Opinion
Civil Action No.: L-02-2790
September 12, 2002
MEMORANDUM
Plaintiff Charles henry filed the instant case on August 22, 2002 seeking to challenge actions taken by individual Internal Revenue Service Appeals Officers in reaching a determination that he is liable for federal income taxes owed for the year 1997. Paper No. 1. Plaintiff alleges that he was deprived of his right to due process of the law under the Fifth Amendment when he was denied a hearing by Mr. Bronstein and when a subsequent decision was issued sustaining the IRS's decision to file a Notice of Levy against Mr. Henry. Id.
Plaintiff has attached to his complaint a copy of the determination letter which includes the details of the decision made by Mr. Bronstein. See Id. at Ex. E. It appears that Mr. Henry refused to go forward with the hearing he requested pursuant to 26 U.S.C. § 6330 because he was informed that he could not tape record the hearing. Id. As a result of his refusal, Bronstein determined that Mr. Henry had waived his right to a hearing. Id. at Ex. E, p. 3. Plaintiff does not deny that the hearing was terminated when he insisted that the hearing be recorded. Paper No. 1 at p. 6. In addition, the letter of determination clarifies Mr. Henry's basis for challenging the tax liability as follows:
The taxpayer has challenged the constitutionality of the statutory rules requiring individuals to file federal income tax returns and the federal government's right to assess and enforce collection of income taxes through the filing of a Notice of Levy. The taxpayer's arguments are frivolous and without merit.Id. at Ex. E, p. 2.
Under the provisions of 28 U.S.C. § 1915 (e)(2) a case "shall be dismissed at any time if the court determines that — (A) the allegation of poverty is untrue; or (B) the action or appeal — (i)is frivolous or malicious; (ii) fails to state a claim on which relief may be granted; or (iii) seeks monetary relief against a defendant who is immune from such relief." The Constitution of the United States grants Congress the power to tax under Art. I, § 8, cl. 1 (Congress "shall have power to lay and collect taxes"); and under the Sixteenth amendment (Congress "shall have power to lay and collect taxes on incomes, from whatever source derived . . ."). Congress has lawfully delegated the power to tax to the IRS. See 26 U.S.C. § 6201 et seq. The IRS has the authority as well as the affirmative duty to assess and enforce taxes. 26 U.S.C. § 6201, 7601(a). Mr. Henry's assertions regarding the constitutionality of the government's authority to assess and enforce income taxes are frivolous and his assertion that he was denied a due process hearing is without merit. Mr. Henry admits that he refused to comply with the procedural rules in place for the hearing prohibiting tape recording. Refusal to comply with the rules for the hearing is tantamount to a waiver of his request for that hearing. In short., Mr. Henry can not assert that his rights to due process were denied when the hearing which he claims he was entitled to was waived.
This Court notes that Mr. Henry does not seek to challenge the "alleged taxes" that were the subject of the IRS proceeding. The fact that Mr. Henry's due process claim hinges on his opportunity to be heard on a frivolous assertion cannot, however, be ignored.
A separate Order follows dismissing this case.
COMPLAINT FOR VIOLATION OF FEDERAL LAW
COMES NOW, Charles N. Henry, III, Plaintiff, and files this Complaint for Denial of Due Process and for that provides the following:JURISDICTION
1. That jurisdiction of this court is invoked pursuant to Public Law 105-206, section 1203, this being a complaint for denial of due process by the Internal Revenue Service Appeals Officers and that jurisdiction of this Court is invoked pursuant to Title 28 United States Code § 1331, this action being a federal question. The venue is proper under Title 28 U.S.C. § 1391. Title 28 U.S.C. § 1331 reads as follows:
The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.
2. Defendants may be sued in their individual capacity because the United States may not claim sovereign immunity under the provisions of the Federal Tort Claims Act.
3. Jurisdiction is also proper pursuant to 28 U.S.C. § 1361 which states:
The district courts shall have original jurisdiction of an action in the nature of mandamus to compel an officer or employee of the United States or any agency thereof to perform a duty owed to the plaintiff.
4. The United States Tax Court does not have jurisdiction because Title 26 C.F.R. § 601.102 states in relevant part, 601.102 Classification of taxes collected by the Internal Revenue Service
(b) Assessed taxes. Taxes collected principally by assessment fail into the following two main classes:
(2) Taxes not within the jurisdiction of the 13.5. Tax Court. Taxes not imposed by chapter 1, 2, 3, or 4 of the 1939 Code or subtitle A or chapter 11 or 12 of the 1954 Code are within this class, such as:
(i) Employment taxes.
5. The controversy involves an alleged employment tax for tax year 1997, but due process of law is the issue of this complaint, not any alleged taxes.
6. The Plaintiff is within the 30 day limitation imposed by Title 26 U.S.C. § 6330, which states in relevant part, (d) Proceeding after hearing. — (1) Judicial review of determination. — The person may, within 30 days of a determination under this section, appeal such determination (B) * * * to a district court of the United States. The adverse determination notice was dated July 22, 2002.
7. This action is filed to afford Plaintiff his due process rights pursuant to Amendment Five of the United States Constitution and Public Law 105-206, section 1203, and 26 U.S.C. § 6330 (b) (c), which have been denied by Defendants here to date. Public Law 105-206, section 1203, Termination of Employment For Misconduct, states in pertinent
(a) IN GENERAL. Subject to subsection (c), the Commissioner of Internal Revenue shall terminate the employment of any employee of the Internal Revenue Service if there is a final administrative or judicial determination that such employee committed any act or omission described under subsection (b) in the performance of the employees official duties. Such termination shall be a removal for cause on charges of misconduct.
(b) ACTS OR OMISSIONS. The acts or omissions referred to under subsection. (a) are:
(3) with respect to a taxpayer, taxpayer representative, or other employee of the internal Revenue Service, the violation of —
(A) any right: under the Constitution of the United States;
26 U.S.C. § 6330 states in pertinent part:
(b)(1) if the person requests a hearing under subsection (a)(3)(B), such hearing shall be held by the Internal Revenue Service Office of Appeals.
(c)(1) The appeals officer shall at the hearing obtain verification from the Secretary that the requirements of any applicable laws or administrative procedure have been met.
PLAINTIFF
8. That Charles N. Henry, III is a citizen of the State of Maryland,; so this case is properly venued. in the State of Maryland, United States District Court for the District of Maryland. His address is 22 Sugar Tree Place, Cockeysville, Maryland 21030.DEFENDANTS
9. That Bruce Bronstein is an Appeals Officer, IRS Employee ID#: 08-02408, Internal Revenue Service, at Baltimore Appeals Office, 31 Hopkins Plaza, Suite 1310, Baltimore, Maryland 21201.
10. That Aaron Whitaker is Appeals Team Manager, IRS Employee ID-not given, Internal Revenue Service, at Baltimore Appeals Office, 31 Hopkins Plaza, Suite 1310, Baltimore, Maryland 21201.
STATEMENT OF CLAIM
11. Mr. Bronstein and Mr. Whitaker are the adverse parties of this litigation because the actions complained of constitute actions committed in their individual capacity. Unfortunately, due to the newness of Title 26 U.S.C. § 6330 — it was effectuated approximately (4) years ago as section 3401(b) of Public Law 105-206 — there are no statutory specifications or case law, with respect to styling or service of such petitions. Public Law 105-206, section 1203 also applies because the defendants violated Plaintiff's right under the United States Constitution. For this reason, and because the Petitioner is a pro se litigant, this court should afford substantial latitude with respect to this pleading. See, Haines v. Kerner, 404 U.S. 519, 30 L.Ed.2d 652, 92
12. This action is filed to afford Plaintiff his due process rights pursuant to Amendment Five of the United States Constitution, which rights have been denied by Defendants here to date.
13. On August 12, 2000, the Internal Revenue Service issued a Final Notice — Notice of Intent to Levy and Notice of Your Right to a Hearing (Z 895 782 793) (for year 1997). (Plaintiff's Exhibit A)
14. On September 18, 2000, Plaintiff made a request for appeals consideration pursuant to 26 U.S.C. § 6330 and stated the This Request for Appeal Consideration is for the purpose of invoking my right to have the Appeals Office review the lawfulness of the determination and other actions which have been taken in my case. (Plaintiff's Exhibit B).
15. The Internal Revenue Service, responded in a letter that stated Your case has been assigned to our office and assigned to the Appeals Officer named above. The Appeals Officer will contact you soon to discuss your case or arrange a mutually satisfactory date for a conference. (Plaintiff's Exhibit C)
16. On April 26, 2002, Defendant Bronstein sent a letter to Plaintiff that stated in part: If you intend to contest the assessed tax liability, you must provide this office with the requisite documentary evidence to support your position that the liability in question is correct. He cited no law that required Plaintiff to prove his position. (Plaintiff's Exhibit D)
17. On May 20, 2002 an alleged hearing was held in the Baltimore offices of the Internal Revenue Service, Suite 1310, 31 Hopkins Plaza.
18. Defendant Bronstein, Plaintiff and Plaintiff's witness assembled in a meeting room of Suite 1310 and Defendant Bronstein outlined what would be done at the meeting.
19. When Defendant Bronstein noticed tape recorders on the meeting room table he asked if the recorders were on and then ended the meeting and cited a May 2, 2002 Memorandum For All Area Directors (IRS) that stated that audio recordings would not be allowed on Appeals cases. The language of the Memorandum implied that 26 U.S.C. § 7521 was overridden! Defendant Bronstein would not allow Plaintiff to read the Memorandum and record same into his tape recorder.
20. Defendant Bronstein violated Plaintiff's Due process rights pursuant to Title 26 § 6330(b)(1) and (c)(1) and his rights pursuant to Amendment V of the United States Constitution.
21 On July 22, 2002 Defendant Whitaker issued a Notice of Determination. (Plaintiff's Exhibit E)
22. On August 21, 2002 Plaintiff responded in a letter that rebutted Defendant Whitaker's allegations in his Notice of Determination and asked for a hearing and a redetermination. (Plaintiff's Exhibit F)
23. It was the right of Mr. Henry to have an in person appeals conference. Title 26 § 6330(b)(1) and (c)(1) states in relevant part,
(b) Right to a fair hearing.
(1) In general. If the person requests a hearing under subsection (a)(3)(B), such hearing shall be held by the Internal Revenue Service Office of Appeals.
(c) Matters considered at the hearing. — In the case of any hearing conducted under this section —
(1) Requirement of investigation. — The appeals officer shall at the hearing obtain verification from the Secretary that the requirements of any applicable law or administrative procedure have been met.
23. It was the right of Mr. Henry to have an in person appeals conference. Amendment V of the United States Constitution states in relevant part:
No person shall be deprived of life, liberty, or property, without due process of law . . .
24. The IRS has clearly not followed its prescribed Regulations (Title 26 C.F.R.) as set forth in 26 C.F.R. § 601.102 and 26 U.S.C. § 6330 (b)(1) and (c)(1).
25. That actions of Bruce Bronstein, and Aaron Whitaker as stated in paragraphs 13 through 24 to wit, deprived the petitioner of a portion of his right to due process as guaranteed by Article V of the United States Constitution and 26 U.S.C. § 6330 (b)(1) and (c)(1).
26. A memorandum of law is incorporated in this petition by reference thereto.
27. Plaintiff's Affidavit of the Hearing is incorporated with the Memorandum.
Relief Sought:
WHEREFORE, Petitioner demands judgment against Bruce Bronstein, and Aaron Whitaker as follows:
1) a judgment that Bruce Bronstein, and Aaron Whitaker violated the law depriving Plaintiff of his right to due process as guaranteed by Article V of the United States Constitution;
2) an ORDER that Bruce Bronstein, and Aaron Whitaker provide a fair hearing pursuant to 26 C.F.R. § 601.106 and IRC §§ 6213(b)(2), and 6330(b)(1) (c)(1) for all alleged assessments against Plaintiff for year 1997, if they cannot be substantiated in law and fact to this Court;
3) an ORDER that Bruce Bronstein, and Aaron Whitaker provide complete authenticated documentation to support all alleged assessments against Plaintiff for year 1997;
4) an ORDER that the Defendants comply with the laws as stated in 18 above in all future matters relating to the Plaintiff;
5) an Order that the Defendants pay costs and reasonable attorney fees to the Plaintiff for prosecuting this action;
6) an Order that this court find that the Defendant's erred when they found that a tax liability was imposed upon Plaintiff for tax year 1997;
7) an Order that collection efforts against the Plaintiff be suspended, pursuant to 26 U.S.C. § 6330 (e), for tax years 1997;
8) and other such relief that this Court should deem just and equitable.
THE PLAINTIFF DEMANDS A TRIAL BY JURY. Dated this 21st day of August, 2002, at Cockeysville, Maryland. MEMORANDUM IN SUPPORT OF COMPLAINT FOR VIOLATION OF FEDERAL LAWCOMES NOW the above captioned pro se Plaintiff, Charles Henry, III (hereinafter, Mr. Henry, and he submits this memorandum of law in support of his Complaint For Violation of Federal Law).
A. Defendant's denied Plaintiff his due process rights by denying him a hearing.
The law clearly states that Plaintiff has a Right to a fair hearing. 26 U.S.C. § 6330 provides for a hearing and states in pertinent part:
(b)(1) If the person requests a hearing under subsection (a)(3)(B), such hearing shall be held by the Internal Revenue Service Office of Appeals.
(c)(1) The appeals officer shall at the hearing obtain verification from the Secretary that the requirements of any applicable laws or administrative procedure have been met.
Defendant's not only did not provide Plaintiff a hearing, they therefore could not verify that all applicable law or administrative procedure have been met.
B. Plaintiff's Due Process Rights pursuant to Amendment Five of the United States Constitution clearly have not been met.
Amendment Five states in pertinent part:
No person shall be held to answer for a capital, or otherwise infamous crime, . . . nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just Compensation.
Due Process of Law is defined in Black's Law Dictionary as:
An orderly proceeding wherein a person is served with notice, actual or constructive, and has an opportunity to be heard and to enforce and protect his rights before a court having power to hear and determine the case. Kazubowski v. Kazubowski, 45 Ill.2d 405, N.E.2d 282, 290. Phrase means that no person shall be deprived of life, liberty, property or of any right granted him by statute, unless matter involved first shall have been adjudicated against him upon trial conducted according to established rules regulating judicial proceeding, and it forbids condemnation without a hearing. Pettit v. Penn, La.App., 180 So.2d 66, 69.
C. Defendant's clearly violated Plaintiff's Constitutional Rights.
Public Law 105-206, section 1203, Termination of Employment For Misconduct, states in pertinent part:
(a) IN GENERAL, Subject to subsection (c), the Commissioner of Internal Revenue shall terminate the employment of any employee of the Internal Revenue Service if there is a final administrative or judicial determination that such employee committed any act or omission described under subsection (b) in the performance of the employees official duties. Such termination shall be a removal for cause on charges of misconduct.
(b) ACTS OR OMISSIONS, The arts or omissions referred to under subsection (a) are —
(3) with respect to a taxpayer, taxpayer representative, or other employee of the Internal Revenue Service, the violation of —
(A) any right under the Constitution of the United States;
26 U.S.C. § 6330 states in pertinent part:
(b)(1) If the person request a hearing under subsection (a)(3)(B), such bearing shall be held by the Internal Revenue Service Office of Appeals. (c)(1) The appeals officer shall at the hearing obtain verification from the Secretary that the requirements of any applicable laws or administrative procedure have been met.28 U.S.C. § 1361 states:
The district courts shall have original jurisdiction of an action in the nature of mandamus to compel an officer or employee of the United States or any agency thereof to perform a duty owed to the plaintiff
The Defendant's clearly owe a duty to Plaintiff to grant him a fair and impartial heating. Plaintiff timely requested a hearing as shown in Plaintiff's Exhibit B. Defendant Bronstein halted the "hearing" before it actually began based on a Memorandum dated May 2, 2002, which was not law. (See Plaintiff's Exhibit G). Plaintiff cited 26 U.S.C. § 7521 that clearly states that if taxpayer notifies Appeals of his intent to record the hearing in advance of the hearing, the internal Revenue Service must allow him to record the hearing. Section 7521 states in pertinent part:
(a)(1) Recording by taxpayer
Any officer or employee of the Internal Revenue Service in connection with any in-person interview with any taxpayer relating to the determination or collection of any tax shall, upon advance request of such taxpayer, allow the taxpayer to make an audio recording of such interview at the taxpayer's own expense and with the taxpayer's own equipment.
This is the LAW which the Defendants and the entire Internal Revenue Service must abide by. Memorandums are NOT law, they are only guidelines and are unlawful unless they are made pursuant to the LAW.
Plaintiff hereby attaches his Affidavit of the "Hearing" to verify the account of what transpired Plaintiff can and will supply an audio recording of what transpired up to the time Mr. Bronstein halted the "hearing." (See Plaintiff's Exhibit H)
Respectfully submitted this 21st day of August, 2002. Charles N. Henry, III
PLAINTIFF'S EXHIBIT A
August 12, 2000CHARLES N HENRY 9005 NAYGALL RD BALTIMORE MD 21234-1335051
Department of the Treasury Internal Revenue Service P.O. BOX 57 BENSALEM, PA. 19020
Toll Free: 1-800-829-7650
Final Notice — Notice of Intent to Levy and Notice of Your Right to a Hearing Please Respond Immediately
You have not paid your federal tax. We previously asked you to pay but we still haven't received full payment. This letter is your notice of our intent to levy under Internal Revenue Code Section (IRC) 6331 and your notice of a right to receive Appeals consideration under IRC 6330. PLEASE CALL US IMMEDIATELY at one of the telephone numbers shown above if you recently made a payment or can't pay the amount you owe.
We may file a Notice of Federal Tax Lien at any time to protect the government's interest. A lien is public notice to your creditors that the government has a right to your interests in your current assets and assets you acquire after we file a lien.
If you don't pay this amount, make alternative arrangements to pay, or request Appeals consideration within 30 days from the date of this letter, we may take your property or rights to property such as real estate, automobiles, business assets, bank accounts, wages, commissions, and other income to collect the amount you owe. See the enclosed Publication 594, Understanding the Collection Process, for additional information about this and see Publication 1660 which explains your right to a hearing. The enclosed Form 12153 is used to request a hearing.
To prevent enforced collection actions, please send us full payment today for the amount you owe shown on the back of this letter. Make your check or money order payable to the United States Treasury. Write your social security number or employer identification number and the tax year on your payment. Send your payment in the enclosed envelope with a copy of this letter.
Enclosures: Copy of letter L. G. DOWD Form 12153 Chief, Automated Collection Branch Publication 594 Publication 1660 Envelope
PLAINTIFF'S EXHIBIT B Request for Appeals Consideration
Concerning: Charles Henry 22 Sugar Tree Place Cockeysville, MD 21030
July 18, 2001 Certified Mail No. 7099 3400 0020 1435 7194
John J. Jennings, District Director Internal Revenue Service P.O. Box 1018 Baltimore, Maryland 21203
Re: Letter 1058, dated July 3, 2001, concerning the year 1997.
Dear Mr. Jennings:
This Request for Appeals Consideration is for the purpose of invoking my right to have the Appeals Office review the lawfulness of the determinations and other actions which have been taken in my case. It is based upon the provisions of 26 U.S.C. § 6330, which states in part:
"§ 6330, Notice and opportunity for hearing before levy
(a) Requirement of notice before levy. —
(1) In general.
No levy may be made on any property or right to property of any person unless the Secretary has notified such person in writing of their right to a hearing under this section before such levy is made. Such notice shall be required only once for the taxable period to which the unpaid tax specified in paragraph (3)(A) relates.
. . . (3) Information included with notice.
The notice required under paragraph (1) shall include in simple and nontechnical terms —
. . . (B) the right of the person to request a hearing during the 30-day period under paragraph (2); . . .
(b) Right to fair hearing. —
(1) In general.
If the person requests a hearing under subsection (a)(3)(B), such hearing shall be held by the Internal Revenue Service Office of Appeals." [Emphasis added]
I would like to specify as the location for my conference the Internal Revenue Service office closest to my home. If that office can not support the holding of this appeal conference, then I request that it be held in the closest IRS office which can support one. Further, I plan to record the conference, and bring two witnesses.
Please be aware that I have repeatedly requested Appeals consideration of my case (sometimes through my Power of Attorney), throughout the pre-statutory (30-day) and statutory (90-day) notice stages, up to the present. These requests have either been ignored completely or denied by the Internal Revenue Service (IRS) employee controlling my case, even though they have provided no evidence of any lawful authority to make such denial. This in itself is a blatant violation of my right to due process. Due to this disregard for my rights, I have been deprived of the opportunity to disprove allegations that I am liable for any taxes the IRS alleges that I owe. Therefore, one of the issues to be addressed at my conference is the lawful basis of the underlying assessment upon which this lien is based. This issue is specifically listed as one which may be raised at 26 U.S.C. § 6330 (c)(2)(B), which states:
"(c) Matters considered at hearing.
In the case of any hearing conducted under this section —
. . . (2) Issues at hearing.
. . . (B) Underlying liability.
The person may also raise at the hearing challenges to the existence or amount of the underlying tax liability for any tax period if the person did not receive any statutory notice of deficiency for such tax liability or did not otherwise have an opportunity to dispute such tax liability." [Emphasis added]
Further, according to 26 U.S.C. § 6330 (e), which states:
(e) Suspension of collections and statute of limitations.—
(1) In general.
Except as provided in paragraph (2), if a hearing is requested under subsection (a)(3)(B), the levy actions which are the subject of the requested hearing and the running of any period of limitations under section 6502 (relating to collection after assessment), section 6531 (relating to criminal prosecutions), or section 6532 (relating to other suits) shall be suspended for the period during which such hearing, and appeals therein, are pending. In no event shall any such period expire before the 90th day after the day on which there is a final determination in such hearing." [Emphasis added]
the collection actions being taken should be suspended while my appeal is pending. Therefore, please prepare a memorandum to the district director, requesting that all collection activity be suspended while Appeals considers the issues identified in this request.
The heart of this matter is the lack of any statute which clearly and unequivocally makes me liable for (or subject to) the tax imposed within Subtitle A of the Internal Revenue Code (IRC). Without such statutory liability, I could not owe any amounts with respect to such tax. This is acknowledged by the United States Court of Appeals for the Ninth Circuit, where they stated in the case of Bothke v. Fluor Engineers and Constructors, Inc. ( 713 F.2d 1405):
" Second, the taxpayer must be liable for the tax. Id. Tax liability is a condition precedent to the demand. Merely demanding payment, even repeatedly, does not cause liability." [Emphasis added]
The United States Court of Appeals for the Second Circuit also confirms this principle in the case of Botta v. Scanlon, ( 288 F.2d 504):
"However, a reasonable construction of the taxing statutes does not include vesting any tax official with absolute power of assessment against individuals not specified in the statutes as persons liable for the tax without an opportunity for judicial review of this status before the appellation of "taxpayer is bestowed upon them and their property is seized and sold." [Emphasis added]
These cases exemplify the principle that the IRS does not have any lawful authority to assess taxes against me unless there is some statute which specifies that I am liable for (or subject to) such tax. In fact, even the Code of Federal Regulations (C.F.R.) acknowledges this principle in the description of the rules at 26 C.F.R. § 601.106 (f)(1), "Conference and practice requirements." Rule I states:
" An exaction by the U.S. Government, which is not based upon law, statutory or otherwise, is a taking of property without due process of law, in violation of the Fifth Amendment to the U.S. Constitution. Accordingly, an Appeals representative in his or her conclusions of fact or application of the law, shall hew to the law and the recognized standards of legal construction. It shall be his or her duty to determine the correct amount of the tax, with strict impartiality as between the taxpayer and the Government, and without favoritism or discrimination as between taxpayers." (emphasis added)
It is clear that it is the duty of the Appeals Office to determine the lawful basis of any assessment which is disputed. It is this duty that my appeal is invoking in regards to the alleged assessment against me.
In spite of numerous requests, the IRS has failed or refused to identify' the statute which they claim makes me liable for the tax, and in so doing have failed to verify their authority to perform the acts which have been taken in my case. Unless and until the statute making me liable for any tax is identified, any collection actions taken against me and my property are unlawful and invalid. Such unlawful acts negate any immunity which the responsible IRS employees may otherwise enjoy, thus subjecting them to personal liability for any damages resulting from those acts. The Court in the Bothke case above confirms this loss of immunity.
Please be aware that I have made the determination that I am not liable for (or subject to) the taxes the IRS alleges I owe, and therefore I am not a "taxpayer" as that term is defined within IRC § 7701(a)(14), which states in pertinent part:
"§ 7701. Definitions
(a) When used in this title, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof —
(14) Taxpayer.
The term "taxpayer" means any person subject to any internal revenue tax" [Emphasis added]
If some employee of the IRS has made a determination contrary to the one I made — that I am a "taxpayer", or subject to (or liable for) a tax — then it is necessary for such employee to identify the source of their authority to make such determination, and provide copies of the Delegation Order(s) which delegate such authority to such employee.
As previously mentioned, the issue of statutory liability is of the utmost importance because it affects all aspects of the collection actions being taken. Indeed, it is the basis of all collection actions. For example, IRC § 6331, "Levy and distraint" states:
"(a) Authority of Secretary.
If any person liable to pay any tax neglects or refuses to pay the same within 10 days after notice and demand, it shall be lawful for the Secretary to collect such tax (and such further sum as shall be sufficient to cover the expenses of the levy) by levy upon all property and rights to property (except such property as is exempt under section 6334) belonging to such person or on which there is a lien provided in this chapter for the payment of such tax." [Emphasis added]
This section makes it clear that unless a person has been made liable to pay a tax, the Secretary lacks any authority to levy against their property. In spite of the lack of authority to lien against anyone other than a person liable, the enclosed notice, dated July 3, 2001, asserts the intention of the IRS to levy my property. Please be aware that any attempts to collect the alleged assessment despite this lack of lawful authority must be considered to be knowing and willful violations of my right to due process. All such violations will be prosecuted to the fullest extent possible.
In addition to the above, the alleged assessment is outside the Secretary's lawful authority to assess, as established within IRC § 6201, which states:
"§ 6201. Assessment authority
(a) Authority of Secretary.
The Secretary is authorized and required to make the inquiries, determinations, and assessments of all taxes (including interest, additional amounts, additions to the tax, and assessable penalties) imposed by this title, or accruing under any former internal revenue law, which have not been duly paid by stamp at the time and in the manner provided by law. Such authority shall extend to and include the following:
(1) Taxes shown on return.
The Secretary shall assess all taxes determined by the taxpayer or by the Secretary as to which returns or lists are made under this title.
(2) Unpaid taxes payable by stamp. . . ." [Emphasis added]
From this section, it is clear that the Secretary's authority is limited to the assessment of those taxes which are either payable by stamp or those for which returns or lists have been made. However, in my case, there are no returns. I had no requirement to file any returns, because returns are only required to be filed by those persons made liable for (or subject to) a tax. This is confirmed by IRC §§ 6001 and 6011, which are reproduced in part below.
"§ 6001. Notice or regulations requiring records, statements, and special returns
Every person liable for any tax imposed by this title, or for the collection thereof, shall keep such records, render such statements, make such returns, and comply with such rules and regulations as the Secretary may from time to time prescribe." [Emphasis added]
"§ 6011. General requirement of return, statement, or list
(a) General rule.
When required by regulations prescribed by the Secretary any person made liable for any tax imposed by this title, or with respect to the collection thereof, shall make a return or statement according to the forms and regulations prescribed by the Secretary." [Emphasis added]
The IRS alleges that IRC § 6020 authorized them to make Substitute for Returns (SERs) in my case due to my alleged failure to file required returns. As shown above, since I had no requirement to file any returns, I could not fail to file such returns. Likewise, due to such lack of requirement for me to file, § 6020(b) confers no authority to file returns with respect to me. Therefore, any deficiency or assessment based upon such invalid returns are likewise invalid. If there is some other section of the IRC which authorizes unsigned returns to be used as the basis for an assessment, then it is necessary for the IRS to identify such section, 50 such authority can be verified.
This notice is required pursuant to IRC §§ 6330(a)(1) and 6331(d)(1), it is neither signed pursuant to IRC § 6061, nor verified by a written declaration that it is made under the penalties of perjury pursuant to IRC § 6065. Therefore, your notice, dated July 3, 2001, is invalid on it's face, and so any collection actions based upon such defective notice would likewise be unlawful.
Finally, the deficiency procedures established within Subchapter B of Chapter 63 only relate to the taxes imposed by Subtitle A (income taxes), Subtitle B (estate and gift taxes), and Chapters 41, 42, 43, and 44 (excise taxes). Please be aware that I am a citizen of the United States and have received no foreign-earned income for the years in question, therefore I have no taxable income. Further, I am unaware of any circumstance which would subject me to any Subtitle B taxes, and am certainly not involved in any activity which would subject me to the referenced excise taxes. Therefore, if you are contending that you have determined that I am in fact subject to one of the taxes for which the deficiency procedures are prescribed, then identify the tax, and explain with particularity the basis of such determination.
In conclusion, the facts and laws presented herein provide evidence that the Internal Revenue Service is acting outside of it's lawful authority by erroneously assessing a tax against me for which I am not liable, and further by attempting to collect such erroneously assessed tax by methods not authorized to be taken against me. Therefore, I demand that the alleged assessments against me be abated pursuant to IRC § 6404(a)(3), or otherwise removed pursuant to Internal Revenue Manual Sub-SubSection 5525.1, "General", which states at paragraph (9), "Taxpayers are also entitled to have any erroneous assessments of tax, penalty and interest removed."
I have enclosed a Form 12153 to facilitate the processing of my request. If this request for consideration by the Appeals function is imperfect in any way, please explain with particularity any such defects, and provide me with all information necessary for me to perfect this request. If you fail or refuse to either grant me this Appeal consideration, abate or remove the erroneous assessment, or provide all of the information requested herein, such failure or refusal must be considered to be a knowing and willful violation of my rights to due process and administrative appeal. Therefore, upon such failure or refusal, all of my administrative remedies must be considered to be exhausted by this request. Further, any statements not specifically rebutted in your response to this request must be considered true.
Under penalty of perjury, I declare that the foregoing is true and correct to the best of my knowledge and belief
Charles Henry
Enclosures: Copy of Letter 1058, dated July 3, 2001; Form 12153.
cc: Retained to file.
L.G. Dowd, Collection branch Internal Revenue Service P.O. Box 57 Bensalem, PA 19020
Schedule of Disputed Issues
(1) The Internal Revenue Service has repeatedly failed or refused to honor my right to have the Appeals Office consider my case, in spite of numerous requests for such appeals.
(2) The Internal Revenue Service has failed or refused to identify the statute which they claim makes me liable for any tax they allege I owe.
(3) The Internal Revenue Service has failed or refused to identify the source of any authority to make a determination that I am a "taxpayer" as defined within IRC § 7701(a)(14), yet is acting on the presumption that such a determination has been made.
(4) The Internal Revenue Service lacks any statutory authority to file liens against any person who has not been made liable for a tax by statute, but according to the notice sent, has filed one against me nevertheless.
(5) The Internal Revenue Service lacks any statutory authority to assess any taxes (other than those which are to be paid by stamp) unless on the basis of a valid return. However, the IRS alleges that an assessment has been made against me even though no valid returns have been filed upon which such alleged assessment could be made.
(6) The Internal Revenue Service lacks authority to make any returns pursuant to IRC § 6020, unless such returns are otherwise required to be made by law. Since the requirement for filing a return is predicated upon being made liable for a tax, the lack of such statutory liability precludes a requirement to file any return.
(7) Any assessment based upon such invalid returns is likewise invalid and unlawful.
(8) The Letter 1058, dated July 3, 2001, is invalid because it is not signed under penalty of perjury as required pursuant to IRC §§ 6061 and 6065.
(9) I am a citizen of the United States and received no foreign-earned income. Therefore I have no taxable income which would come within the authority of the deficiency procedures.
EXHIBIT C ATTACHMENT TO DETERMINATION LETTER
Charles N. Henry III CDP Hearing [Notice of Levy] Tax Year: 1997
ISSUE
Whether the IRS's decision to file a Notice of Levy was an appropriate action as a consequence of the taxpayer's failure to pay his federal income taxes with respect to the tax year listed above.
SUMMARY RECOMMENDATION
The taxpayer has challenged the constitutionality of the statutory rules requiring individuals to file federal income tax returns and the federal government's right to assess and enforce collection of income taxes through the filing of a Notice of Levy. The taxpayer's arguments are frivolous and without merit.
The assessed liabilities result from the taxpayer's failure to pay the tax liability as determined by the IRS.
The IRS has made demand for payment and the taxpayer has failed to pay the balances due. Accordingly, the IRS is entitled to initiate collection action. The taxpayer has failed to offer any alternatives to collection action.
With the best information available, the requirements of various applicable legal and administrative procedures have been met.
Section 6330(c) allows the taxpayer to raise any relevant issue relating to the unpaid tax. All concerns raised by the taxpayer pursuant to IRS Form 12153 have been addressed. The determination in this case is being made under section 6330 authority.
DISCUSSION
According to IRS transcripts, the taxpayer has continuously failed to voluntarily file federal income tax returns since 1995 even though he is required to file such returns. On December 31, 2001, the IRS prepared substitute returns for the tax years ending 1995, 1996, 1998, 1999 and 2000 based on information documents provided to the IRS. The taxpayer's wages for these years is as follows:
Year Wages Withholding Taxes __________________________________________________
1995 $36,957 $5,641 1996 83,101 9,583 1998 48,530 2,758 1999 50,927 2,589 2000 47,745 2,093
In 1997, the taxpayer was employed by BGE Commercial Building Systems, Inc. Based on IRS transcripts, the taxpayer earned $52,783 in wages, of which $3,030 in federal income taxes was withheld for the tax year ending 1997.
IRS transcripts indicate that a substitute return was prepared by the IRS on July 19, 1999 based on information documents provided to the IRS.
On July 3, 2001, the IRS issued Letter 1058 [Notice of Intent to Levy] to the taxpayer. On July 17, 2001, the taxpayer submitted Form 12153 in response to the Notice of Levy, with a Protest attached that sets forth constitutional arguments.
Issues Raised By The Taxpayer
The basis for the taxpayer's request for a due process hearing is that he believes his income is exempt from taxation and that the IRS lacks the statutory and regulatory authority to enforce collection of such taxes. Constitutional challenges are not considered a valid reason for contesting proposed collection action. Tolotti v. Commissioner, T.C.Memo 2002-86.
Moreover, the taxpayer is attempting to argue that the various rules and procedures followed by the IRS to enforce collection action are unconstitutional, improper and invalid. In conjunction with the taxpayer's constitutional arguments, he has also raised questions as to the validity of the assessments.
It is well established rule of law that citizens whose income is required to be reported to the IRS must file federal income tax returns. The courts have addressed this issue in numerous cases and have sustained the federal government with respect to this matter. Indeed, the courts have imposed penalties against individuals who continue to challenge the constitutionality of income taxation at the federal level.
In the case at hand, the taxpayer's arguments are frivolous and without merit. Furthermore, there is no requirement that the IRS provide the taxpayer with a copy of the verification required by section 6330. Nestor v. Commissioner, 83 TCM 4364, Bonfante v. US, 2002-1 USTC 50,266,Barker v. Commissioner, 83 TCM 1089, Nicklaus v. Commissioner, 117 TC., No. 10, and Hurford v. Commissioner, TC Memo. 2002-94 [2002].
Are There Collection Alternatives?
No. The taxpayer has not addressed any possible collection alternatives in his request for a CDP Hearing.
Miscellaneous
On April 26, 2002, the taxpayer was notified that a due process hearing would be held on May 20, 2002. Prior to the start of the hearing, the taxpayer was advised that, pursuant to new procedures implemented by the Office of the National Director of Appeals, he could not make an audio or stenographic recording of the hearing. In response to this prohibition of recording the hearing, the taxpayer elected to waive his right to a CDP Hearing.
This Appeals Officer has had no prior involvement with respect to the taxpayer's outstanding tax liabilities.
Balancing Efficient Collection Intrusiveness
Section 6330(c)(3)(C) requires that Appeals determine that the filing of a Notice of Federal Tax Lien or Notice of Levy balances the need for the efficient collection of taxes with the legitimate concern of the taxpayer that any collection action be no more intrusive than necessary. In essence, the lease intrusive collection action should be used to protect the IRS's interest in efficient tax collection. Thus, an independent analysis is required to ensure that the collection action that is proposed adequately protects the IRS's interests without adversely affecting the taxpayer.
Policy Statement P-5-2 permits the Collection Division to exercise a wide latitude of discretion in collection matters. With respect to enforcement action, Revenue Officers are expected to exercise good judgment so as to take appropriate enforcement actions when warranted.
It would seem that the filing of a Notice of Levy is appropriate under the circumstances because the taxpayer has had ample opportunities to pay the assessed amount, and has failed to do so.
PLAINTIFF'S EXHIBIT D
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY Baltimore Appeals Office Date: April 26, 2002 31 Hopkins Plaza Suite 1310 Charles Henry, III Baltimore, MD 21201 22 Sugar Tree Place Cockeysville, MD 21030-3140 In re: CDP Hearing Request Person to Contact: Bruce Bronstein IRS Employee #: 08-02408 Telephone Number: (410) 962-3240
Dear Mr. Henry:
This letter is in response to your request [a copy of which is attached] for a Collection Due Process [CDP] Hearing with respect to the Collection Division's decision to initiate collection action against you in order to collect unpaid federal income tax liabilities for the year 1997. This CDP Hearing includes the consideration of all issues addressed in your request for this hearing.
The Appeals Division's jurisdiction to consider collection actions in CDP Hearings is specified in section 6330 of the Internal Revenue Code. A principal purpose of the hearing is to consider the appropriateness of the proposed collection action, and alternative remedies such as the implementation of Installment Agreements and Offers-in-Compromise. Our determination in your case must balance your right that the proposed action be no more intrusive than necessary with the IRS's need for an efficient collection of tax.
If you intend to contest the assessed tax liability, you must provide this office with the requisite documentary evidence to support your position that the liability in question is incorrect. Please forward to this office all materials that you wish to have this office consider at least 10 calendar days prior to your scheduled CDP Hearing date. If you intend to submit original documents to this office, I suggest that you keep a copy of all materials that are submitted.
In the event that you do not wish to contest the liability and desire to pursue collection alternatives, you need to decide which alternative is best for your particular facts and circumstances. The 2 possible collection alternatives consist of the implementation of an Installment Agreement or the submission of an Offer-in-Compromise.
The Internal Revenue Manual determines whether a taxpayer is eligible for any alternative means of paying an outstanding liability. To qualify for an Installment Agreement, you must establish an ability to pay the entire delinquency amount plus accrued interest in a reasonable period of time, as well as remain current in your tax obligations. Failure to remain in compliance with your tax obligations will either disqualify you from entering into an Installment Agreement, or result in the termination of the Installment Agreement.
For an Offer-in-Compromise to be acceptable, the amount offered must be at least equal to the sum total of your net realizable equity in assets and future income earning potential, but less than the total outstanding liability. If the outstanding liability is less than your equity in assets and income potential, you will not be permitted to compromise the liability in question. In addition, if you are not in current compliance with your tax obligations, you will not be eligible for an Offer-in-Compromise.
In the event that you wish to propose collection alternatives at the CDP Hearing, you will need to provide all current financial information in order for this office to make an appropriate determination in your case.
If you have already submitted an Offer-in-Compromise to the IRS and it is currently under consideration by another function in the IRS, the decision as to the adequacy of your pending offer will be made by the office that has jurisdiction of your case. Accordingly, you may want to withdraw your request for a CDP Hearing at this time.
If you have filed for bankruptcy protection and your petition for relief is still pending, you may also want to consider withdrawing your request for a CDP Hearing. When a bankruptcy petition is filed, it acts as an injunction against any further action by creditors. It is the policy of the IRS to diligently ensure that the automatic stay is not violated in such cases. Thus, in accordance with the bankruptcy procedures, the IRS can not take any collection action against you until a decision has been made with regard to your bankruptcy filing. In the event that you filed a bankruptcy petition, please submit a complete copy of your Petition to my office.
Should you wish to have your CDP Hearing in the form of a conference call in lieu of a face-to-face conference, you must submit a written statement to this effect and indicate exactly when you would like to have the conference conducted by telephone. You will need to provide me with the phone number where you can be reached at the time of the call.
If you wish to withdraw your request for a CDP Hearing at this time, please complete, sign and return the enclosed IRS Form 12256 to my office within 10 calendar days from the date of this letter. By withdrawing your request, you have agreed to waive your right to file a judicial appeal to either the United States Tax Court or District Court under sections 6320 or 6330. However, you still preserve all of your administrative rights under the general rules governing collection due process cases.
My office is located in a federal building that has instituted strict security measures. You will be required to present photo identification in order to enter this building. I also suggest that you present a copy of this letter to security officials when you arrive for your CDP Hearing.
Your CDP Hearing is scheduled for Monday, May 20, 2002 at 8:15 a.m. in my office. The address appears at the top of this letter.
Sincerely yours,
Bruce Bronstein
Appeals Officer
Enclosures: as stated
PLAINTIFF'S EXHIBIT E
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY Baltimore Appeals Office 31 Hopkins Plaza Suite 1310 Baltimore, MD 21201 Person to Contact: Bruce Bronstein IRS Employee ID#: 08-02408 Telephone Number: (410) 962-3240 Fax Number: (410) 962-3146 Refer Reply To: Charles N. Henry, III AP GEN: BAL BB 22 Sugar Tree Place SSN/EIN: 038-30-9303 Cockeysville, MD 21030-3140 Tax Type/Form Number: 1040 Tax Periods: 1997 In Re: Due Process Appeal [Tax Court]
CERTIFIED MAIL
NOTICE OF DETERMINATION CONCERNING COLLECTION ACTIONS UNDER SECTION 6320 AND/OR SECTION 6330 OF THE INTERNAL REVENUE CODE
Dear Mr. Henry:
We have reviewed the IRS's proposed collection action with respect to your request for a Collection Due Process Hearing. This letter is your legal Notice of Determination, as required by law. A summary of our determination is set forth below. Attached to this document is a detailed explanation as to the matters we considered at your Appeals hearing and our conclusions.
If you want to dispute this determination in court, you must file a petition with the United States Tax Court for a redetermination within 30 days from the date of this letter.
To get a petition form and the rules for filing a petition, write to: Clerk, United States Tax Court, 400 Second Street, NW, Washington, D.C. 20217.
The time limit for filing your petition is fixed by law. The court cannot consider your case if you file late. If the court determines that you made your petition to the wrong court, you will have 30 days after such determination to file with the correct court.
If you do not file a petition to the court within the time frame provided by law, your case will be returned to the originating IRS office for action consistent with the determination summarized below and described on the attached pages.
SUMMARY OF DETERMINATION:
You have failed to establish that the assessed tax liability is incorrect. Accordingly, no adjustments can be made to the assessed balance due. In addition, you have failed to offer any alternatives to collection action.
On the basis of the above, the IRS's decision to file a Notice of Levy against you is sustained. Accordingly, jurisdiction of your case is being returned to the Collection Division for appropriate action.
If you have any questions concerning this matter, please direct your inquiries to the person whose name and telephone number are shown above.
Sincerely yours,
Aaron Whitaker
Appeals Team Manager
PLAINTIFF'S EXHIBIT F
Charles N. Henry 22 Sugar Tree Place Cockeysville, MD 21030
Certified Mail No. 7000-1670-0006-3362-1923 August 21, 2003
Internal Revenue Service Delaware-Maryland Appeals Office Attn: Aaron B. Whitaker, Jr. Appeals Team Manager 31 Hopkins Plaza, Suite 1310 Baltimore, MD 21201
RE: Determination Letter Concerning Collection Action Under Section 6320 And/Or Section 6330 Of The Internal Revenue Code, dated July 22, 2002.
Dear Mr. Whitaker:
Your letter stated that We have reviewed the IRS's proposed collection action with respect to your request for a Collection Due Process Hearing. This letter is your legal Notice of Determination as required by law. A summary of our determination is set forth below. Attached to this document is a detailed explanation as to the matters we considered at your appeals hearing and our conclusions.
The Attachment to Determination Letter stated that the taxpayer was advised that, pursuant to new procedures implemented by the Office of the National Director of Appeal, he could not make an audio or stenographic recording of the hearing. This statement ignore my Request and is not the law. I stated in my Request For Appeals Consideration that I wish to record the hearing and would bring two witnesses.
Your allegation that Appeals Office has the discretion to grant recording is in error. I suggest that you read 26 U.S.C. § 7521 which states in pertinent part:
(a)(1) Recording by taxpayer
Any officer or employee of the Interner Revenue Service in connection with any in-person interview with any taxpayer relating to the determination or collection of any tax shall, upon advance request of such taxpayer, allow the taxpayer to make an audio recording of such interview at the taxpayer's own expense and with the taxpayer's own equipment.
This is the LAW which you and the entire Internal Revenue Service must abide by. Procedures are NOT law, they are only guidelines and are unlawful unless they are made pursuant to the LAW.
The Attachment to Determination Letter stated that In response to this prohibition of recording the hearing, the taxpayer elected to waive his right to a CDP Hearing. Wrong again!. My notes clearly show that Mr. Bronstein ended the hearing when he discovered that my witness and I were recording the meeting. Mr. Bronstein made a preliminary statement regarding the hearing. I was not given an opportunity to discuss any issues in the hearing.
The Attachment to Determination Letter stated that The taxpayer has challenged the constitutionality of the statutory rules requiring individual to file income tax returns . . . The taxpayers arguments are frivolous and without merit. Wrong! The attachment to my request for appeal conference listed a schedule of disputed issues. None of them are frivolous. I raised numerous pertinent issues, in my request for appeals, that were material to the hearing at hand. To refresh your memory I stated:
1. The first issue I want to address is the underlying statute which must establish whether or not I am liable for, or subject to, the taxes allegedly assessed against me.
2. Have you or anyone else within the IRS made a determination that I have a requirement to file a return for the years at issue?
3. Have returns been prepared in my case pursuant to IRC § 6020? If so, please furnish me with the properly signed copies?
4. . . . the authority granted to the Secretary to assess taxes is limited by Congress. [See copy of IR Code § 6201 attached.]
5. This determination (deficiency) appears to be based upon information returns received from third parties . . . please inform me of the procedure to get these corrections done.
6. Please explain to me how I fit into the definition of "employee" which does include me, then please provide a copy or cite it, so that I can verify it. [See attached copy of IRC § 3401(c)] Since I do not fit into that definition, then any payments made to me would be outside the definition of "wages."
7. Whether or not the procedure mandated by Congress for the making of an assessment have been followed. [IR Code § 6203 and 26 C.F.R. § 6203-1 establish the requirements for making an assessment]
The Attachment to Determination Letter stated that The assessed liabilities result from the taxpayer's failure to pay the tax liability as determined by the IRS. Wrong! I dispute having any liability because I have not been shown any statute that makes me liable for any income taxes. This is not a frivolous argument! My letter clearly raised challenges to the validity and amount of underlying tax liability pursuant to IRC § 6330(c)(C)(2)(B). IRC § 6330(c)(C)(2)(B) clearly allows for challenges to the validity and amount of the underlying tax liability.
The Attachment to Determination Letter stated that The IRS has made demand for payment and the taxpayer has failed to pay the balances due. I disagree. I have not received a valid, authenticated Notice and Demand, for each year assessed, as required by law. "Computer records indicate" is merely hearsay. Please send me valid authenticated copies of all of the alleged Notice's and Demand. The validity of each assessment is shown by the Summary Record of Assessments, pursuant to 26 C.F.R. § 301.6203-1. The Summary Record of Assessments must be signed by an assessment officer. No such signed assessment was proved to me.
When did the IRS issue a notice and demand? Please supply copies of the notice and demand and copies of the "best information available" that was used to prepare the assessment for the alleged tax liability. Transcripts are merely copies from another document. I request the actual authenticated document pursuant to IRC § 6331.
The Attachment to Determination Letter stated that With the best information available, the requirements of various applicable legal and administrative procedures have been met. I disagree. The IRS has NOT followed due process of law in making their assessments. I have not received any authenticated documentation pursuant to the Federal Rules of Evidence, Rule 901 et seq. or any documents signed under penalty of perjury as required by Internal Revenue Code § 6065. The IRS has NOT followed due process of law in making their assessments.
Due Process of Law is defined in Black's Law Dictionary as:
An orderly proceeding wherein a person is served with notice, actual or constructive, and has an opportunity to be heard and to enforce and protect his rights before a court having power to hear and determine the case. Kazubowski v. Kazubowski, 45 Ill.2d 405, N.E.2d 282, 290. Phrase means that no person shall be deprived of life, liberty, property or of any right granted him by statute, unless matter involved first shall have been adjudicated against him upon trial conducted according to established rules regulating judicial proceedings, and it forbids condemnation without a hearing. Pettit v. Penn, La.App., 180 So.2d 66, 69.
The Attachment to Determination Letter stated that According to IRS transcripts, the taxpayer has continuously failed to voluntarily file federal income tax returns since 1995 even though he is required to file such returns. This statement is false! [have asked that the IRS cite the statute that makes me liable. I have also asked for a copy or cite of the statute that requires me to file a return. The IRS failed to provide answers to the above elemental questions.
The Attachment to the Determination Letter stated that The proposed levy isn't unnecessarily intrusive and is necessary because you haven't attempted to pay what is owed. Wrong! Any unlawful levy that is not substantiated with any authenticated documentation is intrusive. The alleged levy is not necessary and not substantiated due to the fact that no liability to me has been proven.
Your letter also stated that The notice of intent to levy is sustained. On what basis? I hereby request copies of all documents used as a basis to sustain the notice of intent to levy.
The Attachment to Determination Letter stated that All concerns raised by the taxpayer pursuant to IRS Form 12153 have teen addressed. Wrong again! This statement is in error. I dispute having any liability because I have not been shown any statute that makes me liable for any income taxes, This is not a frivolous argument!
How could I raise any relevant issues when I was not afforded a due process hearing?
Your "Determination Letter" is proof that Appeals has denied me due process of law. Appeals has denied me a hearing in which to dispute the assessment and whereby the IRS could substantiate its assessment.
The statements in your letter are not only erroneous, they are false and misleading. I suggest that you review this letter and issue a fair decision or grant me a hearing.
I also cannot discern from your determination the legal basis of your conclusion.
Furthermore, you wrote,
If you want to dispute this determination in court, you must file a petition with the United States Tax Court for a re-determination within 30 days from the date of this letter.
However, no such remedy in tax court exists, as per Title 26 C.F.R. § 601.102, which states in relevant part.
§ 601.102 Classification of taxes collected by the Internal Revenue Service.
(2) Taxes not within the jurisdiction of the U.S. Tax Court. Taxes not imposed by chapter 1, 2, 3, or 4 of the 1939 Code or subtitle A or chapter 11 or 12 of the 1954 Code are within this class, such as:
(I) Employment taxes
(ii) Miscellaneous excise taxes collected by return. [Emphasis mine]
Because the tax in question is an employment tax; and because the employment tax is not imposed by chapters 1, 2, 3, 4, 11 or 12, the tax court cannot possibly have jurisdiction as a matter of law.
As such, it appears that there is no remedy available to me; and the unavailability of a remedy would be violative of my right to due process, as guaranteed in the 5th and 14th Amendments of the U.S. Constitution. It is for this reason and those stated above that I request a re-determination.
Please respond within ten days after receipt of this letter.
With express reservation of all my rights.
Charles N. Henry
PLAINTIFF'S EXHIBIT G
DEPARTMENT OF THE TREASURY INTERNER REVENUE SERVICE Washington D.C. 20224 May 2, 2002
MEMORANDUM FOR ALL APPEALS AREA DIRECTORS
FROM: Linda M. Garrard, /S/ Charles E. Dletz M. Garrard Acting Chief, Appeals
SUBJECT: Audio or Stenographic Recordings
Effective immediately, audio and stenographic recordings will no longer be allowed on Appeals cases. Taxpayers and/or representatives who have already requested such recordings will be informed of the change in practice immediately, and advised that their request cannot be allowed.
BACKGROUND
Prior to enactment of IRC 7521, Service Compliance functions voluntarily allowed audio recordings. Appeals decided to follow this practice at that time. IRC 7521, enacted in 1988, provided for the allowance of audio recordings of conferences relative to the determination or collection of a tax, between the taxpayer and the Internal Revenue Service, provided that the Service was given at least ten (10) days advance notice of the taxpayer's intent to record the conference.
Although Appeals makes liability and collectibility determinations, Appeals' procedures differ from Examination and Collection function contacts that are not discretionary for the taxpayers Contact with Appeals is discretionary for the taxpayer, and as such, recording has always been discretionary for Appeals. It should also be noted that Appeals was deliberately excluded in Notice 89-51 that dealt with the audio recording provision, as Counsel determined that IRC 7521 was not applicable to Appeals.
Recently Appeals has had several incidents of audio recordings being altered to imply Appeals employees were making inappropriate comments. In some oases, those altered recordings were broadcast on the radio. We are also aware of instances where excerpts of stenographic records were combined in inappropriate ways and published in anti-tax newsletters and other anti-government publications.
These actions have had the result of undermining the appearance of Appeals' competence, impeding Appeals ability to adequately function in its role as a dispute resolution function. These incidents have interfered with our customers' perception of our ability to carry out Appeals' mission to be fair and impartial in our considerations; and therefore cannot be allowed to continue.
In addition, Appeals has always been concerned that the practice of recording conferences and hearings could inappropriately interfere with the informal nature of Appeals conferences, and therefore might improperly impede settlement.
Therefore, the decision has been made to eliminated all audio as well as stenographic recordings of Appeals conferences and hearings. That decision is effective immediately upon the date of this memorandum.
This memorandum supercedes guidance issued in Internal Revenue Manual 8.7.2.3.4 and 5.6.1.2.5 on the subject of recording hearings and conferences. The IRM will be updated to reflect these changes during the next regular update of that section.
If you have any questions, please contact your Area Collection Coordinator. Area Collection Coordinators may contact Cheryl Revier at (202) 694-1847 or Pat Bisson at (202) 694-1836 if questions arise.
PLAINTIFF'S EXHIBIT H AFFIDAVIT
I, Charles N. Henry, of 22 Sugar Tree Place, Cockeysville, Maryland 21030, do hereby declare, for that the following do show sufficient basis for my affidavit:
At approximately 8:15 AM on May 20, 2002 Mr. Bruce Bronstein appeared, introduced himself and led us to a conference room for the hearing.
When he saw a tape recorder on the table, he informed us that we could not record the meeting.
I objected and started to read him IRC section 7521, concerning my right to record the meeting. He cut me off in midsentence, handed me a memo and ordered me to read it.
I responded by objecting yet again, this time on the basis of denial of due process, and that the IRS had been previously notified of my intention to record the meeting.
Mr. Bronstein let me read the memorandum, but would not let us have a copy. I noticed that the document was dated May 2, 2002 and asked Mr. Bronstein why I hadn't been notified in the ensuing several weeks. He replied that he had just been given the memo that morning.
While I was still reading the document in question, Mr. Bronstein, seeing the tape recorder still on the table, declared the meeting terminated.
Once again I objected, this time on two issues: First, that I was being denied due process and, Second, that the memorandum was unsigned. Based on the fact that there was no signature, I questioned the authenticity of the document.
Under penalty of perjury, the above is true, correct, and complete to the best of my knowledge.
Further Affiant saith not.
Charles N. Henry, III
Subscribed and sworn before me a Notary Public, of the State of Maryland County of Baltimore, this 22rd day of August 2002, that the above named person did appear before me and was identified to be the person executing this document.
Notary Public ____________
My commission ____________