TAX COURT OPINION

Case: Ezra Wallace
Docket Number: 6011-07L
Judge: Colvin
Opinion Type: bench
Filed: 03/13/2009
Pages: 12

UNITED STATES TAX COURT WASHINGTON, D.C . 2021 7 EZRA WALLACE, Petitioner, v . COMMISSIONER OF INTERNAL REVENUE , Respondent . Docket No . 6011-07 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 Los Angeles, California on February 26, 2009, containing her oral findings of fact and .opinion rendered after the hearing on respondent's motion . In accordance with the oral findings of fact and opinion, an order and decision will be entered for respondent . (Signed ) Diane L. Kroupa Judge Dated : Washington, D .C . March 13, 2009 SERVED Mar 16 2009 3 1~ Bench Opinion by Judge Diane' L . Kroupa February 2 6 , 2008 2 EZRA WALLACE V . COMMISSIONER Docket No . 6011-07 L 3 'BENCH OPINION 4 The Court has decided to render oral findings of fact 5 and opinion in this case and the following represents th e 6 Court's oral findings of fact and opinion . These ora l 7 findings -offact and opinion shall not be relied upon as 8 precedent in any other case-. .. 9 This bench : opinion . is-made pursuant to the authority 10 granted by section 7459(b) and Rule 152 . . All sectio n 11 references are to the Internal Revenue Code as amended and 12 in effect for 1999 and 2001, . the years at. issue, and all 13 . Rule references are to the Tax Court Rules of Practice and 14 Procedure . 15 This is a collection review case involving a 16 proposed levy to collect Petitioner's unpaid liabilities for 17 ..each of . the years at issue . This collection review matter 18 is before the Court on Respondent's Motion for Summar y 19 . Judgment, . filed on January 21, 2009 . 20 There was . no appearance by or on behalf o f 21 'Petitioner . Kim Nguyen appeared on behalf of Respondent . 22 FINDINGS OF FAC T 23 The record establishes or the-parties do not 24 dispute'the following : 25 . .Petitioner resided in California at the time he Heritage Reporting Corporatio n (202) 628-4888 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 filed the collection review petition in this case . Petitioner failed to file a return for 1999 or 2001, nor di d he respond to Respondent's requests for information . 4 Respondent prepared a substitute for return based upo n D WO information from third-party payors'. Petitioner failed to file a petition timely to contest Respondent' s determinations for either 1999 or 2001 . Responden t thereafter assessed the tax liabilities for the years at issue, along with'the additions to tax and interest . Petitioner failed to pay the amount assessed s o Respondent issued to Petitioner a letter entitled "Fina l Notice - Notice of . Intent to Levy and Notice of Your Righ t to a Hearing," dated April 3, 2006, for the outstandin g liabilities for 1999 and-2001 (referred to as the Levy Notice) . Petitioner requested a hearing in response to th e Levy Notice . Petitioner sought to contest the underlyin g tax liabilities at issue . In his hearing request, Petitioner raised n o relevant issue under .section .6330 . Specifically, he state d that "I am requesting a face-to-.face collection due proces s hearing in an Appeals office closest to my place o f residence . This is'also to inform you that I will be audi o recording this hearing . One of the issues we will addres s is if the IRS follows proper procedure ." Petitioner went o n further to state :, "If the IRS has considered any of m y Heritage Reporting Corporation (202) 628-4888 5 1 prior issues that I've raised in the past to be frivolous, I 2 hereby renounce them . " 3- The settlement officer assigned to Petitioner's .4 hearing informed-.Petitioner that he would be allowed a 5 face-to-face conference on any non-frivolous issue . 6- Petitioner was-told, however, that he must provide the non- 7 frivolous issue in writing or by calling the settlemen t 8 officer within a. date certain .- Petitioner never responded, 9 nor did Petitioner complete a Form 433-A, entitle d 10 "Collection Information Statement" so that they coul d 11 consider collection alternatives The settlement office r 12 also explained that Petitioner needed to file delinquent tax 13 returns for 2000, 2003, 2004 and-2005 . :The letter als o 14 informed Petitioner that, if he failed to provide the .15 necessary information, the settlement officer would be 16 -unable to consider any collection alternatives and would 17 issue a determination notice based on the-information in 18 Respondent's administrative file . 19 Petitioner sent two letters to Respondent . In both 20 letters, Petitioner claimed that he . .had legitimate non- 21 frivolous issues to discuss- with the settlement officer at 22 the hearing, but he failed to provide these issues to the 23 settlement officer . . Petitioner also failed to present any 24 collection alternatives to the settlement officer or inform 25 her of any hardship or special circumstances . Heritage Reporting Corporation (202) 628-4888 2' l Petitioner failed to provide any additiona l 2 information to the settlement officer . Consequently, th e 3 settlement officer sustained the proposed -collection actio n by levy in a Notice of Determination Concerning Collection 6 Action(s) under Section 6320 and/or 6330, dated February 15 , 1. Apx- 6 200, . As previously stated, Respondent filed a summary 7 judgment motion . 8 Petitioner failed to appear at the hearing on 9 Respondent's motion, and Petitioner failed to file a 10 response or objection to Respondent's motion before th e 11 calendar call of the February 23, 2009 trial session of the 12 Court in Los Angeles, California. . Respondent's counse l 13 informed the Court that she had received, however, a copy of 14 Petitioner's objection to Respondent's summary judgmen t 15 motion and a document entitled "Petitioner-'s statement ." 16 Petitioner failed to,attend the calendar call or 17 the hearing asserting instead that no trial should be held 18, as the Court's review should be limited to th e 19 administrative record . Petitioner relies upon Robinette v . 20 Commissioner ,' 439'F .3d 455 (8th Cir . 2006) rev'g 123 T .C . 85 21 (2004) and makes the same arguments as other taxpayers i n 22 collection due process cases . De Haas v . Commissioner , T .C . .23 Memo . 2009-25 ; Klootwyk v . Commissioner , T .C . Memo . .24 2008-214 ; Swisher v . Commissioner , Docket No . 11904-06 L 25 dismissed for lack of jurisdiction affirmed by 6th Circuit Heritage Reporting Corporation (202) 628-4888 1 in an unpublished order dated January 30, 2009 . The Cour t 2 filed Petitioner's objection to Respondent's motion and also 3 filed "Petitioner's statement" as a status report . Nothing 4 in the objection or status report is relevant to the issu e 5 whether Respondent abused his discretion in sustaining the 7 .6 collection action regarding 1999 or 2001 . 7 OPINION 8 We are asked to decide whether to grant summary 9 judgment . Summary judgment is intended to expedit e 10 litigation and avoid unnecessary and expensive trials . See, 11 e .g ., FPL Group . Inc . v . Commissioner , 116 T .C . 73, 7 4 12 (2001) .' A motion for summary judgment will be granted if 13 the pleadings, answers to interrogatories, depositions, 14 admissions, and other'acceptable materials, together with 15 the affidavits, if any, show that there is no genuine issue . 16 as to any material fact and that a decision may be rendered 17 as a matter of law .- See Rule 121(b) ; Elect . Arts . Inc . v . 18 Commissioner , 118 T .C . 226, 238 (2002) . The moving party 19 has the burden of'proving that no genuine issue of material 20 fact exists and that it is entitled to judgment as a matter 21 Of law . See, 'e .g .,' Rauenhorst v . Commissioner , 119 T .C . 22 157, 162'('2002') . The party opposing summary judgment must 23 set forth specific facts that show that a genuine question 24 of material fact exists and may not rely merely o n 25 allegations or denials in the pleadings . Heritage Reporting Corporation (202) 628-4888 8 1 Grant Creek . Water Works, Ltd, v . Commissioner , 91 2 T .C . 322, 325 (1988) . 3 We begin with the standard of review . Where, as 4 is the case here, the validity of the underlying ta x 5 liability is not properly placed at issue, the Court will 6 . review Respondent's determination for abuse of discretion . 7 8 Sego v . Commissioner , 114 T .C . 604, 610 (2000) : Goza v . Commissioner , 114 T .C . 176, 181-182 (2000) . We must decide 9 .. . whether Respondent exercised his discretion arbitrarily , 10 capriciously., or without sound basis in fact or law . Se e 11 Woodral v . Commissioner , 112 T .C .: 19, 23 (1999) . Based upon 12 our .examination of the entire . record before us, we find that 13 Respondent did not abuse his discretion in determining that 14 the collection-action-should proceed with-respect t o 15 Petitioner's unpaid liabilities for 1999 and 2001 . 16 We next briefly describe collection proceedings . 17 If any person liable for Federal tax liability neglects or 18 refuses to make payment-within ten days of notice an d 19 demand, the-Commissioner is authorized to collect the tax by 20 levy on that person's property . :' See sec . 6331 (a) . A t 21' least 30 days before enforcing collection by levy on the 22 person's .property, the Secretary .is obliged to provide the 23 . person-with a final notice of intent to levy, . includin g 24 . notice of the administrativeappeals available to the 25 person . See sec . 6331 (d)- . Heritage Reporting Corporation (202) 628-4888 9 1 The person is entitled, upon request, to an 2 administrative review hearing before Appeals . Sec . 3 6330(b)(1) . If the taxpayer requests a hearing, he or she 4 may raise at that hearing-any relevant issues relating to 5 the unpaid tax or the proposed levy . Sec . 6330(c)(2) . 6 Relevant issues include any appropriate spousal defenses, 7 challenges to the appropriateness of collection, and 8 possible alternative means of .;collection .such as an 9, installment . agreement or an offer-,in-compromise . Sec . 10 6330(c)(2)(A) . After the'hearing, the Appeals officer is 11 required to make-a determination that addresses issues the 12 taxpayer raised, verifies that-all requirements o f 13 applicable law and administrative procedures . have been met, 14 and balances the need for the efficient collection of taxes 15 with the legitimate concern of the person that an y 16 collection action be no . more intrusive than necessary . Sec . 17 6330(c) (3) (C ) 18 The-record reflects that~the settlement officer 19 properly . verified that all the legal and procedura l 20 requirements have been meta The settlement office r 21 confirmed, using a transcript of Petitioner's accounts, that 22 assessments were properly-made for each of the years a t 23 issue, that appropriate and timely notices were sen t 24 regarding the assessments,, and that Petitioner was properly 25 informed of . his rights with respect to the' proposed levy Heritage .Reporting Corporation (202) 628-4888 lop 1 action . 1 0 2 The record also reflects that Petitioner did not 3 raise any relevant issue nor provide any financia l 4 information or become compliant with his delinquent filing 5 and payment obligations .- We have .frequently and 6 consistently held that an officer does not abuse any 7 discretion if the taxpayer fails to submit the required an d requested financial information . "Sapp v . Commissioner , T .C . 9 Memo . 2006-104 . . In addition, Petitioner argues that he is 10 entitled to a face-to-face hearing . We disagree . A hearing 11 may consist of one or more written or oral communication s 12 between an Appeal-s officer and the taxpayer . Sec . 13 30.1 .6330-1, Proced . & Admin . Regs . This and other courts 14 have held that face-to-face hearings are not required under 15 section 6330 . Katz v . Commissioner , 115 T .C . 329 (2000 ) 16 (taxpayer not entitled to face-to-face hearing ; telephone 17 conference procedurally proper) ; Leineweber v . Commissioner , 18 T .C . Memo . 2004-17 (face-to-face(cid:127)hearing not required ; prior 19 telephone conversations constitute CDP hearing) ; Tilley v . 20 United .States , 270 F . Supp . 2d ,731 (M .D .N .C . 2003 ) 21 (face-to-face hearing not required ; telephone conversations 22 sufficed) ; Guy v . United States , 2002 West Law 173285 0 23 ((cid:127)E .D .N .Y .2002) (IRS .does not owe taxpayer 'a duty to hold a 24 face-to-face CDP hearing) . Furthermore, we consider only 25 arguments, issues and matters that were raised at th e Heritage Reporting Corporation (202) 628-4888 11 1 .., :collection hearing or otherwise brought to the attention o f 2 Appeals . Magana v . Commissioner , 118 T . C . 488 , 493 (2002) . 3 Finally , the record reflects that the settlement 4 officer properly balanced the need for . efficient collection 5 of taxes with Petitioner ' s legitimate concern that an y 6 collection be no more intrusive than necessary . 7. In this proceeding now before the Court ., 8 Petitioner asserts nothing but frivolous and .groundless 9 arguments . It is apparent from the entire record that 10 Petitioner instituted or maintained . this proceeding 11 primarily , if not exclusively ,- as a protest against th e 12 Federal income tax system and his proceeding in this Court 13 is merely a continuation of Petitioner ' s refusal t o 14 acknowledge and satisfy his tax ,obligations . We ar e 15 convinced that no purpose would be served in repeating al l 16 that has been said about his frivolous .and misguided . 17 arguments . 18 Petitioner has failed to file tax returns for each 19 of the last six years even though Petitioner received non- 2'0 employee compensation'of over $100,000 each year . When 21 Respondent prepared'a substitute for return for him based on 22 . . information from third-party payors, Petitioner failed t o 23 . file a . petition to .contest the defic_iency .but.later filed a 24 petition to contest the collection action that he failed to 25 prosecute . We find Petitioner's reliance upon Robinette v . Heritage Reporting Corporatio n (202) 628-4888 i 1 2 Commissioner , supra to be misplaced . See De Haas v . Commissioner , supra ; Klootwyk v . Commissioner , supra ; Swisher v . Commissioner , supra . . We take this opportunity to admonish Petitioner that the Court will consider imposing a penalty against 'Petitioner under section 6673 if Petitioner returns to th e Court and advances similar arguments in the future . Section 6673 allows the Tax Court to require a taxpayer to pay t o 9 the United States a penalty up to $25,000 whenever it . 10 appears that proceedings have been instituted or maintained 11 by the taxpayer primarily for delay or that the taxpayer's 12 position in such proceedingsis frivolous or groundless . 13 Petitioner has not asserted any spousal defenses, 1.4. or otherwise offered any additional collection alternatives . 15 See sec . 6330(c)(2) . Accordingly, these issues are no w 16 deemed conceded . Rule 331(b)(4) . 17 Petitioner has not presented any evidence o r 18 persuasive arguments to convince us that Respondent abused 19 his:-discretion . We, therefore, conclude that the settlement 20 officer did not abuse her discretion in upholding 21 Respondent's proposed levy action to collect from Petitioner 22 outstanding tax liabilities for 1999 and 2001 . 23 To reflect .the foregoing, decision will be entered 24 for Respondent, and an appropriate order will be issue d 25 sustaining the determinations set forth in the Notice of Heritage Reporting Corporatio n (202) 628-4888 i . . Y 1 3 Determination Concerning Collection Action(s) Under Section '1 Az 2 6320 and/or 6330, dated February 15, 200', upon which thi s 3 case is based , regarding the unpaid liabilities for 1999 and 4 2001 . The order will also grant Respondent ' s motion fo r summary judgment . 6 This concludes the Court's oral findings of fac t 7 and opinion in this case . (Whereupon, at 10 :05 a .m .-, the bench opinion i n 9 the above-entitled matter was concluded .) 10 / / 11 // 12 // 1 3 14 / / 15 // 1 6 17 18 // 19 // 2 0 21 22 2 3 24 // 25 // Heritage Reporting Corporation (202) 628-4888