Court Opinion

ID: 4333809
Source: CourtListenerOpinion
Date Created: 2018-11-14 01:22:31.36268+00
Date Added: 2024-06-11T14:47:27.792305
License: Public Domain

118 T.C. No. 23

                UNITED STATES TAX COURT

           THOMAS W. ROBERTS, Petitioner v.
     COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 1991-01L.             Filed May 3, 2002.

     R’s Appeals officer (A) issued a notice of deter-
mination to P in which that officer determined to
proceed with collection with respect to P’s taxable
year 1996. In making that determination, A relied on
Form 4340, Certificate of Assessments, Payments, and
Other Specified Matters (Form 4340). A provided to P a
copy of that form with the notice of determination but
did not provide to him a copy of Form 23C, Assessment
Certificate--Summary Record of Assessments (Form 23C).
R has for a number of years been engaged in making a
transition in R’s assessment procedure from the general
use of a manually prepared Form 23C to the general use
of a computer-generated Revenue Accounting Control
System (RACS) Report 006 (RACS 006).

     Held: R’s use of the computer-generated RACS 006,
instead of the manually prepared Form 23C, in making an
assessment with respect to P’s taxable year 1996 did
not constitute an irregularity in R’s assessment proce-
dure. Held, further, R made a valid assessment with
                               - 2 -

     respect to P’s taxable year 1996. Held, further, for
     purposes of complying with sec. 6330(c)(1), I.R.C., it
     was not an abuse of discretion for A to have relied on
     Form 4340 to verify R’s assessment with respect to P’s
     taxable year 1996. See Davis v. Commissioner, 115 T.C.
     35 (2000). Held, further, any inability of P before or
     at R’s Appeals Office hearing to examine Forms 23C and
     4340 and to cross-examine witnesses did not constitute
     an abuse of discretion. See Nestor v. Commissioner,
     118 T.C. 162 (2002); Davis v. Commissioner, supra.
     Held, further, R did not abuse R’s discretion in deter-
     mining in the notice of determination to proceed with
     collection with respect to P’s taxable year 1996.

          Held, further: P is required to pay a penalty
     under sec. 6673(a), I.R.C.

     Thomas W. Roberts, pro se.

     Joanne B. Minsky, for respondent.

                              OPINION

     CHIECHI, Judge:   This case is before the Court on the

parties’ cross-motions for partial summary judgment.1   We shall

     1
      Both petitioner and respondent incorrectly characterized
their respective motions as motions for summary judgment. In
those motions, the parties address only the following two of the
three allegations of error in the petition:

     a)   The appeals officer failed to get proper verifica-
          tion from the Secretary that the service met the
          requirements of any applicable law or administra-
          tive procedure as required by §6330(c)(1), 26 CFR
          §301.6320-[1]T(e)(1) and 26 CFR §301.6330-
          [1]T(e)(1).

     b)   The appeals officer failed to furnish requested
          documentation prior to the hearing and refused to
                                                   (continued...)
                               - 3 -

deny petitioner’s motion for partial summary judgment (peti-

tioner’s motion), and we shall grant respondent’s motion for

partial summary judgment (respondent’s motion).

                            Background

     The record establishes and/or the parties do not dispute the

following.

     Petitioner resided in Winter Park, Florida, at the time he

filed the petition in this case.

     Petitioner filed a Federal income tax (tax) return (return)

for his taxable year 1996, which showed $42,710 as the tax due

for that year.   When petitioner filed his 1996 return, he did not

pay the amount of tax due shown in that return.

     On December 21, 1998, petitioner made the following request

(December 21, 1998 request) with respect to his taxable year 1996

by letter to the Disclosure Office (Disclosure Office) of the

Internal Revenue Service (IRS):

     Please provide a copy of the actual, duly signed and
     certified, Form 23-C, Certificate of Assessments, as
     per 26 CFR 301.6203-1and [sic] Internal Revenue Manual
     3(17)(46)2.3, for Thomas W. Roberts, a natural person,
     for the year 1996. A current copy of a sample Form 23-

     1
      (...continued)
          furnish the requested documentation at the due
          process hearing that Petitioners [sic] requested.

The parties do not address in their respective motions the
following remaining allegation of error in the petition:
“c) These failures resulted in the Petitioner’s inability to
examine documents and to cross examine witnesses against him.”
We shall, however, address that allegation below.
                               - 4 -

     C is attached. (Do not send a RACS Report or an Indi-
     vidual Master File, as these are not responsive to this
     request). As this request is placed under an act of
     Congress, The Privacy Act, it supersedes any agency
     policy preventing the disclosure of the signed assess-
     ment.

     On January 5, 1999, the Disclosure Office sent a letter

(January 5, 1999 Disclosure Office letter) to petitioner in

response to his December 21, 1998 request.    That letter stated in

pertinent part:

     In your letter you requested a copy of Form 23-C for
     the tax year 1996. All 23-C assessment documents would
     be available only from the service center where the
     assessment was made. In your case however, there have
     been no assessments other than the processing of your
     tax return plus penalty and interest. We are enclosing
     a transcript for your reference.

     On October 11, 1999, respondent issued to petitioner a final

notice of intent to levy with respect to petitioner’s taxable

year 1996 (final notice of intent to levy).    Thereafter, on a

date not disclosed by the record, petitioner requested a hearing

with the IRS Appeals Office (Appeals Office) with respect to that

notice.   On August 8, 2000, the Appeals Office held a hearing

with petitioner with respect to the final notice of intent to

levy.

     On January 12, 2001, the Appeals Office issued to petitioner

a “NOTICE OF DETERMINATION CONCERNING COLLECTION ACTION(S) UNDER

SECTION 6320 and/or 6330" (notice of determination) with respect

to petitioner’s taxable year 1996.     That notice stated in perti-

nent part:
                         - 5 -

To the best of my [the Appeals officer’s] knowledge,
with the information available to me, I have determined
that the Collection Division has followed all applic-
able laws, policies, regulations and procedures:

     1)   Assessments were made and notice and demand
          for payment of the taxes under IRC §6303(a)
          were sent to the taxpayer’s last known ad-
          dress, along with Publication 1, Your Rights
          as a Taxpayer.

     2)   You neglected or refused to pay the tax; per
          IRC §6321, a lien in favor of the United
          States upon all property and rights to prop-
          erty was created;

     3)   Letter 1058, Final Notice, Notice of Intent
          to Levy and Notice of Your Right to a Hear-
          ing, was sent to the [sic] you, along with
          Publication 594, Understanding the Collection
          Process, in accordance with IRC §6330(d).

Mr. Roberts, you were informed by the Court and Chief
Counsel’s Office that your argument regarding the
perceived lack of a valid summary record of assessment
is not valid. During your hearing, you offered no
proof that the assessment document is flawed in any
manner. We have enclosed Form 4340, Certificate of
Assessments and Payments, for the year 1996.

Your claim that Revenue Officer Colt in [sic] not an
employee of IRS and has not been issued a bond that is
required by the Statutes at Large has no relevance to
this proceeding and has been previously answered by the
Disclosure Office.

Your concern that the actions of the Collection Divi-
sion are unduly intrusive was weighed against the
Service’s responsibility to apply the tax law fairly to
all. Mr. Roberts, you voluntarily filed the 1996
return and reported your taxable income. You now
refuse to pay the balance owed. Our records indicate
that you have not filed a tax return since 1996.
Enforcement action is fully warranted in this case.

You chose not to offer collection alternatives at this
time.
                                 - 6 -

     The Appeals officer relied on Form 4340, CERTIFICATE OF

ASSESSMENTS, PAYMENTS, AND OTHER SPECIFIED MATTERS (Form 4340),

in making the statement in the notice of determination that

“Assessments were made”.    The Appeals officer provided a copy of

that form to petitioner with the notice of determination.    Form

4340 that respondent provided to petitioner set forth, inter

alia, petitioner’s name, the date of assessment, the character of

the liability assessed, the taxable period, and the amounts

assessed.

                              Discussion

     A partial summary adjudication may be made that does not

dispose of all the issues in a case if it is shown, inter alia,

that there is no genuine issue of material fact with respect to

the question(s) on which partial summary adjudication is sought.

Rule 121(b);2 Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520

(1992), affd. 17 F.3d 965 (7th Cir. 1994).    We conclude that

there is no genuine issue of material fact regarding the ques-

tions raised in petitioner’s motion and in respondent’s motion.

     The validity of the underlying tax liability for 1996 is not

at issue in this case.    Consequently, we shall apply an abuse-of-

discretion standard.     Sego v. Commissioner, 114 T.C. 604, 610

     2
      All Rule references are to the Tax Court Rules of Practice
and Procedure. Unless otherwise indicated, all section refer-
ences are to the Internal Revenue Code in effect at all relevant
times.
                              - 7 -

(2000); Goza v. Commissioner, 114 T.C. 176, 182 (2000).

     According to petitioner, petitioner’s “motion addresses only

one error; the non-existence of an assessment” with respect to

petitioner’s taxable year 1996.3   In support of his contention

that respondent did not make an assessment with respect to that

year, petitioner points out that “The appeals officer acknowl-

edged that there is no 23C document in Petitioner’s case” and

that, in making the assessment with respect to petitioner’s

taxable year 1996, respondent did not use Form 23C, Assessment

Certificate--Summary Record of Assessments (Form 23C),4 but

instead used a computer and a computer-generated report known as

Revenue Accounting Control System (RACS) Report 006 (RACS 006).5

     3
      We disagree that petitioner’s motion addresses only “the
non-existence of an assessment”. As discussed supra note 1,
petitioner’s motion addresses two of the three allegations of
error in the petition.
     4
      According to petitioner, respondent’s Internal Revenue
Manual (IRM) requires that, in making an assessment of tax,
respondent use Form 23C signed by an authorized official. To
support that contention, petitioner relies on what he identifies
as IRM sec. 3.17.46.2.4(1) (Jan. 1, 1999), which he quotes in
petitioner’s motion as follows:

     All assessments must be certified by signature of an
     authorized official on the Summary Record of Assessment
     (Form 23C, Assessment Certificate-Summary Record of
     Assessments). A signed Summary Record of Assessment
     authorizes issuance of notices and other collection
     actions (refer to IRC Regulations 301 6203-1 [sic]).
     5
      Petitioner also contends that the Disclosure Office admit-
ted that respondent made no assessment with respect to peti-
tioner’s taxable year 1996 when that office stated the following
                                                   (continued...)
                              - 8 -

     As we understand petitioner’s position, he is arguing that,

because respondent used a computer and RACS 006, instead of Form

23C, to make an assessment with respect to petitioner’s taxable

year 1996, he has shown an irregularity in respondent’s assess-

ment procedure with respect to that year.   That is because,

according to petitioner, respondent’s failure to use Form 23C to

make an assessment with respect to petitioner’s taxable year 1996

means that there was no signed summary record of assessment, as

required by section 6203 and section 301.6203-1, Proced. & Admin.

Regs.,6 and consequently no assessment, or at least no valid

     5
      (...continued)
in the January 5, 1999 Disclosure Office letter: “In your case
however, there have been no assessments other than the processing
of your tax return plus penalty and interest.” We reject peti-
tioner’s unfounded reading of that sentence. The sentence in
question plainly indicates that respondent assessed the tax due
shown in petitioner’s return for 1996 as well as a penalty and
interest with respect to that year.
     6
      Sec. 6203 provides, inter alia, that an assessment is to be
made by recording the liability of the taxpayer in accordance
with prescribed rules or regulations. Sec. 301.6203-1, Proced. &
Admin. Regs., provides in pertinent part:

     The assessment shall be made by an assessment officer
     signing the summary record of assessment. The summary
     record, through supporting records, shall provide
     identification of the taxpayer, the character of the
     liability assessed, the taxable period, if applicable,
     and the amount of the assessment. * * * If the taxpayer
     requests a copy of the record of assessment, he shall
     be furnished a copy of the pertinent parts of the
     assessment which set forth the name of the taxpayer,
     the date of assessment, the character of the liability
     assessed, the taxable period, if applicable, and the
     amounts assessed.
                              - 9 -

assessment, by respondent with respect to that year.   Having

shown what petitioner maintains is an irregularity in respon-

dent’s assessment procedure with respect to his taxable year

1996, petitioner further argues that the Appeals officer’s

reliance on Form 4340 to verify that respondent made a valid

assessment with respect to that year does not satisfy the re-

quirements of section 6330(c)(1) that the Appeals officer obtain

verification that the requirements of any applicable law or

administrative procedure have been met.7

     We reject petitioner’s position.   As petitioner is aware

from Lester v. United States, No. 13-96-15835 MA, Adv. No. 97-

1078M (D.N.M. July 7, 1998), which he cites in petitioner’s

motion and in petitioner’s response to respondent’s motion,

respondent has for a number of years been engaged in making a

transition in respondent’s assessment procedure from the general

use of a manually prepared Form 23C to the general use of RACS

     7
      While not altogether clear, petitioner may also be arguing
that respondent’s assessment with respect to petitioner’s taxable
year 1996 may not be valid because he did not receive certain
documentation to which he is entitled under sec. 6203 and sec.
301.6203-1, Proced. & Admin. Regs. Respondent provided peti-
tioner with a copy of Form 4340 with the notice of determination.
That form set forth, inter alia, petitioner’s name, the date of
assessment, the character of the liability assessed, the taxable
period, and the amounts assessed. We conclude that petitioner
has received the documentation to which he is entitled under sec.
6203 and sec. 301.6203-1, Proced. & Admin. Regs. See Koff v.
United States, 3 F.3d 1297, 1298 (9th Cir. 1993). That the
Appeals officer provided petitioner a copy of Form 4340 with the
notice of determination does not constitute an abuse of discre-
tion. See Nestor v. Commissioner, 118 T.C. 162 (2002).
                                  - 10 -

006.8       See also, e.g., Kruger v. United States, 88 AFTR 2d 2001-

5865, at 2001-5867, 2001-2 USTC par. 50,624, at 89,568 (D. Nev.

2001); Leier v. Dept. of Treasury/IRS, 73 AFTR 2d 94-533, at 94-

534 (M.D. Fla. 1993); Tsimbidis v. IRS, 72 AFTR 2d 93-6640, at

93-6641 (E.D. Va. 1993).       Nothing in the law supports, and we

reject, what we understand to be petitioner’s position that

        8
      Pertinent portions of the current IRM relating to respon-
dent’s assessment procedure describe respondent’s use of RACS
006s in that procedure. IRM sec. 3.17.63.21.6 (Oct. 1, 2001),
entitled “Summary Record of Assessments (RACS Report 006)”,
outlines the procedure for producing the summary record of
assessments (RACS 006) and requires that such document be signed
by the assessment officer on the date the assessment is made.
IRM sec. 3.17.63.21.6(2)(B). IRM sec. 3.17.63.21.6(4) generally
provides that, when the computer system that produces the RACS
006 is unavailable, “the Submission Processing Center will
manually prepare a Form 23C, Assessment Certificate (Summary
Record of Assessment.)”. See also IRM sec. 3.17.63.18.1 (Oct. 1,
2001) (outlining procedures for use of Forms 23C in certain other
circumstances). The current IRM provides that, whether the
assessment is made manually on Form 23C or by the computer-
generated report RACS 006, both documents are considered to be a
summary record of assessment and both documents are required to
be signed by an assessment officer, in accordance with sec.
301.6203-1, Proced. & Admin. Regs. The IRM section on which
petitioner relies in petitioner’s motion does not appear in the
current IRM.

     We note that the assessment procedure described in the
current IRM is consistent with the following description of
respondent’s assessment procedure that, according to petitioner,
the Appeals officer gave petitioner at the Appeals Office hear-
ing:

        ... It is in a case where there’s maybe   a jeopardy
        assessment and it’s a manual assessment   for that day,
        the old form, which is a piece of paper   that says 23C
        on the bottom; the Form 23C document is   used.

             But normal assessments are made by computer and we
        call this listing that comes out, RACS 006, ...
                              - 11 -

respondent’s use in respondent’s assessment procedure of RACS

006, instead of Form 23C, to make an assessment with respect to

petitioner’s taxable year 1996 does not comply with the require-

ments of section 6203 and section 301.6203-1, Proced. & Admin.

Regs.9

     On the record before us, we find that respondent’s use of

RACS 006, instead of Form 23C, in making an assessment with

respect to petitioner’s taxable year 1996 did not constitute an

irregularity in respondent’s assessment procedure.   On that

record, we agree with respondent’s position in respondent’s

motion, and we find:   (1) There was no irregularity in respon-

dent’s assessment procedure with respect to petitioner’s taxable

year 1996, (2) respondent made a valid assessment with respect to

that year, and (3) for purposes of complying with section

6330(c)(1), it was not an abuse of discretion for the Appeals

officer to have relied on Form 4340 to verify respondent’s

assessment with respect to that year, see Davis v. Commissioner,

     9
      We also reject petitioner’s apparent attempt to dictate how
respondent implements the requirements of sec. 6203 and sec.
301.6203-1, Proced. & Admin. Regs. In this connection, peti-
tioner stated in petitioner’s December 21, 1998 request to the
IRS Disclosure Office:

     Please provide a copy of the actual, duly signed and
     certified, Form 23-C, Certificate of Assessments, as
     per 26 CFR 301.6203-1 * * * (Do not send a RACS Report
     or an Individual Master File, as these are not respon-
     sive to this request). * * * [Emphasis added.]
                               - 12 -

115 T.C. 35 (2000).10   On the record before us, we reject the

first and second allegations of error in the petition.

     We turn now to the third allegation of error in the petition

regarding petitioner’s alleged “inability to examine documents

and to cross examine witnesses against him.”   Although the

     10
      In Davis v. Commissioner, 115 T.C. 35 (2000), we held
that, absent a showing by the taxpayer of an irregularity in
respondent’s assessment procedure, it was not an abuse of discre-
tion for the Appeals officer to have relied on Form 4340 for
purposes of complying with sec. 6330(c)(1). Id. at 41. That is
because Form 4340 provides presumptive evidence that the Commis-
sioner of Internal Revenue (Commissioner) has validly assessed a
tax. E.g., United States v. Chila, 871 F.2d 1015, 1018 (11th
Cir. 1989); Davis v. Commissioner, supra at 40.

     After we decided Davis, we held that it was not an abuse of
discretion for the Appeals officer to have relied on certain
computer-generated transcripts for purposes of complying with
sec. 6330(c)(1). E.g., Howard v. Commissioner, T.C. Memo. 2002-
81; Kuglin v. Commissioner, T.C. Memo. 2002-51; Mann v. Commis-
sioner, T.C. Memo. 2002-48. Sec. 6330(c)(1) does not require the
Commissioner to rely on a particular document to satisfy the
verification requirement imposed by that section. E.g., Lindsey
v. Commissioner, T.C. Memo. 2002-87; Kuglin v. Commissioner,
supra.

     We note that petitioner represented the taxpayer in Davis v.
Commissioner, supra, and that in Lunsford v. Commissioner, 117
T.C. 183 (2001), we observed:

     We note that the petition in this case [Lunsford v.
     Commissioner, supra] is essentially the same as the
     petition filed with this Court in Davis v. Commis-
     sioner, 115 T.C. 35, 39 (2000). This is not surprising
     since the petition was filed by Thomas W. Roberts, who
     also filed the petition for the taxpayer in the Davis
     case. Mr. Roberts was disbarred from practice before
     this Court on June 18, 2001, and was removed as peti-
     tioners’ counsel on July 18, 2001.

Lunsford v. Commissioner, supra at 187 n.8.
                              - 13 -

parties do not address that allegation in their respective

motions, we shall dispose of that matter at this time.   That is

because we conclude that, as a matter of law, there was no abuse

of discretion regardless whether petitioner had the opportunity

before or at the Appeals Office hearing (1) to examine the

document that he requested (i.e., Form 23C) and the document that

the Appeals officer provided to petitioner with the notice of

determination (i.e., Form 4340) or (2) to cross-examine wit-

nesses.   See Nestor v. Commissioner, 118 T.C. 162 (2002); Davis

v. Commissioner, supra at 41-42.11

     Based on our examination of the entire record before us, we

find that respondent did not abuse respondent’s discretion in

determining in the notice of determination to proceed with

collection with respect to petitioner’s taxable year 1996.

     In respondent’s motion, respondent requests that the Court

require petitioner to pay a penalty to the United States pursuant

to section 6673(a)(1).   Section 6673(a)(1) authorizes the Court

to require a taxpayer to pay to the United States a penalty in an

amount not to exceed $25,000 whenever it appears to the Court

that, inter alia, a proceeding before it was instituted or

maintained primarily for delay, sec. 6673(a)(1)(A), or the

taxpayer's position in such a proceeding is frivolous or ground-

     11
      See also Lindsay v. Commissioner, T.C. Memo. 2001-285;
Watson v. Commissioner, T.C. Memo. 2001-213; Wylie v. Commis-
sioner, T.C. Memo. 2001-65.
                               - 14 -

less, sec. 6673(a)(1)(B).

     In Pierson v. Commissioner, 115 T.C. 576, 581 (2000), we

issued an unequivocal warning to taxpayers concerning the imposi-

tion of a penalty under section 6673(a) on those taxpayers who

abuse the protections afforded by sections 6320 and 6330 by

instituting or maintaining actions under those sections primarily

for delay or by taking frivolous or groundless positions in such

actions.   In the petition and in petitioner’s motion and his

response to respondent’s motion, petitioner is raising, we

believe primarily for delay, arguments and contentions that we

have previously rejected, thereby causing the Court to waste its

limited resources.12   We shall impose a penalty on petitioner

pursuant to section 6673(a)(1) in the amount of $10,000.

     We have considered all of the arguments and contentions that

petitioner advances in petitioner’s motion and petitioner’s

response to respondent’s motion, which are not discussed herein,

and we find them to be without merit and/or irrelevant.

     On the record before us, we shall deny petitioner’s motion,

and we shall grant respondent’s motion.

     12
      Petitioner is well aware of the Court’s views regarding
the allegations of error that he raised in the petition. They
are essentially the same allegations that he raised as the
representative for the taxpayer in Davis v. Commissioner, supra,
and for the taxpayer in Wylie v. Commissioner, supra.
                        - 15 -

To reflect the foregoing,

                                 An order denying petitioner’s

                            motion and granting respondent’s

                            motion and decision for respondent

                            will be entered.