Brumback v. Comm'r , 93 T.C.M. 1043 ( 2007 )

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.
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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).
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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).
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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.