t c memo united_states tax_court crevenne c and barbara a carrillo petitioners v commissioner of internal revenue respondent docket no 2593-04l filed date ps filed a petition for judicial review pursuant to sec_6320 and sec_6330 i r c in response to determinations by r that lien and levy actions were appropriate held because ps have advanced groundless complaints in dispute of the notices of lien and levy r’s determination to proceed with collection action is sustained held further a penalty under sec_6673 i r c is due from ps and is awarded to the united_states in the amount of dollar_figure crevenne c and barbara a carrillo pro sese rollin g thorley for respondent memorandum findings_of_fact and opinion wherry judge this case arises from a petition for judicial review filed in response to notices of determination concerning collection action s under sec_6320 and or the issues for decision are whether respondent may proceed with collection action as so determined and whether the court sua sponte should impose a penalty under sec_6673 findings_of_fact some of the facts have been stipulated and are so found the stipulations of the parties with accompanying exhibits are incorporated herein by this reference petitioners on or about date filed a joint form_1040 u s individual_income_tax_return for the taxable_year they reported adjusted_gross_income of dollar_figure total_tax of dollar_figure withholding of dollar_figure and a refund amount of dollar_figure they similarly on or about date filed a joint_return for reporting substantial adjusted_gross_income total_tax of dollar_figure withholding of dollar_figure and a refund amount of dollar_figure the internal_revenue_service irs assessed the reported tax for and on date and date respectively unless otherwise indicated section references are to the internal_revenue_code_of_1986 as amended and rule references are to the tax_court rules_of_practice and procedure petitioners thereafter filed a series of refund claims and or amended returns with respect to their and returns in these documents petitioners attempted to change their reporting position to reflect zero for all pertinent items of income and deduction and to request refunds for the balance of tax withheld and not previously refunded the irs issued denials of these claims and advised petitioners therein of their right to contest disallowance by an administrative appeal or by instituting suit in the u s district_court or u s court of federal claims within years respondent assessed additional tax and interest with respect to and on august and date respectively notices of balance due for were issued on date date date date and date notices of balance due for were issued on date date and date on their returns for and petitioners reported zero for all items of income and deduction and requested refunds for the full amount claimed thereon as federal_income_tax withheld they attached to each of these returns written statements espousing their assertions that no law required them the record contains little information as to the circumstances surrounding these assessments petitioners however have not separately challenged them apart from their generalized objections to liability for any income taxes to file a return or to pay income taxes respondent issued to petitioners notices of deficiency for and on date and date respectively petitioners responded to each notice with a letter acknowledging their receipt of the notice and their right to file a petition with the tax_court but stating inter alia before i file pay or do anything with respect to your ‘notice ’ i must first establish whether or not it was sent pursuant to law whether or not it has the ‘force and effect of law ’ and whether you had any authority to send me the notice petitioners at no time petitioned this court for redetermination of the deficiencies and penalties reflected in the notices respondent assessed the tax penalty and interest amounts due for on date and sent a notices of balance due on that date and on date likewise tax penalty and interest for were assessed on date and a notice of balance due was sent on that date respondent issued to petitioners a final notice_of_intent_to_levy and notice of your right to a hearing dated date with regard to the and years and a notice_of_federal_tax_lien filing and your right to a hearing under sec_6320 dated date with regard to the through taxable years the latter notice reflected a total amount due for the years in issue of dollar_figure petitioners timely submitted a form request for a collection_due_process_hearing with respect to the two notices they included with their form an attachment in which they disputed the validity of and requested that the appeals officer have at the hearing copies of documents pertaining to among other things the underlying tax_liability the assessment the notice_and_demand for payment and the verification from the secretary that the requirements of any applicable law or procedure had been met they concluded the attachment with the following this is also to remind you that i will be tape recording the cdp hearing i will also have a court reporter and irwin schiff who has my power_of_attorney and who will be assisting me respondent on date issued to petitioners a further final notice_of_intent_to_levy and notice of your right to a hearing pertaining to their tax_year petitioners again submitted a timely form with an attachment irwin schiff and his activities in protest of the tax laws are well known to this court see eg schiff v commissioner tcmemo_1992_183 and cases cited therein respondent also on date apparently in inadvertence issued to petitioners’ bank a notice_of_levy with respect to and however the appeals officer handling petitioners’ case testified that the levy was released on account of the pending collection hearing request accordingly this activity has no bearing on our review of the specific collection actions that are the subject of the instant proceeding and will not be further addressed despite the emphasis given thereto by petitioners at trial and on brief substantially identical to that provided with their previous form on date an initial letter was sent to petitioners advising that their case had been received by the las vegas nevada appeals_office for consideration and briefly explaining the appeals process petitioners responded to this letter the following day with a 45-page typewritten statement entitled constructive legal notice and purporting to reserve all of our constitutional rights and to set forth petitioners’ arguments against collection action by a letter dated date anthony j aguiar the appeals officer to whom petitioners’ case had been assigned scheduled a hearing for date in las vegas and asked that petitioners contact him within days to indicate whether the date and time were convenient petitioners in turn sent two letters to the appeals officer with respect to the scheduled hearing in the first dated date petitioners focused on the contention that they had received no taxable_income in the constitutional sense the letter also advised that petitioners would be recording the hearing and would have a court reporter with them as a witness the second lengthy communication received by the irs on date essentially reiterated the points pressed earlier in the attachments to petitioners’ forms on date the appeals officer attempted to hold the scheduled conference with mr carrillo but mr carrillo refused to proceed when he was not permitted to record the hearing thereafter on date respondent issued a separate but identical notice_of_determination concerning collection action s under sec_6320 and or to each petitioner sustaining the proposed lien and levy actions an attachment to the notice addressed the various issues raised by petitioners indicated that petitioners were not entitled to raise their underlying liabilities on account of failure to seek prior available recourse in the district_court for and or tax_court for and and pointed out that petitioners had raised no issue as to collection alternatives petitioners’ petition disputing the notices of determination was filed on date and reflected an address in las vegas nevada in general petitioners ask that the court declare the notices of determination null and void petitioners’ complaints with respect to the administrative proceedings include the following no legitimate hearing under sec_6330 ever took place petitioners were not permitted to record a hearing petitioners were denied the opportunity to raise issues they deemed relevant eg the existence of the underlying tax_liability and requested documentation had not been produced eg record of the assessments statutory notice_and_demand for payment any valid notice_of_deficiency authorization under sec_7401 from the secretary for the instant collection actions and verification from the secretary that all applicable_requirements were met petitioners pray that this court declare invalid and nullify completely the date determination and not remand the case to the irs for a new hearing order the government to cease enforcement activity and release the filed notice of lien and order the government to reimburse petitioners for all costs incurred in submitting the instant petition after the pleadings were closed in this case petitioners reiterated their request that this court declare invalid the determination at issue by means of a document and multiple attachments filed on date as a motion to dismiss for lack of jurisdiction petitioners supplemented this motion with additional materials on date and respondent filed a notice of objection on date the court denied petitioners’ motion on date petitioners thereafter served a request for admissions on respondent and filed a copy with the court on date the paragraphs generally asked respondent to admit to a broad the court notes that to the extent that the petition seeks reasonable administrative and or litigation costs pursuant to sec_7430 any such claim is premature and will not be further addressed see rule spectrum of alleged failures to comply with statutory requirements respondent filed a response denying the allegations in all material respects by notice issued on date the instant case was set for trial at the session beginning on date in las vegas nevada respondent then filed a motion for summary_judgment and to impose a sec_6673 penalty on date petitioners filed an objection to respondent’s motion on date wherein they principally complained about respondent’s various characterizations of positions taken by petitioners as frivolous groundless or merit less sic they also took issue with respondent’s assertion that failure to allow recording of the hearing was harmless error the court on date issued an order denying the motion for summary_judgment ruling as set forth below as respondent correctly notes in the motion for summary_judgment the issues raised by petitioners during the administrative process have been repeatedly rejected by this and other courts moreover maintenance of these arguments has served as grounds for imposition of penalties under sec_6673 however the case in its current posture does present a procedural shortcoming on date this court issued 121_tc_8 in which it was held that taxpayers are entitled pursuant to sec_7521 to audio record sec_6330 hearings the taxpayer in that case had refused to proceed when denied the opportunity to record and we remanded the case to allow a recorded appeals hearing id in contrast we have distinguished and declined to remand cases where the administrative proceedings took place prior to our opinion in keene v commissioner supra where the taxpayer had participated in an appeals_office hearing albeit unrecorded and where all issues raised by the taxpayer could be properly decided from the existing record e g id pincite frey v commissioner tcmemo_2004_87 durrenberger v commissioner tcmemo_2004_44 brashear v commissioner tcmemo_2003_196 kemper v commissioner tcmemo_2003_195 the circumstances of the instant case are closely analogous to those in keene v commissioner supra and diverge from those where it was determined that remand was not necessary and would not be productive critically the letter scheduling the hearing was sent on date the aborted hearing was held on date and the notices of determination were issued on date although these dates are nearly a month approximately months and more months respectively after the opinion in keene v commissioner supra petitioners were not afforded an opportunity for a recorded conference further because the requested face-to-face hearing was not held there still exists a possibility that petitioners might have raised one or more nonfrivolous issues if the meeting had proceeded in this situation the court will not accept respondent’s invitation to characterize the failure to allow recording as harmless error hence the court will deny respondent’s motion for summary_judgment at this time as in keene v commissioner supra pincite however we admonish petitioners that if they persist in making frivolous and groundless tax_protester arguments in any further proceedings with respect to this case rather than raising relevant issues as specified in sec_6330 the court will consider granting a future motion for summary_judgment in such an instance the court would also be in a position to impose a penalty under sec_6673 petitioners followed this denial with a motion for summary_judgment of their own filed on date they alleged that they were not given notice of the denial of their refund claims after respondent filed a response the court denied petitioners’ motion on date as their claims were both factually and legally insufficient to support any relief in this proceeding we also cautioned petitioners to take heed of our earlier warning with regard to sec_6673 this case was called from the calendar of the trial session of the court in las vegas nevada on date and a trial was held the following day at the outset the court explained to mr carrillo who appeared on behalf of himself and his wife as follows the court and if you review my order which was issued in this case mr carrillo and that order is dated date denying the government’s motion for summary_judgment i have already held as a matter of law that the government did fail to provide you with the right to record a hearing which you were entitled to so you can consider that issue established and i believe that mr thorley acknowledged that the court as a whole had concluded that and the government has now acquiesced in that error the issue that you need to keep and be aware of is that in another case issued the same day as keene the kemper case the court found that where the taxpayers are making only frivolous arguments for delay which have been routinely rejected by our court and all higher courts that there is no need to remand the case for a hearing if that is the only case that the taxpayer is making unless the taxpayer is making an argument that is permitted under there is no need to remand it we can decide the case on the evidence before us and this is your trial it is being recorded verbatim word-for-word and you can get a copy of it and so if you have any other issues that you have not raised yet or if other issues that you have not raised yet but for which you believe are legitimate--although read my order and i told you what i think on the ones that i have seen to date--then you should raise them here mr carrillo however proceeded to rehash matters relied upon in petitioners’ earlier papers and filings and failed to identify any specific colorable issues for remand the only potentially novel issue cited was that of a date notice_of_levy issued to petitioners’ bank as to which see supra note the parties subsequently filed posttrial briefs petitioners recapitulated the positions taken throughout these proceedings and at trial including focusing once again on lack of a recorded hearing i collection actions a general rules opinion sec_6321 imposes a lien in favor of the united_states upon all property and rights to property of a taxpayer liable for tax where there exists a failure to pay the tax_liability after demand for payment the lien generally arises at the time assessment is made sec_6322 sec_6323 however provides that such lien shall not be valid against any purchaser holder of a security_interest mechanic’s_lienor or judgment lien creditor until the secretary files a notice of lien with the appropriate public officials sec_6320 then sets forth procedures applicable to afford protections for taxpayers in lien situations sec_6320 establishes the requirement that the secretary notify in writing the person described in sec_6321 of the filing of a notice of lien under sec_6323 this notice required by sec_6320 must be sent not more than business days after the notice of tax_lien is filed and must advise the taxpayer of the opportunity for administrative review of the matter in the form of a hearing before the irs office of appeals sec_6320 and sec_6320 and c grants a taxpayer who so requests the right to a fair hearing before an impartial appeals officer generally to be conducted in accordance with the procedures described in sec_6330 d and e likewise sec_6331 authorizes the commissioner to levy upon all property and rights to property of a taxpayer where there exists a failure to pay any_tax liability within days after notice_and_demand for payment sec_6331 and sec_6330 then specify germane protective procedures sec_6331 generally requires that a person be provided with at least days’ prior written notice of the commissioner’s intent to levy before collection may proceed sec_6331 also indicates that this notification should include a statement of available administrative appeals sec_6330 expands in several respects upon the premise of sec_6331 forbidding collection by levy until the taxpayer has been furnished notice of the opportunity for administrative review of the matter in the form of a hearing before the irs office of appeals sec_6330 grants a taxpayer who so requests the right to a fair hearing before an impartial appeals officer sec_6330 addresses the matters to be considered at the hearing sec_6330 matters considered at hearing --in the case of any hearing conducted under this section-- requirement of investigation --the appeals officer shall at the hearing obtain verification from the secretary that the requirements of any applicable law or administrative procedure have been met issues at hearing -- a in general --the person may raise at the hearing any relevant issue relating to the unpaid tax or the proposed levy including-- i appropriate spousal defenses ii challenges to the appropriateness of collection actions and iii offers of collection alternatives which may include the posting of a bond the substitution of other assets an installment_agreement or an offer-in-compromise b underlying liability --the person may also raise at the hearing challenges to the existence or amount of the underlying tax_liability for any_tax period if the person did not receive any statutory_notice_of_deficiency for such tax_liability or did not otherwise have an opportunity to dispute such tax_liability once the appeals officer has issued a determination regarding the disputed collection action sec_6330 allows the taxpayer to seek judicial review in the tax_court or a district_court depending upon the type of tax at issue in considering whether taxpayers are entitled to any relief from the commissioner’s determination this court has established the following standard of review where the validity of the underlying tax_liability is properly at issue the court will review the matter on a de novo basis however where the validity of the underlying tax_liability is not properly at issue the court will review the commissioner’s administrative determination for abuse_of_discretion 114_tc_604 b analysi sec_1 appeals hearing hearings conducted under sec_6320 and sec_6330 are informal proceedings not formal adjudications 115_tc_329 115_tc_35 there exists no right to subpoena witnesses or documents in connection with these hearings 118_tc_365 affd 329_f3d_1224 11th cir 118_tc_162 davis v commissioner supra pincite taxpayers are entitled to be offered a face-to-face hearing at the appeals_office nearest their residence where the taxpayer declines to participate in a proffered face-to-face hearing hearings may also be conducted by telephone or correspondence katz v commissioner supra pincite- dorra v commissioner tcmemo_2004_16 sec_301 d q a-d6 and d7 proced admin regs furthermore once a taxpayer has been given a reasonable opportunity for a hearing but has failed to avail himself or herself of that opportunity we have approved the making of a determination to proceed with collection based on the appeals officer’s review of the case file see eg taylor v commissioner tcmemo_2004_25 affd 130_fedappx_934 9th cir leineweber v commissioner tcmemo_2004_17 armstrong v commissioner tcmemo_2002_224 gougler v commissioner tcmemo_2002_185 mann v commissioner tcmemo_2002_48 thus a face-to-face meeting is not invariably required regulations promulgated under sec_6320 and sec_6330 likewise incorporate many of the foregoing concepts as follows q-d6 how are cdp hearings conducted a-d6 cdp hearings are informal in nature and do not require the appeals officer_or_employee and the taxpayer or the taxpayer’s representative to hold a face-to-face meeting a cdp hearing may but is not required to consist of a face- to-face meeting one or more written or oral communications between an appeals officer_or_employee and the taxpayer or the taxpayer’s representative or some combination thereof q-d7 if a taxpayer wants a face-to-face cdp hearing where will it be held a-d7 the taxpayer must be offered an opportunity for a hearing at the appeals_office closest to taxpayer’s residence or in the case of a business taxpayer the taxpayer’s principal_place_of_business if that is not satisfactory to the taxpayer the taxpayer will be given an opportunity for a hearing by correspondence or by telephone if that is not satisfactory to the taxpayer the appeals officer_or_employee will review the taxpayer’s request for a cdp hearing the case file any other written communications from the taxpayer including written communications if any submitted in connection with the cdp hearing and any notes of any oral communications with the taxpayer or the taxpayer’s representative under such circumstances review of those documents will constitute the cdp hearing for the purposes of sec_6330 sec_301_6330-1 q a-d6 and d7 proced admin regs see also sec_301_6320-1 q a-d6 and d7 proced admin regs substantially identical language except for final reference to sec_6320 this court has cited the above regulatory provisions and corresponding promulgations under sec_6320 with approval see eg taylor v commissioner supra leineweber v commissioner supra dorra v commissioner supra gougler v commissioner supra with respect to the instant matter the record reflects that petitioners were provided with an opportunity for a face-to-face hearing on date the hearing did not proceed when petitioners were not permitted to record the meeting as explained in our previous order in this case in 121_tc_8 this court held that taxpayers are entitled pursuant to sec_7521 to audio record sec_6330 hearings the taxpayer in that case had refused to proceed when denied the opportunity to record and we remanded the case to allow a recorded appeals hearing id in contrast again as noted in the court’s date order we have distinguished and declined to remand cases where the taxpayer had participated in an appeals_office hearing albeit unrecorded and where all issues raised by the taxpayer could be properly decided from the existing record e g id pincite frey v commissioner tcmemo_2004_87 durrenberger v commissioner tcmemo_2004_44 brashear v commissioner tcmemo_2003_196 kemper v commissioner tcmemo_2003_195 stated otherwise cases will not be remanded to appeals nor determinations otherwise invalidated merely on account of the lack of a recording when to do so is not necessary and would not be productive see eg frey v commissioner supra durrenberger v commissioner supra brashear v commissioner supra kemper v commissioner supra see also 117_tc_183 a principal scenario falling short of the necessary or productive standard exists where the taxpayers rely on frivolous or groundless arguments consistently rejected by this and other courts see eg frey v commissioner supra brashear v commissioner supra kemper v commissioner supra because no hearing had been conducted at all in petitioners’ case we declined to grant respondent’s motion for summary_judgment the record as it then existed did not foreclose the possibility that petitioners might have raised valid arguments had a hearing been held accordingly we provided petitioners an opportunity before the court at the trial session in las vegas to identify any legitimate issues they wished to raise that could warrant further consideration of the merits of their case by the appeals_office or this court petitioners however merely continued to focus on the denial of a recorded hearing and offered no substantive issues of merit hence despite repeated warnings and opportunities the only contentions other than the recorded hearing advanced by petitioners are as will be further discussed below of a nature previously rejected by this and other courts the record therefore does not indicate that any purpose would be served by remand or additional proceedings the court concludes that all pertinent issues relating to the propriety of the collection determination can be decided through review of the materials before it review of underlying liabilities as regards and petitioners in asserting that they are not bound to pay federal income taxes are essentially seeking to challenge even the underlying liabilities they reported on their original returns no notice_of_deficiency was issued to petitioners for either or but petitioners filed amended returns and or refund claims advancing the position they are now espousing these requests were denied and petitioners were advised of their opportunity to contest the denials in the u s district_court or u s court of federal claims petitioners did not file suit this court has ruled that taxpayers are not precluded by sec_6330 from challenging self-reported liabilities when they have not otherwise been provided with a chance to do so 122_tc_1 however we have also recently concluded that a taxpayer whose amended returns and concomitant claims for refund were disallowed and who was notified of the opportunity to institute a refund_suit in the u s district_court or u s court of federal claims received an opportunity to dispute the self-reported liability within the meaning of sec_6330 farley v commissioner tcmemo_2004_168 alternatively and to the extent that the various assessments against petitioners might fall outside the foregoing precedent we have in other circumstances involving amended returns and the advancement of only frivolous arguments without explicitly addressing whether disallowance of refund claims could constitute the requisite opportunity for dispute simply characterized the taxpayer’s challenge as meritless with the following observation sec_6330 provides that a taxpayer may raise any ‘relevant’ issue at the collection hearing it does not say that the taxpayer may raise ‘any’ issue petitioner raised only groundless and frivolous issues not relevant issues hathaway v commissioner tcmemo_2004_15 petitioners have challenged the existence of their underlying tax_liabilities only through generalized contentions that no statute imposes or requires them to pay income taxes they have at no time alleged that they did not in fact receive the funds on which the tax_liabilities for and are based thus even if petitioners were permitted to challenge their underlying liabilities in this proceeding they have raised no genuine relevant issue as to the amount of such liabilities for or with respect to and petitioners were issued statutory notices of deficiency and did not file petitions challenging those notices in this court furthermore communications from petitioners expressly reference the notices of deficiency making clear that these documents were received to the extent that petitioners have argued that they should nonetheless be entitled to challenge their underlying liabilities on grounds that the notices were invalid due to a lack of a delegation of authority from the secretary to the individual in ogden utah signing the notices this contention is without merit the secretary or_his_delegate may issue notices of deficiency sec_6212 sec_7701 and a i the secretary’s authority in this matter was previously delegated to district directors and directors of service centers has since been redelegated consistent with the restructuring of the irs and may in turn be redelegated to officers or employees under the supervision of persons so authorized sec_301_6212-1 sec_301_7701-9 and c proced admin regs deleg order no rev date see also nestor v commissioner t c pincite accordingly because petitioners received valid notices of deficiency and did not timely petition for redetermination they are precluded under sec_6330 from disputing their underlying and liabilities in this proceeding their remaining contentions generally challenging the existence of any statute imposing or requiring them to pay income_tax warrant no further comment see 737_f2d_1417 5th cir we perceive no need to refute these arguments with somber reasoning and copious citation of precedent to do so might suggest that these arguments have some colorable merit c review for abuse_of_discretion petitioners have also made various arguments relating to aspects of the assessment and collection procedures that we review for abuse_of_discretion action constitutes an abuse_of_discretion under this standard where arbitrary capricious or without sound basis in fact or law 112_tc_19 as a threshold matter we point out that petitioners’ demands and allegations regarding the authority of the individuals issuing the notices of tax_lien tax_lien_filing and intent to levy are meritless for reasons substantially identical to those just discussed in connection with the notices of deficiency the secretary or_his_delegate including the commissioner may issue these collection notices and authority to so issue notices regarding liens and to levy upon property has in turn been delegated to a host of pertinent collection and compliance personnel sec_6320 sec_6330 sec_7701 and sec_12 sec_7803 sec_301_6320-1 sec_301_6330-1 proced admin regs deleg order no rev date deleg order no rev date see also 119_tc_252 everman v commissioner tcmemo_2003_137 additionally we note that there exists no statutory requirement that such collection notices be signed everman v commissioner supra petitioners have claimed that no valid assessments support the proposed collection and have asserted that they should have been provided with copies of form 23c summary record of assessment with copies of the tax returns from which the assessments emanated and with verification from the secretary that the requirements of any applicable law or administrative procedure were met federal tax assessments are formally recorded on a record of assessment in accordance with sec_6203 the commissioner is not required to use form 23c in making an assessment roberts v commissioner t c pincite furthermore sec_6330 mandates neither that the appeals officer rely on a particular document in satisfying the verification requirement nor that the appeals officer actually give the taxpayer a copy of the verification upon which he or she relied craig v commissioner supra pincite nestor v commissioner supra pincite a form_4340 certificate of assessments payments and other specified matters for instance constitutes presumptive evidence that a tax has been validly assessed pursuant to sec_6203 davis v commissioner t c pincite and cases cited thereat consequently absent a showing by the taxpayer of some irregularity in the assessment procedure that would raise a question about the validity of the assessments a form_4340 reflecting that tax_liabilities were assessed and remain unpaid is sufficient to support collection action under sec_6330 id pincite we have specifically held that it is not an abuse_of_discretion for an appeals officer to rely on form_4340 nestor v commissioner supra pincite davis v commissioner supra pincite or a computer transcript of account schroeder v commissioner tcmemo_2002_190 mann v commissioner tcmemo_2002_48 to comply with sec_6330 here the record contains forms for and indicating that assessments were made for each of these years and that taxes remain unpaid petitioners have cited no particular irregularities in the assessment procedure in addition to the specific dictates of sec_6320 and sec_6330 the secretary upon request is directed to furnish to the taxpayer a copy of pertinent parts of the record of assessment setting forth the taxpayer’s name the date of assessment the character of the liability assessed the taxable_period if applicable and the amounts assessed sec_6203 sec_301 proced admin regs a taxpayer receiving a copy of form_4340 has been provided with all the documentation to which he or she is entitled under sec_6203 and sec_301_6203-1 proced admin regs roberts v commissioner supra pincite n this court likewise has upheld collection actions where taxpayers were provided with literal transcripts of account so- called mftrax see eg frank v commissioner tcmemo_2003_88 swann v commissioner tcmemo_2003_70 the notices of determination recite appeals has reviewed the certified computer transcripts and verified the assessments copies of the certified transcripts have been mailed to you furthermore arguments similar to petitioner’s statements concerning copies of the tax returns from which assessments were made have been summarily rejected see eg bethea v commissioner tcmemo_2003_278 fink v commissioner tcmemo_2003_61 the court concludes that petitioners’ complaints regarding the assessments and verification are meritless petitioners have denied receiving the notice_and_demand for payment that sec_6303 establishes should be given within days of the making of an assessment however a notice of balance due constitutes a notice_and_demand for payment within the meaning of sec_6303 craig v commissioner supra pincite the forms indicate that petitioners were sent such notices of balance due for each of the tax years involved petitioners have also attempted to raise sec_7401 as a defense sec_7401 directs that no civil_action for inter alia collection or recovery_of taxes shall be commenced unless authorized or sanctioned by the secretary this section has no bearing on the instant proceeding in that the filing of a notice_of_federal_tax_lien under sec_6323 and the levying upon property under sec_6331 are administrative actions that do not necessitate the institution of a civil suit 461_us_677 yazzie v commissioner tcmemo_2004_233 affd __ fed appx __ 9th cir thus with respect to those issues enumerated in sec_6330 and subject_to review in collection proceedings for abuse_of_discretion petitioners have not raised any spousal defenses valid challenges to the appropriateness of the collection action or collection alternatives as this court has noted in earlier cases rule b states that a petition for review of a collection action shall contain clear and concise assignments of each and every error alleged to have been committed in the notice_of_determination and that any issue not raised in the assignments of error shall be deemed conceded see lunsford v commissioner t c pincite 114_tc_176 for completeness we have addressed various points advanced by petitioners during the administrative process and this litigation but the items listed in sec_6330 were not pursued during any proceedings accordingly the court concludes that respondent’s determination to proceed with collection of petitioners’ tax_liabilities was not an abuse_of_discretion ii sec_6673 penalty sec_6673 authorizes the court to require the taxpayer to pay a penalty not in excess of dollar_figure when it appears to the court that inter alia 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 in 115_tc_576 we warned that taxpayers abusing the protections afforded by sec_6320 and sec_6330 through the bringing of dilatory or frivolous lien or levy actions will face sanctions under sec_6673 we have since repeatedly disposed of cases premised on arguments akin to those raised herein summarily and with imposition of the sec_6673 penalty see eg craig v commissioner t c pincite and cases cited thereat with respect to the instant matter and despite petitioners’ denials in their objection to respondent’s motion for summary_judgment we are convinced that petitioners instituted this proceeding primarily for delay throughout the administrative and litigation process petitioners advanced contentions and demands previously and consistently rejected by this and other courts they submitted lengthy communications quoting citing using out of context and otherwise misapplying portions of the internal_revenue_code regulations supreme court decisions and other authorities while their procedural stance concerning recording was correct they ignored the court’s explicit warning that any further proceedings would be justified only in the face of relevant and nonfrivolous issues moreover petitioners were on multiple occasions expressly alerted to the potential use of sanctions in their case yet mr carrillo appeared at the trial session in las vegas without any legitimate evidence or argument in support of their position he instead continued to espouse those positions that had been explicitly addressed and rejected in this court’s order of date or in other cases previously decided by the court the court sua sponte concludes that a penalty of dollar_figure should be awarded to the united_states in this case to reflect the foregoing an appropriate decision will be entered


internal_revenue_service number release date index number --------------- --------- -------------------------- ------------------------------- in re --------------------------------------------------- ------------------------------------------------------ department of the treasury washington dc person to contact ----------------------- id no --------------- telephone number --------------------- refer reply to cc intl - plr-157729-02 date date legend --------------------- ------------------------ --------------------------- ---------------------------- ----------------------------------------------- taxpayer --------------------------------------------------------------------------------- date a date b manager individual a management company cpa firm x office of cpa firm in country y country y dear --------- this replies to a letter dated date in which taxpayer requests an extension of time under treas reg ' to make the election provided by i r c ' d in accordance with notice_89_79 1989_2_cb_392 to be treated as a domestic_corporation for u s tax purposes for the tax_year ended on date a the information submitted for consideration is substantially as set forth below -------------------------------------------------- ---------------------------------- ------------ --------- the ruling contained in this letter is predicated upon facts and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party this office has not verified any of the above material submitted in support of the request for a ruling verification of the factual information representations and other data may be required as a part of the audit process taxpayer’s operations are managed in country y by management company manager is the account executive in charge of overseeing operations for taxpayer including tax matters date b was the due_date for making the sec_953 election for the tax_year ended on date a about ten months before date b manager contacted individual a a senior manager with the x office of cpa firm in country y and engaged cpa firm to prepare the sec_953 election statement the affidavits of manager and individual a and the facts submitted describe the circumstances that led to the discovery of and the reasons for the missed sec_953 election as of the date of this request for relief it is stated that the irs has not contacted taxpayer about the missed sec_953 election for the tax_year ended on date a sec_301 -1 b provides that an election includes an application_for relief in respect of tax and defines a regulatory election as an election whose due_date is prescribed by a regulation a revenue_ruling revenue_procedure notice or announcement sec_301_9100-1 provides that the commissioner has discretion to grant a taxpayer a reasonable extension of time under the rules set forth in sec_301_9100-3 to make a regulatory election under all subtitles of the internal_revenue_code except subtitles e g h and i sec_301_9100-3 provides that requests for relief subject_to this section will be granted when the taxpayer provides the evidence including affidavits described in sec_301_9100-3 to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and the grant of relief will not prejudice the interests of the government notice_89_79 provides that the election to be treated as a domestic_corporation under in re plr-157729-02 ' d to be effective for a taxable_year must be filed by the due_date prescribed in i r c ' b with extensions for the united_states income_tax return that is due if the election becomes effective in the present situation notice_89_79 fixes the time to make the election under ' d therefore the commissioner has discretionary authority under ' c to grant taxpayer an extension of time provided that taxpayer satisfies the standards set forth under ' a based on the facts and circumstances of this case we conclude that taxpayer satisfies ' a accordingly taxpayer is granted an extension of time until days from the date of this ruling letter to make the election provided by i r c ' d in accordance with notice_89_79 1989_2_cb_392 to be treated as a domestic_corporation for u s tax purposes for the tax_year ended on date a the granting of an extension of time is not a determination that taxpayer is otherwise eligible to file the ' d election ' a no ruling has been requested and none is expressed as to the application of any other section of the code or regulations to the facts presented a copy of this ruling letter should be associated with the ' d election this ruling is directed only to the taxpayer who requested it i r c ' j 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 and the other authorized representative sincerely associate chief_counsel international by s allen goldstein allen goldstein reviewer enclosure copy for purposes


internal_revenue_service number info release date march cc psi 1-genin-107912-03 uilc dear we are responding to your facsimile correspondence requesting relief in order to establish s_corporation status effective as of date your account has since been updated to reflect an election as requested you should receive an acceptance letter from the service_center within the next days reflecting the appropriate effective date no further action is needed on your part unless you either fail to receive an acknowledgment letter or if the effective date listed is incorrect in addition the irs has developed two new cd-roms to help educate small_business owners on their tax responsibilities introduction to federal taxes for small_business self-employed and a virtual small_business workshop these two cd- roms are free and can be ordered by calling the irs also provides a special resource website www irs gov smallbiz which is dedicated to providing information to small_business taxpayers please keep this letter with your tax records and feel free to provide a copy of it to your authorized representative we hope that the above information proves helpful sincerely yours s dianna k miosi dianna k miosi chief branch associate chief_counsel passthroughs and special industries


internal_revenue_service department of the treasury index number washington dc person to contact telephone number number release date refer reply to cc dom p si plr-102592-99 date july legend x y state d1 d2 d3 d4 d5 this responds to your date letter and prior correspondence submitted on behalf of x requesting rulings under sec_1362 of the internal_revenue_code and that x be given an extension of time to elect to treat y as a qualified_subchapter_s_subsidiary qsub for its taxable_year beginning d4 under sec_301 of the procedure and administration regulations cc dom p si plr-102592-99 facts x was incorporated under state law and elected subchapter_s status for its first taxable_year beginning d1 on d2 x formed a wholly-owned subsidiary y on advice from tax professionals x filed a form_966 electing to treat y as a qsub as of d2 however x was not eligible to elect to treat y as a qsub as of d2 therefore x’s formation of y caused x to become a member_of_an_affiliated_group thereby terminating x’s subchapter_s_corporation election x was eligible however to elect to treat y as a qsub as of its taxable_year beginning d4 but failed to file timely an election during the period d2 to d3 y paid dividends to x until d5 neither x nor its shareholders were aware that the formation of y terminated x’s subchapter_s_corporation election x represents that the formation of y was not motivated by tax_avoidance or retroactive tax planning in addition x and its shareholders agree to make any adjustments consistent with the treatment of x as an s_corporation as may be required by the secretary with respect to the period specified by sec_1362 thus x will report the dividends it received from y during the period d2 to d3 consistent with x being a subchapter_s_corporation for that period in addition y will be taxed under subchapter_c of the code and will be subject_to the rules permitting wholly-owned c_corporation subsidiaries of s_corporations for the period d2 to d3 law and analysis sec_1361 defines an s_corporation with respect to any taxable_year as a small_business_corporation for which an s election under sec_1362 is in effect for that year sec_1361 provides that one of the requirements for a taxpayer to be a small_business_corporation is that the taxpayer is a domestic_corporation that is not an ineligible_corporation sec_1361 as in effect for taxable years beginning before date provides that an ineligible_corporation is a corporation that is a member_of_an_affiliated_group within the meaning of sec_1504 without regard to the exceptions contained in sec_1504 sec_1504 provides than an affiliated_group exists where a common parent_corporation directly owns at least of the total voting power and at least of the total value of the stock of another corporation sec_1361 defines the term qualified_subchapter_s_subsidiary as a domestic_corporation which is not an ineligible_corporation if percent of the stock of the corporation is owned by the s_corporation and the s_corporation elects to treat the corporation as a qsub the statutory provision however does not provide guidance on the manner in which the qsub election is made or the effective date of the election cc dom p si plr-102592-99 sec_1362 provides that an s election under sec_1362 shall be terminated whenever at any time on or after the first day of the taxable_year for which the corporation is an s_corporation the corporation ceases to be a small_business_corporation the termination is effective on and after the date of cessation sec_1362 provides that if an election under sec_1362 by any corporation a was not effective for the taxable_year for which made determined without regard to sec_1362 by reason of a failure to meet the requirements of sec_1361 or to obtain shareholder consents or b was terminated under paragraph or of sec_1362 the secretary determines that the circumstances resulting in such ineffectiveness or termination were inadvertent no later than a reasonable period of time after discovery of the circumstances resulting in such effectiveness or termination steps were taken a so that the corporation is a small_business_corporation or b to acquire the required shareholder consents and the corporation and each person who was a shareholder in the corporation at any time during the period specified pursuant to this subsection agrees to make such adjustments consistent with the treatment of the corporation as an s_corporation as may be required by the secretary with respect to such period then notwithstanding the circumstances resulting in such ineffectiveness or termination the corporation shall be treated as an s_corporation during the period specified by the secretary the committee reports accompanying the subchapter_s_revision_act_of_1982 in discussing sec_1362 as it relates to inadvertent terminations state in part as follows if the internal_revenue_service determines that a corporation’s subchapter_s_election is inadvertently terminated the service can waive the effect of the terminating event for any period if the corporation timely corrects the event and if the corporation and the shareholders agree to be treated as if the election had been in effect for such period the committee intends that the internal_revenue_service be reasonable in granting waivers so that corporations whose subchapter_s eligibility requirements have been inadvertently violated do not suffer the tax consequences of a termination if no tax_avoidance would result from the continued subchapter_s treatment in granting a waiver it is hoped the taxpayers and the government will work out agreements that protect the revenues without undue_hardship to taxpayers it is expected that the waiver may be made retroactive for all years or retroactive for the period in which the corporation again became eligible for subchapter_s treatment depending on the facts cc dom p si plr-102592-99 s rep no 97th cong 2d sess 1982_2_cb_718 notice_97_4 1997_1_irb_24 provides a temporary procedure for making a qsub election under notice_97_4 a taxpayer makes a qsub election with respect to a subsidiary by filing a form_966 subject_to certain modifications with the appropriate service_center the election may be effective on the date the form_966 is filed or up to days prior to the filing of the form provided that the date is not before the parent’s first taxable_year beginning after date and that the subsidiary otherwise qualifies as a qsub for the entire period for which the retroactive election is in effect sec_301_9100-1 provides that the commissioner has discretion to grant a reasonable extension of time under the rules set forth in sec_301_9100-3 to make a regulatory election sec_301_9100-1 defines a 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 will use to determine whether to grant an extension of time to make an election sec_301_9100-1 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 requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301 a conclusions based solely on the facts submitted and representations made we conclude that x’s subchapter_s_corporation election terminated on d2 we also conclude that the termination was inadvertent under sec_1362 under the provisions of sec_1362 x will be treated as continuing to be an s_corporation during the period from d2 to the present provided that x’s subchapter_s_corporation election did not otherwise terminate under sec_1362 and that x is treated as the owner of y for the period d2 to d3 this ruling is further conditioned on x and y not filing a consolidated_return for the period d2 to d3 and x reporting all dividends distributed by y for the same period consistent with x being a subchapter_s_corporation and y being a wholly-owned c_corporation subsidiary of x cc dom p si plr-102592-99 based solely on the facts submitted and representations made we conclude that the requirements of sec_301_9100-3 have been satisfied as a result x is granted an extension of time of sixty days from the date of this letter to elect to treat y as a qsub effective as of d4 except as specifically set forth above no opinion is expressed concerning the federal tax consequences of the facts described above under any other provision of the code specifically no opinion is expressed concerning whether x’s subchapter_s_corporation election was a valid election under sec_1362 or whether y otherwise qualifies as a qsub for federal tax purposes the rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination this ruling is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent pursuant to the power_of_attorney on file with this office copies of this letter are being sent to x and x’s second authorized representative sincerely signed paul k kugler paul f kugler assistant chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes


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 tege eoeg teb presp-148154-06 date date dear -------------- this letter is in response to your application_for an allocation of authority to issue dollar_figure------- ----------------- in clean renewable energy bonds crebs under sec_54 of the internal_revenue_code the code pursuant to sec_54 of the internal_revenue_code the code and notice_2005_98 2005_52_irb_1211 and after review of your application submitted on date including supplements thereto we have determined that the projects described in appendix a attached hereto are qualified for purposes of sec_54 and will be owned by one or more qualified borrowers we allocate authority to ----------------------------------- ------------ the issuer a qualified issuer under sec_54 to issue up to dollar_figure-------------- of clean renewable energy bonds crebs bonds issued pursuant to this allocation must be designated by the issuer as bonds for purposes of sec_54 for the projects described in appendix a up to the amount allocated for each project described in appendix a bonds so designated must be issued on or before date please be aware that in order for bonds to be crebs the applicable_requirements of the code including without limitation sec_54 notice_2005_98 and notice_2006_7 2006_10_irb_559 must be met please note that creb proceeds may be used to reimburse capital expenditures paid_by qualified borrowers for qualified projects only if the provisions of sec_54 are met sec_54 of the code imposes a limitation of dollar_figure on the amount of crebs which may be issued to finance qualified projects the limitation sec_54 provides that the limitation is to be allocated by the secretary of treasury in such manner as the secretary deems appropriate except that no more than dollar_figure of the limitation may be allocated to finance qualified projects of qualified borrowers which are governmental bodies presp-148154-06 section of notice_2005_98 2005_52_irb_1211 provides that the limitation will be allocated among qualified projects for which a share of such limitation has been requested beginning with the project s requesting the smallest share in dollar amount and continuing with the project s requesting the next-smallest share until the total limitation has been exhausted however in the event that dollar_figure has been allocated to qualified projects of qualified borrowers that are governmental bodies the remaining shares of the limitation will be allocated under the methodology described in the previous sentence only to qualified projects of qualified borrowers that are not governmental bodies for purposes of allocating the limitation among projects all qualified projects located at the same site and owned by the same qualified_borrower are treated as a single project and each project is treated as requesting a single allocation an allocation of shares of the limitation cannot be made with respect to the projects owned by the borrowers listed in appendix b because such borrowers are governmental bodies and dollar_figure has already been allocated to applications requesting a smaller share of the limitation to finance qualified projects owned by qualified borrowers that are governmental bodies we appreciate your submission of the application_for our consideration and encourage you to continue to pursue your plans for constructing clean renewable energy projects if you have any questions with respect to this allocation please contact --------------------- ------------------------------------------------------------------------------------------------------------------ -- ---------------------------------------- of the office of division counsel associate chief_counsel tax-exempt and government entities on -------------------- not a toll-free call except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter for purposes of the renewable_electricity_production_credit under sec_45 of the code no inference may be drawn from this allocation that any project listed in the appendices attached hereto is a qualified_facility or that electricity to be produced at such project s is electricity from a qualified_energy resource at a qualified_facility within the meaning of sec_45 this determination is directed only to the applicant named above sec_6110 of the code provides that it may not be used or cited as precedent a copy of this letter must be attached to any form 8038-g information_return for tax- exempt governmental obligations filed for bonds issued pursuant to this allocation presp-148154-06 the allocation contained in this letter is based upon information and representations submitted by the applicant for the creb allocation and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the application_for an allocation it is subject_to verification on examination sincerely assistant chief_counsel exempt_organizations employment_tax government entities tax exempt government entities by timothy l jones senior counsel tax-exempt_bonds branch presp-148154-06 borrower name ------------------------------ ---------- ------------------------------ ---------- ------------------------------ ---------- total appendix a project type project location hydropower facility solar_energy_facility hydropower facility -------------------------------- --------------------- -------------------------------- ---------------- -------------------------------- -------------------------- amount allocated ------------- --------------- --------------- ------------------ presp-148154-06 borrower name ----------------------------- ----------- ----------------------------- ----------- total appendix b project type project location hydropower facility hydropower facility -------------------------------- ------------------------- -------------------------------- -------------------------- amount requested --------------- --------------- ------------------


internal_revenue_service department of the treasury index number number release date washington dc person to contact telephone number refer reply to cc intl plr date date legend taxpayer deferral years individual a dear this replies to a letter dated date in which taxpayer requests an extension of time under sec_301_9100-3 to elect the provisions of revproc_89_45 1989_2_cb_596 for the deferral years the information submitted for consideration is substantially as set forth below the ruling contained in this letter is predicated upon facts and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party this office has not verified any of the material submitted in support of the request for a ruling verification of the factual information representations and other data may be required as a part of the audit process prior to becoming a u s resident taxpayer established and contributed to canadian registered retirement savings plans rrsps no contributions have been made to these plans since taxpayer became a u s resident in addition no distributions have been made by these plans all u s tax returns have been timely filed but without an election under revproc_89_45 to defer u s income_tax on current earnings_of the rrsps taxpayer became aware of revproc_89_45 while reading a newspaper article dealing with its filing_requirements after several unsuccessful attempts to engage the services of a tax professional knowledgeable about revproc_89_45 taxpayer finally engaged in re plr the services of individual a an attorney and certified_public_accountant individual a informed taxpayer of the need to file the election and how to proceed with a request to extend the time for filing the elections for prior years taxpayer’s failure to make the election under revproc_89_45 was not discovered by the irs prior to this request for a ruling sec_301_9100-1 provides that the commissioner has discretion to grant a reasonable extension of time under the standards set forth in sec_301_9100-3 to make a regulatory election under all subtitles of the internal_revenue_code except subtitles e g h and i sec_301 -1 b defines a regulatory election as an election whose due_date is prescribed by a regulation a revenue_ruling revenue_procedure notice or announcement sec_301_9100-3 provides standards for extensions of time for making regulatory elections when the deadline for making the election is other than a due_date prescribed by statute sec_301_9100-3 provides that requests for relief subject_to this section will be granted when the taxpayer provides the evidence including affidavits described in sec_301_9100-3 to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and the grant of relief will not prejudice the interests of the government in the present situation revproc_89_45 provides the procedures that a beneficiary of a rrsp must follow to elect to defer u s tax on earnings accrued in the plan during the taxable_year therefore the commissioner has discretionary authority under sec_301_9100-1 to grant taxpayer an extension of time provided that taxpayer satisfies the standards set forth in sec_301_9100-3 based on the facts and circumstances of this case we conclude that taxpayer satisfies sec_301_9100-3 accordingly taxpayer is granted an extension of time until days from the date of this ruling letter to elect the provisions of revproc_89_45 for the deferral years no ruling has been requested and none is expressed as to the application of any other section of the code or regulations to the facts presented a copy of this ruling letter should be associated with the deferral years this ruling is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent in re plr pursuant to a power_of_attorney on file in this office a copy of this letter is being sent to your authorized representative sincerely s allen goldstein allen goldstein reviewer office of the associate chief_counsel international