TAX COURT OPINION

Case: James A. Wagner
Docket Number: 5756-07S
Judge: Colvin
Opinion Type: bench
Filed: 12/08/2008
Pages: 11

lit/very CA 3 S~~A r UNITED STATES TAX COURT WASHINGTON , DC 2021 7 JAMES A . WAGNER, Petitioner v . ) Docket No . 5756-07S . COMMISSIONER OF INTERNAL REVENUE, Respondent 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 hearing of the above case before Special Trial Judge Robert N . Armen, Jr . at Pittsburgh, Pennsylvania on October 21, 2008, containing his oral findings of fact and opinion rendered at the conclusion of the hearing . In accordance with the oral findings of fact and opinion, and Order and Decision will be ente red for respondent . (Signed) Robert N . Armen, Jr. Special Trial Judg e DATE : December 8, 2008 Washington, D .C . SERVED DEC - 9 2008 3 1 Bench Opinion by Special Trial Judge Robert N . Armen 2 October 21, 2008 Wagner v . Commissioner 3 Docket No . 5756-07 S 4 The Court has decided to render ora l 5 findings of fact and opinion in this case, and th e 6 following represents the Court's oral finding of fact 7 and opinion . The oral findings of fact and opinion shall not be relied upon as precedent in any other case . 9 10 This proceeding was heard as a small Tax 11 case pursuant to the provisions of § 7463(f)(2) of the 12 Internal Revenue Code of 1986, as amended, and Rules 13 170 through 175 of the Tax Court Rules of Practice and 14 Procedure . See and compare Rules 330 through 334 of 15 the Tax Court Rules of Practice and Procedure . 16 This bench opinion is made pursuant to the 17 authority granted by § 7459(b) of the Internal Revenue 18 Code of 1986, as amended , and Rule 152 of the Tax 19 Court Rules of Practice and Procedure . Hereinafter in 20 this bench opinion, all section numbers refer to the 21 Internal Revenue Code of 1986, as amended , and al l 22 rule numbers refer to the Tax Court Rules of Practice 23 and Procedure . 24 Russell F . Kurdys appeared on behalf o f 25 Respondent . There was no appearance by or on behalf Heritage Reporting Corporation (202) 628-4888 4 1 of Petitioner . By notice dated May 20, 2008, an d 2 served on Petitioner by certified mail on that same 3 date, this case was calendared for trial on 4 October 20, 2008, in Pittsburgh, Pennsylvania . 5 However, on July 31, 2008, Respondent filed a motion 6 for summary judgment, a copy of which was served by 7 Respondent on Petitioner by mail on July 30, 2008 . 8 In his motion, Respondent moves pursuant to 9 Rule 121 for a summary adjudication in his favor o n 10 all issues presented in this collection review case 11 involving Petitioner's outstanding trust fun d 12 liabilities for the four taxable (calendar) quarters 13 ended December 31, 2001, through September 30, 2002 . 14 By order dated August 4, 2008, and served on 15 Petitioner by certified mail on August 6, 2008, th e 16 Court directed Petitioner to file on or befor e 17 September 4, 2008, an objection or other response to 18 Respondent's aforementioned motion . Petitioner never 19 responded to the Court's order . By order date d 20 October 9, 2008, and served on Petitioner by certified 21 mail on October 10, 2008, the Court calendare d 22 Respondent's motion for hearing in Pittsburgh, 23 Pennsylvania, on October 20, 2008 . 24 Respondent's motion for summary judgment was 25 called and recalled for hearing on October 20, 2008, Heritage Reporting Corporatio n (202) 628-4888 5 1 in Pittsburgh, Pennsylvania . Petitioner did no t 2 appear . In contract, counsel for Respondent appeared 3 and offered argument in support of his motion . The 4 facts relevant to the disposition of Respondent' s 5 motion for summary judgment may be briefly summarized 6 as follows : 7 Petitioner resided in the Commonwealth of 8 Pennsylvania at the time that the petition was file d 9 with the Court . Helicopter Aviation Services, Inc ., a 10 corporation, became delinquent in paying employmen t 11 taxes for the four taxable quarters ended December 31, 12 2001, through September 30, 2002 . At the time , 13 Petitioner was an officer and part owner of the 14 corporation . 15 On October 12, 2004, the Internal Revenue 16 Service (IRS) sent by certified mail a Letter 1153, 17 Trust Funds Recovery Penalty Letter, proposing to 18 assess against Petitioner a trust fund recovery 19 penalty attributable to unpaid liabilities from Form 20 941, Employer's Quarterly Federal Tax Return, incurred 21 by Helicopter Aviation Services, Inc . for the four 22 taxable quarters ended December 31, 2001, through 23 September 30, 2002 . See § 6672 . 24 Petitioner contested his liability for the 25 proposed trust fund recovery penalty on the Form 2751, Heritage Reporting Corporatio n (202) 628-4888 6 1 Proposed Assessment of Trust Fund Recovery Penalty, 2 included with the Letter 1153 . Petitioner's contest 3 was unsuccessful . Thereafter, the IRS assesse d 4 liabilities pursuant to § 6672 for the four taxable 5 quarters ended December 31, 2001, through 6 September 30, 2002 . 7 On June 7 , 2006, after the aforementione d 8 liabilities had been assessed, the IRS sent Petitioner 9 a Final Notice of Intent to Levy and Notice of You r 10 Right to a Hearing (Final Notice) . See § 6330(a) . 11 The final notice reflected Petitioner's outstanding 12 liabilities for the trust fund recovery penalty for 13 the four taxable quarters ended December 31, 2001, 14 through September 30, 2002 . 15 Petitioner, acting through his authorized 16 representative, timely submitted to Respondent a Form 17 12153, Request for a Collection Due Process Hearing . 18 On the Form 12153, Petitioner challenged only the 19 existence or amount of the underlying liabilities for 20 the four taxable quarters ended December 31, 2001 , 21 through September 30, 2002 . 22 During the course of the administrative 23 hearing, Respondent's settlement officer advised 24 Petitioner's representative, both in writing and 25 orally, that the underlying trust fund liabilitie s Heritage Reporting Corporation (202) 628-4888 7 1 could not be considered because Petitioner already had 2 had an opportunity to contest those liabilities whe n 3 he received the notice of proposed assessment, Form 4 1153 . 5 Respondent ' s settlement officer also advised 6 that collection alternatives could only be considered 7 if all returns were filed and collection information 8 statements were submitted . On February 16, 2007, 9 Respondent's Office of Appeals sent Petitioner a 10 notice of determination concerning collectio n 11 action(s) under § 6320 and/or 6330 (notice of 12 determination) sustaining the proposed . levy . 13 The attachment to the notice o f 14 determination included the following statements by the 15 settlement officer : "The history documentation from 16 Compliance dated 10-12-2004 shows that you were issued 17 Letter 1153 proposing the trust fund assessment, and 18 it was appealed by you on 12-13-2004 . This appeal was 19 previously reviewed by Appeals and closed out o n 20 3-30-2006, sustaining the asserti- gb of the trust fun d 21 assessment made by Compliance in full . 22 . "Since you had a previous opportunity t o 23 appeal the liability to Appeals and the liability was 24 upheld, the liability issue will not be heard at this 25 Collection Due Process Hearing ." Petitioner appealed Heritage Reporting Corporation (202) 628-4888 8 1 from the notice of determination by timely filing a 2 petition with this Court . See § 6330(d) . In the 3 petition, Petitioner challenged only the existence or 4 amount of the underlying liabilities . 5 Summary judgment is intended to expedit e 6 litigation and avoid unnecessary and expensive trials . 7 Florida Peach Corp . v . Commissioner , 90 T .C . 678, 681 8 (1988) . Summary judgment may be granted where there 9 is no genuine issue of any material fact and a 10 decision may be rendered as a matter of law . Rule 11 121(a) and (b) ; see Sunstrand Corp . v . Commissioner , 12 98 T .C . 518, 520 (1992), affd . 17 F .3d 965 (7th Cir . 13 1994) ; Zaentz v . Commissioner , 90 T .C . 753, 75 4 14 (1988) . 15 After reviewing the record, we conclude that 16 there are no genuine issues of material fact and that 17 Respondent is entitled to judgment as a matter of law . 18 After reviewing the record, and in view o f 19 Petitioner's failure to respond to Respondent's motion 20 for summary judgment pursuant to our order or t o 21 appear at the hearing on the motion, see fina l 22 sentence of Rule 121(d), we conclude that there is no 23 genuine issue as to any material fact and that a 24 decision may be rendered as a matter of law . 25 Accordingly, we shall grant Respondent's Heritage Reporting Corporatio n (202) 628-4888 9 1 motion . Section 6330 generally provides that th e 2 Commissioner cannot proceed with collection by levy 3 until the person has been given notice and th e 4 opportunity for an administrative review of the matter 5 (in the form of an Appeals Office hearing) and i f 6 dissatisfied, with judicial review of the 7 administrative determination . See Davis v . 8 9 Commissioner , 115 T .C . 35, 37 ( 2000) ; Goza v . Commissioner , 114 T .C . 176, 179 ( 2000) . 10 Section 6330(c) prescribes the matters that 11 a person may raise at an Appeals office hearing . In 12 sum, § 6330(c) provides that a person may rais e 13 collection issues such as spousal defenses, the 14 appropriateness of the Commissioner ' s intende d 15 collection action, and possible alternative means of 16 collection . 17 Section 6330(c)(2)(B) provides that th e 18 existence and amount of the underlying tax liability 19 can be contested at an Appeals Office hearing only if 20 the person did not receive a notice of deficiency for 21 the tax in question or did not otherwise have an 22 earlier opportunity to dispute the tax liability . See 23 24 Sego v . Commissioner , 114 T .C . 604, 609 (2000) ; Goza v . Commissioner , supra . 25 Section 6330(d) provides for judicial review Heritage Reporting Corporatio n (202) 628-4888 1 0 1 of the administrative determination . See Ginsburg v . 2 Commissioner , 130 T .C . No . 7 (April 28, 2008) , 3 explaining that the Court's jurisdiction includes 4 review of all appeals of collection determination s 5 made after October 16, 2006, including when trust fund 6 recovery penalties are part of the underlying ta x 7 liabilities . 8 In both the administrative proceeding and 9 the present judicial case, Petitioner has challenged 10 only the existence or amount of his underlyin g 11 liabilities for the trust fund recovery penalty . As 12 relevant herein, § 6330(c)(2)(B) bars Petitioner from 13 raising that issue if he had "an earlier opportunity 14 to dispute the tax liability . " 15 Here, the record is clear . Prior to 16 assessment of the trust fund recovery penalty , 17 Respondent sent Petitioner a Letter 1153 affording him 18 the opportunity to contest the proposed assessment . 19 Petitioner took advantage of that opportunity, but he 20 did not prevail . 21 Thus, Petitioner may not now, in the context 22 of the present collection action, challenge th e 23 existence or amount of his underlying liabilities . 24 McClure v . Commissioner , T .C . Memo 2008-136 ; see § 25 301 .6330-1(e)(3), Q&A-E2, Procedural an d Heritage Reporting Corporation (202) 628-4888 1 1 1 Administrative Regs . ; Pelliccio v . United States , 253 2 F .Supp .2d 258 (D .Conn . 2003) ; see also Lewis v . 3 Commissioner , 128 T .C . 48, 50-61 (2007), discussing at 4 length and upholding the validity of § 301 .6330- 5 1(e)(3 ), Q&A-E2, Procedural and Administrative Regs . 6 Petitioner failed to make a valid challenge 7 to the appropriateness of Respondent ' s intende d 8 collection action or raise a spousal defense or offer 9 an alternative means of collection . Any such issue is 10 now deemed to be conceded . See Rule 331(b)(4) ("Any 11 issue not raised in the assignments of error shall be 12 deemed to be conceded ." ) 13 In the absence of a valid issue for review, 14 we conclude that Respondent is entitled to judgment as 15 a matter of law sustaining the notice o f 16 determination . Accordingly , we shall grant 17 Respondent's motion and thereby sustain th e 18 determination of the Appeals Office permitting 19 Respondent to proceed with collection by levy . 20 In sum, we shall 1) grant Respondent' s 21 motion for summary judgment filed July 31, 2008, and 22 2) decide that Respondent may proceed with collection 23 with respect to unpaid trust fund recovery penalties 24 under § 6672 for the four taxable (calendar) quarters 25 ended December 31, 2001, through September 30, 2002 , Heritage Reporting Corporation (202) 628-4888 1 2 1 as determined in the notice of determination dated 2 February 16, 2007, upon which notice this case is 3 based . 4 This concludes the Court's oral findings of 5 fact and opinion in this case . 6 (Whereupon , at 9 :10 a .m ., the bench opinion 7 in the above - entitled matter was concluded . ) 8 9 10 11 12 / / 13 14 15 16 17 18 19 20 21 22 23 24 / / 25 Heritage Reporting Corporation (202) 628-4888