T.C. Memo. 2009-229



                UNITED STATES TAX COURT



            FERNANDO POWERS, Petitioner v.
     COMMISSIONER OF INTERNAL REVENUE, Respondent



Docket No. 10758-06L.            Filed October 5, 2009.



     P submitted a 2001 Form 1040, listing as “-0-” his
income, adjusted gross income, tax and credits, other
taxes, and amount owed. On this form P claimed three
daughters as dependents; he also claimed a refund for
the Federal income tax withheld amounts shown on the
Form W-2 and the Form 1099-R attached thereto. R made
adjustments to P’s 2001 Form 1040. R contends that R
sent to P a notice of deficiency and P received it; P
contends otherwise. R assessed and initiated
collection proceedings. P requested a hearing.
Ultimately, R sent to P a notice of determination to
proceed with collection. P then petitioned this Court.
R moved for summary judgment and to impose a penalty
under sec. 6673(a)(1), I.R.C. 1986.

     1. Held: R failed to show there is no genuine
issue as to the material fact of whether R sent a
notice of deficiency to P.
                                - 2 -

          2. Held, further, R failed to show there is no
     genuine issue as to the material fact of whether P
     received a notice of deficiency.

          3. Held, further, R is entitled to summary
     judgment that the settlement officer employed in R’s
     Appeals Office was permitted to conduct the
     administrative collection hearing.

          4. Held, further, R is entitled to summary
     judgment that R’s settlement officer was impartial.

          5. Held, further, R is entitled to summary
     judgment that R’s answer was timely filed in accordance
     with our Rules, and so P is not entitled to a default
     judgment.

          6. Held, further, because P’s actions in the
     further proceedings in the instant case may affect our
     ruling as to sec. 6673(a)(1), I.R.C. 1986, R’s motion
     to impose a penalty will be denied; this matter is to
     be reexamined at an appropriate later time, at the
     Court’s own motion if necessary.



     Fernando Powers, pro se.

     Carol-Lynn E. Moran, for respondent.



                        MEMORANDUM OPINION


     CHABOT, Judge:   This matter is before us on respondent’s

motion for summary judgment under Rule 1211 and to impose a

penalty under section 6673.2    Petitioner commenced this case in


     1
      Unless indicated otherwise, all Rule references are to the
Tax Court Rules of Practice and Procedure.
     2
      Unless indicated otherwise, all section references are to
sections of the Internal Revenue Code of 1986 as in effect for
                                                   (continued...)
                              - 3 -

response to Notices of Determination Concerning Collection

Action(s) Under Section 6320 and/or 6330.3   Respondent moved for

summary judgment “upon all issues presented in this case”.    We

separately consider and rule on a number of those issues.    We

then consider and rule on respondent’s motion to impose a penalty

under section 6673.

     Our statements as to the facts are based on the parties’

exhibits, those matters that are admitted in the pleadings and

other documents in the Court’s file (e.g., petitioner’s request

for admissions and respondent’s response thereto), and those

matters that are admitted in the motion papers.

                           Background

     When the petition was filed in the instant case, petitioner

resided in New Jersey.

     In early 2002 petitioner sent to respondent a Form 1040,

U.S. Individual Income Tax Return, for 2001, hereinafter

sometimes referred to as petitioner’s 2001 Form 1040.    Attached

to petitioner’s 2001 Form 1040 were (1) a Form 1099-R,



     2
      (...continued)
proceedings commenced on the date the petition in the instant
case was filed, except that the section references in table 1 and
the footnotes thereto, infra, are to sections of the Internal
Revenue Code of 1986 as in effect for 2001.
     3
      The notices pertained to 2001 and 2002. Respondent
previously moved to dismiss as to 2002 for lack of jurisdiction,
and the Court granted that motion. Thus, only 2001 remains
before us.
                                - 4 -

Distributions From Pensions, Annuities, Retirement or Profit-

Sharing Plans, IRAs, Insurance Contracts, etc., showing a total

distribution from a “Thrift and Stock Plan” of $9,984.91, with

$1,996.98 Federal income tax withheld and $105 New Jersey State

tax withheld, and (2) a Form W-2, Wage and Tax Statement, showing

compensation of $35,287.17, with $159.92 Federal income tax

withheld and $718.72 New Jersey State income tax withheld.

     During 2002 employees of the Internal Revenue Service

(hereinafter collectively referred to as the IRS) and petitioner

communicated with each other.   On December 1, 2002, the IRS sent

a letter to petitioner stating that petitioner’s 2001 Form 1040

“cannot be processed”.   The letter stated there was enclosed a

report proposing “tax and penalties” and asked for a response

within 30 days.   On December 12, 2002, the IRS received a letter

in response from petitioner, contending the IRS has no authority

to “change” his tax return and stating that he did not intend to

“self-assess” any 2001 income tax liability against himself.

     The IRS prepared a notice of deficiency addressed to

petitioner and dated May 21, 2003.      (There is a dispute as to

whether this notice of deficiency was sent and, if it was sent,

whether petitioner received it.)

     Table 1 compares certain items on petitioner’s 2001 Form

1040 with corresponding items on the notice of deficiency.
                            - 5 -

                        Table 1

                      Petitioner’s 2001         Notice
          Item            Form 1040         of Deficiency

Filing status           1
                         Single/head              Single
                         of household
Adjusted gross income         -0-             $51,991.00
                                              2

Dependents                     3                     -0-
Personal exemption            -0-               (2,900.00)
Deductions                    -0-              3
                                                (4,550.00)
Taxable income                -0-               44,541.00
Sec. 1 income tax             -0-                  8,863.00
Credits                       -0-                   4
                                                     300.00
“IRA tax”                     -0-                   5
                                                     998.00
Total tax liability           -0-                 9,561.00
Withholding                $2,156.90             6
                                                  2,155.00
Refund                      2,156.90                 -0-
Balance due                   -0-                 7,406.00
Sec. 6651(a)(1) addition      ---                 1,851.50
Sec. 6654 addition            ---                   7
                                                     286.40
Interest (to 12/31/2002)      ---                    404.21
Amount due                    -0-                 9,948.11

      Petitioner showed himself as both “Single” and
      1

“Head of household” on the Filing Status portion of his
2001 Form 1040.
     2
      This is the sum of the five income adjustments in
the notice of deficiency--three Form W-2 wage items, a
Form 1099-R distribution item, and an unemployment
compensation item.
     3
      Respondent allowed the standard deduction for a
single taxpayer. The standard deduction for a head of
household was $6,650.
     4
      Rate reduction credit.
     5
      We surmise that this is the 10-percent additional
tax under sec. 72(t) on account of the $9,984.91
distribution shown on a Form 1099-R attached to
petitioner’s 2001 Form 1040.
     6
      At the hearing on respondent’s motion, respondent
conceded that petitioner was entitled to the additional
$1.90 credit for withholding.
     7
      In the calculation of the sec. 6654 addition to
tax in the notice of deficiency respondent determined
that the prior year tax liability was “0.00”. We draw
respondent’s attention to Wheeler v. Commissioner, 

, 210-212 (2006), affd. 

(10th
Cir. 2008).
                              - 6 -

     On October 13, 2003, respondent assessed the amounts shown

in table 2.

                             Table 2

                Item                           Amount

          Additional tax                     $9,561.00
          Late filing “penalty”               1,666.35
          Failure to pay tax “penalty”1         666.54
          Estimated tax “penalty”2              286.40
          Interest                              770.90
          1
           The notice of deficiency, in the “Explanation of
     the Delinquency Penalty” portion, states: “5. Failure
     to Pay penalty rate 0.000” and that the amount of the
     “penalty” is “0.00”. We draw respondent’s attention to
     Wheeler v. Commissioner, 

.
          2
           See supra note 7 to table 1.

     The parties agree that respondent sent to petitioner a

notice of tax lien for 2001, dated June 28, 2005.

     Respondent sent to petitioner a Notice of Federal Tax Lien

Filing and Your Right to a Hearing Under IRC 6320, dated July 7,

2005, hereinafter sometimes referred to as the notice of filing.

In the notice of filing respondent stated that on June 30, 2005,

respondent had filed a notice of tax lien in the amount of

$10,796.19 on account of petitioner’s 2001 income tax liability

(see supra note 3, regarding an unrelated 2002 item), that this

“lien attaches to all property you currently own and to all

property you may acquire in the future”, and that petitioner has

“a right to request a hearing with us to appeal this collection

action and to discuss your payment method options.”   Enclosed

with the notice of filing was a Form 12153, Request for a
                                - 7 -

Collection Due Process Hearing (hereinafter sometimes referred to

as the hearing request), and an instruction that petitioner “must

request [his] hearing by 08/08/2005.”

     On July 24, 2005, petitioner submitted a hearing request

identifying the taxable periods as 1996 through 2002 and stating:

“1996 and prior we were a family of 5, then from 1996-97 to

present day I’m single with three children.”    In the hearing

request, petitioner listed the following reasons for disagreement

with respondent:

     1. If I had a liability my children were never
     computed in by the IRS! [At this point in the hearing
     request petitioner set forth the names and Social
     Security numbers of the three children.]

     2. I was never given DPH (Due Process Hearing) when I
     requested for it, or an audit! IRS is subject to 6320.

     3. IRS never responded to my letters or responses to
     the IRS or my request for a face to face hearings.
     (Please read your mission statement)

     4. IRS has failed to follow their statutory laws and
     manuals in violation of 7214 title 26, that they are
     subject to. Yick Wo v. Hopkins. U.S. Supreme Court.
     [Reproduced literally.]

     Respondent’s settlement officer, Darryl Lee (hereinafter

sometimes referred to as Lee), replied to the hearing request on

February 23, 2006.    Lee is a settlement officer employed in

respondent’s Philadelphia Appeals Office; he is not an appeals

officer.   In that reply, Lee verified receipt of the hearing

request and said:    “The items that you mention in your CDP
                                 - 8 -

request are items that:   1. Courts have determined are frivolous

or groundless, or 2. Appeals does not consider.    These are moral,

religious, political, constitutional, conscientious, or similar

grounds.”   Lee referred petitioner to a Web site containing

examples of arguments that are considered frivolous or

groundless, and then noted:     “Appeals does not provide a face-to-

face conference if the only items you wish to discuss are those

mentioned above.”    Lee asked petitioner to write within 15 days

to “describe the legitimate issues you will discuss” at a hearing

and stated that a telephone conference would be available to

petitioner:   “I have scheduled a telephone conference for you on

March 30, 2006 at 10:00 am.”4

     Petitioner replied to Lee in a letter apparently sent on or

about March 7, 2006, stating that Lee did not specify which of

petitioner’s arguments were frivolous and asking Lee to do so.

Petitioner stated:    “I want to have a face to face meeting and be

able to record as I have done so for other previous years”.

Petitioner added:    “I do not have a long distance phone to use to

call you or anyone available on that date that you placed on your




     4
      In the pleadings, the parties agree that Lee’s letter
scheduled the telephone conference for 11 a.m. Our finding of 10
a.m. is a quotation from Lee’s letter, which is attached as an
exhibit to Lee’s declaration in support of respondent’s summary
judgment motion. See Jasionowski v. Commissioner, 

,
318 (1976). We note also that respondent’s motion papers state
the telephone conference was scheduled for 10 a.m.
                                - 9 -

letter to me which is March 30, 2006.”    In this letter, as in the

hearing request and his 2001 Form 1040, petitioner stated that he

is a single parent of three daughters.

     Lee replied to petitioner on March 23, 2006, again denying

petitioner a face-to-face hearing because petitioner did not

inform him, “in writing, of the legitimate issues” that

petitioner intended to raise at the hearing.    Lee stated:   “At

this time, you are prohibited from recording[5] or having a face

to face conference.”    Lee concluded:   “Since you do not have long

distance on your telephone, provide me with a contact phone

number you can be reached at on March 30, 2006 at 10:00am.”

(Emphasis added.)

     On March 30, 2006, Lee wrote to petitioner about the

telephone conference:    “The conference was scheduled for March

30, 2006 at 11:00am.    I tried calling you at the scheduled time

but you were not available and you had not called to indicate

that this date and/or time were not convenient.”    (Emphasis

added.)   Lee added:   “Please be advised that we will make a

determination in the Collection Due Process hearing you requested

by reviewing the Collection administrative file and whatever

information you have already provided.”    Lee also said that




     5
      See Calafati v. Commissioner, 

(2006); Keene v.
Commissioner, 

(2003).
                              - 10 -

petitioner could provide additional information “within 14 days

from the date on this letter.”

     On May 5, 2006, respondent sent to petitioner two documents

titled “Notice of Determination Concerning Collection Action(s)

Under Section 6320 and/or 6330”, for 2001.6   The notices are

identical and were sent to petitioner at two different addresses.

The notices state, in pertinent part,7 as follows:

     CHALLENGES TO THE APPROPRIATENESS OF COLLECTION ACTIONS

     You did not challenge collection actions. You were
     sent an appointment letter dated February 23, 2006 for
     a telephone conference on March 30, 2006. Since you
     failed to call for your conference, you were sent a
     final opportunity letter dated March 30, 2006 that
     provided you 14 days to provide information to be
     considered for your hearing. You failed to submit any
     information.

     The issues you address on your request for a hearing
     were determined to be frivolous. You were advised of
     this in your appointment letter. You failed to send in
     a letter with issues you would like to address other
     than those determined to be frivolous.

     No issues were raised.



     6
      Another pair of notices was sent at the same time for 2002.
See supra note 3.
     7
      The notices also state that the notice of filing “was sent
to you [petitioner] on July 7, 2005. Your Form-12153 was
received on July 29, 2005. The request is not timely.”
Petitioner’s Form 12153 (the hearing request) was timely--the
notice of filing directed petitioner to file the form by
“08/08/2005”, and in this proceeding respondent has consistently
admitted the timeliness. The record shows that respondent has
proceeded on the basis that the hearing request was timely. Thus
this error in the notices has merely been a distraction that has
not affected petitioner’s rights.
                              - 11 -

The notices are signed by Laura Weening, Appeals Team Manager;

they state that Lee is the “Person to Contact”.

     Petitioner then timely filed a petition with this Court.

                            Discussion

1.   Parties’ Contentions, Conclusions

      Respondent contends that respondent mailed and petitioner

received the notice of deficiency for 2001.     In support of this

contention, respondent invokes the presumptions of official

regularity and delivery of the mail.     In regard to the

administrative collection hearing, respondent contends that Lee

attempted to call petitioner on the telephone for the

administrative collection hearing, but petitioner did not answer.

Respondent maintains that Lee then sent a “second chance” letter

to petitioner, but petitioner did not respond to that letter.

Respondent denies that there was a “default” on respondent’s

part.

      Respondent further contends that a penalty should be imposed

on petitioner under section 6673 because petitioner is using the

Tax Court collection proceeding merely to raise frivolous

arguments and to delay collection.

      Petitioner contends that (1) respondent did not issue and he

did not receive a notice of deficiency for 2001; (2) respondent

failed to provide him with an administrative collection hearing;

(3) he is entitled to a default judgment under Rule 123; (4) an
                                - 12 -

appeals officer, rather than a settlement officer, should have

conducted the administrative collection hearing; and (5)

respondent’s settlement officer was not impartial.    Petitioner

also objects that he does not know what he has done that

respondent contends is frivolous.

      We conclude that (a) respondent is not entitled to summary

judgment on the material facts of (1) whether respondent sent a

notice of deficiency to petitioner and (2) whether petitioner

received any such notice of deficiency; (b) respondent is

entitled to summary judgment that (1) Lee, a settlement officer

employed in respondent’s Appeals Office, was permitted to conduct

the administrative collection hearing; (2) Lee was impartial, and

(3) respondent timely filed the answer and so the filing of the

answer was not a violation of our Rules and so does not lead us

to declare a default; (c) other matters that may be subsumed in

respondent’s summary judgment motion may be moot and so will be

denied without prejudice.    We will deny respondent’s motion to

impose a penalty under section 6673 but only because petitioner’s

actions in further proceedings in the instant case may affect our

ultimate ruling; this matter is to be revisited at an appropriate

time.

2.   In General--Summary Judgment

        Summary judgment is a procedure used to expedite litigation;

it is intended to avoid unnecessary and expensive trials.
                              - 13 -

However, it is not a substitute for trial; it should not be used

to resolve genuine disputes over material factual issues.         Cox v.

American Fidelity & Casualty Co., 

, 618 (9th Cir.

1957); Vallone v. Commissioner, 

, 801 (1987).      A

motion for summary judgment will be granted “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(b).

     Because the effect of granting a motion for summary judgment

is to decide the case against a party without allowing that party

an opportunity for trial, the procedure should be “cautiously

invoked” and the motion should be granted only after a careful

consideration of the case.   Associated Press v. United States,

, 6 (1945); Cox v. American Fidelity & Casualty 

; Kroh v. Commissioner, 

, 390 (1992).

The moving party has the burden of showing the absence of a

genuine issue as to any material fact.   Ideal Dairy Farms, Inc.

v. John Labatt, Ltd., 

, 743 (3d Cir. 1996); Dahlstrom

v. Commissioner, 

, 821 (1985).   For these purposes,

the party opposing the motion is to be afforded the benefit of

all reasonable doubt, and the material submitted by both sides

must be viewed in the light most favorable to the opposing party;
                              - 14 -

that is, all doubts as to the existence of an issue of material

fact must be resolved against the movant.   E.g., Adickes v. S.H.

Kress & Co., 

, 157 (1970); Pennsylvania Coal Ass’n v.

Babbitt, 

, 236 (3d Cir. 1995); Dreher v. Sielaff, 

, 1143 n.4 (7th Cir. 1980); Kroh v. Commissioner, 

.   A motion for summary judgment may be granted in

part and denied in part.   Elect. Arts, Inc. v. Commissioner, 

, 238 (2002).

3.   In General--The Collection Framework

      In general, section 6321 imposes a lien in favor of the

United States on all property and rights to property of a person

liable for tax when a demand for the payment of the person’s

taxes has been made and the person fails to pay those taxes.

Such a lien arises when an assessment is made.   Sec. 6322.

      Sections 6320 (relating to liens) and 6330 (relating to

levies) generally provide protections for taxpayers in tax

collection matters.   In general, sections 6320 and 6330 provide

for notice and the right to an administrative hearing and

judicial review when the Commissioner files a Federal tax lien or

proposes to collect unpaid taxes by levy.    Inv. Research

Associates, Inc. v. Commissioner, 

, 185-186 (2006).

     Section 6320(a)(1) requires the Commissioner to “notify in

writing the person described in section 6321 of the filing of a

notice of lien under section 6323.”    Section 6320(a)(2) generally
                             - 15 -

sets forth the time and methods under which the Commissioner is

required to provide the notice described in section 6320(a)(1).

The flush language of section 6320(a)(2) provides that the notice

required by section 6320(a)(1) is to be provided not more than 5

business days after the day of the filing of the notice of lien.8

Section 6320(a)(3) describes the information required to be

included in the notice described in section 6320(a)(1).    Section

6320(a)(3)(B) provides that the notice shall include “the right

of the person to request a hearing during the 30-day period

beginning on the day after the 5-day period described in

paragraph (2)”.9

     Section 6320(b) affords taxpayers the right to a hearing

before an impartial officer or employee of the Appeals Office.

Pursuant to section 6320(b)(2), a taxpayer is entitled to only

one hearing regarding the tax period relating to the amount of

unpaid tax.

     Section 6320(c), as effective for the instant case, provided

that the hearing generally shall be conducted consistent with the

procedures set forth in sections 6330(c), (d) (other than

paragraph (2)(B) thereof), and (e).



     8
      July 7, 2005, the date of the notice of filing, was the
fourth business day after June 30, 2005, the date respondent
filed the notice of tax lien.
     9
      Petitioner submitted the hearing request on July 24, 2005,
well within the required 30-day period. See supra note 7.
                              - 16 -

     Section 6330(c)(1) requires the appeals officer to obtain

verification that the requirements of any applicable law or

administrative procedure have been met.    Section 6330(c)(2)(A)

provides that the taxpayer may raise at the hearing “any relevant

issue relating to the unpaid tax or the proposed levy” including

spousal defenses, challenges to the appropriateness of collection

actions, and alternatives to collection.

     Section 6330(c)(3) provides that a determination of the

appeals officer shall take into consideration the verification

under section 6330(c)(1), the issues raised by the taxpayer, and

whether the proposed collection action balances the need for the

efficient collection of taxes with the legitimate concern of the

taxpayer that any collection action not be any more intrusive

than necessary.

     Section 6330(c)(2)(B) provides, in general, that a taxpayer

may dispute the underlying tax liability at the administrative

collection hearing if both of two requirements have been

satisfied:   (1) The taxpayer did not receive a notice of

deficiency for that tax liability and (2) the taxpayer did not

otherwise have an opportunity to dispute that tax liability.    See

Hoyle v. Commissioner, 131 T.C.     ,      (2008) (slip op. at 5).

If either one of these requirements is not satisfied (i.e., if

the taxpayer received the notice of deficiency or the taxpayer

had another opportunity to dispute the tax liability), then
                              - 17 -

section 6330(c)(2)(B) does not provide authority for the taxpayer

to dispute that tax liability at the administrative collection

hearing.   See Kuykendall v. Commissioner, 

, 8010

(2007) (as to notice of deficiency); Lewis v. Commissioner, 

(2007) (as to other opportunity to dispute).

     When the Appeals Office issues a notice of determination to

a taxpayer following an administrative collection hearing

regarding a lien or levy action, sections 6320(c) (by way of

cross-reference) and 6330(d)(1) provide that the taxpayer will

have 30 days following the issuance of a notice of determination

to seek judicial review.   If the underlying tax liability is

properly in issue, then the court will review the determination

by the Appeals Office de novo.   Sego v. Commissioner, 

, 610 (2000).   If, instead, the underlying tax liability is

not in issue, then the court will review the determination of the

Appeals Office for abuse of discretion.

      In Kuykendall v. Commissioner, 

(2007), the
parties disputed whether the taxpayers’ actual receipt of the
notice of deficiency 12 days before the end of the period for
petitioning this Court constituted a receipt of the notice of
deficiency for purposes of sec. 6330(c)(2)(B). We held that it
did not. There not being any contention that the taxpayers
otherwise had an opportunity to dispute their tax liability, we
remanded to the Appeals Office for further proceedings.

As a result of the administrative hearing after the remand,
the parties in that case agreed to a reduction of more than 40
percent in the taxpayers’ liability. Kuykendall v. Commissioner,
T.C. Memo. 2008-277.
                                - 18 -

4.   Summary Judgment Issues

       A.   The Notice of Deficiency--Sending and Receipt

       The parties dispute whether (1) respondent sent a notice of

deficiency and (2) petitioner received one.     The analysis of each

of these two issues involves examination of many of the same

materials that have been presented to us in connection with the

other of these issues.     But each of these issues has different

consequences from the other, and so we consider them separately.

We consider first the sending and then the receipt.

             (1) Whether a Valid Notice of Deficiency Was Sent To
                 Petitioner

       In the setting of the instant case, if a valid notice of

deficiency for 2001 was not sent to petitioner, then an

assessment of a deficiency would be invalid.     See sec. 6213(a);

Freije v. Commissioner, 

, 35-37 (2005).     As we stated

in Hoyle v. Commissioner, 131 T.C. at       ,     (slip op. at 14-

15):

       Under sections 6321 and 6322, a tax lien arises in
       favor of the United States at the time an assessment is
       made. If respondent did not validly assess
       petitioner’s 1993 tax liability, then no lien would
       have arisen with respect to that tax liability and
       collection could not proceed. Accordingly, if the
       assessment was invalid, the determination to proceed
       with collection was error as a matter of law. * * *

       Accordingly, whether respondent mailed the notice of

deficiency is a material fact in the instant case and we must
                               - 19 -

determine whether respondent carried the summary judgment burden

of showing that there is no genuine issue as to this fact.

     Respondent asserts that “Respondent properly mailed the

statutory notice of deficiency to the petitioner’s last known

address on May 21, 2003.”11   But Lee’s declaration, attached to

respondent’s motion, does not assert that a notice of deficiency

was mailed, much less that it was “properly mailed” or that it

was mailed on May 21, 2003.   Nor does any of the 17 exhibits

attached to Lee’s declaration (which we understand to be what

respondent asserts are “the relevant documents contained in the

administrative record from the CDP hearing”) assert any of the

foregoing.

     Respondent filed a certified copy of the Form 4340,

Certificate of Assessments, Payments, and Other Specified

Matters, as a supplement to the motion before us.   That document

shows actions on various dates, including assessments having been

made on October 13, 2003, but does not show any event as having

occurred on May 21, 2003, and does not reference any mailing of a

notice of deficiency.   A document described as “a literal



     11
      At another point in the motion papers respondent asserts
that “On May 21, 2003, respondent sent a statutory notice of
deficiency to petitioner, proposing a tax liability for taxable
year 2001 and additions to tax under I.R.C. §§ 6651(a)(1) and
6654(a).” (Emphasis added.) We assume respondent’s contention
is as to a notice of deficiency that determined deficiencies, and
not a document proposing deficiencies, such as a so-called 30-day
letter.
                                - 20 -

transcript for taxable year 2001”, attached to Lee’s declaration,

is similar to the Form 4340; it also does not show any event as

having occurred on May 21, 2003, and does not reference any

mailing of a notice of deficiency.

     In Lee’s declaration, he asserts that he verified that all

legal and procedural requirements were met.

     Lee’s declaration does not indicate what he relied on to

verify that the notice of deficiency was mailed.    Lee attached

the notice of determination to his declaration.    The entire

explanation of this matter in the notice of determination is as

follows:

     VALIDITY OF THE ASSESSMENT

     The assessment is valid.

Respondent’s analysis in the summary judgment motion is as

follows:

     17. Respondent properly mailed the statutory notice of
     deficiency to petitioner’s last known address on May
     21, 2003. A copy of the notice of deficiency for
     taxable year 2001 sent certified mail to petitioner is
     contained in respondent’s examination file, and is
     attached hereto as Declaration Exhibit D. While there
     is no United States Postal Service Form 3877 in the
     administrative file, the certified mail number 7112
     7667 8555 3616 8042 is located on the first page of the
     statutory notice of deficiency, reflecting that the
     letter was sent out by certified mail to the
     petitioner. Respondent is entitled to rely upon
     presumptions of official regularity and delivery where
     the record reflects proper mailing of the statutory
     notice of deficiency. Sego v. 

[

, 610 (2000)]; Bailey v. Commissioner, T.C.
     Memo. 2005-241. See also Figler v. Commissioner, T.C.
     Memo. 2005-230; Carey v. Commissioner, T.C. Memo. 2002-
                              - 21 -

     209. There is no evidence that the statutory notice of
     deficiency was returned to the Service. Petitioner did
     not deny receipt of the notice of deficiency in his
     Form 12153 or during the CDP hearing. Thus, the
     presumptions of official regularity and delivery have
     not been rebutted. Bailey v. 

.
     Accordingly, the settlement officer did not consider
     underlying liability.

None of the four cases respondent cites was a summary judgment

proceeding, with the special obligations that are imposed on the

movant of a summary judgment motion.   In Sego and Figler the

Commissioner presented U.S. Postal Service Forms 3877.    In the

instant case, not only was no Form 3877 presented; respondent

asserts there is no Form 3877 in the administrative file.    In

Bailey the parties stipulated that the notice of deficiency was

mailed; in the instant case, this is a disputed matter.    In Carey

the dispute was whether the notices of deficiency were mailed to

the taxpayer’s last known address, not whether they were mailed

at all.   None of these cases supports respondent’s position in

the summary judgment motion before us.

     Hoyle v. Commissioner, 131 T.C.      (2008), is close to

being on all fours with the instant case, the main difference

being that Hoyle did not involve the additional obligations

imposed in the instant case because respondent is proceeding here

by way of summary judgment.   We stated as follows in Hoyle v.

Commissioner, 131 T.C. at     ,     (slip op. at 11-12, 13-14):

          Respondent asserts that in the absence of clear
     evidence to the contrary, respondent may rely on a
     presumption of official regularity. We have held that
                                      - 22 -

     exact compliance with Postal Service Form 3877 mailing
     procedures raises a presumption of official regularity
     in favor of the Commissioner and is sufficient, absent
     evidence to the contrary, to establish that the notice
     was properly mailed. Coleman v. Commissioner, 

(1990); see also United States v. Zolla, 

, 810 (9th Cir. 1984). It may be true that an
     Appeals officer could rely on a properly completed
     Postal Service Form 3877 to meet his verification
     obligation under section 6330(c)(1); however, in the
     instant case, the administrative record did not contain
     a Postal Service Form 3877. Accordingly, the Appeals
     officer could not have based his verification on that
     form.

              *       *       *         *      *       *        *

          In sum, it is unclear what the Appeals officer
     relied on to verify that the assessment of petitioner’s
     1993 tax liability was preceded by a duly mailed notice
     of deficiency. Because it is not clear from the record
     that respondent sent a notice of deficiency to
     petitioner before assessing the deficiencies in issue,
     we must decide whether it is appropriate for this Court
     to review petitioner’s underlying tax liability de novo
     or whether instead we should remand to the Appeals
     Office for clarification of the basis for the Appeals
     officer’s verification that all requirements of
     applicable law were met. [Fn. ref. omitted.]

     In the instant case, as respondent notes, “there is no

United States Postal Service Form 3877 in the administrative

file”.     The material submitted does not include any other

evidence of any mailing or any assertion that would meet the

requirements of Rule 121(d).12


     12
          Rule 121(d) provides as follows:

                          RULE 121.    SUMMARY JUDGMENT

                  *       *       *     *      *   *       *

                                                               (continued...)
                             - 23 -

     All of the cases respondent relies on in the “presumptions-

of-official-regularity-and-delivery” argument have anchored those

presumptions in significant evidence; the argument in the instant

summary judgment motion is not so anchored.

     Respondent’s argument in this setting puts us in mind of our

response to a taxpayer’s argument in Bibby v. Commissioner, 

, 646 n.4 (1965):

          Petitioners’ explanation of how the intention to
          4

     make a valid conveyance somehow results in such a
     conveyance actually being made is strikingly similar to
     the explanation given by Ko-Ko, the Lord High
     Executioner, to the Mikado of Japan in Gilbert and
     Sullivan’s operetta. To show how it could be that,
     although the Mikado had ordered an execution, the
     would-be victim was not yet deceased, Ko-Ko explained:



     12
      (...continued)
          (d) Form of Affidavits; Further Testimony; Defense
     Required: Supporting and opposing affidavits shall be
     made on personal knowledge, shall set forth such facts
     as would be admissible in evidence, and shall show
     affirmatively that the affiant is competent to testify
     to the matters stated therein. Sworn or certified
     copies of all papers or parts thereof referred to in an
     affidavit shall be attached thereto or filed therewith.
     The Court may permit affidavits to be supplemented or
     opposed by answers to interrogatories, depositions,
     further affidavits, or other acceptable materials, to
     the extent that other applicable conditions in these
     Rules are satisfied for utilizing such procedures.
     When a motion for summary judgment is made and
     supported as provided in this Rule, an adverse party
     may not rest upon the mere allegations or denials of
     such party’s pleading, but such party’s response, by
     affidavits or as otherwise provided in this Rule, must
     set forth specific facts showing that there is a
     genuine issue for trial. If the adverse party does not
     so respond, then a decision, if appropriate, may be
     entered against such party. [Emphasis added.]
                               - 24 -

            When your Majesty says, “Let a thing be
            done,” it’s as good as done--practically, it
            is done--because your Majesty’s will is law.
            Your Majesty says, “Kill a gentleman,” and a
            gentleman is told off to be killed.
            Consequently, that gentleman is as good as
            dead--practically, he is dead--and if he is
            dead, why not say so?

       Unlike the Mikado, we do not find the syllogism
       sufficiently persuasive.

       On the basis of the foregoing, we conclude that respondent

failed to show that there is no genuine issue as to the material

fact of whether respondent mailed a notice of deficiency to

petitioner.    Consequently, summary judgment will be denied on

this matter.

       The parties must understand that this is not a ruling on the

underlying issue; this ruling merely restores this matter to

consideration under our normal procedures in collection cases.

See Hoyle v. 

.    As to further proceedings on

this point, it may be helpful to compare Butti v. Commissioner,

T.C. Memo. 2008-82, with Butti v. Commissioner, T.C. Memo. 2009-

198.

            (2) Whether Petitioner Received a Notice of Deficiency

       In general the Commissioner must not assess a deficiency

until a notice of deficiency has been sent to the taxpayer.    Sec.

6213(a).    If the notice of deficiency was sent to the taxpayer’s

last known address, then it is effective for section 6213(a)

purposes even if the taxpayer did not receive the notice.    Sec.
                                  - 25 -

6212(b); see, e.g., Mason v. Commissioner, 132 T.C.           ,         n.9

(2009) (slip op. at 29); Weber v. Commissioner, 

, 263

(2004); Pietanza v. Commissioner, 

, 736 (1989), affd.

without published opinion 

(3d Cir. 1991).            In

contrast, under the collection statute, if the taxpayer did not

receive a notice of deficiency, then the taxpayer generally would

be entitled to dispute the underlying tax liability at the

administrative collection hearing.         Sec. 6330(c)(2)(B).13

     Among the matters petitioner raised on many occasions (see

infra 5. Sec. 6673 Penalty) is his entitlement to claim the

income tax benefits that may result from his being “single with



     13
          Sec. 6330(c)(2)(B) provides as follows:

     SEC. 6330.      NOTICE AND OPPORTUNITY FOR HEARING BEFORE
                     LEVY.

                 *      *     *     *        *     *     *

          (c) Matters Considered at Hearing.--In the case of
     any hearing conducted under this section--

                 *      *     *     *        *     *     *

                  (2) Issues at hearing.--

                 *      *     *     *        *     *     *

                       (B) Underlying liability.--The person
                  may also raise at the hearing challenges to
                  the existence or amount of the underlying tax
                  liability for any tax period if the person
                  did not receive any statutory notice of
                  deficiency for such tax liability or did not
                  otherwise have an opportunity to dispute such
                  tax liability.
                                - 26 -

three children”, his having identified the children by name and

Social Security number.    This appears to be a nonfrivolous issue

that (if he prevailed on it in whole or part) could reduce his

2001 income tax liability.14

     Accordingly, the issue of whether petitioner received a

notice of deficiency appears to be an issue as to a material

fact.     Cf. Elect. Arts, Inc. v. Commissioner, 

.

     We consider whether the movant, respondent, has shown that

in the words of Rule 121(b), this is “no genuine issue”.    That

brings us to the question of whether respondent has shown that

petitioner received the notice of deficiency, a copy of which is

included in respondent’s motion papers and is 

in

table 1.15

     Respondent’s contentions in this regard are essentially the

same as those with regard to the mailing 

, relying on




     14
       Respondent directs our attention to Carrillo v.
Commissioner, T.C. Memo. 2005-290, Holliday v. Commissioner, T.C.
Memo. 2005-240, and Delgado v. Commissioner, T.C. Memo. 2005-186.
In all of these cases we concluded that the taxpayers failed to
identify any specific colorable or legitimate issues. Viewing
the instant case through the lens of respondent’s summary
judgment motion, we conclude that petitioner’s repeated claim to
being “single with three children” is a colorable or legitimate
issue.
     15
      Respondent does not contend, in connection with the
instant summary judgment motion, that petitioner had any other
opportunity to dispute his tax liability, so we focus on the
notice of deficiency alternative in sec. 6330(c)(2)(B). Cf.
Lewis v. Commissioner, 

(2007).
                              - 27 -

the same four opinions.   We conclude that none of the four

opinions supports respondent’s position on the receipt issue.

     In Sego v. Commissioner, 

(2000), we held that,

for purposes of section 6330(c)(2)(B), a taxpayer may not defeat

receipt of the notice of deficiency by deliberately refusing it.

In so holding, we relied on the substantial evidence there in the

record indicating that the notice of deficiency was properly sent

and, absent the taxpayer’s refusal to accept delivery, would have

been received:

          The record in this case contains a copy of a
     notice of deficiency dated August 13, 1997, addressed
     to Davina Sego; a Form 3877 indicating that the notice
     was sent on the date it bears; corroborating Postal
     Service forms and testimony indicating attempted
     delivery of the statutory notice to Davina Sego at the
     address acknowledged by petitioners to be their
     residence; and evidence that Davina Sego would not have
     petitioned the Court in response to the statutory
     notice of deficiency if she had actually received it. *
     * *

          * * * Based on the Court’s observation of
     petitioners, their claims are at best misguided and, in
     any event, unreliable and improbable. On the
     preponderance of the evidence, we conclude that the
     statutory notice of deficiency was sent to Davina Sego
     and that the notices of attempted delivery of certified
     mail were left at petitioners’ residence as testified
     by the Postal Service employee. Further, we conclude
     that each petitioner had an earlier opportunity to
     dispute in this Court his or her tax liability for
     1993, 1994, and 1995 and deliberately declined to do
     so. See sec. 6330(c)(2)(B). [Id. at 610-611.]

In contrast to the substantial evidence presented in Sego,

respondent (in the instant summary judgment motion) has not

presented (1) a U.S. Postal Service Form 3877 demonstrating that
                              - 28 -

the notice was sent on the date contained in the notice; (2)

other U.S. Postal Service forms and corroborating affidavits

indicating attempted delivery of the notice of deficiency; or (3)

evidence demonstrating that even if petitioner had received the

notice, he would not have petitioned the Tax Court.   Nor has

respondent provided any evidence that petitioner deliberately

refused the notice of deficiency.   Respondent cannot find support

in Sego.

     In Bailey v. Commissioner, T.C. Memo. 2005-241, the taxpayer

stipulated that the notice of deficiency was mailed to him and

sent to the correct address, and he testified “that he ‘[didn’t]

* * * recall receiving it’ and he ‘did not document the receipt

of it.’”   In contrast, in the instant case, (1) respondent has

failed to establish that the notice of deficiency was sent, (2)

there is no equivocation in petitioner’s denial of the fact of

receipt, and (3) the summary judgment setting requires us to view

disputed facts in the light most favorable to the party opposing

the motion.

     In Figler v. Commissioner, T.C. Memo. 2005-230, the

Commissioner presented extensive evidence to show that the notice

of deficiency was mailed to the taxpayer and that the taxpayer

had previously refused to accept certified mail that the

Commissioner sent to the taxpayer; that foundation is completely

absent in the instant case’s summary judgment setting.
                              - 29 -

     In Carey v. Commissioner, T.C. Memo. 2002-209, the

Commissioner presented evidence of attempted delivery of the

notices of deficiency, and the Court had the benefit of observing

the taxpayer husband during his testimony and concluding that the

taxpayers had deliberately refused delivery of the notices of

deficiency; that foundation is completely absent in the instant

case’s summary judgment setting.

     On the basis of the foregoing, we conclude that respondent

failed to show that there is no genuine issue as to the material

fact of whether petitioner received a notice of deficiency.

Consequently, summary judgment will be denied on this matter.

     The parties must understand that this is not a ruling on the

underlying issue; this ruling merely restores this matter to

consideration under our normal procedures in collection cases.

     B.   Whether the Settlement Officer May Conduct the Hearing

     Petitioner contends that the use of a settlement officer

rather than an appeals officer to conduct his administrative

collection hearing violates the Treasury Department’s “rules and

regulations”.

     Both section 6320(b) and section 6330(b) provide that the

taxpayer has the right to a hearing, that the hearing is to be

“held by the Internal Revenue Service Office of Appeals”, and

that the hearing “shall be conducted by an officer or
                               - 30 -

employee”.16   Lee is a settlement officer employed in

respondent’s Philadelphia Appeals Office.    Thus the use of Lee to

conduct the administrative collection hearing does not violate

the requirements of the statute.   Section 6330(b)(3) is identical

to section 6320(b)(3) in this respect.    Petitioner has not

directed our attention to, and we have not found, any provision

of the statute that would prohibit settlement officers from

conducting the administrative collection hearing.

     Section 301.6320-1(d)(1), Proced. & Admin. Regs., directs

that “A CDP hearing will be conducted by an employee or officer

of Appeals”.   Thus the use of Lee to conduct the hearing is

authorized by the relevant regulation.    Section 301.6330-1(d)(1),

Proced. & Admin. Regs., is identical to section 301.6320-1(d)(1),

Proced. & Admin. Regs., in this regard.    Petitioner has not

directed our attention to, and we have not found, any Treasury




     16
      We note that the heading of par. (3) of both of these
sections is “Impartial officer.” However, the text plainly
authorizes conduct by “an officer or employee”. (Emphasis
added.) As we noted in another context in Estate of Rosenberg v.
Commissioner, 

, 990 (1986), affd. without published
opinion 

(4th Cir. 1987), the heading of a provision

     cannot limit the plain meaning of the statutory
     provisions themselves. United States v. Minker, 

, 185 (1956); Brotherhood of Railroad Trainmen
     v. Baltimore & Ohio Railroad Co., 

, 528-529
     (1947); Barbados #6 Ltd. v. Commissioner, 

,
     906 n.11 (1985). * * *
                               - 31 -

Department regulation, or any “rule” of the Treasury Department

or the Commissioner that would be violated by settlement

officers’ conducting hearings.

     We conclude that there is no genuine issue of material fact

and that a decision may be rendered as a matter of law that

respondent may have a settlement officer conduct the

administrative collection hearing.      We will grant summary

judgment on this matter.

     C.   Whether the Settlement Officer Was Impartial

     Petitioner contends Lee was not impartial.      Petitioner does

not contend that Lee had prior involvement with respect to the

unpaid tax involved in this case.    See secs. 6320(b)(3),

6330(b)(3).   Instead, petitioner states:

     Darryl Lee simply picked and choose what would give his
     employer the Commissioner of the I.R.S. a win rather
     then being impartial. Which in the case in the federal
     District Court for the District of New Jersey Fernando
     Powers V. Commissioner of the I.R.S. Docket number CASE
     NO. 06-2391 (NLH) the Department of Justice admits that
     the Internal Revenue Service is not part of the
     American Government, further raising more questions.
     Was the SETTLEMENT OFFICER REALLY BEING IMPARTIAL?
     [Reproduced literally.]

     Rule 121(d) requires an adverse party to respond to a motion

for summary judgment with “specific facts showing that there is a

genuine issue for trial.”   Our evaluation of the record herein

leads us to conclude that petitioner’s argument is not properly

supported because petitioner did not provide any specific facts

showing that Lee was biased.   Instead, it appears that petitioner
                                - 32 -

disagreed with Lee’s conclusions, and from that disagreement

petitioner infers bias.    But much more must be shown for a

finding of bias.   Accordingly, given the lack of a factual basis

for petitioner’s claim, there is not a genuine issue of material

fact as to whether Lee was biased.       Thus, we will grant summary

judgment on this matter.

     D.   Default Judgment

     Petitioner maintains that he is entitled to a default

judgment under Rule 123.     He argues that respondent’s attorney:

     stated on her briefs dated February 15, 2006, paragraph
     one (1) pleadings in this case as being closed on July
     20, 2006. Clearly by looking at the trial log one can
     see that the respondent filed the day after on July 21,
     2006 therefore putting the Commissioner in Default
     under Tax Court Rule 123 DEFAULT AND DISMISSAL
     (a)(b)(c). [Reproduced literally.]

     We gather that the thrust of petitioner’s contention is that

(1) respondent asserts that the pleadings were closed on July 20,

2006; (2) respondent’s answer was not filed until July 21, 2006;

(3) accordingly, petitioner contends, respondent may be held to

be in default under Rule 123(a).

     The pleadings in the instant case consist of petitioner’s

petition and respondent’s answer.    No reply or other responsive

pleading has been filed or directed.      See Rule 30.   As a result,

the pleadings were closed in the instant case on July 21, 2006,

when respondent’s answer was filed.      See Nis Family Trust v.

Commissioner, 

, 535-536 (2000); Abrams v.
                                 - 33 -

Commissioner, 

, 404 (1984); Jarvis v. Commissioner, 

, 649 (1982).

      Respondent’s answer was filed 6 weeks after service of the

petition, well within the 60-day period allowed under Rule 36(a)

for filing the answer.      Accordingly, petitioner is incorrect in

his assertion that respondent’s answer was not timely.

      Respondent erred in stating in the summary judgment motion

papers that the pleadings were closed on July 20, 2006.     That was

the date respondent served the answer on petitioner, not the date

the answer was filed.    Respondent’s 1-day misstatement (which

appears in a document dated February 15, 2007, not 2006 as stated

by petitioner in his default contention) is not a failure to

comply with our Rules; it has no effect on any matters,

procedural or substantive, in the instant case.

      We hold that respondent is entitled to summary judgment that

respondent’s answer was timely filed in accordance with our

Rules.

5.   Section 6673 Penalty

      Respondent further moves that the Court impose a penalty

pursuant to section 6673, contending that petitioner is using

these proceedings “as a vehicle to raise frivolous arguments

against the federal income tax system and simply to delay the

collection process.”
                             - 34 -

     In pertinent part, section 6673(a)(1) authorizes the Tax

Court to impose a penalty of up to $25,000, payable to the United

States, whenever it appears to the Court that:   (1) The taxpayer

institutes or maintains a proceeding primarily for delay; (2) the

taxpayer’s position in the proceeding is frivolous or groundless;

or (3) the taxpayer unreasonably failed to pursue the available

administrative remedies.

     Petitioner responds to the penalty motion as follows

(reproduced literally):

     4. Further the I.R.S. Failure to show why is the
        very fabric of freedom, the Law of the Land, the
        definition and limitation of power on the American
        Government disallowed in this INFEIORIOR lower
        court and is considered frivolous?

     5. Further the I.R.S. Failure to show why are the
        Federal United States Supreme Court Cases not
        being allowed into the inferior lower court that
        has to do with the Federal “Income Tax” and the
        Sixteen Amendment issues? Such as the BRUSHABER
        v. UNION PACIFIC R. CO., 

(1916).

     6. Further the I.R.S. Failure to show what exactly
        is Frivolous and where in the law can a state or
        federal Citizen of the Republic find the meaning
        so that it can be understood? Surely it can not
        be so broad that any argument or defense that is
        brought up by the Plaintiff (Fernando Powers)
        that the Internal Revenue Service disagrees with,
        would, or could be call frivolous, just because
        the I.R.S. Simply disagrees? This further
        proving Plaintiffs notorious Default is proper
        and the I.R.S.’s secret default is not and the
        issues at hand were decided without all the facts
        that were submitted to the I.R.S. Settlement
        officer unknowingly and NOT an Appeals officer as
        I believe that the law prescribes and their own
        admissions confirms this fact. Is it not true
        that one must be qualified under a job description
                              - 35 -

        to be able to do a particular job within the
        I.R.S. with defined and limited powers created by
        some law or policy? Settlement officer lacked
        subject matter jurisdiction in an appeals hearing.

     7. So as a non-tax payer of the “income Tax” I simply
        do not understand, especially since no one from
        the I.R.S. Is welling to explain anything to me,
        so again how am I suppose to understand?

     We do not try to present a comprehensive definition of

“frivolous”, nor do we try to present a comprehensive list of

petitioner’s contentions that are frivolous.    We list a few

items, focusing initially on petitioner’s own response to

respondent’s motion.

     Petitioner still regards himself “as a non-tax payer of the

‘income Tax’”.   Petitioner’s 2001 Form 1040 included a Form 1099-

R and a Form W-2, which together showed more than $45,000 in

income subject to tax.   Does petitioner really believe that those

who annually file more than 100 million income tax returns are

merely following a Pied Piper?   We draw petitioner’s attention to

the following warning by the Court of Appeals for the Third

Circuit, the Court to which the instant case is appealable, in

United States v. Connor, 

, 944 (3d Cir. 1990):

     We take this opportunity to reiterate that wages are
     income within the meaning of the Sixteenth Amendment.
     Unless subsequent Supreme Court decisions throw any
     doubt on this conclusion, we will view arguments to the
     contrary as frivolous, which may subject the party
     asserting them to appropriate sanctions.

     Petitioner directs our attention to Brushaber v. Union

Pacific R. Co., 

(1916).     The Supreme Court’s opinion
                              - 36 -

in Brushaber strikes down every objection advanced in the case to

the constitutionality of the income tax provisions of the 1913

tariff act.   As best we can tell, nothing in the Supreme Court’s

opinion in Brushaber supports any contention petitioner makes in

the instant case; to contend otherwise is frivolous.

     In his petition, petitioner claims violations of his rights

under the First, Fourth, Fifth, “6th or 7th”, Eighth, Ninth,

Tenth, and Thirteenth Amendments to the Constitution, as well as

violations of Sections 8 (Clause 17) and 9 of Article I of the

Constitution.   We will not undertake to analyze each of these

contentions, many of which, to the extent we can understand them,

appear to have been dealt with in Rowlee v. Commissioner, 

, 1119-1122 (1983).   In Rowlee we considered the taxpayer’s

contentions as bearing on the issue of fraud.

    In

Crain v. Commissioner, 

, 1417-1418 (5th Cir. 1984),

affg. an order of this Court, the Court of Appeals stated:

          We perceive no need to refute these arguments with
     somber reasoning and copious citation of precedent; to
     do so might suggest that these arguments have some
     colorable merit. The constitutionality of our income
     tax system--including the role played within that
     system by the Internal Revenue Service and the Tax
     Court--has long been established. We affirm the
     dismissal of Crain’s spurious “petition” and the
     assessment of a penalty imposed by the Tax Court for
     instituting a frivolous proceeding. 26 U.S.C. § 6673.

The Court of Appeals in Crain not only affirmed this Court’s

imposition of a penalty under section 6673 but also imposed its

own damage award against Crain for making on appeal “a hodgepodge
                               - 37 -

of unsupported assertions, irrelevant platitudes, and legalistic

gibberish.”

   To the same effect is Sauers v.

Commissioner, 

(3d Cir. 1985), affg. T.C. Memo. 1984-

367.

       Petitioner must understand that his successes as to parts of

respondent’s summary judgment motion do not insulate him from a

section 6673 penalty.    Indeed, we have imposed such penalties

even where taxpayers have ultimately prevailed on some matters in

their cases.    Burke v. Commissioner, 

, 115-116 (2d

Cir. 1991), affg. on this issue and vacating and remanding on

another issue T.C. Memo. 1989-671; Wheeler v. Commissioner, 

, 212-214 (2006), affd. 

(10th Cir. 2008).

To the same effect see Harrell v. Commissioner, T.C. Memo. 1998-

207, affd. without published opinion 

(7th Cir.

1999).    Also, we have imposed such penalties even where taxpayers

have raised some issues that were neither frivolous nor

groundless, along with issues that were frivolous or groundless.

Granado v. Commissioner, 

, 94 (7th Cir. 1986), affg.

T.C. Memo. 1985-237; Sloan v. Commissioner, 

, 148-149

(1994), affd. 

, 800 (7th Cir. 1995).    Petitioner

should also understand that some Courts of Appeals, in affirming

this Court’s imposition of section 6673 penalties, have added

their own penalties because of frivolous arguments presented on

appeal.    See, e.g., Schlosser v. Commissioner, 

38 -

169, 171 (3d Cir. 2008), affg. T.C. Memo. 2007-297 and T.C. Memo.

2007-298.

     We note that, because of our determination to deny parts of

respondent’s summary judgment motion, there are to be additional

proceedings before this Court in the instant case.   Petitioner’s

conduct in the additional proceedings may affect our ultimate

determination regarding a section 6673 penalty.   Compare Wheeler

v. Commissioner, 

, and Sloan v. Commissioner, 

, with Harrell v. Commissioner, T.C. Memo. 1998-207.

Accordingly, we will deny respondent’s section 6673 motion at

this point; but petitioner is warned that we will revisit the

matter at a later point in our proceedings, at the Court’s own

motion if necessary.
                              - 39 -

     To reflect the foregoing,17

                                   An appropriate order will be

                              issued (1) granting in part and

                              denying in part respondent’s motion

                              for summary judgment, and (2)

                              denying respondent’s motion for a

                              section 6673 penalty.




     17
      We have not grappled with the dispute as to the telephone
hearing. Respondent’s materials show Lee was to telephone
petitioner. Respondent maintains Lee telephoned, but petitioner
did not pick up the telephone. But the notice of determination
states that it was petitioner who failed to call. Petitioner
maintains he waited at the agreed-upon time, but the call never
came. Some of the materials state that the agreed-upon time was
10 a.m. and some that it was 11 a.m. We note that another Court
concluded that the agreed-upon time was 10:30 a.m., a time that
does not appear in any of the materials the parties submitted in
the instant case. At this point, the administrative record
appears to be “badly muddled”. See Meeh v. Commissioner, T.C.
Memo. 2009-180. Depending on the outcome of the matters
remaining in the instant case, this issue may be moot. It will
be dealt with if and when it appears to be of any moment in the
further proceedings.