TAX COURT OPINION

Case: Ernest J. McDade
Docket Number: 4928-07L
Judge: Colvin
Opinion Type: bench
Filed: 10/10/2008
Pages: 9

UNITED STATES TAX COURT WASHINGTON, D .C . 2021 7 ERNEST J . MCDADE , Petitioner , V . COMMISSIONER OF INTERNAL REVENUE , Respondent . Docket No . 4928-07 L O R D E R 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 Diane L . Kroupa at Boise, Idaho on September 8, 2008, containing her 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 ) Diane L. Kroupa Judge Dated : Washington, D .C . October 10, 2008 SERVED OCT 10 2008 2 1 Bench Opinion by Judge Diane L . Kroupa September 8, 200 8 2 McDade v . Commissioner Docket No . 4928-07 L 3 THE COURT : The Court has decided to render 4 oral findings of fact and opinion in this case, an d 5 the following represents the Court's oral findings of 6 fact and opinion . The oral findings of fact an d 7 opinion shall not be relied upon as precedent in any 8 other case . 9 This bench opinion is made pursuant to the 10 authority granted by section 7459(b) of the Internal 11 Revenue Code and Rule 152 of the Tax Court Rules o f 12 Practice and Procedure . All section references are to 13 the Internal Revenue Code, and all rule references are 14 to the Tax Court Rules of Practice and Procedure . 15 Ernest McDade appeared pro se, and John 16 Davis appeared on behalf of respondent . 17 This case involves collection review matters 18 regarding tax liabilities against petitioner for tax 19 years 1999 through and including 2004 . This case wa s 20 consolidated for trial purposes only with th e 21 deficiency case at Docket Number 2896 8-07 relating t o -40 0 22 tax year 2005 . 23 FINDINGS OF FAC T 24 The record establishes or the parties do not 25 dispute the following facts : Heritage Reporting Corporation (202) 628-4888 3 1 Petitioner resided in Idaho at the time he 2 filed the petition in this case . 3 Petitioner was a construction worker until 4 1999 when he retired . While he was an employee, his 5 employer withheld Federal and State income taxes from 6 his wages . After he retired, petitioner purchased an 7 18-wheeler semi truck to carry livestock . Mos t 8 importantly, petitioner stopped filing Federal income 9 tax returns when he retired . In fact, petitioner has 10 not filed a tax return for the years 1999, 2000, 2001, 11 2002, 2003 and 2004 (collectively the years at issue) . 12 Petitioner received statutory notices of deficiency 13 for each of the years at issue, and petitioner failed 14 to file a petition to contest the determinations in 15 the deficiency notices . 16 Respondent then assessed the amounts due in 17 the deficiency notices and issued notices of balance 18 due, which petitioner failed to pay, asserting that he 19 has no obligation to file Federal tax returns because 20 he is a member of the Western Shoshone Tribe . 21 Respondent filed a Notice of Federal Tax 22 Lien with the County recorder in Gooding County , 23 Idaho, recording liens with respect to petitioner's 24 tax liabilities for the years 1999 through 2002 o n 25 August 22, 2006, and with respect to petitioner's tax Heritage Reporting Corporatio n (202) 628-4888 4 1 liabilities for the years 2003 and 2004 on Novembe r 2 24, 2006 . Respondent also issued petitioner a Notice 3 of Federal Tax Lien Filing and Your Right to a Hearing 4 under Section 6320 regarding all the years at issue . 5 Petitioner timely requested a CDP hearin g 6 regarding the lien actions for the years 1999 through 7 2002 but was not timely for the levy actions for those 8 years . Petitioner's CDP request for the years 200 3 9 and 2004 was timely with respect to both the lien and 10 levy actions for 2003 and 2004 . 11 Petitioner does not cite any error i n 12 respondent's-collection procedures or the procedures 13 the Appeals officer followed, nor does petitione r 14 raise any collection alternatives . Petitioner seeks 15 to contest the underlying liabilities by asserting 16 that he, as a member of the Shoshone Tribe, is not 17 subject to the Federal income tax Code . Petitioner 18 does not dispute that he received the statutory 19 notices of deficiency for each of the years at issue . 20 Petitioner disputes that the Internal Revenue Service, 21 the IRS, has any jurisdiction over him . 22 Respondent issued petitioner a Notice of 23 Determination Concerning Collection Action unde r 24 section 6320 for the years 1999 through 2004 and under 25 section 6330 for years 2003 and 2004 on February 21, Heritage Reporting Corporation (202) 628-4888 5 1 2007 . On the same date, respondent issued petitioner 2 a Decision Letter with respect to the levy action s 3 under section 6330 for the years 1999 through 2002 . 4 The Determination Notice and the Decision Lette r 5 sustained the proposed collection actions on th e 6 grounds that petitioner presented solely frivolous 7 arguments and that petitioner could not contest th e 8 underlying liabilities because he received deficiency 9 notices for each of the years at issue . The notices 10 determined that all requirements of law an d 11 administrative procedures were followed . 12 Petitioner filed a petition with this Court 13 requesting that we review whether the Appeals Office 14 abused its discretion in sustaining the propose d 15 collection actions . 16 OPINION 17 We address each of petitioner's claims i n 18 turn . First, we address whether respondent abused his 19 discretion in sustaining the collection action . 20 Standard of Review . Where the validity of 21 the underlying tax liability is properly at issue, the 22 Court will review the matter on a de novo basis . Sego 23 v . Commissioner , 114 T .C . 604, 610 (2000) . Where, as 24 is the case here, the validity of the underlying tax 25 liability is not properly placed at issue, the Cour t Heritage Reporting Corporation (202) 628-4888 6 1 will review respondent's determination for abuse of 2 discretion . Sego v . Commissioner , supra ; Goza v . 3 Commissioner , 114 T .C . 176, 181-182 (2000 ) . We must 4 decide whether Respondent exercised his discretio n 5 arbitrarily, capriciously, or without sound basis in 6 fact or law . See Woodral v . Commissioner , 112 T .C . 7 19, 23 (1999) . Fargo v . Commissioner , T .C . Memo 8 2004-13 . Based upon our examination of the entire 9 record before us, we find that respondent did not 10 abuse his discretion in determining that th e 11 collection action should proceed with respect t o 12 petitioner's unpaid liabilities for each of the years 13 at issue . 14 Overview of Collection Proceedings . If any 15 person liable for Federal income tax neglects or 16 refuses to make payment within ten days of notice and 17 demand, the Commissioner is authorized to collect the 18 tax by levy on that person's property . See sec . 19 6331(a) . At least 30 days before enforcing collection 20 by levy on the person's property, the Secretary i s 21 obligated to provide the person with a final notice of 22 intent to levy, including notice of the administrative 23 appeals available to the person . See sec . 6331(d) . 24 The person is entitled, upon request, to an 25 administrative review hearing before Appeals . Sec . Heritage Reporting Corporatio n (202) 628-4888 7 1 6330(b)(1) . If the taxpayer requests a hearing, he or 2 she may raise at that hearing any relevant issues 3 relating to the unpaid tax or the proposed levy . Sec . 4 6330(c)(2) . Relevant issues include any appropriate 5 spousal defenses, challenges to the appropriateness of 6 collection, and possible alternative means o f 7 collection such as an installment agreement or an 8 offer-in-compromise . Sec . 6330(c)(2)(A) . Th e 9 existence and amount of the underlying tax liability 10 can be contested only if the person did not receive a 11 notice of deficiency for the taxes in question or did 12 not otherwise have an earlier opportunity to dispute 13 the tax liability . Sec . 6330(c)(2)(B) ; see Sego v . 14 15 Commissioner , supra at 609 ; Goza v . Commissioner , supra . After the hearing, the Appeals officer i s 16 required to make a determination that addresses issues 17 the taxpayer raised, verifies that all requirements of 18 applicable law and administrative procedures have been 19 met, and balances the need for the efficien t 20 collection of taxes with the legitimate concern of the 21 person that any collection action be no more intrusive 22 than necessary . Sec . 6330 (c) (3) (C) . 23 The record demonstrates that the Appeal s 24 Office properly verified that all applicable laws and 25 administrative procedures were followed in this Heritage Reporting Corporatio n (202) 628-4888 8 1 collection review matter . The Appeals office r 2 confirmed, using a transcript of petitioner's account, 3 that assessments were properly made for each of th e 4 years at issue, that appropriate and timely notices 5 were sent regarding the assessments, and tha t 6 petitioner was properly informed of his rights with 7 respect to the proposed collection actions . 8 The Appeals officer also explained that 9 petitioner's argument of being exempt from Federal 10 income tax was irrelevant because petitioner had 11 received statutory notices of deficiency regardin g 12 each of the years at issue . Thus, the Appeals officer 13 addressed the sole issue petitioner raised . Finally, 14 the record reflects that the Appeals officer properly 15 balanced the need for efficient collection of taxe s 16 with petitioner's legitimate concern that any 17 collection be no more intrusive than necessary . 18 Petitioner has not raised any challenges to 19 the appropriateness of collection, did not assert any 20 spousal defenses, or otherwise offer any collection 21 alternatives . See sec . 6330(c)(2) . Accordingly these 22 issues are now deemed conceded . Rule 331(b)(4) . 23 Petitioner has not presented any evidence or 24 persuasive arguments to convince us that responden t 25 abused his discretion . We therefore conclude that the Heritage Reporting Corporatio n (202) 628-4888 9 1 Appeals Office did not abuse its discretion in 2 upholding the collection action regarding the 3 outstanding income tax liabilities for each of the 4 years at issue . 5 To reflect the foregoing, decision will be 6 entered for respondent and an appropriate order will 7 be issued sustaining the determination set forth in 8 the Notice of Determination Concerning Collection 9 Action(s) Under Section 6320 and/or 6330, dated 10 February 21, 2007, upon which this case is based, 11 regarding the unpaid tax liabilities for the years 12 1999, 2000, 2001, 2002, 2003 and 2004 . 13 This concludes the Court's oral findings of 14 fact and opinion in this case . 15 (Whereupon, at 3 :40 p .m ., the bench opinion 16 in the above-entitled matter was concluded . ) 17 // 18 // 19 // 2 0 2 1 2 2 23 2 4 25 / / // Heritage Reporting Corporation (202) 628-4888