T.C. Mem o. 2 01 5- 20

UNITED STAT ES TAX COURT

TIFFANY W EI DING, Peti ti on er v . COMM ISSI ONER OF INTERNAL REVENUE, Resp on de nt

Doc ke t No . 24 66 2- 13 L. Fi le d F eb ru ary 9, 2 01 5.

Lawren ce W. Lut tre ll , forpe ti ti on er. Ro be rt W. Mop si ck , forres po nd en t.

MEMORANDUM OPINION LAUBER, Ju dg e: In thi s co ll ect io n due pro ces s (C DP) cas e, pe ti ti on er ti m el y so ug htrev ie w pu rs ua ntto sec ti on 63 30 (d )(1 ) of ano ti ce o f de te rm in at io n 1

All st atut ory

refe ren ces are t o the Int ern al Rev enue Co de as i n e ffec t atall 1 rel ev an t t im es , andall Ru le refe ren ces are t o the Tax C ou rt Rul es of P ract ic e an d Pro cedur e. W e ro un d a ll do ll ar am ou nt s t o the ne ares t d ol lar.- 2 -

[* 2] co nc ern in g c ol le ct io n a ct io n fo r ta x years 2 00 3, 2 00 4, 2 00 5, 2 00 6, an d 2 00 7. On Se pt em

be r 17 , 20 14 , we gra nt eda m ot io n b y th e In te rn al Rev enue Serv ic e (IRS or r es po nd en t) t o d is m is s the cas e as m oo t wi th res pe ctto tax y ears 20 06 an d 20 07 be cau se aft er s he fil edhe r pe ti ti on , pet it io ne r fu ll y pa idhe r ta x l iabi li ti es for th os e y ears . On Sep te m

be r 24 , 20 14 , res po nd en t fi le d am ot io n fo r su m m ary jud gm en t wi th res pe ctto tax y ears 20 03 , 20 04 , and20 05 . Peti ti on er fi le d a
res po ns e o n Dec em

be r 5, 2 01 4. We will de ny resp on de nt ’s m ot io n.

Bac kg ro un d W e as su m e th e fo ll owi ng fact s o n the ba si s o f th e p le ad in gs , res po nd en t’s
m ot io n fo r su m

m ary jud gm en t, an d the att ach edex hi bi ts . Thes e fac ts are s ta te d
so le ly for the pu rp os e o f de ci di ng th is m ot io n fo r su m m ary jud gm en t an d n otas fin di ng s o f fac t i n thi s ca se . See Fed . R. Civ . P. 52 (a); Ru le 1(b ); C oo k v
. Co m m is si on er, 1 15 T.C. 15 (20 00 ), aff’d, 2 69 F.3d85 4 (7 th Cir . 20 01 ). Pet it io ne r res id edinNew Jer se y

when sh e fi le d h er p et it io n. Pet it io ne r, a rea l es ta te pro fes si on al , fil edlat e h er Fe de ral in co m e ta x re tu rn s fo r 20 03 , 20 04 , and20 05 . On th es e returns sh e rep orte d t ax li ab il it ie s o f $4 3,5 28 , $2 9,5 76 , and$2 ,68 2, re sp ect iv el y . The IR S ex am in edth os e returns . Pet it io ne r was ab se ntfro m th e Uni te d S ta te s dur in g m uc h o f th e ex am in at io n pe rio d, ca rin g fo r si ckfam il y m em be rs inCh in a. Duri ng th is ti m e sh e en tru st ed- 3 -

[* 3] he r affa irs to Ro be rt Kl au sn er, a ce rti fie d p ub li c acc ou nt an t (C .P.A.) at Patriz io & Zha o i n P ars ip pa ny, N ew Je rs ey . The IRS u lt im at el y

pro po se d fo r 20 03 , 20 04 , and20 05 tax de fic ie nc ie s o f $1 40 ,35 0, $ 34 7,2 39 , and$1 28 ,98 7, re sp ect iv el y , as wel l as accuracy-rela te d pe na lt ie s an d a dd it io ns to tax forlat e fi li ng . On Oct ob er 1 2, 2 01 0, the IRS s en t pe ti ti on er a n ot ic e o f de fic ie nc y set ti ng forth th es e ad

jus tm en ts . This no ti ce was se ntto pe ti ti on er atanad dr es s i n Hi gh land s, New J ers ey , whi chev id en tl y was h er res id en ce. Whe n p et it io ne r di d n otpe ti ti on th is Co urt wi th in 90 da y s, the IRS, o n Ap ril 11 , 20 11 , ass es se d the tax , pen al ti es , andad di ti on s t o t ax for20 03 -2 00 5 a s wel l as in te res t ac cru edto th atda te . In an effo rt t o c ol le ctth es e as se ss edam ount s, the IRS fi le d ano ti ce o f Fed eral tax li en(NFTL) an d s en t p et it io ne r, on Jan ua ry 17 , 20 12 , a Not ic e o f Fed eral Tax Li enFil in g a ndYou r Ri gh t t o aHeari ng un de r IRC 63 20 . This no ti ce was ad dr es se d t o p et it io ne r ata po stoff ic e b ox inNave si nk , New Je rs ey . This po stoff ic e b ox was app aren tl y

ren te d b y

pe ti ti on er’s s is te r, who
rece iv edth e n ot ic e an d fo rward editto Mr. Klaus ne r. As p et it io ne r’s rep res en ta ti ve , Mr. Klaus ne r ti m el y fil edFo rm

12 15 3, Reque stfor

a Co ll ect io n Du e Pro ces s o r Equ iv al en t Hea rin g, re qu es ti ng a CDP he ari ng . He in fo rm edth e IRS th atpe ti ti on er was ou t o f th e co un try carin g fo r- 4 -

[* 4] fam il y

m em be rs inCh in a. He als o s ta te d tha t the 20 03 -2 00 5 e xa m in at io n h ad be en“ cl os edwith a dv ers e ad jus tm en ts du e to lac k o f in fo rm at io n wh ic h o ccu rred jus t af te r * * * [p et it io ne r] leftth e co un try.” He sta te d tha t the m is si ng in fo rm at io n “ wou ldreduc e th e ta x l iabi li ty for tho se y ears si gn ifi can tl y ” an d reque st edau di t re co ns id erat io n. The cas e was ass ig ne d t o IR S se tt le m en t o ffi cer ( SO) Woldto co nduc t a CDP h eari ng . On Aug us t 1 7, 2 01 2, SO Wol d n ot edinhe r cas e act iv ity reco rdth at sh e co ul d n otfin d i n the IRS fi le s an y no ti ce o f de fic ie nc y

is su edfor20 03 -2 00 5. Howev er, s he di d fi nda Lett er 9 50 , is su edJan ua ry 4, 2 01 0, wh ic h a ffo rd edpe ti
ti on er ap pe al rig ht s co nc ern in g the pro po se d aud itad jus tm en ts for20 03 -2 00 5. SO W ol d n ot edinhe r cas e act iv ity reco rdth atsh e wou ld“ in qu ire why th e ta xp ay er di d n otap pe al th e p ro po se d a dju st m en ts by E xa m when sh e h adth e o pp ortuni ty.” On Au gu st20 , 20 12 , SO W ol d c on du ct eda face -to -fac e CDP h eari ng with Mr. Kl au sn er an d p et it io ne r’s si st er, wh o h adals o fi le d apo wer o f atto rn ey . Durin g the he ari ng pe ti ti on er’s rep res en ta ti ve s s ou gh t t o c ha ll en ge he r un de rlyin g t ax li ab il it ie s fo r 20 03 -2 00 5. Th ey als o re qu es te d aco ll ect io n a lt ern at iv e. SO W ol d p oi nt edou t tha t i f pe ti ti on er h adne gl ect edto purs ue a pr io r op po rtu ni ty to d is pu te he r 20 03 -2 00 5 t ax li ab il it ie s, s he co ul d n otch al le ng e th os e li ab il it ie s atth e CDP h eari ng . SO W ol d the n p ro du ceda co py of th e Let te r 95 0- 5 -

[* 5] an d a sk edwhy pe ti ti on er h adno t re sp on de d t o thi s l et te r by fil in g apro te st with IR S App eal s. Pet it io ne r’s si st er s tate d tha t p et it io ne r ha d n otrece iv edth is le tt er. SO W ol d the n i nf

orm edpe ti ti on er’s rep res en ta ti ve s tha t b ecau se sh e co ul d
no t fi nda co py of an y

no ti ce o f de fic ie nc y

inth e IRS fil es an d b ecau se pe ti ti on er ha d n otrece iv edth e Let te r 95 0, p et it io ne r’s rep res en ta ti ve s wo ul d b e p erm it te d t o ch al le ng e h er u nd erl y in g t ax li ab il it ie s fo r 20 03 -2 00 5 dur in g the CDP p ro ces s. On Se pt em

be r 17 , 20 12 , SO W ol d re cei ve d apa ck ag e o f do cum en ts fro m pe ti ti on er’s rep res en ta ti ve s re la ti ng to th e 2 00 3- 20 05 au di t ad jus tm en ts . The ca se was th enass ig ne d t o Ap pe al s Off ic er (AO) Ki lano wsk i fo r au di t re co ns id erat io n. AO Kila no wsk i p erfo rm eda th or ou gh rev ie w of p et it io ne r’s do cum en ta ti on an d
m etwith h er re pr es en ta ti ve s dur in g the en su in g s ix m on th s. On M arch 12 , 20 13 , AO Kilan ows ki pre pa reda rep ort re co m m en di ng subst an ti al ad jus tm en ts inpe ti ti on er’s fav or . He st at edth ata no ti ce o f de fic ie nc y ha d be ensen t fo r 20 03 -2 00 5 b utth at“ th e ta xp ay er d efau lt eddu e to be in g o utof t he Uni te d S tate s.” C it in g the do cu m en ta ti on pe ti ti on er’s rep res en ta ti ve s h adsupp li ed
co nc ern in g h er co stof g oo ds so ld , bu si ne ss ex pe ns es , andothe r it em s, AO Kil an ows ki reco m

m en de d tha t h er t ax ab le in co m e fo r 20 03 , 20 04 , and20 05 , as d et erm in edby E xa m , sh ou ldbe ad jus te d d own wardby $75 ,00 0, $ 28 2,8 95 , and $4 72 ,17 9, re sp ect iv el y . Thes e ad jus tm en ts rep res en te d app ro xi m at el y 46 % of t he- 6 -

[* 6] ad jus tm en ts to whi chpe ti ti on er’s rep res en tati ve s co nt en de d tha t s he was en ti tl ed . AO Kil an ows ki reco m m en de d tha t the IRS m ak e n o c on ces si onon th e accu racy-rela te d p en al ti es or t he ad di ti on s t o t ax forlat e fi li ng . The IRS m ad e th e ad

jus tm en ts to pe ti ti on er’s acc ou nt s as reco m m en de d b y AO Kila no wsk i. InJu ly 201 3 S O W ol d i nf orm edMr. Klaus ne r th at , aft er the se ad jus tm en ts were m ad e, pe ti ti on er’s t ot al ba lanc e due for20 03 -2 00 5 (i nc lu di ng accrue d i nt eres t) wa s $ 93 0,8 67 . SO W ol d i nd ic at edth atinord er fo r he r to
co ns id er co ll ect io n a lt ern at iv es , pet it io ne r wou ldne edto li qu id at e certa in real
es ta te ho ld in gs or o bt ai n alo anby borro win g a ga in stth os e as se ts . InAug us t 2 01 3 M r. Klau sn er i nf orm edSO W ol d tha t p et it io ne r in te nd ed ei th er t o s el l h er re al est at e h ol di ng s o r to ob ta in a lo an , whi chsh e was att em pt in g to ne go ti at e fro m

a so ur ce i n C hi na . On Sep te m be r 3, 2 01 3, M r. Klau sn er ca ll ed SO W ol d t o s ay

th athe ha d n o n ew in fo rm at io n t o re po rt. Atth is po in t SO Wol d
co nc lu de d tha t the cas e sh ou ldbe clo se d. On Se pt em

be r 13 , 20 13 , th e IRS sen t p et it io ne r a No ti ce o f Det erm in at io n Co nc ern in g C ol le ct io n Act io n( s) un de r Sec ti on 63 20 an d/ or63 30 su st ai ni ng th e NFTL fil in g fo r 20 03 -2 00 5. Th is no ti ce was ad dr es se d t o p et it io ne r athe r si st er’s po stoff ic e b ox inNave si nk , New Jer se y . Und er the cap ti on “ Su m m ary of- 7 -

[* 7] Dete rm in at io n,” th e IRS st at edth atitha d m ad e th e fo ll owi ng de te rm in at io ns co nc ern in g p et it io ne r’s ta x l iabi li ti es for 20 03 -2 00 5: You r acc ou ntha s b eenad jus te d i n a cco rd an ce wi th y ou r au di t re co nsi de rat io n fo r th e Fo rm

10 40 returns forth e ta x years, 2 00 3, 2 00 4, [an d] 20 05 * * *. Yo urreque stforanin st al lm en t ag reem en t co ul d no t b e g ran te d, b ecau se y ou r co ll ect io n i nf orm at io n s ta te m en t s ho wed th aty ouha ve anin ab il ity to m ak e m on th ly paym en ts . Bas edon th e in fo rm at io n l is te d i n your co ll ect io n i nf orm at io n s tate m en t, we ca nn ot de em y ou r acc ou ntas c urren tl y no t co ll ect ib le , as i t ap pe ars th aty ou ha ve equi ty in as se ts . Pet it io ne r ti m el y

pe ti ti on edforrev ie w of thi s n ot ic e o f de te rm in at io n. Her pe ti ti on see ks to ch al le ng e intwo res pe ct s h er und erl y in g t ax li ab il it ie s fo r 20 03
- 20 05 . She fir stco nt en ds th atth e IRS in co rrec tl y de te rm in edhe r “ se lf e m

pl oym en t ta xe s an d/ orcap it al ga in s t ax es ” fo r 20 03 -2 00 5. Sh e n ex t co nt en ds th atth e IRS im pr op erl y de te rm in edpe na lt ie s an d a dd it io ns to tax forth es e y ears in as m uc h a s

“ th ere d oe s ex is t re as on ab le cau se ” fo r he r la te fil in gs an d o mis si on s. Dis cu ss io n The pu rp os e o f su m

m ary jud gm en t i s t o e xp ed it e li ti ga ti on an d a vo idco st ly, ti m e-co ns um in g, an d u nn eces sa ry tri al s. Fl a. Peac h C or

p. v . Comm is si on er, 9 0 T.C. 67 8, 6 81 (19 88 ). Und er Ru le 12 1( b) th e Co urt m ay gra ntsu m

m ary jud gm en t whe n the re i s n o g enui ne di sp ut e as to any m at eri al factan d ade ci si on m ay be
ren de redas am at te r of

law. Su nd st ran d C or

p. v . Comm is si on er, 9 8 T.C. 5 18 , 52 0,- 8 -

[* 8] (19 92 ), aff’d, 1 7 F .3d96 5 (7 th Cir . 19 94 ). In d eci di ng whet he r to gra nt
su m m ary jud gm en t, we co ns tru e fac tu al m at eri al s an d i nf eren ces dra wn fr om

th em in th e li gh t m os t favo rab le to th e n on m ov in g p arty . Ibi d. Insee ki ng su m

m ary jud gm en t, re sp on de ntco nt en ds th atpe ti ti on er i s p recl ud edfro m

ch al le ng in g h er u nd erl y in g t ax li ab il it ie s fo r 20 03 -2 00 5 b ecau se sh e rece iv eda no ti ce o f de fic ie nc y bu t n eg le ct edto pe ti ti on th is Co urt i n re sp on se . Res po nd en t h as att ach edto hi s p le ad in gs a co py of th e n ot ic e o f de fic ie nc y da te d Octo be r 10 , 20 12 . Res po nd en t h as als o a tt ach edto hi s p le ad in gs a co py of a U.S. Po st al Serv ic e Fo rm

38 77 , whi chin di cat es th atanart ic le with atra ck in g n um be r co rres po nd in g t o tha t o n the no ti ce o f de fic ie nc y was m ai le d t o p et it io ne r on Octo be r 12 , 20 12 , at h er Hi gh land s, New J ers ey , add res s. Thus , alt ho ug h the SO
was in it ia ll y

un ab le to fin d the no ti ce o f de fic ie nc y , itno w app ears th ata no ti ce was ti m el y

m ai le d. Be cau se pe ti ti on er d idno t p et it io n thi s C ou rt i n re sp on se to th atno ti ce, res po nd en t co nt en ds th atsh e can no t ch al le ng e h er u nd erl y in g t ax li ab il it ie s fo r 20 03 -2 00 5. Re sp on de ntfurth er co nt en ds th atSO W ol d d idno t ab us e h er d is cret io n i n d ecl in in g t o o fferpe ti ti on er a co ll ect io n a lt ern at iv e; th at th ere i s n o g enui ne di sp ut e co nc ern in g a ny m at eri al fact ; an d tha t the IRS i s en ti tl edto jud gm en t as a m at te r of law.- 9 -

[* 9] W e co nc lu de th atsu m m ary jud gm en t m

us t b e d en ie d. As res po nd en t pr op erl y reco gn iz es , forpu rp os es of d et erm in in g wh ethe r a t ax pa y er ca n ra is e li ab il ity un de r se ct io n 6 33 0( c)(2 )(B) , actua l re cei ptof the st atut ory no ti ce m us t b e de te rm in ed . See Seg o v . Commis si on er, 1 14 T.C. 60 4, 6 10 -6 11 (20 00 ); Tatum v. Co m m is si on er, T.C. Mem o. 2 00 3- 11 5. Co ns tru in g the fact s o f rec or d a nd in fere nc es dra wn fr om

th em inth e li gh t m os t fa vo rab le to pe ti ti on er, we co nc lu de th atth ere i s a g enui ne di sp ut e o f m at eri al factas t o wh ethe r sh e actua ll y rece iv ed th e n ot ic e o f de fic ie nc y . The reco rdest ab li sh es th atpe ti ti on er was ab se ntfro m th e Uni te d S ta te s dur in g m uc h o f th e 2 01 0 c al en da r y ear. Fo r th atreas on , sh e en tru st edhe r affa irs to he r C.P.A., who se firm

was i n P ars ip pa ny, N ew Je rs ey , andto he r si st er, wh o rece iv edm ai l ata po stoff ic e b ox inNave si nk , New Jer se y . All n ot ic es an d o th er co m m un ic at io ns th atth e IRS ad dr es se d t o h er s is te r’s po stoff ic e b ox an d t o h er C.P.A. ap pe ar t o h av e rec ei ve d p ro m ptres po ns es . On the othe r ha nd , pet it io ne r’s si st er i nf orm edSO W ol d tha t p et it io ne r ne ve r rec ei ve d the Lett er 9 50 . Thatlet te r, li ke th e n ot ic e o f de fic ie nc y , was pr es um ab ly m ai le d t o p et it io ne r’s Hig hl an ds , New Jer se y , add res s. AO Kil an ows ki st at edinhi s re po rt t ha t a n ot ic e o f de fic ie nc y ha d b eensen t t o pe ti ti on er fo r 20 03 -2 00 5 b utth at“ th e ta xp ay er d efau lt eddu e to be in g o utof t he- 10 -

[* 10 ] Uni te d S ta te s.” Vi ewin g i nf eren ces fro m

th es e fac ts inth e li gh t m os t fav or ab le to pe ti ti on er, we co nc lu de th atth ere i s a g enui ne di sp ut e o f fac t as to whe th er the no ti ce o f de fic ie nc y , if m ai le d t o h er “ la stkn own ad dr es s,” wa s actua ll y rece iv edby her. If p et it io ne r di d re cei ve th e n ot ic e o f de fic ie nc y , itwou ldap pe ar tha t s he wil l b e p recl ud edfro m

di sp ut in g h er u nd erl y in g t ax li ab il it ie s fo r 20 03 -2 00 5 e ve n th ou gh SO W ol d p erm it te d h er re pr es en ta ti ve s t o ra is e th os e li ab il it ie s, an d e ve n th ou gh th e IRS actua ll y

ad jus te d the m , du rin g the CDP p ro ces s. Th e reg ul at io ns sp eci fic al ly addres s the si tu at io n wh ere “ anApp eal s o ffi cer c on si de rs th e m eri ts of a ta xp ay er’s l iabi li ty in a C DP he ari ng when th e ta xp ay er h adpre vi ou sl y rece iv ed a st atut ory

no ti ce o f de fic ie nc y .” Sec. 3 01 .63 20 -1 (e)( 3) , Q-E11 , Pro ced . & Adm in . Reg s. Th e reg ul at io ns pro vi de th at , inth is si tu at io n, an y ad jus tm en t t o the ta xp ay er’s und erl y in g t ax li ab il ity wil l n otbe co ns id eredpart o f th e n ot ic e o f de te rm in at io n: Inth e App eal s o ffi cer’s s ol e d is cret io n, * * * th e App eal s o ffi cer m ay co ns id er the ex is te nc e o r am ou ntof t he un de rlyin g t ax li ab il ity , or su chothe r pr ecl ud edis su es , at the same tim e as th e CDP h eari ng . Any det erm in at io n, h owe ve r, m ad e b y th e App eal s o ffi cer wi th res pe ctto su cha pr ecl ud edis su e sh al l n otbe tre at edas p artof t he Not ic e o f Det erm in at io n i ss ue d b y th e App eal s o ffi cer a ndwil l n otbe subjec t t o a ny j ud ic ia l re vi ew. Becaus e an y de ci si on s m ad e b y

th e App eal s o ffi cer o n s uc h p recl ud edis su es are n otpro pe rly a partof t he CDP h eari ng , su chde ci si on s ar e n otrequi redto ap pe ar i n the Not ic e- 11 -

[* 11 ] of De te rm in at io n i ss ue d fo ll owi ng th e h eari ng . Evenif a de ci si on co nc ern in g s uc h p recl ud edis su es is refe rredto inth e Not ic e of Dete rm in at io n, i t i s n otrev ie wab le by the Tax C ou rt b ecau se th e pr ecl ud edis su e is no t p ro pe rly partof the CDP h eari ng . Id . par a. (e)( 3) , A-E11
. W e uph el d the va li di ty of th is reg ul at io n i n B eh li ng v. Co m m is si on er, 1 18 T.C. 57 2 (2 00 2) , con cl ud in g tha t i t “pr es en ts a reas on ab le an d ‘tax pa y er-f rie nd ly’ ap pr oa chto th e co ll ect io n re vi ew pr oc es s re fle ct in g ‘res po nd en t’s g oo d- fai th effo rt * * * to pro vi de a ta xp ay er wi th a fi na l o pp ortu ni ty for ad m in is tra ti ve rev ie w’ of hi s o r he r ta x l iabi li ty.” Id. at57 9 (quo ti ng Kenn edy v. Co m m is si on er, 1 16 T.C. 25 5, 2 62 (20 01 )). W e acc or di ng ly hel d i n B eh li ng th at“ res po nd en t’s d eci
si onto pe rm itpe ti ti on er t o o fferin fo rm at io n a t the App eal s Off ic e h eari ng rel eva ntto th e ex is te nc e o r am ou ntof h is un de rlyin g t ax li ab il ity di d n otres ul t i n a waiv er b y res po nd en t o f th e res tri ct io n s etforthinsec ti on 63 30 (c)( 2) (B).” 11 8 T.C. at 5 79 ; s ee al so Hol landv. Co m m is si on er, T.C. Mem o. 2 01 3- 20 5. Un le ss pe ti ti on er ca n a dv an ce p ers ua si ve factua l d is ti nc ti on s b etweenhe r si tu at io n a nd th e si tu at io n s etforth inth e reg ul at io n a ndinBeh li ng , th e sa m e res ul t wo ul d s eem to fol lo w her e. Bu t n ei th er p arty ha s ad dr es se d thi s i ss ue , andwe have no oc cas io n t o d eci de itno w.- 12 -

[* 12 ] Fo r th es e rea so ns we wil l d en y res po nd en t’s m ot io n fo r su m m ary jud gm en t fil edSep te m

be r 24 , 20 14
. An ap pr op ria te ord er wi ll be is su ed
.