T.C. Mem o. 2 01 3- 20 5

UNITED STAT ES TAX COURT

DAVID EDGA R HOLLAND, Pet it io ne r v. COMM ISSI ONER OF INTERNAL REVENUE, Resp on de nt

Doc ke t No . 16 53 7- 12 L. Fi le d Au gu st29 , 20 13
.
Dav idEdg ar Ho ll an d, p ro se. Jo na th anE. Behr en s, fo r res po nd en t.

MEMORANDUM OPINION RUWE , Ju dg e: Thi s m at te r is be fo re the Co urt o n re sp on de nt ’s m ot io n fo r su m m ary jud gm en t (m ot io n) pu rs ua ntto Ru le 12 1. Res po nd en t co nt en ds th atno 1

Unl es s o th erwi se in di cat ed , all Ru le refe ren ces are t o t he Tax C ou rt R ul es 1 of Prac ti ce an d P ro cedur e, an d a ll sec ti onrefe ren ces are t o the Int ern al Rev enue Co de ineffe ctat a ll rel ev an t t im es .- 2 -

[* 2] ge nu in e d is pu te ex is ts as t o a ny m at eri al factan d t ha t the de te rm in at io n t o co ll ectpe ti ti on er’s i nc om e ta x l iabi li ti es by lev y sh ou ldbe up he ld . Peti ti on er h as no t re sp on de d t o the m ot io n, d es pi te anord er fro m th is Co urt i ns tru ct in g h im to do
so . 2 Bac kg ro un d At the ti m e th e p et it io n was fil ed , pet it io ne r res id edinDela ware. Pet it io ne r ti m el y

fil edhi s 2 00 1 F ed eral in co m e ta x re tu rn , andres po nd en t as se ss edth e ta x re po rte d o n the return. Pe ti ti on er’s wit hh el d t ax es were in su ffi ci en t t o p ay

th e ta x l iabi li ty repo rte d o n the return. Co ns eque nt ly,
res po nd en t as se ss edth e ta x a ndth e fai lure t o p ay pe na lty . Pet it io ne r di d n otfil e Fed eral in co m e ta x re tu rn s fo r th e ta xabl e y ears 20 02
an d 2 00 4. Re sp on de ntpre paredsubs ti tu te s fo r returns (SFRs ) fo r th e ta xabl e y ears 20 02 an d 2 00 4 p ur su an t t o s ect io n 6 02 0( b) . Res po nd en t m ai le d t o p et it io ne r a n ot ic e o f de fic ie nc y

forth e ta xabl e y ears 20 02 an d 2 00 4. Pe ti ti on er re cei ve d the
no ti ce o f de fic ie nc y

bu t d idno t fi le a pe ti ti on . Res po nd en t as se ss edth e ta x a nd pe na lt ie s as de te rm in edinth e n ot ic e o f de fic ie nc y .

By ord er d at edMarc h 1 2, 2 01 3, the Co urt d ire ct edpe ti ti on er t o fi le a 2 res po ns e o n o r be fo re Ap ril 12 , 20 13 . No res po ns e was fil edby pet it io ne r.- 3 -

[* 3] Res po nd en t s en t p et it io ne r a Let te r 10 58 , Fin al Not ic e o f In te ntto Levy and Not ic e o f Your Ri gh t t o aHeari ng , dat edMarc h 2 8, 2 01 1, ad vi si ng hi m th at res po nd en t i nt en de d t o l ev y to co ll ectth e unp ai d t ax li ab il it ie s fo r th e ta xabl e y ears 20 01 , 20 02 , and20 04 (y ears at i ss ue ) an d t ha t h e co ul d re qu es t a h eari ng with re sp on de nt ’s Offic e o f App eal s. Th e am ou nt s o f unpa idtax es , pen al ti es , and in te res t fo r th e y ears at i ss ue as o f Mar ch28 , 20 11 , were as fol lo ws:

Ass es se d Accru ed Accru ed Year bal an ce pe na lty int eres t Tota l 20 01 $51 5.0 0 --- $3 09 .41 $82 4.4 1 20 02 1,27 7.1 3 --- 241 .27 1,51 8.4 0 20 04 27 ,66 5.7 1 $0 .01 5,11 0.2 2 32 ,77 5.9 4 Pet it io ne r subm it te d ati m el y Fo rm 12 15 3, Re qu es t fo r a Co ll ect io n Du e Pro ces s o r Equ iv al en t Hea rin g, i n wh ic h h e d idno t co nt es t the un de rlyin g li ab il it ie s b utin st eadreque st edanoff er-i n- co m pr om is e. By let te r da te d M arch 30 , 20 12 , res po nd en t’s s et tl em en t o ffi cer ackno wled ge d re cei ptof p et it io ne r’s co ll ect io n due pro ces s (C DP) h eari ng reque st
an d s ch edul eda te le ph on e co nf eren ce ca ll forMay 1, 20 12 . In the let te r th e se tt le m en t o ffi cer r eque st edth atpe ti ti on er p ro vi de a co m pl et edFo rm

43 3- A, Co ll ect io n In fo rm at io n S ta te m en t fo r W ag e Earn ers an d S el f-Em pl oyed In di vi du al s, s o tha t a d eci si on co ul d b e m ad e reg ard in g p et it io ne r’s reque stforan- 4 -

[* 4] off er-i n- co m pr om is e. The l et te r al so st at edth atpe ti ti on er h adno t fi le d Fed eral in co m e ta x re tu rn s fo r th e y ears 20 05 th ro ug h 2 01 1, an d t ha t h e m us t pr ov id e si gn edreturns for th es e y ears to th e se tt le m en t o ffi cer. On Ap ril 23 , 20 12 , th e se tt le m en t o ffi cer r ecei ve d fr om pe ti ti on er a co m pl et edFo rm

43 3- A andsi gn edco pi es of p et it io ne r’s Fed eral in co m e ta x returns forth e y ears 20 01 , 20 02 , and20 04 th ro ug h 2 01 0. Th e se tt le m en t o ffi cer al so rece iv edanun si gn edreturn fo r 20 11 , whi chhe returne d t o p et it io ne r with in st ru ct io ns to si gn th e return a ndm ai l i t t o t he ad dr es s s pe ci fie d i n t he in st ru ct io ns forFo rm

10 40 , U.S. Ind iv idua l In co m e Tax Return. Usi ng th e in fo rm at io n re po rte d o n F orm 43 3- A th e se tt le m en t o ffi cer de te rm in edth atpe ti ti on er was ab le to m ak e m on th ly paym en ts of $ 56 9 t owa rd s hi s t ax li ab il it ie s. Th e se tt le m en t o ffi cer a ls o d et erm in edth atpe ti ti on er h adcas h
on ha ndof $ 2,4 65 .33 . Furt he rm or e, us in g t he qu ic k s al e v al ue m etho d,
res po nd en t d et erm in edth atpe ti ti on er h adequi ty in re al est at e o f $1 2,0 00 an d equi ty in v eh ic le s o f $8 ,40 0. As a res ul t, p et it io ne r ha d e qu ity inpro pe rty of $2 2,8 65 .33 th athe co ul d s el l i n o rd er t o p ay hi s t ax li ab il it ie s. Be cau se pe ti ti on er co ul d m ak e a m on th ly paym en t o f $5 69 an d h ad$2 2,8 65 .33 of e qu ity inpro pe rty, th e se tt le m en t o ffi cer d et erm in edth atpe ti ti on er co ul d fu ll y pay th e o ut st an di ng ta x l iabi li ti es forth e y ears at i ss ue .- 5 -

[* 5] Dur in g the CDP h eari ng on May 1, 20 12 , th e se tt le m en t o ffi cer i nf orm ed pe ti ti on er tha t h e d idno t ev al ua te pe ti ti on er’s el ig ib il ity for anoff er-i nco m pr om is e b ecau se pe ti ti on er d idno t s ub m ita Fo rm 65 6, Offe r in Co m

pr om is e. The set tl em en t o ffi cer g av e p et it io ne r un ti l M ay 14 , 20 12 , to subm ita Fo rm 65 6. Pet it io ne r di d n otpro vi de th e se tt le m en t o ffi cer wi th a Fo rm 65 6. Res po nd en t i ss ue d p et it io ne r a No ti ce o f Det erm in at io n C on cern in g Co ll ect io n Act io n( s) Und er Se ct io n 6 32 0 a nd/o r 63 30 , dat edMay 30, 2 01 2,
su st ai ni ng th e le vy acti on . Peti ti on er t im el y fil eda pe ti ti onwith t hi s C ou rt. Dis cu ss io n Su m m ary jud gm en t i s i nt en de d t o e xp ed it e li ti ga ti on an d t o avo id
un ne ces sary

an d e xp en si ve tri al s. Sh io sa ki v. Co m mis si on er, 6 1 T.C. 8 61 , 86 2 (1 97 4) . Summ ary jud gm en t m ay be gra nt edwher e th e p le ad in gs an d o th er m at eri al s s ho w th atth ere i s n o g enui ne di sp ut e as to an y m at eri al factan d tha t a de ci si on m ay

be ren de redas am at te r of law. Ru le 12 1( a) an d (b ); S un ds tra nd Co rp . v. Co m

m is si on er, 9 8 T.C. 5 18 , 52 0 (1 99 2) , aff’d, 1 7 F .3d96 5 (7 th Cir
. 19 94 ). The b ur de n i s o n the m ov in g p arty to de m on st rat e th atno ge nu in e d is pu te as to an y m at eri al factrem ai ns an d t ha t h e is en ti tl edto jud gm en t as a m at te r of law. FPL Grp., In c. & Subs . v. Co m m is si on er, 1 16 T.C. 73 , 74 -7 5 (2 00 1) . In al l
cas es , th e ev id en ce i s v ie wedinth e li gh t m os t fa vo rab le to th e n on m ov in g p arty .- 6 -

[* 6] Bo ndv. Co m

m is si on er, 1 00 T.C. 32 , 36 (19 93 ). Howev er, the no nm ov in g pa rty is re qu ire d “ to go be y on d the pl ead in gs an d b y * * * [h is ] own affi da vi ts , or by the ‘ de po si ti on s, an swe rs to in te rro ga to rie s, an d a dm is si on s o n fi le ,’ de si gn at e ‘spe ci fic fact s s ho win g tha t the re i s a g enui ne is su e fo r tr ia l.’” Cel ot ex Co rp . v. Catret t, 4 77 U.S. 31 7, 3 24 (19 86 ); s ee al so Rau en ho rs t v . Comm is si on er, 1 19 T.C. 15 7, 1 75 (20 02 ); F PL Grp., In c. & Subs . v. Co m m is si on er, 1 15 T.C. 55 4, 5 59 (2 00 0) . Desp it e o urord er tha t p et it io ne r fi le a res po ns e, he fai le d t o re sp on d t o th e m ot io n a ndha s fa il edto de m on strat e th atth ere i s a g enui ne di sp ut e fo r tr ia l. Co ns eque nt ly, we co nc lu de th atth ere i s n o d is pu te as t o a ny m at eri al factan d tha t a d eci si on m ay

be ren de redas am at te r of law. Sect io n 6 33 1( a) p ro vi de s tha t i f an y pe rs on li ab le to pa y

an y tax ne gl ect s o r refu se s t o p ay

su chtax withi n 1 0 d ay s af te r no ti ce an d d em an d fo r pa y m en t, the n th e Sec ret ary is au th or iz edto co ll ectsu chtax by lev y up on th e p ers on ’s pro pe rty. Sect io n 6 33 1( d) pro vi de s tha t, atlea st30 da y s b efo re en fo rci ng co ll ect io n b y way of a le vy onth e p ers on ’s pro pe rty, the Secr et ary is ob li ge d t o p ro vi de th e p ers on with afin al no ti ce o f in te ntto lev y , in cl ud in g n ot ic e o f th e admin is tra ti ve ap pe al s av ai labl e to th e p ers on . If a ta xp ay er reque st s a C DP he ari ng , he m ay rai se at t ha t he ari ng an y

rel ev an t i ss ue rel at in g t o t he unpa idtax or p ro po se d l ev y . Sec.- 7 -

[* 7] 63 30 (c)( 2) . Rele va ntis su es in cl ud e p os si bl e al te rn at iv e m ean s o f co ll ect io n. Sec. 6 33 0( c)(2 )(A)(i ii ). St an da rdof R ev ie w If a t ax pa y er’s und erl y in g l iabi li ty is p ro pe rly at is su e, th e Co urt re vi ews an y de te rm in at io n re gard in g the un de rlyin g l iabi li ty de n ov o. Go za v . Co m m is si on er, 1 14 T.C. 17 6, 1 81 -1 82 (20 00 ). Und erl y in g Li ab il ity

for20 01 Sect io n 6 33 0( c)(2 )(B) pe rm it s a t ax pa y er t o c ha ll en ge th e ex is te nc e o r am ountof t he tax li ab il ity rep orte d o n h is ori gi na l re tu rnif h e h as no t re cei ve d a
no ti ce o f de fic ie nc y

or n otothe rwis e h adanop po rtu ni ty to d is pu te th e ta x l iabi li ty in qu es ti on . See Mo nt go m ery v. Co m m is si on er, 1 22 T.C. 1, 9 -1 0 (2 00 4)
. Pet it io ne r ti m el y

fil edhi s 2 00 1 F ed eral in co m e ta x re tu rn . Peti ti on er d idno t rece iv e a n ot ic e o f de fic ie nc y an d d idno t h av e a p rev io us op po rtu ni ty to d is pu te hi s 2 00 1 t ax li ab il ity . Howev er, dur in g t he CDP h eari ng pe ti ti on er s ub m it te d a n am en de d re tu rnfor

20 01 . The t ax sh own on th e am en de d re tu rnex ceed edth e ta x sh own on th e o rig in al return. Th eref or e, pe ti ti on er d idno t d is pu te th e am ou ntof th e 2 00 1 t ax li ab il ity

ass es se d b y

res po nd en t. Co ns eque nt ly, pe ti ti on er’s 2 00 1 t ax li ab il ity is no t p ro pe rly befo re the Co urt.- 8 -

[* 8] Und erl y in g Li ab il it ie s fo r 20 02 an d 2 00 4 Pet it io ne r rec ei ve d ano ti ce o f de fic ie nc y forth e ta xabl e y ears 20 02 an d 20 04 ba se d o n S FRs pre pa redby resp on de nt . Duri ng th e CDP h eari ng pe ti ti on er subm it te d F ed eral in co m e ta x re tu rn s fo r th e 2 00 2 a nd20 04 tax ab le y ears . The
se tt le m en t o ffi cer f

orward edth es e returns to be pro ces se d. Sect io n 6 33 0( c)(2 )(B) st at es a “pe rs on m ay als o ra is e atth e h eari ng ch al le ng es to th e ex is te nc e o r am ou ntof t he un de rlyin g t ax li ab il ity foran y tax pe rio d i f th e p ers on di d n otrece iv e an y st atut ory no ti ce o f de fic ie nc y

forsu chtax li ab il ity or d idno t o th erwi se have anop po rtu ni ty to d is pu te su chtax li ab il ity .” Purs ua ntto sec ti on 63 30 (c)( 2) (B) ape rs on m ay no t ra is e th e und erl y in g t ax li ab il ity if h e rec ei ve d ano ti ce o f de fic ie nc y . See al so sec . 30 1.6 33 0- 1( e)(3 ), AE2, Pro ced . & Adm in . Reg s. The set tl em en t o ffi cer’s d eci si on to forwardpe ti ti on er’s 2 00 2 a nd20 04 Fed eral in co m e ta x re tu rn s fo r pr oc es si ng do es no t re su ltina waiv er b y res po nd en t o f th e res tri ct io n s etforth insec ti on 63 30 (c)( 2) (B). See Beh li ng v. Co m m is si on er, 1 18 T.C. 57 2, 5 79 (20 02 ). Ther efo re, the set tl em en t o ffi cer’s
co ns id erat io n o f pe ti ti on er’s t ax li ab il it ie s fo r th e 2 00 2 and20 04 tax ab le y ears do es no t al lo w th e Co urt t o c on si de r su chpre cl ud edis su es . See Mi ll er v . Co m m is si on er, T.C. Mem o. 2 00 7- 35 , 20 07 Tax C t. Me m o LEXIS 3 2, at*2 2; sec .- 9 -

[* 9] 30 1.6 33 0- 1( e)(3 ), A-E11 , Pro ced . & Adm in . Reg s. (“ Any det erm in at io n, ho wev er, 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
no t b e tr eat 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 an d wi ll no t b e subjec t t o any j ud ic ia l re vi ew.” (Em ph as is ad de d.))
. Co ns eque nt ly, pe ti ti on er’s 2 00 2 a nd20 04 tax li ab il it ie s ar e n otpro pe rly be fo re the Co urt. Abu se of Di sc ret io n The Co urt re vi ews adm in is tra ti ve de te rm in at io ns by the Co m m is si on er’s Offi ce o f App eal s re ga rd in g n on li ab il ity is su es forab us e o f di sc ret io n. Ho y le v. Co m m is si on er, 1 31 T.C. 19 7, 2 00 (20 08 ); Go za v . Comm is si on er, 1 14 T.C. at 1 82
. The de te rm in at io n o f th e Offi ce o f App eal s m us t t ak e in to co ns id erat io n: (1) th e ve rif ic at io n tha t the requi rem en ts of app li cab le law an d a dm in is tra ti ve pro cedur e ha ve be enm et ; (2 ) is su es rai se d b y th e ta xp ay er; an d (3 ) whe th er an y pro po se d
co ll ect io n a ct io n b al an ces th e n eedforth e eff ic ie ntco ll ect io n o f ta xe s wi thth e le gi ti m at e co nc ernof t he pe rs on th atan y co ll ect io n b e n o m or e in tru si ve th an ne ces sa ry . Sec. 6 33 0( c)(3 ); s ee al so Lun sf or d v . Comm is si on er, 1 17 T.C. 18 3, 18 4 (2 00 1) . The s et tl em en t o ffi cer p ro pe rly bas edhi s d et erm in at io n o n t he fact or s requi redby sect io n 6 33 0( c)(3 ).- 10 -

[* 10 ] Offer- in -Co m

pr om is e The set tl em en t o f di sp ut edtax li ab il it ie s i s g ov ern edby sect io ns 71 21 an d 71 22 , whi chau th or iz e th e Sec ret ary to set tl e an y tax di sp ut es an d c om

pr om is e an y ci vi l o r cri min al cas e ari si ng un de r th e in te rn al rev enue laws . Reg ul at io ns un de r se ct io n 7 12 2 c larif

y th e p ro cedur e requi redwith re sp ectto anoff er-i nco m pr om is e. Sect io n 3 01 .71 22 -1 (d )(1 ), Pro ced . & Adm in . Reg s., p ro vi de s tha t an

“ of fer t o c om

pr om is e a t ax li ab il ity

pu rs ua ntto sec ti on 71 22 m us t b e subm it te d
acco rd in g t o the pro cedur es , andinth e fo rm an d m an ne r, pr es cri be d b y th e Secr et ary. An o fferto co m pr om is e a t ax li ab il ity

m us t b e m ad e in writ in g, m us t b e si gn edby the tax pa y er u nd er p en al ty of pe rjury, andm us t co nt ai n a ll of t he in fo rm at io n p res cri be d o r reque st edby the Secr et ary. ” Rev . Pro c. 20 03 -7 1, s ec. 4.0 1, 2 00 3- 2 C .B. 51 7, 5 17 , pro vi de s tha t an “ of fer t o c om

pr om is e a t ax li ab il ity m us t b e subm it te d i n wri ti ng on th e Servi ce’s Fo rm 65 6, Offe r inCo m

pr om is e.” See a ls o Go dwi n v . Comm is si on er, T.C. Mem o. 2 00 3- 28 9, 2 00 3 Tax Ct. M em o LEXIS 29 2, at*3 2 (“ Tax pa y ers who wis h t o p ro po se anoff er i n c om pr om is e m

us t subm ita Fo rm

65 6” .), aff’d, 1 32 Fed . App x. 7 85 (11 th Cir . 20 05 ) Pet it io ne r reque st edanoff er-i n- co m pr om is e o n F orm

12 15 3. Du rin g t he CDP h eari ng th e se tt le m en t o ffi cer i nf orm edpe ti ti on er tha t h e m us t s ub m ita Fo rm 65 6 t o b e ev al ua te d fo r anoff er-i n- co m pr om is e. The s et tl em en t o ffi cer g av e- 11 -

[* 11 ] pe ti ti on er 1 4 d ay s t o s ub mita Fo rm 65 6. Pe ti ti on er n ev er s ub m it te d aFo rm 65 6. The re i s n o abu se of d is cret io n wh enth e se tt le m en t o ffi cer f ai ls to co ns id er a ta xp ay er’s reque stforanoff er-i n- co m pr om is e whe n aFo rm

65 6 was no t fi le d. See Ken dr ic ks v. Co m

mis si on er, 1 24 T.C. 69 , 79 (20 05 ); Ge nt il e v . Co m m is si on er, T.C. Mem o. 2 01 3- 17 5, at*9 ; Warin g v . Comm is si on er, T.C. Mem o. 2 01 1- 27 0, 2 01 1 Tax Ct. M em o LEXIS 2 62 , at * 6; Lud zackv. Co m m is si on er, T.C. Mem o. 2 01 1- 11 1, 2 01 1 Tax Ct. M em o LEXIS 1 08 , at * 5- *6
. Furth erm or e, pe ti ti on er fa il edto res po ndto th e m ot io n a s o rd eredby the Co urt. By fai li ng to res po ndto th e as se rti on s i n t he m ot io n, p et it io ne r wai ve d h is rig htto co nt es t the m . See Ru le 12 1( d) ; Lu ns fo rdv. Co m m is si on er, 1 17 T.C. at 1 87 ; Ako nji v. Co m

m is si on er, T.C. Mem o. 2 01 2- 56 , 20 12 Tax C t. Me m o LEXIS 4 9, at *6 . Con se qu en tl y , th e se tt le m en t o ffi cer d idno t ab us e h is di sc ret io n i n d en y in g pe ti ti on er’s reque stfora co ll ect io n a lt ern at iv e. As a re su lt , res po nd en t’s de te rm in at io n i s s us ta in ed
. Inreac hi ng ou r de ci si on , we hav e co ns id eredall arg um en ts m ad e b y th e pa rti es , andto th e ex te ntno t m en ti on edor a dd res se d, the y are i rrel ev an t o r witho utm eri t.- 12 -

[* 12 ] To ref

le ctth e fo reg oi ng , An ap pr op ria te ord er wi ll be is su edgra nt in g re sp on de nt ’s m ot io n, an d d eci si on wil l b e en te redfor
res po nd en t.