TAX COURT OPINION

Case: Michael M. Sasaki
Docket Number: 16133-12L
Judge: Gale
Opinion Type: bench
Filed: 06/25/2013
Pages: 13

ALS UNITED STATES TAX COURT WASHINGTON, DC 20217 MICHAEL M. SASAKI, Petitioner, V. COMMISSIONER OF INTERNAL REVENUE, Respondent OR D E R ) ) ) ) ) Docket No. ) ) ) ) 16133-12L. 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 trial in the above case before Judge Joseph H. Gale at Honolulu, Hawaii, on June 14, 2013, containing his oral findings of fact and opinion rendered at the trial session at which the case was heard. Decision will be entered for respondent in accordance with the oral findings of fact and opinion. (Signed) Joseph H. Gale Judge Dated: Washington, D.C. June 25, 2013 SERVED Jun 26 2013 Capital Reporting Company 3 1 2 Bench Opinion by Judge Joseph H. Gale June 14, 2013 3· Michael M. Sasaki v. Commissioner 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Docket No. 16133-12L 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 bench opinion is made pursuant to the authority granted by section 7459(b) of the Internal Revenue Code and Rule 152 of the Tax Court Rules of Practice and Procedure. Hereinafter, all section references are to the Internal Revenue Code in effect for the years at issue, and all Rule references are to the Tax Court Rules of Practice and Procedure. Petitioner Michael M. Sasaki appeared on his own behalf. Jonathan J. Ono appeared on behalf of respondent. Pursuant to section 6330 (d) (1), petitioner seeks review of respondent's determination to proceed 23 with a levy to collect unpaid income tax, additions to 24 25 tax, and interest for his 1999, 2000, 2001, and 2002 taxable years. The issue for decision is whether 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 respondent abused his discretion in making that determination. BACKGROUND The parties did not stipulate any facts or evidence. Pursuant to the Court's Order dated May 23, 2013, certain facts and evidence were deemed stipulated for purposes of this case under Rule 91(f) (3).1 See Miller v. Commissioner, 654 F.2d 519, 521 (8 Cir. 1981); see also Vogt v. Commissioner, 336 Fed. Appx. 758 (9 Cir. 2009); Lehmann v. th Commissioner, 899 F.2d 18 (9th Cir. 1990). Petitioner resided in Hawaii at the time the petition was filed. Footnote 1: 1The deemed stipulations did not include the Forms 4340, Certificates of Assessments, Payments, and Other Specified Matters, for the years at issue. However, certified copies of those Forms are in the record, attached to respondent's Motion to Dismiss for Lack of Prosecution, filed June 10, 2013 and to his Motion to Show Cause Why Proposed Facts in Evidence Should Not Be Accepted as Established. Petitioner did not file Federal income tax returns for 1999, 2000, 2001, or 2002. Respondent prepared substitutes for return under section 6020(b) and issued petitioner separate notices of deficiency 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 1 2 3 4 5 6 7 for each of the four years. Petitioner received the notices of deficiency.2 Petitioner did not petition this Court for redetermination of any of the deficiencies, and respondent therefore assessed the income tax liabilities, together with additions to tax and interest, for each of the years at issue. Footnote 2: 2The notices of deficiency were 8 mailed to the address petitioner listed on the 9 petition in this case and used in all correspondence 10 with respondent. Petitioner has not denied that he 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 received the notices. Petitioner did not pay the assessed liabilities, and on July 4, 2011, respondent issued to him a Final Notice of Intent to Levy and Notice of Your Right to a Hearing, with respect to taxable years 1999, 2000, 2001, and 2002. Petitioner made a timely request for a collection due process (CDP) hearing under section 6330. Therein, he claimed a right to a separate CDP hearing for each taxable period, and demanded a separate hearing for each taxable year covered by the levy notice. He further insisted that the verification mandated by section 6330 (c) (1) was required to be made by the Internal Revenue Service office or officer pursuing collection rather than the Appeals officer handling his section 6330 hearing. He 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 also requested "photocopies of the relevant [Forms] '1040A', or substitute therefor executed by the Secretary * * * in accordance with IRC § 6020(b) which gave rise to the purported assessment for the specified period; photocopies of the relevant purported 'assessment' for the specified period; and, photocopies of the relevant 'Notice and Demand' made 'within 60 days after' the relevant purported 'assessment'. " In subsequent correspondence petitioner contended that the Letter 1058 and Letter 3884C sent to him by respondent were unsigned, in violation of section 6061(a).3 Footnote 3: 3Petitioner also asserted in his correspondence that he was entitled under sec. 6330(b) (3) to a hearing conducted by an officer or employee who has had no prior involvement with respect to the unpaid taxes at issue. In a subsequent letter to petitioner, the Appeals employee assigned to conduct petitioner's hearings stated that she did not recall any previous involvement with respect to the taxable periods at issue and requested petitioner to notify her if he believed to the contrary. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Petitioner has offered no evidence of any prior 24 25 involvement by the Appeals employees who handled his hearing request. We accordingly do not consider the 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 1 matter further. 2 On September 27, 2011, respondent's Fresno, 3 California Appeals office sent petitioner a letter 4 5 acknowledging receipt of his case for consideration, and informing him generally of the CDP hearing process. 6 Petitioner responded with a letter dated October 5, 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 2011, wherein he requested four separate face-to-face hearings, and reasserted the other demands he made in his hearing request. By letter dated January 24, 2012, the Appeals officer scheduled a telephone conference for March 21, 2012, during which "four separate hearings for the tax years at issue" would be conducted. The letter advised petitioner that, in order to qualify for a face-to-face hearing, he would need to file tax returns for 2008, 2009, and 2010, and provide financial information if he sought a collection alternative. he hearings were rescheduled for April 6, 2012; the Appeals officer called at the scheduled time, but petitioner was not available. The Appeals officer sent petitioner a follow-up letter that same day wherein she informed petitioner of her unsuccessful attempt to reach him for the telephone hearings, and requested any information he would like to provide for consideration. Petitioner did not respond. On May 21, 2012, the Appeals officer issued 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 8 1 to petitioner a Notice of Determination Concerning 2 Collection Action(s) under Section 6320 and/or 6330, 3 4 5 sustaining the proposed levy. Petitioner timely filed a petition for review of the determination. On January 8, 2013, the 6 Court issued a Notice Setting Case for Trial informing 7 8 the parties of the date, time, and location of trial. That same day the Court issued a Standing Pretrial 9 Order that, among other things, directed the parties 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 to begin discussing the case and to stipulate facts to the maximum extent possible. On April 16, 2013, respondent filed a Motion to Show Cause Why Proposed Facts in Evidence Should Not Be Accepted as Established. Therein, he advised the Court that he had attempted to initiate the stipulation process, but received no response from petitioner. He attached to the motion a proposed stipulation of facts with exhibits, and requested that the Court issue an order requiring petitioner to show cause why the proposed facts and exhibits should not be accepted as established for purposes of this case. See Rule 91(f). The Court issued an order to show cause and petitioner responded with arguments that, in the Court's judgment, were not fairly directed to the proposed stipulation. Accordingly, the Court made 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 9 1 2 3 4 5 the order to show cause absolute as to most of the proposed facts and exhibits. At trial, petitioner argued that he was entitled to a face-to-face hearing with the person who determined he had income for the years at issue. 6 When asked, petitioner did not specifically deny 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 receiving the income underlying the assessments respondent seeks to collect by levy. DISCUSSION Section 6330 (a) requires that written notice be given to a person upon whose property the Secretary intends to levy to collect an unpaid tax (taxpayer) advising him of the amount of the unpaid tax and of his right to a hearing. If a hearing is requested, the hearing is to be conducted by an officer or employee of the I.R.S. Appeals Office with no prior involvement with respect to the unpaid tax at issue. Sec. 6330(b) (1), (3). At the hearing, the Appeals officer shall obtain verification that the requirements of any applicable law or administrative procedure have been met. Sec. 6330 (c) (1). The taxpayer may raise at the hearing any relevant issue relating to the unpaid tax or the proposed levy, including offers of collection alternatives. S·ec. 6330(c) (2) (A). The taxpayer may also challenge the 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 10 1 2 3 4 5 6 7 8 9 existence or amount of the underlying tax liability if the taxpayer did not receive a statutory notice of deficiency for such liability or did not otherwise have an opportunity to dispute the liability. Sec. 6330 (c) (2) (B). At the conclusion of the hearing, the Appeals officer must determine whether and how to proceed with collection and shall take into account: (1) the verification that the requirements of any 10 applicable law or administrative procedure have been 11 met; (2) the relevant issues raised by the taxpayer; 12 13 14 (3) the taxpayer's challenges to the underlying tax liability, where permitted; and (4) whether any proposed collection action balances the need for the 15 efficient collection of taxes with the legitimate 16 17 18 19 20 21 22 23 24 25 concern of the taxpayer that the collection action be no more intrusive than necessary. Sec. 6330 (c) (3). We review determinations concerning the underlying tax liability de novo. Goza v. Commissioner, 114 T.C. 176, 181-182 (2000). Where the validity of the underlying tax liability is not at issue, we review the Appeals officer's administrative determinations for abuse of discretion. Sego v. Commissioner, 114 T.C. 604, 610 (2000); Goza v. Commissioner, 114 T.C. at 182. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 11 1 2 3 4 5 6 7 Petitioner has not asserted any challenge to his underlying tax liabilities, nor could he, as he received notices of deficiency for each year covered by the levy. Petitioner's claim that he is entitled to a face-to-face hearing with the person who determined he had income during the years covered by the levy notice, or to any face-to-face hearing at all for that 8 matter, is meritless. Section 6330 hearings are 9 informal in natùre and do not require the Appeals 10 officer and the taxpayer to hold a face-to-face 11 meeting, although taxpayers who present relevant, non- 12 13 14 15 16 17 18 19 20 21 22 23 24 25 frivolous reasons for disagreement with a collection action will ordinarily be offered such a meeting. Sec. 301.6330-1(d) (1) A-D6, A-D7, Proced. & Admin. Regs. As more fully discussed below, the contentions advanced by petitioner in his correspondence with the Appeals office all lacked in merit. The Appeals officer did not abuse her discretion in denying him a face-to-face hearing. In the notice of determination the Appeals officer states that verification of the satisfaction of the requirements of any applicable law or administrative procedure had been made through transcript analysis. Petitioner, relying on an internal memorandum reproduced in an Office of IRS 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 12 1 Chief Counsel Bulletin (Bulletin No. 487, April 2001), 2 3 4 5 6 contends that the verification mandated by section 6330(c) (1) must be made by the Internal Revenue Service office or officer pursuing collection rather than the Appeals officer handling his section 6330 hearing. Petitioner's reliance on the memorandum is 7 misplaced. The memorandum states: "This document may 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 not be used or cited as precedent." See sec. 6110(k) (3). Instead, it is well settled that the verification requirement of section 6330 (c) (1) may be satisfied by the hearing officer's review of computer transcripts of the taxpayer's account, absent the identification of any irregularity in those transcripts (which petitioner herein has not shown). See Davis v. Commissioner, 115 T.C. 35, 40-41 (2000); Keene v. Commissioner, T.C. Memo. 2002-277 (and cases therein cited). The Forms 4340 placed in the record by respondent satisfy the Court that the transcripts reviewed by the Appeals officer demonstrated that all requirements of applicable law or administrative procedure were satisfied. See Bowman v. Commissioner, T.C. Memo. 2007-114. Petitioner's apparent belief that the Appeals office was required to provide him with copies of income tax returns or substitutes for return 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 13 1 2 3 4 5 6 7 8 9 10 11 prepared pursuant to section 6020(b) or of any notice and demand for payment is equally unavailing. There is no requirement under section 6330 that the Appeals officer provide such documents or, indeed, any evidence of the satisfaction of the verification requirement to the taxpayer. See Nestor v. Commissioner, 118 T.C. 162 (2002). As for petitioner's request for a copies of the assessments, it is sufficient if the taxpayer is provided a copy of the Form 4340, covering the tax and period for which collection is sought, before the Tax Court trial. Id. 12 Petitioner was provided such Forms 4340, at a minimum, 13 14 15 when respondent sought to compel stipulations. Finally, petitioner's contention that the Letters 1058 and 3884C were required to be signed is 16 meritless. See Craig v. Commissioner, 119 T.C. 252, 17 18 19 20 21 263 (2002); Oropeza v. Commissioner, T.C. Memo. 2008- 94; Wilson v. Commissioner, T.C. Memo. 2002-242. We conclude that the Appeals officer did not abuse her discretion in sustaining the proposed levy. Contentions we have not addressed are irrelevant, 22 moot, or meritless. To reflect the foregoing, 23 24 25 decision will be entered for respondent. This concludes the Court's oral findings of fact and opinion in this case. 866.488.DEPO www.CapitalReportingCompany.com 1 2 3 4 5 6 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Capital Reporting Company (Whereupon, at 1:37 p.m., the above- entitled matter was concluded.) 14 866.488.DEPO www.CapitalReportingCompany.com