TAX COURT OPINION

Case: James Norbert Green
Docket Number: 14495-11L
Judge: Morrison
Opinion Type: bench
Filed: 07/11/2012
Pages: 18

UNITED STATES TAX COURT WASHINGTON, DC 20217 JAMES NORBERT GREEN, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ) Docket No. 14495-11L. ) 3 ) ) ) ORDER OF SERVICE OF TRANSCRIPT Pursuant to Rule 152(b), Tax Court Rules of Practice of Procedure, there is transmitted herewith to petitioner and to respondent a copy of the pages of the transcript of the trial of the above case before Judge Richard T. Morrison, at Detroit, Michigan, on May 16, 2012, 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, an appropriate order and decision will be entered. (Signed) Richard T. Morrison Judge Dated: Washington, D.C. July 11, 2012 SERVED .JUL 1 t 2012 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3 BENCH OPINION BY JUDGE RICHARD T. MORRISON JAMES NORBERT GREEN v. COMMISSIONER DOCKET NO: 14495-11L DATE: MAY 16, 2012 THE COURT: The Court has decided to render Oral Findings of Fact and Opinion in this case. The following represents the Court's Oral Findings of Fact and Opinion, which shall not be relied on as precedent in any other case. This bench opinion is made pursuant to the authority granted in section 7459(b) and Rule 152. All section references are to the Internal Revenue Code of 1986, as amended, and all Rule references are to the Tax Court Rules of Practice and Procedure. By a notice of determination dated May 25, 2011, the IRS Appeals Office sustained a proposed levy to collect James Norbert Green's unpaid income-tax liabilities for the years 2008 and 20.09. Mr. Green timely filed a petition with the Tax Court challenging the determination of the IRS Appeals Office. We have jurisdiction under section 6330(d) (1) to review the IRS Appeals Office's determination. The case was tried on May 15, 2012 in Detroit, Michigan. Mr. Green appeared pro se. Ms. Alicia A. Mazurek appeared on behalf of the Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 respondent, tne 1RS. Mr. Green nad a pending motion to dismiss as of the end of trial had moved to dismiss the IRS's 2009 claim for lack of subject matter jurisdiction and to dismiss the IRS's 2008 claim for failure to state a claim upon which relief can be granted. We deny Mr. Green's motion as moot because the issues raised in the motion are resolved in this opinion to the extent it is appropriate to resolve them. Findings of Fact We incorporate the stipulation of facts with Exhibits 1-J through 14-J. Mr. Green resided in Michigan when he filed his petition. During 2008 and 2009, Mr. Green was employed as a locomotive engineer for Grand Trunk Western Railroad, Inc. On April 14, 2009, Mr. Green submitted a Form 1040, U.S. Individual Income Tax Return, for the year 2008. On the Form 1040, Mr. Green made zero entries for multiple lines, including the lines for wages and salaries, adjusted gross income, taxable income, and total tax; he claimed that he was entitled to a refund of $11,781.71. On January 11, 2010, the IRS sent Mr. Green a notice of deficiency for the year 2008. Mr. Green admits that he received the notice of deficiency. The Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 S notice of deficiency determined that Mr. Green had an income-tax deficiency of $15,463 and that he was liable for a section-6651(a) (1) penalty of $1,107.23, a section-6651(a) (2) penalty of $172.24, and a section-6654 (a) penalty of $120.51. The determinations in the notice of deficiency were consistent with a substitute for return prepared under section 6020(b). Mr. Green did not petition the Tax Court for redetermination of the deficiency. On May 24, 2010, after the expiration of Mr. Green's 90-day period to petition the Tax Court, the IRS assessed the tax shown on the notice of deficiency. On April 13, 2010, Mr. Green submitted a Form 1040 for the year 2009. On the Form 1040, Mr. Green made zero entries for multiple lines, including the lines for wages and salaries, adjusted gross income, taxable income, and total tax; he claimed that he was entitled to a refund of $13,537.15. The IRS did not issue a notice of deficiency to Mr. Green for the year 2009. Instead, the IRS assessed Mr. Green's 2009 tax liability under the mathematical-error assessment procedures of section 6213 (b). On February 19, 2011, the IRS sent Mr. Green a notice of intent to levy to collect his unpaid Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 6 income-tax liabilities for 2008 and 2009. On February 20, 2011, Mr. Green submitted a request for a collection-due-process (CDP) hearing regarding the proposed levy. In his request, Mr. Green stated that he disagreed with the proposed levy because "I'm~ not liableifor-the tax." On April 6, 2011, Settlement Officer Eric Feinman of the IRS Appeäls Office sent Mr. Green a letter acknowledging reëeipt of Mr. Green's request for a CDP hearing and scheduling a telephone conference for May 4, 2011 at 3:00 p.m.. EDT. The letter advised Mr. Green that some of his reasons for opposing the proposed levy (as shown by his previous correspondence with theLIRS) were frivolous.. The letter informed Mr. Green that a.face-to-face hearing could not be scheduled where the hearing request was based solely on frivolous positions or reflected a desire to.delay or impede the administration of federal tax laws. The letter advised Mr. Green to raise "legitimate issueë" such as collection alternatives or challenges to the appropriateness of collection action. The:letter also advised Mr. Green that because he received a notice of deficiency for 2008, he could not contest his underlying tax liability for 2008 ·at the CDP hearing. However, if he Heritage Repþrting Corporation (202|) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 7 filed a "legitimate, processable tax return" for 2008, the letter stated that his underlying tax liability for 2008 could be reconsidered under "Appeals General Authority". Mr. Green did not file a new tax return for 2008. On April 18, 2011, Mr. Green sent Settlement Officer Feinman a letter stating that he would not be available for a telephone conference on May 4, 2011, but that he would be available on May 16, 2011. Mr. Green's letter also stated that he would prefer a face-to-face hearing. The letter denied that he had frivolous reasons for objecting to the proposed levy. In the letter, Mr. Green argued that the IRS had "no lawful assessments" for 2008 and 2009 and that the IRS had refused to provide him with copies of valid assessments pursuant to 26 C.F.R. section 301.6203. He also claimed that the IRS had no authority under section 6020(b) to prepare a substitute Form 1040. Lastly, he noted that no notice of deficiency had been issued for 2009. Mr. Green signed his letter "James Green, non 'taxpayer', non federal employee and non resident of the District of Columbia and all other federal territories." On May 4, 2011, Settlement Officer Feinman sent Mr. Green a letter rescheduling the telephone Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 8 conference for May 16, 2011 at 1:00 p.m. EDT. The letter notified Mr. Green that his request for a face- to-face hearing had been denied because he was raising frivolous or "desire to delay" issues. The letter reiterated that Mr. Green could not contest his underlying tax liability for 2008 because he had received a notice of deficiency. The letter requested that Mr. Green submit a "legitimate, processable tax return" for 2008. The letter informed Mr. Green that his 2009 tax return was frivolous and that his 2009 tax liability had been assessed under "math error procedures". The letter encouraged Mr. Green to file a "legitimate, processable tax return" for 2009. Settlement Officer Fein:man enclosed transcripts of Mr·. Green's account for 200:8 and 2009 along with the letter, which stated that the transcripts satisfied the legal requirements of 26 C.F.R. section 301.6203- 1. The letter also stated that section 6020(b) allowed the IRS to prepare a substitute Form 1040 when the taxpayer either failed to file a return or filed a fraudulent return. On May 12, 20,11, Mr. Green sent Settlement Officer Feinman a letter with the subject line "Your obfuscation letter dated May 4th 2011 (attached)". This letter largely reiterated the positions stated in Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 9 Mr. Green's April 18, 2011 letter. Mr. Green's May 12, 2011 letter again requested a face-to-face hearing, denied taking frivolous positions, challenged the validity of his underlying tax liability and the assessments for 2008 and 2009, and argued that section 6020(b) and 26 C.F.R. section 301.6203 had not been followed. Additionally, the May 12, 2011 letter claimed that "no substantive regulation" existed for sections 6211 ("Definition of a deficiency") and 6212 ("Notice of deficiency") and asserted that Mr. Green was not an "employee" because he was not a federal employee. The May 12, 2011 letter concluded by accusing Settlement Officer Feinman and his "confederates" of "computer fraud mail fraud [sic] and extortion". Mr. Green used the same "non taxpayer" signature that he used on his April 18, 2011 letter. On May 16, 2011, Settlement Officer Feinman called Mr. Green at 1:00 p.m. EDT for the telephone conference but did not reach him. Settlement Officer Feinman left a voicemail message. Mr. Green did not respond. On May 23, 2011, Settlement Officer Feinman reviewed Mr. Green's May 12, 2011 letter, which the IRS Appeals Officefxeceived on May l'7, 2011. Settlement Officer Feinman concluded that Mr. Green Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 10 continued to raise frivolous or "desire to delay" issues. On May 25, 2011, the IRS Appeals Office issued a notice of determination sustaining the proposed levy to collect Mr. Green's unpaid income-tax liabilities for 2008 and 2009. On June 20, 2011, Mr. Green filed a Tax Court petition to challenge the IRS Appeals Office's determination. On May 7, 2012, the IRS applied a portion of Mr. Green's overpayment for his 2011 tax liability to his 2009 tax liability. 1. Tax Year 2008 Opinion Mr. Green alleges that the IRS Appeals Office erred in not allowing him to contest his underlying tax liability for 2008 at the CDP hearing. He argues that he lacked a prior opportunity to challenge his underlying tax liability because he never received "assessment certificates" under 26 C.F.R. section 301.6203-1 despite repeated requests to the IRS. However, the validity of a tax assessment is a separate issue from the existence and amount of an underlying tax liability. See Roberts v. Commissioner, 118 T.C. 365, 369 (2002), aff'd, 329 F.3d 1224 (11th Cir. 2003). We hold that section Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 11 6330 (c) (2) (B) barred Mr. Green from challenging his underlying tax liability for 2008 at the CDP hearing because he had received a notice of deficiency for 2008. See Montgomery v. Commissioner, 122 T.C. 1, 8 (2004); Goza v. Commissioner, 114 T.C. 176, 182-183 (2000). The notice of deficiency provided Mr. Green with a prior opportunity to dispute his underlying tax liability, even if he did not petition the Tax Court for redetermination of the deficiency. See Goza v. Commissioner, 114 T.C. at 182-183. Because Mr. Green's underlying tax liability for 2008 is not properly at issue, we apply an abuse-of-discretion standard in reviewing the IRS's determination to sustain the proposed levy with respect to 2008. See, e.g., Sepo v. Commissioner, 114 T.C. 604, 610 (2000). We construe Mr. Green's no-assessment- certificates argument as an allegation that his 2008 tax liability was improperly assessed because he never received "assessment certificates" under 26 C.F.R. section 301.6203-1, and that the IRS Appeals Office erred in verifying that a valid assessment had been made. Under 26 C.F.R. section 301.6203-1, if the taxpayer requests a copy of the record of assessment, the IRS must furnish "a copy of the pertinent parts of the assessment which set forth the name of the Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 12 taxpayer, the date of assessment, the character of the liability assessed, the taxable period, if applicable, and the amounts assessed." It is unclear why the IRS's failure to furnish a copy of the record of assessment would invalidate an otherwise valid assessment. Nonetheless, we find that the account transcript for 2008 that Settlement Officer Feinman sent Mr. Green on May 4, 2011 satisfied the requirements of 26 C.F.R. section 301.6203-1 by providing the requisite information. Thus Mr. Green's 2008 tax liability was not improperly assessed because of the IRS's failure to furnish records under 26 C.F.R. section 301.6203-1. Mr. Green also cites Brafman v. United States, 384 F.2d 863 (5.th Cir. 1967), to argue that an assessment certificate does not satisfy 26 C.F.R. section 301.6203-1 unless it is signed by an assessment officer. We construe this argument as an allegation that his 2008 tax liability was improperly assessed and that the IRS Appeals Office erred in verifying that a valid assessment had been made. Mr. Green's reliance on Brafman is misplaced. Brafman only held that an assessment officer must sign a Form 23C, Assessment Certificate mmary Record of Assessments. See Nicklaus v. Commissioner, 117 T.C. Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Mr. Green's last argument is that he did not 15 receive a CDP hearing because he did not receive a face-to-face hearing. However, a CDP hearing can consist of written or oral communications. 26 C.F.R. section 301.6330-1(d) (2), Q&A-D6. The IRS Appeals Officer is not required to hold a face-to-face hearing. Id. Mr. Green claims that he needed a face-to-face hearing to present evidence and examine witnesses. But Mr. Green had the opportunity to present evidence by correspondence, and a taxpayer does not have the right. to subpoena and examine witnesses at a CDP hearing. Id.; Davis v. Commissioner, 115 T.C. at 41-42. We further find that the vast majority of arguments that Mr. Green raised before the IRS Appeals Office reflected frivolous positions or a desire to delay or impede the administration of the federal tax laws. Because Mr. Green's arguments were largely frivolous or reflected a "desire to delay", it was not an abuse of discretion for the IRS ice to deny him a face-to-face hearing. See 26 C.F.R. section 301.6330-1(d) (2), Q&A-D7, D8. Alternatively, even if Mr. Green should have been granted a face-to-face hearing, he has not demonstrated that a face-to-face hearing would have been constructive. Settlement Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 16 Officer Feinman offered Mr. Green a telephone conference and rescheduled the conference at Mr. Green's request. Yet, Mr. Green failed to respond to Settlement Officer Feinman's phone call or voicemail message of May 16, 2011. Mr. Green's lack of response implied that he had already made all the arguments that he wished to make. Thus it is unclear what additional purpose would have been served by a face- to-face hearing. Lastly, Mr. Green cites C.C.A. 200123060 2001 (June 8, 24É$(cid:16)040'toargue that a face-to-face hearing should be granted even if the r raised only frivolous issues. But the chief counsel advisory addressed only the advisability of a form letter that the Las Vegas Appeals Office planned to send to taxpayers who raised frivolous arguments; the letter would state that Appeals would not offer a face-to- face or telephone conference to such taxpayers and would instead issue a notice of determination within 15 days of the letter unless the taxpayer raised "relevant" issues. These facts are not at issue here, and additionally, a chief counsel advisory is not binding on the Tax Court. See Halliburton Co. v. Commissioner, 100 T.C. 216, 232 (1993) (revenue rulings and other interpretations published by the IRS Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 17 are not binding on the courts), aff'd, 25 F.3d 1043 ·(5th Cir. 1994). We conclude that the written communications between Mr. Green and Settlement Officer Feinman constituted a valid CDP hearing under section 6330(b) and that the IRS Appeals Office did not abuse its discretion in denying Mr. Green a face-to-face hearing. We thus conclude that (1) Mr. Green's 2008 tax liability was validly assessed, (2) Mr. Green received a CDP hearing as required by section 6330(b), (3) the IRS Appeals Office did not abuse its discretion in denying·Mr. Green a face-to-face hearing, (4) the IRS Appeals Office did not abuse its discretion in verifying at the hearing that the requirements of any applicable law or administrative procedure had been met, see sec. 6330 (c) (1), including the requirement that Mr. Green's 2008 tax liability had been validly assessed, and (5) the IRS Appeals Office did not abuse its discretion in sustaining the proposed levy to collect Mr. Green's unpaid 2008 tax liabilities. 2. Tax Year 2009 The IRS concedes that the proposed levy should not be sustained to collect Mr. Green's 2009 tax liabilities. The IRS agrees that the Court can Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 18 enter an order stating that the proposed levy is not sustained with respect to 2009, and the IRS states that it plans to abate the assessment of Mr. Green's 2009 tax liability so that there is no balance due. Therefore, Mr. Green's substantive arguments challenging the proposed levy with respect to 2009 are moot. We need not address those arguments. Mr. Green, however, is not satisfied with the IRS's concession that the proposed levy should not be sustained with respect to 2009. He argues that the Court should grant a refund of his 2011 overpayment to the extent it was applied toward his 2009 tax liability. We lack jurisdiction in a CDP proceeding to determine an overpayment or to order a refund or credit of taxes paid. Greene-Thapedi v. Commissioner, 126 T.C. 1, 11-12 (2006) . Thuspe cannot address Mr. Green's request for a refund or his related argument that the offset of his 2009 liability should have been made by the Treasury Financial Management Service, not the IRS. However, we do note that the IRS has discretion under section 6402(a) to credit a taxpayer's overpayment to another liability. See Weber v. Commissioner, 138 T.C., (2011) (slip op. at 14-15). We conclude that the proposed levy should Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 19 not be sustained with respect to 2009. Mr. Green makes other arguments that are frivolous, such as his argument that the IRS cannot levy on the earnings of a private employee and his argument that there are no "substantive regulations" on CDP procedures. We need not address these frivolous arguments. See Crain v. Commissioner, 737 F.2d 1417, 1417 (5th Cir. 1984) ("We perceive no need to refute these [frivolous] arguments with somber reasoning and copious citation of precedent; to do so might suggest that these arguments have some colorable merit . ") ; Wnuck v . Commiss ioner, 136 T.C. 498, 501-513 (2011) (discussing why courts often decline to refute frivolous anti-tax arguments). To reflect the foregoing, an appropriate order and decision will be entered. This concludes the Court's Oral Findings of Fact and Opinion in this case. (Whereupon,- at 5:15 p.m., the bench opinion in the above-entitled matter was concluded.) // // // // // // Heritage Reporting Corporation (202) 628-4888