TAX COURT OPINION

Case: Julian Winfred Mandody
Docket Number: 10125-18L
Judge: Buch
Opinion Type: bench
Filed: 12/30/2020
Pages: 9

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(cid:44)(cid:81)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:85)(cid:71)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:82)(cid:85)(cid:68)(cid:79)(cid:3)(cid:73)(cid:76)(cid:81)(cid:71)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:73)(cid:68)(cid:70)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:82)(cid:83)(cid:76)(cid:81)(cid:76)(cid:82)(cid:81)(cid:15)(cid:3)(cid:71)(cid:72)(cid:70)(cid:76)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:90)(cid:76)(cid:79)(cid:79)(cid:3)(cid:69)(cid:72)(cid:3) (cid:72)(cid:81)(cid:87)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:85)(cid:72)(cid:86)(cid:83)(cid:82)(cid:81)(cid:71)(cid:72)(cid:81)(cid:87)(cid:17)(cid:3)(cid:3) (Signed) Ronald L. Buch (Signed) Ronald L. Buch Judge Judge Served 12/30/20 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 Judge Ronald L. Buch December 2, 2020 Julian Winfred Mandody v. Commissioner Docket No. 10125-18L 3 THE COURT: The following represents the Court's oral findings of fact and opinion. These oral findings of fact and opinion may not be relied on 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. Any section references refer to the Internal Revenue Code or the Treasury regulations in effect during the year at issue, and Rule references are to the Tax Court Rules of Practice and Procedure. This is a collection case in which we are asked to review the Commissioner's notice of determination sustaining a notice of intent to levy with respect to Mr. Mandody's 2015 tax liability. When the Commissioner issued his notice of intent to levy, Mr. Mandody administratively appealed the levy, but in the course of that administrative appeal, he did not provide the necessary financial information or otherwise satisfy the conditions necessary to qualify for a collection alternative. Accordingly, we sustain the Commissioner's determination. 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 BACKGROUND 4 Mr. Mandody has an outstanding liability of $4,770 for 2015, plus interest and penalties. In November 2016, Mr. Mandody untimely filed his 2015 return reporting a tax liability of $4,770, no payments, and a balance due in that same amount. The following month, the Commissioner issued a notice of balance due. And when Mr. Mandody didn't pay that liability, the Commissioner issued a notice of intent to levy. In response, Mr. Mandody submitted a Form 12153, Request for a Collection due Process or Equivalent Hearing, indicating his interest in pursuing collection alternatives. Specifically, he requested that the Commissioner enter into either an offer in compromise or an installment agreement with him. In response to Mr. Mandody's request, an appeals officer reviewed Mr. Mandody's current liabilities to prepare for and schedule a hearing. In doing so, the appeals officer learned, and noted in her case activity record, that Mr. Mandody had over $200,000 of outstanding liabilities. The same date as making that note, the appeals officer sent a letter to Mr. Mandody scheduling a telephonic hearing and requesting some additional information. To determine Mr. Mandody's ability to pay, the appeals officer requested that Mr. Mandody provide a 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 completed Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, and a completed Form 433-B, Collection Information Statement for Businesses. And to make sure he was in compliance with his current tax liabilities, the appeals officer requested either proof that Mr. Mandody had made his estimated tax payments for 2016 and 2017 or proof that he was not required to make such payments. Mr. Mandody attended his scheduled hearing by telephone, but he did not provide the requested information. He neither completed the requested forms showing his collectability, nor provided proof that he had made his estimated 2016 and 2017 estimated tax payments. Instead, he questioned why his prior installment agreements for other years had been terminated. The appeals officer explained to Mr. Mandody that his prior agreements had been terminated because he defaulted on them by accruing an additional unpaid liability. At the conclusion of the hearing, the appeals officer provided Mr. Mandody an additional two weeks to provide the completed collection information statements and estimated tax information. He never did so. After his two-week extension lapsed, the appeals officer issued a notice of determination. She concluded that Mr. Mandody did not qualify for collection 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 6 alternatives because he failed to provide financial information. He also had an outstanding liability for 2016 and failed to make estimated tax payments for 2017 (or demonstrate that he was not required to do so). The appeals officer further evaluated the Commissioner's assessment and collection activities regarding Mr. Mandody's 2015 liability and concluded that the Commissioner had followed all legal and procedural requirements. Additionally, she confirmed that she had not previously been involved in either Appeals or any other IRS function with respect to Mr. Manodody's 2015 income tax liability. Mr. Mandody timely filed a petition with this Court seeking review of the appeals officer's determination. In his petition, Mr. Mandody argues that the Commissioner erred by failing to consider a streamlined installment agreement addressing his total outstanding liabilities across all open years. This case was scheduled for trial on December 1, 2020. Mr. Mandody did not appear. Rather than dismiss the case for failure to properly prosecute, see Rule 123(b), we held a trial and the Commissioner put into evidence the administrative record along with certified transcripts of account showing outstanding liabilities for 2003, 2004, 2006, 2007, 2008, 2014, 2015, 2016, and 2017 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 7 totaling well in excess of $100,000. In arguing why he should prevail, the Commissioner noted that the amount of Mr. Mandody's total outstanding liability at the time of the administrative hearing was well in excess of $50,000. DISCUSSION As a general matter, the Commissioner's determinations are presumed to be correct, and the taxpayer bears the burden of proving an error. Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). Where the underlying liability is not at issue, we review the Commissioner's determination for abuse of discretion. Sego v. Commissioner, 114 T.C. 604, 610 (2000); Goza v. Commissioner, 114 T.C. 176, 181-182 (2000). In reviewing for abuse of discretion, we do not conduct an independent review of the collection alternatives. We do not substitute our judgment for that of the Commissioner. We only ensure that the Commissioner's decision was not arbitrary, capricious, or without sound basis in fact or law. Klein v. Commissioner, 149 T.C. 341, 348 (2017); Murphy v. Commissioner, 125 T.C. 301, 320 (2005), aff'd, 469 F.3d 27 (1st Cir. 2006). The steps the commissioner must follow in reviewing a collection action and making a determination are well settled. In a collection proceeding, the 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 8 Commissioner must: (1) verify that the requirements of applicable law and administrative procedure had been met; (2) consider issues raised by the taxpayer; and (3) consider whether any proposed collection action reasonably balances the need for efficient tax collection with the legitimate concern of the taxpayer that any collection action be no more intrusive than necessary. Sec. 6330(c)(3); Lunsford v. Commissioner, 117 T.C. 183, 184 (2001). The Commissioner did not abuse his discretion in sustaining the levy. The appeals officer concluded that the Commissioner had complied with all legal and procedural requirements regarding the 2015 notice of intent to levy. Additionally, the appeals officer confirmed that she had not previously participated in the Commissioner's assessment or collection activities with respect to Mr. Mandody's liability. The appeals officer considered the collection alternatives that Mr. Mandody proposed and weighed the equities of sustaining the levy. Because Mr. Mandody failed to provide financial information or establish that he was current with his estimated tax payments, the appeals officer determined that the collection activity was appropriate and that Mr. Mandody was not eligible for any collection alternatives. The appeals officer's decision was based on Mr. 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 Mandody's failure to meaningfully participate in the hearing process. The Commissioner cannot be faulted for failing to consider financial information that was never provided. Orum v. Commissioner, 123 T.C. 1, 13-14 (2004). This is particularly true in a situation like this case, where the appeals officer allowed Mr. Mandody additional time to provide the financial information, and he failed to do so. If a taxpayer fails to provide information necessary to consider an issue after being given a reasonable opportunity to do so, the issue cannot be raised on review. Sec. 301.6330-1(f)(2)(A-F3), Proced. & Admin. Regs.; see also Giamelli v. Commissioner, 129 T.C. 107, 115 (2007). The Commissioner did not abuse his discretion by failing to consider a streamlined installment agreement. The Court previously denied a motion for summary judgment filed by the Commissioner in this case. See Order dated July 9, 2019. The Court's order raised a question of fact regarding whether the total amount of Mr. Mandody's liability across all open years was below $50,000. If a taxpayer's liability is below $50,000, an appeals officer may consider a streamlined settlement agreement without requiring the kind of financial information sought by the appeals officer here. Internal Revenue Manual pt. 5.14.5.2 (December 23, 2015). The record is now clear, 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 10 however, that at the time the Commissioner made his determination, Mr. Mandody's liability was well in excess of $50,000. Moreover, the appeals officer confirmed that Mr. Mandody's liability was in excess of $200,000 and contemporaneously noted it in her case activity report. CONCLUSION The Commissioner did not abuse his discretion when he upheld the notice of intent to levy. Accordingly, we sustain the determination. Decision will be entered for the Commissioner. (Whereupon, at 10:11 a.m., the above-entitled matter was concluded.)