## Facts

- The IRS assessed Michael Craig for federal income tax liabilities for tax years 1990, 1991, 1992, and 1995 and initiated collection by levy.
- On February 22, 2001, the IRS mailed final notices of intent to levy under I.R.C. § 6330 for 1990–1992 and for 1995.
- Craig timely requested a collection due process (CDP) hearing by submitting Forms 12153; the IRS treated the request as untimely due to a mistaken view about the signature timing.
- An IRS Appeals Officer provided an “equivalent hearing” under Treasury regulations and issued a “decision letter” sustaining the proposed levy, stating Craig was not entitled to judicial review.
- Craig filed a timely petition in the Tax Court seeking review under I.R.C. § 6330(d)(1).
- The Commissioner moved for summary judgment sustaining collection and sought a penalty under I.R.C. § 6673(a) for frivolous and dilatory litigation.

## Issues

1. Whether the Tax Court has jurisdiction under I.R.C. § 6330(d)(1) when the IRS, after an agency error, issues a decision letter from an equivalent hearing instead of a notice of determination from a CDP hearing that should have been provided.
2. Whether summary judgment should be granted sustaining the proposed levy to collect the assessed liabilities for 1990, 1991, 1992, and 1995.
3. Whether a penalty should be imposed under I.R.C. § 6673(a) for maintaining the proceeding primarily for delay and advancing frivolous or groundless positions.

## Decision

- The court held it had jurisdiction under I.R.C. § 6330(d)(1) because the decision letter reflected an Appeals determination on the levy, and Craig timely petitioned for review.
- The court granted summary judgment for the Commissioner and sustained the proposed levy.
- The court imposed a penalty under I.R.C. § 6673(a) based on frivolous positions and delay-oriented conduct.

## Legal Principles

- For § 6330(d)(1) jurisdiction, a taxpayer’s timely request for a CDP hearing and timely petition may allow review when the IRS’s written action, though mislabeled as a decision letter, functionally constitutes a determination sustaining collection.
- Jurisdiction does not depend solely on the IRS’s label for its written disposition when the agency’s misclassification would otherwise defeat statutory judicial review.
- Summary judgment is appropriate when there is no genuine dispute of material fact and the Commissioner is entitled to judgment as a matter of law in sustaining a proposed levy.
- The Tax Court may impose a § 6673(a) penalty when a taxpayer maintains proceedings primarily for delay or asserts frivolous or groundless positions.

## Conclusion

The Tax Court treated an IRS decision letter issued after an erroneously classified equivalent hearing as sufficient to permit judicial review under § 6330(d)(1), sustained the levy by summary judgment, and sanctioned the taxpayer under § 6673(a) for frivolous, delay-driven litigation.


Craig v. Commissioner, 119 T.C. 252 (2002)