department of the treasury internal_revenue_service washington d c tax exempt and government entities sep si tep ra ty u l xxxxk xxxxx legend taxpayer a xxxxxx ira x xxxxxx bank c xxxxx amount n xxxxx form z xxxxx bank d xxxxx account s xxxxx account t xxxxx account u xxxxx amount o xxxxx amount p xxxxx amount q xxxxx year xxxxx date xxxxx xxxxx page date xxxxx date xxxxx dear xxxxx this is in response to your letter dated date as supplemented by correspondence dated may may august and date submitted on your behalf by your authorized representative in which you request a waiver of the 60-day rollover requirement contained in sec_408 of the internal_revenue_code code the following facts and representations are made under penalties of perjury in support of your ruling_request taxpayer a age represents that he received a distribution from ira x at bank c totaling amount n of which he intended to roll over amount o to another ira at bank d taxpayer a asserts that his failure to accomplish a rollover within the 60-day period prescribed by sec_408 of the code was due to the failure of bank c and bank d to carry out his intended instructions and that as a result of ongoing memory problems due to a prior stroke and concern about a possibly cancerous skin lesion he failed to notice the mistake until after the expiration of the 60-day period taxpayer a represents that he maintained ira x at bank c on date taxpayer a requested that bank c transfer amount n the entire account balance of ira x to account s at bank d on date the day following date taxpayer a’s entire account balance in ira x was transferred by wire transmission to bank d taxpayer a intended that bank d maintain the transferred funds as ira funds however account s the account listed on the transfer request was not an ira when received by bank d the funds were not deposited into an ira account taxpayer a made his request for the transfer by completing form z the general form used by bank c to process jra withdrawals a copy of the form z that taxpayer a executed was submitted as part of this ruling_request on date taxpayer a executed a wire transfer agreement with bank d to authorize wire transmission of funds to or from his account s maintained at bank in addition taxpayer a opened three new_accounts which could be accessed d under the terms of the agreement upon the transfer of amount n to bank d amount n was allocated among the three new_accounts accounts s t and u accounts s and t were certificates of deposit cd with identical terms and which each received one-half of amount o account u a money market account received the remainder of amount n taxpayer a represents that by transferring amount o into accounts s and t he intended on date to make a trustee-to-trustee transfer of most of his investment in ira x to an ira investment at bank d taxpayer a represents that he did not intend that the xxxxx page v remainder of amount n allocated to account u would be treated as a rollover_contribution to an ira on date taxpayer a went to bank d to request withdrawal of amount p to satisfy his required_minimum_distribution from the transferred funds and he discovered that accounts s and t were not ira cds taxpayer a further represents that he suffers from periodic lightheadedness and dizziness and has some problems with his speech and memory as a result of a stroke that occurred approximately seven years prior to date he also represents that during the two month period prior to date he became aware of a possible cancerous skin lesion for which he received treatment approximately one month after date taxpayer a asserts that as a result of the combination of his ongoing memory problems and his preoccupation with his skin condition he failed to carry out the rollover transaction that he intended to accomplish and he failed to recognize his mistake until after the 60-day period had expired based on the facts and representations presented in this letter you request that the service waive the 60-day rollover requirement with respect to the distribution of amount n from ira x sec_408 of the code provides that except as otherwise provided in sec_408 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 does not apply to any amount_paid or distributed out of an ira to the individual for whose benefit the ira is maintained if-- i ii 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 the entire amount received including money and any other_property is 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 page sec_408 of the code provides that sec_408 does not apply to any amount described in sec_408 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 from an ira which was not includible in gross_income because of the application of sec_408 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 do not apply to any amount required to be distributed under sec_408 sec_408 of the code provides that the secretary may waive the day requirement under sec_408 and sec_408 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 revproc_2003_16 r b provides that in determining whether to grant a waiver of the 60-day rollover requirement pursuant to sec_408 the service will consider all relevant facts and circumstances including 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 errors committed by a financial_institution inability to complete further when amount n was taxpayer a has stated that he gave instructions to bank c which if followed would have resulted in the timely rollover of ira x however the documentation submitted shows that taxpayer a instructed bank c to transfer amount n to account s a non-ira account at bank d transferred to bank d it was divided and deposited into account t and account u in addition to account s all three of which were non-ira accounts a letter from bank d indicates that when it received the wire transfer from bank c it was unaware that amount n constituted proceeds from an ira and that it set up the three non-ira funds at the request of taxpayer a accordingly taxpayer a has not shown that the failure to complete a timely rollover was a result of any error in addition taxpayer a has not shown that on the part of a financial_institution either his memory problems which were long standing and which had not worsened during the period in question or his concerns for his skin condition caused his failure to carry out the intended rollover at the time of the transaction or his failure to notice the error during the days following es page therefore pursuant to sec_408 of the code the service declines to waive the 60-day rollover requirement with respect to the distribution of amount n from ira x this ruling assumes that ira x satisfies the qualification requirements of sec_408 of the code at all times relevant to this transaction 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 ruling 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_ruling is being sent to your authorized representative if you wish to inquire about this ruling please contact 0c d xxxxx by telephone at xxxxx or by fax at xxxxx please address all correspondence to se t ep ra t4 sincerely yours laura b warshawsky manager employee_plans technical group enclosures deleted copy of ruling letter notice of intention to disclose cc xxxxx xxxxx xxxxx


internal_revenue_service number release date index number ------------------------------------------ ---------------------- ------------------------- ------------------------------ ------------------------------------ department of the treasury washington dc third party communication none date of communication not applicable_person to contact -------------------- id no ------------ telephone number -------------------- refer reply to cc ita plr-129929-11 date date do -------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------- ty -------------------------- legend -------------------------------------------------------------------- ------------------------------------------------------------ ------------------------------------------------------------ ------------------------- ------- -------------------------------------------------- --------------------------------------------------------- ---------------------------------------------------- parent taxpayer taxpayer products specifics target_corporation ------------------------------------------------------ subsidiary llc llc llc 1’s subsidiary -------------------------------------------------------- date date date old cpa firm old law firm new cpa firm tax_year tax_year ---------------------- -------------------------- ---------------------- ------------------- -------------------------------------- ---------------------- -------------------------- -------------------------- plr-129929-11 dear --------------- we received new cpa firm’s letter of date which notes parent’s request for an extension of time under sec_301_9100-1 of the procedure and administration regulations to file a form_970 application to use lifo inventory_method on behalf of taxpayer and taxpayer see also sec_301_9100-3 the following facts have been obtained from the above-referenced letter the accompanying affidavit and completed drafts of two form sec_970 on date the parent consolidated_group acquired target_corporation in the following manner subsidiary a subsidiary of parent set up two single-member limited_liability companies llc and llc in turn llc created llc 1’s subsidiary as a wholly owned subsidiary and llc created taxpayer as a wholly owned subsidiary llc 1’s subsidiary and target_corporation merged and target_corporation became the surviving entity target_corporation transferred its operating_assets including inventories and its liabilities to taxpayer which canceled the promissory note it had received from llc 1’s subsidiary before the latter’s merger with target_corporation following this transaction taxpayer became engaged in the wholesale and retail sales and distribution of products including specifics for the taxable_year ending tax_year taxpayer used the lifo_method even though parent had failed to file a form_970 on taxpayer 1’s behalf as required under sec_1_472-3 of the income_tax regulations parent engaged old cpa firm to prepare its consolidated tax_return for the taxable_year ending tax_year but old cpa firm failed to advise parent that it had to file a form_970 on taxpayer 1’s behalf if taxpayer wanted to elect the lifo_method for its initial taxable_year on date taxpayer was converted from a corporation to a single-member limited_liability_company and became taxpayer and llc was dissolved effective date taxpayer elected to be treated as a corporation under sec_301_7701-3 under sec_301_7701-3 the conversion of taxpayer from disregarded_entity to corporation is treated as if subsidiary had contributed all the assets and liabilities of taxpayer to the corporation in exchange for the corporation’s stock parent failed however to file a form_970 on behalf of taxpayer to elect the lifo_method effective for the date of conversion as required by revrul_70_564 1970_2_cb_109 parent engaged old law firm to advise it regarding this restructuring but old law firm failed to advise parent that it had to file a form_970 on behalf of taxpayer if taxpayer wanted to elect the lifo_method effective as of the date of its conversion to a corporation plr-129929-11 in march of parent engaged new cpa firm to perform a review of its inventory methods for federal_income_tax purposes new cpa firm determined that parent had failed to file a form_970 on behalf of taxpayer for the taxable_year ending tax_year and had failed to file a form_970 on behalf of taxpayer for the taxable_year ending tax_year nevertheless parent filed consolidated federal_income_tax returns for the taxable_year that included the acquisition of target_corporation and for all subsequent taxable years consistent with its having timely filed form sec_970 on behalf of taxpayer and taxpayer the statute_of_limitations on assessments under sec_6501 has expired for the taxable_year ending tax_year but remains open for the taxable_year ending tax_year new cpa firm has advised parent to request an extension of time for filing the required form sec_970 sec_472 provides that a taxpayer may use the method provided in subsection b lifo inventory_method in inventorying goods specified in an application to use such method filed at such time and in such manner as the secretary may prescribe sec_1_472-3 provides in relevant part that the lifo inventory_method may be adopted and used only if the taxpayer files with its income_tax return for the taxable_year as of the close of which the method is first to be used a statement of its election to use such inventory_method sec_301_7701-3 provides in relevant part that a business_entity that is not classified as a corporation under sec_301_7701-2 or an eligible_entity can elect its classification for federal tax purposes as provided in this section sec_301_9100-1 defines regulatory election as an election whose due_date is prescribed by a regulation published in the federal_register or a revenue_ruling revenue_procedure notice or announcement published in the internal_revenue_bulletin sec_301_9100-1 provides in relevant part that the commissioner has discretion to grant a reasonable extension of the time to make a regulatory election under all subtitles of the code except subtitles e g h and i if the taxpayer has acted reasonably and in good_faith and if granting that relief will not prejudice the interests of the government plr-129929-11 sec_301_9100-3 provides the standards that the commissioner will use in determining whether to grant an extension of time to make a regulatory election it also provides information and representations that must be furnished by the taxpayer to enable the internal_revenue_service to determine whether the taxpayer has satisfied these standards the relevant standards are whether the taxpayer acted reasonably and in good_faith and whether granting relief would prejudice the interests of the government sec_301_9100-3 provides that a taxpayer is deemed to have acted reasonably and in good_faith if the taxpayer requests relief under this section before the failure to make the regulatory election is discovered by the internal_revenue_service sec_301_9100-3 provides that a taxpayer is deemed to have acted reasonably and in good_faith if 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 provides that a taxpayer will not be considered to have acted reasonably and in good_faith if the taxpayer seeks to alter a return position for which an accuracy-related_penalty has been or could be imposed under sec_6662 at the time the taxpayer requests relief and the new position requires or permits a regulatory election for which relief is requested or if the taxpayer was informed in all material respects of the required election and related tax consequences but chose not to file the election furthermore a taxpayer ordinarily will not be considered to have acted reasonably and in good_faith if the taxpayer uses hindsight in requesting relief sec_301_9100-3 provides that the interests of the government are prejudiced if granting relief would result in a taxpayer having a lower tax_liability in the aggregate for all tax years affected by the regulatory election than the taxpayer would have had if the election had been timely made taking into account the time_value_of_money similarly if the tax consequences of more than one taxpayer are affected by the election the government’s interests are prejudiced if extending the time for making the election may result in the affected taxpayers in the aggregate having a lower tax_liability than if the election had been timely made sec_301_9100-3 provides that the interests of the government are ordinarily prejudiced if the tax_year in which the regulatory election should have been made or any_tax 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 before the taxpayer’s receipt of a ruling granting relief under this section plr-129929-11 revrul_70_564 1970_2_cb_109 provides that a new corporation must file a form_970 if that corporation wants to use the lifo inventory_method to account for lifo inventory received in a transfer that qualifies under sec_351 the information and representations furnished by parent and taxpayer establish that they have acted reasonably and in good_faith in this request furthermore granting an extension will not prejudice the interests of the government accordingly an extension of time is hereby granted to file the necessary form_970 for the taxable years ended tax_year this extension shall be for a period of days from the date of this ruling please attach a copy of this ruling to the form sec_970 when filed no opinion is expressed as to the application of any other provisions of the code or the regulations which may be applicable to the transactions described in this letter specifically no opinion is expressed regarding the propriety of the lifo inventory methods used by taxpayer and taxpayer or the propriety of taxpayer 1’s conversion from a corporation to a single-member limited_liability_company and taxpayer 2’s subsequent election to be treated as a corporation this ruling is directed only to the taxpayer that requested it sec_6110 provides that it may not be used or cited as precedent in accordance with the provisions of a power_of_attorney on file with this office we are sending a copy of this ruling letter to the taxpayer s authorized representatives please contact the person whose name and telephone number are shown above if you have any questions sincerely roy a hirschhorn chief branch office of associate chief_counsel income_tax accounting


internal_revenue_service department of the treasury index number washington dc person to contact telephone number refer reply to cc dom p si 3-plr-108147-99 date date number release date legend taxpayer year dear this letter responds to your letter dated date and subsequent correspondence requesting a ruling that taxpayer be given an extension of time to make the election under sec_469 of the internal_revenue_code and sec_1_469-9 of the income_tax regulations to treat all interests in rental real_estate as a single rental real_estate activity facts taxpayer has represented the following facts taxpayer qualifies under sec_469 and b to make the election to treat all interests in rental real_estate as a single activity however taxpayer failed to include the statement required by sec_1 g with the return filed for year to make the election effective for year taxpayer seeks relief under sec_301_9100-1 and sec_301_9100-3 of the procedure and administration regulations for the late election discussion under sec_469 the term passive_activity generally includes any rental_activity sec_469 provides a limited exception to this rule for taxpayers in a real_property business specifically sec_469 indicates that if a taxpayer meets plr-108147-99 the requirements of sec_469 the taxpayer’s rental real_estate activity will no longer be presumptively passive by its terms the exception under sec_469 is to be applied as if each interest of the taxpayer in rental real_estate were a separate activity however a taxpayer may elect to treat all interests in rental real_estate as a single activity sec_1_469-9 of the income_tax regulations provides that a qualifying taxpayer makes the election to treat all interests in rental real_estate as a single rental real_estate activity by filing a statement with the taxpayer’s original income_tax return for the taxable_year sec_1_469-9 describes the information that must be contained in the statement sec_301_9100-1 of the procedure and administration regulations provides that the commissioner may grant a reasonable extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code except subtitles e g h and i sec_301_9100-1 defines the term regulatory election as an election whose due_date is prescribed by a regulation published in the federal_register or a revenue_ruling revenue_procedure notice or announcement published in the internal_revenue_bulletin sec_301_9100-1 through provide the standards the commissioner uses to determine whether to grant an extension of time to make a regulatory election sec_301_9100-2 provides automatic extensions of time for making certain elections sec_301_9100-3 provides extensions of time for making elections that do not meet the requirements of sec_301_9100-2 sec_301_9100-3 provides that requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government conclusion in the present situation the requirements of sec_301_9100-1 and sec_301_9100-3 have been satisfied therefore taxpayer is granted an extension of time until days following the date of this letter to make the election under sec_469 to treat all interest in rental real_estate as a single activity effective year the election must be in the form of the statement required by sec_1_469-9 and attached to an amended_return for year a copy of this letter should be attached to the election and is included for that purpose plr-108147-99 except as specifically set forth above no opinion is expressed or implied as to the federal tax consequences of the transaction described above under any other provision of the code specifically no opinion is expressed concerning whether taxpayer meets the requirements of sec_469 or whether taxpayer materially participates in any activity in addition no opinion is expressed on taxpayer’s computation of modified_adjusted_gross_income under sec_469 for the years at issue this ruling is directed only to the taxpayer on whose behalf it was requested sec_6110 provides that it may not be used or cited as precedent pursuant to a power_of_attorney on file in this office a copy of this letter is being sent to taxpayer sincerely yours paul f kugler assistant chief_counsel passthroughs and special industries attachments copy of this letter copy for sec_6110 purposes


t c memo united_states tax_court elmer jon buckardt petitioner v commissioner of internal revenue respondent docket no 29924-09l filed date elmer jon buckardt pro_se lisa m oshiro for respondent memorandum findings_of_fact and opinion marvel judge petitioner petitioned the court to review determinations of the internal revenue service’s irs office of appeals appeals_office sustaining the filing of a notice_of_federal_tax_lien relating to petitioner’s unpaid federal income taxes for and and section civil penalty for the filing of a notice_of_federal_tax_lien relating to petitioner’s unpaid federal_income_tax for and sec_6702 penalties for and and a proposed levy to collect petitioner’s federal income taxes and sec_6702 penalties for pursuant to sec_6330 petitioner timely filed a petition seeking review of respondent’s determinations respondent filed a motion to permit levy pursuant to sec_6330 and a motion to impose a penalty under sec_6673 as discussed below we shall sustain the notices of determination and grant respondent’s motion to permit levy but shall not impose a penalty under sec_6673 at this time 1unless otherwise indicated section references are to the internal_revenue_code_of_1986 code as amended and rule references are to the tax_court rules_of_practice and procedure 2although respondent assessed and is attempting to collect the sec_6702 penalty the notice_of_federal_tax_lien filing and your right to a hearing under sec_6320 first lien notice and the related notice_of_determination showed a sec_6672 penalty and not a sec_6702 penalty however the activity record of settlement officer l silva who was assigned to the case and other parts of the attachment to the notice_of_determination show that settlement officer silva addressed the correct penalty we therefore treat the references to the sec_6672 penalty as typographical errors findings_of_fact some facts have been stipulated and are so found we incorporate the stipulated facts into our findings by this reference petitioner resided in washington when he filed his petition petitioner failed to file his federal_income_tax returns for respondent prepared substitutes for returns for petitioner under sec_6020 on dates that do not appear in the record respondent mailed petitioner and petitioner received a notice_of_deficiency for on date respondent assessed petitioner’s federal_income_tax liability interest and an addition_to_tax under sec_6651 for failure to timely file a return for at some point in respondent mailed petitioner and petitioner received separate notices of deficiency for and petitioner filed petitions in response to the notices of deficiency for and but this court dismissed both cases for failure to state a claim on date respondent assessed petitioner’s federal_income_tax liability interest and additions to tax under sec_6651 for failure to timely file a return and sec_6654 for failure to pay estimated_tax for on date respondent assessed petitioner’s federal_income_tax liability interest and additions to tax under sec_6651 for failure to timely file a return and sec_6654 for failure to pay estimated_tax for respondent issued petitioner notices of balance due for each year but petitioner failed to remit to respondent the amounts due at some point before date petitioner filed what respondent determined to be frivolous returns for on or about date petitioner mailed a letter to the irs in which petitioner asked questions such as which information he submitted to the irs was frivolous what was the meaning of frivolous position and arguments advanced as well as a number of questions regarding the sec_6702 penalty for frivolous tax returns and submissions in his letter petitioner stated that he expected a meaningful clarification of the reasons for the irs’ ‘frivolous’ allegation within days in conclusion petitioner stated that he preferred all correspondence in writing on june and september and respondent assessed petitioner sec_6702 penalties for filing frivolous federal_income_tax returns for and respectively on the same dates respondent issued petitioner notices of balance due 3on date respondent also assessed petitioner an addition_to_tax under sec_6651 for failure to timely pay tax for on date respondent assessed petitioner additions to tax under sec_6651 for failure to timely pay taxes for and on date respondent mailed petitioner the first lien notice informing him that a notice_of_federal_tax_lien had been filed with respect to his unpaid federal_income_tax liabilities for and and for the unpaid sec_6702 penalty assessed for on date respondent mailed petitioner a final notice_of_intent_to_levy and notice of your right to a hearing final notice with respect to his liability for the unpaid federal_income_tax liabilities and sec_6702 penalties for on date respondent mailed petitioner a lien notice informing him that a notice_of_federal_tax_lien had been filed with respect to his unpaid federal_income_tax liability for and the unpaid sec_6702 penalties assessed for and second lien notice on date petitioner mailed respondent a letter asserting that the irs had violated his due process rights in the date letter petitioner referred to the notices of deficiency for petitioner timely submitted three letters requesting a hearing in each letter he stated that he disagreed with respondent’s collection actions for the following reason a procedurally proper assessment is the instrument that establishes liability whether it be a tax itself the interest or penalties no 4as discussed above see supra note the first lien notice contained a typographical error and referred to the sec_6672 penalty assessment is on the record i request that a procedurally proper assessment be provided to me within days of this request i do not want a form_4340 which is merely presumptive evidence of an assessment in the letter requesting a hearing with respect to the final notice petitioner also stated that he had no receipts from a federally connected activity petitioner’s cases were assigned to settlement officer silva on date settlement officer silva mailed petitioner three letters acknowledging the receipt of his correspondence and scheduling a telephone hearing for date the letters informed petitioner that he would not be able to raise the issue of the underlying liabilities during the hearing because he had had prior opportunities to dispute the balances owed settlement officer silva also stated that the appeals_office would not consider the frivolous issues that petitioner had raised in his request for a sec_6330 hearing settlement officer silva enclosed transcripts of petitioner’s tax accounts and requested that he provide a completed form 433-a collection information statement for wage earners and self-employed individuals on or about date settlement officer silva mailed petitioner a letter stating that per petitioner’s request received date the sec_6330 hearing would be conducted through correspondence and that the date letter was petitioner’s sec_6330 hearing in the date letter settlement officer silva wrote that petitioner’s position was intended to delay or impede federal tax_administration or was a specified frivolous position settlement officer silva allowed petitioner additional time to amend his hearing request and raise legitimate issues such as collection alternatives challenges to the appropriateness of collection action or spousal defenses if applicable settlement officer silva again requested petitioner to provide a completed form 433-a in the date letter settlement officer silva also stated that if petitioner failed to withdraw frivolous issues from his requests for a hearing or withdraw those hearing requests sec_6702 authorized the irs to impose a dollar_figure penalty settlement officer silva acknowledged petitioner’s entitlement to challenge the underlying liabilities because the irs did not issue a notice_of_deficiency with respect to the sec_6702 penalties on date settlement officer silva mailed petitioner two letters similar to the date letter which constituted petitioner’s sec_6330 hearings with respect to the second lien notice and the levy notice by the date letters settlement officer silva gave petitioner the opportunity to amend his hearing requests and submit the forms a by date on date petitioner mailed a letter demanding that settlement officer silva accept his returns as filed and withdraw the notice of lien within days reiterating his demand for a record of assessment and stating that under the code the domestic income of most americans is not taxable petitioner also demanded that his case be assigned to an appeals officer rather than a settlement officer instead of enclosing a completed form 433-a petitioner attached a statement claiming among other things that information sought in the form 433-a was protected by the fourth and fifth amendments to the u s constitution on date respondent sent petitioner three notices of determination concerning collection action s under sec_6320 and or sustaining the two notices of lien and the final notice according to the attachments to the notices of determination the appeals_office concluded that all legal and administrative requirements had been met petitioner failed to raise any nonfrivolous issues or suggest collection alternatives and the liens and the levy properly balanced the need for efficient collection_of_taxes with the concerns regarding the intrusiveness of the collection actions petitioner timely petitioned this court challenging respondent’s determinations in the petition petitioner challenged respondent’s authority to make a substitute for return demanded a record of assessment other than a form_4340 certificate of assessments payments and other specified matters and asserted he owed no taxes for because his income derived from a domestic statutory_grouping source which did not appear in any operative_section opinion i the collection actions a in general sec_6321 imposes a lien in favor of the united_states on all property and property rights of a taxpayer liable for taxes after a demand for the payment of the taxes has been made and the taxpayer fails to pay those taxes the lien arises when the assessment is made sec_6322 sec_6320 requires the secretary5 to notify the taxpayer in writing of the filing of a notice_of_federal_tax_lien and of the taxpayer’s right to an administrative hearing on the matter similarly before proceeding with a levy the secretary must notify the taxpayer in writing of the right to a hearing sec_6330 and b during the hearing a taxpayer may raise any relevant issue including challenges to the appropriateness of the collection action and possible collection alternatives sec_6330 a taxpayer is precluded 5the term secretary means the secretary_of_the_treasury or_his_delegate sec_7701 from contesting the existence or amount of the underlying tax_liability unless the taxpayer did not receive a notice_of_deficiency for the tax_liability in question or did not otherwise have an opportunity to dispute the tax_liability see sec_6330 114_tc_604 following a hearing the appeals_office must issue a notice_of_determination regarding the validity of the filed federal_tax_lien and or whether the proposed levy action may proceed the appeals_office is required to take into consideration verification presented by the secretary that the requirements of applicable law and administrative procedure have been met relevant issues raised by the taxpayer and whether the proposed collection action appropriately balances the need for efficient collection_of_taxes with a taxpayer’s concerns regarding the intrusiveness of the proposed collection action sec_6330 if the taxpayer disagrees with the appeals office’s determination the taxpayer may seek judicial review by appealing to this court sec_6330 we have jurisdiction to review the commissioner’s determination when the underlying tax_liability consists of frivolous_return penalties 130_tc_44 where the validity of the underlying tax_liability is properly at issue the court reviews the determination regarding such liability de novo sego v commissioner t c pincite 114_tc_176 where the validity of the underlying tax_liability is not properly at issue the court reviews the determination of the appeals_office for abuse_of_discretion sego v commissioner t c pincite goza v commissioner t c pincite an abuse_of_discretion occurs if the appeals_office exercises its discretion arbitrarily capriciously or without sound basis in fact or law 112_tc_19 see also 125_tc_301 aff’d 469_f3d_27 1st cir b review of respondent’s determinations petitioner acknowledges that he received the notices of deficiency for accordingly he may not challenge in this proceeding the existence or the amount of his federal_income_tax liabilities for the years at issue see sec_6330 petitioner did not receive a notice_of_deficiency with respect to the sec_6702 penalties because the deficiency procedures of sections do not apply to frivolous_return penalties under sec_6702 sec_6703 petitioner also did not have an opportunity to dispute those penalties accordingly petitioner was entitled to challenge the sec_6702 penalties during the sec_6330 hearing see callahan v commissioner t c pincite see also 136_tc_455 although petitioner was entitled to challenge the sec_6702 penalties during the sec_6330 hearing in his correspondence with the appeals_office he did not present evidence or argument regarding why he was not liable for them instead he stated that there was no assessment on the record and that he should have been provided with a procedurally proper assessment rather than a form_4340 in subsequent correspondence he demanded definitions of the words frivolous and position and asserted other similar arguments but he did not argue that he should not be liable for the sec_6702 penalties generally we may consider only those issues that the taxpayer raised during the sec_6330 hearing see 129_tc_107 118_tc_488 sec_301_6330-1 q a-f3 proced admin regs petitioner did not properly raise the issue of his liability for the sec_6702 penalties during the sec_6330 hearing and we therefore shall not consider it in this proceeding see giamelli v commissioner t c pincite granger v commissioner t c 6in addition we deem petitioner to have conceded the issue of whether he is liable for the sec_6702 penalties because his petition contains no specific allegations or supporting facts regarding them see rule b petitioner’s frivolous and groundless arguments at trial also do not raise any legitimate issue regarding these penalties accordingly respondent has no burden of production under sec_7491 with respect to the sec_6702 penalties see 123_tc_213 118_tc_358 memo stockton v commissioner tcmemo_2009_186 sec_301_6330-1 q a-f3 proced admin regs because the issue of petitioner’s underlying liabilities is not properly before us we review for abuse_of_discretion the appeals office’s conclusion to proceed with the collection actions in his requests for a sec_6330 hearing and in the petition petitioner stated that he disagreed with the collection actions because the form_4340 was merely presumptive evidence of an assessment we previously have held that no specific form of verification of an assessment is required that no particular document need be provided to a taxpayer at a sec_6330 hearing and that a form_4340 satisfies the verification requirements of sec_6330 see 124_tc_189 117_tc_183 the forms in the record show that respondent assessed the tax_liabilities that he now intends to collect from petitioner and that respondent sent petitioner notices of balance due petitioner has not alleged any irregularity in the assessment procedure that would raise a question about the validity of the assessments or the information contained in the forms petitioner failed to raise any other issue during his sec_6330 hearing we reject the other arguments petitioner raised in his petition and at trial petitioner asserts that respondent lacked the authority to prepare substitutes for returns for petitioner petitioner is mistaken under sec_6020 the secretary has the authority to execute a return i f any person fails to make any return required by any internal revenue law or regulation made thereunder at the time prescribed therefor or makes willfully or otherwise a false_or_fraudulent_return in his petition petitioner also contended that he did not owe any_tax because all income derived from a domestic statutory_grouping source which did not appear in any operative_section and therefore could not be included in gross_income we reject petitioner’s argument because the code imposes an income_tax on income from sources within and without the united_states see sec_1_1-1 income_tax regs 7the notices of determination with respect to the lien notices refer to a taxpayer that appears to be unrelated to petitioner and are poorly written and edited however these lien notices show that settlement officer silva fully addressed the merits of petitioner’s case the record reflects that the appeals_office properly verified that the requirements of all applicable laws and administrative procedures were met accordingly we hold that the appeals_office did not abuse its discretion in determining to proceed with collection against petitioner c respondent’s motion to permit levy generally sec_6330 provides that the secretary may not proceed with collection by levy if the taxpayer timely requests a sec_6330 hearing and while any appeals from such a hearing are pending sec_6330 provides an exception to the suspension of the levy imposed under sec_6330 if the taxpayer’s underlying tax_liability is not at issue and the court determines that good cause is shown not to suspend the levy we have jurisdiction to consider respondent’s motion to permit levy see burke v commissioner t c pincite we have held that good cause exists when the taxpayer fails to assert any meritorious arguments as to why the collection action may not proceed id pincite- respondent requests us to permit levy only with respect to the federal_income_tax liabilities for and not with respect to the sec_6702 penalties as discussed supra p petitioner is barred from challenging the existence or amount of his underlying tax_liabilities for in this proceeding see sec_6330 in addition petitioner failed to advance any nonfrivolous argument or offer a collection alternative throughout this proceeding petitioner has failed to raise any meritorious argument we shall grant respondent’s motion to permit levy ii sec_6673 penalty sec_6673 authorizes the tax_court to require a taxpayer to pay to the united_states a penalty not in excess of dollar_figure when it appears that proceedings have been instituted or maintained by the taxpayer primarily for delay or that the taxpayer’s position in such proceeding is frivolous or groundless see also burke v commissioner t c pincite we have imposed the sec_6673 penalty when taxpayers abused the procedural protections afforded by sec_6320 and sec_6330 see id 115_tc_576 petitioner is no stranger in this court he has filed four petitions for redetermination of deficiencies in buckardt v commissioner tcmemo_2010_ we sustained the commissioner’s determination of deficiencies and additions to tax under sec_6651 and and a for but declined to impose the sec_6673 penalty however we warned petitioner that we would do so in the future if he continued to make frivolous arguments or instituted or maintained proceedings primarily for delay see id in buckardt v commissioner t c dkt no date bench opinion which we decided after the trial in this case we sustained the commissioner’s determination of the deficiency and accuracy-related_penalty under sec_6662 for and required mr buckardt to pay a dollar_figure penalty pursuant to sec_6673 petitioner’s statements in the petition and the reply and at trial demonstrate that he has not fully abandoned arguments that we typically describe as frivolous however this is petitioner’s first collection review proceeding in this court he cooperated in the stipulation process and did not raise his income grouping argument at trial in the exercise of our discretion we shall not impose a sec_6673 penalty at this time but we warn petitioner that we may impose this penalty if he returns to this court and makes similar arguments in the future 8as discussed above see supra p petitioner also filed petitions in this court in in response to the notices for deficiencies for both of those cases were dismissed for failure to state a claim upon which relief can be granted we have considered all of the arguments raised by either party and to the extent not discussed above we find them to be irrelevant or without merit to reflect the foregoing an order will be entered granting respondent’s motion to permit levy and denying respondent’s motion to impose the sec_6673 penalty and decision will be entered for respondent