TAX COURT OPINION

Case: Enmed, LLC d.b.a. Quality Home Health Agency
Docket Number: 17142-08L
Judge: Colvin
Opinion Type: bench
Filed: 07/20/2009
Pages: 10

UNITED . STATES TAX COURT Washington, D .C . 2021 7 ENMED, LLC D .B .A . QUALITY HOME HEALTH AGENCY, ) . Petitioner, v Docket No . 17142-08L COMMISSIONER OF INTERNAL REVENUE, Respondent . 0 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 th e pages of the transcript of the trial of the above case before Special Trial Judge Lewis R . Carluzzo at Los Angeles, California, on May 28, 2009, containing his oral findings of fact and opinion rendered at the conclusion of trial . In accordance with the oral findings of fact and opinion, an appropriate order will be issued granting .respondent's motion as recharacterized . (Signed) Lewis R . Carluzzo Special Trial Judg e Dated : Washington, D .C . July 20, 2009 SERVED JUL 212009 3 1 Bench Opinion by Special Trial Judge Lewis R . Carluzzo 2 Enmed LLC v . Commissioner Docket No . 17142-08L 3 May 28, 200 9 4 The Court has decided to render ora l 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 . Section references contained in thi s 8 bench opinion are to the Internal Revenue Code o f 9 1986, as amended, in effect for the relevant period . 10 Rule references are to the Tax Court Rules of Practice 11 and Procedure . 12 By Order dated January 14, 2009, this 13 Section 6330(d) case was assigned pursuant to the 14 provisions of Section 7443(A)(b)(4) of the Interna l 15 Revenue Code of 1986, as amended, and was conducted in 16 accordance with Rules 180, 181 and 182 . This benc h 17 opinion is made pursuant to the authority granted by 18 Section 7459(b) of the Internal Revenue Code of 1986, 19 as amended, and Rule 152 . 20 This case is before the Court o n 21 Respondent's motion for summary judgment filed 22 November 20, 2008 . Petitioner's response and 23 objection to Respondent's motion was file d 24 December 19, 2008 . A hearing was conducted o n 25 Respondent's motion on May 26, 2009 in Los Angeles, Heritage Reporting Corporation (202) 628-4888 4 1 California . 2 Petitioner, through Johnny Rhondo, a 3 managing member, appeared pro se and opposed the 4 motion . Guy H . Glaser appeared on behalf o f 5 Respondent and argued in support of the motion . 6 Resolving a matter in response to a motion 7 for summary judgment is appropriate "if the pleadings, 8 answers to interrogatories, depositions, admission s 9 and any other acceptable materials, together wit h 10 acceptable affidavits, if any, show that there is no 11 genuine issue as to any material fact and that a 12 decision may be rendered as a matter of law" . Rule 13 121(b) ; Sundstrand Corp . v . Commissioner , 98 T .C . 518, 14 520 (1992) affd . 17 F .3d 965 (Seventh Cir . 1994) . 15 Kroh v . Commissioner , 98 T .C . 383, 389 (1992) . 16 There are no answers to interrogatories , 17 depositions or admissions in this case . The pleadings 18 consist of the petition and the answer . See Rule 30 . 19 Giving due regard to the statements contained in : 1) 20 the pleadings ; 2) the representations made i n 21 respondent's motion and attached affidavits ; 3 ) 22 Petitioner's objection and attached declaration ; and 23 4) taking into account the presentations made by the 24 parties at the hearing, the Court is satisfied that 25 there are no genuine issues as to any material facts Heritage Reporting Corporatio n (202) 628-4888 5 1 relating to whether Petitioner is entitled t o 2 challenge in this proceeding the existence or the 3 amount of the underlying liability that has given rise 4 to the collection action here in dispute . 5 Consequently, disposition of the case, at 6 least in part, upon summary judgment is appropriate . 7 The undisputed facts relating to Petitioner' s 8 challenge to the underlying liabilities are easily 9 summarized as follows . Taking into account a n 10 extension to file, Petitioner's 2004 federal income 11 tax return was due to be filed on or befor e 12 October 15, 2005 . 13 According to Petitioner, technical computer 14 problems and a theft of computer equipment, however, 15 necessarily delayed the filing of that return until 16 September 19, 2006 . As a result, and in due course, 17 two penalties were assessed against Petitioner, one 18 pursuant to Section 6698(a)(1) and the other pursuant 19 to Section 6721(a) (the penalties) . 20 By letter dated December 3, 2006, Petitioner 21 requested that the penalties be abated . As Petitioner 22 viewed, and views, the matter, the delay in filing its 23 2004 return was due to "reasonable cause" . Tha t 24 request was denied by letter dated March 29, 2007 . In 25 response to that denial by letter dated May 19, 2007, Heritage Reporting Corporatio n (202) 628-4888 6 1 Petitioner requested that the matter be considered by 2 Respondent's appeals office . 3 In that letter, Petitioner once again argued 4 that the penalties should be abated because there was 5 reasonable cause for its untimely 2004 return . 6 Petitioner's request for appeals review was assigned 7 to an appeals tax specialist located in Ogden, Utah . 8 A series of correspondence and at least one phone call 9 between Petitioner and the appeals tax specialis t 10 followed . 11 By letter dated September 13, 2007, the 12 appeals tax specialist notified Petitioner that she 13 was planning to deny the relief requested b y 14 Petitioner . In that letter, Petitioner was advised to 15 pay the penalties and pursue a refund claim . 16 Petitioner requested reconsideration, and by letter 17 dated October 10, 2007, Petitioner was advised that 18 the determination to sustain the penalties wa s 19 appropriate . Once again, Petitioner was advised to 20 pay the tax and pursue a refund claim . 21 The assessments of the penalties and related 22 items (the underlying liability) ultimately caused a 23 notice of federal tax lien to be filed on March 7 , 24 2009 (the lien) . Notice of that event wa s 25 appropriately given to Petitioner pursuant to Section Heritage Reporting Corporation (202) 628-4888 7 1 6220(a), and in response, Petitioner timely requested 2 an administrative hearing . See Section 6320(b) . 3 Having been advised of the identity o f 4 Respondent's settlement officer assigned to conduct 5 the administrative hearing by letter dated May 10, 6 2008, Petitioner, in addition to once agai n 7 challenging the imposition of the penalties, noted 8 that it had "not had the opportunity to dispute the 9 appropriateness of the collection action" . 10 In that letter, Petitioner also declined the 11 opportunity for a face to face hearing wit h 12 Respondent's settlement officer while at the same time 13 suggesting that its request for a face to face hearing 14 with the appeals tax specialist who considere d 15 Petitioner's abatement request was unfairly denied as 16 untimely . 17 Respondent's settlement officer took the 18 position that the underlying liabilities could not be 19 challenged in the Section 6320(b) administrativ e 20 hearing because Petitioner's request for an abatement 21 of the penalties had been previously considered an d 22 denied by Respondent's appeals office . Ultimately, by 23 letter dated May 16, 2008, Respondent's settlemen t 24 officer notified Petitioner that the filing,of the 25 lien would be sustained, at least in part, because Heritage Reporting Corporatio n (202) 628-4888 8 1 Petitioner "did not meet the terms of the installment 2 agreement" . 3 As it turns out, the existence of any such 4 installment agreement is in question . In any event, 5 in a notice of determination concerning collectio n 6 action(s) under Section 6320 dated June 18, 2008 , 7 Respondent determined that the filing of the lien was 8 appropriate . In a timely petition filed in response 9 to that notice, Petitioner challenges tha t 10 determination . 11 A fair reading of the petition, filed pro 12 se, strongly suggests that the only issue, or issues, 13 raised relate to the existence or the amount of the 14 underlying liability . Consistent with the position 15 taken by Respondent's settlement officer in the motion 16 here under consideration, Respondent argues tha t 17 Petitioner cannot challenge the existence or th e 18 amount of the underlying liability in this proceeding 19 because Petitioner previously disputed that liability 20 before Respondent's appeals office . See Section 21 6330 (c) (2) (B) . 22 As correctly pointed out in Respondent's 23 motion, this Court considers appeals' review of the 24 denial of a taxpayer's request for penalty abatement 25 to be an "opportunity to dispute such tax liability" Heritage Reporting Corporation (202) 628-4888 9 1 within the meaning of that section even though as here 2 the taxpayer could not seek judicial review'of th e 3 appeals officer's findings . See Lewis v . 4 Commissioner , 128 T .C . 48 (2007) . 5 Furthermore, Petitioner's position that the 6 Administrative Procedures Act in some manner o r 7 another operates to allow this Court to review for 8 abuse of discretion the decision of the appeals tax 9 specialist who denied Petitioner's abatement reques t 10 ignores a long line of authorities to the contrary . 11 See, e .g ., the cases cited at Ewing v . Commissioner , 12 122 T .C . 32, 50-51 (2004), vacated on unrelate d 13 jurisdictional grounds, 439 F .3d 1009 (Ninth Cir . 14 2006) . 15 Because Petitioner "otherwise" had th e 16 opportunity "to dispute" the underlying liability, it 17 may not challenge the existence of the amount of that 18 liability in this proceeding . Respondent's motion is 19 well made on the point ; however, we are not prepared 20 at this juncture to enter decision in Respondent ' 21 favor . As noted above, in Petitioner's May 10, 2008 22 letter to Respondent's settlement officer Petitioner 23 pointed out that it had "not had the opportunity to 24 dispute the appropriateness of the collection action" . 25 Respondent's appeals tax specialist wh o Heritage Reporting Corporation (202) 628-4888 1 0 1 denied Petitioner's request to abate the penalties 2 obviously did not consider any collection matters . 3 Furthermore, it would appear that Respondent' s 4 settlement officer sustained the filing of the notice 5 of federal tax lien, at least in part, becaus e 6 Petitioner failed to honor an installment agreement 7 that might never have been in effect . 8 Other than the above-referenced statement 9 made by Petitioner in its May 10, 2008 letter t o 10 Respondent's settlement officer it is questionable 11 whether Petitioner actually challenged the 12 "appropriateness of the collection action" at the 13 administrative hearing . Similarly, it is questionable 14 whether Petitioner intends to raise such a challenge 15 in this proceeding . 16 The petition suggests otherwise . 17 Nevertheless, the questions constrain us to treat 18 Respondent's motion as a motion for partial summary 19 judgment regarding only Petitioner's entitlement t o 20 challenge the underlying liability . We will allow the 21 case to proceed in order to consider whether othe r 22 issues that were or could have been raised at the 23 administrative level need to be addressed here . 24 To reflect the foregoing, an appropriate 25 order will be issued granting Respondent's motion a s Heritage Reporting Corporation (202) 628-4888 1 recharacterized , 2 3 (Whereupon, at 10 :05 a .m ., the bench opinion in 4 the above-entitled matter was concluded . ) 1 1 5 6 7 8 9 10 1 1 12 13 14 1 5 16 17 18 19 20 21 22 23 2 4 25 Heritage Reporting Corporation (202) 628-4888