TAX COURT OPINION

Case: Charles Victor & Gina Stebley
Docket Number: 1345-10
Judge: Colvin
Opinion Type: bench
Filed: 02/11/2011
Pages: 6

UNITED STATES TAX COURT 20217 WASHINGTON, D.C. CHARLES VICTOR AND GINA STEBLEY, Petitioners, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) ) ) ) ) ) ) ) Docket No. 1345-10 O R D E R 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 petitioners and to respondent a copy of transcript of Judge Lewis R. Carluzzo at Fresno, California, on January 13, 2011, containing his oral at the above case before Special Trial the conclusion of trial. the pages of the the trial of findings of fact and opinion rendered In accordance with the oral findings of fact and opinion, an appropriate order and decision will be entered for respondent. (Signed) Lewis R. Carluzzo Special Trial Judge Dated: Washington, D.C. February 11, 2011 SERVED EB 14 2011 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 3 Bench Opinion by Special Trial Judge Lewis R. Carluzzo Charles Victor & Gina Stebley v. Commissioner Docket No. 1345-10L January 13, 2011 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. Subsequent section references contained in this bench opinion are to the Internal Revenue Code of 1986, as amended, in effect for the relevant period. Rule references are to the Tax Court Rules of Practice & Procedure. This section 6330(d) proceeding has been assigned pursuant to section 7443A(b) (4) and Rules 180 through 182. This bench opinion is made pursuant to the authority granted by section 7459(b), and Rule 152 This case is before the Court on Respondent's motion for summary judgment, filed July 28, 2010. Petitioners' opposition to Respondent's motion was filed August 25, 2010, and Respondent's response to Petitioners' opposition was filed August 30, 2010. A hearing was conducted on Respondent's motion in Fresno, California, on January 11, 2011. Matthew Williams appeared on behalf of Respondent and argued in support of the motion. Charles Victor Stebley and Gina Stebley appeared pro sese (although we note that Charles Victor Stebley is an attorney), and argued against it. Heritage Reporting Corporation (202) 628-4888 4 Giving due regard to the representations made in Respondent's motion, Petitioners' opposition to Respondent's motion, Respondent's response to Petitioners' opposition, and the arguments presented by the parties at the hearing, the Court is satisfied that there are no genuine issues as to any material facts in this case. Consequently, disposition of the case upon summary judgment is appropriate. Rule 121(b); Sundstrand Corp. v. Commissioner, 98 TC 518, 520 (1992), affd. 17 F.3d 965 (7th Cir. 1994). The undisputed facts relevant to the disposition of Respondent's motion are summarized as follows. In a notice of determination concerning collection action(s) under section 6320 and/or 6330, dated December 16, 2009, Respondent determined that a levy is an appropriate collection action with respect to Petitioners' outstanding 2006 federal income tax liability. That liability was assessed in due course, pursuant to the income tax liability shown on Petitioners' 2006 joint federal income tax return, but never paid (the underlying liability). Petitioners do not challenge the existence or the amount of the underlying liability, nor do they suggest that Respondent's settlement officer failed to 'obtain verification from the Secretary that the requirements of any applicable law or administrative procedure have been met' as required by section 6330(c) (1). Instead, they claim that 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 Heritage Reporting Corporation (202) 628-4888 5 Respondent's determination sustaining the intended levy is an abuse of discretion because they were entitled either to one or the other of collection alternatives proposed to Respondent's settlement officer. During the administrative hearing, Petitioners proposed that as an alternative to a levy, the underlying liability be collected either through an installment agreement or that the liability be placed in the status of currently not collectible. Both collection alternatives were rejected by the settlement officer. We review for abuse of discretion the settlement officer's determination to sustain the proposed levy rather than consider Petitioners' alternatives to that collection action. Goza v. Commissioner, 114 TC 176 (2000). 'Abuse of discretion occurs when a decision is based upon an erroneous view of the law or a clearly erroneous assessment of the facts.' Fargo v. Commissioner, 447 F.3d 706 (9th Cir. 2006). Although Petitioners generally proposed an installment agreement method as a collection alternative to a levy, they did not provide the settlement officer with the specific terms of any such agreement. Furthermore, Petitioners' history of 'noncompliance' as described by the settlement officer (and not disputed by Petitioners) in and of itself justifies the settlement officer's refusal to 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 Heritage Reporting Corporation (202) 628-4888 6 consider an installment agreement as a collection alternative to a levy. See Giamelli v. Commissioner, 129 TC 107 (2007), (citing to the Internal Revenue Manual, section 5.14.1.2(9) (e) at 17,504. Under the circumstances, the settlement officer's rejection of Petitioners' generalized proposal to allow an installment agreement represents neither an 'erroneous view of the law' nor 'a clearly erroneous assessment of the facts'. We find there is no abuse of discretion in the settlement officer's refusal to consider an installment agreement as a collection alternative to a levy. We recognize that Petitioners' noncompliance with other federal tax obligations would not preclude placing the underlying liability in currently-not-collectible status, but this is so only upon a showing that a proposed levy or the proposed levy would result in a financial hardship to Petitioners to such an extent that they would be unable to satisfy their basic living expenses. See Vinatieri v. Commissioner, 113 TC number 16 (2009). Petitioners' financial information, even though conflicting, submitted to the settlement officer hardly suggests that Petitioner would endure a financial hardship so severe so as to interfere with their ability to satisfy their basic living expenses. In this regard, we note that the events alleged to have been suffered by Petitioners as 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 Heritage Reporting Corporation (202) 628-4888 7 described in their opposition to Respondent's motion and during the hearing are not considered in our review of the settlement officer's determination. See Keller et al. v. Commissioner, 568 F.3d 710 (9th Cir. 2009), citing Robinette v. Commissioner, 439 F.3d 455, 458 (8th Cir. 2006). The settlement officer's rejection of Petitioners' proposal to place the underlying liability in the status of currently not collectible is not an abuse of discretion. It follows that the determination made in the above-referenced notice of determination should be sustained. Nevertheless, as pointed out in footnote 10 in Keller, sustaining Respondent's proposed collection action in this proceeding is not 'necessarily the end of the road'. If in fact any change in Petitioners' circumstances would affect the determination here in dispute, then jurisdiction over that dete mination is retained by Respondent's office of appeals. See section 6330(d) (2). To reflect the foregoing, an appropriate order and decision for Respondent will be entered. This concludes the Court's oral findings of fact and opinion in this case. (Whereupon, at 12:13 p.m., the bench opinion in 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 Heritage Reporting Corporation (202) 628-4888