T.C. Summary Opinion 2011-88

UNITED STATES TAX COURT

ERIC LYNN TRACY, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 8727-10S. Filed July 12, 2011.

Eric Lynn Tracy, pro se.

John D. Davis, for respondent.

MORRISON, Judge: This case was heard pursuant to the

provisions of section 7463 of the Internal Revenue Code in effect

when the petition was filed. Pursuant to section 7463(b), the

decision to be entered is not reviewable by any other court and

this opinion shall not be treated as precedent for any other

case. Unless otherwise indicated, all references to sections are
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to the Internal Revenue Code, and all references to Rules are to

the Tax Court Rules of Practice and Procedure.

Pursuant to section 6320, Eric Lynn Tracy seeks our review

of a determination concerning the filing of a notice of federal

tax lien to collect his unpaid 2008 federal income-tax liability. 

As explained below, we decide that the determination by the IRS

Appeals Office was not an abuse of discretion.

Background

On November 5, 2009, the IRS mailed a notice to Tracy that

it had filed a notice of federal tax lien to secure Tracy’s 2008

income-tax liability of $22,872.82. Tracy requested a

collection-review hearing with the IRS Appeals Office. The

request, dated November 14, 2009, stated:

I am currently encarcerated in the Idaho Department of

Corrections. I have no property, assets or income. I

am completely dependant on the charity of family for

support. I don’t expect to get out till 2022. When I

do get out, I will be starting my life over completely. 

Please consider my extreme hardship [illegible] paid my

taxes faithfully for many years--I am now begging for

mercy. Thank you.

The hearing was assigned to a settlement officer, who conducted

the hearing by correspondence. In a notice of determination

dated March 10, 2010, the settlement officer determined that all

requirements of applicable law and administrative procedure had

been met. The settlement officer determined that because Tracy

was in prison, his account with the IRS would be placed in
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“currently not collectible” status.1 The settlement officer

determined that the filing of the notice of federal tax lien

balanced the need to efficiently collect tax with Tracy’s concern

that the collection action be no more intrusive than necessary. 

The settlement officer also determined that none of the

conditions in section 6323(j) for withdrawing the filing of the

notice of federal tax lien had been satisfied.2 In his petition

to the Tax Court, which he mailed on April 7, 2010, Tracy stated: 

A On July 31, 2007 I was convicted by the State of

Idaho for some very poor choices on my part, and

sentenced for a period of 5 to 15 years in the

Idaho Department of Corrections. 

B The very few assets, both monetary and nonmonetary, that I had left after becoming divorced

in 2006 have subsequently been paid to satisfy

debts and pay legal fees, reposessed, or sold to

pay debts--I literally have nothing left to my

name of any worth that I know of.

C I have no income other than the paltry $.30/hr

that the prison pays me as a braille

transcriptionist. I am almost completely

1“Currently not collectible” status apparently means that

the IRS will not attempt to collect the tax liability. The IRS

can remove this status.

2Sec. 6323(j)(1) provides that the IRS may withdraw a filed

notice of lien, and that the withdrawn notice shall be treated as

if it had not been filed, if the IRS determines (1) the filing of

such notice was premature or otherwise not in accordance with

administrative procedures, (2) the taxpayer has entered into an

installment agreement, (3) the withdrawal of the notice will

facilitate the collection of the tax liability, or (4) “with the

consent of the taxpayer or the National Taxpayer Advocate, the

withdrawal of such notice would be in the best interests of the

taxpayer (as determined by the National Taxpayer Advocate) and

the United States.”
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dependent upon the charity of family members for

support.

D When I finally regain my freedom (earliest, late

in 2012), I will be starting over from nothing--I

will need every dime to survive and not be

dependent upon government assistance.

E I believe these circumstances constitute extreme

hardship. 

At the time the petition was filed, Tracy was a resident of

Idaho. The parties submitted this case without trial under Rule

122. The parties agreed to a stipulation, which the Court

adopts. The record consists of (1) the facts that the parties

have stipulated and (2) the documents that the parties have

stipulated are admissible. The Court ordered the parties to file

briefs. The IRS filed a brief; Tracy did not.

Discussion

Section 6321 imposes a lien in favor of the United States on

all property and rights to property of a person liable for tax if

there has been a demand for payment and the person has failed to

pay. The lien arises at the time of assessment. Sec. 6322. For

the federal tax lien to have priority over other liens or

security interests, the IRS must file a notice of federal tax

lien. Sec. 6323(a); Behling v. Commissioner, 118 T.C. 572, 575

(2002). The notice must normally be filed with the appropriate

office of the state or local government subdivision in which the

property is located. Sec. 6323(f)(1). 
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Section 6320(a) provides that the IRS must generally give

the person against whom a federal tax lien is filed written

notice of the notice’s filing within five days after the date of

its filing. Section 6320(b) provides the person with an

opportunity for a hearing before the IRS Appeals Office. The

hearing is conducted pursuant to subsections (c), (d) (other than

paragraph (2)(B)), (e), and (g) of section 6330. Sec. 6320(c).

At the hearing, the taxpayer may raise any issues relevant

to the unpaid tax including: (1) challenges to the

appropriateness of the IRS’s collection actions; and (2) offers

of collection alternatives (e.g., an installment agreement, an

offer-in-compromise, the posting of a bond, or the substitution

of other assets). Sec. 6330(c)(2)(A)(ii) and (iii). The Appeals

Office must consider the following in making the determination:

(1) whether the requirements of any applicable law or

administrative procedure were met; (2) the issues properly raised

by the taxpayer; and (3) whether the proposed collection action

balances the need for the efficient collection of taxes with the

taxpayer’s legitimate concern that the collection action be no

more intrusive than necessary. Sec. 6330(c)(3).

A taxpayer may appeal the Appeals Office’s determination to 

this Court within the 30-day period starting on the day after the

date of the notice of determination. Secs. 6320(c), 6330(d)(1). 
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In reviewing the IRS’s determination, the Court applies an abuseof-discretion standard when the underlying tax liability is not

at issue. Sego v. Commissioner, 114 T.C. 604, 610 (2000).

The settlement officer assigned to Tracy’s hearing

considered the three items that were required by section

6330(c)(3) to be considered. First, the settlement officer

determined that all requirements of applicable law and

administrative procedure had been met. See sec. 6330(c)(3)(A). 

Second, the settlement officer considered the issues Tracy

raised. See sec. 6330(c)(3)(B). Third, the settlement officer

considered whether the collection action (i.e., the filing of the

notice of federal tax lien) balanced the need for the efficient

collection of taxes with Tracy’s concern that the collection

action be no more intrusive than necessary. See sec. 

6330(c)(3)(C). Although the Court has jurisdiction to determine

whether the settlement officer made an error in considering these

items, see secs. 6320(c), 6330(d)(1), the Court looks to Tracy to

identify these errors, see Rule 331(b)(4) (requiring petition to

contain “clear and concise assignments of each and every error

which the petitioner alleges to have been committed in the notice

of determination”); Rule 151(e) (requiring briefs to state the

nature of the controversy, issues to be decided, proposed

findings of fact, points on which the party relies, points of law

involved, and disputed questions of fact). Tracy does not
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identify any specific errors made by the settlement officer. He

merely repeats (through his petition) the same material he

presented to the settlement officer. The settlement officer has

already considered this material. We are not required, without

guidance from Tracy, to determine which of the various aspects of

the settlement officer’s determination is erroneous. We

therefore sustain the determination.

To reflect the foregoing,

Decision will be entered

for respondent.