TAX COURT OPINION

Case: Organic Cannabis Foundation, LLC
Docket Number: 5442-22L
Judge: Goeke
Opinion Type: bench
Filed: 03/12/2025
Pages: 7

Organic Cannabis Foundation, LLC, Et Al., Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent United States Tax Court Washington, DC 20217 Docket Nos. 381-22L, 5442-22L. ORDER Pursuant to Rule 152(b) of the Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit herewith to petitioner and to the Commissioner a copy of the pages of the transcript of the hearing in these cases before Judge Joseph Robert Goeke at San Francisco, California containing his oral findings of fact and opinion rendered at the trial session at which these cases were heard. In accordance with the oral findings of fact and opinion, an appropriate order will be issued. (Signed) Joseph Robert Goeke Judge Served 03/12/25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Bench Opinion by Judge Joseph Robert Goeke 3 March 3, 2025 Organic Cannabis Foundation, LLC, et al., v. Commissioner of Internal Revenue Docket Nos. 381-22L and 5442-22L THE COURT: The Court has decided to render oral findings of fact and opinion in these cases 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 opinion is rendered pursuant to Rule 152 of the Tax Court Rules of Practice and Procedure and Internal Revenue Code section 7459(b). Hereinafter, section references are to the Internal Revenue Code in effect for the years in 15 question. 16 17 18 19 20 21 22 23 24 25 Both these dockets involve proposed collection action by Respondent for the years 2010, 2011, and 2018. 2010 and 2011 have been resolved by proposed Decision documents and will not be further addressed. This bench opinion relates only to 2018. On July 15th, 2024, Respondent filed a supplemental Motion to Dismiss the 2018 taxable year from this collection due process case for lack of jurisdiction on the grounds that Appeals did not make a determination for 2018. A determination by Appeals is required for the Court to 1 2 3 4 5 6 7 8 9 10 11 entertain a case under section 6330(d)(1). 4 In the motion filed by Respondent, there's an assertion that the Petitioner was not entitled to a hearing under section 6330 because the Petitioner's CDP hearing request was after the 30-day deadline for requesting a CDP hearing with Appeals and that the facts did not warrant equitable tolling of the 30-day deadline. See section 6330 and 6320(a)(3)(B) which provides that taxpayers must request a CDP hearing within 30 days beginning 5 days after the date of filing the Notice of Lien. Hereinafter, we refer to this as the 30-day 12 deadline. 13 14 15 16 17 18 19 20 21 22 23 Respondent filed the supplemental motion which is now before us seeking dismissal of the year 2018 after the Appeals Settlement officer had conducted an administrative hearing to consider the equitable tolling issue on remand following our opinion in Organic Cannabis v. Commissioner, 161 T.C. 13 (2023). In that opinion, we held the 30-day deadline is not fixed, it is not jurisdictional, and therefore, is amenable to an analysis of whether equitable tolling would suspend that deadline. We remanded the case to Appeals for a determination whether Appeals found on the facts that equitable tolling 24 was warranted. 25 During the administrative hearing, Appeals found 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 that facts surrounding Petitioner's late hearing request 5 did not warrant equitable tolling for 2018. Accordingly, Appeals found that the Petitioner was not entitled to a CDP hearing for that year and Appeals issued a supplemental Decision letter that found against equitable tolling and sustained the collection action for 2018. Subsequently, this Court set a factful hearing on the evidence surrounding equitable tolling for a de novo review of the Appeals determination on this date in San Francisco, California on the basis of which we are calling these dockets and rendering this bench opinion. Our analysis is to determine whether an independent factual analysis by the Court is required or whether the Court can simply accept Petitioner's factual concession in the present case as the Court would accept a factual concession in deficiency cases or other jurisdictions of 17 the Court. 18 19 20 21 22 23 24 25 After Respondent filed the supplemental Motion to Dismiss, the parties agreed that the facts and circumstances surrounding Petitioner's late request for a CDP hearing did not warrant equitable tolling and Petitioner stipulated to that extent, thus conceding the factual equitable tolling issue. For 2018, the parties agree that the facts surrounding Petitioner's late request do not warrant fact findingJRG equitable tolling, as explained, and that the 30-day deadline should be enforced, and thus, Petitioner's 6 request that a Notice of Determination should be found in lieu of a Decision letter is deemed conceded. We accept this concession as a factual stipulation by Petitioner. Accordingly, it was proper for Appeals to provide an equivalent hearing to Petitioner and to issue a Decision letter as opposed to a Notice of Determination pursuant to Treasury Regulation section 301.6320-1(i)(1). Our jurisdiction in the present case relative to 2018 depends on the determination by Appeals. Section 6330(d). Taxpayers are entitled to petition this Court for review of a Notice of Determination by Appeals and we have jurisdiction to review such a determination. Section 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 6330(d)(1). 16 17 18 19 20 21 22 23 24 25 Our authority to review the Appeals action is based upon a determination by Appeals. Thus, in Organic Cannabis, we held that if equitable tolling was applicable, a Decision letter issued by Appeals should be considered a Notice of Determination and we would be entitled to review such a Decision letter. However, if equitable tolling is not applicable, then the Decision letter would not yield the authority for us to review the Appeals action. Petitioner's concession in the present case causes us to find that the Appeals, determination was JRG in fact, ^a letter and not a Notice of Determination. 7 Appeals must provide a CDP hearing only when the taxpayer timely requests a CDP hearing within the 90-day deadline or the taxpayer's hearing request is deemed timely due to equitable tolling. This is the holding of Organic Cannabis, and Appeals is only required to make a determination at the conclusion of the CDP hearing if, in fact, the hearing request was deemed timely. When the taxpayer fails to submit a CDP hearing request timely or a late file request is not deemed timely due to equitable tolling, Appeals is not required to make a determination. Ramey v. Commissioner, 156 T.C. 1, 11 (2021). The Regulations also provide that a taxpayer who requested a CDP hearing in an untimely fashion should be provided an equivalent hearing and that a Decision letter should be sent as opposed to a Notice of Determination. Treas. Reg. section 301.6320-1(c)(1), (2) Q and A-15 and Q and A-17. See Craig v. Commissioner, 119 T.C. 252, 257 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 (2002). 20 21 22 23 24 25 The law is clear that a Decision letter which is not subsequently deemed to be a Notice of Determination does not yield judicial review. Moorhous v. Commissioner, 116 T.C. 263, 269-20 (2001). On the basis of Petitioner's concession of the factual issue in this case, we find that there's no 30JRGissued a Decision LetterJRGJRG further determination necessary by the Court because we 8 accept Petitioner's factual concession in a similar fashion to the way we would accept any factual concession in our other jurisdictional activities. The absence of a determination and the presence of a Decision letter are grounds for dismissal for lack of jurisdiction. LG Kendrick, LLC v. Commissioner, 146 T.C. 17, 31 (2016) aff'd 684 F. App'x 744 (Tenth Cir. 2017). Accordingly, we will grant the Respondent's Supplemental Motion to Dismiss for 2018 and the appropriate order will be issued. This ends the Court's oral findings of fact and opinion in this matter. (Whereupon, at 10:10 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