Opinion
10664-22L
06-22-2023
NEIL STIERHOFF, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Adam B. Landy Special Trial Judge
Pending before the Court is Mr. Stierhoff's Motion for Summary Judgment, filed November 18, 2022. Mr. Stierhoff argues that he is not "'included' in the 'general class' of 'person[s]' under an official 'duty' contemplated by [Internal Revenue Code (I.R.C.)] §§ 6671(b) and 6702(a)". As a result, Mr. Stierhoff maintains that he is not subject to the I.R.C. § 6702(a) civil penalty for submission of frivolous tax returns for the three tax years at issue, and no liability exists for which the proposed levy is necessary. Since Mr. Stierhoff considers himself not a person within the meaning of I.R.C. § 6671(b), he further maintains that the assessment of the civil penalty is without basis and is arbitrary and capricious, and the Commissioner has exceeded his authority to assess and collect the civil penalty for the tax years at issue. Consequently, Mr. Stierhoff contends that the Commissioner failed to abate the civil penalties and erred in sustaining the proposed levy action.
Unless otherwise indicated, all statutory references are to the Internal Revenue Code, Title 26 U.S.C., in effect at all relevant times, and all regulation references are to the Code of Federal Regulations, Title 26 (Treas. Reg.).
Although the notice of determination listed the civil penalty liability for tax years 1999 through 2002, the IRS abated the penalty for tax year 2001 since the settlement officer was unable to verify all applicable laws and procedures were met, including proper supervisory approval of the penalty pursuant to section 6751, prior to assessment of the civil penalty for this single tax year.
On December 13, 2022, the Commissioner filed an objection to the motion arguing that Mr. Stierhoff is not entitled to judgment as a matter of law. The Commissioner disputes Mr. Stierhoff's contentions that the settlement officer did not provide sufficient analysis showing that Mr. Stierhoff is included in the class of persons contemplated by I.R.C. §§ 6671(b) and 6702(a) and why any exclusion of I.R.C. § 6702 from the Treasury Regulations does not make the assessment and collection of Mr. Stierhoff's civil penalty liabilities improper or arbitrary. The Commissioner argues that the settlement officer fully complied with the requirements of I.R.C. § 6330, as stated in the notice of determination, in sustaining the proposed levy action. Specifically, the Commissioner states that the settlement officer (1) properly verified that the requirements of applicable law or administrative procedure were met, (2) considered all relevant issues Mr. Stierhoff raised, and (3) considered whether the proposed collection action balanced the Government's need for the efficient collection of taxes with Mr. Stierhoff's legitimate concern that any collection action be no more intrusive than necessary. See § 6330(c)(3). Hence, Mr. Stierhoff has not shown that no genuine issue of material fact exists, and he is entitled to judgment as a matter of law. The Commissioner urges this Court to deny Mr. Stierhoff's motion.
Upon careful consideration of Mr. Stierhoff's motion, the Commissioner's objection, the parties' filings to date, and the legal principles observed in Crites v. Commissioner, T.C. Memo. 2012-267, at *7-8, where this Court determined that the definition of "persons" in I.R.C. § 6671(b) includes officers and employees but does not exclude all others subject to the I.R.C. § 6702 penalty, we find that there exists a genuine dispute of material fact as to whether Mr. Stierhoff is entitled to summary adjudication in his favor upon all issues presented in this collection due process case.
Finally, Mr. Stierhoff's attention is invited to I.R.C. § 6673(a). If it appears to the Court that a position or argument offered by Mr. Stierhoff in this proceeding is frivolous, groundless, or the proceedings are instituted or maintained "primarily for delay", then we can impose a penalty (not to exceed $25,000). Mr. Stierhoff is advised that the arguments in his Motion for Summary Judgment appear to be frivolous. No penalty will be imposed at this time. Any future submission by Mr. Stierhoff advancing a frivolous or groundless position will result in the imposition of a penalty in an amount up to $25,000.
Accordingly, it is
ORDERED that Mr. Stierhoff's Motion for Summary Judgment, filed November 18, 2022, is denied. It is further
ORDERED that this case is restored to the general docket for trial or other disposition in due course.