TAX COURT OPINION

Case: Kathleen M. Wolcott
Docket Number: 16103-07L
Judge: Goeke
Opinion Type: memo
Filed: 06/12/2008
Pages: 9

RECORDED T .C . Memo . 2008-153 UNITED STATES TAX C CD URT KATHLEEN M . WOLCOTT, Petitioner V . COMMISSIONER OF INTERNAL REVENUE, Responden t i Docket No . 16103-07L . Filed June 12, 2008 . Kathleen M . Wolcott, pro se . Beth A . Nunnink , for respondent . MEMORANDUM OPINION GOEKE, Judge : The instant matter i s before the Court on respondent's motion for summary judgment and to impose a penalt y under section 6673 . The issue for decis ion is whether respondent's Appeals Office abused its d iscretion in determinin g SERVED JUN 1 2 2008 - 2 - to proceed with the collection action with respect to petitioner's unpaid income tax liabilities for the taxable years 1999, 2000, and 2001 . In addition respondent requests that the Court impose a penalty in an appropriate amount, pursuant t o section 6673, on the ground that petitioner instituted these proceedings primarily for delay and that petitioner's position is frivolous and groundless . As explained herein, we will grant respondent's motion . Unless otherwise indicated, all section references are to the Internal Revenue Code, and all Rule references are to the Tax Court Rules of Practice and Procedure . Background At the time of filing the petition, petitioner resided in Tennessee . Petitioner's Previous Tax Court Cas e Petitioner failed to file income tax returns for the 1999, 2000, and 2001 tax years (the years at issue) and for the tax year 2002 . Respondent mailed petitioner notices of deficiency for the tax years 1999, 2000, 2001, and 2002, but the notices of deficiency for 1999, 2000, and 2001 were returned undelivered . Petitioner did not allege that the notices of deficiency were not mailed to her last known address . Petitioner did not file a petition challenging the deficiencies, and on July 19, 2004, respondent assessed the deficiencies along with additions to tax 3 - and interest . However, the record demonstrates that petitioner received the notice of deficiency for 2002 but failed to file a petition for redetermination challenging the notice . On January 11, 2006, respondent's Appeals office issued to petitioner : (1) A Decision Letter Conce ning Equivalent Hearing Under Section 6320 and/or 6330 concerning a proposed levy with respect to petitioner's 1999, 2000, and 001 tax years (decision letter) ; (2) a Notice of Determination C ncerning Collection Action(s) Under Section 6320 and/or 6330 as to a notice of Federal tax lien for the 1999, 2000, and 2001 tax years ; and (3) a Notice of Determination Concerning Col ection Action(s) Under Section 6320 and/or 6330 concerning a lien and proposed levy with respect to petitioner's 2002 tax year . On February 14, 2006, petitioner timely filed a petition, Wolcott v . Commissioner , docket No . 3258-06L, challenging those notices . However, the petition contained nothing but frivolous and groundless arguments . On March 24, 2006, respondent file a motion to dismiss for failure to state a claim upon which relief can be granted and to impose a penalty under section 6673 . Petitioner filed a n objection thereto . Respondent's motion was heard, and during the hearing the question arose whether the Court had jurisdiction over the decision letter . The Court directed respondent to file a report addressing the Court's jurisdiction with regard to the decision letter and specifically whether the final notice o f intent to levy underlying the decision letter was mailed to petitioner's last known address . Respondent filed a status report stating that a copy of the final notice of intent to levy for 1999, 2000, and 2001 could not be found . Although a copy of a certified mailing list was attached indicating that a document was mailed to petitioner at Henderson, North Carolina, o n November 24, 2004, respondent was unable to provide the Court with a copy of the last tax return that petitioner filed before November 2004 . On July 14, 2006, the Court issued an order . which dismissed for lack of jurisdiction and deemed stricken so much of the petition as pertained to the decision letter because respondent did not make a determination under section 6330 in that he failed to send the written notice required under section 6330(a) to petitioner at her last known address . On July 18, 2006, the Court entered an order of dismissal and decision granting respondent's motion to dismiss the case on the ground that the petition failed to state a claim for relief concerning respondent's notices of determination pertaining to the liens for 1999, 2000, 2001, and 2002 and the levy for 2002 . Although the Court found that petitioner was not liable for a penalty pursuant to section 6673, the Court stated : "we nevertheless will take this opportunity to admonish petitioner that the Court will consider imposing su~h a penalty should sh e return to the Court and advance similar arguments in the future ." Petitioner did not appeal, and on October 16, 2006, the decision became final . Petitioner's Present Cas e On August 9, 2006, respondent sent petitioner a Final Notice, Notice of Intent to Levy and Notice of Your Right to a Hearing, advising petitioner that respondent intended to levy to collect the unpaid liabilities for the years at issue and that petitioner could receive a collection he ring with respondent's Appeals Office . ' On September 8, 2006, petitioner se t respondent a Form 12153, Request for a Collection Due Proc ss Hearing . On Marc h 12, 2007, the settlement officer assigned to the case requested information from petitioner and requested a telephone conference with petitioner . On April 2, 2007, petitioner faxed a packet of documents to the settlement officer rais~ng the underlyin g liability and expressing an interest in ollection alternatives . On April 3, 2007, the settlement officer offered a face-to-face conference with petitioner and requested a Form 433-A, Collection Information Statement for Wage Earners a d Self-Employed Individuals, to consider collection alternatives . Petitioner di d 'The Aug . 9, 2006, notice was withi 90 days of our order of July 14, 2006, but the notice does not Violate sec . 6330( e) . See McGowen v . Commissioner , T .C . Memo . 2008'-125 . - 6 - not respond to the settlement officer's request, provide any information regarding collection alternatives, or request a face- to-face conference with the settlement officer . On June 12, 2007, respondent's Appeals Office issued to petitioner a Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330 (notice of determination) . On July 17, 2007, petitioner filed a petition with this Court seeking relief from respondent's notice of determination . The reasons petitioner set forth were frivolous and groundless . On April 2, 2008, respondent filed the motion for summary judgment and to impose a penalty under section 6673 . Petitioner filed a notice of objection thereto . Discussio n Summary Judgmen t Summary judgment is intended to expedite litigation and avoid unnecessary and expensive trials . Fla . Peach Corp . v . Commissioner , 90 T .C . 678, 681 (1988) . Summary judgment may be granted where there is no genuine issue of material fact and a decision may be rendered as a matter of law . Rule 121(a) and (b) ; Sundstrand Corp . v . Commissioner , 98 T .C . 518, 520 (1992), affd . 17 F .3d 965 (7th Cir . 1994) . The moving party bears the burden of proving that there is no genuine issue of material fact . Dahlstrom v . Commissioner , 85 T .C . 812, 821 (1985) ; Jacklin v . Commissioner , 79 T .C . 340, 344 (1982) . When a motion - 7 - for summary judgment is made and support d as provided in Rule 121, the party opposing summary judgment must set forth specific facts which show that a question of genu ne material fact exist s and may not rely merely on allegations o denials in th e pleadings . Grant Creek Water Works, Ltd v . Commissioner, 91 T .C . 322, 325 (1988) ; Casanova Co . v . Commissioner, 87 T .C . 214, 217 (1986) . Respondent argues that since the prior case ( Wolcott v . Commissioner , docket No . 3258-06L) involred petitioner and the Ii same years at issue as the present case, and because the Court issued a final judgment as to the merits, section 6330(c)(2)(B) prevents petitioner from raising the underlying liability in this case because petitioner already had a chance to do so . Petitioner may not raise the underlying ax liability in this case because she has already had an opportunity to challenge it . See sec . 6330(c)(2)(B) . This Court reviews the Appeals Office's administrative determination with respect to nonliability issue s for an abuse of discretion . Goza v . Corp issioner, 114 T .C . 176 (2000) . On the undisputed facts respondent id not abuse his discretion in determining to proceed wit the collection action in the notice of determination with respect to the years at issue . Section 6673 Penalt y As discussed earlier in the Court's order of dismissal and decision entered July 18, 2006, in Wolcott v . Commissioner , docket No . 3258-06L, petitioner was admonished that the Court would consider imposing a penalty should she return to this Court and continue to advance frivolous arguments . Section 6673(a)(1) authorizes this 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 . Section 6673(a)(1) applies to collection proceedings . See Pierson v . Commissioner , 115 T .C . 576 (2000) ; Hoffman v . Commissioner , T .C . Memo . 2000-198 . Petitioner's request for a hearing, her petition, and her reply make arguments under the "public protection clause" of the Paperwork Reduction Act . See United States v . Dawes , 951 F .2d 1189, 1193 (10th Cir . 1991) ("Congress enacted the PRA [Paperwork Reduction Act] to keep agencies, including the IRS, from deluging the public with needless paperwork . It did not do so to create a loophole in the tax code .") ; Wheeler v . Commissioner , 127 T .C . 200, 208 (2006) ("The Paperwork Reduction Act is not a defens e * * nor does it create a loophole in the Code ."), affd . 521 F .3d 1289 (10th Cir . 2008) . In addition, petitioner's notice of 9 - objection contained statements, contentins, and arguments that the Court finds to be frivolous and/or g oundless . Petitioner raises the same frivolous arguments that she raised in her prior case . See Wolcott v . Commissioner , dock t No . 3258-06L ; supra pp . 3-5 . Petitioner has failed to set forth ny genuine issue o f material fact . In her petition, reply, nd notice of objection to respondent's motion, petitioner raise the same frivolou s arguments . Petitioner's actions establi h that she is using the collection proceedings primarily for de l Y(cid:127) We cautioned petitioner in her prio case that she might be subject to a penalty if in the future sh instituted o r maintained a proceeding in this Court pr imarily for delay or her position in any such proceeding was fri olous or groundless . We find that petitioner is liable for a pe alty under section 667 3 in the amount of $1,000 . To reflect the foregoing, An appropriate order an d decision will be entered .