# PURSUANT TO INTERNAL REVENUE CODE SECTION 7463(b),THIS OPINION MAY NOT BE TREATED AS PRECEDENT FOR ANY OTHER CASE.T.C. Sum m ary Opi ni on 20 14 -9 5

UNITED STAT ES TAX COURT

JAM ES R. MORR ISON, Pet it io ne r v. COMM ISSI ONER OF INTERNAL REVENUE, Resp on de nt

Doc ke t No . 45 2- 13 S L. Fi le d S ep te m be r 23 , 20 14 . Ja m es R. Mo rri so n, p ro se. Lou is H. Hill , forres po nd en t.

SUMM ARY OPINION RUWE , Ju dg e: Thi s ca se was h eardpu rs ua ntto th e p ro vi si on s o f se ct io n 74 63 of the Int ern al Rev enue Co de ineffec t wh enth e p et it io n was fil ed . 1

All sec ti on refe ren ces are t o the Int ern al Rev enue Co de ineffe ctat a ll 1 rel ev an t t im es , andall Ru le refe ren ces are t o the Tax C ou rt Rul es of P ract ic e an d Pro cedur e, un le ss othe rwis e in di cat ed .- 2 -

Purs ua ntto sec ti on 74 63 (b ), th e d eci si on to be en te redis no t re vi ewab le by any ot he r co urt, an d thi s o pi ni on sh al l n otbe tre at edas p rece de ntforan y othe r cas e. Thi s ca se was b ro ug htby pet it io ne r un de r se ct io n 6 33 0( d) (1 ) reg ard in g the de ci si on by the Offic e o f App eal s t o s us ta inth e co ll ect io n b y way of l ev y of pe ti ti on er’s unp ai d i nc om e ta x l iabi li ti es forth e ta xabl e y ears 20 08 an d 2 00 9. Res po nd en t h as m ov edforsu m m ary jud gm en t p ur su an t t o the pro vi si on s o f Ru le 12 1. Bac kg ro un d Res po nd en t s en t t o p et it io ne r a Fi na l No ti ce o f In te ntto Levy andNot ic e o f You r Ri gh t t o aHeari ng da te d J ul y 11 , 20 07 , adv is in g p et it io ne r th atres po nd en t in te nd edto lev y

to co ll ecthi s u np ai d i nc om e ta x l iabi li ti es for th e ta xabl e y ears 20 08 an d 2 00 9 andth atpe ti ti on er co ul d re cei ve a he ari ng with the Offic e o f App eal s. Pet it io ne r ti m el y

subm it te d aFo rm

12 15 3, Re qu es t fo r a Co ll ect io n Du e Pro ces s o r Equ iv al en t Hearin g. Inth atreque st , pet it io ne r co nt en ds th athe is no t li ab le forth e ta x. A co ll ect io n due pro ces s (C DP) h eari ng was c on du ct edon Octo be r 3, 2 01 2, dur in g wh ic h p et it io ne r arg ue d tha t co m pe ns at io n p ai d t o h im

by Brad fo rdSch oo ls durin g 2 00 8 and20 09 was n ottax ab le in co m e b ecau se tax ab le

“ wag es ” fo r pu rp os es of the Int ern al Rev enue Co de are l im it edto co m pe ns at io n- 3 -

pa idto go ve rn m en t o ffi ci al s an d d o n otin cl ud e co m pe ns at io n p ai d t o p eo pl e who work fo r pr iv at e em

pl oyers. No co ll ect io n a lt ern at iv e was di sc us se d dur in g the CDP h eari ng be cau se pe ti ti on er co nt en de d o nl y th athe owedno tax forth e y ears 20 08 an d 2 00 9. A no ti ce o f de fic ie nc y

was m ai le d t o p et it io ne r on Aug us t 1 , 20 11 , for pe ti ti on er’s 2 00 9 i nc om e ta x year. A no ti ce o f de fic ie nc y for20 08 was m ai le d t o pe ti ti on er o n Au gu st6, 2 01 1. Pe ti ti on er d oe s n otde ny recei vi ng th e n ot ic es of de fic ie nc y . The Ap pe al s o ffi cer i nf orm edpe ti ti on er tha t h e co ul d n otdi sp ut e th e un de rlyin g i nc om e ta x l iabi li ti es be cau se a st atut ory no ti ce o f de fic ie nc y

was is su edto hi m

foreach of tho se y ears . On No ve m

be r 27 , 20 12 , App eal s i ss ue d t o p et it io ne r a No ti ce o f Dete rm in at io n C on cern in g C ol le ct io n Act io n( s) Und er Se ct io n 6 32 0 and/o r 63 30 st at in g tha t re sp on de ntwou ldpro ceedwith the pro po se d l ev y . Peti ti on er t im el y fil eda pe ti ti on . Peti ti on er re si de d i n Oh io at the ti m e h e fi le d h is pe ti ti on . The is su e p et it io ne r ha s ra is edth ro ug ho utth is cas e is th atth e co m pe ns at io n pa idto hi m

by Bradf or d S ch oo ls do es no t co ns ti tu te wage s wi th inth e m ean in g o f- 4 -

th e In te rn al Rev enue Co de an d the refo re tha t co m pe ns at io n i s n otsubjec t t o Fed eral in co m e ta x. 2 Dis cu ss io n Su m m ary jud gm en t i s i nt en de d t o e xp ed it e li ti ga ti on an d t o avo id un ne ces sary

an d e xp en si ve tri al s. Sh io sa ki v. Co m mis si on er, 6 1 T.C. 8 61 , 86 2 (1 97 4) . Summ ary jud gm en t m ay be gra nt edwher e th e p le ad in gs an d o th er m at eri al s s ho w th atth ere i s n o g enui ne di sp ut e as to an y m at eri al factan d tha t a de ci si on m ay

be ren de redas am at te r of law. Ru le 12 1( a) an d (b ); S un ds tra nd Co rp . v. Co m

m is si on er, 9 8 T.C. 5 18 , 52 0 (1 99 2) , aff’d, 1 7 F .3d96 5 (7 th Cir . 19 94 ). The b ur de n i s o n the m ov in g p arty to de m on strat e th atno ge nu in e d is pu te as to an y m at eri al factrem ai ns an d tha t h e is en ti tl edto jud gm en t as a m at te r of law. FPL Grp., In c. & Subs . v. Co m m is si on er, 1 16 T.C. 73 , 74 -7 5 (2 00 1) . In al l cas es , th e ev id en ce i s v ie wedinth e li gh t m os t fa vo rab le to th e n on m ov in g p arty . Bo ndv. Co m

m is si on er, 1 00 T.C. 32 , 36 (19 93 ). Howev er, the no nm ov in g p arty is The pe ti ti on st at es : 2 I am a pr iv at e-s ect orcit iz enno t anoff ic er o r em

pl oyee of th e Uni te d St at es , no r an y

fed eral co rp or at io n o r pa rtn ers hi p, n orof any publ ic of fic e, th atI am

em pl oyed b y a pr iv at e se ct or

co m pa ny (no n- fed eral en ti ty) no t en ga ge d i n apri vi le ge d t ax ab le act iv ity , andas s uc h, I d id no t re cei ve any

tax ab le in co m e in th e fo rm of “ wag es ” as de fin edin IRC 3 40 1( a) o r 31 21 (a), n oran y “ se lf- em pl oym en t i nc om e” as as so ci at edto a “ tra de or b us in es s” an d d efi ne d i n IR C 7 70 1( a)(2 6) .- 5 -

requi redto go be y on d the pl ead in gs an d b y hi s o wn af

fid av it s, o r by the de po si ti on s, an swe rs to in te rro ga to rie s, an d a dm is si on s o n fi le , des ig na te sp eci fic fact s s ho win g tha t the re i s a g enui ne di sp ut e fo r tr ia l. Cel ot ex Co rp . v. Cat ret t, 47 7 U.S. 3 17 , 32 4 (1 98 6) ; s ee al so Rau en ho rs t v . Comm is si on er, 1 19 T.C. 15 7, 17 5 (2 00 2) ; FP L Grp., In c. & Subs . v. Co m m is si on er, 1 15 T.C. 55 4, 5 59 (20 00 ). W e co nc lu de th atth ere i s n o d is pu te as t o any m at eri al factan d tha t a d eci si on m ay be ren de redas am at te r of law. Whe n “ an y

pe rs onli ab le to pay

an y tax ne gl ect s o r refu se s t o p ay th e sa m e withi n 1 0 d ay s af

te r no ti ce an d d em an d” th e Co m mis si on er i s au th or iz edto co ll ect th e unp ai d t ax “by lev y

up on all pro pe rty andrig ht s t o p ro pe rty * * * be lo ng in g t o su chpe rs on ”. Sec. 6 33 1( a). Sec ti on 63 30 (a)( 1) pro vi de s tha t “ [n ]o lev y m ay be m ad e o n any pro pe rty or ri gh t t o p ro pe rty of an y pe rs on un le ss th e Sec ret ary ha s no ti fie d s uc h p ers on inwrit in g o f th ei r ri gh t t o ahe ari ng un de r th is sec ti on be fo re su chlev y is m ad e.” If t im el y

reque st edby the tax pa y er, a CDP h eari ng is he ldby anApp eal s o ffi cer wi th inth e Co m m is si on er’s Offi ce wh o h as ha d n o p rio r in vo lv em en t wi th res pe ctto th e unp ai d t ax . Sec. 6 33 0( b) ; s ee Offi le r v. Co m m is si on er, 1 14 T.C. 49 2, 4 96 (20 00 ). At th e h eari ng th e ta xp ay er m ay rai se an y rel ev an t i ss ue , in cl ud in g app ro pr ia te sp ou sa l d efen se s, ch al le ng es to th e ap pr op ria te ne ss of the co ll ect io n a ct io n, an d c ol le ct io n a lt ern at iv es . Sec.- 6 -

63 30 (c)( 2) (A). The t ax pay er i s al so en ti tl edto rai se is su es reg ard in g the un de rlyin g t axli ab il ity

“ if the pe rs on di d n otrece iv e an y st atut ory no ti ce o f de fic ie nc y

forsu chtax li ab il ity ”. Sec. 6 33 0( c)(2 )(B) . Purs uantto sec ti on 63 30 (c)( 3) , th e d et erm in at io n o f a s et tl em en t o ffi cer m us t t ak e in to co ns id erat io n: (A) th e v eri fic at io n tha t the requi rem en ts of ap pl ic ab le law an d a dm in is tra ti ve pro cedur e h av e b eenm et ; (B ) is su es rai se d b y th e ta xp ay er; an d (C ) whe th er an y pro po se d c ol le ct io n a ct io n b al an ces th e n eedfor th e eff ic ie ntco ll ect io n o f ta xe s wi th th e le gi ti m at e co nc ernof the pe rs onth atan y co ll ect io n b e n o m or e in tru si ve th anne ces sary . The s et tl em en t o ffi cer c on si de red al l thr ee o f th es e m at te rs . Fol lo win g the CDP h eari ng , th e App eal s o ffi cer wi ll de te rm in e whe th er p ro ceed in g wi th th e p ro po se d l ev y is ap pr op ria te . If so , he wi ll is su e a n ot ic e o f de te rm in at io n. Se c. 63 30 (c)( 3) ; Offi le r v. C omm is si on er, 1 14 T.C. at 4 98 . W e h av e juri sd ic ti on to rev ie w th e d et erm in at io n m ad e b y App eal s. See se c. 63 30 (d )(1 ); Off

il er v . Comm is si on er, 1 14 T.C. at 4 98 . W e g en eral ly revi ew th e App eal s o ffi cer’s d et erm in at io n fo r ab us e o f di sc ret io n. Se e Seg o v . Co m m is si on er, 1 14 T.C. 60 4, 6 10 (20 00 ); Go za v . Comm is si on er, 1 14 T.C. 17 6, 18 1- 18 2 (2 00 0) . Und er the ab us e o f di sc ret io n s tand ard , we dec id e whe th er the de te rm in at io n o f th e App eal s o ffi cer was arb itrary, capri ci ou s, o r witho uta so un d- 7 -

ba si s i n fa ctor l aw. Murp hy v. Co m m is si on er, 1 25 T.C. 30 1, 3 08 , 32 0 (2 00 5) , aff’d, 4 69 F.3d27 (1s t Ci r. 20 06 ). Howev er, we rev ie w a de te rm in at io n re ga rd in g th e und erl y in g t axli ab il ity de no vo wher e th e ta xp ay er d idno t re cei ve an y st atut ory no ti ce o f de fic ie nc y

forth e ta x l iabi li ty or di d n otothe rwis e h av e an op po rtu ni ty to d is pu te th e ta x l iabi li ty. Sec. 6 33 0( c)(2 )(B) ; s ee M on tg om ery v. Co m m is si on er, 1 22 T.C. 1, 8 (20 04 ); S eg o v . Comm is si on er, 1 14 T.C. at 6 10 ; Goz a v . Comm is si on er, 1 14 T.C. at 1 81 -1 82 . Pet it io ne r rec ei ve d n ot ic es of d efi ci en cy forbo th20 08 an d 2 00 9. Pe ti ti on er di d n otfil e ti m el y

pe ti ti on s re ga rd in g the se no ti ces of d efi ci en cy an d i s the refo re no t en ti tl edto co nt es t the un de rlyin g l iabi li ti es inth is cas e. Eve n i f pe ti ti on er were ab le to co nt es t the un de rlyin g l iabi li ti es , hi s o nl y arg um en t i s tha t h is co m

pe ns at io n dur in g 2 00 8 and20 09 was n ottax ab le be cau se he is a no n- Fed eral work er, anarg um en t tha t h as be enhe ldto be fri vo lo us . See Zoo k v . Comm is si on er, T.C. Mem o. 2 01 3- 12 8; Sn ow v . Comm is si on er, T.C. Mem o. 2 01 3- 11 4; Not ic e 2 00 7- 30 , 20 07 -1 C.B. 8 83 . 3 Inhi s re sp on se to res po nd en t’s m ot io n fo r su m m ary jud gm en t, p et it io ne r 3 st at es : th e m at te r whi chth e Pet it io ne r ha s b ro ug htbe fo re the co urt be gi nn in g wi th hi s o rig in al fil in g i s tha t wh atI th e p et it io ne r ha ve be enpa idan d re po rte d b y m ean s o f a W-2 d oe s n otqu al ify as (co nt in ue d...)- 8 -

Res po nd en t’s m ot io n wi ll be gra nt ed . An ap pr op ria te ord er an d de ci si on wil l b e en te red .

(...co nt inue d) 3 “ wag es ” p ai d t o an “ em

pl oyee” as th os e te rm s ar e d efi ne d wi th inth e co de . The Re sp on de ntke ep s re min di ng th e co urt tha t the Pet it io ne r can ’t arg ue th e am ou ntdu e as if tha t i s the arg um en t the Pet it io ne r wan ts to bri ng be fo re the co urt, BUT I T I S NOT . The o nl y is su e be fo re the co urt i s, d o the nu m be rs ap pe ari ng onth e W-2 rep res en t “ wag es ” p ai d t o an “ em

pl oyee” as th os e te rm s ar e d efi ne d wi th inth e co de , andth e Res po nd en t h as pro vi de d n o “ ad di ti on al ev id en ce” a s requi redby law.