FRIVOLOUS RETURN PENALTIES UPHELD.

[2] The matter is before the court on defendant's motion for summary judgment. (docket # 5). Defendant seeks dismissal of plaintiff's claims on the basis that this court lacks subject-matter jurisdiction. Defendant asserts that the proper forum for plaintiff's lawsuit attempting to challenge his underlying tax liability is the United States Tax Court. (Def. Brief at 4). Defendant argues that this court does have "jurisdiction to review the IRS's determination with respect to the frivolous return penalties assessed pursuant to 26 U.S.C. § 6702." (Def. Brief at 4 n.1) (citing Van Es v. Commissioner, 115 T.C. 324 (2000). Defendant seeks a court order affirming the decision of the appeals officer imposing sanctions against plaintiff for filing frivolous tax returns.

[3] Plaintiff filed his response on February 21, 2002. (docket # 13). Plaintiff opposes defendant's motion for summary Judgment on the basis that, "Defendant's memorandum of law is nothing but a conglomeration of false and fraudulent claims designed to circumvent the law and deny plaintiff protection." (docket # 13, at 2). Plaintiff vehemently disagrees with the defendant's assertion that plaintiff's underlying ability to pay taxes was not at issue at the hearing. Plaintiff claims that he challenged his underlying liability to pay taxes at the hearing and states, "it is an issue in this proceeding and is a contested issue of fact." (Id.). Plaintiff repeats this assertion on page 3 of his brief where he states, "The issue of underlying liability is at issue in this proceeding and is a contested issue of fact." (Id. at 3). Plaintiff repeats these arguments on page 21 of his brief and in the declaration he attached in support of his brief.

[4] Upon review, defendant's motion for summary judgment affirming the administrative decision imposing sanctions will be granted. Plaintiff's remaining claims will be dismissed because the court lacks subject-matter jurisdiction on those claims.

[6] Summary judgment is appropriate when the record reveals that there are no issues as to any material fact in dispute and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); Hiney Printing Co. v. Brantner, 243 F.3d 956, 959 (6th Cir. 2001); Redding v. St. Edward, 241 F.3d 530, 532 (6th Cir. 2001); Parker v. Metropolitan Life Ins. Co., 121 F.3d 1006, 1009 (6th Cir. 1997) (en banc). The standard for determining whether summary judgment is appropriate is whether "the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986); see Watkins v. City of Battle Creek, 273 F.3d 682, 685 (6th Cir. 2001); Groner v. Golden Gate Gardens Apts., 250 F.3d 1039, 1043 (6th Cir. 2001); Strouss v. Michigan Dep't of Corr., 250 F.3d 336, 341 (6th Cir. 2001). The court must consider all pleadings, depositions, affidavits, and admissions on file, and draw all justifiable inferences in favor of the party opposing the motion. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Pride v. Bic Corp., 218 F.3d 566, 567 (6th Cir. 2000).

[7] When the party without the burden of proof (generally the defendant) seeks summary judgment, that party bears the initial burden of pointing out to the district court an absence of evidence to support the non-moving party's case, but need not support its motion with affidavits or other materials "negating" the opponent's claim. Moore v. Philip Morris Cos., Inc., 8 F.3d 335, 339 (6th Cir. 1993). Once the movant shows that "there is an absence of evidence to support the non-moving party's case," the non-moving party has the burden of coming forward with evidence raising a triable issue of fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). To sustain this burden, a plaintiff may not rest on the mere allegations of his pleadings. Fed. R. Civ. P. 56(e); Dudley v. Eden, 260 F.3d 722, 724 (6th Cir. 2001); Braithwaite v. Timken Co., 258 F.3d 488, 493 (6th Cir. 2001); Campbell v. Grand Trunk W.R.R., 238 F.3d 772, 775 (6th Cir. 2001). "A mere scintilla of evidence is insufficient." March v. Levine, 249 F.3d 462, 471 (6th Cir. 2001). Rather, a party with the burden of proof opposing a motion for summary has the burden to come forth with requisite proof to support his legal claim, particularly where he has had an opportunity to conduct discovery. See Cardamone v. Cohen, 241 F.3d 520, 524 (6th Cir. 2001); Noble v. Chrysler Motors Corp., 32 F.3d 997, 999 (6th Cir. 1994).

[10] Plaintiff requested a hearing. (Docket # 8, Ex. C). Plaintiff objected to the penalties imposed and stated the basis for his objection as follows:

REQUEST FOR DUE PROCESS HEARING "FRIVOLOUS" PENALTY

[12] Please have at the hearing:

[13] On July 12, 2001, the Internal Revenue Service appeals officer conducted a collection due-process hearing. Pertinent portions of the transcript according to plaintiff are set forth below:

      MF   Ok . . . um. Today is July 12, 2001. If you could state

      Type Tax            Tax Period

• You demanded that you be provided with implementing regulations for code section 6702 and stated that the penalty was not valid without these regulations.

• You stated that the code did not define the word liability and did not state that you were liable for an income tax.

• You did not raise any other issues (other than demanding names and job descriptions of employees and demanding copies of regulations) and you did not raise any issues that Appeals has jurisdiction over.

• Balancing efficient Tax Collection with Concern Regarding Intrusiveness

  Because the t/p did not raise any issues, other than constitutional objections to the income tax laws, the proposed levy action balances the need for efficient tax collection with concern regarding the intrusiveness of the action.

[16] Numerous federal courts have upheld the imposition of the $500 sanction by the IRS pursuant to 26 U.S.C. § 6702(a), where, as here, a tax form is filed stating that an individual had no income, but the attached W-2 forms show wages, tips, or other compensation of greater than zero. See Hoffman v. United States, No. C02-50234JB, 209 F. Supp. 2d 1089, 1093 (W.D. Wash. 2002); Loofbourrow v. Commissioner, 208 F. Supp. 2d 698, 709- 10 (S.D. Tex. 2002); Carroll v. United States, No. 01-2877- G/BRE, 2002 WL 1962944 (W.D. Tenn. May 29, 2002); Reinhard v. Internal Revenue Service, No. CIVS-1286GCDGGHPS, 2002 WL 1095351, at * 5 (E.D. Cal. May 24, 2002); Light v. United States, No. CV-S-01-923-LRH(RJJ), 2002 WL 1465963, at * 3 (D. Nev. May 15, 2002) (citing, among other cases, Sizemore v. United States, 797 F.2d 268, 270 (6th Cir. 1986)); Montijo v. United States, No. CV-S-01-1227-RLH(LRL), 2002 WL 1466096, at * 3 (D. Nev. May 14, 2002) (finding "no doubt" about the validity of the penalty) (collecting cases); Baker v. United States, No. CV-S-01-1187-RLH RJJ, 2002 WL 139612, at * 3 (D. Nev. May 10, 2002) (same).

[17] The appeals officer's decision upholding sanctions against plaintiff took into consideration "(A) the verification presented under paragraph (1); (B) the issues raised under paragraph (2); and (C) whether any proposed collection action balances the need for the efficient collection of taxes with the legitimate concern of the person that any collection action be no more intrusive than necessary." 26 U.S.C. § 6330(c). (Complaint, Ex. A).

[18] Section 6330 (d) provides for judicial review after a CDP hearing, but fails to specify the standard of review or the court responsible for conducting that review. Carroll, 2002 WL 1962944, at * 3.

[19] In the absence of controlling appellate authority, the court will assume for analytical purposes that this court does have subject-matter jurisdiction limited to review of the appropriateness of the frivolous tax return penalties imposed pursuant to 26 U.S.C. § 6330(d). In Carroll v. United States, the United States District Court for the Western District of Tennessee applied an abuse-of-discretion standard in conducting a section 6330(d) review. The court noted that in other contexts the Sixth Circuit had held that the appropriate standard of review of penalty determinations by administrative agencies should be the abuse-of-discretion standard. 2002 WL 1962944, at * 3 (citing Steeltech, Ltd. v. United States Environmental Protection Agency, 273 F.3d 652, 655 (6th Cir. 2001) and Schuck v. Frank, 27 F.3d 194, 197 (6th Cir. 1994)). The court observed that lower courts within the Sixth Circuit had applied an abuse-of-discretion standard in this specific context, citing the legislative history of section 6330. 2002 WL 1962944, at * 3 (citing Bonfare v. United States, No. C-2-00-1222, 2002 WL 373407 (S.D. Ohio Jan. 29, 2002) and Geller v. United States, No. C2-00-1116, 2001 1346669, at * 2 (S.D. Ohio Sept. 25, 2001)). Other courts have also applied the abuse-of-discretion standard. "[T]he legislative history indicates that a court should conduct a de novo review only 'where the validity of the tax liability was properly at issue at the administrative hearing.' H. Conf. Rept. 105- 599, 105th Cong. 2d sess. 266 (1998). Where the amount of the underlying tax liability is not properly part of the appeal, the court reviews a Notice of Determination for abuse of discretion." Pinsonneault v. United States, No. CV-5-01-919-RLJRRJJ, 2002 WL 442275, at * 3 (D. Nev. Feb. 14, 2002); see also Stanifird v. Wilcox, No. CV-00-1954-PHX JAT, 2001 WL 758711, at * 1 (D. Ariz. June 12, 2001). Under an abuse-of-discretion standard, the administrative decision must be affirmed unless the court determines with a "definite and firm conviction that a clear error of judgment has been committed." Cincinnati Ins. Co, v. Byers, 151 F.3d 574, 578 (6th Cir. 1998). Other courts have applied a de novo review standard. See, e.g., Light, 2002 WL 1465963, at * 3. The courts applying a de novo review have limited judicial review "to those issues raised during the CDP hearing.". Reinhardt, 2002 WL 1095351, at * 4. Regardless of whether the hearing officer's decision is reviewed de novo, or under an abuse-of-discretion standard, in the present case, the defendant is entitled to judgment in its favor as a matter of law upon the statutory sanctions imposed against plaintiff for filing frivolous returns.

[20] Plaintiff clearly received notice and opportunity for a hearing prior to the IRS levy as required by 26 U.S.C. § 6330(a).¹ Plaintiff requested and received a CDP hearing pursuant to 26 U.S.C. § 6330(b) before a hearing officer.² At the hearing, plaintiff declined to challenge matters allowable under 26 U.S.C. § 6330(c)(2). Plaintiff did not challenge the appropriateness of the intended method of collection, offer an alternative means of collection, or raise a spousal defense. Carroll, 2002 WL 1962944, at * 5. The statute provides that a person "may also raise at the hearing challenges to the existence or amount of the underlying tax liability," if other requirements are met. 26 U.S.C. § 26 U.S.C. § 6330(c)(2)(B). In this context, the "underlying tax liability" referred to in 26 U.S.C. § 6330(b) is the frivolous return penalty, not the underlying liability to pay taxes for a particular year. See Montijo, 2002 WL 1466096, at *2; Light, 2002 WL 1465963, at * 3. From the record presented, it is clear that plaintiff had an opportunity to contest his tax liability at the hearing. See Reinhardt, 2002 WL 1095351, at * 5. In any event, plaintiff's arguments regarding why he was not obligated to pay taxes have been expressly rejected by the federal courts. The hearing officer was not required to respond to such well- worn and frivolous arguments. Reinhardt, 2002 WL 109351, at * 6; see also United States v. Mundt, 29 F.3d 233, 237 (6th Cir. 1994) (reciting a litany of rejected arguments concerning the power of the United States government to collect income tax).

[21] Plaintiff complains that the hearing officer refused to identify the IRS employees who imposed the penalties. "The identity of the IRS employees who imposed the penalt[ies] is not relevant to whether the penalty was proper. Accordingly, this claim is without merit." Reinhardt, 2002 WL 1095351 [sic], at *5. Courts have likewise rejected as "frivolous" the argument that the IRS failed to offer proof that those who determined and imposed the penalties were authorized to do so. Hoffman, 209 F. Supp. 2d at 1094.

[22] Plaintiff complains that the hearing officer failed to identify the regulations that required plaintiff to pay the penalty. "According to the regulations, there is no requirement that the hearing officer identify the regulations on which the penalty is based during the hearing." Reinhardt, 2002 WL 109351, at * 5. In any event, the written notices that plaintiff received identified the statutory basis for the penalties imposed. Finally, plaintiff complains that he was not provided with the verification he had requested from the hearing officer. There is simply no requirement that the appeals officer provide a verification to the taxpayer. Reinhardt, 2002 WL 1095351, at * 5. The penalty will therefore be affirmed.

[23] To the extent plaintiff is attempting to challenge his tax liability for the 1998 and 1999 tax years, such claims must be dismissed for lack of jurisdiction. Such claims fall within the exclusive jurisdiction of the United States Tax Court. See Diefienbaugh v. Weiss, No.00-3344, 2002 WL 1679510 (6th Cir. Nov. 3, 2000); Pinsonneault v. United States, 2002 WL 442275, at * 2; accord Steidel v. Evans, 2002 WL 1988174, at * 2; Cortes v. United States, No. CV-S-01-940-RLH LRL, 2002 WL 1987469, at * 2 (D. Nev. July 10, 2002).

[24] Finally, the United States is immune from suit under the doctrine of sovereign immunity. United States v. Mitchell, 445 U.S. 535, 538 (1980). Plaintiff has the burden of establishing that the government has waived sovereign immunity and to identify the specific statutory provision containing the waiver. See Baker v. United States, 817 F.2d 560, 562 (9th Cir. 1987). The waiver must be express and will not be implied. Lane v. Pena, 518 U.S. 187, 192 (1996). The scope of any waiver of sovereign immunity is to be strictly construed in favor of the sovereign. See Department of the Army v. Blue Fox, Inc., 525 U.S. 255, 261 (1999). Plaintiff's claim for monetary damages against defendant is barred by sovereign immunity.

Dated: September 20, 2002

[27] IT IS ORDERED that defendant's motion for summary judgment (docket # 5) be and hereby is GRANTED. The administrative decision imposing sanctions against plaintiff is AFFIRMED.

[28] IT IS FURTHER ORDERED that plaintiff's claims attempting to challenge his tax liability for the 1998 and 1999 tax years and for monetary damages against the United States are DISMISSED for lack of subject-matter jurisdiction.

Dated: September 20, 2002

²If plaintiff was attempting to assert a procedural due-process claim, this court lacks jurisdiction over such a claim. See, e.g., Glass v. Internal Revenue Service, No. 01-2112, 2001 WL 1356141 (10th Cir. Nov. 5, 2001). "District courts have no jurisdiction over civil claims challenging taxes unless litigants first pay the assessed tax and then raise these claims in a refund suit. See 26 U.S.C. § 7421(a) prohibiting suits to restrain assessment or collection of taxes); see also Flora v. United States, 362 U.S. 145 (1960) (holding that 28 U.S.C. § 1346(a), which gives district courts jurisdiction over suits challenging tax assessments, requires full payment of assessed tax prior to suit)." Tornichio, 2002 WL 508325, at * 3.