TAX COURT OPINION

Case: Sheldon Kurt & Hillary Latos
Docket Number: 29582-11SL
Judge: Panuthos
Opinion Type: bench
Filed: 03/21/2013
Pages: 9

UNITED STATES TAX COURT WASHINGTON, DC 20217 SHELDON KURT & HILLARY LATOS, Petitioners, v. COMMISSIONER OF INTERNAL REVENUE, Respondent RMM ) ) ) ) ) Docket No. 29582-11SL. ) ) ) ) ) OR D E R Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is 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 hearing in the above case before Chief Special Trial Judge Peter J. Panuthos at New York, New York, on March 6, 2013, containing oral findings of fact and opinion rendered at the trial session at which the case was heard. In accordance with the oral findings of fact and opinion, an order and decision will be entered for respondent. (Signed) Peter J. Panuthos Special Trial Judge Dated: Washington, D.C. March 21, 2013 SERVED Mar 22 2013 Capital Reporting Company Sheldon Kurt & Hillary Latos 03-06-2013 3 1 Bench Opinion by Judge Peter J. Panuthos 2 March 6, 2013 3 Sheldon Kurt & Hillary Latos Docket No. 29582-11SL 4 THE COURT: The court has decided to render 5 oral findings of fact and opinion in this case, and 6 7 the following represents the Court's oral findings of fact and opinion. The oral findings of fact and 8 opinion shall not be relied upon as precedent in any 9 other case. 10 This bench opinion is made pursuant to the 11 authority granted by section 7459(b) of the Internal 12 Revenue Code of 1986, as amended, and Rule 152 of the 13 14 15 Tax Court Rules of Practice and Procedure. Subsequent section references contained in this bench opinion are to sections of the Internal Revenue Code of 1986, 16 as amended, in effect for 2009, and all Rule 17 references are to the Tax Court Rules of Practice and Pr ocedur e . 18 19 The issue for decision is whether the 20 respondent's determination to proceed with a proposed 21 22 levy to collect petitioners' unpaid Federal income tax liability for taxable year 2009 was an abuse of 23 discretion. Petitioner Sheldon Kurt Latos did not 24 appear at trial nor did he execute the stipulation of 25 facts that was signed by petitioner Hillary Latos (866) 448 - DEPO www.CapitalReportingCompany.com 2013 Capital Reporting Company Sheldon Kurt & Hillary Latos 03-06-2013 4 1 (hereinafter petitioner) and counsel for respondent. 2 Because petitioner Sheldon Kurt Latos did not appear 3 at trial or otherwise execute the stipulation of 4 facts, we dismiss this case as to him for lack of 5 prosecution, but withhold entry of decision to be 6 7 8 consistent with the decision to be entered as a result of this opinion. The record establishes the following. The 9 petitioner filed a timely petition disputing 1 10 11 12 13 respondent's Notices of Determination dated November 21, 2011, that sustained a proposed levy action with respect to their outstanding tax liability for tax year 2009, based on unpaid taxes reported on a joint 14 Federal income tax return for that year. Petitioners 15 resided in New York at the time they filed the 16 petition. 17 18 Petitioners filed a joint Federal Income Tax. Return for the taxable year 2009 and reported a 19 balance due of $5,296. Respondent assessed the 20 balance due as well as an addition to the tax under 21 22 section 6651(a) (2). On March 21, 2011, respondent sent petitioners a Final Notice of Intent to Levy and 23 Noticë of Your Right to a Hearing. PetitionerStimely 24 filed a Form 12153, Request For a Collection Due 25 Process Or Equivalent Hearing. In the request (866) 448 - DEPO www.CapitalReportingCompany.com 2013 Capital Reporting Company Sheldon Kurt & Hillary Latos 03-06-2013 5 1 petitioners requested an installment agreement as a 2 collection alternative. On printed section60f the 3 4 Form 12153, petitioners also made marks next to items such as, "I cannot pay my taxes" and "I do not 5 believe I should be responsible for penalties." 6 7 8 9 After the filing of the Form 12153, respondent attempted to communicate with petitioners for purposes of conducting a CDP hearing. Respondent scheduled a telephonic CDP hearing on November 1, 10 2011. Petitioners did not call for the scheduled 11 hearing. According to petitioner, her Internet was 12 not operational and she was unable to communicate 13 with the settlement officer. She indicated that she 14 later left a telephone message with the settlement 15 officer advising that she was unable to attend the 16 telephonic conference. Respondent's records do not 17 reflect contacts by petitionerJs ln response to the 18 offer of a hearing. Respondent provided petitioners 19 with a second opportunity to discuss collection with 20 a deadline of November 15, 2011. Petitioners 21 apparently failed to respond to that deadline. 22 Respondent then issued separate Notices of 23 Determination Concerning Collection Actions to 24 petitioners, both dated November 21, 2011 and 25 petitioners filed a timely petition. Though the (866) 448 - DEPO www.CapitalReportingCompany.com 2013 Capital Reporting Company Sheldon Kurt & Hillary Latos 03-06-2013 6 1 petition appears to be signed only by Sheldon Kurt 2 Latos, we deem petitioner to have ratified the 3 petition, given that she appeared for trial and 4 5 signed the stipulation of facts. Sections 6320 and 6330 provide 6 procedures for administrative and judicial review of 7 8 respondent's lien and levy actions. In short, any person receiving a notice of a lien filing or a 9 proposed levy may request an administrative hearing 10 with respondent's Appeals Office. The Appeals Office 11 is obliged to verify that the requirements of any 12 applicable law or administrative procedure have been 13 met. Secs. 6330(c) (1), 6320 (c). The person may 14 raise at the administrative hearing any relevant 15 issue relating to the unpaid tax or the collection 16 action, including appropriate spousal defenses, 17 challenges to the appropriateness of the collection 18 action, and offers of collection alternatives. Secs. 19 6330 (c) (2) (A), 6320 (c) . The person may also raise at 20 the hearing challenges to the existence or amount of 21 the underlying tax liability if the person did not 22 receive a statutory notice of deficiency for such tax 23 liability or did not otherwise have an opportunity to 24 dispute such tax liability. Secs . 6330 (c) (2) (B), 25 6320 (c). The court will only consider a challenge to (866) 448 - DEPO www.CapitalReportingCompany.com 2013 Capital Reporting Company Sheldon Kurt & Hillary Latos 03-06-2013 1 2 the underlying tax liability on review if the taxpayer properly raised the issue during the CDP 3 hearing. Sec. 301.6320-1(f), Q&A-F3, Proced. & 4 Admin. Regs.; see also Giamelli v. Commissioner, 129 7 5 T.C. 107, 115 (2007). 6 When the underlying tax liability is 7 properly at issue, we review the Commissioner's 8 determination de novo; where' the validity of the 9 underlying tax liability is not at issue, we will 10 review the Commissioner's administrative 11 determination for abuse of discretion. Sego v. 12 Commissioner, 114 T.C. 604, 610 (2000); Goza v. 13 Commissioner, 114 T.C. 176, 181-182 (2000). 14 Petitioner may prove abuse of discretion by showing 15 that respondent exercised his discretion arbitrarily, 16 capriciously, or without sound basis inAlaw. ÊMk or' See 17 Giamelli v. Commissioner, 129 T.C. at 111. When a 18 hearing officer is unable or refuses to consider 19 collection alternatives because of a taxpayer's 20 failure to provide financial information, courts have 21 held that there was no abuse of discretion. 22 Schwersensky v. Commissioner, T.C. Memo. 2006-178; 23 see also Lance v. Commissioner, T.C. Memo. 2009-129. 24 Since this case involves a self-assessed 25 tax, petitioners are entitled to raise the underlying (866) 448 - DEPO www.CapitalReportingCompany.com 2013 Capital Reporting Company Sheldon Kurt & Hillary Latos 03-06-2013 1 tax liability. However, a taxpayer is precluded from 8 2 disputing the tax liability if the underlying tax 3 liability was not raised during the CDP hearing. 4 Giamelli v. Commissioner, 129 T.C. at 115. 5 Petitioners dispute the underlying tax liability in 6 their petition, but petitioner5did not attend an 7 Appeals Office hearing and did not otherwise raise 8 the underlying tax liability in a CDP hearing. The 9 question is whether petitioners had a reasonable 10 opportunity to present evidence as to the underlying 11 liability. On the basis of this record, we conclude 12 that petitioners did have a reasonable opportunity to 13 present evidence and failed to appear and failed to 14 respond to letters from the IRS. 15 Because petitioners did not raise the 16 underlying liability during the CDP hearing, we 17 review respondent's determination to proceed with the 18 collection for abuse of discretion. Goza v. 19 Commissioner, 114 T.C. at 182. From the petition, we 20 gather that petitioners contend that respondent 21 abused his discretion by not considering the 22 incomplete financial information that was submitted. 23 During the CDP hearing, petitioners failed to submit 24 the requested collection information statement so 25 that respondent could evaluate the proposed offer-in- (866) 448 - DEPO www.CapitalReportingCompany.com 2013 Capital Reporting Company Sheldon Kurt & Hillary Latos 03-06-2013 compromise. We have consistently held that it is not 9 an abuse of discretion for the Appeals Office to reject collection alternatives and sustain the proposed collection action on the basis of the taxpayer's failure to submit requested financial information. See Huntress v. Commissioner, T.C. 1 2 3 4 5 6 7 Memo. 2009-161; Prater v. Commissioner, T.C. Memo. 8 2007-241; Roman v. Commissioner, T.C. Memo. 2004-20. 9 Petitioner was aware that the respondent's settlement 10 officer requested a collection information statement 11 12 and additional financia.1 information, and she failed to provide it. Accordingly, it was not an abuse of 13 discretion for the Appeals Office to reject 14 petitioner's proposed offer-in-compromise because of 15 a lack of necessary financial information. 16 Based on the foregoing, we sustain 17 respondent's collection4(levy) in respect to 18 petitioner's outstanding income tax liability for the 19 taxable year 2009 as determined by respondent in the 20 Notice of Determination Concerning Collection 21 Action(s) under Section 6320 and/or 6330, dated 22 November 21, 2011, upon which this case is based. An 23 appropriate order and decision will be entered. 24 This concludes the Court's oral findings of 25 fact and opinion in this case. (866) 448 - DEPO www.CapitalReportingCompany.com 2013 Capital Reporting Company Sheldon Kurt & Hillary Latos 03-06-2013 (Whereupon, at 1:20 p.m., the above- entitled matter was concluded.) 10 (866) 448 - DEPO www.CapitalReportingCompany.com 2013 1 2 3 4 S 6 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25