TAX COURT OPINION

Case: Sergio V. Rayneri
Docket Number: 19346-11S
Judge: Carluzzo
Opinion Type: bench
Filed: 06/04/2013
Pages: 8

UNITED STATES TAX COURT WASHINGTON, D.C. 20217 RUBEN FLORES, ) Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) ) Docket No. 7592-12SL ) ) ) ) ORDER Pursuant to the determination of the Court as set forth in its bench opinion rendered on March 13, 2013, 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 Special Trial Judge Lewis R. Carluzzo at Los Angeles, California, 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, an appropriate Order and Decision will be entered. (Signed) Lewis R. Carluzzo Special Trial Judge Dated: Washington, D.C. June 4, 2013 SERVED JUN - 4 2013 Capital Reporting Company 3 1 Bench Opinion by Judge Lewis R. Carluzzo 2 March 13, 2013 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Ruben Flores v. Commissioner Docket No. 7592-12SL THE COURT: The Court has decided to render oral findings of fact and opinion in this case, and the following represents the Court's oral findings of fact and opinion: Unless otherwise indicated, section references contained in this Bench Opinion are to the Internal Revenue Code of 1986, as amended, in effect for the relevant period. Rule references are to the Tax Court Rules of Practice and Procedure. This Section 6330 (d) proceeding is subject to the Small Tax Case provisions of Section 7463 and Rules 170 through 175. This Bench Opinion is made pursuant to the authority granted by Section 7459(b) and Rule 152. This case is before the Court on 20 Respondent's Motion for Summary Judgment, filed 21 22 23 24 January 9, 2013. A hearing was conducted on Respondent's motion on March 11, 2013, in Los Angeles, California. Linette B. Angelastro appeared on behalf of Respondent and argued in support of the 25 motion. Ruben Flores appeared on his own behalf and 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 1 2 3 4 5 opposed it. He lived in California at the time the petition in this case was filed. The undisputed facts relevant to the resolution of Respondent's motion are easily summarized. In a Notice of Determination Concerning 6 Collection Action(s) under Section 6320 and/or 6330, 7 8 9 dated March 13, 2012 (notice), Respondent determined that a Notice of Federal Tax Lien (NFTL) is an appropriate collection action with respect to 10 Petitioner's outstanding and unpaid 2006 Federal 11 12 13 14 15 16 17 18 19 20 21 22 23 income tax liability, which includes interest, penalties, and additions to tax (underlying liability). The assessments giving rise to the underlying liability were made on various dates pursuant to (1) tax reported on Petitioner's 2006 Federal income tax return, and (2) a subsequently determined deficiency in Petitioner's 2006 Federal income tax. See Sections 6201(a) (1), 6213(a) (c). Petitioner does not dispute the existence or the amount of the underlying liability. Instead, he challenges the appropriateness of the NFTL and requests that it be withdrawn. According to 24 Petitioner, the NFTL should not have been filed 25 because at the time it was filed there was, and 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 1 2 3 4 5 continues to be, a partial payment installment agreement in effect with respect to the underlying liability. Petitioner's relatively narrow challenge to the determination made in the notice allows for the disposition of Respondent's motion with little 6 more than a review of the circumstances surrounding 7 8 the filig of the NFTL. At the time Petitioner entered into the 9 partial payment installment agreement, he was under 10 11 12 13 the impression that the NFTL would not be filed as long as he held up his side of the bargain -- that is, as long as he made the agreed-upon installment payments on time and otherwise remained compliant 14 with his Federal tax obligations, which he did and 15 16 17 18 19 20 21 22 23 24 25 continues to do. According to Petitioner, the filing of the NFTL could result in the termination of his employment, although, as of the date of the hearing, he had not been threatened with the loss of his job because of the NFTL. Petitioner's 1mpress1on, or, more accurately, m1s1mpression, regarding the filing of the NFTL is understandable given the language used in the partial payment installment agreement dated August 2, 2011, through which he continues to make 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 1 2 payments towards the underlying liability (installment agreement). The filing of an NFTL is 3 mentioned twice in the installment agreement, each 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 time after a reference to Petitioner's failure to "meet the conditions" of the installment agreement. A reasonable interpretation of the relevant provisions of the installment agreement lends support to Petitioner's argument that the NFTL should only have been filed upon his failure to "meet the conditions" of the installment agreement. Notwithstanding the placement of the language in the installment agreement that refers to the NFTL, a closer reading of the document shows that Respondent reserves the right to file the NFTL even though Petitioner complied with his obligations under the installment agreement in order "to protect the interest of the Government," which, of course, is the purpose of an NFTL. See Section 6323. Section 6159, which authorizes Respondent to enter into installment agreements, makes no reference to the filing of an NFTL with respect to Federal tax liabilities subject to an installment agreement. The regulations promulgated under that section, however, specifically provide for that collection action, see Section 301.6159-1(f) (3) (B), 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 1 2 3 4 Procedural and Administrative Regs, as does the Internal Revenue Manual, see IRM, part 5.12.2.4.1 (October 30, 2009), 5.12.2.4.2 (October 30, 2009). For what it is worth, we note that the 5 Commissioner's use of a levy to collect a Federal tax . 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 liability subject to a Section 6159 installment agreement is restricted. See Section 6331(k) (2). Because the underlying liability is not in dispute in this case, the Respondent's determination that the NFTL is an appropriate collection action is reviewed by us for abuse of discretion. See Goza v. Commissioner, 114 T.C. 176 (2000). In so doing, we consider whether the determination has a sound basis in law and fact. See Woodral v. Commissioner, 112 T.C. 19, 23 (1999). The filing of the NFTL during the pendency of the installment agreement did not violate any provision of the Internal Revenue Code, the regulations promulgated thereunder, or the Internal Revenue Manual, and, contrary to Petitioner's argument, the filing of the NFTL did not violate the terms of the installment agreement. Furthermore, because the installment agreement does not provide for a payment of the underlying liability within the relevant period of limitations -- see Section 6502 -- 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 8 1 2 3 4 5 6 Respondent's refusal to withdraw the NFTL is not an abuse of discretion. See Akonji v. Commissioner, T.C. Memo. 2012-56. In all other respects, Respondent has shown that he has satisfied the procedural requirements imposed upon him by Sections 6320 and 6330, and 7 Petitioner does not suggest otherwise. Because there 8 9 are no genuine disputes as to any material facts, and because Respondent is entitled to judgment as a 10 matter of law, disposition of this case upon summary 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 judgment is appropriate. See Rule 121(b), Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), affirmed 17 F.3d 965. (Seventh Circuit 1994). It follows that Respondent's motion will be granted. In closing, however, we think it important to once again call Petitioner's attention to a point discussed during the hearing. That is, if in the future Petitioner's employer threatens to terminate his employment because of the NFTL, he is free to renew his administrative request for the withdrawal of the NFTL on that ground. See Section 6330 (d) (2) (B). To reflect the foregoing, an appropriate order and decision will be entered, allowing Respondent to proceed with collection as determined in the notice. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company This concludes the Court's oral findings of 9 fact and opinion in this case. All right? And I believe that concludes 1 2 3 4 all of our proceedings in this matter. And this 5 6 trial session is adjourned. Let's go off the record. Let me thank my trial clerk, my court reporter, the 7 marshal, and I see I have one of Respondent' counsel in the courtroom. Let me just make a comment on that. (Whereupon, at 9:18 a.m., the above- entitled matter were concluded.) 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 866.488.DEPO www.CapitalReportingCompany.com