§6702 — Frivolous tax submissions

485, 492–93 (2017), supplementing and overruling in part 147 T.C.

485 (2017), supplementing and overruling in part 147 T.C.

She also rgued that: (cid:16)042 she was entitled to dispute her liability for the 2005 frivolous- return penalty; (cid:16)042 the Commissioner relied on old information which was superseded by another 1040X filed in February 2010;3 (cid:16)042 The Commissioner's imposition ofthe frivolous-return penalty against her failed to provide facts establishing that section 6702(a) even applied to her; (cid:16)042.

Stare Decisis Principles of stare decisis weigh against overruling Moore and Van Es.

- 12 - [*12] This case is distinguishable from Vigon in at least two respects.

6702 (frivolous return penalty does not apply iftaxpayerwithdraws frivolous submission within 30 days ofreceiving notice from the IRS).

6702(a)(1)(A), or that his position is not one "which the Secretary has identified as frivolous," sec. 6702(a)(2)(A). Ifthe tax- payer at his CDP hearing advances no rational argument about why the penalty does not apply but instead insists on maintaining frivolous arguments that his wages are not "income," he has not made a meaningful challenge to his liability for the penalty.

The circumstances in-Nelson are clearly distinguishable from petitioner ' s position .

We disagree with petitioner’s arguments and sustain 1 Unless otherwise indicated, all statutory references are to the Internal Revenue Code, Title 26 U.S.C.

Petitioners assert that Congress did not intend such a narrow reading but cite no authority.

Petitioners assert that Congress did not intend such a narrow reading but cite no authority.

He withdrew the returns under threat of sanctions pursuant to section 6702 (imposing a penalty for frivolous tax submissions), and the amended returns were not processed.

On May 27 and June 3, 2019, the IRS assessed two penalties (one for each return) of $5,000 pursuant to section 6702(a), and assessment notices were sent to petitioner on the same dates.

14, 23-24 (2019) (discussing penalties assessed pursuant to section 6702).

We hold that petitioner did not properly raise the issue ofhis underlying tax liabilities for 2006, 2007, and 2008 during his administrative hearing.

Pursuant to section 6702(a), a person shall pay a penalty of$5,000 for a frivolous tax return.

Generally, section 6702 provides for a $5,000 civil penalty for filing a frivolous tax return.

We hold that petitioner is liable for the penalty and that the Appeals Office properly sustainedthe collection action.

[Citations omitted.] As we explain below, we hold that Mr.

Ifa taxpayer requests a hearing in response to an NFTL or a notice oflevy i pursuant to section 6320 or 6330, a hearing shall be held before an impartial officer or employee ofAppeals. Secs. 6320(b)(1), (3), 6330(b)(1), (3). The. hearing under section 6320 generally shall be conducted in a manner consistent with the procedures set forth in section 6330(c), (d), and (e).

On July 9, 2009, respondent mailed a letter to petitioner which explained the $5,000 civil penalty for filing a frivolous tax return pursuant to section 6702.1 The letter gave petitioner a chance to avoid the civil penalty by amending his position regarding the Forms 4852 filed for 2006 and 2008.

Pursuant to section 6702 respondent assessed against petitioner a $500 penalty for each ofthe tax years 2004 and 2005 and a $5,000 penalty for 2007.

The settlement officer warned petitioners that if they did not withdraw the frivolous issues and submit legitimate ones, he would disregard their hearing requests and return their case to the IRS collection office that had referred it to Appeals and the IRS could impose a $5,000 penalty pursuant to section 6702(b).

Accordingly, we hold that petitioner is liable for an addition to tax under section 6654 for 2007.

On June 1, 2009, the IRS issued to M & T Bank a 2The penalties for both 2002 and 2003 were assessed pursuant to section 6702(a), which imposes a penalty for filing a frivolous tax return .

We hold that the IRS correctly assessed the section 6702 penalty .

MEMORANDUM OPINION JACOBS, Judge : The dispute between the parties concerns respondent's proposed use of a levy to collect frivolous income tax return penalties against petitioner pursuant to section 6702 .

Constitution from providing information on a return, that he had “zero” income according to the Supreme Court’s definition of income since he had no earnings in 2001, and that he is putting the IRS on notice that his 2001 tax return and claim for refund cannot be considered “frivolous” on any basis pursuant to section 6702, and various similar arguments.

The collection activity concerned petitioner’s assessed and unpaid 1992 income tax liability and frivolous income tax return penalties for the 1994, 1995, and 1996 tax years pursuant to section 6702(a).

Just as in Moore, in which we held that we did not have jurisdiction to redetermine Federal trust fund taxes, we hold that we do not, in the instant case, have jurisdiction to redetermine the frivolous return penalties assessed pursuant to section 6702.

Frivolous Return Penalties A taxpayer may dispute liability for frivolous return penalties under section 6702 “at a CDP hearing and on review of the CDP determination in this Court, in the absence of any other opportunity to contest it.” Pohl v. Commissioner, T.C. Memo. 2013-291, at *7–8; see Callahan v. Commissioner, 130 T.C. 44, 49 (2008). In that instance the section 6702 penalty is the underlying liability, see Callahan, 130 T.C. at 49–50; Sun River Fin. Tr. v. Commissioner, T.C. Memo. 2020-

Vigon was a CDP case where the Commissioner had assessed penalties under section 6702 and filed a notice of federal tax lien; the taxpayer then requested a CDP hearing and challenged his underlying liabilities at that CDP hearing, which culminated with the IRS Appeals Office’s issuing the taxpayer a notice of determination sustaining the NFTL filing.

In that instance, the section 6702 penalty is the underlying liability, see Sun River Fin. Tr. v. Commissioner, T.C. Memo. 2020-30, at *9–10; Callahan, 130 T.C. at 49–50, and the taxpayer is entitled to de novo review of the penalty so long as “he has raised a meaningful challenge to the penalty at his CDP hearing,” Pohl, T.C. Memo. 2013-291, at *8. But if the taxpayer fails to make a meaningful challenge to the penalty, we review for abuse of discretion. Pohl, T.C. Memo. 2013-291, at *9; Burnet

Because the taxpayer does not receive a statutory notice of deficiency before a penalty under section 6702 is assessed, the taxpayer may challenge his or her liability for the penalty in an administrative hearing under section 6320 or 6330. Callahan v. Commissioner, 130 T.C. at 49-50. Petitioner received Letters 1058 for the penalties and requested a hearing. At the hearing petitioner had the opportunity to challenge the assessment of the penalties. He did not raise any factual or substantive ch

The IRS in that case assessed penalties under section 6702 and filed an NFTL; the taxpayerre- quested a CDP hearing and challenged his underlying liability.

Ifwe assume that the IRM provision cited by the Commissioner shows that the IRS interprets section 6702 to call for a penalty even where a copy is labeled as such and does not seek an additional refund, then we think it is incorrect because it fails to distinguish a purported tax return from a mere c_op_y of a purported tax return.6 We hold that Mrs. Kestin's six plainly marked photocopies sent to the IRS with her letters did not purport to be tax returns and are not subject to the penalty under

He did not request a collection alternative; rather, he checked the box marked "Other" and attached a statement disputing his liability for the section 6702 penalties. A settlement officer (SO) from the IRS Appeals Office held a telephone CDP hearing with petitioner on March 15, 2016. Petitioner contended that he was not liable for any penalty because his deceased wife's retirement income was not subject to Federal income tax. He did not seek or propose a collection alternative. The SO verified

The distinctive circumstances ofthis case The Commissioner asserts, however, that the section 6702 penalty for "Frivolous Tax Submissions", unlike the income tax, £ sec. 6501(a), has no statute oflimitations in the Code. For purposes ofthe Commissioner's motion to dismiss, we so assume. The Commissioner has abated the previous penalty assessments against Mr. Vigon; but, as the Commissioner observes, ifthis case is dismissed, the IRS claims the right to reassess against and collect from Mr. Vigon

chapter” shall apply if the IRS reassesses the tax after the taxpayer timely requests that the assessment be abated. See sec. 6213(b)(2)(A). The ability to cure before assessment of some assessable penalties is additional evidence of a system intended to provide taxpayers meaningful opportunities to remedy the problem before assessment. See, e.g., sec. 6702 (frivolous return penalty does not apply if taxpayer withdraws frivolous submission within 30 days of receiving notice from the IRS).

Respondent argues that the Commissioner timely ass ssed the section 6702(a) penalty. Respondent contends that the section 650 (a) period of limitations is applicable only to the assessment of"return-based" penalties. According to respondent, a section 6702(a) penalty is retur base'd ifsither the purported return document was a valid return or the IRS processed the purported return document as a valid return. Respondent further contánds that ifthe penalty is not return based, the seátion 6501(a)

assessed under section 6702 .2 Wagenknecht v . United States , 533 F .3d 412, 416 (6th Cir .' 2008) ; Van Es v . . Commissioner, 115 T .C . 324, 328 (2000) ; Dunbar V . Commissioner , T .C . Memo . 2006-184 . Accordingly, we will 2Sec . 6330(d)(1) was amended by the Pension Protection Act of 2006 (PPA), Pub . L . 109-280, sec . 855,. 120 Stat. 1019 . For sec . 6330 determinations issued after the effective date of the PPA, this Court does have jurisdiction over frivolous return penalties . See C

- 3 - petitioner is liable for an addition to tax under section 6654 for 2007; (5) respondent properly assessed section 6702 frivolous return penalties against petitioner folr 2006 and 2007; and (6) Appeals abused its discretion in determining to proceed with collection by levy of the frivolous- return penalties.

determination to proceed with collection of penalties under section 6682 for 2002 and under section 6702 for 1.997-2001.

n is not frivolous and is not designed to delay or impede the administration of Federal income tax laws; (9) no Internal Revenue Service (IRS) employee has any delegated authority to determine if a return is "frivolous" or to impose a penalty; (10) section 6702 is benign because there is no related legislative regulation implementing the statute; (11) the IRS has no legal basis to hold the $16.86 withheld for petitioner's 1996 income tax because no assessment was made against her; (12) sections

On or about June 11, 2004, respondent sent petitioner a notice of Federal tax lien filing and right to a hearing regarding income taxes for 1999, 2000, and 2001 and penalty pursuant to section 6702 for 1999 and 2000.

s otherwise indicated, all section references are to the Internal Revenue Code as amended. - 2 - dismiss the petition for lack of jurisdiction for the tax year 1997, on the ground that the only liability for 1997 is a frivolous return penalty under section 6702. Background At the time the petition was filed, petitioners resided in Little Rock, Arkansas. Jason Henderson (petitioner) filed a Form 1040, U.S. Individual Income Tax Return, for 1997. Petitioner checked the box “single” as his filing s

Petitioner’s Refund Actions Pursuant to section 6702, respondent assessed a $500 frivolous return penalty against petitioner for each of the years at issue, as well as for other years.

otion to dismiss for lack of jurisdiction and to strike all allegations in the second amended petition pertaining to a Notice of Federal Tax Lien filed October 8, 1998, pertaining to a frivolous return penalty imposed against petitioners pursuant to section 6702; and (2) respondent’s - 2 - motion to dismiss for failure to state a claim and to impose a penalty under section 6673.1 Because respondent has presented matters outside of the pleadings, we shall treat the motion to dismiss as respondent

Rather, respondent assessed a frivolous return penalty pursuant to section 6702.4 On November 10, 1994, respondent issued a 30-day letter to petitioner with respect to petitioner's 1988 taxable year.

6 Section 6702 generally authorizes a penalty for frivolous tax returns. Petitioners address a frivolous return penalty for the first time in their Response. 7 Petitioners, in their Response, also state: “WHEREFORE, it is prayed that Petitioners’ motion be granted . . . .” Petitioners’ Response does not assert facts supporting a summary judgment moti

r listed Nov. 8, 2021, as the date of filing of petitioner’s 2020 return.) The letter directed petitioner to file a corrected return within 30 days and warned that, if no action was taken, the IRS would assess a $5,000 frivolous return penalty under section 6702. The Correspondence Examination Automation Report documented that the examining agent’s immediate supervisor approved assertion of the accuracy-related penalty in the Notice of Deficiency “per Lead sheet completed on case.” Discussion Bu

The IRS Frivolous Return Program sent Mr. Aubuchon a letter, notifying him that his tax return claimed one or more frivolous positions and that if his tax return was not corrected immediately, the IRS would assess a $5,000 penalty against him under section 6702. On December 14, 2022, the IRS Frivolous Return Program adjusted Mr. Aubuchon’s 2017 tax return to include his Form W–2 wages and determining a deficiency in federal income tax of $11,920. After credit for tax withholdings of $13,999, an

In discussing the section 6702 penalty for a frivolous return, the report likewise states that the penalty is “immediately assessable.” Id.

ng a credit for the Social Security and Medicare taxes withheld by Mountain Vista. In addition to the deficiency and section 6662(a) penalty determined in the notice of deficiency, respondent also determined a frivolous return penalty for 2018 under section 6702. The parties stipulated related notices and correspondence between the IRS and petitioner. Petitioner highlighted those among her grievances in her pretrial memorandum, her closing argument at trial, and a posttrial written submission th

After these concessions, the sole issue for decision is whether respondent abused his discretion in sustaining a proposed levy and the filing ofa notice ofFederal tax lien (NFTL) with respect to petitioner's unpaid section 6702 penalties for 2010 and 2011.

ANN SMITH, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. 6105-16. Filed September 3, 2019. Ps omitted from their income tax returns amounts they received as interest and for work performed. Ps claim that, because R assessed I.R.C. sec. 6702 frivolous return penalties, he must make I.R.C. sec. 6020(b)(1) substitute returns for Ps before he can claim the returns they filed are incorrect. Ps also argue that they were not employees within the meaning ofI.R.C. ch. 21 (Federa

ection 6330(d)(1) ofthe determination by the Internal Revenue Service (IRS or respondent) to uphold a notice ofintent to levy to facili- tate collection ofpetitioner's unpaid Federal income tax liabilities and penalties SERVED Mar 14 2019 - 2 - [*2] for 2010, 2012, and 2015.¹ Respondent has agreed to abate a $5,000 penalty assessed for 2010 under section 6702 (civil penalty for submitting a frivolous tax return).

97 (2017), the IRS assessed penalties under section 6702 for frivolous tax submissions.

(CCH) 1273, 1279 (holding that supervisory approval was not required for a section 6702 penalty for filing a frivolous tax return).

oner's income tax liabilities for the taxable years 2004, 2010, 2013, and 2014 are based on the tax returns he filed. Respondent determined that petitioner's 2009 tax return was a frivolous return and assessed a $5,000 frivolous return penalty under section 6702. Respondent determined petitioner's tax liabilities for 2009 and 2011 using the substitute for return procedures ofsection 6020(b), and on June 25, 2012, and June 30, 2014, respondent sent petitioner notices ofdeficiency for 2009 and 201

SERVED Apr 05 2018 - 2 - [*2] Office ofAppeals to sustain the collection by levy ofpetitioner's unpaid liability for assessed section 6702 penalties for 2011 and unpaid income tax liability for 2012.

al consequences ofmaking such a concession. See (continued...) - 13 - [*13] It seems that petitioner's main allegations in his petition are directed at the Commissioner's imposition against him ofa civil penalty for filing a frivolous return under section 6702. To the extent petitioner is attempting to dispute this penalty, this Court lacksjurisdiction to review challenges to this penalty in a deficiency case; only in the context ofthe review ofa notice ofdetermination issued pursuant to section

ents and determined an accuracy-related penalty of$11,352 under section 6662(a) and (d) on the remaining underpayment, leaving a total amount due of$68,114 plus interest. The Commissioner also assessed a frivolous tax return submission penalty under section 6702. The Jagoses filed a petition for redetermination to this Court on January 6, 2016. At the time they filed the petition they resided in Michigan. In their petition they argue that none ofthe income they received was taxable and that the

v. Commissioner, 132 T.C. 301, 318 (2009) ("a section 6672(b)(1) notice that was not received * * * by a taxpayerdoes not constitute an opportunityto dispute that taxpayer's liability"); Callahan v. Commissioner, 130 T.C. 44, 50 (2008) (addressing sec. 6702 frivolous return penalties). - 11 - [*11] Under this framework, a taxpayer in a CDP case is entitled to challenge his underlying liability for a section 6707A penalty only ifhe did not have a prior op- portunity to dispute it. For this purpo

SERVED JUL 2 7 2015 - 2 - [*2] Office ofAppeals to sustain the collection by levy ofpetitioner's unpaid liability for assessed section 6702 frivolous return penalties and interest.

The issues for consideration are: (1) whether petitioner is liable for penalties under section 6702 for tax years 2002 and 2003; (2) whether respondent's determination to proceed with the proposed collection actions was proper; and (3) whether sanctions should be imposed against petitionerpursuant to section 6673(a)(1).

On September 29, 2008, a section 6702 penalty was assessed against each petitioner for the amended return.

The tax liabilities at issue consist solely ofpenalties imposed under section 6702 for the submission offrivolous tax returns.

609, listing positions identified as frivolous for purposes ofapplication ofthe section 6702 frivolous tax submissions penalty.

Hill is liable for a $5,000 frivolous return penaltyunder section 6702 for 2005; (2) whether respondent abused his discretion in sustaining a proposed levy and a notice ofFederal tax lien for 2005; and (3) whetherthe Court should impose a penalty under section 6673(a).

the return that they had filed and on which they had reported zero wages represented a frivolous position and offering them 30 days within which to submit a corrected return; otherwise the IRS would impose a $5,000 frivolous submission penalty under section 6702. The Waltners did not submit a corrected return, and respondent assessed a $5,000 penalty and issued to Mr. Waltner a notice ofpenalty charge, informing him ofthe assessed penalty. The Collection Proceeding Before the IRS Respondent issu

Additionally,Notice 2010- 33, supra, lists positions that the IRS has identified as "frivolous" for purposes of the section 6702 penalty for making "frivolous tax submissions." This Notice explicitly characterizes as "frivolous" the submissionthat: Verification under section 6330 that the requirements ofany applicable law or administrative procedure have been met may only be based on one or more particular forms or documents (which must be in a certain format),

In Thornberry, the taxpayers timely requested administrative hearings under sections 6320 and 6330 in response to notices ofintent to levy and notices of Federal tax lien filing sent to them with respect to their unpaid tax liabilities, including a section 6702 penalty, for 2000, 2001, 2002, and 2007.

6702 1998 $9,345 -- -- 2000 8,770 -- -- 2001 1,760 $500 $500 2002 31,296 --- -- 2003 9,272 -- -- 2004 74,235 -- -- 2005 6,829 --- -- 2006 11,172 --- -- 2007 6,745 -- -- 2008 5,714 -- --- Unless otherwise indicated, all section references are to the Internal Revenue Code in effect at all relevant times. All monetary amounts are rounded to the n

Frivolous Submission Penalty Under Section 6702 (Docket No.

t he might become subject to a sec. 6673 penalty in future cases ifhe persisted in maintaining proceedings for delay or otherwise advanced frivolous arguments. At docket No. 15452-10L, a collection due process case for 2006 concerning imposition ofa sec. 6702 penalty for filing a frivolous return, we held that petitioner's 2006 Form 1040 "reflects a desire (which appears on the (continued...) - 16 - [*16] Petitioner has wasted the time and resources ofthis Court. The record demonstrates that pet

he might become subject to a sec. 6673 penalty in future cases ifhe persisted in maintaining proceedings for delay or otherwise advanced frivolous arguments. At docket No. 15452-10L, a collection due process case for 2006 concerning imposition ofa sec. 6702 penalty for filing a frivolous return, we held that petitioner's 2006 Form 1040 "reflects a desire (which appears on the purported return) to delay or impede the administration ofFederal tax laws" and imposed on petitioner a sec. 6673 penalt

2009), and section 6702 frivolous return penalties, see Callahan v.

he might become subject to a sec. 6673 penalty in future cases ifhe persisted in maintaining proceedings for delay or otherwise advanced frivolous arguments. At docket No. 15452-10L, a collection due process case for 2006 concerning imposition ofa sec. 6702 penalty for filing a frivolous return, we held that petitioner's 2006 Form 1040 "reflects a desire (which appears on the purported return) to delay or impede the administration ofFederal tax laws" and imposed on petitioner a sec. 6673 penalt

Section 6654(a) imposes an addition to tax on an individual taxpayerwho underpays a required installment ofestimated tax. This addition to tax is determined by reference to four required installment payments ofthe taxpayer's estimated tax liability. Sec. 6654(c)(1). In general, for a taxpayerto avoid an addition to tax under section 6654

On May 15, 2007, the IRS Appeals Office issued a notice ofdetermination sustaining levy and lien actions against Karl Weatherlyto còllect section 6702 penalties related to the tax years 1998, 1999, 2000, 2001, 2002, 2003, and 2004.3 3The notice ofdetermination is not in the record, but i is attached to the petition Karl Weatherly filed in docket No.

It assessed frivolous-returnpenalties under section 6702 for each ofthe Forms 1040.

Section 6201(d) provides that if, in any court proceeding, a taxpayer fully cooperates with the Commissioner and raises a reasonable dispute with respect to an information return, the Commissioner has the burden ofproducing reasonable and probative evidence to verify the information return.

That is notto say that-we will remand this case for a face-to-face hearing with respect to petitionet's liábilitý for the section 6702 penalty.

espondent sent petitioner a letter - 4 - warning him that issues he raised in his hearing request were frivolous and failure to withdrawthe frivolous issues in writing within 30 days from the date ofthe letter could result in a $5,000 penalty under section 6702 (b). The letter also rescheduledthe telephone conference. In response, petitioner sent a letterto respondentwithdrawing his frivolous position and stating: "I respect your information and ifa frivolous position was taken or used then I wa

Section 6654(a) imposes an addition to tax on an individual taxpayer who underpays a required installment ofestimated tax. This addition to tax is determined by reference to four required installment payments ofthe taxpayer's estimated tax liability. Sec. 6654(c)(1). In general, for a taxpayer to avoid an addition to tax under section 66

ith written notice of the spe ific relevant issues he wished to raise at the hearing. The Appeals Office also mailed Mr. Barry a copy of the IRS publicatien "The Truth About Frivolous Tax Arguments". In reply, r. Barry wrote a letter in sPursuant to sec. 6702, the IRS iåposed a frivolous return penalty on Mr. Barry for reporting zeko income and zero tax liability on his 2000 tax return. MrÌ.I Barry challenged that penalty in the District Court, which upheld the penalty. See Barry v. United State

- 7 - advising him of the consequences of filing frivolous tax returns, and imposing penalties under section 6702 for frivolous tax submissions.

The purpose of section 6673, like that of section 6702, is to compel taxpayers to think and to conform their conduct to settled tax principles.

evant, or without merit.3 To reflect the foregoing, Decision will be entered for respondent. 3Petitioner devoted large portions of his argument at trial to the issue of whether respondent was entitled to assess a frivolous return penalty pursuant to sec. 6702. However, we lack jurisdiction in a deficiency proceeding to review the Commissioner's determination to assess the frivolous return penalty under sec. 6702. Van Es v. Commissioner, 115 T.C. 324, 328-329 (2000).

- 7 - advising him of the consequences of filing frivolous tax returns, and imposing penalties under section 6702 for frivolous tax submissions.

respondent, on January 25, 2008, sent petitioners letters advising that their 2005 and 2006 income tax I I returns contained reporting positions that are considered to be "Frivolous Tax Submissions" and that they might be subject to a penalty under section 6702 . Tho~e same letters provided I petitioners with an opportunity to correct their 2005 and 200 6 returns . In responses dated February 27, 2008,1petitioner advised respondent that his returns were correct and that his position was fully e

petitioner in bold print that "section 6702 imposes a $5,000 penalty for the filing of a frivolous tax return or purported return .

On September 4, 2000, respondent assessed a frivolous return penalty under section 6702 with respect to petitioner's 1998 return .

SERVED Aug 03 2010 2 - determination) in which respondent determined to proceed with collection by levy of the frivolous return penalties imposed under section 6702 against petitioners for the tax years 2002, 2003, 2004, and 2005 .

The Internal Revenue Service (IRS) assessed frivolous return penalties against petitioner under section 6702 for 1996, 1997 , and 1998 .

respondent, on January 25, 2008, sent petitioners letters advising that their 2005 and 2006 income tax I I returns contained reporting positions that are considered to be "Frivolous Tax Submissions" and that they might be subject to a penalty under section 6702 . Tho~e same letters provided I petitioners with an opportunity to correct their 2005 and 200 6 returns . In responses dated February 27, 2008,1petitioner advised respondent that his returns were correct and that his position was fully e

agenda and his postconference letters , we find that petitioner did raise a challenge to a frivolous return penalty under sec . 6702 for .1998 . With respect to determinations made before Oct . 17, 2006, we have held that we lack jurisdiction over a sec. 6702 penalty. See Johnson v. Commissioner, 117 T .C . 204, 208 (2001) ; Dunbar v. Commissioner , T .C . Memo . 2006-184 . But see Wagenknechtv . United States,: F .3d 729 (6th Cir . 2007) . However, petitioner's IMF, which part of the administra

Respondent also assessed a section 6702 civil penalty against petitioner for tax year-2002 on December 12, 2005 .

Huntress placed an "X" in the blank by each item, even though some of them are manifestly incorrect with respect to him (e .g ., "I did not receive'a statutory Notice of Deficiency") or do not apply to him ,(e .g ., a dispute about "the $500 frivolous [return] penalty" of section 6702, which was not assessed against him) .

f deficiency to petitioner . Although he received the notices of deficiency, petitioner did not file petitions in this Court, and the amounts determined in the notices were assessed . The IRS also determined a frivolous return penalty for 1999 under section 6702 . (Although the petition included reference to the section 6702 penalty, that part of the case was dismissed for lack of jurisdiction because. the determination appealed by the petition 3 - was made before the effective date of -the amen

On July 15, 2005, respondent sent etitioner written notice that a lien had been filed with respect to his unpaid Federal income taxes for 2000 and 2002 as well Is with respect to an assessed frivolous income tax return penalty under section 6702 for 2002 .

Respondent also assesse penalties against petitioner under section 6702 for 1997, 2003, and 2004 .

against petitioner $500 civil penalties under section 6702 for filing frivolous income tax returns for 2002 and 2003, as well as for 1998 and 2001 .5 In each instance, respondent sent petitioner a statutory notice of balance due on the date of assessment .

Respondent also assessed penalties against petitioner under section 6702 for 1997, 2003, and 2004 .

* * * shall not apply with respect to the assessment or collection of the penalties provided by sections 6700, 6701, and 6702”); Van Es v. Commissioner, 115 T.C. 324, 329 (2000) (the Tax Court does not have jurisdiction to redetermine liability for sec. 6702 penalties); Wilt v. Commissioner, 60 T.C. 977 (1973) (trust fund recovery penalties under sec. 6672 fall outside the Tax Court’s deficiency jurisdiction). Whether the Tax Court’s "collection due process” jurisdiction extends to the review o

Respondent assessed a $500 civil penalty against petitioner under section 6702 for filing a frivolous tax return for 1997 .

The NFTL also listed section 6702 frivolous return penalties owed for 2000, 2001, and 2002 .

He attached to the return a statement containing ta x protester arguments . Respondent sent to petitioner a letter advising him that the document he had sent as a Federal tax return was frivolous and was subject to the frivolous return penalty under section 6702 . Respondent also sent to petitioner a so-called 30-day letter proposing for 2001 adjustments to income and an addition to tax under section 6651 for failure to file timely . 3 - On December 10, 2003, respondent issued to petitioner a st

_ 4 _ return penalty under section 6702 with respect to his taxable year 1998.

Individual Income Tax Return, for 1996 with zeros in all entries and an attached statement containing frivolous tax protester arguments.2 Respondent treated the Form 1040 as a frivolous return and assessed a frivolous return penalty under section 6702 on June.29, 1998.

Respondent informed petitioner that his claims had been repeatedly rejected as frivolous and without merit, and that he could be subject to a penalty under section 6702 of $500 for filing a frivolous return .

In fact, in a letter to respondent dated September 5, 1999, contesting penalties under section 6702 for filing a frivolous income tax return, petitioner stated: "I 8 Petitioner informed respondent's Appeals Officer that his speech included in the Form 4852 was protected under the First Amendment because it was his redress against the Government as well as his defense against the Government's "illgitimate assumptions" that all income

ce that his refund claims for the 1996, 1997, and 1998 taxable years were disallowed, informed him that the Tax Court and other Federal courts have repeatedly rejected his position, and again informed him that a penalty of $500 may be assessed under section 6702. On September 4, 2000, the IRS assessed the Frivolous Return Penalty under section 6702 against petitioner for his 1996, 1997, and 1998 taxable years. During 1999, petitioner purchased a package of documents for $9,000 from John P. Ellis

In this document petitioner argues, inter alia, that no section of the Internal Revenue Code establishes an income tax liability or provides that income taxes have to be paid on the basis of a return, that he is protected by the Fifth Amendment of the Constitution from providing information on a return, that he had "zero" income according to the Supreme Court's definition of income since he had no earnings in 2001, and that he is putting the

Respondent assessed frivolous return penalties under section 6702 for those returns.

he Federal Government violate taxpayers’ Fifth Amendment rights; (5) courts have held that a Form 1040 with zeros inserted in the spaces provided qualifies as a tax return; (6) petitioners had zero income according to the Supreme Court’s definition of income; (7) petitioners’ 1997 tax return does not constitute a “frivolous” return for purposes of section 6702; and (8) no statute allows the IRS to change petitioners’ tax return.

The taxpayer was given an opportunity to raise the issue of the underlying tax liability with regards to the Frivolous Income Tax Return Civil Penalty under IRC § 6702 for the tax periods listed above.

s disagreement with the proposed levy. He challenged the validity 2 The notice of intent to levy incorporated, in addition to the income tax liabilities dealt with in the notice of determination and at issue in this proceeding, civil penalties under sec. 6702 for the filing of frivolous returns. This Court lacks jurisdiction to review any issues related to those penalties. Van Es v. Commissioner, 115 T.C. 324, 328-329 (2000). - 4 - of, and requested that the Appeals officer have at the hearing c

he Federal Government violate taxpayers’ Fifth Amendment rights; (6) courts have held that a Form 1040 with zeros inserted in the spaces provided qualifies as a tax return; (7) petitioners had zero income according to the Supreme Court’s definition of income; (8) petitioners’ 1996 tax return does not constitute a “frivolous” return for purposes of section 6702; and (9) no statute allows the IRS to change petitioners’ tax return.

e of balance due with respect to petitioner’s unpaid liability for 1999. On August 26, 2002, respondent issued to petitioner 4Respondent credited $500 of the refund claimed in peti- tioner’s 1999 return in payment of a frivolous return penalty under sec. 6702 that respondent imposed on petitioner with respect to his 1999 return. - 4 - another notice of balance due with respect to that unpaid liabil- ity. On November 5, 2002, respondent issued to petitioner a final notice of intent to levy and no

ot wishing to commit perjury under either statute, I can only swear to have “zero” income for 1996. 7) I am also putting the IRS on notice that my 1996 tax return and claim for refund can not be considered “frivolous” on any basis - pursuant to Code Section 6702. For one thing, there is no statute that requires me to make a “self- assessment.” Therefore, how can I be charged with a penalty for not doing something - allegedly incorrectly - that no statute requires me do at all? * * * * * * * * *

324, 328-329 (2000) (case dismissed for lack of jurisdiction on the ground the Court lacks jurisdiction to review the frivolous return penalty imposed under section 6702); Moore v.

* 8) Please note that my 1997 return also constitutes a claim for refund pursuant to Code Section 6402. 9) I am also putting the I.R.S. on notice that my 1997 tax return and claim for refund does not constitute a “frivolous” return pursuant to Code section 6702. * * * 11) In addition, don’t notify me that the I.R.S. is “changing” my return, since there is no statute that allows the I.R.S. to do that. You might prepare a return (pursuant to Code section 6020b) where no return is filed, but where

of proposed levy. On February 1, 2002, respondent issued to petitioner a Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320 relating to petitioner’s unpaid taxes for 1998.2 2 The notice of Federal tax lien also relates to a sec. 6702 frivolous return penalty assessed for 1999. - 4 - D. Hearing Request Relating to the Lien On February 22, 2002, petitioner filed a Form 12153, Request for a Collection Due Process Hearing, with respect to the notice of Federal tax lien for

respondent a Form 12153, Request for a Collection Due Process Hearing, with multiple attachments 3 A second Final Notice of Intent To Levy and Notice of Your Right to a Hearing was also issued on Feb. 27, 2003, with respect to a civil penalty under sec. 6702 for the filing of a frivolous return for the 1999 taxable year. This Court lacks jurisdiction to review any issues related to this penalty. Van Es v. Commissioner, 115 T.C. 324, 328-329 (2000). - 4 - setting forth his disagreement with the p

Petitioner admitted that respondent previously assessed the section 6702 frivolous return penalty against him.

were frivolous. The letter also stated that the IRS would not respond to any future correspondence regarding these claims and provided petitioner with an opportunity to correct his return to prevent the imposition of a frivolous return penalty under section 6702. On August 10, 2000, petitioner in a letter responded to the IRS’s August 4, 2000, letter. Petitioner claimed, among other things, that he was entitled to an administrative hearing before a section 6702 penalty could be imposed, and that

his purported 1998 return, petitioner scratched out the words "Under penalty of perjury" in the jurat above his signature. There is no evidence in the record that petitioner ever submitted the purported 1996 and 1997 returns to the IRS. Pursuant to sec. 6702, respondent assessed a frivolous return penalty with respect to petitioner's purported 1998 return. The frivolous return penalty is not at issue here. 4 The term "substitute for return" (SFR) has been used to describe a return prepared by t

rch 31, 2003, at Los Angeles, California. Background Respondent has assessed income tax deficiencies, penalties, and additions to tax against petitioner for 1992 and 1997. Respondent has also assessed $500 civil penalties for frivolous returns under section 6702. A Form 1058, Final Notice--Notice of Intent to Levy and Notice of Your Right to a Hearing, was sent to petitioner on February 5, 2001, and he requested a section 6330 hearing. Petitioner’s 1992 income tax return, which was filed in earl

his Form 12153 (petitioner’s attachment to Form 12153) that contained state- ments, contentions, arguments, and requests that the Court finds to be frivolous and/or groundless.6 5The notice of lien also pertained to a frivolous return penalty under sec. 6702 regarding each of petitioner’s returns for 1996 and 1997. 6Petitioner’s attachment to Form 12153 contained statements, contentions, arguments, and requests that are similar to the (continued...) - 5 - On January 12, 2001, respondent’s Appea

On July 17, 2000, respondent assessed a frivolous return penalty under section 6702 regarding petitioner’s 1998 return.

noted that I had “zero” income according to the Supreme Court’s definition of income (See Note #1) * * * . 7) I am also putting the IRS on notice that my 1998 tax return and claim for refund does not constitute a “frivolous” return pursuant to Code Section 6702. * * * * * * * * * * 10) In addition, don’t notify me that the IRS is “changing” my return, since there is no statute that allows the IRS to do that. You might prepare a return - 5 - (pursuant to Code Section 6020(b)), where no return is

une 28, 1999, notice. On September 6, 2000, respondent issued two Form Letters 1058, Final Notice--Notice of Intent to Levy and Notice of Your Right to a Hearing, one for 1995 and 1996 and the other for 1997 and 1998.2 2 The 1998 liability was for a sec. 6702 civil penalty. In (continued...) - 5 - On October 12, 2000, respondent received petitioner’s Form 12153, Request for a Collection Due Process Hearing. On February 13, 2002, a face-to-face hearing was held between an Appeals officer and peti

On August 27, 2001, respondent issued to petitioners a final notice of intent to levy and notice of your right to a hearing (notice of intent to levy) with respect to (1) petitioners’ taxable years 1989, 1990, and 1991, (2) petitioners’ unpaid liabilities for 1995, 1996, 1997, and 1998, and (3) a frivolous return penalty under section 6702 with respect to petitioners’ taxable year 1999.

section 6673. Attached as exhibits to the motion for summary judgment are literal transcripts and computer generated transcripts (TAXMODA) of 2 On Sept. 6, 2002, we dismissed for lack of jurisdiction the portions of the petition that related to the sec. 6702 frivolous return penalties for 1996 through 1999 and the sec. 6682 false withholding information penalty for 2000. - 6 - petitioner’s accounts for 1996, 1997, and 1998. On November 8, 2002, the Court ordered petitioner to file a response to

On December 16, 1999, respondent issued to petitioner a final notice of intent to levy and notice of your right to a hearing (notice of intent to levy) with respect to (1) peti- tioner’s unpaid liability for each of his taxable years 1987, 1988, 1989, 1993, 1994, and 1995 and (2) a frivolous return penalty under section 6702 with respect to each of his taxable years 1995 and 1996.

o. 2003-45. On March 21, 2001, respondent sent to petitioner a letter advising him that his tax-reporting position was frivolous and giving him the opportunity to correct his position in order to avoid imposition of frivolous return penalties under section 6702. On April 1, 2001, petitioner responded to respondent’s letter. Petitioner stated in part: The only Code sections identified in the 1040's Privacy Act Notice as allegedly applying to income -4- taxes are Code Sections 6001, 6011, and 6012

After petitioner filed those tax returns and before October 1999 (when respondent issued the notice of intent to levy discussed at paragraph B, below), respondent assessed the frivolous return penalty under section 6702 for 1990-97.

ms of procedural and substantive defects in both the assessment of his income tax deficiency for 1996 and the section 2 See also Van Es v. Commissioner, 115 T.C. 324 (2000) (holding, in a sec. 6330 case, that the Tax Court lacked jurisdiction over a sec. 6702 penalty for the filing of a frivolous return and granted the Commissioner’s motion to dismiss for lack of jurisdiction). - 5 - 6330 hearing. In particular, petitioner argues that he was not afforded a “fair hearing” because he did not recei

should also be noted that I had “zero” income according to the Supreme Court’s definition of income * * *. 9) I am also putting the IRS on notice that my 1997 tax return and claim for refund does not constitute a “frivolous” return pursuant to Code Section 6702. * * * * * * * 11) In addition, don’t notify me, that the IRS is “changing” my return, since there is no statute that allows the IRS to do that. You might prepare a return (pursuant to Code Section 6020b), where no return is filed, but w

should also be noted that I had "zero" income according to the Supreme Court's definition of income * * * 8) I am also putting the IRS on notice that my 1921 tax return and claim for refund does not constitute a "frivolous" return pursuant to Code Section 6702. * * * * * * * 10) In addition, don't notify me that the IRS is changing" my return, since there is no statute that allows the IRS to do that. You might prepare a return (pursuant to Code Section 6020(b), where no return is filed, but as

8) Please note that my 1997 return also constitutes a claim for refund pursuant to Code Section 6402. 9) I am also putting the IRS on notice that my 1997 tax return and claim or [sic] refund does not constitute a “frivolous” return pursuant to Code Section 6702. * * * * * * * * * * 11) In addition, don’t notify me [t]hat the IRS is “changing” my return, since there is no statute that allows the IRS to do that. You might prepare a return (pursuant to Code Section 6020(b)) where no return is file

that I had “zero” income ACCORDING TO THE SUPREME COURT’S DEFINITION OF INCOME * * * . 8) With this statement, I am also putting the IRS on notice that my 1997 tax return and claim for refund does not constitute a “frivolous” return pursuant to Code Section 6702. * * * - 5 - * * * * * * * 10) In addition, don’t notify me that the IRS is “changing” my return, since there is no statute that allows the IRS to do that. You might prepare a return (pursuant to Code Section 6020(b)), where no return is

also be noted that I had “zero” income according to the Supreme Court’s definition of income * * * . 8) I am also putting the IRS on notice that my 1997 tax return and claim for refund does not constitute a - 4 - “frivolous” return pursuant to Code Section 6702. * * * * * * * 10) In addition, don’t notify me that the IRS is “changing” my return, since there is no statute that allows the IRS to do that. B. Respondent’s 30-day Letter and Petitioner’s Response By letter dated September 2, 1999, res

hould also be noted that I had “zero” income according to the Supreme Court’s definition of income * * * . 7) I am also putting the IRS on notice that my 1998 tax return and claim for refund does not constitute a “frivolous” return pursuant to Code Section 6702. * * * * * * * * * * 10) In addition, don’t notify me that the IRS is - 5 - “changing” my return, since there is no statute that allows the IRS to do that. You might prepare a return (pursuant to Code Section 6020(b)) where no return is f

t should also be noted that I had “zero” income according to the Supreme Court’s definition of income * * * 8) I am also putting the IRS on notice that my 1997 tax return and claim for refund does not constitute a “frivolous” return pursuant to Code Section 6702. * * * * * * * * * * - 5 - 10) In addition, please do not notify me that the IRS is “changing” my return since there is no statute that allows the IRS to do this. You might prepare a return (pursuant to Code Section 6020(b)) where no ret

On June 14, 1999, respondent assessed a section 6702 frivolous return penalty with respect to each of petitioner’s taxable years at issue.

noted that I had “zero” income according to the Supreme Court’s definition of income (See Note #1) * * * . 7) I am also putting the IRS on notice that my 1995 tax return and claim for refund does not constitute a “frivolous” return pursuant to Code Section 6702. * * * 8) Moreover, since no assessment for 1995 income taxes * * * has ever been made against me, the IRS has no legal basis to hold the $4143 of my money it is now holding for 1995 income taxes. * * * * * * * 10) In addition, don’t noti

e assessment was not valid; (2) the Appeals officer never received verification that the requirements of applicable law and procedure had been met; (3) the underlying tax liability was incorrect; (4) they never received a “valid” notice of deficiency; (5) they never received a notice and demand for payment; and (6) a frivolous return penalty under section 6702 was incorrect.

noted that I had “zero” income according to the Supreme Court’s definition of income (See Note #1) * * * . 8) I am also putting the IRS on notice that my 1997 tax return and claim for refund does not constitute a “frivolous” return pursuant to Code Section 6702. * * * * * * * 10) In addition, don’t notify me that the IRS is “changing” my return, since there is no statute that allows the IRS to do that. You might prepare a return (pursuant to Code Section 6020(b)) where no return is filed, but as

x return. * * * * * * * It should also be noted that we had “zero” income according to the Supreme Court’s definition of income * * * . We would like the IRS to note that our 1997 tax return does not constitute a “frivolous” return pursuant to Code Section 6702. * * * * * * * In addition, do not notify us, that the IRS is “changing” our return, since there is no statute that allows the IRS to do so. You might prepare a return (pursuant to Code Section 6020(b), where no return is filed, but where

e rendered as a matter of law.” Rule 121(a) and (b); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), affd. 17 F.3d 965 (7th Cir. 1994). The moving party bears the burden of proving 2 Because we lack jurisdiction over the assessment of the sec. 6702 frivolous return penalties, we shall dismiss for lack of jurisdiction the related part of the petition. Van Es v. Commissioner, 115 T.C. 324 (2000). -7- that there is no genuine issue of material fact, and factual inferences are drawn in a

o impose a penalty on him under sec. 6673(a)(1)(B) for putting forth a frivolous or groundless position. Compare Branch v. IRS, 846 F.2d 36, 37 (8th Cir. 1988) (“A taxpayer’s asserted good faith is not relevant to the assessment of frivolous return [sec. 6702] penalties.”) with May v. Commissioner, 752 F.2d 1301, 1306 (8th Cir. 1985) (“showing of willfulness or lack of good faith is required [for sec. 6673(a)(1) damages]”). Title 28 U.S.C. sec. 1927 (1988) provides: “Any attorney * * * who so mu

The IRS treated the altered 1040 as a frivolous return under section 6702 and fined petitioner $500.

E S. MEYER, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket Nos. 2263-00L, 5001-00L.1 Filed November 7, 2000. R issued final notices of intent to levy to Ps. The notices requested payment of frivolous return penalties imposed under sec. 6702, I.R.C., for the taxable years 1996 and 1997. Ps requested an Appeals Office hearing pursuant to sec. 6330(b), I.R.C. On Jan. 13, 2000, prior to conducting an Appeals Office hearing, R issued determination letters to Ps stating that R would

The IRS treated the altered 1040 as a frivolous return under section 6702 and fined petitioner $500.

7. Please note that my 1992 return also con-stitutes a claim for refund pursuant to IRCode § 6402. 8. I am also putting IRS on notice that my corrected 1992 tax return and claim for refund does not constitute a "frivolous" return pursuant to IRCode § 6702. My amended return and claim for refund is based on 9 court decisions, 9 Internal Revenue Code sections, 3 Privacy Act Notice provisions and numerous other references. As such, it can not [sic] be termed "frivolous" on any basis as that term i

Rather, respondent treated it as a frivolous return and assessed the frivolous return penalty under section 6702 against petitioner in the amount of $500.

As a result of these two filings, respondent determined that no valid return was filed for 1988 or 1989, and assessed a frivolous return penalty of $500 under section 6702 for each of those filings.