T.C. Memo. 2003-276

UNITED STATES TAX COURT

 CARL AND LISA NEUGEBAUER, Petitioners v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 8568-02L. Filed September 23, 2003.

Carl and Lisa Neugebauer, pro se.

Karen Nicholson Sommers, for respondent.

MEMORANDUM OPINION

LARO, Judge: Petitioners, while residing in Murrieta,

California, petitioned the Court under section 6330(d) to review

respondent’s proposed collection activity in the form of a levy.

Respondent proposed this action to collect petitioners’ joint

Federal income tax liability for 1994 and 1995. Currently, the

case is before the Court on respondent’s motion for summary
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judgment under Rule 121(a). Petitioners responded to

respondent’s motion under Rule 121(b).

We shall grant respondent’s motion for summary judgment.

Section references are to the applicable versions of the Internal

Revenue Code. Rule references are to the Tax Court Rules of

Practice and Procedure. 

Background

Petitioners filed joint Federal income tax returns for 1994

and 1995 reflecting refunds for both years. These returns were

later audited, and on or about April 19, 1999, respondent

assessed income tax deficiencies and related penalties and

interest against petitioners with respect to 1994 and 1995. 

Petitioners failed to pay fully the amounts assessed and in

February 2000 ceased making monthly payments of $2,500 per month

as mandated by an installment payment agreement. On or about May

7, 2001, respondent issued to petitioners a letter entitled

“Final Notice - Notice of Intent to Levy and Notice of Your Right

to a Hearing Under IRC 6330". 

On or about June 8, 2001, petitioners submitted a Form

12153, Request For A Collection Due Process Hearing. On January

10, 2002, petitioners submitted an offer in compromise and a

collection information statement in connection with their request

for a hearing. Respondent’s Appeal officer determined that the

offer in compromise should not be accepted because the offer and
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supporting financial information were incomplete. Petitioners

did not provide the complete information. On January 17, 2002, a

hearing was held between respondent’s Appeals officer and

petitioners’ counsel Judy E. Hamilton. In connection with the

hearing, the Appeals officer reviewed Internal Revenue Service

transcripts of account for petitioners’ 1994 and 1995 income tax

liabilities.

On April 12, 2002, respondent sent petitioners a Notice of

Determination Concerning Collection Action(s) Under Section 6320

and/or 6330 (Notice of Determination) regarding petitioners’ 1994

and 1995 income tax liabilities. On May 13, 2002, petitioners

filed with the Court a Petition for Lien or Levy Action. Neither

in the petition nor in the previous request for a hearing did

petitioners raise any issues with respect to the existence or the

amount of the underlying tax liability. Instead, petitioners

allege that they were denied their right to a hearing under

section 6330, that they were denied participation in the

proceedings relating to their offer in compromise, and that they

were subjected to punitive conduct by personnel of the Internal

Revenue Service (IRS). Petitioners ask the Court to remand this

case to Appeals for further consideration of an offer in

compromise or, alternatively, to transfer this case to the

appropriate Federal District Court. 
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On July 11, 2003, respondent moved for summary adjudication

on all issues presented in this case. On August 20, 2003,

petitioners filed with the Court a reply to that 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 with respect to all or any part of the legal issues in

controversy “if the pleadings, answers to interrogatories,

depositions, admissions, and any other acceptable materials,

together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that a decision may be

rendered as a matter of law.” Rule 121(a) and (b); Sundstrand

Corp. v. Commissioner, 98 T.C. 518, 520 (1992), affd. 17 F.3d 965

(7th Cir. 1994). The moving party bears the burden of proving

that there is no genuine issue of material fact, and factual

inferences are drawn in a manner most favorable to the party

opposing summary judgment. Dahlstrom v. Commissioner, 85 T.C.

812, 821 (1985); Jacklin v. Commissioner, 79 T.C. 340, 344

(1982). 

As will be shown in the discussion that follows, petitioners

raised no genuine issue as to any material fact. Respondent

supported his motion for summary judgment with the pleadings,

exhibits, and an affidavit of one of his attorneys. Petitioners’
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reply was supported by materials not responsive to the merits of

respondent’s motion. The reply also did not set forth any

specific facts showing a genuine issue for trial. We consider

“the pleadings, answers to interrogatories, depositions,

admissions, and any other acceptable materials, together with the

affidavits”, and find no genuine issue as to any material fact.

Rule 121(b). Accordingly, we conclude that this case is ripe for

summary judgment. Celotex Corp. v. Catrett, 477 U.S. 317 (1986). 

Section 6331(a) provides that if any person liable to pay

any tax neglects or refuses to pay such tax within 10 days after

notice and demand for payment, the Secretary may collect such tax

by levy on the person’s property. Section 6331(d) states that at

least 30 days before enforcing collection by levy on the person’s

property, the Secretary must furnish the person with a final

notice of intent to levy, including notice of the administrative

appeals available to the person.

Under section 6330, the Commissioner cannot proceed with

collection by levy until the person has been given notice and the

opportunity for an administrative review of the matter (in the

form of an Appeals Office hearing) and, if dissatisfied, with

judicial review of the administrative determination. Davis v.

Commissioner, 115 T.C. 35, 37 (2000); Goza v. Commissioner, 114

T.C. 176, 179-180 (2000). In the case of such judicial review,

the Court will review a taxpayer’s liability under the de novo
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standard where the validity of the underlying tax liability is at

issue. A taxpayer’s underlying tax liability may be at issue if

he or she “did not receive any statutory notice of deficiency for

such tax liability or did not otherwise have an opportunity to

dispute such tax liability.” Sec. 6330(c)(2)(B). The Court will

review the Commissioner’s administrative determination for abuse

of discretion with respect to all other issues. Sego v.

Commissioner, 114 T.C. 604, 610 (2000).

Here, petitioners do not dispute the existence or the amount

of an underlying tax liability. Therefore, the proper standard

for our review of respondent’s determination is abuse of

discretion. Under section 6330(c)(3), the determination of an

Appeals officer must take into consideration (A) the verification

that the requirements of applicable law and administrative

procedures have been met, (B) issues raised by the taxpayer, and

(C) whether any proposed collection action balances the need for

the efficient collection of taxes with the legitimate concern of

the person that any collection be no more intrusive than

necessary. 

Here, the Appeals officer addressed all these matters. 

He satisfied the first requirement by reviewing the Internal

Revenue Service transcripts of petitioners’ account. Hill v.

Commissioner, T.C. Memo. 2002-272; Kuglin v. Commissioner, T.C.

Memo. 2002-51; Weishan v. Commissioner, T.C. Memo. 2002-88. 
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The Appeals officer satisfied the second requirement by

considering the issues raised by petitioners. The only issue

raised by petitioners was their inability to pay the liability in

full and, in that regard, petitioners requested that they be

allowed to satisfy the liability through an offer in compromise. 

The Appeals officer addressed this request by reviewing the

information submitted, explaining that it was incomplete, and

asking for additional information. Petitioners failed to submit

a properly completed Form 656, Offer in Compromise, and the

required financial information for the consideration of their

request. 

As to the third requirement, the Appeals officer properly

balanced the need for efficient collection of taxes through the

proposed levy against the concern that any collection action be

no more intrusive than necessary. Petitioners failed to provide

the information required in order to consider an alternative

collection action. 

Throughout the proceeding, petitioners’ conduct demonstrates 

propensity to delay the collection of their outstanding tax

liabilities. We sustain respondent’s determination regarding the

proposed levy as a permissible exercise of discretion. We note

as to the allegations set forth in the petition that petitioners

did receive a hearing under section 6330, that petitioners were

given an opportunity to participate in an offer in compromise,
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and that petitioners’ unsupported allegations create no triable

issue of fact regarding the “punitive conduct” by the IRS

personnel.

Regarding petitioners’ request to refer this case to a

different forum, we observe that this Court has jurisdiction over

the appeal of the administrative determinations where the

underlying tax liability concerns unpaid income taxes, as opposed

to the other taxes. See, e.g., Goza v. Commissioner, supra;

Danner v. United States, 208 F. Supp. 2d 1166 (E.D. Wash. 2002);

Gillett v. United States, 233 F. Supp. 2d 874 (W.D. Mich. 2002). 

Therefore, we decline to grant petitioners’ request. 

We have considered all arguments raised by the parties and

have found those arguments not discussed herein to be irrelevant

and/or without merit. Accordingly, 

An appropriate order and

decision will be entered for

respondent.