TAX COURT OPINION

Case: Thomas Gray & Marie A. Gray
Docket Number: 9386-14SL
Judge: Guy
Opinion Type: bench
Filed: 04/27/2015
Pages: 10

UNITED STATES TAX COURT WASHINGTON, DC 20217 DRB THOMAS GRAY & MARIE A. GRAY, Petitioners, v. ) ) ) ) Docket No. 9386-14SL. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) 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 petitioners and to respondent a copy of the pages of the transcript of the trial in the abovecaptioned case before Special Trial Judge Daniel A. Guy, Jr., at Boston, Massachusetts, on April 14, 2015, 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 order and decision will be entered for respondent. (Signed) Daniel A. Guy, Jr. Special Trial Judge Dated: Washington, D.C. April 27, 2015 SERVED Apr 28 2015 Capital Reporting Company 3 1 2 Bench Opinion by Special Trial Judge Daniel A. Guy, Jr. 3 April 15, 2015 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Thomas Gray & Marie A. Gray v. Commissioner Docket No. 9386-14SL 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. The oral findings of fact and opinion shall not be relied upon as precedent in any other case. This proceeding for the review of a collection action is a small tax case conducted pursuant to the provisions of Section 7463 of the Internal Revenue Code of 1986, as amended, and Rules 170 through 174 of the Tax Court Rules of Practice and Procedure. This bench opinion is made pursuant to the authority granted by Section 7459(b) of the Internal Revenue Code of 1986, as amended, and Rule 152 of the Tax Court Rules of Practice and Procedure. 22 Hereinafter in this bench opinion, section references 23 24 25 are to the Internal Revenue Code of 1986, as amended, in effect for 2010, and Rule references are to the Tax Court Rules of Practice and Procedure. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company This matter before the Court on 15 4 respondent's motion for summary judgment, with a supporting declaration, filed pursuant to Rule 121. 1 2 3 4 Respondent's motion was called for hearing in Boston, 5 Massachusetts, on April 14, 2015. Thomas Gray 6 7 8 9 appeared at the hearing and represented himself. He informed the Court that his wife, Marie A. Gray, was unable to appear for the hearing because of illness, but that she was content to allow him to prosecute ·10 the case on her behalf. Carlton W. King appeared on 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 behalf of respondent. Summary judgment serves to "expedite litigation and avoid unnecessary and expensive trials." Fla. Peach Corp. v. Commissioner, 90 T.C. 678, 681 (1988). Either party may move for summary judgment upon all or any part of the legal issues in controversy. Rule 121(a). The Court will grant summary judgment only "if the pleadings, answers to interrogatories, depositions, admissions, and any other acceptable materials, together with the affidavits or declarations, if any, show that there is no genuine dispute as to any material fact and that a decision may be rendered as a matter of law." Rule 121(a) and (b). Respondent's.motion for summary judgment is well founded in the light of the 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 1 2 3 4 5 averments therein, the pleadings, a declaration executed by Settlement Officer Cathy Benson (SO Benson), and the administrative record. We conclude that there is no genuine dispute as to a material fact and that respondent is entitled to judgment as a 6 matter of law sustaining the notice of determination 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 upon which this case is based. The following facts are not in dispute and are drawn from the pleadings and other documents constituting the record in this case. On October 30, 2012, respondent mailed to petitioners a notice of deficiency for the taxable year 2010. Respondent determined that petitioners were liable for an income tax deficiency of $12,904 and an accuracy-related penalty under Section 6662(a) of $2,580.80. Petitioners did not file a petition for redetermination with the Court challenging the notice of deficiency. Respondent subsequently assessed the tax and penalty and sent notices of balance due to petitioners in April and May 2013. When petitioners failed to remit payment, respondent filed a federal tax lien and issued to petitioners a Notice of Federal Tax Lien Filing and Your Right to a Hearing Under Section 6320. Petitioners responded to this 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 1 1 2 notice by submitting to the IRS Office of Appeals (Appeals Office) a Form 12153, Request for a 3 Collection Due Process or Equivalent Hearing, 4 5 6 7 8 9 10 11 12 13 indicating that they intended to present an offer-in- compromise. Petitioners' case was assigned within the Appeals Office to SO Benson. In late February 2014, SO Benson sent a letter to petitioners, with a copy to Jonathan McCormick, petitioners' power of attorney, informing them that she had scheduled a telephone conference call on March 14, 2014, to discuss petitioners' case, and that before that date petitioners were required to submit to the Appeals 14 Office a Form 433-A, Collection Information Statement 15 16 17 18 19 20 21 22 23 24 25 for Individuals, to allow the Appeals Office to evaluate their eligibility for an offer-in- compromise. SO Benson obtained a record from the U.S. Postal Service showing that the notice of deficiency for 2010 was delivered to petitioners shortly after it was mailed to them. Neither petitioners nor Mr. McCormick submitted to SO Benson the financial records that she requested. Nevertheless, SO Benson called petitioners on March 14, 2014. She also attempted to contact Mr. McCormick at that time, but she was 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 1 2 3 4 5 6 7 8 informed that he was on extended leave and was transferred to his voice mail system. SO Benson informed petitioners that without a Form 433-A, she would have to close the case and make a determination on the administrative record she had at that time. As of March 25, 2014, SO Benson had not received any additional information from petitioners or Mr. McCormick. On April 3, 2014, the Appeals 9 Office issued to petitioners a Notice of 10 Determination Concerning Collection Action sustaining 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the filing of the tax lien. On April 28, 2014, petitioners filed with the Court a timely petition for review. Section 6321 provides that if any person liable to pay any tax neglects or refuses to pay the same after demand, the unpaid amount, including any interest, addition to tax, or assessable penalty, shall be a lien in favor of the United States. Although Section 6322 provides that the lien imposed by Section 6321 generally arises at the time the tax is assessed, Section 6323(a) explains that the lien imposed by Section 6321 is not valid as against certain of the taxpayer's creditors until a notice of lien is filed in accordance with Section 6323(f). Section 6320(a) provides that the Commissioner shall 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 8 1 2 3 4 5 6 7 8 9 notify a taxpayer in writing when a notice of lien is filed under Section 6323 and inform the taxpayer of the right to request an administrative hearing with the Appeals Office. See Sec. 6330(b). In conducting administrative hearings in collection matters, the Appeals Office must verify that the requirements of any applicable law or administrative procedure have been met in processing the case. Sec. 6330(c)(1), (3) (A). The Appeals 10 Office also must consider any issues raised by the 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 person relating to the unpaid tax or proposed levy, including offers of collection alternatives, appropriate spousal defenses, and challenges to the appropriateness of the collection action. Sec. 6330(c)(2) (A), (3) (B). A person may challenge the existence or amount of his underlying tax liability if the person did not receive a notice of deficiency or did not otherwise have an opportunity to dispute such tax liability. Sec. 6330(c)(2)(B). Finally, the Appeals Office must consider whether the collection action balances the need for efficient collection against the person's concern that collection be no more intrusive than necessary. Sec. 6330(c)(3)(C). This Court has jurisdiction to review the 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 9 1 administrative determination made by the Appeals 2 Office. Sec. 6330(d)(1). If the taxpayer's 3 4 5 6 7 8 underlying tax liability is not in dispute, as is the case here, we review the Appeals Office's administrative decision for abuse of discretion. Goza v. Commissioner, 114 T.C. 176, 181-182 (2000). An abuse of discretion occurs if the Appeals Office exercises its discretion "arbitrarily, capriciously, 9 . or without.sound basis in fact or law." Woodral v. 10 11 12 13 14 15 16 17 18 19 20 Commissioner, 112 T.C. 19, 23 (1999). Under the circumstances of this case, the Court's review is limited to the administrative record. See Murphy v. Commissioner, 469 F. 3d 27 (1st Cir. 2006), aff' 125 T.C. 301 (2005). At the hearing of this matter, Mr. Gray sought to explain why he thought respondent erred in determining the tax deficiency for 2010. Petitioners have not asserted at any stage of these proceedings, however, that they did not receive the notice of deficiency for 2010 when it was mailed to them in 21 October 2012. It follows as a matter of law that 22 23 24 25 petitioners are barred under Section 6330(c)(2)(B) from challenging the existence or amount of their tax liability for 2010 in this proceeding. Mr. Gray also maintains that SO Benson 866.488.DEPO www.Capita1ReportingCompany.com Capital Reporting Company 10 1 2 3 4 5 6 7 8 abused her discretion by failing to contact their representative, Mr. McCormick, or another representative at the firm where he was employed. The administrative record shows that SO Benson wrote to Mr. McCormick in late February 2014 and informed him of the need to promptly submit a Form 433-A and related financial information on petitioners' behalf. SO Benson also left voice mail messages for Mr. 9 McCormick in March 2014, but he did not return her 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 calls. On this record, we cannot say that SO Benson was obliged under the law to do any more than she did in attempting to contact Mr. McCormick, and she certainly did not abuse her discretion in failing to identify another representative at Mr. McCormick's firm who might take on petitioners' case. In the end, petitioners did not provide SO Benson with the financial documentation that she requested to evaluate whether they qualified for an offer-in-compromise. See, e.g., Olsen v. United States, 414 F. 3d 144, 153-154 (1st Cir. 2005)(no OG- abuse of discretion in rejecting an offer-in- compromise when the taxpayer failed to provide requested financial information for consideration at the administrative hearing); Pough v. Commissioner, 135 T.C. 344, 351 (2010). 866.488.DEPO www.Capita1ReportingCompany.com Capital Reporting Company 11 1 2 3 We conclude on this record that SO Benson properly verified that the requirements of all applicable laws and administrative procedures were 4 met in the processing of petitioners' case, Sec. 5 6330(c)(1), and that the tax lien fairly balances the 6 Government's need for efficient collection of taxes 7 with petitioners' concerns that the collection action 8 9 be no more intrusive than necessary, Sec. 6330(c)(3)(C). In sum, we conclude that the Appeals 10 Office did not abuse its discretion in this case, and respondent's determination is sustained. This concludes the Court's oral findings of fact and opinion. (Whereupon, at 10:46 a.m., the above- entitled matter was concluded.) 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 866.488.DEPO www.Capita1ReportingCompany.com