TAX COURT OPINION

Case: William E. Dye, III
Docket Number: 7528-14L
Judge: Goeke
Opinion Type: bench
Filed: 12/22/2014
Pages: 8

ALS UNITED STATES TAX COURT WASHINGTON, DC 20217 WILLIAM E. DYE, III, Petitioner(s), v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ) Docket No. 7528-14 L. ) ) ) ) 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 Judge Joseph Robert Goeke at Jacksonville, Florida on December 4, 2014, 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, a decision will be entered for respondent. (Signed) Joseph Robert Goeke Judge Dated: Washington, D.C. December 22, 2014 SERVED Dec 23 2014 Capital Reporting Company 3 1 2 Bench Opinion by Judge Joseph Robert Goeke December 4, 2014 3 William E. Dye, III v. Commissioner 4 5 Docket No. 7528-14L THE COURT: The Court has decided to render 6 Oral Findings of Fact and Opinion in this case and 7 8 the following represents the Court's Oral Findings of Fact and Opinion. The Oral Findings of Fact and 9 Opinion shall not be relied upon as precedent in any 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 other case. This opinion is rendered pursuant to the Rule 152 of the Tax Court's Rules of Practice and Procedure and hereinafter Rule references are to the Tax Court Rules of Practice and Procedure. This case involves Respondent's efforts to collect via lien and levy trust fund recovery penalties which were assessed against the Petitioner relative to his incorporated bail bonds business for quarters in periods ending December 31, 2007, December 31, 2008, December 31, 2011, March 31, 2012, June 30, 2012, September 30, 2012, December 31, 2012 and March 31, 2013. Respondent sent Petitioner a final Notice of Intent to Levy and a notice of Petitioner's right to a hearing on January 2, 2014 with respect to the 866.488.DEPO www.Capita1ReportingCompany.com Capital Reporting Company 4 1 2 taxable periods and amounts Respondent had previously assessed. On January 7, 2014 Respondent received 3 Petitioner's Form 12153, a request for a collection 4 5 6 7 8 9 due process or equivalent hearing. On January 14, 2014 Respondent sent Petitioner a Notice of Federal Tax Lien filing and right to a hearing under section 6320 with respect to the same taxable periods. Respondent recorded a Notice of Federal Tax Lien with respect to the periods at issue in this case in 10 Hillsborough County, Florida and Duval County, 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Florida on January 15 and January 13, 2014 respectively. Petitioner lived in Florida at the time the petition in this case was filed. On January 28, 2014 Respondent received a second Form 12153, request for collection due process or equivalent hearing in connection with the Notice of Federal Tax Lien filing. In his request for a hearing pursuant to section 6330 the Petitioner indicated that he was seeking the hearing both with respect to the lien and the levy. He indicated he was seeking an installment agreement or an offer in compromise to resolve the underlying liabilities. At trial, Petitioner testified and the parties had a very succinct stipulation of facts 25 which included only the Notice of Determination, 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 1 which was issued after Petitioner's meeting with the 2 3 4 5 6 7 8 9 settlement officer. Petitioner failed to provide any of the information the settlement officer requested in order to consider an offer in compromise or some other alternative to collection. And at the hearing the settlement officer asked the Petitioner why he had failed to appeal the trust fund recovery penalties assessment and the Petitioner stated that he didn't have time to appeal the assessment. 10 The settlement officer did not consider 11 whether Petitioner was actually liable for the trust 12 13 14 15 16 17 18 19 20 21 22 23 24 fund recovery penalties because Petitioner had been given an opportunity to appeal those penalties prior to the assessment. Because the Petitioner failed to provide any information in support of a collection alternative the settlement officer issued the Notice of Determination sustaining the proposed levy and the recording of the federal tax lien. At trial we admitted into the record certified records form the Internal Revenue Service constituting the administrative file of the due process hearing before the settlement officer. And we also admitted a certified copy of the transcript of Petitioner's trust fund recovery penalty 25 assessment accounts. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 1 2 3 4 5 6 7 8 9 Petitioner's testimony was vague and it sometimes lacked credibility. However, Petitioner alluded to the fact that he may not have received or seen the trust fund recovery penalty assessment information in time to file an appeal because it had been hidden from him by his staff. We find this testimony to be lacking in credibility and also we believe that Petitioner did control the corporation for the period in question based upon his testimony. 10 Although he said he was trying to phase himself out 11 12 13 14 15 16 17 of the business when he reached the age of 64, he continued to receive money from the business. He continued to control the business and own the business and the persons who operated the business were his employees. We find that it lacked credibility that they would have intentionally his records from the 18 Petitioner. But in any event, we allowed the 19 Petitioner to testify regarding why he was not the 20 21 22 23 24 25 responsible officer of the bail bonds business and therefore why he should not be liable for the trust fund recovery penalty. His testimony in this regard actually supported Respondent's position that he was the responsible officer, as he indicated he continued to manage the business and actually took funds from 866.488.DEPO www.Capita1ReportingCompany.com Capital Reporting Company 7 the business during the periods in question. Therefore, for both the reasons that he had not properly sought Appellate review of the assessment prior to it having been made and because we find based upon his own testimony that he was a responsible officer, there is not basis to challenge Q the underlying liability. Given the fact that the underlying liability is as determined by Respondent we review the settlement officer's analysis of the case for abuse of discretion in determining whether the settlement officer properly reviewed the underlying records and determined whether the assessments were appropriate and also whether the settlement officer properly considered Petitioner's request for a collection alternative. Under sections 6330(c)(2)(a) of the Internal Revenue Code the taxpayer may raise any relevant issue relating to the unpaid tax or the proposed levy at a collection due process hearing including appropriate spousal defenses, the appropriateness of collection actions and alternative 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 means of collection which may include the posting of 23 24 25 a bond, the substitution of other assets, an installment agreement or an offer in compromise. As previously stated, the Petitioner was not entitled to 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 8 1 2 pursue the underlying tax liability pursuant to section 6330(c)(2)(b) because he had been given a 3 prior opportunity to do that. See Pough v. 4 5 6 7 8 9 Commissioner, 135 T.C. 344 (2010) and Treas. Reg. § 301.6320-1(f)(2). In addition, as we stated, we find that based on Petitioner's own testimony he had not established that there is any question about his liability for the trust fund recovery penalty since 10 based on his own testimony he was a responsible 11 officer. 12 13 14 15 As stated, the appropriate standard for judicial review of the appeals officer's collection due process determination when the validity of the underlying tax liability is not properly an issue is 16 whether the appeals officer abused his discretion in 17 making the determination under section 6330(c) (3). 18 19 20 21 22 23 Sego v. Commissioner, 114 T.C. 604, 610 (2000). In this case the settlement officer verified that the requirements of the applicable laws and administrative procedures were met in recording the Notice of Federal Tax Lien and issuing a Notice of Intent to Levy. In addition, the settlement 24 officer considered all relevant issues raised by the 25 Petitioner and because Petitioner failed to produce 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 1 2 any information the settlement officer was not able to consider a collection alternative. The settlement 3 officer also determined that the Petitioner was not 9 in compliance with the current filing requirements at the time of the hearing as he had failed to file income tax returns for the years 2011 and 201k At trial, Petitioner testified that he also failed to file an income tax return for 2013. Given these circumstances it was obviously not an abuse of discretion for the settlement officer to determine that a collection alternative was not appropriate. On the facts of this case there is no alternative but to sustain the proposed collection action and the determinations made by the settlement officer. This concludes the Court's Oral Findings of Fact and Opinion in this case. (Whereupon, at 9:14 a.m., the above- entitled matter was concluded.) 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