internal_revenue_service national_office technical_advice_memorandum date third party contact none number release date index uil no case-mis no director of field operations - east natural_resources and construction lmsb nrc tam-171136-03 cc ita taxpayer's name taxpayer's address ---------------------------------- ------------------------------ ---------------------------------- ------------------------------ ---------------- ------- --------------------- taxpayer's identification no year involved date of conference legend taxpayer business e business f target target state b state c state d year year year date t date u date w date x g h ---------------------------------- ------ ------------ --------------------------------------------- -------------------------------------------- ------------- ------------ ---------- ------- ------- ------- -------------------------- ----------------------- --------------------- --------------------- ---- ---- tam-171136-03 dollar_figuremm dollar_figurepp dollar_figureqq issue s --------------- ------------- --------------- are stock issuance costs netted against stock proceeds or do stock issuance costs create a separate intangible asset if stock issuance costs are not netted against stock proceeds may a target_corporation deduct under sec_165 of the internal_revenue_code the target’s previously incurred stock issuance costs when the target is acquired in a statutory merger that qualifies as a tax-free reorganization under sec_368 conclusion s stock issuance costs are netted against stock proceeds because we have determined that the stock issuance costs should be netted against stock proceeds we need not reach the second issue facts taxpayer is a business e holding_company organized as a subchapter_c_corporation for federal_income_tax purposes and is an accrual basis taxpayer taxpayer’s subsidiaries provide various business f services target prior to date x target was a business e holding_company organized under the laws of state c in year target had raised additional capital by issuing shares of its common_stock to the public proceeds from the sale were to be used for general corporate purposes in connection with the issuance of the stock target incurred dollar_figuremm of issuance costs the stock issuance costs were reflected in the equity section of target 1’s financial statements and were not deducted on its income_tax return subsequently on date x target merged into taxpayer the facts state that the merger of target into taxpayer qualified as a reorganization under sec_368 under the agreement and plan of merger dated as of date t each outstanding share of the common_stock of target was converted into g shares of taxpayer target prior to date w target was a business e holding_company organized under the laws of state d in year target had raised additional capital by issuing shares of its tam-171136-03 common_stock to the public in connection with the issuance of its common_stock target incurred dollar_figurepp of stock issuance and regulatory costs subsequently on date w target merged into taxpayer under the agreement and plan of merger dated as of date u each outstanding share of the common_stock of target was to be converted into h shares of taxpayer common_stock each share of target class b preferred_stock was to be converted into one share of taxpayer class b preferred_stock the facts state that the merger qualified under sec_368 taxpayer’s claim taxpayer timely filed a consolidated_income_tax_return for year in year taxpayer filed a form 1120x amended u s_corporation income_tax return for year claiming increased deductions of dollar_figureqq equal to dollar_figuremm plus dollar_figurepp and claimed a refund the additional deductions were taken for transaction costs that no longer provide future benefit law and analysis established precedent holds that when a taxpayer sells its own stock the costs incident to the sale are netted against the proceeds of the sale and are never recoverable see 651_f2d_828 2d cir 74_f2d_163 10th cir 88_tc_1157 32_bta_39 acq in part 1935_1_cb_15 nonacq in part 1935_1_cb_35 acq 1954_1_cb_6 28_bta_480 8_bta_631 acq 1928_2_cb_3 aff’d 33_f2d_75 1st cir 3_bta_932 taxpayer argues that costs of stock issuance should no longer be netted against proceeds after 503_us_79 which held that certain expenditures incurred in a friendly takeover of the taxpayer should be capitalized indopco clarified that 403_us_345 did not mean that only expenditures that create or enhance separate and distinct assets are to be capitalized under sec_263 u s pincite emphasis in original some of the cases that form the established precedent rely upon the argument that the costs of stock issuance did not result in the acquisition of a capital_asset see eg pacific coast b t a pincite therefore taxpayer argues they are overturned by indopco however the rationale of these cases is not directed at whether the expenditure is ordinary or capital but whether the taxpayer has incurred a cost that could result in a loss see pacific coast b t a pincite the cases reason that the taxpayer receives less capital_investment because of the expenditures barbour coal f 2d pincite simmons b t a pincite emerson electric b t a pincite because the tam-171136-03 expenditures at issue simply reduced the amount of capital the taxpayer received for the sale of the stock there is no potential loss for the taxpayer pacific coast b t a pincite the cases that form the established precedent thus distinguish cases such as 43_f2d_298 10th cir where the expenditure at issue results in the acquisition of an asset and the asset could potentially be the basis for a loss see barbour coal f 2d pincite simmons b t a pincite for the same reason the cases explicitly distinguish cases such as 16_bta_409 acq in result c b involving organizational_expenses which would likewise result in an asset that could be the basis for a loss see van keuren b t a pincite pacific coast b t a pincite although indopco holds that the acquisition of an asset is not a prerequisite for capitalization indopco does not hold that all capitalized costs are recoverable as a result indopco does not change prior precedent that no loss is ever allowed for costs of a stock issuance taxpayer also argues that prior precedent is changed by the recent publication of sec_1_263_a_-5 of the income_tax regulations which requires that a taxpayer capitalize amounts paid to facilitate a stock issuance sec_1_263_a_-5 lists what expenditures must be capitalized as opposed to being currently deducted stock issuance costs are listed to assure they are not construed to be currently deductible taxpayer also cites notice_2004_18 2004_11_irb_605 which solicits comments on the possible treatment of capitalized costs including stock issuance costs in future regulations the notice however does not change past precedent in regard to their treatment caveat s a copy of this technical_advice_memorandum is to be given to taxpayer sec_6110 provides that it may not be used or cited as precedent


h ts tax_exempt_and_government_entities_division department of the treasury internal_revenue_service washington d c mar ol uniform issue list ep ra ‘ legend taxpayer a plan b account c financial_institution d ira e - amount dear this letter is in response to a request for a letter_ruling dated date as supplemented by additional information dated date from your authorized representative in which you request a waiver of the 60-day rollover requirement contained in sec_402 of the internal_revenue_code code regarding the distribution of amount from plan b the following facts and representations have been submitted under penalty of perjury in support of the ruling requested taxpayer a age represents that he took a distribution of amount from plan b taxpayer a asserts that his failure to accomplish a rollover within the 60-day period prescribed by sec_402 of the code was the result of being preoccupied with recovering several of his household_items which were lost when he moved following his retirement taxpayer a moved from new orleans louisiana to portsmouth virginia on date during the move several items of furniture were lost on date taxpayer a retired on date taxpayer a received a distribution of amount from plan b he immediately deposited the check for amount into account c a non-ira account with financial_institution d taxpayer a indicated that he intended to rollover this amount into an individual_retirement_account ira his deadline to roll over amount into an eligible_retirement_plan was date during the period from the move in august until a settlement was reached with the moving company in early february taxpayer a indicates he spent several months making numerous telephone calls and writing letters in his attempt to locate the missing items taxpayer a maintains that his preoccupation with the missing items and the christmas holiday period caused him to forget the rollover deadline on date days beyond the rollover deadline taxpayer a went to a local branch of financial_institution d to complete the rollover of amount into an ira however it was closed for the new year's holiday when he returned on date taxpayer a completed an application to open a rollover ira ira e with financial_institution d and transferred amount into this newly opened account shortly thereafter when he met with his tax_return_preparer taxpayer a was informed he missed his rollover deadline based on the above facts and representations you request that the internal_revenue_service service waive the 60-day rollover requirement contained in sec_402 of the code with respect to amount sec_402 of the code provides that if any portion of the balance_to_the_credit of an employee in a qualified_trust is paid to the employee in an eligible_rollover_distribution and the distributee transfers any portion of the property received in such distribution to an eligible_retirement_plan and in the case of a distribution_of_property other than money the amount so transferred consists of the property distributed then such distribution to the extent transferred shall not be includible in gross_income for the taxable_year in which paid sec_402 of the code states that such rollover must be accomplished within days following the day on which the distributee received the property an individual_retirement_account ira constitutes one form of eligible_retirement_plan code sec_402 b of the code provides in relevant part that the secretary may waive the 60-day requirement under sec_402 of the code where the failure to waive such requirement would be against equity or good conscience including casualty disaster or other events beyond the reasonable control of the individual subject_to such requirement only distributions that occurred after date are eligible for the waiver under sec_402 of the sec_402 of the code provides that any amount transferred in a direct trustee-to-trustee transfer in accordance with sec_401 shall not be includible in gross_income for the taxable_year of such transfer sec_1 a of the income_tax regulations question and answer-15 provides in relevant part that an eligible_rollover_distribution that is paid to an eligible_retirement_plan in a direct_rollover is a distribution and rollover and not a transfer of assets and liabilities revproc_2003_16 r b date provides that in determining whether to grant a waiver of the 60-day rollover requirement pursuant to sec_408 of the code the service will consider all relevant facts and circumstances including errors committed by a financial_institution inability to complete a rollover due to death disability hospitalization incarceration restrictions imposed by a foreign_country or postal error the use of the amount distributed for example in the case of payment by check whether the check was cashed and the time elapsed since the distribution occurred taxpayer a has not presented any evidence to the service as to how any of the factors outlined in revproc_2003_16 affected his ability to rollover amount on a timely basis taxpayer a stated that that the ordeal of losing many of his personal belongings during his move from new orleans louisiana to portsmouth virginia and the subsequent time and energy spent attempting to recover them interfered with taxpayer a’s management of his financial affairs however taxpayer a had over two months to deal with this problem prior to taking the distribution of amount from plan b the loss of his possessions did not affect his ability to take a distribution therefore it did not constitute an event beyond his reasonable control the information presented indicates that the failure to rollover amount into an ira within the 60-day rollover period was at all times within the reasonable control of taxpayer a under the circumstances presented in this case the service hereby declines to waive the 60-day rollover requirement with respect to the distribution of amount from plan b and thus amount will not be considered a valid rollover_contribution within the meaning of sec_402 of the code because the 60-day rollover requirement was not satisfied no opinion is expressed as to the tax treatment of the transaction described herein under the provisions of any other section of either the code or regulations which may be applicable thereto this letter is directed only to the taxpayer who requested it sec_6110 of the code provides that it may not be used or cited as precedent a copy of this letter_ruling has been sent to your authorized representative pursuant to a power_of_attorney on file in this office if you wish to inquire about this ruling please contact i d at sincerely yours cab ea wil b manager employee_plans technical group cc


internal_revenue_service number release date ---------------------------------- ----------------------------- --------------------------------------------- -------------------------------- in re --------------------------------------------- ----------------------------- -------------------------- ------------------------ - department of the treasury washington dc person to contact ---------------- id no ------------- cc ita telephone number --------------------- refer reply to plr-120552-05 date date legend a --------------------------------------------------------------- ------------------------------------------------- dates -------------------------- -------------------------- --------------------------- groups taxpayers and on attachment taxpayers and on attachment all other taxpayers on attachment dear -------------------- this letter responds to your letter and submissions of date supplementing a previous submission of march in which you requested on behalf of a above and forty other related parties the taxpayers - see attachment certain private letter rulings relating to the late-filing of forms election to have a tax_year other than a required tax_year specifically you requested that the taxpayers’ late-filed forms be considered timely filed under the authority contained in sec_301_9100-3 of the procedure and administration regulations we are pleased to address your concerns the information submitted indicates that each of the forty-one taxpayers on whose behalf rulings are requested is a partnership employing an overall accrual_method of accounting taxpayers are members of a tiered_structure as defined in sec_1_444-2t of the temporary income_tax regulations under sec_706 of the internal_revenue_code a partnership’s taxable_year must be its required_taxable_year unless among other exceptions not relevant here the partnership elects under sec_444 of the code to use a taxable_year other than its required_taxable_year sec_444 and permit an eligible_partnership to elect or change to a taxable_year only if the deferral_period of the taxable_year elected is not longer than the shorter of three months or the deferral_period of the taxable_year being changed the term deferral_period generally refers to the number of months between the beginning of the entity’s taxable_year and the close of the first required_taxable_year ending within such taxable_year in the instant circumstances taxpayers desired to elect a taxable_year ending november for their initial taxable_year which is a permitted taxable_year under sec_444 sec_444 of the code and sec_1_444-2t of the regulations provide in relevant part that entities that are part of a tiered_structure that consists only of partnerships all of which have the same taxable_year may make or continue an election under sec_444 of the code sec_1_444-3t of the regulations provides among other requirements that form_8716 must be filed by the earlier of i the 15th day of the fifth month following the month that includes the first day of the tax_year for which the election will first be effective or ii the due_date without regard to extensions of the income_tax return resulting from the sec_444 election sec_301_9100-1 of the regulations set forth rules respecting the granting of extensions of time for making certain elections under these rules the commissioner in his discretion may grant a reasonable extension of time to make a regulatory election under subtitle a provided the taxpayer acted reasonably and in good_faith and that the granting of relief will not prejudice the interests of the government sec_301_9100-2 sets forth rules governing automatic extensions for regulatory elections including elections to use other than the required tax_year under sec_444 if the provisions of section' do not apply to the taxpayer's situation as in the instant case the provisions of sec_301_9100-3 other extensions may apply sec_301_9100-3 sets forth standards that the commissioner will employ in determining whether to grant discretionary relief in situations that do not meet the requirements of sec_301_9100-2 the standards applied are whether the taxpayer acted reasonably and in good_faith in the matter and whether the granting of relief will prejudice the interests of the government generally a taxpayer will be deemed to have acted reasonably and in good_faith where for example the taxpayer reasonably relied on a qualified_tax professional and that professional failed to make or advise the taxpayer to make the election at issue in the instant circumstances group taxpayers’ forms electing to use a taxable_year ending november were due on or before date group taxpayers’ forms electing to use a taxable_year ending november were due on or before date and group taxpayers’ forms electing to use a taxable_year ending november were due on or before date due to an error or misunderstanding none of the forms was timely filed however the error was not due to any lack of due diligence or prompt action on the part of any taxpayer the information submitted and representations furnished by the taxpayers and their tax professionals establish that taxpayers acted reasonably and in good_faith in respect of this matter furthermore we have determined that the granting of relief in this case will not prejudice the interests of the government within the intendment of sec_301_9100-3 accordingly the requirements of sec_301_9100-3 for the granting of relief have been satisfied within days of the date of this ruling each taxpayer should file with the irs cincinnati service_center attn entity control a form_8716 electing to use a tax_year ending november effective for its first taxable_year ending either date date or date as appropriate a copy of this letter_ruling should accompany such submission and each taxpayer should type or print at the top of the form filed under sec_301_9100-3 of the regulations this ruling is further conditioned on taxpayers complying with sec_1 1t a which provides in relevant part that for each taxable_year that a partnership has an election under sec_444 in effect the partnership must i file a return as provided in sec_1_7519-2t and ii make any required_payment as provided in sec_1_7519-2t except for the specific ruling above which is restricted to the filing of forms we express or imply no opinion concerning the federal_income_tax consequences of the facts of this case under any other provision of the code or regulations that may be applicable thereto this letter_ruling is based on facts and representations provided by the taxpayers and their authorized representatives and is limited to the matters specifically addressed no opinion is expressed as to the tax treatment of the transactions considered herein under the provisions of any other sections of the code or regulations which may be applicable thereto or the tax treatment of any conditions existing at the time of or effects resulting from such transactions which are not specifically addressed herein because it could help resolve federal tax issues a copy of this letter should be maintained with the taxpayers’ permanent records pursuant to a power_of_attorney currently on file with this office the original of this letter_ruling is being sent to the taxpayers’ authorized representative and copies are being furnished to the taxpayers and their second-designated authorized representatives a copy of this letter is also being sent to the taxpayers’ appropriate irs industry director this ruling is directed only to the taxpayers who requested it sec_6110 of the internal_revenue_code provides that it may not be used or cited as precedent associate chief_counsel income_tax accounting s william a jackson by _________________________ william a jackson chief branch attachment enclosures copy of this letter copy for sec_6110 purposes attachment plr-119941-05 ---------------------------------------------------------------- -------------------------------------------------------------- plr- -------------------------------- plr-119947-05 --------------------------------------------------------------------------- plr-119950-05 --------------------------------------------------------- plr-119955-05 ------------------------------------------ plr- ---------------------------------------- plr-120150-05 ------------------------------------- plr-120154-05 -------------------------------------------------- plr-120199-05 ------------------------------------------------------- plr- --------------------------------------------- plr-120212-05 -------------------------------------------------- plr-120219-05 ----------------------------------------- plr-120220-05 ------------------------------------ plr-120218-05 --------------------------------------- plr-120222-05 ---------------------------- plr-120231-05 ------------------------------------------ plr-120233-05 ----------------------------------------------------- ---------------------------------------------------- plr-120235-05 ------------------------------------ plr-120236-05 -------------------------------------------------- plr-120237-05 ----------------------------------------------------------- plr-120239-05 ---------------------------------------------- plr-120248-05 ----------------------------------- plr-120249-05 -------------------------------------- plr-120252-05 -------------------------------------------- plr-120254-05 ---------------------------------------------------------- plr-120258-05 ----------------------------------------- plr-120263-05 ---------------------------------------------- plr-120268-05 --------------------------------------- plr-120270-05 -------------------------------------------------------------- plr-120507-05 ------------------------------------------- plr-120514-05 ------------------------- plr-120512-05 ------------------------ plr-120517-05 ------------------------------------------------- plr-120519-05 ----------------------------------------- plr-120526-05 -------------------------------- plr-120527-05 ---------------------------------------------------------- plr-120566-05 ------------------------------------------------- plr-120528-05 ----------------------------------------------- plr-120548-05 ------------------------------------------------- plr-120550-05 --------------------------------------- -------------------------------------------- plr-120552-05


department of the treasury i i ap internal_revenue_service washington d c dec tax_exempt_and_government_entities_division uniform issue list t’ cp rat xxxxxxxxkxxxxx xxxxxxkxxkxxxxxxx xxxxxxxxkxxxkxx legend decedent a amount ira v financial_institution b account w financial_institution c account x financial_institution d ira y financial_institution e xxxxxxxxxxx xxxxxxxxx xxxxxxxxx xxxxxxxxxx xxxxxxxxxxxxxxxxxxxkxkxkxk xxxxxxxxxxxxxxxxkxxkxkxkxxkkxkkkx xxxxxxxxxxkxx xkxxxxxkxxkxkxkxkxxxkkxkkxkkkkkkkkk kkk mk xxxxxxxxxxxxxxkxxkxkxkxkkxkkkxkxkkkkxkk xxxxxxxxkxxxxkxxkxxkx xxxxxxxxxxxx xxxxxxxxkxxxxxxxxxxxkxkxkxkxkxkk xxxxxxxxxxxxxxxxkx xxxxxxxxxkxxx page ira z financial_institution f amount taxpayer g state h dear xxxxxxx xxxxxxxxxxxxxxkxxxkxkxkk xxxxxxxxxxxxxxxxxxxxkxaxkk xxxxxxxxxxxxxkx xxxxxxxxxx xxxxxxxxxxxxk xxxxxxkx this is in response to your request dated date as supplemented by correspondence dated july october two items dated november november and date from your authorized representatives in which you request a waiver of the 60-day rollover requirement contained in sec_408 of the internal_revenue_code the code with respect to decedent a you are the executor of the estate of decedent a you also are the surviving_spouse of decedent a the following facts and representations have been submitted under penalty of perjury in support of the ruling requested you represent that decedent a received a distribution of amount from ira v maintained with financial_institution b with the intent to create a rollover ira account at financial_institution c you assert that his failure to accomplish a rollover within the 60-day period prescribed by sec_408 of the code was due to a mistake made by financial_institution c in failing to deposit amount into a rollover ira account you further represent that amount has not been used for any other purpose decedent a maintained ira v with financial_institution b on date decedent a received a distribution of amount from ira v on date decedent a opened account w at financial_institution c with instructions to financial_institution c to put the funds in an ira on date decedent a discovered that financial_institution c had not put the funds into an ira as directed you represent that decedent a attempted to resolve the issue but died on date without having succeeded in transferring the funds to an ira you represent that financial_institution c was acquired by financial_institution d and that account w became account x held with financial_institution d on date a representative of financial_institution d acknowledged in writing that financial_institution c had opened a standard page checking account rather than the ira requested by decedent a and that the funds intended for the ira were erroneously deposited into the checking account you subsequently transferred amount from account x to ira y with financial_institution e in your name taxpayer g and you then transferred ira y to ira z with financial_institution f in the name of taxpayer g you represent that no one has withdrawn any part of amount except with respect to the transfers described above based on the facts and representations you request a ruling that the internal_revenue_service the service waive the 60-day rollover requirement contained in sec_408 of the code with respect to the distribution of amount sec_408 of the code provides that except as otherwise provided in sec_408 of the code any amount_paid or distributed out of an ira shall be included in gross_income by the payee or distributee as the case may be in the manner provided under sec_72 of the code sec_408 of the code defines and provides the rules applicable to ira_rollovers sec_408 of the code provides that sec_408 of the code does not apply to any amount_paid or distributed out of an ira to the individual for whose benefit the ira is maintained if ii the entire amount received including money and any other_property is i the entire amount received including money and any other_property is paid into an ira for the benefit of such individual not later than the day after the day on which the individual receives the payment or distribution or paid into an eligible_retirement_plan other than an ira for the benefit of such individual not later than the day after the date on which the payment or distribution is received except that the maximum amount which may be paid into such plan may not exceed the portion of the amount received which is includible in gross_income determined without regard to sec_408 of the code the code sec_408 of the code provides that sec_408 of the code does not apply to any amount described in sec_408 of the code received by an individual from an ira if at any time during the 1-year period ending on the day of such receipt such individual received any other amount described in sec_408 of the code from an ira which was not includible in gross_income because of the application of sec_408 of page sec_408 of the code provides a similar 60-day rollover period for partial rollovers sec_408 of the code provides that the rollover provisions of sec_408 of the code do not apply to any amount required to be distributed under sec_408 of the code sec_408 of the code provides that the secretary may waive the 60-day requirement under sec_408 and sec_408 of the code where the failure to waive such requirement would be against equity or good conscience including casualty disaster or other events beyond the reasonable control of the individual subject_to such requirement only distributions that occurred after date are eligible for the waiver under sec_408 of the code revproc_2003_16 r b date provides that in determining whether to grant a waiver of the 60-day rollover requirement pursuant to sec_408 of the code the service will consider all relevant facts and circumstances including errors committed by a financial_institution inability to complete a rollover due to death disability hospitalization incarceration restrictions imposed by a foreign_country or postal error the use of the amount distributed for example in the case of payment by check whether the check was cashed and the time elapsed since the distribution occurred therefore pursuant to sec_408 of the code the service the information you presented and documentation you submitted are consistent with your assertion that decedent a’s failure to accomplish a timely rollover of amount was caused by a mistake by financial_institution c which resulted in amount being deposited into account w a non-ira account hereby waives the 60-day rollover requirement with respect to the distribution of amount from ira v provided all other requirements of sec_408 of the code except the 60-day requirement were met with respect to such contribution the contribution of amount into an ira on behalf of decedent a would be considered a rollover_contribution within the meaning of sec_408 of the code further provided that taxpayer g would have been eligible to make a spousal_rollover election with respect to such ira created on behalf of decedent a the contribution of amount into ira y will be considered a valid rollover_contribution within the meaning of sec_408 of the code ruling assumes that your actions in contributing amount into ira y set up in finally the scope of the executor’s powers is a matter of state law this this ruling does not authorize the rollover of amounts that are required to be distributed by sec_401 of the code page taxpayer g’s name were in accordance with the laws of state h and pursuant to your authority as executor of the estate no opinion is expressed as to the tax treatment of the transaction described in this ruling under the provisions of any other section of either the code or regulations which may be applicable this letter is directed only to the taxpayer who requested it sec_6110 of the code provides that it may not be used or cited as precedent pursuant to a power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative if you wish to inquire about this ruling please contact xxxxxxxxxx xxxxx id xxxxxxxx at xxx xxx-xxxx please address all correspondence to se t ep ra t1 sincerely yours obie a wether carlton a watkins manager employee_plans technical group enclosures deleted copy of ruling letter notice of intention to disclose cc xxxxkxxxxx xxxxxkxxxxxkkxx xxxxxxxxxxx xxxxkxxkxxxxkxkxkxx


t c memo united_states tax_court jimmie r valentine petitioner v commissioner of internal revenue respondent docket no filed date jimmie r valentine pro_se eric d swenson for respondent memorandum opinion chiechi judge respondent determined the following deficiencies in and additions to petitioner's federal_income_tax year deficiency additions to tax sec_6651 sec_6654 dollar_figure dollar_figure big_number big_number dollar_figure big_number big_number big_number big_number big_number big_number big_number we must decide whether the determinations in the notices of deficiency notices that respondent issued to petitioner should be sustained we hold that they should petitioner did not comply with the court's standing_pretrial_order and did not cooperate with respondent in preparing this case for trial and or attempting to settle it consequently none of the facts has been stipulated however on date respondent filed a request for admissions with the court a copy of which respondent had served on petitioner on date petitioner did not file any response to that request for admissions as a result each matter set forth therein including the following is deemed admitted rule c 85_tc_267 petitioner resided in san diego california at the time he filed the petition petitioner who was born on date and who was throughout the years at issue a practicing medical doctor did all section references are to the internal_revenue_code in effect for the years at issue all rule references are to the tax_court rules_of_practice and procedure not file a federal_income_tax return for any of the years at issue during the years at issue petitioner conducted business under the name j r valentine lab during petitioner received nonemployee compensation from the payors and in the amounts indicated payor amount calif state dept of health calif state dept of health transamerica occidental life ins co john hancock mutual life ins co union labor life ins co prudential insurance co govt employees hospital transamerica occidental life ins co san diego city schools san diego laborers' h w fund dollar_figure big_number big_number big_number big_number big_number big_number total of the foregoing aggregate amount of nonemployee compensation that petitioner received during dollar_figure was paid to j r valentine lab during petitioner received dollar_figure in interest_income from union bank during that year petitioner also received nonemployee compensation from the payors and in the amounts indicated payor amount calif state dept of health calif state dept of health transamerica occidental life ins co union labor life ins co prudential insurance co transamerica occidental life ins co partners health plan san diego city schools dollar_figure big_number big_number big_number big_number total big_number of the foregoing aggregate amount of nonemployee compensation that petitioner received during dollar_figure was paid to j r valentine lab during petitioner received nonemployee compensation from the payors and in the amounts indicated payor amount comanche oil gas corp dollar_figure big_number calif state dept of health transamerica occidental life ins co big_number prudential insurance co big_number aetna health plan transamerica occidental life ins co big_number big_number san diego city schools total big_number of the foregoing aggregate amount of nonemployee compensation that petitioner received during dollar_figure was paid to j r valentine lab during petitioner received nonemployee compensation from the payors and in the amounts indicated payor amount dollar_figure calif state dept of health comanche oil gas corp big_number transamerica occidental life ins co big_number total big_number during that year petitioner also received a taxable retirement annuity distribution in the amount of dollar_figure and dollar_figure in interest_income from great western bank during petitioner received nonemployee compensation from transamerica occidental life_insurance_company in the amount of dollar_figure a taxable retirement annuity distribution in the amount of dollar_figure and dollar_figure in interest_income none of the foregoing amounts of income that petitioner received during the years at issue was included in any federal_income_tax return that he filed all compensation paid to j r valentine lab during those years should have been reported by petitioner as schedule c income petitioner received no income from nontaxable sources during any of the years at issue petitioner's personal living_expenses for were at least dollar_figure petitioner is not entitled for any of the years at issue to a dependency_exemption for any person other than himself petitioner is entitled to the filing_status of single for each of the years at issue on or about date the internal_revenue_service received a check in the amount of dollar_figure from petitioner that was dated date petitioner has the burden of showing error in the determinations of respondent in the notices rule a 290_us_111 based on the deemed admissions in this case and petitioner's failure to establish facts at trial showing that he is entitled to any deductions or exemptions other than those allowed in the notices we find that petitioner has failed to show error in any of the determinations of respondent in those notices accordingly we sustain those determinations to reflect the foregoing decision will be entered for respondent


t c memo united_states tax_court laura e tudor petitioner v commissioner of internal revenue respondent docket no filed date larry d harvey for petitioner randall l preheim for respondent memorandum opinion vasquez judge this case is before the court on respondent’s motion for summary_judgment pursuant to rule unless otherwise indicated all rule references are to the tax_court rules_of_practice and procedure and all section references are to the internal_revenue_code in effect for the year in issue after a concession the sole issue for decision is whether petitioner can exclude from income wages earned during from working in antarctica background at the time she filed the petition petitioner resided in broomfield colorado during petitioner performed services at mcmurdo station in ross island antarctica on her federal_income_tax return petitioner excluded wage income earned and received during for services performed in antarctica i summary_judgment discussion rule a provides that either party may move for summary_judgment upon all or any part of the legal issues in controversy full or partial summary_judgment may be granted only if it is demonstrated that no genuine issue exists as to any material fact and that the legal issues presented by the motion may be decided as a matter of law see rule b 98_tc_518 affd 17_f3d_965 7th cir we conclude that there is no genuine issue as to any material fact and that a decision may be rendered as a matter of law respondent concedes that no penalty pursuant to sec_6662 is due from petitioner for ii in general sec_61 provides that gross_income means all income from whatever source derived accordingly citizens of the united_states generally are taxed on income earned outside the geographical boundaries of the united_states unless the income is specifically excluded from gross_income 117_tc_95 affd sub nom 68_fedappx_44 9th cir affd sub nom 357_f3d_1108 10th cir exclusions from income are construed narrowly and taxpayers must bring themselves within the clear scope of the exclusion id iii sec_911 in 126_tc_89 473_f3d_790 7th cir arnett ii we addressed the arguments made by the parties herein regarding sec_911 the u s court_of_appeals for the seventh circuit agreed with our analysis of sec_911 and affirmed our conclusion that antarctica is not a foreign_country pursuant to sec_911 and the regulations thereunder arnett v commissioner f 3d pincite we shall not repeat our analysis from arnett i herein we follow our analysis and holding in arnett i and the analysis and holding of the court_of_appeals in arnett ii in 126_tc_89 affd continued iv conclusion accordingly for the reasons stated in arnett i arnett ii and herein we conclude that petitioner cannot exclude from gross_income wages earned during from working in antarctica to reflect the foregoing an appropriate order and decision will be entered continued f 3d 7th cir we concluded our opinion with a citation of sec_863 suggesting that sec_863 provided an additional reason to rule against the taxpayer id pincite see also sec_863 providing that income earned in antarctica by a u_s_person is sourced in the united_states in arnett v commissioner f 3d pincite the u s court_of_appeals for the seventh circuit addressed sec_863 in greater detail stating at the outset we think that it is important to note that considering antarctica not to be a foreign_country is compatible with the general statutory scheme notably sec_911 is found under subtitle a chapter subchapter_n of the irc which is designated tax based on income from sources within or without the united_states part i of this subchapter entitled source_rules and other general rules relating to foreign_income deems any activity in antarctica to be space_or_ocean_activity in turn the united_states is designated the source country of income from such activity when earned by a citizen_of_the_united_states sec_863 although this provision does not provide a definitive answer as to whether antarctica is a foreign_country it supports the conclusion that sec_911 is not intended to apply to income earned for services provided in antarctica we take this opportunity to state our agreement with the court of appeals’ conclusion set forth above see also 450_us_1


department of the treasury i n t e r n a l r e v e n u e s e r v i c e washington d c date office_of_chief_counsel number info release date uil conex-114916-06 ----------------------- -------------------------------- ---------------------------------- dear ------------ this letter responds to your inquiry to senator pete domenici about the --------------------- ----------------------------------------------------------------------------------------------------------------tax rebate senator domenici asked us to respond to you directly in date the state of ----------------- state provided payments from surplus state funds to state residents based on their adjusted_gross_income and the total number of exemptions shown on their state personal income_tax returns individuals were not eligible to receive a payment if they were a dependent of another individual during the tax_year they were not a resident of state on the last day of the tax_year or they were an inmate of a public institution for more than six months during the tax_year you ask why the recipients must report these state payments on their federal_income_tax return as gross_income sec_61 of the internal_revenue_code provides that gross_income means all income from whatever source derived unless another provision of law specifically excludes the payment from gross_income this means that the state payments are taxable to the recipients unless the payments qualify under one of the general exclusions from gross_income three types of payments are excludable from gross_income refunds of state income taxes paid for which a taxpayer does not receive a federal tax_benefit gifts and general welfare_payments see sec_3 h b no ------------------session laws see 348_us_426 reh’g denied 349_us_925 holding gross_income encompasses any item representing undeniable accessions to wealth clearly realized and over which the taxpayers have complete dominion conex-114916-06 the state payments are not refunds of state taxes it is our understanding that the state payments are not related to the amount of state_income_tax or other tax that a recipient previously paid the amount of the rebate is not reflected in a taxpayer’s income_tax account under the program a resident can receive a rebate in excess of any state_income_tax paid in other words the total of the tax_payments made by a resident of state in was not reduced by the rebate he or she received thus that resident was enriched by the state payment and therefore is taxable on the payment the state payments do not qualify for exclusion from income as gifts under sec_102 of the code to qualify as a nontaxable_gift a payment must be made from a ’detached and disinterested generosity out of affection respect admiration charity or like impulses ’ generally governmental payments have been treated as gifts only if the payments have been made to a limited group of individuals based on merit or service such as a state’s payments to war veterans neither h b no nor its legislative background indicates that the state payments are made to a limited class out of affection generosity charity or like impulses the state payments also do not qualify for exclusion under the administrative exclusion for general welfare_payments to qualify as general welfare_payments the payments must be made from a governmental fund be for the promotion of the general welfare ie generally based on individual or family needs and not represent compensation_for services the state payments do not satisfy the second requirement ie to help needy individuals pay for expenses such as housing education and basic sustenance therefore the state payments are not excludable as general welfare_payments because the state payments do not qualify for any of the possible exclusions from gross_income recipients must include the payments in gross_income for federal_income_tax purposes many have expressed concerns that taxpayers would be required to file the longer form_1040 rather than the short_form sec_1040a or sec_1040ez in order to report the state payments because form sec_1040a and sec_1040ez do not have specific lines for these payments as you may already know the internal_revenue_service addressed this concern and has allowed taxpayers to report the state payments on line of form_3 duberstein v 363_us_278 quoting 351_us_243 and 343_us_711 see revrul_68_158 1968_1_cb_47 holding state payments to or on behalf of veterans who served in the armed_forces during war time were not includible in gross_income and 101_fsupp_892 ct_cl holding payments from the federal government were gifts in recognition of the services rendered for construction of the panama canal conex-114916-06 1040a and line of form 1040ez a copy of the irs news_release announcing this position is enclosed i hope this information is helpful if you need further information please contact -------------------- identification_number ------------- at ----- ------------- sincerely george j blaine deputy associate chief_counsel income_tax and accounting enclosure


department of the treasury internal_revenue_service washington d c commissioner tax_exempt_and_government_entities_division nov _ uniform issue list 408a sei ter ratz kkk kkk ree legend taxpayer custodian cpa cpa attorney amount a amount b amount c year year independent auditor kek kkk kkk kkk kkk kkk eke kkk kkhe kk kkk kkk kek kkk kek kek xe ee nee year year year dear this is in response to your request dated date submitted on your behalf by your authorized representative as supplemented by correspondence dated date date date date date date date and date and a conference held on date in which you request relief under sec_301_9100-3 of the procedure and administrative regulations the regulations the following facts and representations have been submitted under penalty of perjury in support of the ruling requested taxpayer owned ira x a simplified employee plan sep ira described in sec_408 of the internal_revenue_code the code and maintained by custodian on december year custodian at taxpayer’s request transferred amount a from ira x to ira y a roth_ira described in sec_408a of the code as a roth_ira_conversion ira y is also maintained by custodian _ taxpayer represents that he relied heavily on cpa his long time certified_public_accountant and preparer of his federal u s individual income_tax returns income_tax return s for guidance with respect to his u s individual income_tax obligations taxpayer consulted with cpa prior to his request to convert ira x to ira y during the time of the conversion cpa represents that he advised and cautioned taxpayer of the modified_adjusted_gross_income magi limitations relating to roth_ira conversions as provided by sec_408a of the code cpa also represents that at the time of the conversion he had not yet determined taxpayer's year magi accordingly taxpayer represents that he was unaware that his magi exceeded the roth_ira_conversion magi limitation at the time of the conversion in year subsequent to the conversion taxpayer re-engaged cpa to prepare his year income_tax return cpa determined that taxpayer's magi was amount b cpa did not advise taxpayer at that time that amount b exceeded the roth_ira_conversion magi limitations and that consequently his conversion from ira x to ira y was a failed conversion under cpa represents that he does not recall whether he reviewed the issue of taxpayer's eligibility to convert ira x to ira y during the time he prepared the year income_tax return accordingly cpa prepared taxpayer's year income_tax return to include the conversion as a distribution from ira x taxpayer was not informed at this time that his conversion was a failed conversion with respect to an unrelated tax matter during year taxpayer engaged cpa to amend his year income_tax return and attorney to work on certain aspects of his amended year income_tax return cpa notified taxpayer and attorney at that time that his magi for year of amount b and the amended year magi of amount c _ were both greater than the allowed magi to convert his sep ira to a roth_ira and therefore his conversion from ira x to ira y was a failed conversion attorney reviewed taxpayer’s original and amended year income_tax return and concurred with cpa 2’s assessment of the failed conversion attorney advised taxpayer that under appropriate circumstances a letter_ruling may be obtained that - would grant a request of relief to make an election to recharacterize the conversion consequently taxpayer was not made aware of the failed conversion and the available election to recharacterize his roth_ira to a traditional_ira until december of year taxpayer's request for relief under sec_301 of the regulations was filed shortly after discovering that his conversion was a failed conversion under sec_1_408a-5 q a-9 a of the i t regulations in connection with this submission taxpayer provided a statement from independent auditor who reviewed the year through year income_tax returns and certified under penalties of perjury that the interests of the government would not be prejudiced under the standards set forth under sec_301_9100-3 based on the foregoing facts and representations you have requested a ruling that - pursuant to sec_301_9100-3 of the regulations taxpayer may be granted a period not to exceed days from the date_of_issuance of this ruling to make an election under sec_1_408a-5 of the i t regulations to recharacterize amount a as a contribution to a traditional_ira in a recharacterization the ira contribution is with respect to your request for relief under sec_301_9100-3 of the regulations sec_408a of the code and sec_1_408a-5 of the t regulations provide that except as otherwise provided by the secretary a taxpayer may elect to recharacterize an ira contribution made to one type of ira as having been made to another type of ira by making a trustee-to-trustee transfer of the ira contribution plus earnings to the other type of ira treated as having been made to the transferee ira and not the transferor ira under sec_408a of the code and sec_1_408a-5 of the i t regulations this recharacterization election generally must occur on or before the date prescribed by law including extensions for filing the taxpayer's income_tax return for the year of contribution sec_1_408a-5 q a-6 of the i t regulations describes how a taxpayer makes the election to recharacterize the ira contribution to recharacterize an amount that has been converted from a sep ira to a roth_ira the taxpayer must notify the roth_ira trustee of the taxpayer's intent to recharacterize the amount the taxpayer must provide the trustee and the transferee trustee if different from the transferor trustee with specified information that is sufficient to effect the recharacterization and the trustee must make the transfer sec_408a of the code provides in relevant part that a taxpayer generally is not allowed to make a rollover_contribution to a roth_ira from an individual_retirement_plan other than a roth_ira during any taxable_year if the taxpayer's adjusted_gross_income for that year exceeds dollar_figure sec_408a of the code provides that a conversion of a sep ira to a roth_ira is treated as a rollover from the sep ira to the roth_ira sec_301_9100-1 sec_301_9100-2 and sec_301_9100-3 of the regulations in general _ provide guidance concerning requests for relief submitted to the internal_revenue_service the service on or after date sec_301_9100-1 c provides that the commissioner of the service in his discretion may grant a reasonable extension of the time fixed by a regulation a revenue_ruling a revenue_procedure a notice or an announcement published in the internal_revenue_bulletin for the making of an election or application_for relief in respect of tax under among others subtitle a of the code sec_301_9100-2 of the regulations lists certain elections for which automatic extensions of time to file are granted sec_301_9100-3 generally provides guidance with respect to the granting of relief with respect to those elections not referenced in sec_301_9100-2 the relief requested in this case is not referenced in sec_301_9100-2 sec_301_9100-3 of the regulations provides that applications for relief that fall within sec_301_9100-3 will be granted when the taxpayer provides sufficient evidence including affidavits described in sec_301_9100-3 to establish that the taxpayer acted reasonably and in good_faith and granting relief would not prejudice the interests of the government _ sec_301_9100-3 of the regulations provides that a taxpayer will be deemed to have acted reasonably and in good_faith i if its request for sec_301_9100-1 relief is filed before the failure to make a timely election is discovered by the service ii if the taxpayer inadvertently failed to make the election because of intervening events beyond the taxpayer's control iii if the taxpayer failed to make the election because after exercising reasonable diligence the taxpayer was unaware of the necessity for the election iv the taxpayer reasonably relied upon the written advice of the service or v the taxpayer reasonably relied on a qualified_tax professional including a tax professional employed by the taxpayer and the tax professional failed to make or advise the taxpayer to make the election sec_301_9100-3 of the regulations provides that the interests of the government are ordinarily prejudiced if the taxable_year in which the regulatory election should have been made or any taxable years that would have been affected by the election had it been timely made are closed by the period of limitations on assessment under sec_6501 of the code before the taxpayer's receipt of a ruling granting relief under this section sec_6501 of the code provides that the amount of any_tax assessed shall be assessed within three years after the return required to be filed by the taxpayer was filed sec_301_9100-3 of the regulations further provides that for closed years the service may condition a grant of relief on the taxpayer providing the service with a statement from an independent auditor other than an auditor providing an affidavit pursuant to paragraph e of sec_301_9100-3 certifying that the interests of the government are not prejudiced under the standards set forth in sec_301 c i which provides that the interests of the government will be prejudiced if granting relief results in the taxpayer having less tax_liability in the aggregate for all taxable years affected by the election than he would have had if the election would have been timely made taking into account the time_value_of_money the information presented and documentation submitted by taxpayer is consistent with taxpayer's assertion that his failure to elect to recharacterize the roth_ira on or before the date prescribed by law including extensions for filing his income_tax return for the year of contribution was caused by taxpayer reasonably relying on a qualified_tax professional who failed to advise taxpayer to make the election taxpayer was not made aware of the failed conversion or the election until after the tax_year in question closed taxpayer filed this request for sec_301 relief shortly after discovering he had a failed conversion and before the service discovered his failure to make a timely election to recharacterize the failed conversion based on the above taxpayer meets the requirements of sec_301_9100-3 of the regulations clauses i iii and v for the tax_year in addition since the statute_of_limitations is closed under sec_301 c ii of the regulations granting relief would ordinarily prejudice the interests of the government taxpayer has provided a statement from an independent auditor other than the auditors involved in the identification or correction of the failed conversion certifying that the interests of the government were not prejudiced under the standards set forth under sec_301 c i which satisfies a conditional grant of relief under sec_301 c ii _ accordingly taxpayer is granted an extension of days as measured from the date of the issuance of this ruling letter to recharacterize amount a as a contribution to a traditional_ira no opinion is expressed as to the tax treatment of the transaction described herein under the provisions of any other section of either the code or regulations which may be applicable thereto this letter assumes that the above ira qualifies under either sec_408 of the code or sec_408a of the code at all relevant times this ruling is directed only to the taxpayer who requested it sec_6110 of the code provides that it may not be used or cited by others as precedent a copy of this letter has been sent to your authorized representative in accordance with a power_of_attorney on file with this office if you wish to inquire about this ruling please contact d hh hhh of _ please address all correspondence to se t ep ra t2 sincerely yours e loyee lans technical group enclosures deleted copy of this letter notice of intention to disclose notice cc kkk cc ek ce kkk


t c memo united_states tax_court ted lawrence williams petitioner v commissioner of internal revenue respondent docket no 13829-15l filed date ted lawrence williams pro_se jeremy d cameron for respondent memorandum opinion vasquez judge in this collection_due_process cdp case petitioner seeks review pursuant to sec_6330 of the determination by the internal unless otherwise indicated all section references are to the internal_revenue_code in effect at all relevant times and all rule references are to the tax_court rules_of_practice and procedure revenue service irs or respondent to proceed with collection of his unpaid federal_income_tax liabilities for and respondent has moved for summary_judgment under rule contending that his determination to sustain the proposed collection action was proper as a matter of law to impose a penalty against petitioner pursuant to sec_6673 and to remove the suspension of the proposed levy pursuant to sec_6330 for the reasons stated below we will grant respondent’s motions background the following facts are based on the parties’ pleadings and motion papers including the attached affidavits and exhibits see rule b petitioner a resident of florida at the time he filed the petition is a tax_protester who has not filed a federal_income_tax return since in respondent began an examination for petitioner’s and tax years in the examining agent drove to an address in smithfield utah smithfield address which irs records indicated was petitioner’s last_known_address because the smithfield address did not appear to be a residential location the examining agent used a postal tracer research procedure offered by the u s postal service the postal tracer indicated that petitioner received mail by general delivery at the zip code of the smithfield address the examining agent subsequently consulted the accurint database which indicated that the smithfield address was petitioner’s last_known_address on date the examining agent mailed to petitioner a notice_of_deficiency determining deficiencies of dollar_figure for and dollar_figure for and additions to tax pursuant to sec_6651 and and for both tax years this notice_of_deficiency was addressed to petitioner at the smithfield address the examining agent also mailed a duplicate notice_of_deficiency to petitioner at an address in jacksonville florida which he had found on a third- party information_return petitioner did not challenge the deficiency_notice in this court and the determined deficiencies therein were subsequently assessed on date respondent issued to petitioner a final notice notice_of_intent_to_levy and notice of your right to a hearing levy notice petitioner timely requested a cdp hearing in his cdp hearing request he stated the following audit_reconsideration being filed upon receipt of foia freedom_of_information_act requests never received determination letters for taxable years and as this information was sent to an unknown address the correct address was last noted in a correspondence to the irs dated which should have been updated audit_reconsideration is due to potential procedural and administrative defects petitioner did not check any of the boxes denoting a request for a collection alternative in his cdp hearing request petitioner’s case was transferred to settlement officer so peter salinger in the office of appeals by letter dated date so salinger informed petitioner since the assessments in question are a result of returns prepared under the substitute for return program you also have the opportunity to submit original returns for these years to refute the assessments that were made so salinger also requested a copy of the correspondence petitioner referenced in his cdp hearing request during a subsequent telephone conversation he warned petitioner about the consequences of raising frivolous arguments on date so salinger received from petitioner a document entitled notice of dispute with several attachments this document contained arguments listed as frivolous in notice_2010_33 2010_17_irb_609 include the following positions that a taxpayer’s income is excluded from taxation when the taxpayer rejects or renounces united_states citizenship because the taxpayer is a citizen exclusively of a state that o nly certain types of taxpayers are subject_to income and employment_taxes such as employees of the federal government corporations nonresident_aliens or residents of the district of columbia or the federal territories and that t he united_states tax_court is an illegitimate court or does not for any purported constitutional or other reason have the authority to hear and decide matters within its jurisdiction petitioner advanced such arguments at his cdp hearings and before this court included among the attachments were copies of a notice of federal continued frivolous arguments except for a request that the conference be held by telephone and a restatement of petitioner’s position that the notice_of_deficiency for and was improperly delivered via certified mail to an unknown physical location infra thus never timely received by petitioner williams the attachments contained frivolous arguments and did not seek collection alternatives or raise any other permissible challenges to the proposed levy nowhere in this submission was there a copy of the purported correspondence establishing that petitioner had notified the irs of an address different from that used on the notice_of_deficiency although petitioner failed to submit a copy of his purported correspondence so salinger allowed him to raise the issue of liability because he believed petitioner might not have received the notice_of_deficiency so salinger advised petitioner that he could contest his underlying tax_liabilities by filing original tax returns for and so salinger also notified petitioner that he needed to file hi sec_2011 sec_2012 and sec_2013 returns so continued tax_lien_filing and your right to a hearing under sec_6320 lien notice dated date concerning petitioner’s unpaid federal_income_tax for and and a cdp hearing request pertaining to the lien notice mailed by petitioner to respondent on date because the petition references only the levy notice we need not concern ourselves with the lien notice or any determination under sec_6320 and sec_6330 in connection therewith see 125_tc_301 n aff’d 469_f3d_27 1st cir salinger asked petitioner to provide him with the requested tax returns by date on date so salinger received from petitioner a document entitled amended notice of dispute with several attachments none of which were the requested tax returns or the purported correspondence instead petitioner repeated many of the frivolous arguments he had previously raised he also failed to request any collection alternatives respondent subsequently issued a notice_of_determination concerning collection action s under sec_6320 and or in which the proposed levy was sustained petitioner timely filed a petition with this court in which he repeated many of the frivolous arguments he had raised in the cdp hearing thereafter respondent filed a motion for summary_judgment to which petitioner objected this court held a hearing on respondent’s summary_judgment motion in jacksonville florida during the hearing petitioner continued to advance frivolous arguments he also filed a frivolous motion which we denied we gave petitioner an opportunity to address respondent’s motion for summary_judgment with nonfrivolous arguments when petitioner refused to do so we terminated the hearing and reserved decision on respondent’s motion after further review we denied respondent’s summary_judgment motion because it was unclear from the administrative record whether so salinger had verified that the notice_of_deficiency was mailed to petitioner’s last_known_address we remanded petitioner’s case to the office of appeals for a supplemental hearing on that issue and retained jurisdiction on remand petitioner’s case was reassigned to so james p feist so feist reviewed the examination file and concluded that the irs had sent the notice_of_deficiency to petitioner’s last_known_address in a letter to petitioner dated date so feist explained how he had reached his conclusion and attached the documents on which he relied so feist also told petitioner that the opportunity to contest his underlying liabilities by submitting original returns for and remained open to him the opportunity to request a collection alternative remained open to him and the continued assertion of frivolous arguments could lead to the imposition of monetary penalties so feist gave petitioner until date to provide him with responsive documents one of the attachments to the date letter was a copy of an irs document entitled the truth about frivolous tax arguments which addresses many of the arguments petitioner raised in this proceeding on date so feist received a declaration from petitioner reiterating petitioner’s frivolous position that he is under no legal duty to pay federal_income_tax the declaration contained several attachments none of which was an original return for or thereafter respondent issued a supplemental notice_of_determination sustaining the proposed levy on date respondent moved for summary_judgment and for a sec_6673 penalty against petitioner respondent also filed a motion to remove the suspension of the proposed levy pursuant to sec_6330 in a written response petitioner objected to respondent’s motions i motion for summary_judgment discussion we first address respondent’s summary_judgment motion summary_judgment is designed to expedite litigation and to avoid unnecessary and expensive trials 61_tc_861 a motion for summary_judgment may be granted where the pleadings and other materials show that there is no genuine dispute as to any material fact and that a decision may be rendered as a matter of law rule b 98_tc_518 aff’d 17_f3d_965 7th cir the burden is on the moving party to demonstrate that no genuine issue as to any material fact remains and that he is entitled to judgment as a matter of law 116_tc_73 in all summary_judgment cases the evidence is viewed in the light most favorable to the nonmoving party 100_tc_32 however the nonmoving party is required to go beyond the pleadings and by his own affidavits or by the ‘depositions answers to interrogatories and admissions on file ’ designate ‘specific facts showing that there is a genuine issue for trial ’ 477_us_317 quoting rule e of the federal rules of civil procedure see also rule d 119_tc_157 115_tc_554 in his opposition to respondent’s summary_judgment motion petitioner challenged his own status as a taxpayer and this court’s jurisdiction among other frivolous arguments he did not identify any specific facts showing that there is a genuine issue for trial we therefore conclude that there are no material facts in dispute and that this case is appropriate for summary adjudication a jurisdiction sec_6331 authorizes the secretary to levy upon property and property rights of a taxpayer who fails to pay a tax within days after notice_and_demand before the secretary may levy upon the taxpayer’s property the secretary must first notify the taxpayer of the secretary’s intent to levy sec_6331 the secretary must also notify the taxpayer of his right to a cdp hearing sec_6330 if the taxpayer requests a cdp hearing the hearing is conducted by the office of appeals sec_6330 at the hearing the taxpayer may raise any relevant issue relating to the unpaid tax or the proposed collection action sec_6330 once the so makes a determination the taxpayer may appeal to this court for review sec_6330 b petitioner’s underlying tax_liabilities where the validity of the underlying tax_liability is at issue we review the matter de novo 114_tc_604 114_tc_176 a taxpayer may challenge the underlying tax_liability during a cdp hearing if he did not receive a statutory_notice_of_deficiency for the liability or did not otherwise have the opportunity to dispute the liability sec_6330 see also 122_tc_1 the court will consider an underlying tax_liability on review only if the taxpayer properly raised the issue during the cdp hearing 129_tc_107 see also sec_301 f q a-f3 proced admin regs a taxpayer did not properly raise an underlying liability if he did not present the so with any evidence regarding the liability after being given a reasonable_time see sec_301_6330-1 q a-f3 proced admin regs petitioner is not entitled to challenge his underlying tax_liabilities for tax years and because he did not properly raise them during his initial cdp hearing and his supplemental cdp hearing petitioner failed to present any evidence regarding the liabilities after being given a reasonable_time during his initial cdp hearing so salinger gave petitioner several months to file original returns for and at the supplemental cdp hearing so feist gave petitioner one month to file original returns for and both times petitioner failed to do so choosing instead to raise frivolous arguments because petitioner failed to meaningfully challenge the underlying tax_liabilities at his cdp hearings they are not before this court c respondent’s administrative determinations we now turn to respondent’s determination to proceed with collection which we review under an abuse_of_discretion standard see sego v commissioner t c pincite goza v commissioner t c pincite an abuse_of_discretion occurs if the office of appeals exercises its discretion arbitrarily capriciously or without sound basis in fact or law 112_tc_19 the court does not conduct an independent review and substitute its judgment for that of the so 125_tc_301 aff’d 469_f3d_27 1st cir if the so follows all statutory and administrative guidelines and provides a reasoned balanced decision the court will not reweigh the equities link v commissioner tcmemo_2013_53 at following a cdp hearing the so must determine whether to sustain the proposed levy in making that determination sec_6330 requires the so to consider whether the requirements of any applicable law or administrative procedure have been met any issues appropriately raised by the taxpayer and whether the collection actions balance the need for the efficient collection_of_taxes and the legitimate concern of the taxpayer that any collection action be no more intrusive than necessary see 117_tc_183 diamond v commissioner tcmemo_2012_90 slip op pincite as part of the duty to verify that the requirements of any applicable law or administrative procedure have been met the so must verify that the irs made a valid assessment see sec_6330 131_tc_197 an assessment is not valid unless it is duly preceded by the mailing of a notice_of_deficiency to the taxpayer’s last_known_address sec_6213 hoyle v commissioner t c pincite after reviewing the examination file including a copy of the notice_of_deficiency so feist concluded that the notice_of_deficiency was mailed to petitioner’s last_known_address and that the requirements of applicable law or administrative procedure had been met petitioner however argues that respondent failed to satisfy the verification requirement petitioner’s general argument as we understand it is that respondent did not establish that the address on the notice_of_deficiency was his last_known_address we disagree we have held that absent clear and concise notice of a change_of address a taxpayer’s last_known_address is the address shown on the taxpayer’s return that was most recently filed at the time that the notice was issued 91_tc_1019 see also sec_301_6212-2 proced admin regs in deciding whether the commissioner mailed a notice to a taxpayer at the taxpayer’s last_known_address the relevant inquiry pertains to the commissioner’s knowledge rather than to what may in fact be the taxpayer’s most current address 81_tc_42 the burden falls on the taxpayer to give clear and concise notification to the commissioner of a change in address 62_tc_367 aff’d without published opinion 538_f2d_334 9th cir petitioner has not refuted respondent’s evidence that he mailed the notice_of_deficiency to petitioner’s last_known_address while he contends that he did not reside at the smithfield address petitioner has not specified where the irs should have mailed the notice_of_deficiency he has neither alleged nor shown that his return the last one he filed reported a different address nor has he offered any evidence that he gave the irs clear and concise notification of a different address furthermore the administrative record shows that the examining agent made a substantial effort to ascertain petitioner’s correct address a task made all the more difficult by petitioner’s deliberate failure_to_file returns accordingly we hold that respondent exercised reasonable care and diligence in mailing the notice_of_deficiency to petitioner see 93_tc_22 a fter respondent becomes aware of a taxpayer’s change_of address he must exercise reasonable care and diligence in ascertaining and mailing the notice_of_deficiency to the correct address alta sierra vista inc v commissioner t c pincite we also hold that the irs made a valid assessment of the tax_liabilities at issue and that so feist adequately verified that the requirements of any applicable law or administrative procedure had been met other than denying receipt of the notice_of_deficiency petitioner has not advanced a nonfrivolous basis for us to determine that so feist abused his discretion in sustaining the proposed levy petitioner did not request collection alternatives during his cdp hearings and failed to provide the sos with the financial information and delinquent tax returns they had requested finding no abuse_of_discretion in any respect we will grant summary_judgment for respondent and sustain the proposed collection action ii sec_6673 penalty we now consider respondent’s motion to impose a penalty against petitioner pursuant to sec_6673 respondent argues that sanctions are warranted because petitioner advanced frivolous arguments throughout the cdp hearings and this proceeding we agree with respondent and will impose a penalty against petitioner in the amount of dollar_figure pursuant to sec_6673 sec_6673 authorizes the court to require a taxpayer to pay a penalty to the united_states in an amount not to exceed dollar_figure whenever it appears to the court that the taxpayer instituted or maintained the proceeding primarily for delay or that the taxpayer’s position in the proceeding is frivolous or groundless throughout this proceeding petitioner has taken a multitude of frivolous and groundless positions characteristic of tax protesters despite numerous warnings the imposition of a dollar_figure penalty is appropriate because petitioner was on notice that his frivolous arguments could subject him to monetary penalties this court previously imposed a sec_6673 penalty against petitioner sua sponte for making frivolous arguments see williams v commissioner tcmemo_2002_ furthermore during the initial cdp hearing and the supplemental cdp hearing so salinger and so feist advised petitioner that his arguments were frivolous and could subject him to penalties iii motion to permit levy finally we consider respondent’s motion to permit levy the effect of granting this motion would be to allow the irs to levy immediately in an effort to collect petitioner’s tax_liabilities discussed above without waiting for the decision in this case to become final a taxpayer’s request for a cdp hearing automatically suspends the levy process for the period during which such hearing and appeals therein are we will not painstakingly address petitioner’s assertions with somber reasoning and copious citation of precedent to do so might suggest that these arguments have some colorable merit 737_f2d_1417 5th cir per curiam see also 136_tc_498 pending sec_6330 sec_301_6330-1 q a-g1 proced admin regs the suspension_period continues until the expiration of the time for seeking judicial review or upon exhaustion of any rights to appeals following judicial review this suspension however shall not apply to a levy action while an appeal is pending if the underlying tax_liability is not at issue in the appeal and the court determines that the secretary has shown good cause not to suspend the levy sec_6330 see 124_tc_189 for the reasons stated supra part i b petitioner’s underlying tax_liabilities are not at issue accordingly the sole question is whether respondent has shown good cause not to suspend the levy during the appeal process see sec_6330 sec_6330 does not include a definition of the term good cause we have held however that the commissioner may show good cause that a levy should not be suspended where the taxpayer used the collection review procedure to espouse frivolous and groundless arguments and otherwise needlessly delay collection burke v commissioner t c pincite respondent has shown that for good cause the levy should not be suspended throughout this proceeding petitioner advanced frivolous arguments despite numerous warnings not to do so we therefore find that petitioner has used the collection review procedure to espouse frivolous and groundless arguments and to otherwise delay collection under these circumstances lifting the suspension of the levy is appropriate in reaching our holdings we have considered all arguments made and to the extent not mentioned we consider them irrelevant moot or without merit to reflect the foregoing an appropriate order and decision will be entered