Dec.
36,425(M)], T.C. Memo. 1979-448. The rationale is that
the place of incarceration may constitute a temporary place of
abode, and to require the Commissioner to keep track of a
taxpayer's whereabouts in these circumstances would impose an
"impossible administrative burden" on him. Cohen v.
Commissioner, supra at 773. The exceptions to the taxpayer's
burden to provide clear and concise notification have occurred
where the Commissioner had at his disposal specific information
concerning the whereabouts of an incarcerated taxpayer. See DiViaio
v. Commissioner [76-2
USTC ¶9545], 539 F.2d 231 (D.C. Cir. 1976); Keeton
v. Commissioner [Dec.
36,966], 74 T.C. 377 (1980); O'Brien v. Commissioner
[Dec.
32,700], 62 T.C. 543 (1974). Here,
petitioner does not allege, and we do not find, that he notified
respondent that he wished any correspondence to be sent to him at
his place of incarceration prior to respondent's mailing the
notice of determination on We
accordingly hold that petitioner's last known address when the
notice of determination was mailed was the To
reflect the foregoing, An
order of dismissal for lack of jurisdiction will be entered. 1
Unless otherwise indicated, all section references are to the
Internal Revenue Code in effect for the years in issue, and all
Rule references are to the Tax Court Rules of Practice and
Procedure. [Dec. 56,072]
Kenneth B. and Marie L. Boyd v. Commissioner. An
IRS motion to dismiss for lack of jurisdiction a petition filed by
a married couple who alleged that the IRS erred when it applied a
tax overpayment against their back taxes without first giving them
an opportunity for a Collection Due Proces hearing was granted.
Jurisdiction was sought under Code
Sec. 6330(d), which allows a taxpayer 30 days to appeal
an adverse Collection Due Process hearing determination. The fact
that no hearing was held and no determination actually issued
precluded jurisdiction under that provision. Even if the IRS's
written notice of intent to apply the tax refund as an offset was
construed as a notice of determination, the taxpayers failed to
file their appeal with the Tax Court within the requisite 30 day
period. Since jurisdiction was lacking, it was not necessary to
consider whether an offset is a levy for purposes of Code
Sec. 6330 or whether the IRS violated an installment
agreement by making the offset. Peter
L. Banis, for petitioners; Michael R. Fiore, for respondent. R
applied an overpayment in tax from Ps' 2002 taxable year to other
taxes owed by Ps and notified Ps of that fact (the notice). Ps
rely on language in sec.
6331(i)(3)(B), I.R.C., describing "any levy to
carry out an offset" in support of their assignment that R
erred in levying against their property without first giving them
notice of their right to a sec.
6330, I.R.C., prelevy hearing. Ps also assign error to
R's application of the overpayment to P husband's liability under
an installment agreement. R has moved to dismiss for lack of
jurisdiction on the grounds that Ps have received no statutory
notice of deficiency or any other determination that would give
the Court jurisdiction to consider Ps' assignments of error (and
Ps concede as much). R also disputes that an offset is a levy. We
need not interpret sec.
6331(i)(3)(B), I.R.C., since even were we to consider
the notice as evidence of a determination to proceed to collect
tax by levy, Ps did not timely petition the Court within the
30-day period prescribed by sec.
6330(d)(1), I.R.C., so that we must dismiss for lack of
jurisdiction. Held:
Motion to dismiss for lack of jurisdiction will be granted. OPINION HALPERN,
Judge: This matter is before the Court on respondent's motion to
dismiss for lack of jurisdiction (the motion). Petitioners object.
For the reasons stated, we shall grant the motion. Unless
otherwise indicated, all section references are to the Internal
Revenue Code of 1986, as amended (the Code), and all Rule
references are to the Tax Court Rules of Practice and Procedure. Background The
petition in this case was filed on Petitioners'
principal assignment of error is that the IRS (respondent) erred
in applying the overpayment to other taxes owed by petitioners
without giving them the opportunity for a hearing pursuant to section
6330 (a section
6330 hearing or, simply, hearing). Petitioners further
claim that respondent erred in applying the overpayment to
petitioner husband's liability under an agreement to pay certain
taxes in installments. It was an error to do so, petitioners
claim, since neither was petitioner husband in default under the
agreement nor had respondent complied with the terms of section
6159(b)(5). In the case of default or certain other
occurrences in connection with an installment agreement to pay
tax, section
6159(b)(5) generally requires at least 30 days' notice
if respondent intends to terminate the agreement or modify its
terms. Respondent
did not answer the petition but, instead, made the motion. See
Rule 36(a). In support of the motion, respondent argues that no
statutory notice of deficiency, as authorized by section
6212 and required by section
6213(a) to form the basis for a petition to this Court,
has been sent to petitioners with respect to 2002 (the taxable
year in question), nor has respondent made any other determination
with respect to 2002 that would confer jurisdiction on the Court.
Replying to petitioner's opposition to the motion, respondent
points out that, in their papers opposing the motion, petitioners
concede that no notice of deficiency or other determination was
issued by respondent. Respondent argues that, on those grounds
alone, the motion should be granted. Nevertheless, respondent
addresses petitioners' assignments of error. He denies that
petitioners were entitled to a section
6330 hearing since the overpayment was applied to other
taxes by way of offset and not by way of levy. The notice and
hearing requirements of section
6330, he claims, apply only to proposed levy actions,
and not to administrative offsets. Moreover, he claims that, since
an offset is not a levy, there was no violation of any prohibition
under section
6331(k)(2) that no levy with respect to unpaid tax may
be made while an installment agreement for payment of such tax is
in effect. Discussion
Section
6331(a) authorizes the Secretary of the Treasury
(Secretary) to levy against property and property rights where a
taxpayer liable for taxes fails to pay those taxes within 10 days
after notice and demand for payment is made. Section
6331(d) requires the Secretary to send written notice
of an intent to levy to the taxpayer, and section
6330(a) requires the Secretary to send a written notice
to the taxpayer of his right to a section
6330 hearing at least 30 days before any levy is begun. If
a section
6330 hearing is requested, the hearing is to be
conducted by the Commissioner's Appeals Office, and, at the
hearing, the Appeals officer conducting it must verify that the
requirements of any applicable law or administrative procedure
have been met. Sec.
6330(b)(1), (c)(2).
The taxpayer may raise at the hearing any relevant issue relating
to the unpaid tax or the proposed levy. Sec.
6330(c)(2).2 At the
conclusion of the hearing, the Appeals officer must determine
whether and how to proceed with collection, taking into account,
among other things, collection alternatives proposed by the
taxpayer and whether any proposed collection action balances the
need for the efficient collection of taxes with the legitimate
concern of the taxpayer that the collection action be no more
intrusive than necessary. See sec.
6330(c)(3). After
the hearing, the taxpayer has 30 days to appeal the determination
of the Appeals officer to the appropriate court. Sec.
6330(d)(1). We have jurisdiction to review the Appeals
officer's determination where we have jurisdiction over the type
of tax involved in the case. Sec.
6330(d)(1)(A). In Offiler v. Commissioner [Dec.
53,912], 114 T.C. 492, 498 (2000), we held that
prerequisites to the exercise of our jurisdiction under section
6330(d) are the issuance of a valid notice of
determination and a timely petition for review. See also Lunsford
v. Commissioner [Dec.
54,552], 117 T.C. 159, 161 (2001) (section
6330(d) jurisdiction is dependent on "written
notice" of a section
6330 determination). If
a hearing is timely requested, section
6330(e)(1) suspends the levy action until the
conclusion of the hearing and any judicial review. The section
also overrides the so-called Anti-Injunction Act, section
7421(a), and permits proceedings in the proper court,
including the Tax Court, to enjoin the beginning of a levy during
the period the levy action is suspended. With respect to such
proceedings brought in the Tax Court, the Court has no
jurisdiction to enjoin a levy unless the taxpayer has timely
appealed to the Court to review the Appeals officer's
determination and then only in respect of the unpaid tax or
proposed levy to which the determination being appealed relates. Sec.
6330(e)(1). II.
Levy Versus Offset A
levy is distinguishable from an offset. See, e.g., Belloff v.
Commissioner [93-2
USTC ¶50,396], 996 F.2d 607, 615-616 (2d Cir. 1993)
(comparing discussion of "levy" in United States v.
Natl. Bank of Commerce [85-2
USTC ¶9482], 472 U.S. 713, 720 (1985), with
"setoff" in United States v. Munsey Trust Co.,
332 Based
on the distinction between levy and offset, and the limitation of section
6330 to levy actions, we have held that the
Commissioner's application of a taxpayer's overpayment for one
taxable year to offset the taxpayer's liability for another
taxable year does not constitute a collection action that is
subject to review under section
6330. Bullock v. Commissioner [Dec.
55,006(M)], T.C. Memo. 2003-5. We have relied on the
same distinction in a case involving restrictions applicable to
levy actions during the pendency of an action for relief from
joint and several liability.
Petitioners'
defense to the motion rests on two propositions set forth in the
petition: (1) In applying the overpayment to other taxes,
respondent "effected an offset", and (2) "a levy
must be carried out to effect an offset". They claim that,
because the offset was by levy, respondent erred in not according
them their rights under section
6330 to notice and a hearing. They pray that, on
account of such error, the Court compel respondent to return the
overpayment to them. Petitioners
argue that an offset can be effected only by levy. They believe
that we erred in Bullock v. Commissioner, supra, in holding
that offset is not a levy subject to the provisions of section
6330. Petitioners support their argument by pointing to
the language of section
6331(i)(3)(B)(i). Section
6331(i) provides that no levy may be made during the
pendency of proceedings for the refund of a divisible tax (e.g.,
any employment tax). In pertinent part, section
6331(i)(3)(B) provides: "Certain levies. This
subsection shall not apply to--(i) any levy to carry out an offset
under section
6402". By
reference to the language of section
6331(i)(3)(B), a similar exception is incorporated into
section
6331(k), which provides that no levy may be made while
an offer in compromise is pending or an installment agreement is
pending or in effect. Sec.
6331(k)(3)(A). Petitioners
sum up their argument as follows: So
there we have it. To carry out an offset[,] you must levy first.
That is how the Commissioner acquires a taxpayer's property, by
levy. If a levy upon an overpayment were not required, and[,] as
the Respondent contends, an[] offset has independent authority to
operate without the predicate act of a levy, the statute would * *
* [read differently]. Petitioners
acknowledge that they received no notice of determination, but
they ask us to overrule our holdings in Offiler v. Commissioner
[Dec.
53,912], 114 T.C. 492 (2000), and Lunsford v.
Commissioner [Dec.
54,552], 117 T.C. 159 (2001), that a notice of
determination is a prerequisite to our section
6330 jurisdiction. They argue that, in a case where the
Secretary has levied on property of the taxpayer without first
providing the taxpayer the written notice of the taxpayer's right
to a prelevy hearing required by section
6330(a)(1), we have injunctive power under section
6330(e)(1) to undo the levy notwithstanding that the
taxpayer has not received the posthearing notice of determination
to levy contemplated in Offiler and Lunsford. In
support of their argument, they claim that, if we lack authority
to act, they have no remedy for the Secretary's unlawful conduct
in levying on their property without complying with the terms of section
6330, a result (they believe) Congress plainly did not
intend. IV.
Discussion Both
subsections (i) and (k) of section
6331 (as they presently read) were added to that
section by the Internal Revenue Service Restructuring and Reform
Act of 1998 (the 1998 Act), Pub. L. 105-206, secs. 3433(a),
3462(b), 112 Stat. 759, 765. S. Rept. 105-174 (1998), 1998-3 C.B.
537, is the report of the Committee on Finance that accompanied
H.R. 2676, 105th Cong., 2d Sess. (1998), which became the 1998
Act. That report makes clear the committee's intent that new section
6331(i) (which originated in the Senate) would not
affect the IRS's ability to offset refunds. S. Rept. 105-174, supra
at 80, 1998-3 C.B. at 616. Given the historic distinction between
levy and offset, there is no indication why the committee thought
necessary the exception found in section
6331(i)(3)(B)(i), nor is there any explanation of the
language "levy to carry out an offset". We
need not solve the puzzle of section
6331(i)(3)(B)(i), however, because we agree with
respondent that we cannot grant petitioners the relief they
request in any event. B.
Lack of Jurisdiction As
the Supreme Court observed in Owen Equip. & Erection Co. v.
Kroger, 437 U.S. 365, 374 (1978): "It is a fundamental
precept that federal courts are courts of limited jurisdiction.
The limits upon federal jurisdiction, whether imposed by the
Constitution or by Congress, must be neither disregarded nor
evaded." We have only the authority given to us by Congress. Sec.
7442; e.g., Bernal v. Commissioner [Dec.
55,042], 120 T.C. 102, 107 (2003). Petitioners invoke
our authority under section
6330(d) to review a determination made pursuant to that
section to proceed with a collection action (a section
6330 determination) and, under certain circumstances,
to enjoin that action. They pray that we compel respondent to
return the overpayment to them. With
respect to the content of the petition in an action brought under section
6330(d), Rule 331(b) provides that a copy of the notice
of determination accompany the petition. We have described the
notice of determination as the taxpayer's "ticket" to
the Tax Court. Weber v. Commissioner [Dec.
55,588], 122 T.C. 258, 263 (2004). We have held that
the absence of a section
6330 determination is grounds for dismissal of a
petition that purports to be based on section
6330. Offiler v. Commissioner [Dec.
53,913], 114 T.C. at 498. Petitioners
argue that, if written notice of the taxpayer's right to a hearing
is a prerequisite to a levy, the Secretary cannot avoid court
review of a levy by failing to give the requisite notice. What
petitioners consider to be a levy in this case was respondent's
application of the overpayment to other taxes owed by petitioners.
The IRS notified petitioners of that action by a notice dated May
5, 2003 (the notice). The petition was filed on October 14, 2003.
Our jurisdiction under section
6330(e)(1) to enjoin an improper levy is dependent on
both a section
6330 determination and an appeal to this Court within
30 days of that determination. Sec.
6330(d)(1), (e)(1). Thus, even if we were to consider
the notice as evidence of a concurrent section
6330 determination, petitioners failed to seek our
review of that determination within 30 days of May 5, 2003, and,
for that reason alone, we would be required to dismiss for lack of
jurisdiction. See, e.g., Jones v. Commissioner [Dec.
55,033(M)], T.C. Memo. 2003-29 ("statutory periods
are jurisdictional and cannot be extended").3 We do
not have facts in front of us that provide any basis to overrule
Offiler v. Commissioner, supra, and Lunsford v. Commissioner,
supra. Petitioners
also claim that respondent erred in applying the overpayment to a
liability subject to an installment agreement, thus violating the
provisions of section
6159. While petitioners do not claim that section
6159 provides a jurisdictional basis for the Court to
take any action in that regard, they do claim that, had they been
allowed a section
6330 hearing, and had they been allowed to offer a
collection alternative, they would have had the opportunity to
demonstrate not only their entitlement to the collection
alternative of an installment agreement but that petitioner
husband already had an installment agreement to pay the unpaid tax
against which was applied the overpayment. Because petitioners
have not satisfied the prerequisites to invoke our jurisdiction
under section
6330, we have no authority to consider petitioners'
claim.4 V.
Conclusion We
shall grant the motion since we have no jurisdiction to consider
the errors assigned by petitioners. To
reflect the foregoing, An
order of dismissal for lack of jurisdiction will be entered. 1
The wrapper containing the petition has a postmark bearing the
date Oct. 7, 2003. [Dec. 56,148]
Herbert and Rosalie Clark v. Commissioner. The
Tax Court has jurisdiction to review the IRS's determination with
regard to the levy upon a married couple's state tax refund. The Code
Sec. 6330(f) requirement that a taxpayer be given
pre-levy notice is inapplicable to jeopardy levies and levies on
state tax refunds. Dorn v. Commissioner Dec.
55,209(M), 119 TC 356, holds that Code
Sec. 6330(f) does not restrict the Tax Court's
jurisdiction under Code
Sec. 6330(d) to review jeopardy levy determinations. It
does not divest the Tax Court of judicial review. Similar
reasoning was applied with regard to a levy on a state tax refund.
Jeffrey
E. Rattner and Steve Mather, for petitioners; Elaine T. Fuller,
for respondent. R
issued a notice of levy on Ps' State tax refund to collect unpaid
assessed additions to tax. After Ps requested a hearing under sec.
6330, I.R.C., on the appropriateness of the levy, R
determined that the levy was appropriate. Held:
The Court has jurisdiction under sec.
6330(d), I.R.C., to review R's determination regarding
the levy upon Ps' State tax refund. OPINION LARO,
Judge: Petitioners petitioned the Court under section
6330(d) to review a determination of the Commissioner's
Office of Appeals (Appeals) sustaining respondent's levy upon
their State tax refund.1
Respondent made the levy to collect additions to tax assessed as
to petitioners' 1997 Federal income tax. The sole issue in this
Opinion is whether the Court has jurisdiction to review
respondent's determination as to the levy upon petitioners' State
tax refund. We hold that the Court has the requisite jurisdiction. Background Petitioners
filed their 1997 Federal income tax return untimely. Upon receipt
of the return, respondent assessed the tax shown on the return and
related additions to tax for failure to file timely, failure to
pay timely, and failure to make estimated tax payments under sections
6651(a)(1) and (2) and 6654, respectively. On Discussion We
decide whether the Court has jurisdiction under section
6330(d) to review the determination of Appeals
sustaining the levy upon petitioners' State tax refund. Although
neither party has contested our jurisdiction, jurisdiction may not
be conferred upon the Court by agreement, see Neely v.
Commissioner [Dec.
54,062], 115 T.C. 287, 291 (2000); Naftel v.
Commissioner [Dec.
42,414], 85 T.C. 527 (1985), or through an equitable
principle such as estoppel, Am. Fire & Cas. Co. v. Finn
341 Section
6330 was enacted in 1998 to provide taxpayers with
administrative and judicial review of the Commissioner's
collection actions. Internal Revenue Service Restructuring and
Reform Act of 1998, Pub. L. 105-206, sec. 3401, 112 Stat. 746; H.
Conf. Rept. 105-599, at 265-266 (1998), 1998-3 C.B. 755, 1019,
1020. Section
6330(a) provides that the Commissioner must notify
taxpayers of their right to a hearing as to a levy and sets forth
specific rules for the required notice. Section
6330(b) contains rules relating to the hearing. Section
6330(c) lists the issues that taxpayers may raise at a section
6330(b) hearing. Section
6330(d) provides for judicial review of determinations
under section
6330, stating that a taxpayer "may, within 30 days
of a determination under this section, appeal such
determination" to this Court. Section
6330(f) provides that "this section" shall
not apply in the case of a jeopardy levy or a levy on a State tax
refund. In
Dorn v. Commissioner [Dec.
54,974], 119 T.C. 356 (2002), we decided whether section
6330(f) restricts our jurisdiction under section
6330(d) to review jeopardy levy determinations. We held
that it did not. We concluded that section
6330(f) made the section
6330(a) requirement that a taxpayer be given prelevy
notice inapplicable to jeopardy levies rather than divesting this
Court of judicial review in such cases. To
reflect the foregoing, An
appropriate order will be issued. 1
Unless otherwise noted, section references are to the applicable
versions of the Internal Revenue Code. Petitioners resided in [Dec. 56,149(M)] The
Tax Court did not have jurisdiction to enter a decision that fixed
an amount agreed upon by an individual and the IRS as the
taxpayer's unpaid federal income tax liability. The request to
enter the decision was made in connection with the taxpayer's
petition to review a Collection Due Process (CDP) hearing
determination concerning his underlying tax liability and the
taxpayer previously had an opportunity to dispute the tax
liability when the IRS submitted its proof of claim to the
bankruptcy court after the taxpayer filed for bankruptcy
protection under Chapter 13. Although an IRS hearing officer has
the discretion to consider a taxpayer's underlying tax liability
even though the taxpayer has had an opportunity to dispute the
liability, the regulations specifically provide that the
underlying tax liability is not judicially reviewable (Reg.
§301.6330-1(e)(3), Q&A-E11)). Entering a decision
based upon the stipulated settlement would, in effect, be an
impermissible review of the hearing officer's tax liability
determination since the petition was filed because the taxpayer
was challenging that determination. H. Gregory
A. Stout, for petitioners; Stephen J. Neubeck, for respondent. MEMORANDUM
OPINION LARO,
Judge: Petitioners petitioned the Court under section
6330(d) to review a determination made by the
Commissioner's Office of Appeals (Appeals) as to their 1986 and
1990 through 1997 Federal income tax liability.1 While
petitioners alleged in their petition that their underlying tax
liability for those years was different from that shown as due in
respondent's records, respondent alleged in his answer that this
Court was without jurisdiction to determine petitioners'
underlying tax liability for any of those years because
petitioners had the opportunity to dispute the liability in their
previous bankruptcy case. Subsequent
to the filing of the petition, Gisella Sabath (decedent) died.
Thereafter, Thomas J. Sabath (petitioner in the singular) and
respondent moved the Court to dismiss this case, insofar as it
pertains to decedent, for lack of prosecution.2
Petitioner and respondent also filed with the Court a stipulation
asking that we enter a decision that includes a statement as to
the amount of petitioner's unpaid income tax for each of the
subject years. We ordered petitioner and respondent to show cause
why the Court may enter a decision against petitioner that
includes a finding of his underlying tax liability. We referred
them to Kendricks v. Commissioner [Dec.
55,950], 124 T.C. 69 (2005), where we recently held
that a submission by the Internal Revenue Service (IRS) in the
taxpayer's bankruptcy proceeding of a proof of claim for unpaid
Federal income taxes meant that the taxpayers had the opportunity
to dispute that liability for purposes of section
6330(c)(2)(B) and, accordingly, deprived us of the
ability to decide that liability. We directed petitioner and
respondent to discuss whether petitioner had a previous
opportunity during petitioners' bankruptcy proceeding to dispute
the underlying tax liability for any or all of the subject years.
Petitioner and respondent argue in response to our order that We
decide whether we may enter a decision as to petitioner that
reflects a determination of his underlying tax liability. We hold
we may not. Background We
draw the following recitations from the pleadings and other parts
of the record. We set forth these recitations solely for the
purpose of this Memorandum Opinion. Petitioners resided in Petitioners
operated a landscaping business for nearly 30 years and failed to
make estimated tax payments on their self-employment income. In
1991 and 1992, respondent assessed petitioners' Federal income tax
liabilities for 1986 and 1991, respectively. On
On
On
On
In
their petition to this Court, petitioners challenged the amount of
tax remaining unpaid as a result of the bankruptcy case and
requested that the Court review their payment history and
respondent's assessments of interest and penalties. Petitioners
alleged that the amount of tax set forth in the notice of
determination was based on the following errors: (1) Respondent
incorrectly assessed penalties and interest during the pendency of
petitioners' bankruptcy proceeding; (2) respondent misapplied
payments made during the proceeding to interests and penalties
rather than to principal; and (3) respondent failed to consider
petitioners' offer in compromise based on the incorrect assumption
that they did not file the referenced tax returns for 2002. In
answer, respondent alleged that petitioners were precluded by section
6330(c)(2)(B) from litigating in this proceeding the
amount or existence of their underlying tax liability. According
to respondent, the amount of taxes owed by petitioners, the amount
of their payments, the application of those payments, the rates
and accrual of interest, and all other relevant matters alleged by
petitioners in their petition to be improper had been within the
scope and jurisdiction of the bankruptcy court, and petitioners
had the full opportunity in their bankruptcy proceeding to
challenge the amounts and existence of any taxes under the
jurisdiction of the bankruptcy court. On
Discussion Respondent
and petitioner ask the Court to enter a decision fixing an
agreed-upon amount of petitioner's unpaid Federal income taxes
(inclusive of additions to tax, penalties, and interest) as of Where
issues related to the taxpayer's underlying tax liability were
properly raised in a section
6330 proceeding, we may review the determination of
that liability. See sec.
6330(d)(1); see also sec.
6330(c)(2)(B). Section
6330(c)(2)(B), dealing with notice and opportunity for
hearing before levy, provides that in the case of any hearing
conducted under section
6330, a person may raise "challenges to the
existence or amount of the underlying tax liability for any tax
period if the person did not receive any statutory notice of
deficiency for such tax liability or did not otherwise have an
opportunity to dispute such tax liability." Because
petitioners did not receive a notice of deficiency regarding any
of the subject years, they were permitted to challenge the
existence or amount of their underlying tax liability at issue if
they did not "otherwise have an opportunity to dispute such
tax liability." Q-E11.
If an Appeals officer considers the merits of a taxpayer's
liability in a [collection due process (CDP)] hearing when the
taxpayer had previously received a statutory notice of deficiency
or otherwise had an opportunity to dispute the liability prior to
the issuance of a notice of intention to levy, will the Appeals
officer's determination regarding those liability issues be
considered part of the Notice of Determination? A-E11.
No. An Appeals officer may consider the existence and amount of
the underlying tax liability as a part of the CDP hearing only if
the taxpayer did not receive a statutory notice of deficiency for
the tax liability in question or otherwise have a prior
opportunity to dispute the tax liability. * * * In the Appeals
officer's sole discretion, however, the Appeals officer may
consider the existence or amount of the underlying tax liability,
or such other precluded issues, at the same time as the CDP
hearing. Any determination, however, made by the Appeals officer
with respect to such a precluded issue shall not be treated as
part of the Notice of Determination issued by the Appeals officer
and will not be subject to any judicial review. * * * Even if a
decision concerning such precluded issues is referred to in the
Notice of Determination, it is not reviewable by a district court
or the Tax Court because the precluded issue is not properly part
of the CDP hearing. This
Court recently held that when the IRS submits a proof of claim for
an unpaid Federal tax liability in a taxpayer's bankruptcy action,
the taxpayer had the opportunity to dispute the liability for
purposes of section
6330(c)(2)(B). See Kendricks v. Commissioner [Dec.
55,950], 124 T.C. 69 (2005). We noted that 11 U.S.C.
sec. 505(a) (2000) empowers a bankruptcy court in a bankruptcy
proceeding to determine "the amount or legality of any tax,
any fine or penalty relating to a tax, or any addition to tax,
whether or not previously assessed, whether or not paid, and
whether or not contested before and adjudicated by a judicial or
administrative tribunal of competent jurisdiction." In that
respondent in this case filed a proof of claim in petitioners'
previous bankruptcy case, we conclude on the basis of Kendricks
that petitioner had the opportunity to dispute his underlying tax
liability before commencing this lawsuit and thus may not do so in
this proceeding. Respondent
and petitioner rely upon Washington v. Commissioner [Dec.
55,072], 120 T.C. 114 (2003). We conclude that this
reliance is misplaced. In Accordingly, An
appropriate order will be issued. 1
Unless otherwise indicated, section references are to the
applicable versions of the Internal Revenue Code. [Dec. 56,159(M)]
Carey K. Parker II . Commissioner. The
Tax Court lacked jurisdiction to review an IRS decision letter
that resulted from an equivalent hearing. Although the individual
taxpayer received a hearing notice in due course, he failed to
file a timely request for an Appeals Office hearing under Code
Sec. 6330. Accordingly, the IRS did not make a
determination regarding the hearing notice sufficient to invoke
the court's jurisdiction.
The
Tax Court imposed a Code
Sec. 6673(a) penalty on an individual taxpayer for
instituting and maintaining the proceedings primarily for delay.
The taxpayer asserted only frivolous and groundless claims that
have been universally rejected by the courts. He had also been
warned by the IRS that his arguments were frivolous and
groundless, that his case was not appealable to the court and of
the potential consequences of his actions. Carey
K. Parker II, pro se; Marty J. Dama, for respondent. MEMORANDUM
OPINION VASQUEZ,
Judge: Respondent sent petitioner a Decision Letter Concerning
Equivalent Hearing Under Section
6320 and/or 63301 for
1994, 1995, 1996, and 1997. The issue for decision is whether the
Court lacks jurisdiction under section
6330(d)(1) with regard to the years in issue. Background At
the time he filed the petition, petitioner resided in Petitioner
failed to file income tax returns for 1994, 1995, 1996, and 1997.
On On
After
receiving no response to the hearing notice, on On
On
On
On
Petitioner
petitioned the Court to dispute the decision letter. Respondent
filed a motion to dismiss for lack of jurisdiction. Petitioner
filed a response to respondent's motion to dismiss for lack of
jurisdiction. Respondent filed a response to petitioner's response
to respondent's motion to dismiss for lack of jurisdiction. The
Court held a hearing on respondent's motion to dismiss for lack of
jurisdiction. At calendar call, respondent filed an amendment to
motion to dismiss for lack of jurisdiction. Discussion I.
Decision Letter Petitioner
argues that respondent did not send him the hearing notice as
required by section
6330(a), that the first collection notice he received
was the Final Notice Before Levy on Social Security Benefits, that
he timely filed a hearing request from the Final Notice Before
Levy on Social Security Benefits, that the decision letter is the
functional equivalent of a notice of determination, and
accordingly that the Court has jurisdiction over this case
pursuant to section
6330. Respondent
submitted a document entitled "CDP Certified Mail System
Research" printed from respondent's "CDP Certified Mail
Web Site" (Web site certified mail document). Respondent
submitted the Web site certified mail document because respondent
initially had difficulty obtaining a hard copy of the certified
mail list. The certified mail list was issued from the A
few days before calendar call, respondent received a copy of the
certified mail list. Respondent submitted a copy of the certified
mail list to the Court and provided a copy to petitioner. The
certified mail list lists certified mail number 7107 3514 6973
1734 2376; petitioner's name and Social Security number; the
mailing was mailed to the Shorewood address; and a postmark dated Additionally,
respondent submitted petitioner's individual master file literal
transcripts of account for 1994, 1995, 1996, and 1997. The
transcripts of account for each year indicate that petitioner was
issued an "Intent to levy collection due process notice levy
notice" dated Respondent
relies on the Web site certified mail document, the certified mail
list, and the literal transcripts to establish that on Petitioner
claims that he did not receive the hearing notice. Petitioner's
testimony is inconsistent with the documentary evidence in the
record. Orum v. Commissioner [Dec.
55,681], 123 T.C. 1, 9 (2004), affd. on other grounds [2005-2
USTC ¶50,444] 412 F.3d 819 (7th Cir. 2005). The Court
is not required to accept petitioner's unsubstantiated testimony.
See Wood v. Commissioner [64-2
USTC ¶9852], 338 F.2d 602, 605 (9th Cir. 1964), affg. [Dec.
26,628] 41 T.C. 593 (1964). The Court need not accept
at face value a witness's testimony that is self-interested or
otherwise questionable. See Archer v. Commissioner [55-2
USTC ¶9783], 227 F.2d 270, 273 (5th Cir. 1955), affg.
a Memorandum Opinion of this Court; Weiss v. Commissioner [55-1
USTC ¶9365], 221 F.2d 152, 156 (8th Cir. 1955), affg. [Dec.
20,363(M)] T.C. Memo. 1954-51; Schroeder v.
Commissioner [Dec.
43,384(M)], T.C. Memo. 1986-467. After observing
petitioner's demeanor at trial, we find his testimony on this
point not to be credible. See Orum v. Commissioner, supra
at 9. Accordingly,
we find that on A
decision letter is not a determination letter pursuant to section
6320 or 6330.
See Orum v. Commissioner supra at 7-12; Kennedy
v. Commissioner [Dec.
54,315], 116 T.C. 255, 263 (2001); Offiler v.
Commissioner [Dec.
53,912], 114 T.C. 492, 495 (2000). Respondent did not
issue a determination letter to petitioner sufficient to invoke
the Court's jurisdiction to review the hearing notice for 1994,
1995, 1996, and 1997. Orum v. Commissioner, supra; Kennedy v.
Commissioner, supra. Accordingly, we shall dismiss the
petition for lack of jurisdiction on the ground that respondent
did not make a determination pursuant to section
6330 regarding the hearing notice for 1994, 1995, 1996,
and 1997 because petitioner failed to file a timely request for an
Appeals Office hearing pursuant to section
6330(a)(2) and (3)(B) and (b). Orum v. Commissioner,
supra; Kennedy v. Commissioner, supra. II.
Section 6673 Section
6673(a)(1) authorizes this Court to require a taxpayer
to pay to the United States a penalty not to exceed $25,000 if the
taxpayer took frivolous or groundless positions in the proceedings
or instituted the proceedings primarily for delay. A position
maintained by the taxpayer is "frivolous" where "it
is contrary to established law and unsupported by a reasoned,
colorable argument for change in the law." Coleman v.
Commissioner [86-1
USTC ¶9401], 791 F.2d 68, 71 (7th Cir. 1986); see also
Hansen v. Commissioner [87-2
USTC ¶9402], 820 F.2d 1464, 1470 (9th Cir. 1987) (section
6673 penalty upheld because taxpayer should have known
claim was frivolous). Petitioner's
petition is replete with tax-protester rhetoric. Petitioner has
advanced shopworn arguments characteristic of tax-protester
rhetoric that has been universally rejected by this and other
courts. Wilcox v. Commissioner [88-1
USTC ¶9387], 848 F.2d 1007 (9th Cir. 1988), affg. [Dec.
43,889(M)] T.C. Memo. 1987-225; Carter v.
Commissioner [86-1
USTC ¶9279], 784 F.2d 1006, 1009 (9th Cir. 1986). Additionally,
it is obvious to the Court that petitioner litigated this case
primarily for delay. Petitioner was advised of our opinion in Pierson
v. Commissioner, supra, and that he could not litigate
respondent's decision in court. We
conclude that petitioner's position was frivolous and groundless
and that petitioner instituted and maintained these proceedings
primarily for delay. Petitioner was duly warned that his arguments
were frivolous and groundless, that his case was not appealable to
the Court, and of the potential consequences of his actions.
Accordingly, pursuant to section
6673(a), we hold petitioner is liable for a $1,000
penalty. To
reflect the foregoing, An
appropriate order and order of dismissal will be entered. 1 Unless otherwise indicated, all section references are to the Internal Revenue Code. |