TAX COURT OPINION

Case: Eric Edward Chandler
Docket Number: 7252-07L
Judge: Colvin
Opinion Type: bench
Filed: 04/01/2008
Pages: 9

j/ e co4e UNITED STATES TAX COURT WASHINGTON, D.C. 20217 STAT . S .T . JUDGE Docket No . 7252-07L ERIC EDWARD CHANDLE R Petitioner , V . COMMISSIONER OF INTERNAL REVENUE Respondent . * * * ORDER 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 trial of the above case before Judge Joseph R . Goeke at Salt Lake City, Utah, on February 26, 2008, containing his oral findings of fact and opinion rendered at the conclusion of trial . In accordance with the oral findings of fact and opinion, decision will be entered for respondent . (Signed) Joseph Robert Goeke Judge DATED : Washington, D .C . April 1, 2008 RVF-D APR 3 2006' 3 1 Bench Opinion by Judge Joseph Robert Goeke 2 February 26, 200 8 3 Chandler v . Commissioner Docket Number 7252-07 L 4 THE COURT : The Court has decided to render oral 5 findings of fact and opinion in this case and the following 6 represents the Court's oral findings of fact and opinion . 7 The oral findings of fact and opinion shall not be relie d 8 upon as precedent in any other case . 9 This bench opinion is made pursuant to th e 10 authority granted by section 7459(b) of the Internal Revenue 11 Code . Hereinafter section references are to the Interna l 12 Revenue Code . 13 At the timethe petition was filed in this case 14 the Petitioner resided in Salt Lake City, Utah . This case 15 is before the Court on cross-motions for summary judgment . 16 The case arose as a result of Respondent's Notice of Intent 17 to Levy and a subsequent administrative process pursuant to 18 section 6330 regarding income tax liabilities for the years 19 1988, 1989, 1990 and 1991 . 20 No hearing was held because the Appeals officer 21 determined that the Petitioner had not provided requested 22 information and had not cooperated in the hearing process . 23 Subsequently, the Appeals officer issued a Notice o f 24 Determination on February 26, 2007 and the Petitioner filed 25 a timely petition . Heritage Reporting Corporation (202) 628-4888 4 1 A hearing on the parties cross-motions for summary 2 judgment was held before this Court on February 25, 2008 at 3 Salt Lake City, Utah . Petitioner maintained in his motio n 4 that Respondent never permitted Petitioner to challenge the 5 underlying tax liability associated with the years i n 6 question . 7 Respondent makes a counter-argument in two basic 8 forms . The first position Respondent takes is that th e 9 Petitioner had a previous opportunity to challenge the 10 underlying liability before the Bankruptcy Court in U .S . 11 Bankruptcy Court for the District of Utah, Docket Number 96- 12 21467 . Respondent argues that in at least one of th e 13 documents filed with the Bankruptcy Court the Petitioner 14 argued that the proofs of claim filed by Respondent do not 15 reflect the correct income tax liabilities due fro m 16 Petitioner and that the correct amount of tax due from the 17 Petitioner for the years 1988 through 1991 is as shown o n 18 the Forms 1040 submitted by the Petitioner to Respondent for 19 those years . 20 Subsequently, Petitioner's bankruptcy case wa s 21 dismissed for failure to prosecute and other good reason by 22 the United States Bankruptcy Court for the District of Utah 23 on October 19, 2005 . 24 Respondent's second argument in support of 25 Respondent's motion for summary judgment is that the Heritage Reporting Corporatio n (202) 628-4888 5 1 Petitioner has not articulated any basis to challenge the 2 underlying liability as determined by Respondent . Summary 3 judgment is appropriate in this case because there is no 4 dispute as to the key facts . The Court will set forth those 5 facts as pertinent to this motion . 6 After Petitioner's bankruptcy case was dismissed 7 Petitioner's income tax returns for the years 1988 through 8 1991 were processed by the Internal Revenue Servic e 9 Examination Division ., On November 1, 2005 the Interna l 10 Revenue Service Examination Division timely assessed the tax 11 as shown on Petitioner's income tax returns for the year s 12 1988 through 1991 . Also on November 1, 2005 the Internal 13 Revenue Service Examination Division assessed applicable 14 penalties due from the Petitioner for the tax years 1988 15 through 1991 . 16 On November 9, 2005 Respondent also assesse d 17 interest due with respect to the unpaid liabilities for the 18 years in question . Also on November 9, 2005 Responden t 19 mailed to the Petitioner a Notice of Assessment and Demand 20 for Payment with respect to Petitioner's unpaid income tax 21 liabilities . Petitioner failed to pay the assessed income 22 tax liabilities for the years 1988 through 1991 . 23 On March 11, 2006 Respondent mailed to Petitioner 24 Letter 1058, Final Notice of Intent to Levy and Notice of 25 Your Right to a Hearing with respect to Petitioner's unpai d Heritage Reporting Corporation (202) 628-4888 6 1 income tax liabilities for the years 1988 through 1991 . 2 On April 21, 2006 Petitioner timely filed with the 3 Internal Revenue Service a Form 12153, Request fo r 4 Collection Due Process Hearing . Petitioner's request for a 5 collection due process hearing was assigned to the Internal 6 Revenue Service Office of Appeals in San Francisco , 7 California . Initially Petitioner's case was assigned to a 8 settlement officer but subsequently was reassigned to a n 9 Appeals officer . 10 Petitioner was invited by both the settlement 11 officer and the Appeals officer to raise relevant issues, 12 including collection alternatives, regarding the proposed 13 administrative collection action of Petitioner's unpaid 14 income tax liabilities for the years 1988 through 1991 . 15 Although the Petitioner inquired whether the Interna l 16 Revenue Service would accept payment of the taxes due on the 17 years 1988 through 1991, he did not pay the tax liabilities 18 at issue . He did not propose collection alternatives such 19 as an installment agreement, nor did he propose an offer in 20 compromise . And, finally, Petitioner did not provide an y 21 current financial information which would have been required 22 for consideration of any collection alternatives . 23 On February 27, 2007 the Internal Revenue Service 24 Office of Appeals in San Francisco, California, issued to 25 Petitioner a Notice of Determination Concerning Collection Heritage Reporting Corporatio n (202) 628-4888 7 1 Actions under section 6320 and/or 6330 with respect t o 2 Petitioner's unpaid income tax liabilities for the years 3 1988 through 1991 . This collection action sustained the 4 proposed administrative levy . Petitioner filed a timely 5 petition with this Court in response to this Notice o f 6 Determination . 7 In paragraph 12 of the petition the Petitione r 8 alleges that Respondent erred because Respondent failed to 9 determine the amount of the disputed tax liabilities . 10 Petitioner also alleges that Respondent failed to notify 11 Petitioner of the disputed amount due from the Petitioner . 12 However, Petitioner admitted at the hearing before thi s 13 Court that he was advised that the amounts of unpaid 14 liabilities were based upon the returns he file d 15 delinquently for the years in question and that additions to 16 tax were also determined because of those delinquent filings 17 and that the amounts subject to collection also include d 18 statutory interest . 19 Regarding Petitioner's argument that he was not 20 notified by Respondent as to the amounts in question , 21 Petitioner's admission that he knew the amounts in question 22 were based upon his returns refutes his argument . I n 23 addition, Respondent produced correspondence whic h 24 demonstrates that Petitioner was notified as to the amounts 25 that Respondent was seeking in collection and Petitioner has Heritage Reporting Corporatio n (202) 628-4888 8 1 not refuted his receipt of any of these documents which were 2 provided by Respondent in support of Respondent's motion for 3 summary judgment . These documents include the Final Notice 4 of Intent to Levy and Notice of Your Right to a Hearing . 5 We find that the Petitioner did have an 6 opportunity to contest the liabilities in the bankruptcy 7 proceeding and, therefore, Petitioner is not entitled to 8 challenge the existence or amount of the underlying tax 9 liability in these proceedings because he had a prio r 10 opportunity to do so . Section 6330(c)(2)(B) ; Kendricks v . 11 Commissioner , 124 T .C . 69 (2005) . 12 We also find that Petitioner has never effectively 13 offered to Respondent nor to this Court any basis t o 14 challenge the liabilities in question . He admitted at the is hearing that he reported the liabilities he thought were 16 correct on the income tax returns filed for the years i n 17 question and he offered no basis for his failure to file 18 timely returns and pay the taxes in question . Therefore, 19 the burden of showing that the Appeals determination wa s 20 arbitrary or capricious rests with the Petitioner . Pacific 21 First Savings v . Commissioner , 101 T .C . 117, 121 (1993) . 22 Pursuant to section 6330(c)(3) the determination 23 of an Appeals officer must take into consideration the 24 verification that the requirements of applicable law an d 25 administrative procedures have been met, that issues raised Heritage Reporting Corporatio n (202) 628-4888 9 1 by the taxpayer have properly been considered, and whether 2 any proposed collection action balances the need fo r 3 efficient collection of taxes with the legitimate concern of 4 the person that any collection be no more intrusive than 5 necessary . 6 The Appeals officer considered these three factors 7 and the Appeals officer's consideration of Petitioner' s 8 situation in the administrative process fully complies with 9 the requirements of section 6330(c)(3) that there was n o 10 abuse of discretion in considering the collection action 11 offered by Respondent . 12 Moreover, even if the Court were to conclude that 13 the Appeals officer erred in adequately considerin g 14 Petitioner's arguments with respect to the assessments made 15 by Respondent for the tax years 1988 through 1991 , 16 Petitioner has failed to aver facts sufficient to show error 17 in the assessment . Tax Court Rule 331(b)(4) and (5) ; 18 Poindexter v . Commissioner , 122 T .C . 280 (2004) . 19 In Poindexter v . Commissioner this Court held that 20 in order for the tax liability to be properly at issue 21 before the Court, Petitioner's pleadings must contain a 22 sufficient specificity of facts so that the Court ca n 23 conduct a meaningful hearing to determine whether Respondent 24 can proceed with collection of the liabilities in question . 25 Petitioner has failed to raise any issue that would allo w Heritage Reporting Corporation (202) 628-4888 1 0 1 the Court to have a meaningful hearing concerning the 2 underlying tax liabilities . Even when asked repeatedly at 3 the hearing on the motion for summary judgment, Petitioner 4 could not articulate a basis on which he challenged the 5 underlying liabilities for the years in question . 6 Petitioner represented himself before the Court in 7 the hearings on the cross-motions for summary judgment . And 8 Respondent was represented by Inga C . Plucinski . 9 Based upon the Court's analysis of the facts of 10 this case and the applicable law, the Court determines that 11 Respondent's motion for summary judgment should be granted 12 and Petitioner's should be denied . An applicable order and 13 decision document will be entered in accord with the Court's 14 upholding of Respondent's motion for summary judgment . 15 This concludes the Court's oral findings of fac t 16 and opinion in this case . 17 (Whereupon, at 12 :25 p .m ., the bench opinion in 18 the above-entitled matter was concluded . ) 19 20 21 22 23 2 4 25 Heritage Reporting Corporation (202) 628-4888