TAX COURT OPINION

Case: Gary G. & Lynn W. Norris
Docket Number: 4151-12L
Judge: Kroupa
Opinion Type: bench
Filed: 06/28/2013
Pages: 8

UNITED STATES TAX COURT WASHINGTON, D.C. 20217 GARY G. & LYNN W. NORRIS, Petitioners, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) ) ) ) ) ) ) ) ORDE R Docket No. 4151-12L Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit to petitioners and to respondent a copy of the pages of the transcript of this case before Judge Diane L. Kroupa in Portland, Oregon on May 10, 2013, 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, an appropriate order will be issued granting respondent's Motion for Summary Judgment. (Signed) Diane L. Kroupa Judge Date: Washington, DC June 28, 2013 SERVED JUN 28 2013 Capital Reporting Company 3 1 2 Bench Opinion by Judge Diane L. Kroupa May 10, 2013 3 Gary G. & Lynn W. Norris v. Commissioner 4 5 6 7 8 9 10 11 12 13 Docket No. 4151-12L BENCH OPINION 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. THESE ORAL FINDINGS OF FACT AND OPINION SHALL NOT BE RELIED UPON AS PRECEDENT IN ANY OTHER CASE. This bench opinion is made pursuant to the authority granted in section 7459(b) and Rule 152. 14 All section references are to the Internal Revenue 15 Code for 2008, and all Rule references are to the Tax 16 Court Rules·of Practice and Procedure. 17 18 19 20 This is a collection review case involving the proposed levy to collect from petitioners their unpaid tax liabilities ;for 2008. This collection review matter is before the Court on respondent's 21 Motion for Summary Judgment, filed February 20, 2013. 22 Petitioners filed a response to respondent's motion 23 24 25 but failed to appear fdr the hearing scheduled on respondent's motion in Portland, Oregon. Aimee Lobo-Berg appeared on behalf of 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 1 2 3 respondent. FINDINGS OF FACT The record establishes the following facts. 4 Petitioners resided in Mc Minnville, Oregon at the 5 time they filed the collection review petition. 6 Petitioner-husband is a personal injury attorney in 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 sole practice and petitioner-wife is a homemaker. Future references to petitioner individually shall be to petitioner-husband. Petitioners have had an earlier CDP case involving earlier years. For 2008, petitioners filed a return but failed to pay the amount of tax due with the return and failed to have made sufficient estimated taxes. Respondent assessed the unpaid amounts for 2008. When petitioners failed to pay the assessed amounts, respondent sent petitioners a Letter 1058, entitled Final Notice, Notice of Intent to Levy and Notice of Your Right to a Hearing. The levy notice advised petitioners that respondent sought to collect by levy the unpaid tax liability for 2008 and informed them that they could receive a hearing. Petitioners timely requested a hearing. Petitioners stated in their hearing request that they wanted to work out a payment plan and offered to pay $3,000 a month. They did not dispute the underlying tax liability. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 Respondent, in scheduling the hearing, informed petitioners that they must be current with their filing and payment obligations before respondent could consider any collection alternatives. Specifically, respondent informed petitioners that they needed to file a return for 2010, pay their tax liability for 2010, pay estimated tax payments for 2011 and be current with Federal tax deposits for petitioner's law practice. Petitioners U< provided updated financial information. Petitioner rescheduled the CDP hearing several times. 1 2 3 4 5 6 7 8 9 10 11 12 Petitioner told respondent that he was expecting a 13 14 15 16 17 18 settlement that would allow him to pay off the unpaid tax liability for 2005, the anticipated liability for 2010 and the estimated taxes for 2011. Petitioners timely filed the return for 2010 through extension. The return for 2010 showed, however, a tax liability of $52,000, which petitioners failed to pay in full. 19 Petitioner wrote a note to respondent along with a 20 21 22 23 24 25 $20,000 check to the U.S. Treasury. Petitioner wrote that he would keep chipping away at the debt. He could not pay the previously promised $30,000 with the return as it would cause cash-flow problems. The Settlement Officer again informed .petitioner that the officer could not consider any 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 16 17 18 19 20 collection alternatives unless petitioner paid, by December 31, 2011, the outstanding balance for 2010. and the required estimated tax payments for 2011. In addition, the Settlement Officer informed petitioner that his law practice needed to be current with its required Federal tax deposits for the period ended December 31, 2.011. As mentioned previously, petitioner repeatedly rescheduled·the CDP hearing. The Settlement Officer informed petitioner in a "last chance" letter that the Settlement Officer would issue a determination letter sustaining the proposed collection action if petitioners·failed to satisfy the tax liability for 2010 and make estimated tax payments for 2011 by December 31, 2011. Petitioners failed to be current with their tax obligations. Respondent thereafter issued a Determination Notice on January 10, 2012 sustaining the proposed levy action for petitioner's unpaid tax liability for 2008. Respondent also stated in the Determination 21 Notice that petitioners' average annual household 22 income would support paying more than the $3,000 a 23 month petitioners proposed. 24 25 Petitioners timely filed a petition with this Court. In the petition, petitioners assert that 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 1 they are trying to putitogether a payment plan with 2 monthly payments low enough for them to make every 3 month given the cyclical nature of petitioner's law 4 5 6 7 8 9 10 11 practice. They also stated that they were catching up on other debt that would free up money to pay the amount owing for 2008. As mentioned previously, respondent filed a summary judgment motion and the Court scheduled a hearing on respondent's motion at the Portland, Oregon trial session on May 6, 2013. Petitioners did not appear at the hearilng, but did file a response. 12 Petitioners urged in th.e response to respondent's 13 motion that a payment plan be put together for their 14 tax obligations for 200i8 (and possibly other years as 15 well). 16 17 18 19 20 21 22 23 24 25 OPINION We are asked to decide whether to grant summary judgment. Summary judgment is intended to expedite litigation and avoid unnecessary and expensive trials. See, e.g., FPL Group, Inc. v. Commissioner, 116 T.C. 73, 74 (2001). A motion for summary judgment will be granted if the pleadings and other acceptable materials, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that a decision may 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 8 1 2 3 4 5 6 7 8 9 10 11 12 be rendered as a matter of law. See Rule 121(b). Where, as is the case here, the validity of the underlying tax lianility is not properly placed at issue, the Court wil.1 review respondent's determination for abuse of discretion. Sego v. Commissioner, 114 T.C. 604, 610 (2000); Goza v. Commissioner, 114 T.C. 176, 181-182 (2000). We therefore must decide whether respondent exercised his discretion arbitrarily, capriciously or without sound basis in fact or law. See Woodral v. Commissioner, 112 T.C. 19, 23 (1999). It is well established that a Settlement 13 Officer may refuse a taxpayer's collection 14 15 16 17 18 19 20 21 22 23 24 25 alternative if the taxpayer has a history of noncompliance and is not in compliance with current tax obligations. Giamelli v. Commissioner, 129 T.C. 107, 111-112 (2007); Balsamo v. Commissioner, T.C. Memo. 2012-109. Based upon our examination of the entire record before us, we find that respondent did not abuse his discretion in determining that the collection action should proceed with respect to petitioners' unpaid liabilities for 2008. Respondent is therefore entitled to summary judgment in his favor. To reflect the foregoing, decision will be 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 9 1 2 3 entered for respondentland an appropriate order will be issued sustaining the determinations set forth in the Notice of Determination Concerning Collection 4 Action(s) Under Section 6320 and/or 6330, dated 5 6 7 January 10, 2012, upon :which this case is based, regarding petitioners' unpaid income tax liabilities for 2008. The order will also grant respondent's 8 motion for summary judgment. THIS CONCLUDES THE COURT'S ORAL FINDINGS OF FACT AND OPINION IN THIS CASE. (Whereupon, at 10:41 a.m., the above- entitled matter was concluded.) 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 866.488.DEPO www.CapitalReportingCompany.com