TAX COURT OPINION

Case: The Community Law Firm, Inc.
Docket Number: 11498-14SL
Judge: Guy
Opinion Type: bench
Filed: 02/24/2015
Pages: 8

UNITED STATES TAX COURT WASHINGTON, DC 20217 THE COMMUNITY LAW FIRM, INC., Petitioner, v. SD ) ) ) Docket No. 11498-14SL. 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 abovecaptioned case before Special Trial Judge Daniel A. Guy, Jr., at Los Angeles, California, on February 11, 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, decision will be entered for respondent. (Signed) Daniel A. Guy, Jr. Special Trial Judge Dated: Washington, D.C. February 24, 2015 SERVED Feb 24 2015 Capital Reporting Company Bench Opinion by Judge Daniel A. Guy, Jr. 3 February 11, 2015 The Community Law Firm Docket No. 11498-14SL 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. This proceeding for the review of the collection 15 CL action in the small tax case conducted pursuant to the provisions of Section 7463 of the Internal Revenue Code of 1986, as Amended, and Rules 170 ct through 174 of the Tax Court Rules of Practice and Procedure. This bench opinion is made pursuant to the authority granted by Segtion 7459(b) of the Internal Revenue Code of 1986, as amended, and Rule 152 of the Tax Court Rules of Practice and Procedure. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Cr C)G- D6 21 Hereinafter in this bench opinion section references DG- 22 23 24 25 are to the Internal Revenue Code of 1986, as amended, in effect for 2012, and hple references are to the D Cr Tax Court Rules of Practice and Procedure. At the time the petition was filed, Community 866.488.DEPO www.Capita1ReportingCompany.com Capital Reporting Company 1 2 3 Law Firm, Inc.'s (CLF or petitioner, principal place of business was in California. Atyria S. Clark, an attorney and the principal owner of CLF, appeared on 4 Petitioner's behalf at trial. Cassidy B. Collins 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 appeared on behalf of espondent. On May 13, 2013, CLF filed Form 944, Employer's Annual Federal Tax Return, for the tax period ending December 31, 2012, reporting tax due of $3,604.43. CLF failed to pay the tax due with its return. The Internal Revenue Service (IRS) subsequently assessed the tax reported on CLF's return, an addition to tax for failure to file a timely return, an addition to tax for failure to pay the tax due on time and .statutory interest. On June 17, 2013 the prr- IRS sent to CLF a notice of balance due. CLF again failed to remit payment. On September 20, 2013 Aespondent issued to CLF a Final Notice of Intent to Levy and d Notice of a ou 19 Right to a Hearing regarding the tax due for 2012. 20 21 22 23 24 25 CLF responded by timely submitting to the IRS Office. of Appeals (Appeals Office) a Form 12153, Request for a Collection Due Process or Equivalent Hearing, indicating on the form that it intended to offer alternatives to the proposed levy action, namely, an installment agreement or an offer-in-compromise. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company . 5 1 2 3 CLF's case was assigned to Settlement Officer Roseann Novetti (SO Novetti). In mid January 2014, SO Novetti sent a letter to CLF, with a copy to Ms. 4 Clark, stating that CLF would have the opportunity to 5 6 7 8 present alternatives to the proposed levy action during a telephone conference call scheduled for February 13, 2014, and directing CLF to submit to the Appeals Office within 14 days a Form 433-B, 9 Collection Information Statement for Businesses. 10 When CLF failed to submit a Form 433-B to the Appeals 11 Office within the allotted time, SO Novetti issued a 12 13 14 15 16 17 18 19 second 1-etter, with a copy to Ms. Clark, extending the due date for the submission of the Form 433-B and related documentation to March 5, 2014. CLF failed to provide any financial information in support of a collection alternative and otherwise failed to engage in the administrative review process. On April 17, 2014, the Appeals Office issued to CLF a Notice of Determination Concerning 20 Collection Action sustaining the proposed levy 21 22 23 24 25 actioñ. On May 20, 2014, CLF filed with the Court a timely petition for review asserting in relevant part that "there are collection alternatives that do not include the levy of the taxpayer's property." If any person liable to pay any tax neglects or 866.488.DEPO www.Capita1ReportingCompany.com Capital Reporting Company 6 1 2 3 4 5 6 7 8 refuses to pay such tax within 10 days after notice and demand for payment, the Commissioner is authorized to collect such tax by levy on the person's property. Sec. 6331(a). By definition, the term "person" includes a company or corporation. Sec. 7701(a)(1). At least 30 days before enforcing collection by way of a levy on the person's property, the Commissioner is obliged to provide the person 9 with a final notice of intent to levy, including 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 notice of available administrative appeals. Sec. 6331(d). Generally speaking, the Commissioner cannot. proceed with collection by levy until (1) the person has been given notice and the opportunity for an administrative review of the matter (in the form of an Appeals Office hearing) and, if the person is dissatisfied, (2) judicial review of the administrative determination is final. Sec. 6330; see Davis v. Commissioner, 115 T..C. 35,37 (2000);. Goza v. Commissioner, 114 T.C. 176,179(2000). The Appeals Office is responsible for conducting administrative hearings in collection matters. Sec. 6330(b)(1). In particular, the Appeals Office must verify that the requirements of any applicable law or administrative procedure have been met in processing the case. Sec. 6330(c)(1), (3) (A). The Appeals 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 1 Office also must consider any issues raised by the 2 3 4 5 6 7 8 9 10 11 12 13 person relating to the unpaid tax or proposed levy, including offers of collection alternatives, appropriate spousal defenses, and challenges to the appropriateness of the collection action. .Sec. 6330(c)(2) (A), (3)(B). A person may challenge the existence or amount of its underlying tax liability i.f the person did not receive a notice of deficiency or did not otherwise have an opportunity to dispute such tax liability. Sec. 6330(c)(2)(B). Finally, the Appeals Office must consider whether the collection action balances the need for efficient collection against the person's concern that collection be no 14 more intrusive than necessary. Sec. 6330(c)(3)(C). 15 16 This Court has jurisdiction to review the administrative determination made by the Appeals 17 Office. Sec. 6330(d)(1). If the taxpayer's 18 19 20 21 22 23 24 25 underlying tax liability is not in dispute, as is the case here, we review the Appeals Office's administrative decision for abuse of discretion. Goza v. Commissioner, 114 T.C. at 181-182. An abuse of discretion occurs if the Appeals Office exercises its discretion "arbitrarily, capriciously, or without sound basis in fact or law." Woodral v. Commissioner, 112 T.C. 19,23 (1999). Under the 866.488.DEPO www.Capita1ReportingCompany.com Capital Reporting Company 8 1 2 3 4 5 6 7 8 circumstances of this case, the Court's review is limited to the administrative record. See Keller v. Commissioner, 568 F.3d 710,718 (9 Cir. 2009). CLF contends that there are collection alternatives that do not include a levy on its property. While collection alternatives are certainly.available in the normal course, the record shows that neither CLF nor Ms. Clark provided SO 9 Novetti with the financial documentation that she 10 11 12 13 14 15 16 17 18 19 20 requested to evaluate whether CLF was eligible to make installment payments or qualified for an offer- in-compromise. See e.g., Olsen v. United States, 414 F 3d 144, 153-154 (1f+ Cir. 2005) (no abuse of discretion in rejecting an offer-in-compromise when the taxpayer failed to provide requested financial information for consideration at the administrative hearing); Pough v. Commissioner, 135 T.C. 344,351 (2010). We conclude on this record that SO Novetti otherwise properly verified that the requirements of 21 all applicable laws and administrative procedures 22 23 24 25 were met in the processing of Petitioner's case, sec. 6330(c)(1), and that the proposed levy action balances the Government's need for the efficient collection of taxes with petitioner's concerns that 866.488.DEPO www.CapitalReportingCompany.com DCr- D Capital Reporting Company 9 the collection action be no more intrusive than necessary, sec. 6330 (c) (3) (C) . In sum, we conclude that the Appeals Office did not abuse its discretion in this case and Respondent's determination to proceed with the proposed levy is sustained. This concludes the Court's oral findings of fact and opinion. (Whereupon, at 10:07 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