Keene v. Comm'r

Swift, J., dissenting: I agree with the Lunsford treatment of the taxpayers’ frivolous arguments that is reflected in the Kemper opinion being released simultaneously herewith. Kemper v. Commissioner, T.C. Memo. 2003-195 . In Kemper, we conclude, because of the frivolous nature of the taxpayers’ underlying arguments, that the Court need not address the taxpayers’ arguments regarding the recording under section 7521 of collection due process (cdp) Appeals hearings. The same approach should be utilized herein to dispose of Keene’s underlying frivolous arguments to the collection action proposed by respondent. 1

In addition to the grounds set forth herein in Judge Chiechi’s dissenting opinion, as the basis for my dissent I respectfully add the following.

The Regulations

Q&A-D6 of both sections 301.6320-1(d)(2) and 301.6330-1(d)(2), Proced. & Admin. Regs., provides that in the context of CDP Appeals hearings the IRS is not required to record “any” taxpayer conversation with an Appeals officer. In appropriate cases, the IRS may choose to do so and may permit taxpayers to do so, but, under the regulations, the IRS may not be required in “any” case to record a CDP Appeals hearing, nor is the IRS required to permit taxpayers to do so. Procedure and Administrative regulations sections 301.6320-1(d)(2) and 301.6330-l(d)(2) provide identically as follows:

A-D6. The formal hearing procedures required under the Administrative Procedure Act, 5 U.S.C. 551 et seq., do not apply to CDP hearings. CDP hearings are much like Collection Appeal Program (CAP) hearings in that they are informal in nature and do not require the Appeals officer or employee and the taxpayer, or the taxpayer’s representative, to hold a face-to-face meeting. A CDP hearing may, but is not required to, consist of a face-to-face meeting, one or more written or oral communications between an Appeals officer or employee and the taxpayer or the taxpayer’s representative, or some combination thereof. A transcript or recording of any face-to-face meeting or conversation between an Appeals officer or employee and the taxpayer or the taxpayer’s representative is not required. The taxpayer or the taxpayer’s representative does not have the right to subpoena and examine witnesses at a CDP hearing.

I interpret the above regulations broadly to provide a rule that the recording of CDP Appeals hearings may not be required regardless of who it is that physically is to provide the recording equipment (the IRS or the taxpayer) and regardless of who it is that technically is to make the recording (the IRS or the taxpayer).

Contrary to the regulations as I read them, Keene holds in the affirmative, majority op. p. 19, that the IRS was required to allow Keene to record his CDP Appeals hearing and orders a new hearing be scheduled for Keene that is to be recorded.

This opinion effectively invalidates the above regulations. Recent cases in the Federal District Courts have treated taxpayers’ requests to tape record CDP Appeals hearings as discretionary with the IRS and have treated taxpayers’ refusals to participate in the CDP Appeals hearings unless they were permitted to tape record these hearings as a waiver of the taxpayers’ right to a face-to-face hearing. See Muhammad v. United States, 91 AFTR 2d 1985, at 1987 (D.S.C. 2003); Henry v. Bronstein, 90 AFTR 2d 7134, at 7135, 2002-2 USTC par. 50,781 , at 86,147 (D. Md. 2002). In one recent case, Rennie v. IRS, 216 F. Supp. 2d 1078 (E.D. Cal. 2002), the District Court also noted the mischief taxpayers may create with amateur, uncertified transcripts of Appeals hearings, stating as follows:

Also attached to the Complaint is what purports to be a transcript of the Collection Due Process Hearing. The hearing was tape recorded by plaintiff and he has prepared the transcript of it. The transcript is not certified. Moreover, from the court’s research, the Collection Due Process hearings' are supposed to be informal ánd there is not [a] requirement that the hearings be recorded. [Id. at 1079 n.1.]

Frivolous Arguments

Keene’s frivolous arguments are well documented. In an attachment to Keene’s CDP Appeals hearing request, Keene provides a detailed, single-spaced, multipage explanation of the underlying arguments for his appeal of respondent’s proposed collection action. Keene’s lengthy explanation is full of scripted, frivolous, tax protester arguments. Therein, Keene claims that his rights as a taxpayer were ignored by the IRS from the beginning, and he asserts that the only acceptable remedy is for the IRS to “start all over again”. He states as follows:

The IRS has ignored most of my rights even though I have pointed this out, in detail, time after time in letters originating as far back as 11/7/1991. I have carefully documented the IRS’ total disregard of my rights to date. Should the IRS deny this request for a due process hearing it will only be adding to the overwhelming evidence I have accumulated showing the IRS’ illegal denial of my rights to hearings and information.

Now, should you [the Appeals officer], finally decide to grant me a simple hearing at this very late stage in the due process system I will expect you to find that this entire matter, for the tax period 1040 ending 12/31/1991, be remanded back to the very beginning of this process. This remand must go back to include all of the hearings and all of the information due me as outlined in my previous letters. Otherwise my rights will have been violated. * * *

The written explanation attached to Keene’s CDP hearing request itself provides the Court with an adequate record of Keene’s arguments that serve as the underlying basis for his challenge to respondent’s proposed collection action. A tape recording to establish that record is not necessary. It is overwhelmingly clear that there is no merit to Keene’s underlying arguments, and I believe that, under Lunsford v. Commissioner, 117 T.C. 183 (2001), this Court ought to dispose of Keene’s challenge to respondent’s proposed collection action summarily and without deciding the section 7521(a)(1) issue (i.e., the approach taken in Kemper v. Commissioner, supra).

At the most, if some delay is to be tolerated in disposing of Keene’s petition challenging respondent’s proposed collection action, an order should be issued asking Keene to advise the Court in writing, within a specified time period, what underlying arguments he would make (if he were given another opportunity to have a CDP Appeals hearing and to have the hearing recorded) that are not already reflected in the referred-to written attachment to his CDP hearing request. If Keene files a response to such an order containing only frivolous arguments, this case could easily be disposed of without ever addressing the legal issue raised under section 7521(a)(1).

I acknowledge that, in the few nonprotester cdp cases that seem to exist, recorded transcripts of CDP Appeals hearings may be helpful, and nothing that we adopt in the Kemper or Keene opinions will prevent the IRS and taxpayers from agreeing to record CDP Appeals hearings in appropriate situations.

In summary, to conclude that the IRS should be required to record CDP Appeals hearings or to permit taxpayers to record such hearings — whenever taxpayers make such requests and regardless of how difficult the taxpayers and how frivolous their underlying arguments — strikes me as contrary to the above regulations, as inappropriate judicial meddling with respondent’s Appeals hearings, as inefficient use of judicial resources, and as conducive to further delay in the collection of taxes the Federal Government desperately needs.

Under Lunsford v. Commissioner, 117 T.C. 183, 188-189 (2001), generally frivolous CDP cases can and should be dealt with summarily by the courts.