United States Tax Court

T.C. Memo. 2024-19

CHRISTOPHER CRUMEDY,

Petitioner

v.

COMMISSIONER OF INTERNAL REVENUE,

Respondent

__________

Docket No. 14725-21L. Filed February 7, 2024.

__________

Christopher Crumedy, pro se.

Ryan A. Ault, Ashley M. Bender, Corey R. Clapper, and Olivia H. 

Rembach, for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

ASHFORD, Judge: In this collection due process (CDP) case 

petitioner seeks review pursuant to section 6330(d)(1)1 of the 

supplemental determination by the Internal Revenue Service (IRS) 

Independent Office of Appeals (Appeals) to uphold a proposed levy. The 

proposed levy seeks to collect civil penalties under section 6702(a) that 

were assessed against petitioner for having filed frivolous federal 

income tax returns for the 2017 taxable year. The issues before the 

Court are whether (1) petitioner’s underlying liability for those penalties 

is properly at issue in this proceeding and (2) Appeals erred in 

sustaining the proposed collection action.

1 Unless otherwise indicated, statutory references are to the Internal Revenue 

Code, Title 26 U.S.C., in effect at all relevant times, and regulation references are to 

the Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all relevant times. 

Some monetary amounts are rounded to the nearest dollar.

Served 02/07/24
2

[*2] FINDINGS OF FACT

Some of the facts have been stipulated and are so found. The 

Stipulation of Facts and the attached Exhibits are incorporated herein 

by this reference. Petitioner resided in North Carolina when he timely 

filed his Petition with the Court.

I. Petitioner’s Underlying Liability for 2017 

During 2017 petitioner was employed at the Veteran’s 

Administration (VA) and Pitt County Memorial Hospital (Memorial 

Hospital). For 2017, as reported on Forms W–2, Wage and Tax 

Statement, petitioner received income from the VA and Memorial 

Hospital of $38,849 and $11,361, respectively. Petitioner also had his 

own business in 2017.

On July 23, 2018, the IRS received two Forms 1040, 

U.S. Individual Income Tax Return, for 2017 from petitioner.2 On the 

first return petitioner reported no income from “[w]ages, salaries, tips, 

etc.”; instead, he reported “[o]ther income” from “State Farm” of $245 

(which he also reported as his total income and his adjusted gross 

income, but he reported no amount as taxable income). He reported 

payments (for federal income tax withheld) of $244. Petitioner signed 

this return, dating it July 18, 2018. He attached to this return two 

Forms 1040–V, Payment Voucher—one for $139 and another for $105, 

and a payment coupon from State Farm with an amount due of $105 

from petitioner. Transposed over the payment coupon were the 

following words: “MONEY ORDER,” “PAY TO THE ORDER: UNITED 

STATES TREASURY,” “CHARGE THE SUM: $105.18,” “TO: STATE 

FARM,” and “MIRROR ACCOUNT: CHRISTOPHER CRUMEDY.”

On the second return petitioner reported no income from 

“[w]ages, salaries, tips, etc.”; instead, he reported “[o]ther income” from 

“NC Dept. of Revenue” of $139 (which he also reported as his total 

income and his adjusted gross income, but he reported no amount as 

taxable income). He reported payments (for federal income tax 

withheld) of $139. Petitioner signed this return, dating it July 18, 2018. 

He attached to this return the same two Forms 1040–V and State Farm 

payment coupon that he attached to the first return. Additionally, he 

attached to the second return a July 11, 2018, garnishment letter 

addressed to Memorial Hospital from the State of North Carolina 

2 It appears that the IRS treated these returns as duplicate returns because 

the IRS’s records show a 2017 “[t]ax return filed” for petitioner on June 18, 2018.
3

[*3] Department of Revenue; the letter indicates a payment due of $139. 

Transposed over the garnishment letter were the following words: 

“MONEY ORDER,” “PAY TO THE ORDER: UNITED STATES 

TREASURY,” “CHARGE THE SUM: $138.92,” “TO: NORTH 

CAROLINA DEPARTMENT OF REVENUE,” and “MIRROR 

ACCOUNT: CHRISTOPHER CRUMEDY.”

Sometime between July 23, 2018, and April 30, 2019, the IRS 

identified the returns as potentially frivolous tax returns. On May 10, 

2019, the IRS sent petitioner a letter informing him that his July 23, 

2018, “claim[s] for credit” for 2017 could not be allowed because they 

were based on a frivolous position not supported by law. The letter 

further advised petitioner that federal courts have consistently ruled 

against those arguments and may impose substantial fines for taking a 

frivolous position, but that he nevertheless could file suit to recover the 

credit amount with the U.S. District Court that has jurisdiction or with 

the U.S. Court of Federal Claims.

Ultimately, an IRS employee (Ms. Koegal) determined that the 

returns were frivolous and therefore petitioner should be liable for 

section 6702(a) penalties. On May 27 and June 3, 2019, the IRS 

assessed two penalties (one for each return) of $5,000 pursuant to 

section 6702(a), and assessment notices were sent to petitioner on the 

same dates. The record includes a completed Form 8278, Assessment 

and Abatement of Miscellaneous Civil Penalties, for the two section 

6702(a) penalties. The form was prepared by Ms. Koegal on April 30, 

2019, and includes the signature of Adam R. Fisher, Ms. Koegal’s 

immediate supervisor, dated May 1, 2019, approving the penalties.

II. IRS’s Collection Action

On February 25, 2020, the IRS sent petitioner Notice LT11, 

Intent to Levy and Notice of Your Right to a Hearing (levy notice), with 

respect to the assessed section 6702(a) penalties. The levy notice 

advised petitioner that the IRS intended to levy to collect the 

outstanding balance for the section 6702(a) penalties, which through the 

date of the levy notice totaled $8,094, consisting of an “[a]mount . . . 

owed” of $7,760 and “[a]dditional interest charges” of $333, and that he 

had the right to a hearing to appeal the proposed collection action. The 

levy notice also advised petitioner that the IRS might file a notice of 

federal tax lien at any time to protect its interest.
4

[*4] In response to the levy notice petitioner timely submitted Form 

12153, Request for a Collection Due Process or Equivalent Hearing 

(CDP hearing request). As the reason for his disagreement with the levy 

notice petitioner referenced a March 5, 2020, letter he wrote to the IRS 

and “Exhibits A-F,” all of which he attached to his CDP hearing request. 

In his March 5, 2020, letter, petitioner suggested, citing “IRC section 

6702[(b)](3),”3 that he could withdraw the 2017 returns that the IRS had 

received on July 23, 2018. He also stated in his letter that three 

different IRS representatives had informed him that he was to receive a 

refund of $372 for 2017 and thus he was requesting that refund. The 

“Exhibits A-F” were copies of (1) various IRS correspondence sent to 

petitioner from June 18, 2018, to July 26, 2019 (including the two 

assessment notices on which petitioner had added a typed statement 

requesting withdrawal of each return the IRS had received on July 23, 

2018), and (2) certified mailing receipts for correspondence he had sent 

to the IRS on June 18, 2019. In his CDP hearing request petitioner did 

not request any collection alternatives, but he did check the box for lien 

withdrawal (despite no such lien having been filed).

An IRS representative acknowledged receipt of petitioner’s CDP 

hearing request by letter to petitioner dated October 26, 2020, and 

ultimately the request was forwarded to Appeals and assigned to an 

Appeals officer (AO Town).

On January 13, 2021, AO Town sent petitioner a letter in which 

he scheduled a telephone CDP hearing for February 19, 2021. He also 

indicated that the scheduled hearing was petitioner’s opportunity to 

discuss with him the reasons petitioner disagreed with the proposed 

collection action or to discuss collection alternatives. In the letter 

AO Town outlined the issues he had to consider during the hearing. 

Finally, AO Town informed petitioner that if he preferred to reschedule 

the hearing or have another type of conference (i.e., correspondence or 

in-person), he should let him know by January 27, 2021.

On February 19, 2021, petitioner did not call AO Town for the 

scheduled hearing as directed. On the same day AO Town sent 

petitioner a followup letter requesting that petitioner contact him by 

March 5, 2021. He also advised petitioner that after March 5, 2021, he 

would make a determination by reviewing the IRS Office of Collections 

3 In his CDP hearing request, as well as before this Court, petitioner 

erroneously refers to section 6702(b)(3) as section 6702(3).
5

[*5] administrative file and whatever information petitioner had 

provided. Petitioner did not contact AO Town.

Appeals issued a notice of determination dated March 24, 2021, 

to petitioner, sustaining the proposed levy and detailing the basis for 

the determination in an attached summary.

III. Tax Court Proceedings

Petitioner timely filed a Petition with this Court for review of the 

notice of determination. On October 13, 2022, respondent filed a Motion 

to Remand, requesting that the Court remand petitioner’s case to 

Appeals for further consideration because it was not clear whether 

(given some perceived discrepancies in petitioner’s mailing address) 

petitioner had been afforded an opportunity for a CDP hearing to 

address his disagreement with the proposed collection action. On 

October 31, 2022, the Court granted the Motion, remanding the case to 

Appeals so that a settlement officer could conduct a CDP hearing, 

address petitioner’s arguments, and consider collection alternatives.

On December 12, 2022, AO Town sent petitioner a letter 

scheduling a telephone CDP hearing for January 4, 2023. As in his 

January 13, 2021, letter, AO Town outlined the purpose of the hearing

and what he was required to consider during the hearing, and he offered 

petitioner the opportunity to reschedule the hearing or to have the 

hearing in a different format.

On January 4, 2023, petitioner did not call AO Town for the 

scheduled hearing as directed. On the same day AO Town sent 

petitioner a letter that was identical in all respects to the December 12, 

2022, letter, except that it (1) scheduled a telephone CDP hearing for 

January 25, 2023, and (2) was addressed to petitioner in care of an 

address in North Carolina different from the address (also in North 

Carolina) on the December 12, 2022, letter.

On January 25, 2023, petitioner did not call AO Town for the 

rescheduled hearing as directed. On the same day AO Town sent 

petitioner a followup letter requesting that petitioner contact him by 

February 8, 2023. Similar to AO Town’s February 19, 2021, letter, this

followup letter also advised petitioner that after February 8, 2023, 

AO Town would make a determination by reviewing the IRS Office of 

Collections administrative file and whatever information petitioner had 

provided. This letter was sent to petitioner in care of the same address 

to which the January 4, 2023, letter was sent. On January 27 and 
6

[*6] February 10, 2023, petitioner faxed to AO Town copies of 

(1) AO Town’s January 4, 2023, letter and (2) various IRS 

correspondence sent to petitioner from October 22, 2018, to November 4, 

2020. Petitioner provided no explanation for faxing these documents to 

AO Town.

Appeals issued a supplemental notice of determination dated 

March 28, 2023, to petitioner; the supplemental notice of determination 

affirmed the initial determination to sustain the proposed levy. 

A summary detailing the matters considered by Appeals and its 

conclusions was attached to the supplemental notice of determination 

and included the following explanations:

Legal and Procedural Requirements

I, [AO] Town, verified [that] the requirements of any 

applicable law or administrative procedure were met. IRS 

records confirmed the proper issuance of the notice and 

demand, Notice of Intent to Levy and/or Notice of Federal 

Tax Lien (NFTL) filing, and notice of a right to a Collection 

Due Process (CDP) hearing. An assessment was properly 

made for each tax and period listed on the CDP notice.

Notice and demand for payment was mailed to your last 

known address.

There was a balance due when the Notice of Intent to Levy 

was issued or when the NFTL filing was requested. I had 

no prior involvement with respect to the specific tax 

periods either in Appeals or Compliance.

I reviewed the Collection file, IRS records and information 

you provided. My review confirmed that the IRS followed 

all legal and procedural requirements, and the actions 

taken or proposed were appropriate under the 

circumstances.

Collection statute verification:

The collection statute has been suspended; the collection 

period allowed by statute to collect these taxes has been 

suspended by the appropriate computer codes for the tax 

periods at issue.
7

[*7] Issues on the Unpaid Liability

Collection Alternatives Requested

You offered no alternatives to collection.

Challenges to the Liability

You did not dispute your liability.

You raised no other issues.

Remand

In an order dated 10/13/2022, the U.S. Tax Court returned 

your case to the Independent Office of Appeals for a 

supplemental collection due process (CDP) hearing. You 

requested reconsideration of the determination to uphold 

issuance of the Notice of Intent to Levy. You did not 

respond to multiple attempts at contact other than to 

provide documents unrelated to the issues in your initial 

appeal. Nor did you submit anything to explain the context 

of your submissions. As a result, your request cannot be 

further considered.

Balancing Efficient Tax Collection with Concern 

Regarding Intrusiveness

It is Appeals determination to sustain the Notice of Intent 

to Levy. The requirements of all applicable laws and 

administrative procedures have been met. You received 

your required notices.

Your request for withdrawal of the Notice of Federal Tax 

Lien cannot be considered because no lien has been filed on 

the appealed periods. Your petition to the Court cannot be 

considered because you did not respond to multiple 

attempts at contact by the Settlement Officer other than to 

provide documents which were not requested or needed. 

You did not request any other collection alternative or 

respond to attempts at contact. You are not in current 

compliance with filing of returns. Given your lack of 

cooperation, the government took proper action in issuing 

a Notice of Intent to Levy. Lacking your cooperation, the 

Notice of Intent to Levy balances the need for efficient 

collection with your legitimate concern that any collection 

action be no more intrusive than necessary.
8

[*8] OPINION

I. General Legal Principles

A. CDP Review Procedure for a Proposed Levy

Under section 6331(a), if any person liable to pay any tax 

(including additions to tax, interest, additional amounts, or assessable 

penalties) neglects or refuses to do so after notice and demand, the 

Commissioner is authorized to collect the unpaid amount by way of a 

levy upon all property and rights to property belonging to such person 

or upon which there is a lien. Pursuant to section 6330(a), the 

Commissioner must provide the person with written notice of an 

opportunity for an administrative hearing to review the proposed levy.

If an administrative hearing is requested in a levy case, the 

hearing is to be conducted by Appeals. § 6330(b)(1). At the hearing the 

Appeals officer conducting it must obtain verification that the 

requirements of applicable law and administrative procedure have been 

met. § 6330(c)(1). The taxpayer may raise at the hearing any relevant 

issue relating to the unpaid tax or the proposed collection action, 

including spousal defenses, challenges to the appropriateness of the 

proposed collection action, and collection alternatives. § 6330(c)(2)(A). 

Additionally, the taxpayer may challenge the existence or amount of his 

underlying tax liability if he did not receive a notice of deficiency with 

respect to the liability or did not otherwise have an earlier opportunity 

to dispute the liability. § 6330(c)(2)(B); Sego v. Commissioner, 114 T.C. 

604, 609 (2000); Goza v. Commissioner, 114 T.C. 176, 180–81 (2000). As 

relevant here, “underlying tax liability” includes a taxpayer’s liability 

for section 6702 penalties. Callahan v. Commissioner, 130 T.C. 44, 49 

(2008).

Following the hearing the Appeals officer must determine among 

other things whether the proposed collection action is appropriate. In 

reaching the determination the Appeals officer must take into 

consideration: (1) whether the requirements of applicable law and 

administrative procedure have been met; (2) all relevant issues raised 

by the taxpayer; and (3) whether any proposed collection action balances 

the need for the efficient collection of taxes with the legitimate concern 

of the taxpayer that collection be no more intrusive than necessary. 

§ 6330(c)(3); see also Lunsford v. Commissioner, 117 T.C. 183, 184 

(2001); Ragsdale v. Commissioner, T.C. Memo. 2019-33, at *19; Levin v. 
9

[*9] Commissioner, T.C. Memo. 2018-172, at *24–25, aff’d, 804 F. 

App’x 833 (9th Cir. 2020).

B. Standard of Review

Section 6330(d)(1) grants this Court jurisdiction to review the 

determination made by Appeals in a levy case. Furthermore, when (as 

is the case here) this Court remands a case to Appeals and on remand a 

supplemental determination is issued, the Court reviews the 

supplemental determination. See Hoyle v. Commissioner, 136 T.C. 463, 

467–68 (2011), supplementing 131 T.C. 197 (2008). Where the 

taxpayer’s underlying tax liability is properly at issue before this Court, 

the Court reviews the liability determination de novo. Goza, 114 T.C. 

at 181–82. Where the taxpayer’s liability is not properly at issue before 

this Court, the Court reviews Appeals’ determination for abuse of 

discretion; that is, whether the determination was arbitrary, capricious, 

or without sound basis in fact or law. Murphy v. Commissioner, 125 T.C. 

301, 320 (2005), aff’d, 469 F.3d 27 (1st Cir. 2006); Sego, 114 T.C. at 610; 

Goza, 114 T.C. at 181–82.

A taxpayer’s underlying tax liability is properly at issue before 

this Court (thus warranting de novo review of Appeals’ liability 

determination) if the taxpayer has properly raised it during the CDP 

administrative proceedings. See Giamelli v. Commissioner, 129 T.C. 

107, 115 (2007); Treas. Reg. § 301.6330-1(f)(2), Q&A-F3. In a case such 

as the instant case where the underlying tax liability involves the 

collection of section 6702(a) penalties, during the CDP administrative 

proceedings the taxpayer must make a meaningful challenge to the 

penalty itself—e.g., by plausibly contending that his return “contain[s] 

[sufficient] information on which the substantial correctness of the selfassessment may be judged,” § 6702(a)(1)(A), or that his position is not 

one “which the [IRS] has identified as frivolous,” § 6702(a)(2)(A); see also 

Pohl v. Commissioner, T.C. Memo. 2013-291, at *8. The Treasury 

regulations also explicitly state that an issue is not properly raised if the 

taxpayer “fails to present to Appeals any evidence with respect to that 

issue after being given a reasonable opportunity to present such 

evidence.” Treas. Reg. § 301.6330-1(f)(2), Q&A-F3.

II. Analysis

Having set forth the applicable legal principles, we first address 

what is the standard of our review in this case.
10

[*10] As a threshold matter, we conclude that petitioner is not 

precluded from challenging his liability for the section 6702(a) penalties 

by section 6330(c)(2)(B). Petitioner did not receive a notice of deficiency 

before assessment of the penalties because the deficiency procedures do 

not apply with respect to the assessment or collection of section 6702(a) 

penalties, see § 6703(b), and the record before us shows that petitioner 

has not had an earlier opportunity to dispute his liability, see Callahan, 

130 T.C. at 50.

However, we also conclude that petitioner did not properly raise 

an underlying liability challenge during the CDP administrative 

proceedings. The record before us unmistakably shows that petitioner 

made no meaningful challenge to the section 6702(a) penalties during 

the CDP administrative proceedings. He never engaged whatsoever 

with AO Town, except to fax AO Town (without providing any 

explanation) copies of IRS correspondence that had been sent to him. 

Indeed, petitioner cannot plausibly contend that the 2017 returns that 

the IRS received on July 23, 2018, contained sufficient information on 

which the substantial correctness of his self-assessment could be judged. 

Those returns were so-called zero returns; they reported no taxable 

income, seemingly attempted to correct the third-party reporting of his 

two employers, and “contain[ed] information [i.e., payment information] 

that on its face indicate[d] that the self-assessment [was] substantially 

incorrect.” § 6702(a)(1)(B); see also Grunsted v. Commissioner, 136 T.C. 

455, 460 (2011) (“This Court and others have repeatedly characterized 

returns reflecting zero income and zero tax as frivolous.”). Additionally, 

petitioner cannot plausibly contend that his position as reflected on 

those 2017 returns had not been identified by the IRS as frivolous. The 

IRS formally notified petitioner by letter on May 10, 2019, that his 

“claim[s] for credit” as reflected on those 2017 returns could not be 

allowed because they were based on a frivolous position not supported 

by law. Because we conclude that petitioner did not meaningfully 

challenge his underlying liability for the section 6702(a) penalties, we 

will apply an abuse of discretion standard in our review of Appeals’ 

determination in this case.

Turning to the propriety of Appeals’ determination to uphold a 

proposed levy to collect petitioner’s section 6702(a) penalties, as we 

previously noted, see supra p. 8, we review the record before us to 

determine whether AO Town (1) properly verified that the requirements 

of applicable law or administrative procedure had been met;

(2) considered any relevant issues petitioner raised, including spousal 

defenses, challenges to the appropriateness of the proposed collection 
11

[*11] action, and collection alternatives; and (3) considered whether any 

proposed collection action balances the need for the efficient collection 

of taxes with the legitimate concern of petitioner that any collection 

action be no more intrusive than necessary.

During the CDP administrative proceedings, petitioner raised no 

colorable issues about the section 6702(a) penalties or the proposed levy, 

and he offered no collection alternatives. Additionally, as Appeals’ 

determination correctly points out, although petitioner in his CDP 

hearing request checked the box for lien withdrawal, no lien had been 

filed with respect to petitioner’s 2017 taxable year and thus that issue 

could not be considered.

It is clear from our review of the record before us that AO Town 

considered all of the requisite factors under section 6330(c)(3). 

Petitioner seems to question only whether the IRS made a lawful 

assessment of the section 6702(a) penalties because in his view he was 

entitled to withdraw the 2017 returns that the IRS received on July 23, 

2018, and in fact had attempted to do so.4 In support of his position, 

petitioner relies on section 6702(b)(3) and the two exhibits attached to 

his CDP hearing request, which were copies of the two assessment 

notices on which he had added a typed statement requesting withdrawal 

of each return the IRS had received on July 23, 2018.

Petitioner’s position is unfounded, and we reject it. In Kestin v. 

Commissioner, 153 T.C. 14, 21–22 (2019), we made clear that (1) section 

6702(b) imposes a penalty when a frivolous position is asserted in 

“specified frivolous submissions,” which are defined in 

section 6702(b)(2)(B) as CDP hearing requests and applications under 

section 6159 (relating to written installment payment agreements), 

section 7122 (relating to compromises), and section 7811 (relating to 

taxpayer assistance orders); and (2) section 6702(b)(3) provides a 

circumstance, i.e., allowing a taxpayer to withdraw his “specified 

frivolous submission,” which results in the section 6702(b) penalty not 

applying with respect to that submission. The penalties against 

petitioner were not assessed under section 6702(b) but rather under 

4 At trial petitioner sought to probe respondent’s sole witness, Mr. Fisher, the 

immediate supervisor of Ms. Koegal, who initially determined that the returns were 

frivolous and therefore petitioner should be liable for section 6702(a) penalties, on the 

depth and comprehensiveness of his approval of that initial determination for purposes 

of complying with section 6751(b)(1). The Court sustained respondent’s objection to 

petitioner’s attempted line of questioning. It is apparent from the record before us that 

the IRS has complied with section 6751(b)(1).
12

[*12] section 6702(a) for having filed frivolous tax returns for 2017. 

Petitioner never made a “specified frivolous submission” as that term is 

defined in section 6702(b)(2)(B). Thus, the withdrawal mechanism of 

section 6702(b)(3) has no application here. Section 6330(c)(1) required 

AO Town “at the hearing [to] obtain verification from the [IRS] that the 

requirements of any applicable law or administrative procedure have 

been met.” A determination of lawful assessment is a component of the 

section 6330(c)(1) requirement. See Ron Lykins, Inc. v. Commissioner, 

133 T.C. 87, 96–97 (2009). The administrative record in this case clearly 

shows that AO Town verified that valid assessments of the 

section 6702(a) penalties had been made.

In the light of the above, we conclude that there was no abuse of 

discretion, and we sustain Appeals’ determination to uphold the 

proposed levy.5

We have considered all of the arguments made by the parties and, 

to the extent they are not addressed herein, we find them to be moot, 

irrelevant, or without merit.

To reflect the foregoing,

Decision will be entered for respondent.

5 Petitioner is of course free to continue to negotiate with the IRS concerning 

his outstanding liability for the section 6702(a) penalties, but he is entitled to only one 

CDP hearing and Tax Court proceeding with respect to the proposed levy. See Perrin 

v. Commissioner, T.C. Memo. 2012-22, slip op. at 8.