United States Tax Court

T.C. Memo. 2023-132

LIOR BLAS,

Petitioner

v.

COMMISSIONER OF INTERNAL REVENUE,

Respondent

LEO BLAS,

Petitioner

v.

COMMISSIONER OF INTERNAL REVENUE,

Respondent

—————

Docket Nos. 1031-17, 12485-20L. Filed November 6, 2023.

—————

Lior Blas, pro se.1

Amy Chang and Gregory M. Hahn, for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

PUGH, Judge: We tried these two consolidated cases at our

Anchorage, Alaska, remote trial session. The year in issue, 2014, is the 

same in both cases. The deficiency case, at Docket No. 1031-17, 

challenges the Internal Revenue Service’s (IRS’s or respondent’s) notice 

of deficiency increasing petitioner’s income tax liability for 2014 by the 

amount of the advance premium tax credit (APTC) benefit that was 

applied against his monthly health insurance premiums in 2014. The

1 Petitioner filed his petitions in these consolidated cases using two separate 

first names—Lior and Leo—but confirmed at trial he goes by both names.

Served 11/06/23
2

[*2] collection case, at Docket No. 12485-20L, challenges, under section 

6330(d), respondent’s notice of determination sustaining the proposed 

collection by levy of tax petitioner reported on his 2014 Form 1040, U.S. 

Individual Income Tax Return.2 For the reasons summarized below we 

sustain respondent’s determinations in both cases.

FINDINGS OF FACT

The facts we find are derived from the pleadings, trial testimony, 

documents admitted into evidence, stipulated facts and documents, and 

include the administrative record of the collection case. Petitioner

resided in Alaska when he timely filed both petitions.

A. Health Insurance Coverage

In November 2013 petitioner was unemployed and without health 

insurance. Petitioner was concerned that he would be penalized if he did 

not have health insurance coverage for 2014; therefore, he applied for 

health insurance through the Federal Health Insurance Marketplace 

(Marketplace) website. On his application petitioner indicated that his

household income was $15,000. He qualified for the maximum APTC 

benefit on the basis of the information he supplied on the application. 

Petitioner enrolled in the MODA Health Plan, Inc. (MODA), “Be Aligned 

Plan” with a coverage start date of January 1, 2014. The monthly 

premium for the Be Aligned Plan was $694 (a total of $8,328 for 2014).

In December 2013 MODA sent petitioner a letter thanking him for 

choosing MODA. MODA also issued an insurance card to petitioner and 

mailed it to his home address in Chugiak, Alaska.

In December 2013 petitioner secured employment with MRI 

Contract Staffing (MRI). Petitioner was employed with MRI throughout 

2014. MRI paid him wages of $82,000 over the course of 2014. Petitioner 

never reported this improvement in his financial situation to the 

Marketplace. Petitioner did not receive health insurance from MRI. Nor

did he have Medicare or TRICARE coverage at any point during 2014.

Petitioner’s Marketplace coverage with MODA continued 

throughout 2014. The APTC payments covered the full amount of his

2014 insurance premiums; therefore, MODA did not send him any 

2 Unless otherwise indicated, statutory references are to the Internal Revenue 

Code, Title 26 U.S.C., in effect at all relevant times, regulation references are to the 

Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all relevant times, and 

Rule references are to the Tax Court Rules of Practice and Procedure.
3

[*3] billing statements regarding his 2014 health insurance coverage.

MODA sent a billing statement in December 2014 notifying petitioner 

that a premium of $237 was due for insurance coverage beginning 

January 2015. MODA sent additional letters and billing statements to 

petitioner in 2015 seeking payment of outstanding insurance premiums 

for his 2015 health insurance coverage. On January 12, 2015, petitioner 

received from the Marketplace a Form 1095–A, Health Insurance 

Marketplace Statement, and a letter informing him that he was 

required to complete and file Form 8962, Premium Tax Credit (PTC), 

with his 2014 federal income tax return.

B. Tax Return and Examination

Petitioner filed his 2014 Form 1040 on October 19, 2015. On it he 

reported adjusted gross income (AGI) of $83,742, consisting of wages 

($82,000), taxable interest ($58), and other income ($1,884), less student 

loan interest ($200). He claimed one personal exemption and no 

dependents. Petitioner did not attach Form 8962 to his return. He 

reported a balance due of $3,690 on his return. Respondent assessed the 

tax shown, a section 6651(a)(2) addition to tax, and statutory interest.

On January 25, 2016, during the examination of petitioner’s 2014 

federal tax return, the IRS asked petitioner to complete and file Form 

8962. Petitioner completed this form by reporting a family size of two,3

a modified AGI of $83,942, and a value of $8,328 on line 11, column (f), 

Annual Advance Payment of PTC.

On November 22, 2016, respondent issued the notice of deficiency 

to petitioner for 2014. Respondent determined that petitioner received 

the benefit of APTC payments of $8,328, was not entitled to any PTC for 

2014, and therefore was responsible for repaying the excess APTC paid 

on his behalf. At the time, petitioner had a balance due with respect to

the tax he reported on his Form 1040.

C. Administrative Hearing

On July 31, 2019, respondent sent petitioner a Letter 1058, Notice 

of Intent to Levy and Notice of Your Right to a Hearing (levy notice) 

regarding the tax petitioner reported on his Form 1040. Petitioner 

timely filed a request for an administrative hearing. Settlement Officer 

Simarjit Singh (SO Singh) was assigned petitioner’s administrative 

3 Petitioner had a family size of one for 2014, but if we assume he had a family 

size of two our conclusions would not change.
4

[*4] hearing request. At the administrative hearing, petitioner told SO 

Singh that he was disputing the tax he reported on his 2014 Form 1040 

in his deficiency case. SO Singh indicated that petitioner’s deficiency 

case “was for the proposed underreporting [of] income that had no 

bearing [in] regards to [the] liability listed on the [levy notice].”

Respondent issued petitioner the notice of determination on September 

29, 2020.

D. U.S. Bankruptcy Court Proceedings

At the same time petitioner has been seeking relief in this Court, 

he also has been pursuing relief in bankruptcy. Petitioner initially filed 

a petition with the U.S. Bankruptcy Court for the District of Alaska 

(bankruptcy court) on November 30, 2017. He filed that bankruptcy 

petition under 11 U.S.C. chapter 13 but his case was converted to a 

chapter 7 proceeding on February 13, 2019. The parties did not notify 

the Court promptly that it should stay the pending deficiency case

pursuant to 11 U.S.C. § 362(a)(8). The bankruptcy court discharged 

petitioner’s debt on May 31, 2019.

This Court tried the deficiency case on June 18, 2018, and on 

November 18, 2019, issued Blas v. Commissioner, T.C. Memo. 2019-152,

and entered a decision for respondent. We subsequently withdrew the

memorandum opinion and vacated the decision because they were based 

on evidence from a trial that occurred during the automatic stay.

Because the automatic stay was lifted when the bankruptcy court 

discharged petitioner’s debt on May 31, 2019, the proceedings before this 

Court could and did resume, and we tried both cases remotely. But 

during posttrial briefing, on August 15, 2022, petitioner again filed a 

petition in the bankruptcy court under 11 U.S.C. chapter 13. As a result, 

all proceedings again were automatically stayed pursuant to 11 U.S.C. 

§ 362(a)(8). Petitioner’s newest bankruptcy case was dismissed on 

March 2, 2023, once again lifting the stay of proceedings in this Court.

OPINION

I. Deficiency Case

A. Burden of Proof and Production

First we address the burden of proof in this case. Ordinarily, the 

burden of proof in cases before the Court is on the taxpayer. Rule 142(a); 

Welch v. Helvering, 290 U.S. 111, 115 (1933). Generally, under section 
5 

[*5] 7491(a)(1), “[i]f, in any court proceeding, a taxpayer introduces 

credible evidence with respect to any factual issue relevant to 

ascertaining the liability of the taxpayer for any tax imposed by subtitle 

A or B, the Secretary shall have the burden of proof with respect to such 

issue.” Higbee v. Commissioner, 116 T.C. 438, 442 (2001). Petitioner has 

not presented credible evidence sufficient to shift the burden of proof to 

respondent as to any relevant factual issue under section 7491(a). 

We now turn to the burden of production. Petitioner argues that 

respondent must produce evidence that the APTC payments were made 

on his behalf. Respondent disagrees and contends that nothing in the 

Code places the burden on him to produce affirmative proof of the APTC 

payments. Specifically, respondent argues that he does not bear the 

burden of production under section 6201(d).

But the resolution of this case does not hinge on which party has 

the burden of proof or production. At trial petitioner admitted that, at 

the very least, he “inquired” about his eligibility for insurance. The 

record includes a letter to petitioner from MODA indicating that he was 

insured as of December 2013, and a copy of his insurance card. The 

record also includes a Form 1095–A listing the PTCs attributable to him 

to cover his insurance for 2014. Viewed together, this evidence 

constitutes sufficient proof that he acquired coverage through the 

Marketplace for which advance payments of his insurance premiums 

were made.

 Petitioner contends that proving the absence of something (in his 

case, payments for health insurance coverage) is not possible. We agree 

that proving the absence of something is not always easy, but we need 

not debate about how one might prove the absence of something because 

respondent has submitted relevant admissible evidence of payments 

made on petitioner’s behalf.4

B. Advance Premium Tax Credit

 Section 36B allows a PTC to subsidize the cost of health insurance 

purchased through a health insurance exchange by taxpayers meeting 

certain statutory requirements. See Treas. Reg. § 1.36B-2(a). The PTC 

is generally available to individuals with household income between 

100% and 400% of the federal poverty line amount for the year at issue. 

4 At trial petitioner repeatedly raised relevance objections which we said were 

best considered in the context of the entire record. Our analysis demonstrates the 

relevance of, and weight that should be accorded, that evidence.
6 

[*6] § 36B(c)(1)(A), (d)(3)(B); see also McGuire v. Commissioner, 149 T.C. 

254, 259 (2017). The federal poverty line amount is established by the 

most recently published poverty guidelines in effect on the first day of 

the open enrollment period preceding that tax year. Treas. Reg. § 1.36B1(h). Notably, the applicable federal poverty line for a family of one in 

Alaska is $14,350 and 400% of that is $57,400. See Annual Update of the 

HHS Poverty Guidelines, 78 Fed. Reg. 5182, 5183 (Jan. 24, 2013).

Recipients can choose to receive the PTC benefits in advance, in 

which case the payments are made directly to the insurer. See § 36B; 

McGuire, 149 T.C. at 260. At the end of the year, a taxpayer who received 

an APTC must reconcile the amount of the PTC already received with 

the entitlement amount. § 36B(f)(2). The taxpayer may do so by 

completing a Form 8962 and filing it with his federal tax return. If the 

APTC is greater than the entitlement amount, the taxpayer must repay

the excess APTC, reflected as an increase in tax. § 36B(f)(2)(A); see also 

Keel v. Commissioner, T.C. Memo. 2018-5, at *6.

 Petitioner elected to receive the APTC benefit. He qualified for 

the APTC on the basis of his representation on his Marketplace 

application that his household income was $15,000. The 2014 monthly 

premiums for the Be Aligned Plan—totaling $8,328 for the year—were 

paid on petitioner’s behalf. He secured employment with MRI, which 

paid him wages of $82,000 in 2014. His household income for 2014 

therefore exceeded 400% of the federal poverty line amount for the year 

at issue ($57,400); consequently, he is not entitled to any of the APTC 

he received. Because petitioner is responsible for repaying the excess 

APTC paid on his behalf,5 we sustain respondent’s deficiency 

determination.

II. Collection Case

A. Standard of Review

Where the amount of a taxpayer’s underlying tax liability is 

properly at issue in a collection case, we review the IRS’s determination 

de novo. Goza v. Commissioner, 114 T.C. 176, 181–82 (2000). Section 

6330(c)(2)(B) permits taxpayers to challenge the existence or amount of 

5 Petitioner also raised an alternative argument that even if he had a deficiency 

resulting from the APTC he had offsetting deductions. But he did not substantiate any 

deductions.
7 

[*7] their underlying tax liability only if they did not receive a notice of 

deficiency or otherwise have a prior opportunity to contest that liability. 

Where the underlying tax liability is not properly at issue, we 

review the IRS’s determinations for abuse of discretion. Hoyle v. 

Commissioner, 131 T.C. 197, 200 (2008), supplemented by 136 T.C. 463 

(2011); Goza, 114 T.C. at 182. Abuse of discretion exists when a 

determination is arbitrary, capricious, or without sound basis in fact or 

law. See Murphy v. Commissioner, 125 T.C. 301, 320 (2005), aff’d, 469 

F.3d 27 (1st Cir. 2006). The burden is on the taxpayer to prove that the 

settlement officer abused her discretion. Rule 142(a); see Woodral v. 

Commissioner, 112 T.C. 19, 23 (1999).

In deciding whether a settlement officer abused her discretion in 

sustaining the collection action we consider whether she (1) properly 

verified that the requirements of any applicable law or administrative 

procedure have been met; (2) considered any relevant issues the 

taxpayer raised; and (3) determined whether “any proposed collection 

action balances the need for the efficient collection of taxes with the 

legitimate concern of the [taxpayer] that any collection action be no more 

intrusive than necessary.” See § 6330(c)(3).

B. Underlying Liability

The parties agree that petitioner’s underlying liability for 2014 is 

properly at issue in the collection case. Specifically, respondent points 

out that at the administrative hearing petitioner informed SO Singh 

that he was disputing the tax he reported on his 2014 Form 1040 in his 

deficiency case. SO Singh did not think the underlying liability was at 

issue; therefore respondent states that petitioner attempted to raise the 

issue in the administrative hearing but was deprived of the opportunity 

to discuss the issue further. Accepting that petitioner’s underlying 

liability is properly at issue, we review the IRS’s determination de novo. 

See Goza, 114 T.C. at 181–82. Petitioner, however, offered no evidence

at trial relating to his underlying tax liability as he reported it, and we 

see nothing to contradict the tax liability he reported on his 2014 Form 

1040 but did not pay.6

6 The IRS received a payment of $2,198.75 related to petitioner’s chapter 7 

bankruptcy proceeding. Petitioner’s balance due from the tax he reported on his 2014 

Form 1040 was reduced accordingly. In our Order dated April 8, 2022, we explained 

that partial payment does not require us to dismiss the collection action.
8 

C. Nonliability Issues

 Petitioner identified no issues with the actions of SO Singh other 

than the argument we rejected, that the IRS could not proceed with 

collection because of his bankruptcy proceeding.7 Our own review of the 

administrative record identified no abuse of discretion by SO Singh. The 

record shows that SO Singh properly verified that the requirements of 

applicable law and administrative procedure were followed, considered 

relevant issues raised by petitioner, and properly balanced the need for 

efficient collection of taxes with petitioner’s legitimate concern that the 

collection action be no more intrusive than necessary. See § 6330(c)(3). 

Consequently, we uphold respondent’s determination.

We have considered all arguments made and, to the extent not 

mentioned above, we conclude that they are moot, irrelevant, or without 

merit.

To reflect the foregoing,

Appropriate decisions will be entered.

7 At trial petitioner reiterated arguments he made in various filings; namely, 

that the collection action was blocked by his bankruptcy. We rejected these arguments 

in our Order dated April 15, 2022. (This Order mistakenly identified July 31, 2019, as 

the date of assessment instead of the date the levy notice was issued; this does not 

affect our conclusion that the IRS could proceed with collection.) We do so again now. 

When the IRS issued the levy notice on July 31, 2019, the automatic stay related to 

petitioner’s chapter 7 bankruptcy proceeding was no longer in effect. In sum, the IRS

was not barred from proceeding, nor are we. 

[*8]