TAX COURT OPINION

Case: Maureen A. Jones & Stephen M. Jones
Docket Number: 10583-14SL
Judge: Colvin
Opinion Type: bench
Filed: 11/03/2015
Pages: 9

UNITED STATES TAX COURT WASHINGTON, DC 20217 MN MAUREEN A. JONES & STEPHEN M. JONES, ) ) ) Petitioners, v. ) Docket No. 10583-14SL. COMMISSIONER OF INTERNAL REVENUE, ) ) ) ORDER Respondent For cause, it is ORDERED that on page 1 of the September 22, 2015 transcript of the proceedings, lines 6 through 9 are changed to read: 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 shall not be relied upon as precedent in any other case. It is further ORDERED that Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure 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 John O. Colvin at New York, New York (Newark) on September 22, 2015, containing his oral findings of fact and opinion rendered at the conclusion of the hearing. SERVED Nov 03 2015 - 2 - In accordance with the oral findings of fact and opinion, decision will be entered for respondent. (Signed) John O. Colvin Judge Dated: Washington, D.C. November 3, 2015 Capital Reporting Company 3 1 2 Bench Opinion by Judge John O. Colvin September 22, 2015 3 Maureen A. Jones and Stephen M. Jones v. Commissioner 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Docket No. 10583-14SL THE COURT: THE ORAL FINDINGS OF FACT AND OPINION MAY NOT BE RELIED UPON AS PRECIDENT IN ANY OTHER CASE. THE FOLLOWING REPRESENTS THE COURT'S ORAL FINDINGS OF FACT OF OPINION. This bench opinion is in made pursuant to the authority granted by Section 7459(b) and Rule 152. Section references are to the Internal Revenue Code as amended. Rule references are to the Tax Court Rules of Practice and Procedure. This case is before the Court on respondent's motion for summary judgment. A hearing on this motion was held on September 21, 2015, in New York, New York. Maureen A. Jones and Stephen M. Jones represented themselves. Rachel L. Schiffman represented respondent. Based on the filings in this case and the hearing, we conclude that it is appropriate to grant respondent's motion. Background Petitioners resided in East Brunswick, New I 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 4 1 2 3 4 5 6 7 8 9 Jersey when they filed the petition in this case. Petitioner-husband served as a special agent for the Internal Revenue Service from 1971 to 1987 and was injured on the job in June of 1987. In 2009, as part of the resolution of a dispute relating to his employment, petitioner-husband received from the Office of Personnel Management a total of about $155,000 in retirement pay attributable to 2008 and 2009, minus related income tax withholding. Those 10 payments were reported on several Forms 1099-R, 11 Distributions from Pensions, Annuities, Retirement or 12 Profit-Sharing Plans, IRA's, Insurance Contracts, 13 14 15 16 17 18 19 20 21 22 23 24 25 Etc. Petitioners obtained an extension to file their 2009 tax return but they never filed a return for that year. Petitioner-husband wanted the Forms 1099-R that had been issued for 2009 to be modified so that approximately one-half of the $155,000 petitioners received in 2009 would be taxable in 2008. Respondent issued a notice of deficiency to petitioner Maureen A. Jones on February 6, 2012, and to petitioner Stephen M. Jones on February 13, 2012. At the hearing on respondent's motion for summary judgment, petitioners did not dispute respondent's 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 claim that petitioners had received the notices of deficiency. After assessing additional tax, respondent issued a Final Notice of Intent to Levy for tax year 2009 to petitioner Maureen A. Jones on June 4, 2013, and to petitioner Steph . Jones on June 10, 2013. Petitioners timely submitted Form 12153, Request for a Collection Due Process or Equivalent Hearing. The settlement officer assigned to petitioners' case mailed letters to petitioners on September 6, 2013, and September 9, 2013, scheduling the Collection Due Process (CDP) hearing for October 2, 2013. The settlement officer also requested that petitioners complete Form 433-A, Collection Information Statement, and their unfiled 2010 tax return by September 20, 2013. The settlement officer held the CDP hearing on November 5, 2013. As of this date, petitioners had not submitted the information the settlement officer requested in her letters from September 2013. 21 Petitioners and the settlement officer discussed the 22 possibility of having petitioners hardship 23 claim, but petitioners decided not to do that. 24 Petitioners did not submit information relating to 25 hardship the settlement officer had requested, and 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 1 2 3 4 the settlement officer did not consider it further. On February 11, 2014, the settlement officer sustained the proposed levy. On April 9, 2014, respondent issued to petitioners a Notice of 5 Determination Concerning Collection Action Under 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Section 6320 and/or 6330, upon which this case is based. Discussion Petitioners challenge respondent's determination of underlying tax liability. A taxpayer may challenge respondent's determination of the amount of the taxpayer's underlying tax liability during a CDP hearing if the taxpayer did not receive a notice of deficiency or did not otherwise have the opportunity to dispute the liability. Section 6330(c)(2)(B). Petitioners do not dispute that they received the notices of deficiency for 2009. Thus, underlying tax liability is not properly at issue in this case. If a taxpayer's underlying tax liability is not at issue, we review the Appeals Office's determination for abuse of discretion. Goza v. Commissioner, 114 T.C. 176, 181-182 (2000). An abuse of discretion occurs if the Appeals Office exercises its discretion "arbitrarily, 1thout sound basis in fact or law." Woodral v. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 1 2 3 4 5 6 7 Commissioner, 112 T.C. 19, 23 (1999). The Court may grant summary judgment where the record establishes that there is no genuine dispute as to an aterial fact and that a decision may be rendered as a matter of law. See Rule 121(a) and (b). The moving party bears the burden of proving that there is no genuine dispute of 8 material fact, and factual inferences are viewed most 9 favorably to the nonmoving party. See Craig v. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Commissioner, 119 T.C. 252, 259-262 (2002). The settlement officer provided petitioners ample opportunity to submit the documents requested for the CDP hearing, as well as to establish that the proposed levy would cause hardship. Generally, where an Appeals Officer gives a taxpayer an adequate amount of time to submit requested items, it is not an abuse of discretion to move ahead if the taxpayer does not submit the requested items. Pough v. Commissioner, 135 T.C. 344, 351 (2010); Wilcox v. Commissioner, T.C. Memo 2005-257. Even if petitioners' underlying tax liability were at issue, it is well-settled that the income is includable in gross income for the year in which it is received by the taxpayer unless, under the method of accounting used by the taxpayer in 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 8 1 2 3 4 5 6 7 computing taxable income, such amount is properly accounted for as of a different period. Sec. 451(a). The Court's impression from the hearing is that petitioners thought it was unfair that the payments to petitioner-husband had been delayed, resulting in petitioners receiving two years of petitioner-husband's retirement income in one year, 8 which subjected them to more tax than would have been 9 owing if they had received the payments over the two 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 year period. Petitioner-husband testified that petitioners' tax liability would be several thousand dollars higher if the income was all received in 2009 instead of being received in approximately equal amounts in 2008 and 2009. Yet petitioner-husband also acknowledged that he understood that petitioners were obligated to file a tax return and that income is taxable in the year of receipt for a cash basis taxpayer. We conclude that it was not an abuse of discretion for respondent's settlement officer to sustain respondent's Notice of Levy for tax year 2009. The Appeals Office properly verified that the requirements of all applicable laws and administrative procedures were met in the processing of petitioners' case and that the collection action 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 9 balances the Government's need for the efficient collection of taxes with petitioners ' concern that the collection action be no more intrusive than necessary. Thus, we will grant respondent's motion for summary judgment and decision will be entered for respondent. This concludes the Court's findings of fact and opinion in this case. (Whereupon, at 3:47 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