Opinion
32737-21L
09-23-2022
SHELLY TEMPELMAN, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER AND DECISION
COURTNEY D. JONES JUDGE
In this collection due process (CDP) case, petitioner, Shelly Tempelman (Mrs. Tempelman), challenges a Notice of Determination Concerning Collection Actions under IRC Sections 6320 or 6330 (notice of determination) issued by the Internal Revenue Service (IRS) Independent Office of Appeals (Appeals) on November 4, 2021. The notice of determination sustained a levy of Mrs. Tempelman's state tax refundto collect unpaid section 6702(a) frivolous return penalties (including interest) that were assessed against her for tax year 2014. Mrs. Tempelman timely filed a Petition with this Court on December 3, 2021.
Unless otherwise indicated, all statutory references are to the Internal Revenue Code (IRC), Title 26 U.S.C., in effect at all relevant times, and all Rule references are to the Tax Court Rules of Practice and Procedure.
The Notice of Determination states that "[Mrs. Tempelman] filed a timely request for a due process hearing with Appeals under the provisions of the Internal Revenue Code (IRC) Section §6330 in response to a Notice of Intent to Levy issued under IRC §6331(d)(2)" (emphasis added). We construe the reference to a "Notice of Intent to Levy" as a reference to Notice CP92, "Seizure of Your State Tax Refund and Your Right to a Hearing", which was issued to Mrs. Tempelman on November 5, 2018. The notice informed Mrs. Tempelman that she must request a Collection Due Process hearing if she wished to appeal the seizure. A seizure of a state tax refund is permissible under section 6330(f)(2) and is described therein as a "levy". As discussed below, Mrs. Tempelman responded to Notice CP92 by timely filing Form 12153, Request for a Collection Due Process or Equivalent Hearing. That form directs filers to use it if they have been issued one or more "levy notices" including, "Notice of Levy on Your State Tax Refund."
On July 20, 2022, respondent filed a Motion for Summary Judgment contending that the collection action should be sustained. On August 16, 2022, Mrs. Tempelman filed a Response to Motion for Summary Judgment. For the reasons elaborated upon below, we will grant respondent's Motion.
On August 19, 2022, respondent filed a Motion for Leave to File First Supplement to Motion for Summary Judgment. Therein, respondent represented that Mrs. Tempelman did not object to the granting of the motion. The Court granted respondent's motion for leave on August 24, 2022 and filed the First Supplement to Motion for Summary Judgment the same day. On August 24, 2022, Mrs. Tempelman filed a Notice of Objection to First Supplement to Motion for Summary Judgment. As noted in our conclusion below, we conclude that the arguments in the objection are moot, irrelevant, or without merit.
Background
The following background is drawn from the parties' pleadings, motion papers, and associated exhibits and declarations. They are stated solely for the purpose of resolving the present Motion and not as findings of fact in this case. See Rule 1(b). Mrs. Tempelman resided in New Jersey when she filed her Petition.
On April 14, 2015, Mrs. Tempelman jointly filed a Form 1040, U.S. Individual Income Tax Return, for tax year 2014. The Form 1040 reported wages, salaries, and other compensation of $109,808; adjusted gross income of $111,757; taxable income of $64,022; and a refund due of $2,614. Subsequently, Mrs. Tempelman jointly filed a Form 1040X, Amended U.S. Individual Income Tax Return, for tax year 2014 (amended return), which included a Form 4852, Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. The amended return reported adjusted gross income of $1,949; taxable income of $0; and a refund due of $15,660. These adjustments appear largely attributable to an amended amount reported for wages, salaries, and other compensation of $0 on the Form 4852, which was previously reported to be $109,808 on the Form 1040. In Part III, Explanation of changes, of the amended return, Mrs. Tempelman stated:
Mrs. Tempelman's spouse, with whom she jointly filed the Form 1040 and the subsequent amended return, is not a party to this case.
This Form 4852 is submitted to rebut, and correct information on, a document known to have been submitted to the IRS by the party identified as "Payer", erroneously alleging that I received payments from them in the course of a trade or business or other taxable activity. The payments made to me by this payer did not result from any taxable activity and do not constitute any taxable income under relevant law.
On February 1, 2017, the IRS issued a Letter 3176C to Mrs. Tempelman warning her that the amended return contained one or more frivolous positions. The letter further warned her that failure to correct the frivolous position(s) in her amended return would result in the imposition of a penalty under section 6702. At some point thereafter, Mrs. Tempelman contacted the IRS, and apparently appended a "courtesy photocopy" of her amended return to her correspondence, but did not make any corrections to her amended return. Accordingly, on March 23, 2017, IRS employee Tondi McNeeley (Ms. McNeeley) made an initial penalty determination to assess two separate frivolous return penalties under section 6702(a). Ms. McNeeley proposed the two penalties on Form 8278, Assessment and Abatement of Miscellaneous Civil Penalties. Ms. McNeeley submitted Form 8278 for the written approval of her immediate manager, Andrea Ipson (Ms. Ipson), who approved the penalty determination on March 27, 2017.
On May 15, 2017, the IRS issued a Notice CP15, Notice of Penalty Charge, which informed Mrs. Tempelman that it had assessed two separate $5,000 penalties against her under section 6702(a), totaling $10,000. The penalties were assessed due to the frivolous nature of Mrs. Tempelman's amended return, including her true amended return and the photocopy of her amended return that she appended to her correspondence with the IRS. On November 5, 2018, the IRS issued to Mrs. Tempelman a Notice CP92, Seizure of Your State Tax Refund and Your Right to a Hearing.
In response, Mrs. Tempelman timely returned a completed Form 12153, Request for a Collection Due Process or Equivalent Hearing. Mrs. Templeman stated therein:
The proposed action is hereby disputed as I have been falsely accused of filing a frivolous return. I request the right to appeal the seizure (levy) of my state income tax refund because I did NOT file a frivolous return. The legal and administrative requirements of the proposed action are not applicable or appropriate. Please see attached detailed explanation and attachments.
In her detailed explanation, Mrs. Tempelman stated that her "Control Base and History Information" for 2014 reflects that she was assessed a frivolous return penalty bearing civil penalty argument number 44. Mrs. Tempelman is of the belief that this argument number corresponds to the 44th frivolous position listed in Notice 2010-33, a copy of which she attached to her Form 12153. Namely, the 44th listed position provides that a position that is the same as or similar to the following is frivolous: "A taxpayer's income is not taxable if the taxpayer assigns or attributes the income to a religious organization . . . claimed to be tax-exempt under section 501(c)(3)." Notice 2010-33, 2010-17 I.R.B. 609, 612 (Apr. 26, 2010). Mrs. Tempelman stated that, "Nowhere in my return do I assign or attribute anything to a religious organization." Mrs. Tempelman did not request any collection alternatives.
On March 14, 2019, the IRS issued to Mrs. Tempelman a Letter 3884C, which confirmed receipt of Mrs. Tempelman's request for a CDP hearing and invited her to discuss the issues before it submitted her request to Appeals. Soon thereafter, the IRS notified Mrs. Tempelman through a Letter 4473C that her request was forwarded to Appeals.
Mrs. Tempelman's case was ultimately assigned to Settlement Officer Kathleen Lee (SO Lee). On December 23, 2020, SO Lee sent Mrs. Tempelman a Letter 4837, which informed her that her CDP hearing was scheduled to take place telephonically on January 22, 2021. Mrs. Tempelman acknowledged receipt of SO Lee's December 23 letter and requested that the CDP hearing be conducted via correspondence. She also requested a copy of her administrative file. SO Lee acknowledged these requests in a letter dated January 6, 2021.
Before SO Lee, Mrs. Tempelman's case was assigned to Settlement Officer Scott True. He did not perform any substantive actions on the case.
Mrs. Tempelman also made multiple Freedom of Information Act (FOIA) requests during the pendency of her appeal. Mrs. Tempelman made her first FOIA request on September 1, 2019, seeking copies of any section 6020(b) returns, transcripts, Form 12775, and Form 8178 for tax years 2014 and 2015. On October 2, 2019, Mrs. Tempelman received a letter from the Department of Treasury FOIA Public Liaison, stating that it "found no documents specifically responsible to [her] request." Mrs. Tempelman made her second FOIA request on November 10, 2021, seeking a copy of her administrative file, including the Appeals file for her CDP hearing. On July 7, 2022, Mrs. Tempelman received a response that included 178 pages of information.
On February 9, 2021, per Mrs. Tempelman's request, SO Lee sent Mrs. Tempelman a copy of her administrative file. On March 3, 2021, SO Lee issued Mrs. Tempelman a Correspondence Conference Letter, which enclosed a Form 14402, Internal Revenue Code (IRC) Section 6702(d) Frivolous Tax Submissions Penalty Reduction. The letter further informed Mrs. Tempelman that she would have until March 24, 2021, to return the Form 14402 and to raise "any additional issues" beyond what she had already raised through her prior communications.
In her reply dated March 23, 2021, Mrs. Tempelman acknowledged receipt of the Correspondence Conference Letter and addressed a number of points. First, Mrs. Templeman reiterated her belief that "the penalties were unlawfully imposed" and that she was not liable for them. Second, she expressed dissatisfaction with the contents of the administrative file she received and made an additional request for "everything in [her] case file that [SO Lee was] relying on when considering whether or not to uphold the civil penalties." Third, citing Kestin v. Commissioner, 153 T.C. 14 (2019), Mrs. Tempelman argued that one of the penalties was improperly assessed against her for a photocopy of her 2014 amended return.
Accompanying Mrs. Tempelman's administrative file, Letter 6271 informed her that "the enclosed copy of the file does not contain information you previously sent to the Internal Revenue Service, any legally privileged information, or any information in the file that is unrelated to the disputed issue that you have appealed." See also s ection 7803(e)(7) (A taxpayer is entitled to a copy of "the nonprivileged portions of their case file on record regarding the disputed issues (other than documents provided by the taxpayer to the IRS) not later than 10 days before the date of such conference.").
On July 7, 2021, SO Lee replied to Mrs. Templeman's March 23 communication and notified her that the copy of the administrative file that Mrs. Tempelman received contained everything that she was entitled to receive under the Taxpayer First Act and that she would be in touch once a determination was made.
On September 14, 2021, SO Lee sent a letter to Mrs. Tempelman informing her that she had verified that the penalty assessments for tax year 2014 were valid, including proper observance of section 6751(b)(1)'s supervisory approval requirement. SO Lee also offered to consider collection alternatives if she received the proper documentation by September 30, 2021. On September 30, 2021, Mrs. Tempelman acknowledged receipt of SO Lee's letter and requested a 30-day extension to reply. SO Lee responded the same day and offered Mrs. Tempelman a two-week extension (i.e., October 14, 2021). Mrs. Tempelman did not request any collection alternatives or provide the necessary documentation for SO Lee to consider those alternatives.
On November 4, 2021, respondent issued a notice of determination sustaining the proposed levy action. The notice also stated that the requirements of any applicable law or administrative procedure were met. It further indicated that a collection alternative was not considered because Mrs. Tempelman had not provided the requested financial information. Mrs. Tempelman, seeking review of Appeals' determination, timely filed a Petition with this Court pursuant to section 6330(d)(1). Mrs. Tempelman's assignments of error assert that she is not liable for the penalties assessed against her.
Discussion
I. General Principles
A. Summary Judgment Standard
Summary judgment serves to "expedite litigation and avoid unnecessary and expensive trials." Fla. Peach Corp. v. Commissioner, 90 T.C. 678, 681 (1988). We may grant summary judgment when there is no genuine dispute of material fact, and a decision may be rendered as a matter of law. See Rule 121(b); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), aff'd, 17 F.3d 965 (7th Cir. 1994). In deciding whether to grant summary judgment, we construe factual materials and inferences drawn from them in the light most favorable to the nonmoving party. Id. The nonmoving party may not rest upon mere allegations nor denials in their pleadings and must set forth specific facts showing that there is a genuine dispute for trial. Rule 121(d); see also Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). We conclude that there is no genuine dispute as to any material fact and that this case may be adjudicated summarily.
B. Standard of Review
This court has jurisdiction under section 6330(d) to review Appeals' determination. Where the underlying tax liability was properly at issue in the CDP hearing, we will review the determination de novo. Lunsford v. Commissioner, 117 T.C. 183, 185 (2001) (citing Goza v. Commissioner, 114 T.C. 176, 181-82 (2000)). An underlying liability may properly be raised as an issue in the CDP hearing if the taxpayer did not receive a statutory notice of deficiency for the liability (pursuant to section 6212) or if he did not otherwise have an opportunity to dispute it. See § 6330(c)(2)(B). The term "underlying liability" includes any amounts owed by the taxpayer pursuant to the tax laws, including any tax deficiency, additions to tax or penalties, and statutory interest. Katz v. Commissioner, 115 T.C. 329, 338-9 (2000). Where the underlying liability was not properly at issue, we will review the determination for abuse of discretion. Sego v. Commissioner, 114 T.C. 604, 610 (2000); Goza v. Commissioner, 114 T.C. at 182. An abuse of discretion occurs if the Appeals officer or employee conducting the hearing exercises their discretion "arbitrarily, capriciously, or without sound basis in fact or law." Giamelli v. Commissioner, 129 T.C. 107, 111 (2007) (citing Woodral v. Commissioner, 112 T.C. 19, 23 (1999)).
There is no dispute that the Petition was filed timely pursuant to section 6330(d). See Boechler v. Commissioner, 142 S.Ct. 1493 (2022).
Mrs. Tempelman did not receive a notice of deficiency pursuant to section 6212 for the liability, nor did she otherwise have an opportunity to dispute it before her CDP hearing. Her challenge to the underlying liability for the section 6702 penalties was therefore proper. See § 6330(c)(2)(B). Because the liability was properly at issue at the hearing, we will review the determination sustaining it de novo. See Lunsford, 117 T.C. at 185; See also Clarkson v. Commissioner, T.C. Memo. 2022-92. All other issues will be reviewed for abuse of discretion.
Section 6703(b) exempts the assessment or collection of penalties provided by section 6702 from deficiency procedures.
II. Underlying Liability
A. Section 6702 Frivolous Return Penalties
Under section 6702(a), a taxpayer is liable for a frivolous return penalty of $5,000 if: (1) the document filed by the taxpayer "purports to be a return of a tax imposed by" the IRC, (2) the purported return either lacks "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 (3) the taxpayer's conduct either "is based on a position which the Secretary has identified as frivolous under subsection (c)" or "reflects a desire to delay or impede the administration of Federal tax laws." Section 6702(c) instructs the Secretary of the Treasury to prescribe and periodically revise a list of positions he has identified as being frivolous for purposes of section 6702.
The IRS assessed two $5,000 section 6702(a) penalties against Mrs. Tempelman, totaling $10,000. Respondent concedes that the IRS erroneously assessed one of the two penalties against a photocopy of Mrs. Tempelman's 2014 amended return, and that such assessment is improper. A frivolous return penalty cannot be assessed against a plainly marked photocopy of a federal income tax return because it does not constitute the "filing of what purports to be a return." See Kestin, 153 T.C. at 24-28. We granted respondent leave to file a First Supplement to Motion for Summary Judgment. The Supplement and attached exhibit establish that one of the section 6702(a) penalties against Mrs. Tempelman was formally abated. Accordingly, we must determine the propriety of the remaining section 6702(a) penalty assessed against Mrs. Tempelman for filing her amended return for tax year 2014.
Mrs. Tempelman's Petition states that she "filed an amended return, IRS Form 1040X" that was "signed under penalty of perjury," and contained information on which to calculate a tax. The Form 1040X that Mrs. Tempelman filed, by her own acknowledgement, purports to be a tax return. See also O'Brien v. Commissioner, T.C. Memo. 2012-326, *5 (Form 1040X purports to be an amended income tax return). Additionally, Mrs. Tempelman's amended Return, Form 1040X, contains information that on its face indicates that the self-assessment was substantially incorrect. On her amended return, Mrs. Tempelman reported adjusted gross income of $1,949; taxable income of $0; and a refund due of $15,660. These adjustments are largely attributable to an amended amount reported for wages, salaries, and other compensation of $0 on Form 4852, which was previously reported to be $109,808 on the original Form 1040. Mrs. Tempelman's self-assessment of $0 of wages, salaries, and other compensation and the purported refund due of $15,660 as shown on her amended return and attached Form 4852 is enough to conclude that Mrs. Tempelman's amended return contains information that on its face indicates that the self-assessment is substantially incorrect. See Grunsted v. Commissioner, 136 T.C. 455, 460 (a taxpayer's returns were substantially incorrect when petitioner filed a purported return and reported zero wages on attached Form 4852); See Clarkson, T.C. Memo 2022-92 at *9-10.
The refund amount listed on the amended return is the difference of Mrs. Tempelman's total withholding taxes for tax year 2014, less the refund amount she received from her original Form 1040.
Furthermore, Mrs. Tempelman's actions have been designated as frivolous by Notice 2010-33, which contains the listed positions that the IRS has designated as frivolous, in accordance with section 6702(c). Specifically, listed position 1(e) states:
Positions that are the same as or similar to the following are frivolous: (1) Compliance with the internal revenue laws is voluntary or optional and not required by law, including arguments that: . . . (e) A taxpayer has an option under the law to file a document or set of documents in lieu of a return or elect to file a tax return reporting zero taxable income and zero tax liability even if the taxpayer received taxable income during the taxable period for which the return is filed, or similar arguments
described as frivolous in Rev. Rul. 2004-34, 2004-1 C.B. 619.
Notice 2010-33 (emphasis added); See also Rev. Rul. 2004-34 ("Proponents of the zero return position file income tax returns that report no income and no tax liability even though these taxpayers have wages, salary or other income. Taxpayers taking this position typically attach to the zero return a Form W-2 or other information return that reports income and income tax withholding and request refunds from the Service of the withheld taxes. . . A taxpayer cannot use a zero return to avoid or evade the taxpayer's federal income tax liability.").
Mrs. Tempelman's amended return for tax year 2014 reports zero tax liability and seeks a refund of all Federal Income tax, Social Security tax, and Medicare tax withholdings, which is a position that the Secretary has identified as frivolous. See Jaxtheimer v. Commissioner, T.C. Memo. 2019-164, at *5 ("[T]his Court has repeatedly characterized returns reflecting zero income and zero tax as frivolous."). At no point has Mrs. Tempelman provided any documentation or evidence to support her blind assertion that she is not liable for the penalties at issue. Accordingly, the section 6702(a) frivolous return penalty is appropriate.
Mrs. Tempelman argues at length that Form 8278 and her TXMODA datashows that the frivolous return penalty was assessed against her using civil penalty argument 44, as listed in Notice 2010-33. Supra, p. 3. However, the internal Form 8278 and the internal electronic data (e.g., TXMODA data) used by the IRS do not reference public Notice 2010-33, rather they reference Internal Revenue Manual (IRM) Exhibit 25.25.10-1, which is the IRS' own internal listing of the same designated frivolous positions found in Notice 2010-33. IRM argument code 44 applies when a taxpayer files "zero wages on a substitute form." Mrs. Tempelman attached substitute Form 4852 to her amended return, and the form shows $0 of wages. IRM argument code 44 provides for the same substantive basis as listed frivolous position 1(e) in Notice 2010-33, and how the IRS chooses to internally refer to the designation is of no consequence. See Jaxtheimer, T.C. Memo. 2019-164, at *4-5.
TXMODA data is a detailed and current electronic record of a taxpayer's account, including all notice statuses, history items, control bases, and pending transactions. IRM 8.20.22.2 (Oct. 15, 2014).
IRM Exhibit 25.25.10-1, Frivolous Arguments (Sept. 30, 2016), describes frivolous argument number 44 as "Zero Wages on a Substitute Form: Taxpayer generally attaches either a substitute Form W-2, Form 1099, or Form 4852 that shows "$ 0" wages or no wage information. A statement may be included indicating the taxpayer is rebutting information submitted to the IRS by the payer. Entries are usually for Federal Income Tax Withheld, Social Security Tax Withheld, and/or Medicare Tax Withheld. An explanation on the Form 4852 may cite 'statutory language behind IRC 3401 and IRC 3121', or may include some reference to the company refusing to issue a corrected Form W-2 for fear of IRS retaliation."
B. Section 6751(b)(1) Supervisory Approval Requirement
Respondent bears the burden of production and the burden of proof regarding a taxpayer's liability for a section 6702(a) frivolous return penalty. See §§ 6703(a), 7491(c); Graev v. Commissioner, 149 T.C. 485 (2017). Section 6751(b)(1) provides that "[n]o penalty under this title shall be assessed unless the initial determination of such assessment is personally approved (in writing) by the immediate supervisor of the individual making such determination or such higher-level official as the Secretary may designate." An initial determination occurs when the IRS formally communicates its definite decision to assert a penalty against the taxpayer, and not just the mere possibility of such action. Kestin, 153 T.C. at 29-30 (Letter 3176C is not an "initial determination" of a penalty assessment). The section 6702(a) penalty is a "penalty" for purposes of section 6751(b)(1). Id. at 22. If supervisory approval was not obtained for a penalty subject to section 6751(b)(1), then the penalty cannot be sustained. See Graev, 149 T.C. at 493.
The record establishes that Ms. McNeeley made the initial determination to assess the frivolous return penalty on March 23, 2017, when she proposed the penalty on Form 8278 and submitted it to her manager and immediate supervisor, Andrea Ipson, to obtain the requisite written approval. The record further shows that Ms. Ipson approved the penalty determination and signed Form 8278 on March 27, 2017. The CP15, Notice of Penalty Charge, was not issued until May 15, 2017, and thus proper approval of the immediate supervisor was obtained before notice of the penalty was formally communicated to Mrs. Tempelman.
Appeal of this case would presumably lie in the U.S. Court of Appeals for the Third Circuit. §7482(b)(1)(G). Golsen v. Commissioner, 54 T.C. 742 (1970), aff'd, 445 F.2d 985 (10th Cir. 1971). Golsen stands for the proposition that this Court will apply the decision of the Court of Appeals that is "squarely in point where appeal from our decision lies to that Court of Appeals and to that court alone" and, as a corollary, that this Court's own view(s) will be given effect to the extent the relevant Court of Appeals has not expressed one. See Golsen, 54 T.C. at 757. We recognize that there is a split between the circuits as to whether written supervisory approval must be obtained before the IRS issues a formal communication of the penalty such as a notice of deficiency, Chai v. Commissioner, 851 F.3d 190, 221 (2nd Cir. 2017), or merely before the assessment, Laidlaw's Harley Davidson Sales, Inc. v. Commissioner, 29 F.4th 1066, 1071 (9th Cir. 2022); Kroner v. Commissioner, No. 20-13902, 2020 WL 414034, at *12-13 (11th Cir. Sep. 13, 2022), rev'g and remanding T.C. Memo. 2020-73. The Third Circuit does not appear to have taken a position on the issue. See United States v. Komlo, 802. Fed.Appx. 676 (3d. Cir. Jan. 29, 2020); But Cf. United States v. Weiner, No. 18CV16034, 2020 WL 4596926 (D. N.J. Aug. 11, 2020). Accordingly, we follow this Court's approach in the instant case. See, e.g., Graev v. Commissioner, 149 T.C. 485 (2017), supplementing 147 T.C. 460 (2016).
The validity of Form 8278 is supported by the Declaration of Andrea Ipson and electronic records. And while it is true that S.O. Lee had to conduct a search to verify the existence of Form 8278, that fact evidences a public servant working to ensure Mrs. Tempelman received a fair hearing and determination in compliance with the mandates of the law. Mrs. Tempelman has not relied on actual evidence, but rather has made unsupported assertions that fail to rebut the facts at hand. Accordingly, respondent's determination of Mrs. Tempelman's liability for a frivolous return penalty was proper.
Mrs. Tempelman's TXMODA data supports that Tondi McNeeley sought managerial approval on March 23, 2017, the same day that she signed Form 8278. Andrea Ipson signed Form 8278 on March 27, 2017. Tondi McNeeley then recorded the approval of the penalty in the TXMODA database on April 21, 2017. See IRM 25.25.10.8.1; 25.25.10.8.2.
III. Abuse of Discretion
In deciding whether SO Lee abused her discretion in sustaining the collection action, we consider whether she (1) properly verified that the requirements of applicable law and administrative procedure have been met, (2) considered any relevant issues petitioner raised, and (3) considered "whether any proposed collection action balances the need for the efficient collection of taxes with the legitimate concern of [petitioner] that any collection action be no more intrusive than necessary." § 6330(c)(3). Our review of the administrative record establishes that SO Lee properly discharged all of her responsibilities under section 6330(c).
Mrs. Tempelman proposed no collection alternative. SO Lee was not obligated to pursue a collection alternative where no such proposal was made. See McLaine v. Commissioner, 138 T.C. 228, 243 (2012). Finding no abuse of discretion in any respect, we will grant respondent's Motion and sustain the collection action.
IV. Warning Regarding Penalties under Section 6673
We find it appropriate to warn Mrs. Tempelman that this Court, on its own motion, may impose penalties of up to $25,000 pursuant to section 6673(a)(1). This Court is permitted to impose such penalties "[w]henever it appears to the Tax Court" that a taxpayer has instituted or maintained proceedings "primarily for delay," or has taken a position that "is frivolous or groundless." Id. Moreover, we have considerable latitude in determining when, and in what amount, to impose a penalty under section 6673 because these penalties serve to punish and deter the abuse of judicial resources. Precourt v. Commissioner, T.C. Memo. 2010-24, 2010 WL 571822, at *10. "The purpose of section 6673 is to compel taxpayers to think and to conform their conduct to settled principles before they file returns and litigate." Takaba v. Commissioner, 119 T.C. 285, 295 (2002).
Though we will not impose a penalty under section 6673 upon Mrs. Tempelman in the instant case, we take this opportunity to sternly warn her that penalties, up to a maximum of $25,000, are very likely to be imposed upon her in any future cases before this Court if she advances similarly frivolous arguments again.
V. Conclusion
Upon review of the record, we conclude that Mrs. Tempelman is liable for the penalty under section 6702(a) because she filed a frivolous return. Consequently, we will grant respondent's Motion for Summary Judgment and affirm Appeals' determination to sustain the collection action. In reaching our decision, we have considered all arguments made, and, to the extent not mentioned, we conclude that they are moot, irrelevant, or without merit.
Accordingly, it is
ORDERED that respondent's Motion for Summary Judgment as supplemented, is granted. It is further
ORDERED AND DECIDED that the determination set forth in the Notice of Determination Concerning Collection Actions under IRC Sections 6320 or 6330 of the Internal Revenue Code, dated November 4, 2021, upon which this case is based, is sustained.