TAX COURT OPINION

Case: Noel Nelson
Docket Number: 13212-05L
Judge: Goeke
Opinion Type: memo
Filed: 05/20/2009
Pages: 8

i I T .C . Memo 2.009-10 8 UNITED STATES TAX COURT NOEL NELSON , Petitioner v . COMMISSIONER OFINTERNAL REVENUE , Responden t Docket No . 13212-05L : Filed May-20, 2009 . Noel Nelson ,' pro be . Bradley C . Plbvan , for res p MEMORANDUM OPINION GOEKE, Judge : This case i s lien action with respect to petitioner's unpaid tax liabilitie s for 1996 and 2000 . The issue for decision is whether th e settlement officer abused!,his discretion in sustaining . the lien We hold that the settlement offi cer did not abuse his discretion . MAY 2 0 2 - 2 Background Some of the facts have been stipulated . The stipulation of facts and the accompanying exhibits are incorporated by this reference . Petitioner resided in Maryland at the time of filing his petition . Petitioner did not file income tax returns for 1996 an d 2000 .,, Respondent prepared substitutes for returns for petitione r for both years pursuant to section 6020(b) .' Respondent mailed r'notices of deficiency for 1996 and 2000 to petitioner's las t known address, which has been petitioner's address since at least 1995 . . Petitioner denies receiving the notices . A copy of the 2000 deficiency notice sent by certified mail was returned to respondent because petitioner did not claim it timely . Petitioner did not petition this Court in response to the notices, and respondent . assessed the income tax deficiencies for 1996 and 2000 . Thereafter respondent issued to petitioner notices of intentto .levy for 1996 and 2000 . Petitioner did not request a collection due process hearing (CDP hearing) in response to either levy notice . Respondent began to levy upon petitioner's monthly Social Security benefits . On December 17, 2004, respondent issued to petitioner a noticeof Federal tax lien for 1996 and 2000 . Petitioner timel y Ilt 'Unless otherwise indicated, all section references are to the Internal Revenue Code . requested a CDP hearing . The Appeals Office gave petitione r approximately 2 weeks to submit 11 Form 433-A,' Collection Information Statement for'Wage Earner's and Self -Employe d Individuals '(collection information statement) .- Petitione r requested additional''time! .. In a letter-dated April 11, 200 5 settlement officer assigned to petitioner' s case -again reque a collection information-!statement, advised-petitioner that e had to 'file all delinquent tax . leturns before the ' Appeals ' .Offic e could consider -an offer in-compromise ; and'=specifically pointe d out that petitioner had not fil d returns for 1997, 1999, 2'002 ., 2003, ' and 2004 . The sett1ement officer also set a ,date for a telephone conference . Petitioner requested a face-to-facers hearing . The settlement ; office 'responded that petitioner,~woul d have a face-to-face hearing if the provided the requeste d collection information'statement before the scheduled dat e the telephone conferencel ; '-Peti loner responded by reiteratin g his request fora face-to-face , learing and -sought additional-time to provide the requested ';:'collection - information statements . On the scheduled date for the telephone conference, th e settlement officer called petitioner's representative -and . lef-t 5 provided the collection-information statement and had no t responded to the scheduled=telephone con'ference .i Throughout thi s time petitioner's representative was hospitalized following i - 4 accident that=-left,him a quadriplegic, . On June 17, 2005, . respondent issued a notice of determination sustaining the filin g of a s tax ,.lien - for 1996 and 2000 . ,, Petitioner timely file d petition'with this Court-seeking review . Upon .respondent's . motion ;;, the Court remanded the case to the Appeals Office for a face to-face hearin g :n a letter dated November 21, 2005, the,settlement office r again requested petitioner to-provide a-collection information statement, advised petitioner that he had to,file all . delinquen t taxi returns before the Appeals Office could, consider an offer-in- compromise , and specifically identified the years for whic h petitioner had not filed, returns . During a hearing on January 18,"2006 .,° . petitioner requested an offer-in-compromise based onr both doubt-"as to collectibility„and doubt as to liability . , Peti'tioner also . stated that he had not received . .the ,notices o f defici'ency_for 1996 and 2000 . . The settlement,officer .stated that the notices'were mailed to petitioner's . last known address, whic h is petitioner's current address and has been his address since . 1995(cid:127) .j L' The settlement officer explained that petitioner, had t o file .all, delinquent tax returns to qualify for an offer- i „ compromise . ,, The -settlement .officer, informed ,petitioner ; that he could .pursue .an offer-in-compromise with respondent's Compliance Division once he-had filed his delinquent returns and provided a collection information statement ., On February 10,,200G;;, 44 respondent . issued a supplemental notice-of determination . sustaining the '=lien for 1 9 96 and 2000 .: Discussion' Section 6321 imposest ;a'°lien ii on all property and property .) rights of'a taxpayer liable for taxes where a demand for the- payment of the taxes has been mad e and the taxpayer has', failed t o pay . . Upon request the-taxpaye r i s entitled to an administraltive hearing before an impartial offi cer or employee of the Appeals' " Office .. Sec . 6320(b) . At the hearing - a taxpayer may raise an y relevant issue regarding the col lection action including possibl e collection alternatives such as an offer-in-compromise ., .-Sec g 6330 (c) (2) ,(A) The-taxpayer may also",contest the existenc e amount °of the underlying 'tax liability i f the taxpayer did n'ot I receive a notice of deficiency fo r the tax liability or .ot h erwise have an'opportunity to dispute he -tax'' liability . Sec . 6330 ( c) (2) (B) Sego v .' Commissioner ;' 114 . T .C .- .604, 609 . (200 0 Following the hearing,-the Appeals officer must determione . whether the collection"action should-proceed . The Appeal s officer must consider : "(l) Whether the requirements o f applicable law and adminstrative :1procedure .have'been met ;' ; ( any issues the taxpayer raised , and'(3 ) whether-the collectio n action balances the need1for efficient collection of .taxes,wit h the taxpayer's legitimate concern that any :..collection action°b e no more intrusive than necessary . °,- .Sec . . ;6330 (c) (3) Where the validity of the underlying tax liability ;. is properly at issue, the Court reviews the tax liability de novo . Goza v . Commissioner , 114 T .C . 176, 181-182 (2000) . Where the underlying tax liability is not properly at issue, we review determinations regarding collection actions for abuse of ;discretion . Id . at 182 . The abuse of discretion standard requires the Court to decide whether the Appeals officer's determination was arbitrary, . capricious, or without sound basis in fact or law. . Mailman v . Commissioner , 91 T .C . 1079, .108 4 ,Petitioner's underlying tax liabilities for 1996 and 2000 are,not at issue because petitioner previously had an .opportunity to dispute them . The parties stipulated that respondent issued ;notices of deficiency for 1996 and 2000 . Petitioner testified that he-did not receive-either notice, and the settlement office r acknowledged that the 2000 notice was returned to respondent . taxpayer's ability to contest ., the underlying tax liabilit y depends on whether the taxpayer, received a notice of deficiency or otherwise had an opportunity to dispute the tax liability . Sec . 6330(c)(2)(B) . Petitioner had such an opportunityi .with respect to the 1996 and 2000 tax liabilities because respondent also sent notices of intent to levy for'both years to petitioner at his East known address before issuing the lien notice at issue . Petitioner did not dispute that he :received the,, levy .notices . Because petitionerhad'an opportunity to dispute be underlying tax liabilities in response to the levy notices, petitioner is precluded from raising his tax liabilities in'!th'i s <kk case . See Bell v .-Commissioner 1226 T .C . 356, 358-359 (20b 6 sec . 301 .6320-1(e) (3), Q&A-E7 Proced .-& Admin . Regs . Moreover petitioner did not present any records relating,to his"1 :9961Or 2000 ' taxable income at either the CDP ' hearing or the trial ., ' The settlement officer's determination to sustain the lien was reasonable in view of petitioner ' s repeated failure to , provide the requested collection information statement an d "to' . filehis delinquent returns . Petitioner did not raise any .. appropriate defenses to the'lien or-any possible collection,' alternatives . . Although . .petitioner requested an offer-_in- compromise at the CDP hearing he had note prepared one . In 'f i addition, he did not provide the necessary collection informatio n statement or file the delinquent returns.. Rather, he sought' additional time to'prepare the collection . information statement and the returns . Petitioner stated that he did not know that he was require' d to file the delinquent returns to qualify for an offer-in- compromise . However, the settlement officer had previousl y i advised' petitioner in two separate letters that he had to file G f all delinquent returns to quali~yfor an offer-in-compromise and specifically identified S years for which petitioner had faiJled - 8 - to fl-le in addition to the .2 years at issue . At'the hearing the settlement officer advised petitioner to prepare the delinquent returns, and pursue an offer-in-compromise with respondent's Compliance Division . Since the hearing petitioner has taken steps ;~to resolve his tax liabilities, has retained a new, accountant, and has started to prepare his delinquent returns . We hold that respondent did not abuse,his discretion i n sustaining the lien on the basis of petitioner's failure t submitlgthe requested collection information statement and th e delinquent returns . See Giamelli v . Commissioner , 129 T .C . 107 , 111-112 ( 2007 ) ; Cavazos v . Commissioner , T .C . Memo . 2008-257 ; Gazi vi Commissioner , T .C . Memo . .2007-342 ; Prater v . Commissioner , T .C . . Memo . 2007-241 ; . Roman v . Commissioner ,"T .C . Memo .,12004-20 ; Rodriguez v . Commissioner , T .C . Memo . 2003-153 . q ,To .reflect the foregoing, Decision will be entere d for respondent .