TAX COURT OPINION

Case: James Murden Wilcox
Docket Number: 5444-04L
Judge: Vasquez
Opinion Type: memo
Filed: 11/01/2005
Pages: 8

. T.C. Memo. 2005-257 UNITED ·STATES TAX COURT JUD 3 . JAMES MURDEN WILCOX, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. 5444-04L. Filed November 1, 2005. James Murden Wilcox, pro se. Marty J. Dama, for respondent. MEMORANDUM FINDINGS OF FACT AND OPINION VASQUEZ, Judge: Petitioner filed a petition in response to . respondent' s Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330 (Notice of Determination).¹ The sole issue for decision is whether ¹ Unless otherwise indicated, all section references are to the Internal Revenue Code as amended, and all Rule references are to the Tax Court Rules of Practice and Procedure. SERVED NOV - 1 2005 respondent's determination to proceed with collection was an - 2 - abuse of discretion. FINDINGS OF FACT Some of the facts have been stipulated and are so found. The stipulation of facts and the attached exhibits are incorporated herein by this reference. At the time he filed the petition, petitioner resided in Dallas, Texas. In 1976, petitioner was hit by a car while riding his bicycle and suffered numerous permanent and irreversible injuries. Petitioner was diagnosed in 1998 with a broken back. Petitioner was self-employed during 1995, 1996, 1997, and 1998, the years in issue. Before and after the years in issue, petitioner was employed full-time at Fusch-Serold and Partners. Since Fusch-Serold and Partners withheld a sufficient amount from petitioner's pay, petitioner did not owe any additional amounts of tax for the years he was employed at Fusch-Serold and Partners. Respondent assessed the following amounts, which are in dispute: Year 1995 1996 1997 1998 Interest $4,459.61 6,874.01 5,406.61 825.40 Sec. 6651(a)(1) Sec. 6651(a)(2) Sec. 6654(a) Additions to Tax $1,630.13 2,173.95 0.00 0.00 $289.80 676.34 104.74 91.96 $384 428 470 66 On June 11, 2003, respondent mailed to petitioner a Final Notice of Intent To Levy for 1995, 1996, 1997, and 1998. On July - 3 - 10, 2003, petitioner timely filed a Form 12153, Request for a Collection Due Process Hearing (section 6330 hearing). In a letter attached to the Form 12153, petitioner stated: I have paid the taxes in question. I can't afford to pay the penalties and interest, because my income is limited due to my physical disabilities and limitations (see attached). deprive me of obtaining medical help to cope with my physical condition and cause long-term and permanent effects. Any further collection of monies by the IRS will As of December 8, 2003, petitioner's total account balances for 1995, 1996, 1997, 1998 were $4,459.61, $22,808.61, $19,061.33, and $3,879.23, respectively. A section 6330 hearing was held by telephone on January 20, 20€4. Petitioner did not submit a Form 433-A, Collection Information Statement, to the hearing officer as requested. On February 20, 2004, respondent mailed to petitioner a Notice of Determination. In an attachment to the Notice of Determination, respondent described the section 6330 hearing as follows: During the telephone hearing with you and your the reasonable cause criteria for abatement I explained to you that You the penalties. Your therapist stated you could not therapist, we discussed your case. you did not meet of complete the Collection Information Statement, Form 433-A, You cannot concentrate for due to your medical condition. long periods of the form requires your monthly income and expenses. explained to me that you are able to pay your monthly living expenses and you are currently employed. Your therapist offered to assist you in completing the Form 433-A. You the refused her assistance. form had to be completed to determine your ability to pay the taxes. You were provided ample time and opportunity to time. I explained to both of you that It was explained to you that - 4 - You stated you previously file complete the Form 433-A. [sic] an Offer in Compromise that was rejected because you had the ability to full pay the taxes. the Taxpayer Advocate Office; you stated they would not help you. would be issued sustaining the issuance of It was explained to you that a Determination Letter I referred you to the levy. In the petition, petitioner states as his reason as to why he should be entitled to relief: In March of 1976, I was in an accident, in which I was hit by a car while riding my bicycle. permanent and irreversible inJurles. handicapped and limited every [sic] since. I certainly expect relief from the insurmountable penalty & interest charges. I suffered numerous I have been injured, * * * OPINION Section 6331(a) provides that, if any person liable to pay any tax neglects or refuses to do so within 10 days after notice and demand, the Secretary can collect such tax by levy upon property belonging to such person. Pursuant to section 6331(d), the Secretary is required to give the taxpayer notice of his intent to levy and within that notice must describe the administrative review available to the taxpayer, before proceeding with the levy. See also sec. 6330(a). Section 6330(b) describes the administrative review process, providing that a taxpayer can request an Appeals hearing with regard to a levy notice. At the Appeals hearing, the taxpayer may raise certain matters set forth in section 6330(c)(2), which provides, in pertinent part: J - 5 - SEC. 6330(c). Matters Considered At Hearing.--In the case of any hearing conducted under this section-- * * * * * * * (2) Issues at hearing.-- (A) In general.--The person may raise the hearing any relevant at the unpaid tax or proposed levy, issue relating to including-- (i) appropriate spousal defenses; (ii) challenges to the appropriateness of collection actions; and . (iii) offers of collection alternatives, which may include the posting of a bond, the substitution of other assets, an installment agreement, or an offer-incompromise. (B) Underlying liability.--The person the hearing challenges to may also raise at the existence or amount of liability for any tax period if the person did not receive any statutory notice of deficiency for such tax liability or did not otherwise have an opportunity to dispute such tax liability. the underlying tax Pursuant to section 6330(d)(1), within 30 days of the issuance of the notice of determination, the taxpayer may appeal that determination to this Court if we have jurisdiction over the underlying tax liability. Van Es v. Commissioner, 115 T.C. 324, 328 (2000). Although section 6330 does not prescribe the standard of review that the Court is to apply in reviewing the Commissioner's - 6 - administrative determinations, we have stated that, where the validity of the underlying tax liability is properly at issue, the Court will review the matter de novo. Sego v. Commissioner, 114 T.C. 604, 610 (2000); Goza v. Commissioner, 114 T.C. 176, 181 (2000). Where the validity of the underlying tax liability is not properly at issue, however, the Court will review the Commissioner's administrative determination for abuse of discretion. Sego v. Commissioner, supra; Goza v. Commissioner, supra. The term "underlying tax liability" in section 6330(d)(1) includes any amounts allegedly owed by a taxpayer pursuant to the tax laws. Katz v. Commissioner, 115 T.C. 329 (2000). This includes the tax deficiency, additions to tax, and interest. Id. As petitioner does not dispute the validity of the underlying tax liability, we review respondent's determination for an abuse of discretion. Petitioner's claim regarding his inability to pay bears upon issues such as collection alternatives or the appropriateness of the collection action that the Court reviews for abuse of discretion. An action constitutes abuse of discretion where it is arbitrary, capricious, or without sound basis in fact or law. Woodral v. Commissioner, 112 T.C. 19, 23 (1999). The record reflects no abuse of discretion by respondent. We have found that in the face of allegations of undue hardship, a taxpayer must submit complete and current financial data to - 7 - enable the Commissioner to evaluate a taxpayer's qualification for collection alternatives or other relief. Picchiottino v. Commissioner, T.C. Memo. 2004-231. Petitioner had completed a Form 433-A and had turned it·into a revenue officer in 1998. Petitioner contends that respondent's Appeals officer failed to consider.petitioner's entire history as she would not look at the 1998 form. Petitioner alleges that he shculd not have to complete another Form 433-A as the Appeals officer should have the 1998 form. However, the form completed in 1998 does not.represent current financial information, and as petitioner did not give respondent current financial information, it cannot be said that respondent acted arbitrarily or capriciously in determining to proceed with collection. See id ; Nevstat v. Commissioner, T.C. Memo. 2004-208. Petitioner also did not assert in the petition any spousal defenses, any challenges to the appropriateness of the collection • actions, or any offers of collection alternatives other than an offer-in-compromise that was going to be submitted at an unspecified future date but was never submitted. See sec. 6330(c)(2) (A). The issues not raised in the pleadings are now deemed conceded. Rule 331(b)(4). Therefore, we sustain respondent's determination regarding the proposed collection acclon. To reflect the foregoing, - 8 - Decision- will be entered for respondent.