TAX COURT OPINION

Case: Mark Ranuio
Docket Number: 4185-08L
Judge: Colvin
Opinion Type: bench
Filed: 10/21/2008
Pages: 8

ogvf~ 41v~ UNITED STATES TAX COURT WASHINGTON , D .C . 2021 7 MARK RANUIO, Petitioner, v . Docket No . 4185-08 L COMMISSIONER OF INTERNAL REVENUE , Respondent . STAI' . O R D E R Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it i s ORDERED that the Clerk of the Court shall transmit herewith to petitioner and to respondent a copy of the pages of the transcript of the trial of the above case before Judge Diane L . Kroupa at San Francisco, California on September 22, 2008, containing her oral findings of fact and opinion rendered after the conclusion of trial . In accordance with the oral findings of fact and opinion, an appropriate order will be issued . (Signed) Diane L. Kroupa Judge Dated : Washington, D .C . October 21, 2008 SERVED 0 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 P R O C E E D I N G S 2 (2 :35 p .m . ) Bench Opinion by Judge Diane L . Kroupa September 23, 200 8 Mark Ranuio v . Commissioner Docket No . 4185-08 L THE CLERK : Docket No . 4185-08L, Mark Ranuio . THE COURT : The Court has decided to render ora l findings of fact and opinion in this case, and the followin g represents the Court ' s oral findings of fact and opinion . These oral findings of fact and opinion shall no t be relied upon as precedent in any other case . This benc h opinion is made pursuant to the authority granted by sectio n 7459 ( b) of the Internal Revenue Code , and Rule 152 of the Tax Court Rules of Practice & Procedure . All section references are to the Internal Revenu e Code , and all rule references are to the Tax Court's Rule s of Practice & Procedure . Steven Malcoun appeared on behalf of Petitioner , and Jeremy McPherson appeared on behalf of Respondent . This collection review case is before the Court o n Respondent ' s motion to dismiss for lack of jurisdiction an d to strike as to the 2006 tax year, filed April 9th, 2008 . FINDINGS OF FAC T The record establishes or the parties do no t dispute the following facts . Petitioner resided i n California at the time he filed the petition in this case . Heritage Reporting Corporation (202) 628-4888 3 1 Petitioner was in the trucking business providing services 2 during the tomato season to one major customer, who did not 3 renew the contract with Petitioner . Petitioner als o 4 invested in real estate . 5 Petitioner had to liquidate assets to pay the 6 debts . Petitioner filed an income tax return for 2005 , 7 showing $316,055 of tax due, but Petitioner failed to pa y 8 any amount of the tax due . Respondent assessed the $316,055 9 tax shown due on the return for 2005 . Notices of balanc e 10 due were sent to Petitioner, but Petitioner failed to pay . 11 Respondent issued a final notice, notice of intent 12 to levy and notice of your right to a hearing, on Marc h 13 19th, 2007, regarding tax year 2005 . Petitioner timel y 14 requested a CDP hearing for the tax year 2005 . During the 15 CDP hearing, Petitioner proposed an offer-in-compromise as 16 his collection alternative to the proposed levy . 17 Specifically, Petitioner proposed to pay $25,000 over 15 18 months for his unpaid tax liability for 2005 . At the time 19 that the Petitioner requested the CDP hearing for the ta x 20 year 2005, Petitioner had not yet filed an income tax return 21 for 2006 . 22 The settlement officer advised Petitioner that he 23 needed to be in full compliance with his filing requirements 24 before the officer could consider his OIC for the tax year 25 2005 . The settlement officer asked Petitioner to submi t Heritage Reporting Corporation (202) 628-4888 4 1 evidence that Petitioner had filed a return for 2006 and 2 2007, as well as a completed collection informatio n 3 statement, including copies of the closing statements for 4 the real estate sales . 5 Petitioner submitted an incomplete collectio n 6 information statement that prompted the settlement office r 7 to require Petitioner to provide more information, including 8 a copy of an income tax return for 2006 . . Petitioner file d 9 an income tax return for 2006 that showed a $171,123 tax 10 liability that Petitioner failed to pay . The settlement 11 officer was also trying to obtain information as to where 12 Petitioner lived, as the form 433 showed Petitioner' s 13 representative' s address , not Petitioner's, and no rea l 14 estate, vehicles, or other assets of Petitioner were listed 15 on the form, including income and assets of Petitioner' s 16 wife, despite living in a community property state . 17 Petitioner also failed to pay any estimated taxes 18 for 2007, asserting that he was not required to pa y 19 estimated taxes, as he had no income in 2007 . 20 The settlement officer sent a letter informin g 21 Petitioner that she could not consider Petitioner's offer to 22 compromise the unpaid 2005 liability, because Petitioner was 23 not in full compliance with his filing and paymen t 24 obligations, and did not provide full financial disclosure 25 on the form 433, collection information statement , for 2005 . Heritage Reporting Corporation (202) 628-4888 5 1 Petitioner ' s representative responded by stating 2 that the Memphis service center deemed the offe r 3 processable, that Petitioner ' s wife's income was no t 4 relevant because they filed married - filing-separate returns, 5 and that he did not deem it necessary to file another offer 6 to include Petitioner ' s unpaid tax liabilities for 2006 . 7 Petitioner provided an amended offer to compromise th e 8 unpaid tax liabilities for both 2005 and 2006 by paying a 9 total of $ 35,000, i .e ., the 25,000 as earlier proposed for 10 2005 and $ 10,000 for the $171,139 ( sic) unpaid tax liability 11 for 2006 . 12 The settlement officer explained why she disagreed 13 with the Petitioner ' s representative and requested mor e 14 financial information from Petitioner . Petitioner' s 15 representative failed to provide all the requested „ 1 g+h 0y 16 information . On January 201-h, 2008, Respondent issued t o 17 Petitioner a notice of determination concerning collection 18 actions under section 6320 and / or 6330, notic e 19 determination , sustaining Respondent ' s proposed levy action 20 to collect Petitioner ' s unpaid tax liability for 2005 . 21 Petitioner argues that the settlement officer 22 abused her discretion in failing to address the tax year 23 2006 in the determination notice because once Petitioner 24 provided an amended OIC for both 2005 and 2006, th e 25 settlement officer was under an obligation to hold a CDP Heritage Reporting Corporatio n (202) 628-4888 6 1 hearing for both tax periods . 2 OPINION 3 We are asked to decide whether to dismiss this 4 case for lack of jurisdiction as to the tax year 2006 . Both 5 parties agree that the determination notice only relates to 6 the tax year 2005 and that no determination was issue d 7 regarding 2006 as of the time Respondent filed his motion to 8 dismiss as to the tax year 2006 . 9 It is well established that this Court is a court 10 of limited jurisdiction . Jurisdiction under section 6320 or 11 6330 is contingent upon the issuance of a valid notice o f 12 determination and the filing of a timely petition . Boyd v . 13 14 Commissioner , 451 F .3d 811 (1st Cir . 2006) ; Offiler v . Commissioner , 114 T .C . 492, 498 (2000) . A notice of 15 determination includes a written notice that embodies a 16 determination to uphold a proposed levy or sustain a notice 17 of federal tax lien filing . Salazar v . Commissioner , T .C . 18 Memo 2006-7 . The Court does not have jurisdiction if a 19 notice of determination is not issued to the taxpayer . 20 Kennedy v . Commissioner , 116 T .C . 255 (2001) . 21 Petitioner argues, however, relying upon section 22 301 .6330-1(a)(3), Q&A Proced . & Admin . Regs ., that the 23 settlement officer was under an obligation to hold a CD P 24 hearing for both tax years because she received information 25 regarding both tax years on the amended offer . Heritage Reporting Corporation (202) 628-4888 7 1 Respondent argues that both years need to be i n 2 collection, and because no lien or levy notice was issued to 3 Petitioner for 2006, only the tax year 2005 is before th e 4 Court . In other words, Respondent argues that the 5 regulation does not mean that a taxpayer gets to add a tax 6 year for which no lien or levy action has been taken . 7 We agree with Respondent . The regulation at issu e 8 specifically provides, Q VWill a CDP hearing with 9 respect to one tax period be combined with a CDP hearing 10 with respect to another period?"" 0 11 A -D02, \~To the extent practicable , a CDP hearing P 12 with respect to one tax period shown on a CDP notice will b e 13 combined with any and all other CDP hearings which th e 14 taxpayerArequested . f/ Cam' has 15 We read the regulation as Respondent does . Both 16 years need to be in collection to be part of the same CD P 17 hearing . In other words, one tax year subject to collection 18 proceedings may not be combined with another year for whic h 19 there is no lien or levy action commencedQ because no 6V 20 determination was issued for the tax year 2006 at the tim e 0 21 of the DP ring- for 2095, at the time that the CDP 9 22 hearing for 2005 was held, we have no jurisdiction as to the 23 tax year 2006 . 24 We are aware that a separate determination notice 25 has recently been issued to Petitioner for 2006 . We Heritage Reporting Corporatio n (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 1 4 15 1 6 1 7 1 8 1 9 2 0 2 1 22 23 2 4 25 8 therefore are not denying Petitioner his ticket to Tax Cour t as to the year 2006 . Accordingly , we shall grant Respondent's motion t o dismiss for lack of jurisdiction and to strike as to th e taxable year 2006 . To reflect the foregoing , an appropriate orde r will be issued granting Respondent ' s motion to dismiss fo r lack of jurisdiction and to strike as to the- taxab! e yea r Aooto 1-0 ,)< OID 299 . This concludes the Court ' s oral findings of fac t and opinion in this case . (Whereupon , at 2 :46 p .m ., the bench opinion in the above-entitled matter was concluded . ) / / / / Heritage Reporting Corporation (202) 628-4888