TAX COURT OPINION

Case: Fritz B. Ziegler & Margaret S. Ziegler
Docket Number: 4466-22L
Judge: Goeke
Opinion Type: bench
Filed: 07/11/2025
Pages: 13

Fritz B. Ziegler & Margaret S. Ziegler, COMMISSIONER OF INTERNAL REVENUE, Respondent Petitioners v. United States Tax Court Washington, DC 20217 Docket No. 4466-22L. ORDER 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 in the above case before Judge Joseph Robert Goeke at New Orleans, Louisiana containing his oral findings of fact and opinion rendered at the trial session at which this case was heard. In accordance with the oral findings of fact and opinion, respondent's Motion for Summary Judgment, filed April 10, 2025, will be granted and a decision entered for respondent. (Signed) Joseph Robert Goeke Judge Served 07/11/25 1 Bench Opinion by Joseph Robert Goeke 2 June 13, 2025 3 3 Fritz B. Ziegler & Margaret S. Ziegler v. Commissioner 4 Docket No. 4466-22L 5 6 7 8 9 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. The oral Findings of Fact and Opinions shall not JRG be relied upon as precedent in any other case. This 10 opinion is rendered, pursuant to the authority in section 11 7459(b) of the Internal Revenue Code. Hereinafter, 12 section references are to the Internal Revenue Code as it 13 affects the case before us. Rule references are to the 14 Tax Court Rules of Practice and Procedure. 15 Before the Court is a Motion for Summary 16 Judgment under Rule 121. The motion was filed by 17 Respondent seeking a Summary Judgment upholding 18 Respondent's determination to seek collection via levy for 19 tax penalties and interest in income tax for the years 20 2008, 2010, 2011, 2012, 2013, 2014, and 2015. All of 21 these years were subject to a timely request for a 22 collection due process hearing, filed by the Petitioners 23 on December 30th, 2019. 24 Petitioners then brought this case under section 25 6330 to challenge a Notice of Determination, sustaining collection action by Federal tax levy, and a Supplemental 4 Notice of Determination, all for the same years and the same income tax liabilities. We have jurisdiction under 1 2 3 4 section 6330(d). 5 6 7 8 9 The liabilities in question exceed $350,000. Regarding the applicability of Rule 121 and Respondent's Motion for Summary Judgment, the pleadings in this case were closed on April 26th, 2022. A hearing on the Motion for Summary Judgment was held in New Orleans, Louisiana on 10 June 9th, 2024. The motion was filed at least 30 days 11 after the date the pleadings were closed, and within the 12 time, so as not to delay any potential trial, pursuant to 13 Rule 121(a). 14 Pursuant to Rule 93, Respondent filed a 15 certification as to the genuineness of the administrative 16 record on February 2nd, 2024. The certificate sets forth 17 the relevant documents contained in the administrative 18 record from the original hearing and the supplemental 19 hearing held by Respondent's Office of Appeals in this 20 case. Petitioners have offered no objection to the 21 completeness of this filing. The liabilities in question 22 were the result of self-reported tax due on Petitioners' 23 income tax returns for the years listed. In support of 24 Respondent's Motion for Summary Judgment, Respondent 25 listed a declaration of Ms. Harris in support of Respondent's motion, including readable account transcripts for the years in question. On December 2nd, 2019, Respondent sent 5 Petitioners Notice CP90, Notice of Intent to Seize Assets and Notice of Your Right to a Hearing, under section 6330. Petitioner requested such a hearing through their representative on December 30th, 2019. In that request, Petitioners included a statement that they proposed an alternative means of collection other than full pay. 1 2 3 4 5 6 7 8 9 10 Ultimately, Petitioners' alternative was that the case be 11 listed as a nonpay case, because Petitioners did not have 12 sufficient assets to make a payment. Petitioners, in 13 their last filing in this matter, state the following. 14 "We Petitioners do not contest the assessment by the JRG 15 Respondent of tax penalties and interest for the years 16 12/31/08, 12/31/10, 12/31/11, 12/31/12, 12/31/13, 17 12/31/14, and 12/31/15." All of which years were subject 18 to a request for a collection due process hearing, filed 19 by the Petitioners on December 30th, 2019. Given that 20 concession by the Petitioners, the standard of review in 21 this case is abuse of discretion, as is well established 22 with the underlying liabilities is not an issue. 23 This case was originally assigned to a 24 Settlement officer. And Settlement Ofc. Martinez raised 25 the hearing with the Petitioners after initiating contact with Petitioners' counsel. Petitioners maintain from the 6 outset of their communications with the Settlement officer, that their health should be −− that Mr. Ziegler's JRG health should be considered in determining whether Respondent's levy action was appropriate. This continues to be Petitioners' position, through the last documents filed by the Petitioners. And in the last pleadings filed by the Petitioner, Petitioners summarized their JRG JRG position regarding Mr. Ziegler's health as follows: "There remains in this case a genuine issue of material fact in that Petitioners have well- JRG documented, among other issues, the serious medical conditions of Fritz B. Ziegler. And due to his medical issues, he is not able to work, with the Petitioners living only on Social Security benefits. Further, Petitioners' Form 433-A, submitted as part of the court-ordered supplemental hearing, reflects little available cash to pay any debts of the Petitioners. The Form 433-A, using the Government-permitted expenditures, and not taking into account considerable credit card debt incurred over the years, with a portion of such debt used to pay Petitioner Husband's medical expenses, reflects about $600 of Social Security benefits over 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 1 2 3 4 5 6 7 8 9 expenditures, a very old used vehicle, a vehicle 7 that is mortgaged, and a personal residence. Using Respondent's 2025 Government-permitted expenses, Petitioners' excess monthly income would be less than $600. The facts in dispute are not resolved, is the effect the Petitioner JRG Husband's medical issues have on the decision not to place the case in not collectible status based on effective tax administration." 10 We will deal herein with the viability of 11 Petitioners' argument regarding Mr. Ziegler's medical 12 condition, and how it affects the determinations made by 13 the initial Settlement officer and the Settlement officer 14 applied when the case was remanded in the Supplemental 15 Notice of Determination. Among the documents Petitioners 16 provided to the original Settlement officer were a 17 download of bank transactions from their personal 18 checking, savings, and other accounts, covering periods 19 July 2023 through January 2024, listing approximately 207 20 transactions. Those transactions only included eight 21 verifiable medical-related expenses. And these expenses 22 were not catastrophic or significant, as far as 23 Petitioners' lifestyle. 24 Petitioners' representative has presented 25 evidence that Mr. Ziegler suffers from leukemia and other disorders, including potential heart issues. However, up 8 until this point in time, Mr. Ziegler has not incurred significant medical expenses beyond insurance coverage, as reflected by the bank transactions reviewed by the Settlement officers. Petitioners' arguments regarding the potential medical expenses, and the impact of the medical expenses on this case, are also inconsistent with a decision made by the Petitioners to incur a substantial car loan to buy 1 2 3 4 5 6 7 8 9 10 an expensive vehicle in 2024. Petitioners purchased a 11 Honda with the retail value of in excess of $51,000, and 12 incurred a car loan, which required an in excess of $800- 13 a-month payment. This transaction was on May 16th, 2024. 14 The decision to make this transaction, and incur the 15 additional monthly expense, is inconsistent with 16 Petitioners' position that they were concerned with the 17 potential offset of medical expenses. 18 This vehicle was purchased while the Petitioners 19 owned another vehicle as well. And Petitioners have 20 consistently represented that neither of them was 21 employed. So the fact that they have two vehicles, and 22 incurred a significant additional monthly expense to 23 purchase another vehicle, is inconsistent with 24 Petitioners' position that they were concerned about the 25 potential offset of medical expenses which would not 1 permit them to make any payment to the Internal Revenue 9 2 Service. 3 4 5 6 7 8 9 Respondent, in response to Motion for Summary Judgment, reviews carefully the history of Petitioners' representative's communications with Settlement Ofc. Martinez in the first hearing, to demonstrate that Settlement Ofc. Martinez permitted Petitioner adequate time to provide information. Petitioners do not maintain that they were not given such time. So we will not review 10 that information. Respondent and Petitioner took the 11 position, after this case was filed, that there were gaps 12 in the administrative record from Ms. Martinez's review of 13 the case, even though she sustained the levy action in a 14 Notice of Determination. Accordingly, the Court remanded 15 the case. And a new independent Settlement officer was 16 assigned the case after the case was docketed, while the 17 case was on remand. 18 The administrative record includes the 19 information submitted during the first round of 20 administrative review, as well as the information gathered 21 and reviewed by the second Settlement officer in the 22 second round of the administrative process. It also 23 includes both the initial Notice of Determination and the 24 Supplemental Determination. The Supplemental Notice of 25 Determination sustained the same collection action which had been sustained by the initial Notice of Determination. 10 The second Settlement officer was Settlement Ofc. Schoeest. It's spelled S−C−H−O−E−E-S−T. This Settlement JRG officer reviewed the same basic arguments that Petitioners had made which were summarized from Petitioners' papers in the record previously. JRG The Settlement officer inquired about the equity in Petitioners' home, which exceeds $400,000 in equity, and a vehicle; Petitioners owned a Subaru. His analysis 1 2 3 4 5 6 7 8 9 10 was made without considering the impact of the purchase of 11 the Honda. But we believe that purchase of the Honda, 12 together with the fact that Petitioners have never made 13 any serious effort to generate cash to pay this tax 14 liability based upon their equity, supports the analysis 15 of the Settlement officer. Petitioners would maintain 16 they could not obtain any cash from their equity in their 17 home, because there's a lien on the home. However, it's 18 clear that Petitioners had no intent to ever sell the home 19 to recoup the equity, or do any other arrangement with the 20 Internal Revenue Service which might have used the equity 21 in the home to satisfy their tax liability. 22 In any event, the primary analysis of the 23 Settlement officer before the Supplemental Notice was 24 based upon comparison of the allowable expenses to the 25 income Petitioners received, which was approximately $5,900 a month from Social Security. That analysis caused 11 the Settlement officer to determine Petitioners could pay $600 a month. Petitioners now maintain that the 2025 standards would have reduced that amount from $600. But nevertheless, the Settlement officer did determine that Petitioners could make a monthly payment apart from trying to recoup any of the equity in their home or from their 1 2 3 4 5 6 7 8 automobiles. 9 We'll now review the legal principles involved 10 in this case, including the appropriate standard for our 11 review. The purpose of Summary Judgment is to expedite 12 litigation and avoid unnecessary trials. Florida Peach 13 Corp. v. Commissioner, 90 T.C. 678, 681 (1988). Under 14 Rule 121(a)(2), the Court may grant Summary Judgment where 15 there is no genuine issue in dispute as to any material 16 fact, and a decision may be rendered as a matter of law. 17 Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), 18 aff'd 17 F.3d 965 (Seventh Circuit, 1994). 19 In deciding whether to grant Summary Judgment, 20 we construe factual materials and inferences drawn from 21 them in the light most favorable to the nonparty. 22 However, the nonparty may not rest upon mere allegations 23 or denials, but rather must set forth facts demonstrating 24 a genuine dispute for trial. Rule 121(d), Celotex Corp. 25 v. Catrett, 477 U.S. 317, 324 (1986). Applying that standard to the facts of the current case, the only 12 potential factual issue which Petitioners raise, and have consistently argued, is the failure of their claim, that the Settlement officer failed to properly consider their medical expenses, or potential medical expenses flowing from Mr. Ziegler's medical problems. We find that the Settlement officers, in both the initial hearing and in this subsequent hearing, did take steps to consider the ongoing medical expenses 1 2 3 4 5 6 7 8 9 10 incurred by the Petitioners. And their determination is 11 consistent with the Court's findings of fact that there 12 was not a major level of expense for medical expenses 13 prior to the hearing on the Motion for Summary Judgment. 14 Counsel for the Petitioners maintains that they expect 15 that there will be major medical expenses in the future, 16 17 but has not demonstrated what those might be. And they At this point there are basically -- at this point, is only speculation about there JRG 18 those medical expenses. 19 Given that record, we fail to conclude that the 20 Settlement officers abused discretion in upholding the 21 levy. We conclude that the Settlement officer in the 22 Supplemental Notice of Determination, in sustaining the 23 proposed levy, is supported by the administrative record, 24 and was not arbitrary, capricious, nor did he abuse 25 discretion, or otherwise act inconsistent with law. Rather, we find that his findings are consistent with the 13 proper application of the law and regulations under 6330, and that he properly, together with the initial Settlement officer, reviewed the administrative record to determine if the proper steps had been taken to assess the underlying tax liabilities. The question of whether Mr. Ziegler will have catastrophic medical expenses in the future which would require him not to be able to pay some portion of the tax 1 2 3 4 5 6 7 8 9 10 liability on a monthly basis is a reasonable one. 11 However, Petitioners' position that they were concerned 12 with this liability is inconsistent with the fact that 13 they took on a significant car loan in addition to their 14 other expenses that they previously had in 2024, when 15 faced with this tax liability and the potential collection 16 action. 17 We find that the purchase of this vehicle 18 demonstrates Petitioners' cavalier attitude about the tax 19 liabilities, and also the fact that they were not overly 20 concerned with the potential high cost of Mr. Ziegler's 21 medical bills. If Mr. Ziegler was to have catastrophic 22 medical bills in the future, there are remedies in the 23 Internal Revenue Code, and the administrative actions for 24 them to seek review of any potential action that comes 25 from Respondent's levies. And in fact, section 6330 1 2 3 4 5 6 7 8 9 provides that Appeals could consider subsequent events. 14 JRG However, we don't make our ruling based upon that possibility. We do it based upon the administrative record before us, and determine that there was no abuse of discretion. And we sustain the proposed levy action. Any issues not discussed in this bench opinion are either without merit, or were not properly preserved through the administrative proceeding. For me To reiterate our conclusion, we conclude JRG 10 that the Settlement officer's Supplemental Determination 11 is not an abuse of discretion and we sustain Respondent's 12 proposed collection action via levy. 13 This ends the Court's oral Findings of Fact and 14 Opinion in this matter. We're off the record. (Whereupon, at 11:32 a.m., the above-entitled matter was concluded.) 15 16 17 18 19 20 21 22 23 24 25