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Powers v. Commissioner of Internal Revenue Service

August 30, 2007


The opinion of the court was delivered by: Hillman, District Judge


Before the Court is defendant's motion for summary judgment, plaintiff's motion for summary judgment, plaintiff's motion for sanctions, and plaintiff's motion for a more definite statement. For the reasons expressed below, defendant's motion for summary judgment is granted and plaintiff's motions are denied.


Plaintiff, Fernando Powers, filed a complaint against the Internal Revenue Service ("IRS").*fn1 We construe plaintiff's complaint as a request for judicial review pursuant to 26 U.S.C. § 6330(d)(1) of a notice of determination issued by the IRS on May 5, 2006, regarding Powers' income tax returns for 2001 and 2002.*fn2 See Kupcho v. Voysest, No. 04-5336, 2005 WL 791118, at *1 (D.N.J. Feb. 16, 2005) (recognizing that "[a]fter a determination has been issued, a taxpayer may seek judicial review of the determination pursuant to § 6330(d)(1)..."). The documents attached to the declaration of Darryl K. Lee, settlement officer with the IRS, submitted by the defendant*fn3 show that by letter dated July 7, 2005, the IRS sent Powers a "Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320" indicating that Powers owed money for tax years 2001 and 2002, and that Powers could request a hearing. Powers mailed in a timely request for a collection due process ("CDP") hearing to the IRS.

By letters*fn4 dated January 31, 2006, the IRS informed Powers that its Appeals Office had received his case and would conduct a review. By letters dated February 23, 2006, Darryl K. Lee, advised Powers that he received his request for a CDP hearing and found that the items raised by Powers: "(1) Courts have determined are frivolous or groundless, or (2) Appeals does not consider. These are moral, religious, political, constitutional, conscientious, or similar grounds." The letter provided a website address of examples of arguments considered frivolous by the IRS. The letter further informed Powers that the IRS would not be conducting a face-to-face conference, but had set up a telephone conference on March 30, 2006. Finally, the letter advised Powers that if he wished to have a face-to-face conference, he must write to the IRS within fifteen days and describe the legitimate issues he wished to discuss.

By letter dated March 23, 2006, Mr. Lee advised Powers that he had not provided the Appeals Office with a written list of the legitimate issues Powers wished to discuss and, therefore, was "... prohibited from recording or having a face to face conference." The letter further stated that Powers would have to provide him with a contact number in order to be reached for the telephone conference on March 30, 2006, since Powers did not have long distance service on his listed telephone. By letters dated March 30, 2006, Mr. Lee informed Powers that he had tried calling him on the scheduled day and time for the telephonic CDP hearing but was unable to reach Powers; and as a result, the Appeals Office would make its determination based on the administrative file and whatever information Powers had provided.

By letters dated May 5, 2006, the IRS Appeals Office sent two "Notice[s] of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330" to Powers. The notices advised Powers that the recommended action was to sustain the lien and that if he wished to dispute the determination, he must file a petition with the United States Tax Court, or appropriate United States District Court,*fn5 within 30 days of the date of the letter. The letter concluded that the filing of the federal tax lien "balances the need for effective collection of taxes with the legitimate concern that any collection action be no more intrusive than necessary." The first notice concerned the collection of income taxes for 2001. The other notice concerned the imposition of a penalty in the amount of $500.00 pursuant to 26 U.S.C. § 6702 for filing a frivolous return in 2002. The IRS deemed Powers' 2002 return frivolous because Powers listed zeros for all the amounts except for the number of exemptions. Powers also submitted a signed, two-page, single-spaced typed letter in which he stated that he had zero income and that the Code "... did not intend that the wages and/or earnings of private citizens would fall within the meaning of 'income' as 'defined' in Code Section 61 of the 1954 Code" and that "income can only be a derivative of corporate activity."

In his complaint, Powers asks the Court to either find him a "slave of his created governments" upon which Powers will "pay all fees ordered and cease to seek further relief," or find Powers "a Sovereign creator of government, not subject to the law, in harmony with Yick Wo v. Hopkins [118 U.S. 356 (1886)]."*fn6

At the outset, we find that Powers is, like all Americans, subject to the laws of these United States, both its burdens - like taxation -- and its benefits. Taking a liberal interpretation to the allegations in Powers' complaint, we conclude that Powers is seeking judicial review of the notices of determination pursuant to § 6330(d)(1).


A. Subject Matter Jurisdiction Under 26 U.S.C. § 6330(d)(1)

Powers received notices of determination advising him that the Appeals Office of the IRS was sustaining the lien levied against him for collection of income taxes for 2001 and for a $500.00 penalty for filing a frivolous tax return in 2002. Under 26 U.S.C. § 6330(d)(1), Powers has the right to seek judicial review of the determination. Section § 6330(d)(1) provides in pertinent part:

(d)(1) the person may, within 30 days of a determination under this section, appeal such determination-(A) to the Tax Court (and the Tax Court shall have jurisdiction to hear such matter); or

(B) if the Tax Court does not have jurisdiction of the underlying tax liability, to a district ...

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