# 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 -6 9

UNITED STAT ES TAX COURT

JAM ES W ILLIAM HARRIS ON, Peti ti on er v . COMM ISSI ONER OF INTERNAL REVENUE, Resp on de nt

Doc ke t No . 92 88 -1 3S L. Fi le d J ul y 14 , 20 14 . Ja m es W il li am

Harri so n, p ro se. Je remy D. Cam ero n, fo r res po nd en t.

SUMM ARY OPINION GUY, Spec ia l Tri al Ju dg e: Thi s ca se was h eardpu rs uantto th e p ro vi si on s of sec ti on 74 63 ineffe ctwhen th e p et it io n was fil ed . Pur su an t t o s ect io n 7 46 3( b) , 1

Unl es s o th erwi se in di cat ed , all sec ti on refe ren ces are t o t he Int ern al 1 Rev enue Co de , as a m en de d, i n e ffec t atall rel ev an t t im es , andall Ru le refe ren ces are t o t he Tax C ou rt Rul es of P ract ic e an d P ro cedur e. All m on et ary am ou nt s ar e ro un de d t o t he ne ares t d ol lar.- 2 -

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 t hi s o pi ni on sh al l n otbe tre at edas p rece de ntforan y ot he r cas e. Thi s co ll ect io n re vi ew cas e is be fo re the Co urt o n re sp on de nt ’s m ot io n fo r su m m ary jud gm en t, fi le d p ur su an t t o R ul e 1 21 . Res po nd en t’s m ot io n was cal le d fo r he ari ng inAtl an ta , Geor gi a, on Apri l 1 , 20 14 . Peti ti on er ap pe aredat t he he ari ng an d re pr es en te d h im se lf. Su m m ary jud gm en t s erv es to “ ex pe di te li ti ga ti onan d avo idun ne ces sa ry an d ex pe ns iv e tr ia ls .” Fla . Peach Co rp . v. Co m m is si on er, 9 0 T.C. 6 78 , 68 1 (1 98 8) . Eithe r pa rty m ay

m ov e fo r su m

m ary jud gm en t upo n a ll or any partof t he leg al is su es inco nt ro ve rs y . Rul e 1 21 (a). Th e Co urt wi ll gra ntsu m m ary jud gm en t o nl y

“ if t he pl ead in gs , ans wers to in te rro ga to rie s, d ep os it io ns , adm is si on s, an d a ny ot he r acc ep tabl e m at eri al s, t og ethe r with t he affi da vi ts or d ecl arat io ns , if an y , sh ow tha t the re i s n o g enui ne di sp ut e as to any m at eri al factan d t ha t a d eci si on m ay be ren de redas am at te r of law.” R ul e 1 21 (a) and(b) . Res po nd en t, as th e m ov in g p arty , bea rs th e b ur de n o f sh owi ng th atsu m m ary ad jud ic at io n i s warrant ed . See FPL Grp ., Inc . v. Co m m is si on er, 1 15 T.C. 55 4, 5 59 (20 00 ). Res po nd en t’s m ot io n fo r su m m ary jud gm en t i s wel l fo un de d i n t he li gh t o f th e av erm en ts th erei n, the pl ead in gs , a de cl arat io n e xe cu te d b y App eal s Acc ou nt Res ol ut io n S pe ci al is t Nan cy C. Lee (AARS Lee ), an d t he adm in is tra ti ve reco rd .- 3 -

W e co nc lu de th atth ere i s n o g enui ne di sp ut e as to a m at eri al factan d t ha t res po nd en t i s en ti tl edto jud gm en t as a m at te r of law s us ta in in g t he no ti ce o f de te rm in at io n upo n wh ic h t hi s ca se is ba se d. Bac kg ro un d 2 Pet it io ne r an d h is wife (Harri so ns ) fi le d ati m el y joi ntFed eral in co m e ta x return fo r 20 09 . In M ay

20 11 th e Harri so ns subm it te d t o the Int ern al Rev enue Serv ic e (IR S) a Fo rm

10 45 , App li cat io n fo r Ten ta ti ve Refu nd , cla im in g t ax refu nd s fo r 20 08 an d 2 00 9 i n c on ne ct io n wi th th e carry ba ck of n etop erat in g lo ss es fro m

th e ta xabl e y ear 2 01 0. Abo utth e sam e ti m e, th e IRS ex am in edth e Harri so ns ’ 20 09 return and , on Ju ly 18, 2 01 1, m ai le d t he m a no ti ce o f de fic ie nc y

de te rm in in g a n i nc om e ta x de fic ie nc y

of $ 4,2 39 . The d efi ci en cy was attrib ut ab le inrel ev an t p artto di st rib ut io ns th atpe ti ti on er re cei ve d fr om ret ire m en t ac co un ts du rin g 2 00 9 b ut om itte d fr om

in co m e o n t he co up le ’s tax return. Pet it io ne r co nc ed es (an d t he reco rdrefl ect s) th athe rece iv edth e n ot ic e o f de fic ie nc y

sh ortl y aft er i t was m ai le d. OnJu ly 28, 2 01 1, p et it io ne r’s acco un tant wro te to th e IRS Taxp ay er Advo cat e Servi ce an d re qu es te d e xp ed it edpro ces si ng The fol lo win g fa ct s ar e n otindi sp ut e an d are drawnfro m th e p le ad in gs an d 2 ot he r do cu m en ts co ns ti tu ti ng th e rec or d i n t hi s ca se .- 4 -

of th e Fo rm 10 45 de sc rib edab ov e. The Harris on s d idno t fi le a pe ti ti on for red et erm in at io n wi thth e Co urt ch al le ng in g t he no ti ce o f de fic ie nc y . On No ve m

be r 14 , 20 11 , aft er the ti m e fo r fi li ng a ti m el y pe ti ti on for red et erm in at io n wi thth e Co urt h adex pi red , see sec . 62 13 (a), the IRS as se ss edth e in co m e ta x d et erm in edinth e n ot ic e o f de fic ie nc y , a lat e-p aym en t ad di ti on to tax un de r se ct io n 6 65 1( a)(2 ), an d re la te d s ta tu to ry in te res t an d s en t a n ot ic e an d de m an d fo r pa y

m en t t o t he Harri so ns . Whe n t he Harri so ns fai le d t o re m it pa ym en t, the IRS m ai le d t o t he m 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 , for20 09 . The Harri so ns subs eque nt ly file d wi th res po nd en t a t im el y Fo rm 12 15 3, Reque stfor

a Co ll ect io n Du e Pro ces s o r Equ iv al en t Hea rin g, s ta ti ng th atth ey co ul d n otpa y

th e b al an ce due an d t ha t the y in te nd edto off

er a co ll ect io n al te rn at iv e. The F orm

12 15 3 i nc lu de d ava gu e ref eren ce t o F orm s 1 04 0X, Am en de d U.S. In di vi du al Inc om e Tax Return, fo r th e y ears 20 08 th ro ug h 2 01 1 an d alaws ui t p en di ng inth e U.S. Dis tri ctCo urt fo r th e North ernDis tri ctof Geo rg ia . 3 A refu ndsu itth atpe ti ti on er fi le d fo r 20 08 was d is m is se d fo r la ckof 3 subjec t m at te r juri sd ic ti on . See Harr is on v. Un it edSta te s, No . 2: 10 -CV-0 20 9 (RWS), 20 11 W L 23 36 48 (N.D. Ga. Jan . 4, 2 01 1) . A seco ndrefu ndsu itth at pe ti ti on er fi le d fo r 20 08 , 20 09 , and20 10 was d is mis se d b ecau se of h is fai lure t o (co nt in ue d...)- 5 -

On No ve m

be r 6, 2 01 2, AARS Lee m ai le d t o t he Harri so ns a le tt er i nf orm in g th em th atsh e h adsch edul eda te le ph on e co nf eren ce fo r Decem

be r 4, 2 01 2, an d in vi ti ng th em

to subm itto th e Offi ce o f App eal s (Ap pe al s Off ic e) an off

er-i nco m pr om is e (OIC) an d aFo rm 43 3- A, Col le ct io n In fo rm at io n S ta te m en t fo r W ag e Earn ers an d S el f-Em

pl oyed In di vi du al s. OnNov em be r 19 , 20 12 , pet it io ne r wro te to AARS Lee an d s ta te d t ha t n o h eari ng wou ldbe ne ces sary be cau se th e Harri so ns owe d n o i nc om e ta x fo r 20 09 an d, i n fa ct , th ey were due a refu ndfor

th aty ear a s a res ul t o f subs tant ia l l os se s tha t the y in cu rredfro m

20 07 th ro ug h 2 01 2. AARS Lee s ub se qu en tl y

lea rn edth atth e Harri so ns ha d s ub m itte d t o t he IRS th e Fo rm 10 45 m en ti on edab ov e. On M arch 26 , 20 13 , AARS Lee h el d a te le ph on e co nf

eren ce wi th pe ti ti on er an d i nf orm edhi m

th athe wou ldno t b e pe rm it te d t o c ha ll en ge hi s u nd erl y in g t ax li ab il ity for20 09 du rin g t he App eal s Offi ce adm in is tra ti ve he ari ng be cau se th e IRS ha d i ss ue d ano ti ce o f de fic ie nc y to hi m forth aty ear a ndhe di d n otco nt es t i t. Pet it io ne r in fo rm edAARS Lee tha t h e was no t ab le to m ak e in st al lm en t p aym en ts an d p ro vi de d i nf orm at io n t o h er atth at ti m e ab ou t h is curren t i nc om e an d e xp en se s. Fo ll owi ng th is di sc us si on , AARS (...co nt inue d) 3 pr op erl y serve th e co m

pl ai nt . Harris on v. Un it edSta te s, No . 2: 11 -CV-0 23 1 (RWS) (N.D. Ga. Aug. 3 1, 2 01 2) .- 6 -

Lee co nc lu de d t ha t the Harri so ns ’ acco un t fo r 20 09 sh ou ldbe pl acedincurren tl y no t co ll ect ib le st atus . On Ap ril 1, 2 01 3, the App eal s Off ic e m ai le d t o t he Harri so ns a no ti ce o f de te rm in at io n s tati ng th atth e IRS wou ldsu sp en d t he pro po se d l ev y an d p la ce th ei r acc ountfor20 09 incurren tl y no t co ll ect ib le st atus . Peti ti on er fi le d ati m el y pe ti ti on with t he Co urt as se rti ng th atth e IRS fai le d t o p ro ces s an am en de d re tu rn th athe ha d s ub m it te d fo r 20 09 . At th e ti m e th e p et it io n was fil ed , pet it io ne r 4 res id edinGeor gi a. Pet it io ne r te st ifi edat t he he ari ng of t hi s m at te r. He ex pl ai ne d t ha t h e an d hi s wi fe were th e o wne rs of As iaSp ic es , LLC (do in g b us in es s as A Litt le Asi a Res taur an t), wh ic h h adin cu rredlo ss es th atwou ldoff se t al l o f th e in co m e th atth ey rece iv eddu rin g 2 00 9. Th e admin is tra ti ve reco rdin cl ud es co pi es of F orm s 1 04 0X fo r Asi a Sp ic es , LLC, for the tax ab le y ears 20 08 th ro ug h 2 01 2, an d fo r th e Harri so ns forth e ta xabl e y ears 20 06 th ro ug h 2 00 8. Dis cu ss io n Sect io n 6 33 1( a) au th or iz es th e Sec ret ary to lev y up onpro pe rty andpro pe rty rig ht s o f a t ax pa y er l iabl e fo r ta xe s wh o fa il s t o p ay th os e ta xe s wi th in 10 da y s aft er a n ot ic e an d d em an d fo r pa ym en t i s m ad e. Sect io n 6 33 1( d) pro vi de s tha t the Mrs . Harri so n d idno t s ig n t he pe ti ti on an d i s n ota pa rty to t hi s ac ti on . 4- 7 -

le vy autho riz edinsec ti on 63 31 (a) m ay be m ad e wit h re sp ectto unpa idtax on ly if th e Sec ret ary ha s g iv enwrit te n n ot ic e to th e ta xp ay er 3 0 d ay s b efo re the lev y . Sect io n 6 33 0( a) re qu ire s tha t the writ te n n ot ic e in cl ud e th e am ou ntof t he unpa id ta x a ndth e ta xp ay er’s ri gh t t o an a dm in is tra ti ve he ari ng . If the tax pa y er re qu es ts anadm in is tra ti ve he ari ng , th e h eari ng is to be co nduc te d b y

th e App eal s Off

ic e. Sec. 6 33 0( b) (1 ). In r en de rin g a n a dm in is tra ti ve de te rm in at io n i n aco ll ect io n re vi ew pr oc eed in g u nd er s ect io n 6 33 0, the App eal s Offi ce m us t v eri fy th atth e requi rem en ts of a ny app li cab le law an d a dm in is tra ti ve pr oc edur e h av e b eenm etinpro ces si ng th e ta xp ay er’s cas e. Sec. 6 33 0( c)(1 ), (3 )(A). The App eal s Off ic e al so m

us t co ns id er an y

is su es rai se d b y

th e ta xp ay er rel at in g t o t he co ll ect io n a ct io n, i nc lu di ng off ers of c ol le ct io n a lt ern at iv es (su chas anOIC), ap pr op ria te sp ou sa l d efen se s, an d c ha ll en ge s t o t he ap pr op ria te ne ss of th e co ll ect io n a ct io n. Se c. 63 30 (c)( 2) (A), (3 )(B) . A tax pa y er m ay ch al le ng e th e ex is te nc e o r am ou ntof h is or h er u nd erl y in g t ax li ab il ity if the tax pa y er d idno t rece iv e a n ot ic e o f de fic ie nc y or d idno t o th erwi se have anearl ie r op po rtu ni ty to di sp ut e su chtax li ab il ity . Sec. 6 33 0( c)(2 )(B) . Fin al ly, th e App eal s Off ic e m us t co ns id er wh ethe r th e co ll ect io n a ct io n b al an ces th e n eedforeffi ci en t co ll ect io n ag ai ns t the tax pa y er’s co nc ernth atco ll ect io n b e n o m or e in tru si ve th anne ces sa ry . Sec. 6 33 0( c)(3 )(C) .- 8 -

Sect io n 6 33 0( d) (1 ) gr an ts th is Co urt juris di ct io n t o re vi ew th e adm in is tra ti ve de te rm in at io n m ad e b y th e App eal s Off

ic e. If th e ta xp ay er’s un de rlyin g t ax li ab il ity

is pro pe rly in d is pu te , th e Co urt wi ll rev ie w th e de te rm in at io n d e n ov o. Go za v . Comm is si on er, 1 14 T.C. 17 6, 1 81 -1 82 (20 00 ). Whe re the un de rlyin g t ax li ab il ity is no t atis su e, we rev ie w th e d et erm in at io n fo r ab us e o f di sc ret io n. Id . at 1 82 ; s ee al so Seg o v . Comm is si on er, 1 14 T.C. 60 4, 6 10 (2 00 0) . An ab us e o f di sc ret io n o ccu rs if the App eal s Off ic e ex erci se s i ts di sc ret io n “ arb itrari ly, cap ric io us ly, orwitho utso un d b as is infactor l aw.” W oo dr al v. Co m

m is si on er, 1 12 T.C. 19 , 23 (19 99 ). Altho ug h p et it io ne r in it ia ll y ass ert edinhi s re sp on se op po si ng res po nd en t’s m ot io n fo r su m

m ary jud gm en t tha t h e d idno t re cei ve th e n ot ic e o f de fic ie nc y da te d J ul y

18 , 20 11 , he s ub se qu en tl y co nc ed edth athe rece iv edth e n ot ic e sh ortl y aft er i t was m ai le d. Th e Harri so ns di d n ottak e adva nt ag e o f th e o pp ortu ni ty to fi le a p et it io n fo r red et erm in at io n wi th th e Co urt; in st eadth ei r acc ou nt an t re qu es te d th atth e IRS ex pe di te th e p ro ces si ng of acla im for ten ta ti ve refu nd s fo r 20 08 an d 20 09 . Pet it io ne r as se rts th atth e IRS sh ou ldno t b e p erm it te d t o p ro ceedwith co ll ect io n wi th ou t fi rs t p ro ces si ng th e Fo rm 10 45 or t he am en de d t ax return t ha t he subm it te d fo r 20 09 . Peti ti on er’s arg um en t am ou nt s t o aba ckdo orch al le ng e to- 9 -

th e ex is te nc e o r am ountof h is un de rlyin g t ax li ab il ity for 20 09 withi n t he m ean in g of sec ti on 63 30 (c)( 2) (B). Ho wev er, as di sc us se d abo ve , pet it io ne r adm it s tha t h e rece iv edth e n ot ic e o f de fic ie nc y for20 09 bu t d eci de d n otto fil e a p et it io n fo r red et erm in at io n wi thth e Co urt. Co ns is te ntwith s ect io n 6 33 0( c)(2 )(B) , th e App eal s Off

ic e co rrec tl y

de te rm in edth atpe ti ti on er i s n otpe rm it te d t o c ha ll en ge th e ex is te nc e o r am ountof h is un de rlyin g t ax li ab il ity for 20 09 inth is act io n. Se e Seg o v . Comm is si on er, 1 14 T.C. at 6 11 . Eve n a ss um in g fo r th e sa ke of a rg um en t tha t we co ul d c on si de r pe ti ti on er’s co m pl ai ntth atth e IRS fai le d t o p ro ces s h is Fo rm 10 45 an d re la te d a m en de d returns , we wou ldno t o ve rtu rnth e App eal s Off ic e d et erm in at io n i n t hi s ca se . In sh ort, p et it io ne r’s subm is si on of F orm 10 45 to th e IRS cla im in g aten ta ti ve refu nd fo r 20 09 di d n otpre cl ud e res po nd en t fr om is su in g ano ti ce o f de fic ie nc y to hi m for th aty ear. Se e Zarn ow v . Comm is si on er, 4 8 T.C. 2 13 , 21 5 (1 96 7) (fai lu re t o a cton a Fo rm 10 45 withi n t he 90 -d ay

pe rio d p res cri be d i n s ect io n 6 41 1( b) do es no t pr ev en t the Co m

m is si on er fro m

de te rm in in g ade fic ie nc y forth aty ear) . Like wis e, th e Co m m is si on er i s v es te d wi th th e d is cret io n wh ethe r to acce ptan d p ro ces s an am en de d re tu rn . See, e.g ., Can tre ll v. Co m m is si on er, T.C. Mem o. 2 01 2- 25 7 (a nd cas es cit edth erei n) . Desp it e h av in g s ub m itte d aFo rm 10 45 to th e IRS , th e Harri so ns were o bl ig edto fil e a p et it io n fo r red et erm in at io n wi th th e Co urt i f th ey- 10 -

di sa gr eedwith t he no ti ce o f de fic ie nc y inan y res pe ct . Whe n t he y

fai le d t o d o t ha t, th e IRS pro pe rly ass es se d t he tax de fic ie nc y de te rm in edinth e n ot ic e o f de fic ie nc y , andth e App eal s Off ic e was un de r no ob li ga ti on pu rs ua ntto th e pr ov is io ns of s ect io n 6 33 0 t o p ro ces s the am en de d re tu rnor o th erwi se rev ie w th e am ountof p et it io ne r’s un de rlyin g l iabi li ty. On thi s re co rd , we canfin d n o abu se of di sc ret io n i n re sp ectof t he di sp os it io n o f pe ti ti on er’s am en de d re tu rn . Co ns eque nt ly, we rev ie w th e adm in is tra ti ve de te rm in at io n i n thi s ca se for ab us e o f di sc ret io n. We do no t s ub st itut e o urjud gm en t fo r th atof t he App eal s Offi ce. See Mu rp hy v. Co m m is si on er, 1 25 T.C. 30 1, 3 20 (20 05 ), aff’d, 4 69 F.3d 27 (1s t Ci r. 20 06 ). Ins te ad , we con si de r whe th er, i n t he co ur se of m ak in g i ts de te rm in at io n, the App eal s Off ic e (1 ) ve rif

ie d t ha t the requi rem en ts of app li cab le law andadm in is tra ti ve pro cedur es ha ve be enm et , (2) co ns id eredany rel ev an t is su e rai se d b y

th e ta xp ay er tha t re la te s t o t he unpa idtax or the pro po se d l ev y , and (3 ) de te rm in edwhet he r an y pro po se d c ol le ct io n a ct io n b al an ces th e n eedforth e effi ci en t co ll ect io n o f ta xe s wi th th e le gi ti m at e co nc ernof t he pe rs on th atan y co ll ect io n a ct io n b e n o m or e in tru si ve th anne ces sa ry . Sec. 6 33 0( c)(1 )-(3 ). Pet it io ne r ha s fa il edto adva nc e an y arg um en t o r in tro du ce an y ev id en ce tha t wou ldall ow u s t o c on cl ud e th atth e d et erm in at io n t o s us pe ndth e p ro po se d l ev y an d p la ce the Harri so ns ’ acco un t fo r 20 09 incurren tl y no t co ll ect ib le st atus was- 11 -

arb itrary, capri ci ou s, o r witho utso un d b as is infact . Alth ou gh pe ti ti on er d idno t subm ita writ te n OIC or aFo rm 43 3- A andrel at edfin an ci al in fo rm at io n a s reque st ed , AARS Lee acc ep te d o ral st at em en ts th athe m ad e ab ou t h is in co m e an d ex pe ns es du rin g atel ep ho ne co nf eren ce ca ll an d a ll owe d aco ll ect io n a lt ern at iv e th atis les s i nt ru si ve th anth e p ro po se d l ev y . W e h av e n o re as onto qu arre l wi th th e d et erm in at io n b y

th e App eal s Off

ic e th atth e requi rem en ts of app li cab le law an d a dm in is tra ti ve pro cedur e were m etinth is cas e o r th atpl aci ng th e Harri so ns ’ acco un t fo r 20 09 incurren tl y no t co ll ect ib le st atus ap pr op ria te ly bal an cedth e n eed fo r effi ci en t co ll ect io n o f ta xe s wi th pe ti ti on er’s co nc ern s re ga rd in g t he in tru si ve ne ss of t he pro po se d l ev y act io n. Insu m , we ho ldth atth e App eal s Off ic e di d n otab us e it s d is cret io n i n t hi s ca se . To re fle ctth e fo reg oi ng , An ap pr op ria te ord er an d de ci si on wil l b e en te red .