OPINION AND ORDER
In this tax-refund case, plaintiff Justin Schlabach seeks recovery of more than $10,000 in penalties and interest paid pursuant to 26 U.S.C. (“I.R.C.”) § 6702 for filing an allegedly frivolous tax return and an allegedly frivolous tax submission. A trial was held on July 25 and 26, 2011, in Spokane, Washington. Post-trial briefing followed thereafter, and the case is now ready for resolution.
FACTS
On February 7, 2008, at the age of eighteen, Mr. Schlabach filed a Form 1040EZ tax return for the 2007 tax year. Tr. 30:13-16; PX 1; see also Tr. 409:3-19.
Mr. Schlabaeh’s return was forwarded to the Internal Revenue Service’s (“IRS”) action center for frivolous returns, located in Ogden, Utah. See Tr. 175:15-25, 228:15-21, 234:23-25; DX 14, at 3 row 17.
Mr. Schlabach responded to the imposition by sending two sets of documents to the Fresno office. First, on December 1, 2008, under a letter of transmittal, he mailed a corrected, valid Form 1040A for the 2007 tax year. Tr. 36:11-14, 420:7-13; PX 6. Second, on December 4, 2008, he mailed a letter contesting the $5,000 penalty. Tr. 50:15-17; PX 7. Both sets of documents were forwarded to the Ogden office, where Mr. Schlabach’s transmittal and valid return were erroneously classified as frivolous correspondence and destroyed. See Tr. 192:9-13, 241:3-14; PX 12; DX 14, at 3 rows 1-2. This conclusion is inferred from several facts.
On February 23, 2009, in response to the Fresno office’s letter about the missing Form 1040, Mr. Sehlabach again mailed his corrected return. Tr. 63:19-24; see PX 13. This time, it was received in due course, Tr. 65:22-23; PX 15; PX 16, and Mr. Schla-bach’s tax refund for 2007 was later applied to reduce one of his penalties, Tr. 94:8-12; PX 26.
Meanwhile, Mr. Sehlabach addressed the frivolous-return penalty imposed against him regarding the original return. Based upon the dates of the relevant documents, that penalty imposition had probably crossed in the mail with Mr. Schlabaeh’s submission of a proper return for 2007. During January and February 2009, the IRS sent a bill for the penalty and a warning that they would levy on Mr. Schlabaeh’s assets if he did not pay, to each of which Mr. Sehlabach responded with letters containing various requests and arguments. Tr. 53:16 to 57:18; PX 8 to PX 11. Thereafter, on May 5, 2009, Mr. Schla-baeh submitted a Form 12153 Request for a Collection Due Process or Equivalent Hearing (“CDP hearing request”) to contest the penalty. Tr. 59:13-17; DX 5. The Fresno office of the IRS acknowledged receipt of the CDP hearing request on May 20, 2009, Tr. 65:3-5; PX 14, and the appeals office in Fresno sent advice of its procedures on June 25, 2009, Tr. 66:16-18; PX 17. Shortly thereafter, on July 1, 2009, the Fresno office informed Mr. Sehlabach that his appeals request was based on a frivolous position and that he needed to either withdraw his appeal entirely or “[a]mend [his] hearing request in writing, to state a legitimate issue and state in writing that [he] withdraw[s] the frivolous ... issue(s).” PX 18, at 2 (emphasis omitted); see Tr. 67:2-3, 10-15. On July 16, 2009, Mr. Sehlabach submitted an “appeal amendment,” which stated, “[p]er your instructions I am withdrawing anything that was or seems to be frivolous or that would impede the collection of any tax____ My appeal is amended to address these legal issues ONLY and ... I have not nor would intend on making any arguments that are not base[d] on the law.” DX 7, at 1; see Tr.
Less than a month later, on September 7, 2009, the IRS sent Mr. Schlabach a second warning that it would levy on his assets if he did not pay his penalty. Tr. 69:15-18; PX 20. Mr. Schlabach acquiesced, paying the penalty plus interest, totaling $5,176.96, on September 14, 2009. Tr. 72:7-15; PX 21. Mr. Schlabach later filed a refund request. See Tr. 88:3-5; PX 27.
Shortly after Mr. Schlabaeh’s payment of the initial penalty, the Ogden office assessed a second penalty, this time based on Mr. Schlabaeh’s CDP hearing request. The Ogden office had received the CDP hearing request from Fresno in early May 2009, Tr. 206:24 to 207:10, 423:13 to 424:9; DX 14, at 2 row 15, and then approved a frivolous-submission penalty for it on or about October 5, 2009, Tr. 207:16-19, 425:14-17; DX 13; DX 14, at 2 rows 13-14. On October 26, 2009, the IRS sent Mr. Schlabach notice of this second penalty. Tr. 73:6-7; PX 22.
At this juncture, Mr. Schlabach was confused by the second penalty as it was nearly identical to the first and issued shortly after he had paid that penalty. Tr. 74:3-13, 75:2— 3. On November 1, 2009, he sent a letter to the Fresno office expressing this confusion and requesting a correction. Tr. 75:2-5; PX 23.
STANDARDS FOR DECISION
This court has jurisdiction under the Tucker Act, 28 U.S.C. § 1491(a)(1), over claims for federal tax refunds. See Ledford v. United States,
ANALYSIS
The IRS assessed penalties against Mr. Schlabach for allegedly violating I.R.C. § 6702, which prohibits the filing of frivolous tax returns and “specified frivolous submissions.” I.R.C. § 6702(b). For a tax return to be frivolous, it must be facially incorrect or its correctness must be unaseertainable, and it must be “based on a position which the Secretary has identified as frivolous under [I.R.C. § 6702(c) ]” or “reflect[ ] a desire to delay or impede the administration of [fjed-eral tax laws.” Id. § 6702(a)(2)(A)-(B). Correlatively, a specified submission, including “a request for a hearing under ... [I.R.C. § ] 6330,” id. § 6702(b)(2)(B)(i), is frivolous if it, like a frivolous tax return, is based on a position listed under I.R.C. § 6702(e) or seeks to delay or impede federal tax administration. Id. § 6702(b)(2)(A). Pursuant to I.R.C. § 6702(c), the IRS has issued three successive lists of frivolous positions. See Notice 2010-33, 2010-
A. The Tax-Return Penalty
Mr. Sehlabach’s original Form 1040EZ reports zero income for the year 2007, yet claims a tax refund of $1,313.54. PX 1, at 1. It thus “contains information that on its face indicates that the self-assessment is substantially incorrect.” I.R.C. § 6702(a)(1)(B). Second, the tax return includes Forms 4852 which state that “I did not receive an[] income as an employee as specifically defined at IRC section 3401 and 3121 and others.” PX 1, at 2; see also id. at 3. This practice has been identified by the IRS as frivolous under I.R.C. § 6702(c). See Notice 2008-14,
Mr. Schlabach filed a corrected, proper return approximately five months after receiving notice of his Section 6702 violation, compare PX 2, with PX 6, but that was too late to absolve him of the penalty. See PX 2 (affording a 30-day grace period to withdraw a submission after having been given notice that it was frivolous); cf. I.R.C. § 6702(d) (allowing the IRS to reduce the penalty if “such reduction would promote compliance with and administration of the [fjederal tax laws.”). Thus, the court holds that the IRS was justified in assessing Mr. Schlabach a penalty under I.R.C. § 6702(a) for his submission of a frivolous Form 1040EZ for tax year 2007.
B. The “Specified Frivolous Submission” Penalty
1. The CDP hearing request.
The second penalty was assessed because Mr. Schlabach’s CDP hearing request
The government’s witness, Ms. Durrant, testified about her impressions why Mr. Schlabach’s CDP hearing request had been determined by the Ogden office’s reviewer to be frivolous.
2. The “appeal amendment.”
Even if Mr. Schlabach’s initial CDP hearing request were to be considered frivolous, contrary to the determination made above, that would not justify the second penalty. Specifically, Mr. Schlabaeh’s appeal amendment, filed pursuant to I.R.C. § 6702(b)(3), withdrew any potentially frivolous portions of his initial CDP hearing request. Mr. Schlabach’s appeal amendment explicitly stated:
Per your instructions I am withdrawing anything that was or seems to be frivolous or that would impede the collection of any tax and ... I am not attempting to impede the administration of federal tax laws in any way. My appeal is amended to address these legal issues ONLY and ... I have not nor would intend on making any arguments that are not base[d] on the law.
DX 7, at 1. Further, contrary to a contention by the government, the appeal amendment does not resurrect the portions of the original CDP hearing request addressed by Ms. Dun-ant in her testimony. No mention is made of “Title 26,” or of a “record of assessment,” compare Tr. 452:7-22, 454:11-13, and DX 5, at 4-6, with Notice 2008-14,
Instead, the appeal amendment argues only that “a taxpayer may challenge the assessment of the [Sjection 6702 penalty on the ground that the assessments were not personally approved in writing in accordance with [Sjection 6751(b).” DX 7, at 1. The IRS has not listed this argument as a frivolous position, nor, considering Mr. Schla-bach’s genuine confusion expressed in his postscript to the appeals amendment, does it “reflectf] a desire to delay or impede the administration of federal tax laws.” See Thomberry,
CONCLUSION
For the reasons stated, the court finds that Mr*. Schlabach may not recover the money paid in satisfaction of the initial frivolous-tax-return penalty assessed against him. However, the court also finds that the IRS has not met its burden of proof to support the second penalty for a “frivolous specified submission” in the form of Mr. Schlabach’s CDP hearing request. Consequently, Mr. Sehla-bach is entitled to a refund of the second penalty, amounting to $5,027.86, plus interest at the rate provided by law. The clerk shall enter judgment in accord with this disposition.
No costs.
It is so ORDERED.
Notes
. This recitation of facts constitutes the court’s principal findings of fact in accord with RCFC 52(a). Other findings of fact and rulings on mixed questions of fact and law are set out in the analysis.
. The trial transcript is cited as "Tr. -:- Plaintiff's exhibits are cited as "PX -,” and defendant's exhibits are cited as "DX-.”
. Unless otherwise specified, the pages of each exhibit are numbered separately, with the first actual page of each exhibit (as opposed to a title page or tab page) numbered as page 1.
. DX 14 is a printout of a portion of the Frivolous Return Program master database record for Mr. Schlabach, which record notes correspondence received and action taken by the IRS Ogden office related to him. Tr. 209:16-23, 210:25 to 211:3. DX 14 consists of a certification page (page 1), and a spreadsheet (pages 2 and 3). For citation purposes, the court has numbered, from the top down, each row of each page of the spreadsheet. For example, the fifth row on the first page of the spreadsheet would be cited as "DX 14, at 2 row 5,” while the eleventh row on the second page of the spreadsheet would be cited as “DX 14, at 3 row 11."
. The employee most likely to have direct knowledge of the documents' destruction did not testify and was identified at trial only as "4ZGFB.” See Tr. 243:5-6, 438:19-22; DX 14, at 3 rows 1-2.
. Ms. Durrant was the only witness called by the government to testify. Her testimony was received over Mr. Schlabach’s objection that it was improper under Fed.R.Evid. 602 because Ms. Durrant had no personal knowledge of the Ogden office’s handling of Mr. Schlabach’s returns and correspondence. Tr. 183:3-18. The court ruled at trial that the testimony could be received based upon Fed.R.Evid. 406, on the ground that it would concern the “routine practice” of the Ogden office. Tr. 187:11-13, 202:17 to 204:10.
At the time of trial, Fed.R.Evid. 406 provided: Evidence of the habit of a person or of the routine practice of an organization, whether corroborated or not and regardless of the presence of eyewitnesses, is relevant to prove that the conduct of the person or organization on a particular occasion was in conformity with the habit or routine practice.
(Fed.R.Evid. 406 was amended effective December 1, 2011, in a manner that does not affect this analysis.) As the court explained in United States ex. rel El-Amin v. George Washington Univ.,
. I.R.C. § 6751(b)(1) states that "[n]o penalty ... shall be assessed unless the initial determination of such assessment is personally approved (in writing) by the immediate supervisor of the individual making such determination or such higher level official as the Secretary may designate.”
. Relying on the IRS' master database file for Mr. Schlabach, Ms. Durrant testified that this letter was forwarded to the Ogden office where it was classified as frivolous and destroyed. See Tr. 437:8 to 438:10, 513:24 to 514:4; cf. DX 14, at 3 row 3. The court does not credit that testimony. Mr. Schlabach’s letter admitted into evidence as PX 23 and the purportedly corresponding entry in the IRS’ file for Mr. Schlabach share the same month but are a year apart. See Tr. 524:4-15. Ms. Durrant simply misread the file entry.
. Mr. Schlabach’s payment of the second penalty was in the amount of $3,611.04, PX 29, which included interest of $27.59, PX 28, because the IRS had applied to the second penalty of $5,000, the amount of the refund Mr. Schlabach was due on his tax return for 2007. See PX 26 (applying an overpayment of $1,314.00, and interest on the overpayment of $102.82). Interest of $0.27 accrued on the second penalty between the application of the refund and payment. The total paid by Mr. Schlabach on the second penalty was $5,027.86.
. This is not to say that the IRS cannot assess a penalty for a frivolous submission that follows a non-frivolous return. The statute does not expressly prohibit such a penalty. See I.R.C. § 6702(b)(2)(B), (e). Even so, the court notes that it has been unable to find any case relating an instance of the IRS assessing a "specified frivolous submission” penalty for a filing made after the submission of a non-frivolous return.
. The court allowed Ms. Durrant to testify about her impressions over Mr. Schlabach's objections, even though her testimony "(wajs almost lay opinion testimony," Tr. 452:2, and she had not been proffered as a lay-opinion witness. Tr. 451:15 to 452:5.
. "[B]ecause the statutory deficiency procedures do not apply to frivolous return penalties [under] 26 U.S.C. § 6703(b), ... [p]laintiff had no prior opportunity to dispute the penalties.” Yuen v. United States,
. The government argues that Mr. Schlabaeh "renewed his defense of the zero-income and statutory-employee positions asserted on his original return” because the appeal amendment asserts that “I have not filed anything that is frivolous.” Def.’s Post-Trial Br. at 14 (quoting DX 7, at 2) (emphasis omitted). However, a flat denial of liability is not among the positions listed as frivolous by the IRS. Nor, in any event, should Mr. Schlabach’s purported withdrawal be construed to be anything other than what it was.
. Other taxpayers have contended under I.R.C. § 6751 that the IRS must produce the form signed to approve an I.R.C. § 6702 penalty or else the penalty cannot be assessed. Such requests have been described as "meritless,” Lind