T.C. Memo. 2011-32

UNITED STATES TAX COURT

GARY STEVEN COVINGTON, Petitioner v. 

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 17624-09L. Filed February 2, 2011.

Gary Steven Covington, pro se.

David M. McCallum, for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

MORRISON, Judge: The IRS notified the petitioner, Gary

Steven Covington, that it intended to collect his 1995 and 1996

income tax liabilities by levy. Mr. Covington requested a

hearing with the IRS Appeals Office. On June 25, 2009, the

Appeals Office made a collection determination under section 6330
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of the Internal Revenue Code, as amended.1 Covington challenged

the determination by filing a timely petition with this Court. 

We sustain the determination of the Appeals Office. 

FINDINGS OF FACT

1. Before the IRS Proposed the Levy in 2008

Covington failed to file his federal income tax returns for

the years 1995 and 1996. In 1999, the respondent (whom we refer

to as the IRS) sent Covington a notice of deficiency for 1995 and

1996. Instead of filing a Tax Court petition, Covington stamped

each page of the notice “REFUSED FOR FRAUD F.R.C.P. 9(b)” and

sent the notice back to the IRS accompanied by a letter filled

with frivolous theories. He claimed that his name was actually

“Gary Steven., Covington”, and that the deficiency notice,

addressed to “Gary S. Covington”, was therefore invalid. He

enclosed an affidavit in which he swore that he had never been to

the Virgin Islands, that he was not an American citizen, and that

he claimed allegiance to Jesus Christ. (He signed the affidavit

“Gary Steven., Covington”.) The IRS assessed all the taxes and

penalties determined in the deficiency notice. In 2002, it filed

the tax lien that had arisen from the assessment. A notice of

the filing of the lien gave Covington a right to request a

collection hearing with the IRS Appeals Office. See sec.

1All section references are to the Internal Revenue Code, as

amended.
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6320(a)(1), (3)(B), (b)(1). Covington requested a hearing. The

Appeals Office sustained the filing of the tax lien. Covington

appealed this determination to the Tax Court. In 2003, the Tax

Court sustained the determination in an order and decision. 

2. The Proposed Levy and Subsequent Proceedings

On September 29, 2008, the IRS notified Covington by mail

that it intended to collect the unpaid taxes and penalties for

1995 and 1996 by levy. Covington had a right to request another

hearing. Sec. 6330(a)(1), (3)(B), (b)(1). In his request,

Covington said that he wanted the Appeals Office to consider

entering into an installment agreement or an offer-in-compromise. 

His request was accompanied by a 17-point list of generic

complaints, disclaimers, and demands, which he had copied from

the internet. In point 3 of the attachment, Covington claimed

that “Collection actions” were inappropriate, were intrusive, and

would place an undue hardship on him. In point 9, Covington

explained that he wished to audio record the hearing. In point

10, Covington purported to withdraw any frivolous arguments. 

However, in point 6, Covington claimed that he had never received

a notice of deficiency, even though he had received the notice of

deficiency in 1999 and returned it to the IRS. 

On November 24, 2008, Deborah Foote of the IRS mailed a

letter to Covington acknowledging that the IRS had received his

request for a collection hearing. Foote stated that Covington’s
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request had been forwarded to the Appeals Office. Foote asserted

that the balance due for the tax years 1995 and 1996 was

$38,640.90, an amount that included penalties and interest

figured to December 24, 2008. 

On December 8, 2008, Covington replied to Foote’s letter. 

He argued that he did not owe any taxes for 1995 and 1996. 

Covington asserted that, as a member of the private sector during

1995 and 1996, he did not have any taxable income for those

years.

On January 26, 2009, Cheryl Wakefield, an IRS settlement

officer attached to the Appeals Office, sent a letter to

Covington. The letter explained that the Memphis Campus of the

Appeals Office had received his case on December 16, 2008. The

letter promised that the Appeals Office would attempt to contact

Covington as soon as possible.

On February 23, 2009, Wakefield sent another letter to

Covington. Wakefield stated that she had scheduled a telephone

conference call with Covington for March 16, 2009, at noon and

asked him to notify her within 14 days if the time was

inconvenient or if he wished to have the conference by

correspondence. She explained that Covington could not challenge

the tax liabilities because he had had a previous opportunity to

do so. The letter stated that the issues raised in Covington’s

request for a hearing were frivolous, that the Appeals Office did
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not provide a face-to-face conference to discuss frivolous

issues, and that Covington would be allowed a face-to-face

conference on any nonfrivolous issues if he raised a nonfrivolous

issue within 14 days from the date of the letter. As to

Covington’s request to audio record the hearing, Wakefield

explained that audio recording was allowed by the Appeals Office

only in face-to-face conferences, and that Covington was not (as

yet) entitled to a face-to-face conference. Wakefield stated

that she could not consider alternatives to collection action,

such as installment agreements and offers-in-compromise, unless

Covington submitted a collection-information statement within 14

days; i.e., by March 9, 2009. By the same deadline, Covington

would also need to file any overdue federal tax returns. In

particular, Wakefield stated that Covington would need to file

his income-tax return for 2007. 

On March 6, 2009, Covington wrote a letter to Wakefield

responding to her letter. Covington stated that he did not wish

to have a telephone conference with Wakefield. Covington

demanded a face-to-face hearing instead. He stated that at the

face-to-face hearing he planned to discuss procedural

irregularities, his liability for penalties, and alternatives to

collection. However, Covington did not file any overdue federal

tax returns or send Wakefield a collection-information statement.
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On May 20, 2009, Wakefield sent Covington a letter stating

that she had not received the collection-information statement

that she had requested in her February 23, 2009, letter. She

warned Covington that a determination would be made using

whatever information Covington had already provided. If

Covington wished to provide more information, he could do so

within 14 days; i.e., by June 3, 2009.

On June 3, 2009, Covington responded to Wakefield’s May 20,

2009, letter. Covington explained that he did not send Wakefield

a collection-information statement because, as a member of the

private sector, he was exempt from federal income tax. 

On June 25, 2009, the Appeals Office made a collection

determination sustaining the proposed levy. The determination

stated that Covington had received a notice of deficiency for

1995 and 1996 and that therefore Covington was barred from

contesting the amounts of the tax liabilities. The determination

also stated that Covington’s failure to provide financial

information prevented the Appeals Office from considering

collection alternatives. Covington filed a petition with this

Court challenging the determination of the Appeals Office. At

the time he filed his petition, he was a resident of North

Carolina.
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OPINION

1. The Appeals Office’s Determination Was Not an Abuse of

Discretion. 

The Tax Court has jurisdiction to review the Appeals

Office’s determination to sustain the proposed levy to collect 

Covington’s unpaid 1995 and 1996 income-tax liabilities. See

sec. 6330(d)(1). Where the existence and amount of the

underlying tax liability is not properly at issue, we review the

determination for abuse of discretion. Sego v. Commissioner, 114

T.C. 604, 610 (2000). In his brief, Covington essentially

abandoned any challenges to the existence and amounts of his

underlying tax liabilities. Therefore, we review the

determination for abuse of discretion. 

Section 6330(c)(1) requires the Appeals Office to verify

that “the requirements of any applicable law or administrative

procedure have been met.” See also sec. 6330(c)(3)(A). This

verification must be done even if the taxpayer does not request

it. Hoyle v. Commissioner, 131 T.C. 197, 202-203 (2008). The

record reflects that Wakefield (who was attached to the Appeals

Office for these purposes) had determined that (1) the IRS

assessed the taxes following Covington’s failure to respond to

the notice of deficiency, (2) the IRS timely mailed a notice and

demand for payment to Covington at his last known address, (3)

unpaid balances for both years were due, (4) the IRS notified

Covington of its intent to levy, and (5) the IRS notified
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Covington of his right to a levy hearing. We conclude that the

Appeals Office made the verification required by section

6330(c)(1). See Ron Lykins, Inc. v. Commissioner, 133 T.C. 87,

96-97 (2009). 

Section 6330(c)(3)(B) required the Appeals Office to

consider any challenges by Covington to the appropriateness of

collection actions. See also sec. 6330(c)(2)(A)(ii). In

addition, section 6330(c)(3)(C) required the Appeals Office to

consider whether the levy balanced the need for the efficient

collection of taxes with Covington’s concern that the collection

action be no more intrusive than necessary. Covington never put

forward any plausible challenge to the appropriateness of the

levy. The Appeals Office determined that the levy balanced the

need for the efficient collection of taxes with Covington’s

concern that the collection action be no more intrusive than

necessary. We are satisfied that the Appeals Office

appropriately considered Covington’s generic challenge to the

appropriateness of the levy and that it appropriately considered

whether the levy balanced the need for the efficient collection

of taxes with Covington’s concern that the collection action be

no more intrusive than necessary.

Covington stated in his request for a hearing that he wished

to discuss collection alternatives. However, he did not submit a

collection-information statement or file a 2007 tax return. 
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Under these circumstances, the Appeals Office did not abuse its

discretion in not considering collection alternatives. See Orum

v. Commissioner, 123 T.C. 1, 13 (2004) (decision to reject

installment agreement was not abuse of discretion when taxpayer

failed to timely submit financial information), affd. 412 F.3d

819, 821 (7th Cir. 2005); Rodriguez v. Commissioner, T.C. Memo.

2003-153 (decision not to accept offer-in-compromise from

taxpayer who did not file all required tax returns was not abuse

of discretion). 

The Appeals Office did not grant Covington a face-to-face

hearing. Section 301.6330-1(d)(2), Q&A-D8, Proced. & Admin.

Regs., provides that a face-to-face hearing concerning a

collection alternative is not required unless the taxpayer would

be eligible for the alternative. As explained above, Covington

never demonstrated that he was eligible for the collection

alternatives that he proposed to discuss. Therefore, he did not

have a right to a face-to-face hearing.

2. Covington Filed His Tax Court Petition and Maintained This

Lawsuit Primarily for Delay.

The IRS moved for the imposition of sanctions under section

6673(a)(1). If a taxpayer institutes or maintains Tax Court

proceedings primarily to delay collection, the Tax Court may

require a taxpayer to pay the United States up to $25,000. 
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Id. We believe that Covington filed and maintained this lawsuit

primarily to delay collection, not to assert any legitimate

arguments. We shall impose a penalty under section 6673 of

$5,000.

To reflect the foregoing,

An appropriate order and

decision will be entered.