TAX COURT OPINION

Case: Ewing Tool Company, L.L.C.
Docket Number: 6989-13L
Judge: Goeke
Opinion Type: bench
Filed: 10/14/2015
Pages: 9

UNITED STATES TAX COURT WASHINGTON, DC 20217 EWING TOOL COMPANY, L.L.C., Petitioner(s), v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ) Docket No. 6989-13 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 petitioner and to respondent a copy of the pages of the transcript of the hearing in the above case before Judge Joseph Robert Goeke at New Orleans, Louisiana on September 23, 2015, 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 appropriate order of dismissal will be entered. (Signed) Joseph Robert Goeke Judge Dated: Washington, D.C. October 14, 2015 SERVED OCT 19 2015 Capital Reporting Company Bench Opinion by Judge Joseph Robert Goeke 3 September 23, 2015 Ewing Tool Company, L.L.C. Docket No. 6989-13L 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 1 2 3 4 5 6 7 8 9 10 Opinion shall not be relied on as precedent in any 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 other case. This opinion is rendered pursuant to IRC Section 7459(b) and Tax Court Rule of Practice and Procedure 152. Hereinafter section references are to the Internal Revenue Code and rule references are to the Tax Court Rules of Practice and Procedure. This case was brought by the Petitioner under Section 6330(d) to contest the IRS's collection efforts via levy of employment tax liabilities, including penalties and interest, for the period ending December 31° , 2010, and via lien the penalties related to employment tax for the period ending December 315 , 2008. Petitioner is a Louisiana limited liability company with its principal place of business in Louisiana. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 4 1 2 3 4 Petitioner was mailed a notice of determination by the Internal Revenue Service on February 19th, 2013, and Petitioner timely filed the petition contesting the notice of determination. In 5 Petitioner's response to a motion to have this case 6 dismissed on the grounds of mootness, Petitioner 7 maintains that for the quarters ending March 31° , 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 2010; June 30th, 2010; and September 30th, 2010, relative to employment taxes, Petitioner overpaid the amounts due the Internal Revenue Service and directed that those amounts be applied to satisfy Petitioner's liability for the last quarter of 2010. However, as Petitioner acknowledges, these overpayments were not applied as Petitioner would have requested, and Petitioner actually received a refund for one of the quarters. As a result Respondent maintained that Petitioner had a liability for the final quarter of 2010 and Respondent asserted that liability and additions to tax and assessed those amounts and subsequently those determinations by Respondent led to the present litigation. In its response to Respondent's motion to dismiss this case as moot, Petitioner states as follows: "Respondent's failure to timely and correctly apply Petitioner's 941 return overpayment 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 caused Petitioner to incorrectly pay Respondent penalties and interest for the tax period ending December 31°', 2010." Petitioner does not maintain that there remains a tax liability which is unpaid regarding the present matter. Petitioner does not dispute the fact that after the petition was filed in the present action an offset under Section 6402(a) of overpayments, plus a payment by Petitioner, resulted in the payment of all outstanding penalties and interest for the 941 employment taxes, as well as the underlying tax liabilities for the period ending December 31", 2010. Also Petitioner does not dispute that after 15 Petitioner filed this action Respondent abated the 16 civil penalty resulting from employment taxes for the 17 18 19 20 21 22 23 24 25 year 2008. Respondent maintains and Petitioner does not contest the fact that because Petitioner's liability for 941 employment taxes for the period ending December 31", 2010, has been paid in full, that Respondent does not intend to proceed with a levy to collect any tax liability from the Petitioner for the period ending December 31", 2010, and that because Respondent has abated the addition to tax related to 2008, Respondent has released the tax lien 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 regarding the civil penalty for that year. Respondent maintains that because there is no remaining tax due, there is no case or controversy which would sustain this Court's jurisdiction over the present matter. Respondent cites Greene-Thapedi v. Commissioner, 126 T.C. 1 (2006). Petitioner counters that the Court should determine that Respondent's settlement officer in issuing the notice of determination, which precipitated this case, erred in sustaining additions to tax for the quarter ending December 31° in 2010. We note that Petitioner has not maintained that the present action constitutes an effort to seek review of a claim for abatement of interest pursuant to Section 6404(h) and, therefore, any jurisdiction we 16 might have over abatement of interest does not arise 17 18 19 20 21 22 23 24 25 in the present matter. Rather, Petitioner would have us determine that the actual liability, which the parties agree has been paid for certain additions to tax for the period ending December 31° , 2010, should be abated and that the refund or credit should be provided to the Petitioner in the amount of that addition to tax, which has previously been assessed and paid. We believe that the authority cited by 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 1 2 3 Respondent previously cited in this opinion, Greene- Thapedi, controls this matter. In that case the balance due in a collection matter was eliminated by 4 Respondent's offset of the liability in question 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 pursuant to Section 6402(a), very similar to how a portion of the liability in the present case was resolved. However, we note in the present case there was also an additional payment by the Petitioner. In Greene-Thapedi Respondent agreed that there was no unpaid liability on which a levy could be based and Respondent represented that no further collection action was available. Petitioner challenged the dismissal of the case on grounds very similar to the argument made by the Petitioner in the present case. We held that the Court lacked jurisdiction on the collection action and that the Court did not have jurisdiction to determine an overpayment or to order a refund or credit of the taxes that had previously caused the collection action to arise. We dismissed that case as moot, which is the resolution that Respondent seeks pursuant to Respondent's motion in the present case. Petitioner has cited no authority inconsistent with Greene- Thapedi but continues to maintain that the Court 866.488.DEPO www.Capita1ReportingCo.mpany.com Capital Reporting Company 8 1 2 should address the settlement officer's determination sustaining the underlying liability regardless of 3 whether that liability has been paid or subject to 4 5 6 7 offset. Petitioner's position we believe ls in error because Petitioner overlooks the fact that Sections 6320 and 6330 are focused on determinations 8 whether the Internal Revenue Service may collect tax 9 or interest and penalties. Here, because the tax and 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 interest and penalties have been paid, there is no outstanding matter for collection. While we do review underlying liabilities in the course of our duties under Section 6330 if, in fact, the taxpayer had no previous opportunity to have the underlying liabilities reviewed, no such review is pertinent when the liabilities have been satisfied and there is no pending collection action, because our review would serve no purpose and would simply be an academic exercise. We are very sympathetic to the Petitioner's concerns that they will be forced to continue their dispute with the Internal Revenue Service about these additions to tax, and we believe based upon the information that the Petitioner has submitted they have a legitimate argument about the viability of 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 9 1 2 3 4 these additions to tax. However, we do not have jurisdiction over this issue and we do take comfort from the representations made by Respondent's counsel that 5 Petitioner will be entitled to a de novo 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 administrative review of their claim regarding the credit or refund of the additions to tax for the final quarter of 2010, after the dismissal of the present matter. We believe this is appropriate as we have not reached any determination about the merits of the determination made by the settlement officer sustaining the additions to tax, and we trust that Respondent will follow through on the representations made to the Court in that regard. However, based upon the authority and our review of the Court of Appeals decisions, including any pertinent authority in the Fifth Circuit, we have found no basis to change this Court's previous ruling and analysis in Green-Thapedi and we follow that precedent and refer any interested party to the analysis in that case, which is extensive, regarding why this Court does not have jurisdiction to determine the liability once the tax liability has been satisfied and there is no further need for 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 10 collection action. Given this analysis a decision will be entered dismissing this case as moot and we will grant Respondent's motion in that regard. THIS CONCLUDES THE COURT'S ORAL FINDINGS OF FACT AND OPINION IN THIS CASE. (Whereupon, at 11:30 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