TAX COURT OPINION

Case: Arthur R. & Barbara A. Simpkins
Docket Number: 9536-07S
Judge: Colvin
Opinion Type: bench
Filed: 06/25/2008
Pages: 8

UNITED STATES TAX COURT WASHINGTON , DC 2021 7 ARTHUR R . & BARBARA A . SIMPKINS , Petitioner s V . Docket No . 9536-07S . COMMISSIONER OF INTERNAL REVENUE, ) Respondent SERVIC E CAL . STAT . LJ S . T . JUDGE O R 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 petitioners and to respondent a copy of the pages of the transcript of the hearing of the above case before Special Trial Judge Robert N . Armen, Jr . at New York, New York (Westbury) on June 5, 2008, 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, an Order and Decision will be entered for respondent . (Signed) Robert N . Armen, Jr. Special Trial Judg e Dated : Washington, D .C . June 25, 2008 SERVED JUN 2 6 2008 3 1 Bench Opinion by Special Trial Judge Robert N . Armen Jr . 2 June 5, 200 8 3 Simpkins v . Commissioner Docket No . 9536-07S 4 THE COURT : The Court has decided to render oral 5 Findings of Fact and opinion in this case , and th e 6 following represents the Court ' s Oral Findings of Fac t 7 and Opinion . The oral findings of fact and opinion shall 8 not be relied upon as precedent in any other case . 9 This proceeding was heard as a small tax case 10 pursuant to the provisions of Section 7463 ( f)(2) of the 0 11 Internal Revenue Code of 1986, as amended , and Rules 17,91 12 through 175 of the Tax Court Rules of Practice an d 13 Procedure . See and compare Rules 330 through 334 of the 14 Tax Court Rules of Practice and Procedure . 15 This bench opinion is made pursuant to the 16 authority granted by Section 7459(b) of the Interna l 17 Revenue Code of 1986 , as amended , and Rule 152 of the Tax 18 Court Rules of Practice and Procedure . 19 Hereinafter in this bench opinion, and unless 20 otherwise indicated, all section numbers refer to the 21 Internal Revenue Code of 1986, as amended, and all rule 22 numbers refer to the Tax Court Rules of Practice and 23 Procedure . 24 Michelle L . Maniscalco appeared on behalf of the 25 Respondent . There was no appearance by or on behalf of Heritage Reporting Corporation (202) 628-4888 4 1 Petitioners . 2 By Notice, dated December 28, 2007, and served on 3 Petitioners by certified mail on that same date, thi s 4 case was calendared for trial on June 2, 2008, in Ne w 5 York, New York (Westbury Session) . However, on April 23, 6 2008, the Respondent filed a Motion for Summary Judgment, 7 a copy of which was served by Respondent on Petitioners 8 by mail on April 22, 2008 . 9 In his motion, Respondent moves, pursuant to Rule 10 121, for a summary adjudication in his favor on al l 11 issues presented in this collection review case involving 12 Petitioners' outstanding liability for the taxabl e 13 (calendar) year 2003 . 14 By Order dated April 28 , 2008 , and served on 15 Petitioners by certified mail on April 30, 2008, th e 16 Court calendared Respondent's motion for hearing 'n New 17 York, New York, at a date certain of June 3, 2008 . In 18 that same Order, the Court also directed Petitioners to 19 file, on or before May 23, 2006, an objection or other 20 response to Respondent's motion . 21 Petitioners did not comply with the Court's April 22 28, 2008 Order directing them to file an objection o r 23 other response to Respondent's motion . Rather, on May 24 29, 2008, Petitioner Arthur R . Simpkins filed a motion 25 for continuance, which motion was ultimately denied . Heritage Reporting Corporation (202) 628-4888 5 1 The facts relevant to the disposition o f 2 Respondent's Motion for Summary Judgment may be briefly 3 summarized as follows : 4 Petitioners resided in the State of New York at 5 the time that the petition was filed with the Court . 6 Petitioners filed an income tax return for 2003 7 and reported thereon a modest amount of tax, which was 8 paid through withholding . 9 Thereafter, Respondent examined Petitioners' 2003 10 return and determined a deficiency in tax, an addition to 11 tax under Section 6651(a)(1) for failure to timely file, 12 and an accuracy-related penalty under Section 6662(a) . 13 Petitioners did not file a petition fo r 14 redetermination with the Court . See Sec . 6213(a) . 15 Accordingly, on August 21, 2006, Respondent assessed the 16 deficiency, addition to tax, and accuracy-relate d 17 penalty, together with statutory interest . 18 On that same date, Respondent sent Petitioners a 19 statutory notice of balance due, i .e ., notice and demand 20 for payment . See Sec . 6303(a) . Petitioners did not pay 21 the amount owing . 22 On November 23, 2006, Respondent sent Petitioners 23 a Final Notice of Intent to Levy and Notice of Your Right 24 to a Hearing (final notice) . See Sec . 6330(a) . Th e 25 final notice reflected Petitioners' outstanding liability Heritage Reporting Corporatio n (202) 628-4888 6 1 for 2003 . 2 Once again, Petitioners did not pay the amoun t 3 owing . Rather, Petitioners filed with Respondent a Form 4 12153, Request for a Collection Due Process Hearing . In 5 the Form 12153, Petitioners appeared to express interest 6 in entering into an installment payment agreement for a 7 monthly amount that they thought was acceptable . 8 By letter dated February 13, 2007, Respondent's 9 settlement officer contacted Petitioners, scheduled a 10 conference, and advised, inter alia, that "For me to 11 consider alternative collection methods such as a n 12 installment agreement * * *, you must provide * * * A 13 completed Collection Information Statement (Form 433-A 14 for individuals) along with supporting documents for the 15 last, months ." Petitioners failed to provide th e 16 specified statement and documents . 17 On April 2, 2007, . Respondent's Office of appeals 18 sent Petitioners a Notice of Determination Concerning 19 Collection Action(s) under Section 6320 and/or 633 0 20 (notice of determination) . The notice of determination 21 concluded as follows : 22 "Since the taxpayers did not provide the requested 23 Collection Information Statement, a collectio n 24 alternative could not be considered . The proposed levy 25 action is the appropriate action in this case ." Heritage Reporting Corporatio n (202) 628-4888 7 1 Petitioners appealed from the notice o f 2 determination by timely filing a petition with this 3 Court . See Secs . 6330(d) ; 7502(a) . The only issue 4 raised in the petition is a request for an installmen t 5 payment agreement that fits within Petitioners' perceived 6 budget . 7 The Court may grant summary judgment when there is 8 no genuine issue of material fact and a decision may b e 9 rendered as a matter of law . Rule 121(b) ; Sundstrand 10 Corp. v . Commissioner , 98 T .C . 518, 520 (1992), affd . 17 11 F . 3d 965 (7th Cir . 1994) . After reviewing the record, 12 we conclude that there are no genuine issues of material 13 fact, and that Respondent is entitled to judgment as a 14 matter of law . 15 In a case such as the present one where th e 16 underlying tax liability is not properly at issue, the 17 Court reviews the administrative determination o f 18 Respondent's Office of Appeals for abuse of discretion . 19 20 21 Lundsford v . Commissioner , 117 T .C . 183, 185 (2001) ; Sego v . Commissioner , 114 T .C . 604, 610 (2000) ; Goza v . Commissioner , 114 T .C . 176, 182 (2000) . A settlement 22 officer abuses her discretion if her determination is 23 exercised "arbitrarily, capriciously, or without sound 24 basis in fact ." Mailman v . Commissioner, 91 T .C . 1079, 25 1084 (1988) . Heritage Reporting Corporation (202) 628-4888 8 1 In her February 13, 2007 letter, Respondent's 2 settlement officer requested a completed Collection 3 Information Statement (Form 433-A) and supportin g 4 documentation for the three prior months . The settlement 5 officer's letter made clear that no collection 6 alternative would be considered in the absence of that 7 material . 8 The settlement officer's position was reasonable ; 9 it was consistent with established IRS policy requiring 10 the submission of a documented financial statement as a 11 condition precedent to a collection alternative . See 12 Sec . 301 .6330-1(e)(1), Proced . and Admin . Regs ., stating 13 that taxpayers are expected to provide all relevan t 14 information requested by Respondent's Appeals office, 15 specifically including financial statements . 16 In addition, there is nothing in the record to 17 demonstrate that Petitioners ever proposed any specific 18 collection alternative . Lacking both a proposal an d 19 supporting documentation, the settlement officer did not 20 abuse her discretion in sustaining the proposed levy . 21 See Olsen v . United States , 414 F .3d 144, 154 (1st Cir . 22 2005), holding that the Commissioner's Appeals Office did 23 not abuse its discretion in rejecting a proposed offer- 24 in-compromise based, inter alia, on the taxpayers ' 25 failure to provide the information deemed necessary to Heritage Reporting Corporatio n (202) 628-4888 9 1 evaluate the offer (and, in particular, the taxpayers ' 2 claimed inability to pay) ; Orum v . Commissioner , 412 F .3d 3 819 (7th Cir . 2005), affg . 123 T .C . 1 (2004), holdin g 4 that the Commissioner's Appeals office did not abuse it s 5 discretion in rejectW a proposed installment agreement 6 because , inter alia , the taxpayers failed to furnis h 7 current financial information . In Orum , the Court of 8 Appeals also held that judicial review of the Kam, 9 Commissioner ' s decision ' to accept a collection k 10 alternative is deferential . 412 F .3d at 820 . 11 In conclusion : We shall (1) grant Respondent's 12 Motion for Summary Judgment, filed April 23, 2008, and 13 (2) decide that Respondent may proceed with collection 14 for the taxable year 2003, as determined in the notice of 15 determination dated April 2, 2007, upon which notice this 16 case is based . 17 This concludes the Court's oral findings of fact 18 and opinion in this case . 19 (Whereupon, at 9 :10 a .m ., the bench opinion in the 20 above-entitled matter was concluded . ) 21 22 23 24 25 // Heritage Reporting Corporation (202) 628-4888