T.C. Sum m ary Opi ni on 20 13 -4 8

UNITED STAT ES TAX COURT

LAW OFFICES OF R OBERT A. CUSHMAN, LLC, Peti ti on er v . COMMI SSIONER OF INTERNAL REVENUE, Res po nd en t

Doc ke t No . 17 30 9- 12 S L. Fil edJune 13 , 20 13
.
Ro be rt A. Cu sh m an(a m em be r), fo r pe ti ti on er. W il li am C. Bo ga rdus , forres po nd en t.

SUMM ARY OPINION PANUTHOS, Chi ef Sp eci al Trial 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 7 46 3 o f th e In te rn al Rev enue Co de ineffe ctwhen th e- 2 -

pe ti ti on was fi le d. Pur su an t t o s ect io n 7 46 3( b) , th e d eci si onto be en te redis no t 1
rev ie wab 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 nt fo r an y ot he r cas e. Thi s ca se is be fo re the Co urt o n p et it io ne r’s reque stfor rev ie w of 2
res po nd en t’s d et erm in at io n s us ta in in g t he fil in g o f a n ot ic e o f Fed eral tax li en (NFTL) with re sp ectto unpa idem pl oym en t t ax li ab il ity

forth e p eri oden di ng Decem be r 31 , 20 05 . The s ol e is su e fo r de ci si onis whet he r res po nd en t ab us edhi s di sc ret io n i n s us ta in in g t he NFTL for the pe rio d e nd in g Dec em be r 31 , 20 05 , and
no t g ran ti ng pe ti ti on er’s reque stforad di ti on al ti m e fo r a fac e-t o- face m eet in g wi th
res po nd en t’s s ettl em en t o ffi cer ( SO). Bac kg ro un d So m e o f th e fac ts ha ve be enst ip ul at ed , andwe in co rp or at e th e st ip ul at io n an d t he acco m

panyin g e xh ib it s b y

th is refer en ce. At the ti m e th e p et it io n was fil ed , pet it io ne r’s pr in ci pa l p la ce o f bu si ne ss was i n C on ne ct ic ut .

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 of 1 98 6, as am en de d. Al l Ru le refe ren ces are t o t he Tax C ou rt Ru le s o f Prac ti ce an d P ro cedur e. Pet it io ne r was rep res en te d b y Ro be rt A. Cu sh m an . Mr. Cu sh m ansi gn ed 2 th e p et it io n a s a m em

be r of th e L.L.C.- 3 -

On J anua ry

3, 2 01 2, re sp on de ntm ai le d t o p et it io ne r anNFTL for u np ai d
em pl oym en t t ax es forth e ta x p eri oden di ng Decem be r 31 , 20 05 . The NFTL sh owe d atax li ab il ity

of $ 6,6 98 .54 forth attax pe rio d, wh ic h i s the same liabi li ty th e Co urt s us ta in edinLaw Offic es of R ob ertA. Cus hm an , LLC v. Co m m is si on er, T.C. Summ ary Opi ni on20 11 -3 7, fi le d M arch 29 , 20 11
. There , th e Co urt 3
co nc lu de d t ha t re sp on de nt(1) pro pe rly ass es se d p et it io ne r’s em pl oym en t t ax li ab il ity for th e p eri oden di ng Decem be r 31 , 20 05 , (2) di d n otab us e h is di sc ret io n in co nduc ti ng pe ti ti on er’s CDP h eari ng th ro ug h c orres po nd en ce an d t el ep ho ne cal ls , and(3) di d n otab us e h is di sc ret io n i n d en y in g p et it io ne r’s reque stforan in st al lm en t ag reem en t. Pet it io ne r ti m el y subm itte 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 Hea rin g. Onth e Fo rm 12 15 3 p et it io ne r ch eck edth e b ox st at in g “ I Can no t Pa y Bal an ce” a ndreque st edth atres po nd en t withd raw the NFTL. Peti ti on er al so ass ert edth atth e d ep os itpe na lty law h ad ch an ge d a ndth atth ere wo ul d h av e b eenno pe na lty un de r th e cu rren t l aw, th at so m e b al an ces ha d b eenpa idoff bu t n otpro pe rly all oc at ed , andth ata Fo rm 43 3-

InLaw Offic es of R ob ertA. Cus hm an , LLC v. Co m m is si on er, T.C. 3 Su m m ary Opi ni on 20 11 -3 7, p et it io ne r reque st edjud ic ia l re vi ew of res po nd en t’s de te rm in at io n s us ta in in g alev y with re sp ectto th e ta x p eri oden di ng Decem be r 31 , 20 05 , th e sa m e p eri odat i ss ue inth is cas e.- 4 -

B, Co ll ect io n In fo rm at io n S ta te m en t fo r Bu si ne ss es , dat edJan ua ry 21 , 20 10 , was ne ve r co ns id ered
. Set tl em en t Offi cer M ic ha el J. Ma tu sz czak(SO Matus zcza k) sen t a l et te r to pe ti ti on er o n M arch2, 2 01 2, ac kn owl ed gi ng rece ip t o f pe ti ti on er’s Fo rm 12 15 3. SO Matus zcza k s en t an ot he r le tt er t o p et it io ne r on Marc h 2 9, 2 01 2, s ch edul in g a te le ph on e co ll ect io n due pro ces s (C DP) h eari ng forMay 16, 2 01 2, an d i nf orm in g pe ti ti on er tha t an y

reque stto res ch edul e th e CDP h eari ng ha d t o b e m ad e b y Apri l 12 , 20 12 . The Ma rch 29 , 20 12 , let te r advi se d t ha t p et it io ne r ha d h ada pr io r op po rtu ni ty to d is pu te th e und erl y in g l iabi li ty andth atpe ti ti on er the refo re wo ul d
no t b e ab le to di sp ut e th e und erl y in g l iabi li ty at th is CDP h eari ng . The l et te r al so st at edth atpe ti ti on er h adto subm ita co m pl et edFo rm

43 3- B an d m

us t h av e ti m el y pa idinful l an y

requi redFed eral tax de po si ts for SO Matus zcza k t o c on si de r co ll ect io n a lt ern at iv es . The l et te r fu rth er s ta te d t ha t p et it io ne r ha d t o s ub m ita co m pl et edan d s ig ne d F orm

12 27 7, Ap pl ic at io n fo r W ithdrawal of F il edFo rm 66 8( Y), Not ic e o f Fed eral Tax Li en , if p et it io ne r wan te d re sp on de ntto co ns id er withd rawal of t he NFTL. On Ap ril 12 , 20 12 , Mr. Cu sh m an , as an i nd iv idua l, m ai le d t o re sp on de nta co m pl et edFo rm

12 27 7. Onth e fo rm

Mr. Cu sh m anst at edth ata CDP h eari ng was- 5 -

pe nd in g a ndth athe was u nabl e to ob ta in cred itwith t he li enaffe ct in g h is cred it
sc or e. At s om e p oi ntaft er re cei vi ng th e March 29 , 20 12 , let te r sc he du li ng th e te le ph on e CDP h eari ng , pet it io ne r co nt act edSO Matus zcza k t o re qu es t a f ace- to face he ari ng . The fac e-t o- face he ari ng was s ch edul edfor May 23, 2 01 2. OnMay 22 , 20 12 , pet it io ne r’s of

fic e se nta fax to SO Matus zcza k re qu es ti ng to res ch edul e th e May 23 , 20 12 , CDP he ari ng to Ju ne 1, J un e 6 , or J un e 8 be cau se of M r. Cu sh m an ’s sch edul e. Mr. Cu sh m andi d n otap pe ar ator c al l SO M atus zcza k fo r th e CDP h eari ng sch edul edforMay 23, 2 01 2, an d a si de fro m th e Fo rm 12 27 7 M r. Cu sh m ansubm it te d a s anin di vi du al , pet it io ne r di d n otsubm itany of t he in fo rm at io n re qu es te d i n t he Marc h 2 9, 2 01 2, l et te r. On J un e 8 , 20 12 , res po nd en t m ai le d p et it io ne r a No ti ce o f Det erm in at io n Co nc ern in g C ol le ct io n Act io n( s) Und er Se ct io n 6 32 0 a nd/o r 63 30 su st ai ni ng th e NFTL. The n ot ic e o f de te rm in at io n s ta te d t ha t p et it io ne r on ly requ es te d withd rawal of t he NFTL anddi d n otreque stan y co ll ect io n a lt ern at iv e o r subm it fin an ci al in fo rm at io n re qu es te d fo r co ns id erat io n o f co ll ect io n a lt ern at iv es . Pet it io ne r fi le d t he pe ti ti on , ass ert in g a m on g o th er thi ng s tha t a C DP he ari ng was n othe ldev enth ou gh pe ti ti on er h adpro vi de d s ev eral po te nt ia l d at es fo r a h eari ng an d t ha t the Fo rm 43 3- B d at edJan uary

21 , 20 10 , was n ev er- 6 -

co ns id ered . Peti ti on er’s o nl y arg um en t attri al was tha t i t d idno t h av e a CDP he ari ng be cau se th e SO fai le d t o g ran t the reque st edex te ns io n fo r a h eari ng da te . Pet it io ne r as se rte d tha t i t i s s eek in g “ jus t a * * * face -to -fac e h eari ng ” an d t ha t i f th e Co urt wer e to rem an d t he cas e to res po nd en t’s Ap pe al s Off ic e, pe ti ti on er wou ldpro po se th atres po nd en t wi th dr aw th e NFTL as re qu es te d a nddi sc us s co ll ect io n a lt ern at iv es . Dis cu ss io n 1. Gen eral CDP Requi rem en ts If a t ax pa y er fa il s t o p ay

an y Fed eral in co m e ta x l iabi li ty after n ot ic e an d de m an d, a l ie n i n fa vo r of th e Uni te d S ta te s i s i m

po se d o n a ll th e p ro pe rty of the de li nque nttax pay er. Sec . 63 21 . Sect io n 6 32 0( a) p ro vi de s tha t wi th in fiv e bu si ne ss da y s af

te r fi li ng a no ti ce o f ta x l ie n, the IRS m us t p ro vi de writ te n n ot ic e of th atfil in g t o t he tax pa y er. Afte r rece iv in g s uc h n ot ic e, th e ta xp ay er m ay reque stanadm in is tra ti ve he ari ng be fo re the App eal s Off ic e. Sec. 6 32 0( a)(3 )(B)
. A CDP he ari ng co nc ern in g ali enun de r se ct io n 6 32 0 i s t o b e co nduc te d i n acco rd an ce wi th th e rel ev an t p ro vi si on s o f se ct io n 6 33 0. Se c. 63 20 (c). We hav e juri sd ic ti on un de r se ct io n 6 33 0( d) (1 ) to rev ie w th e Co m m is si on er’s d et erm in at io n- 7 -

th atth e NFTL was p ro pe r an d t ha t the Co m m is si on er m ay

pro ceedto co ll ectby it
. 4 Inrev ie win g t he Co m m is si on er’s d eci si on to su st ai n c ol le ct io n a ct io ns , whe re the va li di ty of th e und erl y in g t ax li ab il ity is pro pe rly at is su e, th e Co urt rev ie ws the Co m

m is si on er’s d et erm in at io n o f th e und erl y in g t ax li ab il ity de no vo . Seg o v . Comm 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, 1 81 -1 82 (20 00 ). The C ou rt r ev ie ws an y othe r adm in is tra ti ve de te rm in at io n re ga rd in g p ro po se d c ol le ct io n a ct io ns forab us e o f di sc ret io n. Se go v. Co m m is si on er, 1 14 T.C. at 6 10 ; Go za v . Comm is si on er, 1 14 T.C. at 1 82
. An 5 ab us e o f di sc ret io n o ccu rs when th e ex erci se of d is cret io n i s wi th ou t s oundba si s in factor l aw. Murp hy v. Co m m is si on er, 1 25 T.C. 30 1, 3 08 (20 05 ), aff’d, 4 69 F.3 d 2 7 (1 stCir . 20 06 ).

The Pen si on Pro te ct io n Actof 2 00 6, Pub. L. No. 1 09 -2 80 , sec . 85 5, 1 20 4 St at . at 1 01 9, am en de d s ec. 6 33 0( d) an d g ran te d t hi s C ou rt ju ris di ct io n o ve r al l se c. 63 30 de te rm in at io ns m ad e aft er Oct ob er 1 6, 2 00 6. Pe rk in s v . Comm is si on er, 12 9 T.C. 5 8, 6 3 n .7 (2 00 7)
. Pet it io ne r do es no t d is pu te th e v al id ity of t he un de rlyin g t ax li ab il ity inth is 5 pr oc eed in g. Inan y

ev en t p et it io ne r pr ev io us ly hadanop po rtu ni ty to d is pu te th is li ab il ity ina CDP h eari ng with re sp ectto a le vy for the same tax pe rio d. Se e Law Offi ces of R ob ertA. Cus hm an , LLC, v. Co m m is si on er, T.C. Su m

m ary Opi ni on 20 11 -3 7; see als o s ec. 6 33 0( c)(4 ).- 8 -

At the co ll ect io n h eari ng , a tax pa y er m ay rai se an y rel ev an t i ss ue s re la ti ng to th e unp ai d t ax or p ro po se d l ev y , in cl ud in g s po us al de fen 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 ns , andoff ers of c ol le ct io n a lt ern at iv es . Sec. 6 33 0( c)(2 )(A). Inad di ti on , he m ay ch al le ng e th e ex is te nc e o r am ountof t he
un de rlyin g t ax li ab il ity , bu t o nl y if h e d idno t re cei ve a no ti ce o f de fic ie nc y or ot he rwis e h av e anop po rtu ni ty to d is pu te su chli ab il ity . Sec. 6 33 0( c)(2 )(B)
. The App eal s o ffi cer m

us t v eri fy th atth e requi rem en ts of app li cab le law an d adm in is tra ti ve pro cedur e h av e b eenm et , con si de r th e is su es pro pe rly rais edby the ta xp ay er, an d c on si de r whe th er the pro po se d c ol le ct io n a ct io n b al an ces th e n eed fo r th e eff

ic ie ntco ll ect io n o f ta xe s wi th th e ta xp ay er’s l eg it im at e co nc ernth 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( b) , (c)(3 ). Pet it io ne r as se rts th atres po nd en t ab us edhi s d is cret io n i n s us ta in in g t he NFTL be cau se res po nd en t re fu se d t o re sc he du le pe ti ti on er’s fac e-t o- face CDP h eari ng . 2. Den ia l o f Fac e-t o- Face Heari ng Pet it io ne r arg ue s tha t i t d idno t re cei ve a CDP h eari ng an d t ha t i ts Fo rm 43 3- B was no t co ns id ered . Alth ou gh a CDP h eari ng m ay co ns is t o f a fac e-t o- face
co nf eren ce, a p ro pe r he ari ng m ay als o o ccur by tel ep ho ne or b y co rres po nd en ce un de r certa in cir cu m st an ces . Barry v. Comm is si on er, T.C. Mem o. 2 01 1- 12 7, 2 01 1 W L 22 60 41 8, at*5 (ci ti ng Katz v. Co m m is si on er, 1 15 T.C. 32 9, 3 37 -3 38 (20 00 )).- 9 -

Reque st s fo r a fac e-t o- face CDP h eari ng inord er t o d is cu ss a co ll ect io n a lt ern at iv e

“ wil l n otbe gra nt edun le ss othe r ta xp ay ers wou ldbe eli gi bl e fo r th e al te rn at iv e in si mil ar ci rcu m st an ces .” Sec. 3 01 .63 20 -1 (d )(2 ), Q&A-D8 , Pro ced . & Adm in
. Reg s. To be eli gi bl e fo r a co ll ect io n a lt ern at iv e, th e ta xp ay er m us t p ro vi de requi redreturns , m ak e requi redde po si ts of t ax , andpro vi de reque st edfin an ci al in fo rm at io n, i nc lu di ng Fo rm 43 3- B, to th e App eal s Off ic e. Id .; s ee al so Riv as v. Co m m is si on er, T.C. Mem o. 2 01 2- 20 , 20 12 W L 14 17 45 , at * 6; W il li am s v . Co m m is si on er, T.C. Mem o. 2 00 8- 17 3, 2 00 8 WL 28 34 27 5, at*9 . On it s Fo rm 12 15 3 p et it io ne r reque st edwithd rawal of t he NFTL anddi d n otreque stco ll ect io n al te rn at iv es . SO Matus zczak re qu es te d p et it io ne r to subm ita Fo rm 43 3- B an d
supp orti ng do cum en ta ti onwithi n 1 4 d ay s o f hi s M arch 29 , 20 12 , let te r if pe ti ti on er wi sh edto di sc us s co ll ect io n a lt ern at iv es . Peti ti on er n ev er s ub m it te d a
cu rren t Fo rm

43 3- B o r supp orti ng fin an ci al in fo rm at io n, an d the refo re p et it io ne r was no t el ig ib le fora co ll ect io n a lt ern at iv e. Co ns eque nt ly, res po nd en t’s Ap pe al s Offi ce d idno t ab us e it s d is cret io n b y de nyin g p et it io ne r’s reque stto res ch edul e th e fac e-t o- face he ari ng , andpe ti ti on er was affo rd eda reas on ab le op po rtu ni ty to be he ardfor

th e ta x p eri odat i ss ue . See Ro m anv. Co m m is si on er, T.C. Mem o. 20 04 -2 0.- 10 -

3. Refu sa l To Gran t Co nt in ua nc e an d Den ia l o f Co ll ect io n Al te rn at iv es Pet it io ne r fu rth er co nt en ds th atres po nd en t’s Ap pe al s Off ic e ab us edit s di sc ret io n wh enitde ni edpe ti ti on er’s reque stfora co nt in ua nc e o f th e CDP he ari ng an d d idno t co ns id er co ll ect io n a lt ern at iv es . W hi le anApp eal s o ffi cer’s
un reas on ab le de ni al of areque stform or e ti m e to subm itfin an ci al in fo rm at io n o r ot he r ev id en ce m ay

be anab us e o f di sc ret io n, s ee Sh an le y v. Co m m is si on er, T.C. Mem o. 2 00 9- 17 , 20 09 W L 19 59 29 , at * 5; see als o S ul li va n v . Commis si on er, T.C. Mem o. 2 01 2- 33 7, at*2 0, we co nc lu de th atth e d en ia l b y th e App eal s Off

ic e was no t an ab us e o f di sc ret io n. Pet it io ne r le arn edof the CDP h eari ng sch edul edforMay 16, 2 01 2, wh enit
rece iv edth e March 29 , 20 12 , let te r fro m SO Matus zcza k. Th e March 29 , 20 12 , le tt er cl earl y

in fo rm edpe ti ti on er tha t i t s ho ul d m ak e an y reque st s t o re sc he du le th e CDP h eari ng by Apr il 12 , 20 12 . The l et te r al so reque st eda cu rren t Fo rm 43 3- B s o th atSO Matus zczak c ou ldde te rm in e whe th er p et it io ne r qu al ifi edforan y co ll ect io n a lt ern at iv es . SO Matus zcza k a gr eedto res ch edul e th e CDP h eari ng to May 23, 2 01 2. Whe n p et it io ne r reque st edto res ch edul e th e h eari ng forth e se co ndti m e, pe ti ti on er m ad e th e reque ston May 22, 2 01 2, ju ston e d ay be fo re the sch edul edhe ari ng da te . Pet it io ne r ha d n otpro vi de d t he fin an ci al in fo rm at io n re qu es te d i n t he Marc h 2 9,- 11 -

20 12 , let te r an d re qu es te d t he ex te ns io n b ecau se of M r. Cu sh m an ’s sch edul in g pr ob le m , no t b ecau se pe ti ti on er n eed edm or e ti m e to co m pl et e th e reque st ed fin an ci al in fo rm at io n. A tax pa y er m ay

rai se co ll ect io n a lt ern at iv es th atm ay in cl ud e anin st al lm en t ag reem en t o r anoff

er-i n- co m pr om is e. Secs . 63 20 (c), 6 33 0( c)(2 )(A)(i ii ). Pet it io ne r di d n otreque stan y co ll ect io n a lt ern at iv es . In the Marc h 2 9, 2 01 2, le tt er, the SO reque st eda curren t Fo rm 43 3- B s o t ha t h e co ul d d et erm in e whe th er pe ti ti on er qua li fie d fo r any co ll ect io n a lt ern at iv es . Peti ti on er d idno t p ro vi de a cu rren t Fo rm

43 3- B b ut , init s p et it io n, as se rte d t ha t a F orm 43 3- B d at edJan ua ry 21 , 20 10 , was n otco ns id ered . W e h av e co ns is te nt ly hel d t ha t i t i s n otanab us e o f di sc ret io n fo r th e App eal s Off ic e to rejectco ll ect io n a lt ern at iv es an d s us ta in th e pr op os edco ll ect io n a ct io n o n t he ba si s o f th e ta xp ay er’s fai lu re t o s ub m it reque st edfin an ci al in fo rm at io n. Se e Hun tre ss v. Co m m is si on er, T.C. Mem o. 20 09 -1 61 ; Pr at er v . Comm is si on er, T.C. Mem o. 2 00 7- 24 1; Ro m anv. Co m m is si on er, T.C. Mem o. 2 00 4- 20 . Peti ti on er was aware t ha t SO M atus zcza k ha d re qu es te d c urren t fi na nc ia l i nf orm at io n, an d p et it io ne r fai le d t o p ro vi de it
. On the se fact s, we ca nn otfin d t ha t the de ni al of t he ex te ns io n b ecau se of pe ti ti on er’s fai lu re t o s ub m itreque st edfin an ci al in fo rm at io n was arb itrary, cap ric io us , or wi th ou t s ou ndba si s i n fa ctan d l aw. Furth erm or e, itwas n otan- 12 -

ab us e o f di sc ret io n fo r th e App eal s Off ic e to rejectco ll ect io n a lt ern at iv es be cau se of a la ckof n eces sary

fin an ci al in fo rm at io n. Pe ti ti on er h as no t s ho wn tha t res po nd en t’s d et erm in at io n t o s us ta in th e NFTL bec au se of i ts unpa idtax li ab il it ie s fo r th e ta x p eri oden di ng Decem be r 31 , 20 05 , andfai lu re t o s ub m ita cu rren t Fo rm

43 3- B was arb itrary, capri ci ou s, o r witho utso un d b as is infactor law. 4. Co nc lu si on On the ba si s o f ou r fi nd in gs st at edab ov e, we su st ai n re sp on de nt ’s de te rm in at io n fo r th e ta x p eri oden di ng Decem be r 31 , 20 05 . W e al so co nc lu de th atth ere was no ab us e o f di sc ret io n i n c on du ct in g p et it io ne r’s CDP h eari ng th ro ug h c orres po nd en ce an d t el ep ho ne cal ls an d n o abu se of d is cret io n i n d en y in g pe ti ti on er co ll ect io n a lt ern at iv es . W e h av e co ns id eredth e p art ie s’ arg um en ts an d, t o t he ex te ntno t d is cu ss ed he rei n, we co nc lu de th e arg um en ts to be irr el ev an t, m oo t, o r witho utm eri t. To re fle ctth e fo reg oi ng , Deci si on wil l b e en te redfor
res po nd en t.