TAX COURT OPINION

Case: Brian LeCompte
Docket Number: 8767-09L
Judge: Colvin
Opinion Type: bench
Filed: 02/25/2010
Pages: 11

( 1a 54=- +Krtg STATES TAX COURT WASHINGTON, DC 2021 7 Brian LeCompte, Petitioner V . COMMISSIONER OF INTERNAL REVENUE , Responden t Docket No . 8765-09 8767-09 L Order of Service of Transcrip t Pursuant to Rule 152 ( b), Rules of Practice of Procedure of this Court , there is transmitted herewith to petitioner and to respondent a copy of the pages of the transcript of the trial of the above cases before Judge Mark V . Holmes, at Houston, Texas, on January 12, 2010, containing his oral . findings of fact and opinion rendered at the conclusion of the trial . In accordance with the oral findings of fact and opinion, decision .will be entered for respondent . (Signed) Mark V . Holmes Judge Dated : Washington, D .C . February 25, 2010 SERVED FEB 2 6 2010 3 1 BENCH OPINION BY JUDGE MARK V . HOLME S 2 DOCKET NUMBERS : 8765-09, 8767-09L JANUARY 12, 2010 3 BRIAN LeCOMPTE, ET AL . V . COMMISSIONE R 4 The Court has decided to render oral 5 findings of fact and opinion, and the following 6 represents the Court's oral findings of fact and 7 opinion . 8 This bench opinion is made pursuant to the 9 authority granted by section 7459(b) of the Internal 10 Revenue Code of 1986, as amended, and Rule 152 of the 11 Tax Court's Rules of Practice and Procedure . 12 The facts in this case were stipulated to . 13 There was no testimony, although there was a bit of 14 argument . The Petitioner is a resident of Texas at 15 the time he filed the petition and the government' s 16 motion f-ei 6673 is currently pending . water se .1.17' . 17 The cases, of which there are two, involve 18 the same taxpayer and follow very similar patterns . 19 The case docketed as Number 8765-09 arises from Mr . 20 Le-Compte's 2004 tax year . His taxes that year were 21 filed late on March 5, 2007 . They showed $6,611 owed, 22 which with penalties for failure to timely pay , 23 failure to timely file, underwithholding and interest, 24 were assessed on October 22, 2007 . A notice o f 25 balance due was sent out that same day . The taxes Heritage Reporting Corporatio n (202) 628-4888 4 1 were left unpaid . On January 16, 2008, the government 2 filed a notice of federal tax lien against Mr . 3 LeCompte's property . He timely requested a CDP, or 4 collection due process hearing, under section 6320 . 5 Similarly, for his 2006 year, the case that 6 is at issue in Docket Number 8767-09, he again filed 7 late, this time on January 8, 2008 . His tax retur n 8 showed more than $33,000 in taxes owed and, like the 9 2004 tax year, featured no amounts withheld or made 10 through estimated tax payments . On February 25, 2008, 11 the government assessed the unpaid tax, together again 12 with penalties for failure to timely file, failure to 13 timely pay, underwithholding and interest . A notice 14 of balance due was again sent out on that same day , 15 February 25, 2008 . It was not paid . On June 24 the 16 government filed its notice of federal tax lie n 17 against Mr . LeCompte for the 2006 tax year, and again 18 he requested a collection due process hearing in a 19 timely fashion . 20 The requests for CDP hearings in both these 21 cases were remarkably similar and focused on th e 22 adequacy of the procedure of assessment . In addition, 23 in the 2006 year Mr . LeCompte alleged that the IRS had 24 been specially defective in not sending him a notice 25 of intent to levy, not sending him a notice o f Heritage Reporting Corporation (202) 628-4888 5 1 deficiency for the tax owed, and not sending him a 2 4340 . There were other arguments ; they were al l 3 similarly procedural arguments . In both cases the 4 government sustained the filing of the federal tax 5 lien through a notice of determination issued to Mr . 6 LeCompte, and he appealed in both cases for bot h 7 years . The petitions were again nearly identical . 8 The grounds for Mr . LeCompte's complaint 9 were, in both cases, that the agent and/or appeals 10 officer did not use any Form 4340s in th e 11 determination as none existed at the time ; thus, it 12 would have to be readily accepted that none of the 13 legal and procedural requirements were accomplished 14 prior to filing the deficiency . The Petitioner was 15 greatly prejudiced by not having received the said 16 Forms 4340 even after a legal request for same . 17 Petitioner's due process of law rights have been 18 violated under the Fifth Amendment to the Unite d 19 States Constitution and he is greatly prejudiced . The 20 IRS has not even furnished the taxpayer an officia l 21 transcript of any income tax assessments and the IRS 22 bills do not contain any delegated signatures, seals, 23 certifications or-delegated orders, numbers or dates 24 and signatures taken from Form 23C or Form RACS-006 ." 25 At trial, Mr . LeCompte somewhat changed his Heritage Reporting Corporatio n (202) 628-4888 6 1 argument, saying that the assessments were invalid at 2 least in part because they had been made before a 4340 3 was sent or issued to him . As I said, the findings of 4 fact in this case are not really subject to dispute ; 5 they're all in the stipulation . The conclusions o f 6 law very much are . And here, I want to make clear at 7 the outset that under section 6320 and 6330 of th e 8 Code I am reviewing the notices of determinatio n 9 issued by the two appeals officers for their abuse of 10 discretion . In context, however, this means whether 11 they committed any legal errors since the facts are 12 undisputed . 13 My key holding here is that the appeal s 14 officers made no error of law in issuing the notices 15 of determination . There are numerous cases which I 16 could cite the proposition but I'll pick Nestor v . 17 Commissioner , 118 T .C . 162, which states section 18 6330(c)(1) does not require the appeals officer t o 19 give the taxpayer a copy of the verification that the 20 requirements of any applicable law or administrative 21 procedure have been met . 22 Section 301 .6330-1(e)(1), Procedure an d 23 Administrative Regulations, requires that the appeals 24 officer obtain verification before issuing th e 25 determination, not that he or she provide it to the Heritage Reporting Corporatio n (202) 628-4888 ¤ aKF&reI' 1 C--(cid:127) . There is no requirement under In t 2 Revenue laws or regulations that the appeals officers 3 give the taxpayer a copy of the delegation o f 4 authority from the Secretary to the person, other than 5 the Secretary, who signs the verification require d 6 under section 6330(c)(1) . And that's more or less 7 what happened here . 8 As to Mr . LeCompte's argument made toda y 9 that assessment can proceed only after a 4340 has been 10 issued, the Code is to the contrary . Sectio n 11 6201(a)(1) states quite plainly that the Secretary 12 shall assess all taxes determined by the taxpayer or 13 by the Secretary as to which returns are made under 14 this title . There is no need for a notice o f 15 deficiency when the IRS is satisfied with the adequacy 16 of the amount of tax owed on the return . Moreover , 17 the method of assessment -- that can be set by the 18 Secretary and doesn't have to follow any particular 19 form . Section 6203 of the Code says, "The assessment 20 shall be made by recording the liability of th e 21 taxpayer in the office of the Secretary in accordance 22 with rules or regulations prescribed by th e 23 Secretary ." And that's exactly what the IRS, acting 24 under its delegated power from the Secretary, did in 25 this case . Heritage Reporting Corporation (202) 628-4888 8 1 The precedents cited by Mr . LeCompte are 2 simply not relevant in the computer age . Until its 3 transition to computerized recordkeeping it's true 4 that the Service generally used Form 23C for th e 5 summary record of assessment, but it now uses a 6 computer-generated summary record of assessment known 7 as the RACS Report 006 . See Revenue Ruling 2007-21 . 8 Both these forms have been recognized as summar y 9 records of assessment within the meaning of the Code 10 section 6203 and the Tax Court has affirmed their use . 11 See March v . IRS , 335 F .3d 1186, 1188, (10th Circuit 12 2003) . 13 Instead of an RACS Report 006, which doe s 14 not break out individual taxpayer information, the IRS 15 may, but does not have to, obtain a Form 4340 o r 16 what's called an MFTRA-X literal transcript of the 17 taxpayer's account, either of which also sets forth 18 all of the information required by Regulation section 19 301 .6203-1 . See Roberts v . Commissioner , 329 F .3 d 20 1224, 1228 (11th Circuit 2003), Carillo v . 21 22 Commissioner , T .C . Memo 2005-290, and Michael v . Commissioner , T .C . Memo 2003-26 . A Form 4340 provide s 23 verification of the assessment of the liability in the 24 sending of the various collection notices . An MFTRA-X 25 transcript provides verification of the assessment but Heritage Reporting Corporation (202) 628-4888 1 not the sending of those collection notices . 2 In this case involving the 2004 tax year, 3 the parties stipulated, and I so find, that th e 4 settlement officer reviewed Respondent' s 5 administrative file and the internal transcripts of 6 account pertaining to Mr . LeCompte's income tax fo r 7 the 2004 year and verified that the IRS had satisfied 8 all legal and procedural requirements before assessing 9 the 2004 tax and filing the NFTL, notice of federa l 10 tax lien, for Petitioner's unpaid tax liabilities . 11 The settlement officer confirmed that a 12 notice of deficiency for the 2004 year had not been 13 sent to Petitioner, and, moreover, that a notice of 14 deficiency was not required in this case . She was 15 right to do so . She also requested a certified Form 16 4340 for Mr . LeCompte's 2004 tax year and sent it to 17 him several times . Although he alleged in hi s 18 petition that he never received a Form 4340, a copy 19 was attached to one of his letters dated June 12, 20 2008 . 21 Similarly, in the 2006 case, 8767-09, the 22 settlement officer reviewed the administrative file 23 and internal transcripts of account pertaining to his 24 income tax for the 2006 year and verified that the IRS 25 had also satisfied all legal and procedura l Heritage Reporting Corporation (202) 628-4888 1 0 1 requirements before assessing the tax for 2006 and 2 then filing the NFTL for Mr . LeCompte's unpaid tax 3 liabilities . 4 The settlement officer also confirmed that a 5 statutory notice of deficiency was not required fo r 6 the 2006 year and that the assessment was timely . She 7 also requested a certified Form 4340 for Mr . 8 LeCompte's 2000 [sic] tax year and sent it to the 9 Petitioner, again as stipulated by the parties . 10 There's no reason for me to disagree with that . 11 My conclusion, therefore, is that the 12 settlement officers in both these cases mad e 13 absolutely no errors of law and therefore I' m 14 sustaining the notice of determination in both cases . 15 Moreover, there's the government's 6673 motion that is 16 now pending . Mr . LeCompte, though he has apparently 17 not been a customer of Tax Court before in makin g 18 these arguments, is simply the latest in a very, very 19 very long line of people who have made similarly 20 frivolous arguments . 21 Again, just choosing a case almost a t 22 random, Brodman v . Commissioner , 86 T .C .M . 212 (2003, 23 T .C . Memo 2003-230) . Numerous cases establish that no 24 particular form of verification is required, that no 25 particular document need be provided to taxpayers at a Heritage Reporting Corporation (202) 628-4888 1 1 1 hearing conducted under section 6330, and that Form 2 4340 provided to the taxpayers after the hearin g 3 satisfies the requirement of section 6330(c)(1) 4 (omitting more than 20 cases cited) . Sectio n 5 6673(a)(1) provides, Whenever it appears to the Tax 6 Court that the taxpayer's position in such a 7 proceeding is frivolous or groundless, the Tax Cour t 8 in its decision may require the taxpayer to pay to the 9 United States a penalty not in excess of $25,000 . 10 The definition of frivolous is "a frivolous 11 claim is one that is contrary to established law and 12 unsupported by a meritorious argument for change in 13 the law," that again being from the Brodman case and 14 reflecting very well-settled jurisprudence in tax law . 15 Now, what I look out in figuring out whether t o 16 penalize somebody under this provision is first of all 17 whether the position is frivolous ; it clearly is here 18 as the scores and scores of cases that Mr . LeCompte is 19 simply following have held . His education an d 20 experience as a physician or chiropractor would weigh 21 more heavily in favor of a larger penalty, but again 22 he doesn't seem to have been a customer of the Ta x 23 Court before in making such frivolous arguments . The 24 amounts at issue are not gargantuan, and therefore I 25 will penalize him but penalize him in the relatively Heritage Reporting Corporatio n (202) 628-4888 12 1 small amount of $500 . It only goes up from here, Mr . 2 LeCompte . Please don't come back . 3 It is therefore decided that Respondent may 4 proceed with the collection of Petitioner's federa l 5 income tax liabilities for the tax year 2004 a s 6 described in the notice of determination concerning 7 collection actions under section 6320 and/or 633 0 8 dated March 12, 2009, that being for the 2004 tax 9 year . And it is also decided that Respondent may 10 proceed with the collection of Petitioner's federal 11 income tax liabilities for the tax year 2006 a s 12 described in the notice of determination concernin g 13 collection action under section 6320 and/or 6330 dated 14 March 12, 2009 . 15 This concludes the Court's oral findings of 16 fact and opinion in this case . 17 (Whereupon, at 1 :24 p .m ., the bench opinion 18 in the above-entitled matter was concluded . ) 19 20 // 21 // 22 // 23 // 24 // 25 // Heritage Reporting Corporation (202) 628-4888