                         T.C. Memo. 2002-225



                       UNITED STATES TAX COURT



                  DENNIS STEWART, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 10952-00L.              Filed September 10, 2002.


     Dennis Stewart, pro se.

     Timothy S. Murphy, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     VASQUEZ, Judge:    Pursuant to section 6330(d),1 petitioner

seeks review of respondent’s determination to proceed with

collection of petitioner’s 1990 through 1998 tax liabilities.



     1
        Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
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                         FINDINGS OF FACT

     Some of the facts have been stipulated and are so found.

The stipulation of facts and the attached exhibits are

incorporated herein by this reference.    At the time he filed the

petition, petitioner resided in Michigan.

     Around March 1994, the Internal Revenue Service (IRS)

audited petitioner for 1990 and 1992.    The audit resulted in

proposed increases in petitioner’s income tax liabilities for

those years.   Petitioner knew that he could have appealed the

proposed increases, but instead he agreed to them.

     On March 14, 2000, respondent mailed petitioner, via

certified mail, a Final Notice, Notice of Intent to Levy and

Notice of Your Right to a Hearing, with regard to his unpaid tax

liabilities for 1990 through 1998.

     On or about April 10, 2000, respondent received from

petitioner a timely Request for a Collection Due Process Hearing,

Form 12153, (hearing request) with attachments.    In the hearing

request, petitioner stated:

     Petitioner admits that a certain obligation for taxes
     due the Internal Revenue Service exists, but denies any
     and all responsibility for said obligation for the
     reason that a prior assignment of a lien and its
     proceeds by Petitioner as grantor in favor of the
     United States and the IRS as a grantee was extinguished
     contrary to U.S. law through unlawful mortgage
     foreclosure proceeding concluded on December 15, 1994.
     Additionally, the mortgage foreclosed upon was a
     forgery. It appears that the proceeds of these crimes
     (proceeds which by prior tax liability are the
     legitimate property of the United States), are
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     presently in the possession of individuals by name of
     Henry Soet and Daniel Bylenga, and a corporation doing
     business as Fleet Financial Group. Furthermore, said
     proceeds are more than enough to satisfy any claim for
     unpaid taxes purported against Petitioner.

Petitioner’s statement continued for an additional three pages

alleging criminal conduct by numerous judges, individuals, and

entities.   Additionally, petitioner attached nearly 100 pages of

documents to the hearing request regarding the alleged criminal

conduct by various judges, individuals, and entities.

     On June 23, 2000, the IRS provided petitioner with a section

6330 hearing.   Appeals Officer Bruce Skidmore held the conference

with petitioner telephonically.   Petitioner’s argument centered

on petitioner’s prior lawsuits against Fleet Finance, Inc.

(Fleet), and numerous other entities and individuals regarding

Fleet’s foreclosure on a home owned by petitioner at 2625

Emerson, Grand Rapids, Michigan (the Emerson house).    Petitioner

claimed that the proceeds of the alleged unlawful mortgage

foreclosure, which all went to Fleet, should have paid off the

liabilities at issue because the United States had a second lien

on the Emerson house.

     During the hearing, Mr. Skidmore asked petitioner about his

underlying liabilities.   Petitioner stated that he did not

believe that there was any error in the assessments.    Petitioner

did not raise any spousal defenses or offer alternative means of

collection.
                               - 4 -

      On September 18, 2000, respondent mailed petitioner a

Notice of Determination Concerning Collection Action(s) Under

Section 6320 and/or 6330 (notice of determination) for 1990

through 1998.   Respondent determined (1) the requirements of

applicable law and administrative procedures had been met, (2)

petitioner did not dispute the correctness of the underlying

liabilities for the years in issue, and (3) to proceed with

collection.

                              OPINION

     At trial, petitioner admitted that he did not dispute the

underlying liability at the section 6330 hearing; however, at

trial and on brief petitioner attempted to claim he was entitled

to additional deductions for some of the years in issue.    We

reject this claim for the following reasons:    (1) For 1990 and

1992 he is prevented from disputing his underlying liabilities

because respondent and petitioner reached an agreement as to

additional liabilities and these amounts were assessed, Aguirre

v. Commissioner, 117 T.C. 324, 327 (2001), and (2) petitioner

presented no credible evidence that his underlying liabilities

for any of the years in issue were incorrect.    Smith v.

Commissioner, T.C. Memo. 2002-59.

     Prior to 1994, petitioner owned the Emerson house.     During

1994, Fleet foreclosed on the Emerson house.    Fleet received all

the proceeds of the foreclosure sale.   Petitioner sued Fleet and
                                - 5 -

various other entities and individuals regarding Fleet’s

foreclosure on the Emerson house.

     We shall not painstakingly recount in its entirety

petitioner’s litigation against Fleet and various other entities

and individuals.   To briefly summarize, the Circuit Court for the

County of Kent, Michigan, and the U.S. District Court for the

Western District of Michigan (twice) decided against petitioner

every issue raised by him in each of his lawsuits (including

whether Fleet was a holder in due course with respect to

petitioner’s mortgage and was entitled to foreclose on the

Emerson house).    The Michigan Court of Appeals affirmed the order

of the Circuit Court for the County of Kent and the U.S. Court of

Appeals for the Sixth Circuit (twice) affirmed the judgments of

the U.S. District Court.    Stewart v. Fleet Fin., 229 F.3d 1154

(6th Cir. 2000) (table); Stewart v. Fleet Fin. Group, 129 F.3d

1265 (6th Cir. 1997) (table); Stewart v. Birmingham Mortgage

Corp., No. 190235, 1998 WL 1993019 (Mich. Ct. App. Feb. 3, 1998).

     Petitioner’s argument that the proceeds of the foreclosure

on the Emerson house should have paid off the liabilities at

issue is unpersuasive.   Petitioner failed to raise a spousal

defense, make a valid challenge to the appropriateness of

respondent’s intended collection action, or offer alternative

means of collection.   These issues are now deemed conceded.    Rule

331(b)(4).   Accordingly, we sustain respondent’s determination to
                                - 6 -

proceed with collection with respect to petitioner’s 1990 through

1998 tax years.

     Section 6673(a)(1) authorizes this Court to require a

taxpayer to pay to the United States a penalty not to exceed

$25,000 if the taxpayer took frivolous positions in the

proceedings or instituted the proceedings primarily for delay.

In Pierson v. Commissioner, 115 T.C. 576, 581 (2000), we issued

an unequivocal warning to taxpayers concerning the imposition of

a penalty pursuant to section 6673(a) on taxpayers who abuse the

protections afforded by sections 6320 and 6330 by instituting or

maintaining actions under those sections primarily for delay or

by taking frivolous or groundless positions in such actions.

     In its opinion regarding petitioner’s first U.S. District

Court lawsuit, the U.S. District Court stated that “Stewart is a

vexatious litigant” and that “Stewart’s complaints appear to be

an embittered and reckless attempt to chastise all who played any

role, however trivial, in the foreclosure proceedings upon his

house and his eviction therefrom and, thus, filed for an improper

purpose.”    The U.S. District Court sanctioned petitioner and

ordered him to pay the attorney’s fees of the defendants in that

lawsuit.    The U.S. Court of Appeals for the Sixth Circuit

affirmed, by unpublished opinion, the judgment of the U.S.

District Court–including the imposition of sanctions.     Stewart v.

Fleet Fin. Group, supra.
                               - 7 -

     In its opinion regarding petitioner’s second U.S. District

Court lawsuit, the U.S. District Court stated that petitioner’s

lawsuits were a “frivolous and vexatious attempt to relitigate

adverse decisions reached in his earlier, unsuccessful lawsuits.”

The U.S. District Court sanctioned petitioner and ordered him to

pay the attorney’s fees of the defendants in that lawsuit as

well--this sanction totaled over $23,000.    Additionally, because

the thousands of dollars of sanctions it imposed on petitioner in

the first U.S. District Court lawsuit and other related lawsuits

failed to deter petitioner, the U.S. District Court enjoined

petitioner from filing any civil action against Fleet and the

other named entities and individuals unless petitioner first

filed a bond with the U.S. District Court in the amount of

$25,000.   The U.S. Court of Appeals for the Sixth Circuit

affirmed, by unpublished opinion, the U.S. District Court’s

judgment and permanent injunction.     Stewart v. Fleet Fin., supra.

     Petitioner devoted his petition, his trial memorandum, the

trial, and his briefs in the case at bar to recounting, again,

the alleged wrongdoing by Fleet and other individuals whom he had

previously sued multiple times in State and Federal courts.    In

the petition, at trial, and on brief petitioner raised frivolous

arguments and contentions which we conclude were interposed

primarily for delay.   These arguments and contentions were

similar to those that were rejected repeatedly by State and
                                 - 8 -

Federal courts, thereby causing the Court to waste its limited

resources.   Accordingly, we shall impose a penalty of $7,500

pursuant to section 6673.

     To reflect the foregoing,

                                              Decision will be entered

                                         for respondent.
