TAX COURT OPINION

Case: Shirley M. Cotter
Docket Number: 4173-12L
Judge: Buch
Opinion Type: bench
Filed: 06/17/2013
Pages: 9

UNITED STATES TAX COURT WASHINGTON, DC 20217 SEC SHIRLEY M. COTTER, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ) Docket No. 4173-12L ORDER Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit with this order to both petitioner and respondent a copy of the pages of the transcript of the trial in this case that contain the oral findings of fact and opinion that was rendered at the trial session at Columbus, Ohio. In accordance with the oral findings of fact and opinion, a decision will be entered for respondent. (Signed) Ronald L. Buch Judge Dated: Washington, D.C. June 17, 2013 SERVED Jun 18 2013 Capital Reporting Company 3 1 2 Bench Opinion by Judge Ronald L. Buch June 4, 2013 3 Shirley M. Cotter v. Commissioner 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Docket No. 4173-12L 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. The oral findings of fact and opinion may not be relied upon as precedent in any other case. This opinion is in conformity with Internal Revenue Code section 7459(b) and Rule 152(a) of the Tax Court Rules of Practice and Procedure. All section references that follow refer to the Internal Revenue Code in effect during the years at issue, and all Rule references are to the Tax Court Rules of Practice and Procedure. Background Ms. Cotter filed a "balance due" joint return for the 2010 taxable year, but did not include full payment. The IRS sent Ms. Cotter a Notice of Intent to Levy dated October 4th, 2011. In response, Ms. Cotter filed a Form 12153, requesting a 24 Collection Due Process or Equivalent Hearing. On her 25 request, Ms. Cotter checked the box indicating that 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 she could not pay the liability and she checked the box requesting innocent spouse relief. Ms. Cotter did not provide direct evidence on these matters and did not file a Form 8857, which is required when requesting innocent spouse relief. And as explained in her testimony, she was not requesting innocent spouse relief. Instead, Ms. Cotter made a number of religious statements explaining why she felt that she could not in good conscience pay the tax. Ms. Cotter states that she is a "person of the light" and as such, she considers taxes to be "gifts" from the people and delights in paying taxes when the money is used for certain reasons. However, she does not believe in paying taxes when the money 15 will be used for what she considers to be improper 16 17 18 19 20 21 22 23 24 25 purposes. On January 17th, 2012, the IRS issued a notice of determination, deciding issues raised at the Collection Due Process hearing. The notice of determination stated that the levy was appropriate and that the collective alternatives were not available because Ms. Cotter did not propose any acceptable alternatives and did not indicate that paying the taxes would result in a financial hardship. Ms. Cotter timely petitioned this Court 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company and raised similar religious objections. She also proposed doing community service in lieu of paying 5 the taxes owed. Discussion The Secretary must notify the taxpayer in 1 2 3 4 5 6 writing of her right to a hearing before the 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Secretary can levy against any property or right to property. Sec. 6330 (a) (1),. The writing must include a notice of the right to request a hearing, known as a Collection Due Process hearing. Sec. 6330 (a) (3) (B). A taxpayer may raise any relevant issue relating to the unpaid tax or toAproposedlevy, the 7 E including appropriate spousal defenses, challenges to the appropriateness of collection alternatives, and offers of collection alternatives in the CDP hearing. Sec. 6330 (c) (2) (A). The taxpayer may also challenge the existence or amount of the underlying tax liability if the taxpayer did not receive a statutory notice of deficiency or did not otherwise have the opportunity to dispute the liability. Sec. 6330 (c) (2) (B). While the term underlying liability is not defined in Sec. 6330, we have previously interpreted this term "to include any amounts owed by a taxpayer pursuant to the law." Katz v. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 Commissioner, 115 T.C. 329, 339 (2000). As always, we must apply the appropriate standard of review. If the validity of the underlying liability is properly at issue, we will review that determination de novo. Sego v. Commissioner, 114 T.C. 604, 610 (2000); Goza v. Commissioner, 114 T.C. 176, 181-182 (2000). In contrast, where the validity of the underlying liability is not properly at issue, we will review a determination for an abuse of discretion. Sego v. Commissioner, 114 T.C."610; Goza v. Commissioner, 114 T.C.L182. An abuse of discretion will be found where C4 C the determination was arbitrary, caprlclous or 1 2 3 4 5 6 7 8 9 10 11 12 13 14 without sound basis in fact or law. Giamelli v. 15 16 17 18 19 20 21 22 23 24 25 Commissioner, 129 T.C. 107, 111 (2007). First, we address the underlying liability. Here, Ms. Cotter self-assessed the tax on her return. She does not argue that the self-assessment was in error or otherwise dispute the underlying liability. Instead, she alleges that her religious beliefs do not permit her to pay the tax owed. It is beyond our jurisdiction to consider issues not properly raised in the CDP hearing and an issue is not properly raised if the taxpayer does not request consideration of the issue at the hearing. Sec. 301.6330-1(f) (2), 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 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 Q&A-F3, Proced. & Admin. Regs; Sec. 301.6320-1(f) (2), Q&A-F3, Proced. & Admin. Regs. Thus, the underlying liability is not before this Court. Because the validity of the underlying liability is not at issue, we must decide if the notice of determination reflected an abuse of discretion. Ms. Cotter is also not alleging that such an abuse occurred. She is alleging that she should not be responsible for paying the tax based on her beliefs. There is no evidence that Ms. Cotter provided any financial information or any evidence to support collection alternatives or innocent spouse relief. It appears that she only checked the box on the form. Again, we are subject to our jurisdictional limits and an issue is not properly raised if the taxpayer requests consideration, but does not provide evidence on the issue at the hearing. Sec. 301.6330-1(f) (2), Q&A-F3, Proced. & Admin. Regs; also, Reg. sec.A6320-1(f) (2), Q&A-F3, Proced. & Admin. Regs. Ms. Cotter proposed doing community service, but this is not a collective alternative that is recognized by our tax system. Rule 331(b) (4) requires that a petition pursuant to a levy action must contain "[c]lear and concise assignments of each and every error which 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company petitioner alleges to have been committed in the notice of determination. Any issue not raised in the 8 assignments of error shall be deemedµconceded." Rule 70 L/t 331(b) (5) requires that such a petition must also contain "clear and concise lettered statements of thE fécyf facts on which the petitioner bases each assignment of error." Pursuant to Rule 123(d), the Court may dismiss a case at any time and decide against the taxpayer if the taxpayer fails to properly prosecute or comply with the Rules. The Court may also dismiss a case for cause on its own initiative under Rule 53. Ms. Cotter did not provide evidence during her CDP hearing, other than her religious convictions, as to why the levy should not be sustained. She has also not provided any evidence to the Court, other than her religious convictions, as to why the notice of determination is improper. The Court does not doubt the sincerity of Ms. Cotter's beliefs. However, this does not provide Ms. Cotter 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 with the right to refuse to comply with the law, 21 22 23 24 25 "even though the policies of the Federal Government and the manner of expenditure of its revenues may not accord with the dictates of h[er] conscience or religion." Muste v. Commissioner, 35 T.C. 913, 919 (1961). Further, "the Constitution does not relieve 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 1 2 a pacifist or a conscientious objector of the duty to pay taxes, even though they may be used" for purposes 3 with which petitioner disagrees. Id. at 919. 9 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Therefore, we are presented with three scenarios under which this case could be decided against petitioner. First, Ms. Cotter has not complied with Rule 331(b). She only raised her religious objections and did not provide clear and concise assignments of error or statements of fact. As a result, the Court could dismiss the case under Rule 53 for her failure to state a claim upon which relief can be granted. Second, at trial, Ms. Cotter did not provide or support a justiciable claim for relief. She has only raised her religious objections. As a result, the Court could dismiss the case in accordance with Rule 123(b), for failure to properly prosecute. We do not, however, have a motion from respondent for dismissal on either of these grounds. Finally, Ms. Cotter has not provided evidence to show that the underlying liability is improper or that the Settlement Officer abused her discretion in deciding that collection alternatives 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company were not available. As a result, Ms. Cotter cannot succeed on the merits. Accordingly, a decision will be entered on the merits for respondent. 10 (Whereupon, at 1:18 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