TAX COURT OPINION

Case: Gary & Charlotte Louden
Docket Number: 18665-07S
Judge: Colvin
Opinion Type: bench
Filed: 12/09/2008
Pages: 10

eovs 0644,, S$( V1i . UNITED STATES TAX COURT WASHINGTON , DC 2021 7 GARY AND CHARLOTTE LOUDEN, Petitioners, v . ) Docket No . 18665-07 S COMMISSIONER OF INTERNAL REVENUE, .Respondent . O R D E R Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it i s 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 proceedings in the above case before Judge Laurence J . Whalen at Indianapolis, Indiana, containing his oral findings of fact and opinion rendered on November 4, 2008 . In accordance with the oral findings of fact and opinion, an appropriate order and decision will be entered . (Signed) Laurence J . Whalen Judge Dated : Washington, D .C . December 9, 2008 SERVED DEC 10 2008 3 1 Bench Opinion by Senior Judge Laurence J . Whalen 2 November 4, 200 8 3 Louden v . Commissioner Docket No . 18665-07S 4 THE COURT : The Court has decided to render oral 5 findings of fact and opinion in this case, and th e 6 following represents the Court's oral findings of fact 7 and opinion . 8 This proceeding is a lien action that was brought 9 pursuant to Section 6320(c) and, by cross- reference , 10 Sections 6330(d) and 7463(f)(2) of the Internal Revenue 11 Code of 1986, as amended . 12 This proceeding was also brought pursuant to Rules 13 330 through 334, and Rules 170 through 175 of the Ta x 14 Court Rules of Practice and Procedure . 15 In this bench opinion all section numbers refer to 16 the Internal Revenue Code, as amended , and all Rul e 17 numbers refer to the Tax Court Rules of Practice and 18 Procedure . 19 This bench opinion is made pursuant to the 20 authority granted by Section 7459(b) of the Interna l 21 Revenue Code, as amended , and Rule 152 of the Tax Court 22 Rules of Practice and Procedure . 23 Mr . Gary Louden and Mrs . Charlotte Louden appeared 24 on their own behalf . Diane L . Worland, attorney-at-law, 25 appeared on behalf of Respondent . Heritage Reporting Corporation (202) 628-4888 4 1 This matter is before the Court on Respondent' s 2 Motion for Summary judgment, filed September 19, 2008 . 3 The facts relevant to the proper disposition o f 4 Respondent's motion are as follows : 5 6 Notice of Federal Tax Lien and Petitioner's Response Thereto . 7 On March 7, 2007, Respondent sent to Petitioners a 8 Notice of Federal Tax Lien Filing and Your Right to a 9 Hearing Under IRC 6320 . According to that notice, the 10 Commissioner had filed a Notice of Federal Tax Lien on 11 March 6, 2007, with respect to Petitioners' outstanding 12 tax liabilities for 1996, 1997, 1999, 2002, 2003, and 13 2004 . 14 Thereafter, on or about March 27, 2007 , 15 Petitioners filed with Respondent a Request for a 16 Collection Due Process Hearing on IRS Form 12153 . 17 Petitioners' Form 12153 stated that they disagreed with 18 the filing of the lien because a collection alternative 19 consisting of an installment agreement or an offer i n 20 compromise was appropriate . Petitioners stated that this 21 is a "Hardship case . Financially and Health . " 22 Administrative Process . 23 The Appeals Account Resolution Specialist 24 (referred to herein as Settlement Officer) to who m 25 Petitioners' case was assigned, sent a letter, dated May Heritage Reporting Corporatio n (202) 628-4888 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 5 31, 2007, to Petitioners in which she asked them t o provide a completed Collection Information Statement o n IRS Form 433-A by June 15, 2007 . According to the letter, "The Settlement Office r cannot consider collection alternatives at you r conference without this information ." Petitioners faile d to provide the Collection Information Statement by Jun e 15, 2007 . The Settlement Officer wrote a second letter t o Petitioners, dated June 15, 2007, in which she asked the m to provide the Collection Information Statement by Jun e 29, 2007 . The second letter warned that if th e Settlement Officer did not hear from them, then she ma y decide the matter based upon a review of th e administrative file . Petitioners did not reply to the second letter . Accordingly, on or about July 19, 2007, the Appeal s Office issued a Notice of Determination Concernin g Collection Action(s) Under Section 6320 and/or 6330 wit h respect to Petitioners' outstanding tax liabilities for . 1996, 1997, 1999, 2002, 2003, and 2004, which sustaine d the issuance of the Final Notice of Federal Tax Lien . In an attachment to the Notice of Determination , the Settlement Officer explained that "Since the taxpaye r [sic] did not provide the information requested , we mad e Heritage Reporting Corporation (202) 628-4888 1 our decision based upon the information in their case 2 file and the computer transcripts of the accoun t 6 3 history . " 4 The Petition . 5 Petitioners' petition states as follows : 6 Financially unable to pay this debt . It i s 7 causing us such hardship . My health is declining and my 8 wife's mental stability is unable to even discuss thi s 9 matter . We went thru payment plan for along time . Also 10 through two bankruptcy [sic] . Last one lasted almost 5 11 years . Were [sic] exhausted . Please help . 12 Respondent's Motion for Summary Judgment . 13 Respondent's motion recites the above facts and 14 emphasizes that Petitioners not only failed to provide 15 the Completed Information Statement on Form 433, which 16 was requested by the Settlement Officer, but they als o 17 failed to submit to the Settlement Officer any collection 18 alternative, such as an installment agreement or offer in 19 compromise . 20 Respondent's motion notes that the validity of the 21 underlying tax liability is not before the Court and , 22 thus, the standard for reviewing the action of the 23 Settlement Officer is abuse of discretion . See e .g ., 24 Goza v . Commissioner , 114 T .C . 176 (2000) . 25 Based on that standard, Respondent argues that Heritage Reporting Corporatio n (202) 628-4888 7 1 there is no genuine issue of material fact for trial and 2 Respondent is entitled to decision as a matter of law 3 because the Settlement Officer considered all of th e 4 matters required by Section 6330(c), applicable by cross- 5 reference from Section 6320 ( c), such as spousal defenses, 6 challenges to the appropriateness of the propose d 7 collection action, and offers of collection alternatives . 8 9 Petitioners ' Objection to Respondent ' s Motion for Summary Judgment . 10 In their objection to Respondent's motion, 11 Petitioners deny that they did not respond to th e 12 Settlement Officer, as alleged in Respondent's motion for 13 summary judgment . Accordingly, they argue that th e 14 Respondent's motion cannot be granted because there is a 15 genuine issue of material fact . 16 Evidentiary Hearing . 17 Petitioners' assertion that there is a genuine 18 issue of material fact was not supported by an affidavit 19 or other evidence, as required by Rule 121(d) . It was 20 based upon a mere denial of the facts alleged i n 21 Respondent's motion . These facts are supported by the 22 Declaration of Appeals Account Resolution Specialist 23 Adalee Lindstrom in support of Respondent's Motion for 24 Summary Judgment . 25 During the hearing on Respondent's motion, Mr . Heritage Reporting Corporatio n (202) 628-4888 8 1 Louden assured the Court that he had, in fact, provided 2 the Collection Information Statement to the Settlemen t 3 Officer . To resolve this factual discrepancy, the Court 4 conducted an evidentiary hearing . 5 The Notice of Determination is dated July 19 , 6 2007 . At the evidentiary hearing, Respondent introduced 7 evidence that a copy of it had been delivered to each 8 Petitioner on July 24, 2007, at 10 :21 a .m . 9 Mr . Louden's statement that he had mailed a 10 completed Collection Information Statement to the Appeals 11 Office proved to be correct . One problem, however, i s 12 that neither Petitioner had signed or dated the completed 13 form . 14 A more significant problem is the fact that Mr . 15 Louden had not mailed it until July 24, 2007, six days 16 after the Settlement Officer had completed her work on 17 Petitioners' appeal, and five days after the Notice of 18 Determination had been mailed to Petitioners . 19 The United States Postal Service receipt for the 20 envelope in which the Collection Information Statemen t 21 was sent shows that the Postal Service had accepted it on 22 July 24, 2007, at 10 :18 a .m ., on day prior to its receipt 23 by Respondent's Appeals Office on July 25, 2007 . 24 Respondent introduced a letter, dated July 26 , 25 2007, from the Settlement Officer to Petitioners in which Heritage Reporting Corporatio n (202) 628-4888 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 9 she returned the Collection Information Statement t o Petitioners and stated that the case had been closed o n July 18, 2007 . Based upon the evidence introduced at th e evidentiary hearing, we find that Petitioners did no t submit a completed Collection Information Statement, as requested by the Settlement Officer in her letters t o Petitioners, dated May 31, 2007, and June 15, 2007, unti l after the Settlement Officer had completed her review o f Petitioners' appeal and after she had issued the Notic e of Determination . We find that there is no genuine issue of materia l fact which precludes us from deciding Respondent's Motio n for Summary Judgment and we now turn to that motion . Summary judgment is intended to expedit e litigation and avoid unnecessary and expensive trials . Fla . Peach Corp . v . Commissioner , 90 T .C . 678, 68 1 (1988) . Summary judgment may be granted with respect t o all or any part of the legal issues in controversy "i f the pleadings, answers to interrogatories, depositions , admissions, and any other acceptable materials, togethe r with the affidavits, if any, show that there is n o genuine issue as to any material fact and that a decisio n may be rendered as a matter of law ." Rule 121(a) an d (b) . Heritage Reporting Corporation (202) 628-4888 1 0 1 Because the underlying tax liability is not at 2 issue, our review under Section 6320 is for abuse o f 3 discretion . See Sego v . Commissioner , 114 T .C . 604, 610 4 (2000) ; Goza v . Commissioner , 114 T .C . 176, 182 (2000) . 5 This standard does not ask us to decide whether in our 6 own opinion Petitioners' offer-in-compromise should have 7 been accepted . 8 Under this standard, the question is whether the 9 action of Respondent's Settlement Officer sustaining the 10 lien was arbitrary, capricious, or without sound basis in 11 fact or law . See Woodral v . Commissioner , 112 T .C . 19, 12 23 (1995) ; Keller v . Commissioner , T .C . Memo . 2006-166 ; 13 Fowler v . Commissioner , T .C . Memo . 2004-163 . 14 We do not believe that the action of Respondent's 15 Settlement Officer, approving the lien as an appropriate 16 collection device, was arbitrary, capricious, or without 17 sound basis in fact or law . 18 Petitioners did not make a timely response to her 19 request for information and they offered no othe r 20 collection alternative for her to consider before she 21 issued the Notice of Determination . Based upon the 22 information available to the Settlement Officer, the 23 determination to sustain the lien was reasonable . 24 For the foregoing reasons, we hereby sustain the 25 notice of determination dated July 19, 2007, that was Heritage Reporting Corporatio n (202) 628-4888 11 1 issued to Petitioners with respect to taxable years 1996, 2 1997, 1999, 2002, 2003, and 2004 . 3 This concludes the Court's oral findings of fact 4 and opinion in this case . 5 (Whereupon, at 4 :55 p .m ., the bench opinion in the 6 above-entitled matter was concluded . ) 7 // 8 9 10 // 1 1 12 // 13 // 1 4 15 // 16 // 17 // 18 // 19 // 20 // 2 1 22 // 2 3 24 // 25 Heritage Reporting Corporation (202) 628-4888