T.C. Memo. 2006-260



                      UNITED STATES TAX COURT



                 ROBERT B. KEENAN, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 20073-05L.              Filed December 6, 2006.



     Robert B. Keenan, pro se.

     Linette B. Angelastro, for respondent.



                        MEMORANDUM OPINION


     MARVEL, Judge:   This matter is before the Court on

respondent’s motion for summary judgment, filed pursuant to Rule

121,1 and to impose a penalty under section 6673.


     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 in effect for the
                                                   (continued...)
                                 - 2 -

                            Background

     This is an appeal from respondent’s determination upholding

the proposed use of a levy to collect petitioner’s unpaid Federal

income tax liability for years 1988 and 1990 through 1994.

Petitioner resided in Camarillo, California, when the petition in

this case was filed.

     Petitioner failed to file Federal income tax returns for

1988 and 1990 through 1994.2   Respondent sent statutory notices

of deficiency to petitioner for those years, and petitioner

petitioned this Court with respect to respondent’s

determinations.   On March 7, 2003, the Court entered decisions

that upheld deficiencies and imposed additions to tax under

sections 6651(a)(1) and 6654.3    After the entry of the decisions

respondent assessed the income tax deficiencies and additions to

tax determined by the Court and interest as required by law and

sent petitioner notice and demand for payment.    On August 9,

2004, respondent sent petitioner a Notice of Intent to Levy and

Notice of Your Right to a Hearing, in accordance with sections

6330 and 6331, informing petitioner of respondent’s intent to


     1
      (...continued)
years in issue.
     2
       It appears petitioner did not file a Federal income tax
return for 1989, but that year is not before us.
     3
       We found petitioner liable for income tax deficiencies of
$351,228 and additions to tax under secs. 6651(a) and 6654 of
$78,674.50 and $18,652.17, respectively.
                                 - 3 -

levy to collect the unpaid tax liabilities and of petitioner’s

right to request a hearing with respondent’s Appeals Office.    On

September 7, 2004, petitioner submitted a Form 12153, Request for

a Collection Due Process Hearing.

     Petitioner’s hearing request was initially assigned to

Settlement Officer Adlai Climan (Mr. Climan).    On April 22, 2005,

Mr. Climan drafted an Appeals Case Memorandum that verified that

respondent’s assessments were timely and that petitioner had

received notice and demand for payment for each year in

accordance with section 6303.4    On May 4, 2005, Mr. Climan mailed

to petitioner a letter scheduling a face-to-face conference for

May 18, 2005, at the Los Angeles, California, Appeals Office.

Petitioner requested that the conference be held in Thousand

Oaks, California, because it was closer to his place of

residence.   Mr. Climan initially rejected petitioner’s request

because Mr. Climan’s office was located in Los Angeles, and no

settlement officers worked at the Thousand Oaks office.    After

receiving another request from petitioner to move the meeting to

Thousand Oaks, however, petitioner’s case was reassigned to




     4
       Sec. 6303 requires that the Secretary, within 60 days of
making an assessment of tax pursuant to sec. 6203, give notice to
the person liable for the unpaid tax, stating the amount due and
demanding payment.
                               - 4 -

Settlement Officer Timothy J. Sample (Mr. Sample), who was able

to conduct the hearing at petitioner’s desired location.5

     On June 16, 2005, Mr. Sample sent a letter to petitioner

confirming a face-to-face hearing for June 27, 2005.   On June 27,

2005, Mr. Sample telephoned petitioner and postponed the

conference because he needed to issue to petitioner a contact

letter setting forth the issues to be discussed at the conference

and requesting the financial information necessary to conduct the

hearing.   Mr. Sample informed petitioner that petitioner would be

denied a face-to-face hearing if petitioner did not raise any

substantive issues in response to these requests.   On June 27,

2005, Mr. Sample sent a letter to petitioner scheduling a

telephone conference for July 13, 2005.

     On July 8, 2005, Mr. Sample received a letter from

petitioner in which no substantive issues were raised and no

financial information was provided.    On July 13, 2005, Mr. Sample

attempted to contact petitioner to conduct the scheduled

telephone conference, but petitioner did not participate.   On

July 14, 2005, Mr. Sample sent petitioner a letter scheduling a

telephone conference for July 25, 2005.

     On July 15, 2005, Mr. Sample received from petitioner a

package of documents consisting of frivolous arguments and a


     5
       Mr. Sample works in the Glendale, Cal., office, but he
occasionally works in the Thousand Oaks office and was willing to
meet with petitioner at the Thousand Oaks office.
                                - 5 -

booklet entitled “Investigating the Federal Income Tax” but no

financial information.    On July 22, 2005, Mr. Sample received a

letter from petitioner claiming that he did not participate in

the July 13, 2005, telephone conference because he did not

receive the June 27, 2005, letter.      In a second letter to Mr.

Sample, petitioner stated that he wished to discuss collection

alternatives at a face-to-face hearing.

     Because petitioner stated that he wanted to discuss

collection alternatives, Mr. Sample elected to grant petitioner a

face-to-face hearing.    Before the hearing, Mr. Sample again

informed petitioner that he was required to submit income tax

returns and financial statements in order to discuss collection

alternatives.   On August 22, 2005, Mr. Sample received a letter

from petitioner containing constitutional arguments but no

financial information.

     On September 9, 2005, petitioner’s section 6330 hearing took

place.   Petitioner failed to provide any tax returns or financial

information, thus preventing the discussion of possible

collection alternatives.    When petitioner insisted on discussing

frivolous arguments concerning his underlying tax liability, Mr.

Sample adjourned the meeting.

     On October 4, 2005, respondent issued a Notice of

Determination Concerning Collection Action(s) Under Section 6320

and/or 6330, which sustained the proposed levy action.      In the
                               - 6 -

notice of determination, respondent concluded that petitioner’s

arguments challenging the validity of the assessments were

invalid, that no proposal for payment of the liabilities had been

made, and that all of the requirements imposed by section 6330

for a valid levy had been satisfied.     Respondent also found the

proposed levy action to be no more intrusive than necessary after

balancing the Government’s need to collect the tax with

petitioner’s legitimate concerns.

      On October 27, 2005, petitioner filed a timely petition

contesting respondent’s determination.    In his petition,

petitioner asserted that respondent failed to comply with the

notice requirements of sections 6303, 6330, and 6331, that

respondent erred by changing hearing officers, and that

respondent violated petitioner’s right to procedural due process

because petitioner was not granted a complete hearing to make an

administrative record of all of his issues.

      On September 25, 2006, respondent filed a motion for summary

judgment and to impose a penalty under section 6673.    On October

18, 2006, petitioner filed an objection to respondent’s summary

judgment motion.

                            Discussion

I.   Summary Judgment

      Summary judgment is a procedure designed to expedite

litigation and avoid unnecessary, time-consuming, and expensive
                               - 7 -

trials.   Fla. Peach Corp. v. Commissioner, 

, 681

(1988).   Summary judgment may be granted with respect to all or

any part of the legal issues presented “if the pleadings, answers

to interrogatories, depositions, admissions, and any other

acceptable materials, together with the affidavits, if any, show

that there is no genuine issue as to any material fact and that a

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

(b); Sundstrand Corp. v. Commissioner, 

, 520 (1992),

affd. 

(7th Cir. 1994); Zaentz v. Commissioner, 

, 754 (1988).   The moving party bears the burden of

establishing that there is no genuine issue of material fact, and

factual inferences will be drawn in a manner most favorable to

the party opposing summary judgment.   Dahlstrom v. Commissioner,

, 821 (1985); Jacklin v. Commissioner, 

,

344 (1982).   The nonmoving party, however, cannot rest upon the

allegations or denials in his pleadings, but must “set forth

specific facts showing that there is a genuine issue for trial.”

Rule 121(d); Dahlstrom v. Commissioner, supra at 820-821.

II.   Section 6330

      Section 6330(a) provides that no levy may be made on any

property or right to property of any person unless the Secretary

has notified such person in writing of the right to a hearing

before the levy is made.   If the person makes a request for a

hearing, a hearing shall be held before an impartial officer or
                               - 8 -

employee of the Internal Revenue Service Office of Appeals.      Sec.

6330(b)(1), (3).   At the hearing, a taxpayer may raise any

relevant issue, including appropriate spousal defenses,

challenges to the appropriateness of the collection action, and

collection alternatives.   Sec. 6330(c)(2)(A).   Taxpayers,

however, are expected to provide all relevant information

requested by Appeals, including financial statements, for its

consideration of the facts and issues involved in the hearing.

Sec. 301.6330-1(e)(1), Proced. & Admin. Regs.    Taxpayers are

precluded from contesting the existence or amount of the

underlying tax liability unless the taxpayer failed to receive a

notice of deficiency for the tax in question or did not otherwise

have an earlier opportunity to dispute the tax liability.     Sec.

6330(c)(2)(B); see also Sego v. Commissioner, 

, 609

(2000).

     Following a hearing, the Appeals Office must make a

determination whether the proposed levy action may proceed.      In

so doing, the Appeals Office is required to take into

consideration:   (1) The verification presented by the Secretary

that the requirements of applicable law and administrative

procedures have been met, (2) the relevant issues raised by the

taxpayer, and (3) whether the proposed levy action appropriately

balances the need for efficient collection of taxes with a

taxpayer’s concerns regarding the intrusiveness of the proposed
                                   - 9 -

levy action.    Sec. 6330(c)(3).    A hearing officer may rely on a

computer transcript or Form 4340, Certificate of Assessments,

Payments, and Other Specified Matters, to verify that a valid

assessment was made and that a notice and demand for payment was

sent to the taxpayer in accordance with section 6303.        Nestor v.

Commissioner, 

, 166 (2002); Schaper v. Commissioner,

T.C. Memo. 2002-203; Schroeder v. Commissioner, T.C. Memo. 2002-

190.    Absent a showing of irregularity, a transcript that shows

such information is sufficient to establish that the procedural

requirements of section 6330 have been met.      Nestor v.

Commissioner, supra at 166-167.

       Section 6330(d)(1) grants the Court jurisdiction to review

the determination made by the Appeals officer at the hearing.

Where the underlying tax liability is not in dispute, the Court

will review the determination of the Appeals Office for abuse of

discretion.    Lunsford v. Commissioner, 

, 185 (2001);

Sego v. Commissioner, supra at 610; Goza v. Commissioner, 

, 182 (2000).

       In this case, the undisputed facts set forth in respondent’s

motion, declarations in support of the motion, and attached

exhibits establish that respondent has satisfied the requirements

of section 6330.    Mr. Climan took into consideration all of the

factors required by section 6330(c)(3) and rejected petitioner’s

arguments as either frivolous or irrelevant.
                              - 10 -

     Petitioner argues that respondent failed to comply with the

notice requirements of sections 6303, 6330, and 6331.   Mr.

Climan, however, verified that the proper assessments were made

and the requisite notices had been sent to petitioner in

accordance with section 6303.6   Moreover, the record clearly

establishes that respondent provided petitioner with notice of

his intent to levy and of petitioner’s right to a hearing as

required by sections 6331 and 6330, respectively.

     Petitioner also asserts that respondent erred by changing

settlement officers.   We find this argument completely without

merit, as the reassignment of petitioner’s case to Mr. Sample was

done to accommodate petitioner’s own request to conduct the

hearing at the Appeals Office located in Thousand Oaks.

Petitioner failed to allege facts or demonstrate a connection as

to how this reassignment impacts the validity of his section 6330

proceeding.

     Finally, petitioner claims that respondent violated

petitioner’s right to procedural due process by refusing to allow

him to make an administrative record of all of his issues.

Petitioner argues that Mr. Sample’s decision to adjourn the

Appeals hearing deprived him of a full and complete hearing.    A



     6
       Mr. Climan confirmed that the Internal Revenue Service
(IRS) issued notice and demand to petitioner for the years at
issue by examining transcripts of account using the IRS’s
integrated data retrieval system.
                               - 11 -

taxpayer may raise, and the hearing officer must consider,

relevant issues raised by the taxpayer in a section 6330 hearing.

See sec. 6330(c)(2).    However, it is well established that the

Commissioner and the courts need not consider or refute frivolous

arguments with copious citation and extended discussion.

Williams v. Commissioner, 

, 138-139 (2000) (citing

Crain v. Commissioner, 

, 1417 (5th Cir. 1984)).       Mr.

Climan provided petitioner a meaningful opportunity to present

relevant, nonfrivolous arguments why the levy should not be

allowed to proceed, but petitioner repeatedly refused to provide

any such arguments or information necessary to support them.      Mr.

Sample made several requests for information regarding

petitioner’s financial condition both before and during the

hearing, but petitioner failed to provide any such information.

Accordingly, we find that Mr. Sample did not abuse his discretion

in terminating petitioner’s section 6330 hearing.    There is a

limit to the tax system’s tolerance for unproductive and

frivolous exchanges regarding a taxpayer’s obligations to file

returns and pay tax.    Kolker v. Commissioner, T.C. Memo. 2004-

288.

       On this record, we conclude that there is no genuine issue

of material fact requiring a trial in this case, and we hold that

respondent is entitled to the entry of a decision sustaining the

proposed levy as a matter of law.
                               - 12 -

III.   Section 6673 Penalty

       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 it appears that the taxpayer has instituted or

maintained a proceeding primarily for delay or that the

taxpayer’s position is frivolous or groundless.    Section

6673(a)(1) applies to proceedings under section 6330.      Pierson v.

Commissioner, 

, 581 (2000).    In proceedings under

section 6330, we have imposed the penalty on taxpayers who have

raised frivolous and groundless arguments with respect to the

legality of the Federal tax laws.    See, e.g., Roberts v.

Commissioner, 

, 372-373 (2002), affd. 

(11th Cir. 2003); Eiselstein v. Commissioner, T.C. Memo. 2003-22;

Yacksyzn v. Commissioner, T.C. Memo. 2002-99.

       In this case, the record clearly establishes that the only

arguments made by petitioner during the administrative processing

of this case were frivolous and/or groundless.    Petitioner’s

conduct as summarized in this opinion demonstrates that the

section 6330 proceeding was instituted primarily for delay and as

a means to challenge the legitimacy of the Federal income tax

system.    His conduct merits a substantial penalty.

       In setting the amount of the penalty, we consider

petitioner’s conduct in this case, his extended history of

noncompliance with Federal tax law, his history of pursuing
                              - 13 -

frivolous and groundless litigation in this Court, and the

warnings he has received in previous administrative and judicial

proceedings regarding the consequences of pursuing frivolous and

groundless arguments.   Petitioner repeatedly has failed to file

Federal income tax returns.   He participated in administrative

proceedings before the Internal Revenue Service and filed several

cases in this Court in which he challenged the legitimacy of the

tax system and repeatedly questioned his obligation to file tax

returns.   See Keenan v. Commissioner, T.C. Memo. 2006-45; Keenan

v. Commissioner, T.C. Memo. 1998-388.   During the previous

administrative and judicial proceedings and the section 6330

hearing in this case, petitioner was warned of the consequences

that may attach to his conduct challenging the tax system.    See,

e.g., Keenan v. Commissioner, T.C. Memo. 2006-45.   Despite the

warnings, petitioner has continued to challenge the validity of

the tax system and of the assessments at issue in this case.

Consequently, we shall require petitioner to pay to the United

States a penalty under section 6673(a)(1) of $15,000.

     Other arguments raised by petitioner have been considered

and are rejected as meritless.

     To reflect the foregoing,


                                         An appropriate order and

                                    decision will be entered.