TAX COURT OPINION

Case: Paul L. Bowman
Docket Number: 377-06L
Judge: Chiechi
Opinion Type: memo
Filed: 05/03/2007
Pages: 17

T .C . Memo . 2007-11 4 UNITED STATES TAX COURT PAUL L . BOWMAN, Petitioner v . COMMISSIONER OF INTERNAL REVENUE, Responden t Dock e ~ No . 377-06L . Piled May 3, 2007 . Paul L . Bowman, pro se . Lisa 1K . Hunter , for respondent . MEMORANDUM OPINIO N CHIE HI, Judge : This case is before the Court on respon- dent's mo ion for summary judgment (respondent's motion) .' We shall gra t respondent's motion . 'Pet : responde response, the Cour Ltioner filed a response (petitioner's response) to is motion . Respondent filed a reply to petitioner' s and petitioner submitted to ,'' .the Court a document that had filed as petitioner's reply to that reply . $ t " p MAY 3 2001 - 4 - tached a document to petitioner's Form 12153 . That attachment stated in pertinent part : 1 . Refer to the Tax Reformation Act of 1998 . 2 . I don't agree for all the reasons Congress has determined that I have this hearing . 3 . Details will be both provided and disclosed at the hearing . 4 . I fully intend to cassette record the proceedings of the hearing . 5 . I request a face-to-face hearing . In response to petitioner's Form 12153, a settlement officer with the Appeals Office (settlement officer) sent to petitioner a letter dated October 7, 2005 (settlement officer's October 7 , 2005 letter) . That letter stated in pertinent part : Tax Period ( s) Ended : 12/2001 & 200 2 Date of Conference : October 27, 2005 Time of Conference : 1 :00 P M * * We received your request for a Collection Due Process (CDP) Hearing . While you do not specify the items that you wish to address in a conference, the information you provide leads me to believe that your CDP request is intended to discuss items that : 1 . Courts have determined are frivolous or groundless, o r 2 . Appeals does not consider . These are moral, religious, political, constitutional, conscientious, or similar grounds . Examples of arguments that are considered frivolous or groundless are provided in "The Truth About Frivolous Tax Arguments", a copy of which is enclosed . Please note that it is not a complete list of frivolous and groundless arguments . Appeal does not provide a face-to-face conference if the on y items you wish to discuss are those mentioned above . However, you may have a telephone conference, or dis uss with us by correspondence, any relevant challe ges to the filing of the notice of federal tax lien r the proposed levy . If yo are interested in receiving a face-to-face confe ence, you must be prepared to discuss issues relev nt to paying your tax liability . These include , for e ample, offering other ways to pay the taxes you owe, uch as an installment agreement or offer in compr mise . The Internal Revenue Manuel determines wheth r Appeals can accept your proposal . If you wish to ha e a face-to-face conference, please write me withi 15 days from the date of this letter and describ the legitimate issues you will discuss . In th meantime, I have scheduled a telephone conference or you as shown above . If this is not convenient for y u, or if you prefer to conduct the hearing by corre pondence, please contact me as soon as possible . I wil gladly consider other dates within 14 days of the s heduled conference . Since you provided no telephone number where you could be reached for the conference, please call me on the above shown date at 1 :00 PM . If you provide a phone number, I will contact you inst ad . Reco ds indicate that your income tax returns for cale dar years 2003 and 2004 have not been filed . Inte nal third party payer records reflect sufficien t inco e that requires that you file a return for both year l . Coll ction Due Process provisions require that before alte natives to the proposed levy or filed Notice of Fede al Tax Lien may be considered , except for full paym nt , you must be in full compliance with all filing and payment requirements . Acco dingly, you must file all delinquent tax returns and bring all delinquent payments up to date before the conf rence date shown above , including any required Est' ated Income Tax Payments through the conference All delinquent returns and payments must be date . forwarded directly to my office so that full filing and payment compliance may be verified . Additional time will not be extended to file delinquent returns or make delinquent payments , so that collection alternatives may be considered . Assuming that you will be in full compliance by the date of the conference, I have enclosed a Collection Information Statement that you should complete and return to my office, also within 15 days of the date of this letter . [51 sider collection alternatives to the proposed levy . This information is necessary to con- If you do not file the required returns or submit the required, financial information, or if I don't hear from you on the scheduled conference date, I will issue the required determination letter based on the information in the file . Please contact me with any questions or concerns you have regarding this request or the Collection Due Process procedure itself . Petitioner did not respond to the settlement officer's October 7, 2005 letter . On December 6, 2005, the Appeals office issued to petitioner a notice of determination concerning the collection action(s) under section 6320 and/or 6330 (notice of determination) . That notice stated in pertinent part : 5The settlement officer did not enclose with the settlement officer's October 7, 2005 letter the collection information statement referred to in that letter . However, the settlement officer sent to petitioner that collection information statement by cover letter dated Oct . 11, 2005 . - 7 - You sub itted a timely Collection Due Process Hearing request after receiving Notice of Intent to Levy and Your Right to a Hearing . A telephone conference was schedu ed to discuss alternatives to the proposed levy, since our Collection Due Process hearing request appear d to propose to discuss only frivolous issues in a face to-face conference . You were specifically warned in the conference letter that if you failed to respon , your case would be closed without further action e also advised that you must be in full filing ment compliance before collection alternatives e discussed, that you should submit a completed ion Information Statement, and submit in writin g the rellevant issues to be discussed in a face-to-fac e ence . Since you provided no phone number where uld be reached for conference, you were requested her provide the same or call the Settlemen t r to conduct the conference . You w re given an opportunity to present issues relevant o paying you [sic] tax liability, but you did no t prese t any legitimate, substantive issues for discussion, and did not submit required financial information or fi e delinquent returns as requested . You d'd not provide a telephone number or contact the Settl ment officer on the date of the conference as requested . Mail forwarded to your address was not retu ned undeliverable, so it must be assumed that you rece'ved the conference letter . Ther fore, your case is being closed based upon the best information available in the file, and will be retu ned to Collection for appropriate action, unless you eek judicial review of our determination . An attach4ent to the notice of determination stated in pertinen t part : BRIEF BACKGROUN D Notilce of Intent to Levy and Your Right to a Hearing was sent April 9, 2005 . Your timely request for a Collection Due Process Hearing was received May 9, 2005, within the thirty-day timeframe set forth in Internal Revenue Code Section 6330 . A telephone conference intended to address collection alternatives was scheduled for October 27, 2005 by letter dated October 7, 2005 . The'letter advised you that you had to be in full compliance with all filing and payment requirements before alternatives to the proposed levy could be considered, and requested that you submit a completed Collection Information Statement so that collection alternatives could be explored . It also advised you clearly that the issues you appeared to present in your hearing request were considered frivolous . The Settlement Officer enclosed a package entitled "The Truth About Frivolous Tax Arguments", noting that such arguments had been turned away uniformly by the court system . You were also asked to advise the Settlement officer concerning what relevant and legitimate issues you wished to discuss in the conference by submitting them in writing within fifteen days . You did not file your 2003 and 2004 income tax returns, or pay any required 2005 Estimated Income Tax Payments . Neither did you submit a completed Collection Information Statement, or contact the Settlement Officer on the conference date, or beforehand to reschedule the conference . Since you had been afforded ample opportunity to respond, the Settlement Officer determined that further efforts to obtain information and filing/payment compliance, or to conduct the hearing, were unwarranted . DISCUSSION AND ANALYSI S Transcripts and the case history verify that : 1) the taxes at issue were assessed in accordance with IRC Section 6201, and that notice and demand for payment was mailed to your last known address timely in accordance with IRC Section 6303 . 2) there were balances due when the CDP notice was - 9 issued, as required by IRC Section 6322 and 6331(a), an that a levy source had been ;identified . 3) before any levy action was initiated, notice of i tent to levy was issued in accordance with IR C 6 31(d), which requires that taxpayers be notified o the intention to levy no less than thirty days b fore levy action is initiated . 4 Collection Due Process Notice was sent by cert fied mail, return receipt requested, to your 1 st known address . 5I) The Automated Collection Site attempted to resolve your case , but was unable to do so . herefore, your file was forwarded for appeals onsideration promptly upon receipt of your hearng request . internal account transaction codes were entered imely to place your accounts in suspended statu s ending the outcome of the due process hearin g the Settlement Officer in this case has had no rior involvement with you concerning the taxes at ssue in this due process proceeding, pursuant t o 'requirements of IRC 6330 . ISSUES RAISED BY THE TAXPAYE R 1) no specific issues concerning liability or collection procedures were raised . Rather , you indicated only that you wished a face - to-face hearing , which you intended to tape record , and that details would be disclosed at the hearing . You referenced only the tax reform act of 1998 as th e reason for your hearing request . Finding : Appeals is not obligated to address the types of nonspecific issues contained in your request, as you were advised in our conference letter . You did not submit specific, legitimate issues for discussion in writing to qualify for a face-to-face conference . You were offered an opportunity for a telephone conference, but failed to contact the Settlement Officer . - 10 - 2) No other substantive issues were raised . BALANCING THE NEED FOR EFFICIENT COLLECTION OF THE TAX WITH LEGITIMATE TAXPAYER CONCERN THAT COLLECTION ACTIONS BE NO MORE INTRUSIVE THAN NECESSAR Y Without question, the proposed levy would have been very intrusive, since it would have withdrawn funds that may have been needed to provide for basic health and welfare needs of the family, or production of income, thereby creating a potential financial hardship . Therefore, it is the policy of the Internal Revenue Service to provide individual taxpayers ample opportunity to resolve their tax problems voluntarily before such action becomes necessary . The file indicates that the Service made multiple, unsuccessful attempts to resolve your accounts on a mutually agreeable basis before levy action was proposed . Appeals has determined that issuance of the Notice of Intent to Levy and Your Right to a Hearing was appropriate in your case , absent your cooperation to file returns or submit financial information . Thus, levy appears to be the only efficient method to collect the tax . [Reproduced literally . ] Discussion The Court may grant summary judgment where there is n o genuine issue of material fact and a decision may be rendered as a matter of law . Rule 121(b) ; Sundstrand Corp . v . Commissioner , 98 T .C . 518, 520 (1992), affd . 17 F .3d 965 (7th Cir . 1994) . In support of his position that respondent's motion should be denied, petitioner argues that in determining whether to grant respondent's motion the Court may not consider (1) the 2001 notice of deficiency and the 2002 notice of deficiency and - 11 - (2) Form 43 0, Certificate of Assessments, Payments, and Other Specified M tters (Form 4340), with respect to each of peti- tioner's taxable years 2001 and 2002 . In support of that argu- ment, peti ioner relies on Robinette v . Commissioner , 439 F .3d 455 (8th C'r . 2006), revg . 123 T .C . 85 (2004) . In Ro inette, the United States Court of Appeals for the Eighth Cir uit, to which an appeal in this case would ordinarily lie, held hat its review of whether the Commissioner of Internal Revenue (C mmissioner) abused the Commissioner's discretion in determinin to proceed with the collection action at issue in that case as to be limited "to that information which was before the IRS ." Id . at 462 . We shall follow Robinette in the instant case only if that opinion is squarely in point . Golsen v . Commissio er, 54 T .C . 742, 757 (1970), affd . 445 F .2d 985 (10th Cir . 1971) . We turn first to petitioner's argument that under Robinette v . Commis Toner, supra , the Court may not consider the 2001 notice of deficiency and the 2002 notice of deficiency in deter- mining wh ther to grant respondent's motion . In support of that argument, petitioner asserts in petitioner's response : ourt should note the lack of any consideratio n The what oever by Respondent in the Notice of Determinatio n rega ding the issue of any deficiency notice(s) . Th e Noti e of Determination does not refer in any manner t o the xistence, issuance, receipt, or non-receipt of an y defi iency notice(s) for the years at issue . [Fn . ref . omitted .] - 12 - We reject petitioner's assertion that under Robinette v . Commissioner , su ra, respondent's motion should be denied because the notice of determination did not refer to the 2001 notice of deficiency and the 2002 notice of deficiency .6 See, e .g ., Dues v . Commissioner , T .C . Memo . 2005-109 ; Poe v . Commissioner , T .C . Memo . 2005-107 ; Stoewer v . Commissioner , T .C . Memo . 2003-71 . In each of those cases, the Commissioner issued a notice of defi- ciency to the taxpayer . The notice of determination involved in each such case did not refer explicitly to any such notice . Nonetheless, the Court granted the Commissioner's motion for summary judgment in each such case . We hold that neither Robinette v . Commissioner , supra, nor any other authority pre- cludes the Court's consideration of the 2001 notice of deficiency and the 2002 notice of deficiency in determining whether to grant respondent's motion . ' 6Petitioner also raises a hearsay objection to the 2001 notice of deficiency and the 2002 notice of deficiency . "'Hearsay' is a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted ." Fed . R . Evid . 801(c) . Respondent did not attach as exhibits to respondent's motion the 2001 notice of deficiency and the 2002 notice of deficiency for the truth of the matters asserted therein . We reject petitioner's hearsay objection to the 2001 notice of deficiency and the 2002 notice of deficiency . 7We note that sec . 6330(c)(1) does not mandate that the Appeals Office provide a taxpayer with a copy of the verification upon which that office relied in satisfying the verification requirements of that section . 252, 261-262 (2002) . Craig v . Commissioner , 119 T .C . - 13 - Even if the Court were to decline to consider the 2001 notice of efficiency and the 2002 notice of deficiency attached as exhibit to respondent's motion, the declaration that was signed by he settlement officer (settlement officer's declara- tion) and that was attached to that motion establishes that the settlement officer considered whether a notice of deficiency was issued to etitioner with respect to each of his taxable years 2001 and 2 02 and determined that such a notice was issued for each such ear . The settlement officer's declaration states in pertinent art : I verified through review of the Internal Revenu e Servi e's administrative file and IDRS [integrated data retri val system] information, including transcripts of petitioner's accounts, [81 copies of which are attache d "With respect to the "transcripts of petitioner's accounts" to which t e settlement officer referred in the settlement officer's declaration, petitioner asserts : the phe r ma ke code for noth any pla c lleged 'transcripts' * * * are nothing but indecible, computer coded gibberish . If anyone is t o any sense of them, they must obviously be 'de- Respondent has presented absolutely nothin g decoding' its 'transcripts' . Moreover, there is ng in the administrative record to indicate tha t ecoding actually took place, or, if any did tak e e that it is correct . We reject petitione 2001 and transcrip official with resp respect t computerthose sam EF C D q those assertions . The respective "transcripts o f 's accounts" with respect to petitioner's taxable years 002 are coded computer-generated transcripts (code d s of account) that show certain information in the omputer records of the Internal Revenue Service (IRS) ct to those years . The respective Forms 4340 wit h petitioner's taxable years 2001 and 2002 are noncoded enerated transcripts that show certain information in official computer records with respect to those years . ) (continued . . . - 14 - hereto as Exhibit C,191 that the 2001 and 2002 income taxes at issue, plus penalties and interest, had been properly assessed against petitioner after he wa s .issued notices of deficiency for 2001 and 2002 and failed to contest the notices in Tax Court . * * * At the time the determinations set forth in the notice of determination and the attachment to that notice were made, the settlement officer was aware of and relied upon, inter alia, respondent's issuance of the 2001 notice of deficiency and the 2002 notice of deficiency .1 ° 6( . . .continued) Although petitioner might not be able to decode the respective coded transcripts of account with respect to petitioner's taxable years 2001 and 2002, the settlement officer's declaration makes clear that the settlement officer was able to do so . 9Petitioner also raises an evidentiary objection under rule 1006 of the Federal Rules of Evidence (FRE) with respect to the respective coded transcripts of account relating to petitioner's taxable years 2001 and 2002 . According to petitioner, each such transcript is a summary record within the meaning of that rule . FRE 1006 provides that the contents of voluminous writings that cannot conveniently be examined in court may be presented i n summary form if the writing is made available for examination or copying, or both, by other parties at a reasonable time and place . The respective coded transcripts of account with respect to petitioner's taxable years 2001 and 2002 are not summary records within the meaning of FRE 1006 . As discussed supra note 8, those respective transcripts are coded computer-generated transcripts that show certain information in the official computer records of the IRS with respect to petitioner's taxable years 2001 and 2002 . We note that, even if we were to decline to consider the respective coded transcripts of account with respect to petitioner's taxable years 2001 and 2002, our findings and conclusions herein would not change . 10We reject petitioner's assertion that there is a genuine issue of material fact regarding whether, at the time the determinations set forth in the notice of determination and the attachment to that notice were made, the settlement officer considered respondent's issuance of the 2001 notice of deficienc y . .) (continued . - 15 - We to n now to petitioner's argument that under Robinette v . Commission r, 439 F .3d 455 (8th Cir . 2006), the Court may not consider t e respective Forms 4340 with respect to petitioner's taxable ye rs 2001 and 2002 in determining whether to grant respondent's motion . In support of that argument, petitioner asserts in petitioner's response : this is a review of an administrative decision . As such, the Court is limited to reviewing the conclusions made in the decision, the reasons given for the conclusions and it must base its review on the same record that as considered by the administrative hearing officer . See Robinette v Commissioner , 439 F .3d 455, 459 (8th Cir 2006) . Outside of limited exceptions, the Court may not conduct a trial de novo, make decisions in the first instance (i .e . decide issues not decided at th administrative level), or consider new materials/e idence not considered by the administrativ e heari g officer . Id . These limitations would necessaril exclude materials dated after the administrative decision, such as Respondent's exhibits E and F [Form 4340 ith respect to petitioner's taxable years 2001 and 2 02] (which are dated March 2006 ; the administrative ecision was issued December 2005) . [Fn . ref . omitt d .] [Reproduced literally . ] Petitioner's argument regarding the respective Forms 4340 with respect to petitioner's taxable years 2001 and 2002 appears to be base on his misunderstanding as to what Form 4340 is . As discussed above, Form 4340 is a noncoded computer-generated transcript that is generated on a specified date and that show s (1) certai n information in the official computer records of th e '0( continued ) and the 2 02 notice of deficiency . Petitioner does not assert that they are any other genuine issues of material fact regarding the q estions raised in respondent's motion . - 16 - IRS with respect to a stated taxpayer for a particular taxable year regarding assessments, payments, and other specified matters and (2) the respective dates on which such respective assessments and payments were made and such other matters were undertaken . That Form 4340 is generated on a stated date does not mean that the information reflected in such form regarding assessments, payments, and other specified matters did not appear in the official computer records of the IRS, or that such assessments, payments, and other specified matters did not occur, before such stated date . The information that is shown in Form 4340 with respect to each of petitioner's taxable years 2001 and 2002 is information that appeared in the official computer records of the IRS on dates that preceded the date on which the settlement officer reviewed the administrative file and the information in the IRS's integrated data retrieval system relating to each such year . Such information pertained to assessments and payments made and other specified matters undertaken on the dates speci- fied in Form 4340 relating to each of petitioner's taxable years 2001 and 2002, all of which dates preceded the date on which the settlement officer made that review with respect to each of those years . We hold that neither Robinette v . Commissioner , supra , nor any other authority precludes the Court's consideration of Form 4340 with respect to each of petitioner's taxable years 2001 - 17 - and 2002 in determining whether to grant respondent's motion .1' Petit i ner does not dispute that respondent issued to hi m the 2001 n tice of deficiency and the 2002 notice of deficiency, that he re eived such notices, and that he failed to file a petition i the Court with respect to such notices .12 Where, as is the ca s here, the validity of the underlying tax liability i s "Peti 1004 and F relating t to petitio coded tran taxable ye (2) a s umm ioner also raises evidentiary objections under FRE E 1006 with respect to the respective Forms 434 0 petitioner's taxable years 2001 and 2002 . According er, each such form is (1) "other evidence" of the cript of account with respect to each of petitioner's rs 2001 and 2002 within the meaning of FRE 1004 and ry record within the meaning of FRE 1006 . With rule provi admissible argument t taxable ye transcript meaning o f espect to petitioner's objection under FRE 1004, that es that other evidence of an original writing is under certain circumstances . We reject petitioner's at Form 4340 with respect to each of petitioner' s rs 2001 and 2002 is other evidence of the code d of account relating to each of those years within the FRE 1004 . See supra note 8 . With discussed nous writi be present examinatio time and p with respe is a summa notes 8 a n We no taxable ye under FRE to conside would no t espect to petitioner's objection under FRE 1006, as bove, that rule provides that the contents of volumigs that cannot conveniently be examined in court may d in summary form if the writing is made available fo r or copying, or both, by other parties at a reasonable ace . We reject petitioner's argument that Form 434 0 t to each of petitioner's taxable years 2001 and 2002 y record within the meaning of FRE 1006 . See supra 9 . e that Form 4340 with respect to each of petitioner's rs 2001 and 2002 is a self-authenticating document 02 . We further note that, even if we were to declin e each such form, our findings and conclusions herein hange . 12 Nor 2002 for t additions 2001 notic oes petitioner dispute that he is liable for 2001 an d e respective deficiencies in, and the respectiv e o, petitioner's tax that respondent determined in the of deficiency and the 2002 notice of deficiency . - 18 - not properly placed at issue, the Court will review the determi- nation of the Commissioner for abuse of discretion . Sego v . Commissioner , 114 T .C . 604, 610 (2000) ; Goza v . Commissioner , 114 T .C . 176, 181-182 (2000) . We conclude that there are no genuine issues of material fact regarding the questions raised in respondent's motion . Based upon our examination of the entire record before us , we find that respondent did not abuse respondent's discretion in determining to proceed with the collection action as determined in the notice of determination with respect to petitioner's taxable years 2001 and 2002 . Although respondent does not ask the Court to impose a penalty on petitioner under section 6673(a)(1), we consider sua sponte whether the Court should impose a penalty on petitioner under that section . Section 6673(a)(1) authorizes the Court to require a taxpayer to pay a penalty to the United States in an amount not to exceed $25,000 whenever it appears that a taxpayer instituted or maintained a proceeding in the Court primarily for delay or that a taxpayer's position in such a proceeding is frivolous or groundless . We believe that petitioner instituted and maintained the instant proceeding primarily for delay . We shall not impose a penalty under section 6673(a)(1) on petitioner . However, we caution him that he may be subject to such a penalty if in the - 19 - future he i stitutes or maintains a proceeding in this Cour t primarily f or delay and/or his position in any such proceeding is frivolous o r groundless . See Abrams v . Commissioner , 82 T .C . 403, 409-41 3 (1984) ; White v . Commissioner , 72 T .C . 1126, 1135- 1136 (1979 ) We ha e considered all of the parties' contentions and arguments hat are not discussed herein, and we find them to be without m e it and/or irrelevant . On th record before us, we shall grant respondent's motion . To re lect the foregoing, An order granting respondent's motion and decision will be entered for respondent .