12-2446-ag

Williams v. Comm'r

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

August Term 2012

(Submitted: May 13, 2013 Decided: May 21, 2013)

Docket No. 12-2446-ag

_____________________

OLIVER W. WILLIAMS,

Petitioner-Appellant,

HARRIET S. WILLIAMS,

Petitioner,

V.

COMMISSIONER OF INTERNAL REVENUE,

Respondent-Appellee.

_____________________

Before:

CHIN and LOHIER, Circuit Judges, and SWAIN, District 

Judge.

* 

_____________________

 

* The Honorable Laura Taylor Swain, of the United States 

District Court for the Southern District of New York, sitting by 

designation.
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Appeal from an Order and Decision of the United 

States Tax Court (Armen, J.) granting summary judgment in 

favor of the Commissioner of Internal Revenue and 

sustaining a proposed levy to recover outstanding income 

tax liabilities for the 2000, 2001, and 2002 taxable years. 

AFFIRMED.

_____________________

Oliver W. Williams, pro se, Ossining, New 

York, Petitioner-Appellant.

Patricia McDonald Bowman, Joan I. 

Oppenheimer, for Kathryn Keneally, 

Assistant Attorney General, United 

States Department of Justice, Tax 

Division, Washington, District of 

Columbia, for Respondent-Appellee.

_____________________

PER CURIAM:

Petitioner-appellant Oliver W. Williams, an 

attorney, appeals pro se from an Order and Decision dated 

May 14, 2012 of the United States Tax Court (Armen, J.) 

granting summary judgment in favor of respondent-appellee 

Commissioner of Internal Revenue (the "Commissioner") and 

sustaining a proposed levy to collect outstanding income 
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tax liabilities owed by Williams and his wife for the 2000, 

2001, and 2002 taxable years. We affirm.

BACKGROUND

Between 1995 and 2002, Williams and his wife 

("taxpayers") underpaid their federal income taxes. In 

2006, the Internal Revenue Service (the "IRS") notified 

taxpayers that it planned to seek a federal tax lien 

against the outstanding tax liability. The tax court ruled 

against the taxpayers, sustaining the IRS's proposed tax 

lien, and on appeal -- where taxpayers did not contest the 

underlying tax liability for those taxable years -- we 

affirmed. See Williams v. Comm'r, 299 F. App'x 92, 93-94

(2d Cir. 2008) (summary order). 

By 2010, of the tax liability at issue in the 

previous litigation, only three years of income tax 

liability remained in dispute: 2000, 2001, and 2002. On 

October 15, 2010, the IRS sent taxpayers a Final Notice of 

Intent to Levy and of Your Right to a Hearing. The notice 

stated that the IRS intended to levy $17,949.76, 

$22,698.26, and $19,955.01, inclusive of penalties and 

interest, for the 2000, 2001, and 2002 taxable years, 
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respectively. In addition, the IRS notified taxpayers of 

their right to contest the levy in a collection due process 

("CDP") hearing. Taxpayers, proceeding without 

representation, timely requested a CDP hearing; they (1)

claimed they had no tax liability; (2) contended that, even 

if tax were owed, it was not collectible; and (3) 

challenged certain IRS procedures.

By letter dated January 25, 2011, Thomas A. 

Conley, a settlement officer with the IRS Office of Appeals 

("Appeals Office") scheduled a February 24, 2011 telephone 

conference with taxpayers. The letter indicated that 

Conley could not consider collection alternatives unless 

taxpayers completed a Collection Information Statement and 

verified their income and expenses. Conley further 

informed taxpayers that they were required to submit all 

outstanding federal income tax returns. In response, on 

three separate occasions, taxpayers requested an in-person 

hearing in New York City; Conley told them, however, that 

an in-person CDP hearing was not possible unless taxpayers

provided the requested information. Taxpayers did not 
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comply with the document request and did not call in for 

the scheduled telephone conference. 

On March 21, 2011, the Appeals Office issued a 

Notice of Determination sustaining the proposed levy. 

Taxpayers timely filed a petition in the tax court, 

appealing the determination and alleging, inter alia, that 

the Appeals Office had failed to grant them a face-to-face 

CDP hearing and wrongly sustained the levy. The 

Commissioner moved for summary judgment, arguing that 

Conley had acted within his discretion in sustaining the 

levy without granting the request for an in-person hearing. 

The tax court granted the motion. Williams timely 

appealed.

DISCUSSION

A. Standard of Review

We review decisions of the tax court "in the same 

manner and to the same extent as decisions of the district 

courts in civil actions." IRC § 7482(a)(1). Hence, we 

review de novo a grant of summary judgment by the tax 

court. See Eisenberg v. Comm'r, 155 F.3d 50, 53 (2d Cir. 

1998). To review the tax court's grant of summary 
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judgment, we must also review the decision by the Appeals

Office. We have not, however, established the appropriate 

standard of review for an appeal arising from a CDP 

hearing.

1

The CDP hearing was created by the IRS 

Restructuring and Reform Act of 1998. Pub. L. No. 105-206, 

§ 3401, 112 Stat. 685, codified at IRC § 6330. It provided

a taxpayer with an opportunity to challenge an IRS levy 

before seizure through an independent appeals process. See

IRC § 6330(a)(1). Although the statute codifies the right 

to judicial review of the IRS appeals process by a tax 

court, see IRC § 6330(d)(1), it does not identify the 

standard of review. The legislative history, however, is 

instructive:

 

1 We have repeatedly set forth the standard of review in 

summary orders, see Sher v. Comm'r, 381 F. App'x 62, 63-64 (2d 

Cir. 2010) (summary order) (abuse of discretion review when 

appellants do not contest underlying tax liability in CDP 

hearing); Salazar v. Comm'r, 338 F. App'x 75, 77 (2d Cir. 2009) 

(summary order) (same); Reichle v. Comm'r, 303 F. App'x 987, 988 

(2d Cir. 2008) (summary order) (same); Block v. Comm'r, 301 F. 

App'x 75, 77 (2d Cir. 2008) (summary order) (de novo review of 

tax court decisions, applying the same standards as the tax 

court: review of CDP hearings for abuse of discretion where 

underlying liability is not contested and de novo review when it 

is), but we have not issued a precedential opinion in this 

respect.
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Where the validity of the tax liability was 

properly at issue in the hearing, and where the 

determination with regard to the tax liability is 

a part of the appeal, no levy may take place 

during the pendency of the appeal. The amount of 

tax liability will in such cases be reviewed by 

the appropriate court on a de novo basis. Where 

the validity of the tax liability is not properly 

part of the appeal, the taxpayer may challenge the 

determination of the appeals officer for abuse of 

discretion. 

H.R. Conf. Rep. No. 105-599, at 266 (1998). Many courts 

have adopted this tiered standard of review. See Kindred 

v. Comm'r, 454 F.3d 688, 694 (7th Cir. 2006); Robinette v. 

Comm'r, 439 F.3d 455, 458-59 & n.2 (8th Cir. 2006); Living 

Care Alts. of Utica, Inc. v. United States, 411 F.3d 621, 

626 (6th Cir. 2005). See also Dalton v. Comm'r, 682 F.3d 

149, 155-56 (1st Cir. 2012) (reviewing factual and legal 

conclusions for reasonableness, which is "part and parcel" 

of the abuse of discretion inquiry). We expressly adopt 

that standard today. Therefore, because Williams has 

abandoned his challenges to the validity of the underlying 

tax liability, he may challenge the Appeals Office's

decision only for abuse of discretion. See Jones v. 

Comm'r, 338 F.3d 463, 466 (5th Cir. 2003) (per curiam) ("In 

a collection due process case in which the underlying tax 
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liability is properly at issue, the Tax Court (and hence 

this Court) reviews the underlying liability de novo and 

reviews the other administrative determinations for an 

abuse of discretion.").

B. Determination Without Face-to-Face CDP Hearing

1. Applicable Law

Before the IRS imposes a levy, it must notify a

taxpayer of his right to request a CDP hearing. IRC

§ 6330(a)(1). As part of the hearing, the Appeals Office 

must verify "that the requirements of any applicable law or 

administrative procedure have been met." Id. § 6330(c)(1). 

A CDP hearing, although it provides a taxpayer with an 

opportunity to be heard, is "informal in nature" and does 

not require a face-to-face meeting. Treas. Reg. 

§ 301.6330-1(d)(2), A-D6. A taxpayer who presents 

"relevant, non-frivolous reasons" for disagreeing with the 

proposed levy will "ordinarily" be offered an in-person 

hearing, id. at A-D7; a face-to-face meeting, however, is 

not required. In fact, a CDP "hearing" may consist of "one 

or more written or oral communications" between the Appeals 

Office and the taxpayer or merely a "review of the 
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documents in the case file." Id. at A-D6 & A-D7. Even if 

the CDP hearing consists of an in-person meeting or a 

telephone conversation, a "transcript or recording . . . is 

not required." Id. at A-D6.

At the CDP hearing, the taxpayer may challenge the 

propriety of the collection action, propose a collection 

alternative, or raise any other relevant issue pertaining 

to the unpaid tax. Id. § 6330(c)(2)(A). Generally, 

however, a taxpayer may not challenge the underlying tax 

liability unless he "did not otherwise have an opportunity 

to dispute such tax liability." Id. § 6330(c)(2)(B); see 

also Deutsch v. Comm'r, 478 F.3d 450, 452 (2d Cir. 2007)

(petitioner's attorney consented to tax assessment and 

waived right to contest liability, precluding a later 

challenge). The IRS may request, and a taxpayer "will be 

expected to provide[,] all relevant information requested 

by Appeals, including financial statements, for its 

consideration of the facts and issues involved in the 

hearing." Treas. Reg. § 301.6330-1(e)(1). Moreover, if 

offering collection alternatives, a taxpayer must first

file all required tax returns before seeking an in-person 
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conference. See id. § 301.6330-1(d)(2), at A-D8 (noting 

that IRS generally will not entertain offers to compromise 

in person unless the taxpayers would be eligible in other 

circumstances). 

2. Application

Williams argues that Conley abused his discretion 

by issuing a determination on the proposed levy without 

first affording him an in-person CDP hearing. This 

argument has no merit. 

As an initial matter, Williams assumes that he is 

entitled to a face-to-face conference. This misstates the 

law, and numerous courts have concluded that the IRS may 

issue a final determination without an in-person hearing. 

See, e.g., Murphy v. Comm'r, 469 F.3d 27, 30 (1st Cir. 

2006) (CDP hearing process is informal and "no face-to-face 

meetings are necessary"); Kindred, 454 F.3d at 691 n.7, 695 

n.19 (CDP hearings need not be face-to-face); see also

Treas. Reg. § 301.6330-1(d)(2), A-D6.

Moreover, the IRS was justified in denying a faceto-face hearing here for three reasons. First, Williams 

presented Conley with only frivolous arguments. See Treas. 
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Reg. § 301.6330-1(d)(2), A-D7 & A-D8. He challenged his 

underlying tax liability even though he had received "an 

opportunity to dispute such tax liability" in the prior 

litigation. IRC § 6330(c)(2)(B); see Williams, 299 F. 

App'x at 93. He also argued that collection was timebarred even though a tolling statute extended the statute 

of limitations for the duration of any CDP hearing and 

subsequent related appeals. See IRC § 6502(a)(1) (ten-year 

statute of limitations for collection of taxes); id. § 

6330(e)(1) (tolling statute); see also Lunsford v. Comm'r, 

117 T.C. 183, 189 (2001) (taxpayers who abandoned arguments 

and raised only previously-rejected legal arguments were 

not entitled to CDP hearing). 

Second, despite requests from Conley to do so, 

Williams never submitted the 2009 tax return or the other 

requested documentation. The IRS will not grant a face-toface hearing to "a taxpayer who wishes to make an offer to 

compromise" but has not yet filed required returns or made 

certain deposits of tax. Treas. Reg. § 301.6330-1(d)(2),

at A-D8. Because Williams did not comply with the document 

request, Conley acted within his discretion to deny an in-
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person hearing. See, e.g., Klingenberg v. Comm'r, 104 

T.C.M. (CCH) 470, at *7 (2012) (no abuse of discretion to 

deny face-to-face hearing where, inter alia, taxpayer never 

submitted requested financial information or tax returns); 

see also Rodriguez v. Comm'r, 85 T.C.M. (CCH) 1414, at *4-5 

(2003). 

Third, Conley consulted internal IRS procedures 

before denying the face-to-face hearing. These guidelines 

directed the Appeals Office to deny in-person hearing 

requests when a taxpayer made only frivolous or dilatory 

arguments, or did not file all required returns. 

Accordingly, Conley did not abuse his discretion by denying

an in-person hearing or by sustaining the proposed levy, 

and, therefore, the tax court did not err by so concluding. 

CONCLUSION

For the foregoing reasons, the Order and Decision 

of the tax court is AFFIRMED.