TAX COURT OPINION

Case: Richard A. Eichinger & Diana Suarez
Docket Number: 25369-12SL
Judge: Guy
Opinion Type: bench
Filed: 06/05/2014
Pages: 9

RICHARD A. EICHINGER & DIANA SUAREZ, Petitioners, v. UNITED STATES TAX COURT WASHINGTON, DC 20217 KVC ) ) ) ) ) Docket No. 25369-12SL. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ORD ER 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 trial in the abovecaptioned case before Special Trial Judge Daniel A. Guy, Jr., at Tampa, Florida, on May 5, 2014, containing his 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 directing remand will be issued. (Signed) Daniel A. Guy, Jr. Special Trial Judge Dated: Washington, D.C. June 5, 2014 SERVED Jun 06 2014 Capital Reporting Company 3 1 2 Bench Opinion by Judge Daniel A. Guy, Jr. May 7, 2014 3 Richard A. Eichinger & Diana Suarez v. Commissioner 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Docket No. 25369-12SL 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 proceeding for the review of a collection action is a small tax case conducted pursuant to the provisions of section 7463 of the Internal Revenue Code of 1986, as amended, and Rules 170 through 174 of the Tax Court Rules of Practice and Procedure. This bench opinion is made pursuant to the authority granted by section 7459(b) of the Internal Revenue Code of 1986, as amended, and Rule 152 of the 20 Tax Court Rules of Practice and Procedure. 21 Hereinafter in this bench opinion, section references 22 23 24 25 are to the Internal Revenue code of 1986, as amended, in effect for 2009, and Rule references are to the Tax Court Rules of Practice and Procedure. Petitioners, husband and wife, resided in 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 4 1 2 3 4 5 6 7 8 Florida at the time the petition was filed, and they /V)ae'l< appeared at trial pro se. (cid:16)060>ryJ. Tober appeared on behalf of respondent. Petitioners filed a timely Federal income tax return for 2009 (the year in issue). The Internal Revenue Service (IRS) subsequently examined petitioners' return and, in October 2010, sent to petitioners a request for additional information. Mr. 9 Eichinger promptly responded to the IRS inquiry by 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 letter (with attachments) dated November 3, 2010. The IRS subsequently sent two letters to petitioners acknowledging receipt of MR. Eichinger' s letter and stating that the matter was under review. On April 11, 2011, the IRS mailed duplicate copies of a notice of deficiency for 2009 to petitioners at their address in Orlando, Florida. 7 E-h* LuQS S snS +o Q(cid:16)254· A Petitioners have resided at ers hoy Ce.r(cid:16)042HSted rna|| . the Orlando address for several years and do not dispute that the notice of deficiency was mailed to their correct (last known) address. Two of petitioners' four children were residing at the Orlando address during the period in question. Mr. Eichinger has worked at several temporary jobs outside of the State of Florida during the last few years. When the above-mentioned notice 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 1 of deficiency was mailed to petitioners, Mr. 2 Eichinger was working at a temporary job in 3 Pittsburgh, Pennsylvania. Both petitioners testified 4 5 6 7 8 9 10 11 12 13 14 15 16 that they did not receive the notice of deficiency and were unaware that it had been issued. Respondent has no record indicating that either copy of the notice of deficiency was returned to respondent by the U.S. Postal Service (USPS) unclaimed. Petitioners did not file a petition for redetermination with the Court challenging the notice of deficiency for 2009. In due course, respondent entered an assessment for the tax determined in the notice, along with statutory interest. On or about March 6, 2012, the IRS mailed to petitioners a Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320 for 2009. 17 Petitioners timely submitted to the IRS Office of 18 Appeals (Appeals Office) a Form 12153, Request for a 19 Collection Due Process or Equivalent Hearing. They 20 21 22 23 24 25 did not check any of the boxes on the Form 12153 for a collection alternative and instead they checked the bedy for "I Cannot Pay Balance". Petitioners also stated in relevant part, "I was not given an opportunity to appeal the amount; I have not had the opportunity to respond to a deficiency notice." 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Petitioners' case was assigned within the Appeals Office to Settlement Officer Marie Ribaudo (SO Ribaudo). During the course of an August 16, 2012 telephone conference, Mr. Eichinger informed SO Ribaudo that he and his wife disagreed with the amounts assessed for the year in issue. SO Ribaudo determined that IRS records showed that a notice of deficiency had been issued to petitioners for the year in issue, and, therefore, she concluded that they were precluded from challenging the existence or amount of the tax liabilities that were the subject of the Federal tax lien. Because they failed to provide any financial information in support of a collection alternative, the Appeals Office issued to petitioners a notice of determination sustaining the decision to file the Federal tax lien. (cid:16)254-- Section 6321 imposes a lien in favor of the 18 United States on all property and rights to a 19 20 21 22 23 24 25 property of a taxpayer liable for unpaid taxes after demand for payment. Within five business days after the deley of filing a notice of lien as described in 9,6. section 6323, the Secretary must notify the taxpayer, in writing, that a tax lien was filed and inform the taxpayer of his or her right to an administrative hearing in the Appeals Office before an impartial 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 officer or employee. Sec. 6320(b). Section 6320(c) provides that the Appeals Office hearing generally shall be conducted consistent with the procedures set forth in section 6330(c), (d), and (e). In conducting the administrative hearing, the Appeals Office must verify that the requirements of any applicable law or administrative procedure have been met. Sec. 6330(c)(1). The Appeals Office also must consider any issues raised by the person relating to the unpaid tax or the disputed collection action, including offers of collection alternatives, appropriate spousal defenses, and challenges to the appropriateness of the collection action. Sec. 6330(c)(2) (A). A person may challenge the existence or amount of his or her underlying tax liability if the person did not receive a notice of deficiency or did not otherwise have an opportunity to dispute such tax liability. Sec. 6330(c)(2)(B). Finally, the Appeals Office must consider whether the collection action balances the need for efficient collection against the person's concern that collection be no 22 more intrusive than necessary. Sec. 6330(c)(3)(C). 23 24 25 Once the Appeals Office has issued a determination letter, the taxpayer may seek judicial review of the administrative determination by filing a petition 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 8 1 with the Tax Court. Sec. 6330(d). 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 The Appeals Office determined that a notice of deficiency had been mailed to petitioners' last known address, they had a prior opportunity to dispute the underlying liability, and they were barred from challenging the amount of the underlying liability as part of the collection review process. However, section 6330(c)(2)(B) provides in relevant part that a person may challenge the existence or amount of his or her underlying tax liability if the person did not receive a notice of deficiency. In applying section 6330(c)(2)(B), we have held that proof that a notice of deficiency was sent by certified mail to the taxpayer's last known address, through strict compliance with Postal Service Form 3877 mailing procedures, raises a presumption of 17 official regularity in favor of the Commissioner and 18 19 20 21 22 23 24 25 is sufficient, absent evidence to the contrary, to establish that the notice was properly -mailed. See Hoyle v. Commissioner, 1311.C. 197, 203 (2008), citing Coleman v. Commissioner, 94 T.C. 91 (1990). There is no dispute that respondent mailed a notice of deficiency for 2009 by certified mail to petitioners' last known address. Although a presumption may arise that the notice was delivered 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 9 1 2 3 4 5 to petitioners in due course, both petitioners. testified that they did not receive the notice of deficiency and that they were unaware that it had been issued to them. Notably, Mr. Eichinger's testimony was bolstered by the fact that he was 6 working outside of the State of Florida at the time 7 8 9 10 11 12 13 14 15 16 17 18 19 the notice of deficiency was mailed. On balance, both petitioners'N impressed the Court as being honest and forthright. The record also shows that Mr. Eichinger was actively engaged in the examination process and he promptly responded to an inquiry from the IRS for additional information related to the couple's 2009 tax return. It would have been inconsistent with his pattern of conduct to fail to act if he received the notice of deficiency in question. Finally, in the face of petitioners' testimony and the documentary evidence that they presented at trial, respondent did not engage in any 20 meaningful cross-examination of petitioners. Nor did 21 22 23 24 25 respondent offer any evidence, such as USPS records, to show that petitioners were notified that an item of certified mail was waiting to be claimed, a USPS receipt signed by petitioners (or duly authorized representative) in connection with the delivery of 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 10 1 2 3 4 5 the notice of deficiency, or USPS "track and confirm" records showing that petitioners actually received the notice of deficiency in time to file a timely petition for redetermination with the Court. See, e.g., Kuykendall v. Commissioner, 129 T.C. 77 (2007). 6 Considering all the facts and circumstances, we 7 8 conclude that petitioners did not receive the notice of deficiency for 2009, and, therefore, the Appeals 9 Office erred in determining that they were barred from challenging the amount of their tax liability during the course of the administrative hearing. Under the circumstances, we will issue an Order remanding this case to the Appeals Office for further proceedings consistent with this opinion. This concludes the Court's oral findings of fact and opinion in this case. (Whereupon, at 10:45 a.m., the above- entitled matter was concluded.) 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 866.488.DEPO www.CapitalReportingCompany.com