Court Opinion

ID: 4337308
Source: CourtListenerOpinion
Date Created: 2018-11-14 03:17:16.395446+00
Date Added: 2024-06-11T13:29:25.321152
License: Public Domain

T.C. Memo. 2008-242

                UNITED STATES TAX COURT

             ARTHUR G. KROL, Petitioner v.
     COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 3332-08L.            Filed October 29, 2008.

     In 2005, P received a notice of deficiency for
2002. P’s attorney, A, timely filed a petition for
redetermination on P’s behalf. Neither P nor A
appeared when the case was called for trial. After the
Court issued a show cause order, A appeared and
consented to the dismissal of the case. R assessed the
deficiency. After P failed to pay the amount owing, R
proposed to levy. In 2007, P, through A, requested
administrative review and sought only to challenge the
underlying liability. R rejected the challenge on the
basis of I.R.C. sec. 6330(c)(2)(B) and issued a notice
of determination sustaining the proposed levy. In
2008, P, through A, filed a levy action with this
Court, seeking only to challenge the underlying
liability. R filed a motion for summary judgment; the
Court then issued a show cause order requiring A to
explain why A personally should not be liable under
I.R.C. sec. 6673(a)(2)(A) for multiplying the
proceedings unreasonably and vexatiously.
                                    - 2 -

             Held: R’s motion for summary judgment shall be
        granted. I.R.C. sec. 6330(c)(2)(B).
             Held, further, A is liable personally under I.R.C.
        sec. 6673(a)(2)(A) for excessive costs.

                Jerry R. Abraham, for petitioner.

                John W. Stevens and Steven L. Karon, for respondent.

                             MEMORANDUM OPINION

        ARMEN, Special Trial Judge:     This case is a collection

action involving a proposed levy.       See sec. 6330(d); Rules 330-

334.1       Pending before the Court are (1) respondent’s Motion For

Summary Judgment, filed May 27, 2008, pursuant to Rule 121, and

(2) the Court’s Order And Order To Show Cause, dated June 27,

2008.

        In his motion, respondent moves for a summary adjudication

in respondent’s favor “because, pursuant to I.R.C. 6330(c)(2)(B),

petitioner’s receipt of the statutory notice of deficiency

precludes him from challenging the underlying tax liability for

taxable year 2002, the only error assigned in the petition.”

        In its order, the Court directed petitioner’s counsel of

record Jerry R. Abraham to show cause why the Court should not

        1
        All section references are to the Internal Revenue Code
of 1986, as amended; all Rule references are to the Tax Court
Rules of Practice and Procedure.
                               - 3 -

conclude that he (i.e., Jerry R. Abraham) did not multiply the

proceedings unreasonably and vexatiously and why, therefore, the

Court should not require him, pursuant to section 6673(a)(2)(A),

to pay personally the excess costs, expenses, and attorney’s fees

reasonably incurred because of his conduct.2

     At the time that the petition was filed, both petitioner and

Attorney Jerry R. Abraham resided in the State of Michigan.

Background

     Our summary of the relevant facts necessarily begins with

petitioner’s prior action in this Court (dkt. No. 14170-05)

because that prior action is not only the linchpin of

respondent’s summary judgment motion in the instant action

(docket No. 3332-08L) but also central to our show cause order.

     A.   Petitioner’s Action for Redetermination at Dkt. No.
          14170-05

     By a notice of deficiency dated April 25, 2005, respondent

determined a deficiency in petitioner’s Federal income tax for

the taxable year 2002.3   See sec. 6212(a).   The deficiency was

attributable to respondent’s determination that petitioner had

     2
        For convenience, we shall hereinafter generally refer to
petitioner’s counsel of record Jerry R. Abraham as Attorney Jerry
R. Abraham.
     3
        In that notice, respondent also determined an addition to
tax under sec. 6651(a)(1) for failure to timely file and an
accuracy-related penalty under sec. 6662(a) for negligence or
disregard of rules or regulations.
                               - 4 -

failed to include on his income tax return for 2002 gambling

winnings in the aggregate amount of $415,625, as reported by

casinos in Las Vegas, Nevada, and Detroit, Michigan.4

     In response to the notice of deficiency, petitioner

commenced a case in this Court by timely filing a petition for

redetermination of deficiency, which case was assigned docket No.

14170-05.   See secs. 6213(a), 7502, 7503.   The petition, which

was filed “by and through counsel”, was subscribed by Attorney

Jerry R. Abraham as “Attorney for Petitioner”.   Attorney Jerry R.

Abraham was (and remains) a member of the bar of this Court.

     In the petition for redetermination, petitioner disputed the

deficiency in tax, as well as the addition to tax and accuracy-

related penalty.   The substantive paragraphs of the petition and

the prayer for relief recited as follows:

          4. The amount of the tax liability as set forth
     in said Notice of Deficiency is based upon an erroneous
     computation of taxpayer’s gambling winnings as no
     offset is provided for taxpayer’s gambling losses as
     allowed by Internal Revenue Code § 165(d).

          5. Commissioner’s inaccurate calculations stem
     from resulting inaccuracies relating both to taxpayer’s
     gambling winnings and losses.

          WHEREFORE, Petitioners [sic] respectfully request
     that this Court disallow these revisions as pertaining
     to Petitioner’s gambling winnings and losses and abate

     4
        The inclusion in income of unreported gambling winnings
also served to decrease otherwise allowable itemized deductions
claimed by petitioner on Schedule A, Itemized Deductions. See
sec. 68.
                               - 5 -

     the relevant portion of the existing liability with any
     accompanying penalties.

     In due course, and pursuant to notice provided by certified

mail, dkt. No. 14170-05 was called for trial on June 12, 2006, at

Detroit, Michigan.5   However, at that time, there was no

appearance by or on behalf of petitioner.   In contrast, counsel

for respondent appeared and filed a Stipulation Of Facts.6   Also,

counsel for respondent orally moved to dismiss the case for lack

of prosecution.7

     In response to the Court’s inquiry regarding the absence of

Attorney Jerry R. Abraham, counsel for respondent surmised as

follows:
          I talked to Mr. Abraham a month and a half ago, he
     returned my calls. The only issue he said was, his
     client still needed to get documentation to him showing
     the losses from the gambling income. That was his only
     issue.

          That’s why he didn’t originally get a Tax Court
     memo, because when Attorney Jerry Abraham got them to
     me, I was going to take them, and if he had some
     losses, then make an adjustment. My guess is, his
     client never gave him any evidence of any losses to
     offset the gambling income.

     5
        The case was called at Detroit because Attorney Jerry R.
Abraham, acting on behalf of petitioner, had designated that city
“for all trial proceedings in this matter.”
     6
        The Stipulation Of Facts had been executed by Attorney
Jerry R. Abraham on June 5, 2006, and by respondent’s counsel on
June 9, 2006.
     7
        Subsequently, respondent’s counsel reduced his motion to
writing and, on June 13, 2006, filed a Motion To Dismiss For Lack
Of Prosecution. Counsel for respondent served his motion on
Attorney Jerry R. Abraham by mail on June 12, 2006.
                                   - 6 -

The Court responded as follows:

          Well, that might be so, but this is an opportunity
     for Petitioner’s counsel to come to Court and indicate
     to the Court what he wants the Petitioner to do with
     his case.

          Merely not to show is not a satisfactory response.
     Therefore, the Court is going to order a show cause
     hearing to Mr. Abraham as to why he should not be
     sanctioned for failure to appear. * * *

     On June 13, 2006, the Court served an Order To Show Cause

dated June 12, 2006, on Attorney Jerry R. Abraham directing him

to appear on June 19, 2006, at Detroit, Michigan, and show cause

why the Court should not impose a sanction on him for excessive

costs pursuant to section 6673(a)(2).

     At the show cause hearing, Attorney Jerry R. Abraham

appeared, as did counsel for respondent.        The transcript for that

hearing includes the following colloquy:

          MR. ABRAHAM: Basically, back on June the 6th I
     made a call to the District Counsel attorney and I
     advised him that my client still had not given us the
     documents that we needed and that I told him, in
     addition, that if he did not give it to me by June the 7th,
     we would sign a consent.[8]

              *        *       *     *     *      *     *

          THE COURT:       A consent to what?

          MR. ABRAHAM:      To judgment.

              *        *       *     *     *      *     *

     8
        Notwithstanding the professed lack of documentation,
Attorney Jerry R. Abraham never filed a motion for continuance,
either before or at the trial session.
                                - 7 -

          THE COURT: And, counsel, are you now saying you
     don’t object to the granting of that motion [to dismiss
     for lack of prosecution]?

          MR. ABRAHAM:   At this time I do not.

          THE COURT: Well, first, let me say this, sir:
     that I can see perhaps some room for confusion, but as
     counsel of record, it’s your obligation to make sure
     that either the matter is properly taken care of or you
     appear here to inform the Court as to the status. You
     understand that?

          MR. ABRAHAM:   Yes.   I do.

          THE COURT: All right. I’m going to grant the
     motion to dismiss for lack of prosecution and deem that
     you have satisfied the motion to show cause, Mr.
     Abraham. Thank you very much.

          MR. ABRAHAM:   Thank you.

     Thereafter, by Order Of Dismissal And Decision entered and

served July 3, 2006, the Court granted respondent’s Motion To

Dismiss For Lack Of Prosecution, thereby sustaining all of

respondent’s determinations in the April 25, 2005 notice of

deficiency.

     Petitioner did not file any posthearing motion or a notice

of appeal.    Accordingly, the Court’s Order Of Dismissal And

Decision at dkt. No. 14170-05 became final in due course.     See

secs. 6214(d), 7481(a)(1), 7483.    Thereafter, respondent assessed

the deficiency, addition to tax, and accuracy-related penalty,

together with statutory interest.     See secs. 6215(a), 7459(d);

see also sec. 6601(a).
                               - 8 -

     B.   Petitioner’s Collection Action at Dkt. No. 3332-08L

     As previously stated, the instant case (dkt. No. 3332-08L)

is a collection action involving a proposed levy.    The

commencement of that action had as its origin petitioner’s

failure to pay, upon notice and demand made pursuant to section

6303(a), the liability arising out of petitioner’s above-

described action for redetermination of deficiency.    The

collection action developed as follows:

     On August 2, 2007, respondent sent petitioner a Notice Of

Intent To Levy And Notice Of Your Right To A Hearing (final

notice of intent to levy) in respect of petitioner’s outstanding

liability for 2002.   In response to the final notice of intent to

levy, petitioner, acting through his power of attorney (POA)

Jerry R. Abraham, filed with respondent a Form 12153, Request for

a Collection Due Process or Equivalent Hearing.9    The reason given

for objecting to the proposed levy was as follows:

     Taxpayer requests a re-open audit. He know [sic] has
     located evidence of gambling losses to offset winnings
     and negate the assessed tax.

     Following a telephone conference between Attorney Jerry R.

Abraham and respondent’s settlement officer, respondent’s Appeals

     9
        Petitioner’s power of attorney Jerry R. Abraham is the
same Jerry R. Abraham who was petitioner’s counsel of record in
the action for redetermination of deficiency at dkt. No. 14170-05
and is the same Jerry R. Abraham who is petitioner’s counsel of
record in the instant collection action (dkt. No. 3332-08L). For
convenience, we shall hereinafter refer to petitioner’s power of
attorney Jerry R. Abraham as Attorney Jerry R. Abraham.
                               - 9 -

Office sent petitioner a Notice Of Determination Concerning

Collection Action(s) Under Section 6320 and/or 6330 (notice of

determination) dated January 18, 2008.       In the notice of

determination, respondent’s Appeals Office sustained the proposed

levy.

     The Attachment to the notice of determination states, in

part, as follows:

     ISSUES RAISED BY THE TAXPAYER

     In your written request, Form 12153, your POA raised
     the liability as an issue.

     At the telephone conference, your POA was advised you
     are not able to raise the liability as an issue under
     CDP [Collection Due Process] because you had a prior
     opportunity to do so. Your POA agreed.

              *       *    *    *        *       *     *

     OTHER ISSUES RAISED

     No other issues were raised.    Your POA did not ask for
     a collection alternative.

     In response to the notice of determination, petitioner

timely filed the instant collection action (levy action), which

action was assigned docket number 3332-08L.       The petition was

subscribed by both petitioner individually and by Attorney Jerry

R. Abraham as counsel for petitioner.

     The two (and only) substantive paragraphs of the petition

provide as follows:

     5. The underlying liability is not accurate. The
     original deficiency assessment was based primarily upon
     gambling winnings, but it did not include any
                              - 10 -

     information relating to relevant offsetting losses.
     These offsetting losses will greatly reduce this
     taxpayer’s taxable income as well as his corresponding
     tax liability. Evidence of these losses was provided
     to the Service, but no adjustments have been made to
     decrease the current liability. Therefore, taxpayer
     requests that collection ceases pending the accurate
     adjustment of the 2002 tax liability.

     6. Taxpayer has presented documentary evidence of
     gambling losses which should be offset against his
     recorded gambling winnings. This evidence has been
     presented to the Service, but has not yet resulted in
     any adjustment.

     After filing an Answer, respondent filed his Motion For

Summary Judgment.   See Rules 36, 121.   As previously stated,

respondent moves for a summary adjudication in respondent’s favor

“because, pursuant to I.R.C. [section] 6330(c)(2)(B),

petitioner’s receipt of the statutory notice of deficiency

precludes him from challenging the underlying tax liability for

taxable year 2002, the only error assigned in the petition.”

     The heart of respondent’s motion lies in paragraphs 11 and

12 thereof, which paragraphs state as follows:

          11. Because the petitioner received the notice of
     deficiency in sufficient time to petition the Tax Court
     and did do so, it was improper for petitioner to
     challenge the tax liability to which the statutory
     notice of deficiency related.

          12. Because it was improper for the taxpayer to
     challenge in the CDP hearing the existence or amount of
     petitioner’s liability with respect to taxable year
     2002, the validity of petitioner’s underlying tax
     liability is not properly at issue before this Court.
     [Sego v. Commissioner, 114 T.C. 604 (2000)].
                              - 11 -

     On June 13, 2008, petitioner, through Attorney Jerry R.

Abraham, filed a Response In Opposition to respondent’s motion.

Therein petitioner contends that respondent’s reliance on section

6330(c)(2)(B) is erroneous for two reasons.

     First, the general statutory directive of Section 6330
     is to allow an aggrieved taxpayer to raise any and all
     “alternatives to collection” which are appropriate in
     any given context. Second, while Section 6330(c)(2)(B)
     does limit the scope challenges [sic] to the accuracy
     of a liability, it does not do so when the taxpayer
     “did not otherwise have an opportunity to dispute such
     tax liability.” Id.

     On June 27, 2008, the Court issued its Order And Order To

Show Cause.   The Court’s order directed Attorney Jerry R. Abraham

to show cause why the Court should not conclude that he (i.e.,

Attorney Jerry R. Abraham) multiplied the proceedings

unreasonably and vexatiously and why, therefore, the Court should

not require him, pursuant to section 6673(a)(2)(A), to pay

personally the excess costs, expenses, and attorneys’ fees

reasonably incurred because of his conduct.

     On August 18, 2008, Attorney Jerry R. Abraham filed a

Response To Order To Show Cause.   In it, Attorney Jerry R.

Abraham asserts that petitioner “steadfastly” continues to

request “an accurate re-determination of his 2002 tax liability”

and, toward that end, has sought “this forum to request a re-open

audit as an alternative to the full collection of a tax liability

which he knew to be inaccurate.”   Attorney Jerry R. Abraham

further asserts that “a request for a re-open audit” is a
                                  - 12 -

“collection alternative” and that a collection alternative is

specifically identified by section 6330(c)(2)(A)(iii) as an

appropriate issue to be considered at a collection-related

hearing.    Attorney Jerry R. Abraham then concludes as follows:

     Section 6330(c)(2)(B) * * * clearly limits the ability
to challenge an underlying tax liability as generated through a
deficiency assessment. However, the statute [section
6330(c)(2)(B)] also clearly provides that such limitation for
challenge cannot apply when a taxpayer “did not otherwise have an
opportunity to dispute such tax liability.” In the present
action, this Petitioner was not afforded such an opportunity.

           Granted that this taxpayer availed himself of the
     full appeals process surrounding his 2002 liability,
     but he simply could not have been afforded any
     reasonable opportunity to challenge the assessment
     without further corroboration or evidence of his
     losses. Without this kind of evidence, he could not
     have been afforded an effective opportunity to
     challenge the deficiency based on all the merits of his
     case.

     A hearing on the Court’s June 27, 2008 Order And Order To

Show Cause was held in Washington, D.C., on August 20, 2008.

Having filed the aforementioned August 18, 2008 Response To Order

To Show Cause, Attorney Jerry R. Abraham chose not to attend in

person.    (So did petitioner.)    In contrast, counsel for

respondent did appear and argued in support of a finding that

Attorney Jerry R. Abraham unreasonably and vexatiously multiplied

proceedings and, as a result, should pay personally excess costs,

expenses, and attorney’s fees pursuant to section 6673(a)(2)(A).

Respondent’s motions counsel also introduced a Declaration by

respondent’s field counsel John W. Stevens of Detroit, Michigan,
                                 - 13 -

detailing the time spent (a total of 10.0 hours) dealing with

dkt. No. 3332-08L.    Counsel requested that respondent be

compensated at the rate of $150 per hour.

     Following the aforementioned hearing, the Court issued an

Order dated August 25, 2008, directing Attorney Jerry R. Abraham

to file a response to the Declaration from respondent’s field

counsel.    Attorney Jerry R. Abraham complied with that order by

filing a Response on September 10, 2008.

     In his Response, Attorney Jerry R. Abraham argues that

respondent’s field counsel’s “ten hour computation is

disproportionate and inaccurate.”     Attorney Jerry R. Abraham

further argues that he (i.e., Attorney Jerry R. Abraham) “pursued

an accepted administrative strategy of audit reconsideration

which appeared to fall within the broad statutory mandate of

Internal Revenue Code (‘IRC’) Section 6330(c)(2)(A)(iii)” and

that he acted neither vexatiously nor in bad faith.

Discussion

     A.    Respondent’s Motion

     The record is clear that respondent sent petitioner a notice

of deficiency for 2002 and that petitioner received it in

sufficient time to file a petition for redetermination of

deficiency with this Court.      Indeed, petitioner timely filed such

a petition.    Thus, petitioner had an opportunity to dispute his

underlying tax liability.    The fact that petitioner squandered
                              - 14 -

that opportunity by failing to appear at trial and by consenting

to the dismissal of the case is irrelevant.

     In view of the foregoing, section 6330(c)(2)(B) bars

petitioner from challenging the existence or amount of his

underlying liability in the instant collection action.   This

Court so held in Sego v. Commissioner, 114 T.C. 604 (2000), and

has continued to so hold in an uninterrupted line of cases.10     In

short, petitioner is statutorily barred from challenging the

existence or amount of his underlying liability in the instant

collection action.

     The record is equally clear that petitioner did not, and has

not, offered a collection alternative.   A collection alternative,

which may include the posting of a bond, the substitution of

other assets, an installment payment agreement, or an offer-in-

compromise, see sec. 6330(c)(2)(A)(iii), does not contemplate a

challenge to the existence or amount of the underlying liability

in the guise of a “request for a re-open audit”.   Petitioner’s

assertion to that effect (“the general statutory directive of

Section 6330 is to allow an aggrieved taxpayer to raise any and

     10
        Insofar as sec. 6330(c)(2)(B) is concerned, we are not
aware of a single case from any other Federal court that is
contrary to Sego v. Commissioner, 114 T.C. 604 (2000), and its
numerous progeny. Indeed, petitioner cites no case, from this or
any other court, in support of his position regarding sec.
6330(c)(2)(B).
                                - 15 -

all ‘alternatives to collection’ which are appropriate in any

given context”) is nothing but sophistry.

     Because petitioner raised no issue other than his underlying

liability, and because petitioner is statutorily barred from

raising that issue, the Court shall grant respondent’s Motion For

Summary Judgment.   Sec. 6330(c)(2)(B).

     B.   Order To Show Cause

     We turn now to the Court’s Order And Order To Show Cause

dated June 27, 2008.   We must first decide whether Attorney Jerry

R. Abraham is liable under section 6673(a)(2) for excessive

costs.    If we decide that Attorney Jerry R. Abraham is so liable,

then we must also decide the amount of his liability.

           1.   Counsel’s liability for excessive costs

     Section 6673(a)(2)(A) provides as follows:

          (2) Counsel’s Liability for Excessive Costs.--
     Whenever it appears to the Tax Court that any attorney
     or other person admitted to practice before the Tax
     Court has multiplied the proceedings in any case
     unreasonably and vexatiously, the Tax Court may
     require–

                (A) that such attorney or other person pay
           personally the excess costs, expenses, and
           attorneys’ fees reasonably incurred because of
           such conduct * * *
                              - 16 -

See Estate of Allison v. Commissioner, T.C. Memo. 2008-149, for

the most recent case applying section 6673(a)(2)(A) as a sanction

against an attorney for a taxpayer.    See also Rule 33(b).11

     Attorney Jerry R. Abraham commenced, and has prosecuted, the

instant collection action seeking only to challenge the existence

or amount of petitioner’s underlying liability, notwithstanding

the clear statutory bar of section 6330(c)(2)(B).    Attorney Jerry

R. Abraham has done so notwithstanding his knowledge that

     11
          Rule 33(b) deserves to be quoted; thus, in relevant
part:

          (b) Effect of Signature: The signature of counsel
     or a party constitutes a certificate by the signer that
     the signer has read the pleading; that, to the best of
     the signer’s knowledge, information, and belief formed
     after reasonable inquiry, it is well grounded in fact
     and is warranted by existing law or a good faith
     argument for the extension, modification, or reversal
     of existing law; and that it is not interposed for any
     improper purpose, such as to harass or to cause
     unnecessary delay or needless increase in the cost of
     litigation. The signature of counsel also constitutes
     a representation by counsel that counsel is authorized
     to represent the party or parties on whose behalf the
     pleading is filed. * * * If a pleading is signed in
     violation of this Rule, the Court, upon motion or upon
     its own initiative, may impose upon the person who
     signed it, a represented party, or both, an appropriate
     sanction, which may include an order to pay to the
     other party or parties the amount of the reasonable
     expenses incurred because of the filing of the
     pleading, including reasonable counsel’s fees.
See Gillespie v. Commissioner, T.C. Memo. 2007-202, affd. on
other issues 102 AFTR 2d 6215, 2008-2 USTC par. 50,552 (7th Cir.
2008), for a case in which we justified sanctions against a
taxpayers’ attorney under both sec. 6673(a)(2)(A) and Rule 33(b).
                             - 17 -

petitioner received the April 25, 2005 notice of deficiency in

sufficient time to file an action for redetermination with this

Court, as demonstrated by the fact that he himself (i.e.,

Attorney Jerry R. Abraham) commenced and prosecuted the action

for redetermination of deficiency at dkt. No. 14170-05.   The fact

that Attorney Jerry R. Abraham agreed to the granting of the

Respondent’s Motion To Dismiss For Lack Of Prosecution (and never

even filed a motion for continuance) in no way avoids the fact

that Attorney Jerry R. Abraham himself commenced and prosecuted

the action for redetermination and was therefore fully aware of

that action.

     Further, Attorney Jerry R. Abraham has cited no case from

this or any other Federal court that would even remotely justify,

given the clear statutory bar of section 6330(c)(2)(B), the

commencement and prosecution of the instant collection action

that seeks only to challenge the existence or amount of the

underlying liability.

     The argument by Attorney Jerry R. Abraham suggesting that

petitioner “did not otherwise have an opportunity to dispute such

tax liability” constitutes a reckless disregard of both fact and

well-established law.

     The argument by Attorney Jerry R. Abraham that appears to

equate a challenge to the existence or amount of the underlying

liability to a collection alternative is specious.   In our view,
                              - 18 -

litigation that is commenced and prosecuted without regard to

section 6330(c)(2)(B) is frivolous, and we cannot imagine any

purpose for such litigation other than to delay collection.     See

infra note 13.

     The present case does not involve a lay person untutored in

the law.   Rather, it involves an attorney who is a member of the

bar of this Court.   Practicing as he does before this Court,

Attorney Jerry R. Abraham should possess knowledge of section

6330, the statute that regulates pre-levy procedures, and

specifically subsection (c)(2)(B) thereof.12   That statute has

been part of the Internal Revenue Code since 1998 and has been

the subject of numerous opinions of this Court.   See Internal

Revenue Service Restructuring and Reform Act of 1998, Pub. L.

105-206, sec. 3401, 112 Stat. 685, 746; Sego v. Commissioner, 114
T.C. 604 (2000), and its progeny.

     In commencing the instant action, Attorney Jerry R. Abraham

has disrespected the clear bar of section 6330(c)(2)(B), and he

     12
        If Attorney Jerry R. Abraham wishes to impugn his level
of competence, then suffice it to say that he was expressly
educated as to the bar of sec. 6330(c)(2)(B) by respondent’s
Appeals settlement officer who, in the Attachment to the notice
of determination, told him that “you are not able to raise the
liability as an issue under CDP because you had a prior
opportunity to do so.” (Attorney Jerry R. Abraham has never
contradicted the Appeals settlement officer’s statement, nor has
Attorney Jerry R. Abraham ever contradicted the Appeals
settlement officer’s further statement that “Your POA agreed”,
i.e., that Attorney Jerry R. Abraham agreed with the Appeals
settlement officer’s statement.)
                                - 19 -

has done so without principled justification.13    In so doing we

find that he acted not only recklessly but in bad faith in

commencing and prosecuting the instant case.     See Takaba v.

Commissioner, 119 T.C. 285, 296-297 (2002).

     In sum, Attorney Jerry R. Abraham has unreasonably and

vexatiously multiplied the proceedings and should therefore pay

personally the excess costs, expenses, and attorneys’ fees

reasonably incurred by respondent because of his conduct.    Sec.

6673(a)(2)(A).

          2.     Amount of Counsel’s Liability

     We turn now to the amount that Attorney Jerry R. Abraham

should pay.

     This amount is a function of the time spent by respondent’s

counsel and the rate at which counsel should be compensated.

     13
        See Gillespie v. Commissioner, 102 AFTR 2d 6215, 2008-2
USTC par. 50,552 (7th Cir. 2008), a case in which the Tax Court
petition executed by the taxpayers’ attorney ignored sec.
6330(c)(2)(B) and challenged the existence or amount of the
underlying liability. In its Order, the Court of Appeals cited
sec. 6330(c)(2)(B) and stated that “The statute puts that subject
[how much the taxpayers owed] off limits”. The Court of Appeals
went on to state as follows:

     The [taxpayers’] lawyer comes close to conceding [that
     the petition was frivolous] and argues that counsel is
     entitled to file a petition in order to stall for time
     while trying to negotiate a settlement. That
     effectively concedes an abuse of process. There is no
     right to engage in frivolous litigation in order to
     delay collection.
                              - 20 -

      The record includes a Declaration by respondent’s field

counsel in Detroit, Michigan detailing time spent by him in

dealing with the instant case, a total of 10 hours.   Other than 2

hours to review “requirements for filing a motion for summary

judgment”, we find the time spent reasonable.14   In our view, 8

hours to review the petition and to file an answer, to draft a

motion for summary judgment, to attempt (on more than one

occasion) to contact Attorney Jerry R. Abraham to ascertain

petitioner’s position, to revise the motion, to review Attorney

Jerry R. Abraham’s response in opposition to the motion, to

review the Court’s June 27, 2008 Order And Order To Show Cause,

to coordinate with other members of Chief Counsel’s Office

regarding that matter and provide them with documentation, and to

prepare the Declaration is not “disproportionate and inaccurate”

as alleged by Attorney Jerry R. Abraham.15

     Finally, respondent’s request that attorney time be

compensated at the rate of $150 per hour is reasonable.

Moreover, that rate is consistent with other cases.   E.g.,

Gillespie v. Commissioner, T.C. Memo. 2007-202, affd. on other

     14
        We emphasize that the Declaration represents time spent
by respondent’s field counsel in Detroit, Michigan. Not included
is time spent by any of counsel’s supervisors or by respondent’s
other counsel (or supervisors) in preparing for and attending the
hearing in Washington, D.C.; that time has not been separately
listed in any other declaration filed with the Court.
     15
        We note that Attorney Jerry R. Abraham has not requested
a hearing on this matter.
                              - 21 -

issues 102 AFTR 2d 6215, 2008-2 USTC par. 50,552 (7th Cir. 2008);

see also Takaba v. Commissioner, supra at 303-305; Matthews v.

Commissioner, T.C. Memo. 1995-577, affd. without published

opinion 106 F.3rd 386 (3d Cir. 1996).   Finally, Attorney Jerry R.

Abraham has not suggested that any specific lesser rate is more

appropriate.

     In sum, the “lodestar” amount, see Harper v. Commissioner,

99 T.C. 533, 549 (1992), for respondent’s counsel’s time is

$1,200 (8 hrs. x $150/hr.).

Conclusion

     We shall enter an Order And Order And Decision:   (1)

Granting respondent’s Motion For Summary Judgment, filed May 27,

2008; (2) deciding that respondent may proceed with collection

for the taxable year 2002 as determined in the notice of

determination dated January 18, 2008, upon which notice this case

is based; (3) making our June 27, 2008 order to show cause

absolute; (4) and ordering Attorney Jerry R. Abraham to pay

personally $1,200 to the United States as a penalty pursuant to

section 6673(a)(2)(A).

                                   An order and order and

                              decision consistent with the

                              foregoing shall be entered.