TAX COURT OPINION

Case: Morris Propp
Docket Number: 7262-16L
Judge: Goeke
Opinion Type: bench
Filed: 02/10/2017
Pages: 8

A UNITED STATES TAX COUR WASHINGTON, DC 20217 MORRIS PROPP, Petitioner(s), v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ) Docket No. 7262-16 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 hearing in the above case before Judge Joseph Robert Goeke at Miami, Florida on January 12, 2017, containing his oral fmdings of fact and opinion rendered at the trial session at which this case was heard. In accordance with the oral findings of fact and opinion, an appropriate Order will be issued granting respondent's Motion to Dismiss on Grounds of Mootness, filed December 22, 2016. (Signed) Joseph Robert Goeke Judge Dated: Washington, D.C. February 10, 2017 SERVED FEB 1 3 2017 Capital Reporting Company 3 1 2 Bench Opinion by Judge Joseph Robert Goeke January 12, 2017 3 Morris Propp v. Commissioner 4 5 Docket No. 7262-16L 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 other case. This opinion is rendered pursuant to the authority provided by Internal Revenue Code section 7459(b) and Tax Court Rule of Practice and Procedure, 152. Hereinafter, section references are to the Internal Revenue Code unless noted and Rule references are to the Tax Court Rules of Practice and Procedure. This case is before the Court based upon 19 Respondent's motion to dismiss on grounds of mootness 20 21 22 23 24 25 under Rule 53. This case arises from the timely filed petition after a Notice of Determination and we would generally have jurisdiction under section 6330(d). However, Respondent no longer makes an attempt to collect by levy and therefore there is no collection action currently pending in this case. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 4 1 2 3 4 The facts underlying the present motion are not contested. On October 20th, 2015 Respondent issued a final Notice of Intent to Levy and Notice of Your Right to a Hearing to Petitioner with respect to 5 Petitioner's income tax liability, including 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 penalties and interest, for the taxable year 2012. In response to that notice Petitioner requested a collection due process hearing with Respondent's settlement Office of Appeals pursuant to section 6330(d)(1). On February 23rd, 2016, the appeals office issued a Notice of Determination concerning collection action under section 6320 and/or section 6330 informing Petitioner that the proposed levy action was no longer warranted since Petitioner's liability had been pain in full. There is no dispute that based on Respondent's records; Respondent no longer seeks to collect taxes from the Petitioner,for income tax or penalties, for the year 2012. Petitioner timely filed a petition in this case which was beseg filed on March 24th, 2016. In 22 Offiler v. Commissioner, 114 T.C. 492, 498 (2000), we 23 24 25 held that prerequisites to the exercise of our jurisdiction under section 6330(d) are the issuance of a valid Notice of Determination in a timely 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 petition for review. However, as previously stated, in the current case, Respondent no longer seeks to collect any taxes and there is no collection action currently pending for us to review. The Petitioner's claim for refund arises, if at all, under section 6330(c)(2) as an outgrowth of his challenge to the existence and amount of his underlying 2012 tax liability. Petitioner's current arguments amount to a claim for refund of the penalties assessed relative to his income tax liability for the year 2012. He makes various other arguments and requests that the Court take action against Internal Review Service employees. These are not within the scope of our jurisdiction under section 6330 in any event. And we focus on 16 Petitioner's claim that this Court take action to 17 18 order the refund of the amounts offset to pay the underlying 2012 liability for the penalties which 19 Petitioner now disputes. 20 21 22 23 24 25 Pursuant to section 6330(c)(2), whatsoever right the Petitioner may have to challenge the existence and amount of his underlying tax liability in this proceeding arises only in connection with his challenge to the proposed collection action. Insofar as the proposed collection action is moot, Petitioner 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 1 2 3 4 5 6 7 8 9 has no independent basis to challenge the existence or amount of his underlying tax liability in this proceeding. In Greene-Thapedi v. Commissioner, 126 T.C. 1 (2006), we held that the Tax Court is a court of limited jurisdiction. We may exercise jurisdiction only to the extent expressly authorized by Congress. Our jurisdiction in this case is predicated upon section 6330(d)(1) (A), which gives the Tax Court jurisdiction with respect to such 10 matter as is covered by the final determination 11 12 13 14 15 16 17 18 19 20 21 22 requested hearing before the appeals office. See Davis v. Commissioner, 115 T.C. 35, 37 (2000). Thus, our jurisdiction is defined by the scope of the determination made by the appeals officer and is limited to the determination that the appeals officer was required to make. Freije v. Commissioner, 125 T.C. 14, 25 (2005). We specifically held in Greene-Thapedi that if there is no remaining collection action there is likewise no remaining case or controversy and the case is no longer justiciable. Our jurisdiction under section 6330 is generally limited to reviewing 23 whether a proposed levy action is proper. Chocallo È r 24 25 v. Commissioner, T.C. Memo 2004-152 and Gerakios v. Commissioner, T.C. Memo 2004-203, we dismissed the 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 1 2 collection action subject to review as moot where the parties agreadthat there was no unpaid liability upon IÈ4^ 3 which a lien or levy could be based after the 4 5 taxpayer had paid the liability in full. In the instant case, as in Chocallo and 6 Gerakios, Respondent acknowledges that there is no 7 unpaid liability for the determination year upon 8 which a levy could be based and has stated that Jæ is 9 no longer pursuing the proposed levy. Accordingly, 10 11 in this case, as in Chocallo and Gerakios, the proposed levy for Mr. Propp's 2012 tax liability is 12 moot. 13 14 15 16 17 18 19 20 The analysis in this case also turns on the distinction between a levy and an offset. The limitation of section 6330 relates to our review of levy actions. We have held that the Commissioner's application of a taxpayer's overpayment to one taxable year to offset the taxpayer's liability for another taxable year does not constitute a collection action that is subject to review under section 6330. Hemo 21 Bullock v. Commissioner, T.C. 2003-5. We have relied 22 23 24 25 on the same distinction in a case involving restrictions applicable to levy actions during pendency of an action for relief from joint and several liability. Trent v. Commissioner, T.C. Memo 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 8 1 2 3 4 5 6 2002-285. In section 301.6330-1(g)(2), Q&A-G3, Procedural and Administrative Regs, the Secretary of the Treasury has provided that offset is a non-levy collection action that the IRS may take during the suspension period provided in section 6330(e)(1). See also section 301.6331-4(b) (1), Procedural and 7 Administrative Regs. 8 9 10 11 12 13 14 15 16 17 We've also held in various cases that an offset is distinguishable from the levy and does not constitute a levy. For example, see Sage v. United States, 908 F.2d 18, 27 (5th Cir. 1990) and Boyd v. Commissioner, supra at 300, as well as Bullock v. Commissioner, T.C. Memo 200 -5 and Fulgoni v. United States, 23 C1.Ct. 119, 126 (1991). Given the substantial case law which distinguishes a levy from an offset and Respondent's position that they no longer wish to levy upon any of 18 Petitioner's assets for the 2012 tax liability in the 19 20 21 22 23 24 25 present case, there is no issue pending before us to litigate. The Court specifically and consistently has held that we cannot order a refund pursuant to our jurisdiction under section 6330 and the only action which potentially is relevant that is sought by the Petitioner in the present case is, in fact, the refund. 866.488.DEPO www.Capita1ReportingCompany.com Capital Reporting Company 9 1 Given this analysis, we will grant 2 Respondent's motion and dismiss this case on the 3 4 5 grounds of mootness because there is no longer a collection action which is being sought and, in fact, Respondent's Notice of Determination informed 6 Petitioner that Respondent did not wish to seek collection via levy. This concludes the Court's Oral Findings of Fact and Opinion in this case. (Whereupon, at 9:52 a.m., the above- entitled matter was concluded.) 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