TAX COURT OPINION

Case: Armando Ortiz & Tania K. Cruz
Docket Number: 11983-13L
Judge: Goeke
Opinion Type: bench
Filed: 05/20/2014
Pages: 10

UNITED STATES TAX COURT WASHINGTON, DC 20217 ARMANDO ORTIZ & TANIA K. CRUZ, Petitioner(s), v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ) Docket No. 11983-13 L. ) ) ) ) ORDER 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 the pages of the transcript of the trial in the above case before Judge Joseph Robert Goeke at Miami, Florida, on May 1, 2014 containing his 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 order and decision will be entered for respondent. (Signed) Joseph Robert Goeke Judge Dated: Washington, D.C. May 20, 2014 SSWED MAY 2 1 2014 Capital Reporting Company 3 1 2 3 4 5 6 7 8 9 10 11 12 Bench Opinion by Judge Joseph Robert Goeke May 1, 2014 Armando Ortiz & Tania K. Cruz v. Commissioner Docket No. 11983-13L 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. The authority for this opinion is Tax Court Rule 152 and Internal Revenue Code section 7459(b). 13 Hereinafter, Rule references are to the Tax Court 14 15 16 17 18 19 20 21 22 23 24 25 Rules of Practice and Procedure and section references will be to the Internal Revenue Code. The present case is before the Court for consideration of two motions filed by the respondent in the alternative. Both of these motions will be dispositive of the outcome of the case. As a preliminary matter we note that petitioners were residents of Florida at the time they filed their petition in this case. Respondent has filed a motion under Rule 121 for summary judgment in the case. And in the alternative respondent has filed a motion to dismiss 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 4 1 2 3 4 5 6 7 8 for lack of jurisdiction pursuant to Rules 52 and 53. Jurisdiction in this case depends upon the application of sections 6220 and 6330 of the Internal Revenue Code. This Court has jurisdiction to consider respondent's determinations sustaining collection action under section 6330 vJ When the petitioners timely file a petition following the receipt of a valid notice of determination by the 9 Court. So the threshold question in the case 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 regarding jurisdiction is whether the documents sent to the petitioners, which were characterized by respondent as notices of determination, are in fact valid notices of determination which would trigger our review of respondent's proposed collection action via levy in the present case. Sec. 6330(d) (1) sets forth the basis for our jurisdiction. Respondent asserts that although the settlement officer who considered petitioners' collection case issued notices of determination to each of the petitioners who are husband and wife, this should be viewed in the context of the fact that petitioners had originally failed to timely request the hearing which was the basis for these notices of determination. And although the petitioners timely filed petitions in the tax court based upon the 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 1 2 3 4 5 6 7 8 notices of determination, they had failed to originally timely seek the hearings which were the basis for the settlement officer's analysis. Petitioners cite tax court precedent Wilson v. Commissioner, 131 T.C. 87 (2008) in support of the proposition that there is no jurisdiction in the present case. Although ordered to respond to respondent's 9 motion by the Court, petitioners failed to file any 10 11 response to either the motion for summary judgment or the motion relative to jurisdiction. However, the 12 Court has the authority and the obligation to 13 14 15 16 17 18 19 20 21 22 23 24 25 independently determine whether we have jurisdiction. We note that in the Wilson case cited by respondent, on page 52 and footnote 6, the Court cites Kim v. Commissioner, T.C. Memo. 2005-96. I believe that the facts of the present case are more in accord with Kim than they are with Wilson. In Kim v. Commissioner, the respondent issued a notice of determination despite the fact that the petitioners had not timely requested a hearing. But the notice of determination contains no inconsistencies and determines that petitioners had timely requested a hearing and analyzes whether the petitioners' 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 claim for relief from the collection activity was correct. On the facts of that case the Court determined that we have jurisdiction and we believe those facts are identical to the present situation. Therefore, we believe that the Court has jurisdiction in the present matter and we will proceed to address respondent's motion for summary judgment. Respondent's motion for summary judgment is submitted with the declaration of the settlement officer in question, which provides ample information and the complete discussion of the history of the collection due process case. Respondent has also submitted a certified account transcript demonstrating that the petitioners owed the obligations which are the subject of the proposed collection action. The proposed collection action is in regard to income tax liabilities for the year 2010. There is no dispute about whether petitioners actually owe those liabilities and they have never questioned that. In fact, the only item asserted by the petitioners in seeking the hearing before the collection officer and in their petition before the 23 Court is that the collection of this tax liability 24 will cause them to have economic hardship. 25 The history of the hearing and petitioners' 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 involvement in the activities of their counsel in response to inquiries by the settlement officer is critical to our analysis of the summary judgment. On November 13, 2012 the Internal Revenue Service mailed to the petitioners Form Letter 1058, Notice of Intent to Levy and Notice of Your Right to a Hearing. This notice was with respect to the income tax liabilities previously noted for 2010. On December 26, 2012 petitioners' representative forwarded Form 12153, Request for a Collection Due Process of Equivalent Hearing requesting a hearing with a settlement officer pursuant to code sections 6320 and 6330. This form indicated that the petitioners were interested in pursuing an installment agreement or an offer in compromise. On February 12, 2013 the appeals office of the Internal Revenue Service mailed to the petitioners with a copy to their counsel Form 12153 which provided contacting information for the settlement officer assigned to the case and included 21 Publication 4165 which described the nature of the 22 23 24 25 collection due process hearing which was being .e/cà offsces to the petitioners. On March 4, 2013 the settlement officer assigned to the case mailed another letter to the petitioners and their 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 representative which set forth specific facts relative to the hearing including a proposed date and time for a telephone conference and the request for various information from the petitioners in support of their claim for collection alternatives or consideration of economic hardship. Petitioners didn't provide any information as requested in this letter nor did they participate in the scheduled conference which was set forth in the letter. In fact, petitioners and their representatives failed to contact the settlement officer at all. So the April 9, 2013 date for the conference passed without any information from the petitioners. After that the settlement officer, on 15 April 9, 2013, sent a follow up letter noting that 16 17 18 19 20 21 22 the petitioners and their representatives have failed to contact her and noting that she had not received the requested information from the petitioners which would be necessary for her to consider any collection alternative or the assertion that collection of the tax would result in economic hardship. Petitioners were given an extended time 23 until April 26, 2013 to submit this additional 24 25 information. Once again, petitioners failed to respond and on May the 3rd, 2013 the settlement 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 9 1 2 3 4 5 6 7 8 9 officer issued the notice of determination concerning collection activity which was then timely petitioned on May 29, 2013 before this Court. The Court may grant summary judgment pursuant to Rule 121 where there is no genuine issue of any material fact and the decision may be rendered as a matter of law. Sunstrand v. Commissioner, 98 T.C. 518, 520 (1992), aff'd, 17 F.3d 965 (7th 1994). The Court will view any factual material in 10 inference in the light most favorable to the non- 11 moving party. Dahlstrom v. Commissioner, 85 T.C. 812 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (1985). An adverse party may not rest upon mere allegations or denials but must set forth specific facts showing that there is a genuine issue for trial. Rule 121(d). In the present case because the liability which is the subject of the proposed collection action via levy is not at issue, the Court reviews the actions of the settlement office and the IRS Appeals Office in the present matter for abuse of discretion. Goza v. Commissioner 114 T.C. 176 (2000). Because the petitioners failed to provide any of the information required for the settlement officer to consider collection alternatives or economic hardship there is no abuse of discretion in 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 10 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 the issuance of the notice of determination in the present case. Treas. Reg. section 301.6330-1(e)(1). The total disregard of the correspondence from the settlement officer and the failure to communicate at all with the settlement officer by petitioners' representative or by petitioners themselves provides no basis for us to determine any abuse of discretion by respondent. And we note that the settlement officer fairly considered whether the proposed collection action balanced the hardships to the petitioner with the potential need by the respondent to obtain the income taxes ò( which were due. The mere assertion of economic hardship by the petitioners without submission of any financial information establishing economic hardship simply forecloses any argument by the petitioners before this Court that they should not be subject to the collection because of economic hardship. Given the extensive information provided by respondent in support of the motion for summary judgment and the complete failure of petitioners to provide any counter arguments to respondent's position, we sustain the motion for summary judgment and will enter a decision in both the collection action as to 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company each of the petitioners pursuant to the notices of determination amt sent by the appeals division to the petitioners. That decision will reflect that the collection action as proposed by respondent is 11 sustained. I THIS CONCLUDES THE COURT'S ORAL FINDINGS OF FACT AND OPINION IN THIS CASE. (Whereupon, at 10:47 a.m., 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 25 866.488.DEPO www.CapitalReportingCompany.com