TAX COURT OPINION

Case: Mohamed A. Hadid
Docket Number: 14213-18L
Judge: Carluzzo
Opinion Type: bench
Filed: 04/10/2019
Pages: 10

UNITED STATES TAX COURT WASHINGTON, DC 20217 MOHAMED A. HADID, Petitioner, v. ) ) ) SR ) Docket No. 14213-18 L COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) ) 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 petitioner and to respondent a copy of the pages of the transcript of the trial in the above case before Chief Special Trial Judge Lewis R. Carluzzo at Los Angeles, California, containing his 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, decision will be entered for respondent. (Signed) Lewis R. Carluzzo Special Trial Judge Dated: Washington, D.C. April 10, 2019 SERVED Apr 11 2019 Received 4/3/2019 IN THE UNITED STATES TAX COURT In the Matter of: MOHAMED A. HADID, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) ) ) Docket No. ) ) ) ) ) ) ) ) 14213-18L Pages: 1 through 8 Place: Los Angeles, California Date: March 28, 2019 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 IN THE UNITED STATES TAX COURT 1 In the Matter of: MOHAMED A. HADID, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) ) ) Docket No. ) ) ) ) ) ) ) ) 14213-18L Edward R. Roybal Center & Fed. Bldg. 255 East Temple Street Room 1167, 11th Floor Los Angeles, California 90012 March 28, 2019 The above-entitled matter came on for bench opinion, pursuant to notice at 9:16 a.m. BEFORE: HONORABLE LEWIS R. CARLUZZO Special Trial Judge APPEARANCES: For the Petitioner: No Appearance For the Respondent: No Appearance cnners P R O C E E D I N G S 2 (9:16 a.m.) THE CLERK: Recalling docket number 14213-18L, Mohamed A. Hadid. (Whereupon, a bench opinion was rendered.) 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 Bench Opinion by Special Trial Judge Lewis R. Carluzzo 3 March 28, 2019 Mohamed A. Hadid v. Commissioner of Internal Revenue Docket No. 14213-18L Bench Opinion 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 (bench opinion). Section references made in this bench opinion are to the Internal Revenue Code of 1986, as amended, in effect for the relevant period, and Rule references are to the Tax Court Rules of Practice and 1 2 3 4 5 6 7 8 9 10 11 12 13 Procedure. This bench opinion is made pursuant to the 14 authority granted by section 7459(b) and Rule 152. The 15 decision to be entered in this case shall not be treated 16 as precedent for any other case, and except as provided in 17 Rule 152(c), this bench opinion shall not be cited as 18 authority. 19 20 By Order dated February 1, 2019, this section 6330(d) case was assigned to me for disposition. See sec. 21 7443A(b)(4),(c); Rules 180, 181 and 182. 22 Murray Greiff appeared on behalf of petitioner. 23 Halvor R. Melom appeared on behalf of respondent. 24 25 All of the facts have been stipulated and are so found. At the time the petition was filed, petitioner 4 1 2 3 4 5 6 7 8 9 lived in California. In a notice of determination dated July 12, 2018 (notice), respondent determined that a levy is an appropriate collection action with respect to petitioner's outstanding 2010, 2011, and 2013 Federal income tax liabilities (underlying liabilities), which total more than four million dollars. Because petitioner does not dispute the underlying liabilities, we review respondent's determination for abuse of discretion. See Goza v. 10 Commissioner, 114 T.C. 176 (2000). For the reasons 11 12 13 summarized below, we hold that it was not. 1. The parties agree that respondent's determination is reviewed on the basis of the administrative record, see 14 Keller v. Commissioner, 568 F. 3d 710 (9th Cir. 2009) 15 affirming T.C. Memo. 2006-166, but they disagree on the 16 extent of that record. According to respondent, the 17 administrative record consists of stipulated exhibits 1-J 18 through 19-J, inclusive. Petitioner agrees that those 19 exhibits are properly included in the administrative 20 record, but proposes that exhibits 20-P through 23-P, 21 22 inclusive, also attached to the stipulation of facts, but objected to by respondent, should be included in the 23 administrative file as well. Little would be gained by 24 resolving the dispute between the parties by technical 25 analysis because it matters not whether the administrative record is as respondent contends or as petitioner claims. 5 Either way, our above-stated holding would be the same. Consequently, we proceed by assuming, without finding, that the administrative record is as petitioner describes it, and exhibits 20-P through 23-P will be received and admitted into evidence. 2. As a collection alternative to the proposed levy, Petitioner requested an installment agreement and offered to pay $30,000 per month towards the underlying liabilities. In support of his request for the installment agreement, petitioner provided a financial statement showing that he had $5,000 of monthly income and 1 2 3 4 5 6 7 8 9 10 11 12 13 more than $200,000 of monthly expenses. Petitioner's 14 offer was conditioned upon respondent's agreement that a 15 Notice of Federal Tax Lien (NFTL) would not be filed with 16 17 18 respect to the underlying liabilities. 3. A revenue officer who reviewed the proposed installment agreement at the request of the settlement 19 officer recommended that the proposal be rejected, and 20 21 22 respondent's settlement officer, in turn, rejected it. 4. One reason given for the rejection of the proposed installment agreement was the improbability that 23 Petitioner would be able to honor an agreement to pay 24 25 $30,000 per month given his claimed monthly income of $5,000 per month. At trial petitioner's attorney coners acknowledged the obvious mathematical implications, but 6 suggested that the money would come from somewhere. As we view the matter, given the lack of an identifiable source of funds available to petitioner to honor the proposed installment agreement, the rejection of an otherwise obviously unworkable installment agreement as proposed by petitioner is hardly an abuse of discretion. That determination is supported in law, that is, the settlement officer clearly had the authority to consider and reject the proposal, and the determination is supported in fact, as the critical fact relied upon by the settlement 1 2 3 4 5 6 7 8 9 10 11 12 officer, namely the information shown on the financial 13 14 15 statement offered in support of the installment agreement, is not in dispute. 5. Petitioner also argues that petitioner's situation not 16 only allowed for an installment agreement, but for an 17 18 installment agreement that would preclude respondent's filing of a NFTL. A taxpayer's eligibility for such an 19 installment agreement, if at all, presupposes that the 20 underlying installment agreement was otherwise acceptable. 21 Petitioner's was not, so we need not address petitioner's 22 23 complaint about respondent's failure to take into account the effects that the filing of a NFTL might have on 24 Petitioner's business. Furthermore, because we find that 25 the rejection of petitioner's proposed installment . Cnners agreement was justified if only because of the financial statement he submitted in support of it, we need not 7 consider petitioner's claim that some of the other reasons given by respondent for the rejection of the proposed installment agreement are not supported by the facts. In all other respects, the evidence shows that respondent proceeded as required under section 6330, and Petitioner does not suggest otherwise. That being so, to reflect the foregoing, decision will be entered for respondent. This concludes the Court's bench opinion in this matter. (Whereupon, at 9:25 a.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 CERTIFICATE OF TRANSCRIBER AND PROOFREADER 8 CASE NAME: Mohamed A. Hadid v. Commissioner DOCKET NO.: 14213-18L We, the undersigned, do hereby certify that the foregoing pages, numbers 1 through 8 inclusive, are the true, accurate and complete transcript prepared from the verbal recording made by electronic recording by Troy Ray on March 28, 2019 before the United States Tax Court at its session in Los Angeles, CA, in accordance with the 1 2 3 4 5 6 7 8 9 10 applicable provlslons of the current verbatim reporting 11 12 contract of the Court and have verified the accuracy of the transcript by comparing the typewritten transcript 13 against the verbal recording. 14 6 17 18 19 20 21 23 24 25 Lori Rahtes, CDLT-108 Transcriber Jessica Hernandez Proofreader 3/29/19 Date 3/29/19 Date