TAX COURT OPINION

Case: Kristen Kathy Black
Docket Number: 8608-10S
Judge: Haines
Opinion Type: summary
Filed: 06/14/2011
Pages: 10

T.C. Summary Opini,on 2011-69 UNITED S 'ATES TAX COURT KRISTEN KATHY BLACK, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent docket No. 8608-1OS. Filed June 14, 2011. Kristen Kathy Black, pro se. Nick G. Nilan, for respondent . HAINES, Judge: This case was heard pursuant to the provis i.ons of section 7463 of the Internal Revenue Code in effect when the petition was filed.1 Pursuant to section 7463 (b) , è.he decisièn to be entered is not reviewable by any other court, and Unless otherwis indicated, section references are to the Internal Revenue Code as amended. this opinion shall not be treated as precedent for any other - 2 - case. Petitioner filed a petition with this Court in response to a Notice of Determination concerning Collection Action (s) Under Sections 6320 and/or 6330 (notice of determination) for 2006. Pursuant to section 6330 (d) , petitioner seeks review of respondent's determination that respondent's settlement officer did not abuse her discretion in sustaining the filing of a notice of Federal tax lien and denying an installment agreement. Background Petitioner maintained her legal residence in the State of Washington at the time her petition was filed. Petitioner filed her 2006 Form 1040, U.S. Individual Income Tax Return, on August 12, 2008, reporting tax due of $10,228. Petitioner did not make any payments with her tax return for 2006, and the tax was assessed on September 15, 2008 . Previously petitioner had requested and received an extension of time' to file her 2007 Form 1040, extending the due date to October 15, 2008. Petitioner attempted to resolve -her 2006 tax liability through the use of an installment agreement . An installment agreement was entered into on September 10, 2008, but she defaulted on the agreement and it terminated on March 2, 2009. On that date, respondent issued a notice of intent to levy for - 3 - 2006. Petitioner did not request a collection-due process hearirig with respect to the notice of intent to le#y. Ön March 6, 2009, an Internal Revenue Service (IRS) employee spoke with petitioner about the collection of her outstanding tax liability. Petitioner informed the employee that she was not worki g and could not pay off the tax liability. The employee requested current financial information, but petitioner did not have the information available at the time of- the call. The" employee-mailed petitioner a Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, and advised her to call -back no later than March 16, 2009. The employee also informed petitioners that respondent had not received her 2007 tax return.e Petitioner was advised that she needed| to file her 2007 return and was warned of possible lien and levy enforcement actions. Levies were made with respect to petitioner's 2006 tax liability on May 22 and July 6, 2009, of $1,152.03 and $495.87, respectively. On June 16, 2009, petitioner requested another installment agreenent to resolve her 2006 income tax liabil-ity. She wa informed 'chat an installment agreement could not be granted until the delinquent 2007 return was filed. A deadline of July 16, 2009, was set for petitioner to file her délinquent return. Petitionar was informed that this date would be the ultimate deadline to file anddwas again warned of possible 'lien - 4 - and levy enforcement actions. Respondent did not receive petitioner's 2007 return until October 14,, 20093,s 3 months after the- July 16; 2009, deadline. On October 2, 2009, a notice of Federal.tax lien wás filed against petitioner with respect to the tax liability for 2006 On October 6,, 2009, respondent issued a Noticelof Federal Tax Lien Filing and Your Right *to a Hearing Under IRC 6320 (CDP notice):. The CDP.notice advised petitioner that a notice of Federal tax lien had been filed and that she could request a hearing with the IRS Office of Appeals. Petitioner filed a Form 12153, Request for a Collection Due Process or Equivalent Hearing, dated October 20,- 2009. " On the Form 12153, petitioner checked the box for lien withdrawal and for an installment,agreement as a collection alternative. Enclosed with petitioner's Form 12153 was a Form 12412, Operations Assistance Request, from Letitia Sanches of the Taxpayer Advocate Service, requesting that Ms. Sanches be contacted if anything additional waserequired. On December 28, 2009, respondent's settlement officer sent petitioner a letter scheduling a telephone conferende for January 19, 2010.3 The.letter informed petitioner that withdrawal óf the notice of Federal tax lien could be considered during the hearing and enclosed-a Form 12277, Application for Withdrawal of Filed Form 668 (Y), Notice of Federal Tax Lien. The letter also,advised - 5 - petit oner that in-order- for the settlement officer to consider alternative collection methods, spetitioner must have filed all Federal tax returns required to be filed. In addition, the letter specifically requested petitioner to provide a completed Form 433-A and a copy of her 2008 tax return by January 11, 2010, in orger for the settlement officer to consider collection alter atives. The settlement officer never requested or received any additional information fróm Ms. -Sancheá regarding petitioner's hearing. On January 22,' 2010, the settlement officer sent a letter to petitioner informing her that she had not received a telephone call or.any of the requested information for the hearing. The - letter requested petitioner to provide any information for consideration within 14 days. O February 18, 2010, petitioner faxed a letter to the settleinent officer explaining that she had recently been out of the coùntry. The letter informed the settlement officer that petitioner would all on February 22, 2010, to discuss her case. The settlement of icer did nod receive a telephone call or voice messagg and did n t receive petitioner's delinquent 2008 tax return|or any of she requested financial information On March 11, 2010, -respondent's Office of Appeals issued to petiti<pner a noti e of'determination that sustained the -filing of the notice of Federal tax lien for 2006. In response to the - 6 - notice of determination, petitioner timely mailed her petition to this Court on April 9, 2010, and it was filed on April 12, 2010 See sec. 6330(d) (1); sec. 301.6330-1(f), .Proced. & Admin. Regs., Petitioner does not dispute the'underlying tax liability, for 2006. I. Standard of Review Discussion Because the underlying tax liability is snot at issue, this Court's review under section 6330 is for abuse of discretion. See Sego v. Commissioner, 114 T.C. 604, 610 .(2000); Goza v. Commissioner, 114 T.C. 176, 182 (2000) . This standard requiress the Court to decide whether the settlement officer's denial of petitioner' s requests to withdraw the Federal tax lien and consider an installment agreement was-arbitrary, capricious, or a without sound .basis in fact or law. See Woodral v. Commissioner, 112-T.C. 19, 23 (1999) ; Keller v. Commissioner, T.Ci Memor2006 166, affd. in~part 568 F.3d 710 (9th Cir. 2009) ; Fowler v. Commissioner, T.C. Memo. 2004-163. II,. Withdrawal of Notice of Federal Tax Lien The Federal Government obtains a lien against a "all property and rights to property, whether real or personal" of · any person liable for Federal taxes upon demand for payment and. failure" to pay. Sec. 6321; Iannone v. Commissioner, -122 T.C.e 287., 3293 (2004). The lien arises automatically on the.date of assessment - 7 - and continues until the tax liability is satisfied~or the estatute of limitations bars enforcement of the lien. Id. The notice of Federal tax lien is filed with the appropriate State office or other government office in order to validate the lien against any purchaser, holder of a security interest, mechanic's lienor," or judgment lien cr ditor. See sec. 6323(a); Lindsay v. Commissioner, T.C. Memo. 20017285, affd. 56 Fed. Appx. 800 (9th Cir. 2003). Section 6323(j) (1) provides in pertinent part: SEC. 6323(j). Withdrawal of Notice-in Certain Circumstances.-- (2) In general.--The Secretary may withdraw a notice of a lien filed under this section * Secretary determines that-- * * if the (A) the filing of such notice was premature or¡~otherwise not administrative procedures of in accordance with the Secretary, (B) the taxpayer has entered into an agreement under section 6159 to satisfy the tax liability for which the lien was imposed by means of agreement provides otherwise, installment payments, unless such (C) the withdrawal of such notice will facilitate the collection of liability, or the tax (D) with the consent of the taxpayer or th National Taxpayer Advocate, wi hdrawal of such notice would be in the be t interests of by the National Taxpayer Advocate) and the United States. the taxpayer the (as determined - 8 - An.income itax liability was assessed against petitioner for 2006 on September 15, 2008. - Respondent issued a notice of levy on March 2,-2009, to which petitioner did not respond.a A notice o.f Federal tax lien was filed on October 2, 2009. Filing of the tax lien took place after assessment and notice and demand, and at each step petitioner was properly notified. Therefore, the notice of÷Federal tax lien was not filed prematurely. Entering into an installment agreement does not preclude the filing of a Federal tax lien, nor is the- Commissioner required to withdraw a Federal tax lien after an installment agreement has become effective. See Crisan v. Commissioner, T.C. Memo. 2007- 67; Ramirez v. Commissioner, T.C. Memo. 2005-179; .Stein v. Commissioner, T.C. Memo. 2004-124. There is no evidence suggesting that the filing of the notice of Federal tax 'lien would impair petitioner' s ability to pay her outstanding liabilities . Section 6323 (j) (1) is permissive. .The Commissioner "may" withdraw a Federal tax lien pursuant to section 6323(j) (1), but the settlement officer's denial of petitioner's request to have the Federal tax lien withdrawn was not arbitrary, capricious, or without sound basis in fact or law. On the facts presented, this Court holds that the settlement officer did not abuse her discretion in sustaining the filing of the notice of Federal tax lien. See Crisan v. Commissioner, supra; Ramirez v. Commissioner, supra; Stein v. Commissioner, supra. III. Installment Agreement denerally, a taxpayer mu t be in compliance with all filing requirements and must provide requested financial information before an installment agreement may be considered.2 See Giamelli v. Commissioner, 129 T.C. 107 111 (2007); Orum v. Commissioner, 123 T.C. 1, 13 (2004), affd. 412 F.3d 819 (7th Cir. 2005). Petiti ner has not shown that the filing requirements for all required tax returns have been met, nor has she provided the financ al informa ion necessary to support the granting of an installment agreement. The settlement officer's denial of an instal ment agreement was notaarbitrary, capricious, or without sound asis in fact or law. Therefore, the settlement officer did not abuse her discretion. I reaching hese holdings, the Court has considered all argumerits made and, to the extent not mentioned, concludes that they are moot, irrelevant, or without merit. 2C llection alternatives may be considered where a taxpayer the liability would create undue Sec. 6343(a) (1) (D);;Vinatieri v. Commissioner, 133 alleges that collection of hardship. T.C. 392, 401 (2009). current financial data to the Commissioner to prove undue hardshilp. Vinatieri v. Commissioner, supra at 398. Petitioner has not submitted complete and current financial data to respondent. A taxpayer must submit complete and To reflect the foregoing, - 10 - Decision will be entered for respondent .1