TAX COURT OPINION

Case: Myong & Nam Yi
Docket Number: 8783-10L
Judge: Kroupa
Opinion Type: bench
Filed: 06/27/2011
Pages: 9

UNITED STATES TAX COURT WASHINGTON, DC 20217 KVC MYONG & NAM YI, Petitioners, v. ) Docket No. 8783-10 L COMMISSIONER OF INTERNAL REVENUE, Respondent. 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 to petitioners and to respondent a copy of transcript of June 9, 2011, containing her oral rendered in this case. findings of fact and opinion the above case before Judge Diane L. Kroupa on the pages of the In accordance with the oral findings of fact and opinion, decision will be entered for respondent. (Signed) Diane L. Kroupa Judge Dated: Washington, D.C. June 27, 2011 SERVED Jun 30 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 Judge Diane L. Kroupa June 9, 2011 Myong & Nam Yi v. Commissioner Docket No.: 8783-10L 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. All section references are to the Internal Revenue Code as amended and in effect for the taxable years 2001 and 2002, and all Rule references are to the Tax Court Rules of Practice and Procedure. This is a collection review case involving the filing of a notice of Federal tax lien and a proposed levy to collect petitioners' unpaid liabilities for 2001 and 20.02. This collection review matter is before the Court on respondent's Motion for Summary Judgment, filed on January 11, 2011. The Court scheduled the motion for a hearing at the trial session of the Court in Los Angeles, California on June 6, 2011. Petitioners failed to appear. Steven Roth appeared on behalf of respondent. Heritage Reporting Corporation (202) 628-4888 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 4 FINDINGS OF FACT Petitioners resided in California when they filed the petition for collection review. Petitioners operate a convenience store in Santa Barbara County, California. Respondent issued petitioners a deficiency notice for 2001 and 2002, stating adjustments for unreported income and disallowed expenses. Petitioners failed to file a petition to contest the -deficiencies. Respondent thereafter assessed the tax liabilities. Petitioners failed to pay any of the unpaid tax assessments. Respondent sent peditioners a Notice of Federal Tax Lien Filing -and Your Right to a Hearing advising petitioners that respondent had placed a lien against petitioners' property for unpaid taxes. Petitioners timely filed a request for a hearing with Appeals in response to the lien notice. The hearing request covered both 2001 and 2002. Petitioners timely filed a request for a hearing with Appeals. Petitioners raised no issues other than the underlying liability for 2001 and 2002. Petitioners did not indicate that they sought a collection agreement, an installment agreement, or an offer in compromise. Petitioners failed to provide respondent with requestedsfinancial information. On Form 433-A, Heritage Reporting Corporation (202) 628-4888 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 5 petitioners listed ownership of two properties, but they failed to report whether they earned rental income from either of the properties. Without receiving the requested financial information and supporting documents, respondent was unable to determine whether petitioners qualified for any collection alternatives. Although petitioners did not request a lien withdrawal, respondent reviewed the administrative record and considered whether the criteria for lien withdrawal existed in petitioners' case. Respondent sustained the lien filing and issued petitioners Notice of Determination concerning OL A 9 Collection Action(s) under section 6320 and/or 6330. Petitioners timely filed a petition with this Court. Petitioners continue to argue that they are not liable for the underlying tax liability for 2001 and 2002. To date, petitioners still have failed to propose collection alternatives or provide updated financial information so that respondent can determine petitioners' ability to pay their outstanding tax liabilities. As mentioned previously, respondent filed a summary judgment motion. The Court ordered petitioners to file on or before March 28, 2011, a response or objection to respondent's amended summary Heritage Reporting Corporation (202) 628-4888 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 6 judgment motion. Petitioners failed to file a response or objection. The Court also scheduled the motion for a hearing in Los Angeles, California on June 6, 2011. Petitioners failed to attend the hearing. 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 show that there is no genuine issue as to any material fact and that a decision may be rendered as a matter of law. See Rule 121(b); Elect. Arts, Inc. v. Commissioner, 118 T.C. 226, 238 (2002). The moving party has the burden of proving that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law. See, e.g., Rauenhorst v. Commissioner, 119 T.C. 157, 162 (2002). The party opposing summary judgment must set forth specific facts that show that a genuine question of material fact exists and may not rely merely on allegations or denials in the pleadings. Casanova Co. v. Commissioner, 87 T.C. 214, 216-217 Heritage Reporting Corporation (202) 628-4888 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 7 (1986). Where, as is the case here, the validity of the underlying tax liability is not properly placed at issue, the Court will review respondent's determination for abuse of discretion. Sego v. Commissioner, 114 T.C. 604, 610 (2000); Goza v. Commissioner, 114 T.C. 176, 182 (2000). We 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). Based upon our examination of the entire record before us, we find that respondent did not abuse his discretion in determining to sustain the Federal tax lien filing and to sustain the proposed levy action. Respondent is therefore entitled to summary judgment in his favor. We briefly provide an overview of collection proceedings. If any person liable for Federal tax liability neglects or refuses to make payment within ten days of notice and demand, the Commissioner is authorized to collect the tax by levy on that person's property. See sec. 6331(a). At least 30 days before enforcing collection by levy on the person's property, the Secretary is obliged to provide the person with a final notice of intent to levy, including notice of Heritage Reporting Corporation (202) 628-4888 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 8 the administrative appeals available to the person. See sec. 6331(d). The person is entitled, upon request, to an administrative review hearing before Appeals. Sec. 6330(b) (1). If the taxpayer requests a hearing, he or she may raise at that hearing any relevant issues relating to the unpaid tax or the proposed levy. Sec. 6330(c) (2). Relevant issues include any appropriate spousal defenses, challenges to the appropriateness of collection, and possible alternative means of collection such as an installment agreement or an offer-in-compromise. Sec. 6330(c) (2) (A). After the hearing, the Appeals officer is required to make a determination that addresses issues the taxpayer raised, verifies that all requirements of applicable law and administrative procedures have been met, and balances the need for the efficient collection of taxes with the legitimate concern of the person that any collection action be no more intrusive than necessary. Sec. 6330(c) (3). The record reflects that the Settlement Officer properly verified that all the legal and procedural requirements have been met. The Settlement Officer confirmed, using a transcript of petitioners' accounts, that assessments were properly made for each Heritage Reporting Corporation (202) 628-4888 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 9 year at issue, that appropriate and timely notices were sent regarding the assessments, and that petitioners were properly informed of their rights with respect to the proposed levy action. The record also reflects that the Settlement Officer properly balanced the need for efficient collection of taxes with petitioners' legitimate concern that any collection be no more intrusive than necessary. Petitioners have not raised any valid challenge to the appropriateness of collection, did not assert any spousal defenses, or otherwise offer any collection alternatives. See sec. 6330(c) (2). Accordingly, these issues are now deemed conceded. Rule 331(b) (4). Petitioners have not presented any evidence or persuasive arguments to convince us that respondent abused his discretion. We therefore conclude that respondent did not abuse his discretion in upholding respondent's proposed collection action regarding petitioners' outstanding tax liabilities for each year at issue. To reflect the foregoing, decision will be entered for respondent and an appropriate order will be issued sustaining the determinations set forth in the Notice of Determination Concerning Collection Heritage Reporting Corporation (202) 628-4888 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 10 Action(s) Under Section 6320 and/or 6330, dated April 1, 2010, upon which this case is based, regarding the unpaid liabilities for 2001 and 2002. The order will also grant respondent's motion for summary judgment as amended. This concludes the Court's oral findings of fact and opinion in this case. (Whereupon, at 9:47 a.m., the bench opinion in the above-entitled matter was concluded.) // // // // // // // // // // // // // // // // Heritage Reporting Corporation (202) 628-4888