TAX COURT OPINION

Case: Robert B. Anderson
Docket Number: 1040-11L
Judge: Halpern
Opinion Type: memo
Filed: 02/21/2012
Pages: 10

T.C. Memo. 2012-46 UNITED STATES TAX COURT ROBERT B. ANDERSON, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. 1040-11L. Filed February 21, 2012. Riobert B. Anderson, pro se. Nathan C. Johnstón, forlespon ent. MEMORANDUM OPINION H(ALPERN, Judae: This case is before us to review a determination by respondent's Appeals Office (Appeals) to proceed with collection of petitioner's SVED Îl8 2 1 (cid:0)575ÚÍ(cid:0)575 - 2 - unpaid liability for civil penalties imposed on account of his frivolous tax submissions for 2006 and 2007. Respondent has moved (1) to dismiss on the ground of mootness and to strike as to the taxable year 2006 and (2) for partial summary judgment with respect to 2007 (motion to dismiss and motion for partial summary judgment, respectively). Petitioner objects to both motions (objections). All section references are to the Internal Revenue Code of 1986, as amended and as applicable to this case, and all Rule references are to the Tax Court Rules of Practice and Procedure. Background The following facts are gathered from the pleadings, the motion for partial summary judgment and the declaration of David Kelly in support thereof, the motion to dismiss, and the objections. There appears to be no disagreement as to the following facts. On February 10, 2009, respondent by letter informed petitioner of his intent to impose a $5,000 penalty per return for filing frivolous tax returns for 2006 and 2007. On August 12, 2009, respondent issued to petitioner a Final Notice--Notice of Intent to Levy and Notice of Your Right to a Hearing with respect'to petitioner's 3 - liabilitý for civil penalties imposed pÛrsuant to sectioi16702, plus interest, for filing frivolous returns for 2006 and 2007. In response to the notice, petitioner timely requested a collection due process (CDP) heafing with Appeals (CDP hearing request). See sec. 6330(b)(1). .Attachèd to the CDP.hearing request is an apparently preprinted.checklist on which petitioner checked 21 out of 23 reasons for his disagreement with the filing of the l¢vy. . On October 8, 2009, Freddie Molina, än account resolution specialist in Appeals, wrote to petitioner and, among other things, requested that he provide a completed Form 433-A, Collection Information Statement for Wage Earners and Self-E 1ployed Ind viduals. On February 19, 2010, Mr. Kelly, a settlement officer in Appeals who was assigned petitioner s case, wrote to petitioner, introducing himself and requesting that he provide a Form 433-A. In a lÈtter dated April 2, 2010 Mr. Kelly informed petitioner that he had not received the requested information. In a letter dated Novemþer 17, 2010, Mr. Kelly again requestéd the Form 433-A. Petitioner did not sub nit the Form 433-A before Mr. Kelly closed the case and Appeals issued its detefmination. On December 14, 2010, Appeals issued a Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330 sustaining th'e proposed levy to collect the civil penalties and interest at issue. Respondent's account transcript for petitioner's 2006 taxable year'shows an account balance of zero. The transcript shows that petitioner's unpaid civil penalty liability;(plus-interest) for 2006 was offset in full with credits from overpayments on his 2008 and 2010 income tax returns. Discussion . L Motion to Dismiss Respondent argues: As a result of the full payment of petitioner's 2006 liability. subject to the Notice of Determination, respondent no longer needs nor intends to levy to collect petitioner's civil penalty liability for the taxable year 2006, which gave rise to the petition in the instant case. As there is no remaining case or controversy relating the taxable year 2006~to sustain this Court's jurisdiction, this action is no longer justiciable. See Greene-Thapedi v. Commissioner, 126.T.C. 1 (2006); Gerakios v. Commissioner, T.C. Memo. 2004-203; Chocallo v. Commissioner, T.C. Memo. 2004-152. Accordingly, the Notice of Determination relating to the taxable year 2006 is moot, and the petition should be dismissed relating to the taxable year 2006 and that all references to taxable year 2006 should be stricken from the petition. Petitioner argues: "[Section] 6330 requires a suspension on collections once * * * [he reqüested a CDP hearing] and the monies credited to Petitioner's 2006 civil penalty account * * * [are] in violation of sec. 6330(e)(1)." Petitioner is mistaken. In Greene-Thapedi v. Commissioner, 126 T.C. 1 (2006) the taxpayèr brought a case in the Tax Court disputing a notice of determ nation sust ining a levy for hèr 1992 tax liability. After the filing of the petition, the Comniissioner applied an overpayment from the 1999 taxable year to the 1992 tax liability which resulted (in full payinent of the 1992 tax liability. Id. at 4. Consequently, the Commissionér asserted that the case was möot since he claimed there was no amount due and he was no longer pursuing a collection action. at 6. Tlje Court held:tlie case was moot and noted that^an òffsiét urider section 6402 doés dot constitute a levy action and accordingly is not a collection action subject to review in a section 6330 proceeding. Id. at 7-8; see alsò Boyd v. Co'mmissioner, 124 T.C. 296, 300 (2005), hffd, 4515.3d 8 (1st Cir. 2006); sec. 301.6330-1(g)(2), Q&A-G3', Proced. & Admin.»Regs. (an offset is a nonlevy collectibn action that the IRS may take during the suspensioi1 period provided in section 6330(e)(1)) We shall graut the motion to dismiss. - 6 - II. Motion for Partial Summary Judgment A. s Introduction Respondent moves pursuant to Rule 121 for partial summary adjudicatiòn in his favor upon all;issues presented in this case witli respéct to 2007. We may grant summary judgment ''if the pleadings, answers to interrogatories, depositions, admissions and any other acceptable rnaterials, together with the affidavits, if any, show that there is no genuine issue as to any material façt and that a decision may be rendered as a matter of law " Rulel21(b). The moving party has the burden of proving that there is no genuine issue of material fact, and factual inferences will be read in a manner most favoráblettö the party opposing summary judgment. See, e.g., Anonymous V. Commissioñer, 134 T.C. 13, 15 (2010) (citing Dahlstrom v. Commissionei, 85'T.C. 812, 821 (1985)) We distill from the amended petition the following assignments of error for 2007. Appeals erred (1) in sustaining the section.6702 penalty, plus interest; (2) in denying petitioner a face-to-face hearing; (3) by not allowing petitioner sufficieht . time to submit requested information; and (4) by not allowing a collection alternative. B. Penalty r Respondent appears to argue f r summary adjudicatiönsin his favor with respect to.the first assignment of error on the ground that petitioner's initiál 2007 return showing zero wages, vvas incorrect "duêto petitionef's'frivolous position echoed in his CDP requestµpetition, Ând amended petition.'1 While there is múch in the attachment to the CDP request,bthe:petition, and6the anîended peiiiion that strikes us as frivolous, paragraph 7 of the attächinent does 'state tliat pétitionél. had no30pportunity to challenge the penalty ahd paragraph 20 ofthe attachmènf döe(cid:0)541 raise claims of denial-of due process nd ofthe right to appeal impositioñ of thè penalty.aThose do not strike us as fri olons positionsiindeed, they raise genuine issues.äs to'material facts. Mr..Kelly concludes-his Appéals Case Memorahdum by stating that petitioner presented fr volous arguments, apparently not recognizing petitioner's arguments (a d the fàctual questions presênfed) in the aforementioned paragraphs 7 and 20 While it may be that Mr. Kelly thought$etitionei haèalready hád àn opportunity to challenge the penalty because ofthe Febiùary 10, 200'9, letter and was thus precluded from challengmg t in his CDP hearing that is not ólear. See sec. 6330(c)(2)(B). We cannot grant artial summáry judgment with respedt to petitioner's challenge to the penalty: C. Face-to-Face Hearing - 8 - . As to.whether petitioner was precluded from a face-to-face hearing because, as respondent claims, petitioner raised only frivolous aí.guments; section 301.6330-1(d)(2), AaD8, Proced. & Admin. Regs., does state in part: "A face-to- face CDP conference concerning a.taxpayer's underlying liability will not be granted if the request for a hearing or other taxpayer communication indicates that the taxpayer wishes only to raise irrelevant or frivolous issues". Beöause it does not appear to us that petitioner raised only irrelevant.or frivolous árguments, we shall not grant partial summary judgment on that issue. That is not to say that-we will remand this case for a face-to-face hearing with respect to petitionet's liábilitý for the section 6702 penalty. A taxpayer does not pursuant to section 6330(b)(1) have an absolute right to a face-to-face hearing. Busche v. Comniissiöner T.C. Memo. 2011-285. Petitioner shouldøbe prepared at trial to make whatever arguments he has as to his liability for the penalty. .See Lunsford y Commissioner, 117. T.C. 183, 189 (2001). D. Collection Alternative(cid:0)541 On October 8, 2009, Mr. Molina äsked petitioner to subinit the Form 433-k Mr. Kelly asked petitioner for the form on February 19, April 2, and Novernber 17, 2010, before he thereafter closed the case and Appeals, on Decembér 12, 2010, - 9 - issued its determinÄtion. Petitioner had more than adequate time to submit.the Form 433-A. It was no abuse of discretion for Appeals, acting on the recommendation of Mr. Kelly, to close the case without discussing collection alternatives on account of petitioner's failing to submit the requested Form 433-A. ,, TÖI Enters., Inc. v. Commissioner, T.C. Memo. 2009-123. Respondent is entitled to summar adjudication that Appeals did not err in failing to consider any collectinn alternatives. III. Section 6673 Penalty Under section 6673(a)(1), this Court may require a taxpayer to pay a penalty not in ekcess of $25,000 if (1) the taxpayer has instituted or maintained a proceeding primari y for delay, or (2) the taxpayer's position is "frivolous or groundless". Petitióner acknowledges in his objection to the motion for partial summary judgment that he filed frivolous tax returns. The preprinted list attached to the CDP request makes frivolous aúd groundless arguments. We are concerned that petitioner may have instituted this proceeding to delay collection of the penalties at issue. (cid:16)041ecaution petitioner to proceed with section 6673(a)(1) in mind. -10- IV. Conclusion To reflect the foregoing, An appropriate örder will be issued. . . r . p ' - . - .._ l :