TAX COURT OPINION

Case: Robert P. Joynes
Docket Number: 6634-12L
Judge: Kroupa
Opinion Type: bench
Filed: 06/07/2013
Pages: 16

UNITED STATES TAX COURT WASHINGTON, D.C. 20217 ROBERT P. JOYNES, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) ) ) ) ) ) ) ) ORDER Docket No. 6634-12L Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit to petitioner and to respondent a copy of the pages of the transcript of the trial of this case before Judge Diane L. Kroupa in Des Moines, Iowa on April 23, 2013, containing her 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 order will be issued granting respondent's Motion for Summary Judgment. (Signed) Diane L. Kroupa Judge Date: Washington, DC June 7, 2013 SERWD MUN 1 2 2013 Capital Reporting Company 3 1 Bench Opinion by Judge Diane L. Kroupa 2 April 23, 2013 3 4 5 6 7 8 9 10 11 12 Robert P. Joynes v. Commissioner Docket No. 6634-12L 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. THESE ORAL FINDINGS OF FACT AND OPINION SHALL NOT BE RELIED UPON AS PRECEDENT IN ANY OTHER CASE. This bench opinion is made pursuant to the authority granted in section 7459(b) and Rule 152. 13 All section references are to the Internal Revenue 14 15 16 17 18 19 20 21 22 23 24 25 Code as amended and in effect for the taxable periods at issue (as later defined) and all Rule references are to the Tax Court Rules of Practice and Procedure. This is a collection review case involving a lien and the proposed levy to collect petitioner's unpaid income tax liabilities for 2006 and 2007 and unpaid employment tax liabilities for the periods ending December 31, 2009, March 31, 2010 and June 30, 2010 (collectively the taxable periods at issue). This case is before the Court on respondent's motion for summary judgment and petitioner's motion to continue, both of which the Court scheduled for a 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 4 1 2 3 4 5 6 7 8 hearing at the Court's trial session on April 22, 2013 in Des Moines, Iowa. Stephen Hall appeared on behalf of respondent. Petitioner failed to appear at the calendar call or the hearing. Petitioner failed to appear at calendar call even though petitioner was advised several times that he needed to attend calendar call to explain why he wanted a continuance. 9 Petitioner also failed to appear at the hearing on 10 11 12 13 14 the two motions. The Court will rely, therefore, upon petitioner's objection to respondent's motion for summary judgment. FINDINGS OF FACT The record establishes the following: 15 Petitioner resided in West Des Moines, Iowa at the 16 17 18 19 20 21 22 23 24 25 time he filed the petition. Petitioner has a long history of failing to pay his income and employment taxes for over 11 years since at least 2001. Petitioner failed to pay the amount due for the taxable periods at issue. Respondent thereafter assessed the tax deficiencies, additions to tax and penalties for all the taxable periods at issue. To collect the assessments, respondent issued petitioner a Notice of Intent to Levy and Notice of Your Right to a Hearing regarding 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 1 2 3 4 5 6 7 the unpaid tax penalties for the taxable periods at issue (Levy Notice). Respondent also filed a notice of Federal tax lien and issued petitioner a Notice of Federal Tax Lien Filing and Your Right to a Hearing under Section 6320, advising petitioner that a lien had been filed with respect to his unpaid tax liabilities for the taxable periods at issue (Lien 8 Notice). The Levy Notice and the Lien Notice both 9 advised petitioner that he was able to request a 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 collection hearing where he could raise relevant issues and provide collection alternatives. Petitioner timely requested a hearing in response to the Levy Notice and the Lien Notice. In his hearing request, petitioner did not contest the liability for the unpaid tax amounts. Instead, he checked the box for an installment agreement but did not check the box for an offer in compromise (OIC). He also checked under the Lien Subcategory that he sought to have the lien discharged and withdrawn. He sought such action because he "had already sent financial information and reasons to the OIC centralized division to consider an OIC." Petitioner submitted a second request for CDP hearing. This time petitioner requested an installment agreement, an OIC and withdrawal of the lien. Again, he 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 1 2 3 4 neglected to contest the underlying tax liabilities. He also failed to explain why the lien should be discharged or withdrawn. Jane Edwards, the Appeals Settlement 5 Officer (Settlement Officer) was assigned to 6 petitioner's hearing. She scheduled a conference 7 with petitioner and requested specific documents from 8 9 10 11 12 petitioner so she could consider collection alternatives. These documents included financial information regarding petitioner individually (on a Form 433-A) as well as any business entities in which petitioner held an interest (on a Form 433-B). 13 Petitioner was also required to be current with all 14 filing and payment requirements. The Settlement 15 Officer informed petitioner that she could not 16 17 18 19 20 21 22 consider any collection alternatives without the requested documents. Petitioner did not provide the Settlement Officer with the requested documents. Instead, petitioner asked that the CDP hearing be rescheduled as he had submitted an OIC to the OIC centralized division. Petitioner's representative also called the Settlement Officer leaving a voice 23 mail stating that petitioner wanted to rescind the 24 25 CDP hearing requests because petitioner submitted the OIC. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 1 2 3 4 5 6 7 8 9 10 11 12 13 The Settlement Officer returned the call and left a message that she had petitioner's OIC and she would be reviewing it within the CDP hearing procedures. She further advised that the CDP hearing would take place at the time scheduled. Petitioner asked that the hearing be rescheduled. Petitioner and his representative made several requests to reschedule. The Settlement Officer declined to reschedule noting petitioner's lengthy history of noncompliance and insufficient estimated tax payments, outstanding balances for various tax years, and failure to provide the necessary documentation and information that would enable the Settlement 14 Officer to consider any collection alternative. This 15 16 17 18 19 20 21 22 23 24 25 long lasting scenario is documented in an earlier collection action for different tax periods. Joynes v. Commissioner, Docket No. 21053-11L (in an Order and Decision issued and entered on December 21, 2012). Petitioner did not attend the CDP hearing or call to have a telephonic hearing. The Settlement Officer reviewed the records petitioner submitted to determine petitioner's reasonable collection potential (RCP). The Settlement Officer sent petitioner a "last chance letter" giving him 14 days to provide the missing 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 8 1 2 3 4 5 information the Settlement Officer requested. She also included her analysis of petitioner's RCP. She calculated that petitioner's RCP as $77,510 (an amount that would allow petitioner to pay the unpaid taxes at issue). She also informed him she was 6 missing bank statements and missing evidence that 7 8 9 10 11 12 13 14 15 16 17 18 19 petitioner paid some of the claimed expenses. She also needed a copy of a court-ordered payment. Petitioner sought to compromise his approximate $80,000 tax liability plus interest for $8,460. The Settlement Officer informed petitioner's representative that petitioner was making, based upon the last tax return filed, insufficient estimated tax payments for 2011. She also explained that currently not collectible status and partial settlement agreements were not options until petitioner submitted the additional information to calculate petitioner's ability (or inability) to pay. She needed this critical information for her to consider 20 petitioner's OIC. 21 22 23 24 25 Without any additional information from petitioner, the Settlement Officer then proceeded to make her determination regarding petitioner's CDP case. The Settlement Officer verified that requirements of applicable law and administrative 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 9 1 2 3 4 5 6 7 8 9 procedures had been met by verifying the timeliness of assessment amounts in dispute and verifying that appropriate collection notices had been sent to petitioner. The Settlement Officer balanced the need for the efficient collection of taxes with the legitimate concern of petitioner that any collection be no more intrusive than necessary by finding that no alternative collection action would be available or proper given petitioner's failure to participate 10 meaningfully in the CDP process or to submit any 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 requested financial information and his longstanding pattern of noncompliance. The Settlement Officer sustained the lien action and the proposed collection action by levy in a Notice of Determination Concerning Collection Action(s) under Section 6320 and/or 6330. As previously stated, respondent filed a summary judgment motion. After the Court ordered petitioner to file a response to respondent's summary judgment, petitioner failed to address any of respondent's substantive arguments. Instead, he requested that his case be dismissed. Petitioner asserts in various papers that he does not have the time to prepare for a hearing yet he spent untold hours preparing and mailing papers to the Court. Not only did petitioner send 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 10 1 2 these papers to Judge Diane Kroupa, he sent them to Judge Michael Thornton, Judge John Colvin and the 3 Court's Clerk, Robert Di Trolio. In each of these 4 5 6 7 8 9 10 11 12 13 papers, petitioner asked for a continuance as well as ask for a dismissal. He also asserted that respondent's counsel had conflicts and that Judge Diane Kroupa should be recused. He cites no specifics for either allegation. We note, however, that petitioner made similar assertions in his prior CDP case at Docket No. 21053-11L. Also as previously stated, petitioner failed to attend the hearing on the two motions or provide a Rule 50 (c) statement in lieu of attending the hearing on the motions. The 14 Court was notified that petitioner sent yet another 15 16 17 18 19. 20 21 22 23 24 25 set of papers to Judge Kroupa's chambers and the slew of other judges and Court personnel making the same allegations as before. OPINION We are asked to decide whether to grant summary judgment. Summary judgment is intended to expedite litigation and avoid unnecessary and expensive trials. See, e.g., Florida Peach Corp. v. Commissioner, 90 T.C. 678, 681 (1988). Either party may move for summary judgment upon all or any part of the legal issues in controversy. Rule 121(a). A 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 11 1 motion for summary judgment will be granted if the 2 pleadings and other acceptable materials, together 3 with the affidavits, if any, show that there is no 4 5 6 7 8 9 genuine issue as to any material fact and that a decision may be rendered as a matter of law. See Rule 121(b); Elect. Arts, Inc. v. Commissioner, 118 T.C. 226, 238 (2002). The moving party has the burden of proving that no genuine issue of material fact exists and that it is entitled to judgment as a 10 matter of law. See, e.g., Rauenhorst v. 11 12 13 14 15 16 17 Commissioner, 119 T.C."157, 162 (2002). The party opposing summary judgment must set forth specific facts that show that a genuine question of material fact exists and may not rely merely on allegations or denials in the pleadings. Casanova Co. v. Commissioner,. 87 T.C. 214, 217 (1986). We begin with the standard of review. 18 Where the validity of the underlying tax liability is 19 properly at issue, the Court will review the matter 20 21 22 23 24 25 on a de novo basis. Sego v. Commissioner, 114 T.C. 604, 610 (2000). Where, as is the case here, the validity of the underlying tax liability is not properly placed at issue, the Court will review respondent's determination for abuse of discretion. Sego v. Commissioner, supra; Goza v. Commissioner, 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 12 114 T.C. 176, 181-182 (2000). We must decide whether respondent exercised his discretion arbitrarily, capriciously, or without sound basis in fact or law. See Woodral v. Commissioner, 112 T.C. 19, 23 (1999). Based upon our examination of the entire record before us, we find that respondent did not abuse his discretion in determining that the collection action should proceed with respect to petitioner's unpaid tax liabilities for the taxable periods at issue. We turn now to an overview of the collection proceedings. If any person liable for a Federal tax liability neglects or refuses to make payment within ten days of notice and demand, the Commissioner is authorized to collect the tax by levy on that person's property. See sec. 6331(a). At least 30 days before enforcing collection by levy on the person's property, the Secretary is obliged to provide the person with a final notice of intent to levy, including notice of the administrative appeals available to the person. See sec. 6331(d). The person is entitled, upon request, to an administrative review hearing before Appeals. Sec. 6330 b)(1). If the taxpayer requests a hearing, he or she may raise at that hearing any relevant issues relating to the unpaid tax or the proposed levy. 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 Capital Reporting Company 13 1 2 3 4 5 6 7 8 Sec . 6330 (c)(2)(A); 6320 (c) . Relevant issues include any appropriate spousal defenses, challenges to the appropriateness of collection, and possible alternative means of collection such as an installment agreement or an offer-in-compromise. Sec. 6330 (c)(2)(A). After the hearing, the Appeals officer is required to make a determination that addresses issues the taxpayer raised, verifies that 9 all requirements of applicable law and administrative 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 procedures have been met, and balances the need for the efficient collection of taxes with the legitimate concern of the person that any collection action be no more intrusive than necessary. Scc 330 (c) _)(C) The record reflects that the Settlement officer properly verified that all the legal and procedural requirements have been met. The Settlement Officer confirmed, using a transcript of petitioner's accounts, that assessments were properly made for each of the periods at issue, that appropriate and timely notices were sent regarding the assessments, and that petitioner was properly informed of his rights with respect to the proposed levy action and lien filing. The record also reflects that petitioner never presented any financial information for 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 14 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 respondent to evaluate any collection alternatives. We have frequently and consistently held that an officer does not abuse any discretion by refusing to consider collection alternatives if the taxpayer fails to submit the required and requested financial information. Sapp v. Commissioner, T.C. Memo. 2006- 104. Finally, the record reflects that the Settlement Officer properly balanced the need for the efficient collection of taxes with petitioner's legitimate concern that any collection be no more intrusive than necessary. Petitioner has not asserted any spousal defenses, or otherwise offered any collection alternatives. See sec. 6330 (c)(2). Accordingly, these issues are now deemed conceded. Rule 3316)(4). Petitioner has not presented any evidence or persuasive arguments to convince us that respondent abused his discretion. We therefore conclude that the Settlement Officer did not abuse her discretion in upholding respondent's collection actions to collect the unpaid taxes for each of the taxable periods at issue. The record here reflects, as it did in the prior case, that petitioner repeatedly failed to be 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 15 1 2 3 4 available for the scheduled hea.ring. The record here also shows that petitioner was delinquent in making sufficient estimated tax payments. It is equally clear that the Settlement Officer provided ample 5 warning, instruction and opportunity for petitioner 6 to remedy the situation and allow the Settlement 7 Officer to consider collection alternatives. With 8 9 10 11 respect to petitioner's requests for an extension of the CDP hearing, caselaw highlights the lack of abuse in analogous scenarios. See e.g. Dinino v. Commissioner, T.C. Memo. 2009-284 (noting consistency 12 with IRS guidelines stating that, for purposes of 13 14 good case management, no more than 14 days should be allowed for submitting financial information). 15 Moreover, the purpose of the collection due process 16 17 18 statutes, sections 6320 and 6330, is to provide taxpayers with a forum to raise relevant issues with respect to proposed levy and lien notices. Id. 19 Petitioner is not using the statutes for this 20 21 22 23 24 25 purpose. Rather, petitioner appears to be using the statutes solely as a mechanism to delay collection. Petitioner requested two CDP hearings but never participated in either and he also sought to rescind one of his requests. He also never provided the documents requested to the Settlement Officer. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 16 1 Petitioner also filed a petition but failed to 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 properly prosecute it before this Court. Petitioner never participated in a CDP hearing, never attended the hearing on the two motions, and did not submit a Rule 50(c) statement in lieu of attending the hearing on the two motions. We find that petitioner is using the statutes to delay collection. If he continues to do so, the Court is inclined to impose a penalty against him under section 6673, which authorizes the Tax Court to require a taxpayer to pay to the United States a penalty up to $25,000 whenever it appears that proceedings have been instituted or maintained by the taxpayer primarily for delay or that the taxpayer's position in such proceedings is frivolous or groundless. To reflect the foregoing, decision will be entered for respondent and an appropriate order will be issued granting respondent's Motion for Summary Judgment and denying petitioner's Motion for 20 Continuance. An appropriate order will also be 21 22 issued sustaining respondent's determinations set forth in the Notice of Determination Concerning 23 Collection Action(s) Under Section 6320 and/or 6330, 24 25 upon which this case is based, regarding petitioner's unpaid tax liabilities for each of the taxable 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company periods at issue. THIS CONCLUDES THE COURT'S ORAL FINDINGS OF FACT AND OPINION IN THIS CASE. 17 (Whereupon, at 5:06 p.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