TAX COURT OPINION

Case: Bruce Anthony Tamulis
Docket Number: 21410-19L
Judge: Buch
Opinion Type: bench
Filed: 10/15/2020
Pages: 11

UNITED STATES TAX COURT WASHINGTON, DC 20217 BRUCE ANTHONY TAMULIS, Petitioner, v. ) ) ) ) Docket No. 21410-19 L. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ORDER Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit with this order to petitioner and respondent a copy of the pages of the transcript of the trial in this case before Judge Ronald L. Buch, at the Detroit, Michigan remote session, containing his oral findings of fact and opinion rendered at the trial session at which the case was heard. In accordance with the oral findings of fact and opinion, decision will be entered for respondent. Dated: Washington, D.C. October 15, 2020 (Signed) Ronald L. Buch Judge SERVED Oct 15 2020 3 1 2 3 4 5 6 7 8 9 Bench Opinion by Judge Ronald L. Buch september 17, 2020 Bruce Anthony Tamulis v. Commissioner Docket No. 21410-19L THE COURT: The following represents the Court's oral findings of fact and opinion. The oral findings of fact and opinion may not be relied on as precedent in any other case. This opinion is in conformity with Internal Revenue Code section 7459(b) and Rule 152(a) of the Tax 10 Court Rules of Practice and Procedure. Any section 11 references refer to the Internal Revenue Code or the 12 Treasury regulations in effect during the year at issue, 13 14 15 and Rule references are to the Tax Court Rules of Practice and Procedure. This case comes before the Court as a review of 16 a collection action pursuant to section 6320. The case 17 concerns a Notice of Federal Tax Lien issued by the 18 Commissioner for years 2010, 2011, and 2012, and 19 associated civil tax penalties. 20 21 22 23 Background The Commissioner examined Mr. Tamulis's tax returns for 2010, 2011, and 2012. Each of those years shows a similar series of events. Mr. Tamulis agreed to 24 audit adjustments, including section 6662 accuracy related 25 Penalties. Those amounts were assessed. For 2011 and 2012, the Commissioner also assessed frivolous tax 4 submission penalties under section 6702. The Commissioner issued a Notice of Intent to Levy, and Mr. Tamulis did not bring a collection action from that notice. Then the Commissioner issued a Notice of Federal Tax Lien, culminating in the present lien action. Mr. Tamulis timely filed Form 12153, Request for a Collection Due Process or Equivalent Hearing. That form was accompanied by a two page letter setting forth various frivolous arguments. Mr. Tamulis also included with his Form 12153 an order of dismissal from our Court. That order was issued in docket number 7246-18, dismissing that case for lack of jurisdiction. I will take a moment to digress, and I will describe the case found at docket number 7246-18. In that 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 case, Mr. Tamulis filed a petition in April 2018. In his 17 petition, Mr. Tamulis wrote that he never received either 18 a Notice of Deficiency or a Notice of Determination for 19 any of the years 1997 through 2017. For reasons that are 20 perhaps obvious, the Commissioner filed a motion to 21 dismiss for lack of jurisdiction. In his motion, the 22 Commissioner averred that he had not issued a Notice of 23 Determination or a Notice of Deficiency for any of those 24 years. secause our jurisdiction is generally predicated 25 on both the issuance of a notice and a timely petition, we lacked jurisdiction. July 11, 2018. 5 We issued an order to that effect on Returning to this collection action, the Commissioner responded to Mr. Tamulis by informing him that the IRS had not yet received returns for 2014 through 2017. The matter was then referred to an Appeals Officer. Mr. Tamulis corresponded with the Appeals Officer, repeatedly sending a copy of this Court's order dismissing his previous case and making frivolous arguments. 1 2 3 4 5 6 7 8 9 10 In September 2019, Mr. Tamulis and the Appeals 11 Officer had a telephonic hearing. During that hearing, 12 the Appeals Officer explained that, based on his review of 13 14 the IRS Account Transcript all legal and procedural requirements had been met by the Commissioner. The 15 APPeals Officer also explained that the underlying 16 liability could not be raised during the collection 17 hearing because Mr. Tamulis had previously received a 18 collection notice with respect to the same years and did 19 not request a collection hearing; in other words, Mr. 20 Tamulis had had a prior opportunity to dispute his 21 liability but failed to take advantage of that prior 22 opportunity. 23 24 During the collection hearing, Mr. Tamulis indicated that he was unemployed. The Appeals Officer 25 asked whether Mr. Tamulis would like for his case to be Cnnes Placed in currently non-collectible status. Mr. Tamulis declined and argued that his income was not taxable. 6 In November 2019, the Commissioner issued a Notice of Determination with an attached explanation. In the Notice of Determination, the Commissioner determined that all legal and administrative requirements for the collection action had been taken. The Commissioner also recited that he had considered whether the collection action balances the need for the efficient collection of taxes with the concern that such action be no more intrusive than necessary. Based on those considerations, the Commissioner upheld the lien. The attachment to the Notice of Determination expanded on the points recited in the Notice of 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Determination. In it, the Commissioner noted that Mr. 16 Tamulis had a prior opportunity to challenge the liability 17 in response to the levy proceeding, but he did not do so. 18 The Commissioner also noted that Mr. Tamulis did not offer 19 any collection alternatives and rejected being placed in 20 21 currently not collectible status. Mr. Tamulis timely filed a petition with this 22 Court seeking review of the Commissioner's determination. 23 In his petition and during trial, Mr. Tamulis raised a 24 number of arguments concerning the Commissioner's 25 authority to assess and collect the taxes owed. These coners arguments can be summarized as follows: 7 1. The Commissioner did not issue Notices of Deficiency. 2. The Commissioner did not properly certify the assessments. 3. The Commissioner does not have jurisdiction to tax state citizens. At trial, Mr. Tamulis confirmed that he had not submitted Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, to enable the 1 2 3 4 5 6 7 8 9 10 Commissioner to consider collection alternatives. 11 Additionally, Mr. Tamulis confirmed that he had declined 12 13 14 to be placed on currently non-collectible status. Opinion As a general matter, the Commissioner's 15 determinations are presumed to be correct, and the 16 taxpayer bears the burden of proving an error. Rule 17 18 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). In a collection case such as this, where the 19 underlying liability is not at issue, we review the 20 Commissioner's determination for abuse of discretion. 21 Sego v. Commissioner, 114 T.C. 604, 610 (2000); Goza v. 22 Commissioner, 114 T.C. 176, 181-182 (2000). In reviewing 23 24 25 for abuse of discretion, we do not conduct an independent review of the collection alternatives. We do not substitute our judgment for that of the Commissioner; we only ensure that the Commissioner's decision was not arbitrary, capricious, or without sound basis in fact or law. Klein v. Commissioner, 149 T.C. 341, 348 (2017); Murphy v. Commissioner, 125 T.C. 301, 320 (2005), aff'd, 8 469 F.3d 27 (1st Cir. 2006). In a collection case, a taxpayer may challenge the existence or amount of the underlying tax liability, provided that the taxpayer did not have a prior OPPortunity to dispute the liability. Sec. 6330(c)(2) (B). If a taxpayer received a previous collection notice with respect to the same tax and same tax period, then the taxpayer had a prior opportunity to dispute the existence or amount of the liability. Sec. 301.6320-1(e)(3)A-E7. Mr. Tamulis had prior opportunity to challenge 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 his underlying liability for 2010, 2011, and 2012, and he 16 failed to do so. Because he failed to challenge the 17 underlying liability when he had the prior opportunity, he 18 is precluded from doing so in this proceeding. 19 Accordingly, the Appeals Officer properly declined to 20 review the underlying liability during the collection 21 hearing. 22 We now turn to the question of whether the 23 Commissioner abused his discretion in sustaining the lien. 24 Generally, the Commissioner's determination must take 25 three things into consideration: (1) verification that 9 the requirements of applicable law and administrative procedure have been met; (2) the issues raised by the taxpayer; and (3) whether any proposed collection action reasonably balances the need for efficient tax collection with the legitimate concern of the taxpayer that any collection action be no more intrusive than necessary. Secs. 6320(c), 6330(c)(3); Lunsford v. Commissioner, 117 T.C. 183, 184 (2001). In the Notice of Determination, the Appeals 1 2 3 4 5 6 7 8 9 10 Officer confirmed that she had reviewed Mr. Tamulis's 11 account transcript and verified that the Notice of Federal 12 Tax Lien complied with the requisite legal and procedural 13 14 requirements pursuant to sections 6320(c) and 6330(c)(1). In confirming that all legal and procedural requirements 15 have been met, an Appeals Officer may rely on an account 16 transcript. Schroeder v. Commissioner, T.C. Memo. 2002- 17 18 190; Mann v. Commissioner, T.C. Memo. 2002-48. Collection hearings must be conducted by an 19 impartial officer or employee who has had no prior 20 21 involvement with the unpaid tax. Secs. 6320(b)(3), 6330(b)(3). The Appeals Officer who made the 22 determination in Mr. Tamulis's case confirmed that she had 23 no prior involvement in Mr. Tamulis's previous deficiency 24 proceedings or collection actions. 25 The Appeals Officer also considered whether any . cnæs 10 1 2 3 4 5 Proposed collection action reasonably balanced the need for efficient tax collection with the legitimate concern of the taxpayer that any collection action be no more intrusive than necessary. Mr. Tamulis noted during his collection hearing that he is unemployed, and the Appeals 6 Officer offered to place Mr. Tamulis in currently not 7 8 9 10 11 12 13 collectible status. However, Mr. Tamulis declined that offer; he also did not request any alternative collection action. If a taxpayer fails to request consideration of an issue during the collection hearing, or a taxpayer fails to provide information necessary to consider an issue after being given a reasonable opportunity to do so, the issue cannot be raised on review. Sec. 301.6320- 14 1(f)(2)(A-F3); see also Giamelli v. Commissioner, 129 T.C. 15 107, 115 (2007). Mr. Tamulis did not request a collection 16 alternative, and he rejected the collection alternative he 17 was offered, currently non-collectable status. 18 The remaining arguments presented by Mr. Tamulis 19 both before the Appeals Office and in this Court were 20 21 22 23 frivolous. When a taxpayer advances frivolous arguments in the course of a collection hearing, the Commissioner does not abuse his discretion by declining to address such issues. See, e.g., Sec. 301.6320-1(d)(2)(A-D7), (A-D8); 24 Burke v. Commissioner, 124 T.C. 189, 196-197 (2005). See 25 also Carothers v. Commissioner, T.C. Memo. 2013-165. c onms Likewise, we are reluctant to address patently 11 frivolous arguments. We often quote from Crain v. Commissioner, in which the United States Court of Appeals for the Fifth Circuit wrote: "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." 737 F.2d 1417, 1417 (5th Cir. 1984). And as we further explained in Wnuck v. Commissioner, "[I]t is doubtful whether tax 1 2 3 4 5 6 7 8 9 10 jurisprudence will be much advanced by issuing yet another 11 opinion affirming the obvious truisms about tax law". 136 12 T.C. 498, 504 (2011). For example, we have previously 13 wasted ink on the frivolous argument that being a state 14 citizen somehow means that one is not a citizen of the 15 United States or that the income tax laws do not apply to 16 state citizens. See Waltner v. Commissioner, T.C. Memo. 17 18 19 20 21 2014-35, at *57-58. Yet Mr. Tamulis persists in making such frivolous arguments. Indeed, Mr. Tamulis's persistence in making frivolous arguments raises the question of whether we should impose a sanction on him in this proceeding. 22 Whenever it appears that a taxpayer's position in a 23 Proceeding before this Court is frivolous or groundless, 24 25 we may impose a penalty of up to s25,000. We believe a sanction is appropriate here. Mr. Tamulis previously initiated a frivolous proceeding before our Court at docket number 7246-18. The Commissioner and the Court 12 expended resources - resources that were paid for by other taxpayers - to dispose of that proceeding by way of dismissal. Mr. Tamulis then attempted to somehow use that dismissal to avoid collection of his assessed liabilities. The Commissioner and this Court have again wasted time and resources to dispose of Mr. Tamulis's frivolous arguments. And ironically, among the liabilities that underlie the 1 2 3 4 5 6 7 8 9 10 current collection action, are frivolous tax submission 11 penalties assessed by the Commissioner. Mr. Tamulis has a 12 pattern of wasting the time and resources of this Court 13 14 15 and of the Internal Revenue Service. In the perhaps vain hope that we might dissuade Mr. Tamulis from taking frivolous positions in the future, we will impose a 16 sanction of $5,000, along with the caution that taking further frivolous positions in this Court could yield sanctions of up to $25,000. Decision will be entered for the Commissioner. (Whereupon, at 10:16 a.m., the above-entitled matter was concluded.) 17 18 19 20 21 22 23 24 25