TAX COURT OPINION

Case: Troy James Peterson & Sharon Peterson
Docket Number: 11719-17L
Judge: Goeke
Opinion Type: bench
Filed: 10/15/2018
Pages: 6

SYM UNITED STATES TAX COURT WASHINGTON, DC 20217 TROY JAMES PETERSON & SHARON PETERSON, Petitioner(s), v. ) ) ) ) ) ) Docket No. 11719-17 L. 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 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 San Diego, California containing his oral findings of fact and opinion rendered at the trial session at which this case was heard. In accordance with the oral findings of fact and opinion, a decision will be entered for petitioners. (Signed) Joseph Robert Goeke Judge Dated: Washington, D.C. October 15, 2018 SERVED Oct 16 2018 Bench Opinion by Judge Joseph Robert Goeke September 25, 2018 3 Troy James Peterson and Sharon Peterson v. Commissioner of Internal Revenue Docket No. 11719-17L 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 1 2 3 4 5 6 7 8 9 10 be relied upon as precedent in any other case. This 11 opinion is rendered pursuant to Rule 152 of the Tax Court 12 Rules of Practice and Procedure and section 7459(b) of the 13 14 15 16 17 18 Internal Revenue Code. Hereinafter, section references are to the Internal Revenue Code as it applies to the present case. The Court has jurisdiction over the present case pursuant to section 6330. The present case involves respondent's attempt to collect via lien tax liabilities owed by the 19 petitioners for the years 201A through 2014. At trial, C 20 petitioner Troy Peterson testified. Mr. Peterson made 21 clear that the only point of challenge by the petitioners 22 23 24 25 in the present case is respondent's filing of the lien in question after the petitioners had entered into a payment agreement with respondent. Mr. Peterson was allowed to testify to clarify Cribers en>4ewaso1opernia.e.we.u.il.wwmceemum 1 2 3 4 5 6 7 8 9 10 11 12 the arguments he made before the settlement officer in this case. There's no dispute that he timely sought a hearing after the lien filing, and the Notice of Lien had been served upon him. And there's no dispute that the settlement officer determined that the lien was appropriate in the Notice of Determination which was issued to the petitioners and timely petitioned. The matter for dispute is that Mr. Peterson believes he was mislead concerning the significance of payments he made and his good faith effort to enter into a payment agreement, together with his wife, to avoid the imposition of a lien. He testified credibly that the lien 13 has adversely affected his ability to do business and his 14 credit. He also testified credibly that when faced with 15 16 these liabilities, he sought, in 2016, advice from respondent's personnel about how he could begin paying off 17 his liabilities. He was advised that if he paid $10,000 18 19 and then began to have payments debited from his checking account on a regular basis, he could avoid a lien filing. 20 He, in fact, accomplished those two things, and he and his 21 wife paid $10,000. Subsequently, in the context of the 22 23 hearing with the settlement officer, pursuant to section 6330, Mr. Peterson stated that he decided to pay an 24 additional $4,000 because he believed it would facilitate 25 the removal of the lien. And he did, in fact, do so. He (973)406.2250}operatkwiseerribemnetlwwwascribersmet was also current on the debited payments, pursuant to the 5 agreement he had entered into, until the lien was filed and the government cancelled his agreement. We note that the standard of review in this case, since the liability is not at issue, is abuse of discretion on the part of the settlement officer in sustaining the lien. Goza v. Commissioner, 114 T.C. 176, 182 (2000). The Service in the present case makes the argument that it is appropriate for the respondent to file 1 2 3 4 5 6 7 8 9 10 a tax lien for liabilities where an installment agreement 11 12 13 14 is pending. They cite authorities for this proposition, including Karakaedos v. Commissioner, T.C. Memo 2012-53. We accept the basic proposition as argued by respondent, including the fact that unless specifically 15 precluded, Treasury Reg, section 301.6159-1(f)(3) would 16 permit the filing of a Federal tax lien while an 17 installment agreement is pending. However, we would 18 distinguish the cited cases and find the Treasury Reg. to 19 be not applicable in the present case because throughout 20 21 22 23 24 this proceeding Mr. and Mrs. Peterson have acted in good faith and that they made their payments and began the installment agreement with the specific understanding that no Federal tax lien would be filed, based upon representations that had been made to Mr. Peterson when he 25 made the $10,000 payment initially. We believe that the ønsa.use t opewome.camme!.=maá=»a settlement officer should have considered these circumstances in determining whether it was appropriate to 6 remove the lien filing. We understand that, as a general proposition, respondent was within the parameters of the law in filing the lien while the payment agreement was pending. However, it was inappropriate for respondent to disregard the good-faith efforts of the petitioners to conform with their responsibilities to pay the tax and avoid the filing 1 2 3 4 5 6 7 8 9 10 of a lien by attempting to follow the specific 11 12 13 14 instructions Mr. Peterson was given on his initial effort to begin payment of the tax liability. We also find that given the level of the liability and the petitioners' situation, the payments which the petitioners have made 15 were very significant and demonstrate a willingness to pay 16 the entire liability in question. We would note that the 17 petitioners provided respondent with the ability to take 18 19 20 21 22 the payments directly from their checking account so as to insure the timeliness of the agreed periodic payments. Given these circumstances and Mr. Peterson's credible testimony about the representations he made to the settlement officer and the discussions he had with the 23 settlement officer, we believe it was an abuse of 24 discretion not to relieve the Petersons from the lien that 25 had been filed and remove that lien from the county ycrærs 98;4½2250iopentkaseextheIwwmesahnmet records where the lien was filed. 7 Accordingly we will enter a decision for the petitioners and not sustain the proposed collection action in the form of the lien which has been filed. This concludes the Court's oral findings of fact and opinion in this case. (Whereupon, at 3:45 p.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