Opinion
CV-S-01-1219-JCM-(PAL)
September 30, 2002
Arturo Reynoso, Las Vegas, NV, Plaintiff in proper person.
Daniel Bogden, Esq., Las Vegas, NV, Attorneys for the defendant.
John B. Snyder, III, Esq., USDOJ, Washington, D.C., Attorneys for the defendant.
ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
Presently before this court is defendant's motion for summary judgment (#2). Plaintiff filed an opposition to defendant's summary judgment motion that he entitled a reply to defendant's motion to dismiss (#7). Defendant filed a reply in further support of its motion for summary judgment (#8).
A motion for summary judgment is a procedure which terminates, without a trial, actions in which there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). A summary judgment motion may be made in reliance on the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any." Id.
The movant is entitled to summary judgment if the non-moving party, who bears the burden of persuasion, fails to designate "specific facts showing that there is a genuine issue for trial." Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986) (quoting Fed.R.Civ.P. 56(e)). Thus, in order to preclude a grant of summary judgment, the non-moving party must set forth "specific facts showing that there is a genuine issue for trial." Matsushita Elec. Indust. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting Fed.R.Civ.P. 56(e)). The substantive law defines which facts are material. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). All justifiable inferences must be viewed in the light most favorable to the non-moving party. County of Tuolumne v. Sonora Cmty. Hosp., 236 F.3d 1148, 1154 (9th Cir. 2001) (citing Zenith Radio Corp., 475 U.S. at 587).
Although the non-moving party has the burden of persuasion, the party moving for summary judgment bears the initial burden of showing the absence of a genuine issue of material fact. Metro Indust., Inc. v. Sammi Corp., 82 F.3d 839, 847 (9th Cir. 1996). That burden is met by showing an absence of evidence to support the non-moving party's case. Celotex Corp., 477 U.S. at 325. The burden then shifts to the non-moving party to set forth specific facts demonstrating that there is a genuine issue for trial. Liberty Lobby, Inc., 477 U.S. at 250. In meeting this burden, the non-moving party must go "beyond the pleadings and by its own evidence present specific facts showing that there is a genuine issue for trial." Far Out Prod. v. Oskar, 247 F.3d 986, 997 (9th Cir. 2001) (citing Keenan v. Allan, 91 F.3d 1275, 1279 (9th Cir. 1996)) (quotations omitted).
Plaintiff, Arturo Reynoso, filed a tax return in 1998 that had zeroes on all lines which reflected income and tax due to the government. Plaintiff did not attach a W-2 or 1099 form but instead attached a two-page explanation of why he had no tax liability. As part of his explanation plaintiff indicated that he "had no earning in 1998, that would have been taxable as income, under the Corporation Excise Tax Act of 1901." Plaintiff did not deny having any income, but instead contended his earnings were not taxable.
The Internal Revenue Service assessed a frivolous return penalty pursuant to 26 U.S.C. § 6702. Upon receiving a notice of intent to levy, plaintiff requested a collection due process hearing. After the hearing, the appeals officer determined that the penalty was valid. Pursuant to 26 U.S.C. § 6330(d), plaintiff filed this action contesting the validity of the assessed penalty and the notice of determination.
28 U.S.C. § 6702 provides that a frivolous return penalty of $500 shall be assessed if: a filed tax return does not contain information on which the substantial correctness of the self-assessment may be judged, or contains information that on its face indicates that the self-assessment is substantially incorrect; and (2) the conduct referred to is due to a position which is frivolous, or a desire to delay or impede that administration of Federal income tax laws. In the case at bar, the penalty is appropriate. Plaintiff filed an income tax return showing an income of zero. However, in the explanation attached to his return plaintiff indicated he had earnings but contend they were not taxable. It is clear from the record that the plaintiff intentionally did not provide the proper information to the IRS on his return and in so doing took a frivolous position.
Plaintiff contends a penalty cannot be assessed because he did not receive the proper notice and a demand letter. However, computer records indicate otherwise. The United States has produced a computer generated certificate of assessments, payments, and other specified matters that indicates plaintiff received the appropriate notice. The notice and demand letter in question, may be left at the dwelling or usual place of business or sent by mail to the individual's last known address. 26 U.S.C. § 6303(a). Furthermore, the existence of notices sent after the notice and demand letter, constitute a presumption that the required initial notice and demand letter were sent. U.S. v. Comer, 222 B.R. 555 (E.D. Mich. 1998), See also, Nassar v. U.S., 792 F. Supp. 1040, 1042-43, n. 4-5 (E.D. Mich. 1992); U.S. v. Morgan, 781 F. Supp. 1219, 1221 (E.D. Mich. 1991)("A certificate of assessment and payment which lists "First Notice" dates for each assessment constitutes presumptive proof that the IRS gave notice of the assessment and demand for payment.")
Likewise, plaintiff cannot prevail on his argument that there is no evidence of delegated authority from the Secretary of Treasury. Penalties may be assessed by the Secretary of the Treasury or any delegate. 26 C.F.R. § 301.6201-1(a), see also, Tibbetts v. Secretary, 577 F. Supp. 911, 915 (W.D.N.C. 1984), McCullough v. Secretary, 621 F. Supp. 750, 752 (N.D.Miss. 1985). "The delegation of authority down the chain of command, from the Secretary, to the Commissioner of Internal Revenue, to local IRS employees constitutes a valid delegation by the Commissioner to the delegated officers and employees." Robison v. United States of America, 2002 U.S. Dist. LEXIS 16408, at *10 (D. Nev. July 17, 2002). Based on the delegation of authority, the agents involved in processing plaintiff's claim were acting within their authority.
Plaintiff also questions the conduct of the appeals officer at the hearing. However, at the hearing plaintiff attempted to discuss matters beyond those permitted by statute. Relevant issues relating to the unpaid tax or the proposed levy can be discussed at the hearing including: "(i) appropriate spousal defenses; (ii) challenges to the appropriateness of collection actions; and (iii) offers of collection alternative, which may include the posting of a bond, the substitution of other assets, an installment agreement, or an offer-in-compromise." 26 U.S.C. § 6330(c)(2). Plaintiff chose to focus instead on the procedural arguments regarding notice and delegation of authority.
Plaintiff, did not try to discuss in a constructive manner any of the topics provided for by statute. Rather, he found the hearing a further opportunity to raise the same frivolous arguments that were included with his tax return. As a result of the hearing, the appeals officer determined that the penalty was valid, and this court agrees. The issues that plaintiff attempted to raise before the appeals officer and that he argued here are without merit. Plaintiff has not set forth any specific facts showing that there is a genuine issue for trial in this case. Therefore summary judgment is appropriate.
IT IS HEREBY ORDERED, ADJUDGED AND DECREED that defendant's motion for summary judgment (#2) is GRANTED.