TAX COURT OPINION

Case: Steven & Lena Addison
Docket Number: 27453-09S
Judge: Colvin
Opinion Type: bench
Filed: 12/03/2010
Pages: 9

UNITED STATES TAX COURT 20217 WASHINGTON, D.C. STEVEN AND LENA ADDISON, Petitioners, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) ) ) ) ) ) ) ) Docket No. 27453-09S O R D E R 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 transcript of Judge Lewis R. Carluzzo at Syracuse, New York, on November 2, 2010, containing his oral at the above case before Special Trial the conclusion of trial. the pages of the the trial of findings of fact and opinion rendered In accordance with the oral findings of fact and opinion, an appropriate order and decision will be entered for respondent . (Signed) Lewis R. Carluzzo Special Trial Judge D'ated: Washington, D.C. December 3, 2010 gæVED DEC - 7 2010 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 3 Bench Opinion by Special Trial Judge Lewis R. Carluzzo November 2, 2010 Addison v. Commissioner Docket No. 27453-09 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. Unless otherwise indicated, section references contained in this bench opinion are to the Internal Revenue Code of 1986, as amended, in effect for the relevant period. Rule references are to the Tax Court Rules of Practice and Procedure. This section 6330(d) proceeding is conducted as a Small Tax Case pursuant to the provisions of section 7463 and Rules 170 through 175. This bench opinion is made pursuant to the authority granted by section 7459(b) and Rule 152. This case is before the Court on respondent's Motion for Summary Judgment filed July 23, 2010. Petitioners' objection to respondent's motion was filed September 23, 2010. A hearing was conducted on respondent's motion on November 1, 2010, in Syracuse,- New York. Brian Bilheimer appeared on behalf of respondent. There was no appearance by or on behalf of petitioners. Heritage Reporting Corporation (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 4 Giving due regard to the representations made in respondent's motion and the statements contained in petitioners' objection to respondent's motion the Court is satisfied that there are no genuine issues as to any material facts in this case. Consequently, disposition of the case upon summary judgment is appropriate. Rule 121(b); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), affd 17 F.3d 965 (7th Cir. 1994). Petitioners lived in New York at the time the petition was filed. The undisputed facts relevant to the resolution of respondent's motion are easily summarized. In a Notice of Determination Concerning Collection Action(s), under Section 6320 and/or 6330, dated October 14, 2008, respondent determined that a levy is an appropriate collection action with respect to petitioners' outstanding 2005, 2006 and 2007 Federal income tax liabilities. Petitioners' income tax liabilities for 2005 and 2006 were assessed as a result of the issuance of a notice of deficiency for each of those years. Nothing in the record suggests that the notice of deficiency was not received by petitioners, and we proceed as though it was. Petitioners' 2007 income tax liability was assessed Heritage Reporting Corporation (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 5 pursuant to amounts report on, but not paid with their 2007 joint Federal income tax return. Because all or portions of the underlying liabilities remained unpaid as of March 8, 2009, by letter bearing that date petitioners were notified of respondent's intent to levy to collect those liabilities. The letter further notified petitioners of their right to request an administrative hearing in order to challenge that collection action. See sec. 6330(a). In their timely request for an administrative hearing (Form 12153) petitioners indicated that they "cannot pay taxes - medical hardship due to long-term disability". In that request they further noted that their return preparer "was being investigated for criminal activity by the IRS". Petitioners further noted that their return preparer "advised [them] incorrectly regarding mileage which is the result of what's owed for 3 years". Petitioners did not check either of the collection alternative choices listed in paragraph 7 of Form 12153. By letter dated August 10, 2009, respondent acknowledged petitioners? request for an administrative hearing and scheduled that hearing to take place by telephone at 2 p.m. on September 17, Heritage Reporting Corporation (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 6 2009. Although in their request for an administrative hearing petitioners did not indicate that they were seeking a collective alternative to the proposed levy action, in the August 10, 2009, letter, respondent's settlement officer allowed that collection alternatives would be considered if petitioners submitted certain financial information. Petitioners were further advised that they were not entitled to challenge the existence or the amount of their income tax liabilities for 2005 or 2006 during the administrative hearing, but they could request audit reconsideration for those years. Respondent's letter went on to advise petitioners that with respect to 2007, they should submit an amended return. | Petitioners did not call at the designated time and date. Instead, Lena Addison called respondent's settlement officer the next day. During that telephone conversation and consistent with the statements contained in the August 10, 2009, letter to petitioners, Lena Addison was once again advised to seek audit reconsideration for 2005 and 2006, and further advised to submit an amended return for 2007. After a series of voice mails left between petitioners and respondent's settlement officer, the above- referenced notice of determination was issued. As of Heritage Reporting Corporation (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 7 the date of that notice of determination petitioners had not supplied the requested financial information, they had not requested audit reconsideration for 2005 or 2006, and they had not submitted an amended return for 2007. Allegations made in the petition and statements contained in petitioners' objection to respondent's summary judgment motion do little more than repeat the points made in petitioners' request for an administrative hearing, that is, their health issues and the criminal investigation of their return preparer are referenced. Neither the petition nor petitioners' objection indicates that petitioners at any time requested a collection alternative to the proposed levy. Prior to the administrative hearing, petitioners apparently rejected that consideration be given to designating the underlying liabilities as "currently not collectable" because by so doing, a notice of Federal tax lien would have been filed. Nothing in the petition or in petitioners' objection to respondent's motion suggests that respondent's settlement officer failed to proceed in the manner required under section 6330, and we are satisfied from what has been submitted that respondent's settlement officer proceeded as required. Heritage Reporting Corporation (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 8 The settlement officer's refusal to consider the existence or the amount of petitioners' 2005 and 2006 income tax liabilities was proper because petitioners received a notice of deficiency for those years. See sec. 6330(c) (2) (]B). Furthermore, the settlement officer's requirement that petitioners submit an amended return for 2007, which they did not do, might very well have mooted out any challenge that they had to the amount of that liability In that regard, the settlement officer could hardly consider information not provided. . Otherwise, petitioners did not claim entitlement to a collection alternative at the administrative hearing and, even though their petition does not suggest they intended to, they are not entitled to do so here. See Giamelli v. Commissioner, 129sT.C. 107 (2007). Moreover, in matters such as this one, the failure of a taxpayer to submit financial information requested in connection with a collection alternatife, in and of itself, can be grounds for sustaining respondent's proposed collection activity. See Long v. Commissioner, T.C. Memo, 2010-7 and the cases on that point cited in that opinion. The Court sympathizes with petitioners' Heritage Reporting Corporation (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 9 financial plight, but their limited cooperation with respondent during the administrative hearing, and their failure to submit requested financial information coupled with their failure to request audit reconsideration for 2005 or 2006, or submit an amended 2007 Federal income tax return leaves us little to do other than review the procedural history of the relevant events. In doing so, it becomes obvious that under the circumstances respondent is entitled to proceed with collection as proposed in the above-referenced notice of determination. . In closing we think it appropriate to note that our disposition of this case in no way precludes petitioners from proceeding as instructed by respondent's settlement officer. Namely, they may still seek audit reconsideration for 2005 and 2006, and they may still submit an amended return for 2007. Furthermore, administratively, they may still pursue various collection alternatives to respondent's proposed levy. See sec. 6330(d) (2). All of these options, however, necessitate affirmative action on their part. Their failure to take such action will leave them much in the situation they presently face. As the old saying goes, you can lead a horse to water.... Heritage Reporting Corporation (202) 628-4888 10 To reflect the foregoing, an appropriate order and decision will be entered. This concludes the Court's oral findings of fact and opinion in this case. * (Whereupon, at 12:42 p.m.,.the bench opinion in the above-entitled matter was concluded.) // // // // // // // // // // // // // // // // // // // 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 Heritage Reporting Corporation (202) 628-4888 1