T.C. Summary Opinion 2008-127

UNITED STATES TAX COURT

JONATHAN L. HALL, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 26741-06S. Filed September 22, 2008.

Jonathan L. Hall, pro se.

Innessa Glazman-Molot, for respondent.

PANUTHOS, Chief Special Trial Judge: This case was heard

pursuant to the provisions of section 7463 of the Internal

Revenue Code in effect at the time 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, subsequent section references are to the Internal
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Revenue Code as amended, and Rule references are to the Tax Court

Rules of Practice and Procedure.

This collection case is before the Court on respondent’s

motion for summary judgment filed pursuant to Rule 121 and

petitioner’s objection thereto. The issue for decision is

whether, as a matter of law, respondent’s determination 

sustaining a levy action for tax year 2004 should be upheld.

Background

The following facts are uncontested or established by the

record. Petitioner lived in Virginia when he filed the petition. 

Petitioner worked as a laborer in 2004 and received one or

more Forms 1099-MISC, Miscellaneous Income, reporting his income. 

His Federal income tax return for 2004 reports no withholding and

no estimated tax payments and $2,452 in tax due, including $1,959

of self-employment tax. The Internal Revenue Service (IRS)

assessed the tax petitioner reported as due on his 2004 return,

together with interest and an addition to tax for failure to pay. 

The IRS sent petitioner notice and demand for payment but did not

receive payment.

On April 15, 2006, the IRS mailed a Final Notice of Intent

to Levy and Notice of Your Right to a Hearing. Petitioner

requested a collection hearing to challenge the IRS’s intent to

levy to collect the tax due for 2004. In his hearing request

petitioner asserted that it was premature for the IRS to levy
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1 Petitioner’s assertions mirror three of the four

circumstances provided in sec. 6323(j) for withdrawing a Federal

tax lien. See infra note 3.

2 Petitioner also claimed that his pending Tax Court case

“already encompasses Tax Year 2004 (‘if applicable’)”. The SO

determined that the pending case involved a notice of Federal tax

lien for 2000 through 2003 and verified that the Internal Revenue

Service (IRS) had not filed a Federal tax lien for 2004. She

concluded that the instant collection case was independent of

that case.

upon his property; that withdrawing the levy would facilitate

collection of the tax; and that withdrawal was in his and the

Government’s best interest.1

The IRS assigned a settlement officer (SO) to handle

petitioner’s collection hearing. The SO wrote to petitioner on

September 28, 2006, requesting certain documents as a condition

of her considering collection alternatives, informing petitioner

that he had to provide her with a copy of an amended return for

2004 if he wished to challenge the underlying tax liability, and

scheduling a telephone conference for October 31, 2006. 

Petitioner wrote to the SO and asked for a delay (from October

31, 2006, to May 6, 2007) in the collection hearing for 2004. He

sought to postpone the 2004 levy hearing until after the Court

resolved his challenge to the result of his collection hearing

for tax years 2000 through 2003.2 He asserted that collecting by

levy would impose a hardship on him, asked for a hardcopy of the

Internal Revenue Manual (IRM), and requested a face-to-face

hearing. He did not provide the requested information.
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The SO declined to postpone the hearing for 2004, explained

that the 2004 levy action was separate from the lien action for

2000 through 2003, informed petitioner that he could access the

IRM over the Internet, and asked him to submit a completed Form

433-A, Collection Information Statement for Wage Earners and

Self-Employed Individuals, and a copy of his 2005 return, with

evidence of filing, in order for her to evaluate his financial

situation and consider collection alternatives. The SO wrote

that she would conduct a face-to-face hearing only after

petitioner provided the information required to evaluate his

eligibility for collection alternatives. She also explained that

she was willing to place petitioner’s account in currently

noncollectible (CNC) status if warranted by the information

contained in the requested documents.

On October 31, 2006, petitioner sent a letter to the SO (by

facsimile and certified mail). He included a Form 433-A, without

supporting documentation and marked “DRAFT 10/31/06”. The draft

Form 433-A listed the following assets: (1) A truck used in

petitioner’s business and valued at $1,000; (2) furniture and

personal effects valued at $500; and (3) tools used in

petitioner’s business and valued at $500. Petitioner stated in

his letter: 
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I have attached a “draft” of 433-A. It does not have

attachments, because they would take vastly too many

pages. * * * The information contained in the Form

433-A is a best reasonable rounded off guess-timate,

giving you an approximate snapshot of my current

financial situation, which is dire. In addition, I am

at least two months behind on my rent, and two months

behind on my credit card payments. With this

information you can probably make a reasonable decision

about my financial condition and accurately categorize

the levy as currently noncollectible and you may

“temporarily suspend collection action” at your

discretion.

If there is supporting paperwork you would like to

review, which would have otherwise been part of the

attachments requested, you may review those receipts,

bills, expenses, etc. at a face to face meeting. I do

not anticipate filing any further 1040s for any

additional tax years until the prior years [sic] issues

have been resolved.

Petitioner did not submit a copy of his 2005 return, and the

SO determined that no 2005 return had been filed as of November

2, 2006. The SO concluded that petitioner failed to document his

financial status adequately and that he was not in compliance

with his filing requirements. She further concluded from

petitioner’s not submitting an amended return for 2004 that he

did not contest the underlying tax liabilities.

Respondent’s Appeals Office (Appeals) issued a Notice of

Determination Concerning Collection Actions Under Sections 6320

and/or 6330 (notice), sustaining the intent to levy. The notice

recited that the SO verified that all applicable laws and

procedures were met, considered all issues raised, and balanced

the efficiency and intrusiveness of the proposed collection
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3 The relief petitioner requested and the reasons presented

in par. 4 of the petition are nearly identical to those included

in his petition relating to the collection action for 2000

through 2003, docket No. 11674-06S, which challenges the filing

of Federal tax liens for those years. To the extent that the

instant petition complains of the failure to withdraw a tax lien

under sec. 6323(j), that issue is not relevant to this levy case

and will not be addressed further. 

action. The notice described the SO’s instructing petitioner

that he had to submit completed financial information and his

2005 return in order for her to consider collection alternatives

and her later reiterating this requirement. The notice concluded

that petitioner was not eligible for Appeals consideration of

collection alternatives because he was not in filing compliance

and because he did not provide required financial information.

Petitioner filed a timely petition requesting judicial

review of respondent’s determination.3 

Respondent filed a motion for summary judgment, asserting

that there are no genuine issues of material fact, that

petitioner did not develop any issue to challenge the underlying

tax liability before Appeals, that petitioner’s failure to submit

complete financial information and his noncompliance with filing

obligations precluded Appeals consideration of collection

alternatives, and that respondent is entitled to judgment as a

matter of law. Petitioner objects, arguing that respondent

abused his discretion in sustaining the intent to levy because

the SO denied him a face-to-face hearing, because she refused to
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entertain his dispute over the underlying tax liability, and

because she ignored legal and procedural requirements related to

CNC status for low-income taxpayers claiming hardship. 

Petitioner and respondent’s counsel appeared and were heard at a

hearing on the motion. 

Discussion

Summary judgment “is intended to expedite litigation and

avoid unnecessary and expensive trials.” Fla. Peach Corp. v.

Commissioner, 90 T.C. 678, 681 (1988). Summary judgment may be

granted where there is no genuine issue of material fact and a

decision may be rendered as a matter of law. Rule 121(a) and

(b). The moving party bears the burden of proving that there is

no genuine issue of material fact, and factual inferences are

viewed in the light most favorable to the nonmoving party. Craig

v. Commissioner, 119 T.C. 252, 260 (2002); Dahlstrom v.

Commissioner, 85 T.C. 812, 821 (1985); Jacklin v. Commissioner,

79 T.C. 340, 344 (1982). The party opposing summary judgment

must set forth specific facts that show a genuine question of

material fact exists and may not rely merely on allegations or

denials in the pleadings. Grant Creek Water Works, Ltd. v.

Commissioner, 91 T.C. 322, 325 (1988); Casanova Co. v.

Commissioner, 87 T.C. 214, 217 (1986).

In reviewing the Commissioner’s decision to sustain

collection actions, where the validity of the underlying tax
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liability is properly at issue, the Court reviews the

Commissioner’s determination of the underlying tax liability de

novo. Sego v. Commissioner, 114 T.C. 604, 610 (2000); Goza v.

Commissioner, 114 T.C. 176, 181-182 (2000). The Court reviews

any other administrative determination regarding proposed

collection actions for abuse of discretion. Sego v.

Commissioner, supra at 610; Goza v. Commissioner, supra at 182.

An abuse of discretion occurs when the exercise of discretion is

without sound basis in fact or law. Murphy v. Commissioner, 125

T.C. 301, 308 (2005). If the Court finds that a taxpayer is

liable for deficiencies, additions to tax, and/or penalties, then

the Commissioner’s administrative determination sustaining the

collection action will be reviewed for abuse of discretion. See

Downing v. Commissioner, 118 T.C. 22, 31 (2002); Godwin v.

Commissioner, T.C. Memo. 2003-289, affd. 132 Fed. Appx. 785 (11th

Cir. 2005).

Section 6330(a) provides that the Secretary shall furnish

taxpayers with written notice of their right to a hearing before

any property is levied upon. Section 6330(a) further provides

that the taxpayer may request administrative review of the matter

(in the form of a hearing) within a prescribed 30-day period.

Collection hearings are to be conducted by the

Commissioner’s Office of Appeals, and the Appeals officer

conducting the hearing must verify that the requirements of any
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applicable law or administrative procedure have been met. Sec.

6330(b)(1), (c)(1). Pursuant to section 6330(c)(2)(A), a

taxpayer may raise at the hearing any issue relevant to the

proposed collection activities, including spousal defenses,

challenges to the appropriateness of the intended collection

action(s), and alternative means of collection. Sego v.

Commissioner, supra at 609; Goza v. Commissioner, supra at 180. 

If a taxpayer received a statutory notice of deficiency for the

year in issue or otherwise had the opportunity to dispute the

underlying tax liability, the taxpayer is precluded from

challenging the existence or amount of the underlying tax

liability. Sec. 6330(c)(2)(B); Sego v. Commissioner, supra at

610-611; Goza v. Commissioner, supra at 182-183.

At the conclusion of the hearing, the Appeals officer must

determine whether and how to proceed with collection and shall

consider: (1) The verification that the procedural and statutory

requirements have been followed; (2) the relevant issues raised

by the taxpayer; (3) where permitted, the taxpayer’s challenges

to the underlying tax liability; and (4) whether the collection

action properly balances collection efficiency and intrusiveness. 

Sec. 6330(c)(3).

The 2004 tax liability results from the tax reported as due

by petitioner on his 2004 Federal income tax return. The IRS did

not audit or adjust the return and did not issue a notice of
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4 The IRS was not obliged to issue a notice of deficiency to

petitioner because the assessment was entered under sec.

6201(a)(1) based on the amount petitioner reported due on his

2004 tax return, along with statutory interest and additions to

tax. Moreover, sec. 6211(a) excludes from the definition of a

deficiency the tax that taxpayers report due on their returns. 

Montgomery v. Commissioner, 122 T.C. 1, 8 (2004).

deficiency.4 The record does not reflect that petitioner had any

other opportunity to contest the existence or amount of his selfassessed tax liability for 2004. Accordingly, he was entitled to

challenge the liability during the collection hearing. The SO

invited petitioner to challenge the tax due for 2004 by

submitting an amended return. Petitioner did not submit an

amended return, nor did he challenge the underlying tax liability

during the collection hearing. Accordingly, we review

respondent’s determination for abuse of discretion.

The SO informed petitioner that she could not consider any

collection alternatives without a complete financial disclosure

from petitioner and that he was not eligible for consideration of

any collection alternatives unless he was current with his

Federal income tax filing obligations. Petitioner submitted a

draft Form 433-A, without supporting documentation. He did not

submit his 2005 Federal income tax return. The Commissioner’s

refusal to consider collection alternatives is not an abuse of

discretion where the taxpayer has failed to file all required tax

returns or to provide complete financial information. See Roman

v. Commissioner, T.C. Memo. 2004-20; Rodriguez v. Commissioner,
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5 Petitioner’s concern with the proposed levy was that the

Internal Revenue Service (IRS) would take his truck and with it

his ability to conduct his landscaping and window washing

business. In his draft collection information statement,

petitioner lists as assets: $500 of furniture and personal

effects, $500 of business tools, and a $1,000 truck, which he

used for his business. 

 It is noted that sec. 6334(a)(3) exempts from levy tools

necessary for a taxpayer’s business with an aggregate value far

greater than the tools petitioner claimed (including the value of

his truck). Furthermore, sec. 6334(a)(13)(B) exempts tangible

personal property (which would include petitioner’s truck, in the

event that sec. 6334(a)(3) did not) unless the IRS follows the

procedure outlined in sec. 6334(e)(2). 

T.C. Memo. 2003-153 (and cases cited therein). An Appeals

officer who fails to take into account information he requested

but that the taxpayer did not provide in a reasonable time has

not abused his discretion. Murphy v. Commissioner, supra at 315. 

Thus, the SO did not abuse her discretion in refusing to consider

petitioner’s request to place his 2004 account in CNC status.5

The applicable regulation is clear that a face-to-face

collection hearing is not required by the Code. Sec. 301.6330-

1(d)(2), Q&A-D6, Q&A-D7, and Q&A-D8, Proced. & Admin. Regs. 

Petitioner did not present the information required by the SO and

did not make any justiciable arguments or present any information

that properly addressed the merits of the underlying tax

liability, the validity of the assessment, the conduct of the

proceeding, or compliance with section 6330 requirements. Under

these circumstances, as a matter of law, the SO did not abuse her
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6 Petitioner demonstrated that he was in filing compliance

and disclosed his financial status to a different settlement

officer (SO) on May 15, 2007, in connection with his 2000-03 lien

case. Respondent filed the instant motion on July 13, 2007, and

the SO handling the lien hearing on remand issued a supplemental

notice of determination in that case on Sept. 7, 2007, sustaining

the filing of the Federal tax liens for those years and

determining that petitioner’s account should be reported

currently noncollectible. This determination in September 2007

has no bearing on whether respondent abused his discretion in

this case in November 2006 or on whether there is a genuine issue

for trial in this case.

discretion in not affording petitioner a face-to-face hearing. 

See Davis v. Commissioner, T.C. Memo. 2007-160. 

Finally, as stated in the notice of determination, the SO

verified that the procedural and administrative requirements had

been met and considered whether the proposed collection action

balanced intrusiveness and collection efficiency. See sec.

6330(c)(3). 

Conclusion

Although petitioner was not statutorily barred from

challenging the existence or amount of his income tax liability

for 2004, he failed to raise any such challenge. Petitioner also

failed to raise a spousal defense or make a valid challenge to

the appropriateness of respondent’s intended collection action. 

Petitioner failed to provide the documents required for

consideration of any alternative means of collection.6 These

issues are now deemed conceded. See Rule 331(b)(4). 
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Accordingly, we conclude that respondent is entitled to judgment

as a matter of law sustaining the notice of determination. 

To give effect to the foregoing,

An appropriate order and

decision will be entered.