TAX COURT OPINION

Case: Bryon K. Moles
Docket Number: 30696-09L
Judge: Goeke
Opinion Type: bench
Filed: 04/04/2011
Pages: 6

UNITED STATES TAX COURT WASHINGTON, DC 20217 BYRON K. MOLES, ET AL. Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ) ) ) ) O R D E R Docket No. 30695-09L, 30696-09L, 30726-09L, 7928 -10 L . ~ 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 petitioners and to respondent a copy of the pages of the transcript of the hearing in the above cases before Judge Joseph Robert Goeke at San Francisco, California, on March 15, 2011, containing his oral findings of fact and opinion rendered at the conclusion of the hearing. In accordance with the oral findings of fact and opinion, appropriate orders and decisions will be entered. (Signed) Joseph Robert Goeke Judge Dated: Washington, D.C. April 4, 2011 SERVED APR - 7 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Bench Opinion by Judge Joseph Robert Goeke March 15, 2011 Bryon K. Moles, Et Al. v. Commissioner Docket Nos.: 30695-09L, 30696-09L, 30726-09L, & 7928-10L 3 THE COURT: The Court has decided to render oral findings of fact and opinion in this case, and the following represents the Court's oral findings of fact and opinion. The oral findings of fact and opinion shall not be relied upon as precedent in any other case. This oral findings of fact and opinion is rendered pursuant to Rule 152 of the Tax Court Rules of Practice & Procedure, and Internal Revenue Code section 7459(b). Hereinafter, rule references are to the Tax Court Rules of Practice & Procedure, and section references are to the Internal Revenue Code. In this situation, four dockets have been consolidated for purposes of hearing on four motions for summary judgment filed by Respondent under Rule 121. All four dockets involved attempts by Respondent to begin collection action of income tax liabilities of Petitioner Bryon K. Moles and Petitioner Karen B. Moles. All four dockets involve the same basic factual circumstanc although three of the dockets involve 2004 liabilities, and one docket involves 2005 liabilities. The dockets involve both attempts to collect by Heritage Reporting Corporation (202) 628-4888 4 levy and by lien. However, Respondent is only seeking to uphold a filing of federal tax lien relative to 2005 liabilities. The underlying liabilities in income tax and addition to tax for 2005 are $16,521, and the addition to tax under section 6662(a) is $3304. For 2004, the deficiency amount is two thousand five hundred -- strike that -- is 609%'100 t , and the addition to tax under section 6662(a) is $51,340. The issues framed by Respondent's four motions for summary judgment and Petitioners' response to those motions is whether the Petitioners may raise in these collection due process cases a defense that they do not owe the underlying tax liabilities. Petitioners acknowledge that with respect to the years 2004 and 2005 they received notices of deficiency. They maintain, however, that these notices of deficiency should not prevent them from challenging the underlying tax liabilities in these cases which are before the Court under section 6330. The circumstances of the issuance of the notices of deficiency are not disputed. The parties agree that at the time Respondent mailed the notices of deficiency on February 20th, 2008, the Petitioners had filed for bankruptcy on February 5th, 2008. The Petitioners do not argue that the notices of deficiency 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Heritage Reporting Corporation (202) 628-4888 5 are invalid, but rather that correspondence they received from Respondent subsequent to Respondent sending the notices of deficiency misled them as to the steps they should take regarding the notices of deficiency. The parties agree that after the issuance of the notices of deficiency, and after the Petitioners' bankruptcy case was discharged, Respondent assessed the income tax deficiencies and additions to tax for 2004 and 2005. The correspondence which Petitioner asserts should alleviate them from the restriction in section 6330 regarding their ability to raise the underlying tax liability upon the receipt of a notice of deficiency, was sent to the Petitioners on March 3rd, 2008. In this correspondence, Petitioners represent that Respondent stated they were prohibited by reason of the bankruptcy from filing a petition with respect to the deficiency and for 90 days thereafter. Petitioners assert that the vague statement for 60 days thereafter in the letter of March 3rd, 2008, caused them to fail to file petitions in the United States Tax Court after their discharge in bankruptcy, and that therefore they should be allowed to challenge the underlying tax liabilities for 2004 and 2005 in the present case. Petitioners cite no authority for this proposition, and they do not dispute the fact that the plain 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Heritage Reporting Corporation (202) 628-4888 .1 6 language of section 6330 would indicate that having received the notices of deficiency, the Petitioners may not challenge the underlying liabilities in the present cases under section 6330. Petitioners' argument that Respondent's correspondence misled them and that therefore they should be excused for their failure to petition the Tax Court and that the notices of deficiency should not be a bar to raising the underlying liability in the present case is without merit. The Court's jurisdiction to consider underlying liability under section 6330 is clearly defined in the statute, and there's no exception for circumstances where the Petitioners, having received the notices of deficiency, did not understand the implications of the notice, or did not understand the steps that they should take to pursue a deficiency case in the United States Tax Court. The statute simply states that the Petitioners, having received a notice of deficiency, may not challenge the underlying liability in this case, which is derived in all four dockets from Respondent's attempt to collect liabilities which were the subject of the notices of deficiency for 2004 and 2005. This being the only issue raised by the Petitioners and the facts regarding this issue not being in dispute, the application of the Court's summary judgment 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Heritage Reporting Corporation (202) 628-4888 1 24 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 7 procedures under Rule 121, as described in subsection (b) of Rule 121, is appropriate. Based upon the pleadings, the answers, and the information agreed to by the parties as a result of Respondent's four motions for summary judgment and Petitioners' response to those motions, there is no genuine issue as to any material fact. Obviously, the parties dispute the underlying tax liability and the merits of that liability, but the Court does not have jurisdiction to consider that because of the circumstances described with respect to Petitioners' receipt of the notices of deficiency associated with 2004 and 2005. Given this analysis, decisions will be entered in accord with Respondent' s motions for summary judgment, and the motions for summary judgment will be granted. This concludes the Court's oral findings of fact and opinion in this case . THE CLERK: All rise. (Whereupon, at 3:52 p.m., the bench opinion in the above-entitled matter was concluded.) // // // // // Heritage Reporting Corporation (202) 628-4888