TAX COURT OPINION

Case: Dianalee Waterman
Docket Number: 5600-13L
Judge: Kroupa
Opinion Type: bench
Filed: 10/29/2013
Pages: 11

UNITED STATES TAX COURT WASHINGTON, D.C. 20217 DIANALEE WATERMAN, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) ) ) ) ) ) ) ) ORDE R Docket No. 5600-13L 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 this case before Judge Diane L. Kroupa in Las Vegas, Nevada on September 16, 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 Dismiss for Lack Jurisdiction and denying petitioner's Motion to Restrain Assessment or Collection and to Order Refund of Amount Collected. (Signed) Diane L. Kroupa Judge Date: Washington, DC October 29, 2013 SMVED OCT 3 0 2013 Capital Reporting Company 3 1 2 3 4 5 6 7 8 ·9 10 11 12 Bench Opinion by Judge Diane L. Kroupa September 18, 2013 Dianalee Waterman v. Commissioner Docket No. 5600-13L 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 Code of 1986, as amended, and all Rule references are to the Tax Court Rules of Practice and Procedure. This collection review case is before the Court on petitioner's Motion to Restrain Assessment of Collection (petitioner's motion), and respondent's 19 Motion to Dismiss for Lack of Jurisdiction 20 (respondent's motion). The Court scheduled both 21 motions for a hearing at the Court's trial session in 22 23 24 25 Las Vegas, Nevada. Both motions relate to petitioner's unpaid tax liabilities for 2008. Ric Hulshoff appeared on behalf of respondent. Petitioner failed to appear at the 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company calendar call or the hearing. Petitioner did submit, 4 1 2 however, a Rule 50(c) statement on Tuesday, September llo 3 f, 2013, the day after the hearing. The Court has Pt. 4 5 6 7 8 9 10 11 12 13 14 15 reviewed petitioner's Rule 50(c) motion before rendering this bench opinion. FINDINGS OF FACT The record establishes the following: Petitioner resided in Las Vegas, Nevada at the time she filed the petition. Petitioner filed a Federal income tax return for 2007. She listed a South Carolina address on the 2007 return. Petitioner did not file a tax return for 2008. Respondent issued to petitioner a deficiency notice for petitioner's Federal income tax for 2008. 16 Petitioner did not file a petition with this Court to 17 18 19 20 21 22 contest Respondent's determinations in the deficiency notice. Respondent then assessed the amount due·on the defaulted deficiency notice. Petitioner failed to pay the assessed amounts for 2008. Respondent thereafter mailed to petitioner a Final Notice of Intent to Levy and Notice of Your 23 Right to a Hearing (levy·notice). Respondent sent the Levy Notice by certified mail to petitioner at P.O. Box 115, Elkland, Missouri 65644 (Elkland 24 25 I 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 1 2 3 address). Respondent received the certified mail return receipt, which indicated that the levy notice had been refused, or that it had not been claimed. 4 Petitioner never requested a collection hearing, and 5 6 respondent did not issue a determination notice. Respondent issued two Notices of Levy on 7 Wages, Salary and Other Income (Salary Levy Notices) 8 9 10 11 12 13 14 15 16 to petitioner at the Elkland address. Petitioner's employers were located in Nevada and Pennsylvania. The Salary Levy Notices each showed petitioner's address as the Elkland address. Petitioner never filed a Federal tax return aftér the 2007 return, nor did petitioner ever notify respondent that she had a different address. Petitioner filed a petition seeking review of respondent's collection action for 2008. 17 Petitioner also filed petitioner's motion to restrain 18 collection. Petitioner attached the Salary Levy 19 Notices to the petition, as well as attach them to 20 21 22 23 24 25 petitioner's motion. In the petition and her motion, petitioner alleges that she never received a final Notice of Intent to Levy, which would have given her the opportunity to request a collection hearing under section 6330 before collection proceeded. Respondent 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 18 19 20 21 22 objected to petitioner's motion and moved to dismiss the petition for lack of jurisdiction on the ground that no determination notice, as authorized by section 6320 or 6330, had been issued, nor had respondent made any other determination for 2008 that would confer jurisdiction on the Court. · As previously stated, the Court scheduled both petitioner's motion and respondent's motion for a hearing at the Las Vegas, Nevada trial session. OPINION We are asked to decide whether to grant or deny petitioner's motion or respondent's motion. This requires us to decide the proper basis for dismissal. Respondent argues that the Court lacks jurisdiction in this collection review matter because petitioner failed to request a collection hearing under section 6330. Dismissal on this ground would allow respondent to levy upon petitioner's property to satisfy her Federal income tax liabilities for 2008. In contrast, petitioner argues that she never received a valid Final Notice of Intent to Levy. 23 Dismissal on that ground would in effect invalidate 24 25 the Levy Notice. We begin first with whether to dismiss the 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 1 2 3 4 5 6 7 8 9 petition for lack of jurisdiction. The Tax Court is a court of limited jurisdiction and may exercise that jurisdiction only to the extent authorized by Congress. Naftel v. Commissioner, 85 T.C. 527, 529 (1985). Our jurisdiction under sections 6320 and 6330 depends upon the issuance of a valid determination notice and the filing of a timely petition for review. See Orum v. Commissioner, 123 T.C. 1 (2004), aff'd, 412 F.3d 819 (7th Cir. 2005); 10 Offiler v. Commissioner, 114 T.C. 492, 498 (2000) . 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 See also Rule 330(b). Therefore, in the absence of a determination notice, this Court lacks jurisdiction. Respondent did not issue a determination notice regarding petitioner's outstanding tax liabilities for 2008, because petitioner did not request a collection hearing under section 6330. Respondent must first issue a Final Notice of Intent to Levy and send it to the taxpayer at the taxpayer's last known address before a collection hearing is held, and a determination notice is issued. Secs. 6330 (a) (2) (C), 6331(a) (d); Davis v. Commissioner, 115 T.C. 35, 37 (2000); Goza v. Commissioner, 114 T.C. 176, 179 (2000). We now focus on whether Respondent sent the Levy Notice to Petitioner at her last known address. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 8 1 2 3 The Notice of Intent to Levy must be given in person, left at the person's dwelling or usual place of business, or sent by certified mail or registered 4 mail to the person's last known address. Sec. 5 6 7 8 9 6330(a) (2), 6331(d) (2); secs. 301.6330-1(a) (3), Q & A-8, 301.6331-2(a) (1), Proced. & Admin. Regs. The notice is valid if it is mailed to the taxpayer's last known address, even if it is not received or accepted by the taxpayer. See Williams v. 10 Commissioner, 935 F.2d 1066, 1067 (9th Cir. 1991), 11 aff'g T.C. Memo. 1989-439; United States v. Zolla, 12 13 14 15 16 17 18 19 20 21 22 23 24 25 724 F.2d 808, 810 (9th Cir. 1984); Stein v. Commissioner, T.C. Memo. 2004-124. Respondent may ascertain from facts and circumstances a taxpayer's last known address to send a Levy Notice if respondent has reason to believe the last address taxpayer used is no longer valid. Buffano v. Commissioner, T.C. Memo. 2007-32. Respondent demonstrated that he did mail the Levy Notice to the Elkland address, and that it was returned undeliverable. See Walthers v. Commissioner, T.C. Memo. 2009-139. Petitioner denies, however, ever "residing" at the Elkland address, and argues that the Levy Notice was invalid. Respondent counters that he exercised reasonable care 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 9 1 2 3 4 5 6 7 8 9 and diligence in ascertaining that the Elkland address was petitioner's correct address. See Pyo v. Commissioner, 83 T.C. 626, 633 (1984). We agree with respondent. Respondent received third party information in 2010 that indicated petitioner's correct address was the Elkland address. Respondent confirmed the Elkland address after searching for addresses associated with petitioner in two electronic 10 databases. Respondent had reason to conclude that 11 12 13 14 15 16 17 18 the address on the 2007 return was no longer valid. Moreover, petitioner has failed to file any Federal income tax return after the 2007 return that would have put respondent on notice that petitioner had a different address. In addition, petition has failed to notify respondent of any other address. Despite denying "residing" at the Elkland address, petitioner attached to the petition and to 19 petitioner's motion the Salary Levy Notices that were 20 21 22 23 24 25 sent to the Elkland address, and which showed her address as the Elkland address. We are convinced that petitioner received the Salary Levy Notices at the Elkland address and that the address is the correct address for petitioner in this matter. Petitioner's assertion that she never 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 10 1 "resided" at the Elkland address (a P.O. box), lacks 2 merit. Respondent is obligated to send the Levy 3 Notice to her last known address, not her residence. 4 Petitioner has failed to demonstrate that the Elkland 5 6 7 8 9 10 11 12 13 14 15 address was not her last known address, nor has she shown that respondent failed to exercise reasonable care and diligence in ascertaining the Elkland address was her last known address. We note that petitioner did not assert the 2007 address is her current address, and only denies residing at the Elkland address. The record does not support her allegation that respondent did not issue the Levy Notice to her, and it is therefore invalid. We therefore shall grant respondent's motion. Before concluding, we briefly address 16 petitioner's motion to restrain collection. This 17 Court's authority to restrain collection in a lien or 18 19 20 21 22 23 24 levy action is not unbridled. The Court has no jurisdiction in a collection matter unless the taxpayer has filed a timely appeal, and then only regarding unpaid tax or proposed levy to which the determination being appealed relates. Sec. 6330(e) (1). Lacking any determination notice, we are 25 without jurisdiction to enjoin anything. We 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 11 1 2 3 4 5 6 7 8 9 10 11 12 13 therefore shall deny petitioner's motion. The Court cannot ignore that petitioner has failed to file any Federal income tax returns after the 2007 return,. even though the record reflects that petitioner has received wages. The Court takes this opportunity to inform petitioner of 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. See sec. 6673; Scruggs v. Commissioner, T.C. Memo. 1995-355, 14 aff'd without published opinion, 117 F.3d 1433 (11th 15 Cir. 1997). 16 17 18 19 20 21 22 23 24 25 Multi-year failures to file returns is tantamount to making groundless and frivolous arguments, that the taxpayer has no filing or payment obligations. It is apparent from the entire record that petitioner may be protesting against the Federal income tax system, and that her proceeding in this Court is merely a continuation of petitioner's refusal to acknowledge and satisfy her tax obligations. We will not impose a penalty against 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 12 1 2 3 4 5 6 7 8 petitioner at this time. We warn petitioner, however, that the Court will consider imposing a penalty if petitioner returns to ·the Court and advances groundless arguments in the future regarding her filing and payment obligations. To reflect the foregoing, an appropriate order will be issued granting respondent's motion to dismiss for lack of jurisdiction, and denying 9 petitioner's motion to restrain assessment or collection, and to order refund of amount collected. This concludes the Court's oral findings of fact and opinion in this case. (Whereupon, at 10:47 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