TAX COURT OPINION

Case: Terence Eugene Copeland
Docket Number: 26524-13L
Judge: Buch
Opinion Type: bench
Filed: 01/07/2016
Pages: 7

UNITED STATES TAX COURT WASHINGTON, DC 20217 TERENCEEUGENECOPELAND, Petitioner, v. SD ) ) ) ) Docket No. 26524-13 L. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ORDER Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit with this order to petitioner and respondent a copy of the pages of the transcript of the trial in this case before Judge Ronald L. Buch at Cleveland, Ohio, 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 appropriate decision will be entered. (Signed) Ronald L. Buch Judge Dated: Washington, D.C. January 7, 2016 SERVED Jan 08 2016 Capital Reporting Company 3 1 2 3 4 5 Bench Opinion by Judge Ronald L. Buch December 2, 2015 Terence Eugene Copeland v. Commissioner Docket No. 26524-13L THE COURT: The following represents the 6 Court's oral findings of fact and opinion. The oral 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 findings of fact and opinion may not be relied upon as precedent in any other case. This opinion is in conformity with Internal Revenue Code section 7459(b) and Rule 152(a) of the Tax Court Rules of Practice and Procedure. Any section references refer to the . Internal Revenue Code or the Treasury regulations in effect during the year at issue, and Rule references are to the Tax Court Rules of Practice and Procedure. Mr. Copeland claims that the IRS took unauthorized collection actions against him in 2009 by levying against his wages for an unpaid liability relating to 1995 and 1996. t½hr 4+i-e-iM+ee the liabilities stemming from the 1990s nor the 2009 levy is before this Court. We mention it because it is the root of 22 Mr. Copeland's ongoing feud with the IRS. 23 24 25 When Mr. Copeland came to his understanding that the IRS's collection action was unauthorized, it was too late to do anything about it, based on his 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 understanding of the law. He aired his position with the IRS, the Taxpayer Advocate Service, his Congresswoman and Senator, and the President, but he did not get the result he was hoping for. So, he resorted to self-help. Mr. Copeland's self-help took the form of a frivolous return position. When Mr. Copeland filed his 2011 tax return, he reported a $24,895 tax liability that neither party disputes. Likewise, and he reported $9,382 of withholding that neither party disputes. Yet he reported that the IRS owed him a refund of $6,795.61. He included an annotation on the return that read, in part: "Payment of the refund will fully and finally settle my claim against the IRS." The IRS assessed the self-reported tax, credited Mr. Copeland for the withholding, and set about the business of collecting what was owed. The IRS sent Mr. Copeland a notice of intent to levy on 21 April 17, 2013. He timely requested a hearing. 22 23 24 25 On his Form 12153, Request for a Collection Due Process or Equivalent Hearing, Mr. Copeland did not offer any collection alternatives. He marked "other" as the reason he disagreed with the proposed 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 collection action and, again, disputed the collection action from years earlier. The frustration mounted. After some back and forth, Mr. Copeland still had not gotten the refund he sought. He filed an amended return, this time showing a refund due of $250,000 (along with the same annotation). The IRS followed that with a notice of determination, sustaining the proposed levy action. So Mr. Copeland filed a timely petition. While this case has been pending, the IRS sent Mr. Copeland an automated letter thanking him for his amended return and notifying him that the IRS had "adjusted your account as you requested." Mr. Copeland waited patiently for his $250,000 check. 15 When it didn't arrive, he wrote the IRS to inquire 16 17 18 about his $250,000. The IRS responded noting that the amended return did not show any changes (presumably, but not 19 explicitly, referring to the amount of the tax 20 21 22 liability). The letter also reminded Mr. Copeland of his current balance due. The Secretary must notify taxpayers in 23 writing of their right to request a hearing upon the 24 25 filing of a notice41ien, or before the Secretary can levy against any property or right to property, 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 Section 6320(a)(1), 6330(a)(1). When appropriate, hearings under sections 6320 and 6330 are held together, and the hearings are often called collection due process, or CDP, hearings, Section 6320(b), 6330(b)(2). In a CDP hearing, taxpayers may raise any issue relevant to an unpaid tax or a proposed levy, including appropriate spousal defenses, challenges to the appropriateness of collection alternatives, and offers of collection alternatives, Section 6330 (c)(2)(A). In addition, taxpayers may challenge the existence or amount of the underlying tax liability if they did not receive a statutory notice of deficiency or did not otherwise have the opportunity to dispute the liability, Section 6330(c)(2)(B). If the validity of the underlying liability is properly at issue, we review that determination de novo, Sego v. Commiccicn, 114 T.C. 604, 609-610 Comwi ssî on e e gs (2000); Goza v. Commissioner, 114 T.C. 176, 181-182 (2000). In contrast, where the validity of the underlying liability is not properly at issue, we 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 will review the determination for an abuse o F 25 discretion, Sego v. Commissioner, 114 T.C. at 610; 866.488.DEPO www.Capita1ReportingCompany.com Capital Reporting Company 7 1 2 3 4 5 6 Goza v. Commissioner, 114 T.C. at 182. An abuse of discretion will be found where the determination was "arbitrary, capricious, or without sound basis in fact or law." Giamelli v. Commissioner, 129 T.C. 107, 111 (2000) . The determination by the Appeals officer 7 must take into consideration: One, the verification 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that the requirements of applicable law and administrative procedure have been met. Two, issues raised by the taxpayer, and three, whether any proposed collection action balances the need for efficient collection with the legitimate concern of the taxpayers that any collection action be no more intrusive than necessary, Section 6330 (C). As to the first item, the notice of determination makes clear the Appeals officer verified that the legal and procedural requirements for the levy relating to 2011 had been met. There is nothing else before us. Petitioner did not raise any issues regarding the liability for 2011. The tax liability was self-reported and Mr. Copeland did not dispute it at any time. Mr. Copeland's real dispute is with collection actions taken with respect to 1995 and 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 8 1996, periods not before this Court in this proceeding. Mr. Copeland expressed his frustration with his understanding of how the statute of limitations operates with respect to challenging the earlier collection action, but that is an issue for Congress, not this Court. Mr. Copeland's attempt to circumvent the statute of limitations by writing an arbitrary amount on a return as a refund does not raise a genuine issue as to his 2011 liability, which again, he does not dispute. Likewise, Petitioner did not raise any issues regarding collection alternatives. He did not request any on his Form 12153, raise any with the Appeals officer, or raise any with the Court. It is not an abuse of discretion for the office of Appeals to reject collection alternatives when none are proposed. See Huntcrccc v. Commissioner, T.C. Memo. 2009-161; see also, Kendricks v. Commissioner, 124 T.C. 69,79 (2005). Decision will be entered for Respondent. (Whereupon, at 10:32 a.m., the above- entitled matter was concluded.) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 866.488.DEPO www.CapitalReportingCompany.com