1 All section references are to the Internal Revenue Code,

and all Rule references are to the Tax Court Rules of Practice

and Procedure, unless otherwise indicated.

T.C. Memo. 2002-296

UNITED STATES TAX COURT

STEVEN JOHN RENNIE, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 2539-02L. Filed December 2, 2002.

Steven John Rennie, pro se.

John W. Strate, for respondent.

MEMORANDUM OPINION

GERBER, Judge: Respondent, in a motion filed on August 26,

2002, moved for summary judgment on the questions of whether

respondent may proceed with collection and whether a section

66731 penalty should be imposed against petitioner. With respect
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to the penalty, respondent contends that petitioner instituted

these proceedings primarily for purposes of delay. Petitioner’s

objection to respondent’s motion for summary judgment was filed

on September 23, 2002. On that same date, a hearing was held at

the San Francisco, California, trial session of the Court at

which time the parties’ positions were heard.

Petitioner’s primary position is that respondent did not

meet the requirements of section 6330; that in any event,

petitioner is not obligated to pay any Federal tax; and because

he is not obligated to pay tax, he did not bring this proceeding

for purposes of delay. 

Background

On April 15, 1999, petitioner’s 1998 Federal individual

income tax return was filed. The tax form petitioner submitted 

contained zeros in all pertinent places provided for the

reporting of income. In the box for reporting withholding tax

petitioner reported $7,086.90, which was evidenced by an attached

Form W-2, Wage and Tax Statement. The Form W-2 also reflected

that $65,674.74 in wages was paid to petitioner by the Desert

Palace, Inc., d.b.a. Caesar’s Palace, Las Vegas, Nevada. Also

attached to the return was a two-page pro forma document that

states numerous reasons why petitioner should not be obligated to

pay any Federal income tax. Included in the reasons are the

contentions that: (1) No section of the Internal Revenue Code
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establishes an income tax liability; (2) taxes are voluntary; (3)

the Privacy Act Notice contained in an Internal Revenue Service

booklet on tax returns “informs * * * [petitioner] that * * * [he

is] not required to file”; (4) no assessment had been made

against petitioner for 1998 tax; (5) the word “income” is not

defined in the Internal Revenue Code. Petitioner also cited 

several cases that he contended supported his position. The

propositions he advances have been rejected on numerous occasions

and labeled “frivolous” and “well-worn protester arguments”. 

Nothing would be served by cataloging and addressing petitioner’s

contentions and case citations. See Fox v. Commissioner, T.C.

Memo. 1996-79; Nieman v. Commissioner, T.C. Memo. 1993-533;

Solomon v. Commissioner, T.C. Memo. 1993-509, affd. without

published opinion 42 F.3d 1391 (7th Cir. 1994). See also Crain

v. Commissioner, 737 F.2d 1417, 1417 (5th Cir. 1984), where in

similar circumstances, the court remarked: “We perceive no need

to refute these arguments with somber reasoning and copious

citation of precedent; to do so might suggest that these

arguments have some colorable merit.”

 Respondent examined petitioner’s 1998 return and determined

that petitioner had $22,200 in gambling winnings which were not

reported, in addition to the $65,674.74 in wages reflected on his

Form W-2 but not reported as wages on the 1998 return. On March

3, 2000, respondent mailed a statutory notice of deficiency to
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petitioner, and in a May 8, 2000, letter, responding to the

notice, petitioner acknowledged receipt of it and raised numerous

objections to it. Petitioner, however, did not petition this

Court with respect to the notice. In the notice, respondent had

determined a $19,949 income tax deficiency and a $2,572.42

penalty under section 6662(a) and (b)(1). 

On March 1, 2001, respondent issued a Final Notice--Notice

of Intent to Levy and Notice of Your Right to a Hearing to

petitioner with respect to his 1998 tax liability. In a March

15, 2001, letter, petitioner requested a hearing. The Appeals

officer contacted petitioner and a date was set for a hearing. 

The hearing was held on November 19, 2001, and petitioner and the

Appeals officer each made a tape recording of the conversation. 

Petitioner contended that all of the administrative procedures

had not been met, and he also sought to challenge the underlying

tax liability. The Appeals officer provided petitioner with a

literal transcript of his tax account for the 1998 tax year which

reflected the steps taken by respondent before and after

assessment and up until the time of the hearing. 

After the transcript was presented, petitioner contended

that the presentment was not in accord with the law, because the

statute required that the Appeals officer “shall at the hearing

obtain verification from the Secretary that the requirements of

any applicable law or administrative procedure have been met.” 
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Apparently, petitioner argued that the Secretary must personally

meet the verification requirement. Petitioner also contended

that, although he is required to comply with the statutes and

regulations, he does not have to comply with caselaw. Petitioner

admitted that he did not read any of the cases interpreting the

statutes and regulations. Petitioner also argued that respondent

had not shown him the particular laws that expressly state that

income is taxable to individuals or that define the term

“income”. 

There was also a discussion of the statutory notice of

deficiency. Petitioner admitted that he had received the

document that the Appeals officer described as the Statutory

Notice of Deficiency, but petitioner contended that it was not a

“legal notice of deficiency” because it was not signed by the

Secretary or an authorized designee. Petitioner also made the

same argument with respect to whether the notice for payment was

a proper notice and demand for payment. 

Accordingly, although petitioner received all of the

documents that respondent is required to provide before pursuing

collection, petitioner generally contended that the documents are

defective for lack of the Secretary’s signature or that they are

on the wrong form. In that regard, petitioner argued that

respondent was required to use a particular form in order to

satisfy the notice and demand requirement of the statute. 
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Petitioner referenced procedural guidelines, issued by the

Department of the Treasury more than 50 years ago, that

referenced the form that petitioner argued must be used by

respondent.

In his petition filed with this Court, petitioner alleged

that the November 19, 2001, hearing with Appeals was “lawless and

erroneous”. He also contended that collection was not

appropriate and that respondent had not made a “valid

assessment”. 

At the Appeals hearing, petitioner did not raise any of the

categories for relief set forth in section 6330(c)(2)(A), which

include spousal defenses, challenges to collection actions, and

collection alternatives. 

Discussion 

Respondent seeks summary judgment with respect to whether he

may proceed to collect certain outstanding tax liabilities of 

petitioner and whether petitioner should be held liable for a

penalty under section 6673. Rule 121 provides for summary

judgment to be granted with respect to part or all of the legal

issues in controversy if there is no genuine issue as to any

material fact. See Sunstrand Corp. v. Commissioner, 98 T.C. 518,

520 (1992), affd. 17 F.3d 965 (7th Cir. 1994). In that regard,

summary judgment is intended to expedite litigation and avoid 
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unnecessary and expensive trials. Fla. Peach Corp. v.

Commissioner, 90 T.C. 678, 681 (1988).

There is no genuine issue as to any material fact in this

case. Respondent, pursuant to section 6331(a), was seeking to

levy on petitioner’s property. In accord with sections 6330(a)

and 6331(d), respondent provided petitioner with a final notice

of intent to levy, which also included notice of petitioner’s

right to an administrative appeal of respondent’s decision to

collect the tax. In that regard, the Commissioner cannot collect

by levy without the opportunity for a taxpayer to seek an

administrative review of the determination to proceed with

collection and/or the opportunity for judicial review of the

administrative determination. Davis v. Commissioner, 115 T.C.

35, 37 (2000).

Petitioner opted for an administrative appeal, and after

respondent’s decision to go forward with collection, he sought

review by this Court. Petitioner did not file a petition upon

the issuance of the notice of deficiency, so he is afforded

review solely on the question of abuse of respondent’s discretion

because the validity of the underlying liability is not at issue. 

Sec. 6330(c)(2)(B); Sego v. Commissioner, 114 T.C. 604, 610

(2000).

Because petitioner is not entitled to question the

underlying tax liability, his administrative hearing is limited
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to collection issues, including spousal defenses, the

appropriateness of respondent’s intended collection action, and a

possible alternative to collection. Petitioner questioned the

appropriateness of respondent’s proposed collection action by

questioning whether the Appeals officer had satisfied the

verification requirement of section 6330(c)(1). Petitioner

contends that respondent used incorrect forms for the notice and

demand and otherwise failed to meet the requirement because the

Secretary did not personally verify the liability. 

At the Appeals conference, petitioner was provided with a

literal transcript of his account which detailed information

underlying the assessment of the tax in question. Petitioner

does not question whether all of the steps had been taken or

performed. In effect, he questions the genuineness or

authenticity of the documents respondent used to meet the

statutory requirements. Section 6330(c)(1) does not require the

Commissioner to rely on a particular document to satisfy the

verification requirement. Wagner v. Commissioner, T.C. Memo.

2002-180; see also Roberts v. Commissioner, 118 T.C. 365, 371

(2002). In addition, it has been held that “‘[t]he form on which

a notice and assessment and demand for payment is made is

irrelevant as long as it provides the taxpayer with all the

information required under * * * [section 6303].’” Hughes v.

United States, 953 F.2d 531, 536 (9th Cir. 1992) (quoting Elias
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v. Connett, 908 F.2d 521, 525 (9th Cir. 1990). Accordingly, we

find petitioner’s arguments to be specious and without merit.

From the transcript of petitioner’s Appeals conference, it

is clear that respondent’s Appeals officer met the letter and

spirit of the statutory requirement to provide a full and fair

hearing. In addition, petitioner was provided with documents

that satisfied respondent’s verification requirement. 

Accordingly, we hold that respondent has not abused his

discretion in determining to proceed with collection as set forth

in the March 1, 2001, Final Notice--Notice of Intent to Levy and

Notice of Your Right to a Hearing, sent to petitioner with

respect to the 1998 tax liability.

Finally, respondent has moved for a penalty under section

6673 on the ground that petitioner’s arguments are frivolous and

that he instituted and maintained this proceeding merely for

delay. Section 6673 provides that this Court may impose a

penalty, not to exceed $25,000, where it finds that a taxpayer’s

position in the proceeding is frivolous and/or that the

proceeding was instituted and maintained primarily for delay. 

Section 6673 penalties may be imposed in a lien and levy case. 

Pierson v. Commissioner, 115 T.C. 576, 580-581 (2000).

In addition to questioning the authenticity of respondent’s

documentation, petitioner has interposed protester arguments

which have, on numerous occasions, been rejected by the courts. 
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In order to support his arguments, petitioner has selectively

picked phrases out of context from statutes and rulings. In so

doing, petitioner has chosen to ignore more current or complete

statements of the law. In that same vein, petitioner has chosen

to ignore and/or not follow case precedent and interpretation of

the statutory law.

Under these circumstances we are convinced and hold that

petitioner’s position in this proceeding is frivolous and has

been interposed primarily to protest the tax laws of this country

and/or to delay collection activity by respondent. Accordingly,

we hold that petitioner is liable for a $1,500 penalty under

section 6673(a)(1). 

To reflect the foregoing,

An appropriate order and

decision will be entered granting

respondent’s motion for summary

judgment.