T.C. Memo. 2007-31

UNITED STATES TAX COURT

JOHN ALFRED LASZLOFFY, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 12601-05L. Filed February 7, 2007.

John Alfred Laszloffy, pro se.

Karen Nicholson Sommers, for respondent.

MEMORANDUM OPINION

SWIFT, Judge: This matter is before us under Rule 121 on

the parties’ cross-motions for summary judgment. The underlying

issue in this collection case is whether respondent’s Appeals

Office abused its discretion in sustaining respondent’s proposed

levy action against petitioner’s property.
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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.

For purposes of the instant cross-motions for summary

judgment, and the respective objections thereto, the record

consists of documents set forth in respondent’s administrative

file, the pleadings filed herein, and the parties’ cross-motions

for summary judgment and attachments thereto.

Background

Respondent seeks to levy on petitioner’s property in

connection with petitioner’s assessed and outstanding 1992 and

1993 Federal income taxes and related additions to tax and

interest as follows:

 Additions to Tax 

Year Deficiency

 Sec.

6651(a)(1)

 Sec.

6651(a)(3)

Sec.

6654 Interest*

1992 $ 7,513 $1,878 $1,878 $327 $13,505

1993 10,460 2,615 2,615 441 16,620

* As of approximately Dec. 24, 2004. Includes

 for 1992 an $18 collection fee.

Petitioner, who describes himself as “from the mountains” of

California, failed to file his 1992 and 1993 individual Federal

income tax returns.
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With third-party information returns and Bureau of Labor

Statistics figures, respondent reconstructed petitioner’s 1992

and 1993 income. 

On November 27, 1995, based on respondent’s reconstruction

of petitioner’s income, respondent issued to petitioner a notice

of deficiency relating to 1992 and 1993 in which respondent

determined the above income tax deficiencies and additions to tax

for failure to file and failure to pay estimated income tax. 

Petitioner received respondent’s notice of deficiency.

Petitioner, however, did not petition this Court to redetermine

the income tax deficiencies and additions to tax set forth

therein.

On June 17, 1996, respondent assessed the above income tax

deficiencies, additions to tax for failure to file and failure to

pay estimated income taxes, and related interest.

On December 24, 2004, respondent mailed to petitioner a

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

Hearing (levy notice) relating to the above unpaid liabilities.

On December 30, 2004, petitioner requested a hearing with

respondent’s Appeals Office with respect to the proposed levy

action. On June 7, 2005, respondent’s Appeals officer held a

telephone hearing with petitioner. During the hearing,

petitioner did not propose collection alternatives to

respondent’s Appeals officer. Instead, petitioner presented
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frivolous arguments in which he contested his income tax

liabilities and the validity of the assessments against him.

On June 17, 2005, respondent’s Appeals Office issued to

petitioner a Notice of Determination Concerning Collection Action

(notice of determination) in which respondent’s Appeals Office

sustained respondent’s proposed levy action.

Petitioner timely petitioned this Court to review the above

notice of determination.

Discussion

Summary judgment is proper “if the pleadings, answers to

interrogatories, depositions, admissions, and any other

acceptable materials, together with the affidavits, if any, show

that there is no genuine issue as to any material fact and that a

decision may be rendered as a matter of law.” Rule 121(b); Beery

v. Commissioner, 122 T.C. 184, 187 (2004).

A party opposing a motion for summary judgment “may not rest

upon the mere allegations or denials of such party’s pleading,”

but the objecting party’s response “must set forth specific facts

showing that there is a genuine issue for trial.” Rule 121(d);

Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

The burden of establishing the nonexistence of a genuine

issue of fact is on the party moving for summary judgment.

Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970).
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Section 6331(a) provides generally that, if a taxpayer

liable to pay Federal taxes neglects or refuses to pay the same

within 10 days after notice and demand, it shall be lawful for

respondent to collect such tax by levy upon all property and

rights to property belonging to the taxpayer.

Section 6331(d)(1) requires that, prior to making a levy on

a taxpayer’s property, respondent must give to the taxpayer

written notice of the proposed levy and written notice of the

taxpayer’s right to a hearing.

In such a hearing, respondent is required to verify whether

the requirements of all applicable laws and administrative

procedures have been met and to consider other issues raised by a

taxpayer including appropriate spousal defenses, collection

alternatives, and challenges to the appropriateness of the

collection actions. Sec. 6330(c).

Section 6330(c) also requires respondent to consider whether

respondent’s proposed collection action balances the need for

efficient collection of taxes with the taxpayer's legitimate

concern that any collection action be no more intrusive than

necessary. Sec. 6330(c)(3).

Under section 6330(c)(2)(B), if a taxpayer received a notice

of deficiency for a year in question, in a later collection

hearing the taxpayer may not contest the existence or amount of
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his or her underlying tax liability for that year. Nestor v.

Commissioner, 118 T.C. 162, 165-166 (2002).

Petitioner’s receipt of the notice of deficiency for 1992

and 1993 would appear to preclude petitioner from challenging in

the collection hearing and in this case his 1992 and 1993 Federal

income tax liabilities. Petitioner, however, argues that the

notice of deficiency relating to 1992 and 1993 issued by

respondent was invalid on its face because the notice of

deficiency was based on third-party information returns and

Bureau of Labor Statistics figures. Petitioner argues that, if

the notice of deficiency was invalid, the Tax Court would not

have had jurisdiction to redetermine the deficiencies determined

by respondent, and thus that petitioner, in fact, did not have an

opportunity to challenge his 1992 and 1993 tax liabilities.

We reject petitioner’s argument. A notice of deficiency may

be treated as invalid where the face of the notice of deficiency

itself establishes that respondent did not consider information

that relates to a particular taxpayer and therefore did not

actually make a determination. Scar v. Commissioner, 814 F.2d

1363, 1367-1369 (9th Cir. 1987), revg. 81 T.C. 855 (1983). 

A deficiency determination, however, made by respondent

based on third-party information returns and statistical

information relating to the taxpayer, as is the case herein, is a
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sufficient determination to make the related notice of deficiency

valid. Palmer v IRS, 116 F.3d 1309, 1313-1314 (9th Cir. 1997). 

Because petitioner received a valid notice of deficiency

relating to 1992 and 1993, he is precluded under section

6330(c)(2)(B) from now challenging his 1992 and 1993 Federal

income tax liabilities.

In the collection hearing, petitioner also contested the

validity of the assessments. Petitioner’s arguments, however,

were based upon frivolous arguments that have been uniformly

rejected by this and other courts and do not merit discussion.

Because petitioner did not present to respondent’s Appeals

Office collection alternatives and only advanced frivolous

reasons why the proposed levy is inappropriate, we conclude that

respondent’s Appeals Office did not abuse its discretion in

issuing the notice of determination sustaining respondent’s levy

notice.

For the reasons stated, we shall deny petitioner’s motion

for summary judgment and grant respondent’s motion for summary

judgment.

To reflect the foregoing,

An appropriate order and

decision will be entered for

respondent.