Court Opinion

ID: 4336470
Source: CourtListenerOpinion
Date Created: 2018-11-14 02:52:19.18906+00
Date Added: 2024-06-11T07:51:59.272652
License: Public Domain

T.C. Memo. 2007-118

                      UNITED STATES TAX COURT

                TIMOTHY L. CLOUSE, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent

     Docket No. 13119-02L.             Filed May 9, 2007.

     Timothy L. Clouse, pro se.

     Anita A. Gill, for respondent.

                        MEMORANDUM OPINION

     WELLS, Judge:   This matter is before the Court on

respondent’s motion for summary judgment pursuant to Rule 121.1

The issue we must decide is whether respondent may proceed to

     1
      Unless otherwise indicated, all Rule references are to the
Tax Court Rules of Practice and Procedure, and all section
references are to the Internal Revenue Code, as amended.
                               - 2 -

collect petitioner’s outstanding tax liability by levy pursuant

to section 6330.

                            Background

     At the time of filing the petition, petitioner resided in

Fremont, Ohio.

     Petitioner filed a Federal income tax return for taxable

year 1998 showing an amount due.   Respondent assessed the amount

due and sent petitioner notice and demand for payment.     On

June 23, 2001, respondent sent petitioner a Letter 1058, Final

Notice--Notice of Intent to Levy and Notice of Your Right to a

Hearing.   The Letter 1058 shows an outstanding liability for

taxable year 1998 of $1,290.61.

     On July 19, 2001, petitioner submitted a timely Form 12153,

Request for a Collection Due Process Hearing.   The Form 12153 was

accompanied by a letter from petitioner’s representative, Jerry

A. Jewett (Mr. Jewett),2 containing frivolous arguments.    On

March 21, 2002, respondent’s settlement officer held a face-to-

face hearing with petitioner and Mr. Jewett.    Petitioner provided

a court reporter to transcribe the hearing.

     2
      By order dated Feb. 20, 2004, Mr. Jewett was suspended from
practicing before this Court for 3 years for failure to comply
with the American Bar Association’s Model Rules of Professional
Conduct. Mr. Jewett subsequently withdrew as counsel of record
in the instant case.
                                - 3 -

     On July 12, 2002, respondent issued to petitioner a notice

of determination.   On August 13, 2002, petitioner submitted a

timely petition containing frivolous arguments to this Court.

                             Discussion

     Summary judgment is intended to expedite litigation and

avoid unnecessary and expensive trials and may be granted where

there is no genuine issue of material fact and a decision may be

rendered as a matter of law.   Rule 121(a) and (b); Fla. Peach

Corp. v. Commissioner, 90 T.C. 678, 681 (1988).      The moving party

bears the burden of proving that there is no genuine issue of

material fact, and factual inferences are viewed in a light most

favorable to the nonmoving party.       Craig v. Commissioner, 119
T.C. 252, 260 (2002); Dahlstrom v. Commissioner, 85 T.C. 812, 821

(1985).   The party opposing summary judgment must set forth

specific facts that show that a genuine question of material fact

exists and may not rely merely on allegations or denials in the

pleadings.    Grant Creek Water Works, Ltd. v. Commissioner, 91
T.C. 322, 325 (1988); Casanova Co. v. Commissioner, 87 T.C. 214,

217 (1986).

     Section 6330 provides that no levy may be made on any

property or right to property of a person unless the Secretary

first notifies him or her in writing of the right to a hearing

before the Appeals Office.   The Appeals officer must verify at
                                 - 4 -

the hearing that the applicable laws and administrative

procedures have been followed.    Sec. 6330(c)(1).   At the hearing,

the person requesting a hearing may raise any relevant issues

relating to the unpaid tax or the proposed levy, including

appropriate spousal defenses, challenges to the appropriateness

of collection actions, and collection alternatives.    Sec.

6330(c)(2)(A).   The person may challenge the existence or amount

of the underlying tax, however, only if he or she did not receive

any statutory notice of deficiency for the tax liability or did

not otherwise have an opportunity to dispute the tax liability.

Sec. 6330(c)(2)(B).   A taxpayer who has self-assessed a liability

has not had the opportunity to dispute his tax liability and may

raise the underlying liability in a collection review proceeding.

See Montgomery v. Commissioner, 122 T.C. 1, 9 (2004).

     Where the validity of the underlying tax liability is

properly in issue, the Court will review the matter de novo.

Where the validity of the underlying tax is not properly in

issue, however, the Court will review the Commissioner’s

administrative determination for abuse of discretion.     Sego v.

Commissioner, 114 T.C. 604, 610 (2000); Goza v. Commissioner, 114
T.C. 176, 181-182 (2000).
                               - 5 -

     The record indicates that the only issues petitioner raised

throughout the section 6330 administrative process and in his

petition to this Court were frivolous tax protester arguments.

We do not address petitioner’s frivolous arguments with somber

reasoning and copious citations of precedent, as to do so might

suggest that these arguments possess some degree of colorable

merit.   See Crain v. Commissioner, 737 F.2d 1417, 1417 (5th Cir.

1984).

     Accordingly, we hold that no genuine issue of material fact

exists requiring trial and that respondent is entitled to summary

judgment.   Respondent’s determination to proceed with the

proposed levy to collect petitioner’s tax liability for 1998 was

not an abuse of discretion.

     Section 6673(a)(1) authorizes the Court to impose a penalty

not in excess of $25,000 when it appears to the Court that, inter

alia, the proceedings have been instituted or maintained by the

taxpayer primarily for delay or that the position of the taxpayer

in the proceedings is frivolous or groundless.   In Pierson v.

Commissioner, 115 T.C. 576, 581 (2000), we issued a warning

concerning the imposition of a penalty under section 6673(a)(1)

on those petitioners abusing the protections afforded by sections

6320 and 6330 through the bringing of dilatory or frivolous lien

or levy actions.   The Court has since repeatedly disposed of
                                 - 6 -

cases premised on arguments akin to those raised herein summarily

and with imposition of the section 6673 penalty.3      See, e.g.,

Craig v. Commissioner, supra at 264-265 (and cases cited

thereat).

     Respondent has not sought a section 6673 penalty in the

instant case; however, the Court considers the issue sua sponte.

Although we do not impose a penalty on petitioner, we take this

opportunity to admonish petitioner that the Court will consider

imposing such a penalty should he return to the Court in the

future in an attempt to delay collection or advance frivolous or

groundless arguments.

     To reflect the foregoing,

                                              An appropriate order and

                                         decision will be entered.

     3
      We note that on Dec. 20, 2006, Congress enacted the Tax
Relief and Health Care Act of 2006, Pub. L. 109-432, div. A, sec.
407, 120 Stat. 2960, which, through amendments to secs. 6702 and
6330, instructs the Secretary to prescribe a list of positions
identified as frivolous. A request for a sec. 6330 hearing based
on any such position may then be disregarded and is not subject
to further administrative or judicial review. The new provisions
are effective only for issues raised after the Secretary
prescribes the list of frivolous positions.