Stamos v. Comm'r of Internal Revenue

• Decision Date: 12 December 1990
• Docket Number: 5622-89.,Docket Nos. 5621-89
• Citation: 95 T.C. No. 44,95 T.C. 624
• Parties: FRANK W. STAMOS, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, RespondentLORNA D. STAMOS, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
• Court: U.S. Tax Court

95 T.C. 624

95 T.C. No. 44

FRANK W. STAMOS, Petitioner

v.COMMISSIONER OF INTERNAL REVENUE, RespondentLORNA D. STAMOS, Petitioner

v.COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket Nos. 5621-89

5622-89.

United States Tax Court

Filed December 12, 1990.

Before trial Ps moved to dismiss on the ground that the statutory notices of deficiency sent to them were invalid, because neither respondent, nor the District Director had authority to issue them under Treasury Department Order 150-10, secs. 301.7805-1, 301.7701-9, and 301.6212-1, Proced. & Admin. Regs. HELD, Treasury Department Orders need not be published Administrative Procedure Act to be effective. HELD FURTHER, sec. 301.7805-1, Proced. & Admin. Regs., is Procedure Act. HELD FURTHER, secs. 301.7701-9 and 301.6212-1, Proced. & Admin. Regs., were proposed and promulgated in accordance with the Administrative Procedure Act. Frank W. Stamos and Lorna D. Stamos, pro se.

Bridgette M. Gibson, for the respondent.

OPINION

PARR, Judge:

Respondent determined deficiencies in and additions to petitioners' Federal income tax as follows:

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                ¦Frank W. Stamos     ¦
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                ¦docket No. 5621-89  ¦
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 Additions to tax
                Sec. Sec. Sec. Sec
                Sec
                Year Deficiency 6651(a)(1) 6653(a)(1) 6653(a)(2) 6654 6661  
                1981   $27,259      $6,815       $1,363       1            $2,088 ---
                1982   15,471       3,868        774          1            1,506  $3,868
                1983   8,496        2,124        425          1            520    2,124
                1984   8,324        2,081        416          1            523    2,081
                

Lorna D. Stamos
                docket No. 5622-89
                

 Additions to tax
                Sec. Sec. Sec. Sec. Sec
                Year Deficiency 6651(a)(1) 6653(a)(1) 6653(a)(2) 6654 6661  
                1981   $24,497      $6,124       $1,225       1            $1,877 ---
                1982   12,442       3,111        622          1            1,211  $3,110
                1983   5,158        1,290        258          1            315    1,289
                1984   4,053        1,013        203          1            255    ---
                

1. The authority granted to the Commissioner of Internal Revenue and District Directors, by 26 CFR 301.7701-9, 26 U.S.C. 6212, 26 CFR 301.6212-1, Treasury Order 150-10, and 26 CFR 301.6861-1 to sign and send to the taxpayer by registered or certified mail any notice of deficiency is hereby delegated to the officials listed below. * * *

4. Delegation Order No. 77 (Rev. 23) effective June 16, 1988, superseded.

SECTION 1. Transfer of functions to the Secretary. (a) Except as otherwise provided in subsection (b) of this section, * * * there are hereby transferred to the Secretary of the Treasury all functions of all other officers of the Department of the Treasury and all functions of all agencies and employees of such Department.

* * *

SEC. 2. Performance of functions of Secretary. The Secretary of the Treasury may from time to time make such provisions as he shall deem appropriate authorizing the performance by any other officer, or by any agency or employee, of the Department of the Treasury of any function of the Secretary, including any function transferred to the Secretary by the provisions of this reorganization plan.

BY virtue of the authority vested in me as Secretary of the Treasury, including the authority in the Internal Revenue Code of 1954 and Reorganization Plan No. 26 of 1950, it is ordered as follows:

1. The Commissioner of Internal Revenue shall be responsible for the administration and enforcement of the Internal Revenue Laws.

2. An Assistant General Counsel of the Department of the Treasury shall serve as Chief Counsel of the Internal Revenue Service and as counsel and legal advisor to the Commissioner in all matters pertaining to the administration and enforcement of the Internal Revenue laws. The Chief Counsel shall serve as a member of the Commissioner's executive staff.

* * *

5. All outstanding orders and delegations of authority relating to the above subjects are modified accordingly.

5. U.S. Territories and Insular Possessions. The Commissioner shall, to the extent of authority otherwise vested in him, provide for the administration of the United States internal revenue laws in the U.S. territories and insular possessions and other authorized areas of the world.

Delegation of functions created by the Internal Revenue Code of 1954.

1. By virtue of the authority vested in me by Reorganization Plan No. 26 of 1950 and section 7804(a) of the Internal Revenue Code of 1954, each delegation of authority, and each redelegation of authority made pursuant to such Delegation, which:

(1) Was in effect immediately preceding the enactment of the Internal Revenue Code of 1954, and

(2) Was continued in effect upon the enactment of the Internal Revenue Code of 1954 pursuant to the provisions of section 7851(b)(3) of such Code,

is hereby amended to include any additional or revised functions created or authorized by the Internal Revenue Code of 1954 which are essential to the performance of, or are directly related to, any function included in such delegation or redelegation of authority. Each delegation or redelegation of authority so amended shall be subject to amendment, modification, or revocation to the same extent, and in the same manner, as authorized immediately preceding this amendment by this Order.

2. The preceding paragraph shall not be construed as delegating to any officer or employee of the Internal Revenue Service any function existing under the Internal Revenue Code of 1954 which corresponds to any function which existed under the Internal Revenue Code of 1939 and which immediately preceding the enactment of the Internal Revenue Code of 1954 had not been delegated by the Secretary.

In any case in which a function is vested by the Internal Revenue Code of 1954 in the Secretary or his delegate, and Treasury regulations or Treasury decisions (including this Treasury decision) provide that such function may be performed by a District Director of Internal Revenue, * * * or employee in the office of a District Director * * *

(a) Such provision in the regulations or a Treasury Decision shall constitute a delegation by the Secretary to the Commissioner of the authority to perform such function and a redelegation thereof by the Commissioner to the designated officer or employee, and

(b) An officer or employee authorized by regulations or a Treasury Decision or perform a function shall have authority to redelegate the performance or such function to any officer or employee performing services under his supervision and control, unless such power to so redelegate is prohibited or restricted by proper order or directive, and

(c) The Commissioner may also redelegate authority to perform such function to other officers or employees of the Internal Revenue Service and, to the extent he deems proper, may authorize further redelegation of such authority, * * * 1955-1 C.B. at 718-719.

Tax Court, 1990.

Stamos v. C.I.R.95 T.C. No. 44, 95 T.C. 624, Tax Ct. Rep. (CCH) 47,023, Tax Ct. Rep. Dec. (P-H) 95.44

¹ 50 percent of the interest payable on the portion of the underpayment attributable to negligence or intentional disregard of rules or regulations.

¹ 50 percent of the interest payable on the portion of the underpayment attributable to negligence or intentional disregard of rules or regulations.

Unless otherwise indicated, all section references are to the Internal Revenue Code, as amended and in effect for the taxable years in issue. All Rule references are to the Tax Court Rules of Practice and Procedure.

These cases were consolidated for trial, briefing, and opinion. Shortly before the scheduled trial date, petitioners filed a motion to dismiss pursuant to Rule 53 alleging that the statutory notices of deficiency were invalid, because they were issued by a person who lacked delegated authority. At the hearing on petitioners' motions and trial of these cases respondent filed a cross-motion to dismiss for failure to properly prosecute and a motion for damages under section 6673. The motions were taken under advisement and trial of the consolidated cases proceeded.

The issues presented for decision are:

(1) In regard to petitioners' motion to dismiss whether the notices of deficiency issued to the petitioners herein are invalid; if not,

(2) in regard to respondent's motions, whether petitioners failed to properly prosecute their case and whether respondent is entitled to an award for damages pursuant to section 6673; and

(3) whether petitioners are liable for the deficiencies and additions to tax as determined by respondent.

Petitioners resided in Lodi, California, at the time they filed their petitions. Petitioner Lorna Stamos appeared at trial but did not offer evidence. She indicated she agreed with her husband.

Unless otherwise indicated, all references to petitioner refer to Frank W. Stamos.

For taxable years ending December 31, 1979, and December 31, 1980, petitioners filed joint Federal income tax returns. However, they failed to file returns for taxable years 1981 through 1984. Pursuant to section 6020(b) respondent prepared 1988, respondent sent petitioners the notices of deficiency here in issue. All notices were signed on behalf of respondent by the District Director, Sacramento, California, Office of the Internal Revenue Service (IRS).

Petitioners timely invoked the jurisdiction of the Court by filing their respective petitions seeking redetermination of the deficiencies.

During informal pretrial discovery, petitioners failed to provide documentation to support their income amount or entitlement to any credits of deductions, even though respondent made several attempts to ascertain the information. Instead, petitioner made ‘informal discovery requests‘ to respondent asking a battery of standard tax protester questions, including: ‘Do the respondents [sic] records indicate that the petitioner is a citizen‘ or ‘a resident of the United States,‘ ‘Do the...