Court Opinion

ID: 4336400
Source: CourtListenerOpinion
Date Created: 2018-11-14 02:48:43.49685+00
Date Added: 2024-06-11T14:48:12.746396
License: Public Domain

T.C. Memo. 2007-71

                       UNITED STATES TAX COURT

               WILLIAM J. BRUMBACK, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent

     Docket No. 13821-05L.             Filed March 28, 2007.

     William J. Brumback, pro se.

     Erin K. Salel, for respondent.

                         MEMORANDUM OPINION

     VASQUEZ, Judge:    This case is before the Court on

respondent’s motion for summary judgment and to impose a penalty

under section 6673.    All section references are to the Internal

Revenue Code, and all Rule references are to the Tax Court Rules

of Practice and Procedure.
                                - 2 -

                             Background

     Petitioner submitted to the Internal Revenue Service a Form

1040, U.S. Individual Income Tax Return, for 2001 listing only

zeros; i.e., listing zero income and zero tax due.

     Respondent mailed petitioner a statutory notice of

deficiency for 2001.    Petitioner received the notice of

deficiency for 2001.    Petitioner, however, did not petition the

Court regarding the notice of deficiency for 2001.

     On July 30, 2004, respondent sent petitioner a Notice of

Federal Tax Lien Filing and Your Right to a Hearing (NFTL) with

respect to 2001.    The NFTL listed $33,108.45 of tax owed for

2001.   The NFTL also listed section 6702 frivolous return

penalties owed for 2000, 2001, and 2002.

     On or about August 14, 2004, petitioner sent respondent a

Form 12153, Request for a Collection Due Process Hearing (hearing

request).   Attached to the hearing request, petitioner wrote that

there were irregularities, errors and/or defects in the:

Accounting records of the Internal Revenue Service, record of

assessment, summary record of assessment, verification and

validity of his tax liability, and returns prepared for or

executed for him.    Petitioner did not propose any collection

alternatives.

     On October 29, 2004, Settlement Officer Wendy Clinger sent

petitioner a letter advising him he would not receive a face-to-
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face section 6330 hearing on the issues he raised in his hearing

request because they have been determined by the courts to be

frivolous or issues that the Appeals Office does not consider.

Ms. Clinger offered petitioner a telephone conference on November

18, 2004.   Ms. Clinger also advised petitioner that he had 15

days to submit a list of relevant and nonfrivolous matters (such

as submitting collection alternatives) that he wished to discuss

at the section 6330 hearing, in which case he would be granted a

face-to-face section 6330 hearing.

     On November 3, 2004, petitioner sent a letter to Ms. Clinger

containing frivolous and groundless arguments and stated that he

wanted a face-to-face section 6330 hearing.

     On November 18, 2004, Ms. Clinger called petitioner but did

not speak to him.   She left a message on an answering machine

with her name and telephone number.    Petitioner did not call Ms.

Clinger back.

     Ms. Clinger reviewed the administrative file for 2001 and

confirmed that respondent had complied with all applicable laws

and administrative procedures regarding 2001.   During this

review, Ms. Clinger discovered that petitioner’s assessment for

2001 was too high, and, even though petitioner was not entitled

to challenge his underlying liability in the section 6330

hearing, she had the assessment corrected (i.e., it was partially

abated).
                                - 4 -

     On June 28, 2005, respondent issued a Notice of

Determination Concerning Collection Action(s) Under Section 6320

and/or 6330 to petitioner regarding his 2001 tax year.   In the

notice of determination, respondent determined to sustain the

collection action.

     On July 25, 2005, petitioner timely filed a petition

regarding the notice of determination.   The petition contains

frivolous and groundless arguments.

     On January 31, 2006, in response to petitioner’s lengthy and

frivolous discovery requests, respondent sent petitioner a letter

providing him excerpts from “The Truth About Frivolous Tax

Arguments”.

     On July 5, 2006, respondent sent petitioner a letter that

noted that petitioner’s continuing discovery requests were

frivolous and groundless, and it appeared that their only purpose

was for delay.   Petitioner was advised of the provisions of

section 6673 and that respondent would file a motion requesting

sanctions under section 6673.

     On July 19, 2006, respondent sent petitioner another letter.

Attached were copies of his Form 4340, Certificate of

Assessments, Payments, and Other Specified Matters, for 2001; a

summary record of assessments for 2001; and “The Truth About

Frivolous Tax Arguments”.   Respondent directed petitioner’s
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attention to specific pages of “The Truth About Frivolous Tax

Arguments” regarding petitioner’s contentions.

     On August 21, 2006, respondent filed a motion for summary

judgment and to impose a penalty under section 6673.

     On August 24, 2006, the Court ordered petitioner to file on

or before September 8, 2006, any objection to respondent’s motion

for summary judgment and to impose a penalty under section 6673.

     On September 5, 2006, petitioner filed an objection to

respondent’s motion for summary judgment and to impose a penalty

under section 6673.   In the objection, petitioner made frivolous

and groundless arguments.

     On September 12, 2006, the Court ordered respondent’s motion

for summary judgment and to impose a penalty under section 6673

calendared for hearing at the Court’s San Diego, California,

session beginning September 25, 2006.

     Petitioner appeared at the calendar call and made an oral

motion for a continuance which the Court denied.   At the hearing

on respondent’s motion for summary judgment and to impose a

penalty under section 6673, petitioner filed a supplemental

response to motion for summary judgment.   At the hearing,

petitioner made several frivolous objections which the Court

denied.   Petitioner was evasive in answering the Court’s

questions.
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                              Discussion

I.     Motion for Summary Judgment

        Rule 121(a) provides that either party may move for summary

judgment upon all or any part of the legal issues in controversy.

Full or partial summary judgment may be granted only if it is

demonstrated that no genuine issue exists as to any material fact

and a decision may be rendered as a matter of law.     Rule 121(b);

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 as to any

material fact and that a decision may be rendered as a matter of

law.

II.    Determination To Proceed With Collection

        Section 6320 provides that the Secretary shall furnish the

person described in section 6321 with written notice (i.e., the

hearing notice) of the filing of a notice of lien under section

6323.     Section 6320 further provides that the taxpayer may

request administrative review of the matter (in the form of a

hearing) within a 30-day period.     The hearing generally shall be

conducted consistent with the procedures set forth in section

6330(c), (d), and (e)--which provide for, among other things, the

conduct of the hearing, the making of a determination, and

jurisdiction for court review of the section 6330 determination.

Sec. 6320(c).
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     Pursuant to section 6330(c)(2)(A), a taxpayer may raise at

the section 6330 hearing any relevant issue with regard to the

Commissioner’s collection activities, including spousal defenses,

challenges to the appropriateness of the Commissioner’s intended

collection action, and alternative means of collection.         Sego v.

Commissioner, 114 T.C. 604, 609 (2000); Goza v. Commissioner, 114
T.C. 176, 180 (2000).   If a taxpayer received a statutory notice

of deficiency for the years in issue or otherwise had the

opportunity to dispute the underlying tax liability, the taxpayer

is precluded from challenging the existence or amount of the

underlying tax liability.   Sec. 6330(c)(2)(B); Sego v.

Commissioner, supra at 610-611; Goza v. Commissioner, supra at

182-183.

     Petitioner received a notice of deficiency for 2001.

Accordingly, he cannot challenge his underlying liabilities.        See

sec. 6330(c)(2)(B); Sego v. Commissioner, supra at 610-611; Goza

v. Commissioner, supra at 182-183.       Therefore, we review

respondent’s determination for an abuse of discretion.      See Sego

v. Commissioner, supra at 610.

     Petitioner has failed to raise a spousal defense, make a

valid challenge to the appropriateness of respondent’s intended

collection action, or offer alternative means of collection.

These issues are now deemed conceded.      See Rule 331(b)(4).
                                  - 8 -

       Accordingly, we conclude that respondent did not abuse his

discretion, and we sustain respondent’s determination to proceed

with collection.

III.    Section 6673

       Section 6673(a)(1) authorizes this Court to require a

taxpayer to pay to the United States a penalty not to exceed

$25,000 if the taxpayer took frivolous or groundless positions in

the proceedings or instituted the proceedings primarily for

delay.    A position maintained by the taxpayer is “frivolous”

where it is “contrary to established law and unsupported by a

reasoned, colorable argument for change in the law.”      Coleman v.

Commissioner, 791 F.2d 68, 71 (7th Cir. 1986); see also Hansen v.

Commissioner, 820 F.2d 1464, 1470 (9th Cir. 1987) (section 6673

penalty upheld because taxpayer should have known claim was

frivolous).

       Petitioner has advanced shopworn arguments characteristic of

tax-protester rhetoric that has been universally rejected by this

and other courts.      Wilcox v. Commissioner, 848 F.2d 1007 (9th

Cir. 1988), affg. T.C. Memo. 1987-225; Carter v. Commissioner,

784 F.2d 1006, 1009 (9th Cir. 1986).      We do not painstakingly

address petitioner’s assertions “with somber reasoning and

copious citation of precedent; to do so might suggest that these

arguments have some colorable merit.”      Crain v. Commissioner, 737
F.2d 1417, 1417 (5th Cir. 1984).     Petitioner was warned by
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respondent and the Court that his arguments were frivolous and

without merit, and that if he continued to advance them he could

be subject to a penalty of up to $25,000.       Even after receiving

these repeated warnings, petitioner continued to advance

frivolous and meritless arguments.

     We conclude petitioner’s position was frivolous and

groundless and that petitioner instituted and maintained these

proceedings primarily for delay.    Accordingly, pursuant to

section 6673(a) we hold petitioner is liable for a $5,000

penalty.

     To reflect the foregoing,

                                              An appropriate order and

                                         decision will be entered.