NEEDHAM v. U.S., (D.Nev. 2002)

LARRY R. HICKS, United States District Judge.

On December 21, 2001, the United States filed a Motion for Summary Judgment. (Docket #8). Plaintiff filed a timely Opposition on February 1, 2002, (#13) and for the reasons that follow, the Court grants Defendant's motion.

Plaintiff Dennis Needham filed a Complaint seeking damages and requesting that the Court set aside an invalid collection determination pursuant to 26 U.S.C. § 6330.

Plaintiff's individual income tax returns for 1998 and 1999 contained zeros down the left hand margin to reflect zero income and zero taxes due to the government. As a result, the Internal Revenue Service ("IRS") assessed a frivolous return penalty for each year and sent to Plaintiff a Notice of Intent to Levy. The Notice informed Plaintiff of his right to request a collection due process hearing, which Plaintiff requested and which was held on May 24, 2001. On May 31, 2001, the IRS sent Plaintiff a Notice of Determination Under Section 6320 and/or 6330 essentially rejecting the issues raised by Plaintiff at the hearing as frivolous. The present case is an appeal of the Notice of Determination.

A. Standard of Review

A motion for summary judgment terminates, without a trial, actions in which "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c).

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).

Section 6330(d) does not specify the standard of review a district court should apply to an appeal of a Notice of Determination. However, the legislative history indicates that the 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, 105^th 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. See Sego v. Comm'r of Internal Revenue, 114 T.C. 604, 609-10 (2000).

B. Plaintiff's Section 6330 Appeal

Plaintiff raises the same issues before this Court that he raised at the May 24, 2001 hearing. Plaintiff challenges the Constitutionality of the May 24 hearing, the sufficiency of the Notice, the appeals officer's reliance on computer generated records, the authority of the appeals officer and the legitimacy of individual income tax generally.

Here the IRS hearing officer did not abuse his discretion when he determined that the requirements of applicable law had been met and that Plaintiff had been afforded statutorily-required administrative procedures. 26 U.S.C. § 6330 (c)(1). Additionally, Plaintiff did not address any of the statutorily-specified issues that may be raised at a collection due process hearing, such as spousal defenses, the appropriateness of an intended collection action, and possible alternative means of collection. 26 U.S.C. § 6330 (c). Finally, each of these arguments that Plaintiff now raises in the district court have been considered and rejected by other courts.

For example, in G.M. Leasing Corp. v. United States, 429 U.S. 338 (1977), the United States Supreme Court held that 26 U.S.C. § 6331 authorizes the collection of federal taxes by levy on the property of any person who refuses or neglects to pay any tax. Consequently, and contrary to Plaintiff's assertion, it requires no court order for the IRS to place a levy on an individual's property for failure to pay tax.

Nor is it improper for an appeals officer to rely on computer records in determining that the proper administrative procedures were followed to provide notice and for computing an assessment against a taxpayer. Davis v. Commissioner, 115 T.C. 35, 40 (2000). The "wages are not income" argument has been repeatedly rejected. See Olson v. United States, 760 F.2d 1003, 1005 (9^th Cir. 1985). Also rejected is the claim that an IRS employee is not a "delegate" of the Secretary of the Treasury.Browder v. Commissioner, T.C. Memo 1990-408, 1990 WL 108316.

Plaintiff has not, and cannot, present a material fact that would allow him to defeat Defendant's Motion for Summary Judgment. Defendant's Motion for Summary Judgment (#8) is, therefore, GRANTED. The clerk is directed to close the file.

IT IS SO ORDERED.