TAX COURT OPINION

Case: Gregory King Johnson
Docket Number: 11111-08S
Judge: Colvin
Opinion Type: bench
Filed: 02/23/2009
Pages: 8

UNITED STATES TAX COURT WASHINGTON , DC 2021 7 GREGORY KING JOHNSON , Petitioner , V . Docket No . 11111-08 S COMMISSIONER OF INTERNAL REVENUE , Respondent . O R D E R Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it i s ORDERED that the Clerk of the Court shall transmit herewith to petitioner and to respondent a copy of the pages of the transcript of the proceedings in the above case before the undersigned at Boston, Massachusetts, containing the oral findings of fact and opinion rendered on February 3, 2009 . In accordance with the oral findings of fact and opinion, an appropriate decision will be entered . (Signed ) Laurence J . Whalen Judg e Dated : Washington, D .C . February 23, 200 9 SERVED Feb 25 2009 3 1 Bench Opinion by Senior Judge Laurence J . Whalen 2 (2 :50 p .m . ) 3 GREGORY KING JOHNSON Docket No . 11111-08 S 4 THE COURT : The Court has decided to render 5 oral findings of fact and opinion in this case . And the 6 following represents the Court's oral findings and opinion . 7 This proceeding is a lien action that wa s 8 brought pursuant to Section 6320 and, by cross reference , 9 Sections 6330(d) and 7463(f)(2) of the Internal Revenue Code 10 of 1986, as amended . 11 This proceeding was also brought pursuant to 12 Rules 330 through 334, and Rules 170 through 175 of the Tax 13 Court Rules of Practice and Procedure . 14 In this bench opinion all Section number s 15 refer to the Internal Revenue Code, as amended, and all rule 16 numbers refer to the Tax Court Rules of Practice an d 17 Procedure . 18 . This bench opinion is made pursuant to the 19 authority granted by Section 7459(b) and Rule 152 . 20 Mr . Gregory King Johnson appeared on his own 21 behalf . Erika B . Cormier, Attorney At Law, appeared on 22 behalf of Respondent . 23 The facts set forth in the Stipulation of 24 Facts filed by the parties are hereby incorporated herein by 25 reference, except for Paragraph 28 thereof and Exhibit 24-J Heritage Reporting Corporation (202) 628-4888 2 4 1 which were not accepted into evidence . 2 The Court has found certain other facts based 3 on Mr . Johnson's testimony at trial . 4 The facts relevant to the proper disposition 5 of this case are as follows, Petitioner filed a delinquent 6 return for taxable year 2004 on or about April 13, 2006 , 7 approximately one year after the due date of the return . 8 After credits, Petitioner owed a balance due in the amount 9 of $17,541 . 10 Respondent assessed the balance due and 11 additions to tax under Section 6651(a)(1) for failure to 12 file a timely return, under Section 6651(a)(2) for failure 13 to make timely payment, and under Section 6654(a) fo r 14 failure to pay estimated income tax . 15 During 2004 and 2005, Petitioner underwent 16 bilateral ankle core decompression, left elbow cor e 17 decompressions and nerve transposition, and left ankle 18 arthrodesis for the treatment of osteonecrosis . Th e 19 postoperative recovery for each operation ranged from two to 20 six months . 21 On October 11, 2007, Respondent issued to 22 Petitioner a Notice of Federal Tax Lien Filing and Your 23 Right to a Hearing under IRC 6320 . According to tha t 24 notice, the Commissioner had filed a Notice of Federal Tax 25 Lien on October 12, 2007, with respect to Petitioner's Heritage Reporting Corporatio n (202) 628-4888 4 5 1 outstanding tax liability for 2004 . 2 Thereafter, on or about November 19, 2007 , 3 Petitioner filed with Respondent a Request for a Collection 4 Due Process Hearing on IRS Form 12153 . 5 Petitioner's Form 12153 stated, "I do not 6 believe I should be responsible for penalties due to my 7 severe medical conditions and the fact that I was on a 8 prescribed narcotic for part of 2004 and most of 2005 and as 9 a result my inability to work full time . (sic) I was laid 10 off from Natural Microsystems on January 9, 2004 . I hav e 11 avascular necrosis, see definition below, which has required 12 and will require extensive orthopedic surgeries throughout 13 my life . " 14 The Settlement Officer to whom Petitioner's 15 case was assigned sent a letter dated March 6, 2008 t o 16 Petitioner in which she scheduled a telephone conference 17 call for April 1, 2008, and informed him that for her "to 18 consider alternative collection methods such as a n 19 installment agreement or offer in compromise," he mus t 20 provide a completed Collection Information Statement, Form 21 433-A for individuals, within 14 days of the date of the 22 letter . 23 Shortly before and continuing to April 1st, 24 Petitioner transmitted various documents to the Settlement 25 Officer by facsimile transmissions . Heritage Reporting Corporation (202) 628-4888 6 1 One of the documents transmitted to th e 2 Settlement Officer was a completed Form 433-A Collection 3 Information Statement . 4 By letter dated March 28, 2008, Petitione r 5 sought an extension of two weeks to prepare for the hearing . 6 Petitioner's request for an extension was denied, but h e 7 went forward with the hearing on April 1, 2008 . 8 On or about April 4, 2008, the appeals office 9 issued a Notice of Determination Concerning Collectio n 10 Actions Under Section 6320 and/or 6330 with respect to 11 Petitioner's outstanding tax liability for 2004 whic h 12 sustained the issuance of the Final Notice of Federal Tax 13 Lien . 14 In an attachment to the Notice o f 15 Determination, the Settlement Officer stated as follows, 16 "The hearing was held by telephone at the scheduled time 17 with the Settlement Officer and you . " 18 "You did not submit the requested information 19 for us to consider a collection alternative during th e 20 hearing and neither did you submit any documentation t o 21 support you (sic) beliefs on why the lien should be removed . 22 Therefore, a determination was based on the information in 23 the case file . " 24 Regarding the issues raised by Petitioner, 25 the attachment to the Notice of Determination states, "You Heritage Reporting Corporatio n (202) 628-4888 .1. 7 1 did not question the liability on the Form 12153 ." W e 2 believe the Settlement Officer was mistaken on that point . 3 Among other things, Petitioner's petitio n 4 states, "I do challenge the liability owed for 2004 ." 5 This follows Petitioner's Request for a 6 Collection Due Process Hearing on IRS Form 12153 which, as 7 stated above, took issue with the determination tha t 8 Petitioner was liable for the additions to tax in view of 9 his medical condition . 10 Thus, Petitioner has raised a valid challenge 11 to the tax liability underlying the lien action sustained by 12 the Notice of Determination at issue in this-case and the 13 Court will review this matter on a de novo basis . See , 14 example, Goza v . Commissioner , 114 T .C . 176, 181-182 (2000) . 15 At trial, Petitioner argued that his tax 16 liability for 2004 should be reduced because of his chronic 17 health problems from 2004 through the present time . 18 Specifically, he enumerated four reductions 19 of his 2004 income tax liability that should be made . 20 First, he asserts that all interest and 21 penalties assessed for 2004 should be abated . 22 ..Second, he argues that he should be relieved 23 of the additional tax in the amount of $6,894 reported on 24 Form 5329, Additional Taxes on Qualified Plans (Including 25 IRAs) and Other Tax-Favored Accounts, of his 2004 return . Heritage Reporting Corporatio n (202) 628-4888 8 1 Third, he argues that he should not have been 2 taxed on unemployment compensation for 2004 . 3 Finally, he argues that his 2004 ta x 4 liability should be reduced, in some way, by reason of the 5 fact that he used his own assets, rather than Governmen t 6 assistance, to pay his expenses . 7 We agree with Petitioner that he is no t 8 liable for the additions to tax under Section 6651(a)(1) and 9 under Section 6651(a)(2) that were added by Respondent t o 10 the Petitioner's 2004 tax . 11 Petitioner's serious and painful medica l 12 condition and the orthopaedic operations that he underwent 13 during 2004 and 2005 to obtain relief justified th e 14 relatively short delay in his filing and payment of his 2004 15 tax liability . 16 We believe Petitioner has shown that his 17 failure to file a timely return and his failure to make a 18 timely payment of tax was due to reasonable cause and not 19 due to willful neglect . 20 Except to that extent, however, we reject 21 Petitioner's position and sustain the determination of the 22 Settlement Officer . 23 For the foregoing reasons, except for 24 adjusting Petitioner's tax liability for 2004 by th e 25 abatement of the additions to tax under Section 6651(a)(1) Heritage Reporting Corporation (202) 628-4888 1 and Section 6651(a)(2), we hereby sustain the Notice o f 9 Determination Concerning Collection Actions under Sectio n 6320 and/or 6330 issued to Petitioner on April 4, 2008, wit h respect to taxable year 2004 . This concludes the Court's oral findings o f fact and opinion in this case . (Whereupon, at 3 :00 p .m ., the bench opinio n in the above-entitled matter was concluded . ) 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 / / 17 1 8 19 20 21 22 2 3 24 25 // Heritage Reporting Corporation (202) 628-4888