TAX COURT OPINION

Case: R&L Heating & Air Conditioning Inc.
Docket Number: 5495-18L
Judge: Copeland
Opinion Type: bench
Filed: 03/29/2019
Pages: 12

CLC UNITED STATES TAX COURT WASHINGTON, DC 20217 R&L HEATING & AIR CONDITIONING INC., ) ) ) ) ) Docket No. 5495-18 L. Petitioner(s), v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) 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 petitioner and to respondent a copy of the pages of the transcript of the trial in the above case before Elizabeth A. Copeland at New York, New York, 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, we will issue an Order and Decision granting respondent's Motion for Summary Judgment, sustaining Appeals' determinations and allowing respondent to proceed with the collection actions upon which this case is based. (Signed) Elizabeth A. Copeland Judge Dated: Washington, D.C. March 29, 2019 SERVED Mar 29 2019 RECEIVED IN THE UNITED STATES TAX COURT DRC In the Matter of: R&L HEATING & AIR CONDITIONING INC., Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) ) Docket No. 5495-18L ) ) ) ) ) ) ) ) ) Pages: Place: 1 through 10 New York, NY Date: March 12, 2019 IN THE UNITED STATES TAX COURT 1 In the Matter of: R&L HEATING & AIR CONDITIONING INC., Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) ) ) Docket No. 5495-18L ) ) ) ) ) ) ) ) ) Jacob K. Javits Federal Building 26 Federal Plaza 2nd Floor, Room 206 New York, NY 10278 March 12, 2019 The above-entitled matter came on for bench opinion, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 pursuant to notice at 10:00 a.m. 16 17 18 19 20 21 22 23 24 25 BEFORE: HONORABLE ELIZABETH A. COPELAND Judge APPEARANCES: For the Petitioner: No Appearance the Respondent: For No Appearance ribers P R O C E E D I N G S 2 (10:00 a.m.) THE CLERK: Calling docket number 5495-18L, R&L Heating & Air Conditioning Inc. (Whereupon, a bench opinion was rendered.) 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 Bench Opinion by Judge Elizabeth A. Copeland March 12, 2019 R&L Heating & Air Conditioning Inc. v. Commissioner of 3 Internal Revenue Docket No. 5495-18L THE COURT: The Court has decided to render an Oral Opinion in this case, and the following is the Court's oral,opinion. Unless otherwise indicated, section references are to the Internal Revenue Code and rule 1 2 3 4 5 6 7 8 9 10 references are to the Tax Court Rules of Practice and 11 Procedure as in effect for the periods at issue in this 12 13 14 15 16 17 case. This bench opinion is made under the authority granted by section 7459(b) and Rule 152. Presently before the Court is respondent's motion for summary judgment under Rule 121. The Court ordered petitioner to respond to the motion; and, in his response, he merely alleged that there were factual issues in dispute without 18 providing any specifics. The record reveals there is no 19 genuine dispute of material fact, and the Court may render 20 21 a decision as a matter of law. We shall do so here. Petitioner refers to R&L Heating & Air 22 Conditioning, Inc., IRS refers to the Internal Revenue 23 Service or respondent, and Appeals refers to the IRS 24 Office of Appeals. Petitioner operated its business in 25 New York when it filed the petition. t cribets (973)40622Mjoperadmseescribers.net)wwwescribmée Background 4 Respondent assessed the tax liabilities for the tax periods ended 3/31/13, 6/30/13, 9/30/13, 12/31/13, 3/30/14, 6/30/14, 9/30/14, 3/30/15, 12/31/15, 3/31/2016, 12/31/17, and 3/31/17 based solely on petitioner's self- assessed Federal employment tax returns, Forms 941 that it had submitted for these years. On August 11, 2017, respondent issued to petitioner a Letter 1058. Final Notice - Notice of Intent to Levy and Notice of Your Right 1 2 3 4 S 6 7 8 9 10 to a Hearing (the "CDP Levy Notice") for the above 11 outlined periods. On August 17, 2017, respondent issued 12 to petitioner a Letter 3127, Notice of Federal Tax Lien 13 Filing and Your Right to a Hearing Under IRC 6320 (the 14 15 "CDP Lien Notice") for the taxable period ending March 31, 2017, advising petitioner that respondent had filed a 16 Notice of Federal Tax Lien (NFTL) with respect to 17 petitioner's unpaid payroll liability (Form 941) for the 18 19 20 taxable period ending 3/31/2017. On September 5, 2017, respondent received a signed form 12153, Request for a Collection Due Process or 21 Equivalent Hearing (the "CDP request") indicating that 22 23 24 25 "the lien placed on the company created a negative impact on the business to operate [sic] and cause [sic] the loss of business." Petitioner requested interest and penalties abated and suggested he be given time to get a loan to pay the taxes. Petitioner also requested a lien withdrawal. 5 Prior to petitioner's CDP hearing, Appeals requested certain supporting documents f,grm petitioner for the from purposes of considering any collection alternatives. On February 1, 2018, the Settlement Officer ("S.O.") assigned to the case, Mr. Feinman, received Forms 941 for the tax periods ending June 30, 2015, September 30, 2015, June 30, 2017, and September 30, 2017. The forms showed additional tax due of more than $700,000 1 2 3 4 5 6 7 8 9 10 before penalties and interest. In addition, petitioner 11 failed to make any federal tax deposits for these tax 7< - 12 periods, failed to submit Forms 940, Employer's Annual 13 Federal Unemployment (FUTA) Tax Return, for tax years 2014 14 and 2015, failed to submit the proof of federal tax 15 deposits in the then current quarter, failed to provide 16 17 18 19 20 21 22 the specific basis for lien withdrawal, failed to provide the specific basis for the penalty and interest abatements, and failed to submit a proposal for resolution. Appeals held a CDP hearing and subsequently issued a Notice of Determination on February 20, 2018. The Notice of Determination stated that petitioner did not 23 dispute the underlying tax liability and that he failed to 24 provide the requested information necessary for Appeals to 25 consider any collection alternative. As a result, Appeals cribers determined that it could not grant any relief under 6 sections 6330 or 6320. Petitioner filed the instant petition, raising only the following: . "We are in the process trying to obtain a loan to pay h0WDthe outstanding tax liabilities[.] [A]ny further action will hinder my ability to obtain the loan[.] We asking [sic] that the lien to be [sic] removed so it will be easier getting the loan[.] The penalties and interest assessment imposed on ÇMe firm very high [sic] and would it [sic] to be set aside[.]" Discussion Summary judgment may be granted with respect to 1 2 3 4 5 6 7 8 9 10 11 12 13 14 all or any part of the legal issues in controversy where 15 the record establishes "that there is no genuine dispute 16 as to any material fact and that a decision may be 17 18 19 20 21 22 23 24 rendered as a matter of law." Rule 121(a) and (b). As the moving party, respondent bears the burden of proving that there is no genuine dispute of material fact, and factual inferences are viewed in the light most favorable to petitioner as the nonmoving party. Where a motion for summary judgment is made, an adverse party "must set forth specific facts showing that there is a genuine dispute for trial." Rule 121(d). Here, respondent supported the 25 motion with the pleadings and various exhibits. sium Petitioner supported with a document stating "there are factual issues that are in disputes [sic], therefore the 7 summary judgment motion not [sic] appropriate." Petitioner further stated, "Work was completed [sic]on public buildings by our firm and never been [sic) compensated for this work. This created a hardship for this company causing us to fall behind with the taxes which is no fault of our own." Based on the recòrd, this case is ripe for summary judgment. We review the Commissioner's determinations in a CDP hearing generally for abuse of discretion; except that if the validity of a taxpayer's underlying liability is 1 2 3 4 5 6 7 8 9 10 11 12 13 properly at issue, we review the matter de novo. Giamelli 14 15 16 v. Commissioner, 129 T.C. 107, 111(2007). As a threshold matter, we note that petitioner's CDP Levy Notice and CDP Lien' Notice were properly issued. 17 This is so because the Commissioner may assess and collect 18 19 a taxpayer's tax liability that the taxpayer reported on its own return for any year. Meyer v. Commissioner, 97 20 T.C. 555, 560-561(1991). Here, petitioner does not 21 dispute the tax liability underlying his CDP notice, so 22 23 24 25 the standard of review is abuse of discretion. section 6320 requires the IRS to issue a taxpayer a notice upon the filing of a federal tax lien (NFTL) and grants a taxpayer the right to request a CDP :ribers hearing. Section 6330 requires the IRS to issue a 8 taxpayer notice prior to a levy of any property and grants a taxpayer the right to request a CDP hearing. At that hearing, a taxpayer may raise any issue relating to the appropriateness of the proposed collection action, including a request for innocent spouse relief, request for an installment agreement, or the submission of an offer in compromise. In general, a taxpayer may also challenge an underlying tax liability if the taxpayer has had no previous opportunity. Aside from those matters raised by the taxpayer, Appeals may only consider (a) 1 2 3 4 5 6 7 8 9 10 11 12 whether the IRS complied with an applicable laws and 13 administrative procedures, and 03) whether any proposed 14 collection action balances the need for the efficient 15 collection of taxes with the legitimate concern of the 16 Person that any collection action be no more intrusive 17 18 than necessary 6630(c)(3). Here, petitioner did not raise any viable collection alternatives and provided no other 19 basis under section 6330 or' 6320 on which relief could be granted. 20 21 The record shows that Appeals did not abuse its 22 discretion when petitioner failed to raise any collection 23 alternatives other than needing time to obtain a loan to 24 Pay the taxes. Appeals gave petitioner 30 days to provide 25 necessary documentation and to bring his employment tax ribers deposits current for the first quarter of 2018 so that discussions could ensue. Petitioner failed to do so and Provided no evidence of an attempt to secure a loan for 9 payment of taxes. In reaching our decision today, we have considered all arguments raised by the parties. To the extent not discussed herein, we find them to be irrelevant, moot, or without merit. Accordingly, we will issue an Order and Decision granting respondent's motion for summary judgment, sustaining Appeals' determinations, and allowing respondent to proceed with the collection actions that are the subject of this proceeding. This concludes the Court's Oral Findings of Fact and Opinion in this case. (Whereupon, at 10:13 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 Cribers CERTIFICATE OF TRANSCRIBER AND PROOFREADER 10 CASE NAME: R&L Heating & Air Conditioning Inc. v. Commissioner DOCKET NO.: 5495-18L We, the undersigned, do hereby certify that the foregoing pages, numbers 1 through 10 inclusive, are the true, accurate and complete transcript prepared from the verbal recording made by electronic recording by Adrian 1 2 3 4 5 6 7 8 9 Morris on March 12, 2019 before the United States Tax 10 Court at its session in New York, New York in accordance 11 with the applicable provisions of the current verbatim 12 13 14 15 16 17 18 19 20 21 24 25 reporting contract of the Court and have verified the accuracy of the transcript by comparing the typewritten transcript against the verbal recording. Meribeth Ashley, CET-507 Transcriber Jessica Hernandez Proofreader Clibers 3/14/19 Date 3/14/19 Date