TAX COURT OPINION

Case: Ricky T. Burningham
Docket Number: 21372-12L
Judge: Kroupa
Opinion Type: bench
Filed: 12/16/2013
Pages: 12

UNITED STATES TAX COURT WASHINGTON, D.C. 20217 RICKY T. BURNINGHAM, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) ) ) ) ) ) ) Docket No. 21372-12L OR 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 to petitioner and to respondent a copy of the pages of the transcript of this case before Judge Diane L. Kroupa in San Francisco, California on November 22, 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 December 16, 2013 SERE DEC 1 8 2013 Capital Reporting Company 3 1 2 Bench Opinion by Judge Diane L. Kroupa November 22, 2013 3 Ricky T. Burningham v. Commissioner 4 5 6 7 8 9 10 11 12 Docket No. 21372-12L 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 by 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, for 2003, 2004, 2005, 2006 and 2007 (years at issue), and all Rule references are to the Tax Court Rules of Practice and Procedure. This is a collection review case concerning a collection action to collect unpaid tax liabilities from petitioner for the years at issue. This collection review matter is before the Court on respondent's Motion for Summary Judgment. The Court ordered petitioner to file a response or objection to respondent's motion and scheduled respondent's motion for a hearing. Petitioner filed an objection to respondent's motion and filed a motion to strike the 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 4 1 motion and the related declaration. Petitioner 2 3 4 5 6 7 8 failed to appear, however, for the calendar call or for the scheduled hearing during the November 18, 2013, San Francisco, California trial session. Matthew Williams appeared on behalf of respondent. FINDINGS OF FACT The record establishes the following facts. 9 Petitioner resided in Modesto, California, at the 10 11 12 13 14 15 16 17 18 time he filed the collection review petition. Petitioner failed to file a Federal income tax return for each of the years at issue. Respondent prepared a substitute for return (SFR) for each of the years at issue and informed petitioner that he had a tax liability for each of the years at issue. Respondent issued petitioner a deficiency notice for each of the years at issue. Petitioner did not file a petition or otherwise contest any of the 19 Commissioner's determinations in the deficiency 20 21 22 23 24 notices. Petitioner did not pay the assessed amounts, which respondent seeks to collect through this collection action. Respondent issued petitioner a Letter 1058, Final Notice of Intent to Levy and Notice of Your 25 Right to a Hearing. Petitioner timely requested a 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 1 2 3 4 5 6 hearing and raised two general issues in his hearing request. First, he challenged the underlying tax liabilities for the years at issue. And second, he requested that respondent consider all collection alternatives available to him, yet petitioner failed to provide any financial information for the Appeals 7 Officer to consider any collection alternatives. 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 The Appeals Officer scheduled a telephonic hearing. Before the hearing, the Appeals Officer repeatedly asked petitioner to complete and submit a Form 433-A, Collection Information Statement, as well as a copy of his Federal income tax returns for 2010 and 2011 to confirm that petitioner was current with his Federal income tax filing requirements. The Appeals Officer attempted, unsuccessfully, to reach petitioner at the time scheduled for the hearing. Petitioner did not explain why he was unavailable for the call or why he did not contact the Appeals Officer to propose a new time for a hearing. The Appeals Officer again asked petitioner to submit financial information. Petitioner failed to respond with any information regarding his monthly income, expenses, future anticipated income, assets, liabilities or any other information that would have assisted the Appeals Officer in evaluating whether 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 1 petitioner qualified for a collection alternative. 2 Petitioner also failed to reschedule an alternative 6 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 date and time for the hearing. Petitioner requested the collection hearing to proceed by correspondence, but failed to provide any of information that would enable the Appeals Officer to make a determination. The Appeals Officer determined that petitioner was not in compliance with his Federal filing requirements and that he received the deficiency notices for the years at issue. Without petitioner's financial information and without confirmation that petitioner was current with his filing and payment requirements, the Appeals Officer sustained the collection action in the determination notice. Petitioner timely filed a petition with this Court and makes several assertions. First, he asserts that he may challenge the underlying liability for the years at issue because he did not receive the required deficiency notices. Second, petitioner asserts that he was denied the opportunity to enter into a collection alternative. As mentioned previously, respondent filed a summary judgment motion and the Court scheduled a hearing on respondent's motion at the San Francisco, 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 1 California trial session beginning November 18, 2013. 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 OPINION We must decide whether we will grant summary judgment in favor of respondent. Summary judgment is intended to expedite litigation and to avoid unnecessary and expensive trials. See, e.g., FPL Group, Inc. v. Commissioner, 116 T.C. 73, 74 (2001). We will grant a motion for summary judgment if the pleadings and other acceptable materials, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that a decision may be rendered as a matter of law. See Rule 121(b). We begin our analysis with the standard of review we apply in a collection action. Where the validity of the underlying tax liability is properly at issue, the Court will review the matter on a de novo basis. Sego v. Commissioner, 114 T.C. 604, 610 (2000). Where, as 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, 114 T.C. 176, 181-182 (2000). This abuse of discretion standard requires us to decide whether respondent 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 1 exercised his discretion arbitrarily, capriciously or 2 without sound basis in fact or law. See Woodral v. 8 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 2.3 24 25 Commissioner, 112 T.C. 19, 23 (1999); Fargo v. Commissioner, T.C. Memo. 2004-13. A taxpayer may challenge the existence or the amount of the underlying tax liability at the CDP hearing or in a subsequent court proceeding under section 6330, provided he or she did not receive a deficiency notice or did not otherwise have an opportunity to dispute such tax liability. See sec. 6330 (c) (2) (B); Goza v. Commissioner, supra. The statute contemplates actual receipt of the deficiency notice. Tatum v. Commissioner, T.C. Memo. 2003-115. A taxpayer cannot circumvent the actual receipt requirement, however, by deliberately avoiding delivery. Sego v. Commissioner, supra; Baxter v. Commissioner, T.C. Memo. 2001-300. There is a presumption of official regularity and of delivery that arises when the Commissioner presents evidence that deficiency notices were sent by certified mail to the taxpayer's last known address. See Sego v. Commissioner, supra; Hochschild v. Commissioner, T.C. Memo. 2002-195; Carey v. Commissioner, T.C. Memo. 2002-209; Baxter v. Commissioner, supra. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 9 1 2 3 4 5 6 7 8 Respondent has introduced evidence that the deficiency notices were mailed to petitioner's last known address by certified mail. In contrast, petitioner merely asserts that he did not receive the deficiency notices. He did not offer any evidence that he changed residences or that he had another current address. Petitioner has failed to establish that he did not receive the deficiency notices. 9 Petitioner has not provided credible factual 10 11 12 13 14 15 16 17 18 19 20 21 22 assertions to overcome the strong presumption of proper mailing and delivery. Figler v. Commissioner, T.C. Memo. 2005-230. We therefore conclude that petitioner is presumed to have received the deficiency notices and may not challenge the underlying liability for the years at issue. Moreover, we are mindful that petitioner failed to raise this issue or any other issue at the hearing. Petitioner failed to participate at the hearing and he did so at his own peril. Any issue not raised at the hearing is deemed conceded. Magana v. Commissioner, 118 T.C. 488, 493 (2002). We must now decide whether respondent acted 23 arbitrarily, capriciously or without sound basis in 24 25 fact or law. See Woodral v. Commissioner, 112 T.C. at 23. Based upon our examination of the entire 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 10 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 liabilities for the years at issue. Respondent is therefore entitled to summary judgment in his favor. We briefly explain how we reached our decision. First, the record reflects that petitioner never presented any financial information for the Appeals Officer 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. Moreover, it is well established that an Appeals Officer may refuse to consider any collection alternatives if the taxpayer has a history of noncompliance and is not in compliance with current tax obligations. Giamelli v. Commissioner, 129 T.C. 107, 111-112 (2007); Balsamo v. Commissioner, T.C. Memo. 2012-109. The failure to provide necessary financial documentation prevents a productive and meaningful communication about potential collection 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 11 1 2 3 4 5 6 7 8 9 alternatives. Failure to provide such information alone is sufficient to sustain the determination the Appeals Office made to proceed with the collection action against the taxpayer. TGI Enterprises, Inc. v. Commissioner, T.C. Memo. 2009-123. In addition, an Appeals Officer is not obligated to negotiate indefinitely or to wait any specific time before issuing a determination. See Kreit Mech. Assocs., Inc. v. Commissioner, 137 T.C. 123, 134 (2011); 10 Kuretski v. Commissioner, T.C. Memo. 2012-262; 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Clawson v. Commissioner, T.C. Memo. 2004-106. Respondent's Appeals Officer repeatedly informed petitioner that he needed to provide a completed Form 433-A, Collection Information Statement, and the supporting financial documentation. Petitioner failed to supply the necessary form or the supporting financial information. Petitioner also failed to give any indication that he intended to meaningfully participate in the collection hearing. In toto, petitioner has failed to advance arguments that allow us to conclude that the determination to sustain the proposed collection.action was arbitrary, capr1clous or without sound basis in fact or otherwise an abuse of discretion. See, e.g., Giamelli v. Commissioner, 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 12 129 T.C. 107, 112, 115 (2007). Respondent therefore has not abused any discretion in sustaining the collection action. Accordingly, we sustain respondent's determinations in the determination notice. We place no weight on petitioner's motion to strike respondent's motion and the related declaration. These are non-conventional responses or objections. The Court is uncertain whether petitioner is raising frivolous arguments to delay collection. We are nonetheless concerned that petitioner has not timely filed a Federal income tax return for at least 10 years. We warn petitioner that his actions may subject him to a penalty under section 6673, which authorizes the Tax Court to require a taxpayer to pay to the United States a penalty of 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 proceeding is frivolous or groundless. Petitioner has not raised any valid challenges to the appropriateness of collection, did not assert any spousal defenses, or otherwise offer any collection alternatives. See sec. 6330(c) (2). 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 Accordingly, these issues are now deemed conceded. 2 3 4 5 6 Rule 331(b) (4). To reflect the foregoing, decision will be entered for respondent and an appropriate order will be issued sustaining the determinations set forth in the Notice of Determination Concerning Collection 7 Action (s) Under Section 6320 and/or 6330, upon which this case is based, regarding petitioner's unpaid income tax liabilities for the years at issue. The order will also grant respondent's motion for summary judgment . THIS CONCLUDES THE COURT'S ORAL FINDINGS OF FACT AND OPINION IN THIS CASE. (Whereupon, at 10:14 a.m., the above- entitled matter was concluded.) 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 866.488.DEPO www.CapitalReportingCompany.com