TAX COURT OPINION

Case: Daniel J. & Vicki J. McLoon
Docket Number: 27269-10L
Judge: Kroupa
Opinion Type: bench
Filed: 10/18/2012
Pages: 10

UNITED STATES TAX COURT WASHINGTON, D.C. 20217 DANIEL J. AND VICKI J. MCLOON Petitioners, V. COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) ) ) ) ) ) ) ) ORDER Docket No. 27269-10L Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit to petitioner and to respondent a copy of the pages of the transcript of the trial of this case before Judge Diane L. Kroupa in Los Angeles, California, containing her oral findings of fact and opinion rendered at the trial session at which the case was heard. In accordance with the oral findings of fact and opinion, an ppropriate order will be issued granting respondent's Motion to Dismiss on the Ground of Mootness. (Signed) Diane L. Kroupa Judge Date: Washington, DC October 18, 2012 Capital Reporting Compan Daniel J. & Vicki J. McLoon 09-12-2012 IN THE UNITED STATES TAX COURT In the matter of DANIEL J. McLOON, & VICKI J. Petitioners, vs. COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) ) ) ) ) ) ) Docket No. 27269-10 L ) ) ) ) ) Pages: 1 through 8 Place: Los Angeles, California Date: September 12, 2012 - (866) 448 - DEPO www.CapitalReportingCom aany.com 2012 Capital Reporting Company Daniel J. & Vicki J. McLoon 09-12-2p12 IN THE UNITED STATES TAX COURT In the matter of ) 1 2 3 4 DANIEL J. & VICKI J. McLOON, Petitioner, vs. COMMISSIONER OF INTERNAL REVENUE, Re spondent . ) ) ) ) ) Docket No. 27269-10 L ) ) ) ) ) 5 6 7 8 9 10 11 12 13 14 15 Room 1167 Edward R. Roybal Federal Building and United States Cousthouse 255 East Temple Street Los Angeles, California Wednesday September 12, 2012 The above-entitled matter came on for a 16 bench opinion, pursuant to notice, at 1:20 p.m. 17 18 19 20 21 22 23 24 25 BEFORE: HONORABLE DIANE L. KROUPA Judge A P P E A R A N C E S the Petitioner: For No Appearances the Respondent: For No Appearances . (866) 448 - DEPO www.CapitalReportingCompany.com 2012 . 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 2 0 21 22 2 3 2 4 2 5 Capital Reporting Company Daniel J. & Vicki J McLoon 09-12- 012 P R O C E E D I N G S (1:20 p.m.) 2 THE CLERK: Recalling from the calendar docket No. 27269-10 L, Daniel J. and Vicki J. McLoon. (Whereupon, a bench opinion was rendered in the above-entitled mat ter . ) (866) 448 - DEPO www.CapitalReportingCom any.com 2012 Capital Reporting Company Daniel J. & Vicki J McLoon 09-124012 3 1 Bench Opinion by Judge Diane L. Kroupa 2 Daniel J. & Vicki J McLoon Docket No. 27269-10 L 3 September 12, 2012 4 5 6 7 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. THESE ORAL FINDINGS OF FACT AND 8 OPINION SHALL NOT BE RELIED UPON AS PRECEDENT IN ANY 9 OTHER CASE. 10 This collection review case is before the 11 Court on respondent's motion to dismiss on grounds of 12 mootness. This bench opinion is made pursuant to the 13 authority granted by Section 7459 (b) and Rule 152. 14 All section references are to the Internal Revenue 15 Code for 2007, the year at issue, and all Rule 16 references are to the Tax Court Rules of Practice and 17 Procedure. 18 Daniel McLoon appeared on behalf of 19 petitioners . Michael Tan and James Hiighes appeared 20 on behalf of respondent. 21 22 FINDINGS OF FACT AND OPINION The record establishes or thë parties do not 23 dispute the following facts: 24 Petitioners resided in Califórnia at the . 25 time they filed the petition. (866) 448 - DEPO www.CapitalReportingCompany.com 2012 Capital Reporting Company Daniel J. & Vicki J McLoon 09-12-2012 4 1 2 3 4 5 6 Petitioners filed a joint income tax return for 2007 showing a balance due. As of December, 2009, petitioners' outstanding assessed liabilities (not including accrued interest under Section 6221) totaled approximately $157,933. Petitioners submitted a $155, 000 payment to respondent on 7 December 28, 2009, that cleared the bank on 8 9 10 11 January 4, 2010. On January 1, 2010, respondent filed a notice of Federal tax lien reflecting the assessed balance due of 157,934. Respondent provided petit1oners w1th 12 Letter 3172, Notice of Federal Tax Lien Filing and 13 Your Right to a Hearing under Section 632Q. 14 Petitioners timely requested a collection due process 15 hearing. Between the time that petitioners requested 16 a CDP hearing and the date of the hearing, 17 p-etitioners fully paid their outstanding liability 18 for 2007 . Respondent accordingly prepared a Release 19 of Federal Tax Lien on April 28, 2010, that was 20 recorded in the Los Angeles County Recorder's Office. 21 Petitioners wanted to move forward with a 22 collection due process hearing even th ugh there was 23 no outstanding balance due for 2007. Through various 24 communication mishaps, respondent and petitioners 25 were unable to have a hearing. Settlernent Officer (866) 448 - DEPO www.CapitalReportingCompäny.com 2012 Capital Reporting Compan Daniel J. & Vicki J McLoon 09-12-2012 1 Veronica Smith determined, after revi!ewing all the 2 ·materials in the administrative file,; that the filing 5 3 of the lien was appropriate. Because, however, 4 petitioners had fully satisfied any outstanding 5 balance and the lien had been released, she 6 determined that no further collection action was 7 appropriate. 8 9 Petitioner husband asked at a hearing in January, 2012, before Judge Maurice Foley that the 10 lien be withdrawn, not simply release . There is a 11 phenomenal difference between a tax lien being 12 withdrawn versus a tax lien being released. One 13 14 stays on the taxpayer's record while the other is removed as if the lien never existed. There also is 15 a significant difference between the llien showing 16 approximately $158,000 due rather tha the 17 approximate $3,000 actually assessed due. Judge 18 Foley questioned why the IRS could not indicate that 19 the lien was filed for an incorrect amount and that 20 the IRS admit it made a mistake. IRS ounsel 21 answered that he did not believe it was possible. 22 The IRS changed its position nationally in June, 23 2011, and provided procedures to withdraw a lien, 24 which admittedly was after pet-itioners filed the 25 petition. The June, 2011, procedure occurred, (866) 448 - DEPO www.CapitalReportingComp ny.com 2012 Capital Reporting Company Daniel J. & Vicki J McLoon 09-12-2012 however, before the January, 2012, hearing before 6 Judge. Foley . We found petitioner credible. He explained the stress he endured and the damage the lien has caused with petitioners obtaining credit. Simply 1 2 3 4 5 6 put, petitioner husband is frustrat.ed with the IRS 7 8 9 and the "Tax System. " Petitioner seeks to have this Court find that respondent abused his discretion in sustaining 10 the lien action. We cannot grant the relief that 11 petitioner requests. The proper procedure in a 12 collection review matter, when there has been an 13 abuse of discretion, is to remand the case to 14 Appeals. 15 We are troubled that respondent did not 16 reach an agreement with petitionersbef re this trial 17 session. As Judge Foley said in the earlier hearing, 18 "If you can do anything to fix it, you guys should 19 have done something to fix it. And to rush to put 20 this case to trial and then contend that there is no 21 case or controversy because the amount has been paid 22 when you guys didn't fix it is very disconcerting to 23 me." It is very disconcerting to this Court as well. 24 Never once has respondent admitted it did anything 25 wrong or apologized to petitioners. (866) 448 - DEPO www.CapitalReportingCompany.com . 2012 Capital Reporting Company Daniel J. & Vicki J McLoon 09-12-2012 7 1 As previously mentioned, we cannot give 2 petitioners the relief they request. We are not a 3 4 5 court of equity and cannot ignore the law to achieve an equitable end. Yeomans v. Commissoner, T.C. Memo. 2009-216. We will grant respondent's motion to 6 dismiss on the grounds of mootness so this matter can 7 8 be closed. In so ruling, the Court ha considered the time and resources petitioners, respondent, the 9 Court, the trial clerk, the court reporter, and Court 10 staff have had to spend to handle this matter. We 11 hope in the future that there will be better use of 12 13 14 15 the limited resources. To reflect the foregoing, we shall grant respondent's motion, and this case will be dismissed on the ground of mootness. An appropriate order of 16 dismissal will be issued. 17 THIS CONCLUDES THE COURT'S ORAL FINDINGS OF 18 FACT AND OPINION IN THIS CASE. (Whereupon, at 1:30 p.m., the bench opinion in the above-entitled matter was concluded.) 19 20 21 22 23 24 . 25 (866) 448 - DEPO www.CapitalReportingCompany.com 2012 Capital Reporting Company Daniel J. & Vicki J McLoon 09-12-2012 * * * * * 8 CERTIFICATE OF TRANSCRIBER AND PROOFREADER CASE NAME: Daniel J. & Vicki J. McLoon DOCKET NUMBER: 27269-10 L We, the undersigned, do hereby certify that the foregoing pages, numbers 1 through 8, inclusive, are the true, accurate, and complete transcript 1 2 3 4 5 6 7 8 9 10 prepared from the stenographic notes made by Lisa 11 Moskowitz, on September 12, 2012, before the United 12 States Tax Court at its session in Los Angeles, 13 California, in accordance with the applicable 14 provisions of the current verbatim reporting contract 15 of the Court, and have verified the accuracy of the 16 transcript by comparing the typewritten transcript 17 against the verbal recording. 18 19 20 21 22 23 24 25 Lisa Moskowitz (Court Reporter) (Date) Tracey Bauguss (Scopist) (Date) (866) 448 - DEPO www.CapitalRepor tingComþany.com 2012