T.C. M em o . 2 0 1 9 -1 3

UNITED STATES TAX COURT

RONALD CURTISS GRUM BKOW , Pet it i on er v . COM M ISSIONER OF INTERNAL REVENUE, Res po n d en t

Do ck etNo . 1 5 1 07 -1 7 L. Fi l edFeb ru ary 2 8 , 2 0 1 9
.

Ro n al d Cu rt i s s Gru m

b k ow, p ro s e. W i l l i am J . Greg g an dBart h o l o m ew Ci ren za, fo r res p o n d en t .

M EM ORANDUM OPINION LAUBER, J u d g e: In th is co l l ect i o n du e p ro ces s (CDP) cas e, p et it i o n er
s eek s rev i ew p u rs u an tt o s ect i o n 6 3 3 0 (d ) 1 o f t h e d et erm i n at i o n b y th e In t ern al

1 Al l s t atut o ry

referen ces are t o th e In t ern al Rev en u e Co de i n effect atal l rel ev an t t i m es , an d al l Ru l e referen ces are t o the Tax Co urtRu l es o f Pract ice an d Pro cedure. W e ro u n d al l m o n et ary am o u n t s t o t h e n eares td ol l ar.- 2
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[* 2 ] Rev enu e Serv i ce (IRS o r res p o n d en t ) t o up h o l dth e i ss u an ce o f a n o t i ce o f i n t en tt o l ev y . Th e IRS i n i t i at edth i s co l l ect i on act i o n wi t h res pect t o p et i t i o n er’ s
u np ai dFed eral i n co m e t ax l i ab i l i t y fo r 2 0 11 . Res p o n den th as m o vedfo r s u m m ary ju d g m en tu n d er Ru l e 1 2 1 , co nt en di n g th atth ere are n o d is p u tedi s su es o f m at eri al fact an dth ath is d et erm i n at io n t o s u s tai n th e p ro po s edco l l ect i on act i o n was p ro p er
as a m at t er o f l aw. W e ag ree an dacco rd i n g ly wi l l g ran t t h e m o t i on . Back gro u n d Th e fo l l o w i n g fact s are b as edo n th e p art i es ’ p l ead i n g s an dres p o n d en t ’ s
m o ti o n p ap ers , i n cl ud i n g th e at t ach edd ecl arat io n s an d ex h i b i t s . See Ru l e 1 2 1 (b ). Th o ug h res i di ng i n No rt h Caro l i n a wh enh e fi l edh i s p et it i o n , p et i t i o n er req u es t ed W as h i n g t o n, D.C., as h is p lace o f t ri al
. Pet i t i o ner t i m el y

fi l eda Fed eral i nco m e t ax retu rn fo r 2 0 1 1 . Up o n ex am i n at i on o f h i s retu rnth e IRS d et erm i n edth ath e h adfai l edt o rep o rtcert ai n So ci al Secu ri t y i n co m e, as wel l as i nco m e fro m can cel l at i o n o f cred i t cardd eb t . On No v em b er 1 8 , 2 0 1 3 , th e IRS i ss u edh i m a n o t i ce o f d efi ci en cy refl ect i n g th es e ad ju s t m en t s . Pet i t i o ner p et i ti o n ed t h i s Co u rt fo r rev i ew. Fo ll o wi n g a t ri al we i s su eda b en ch o p i n i o n fi n d i n g th atp et i t i o n er h adco n ced edth e t ax ab i l i t y o f t h e So ci al Secu ri t y i n co m e at i s s u e b u tth atres p o n d en t h adn o t m eth i s b u rd en o f p ro du ct i o n- 3
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[* 3 ] wi t h res p ectt o th e al l eg edcan cel l at i o n -o f-d eb ti n co m e. W e acco rd i n g l y
en t ereda d eci si o n s u st ai n i n g the d efi ci en cy t o th e ex ten to f t h e t ax du e o n t h e
u n rep o rt edSo ci al Secu ri t y i n co m e. Gru m b k o w v . Co m

m is s i o n er, T.C. Dkt . No
. 2 9 8 4 -1 4 (M ay

2 9 , 2 0 1 5 ) (b en ch o p i n io n ). Th atd eci s io n i s n ow fi n al . OnOct o b er 1 9 , 2 0 1 5 , the IRS as ses s edthe d efi ci en cy as th us red et erm i n ed , p l u s ap p l i cab l e i n t eres t . Pet i t i o ner d i dn o tp ay th i s l i ab i li t y up o n n o t ice an dd em an dfo r p aym en t . OnFeb ru ary

6 , 2 0 1 7 , i n an effo rtt o co l l ectth i s o u t s t an d i n g l i ab il i ty , th e IRS s en t p et i t i o n er a Let t er 1 1 , No t i ce o f In t en tt o Lev y an dNo t i ce o f Yo u r Ri g h tt o a Heari n g . He t i m el y

req u es t ed a CDP h eari n g . In h i s h eari n g req ues t p et i t i o n er d i d n o tch eckth e b o x i n d i cat in g th ath e d es i red a co l l ect i o n al t ern at i v e. (He ch eck edthe b o x fo r “ li en wi t h drawal ,” b u tth e IRS h adn o tfi l eda n o ti ce o f Fed eral t ax l i enfo r 2 0 1 1.) Pet i t i o n er as s ert edas th e b as i s fo r h is d is p u t e t h ath e h adb een s ub j ect edt o “ h ack in g ” b y a m ed ia co m p an y
an d t h atth i s was b ei n g i nv es t i g at edb y Fed eral au t h o ri ti es . Th e IRS as s i g n edh is
cas e t o a s et t l em en t o ffi cer (SO) i n th e Fres n o , Cal i fo rn i a, Ap p eal s Offi ce. OnAp ri l 2 1 , 2 0 1 7, t he SO s en tp et i ti o n er a l et t er s ch edu l i n g a t el ep h o n e CDP h eari n g fo r J u n e 1 , 2 0 1 7
. Th e SO ad vi s ed p et i t io n er t hats h e co u l d n o tco n s i der co l l ect i o n al t ern at i v es u n l es s h e s ub m it t eda Fo rm 4 3 3 -A, Co l l ect i o n In fo r-- 4
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[* 4 ] m at i o n St at em en tfo r W ag e Earn ers an d Sel f-Em p l o y edIn d i v idu al s , an d fu l fi l l edh i s cu rren tFed eral t ax fi l i n g o b l ig at io n s. Hav i ng as cert ai n edth at p et i t i o n er h adn otfi l edFed eral i n co m e t ax retu rn s fo r 2 01 2 -2 0 1 6, t he SO i n fo rm edh i m

th ath e n eed edt o fi l e an d s up p ly h er wi t h co p i es o f retu rn s fo r t h es e fi ve y ears b efo re s h e co u l d co n s i d er an y co l l ect i o n al t ern at i v e. Th e CDP h eari n g was h el das s ch edu l edo n J u n e 1 , 2 0 1 7
. Atthatt i m e p et i

t i on er h adn o tfi l edretu rn s fo r 2 0 12 -2 0 16 o r s ub m i t t ed an y fi n an ci al d ocu m en t at i on . Th e SO ex p l ai n edth ati f h e fi l edth es e ret u rn s h e m i g h t b e en t i t l edt o refu n d s t h atco ul db e u s edt o o ffs eth i s 2 0 1 1 l i ab i l it y . Rat h er t h anex p lo re t h i s o p t i o n p et i t i on er at t em p t ed t o ch al l en g e h i s u n d erl y i n g l i ab i l i t y

fo r 2 0 1 1 . Th e SO i n fo rm edh i m th at s he co u l dn o tco n s i d er t h at i s su e b ecau s e t h e am o un to f h i s 2 0 1 1 t ax l i ab i l i t y h adb een co n cl u s iv el y d et erm i n ed b y th i s Co u rt . Sh e rei t erat edth ats h e co u l dn o tco n s i d er a co l l ect i on al t ern at i v e u n l es s h e fi l edh i s 2 01 2 -2 0 1 6 t ax return s an ds ubm i t tedth e req u es t edfi n an ci al i n fo rm at i o n . Rat h er t han d o th i s p et it i o n er s ai dth ath e wo u l dp urs u e h i s ri gh t s i n th i s Co u rt . OnJ u ne 1 3 , 2 01 7 , th e IRS i ss u edp et i t io n er a n o t i ce o f d et erm i n at i o n s u s t ai n i n g th e p ro p os edl ev y , an dh e t i m el y p et i ti o n edth i s Co urtfo r red et erm i n at i o n . He al l eg edi n h i s p et i t io n th atth e “ d et erm i n at i o n was creat edth ro ug h fal s e an d- 5
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[* 5 ] m i s l ead i n g d at a p ro du cedb y cri m i n al co l l u s i o n an ds ubt erfu g e” p ract i cedb y
a m ed i a co m

p an y an di t s as s o ci at es . He fu rt h er al l eg ed “ co n ti n u edh aras s m en to f
m y s el f an dfam i l y

b y u t i l i zi n g co n t ro l l edcas tm em b ers p o s i t i o n edwi t h i n au t h o ri

t at i v e p o s i t i o n s wi t h i n co rp o rat e, p ri v at e, an dg o v ern m en t al s ect o rs o f t he s y s t em .” OnAp ri l 3 , 2 0 1 8 , res p o n d en tfi l eda m o ti o n fo r s u m m ary ju d g m en t. Fo l

l o wi n g a h eari n g on J u n e 4 , 2 0 1 8 , we co n t i n u ed t h e cas e t o g i v e p et i t i o n er t i m e t o
s ub m i tex h i b i t s. On J ul y 1 2 an dAu g u s t 2 0, 2 0 18 , p et i t i o ner fi l edl et t ers wi t h at t ach m en t s s eem in g l y

ai m edatch al l en g i n g h i s u nd erl y in g l i ab i l it y fo r 2 0 11
. OnDecem

b er 3 , 2 0 18 , res p o n d en tfi l ed an ot h er m o t i o n fo r s u m m ary ju d g m en t . OnDecem

ber 1 7 , 2 0 1 8, p et i t i o n er fi l ed h is res p o n s e, an do n J an u ary 2 8 , 2 0 1 9 , h e fi l eda s upp lem en tt o h i s res p o n s e. Nei t h er o f t h es e fi li n g s ad dres s es an y
o f t h e i s su es rai s edi n res p o n d en t ’ s m o t io n o r al l eg es an y d i sp u t edi s s u e o f m at eri al fact
. Di s cu ss i o n A. Su m

m ary J u dg m en tSt an d ard Th e p u rp os e o f s u m

m ary ju d g m en t i s t o ex p ed it e l i t i g at i o n an d av o i dco st l y , t i m e-co n s u m i n g , an du n n eces s ary tri al s . Fl a. Peach Co rp . v . Co m m i s si on er, 9 0 T.C. 6 7 8 , 6 8 1 (1 9 8 8 ). Th e Co urtm ay g ran t s umm ary

ju d g m en twh en th ere i s n o g en ui n e d i s p u t e as t o an y m at eri al fact an da d eci s i o n m ay b e ren dered as a m at t er- 6
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[* 6 ] o f l aw. Ru l e 1 2 1 (b ); Su n d s t ran dCo rp . v . Co m m i ss i o n er, 9 8 T.C. 5 1 8 , 5 2 0 (1 9 9 2), aff’ d , 1 7 F.3 d 9 6 5 (7 t h Ci r. 1 9 9 4 ). Ind eci d i n g wh et h er t o g ran t s u m m ary ju d g m en t , we co n s t ru e fact ual m at eri al s an di n feren ces drawn fro m th em i n th e l i gh t m o s tfav orab l e t o th e n o n m o v i n g p art y . Su n d st ran d Co rp . , 9 8 T.C. at5 2 0
. Ho wev er, th e n o n m o v in g p art y m ay n o tres tup o n m ere al l eg at i o n s o r d en i al s o f h i s p l ead i n g s , b u t i n s t eadm u s t s etfo rt h s p eci fi c fact s s h o wi n g t h atth ere i s a g en ui n e d i s p u t e fo r t ri al
. Ru l e 1 2 1 (d ); s ee Su n ds t ran dCo rp ., 9 8 T.C. at5 2 0
. Fi n d in g n o m at eri al fact s t o b e i n d i s p u t e, we co n cl u d e t h atth i s cas e m ay b e ad ju d i cat eds u m

m ari ly
. B. St an dardo f Rev i ew Nei t her s ect i o n 63 2 0 (c) n o r s ect i o n 6 3 30 (d )(1 ) p res cri b es th e s t an d ardo f
rev i ew t h atth i s Co u rts h o ul dap p l y i n rev iewi n g an IRS ad m in i s t rat i v e d et erm i n at i on i n a CDP cas e. Bu to u r cas e l aw t el l s u s wh ats t an d ardt o ad o p t . Wh ere t h e
v al i d i t y o f t h e t ax p ay er’ s u n d erl y i n g t ax l i ab il i ty i s p ro p erl y

ati s s u e, we rev i ew t h e IRS’ d et erm in at i o n d e n o v o . Go za v . Co m m i s s i o ner, 1 1 4 T.C. 1 7 6 , 1 8 1 -1 8 2 (2 0 0 0). Wh ere (as h ere) t h e t ax p ay er’ s u n d erl y i n g l i ab i l i t y i s n o tb efo re u s , 2 we

2 Pet i t i on er can n otn o wch al len g e h i s u nd erl y i n g t ax l i ab il i ty b ecau s e h e h ad a p ri o r o p p o rtu n it y

t o d o s o wh en h e recei v edth e n o t i ce o f d efi ci en cy . See s ec. 6 3 3 0 (c)(2 )(B); Seg o v . Co m m i s s i o n er, 1 1 4 T.C. 6 0 4, 6 0 9 (2 0 0 0). Pet i t i o n er ex erci s edh i s o p p ortun i t y

t o ch al l en g e h i s 2 01 1 t ax l iab i l i t y wh en h e p et i ti o n edth i s

(co n ti n u ed ...)- 7
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[* 7 ] rev i ew t h e IRS d eci s i o n fo r ab u s e o f d i s cret i o n o n l y . See i d . at1 8 2 . Ab u se
o f d i s cret i o n ex is t s wh en a d et erm i n at i o n i s arb i trary , cap ri ci o u s , o r wi t h o u ts o u n d b as i s i n fact o r l aw. M u rp h y v . Co m m i s si o n er, 1 2 5 T.C. 3 0 1 , 3 2 0 (2 0 0 5 ), aff’ d , 4 6 9 F.3 d2 7 (1 s tCi r. 2 0 06 ). C. An al y s i s In d et erm in i n g wh et h er t h e SO ab u s edh er d i s cret io n we co n s i d er wh et h er
s h e: (1 ) p ro perl y

v eri fi edth atth e req u i rem en t s o f an y ap p l i cab le l aw o r ad m i n is

t rat i v e p ro cedu re h adb een m et , (2 ) co n s i d eredan y rel ev an ti s s u es p et i t i o n er rai s ed , an d (3 ) d et erm i n edwh et h er “ an y p ro p os edco l l ect i o n act io n b al an ces th e
n eed fo r t h e effi ci en tco l l ect i on o f t ax es wi t h th e l eg i ti m at e co n cern o f * * * [p et i ti o n er] t h atan y

co l l ect i o n act i o n b e n o m o re i n t ru s i v e th an n eces s ary . ” Sec. 6 3 3 0 (c)(3 ). Ou r rev i ew o f th e reco rdes t ab l i s h es t h atth e SO p ro p erl y d i s ch arg ed al l o f t h es e res p o n s i b i l i t i es . Du ri n g h i s CDP h eari n g p et i t i o n er s t at edth at h e d i s ag reedwi t h th e am o u n t du e. Bu th e was p recl u d ed fro m ch al l en g i n g h i s 2 0 1 1 t ax l i ab i l i t y atth e CDP h eari n g (an di n th is Co u rt ) b ecau s e h e h adrecei v eda n o t i ce o f d efi ci en cy . See

2 (...co n t in u ed ) Co u rt , an d o ur 2 0 1 5 d eci s i o n co n cl u s i v el y es t ab l i s h edth e am o u nto f t h atl iab i l i ty .- 8
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[* 8 ] s ec. 6 3 3 0 (c)(2 )(B). Th atg av e h i m a p ri o r o p po rtu n i t y

t o ch al len g e h i s
u n d erl y i n g t ax l iab i l i t y , an dh e i s n o ten t i t l ed t o two b i t es atth i s ap p l e. See s up ra
n o t e 2
. Pet i t i o ner d i dn o ts ubm i t an y o ffer o f a co l l ect i on al t ern at i v e. Ev en i f h e h ad d o n e s o, h e was n o ti n co m p l i an ce wi t h h i s t ax fi li n g o bl ig at i o n s fo r 2 0 1 2
- 2 0 1 6 . Th e SO co u ldp ro p erl y h av e reject edan y

p ro p o sedco l l ect i o n al t ern at i v e o n t h atg ro u n dal o n e. See Co x v . Co m m i s s io n er, 1 2 6 T.C. 2 37 , 2 58 (2 0 06 ), rev ’ do n
o t h er g ro u n d s , 5 1 4 F.3 d1 11 9 (1 0 t h Ci r. 2 00 8 ); Hu l l v . Co m m i s s io n er, T.C. M em o. 2 0 1 5 -8 6 , 1 0 9 T.C.M . (CCH) 1 4 38 , 1 44 1
. Pet i t i o ner l i k ewi s e fai ledt o s ub m i tan y o f t he req u i redfi nan ci al i n fo rm at i on . W e h av e co n si s t en t ly h el dthati ti s n otan ab u s e o f d i scret io n fo r an Ap p eal s
o ffi cer t o rejectco l lect i o n al t ern at i v es an ds u s t ai n co l lect io n act io n wh ere t h e t ax p ay er h as fai l ed , aft er b ei n g g i v en s u ffi ci en to p po rtu ni t i es , t o s up p l y th e req u i red fo rm s an di n fo rm at io n . See Hu n t res s v . Co m m is s i o n er, T.C. M em o . 2 0 0 9-1 6 1 , 9 8 T.C.M . (CCH) 8 , 1 0 -1 1 ; Prat er v . Co m m i s s i o n er, T.C. M em o . 2 0 0 7 -2 41 , 9 4 T.C.M . (CCH) 2 0 9 , 2 1 0
. Fi n d i n g n o ab u s e o f d i s cret i o n i n an y res p ect , we wi l l g ran ts u m m ary ju d g m en tfo r res po nd en tan ds u st ai n th e p ro p o s edco l l ect i o n act i on . W e n o t e t h atp et i

t i on er i s free t o sub m i tt o t h e IRS at an y t i m e, fo r i t s co n s i derat io n an d p o s s i b l e- 9
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[* 9 ] accep t an ce, a co ll ect i o n al t ern at i v e i n th e fo rm o f an o ffer-i n -co m

p ro m i s e o r
an i n s t al l m en tag reem en t , s up p o rt edb y th e n eces s ary

fi n an ci al i nfo rm at i o n . To refl ectthe fo reg o i n g , Anap p ro p ri at e o rd er an dd eci s i o n wi l l b e en t eredfo r res p on d en t .