TAX COURT OPINION

Case: Ginger Harmornick
Docket Number: 10230-00L
Judge: Armen
Opinion Type: memo
Filed: 09/03/2002
Pages: 31

T.C. Memo. 2002-219 STAT. UNITED STATES TAX COURT GINGER HARMORNICK, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. 10230-00L. Filed September 3, 2002. Ginger Harmornick, pro se. Wendy S. Harris and Julie A. Pals, for respondent. MEMORANDUM OPINION ARMEN, Special Trial Judoe: This matter is before the Court on respondent's Motion For Summary Judgment And To Impose A Penalty Under I.R.C. Section 6673, filed February 8, 2002, SERVED SEP 3 agg - 2 - pursuant to Rule 121.1 Respondent contends that there is no dispute as to any material fact with respect to this levy action, and that respondent's determination to proceed with collection of petitioner's outstanding tax liabilities for 1990 through 1993 should be sustained as a matter of law. Summary judgment is intended to expedite litigation and avoid.unnecessary and expensive trials. Fla. Peach Corp. v. Commissioner, 90 T.C. 678, 681 (1988). Summary judgment may be granted with respect to all or any part of the legal issues in controversy "if the pleadings, answers to interrogatories, depositions, admissions, and any other acceptable materials, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that a decision may be rendered as a matter of law." Rule 121(b); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), affd. 17 F.3d 965 (7th Cir. 1994); Zaentz v. Commissioner, 90 T.C. 753, 754 (1988); Naftel v. Commissioner, 85 T.C. 527, 529 (1985). The moving party bears the burden of proving that there is no genuine issue of material fact, and factual inferences will be read in a manner most favorable to the party opposing summary judgment. Dahlstrom v. Commissioner, 85 T.C. 812, 821 (1985); Jacklin v. Commissioner, 79 T.C. 340, 344 (1982). ¹ Unless otherwise indicated, all section references are to the Internal Revenue Code, as amended, and all Rule references are to the Tax Court Rules of Practice and Procedure. As explained in detail below, there is no genuine issue as to any material fact, and a decision may be rendered as a matter of law. Accordingly, we shall grant respondent's motion for summary judgment. Background The record establishes and/or the parties do not dispute the fcllowing. A. Petitioner's Failure To File Petitioner has a history of failing to file Federal income tax returns. Specifically, petitioner failed to file Federal income tax returns for 1990 through 1993, the four taxable years in issue. The record suggests that petitioner also failed to file Federal income tax returns for 1994 through 1999. B. Respondent's Notices of Deficiency On May 17, 1994, respondent issued a notice of deficiency to petitioner for 1990. In the notice, respondent determined a deficiency in petitioner's Federal income tax in the amount of $3,121, an addition to tax under section 6651(a)(1) in the amount of $585 for failure to file a tax return, and an addition to tax under section 6654(a) in the amount of $148 for failure to pay estimated tax. The deficiency in income tax was based on respondent's determination that petitioner failed to report wages, unemployment compensation, and interest income as reported to respondent by various third-party payors. - 4 - On April 13, 1995, respondent issued separate notices of deficiency to petitioner for 1991, 1992, and 1993. In the notices, respondent determined deficiencies in, and additions to, petitioner's Federal income taxes as follows: Year Deficiency Sec. 6651(a)(1) Sec. 6654(a) Additions to Tax 1991 1992 1993 $198 15,240 5,781 $100 3,810 1,445 --- $663 239 The deficiencies in income taxes were based on respondent's determination that petitioner failed to report nonemployee compensation, interest income, and unemployment compensation as reported to respondent by various third-party payors. Respondent's records reflect that the notices of deficiency were not returned undelivered to respondent by the U.S. Postal Service. Notably, petitioner has not denied that she received the notices. C. Assessment of Petitioner's Liabilities Petitioner did not file a petition for redetermination with this Court challenging the notices of deficiency. See sec. 6213(a). Accordingly, on October 24, 1994, respondent assessed the determined deficiency and additions to tax for 1990, as well as statutory interest. On that same day, respondent sent petitioner a notice of balance due, informing petitioner that she had a liability for 1990 and requesting that she pay it. Petitioner failed to do so. On November 13, 1995, respondent - 5 - assessed the determined deficiencies and additions to tax for 1991, 1992, and 1993, as well as statutory interest. On that same day, respondent sent petitioner notices of balance due, informing petitioner that she had liabilities for 1991, 1992, and 1993, and requesting that she pay them. Petitioner failed to do so. . . D. Respondent's Final Notice and Petitioner's Response On October 25, 1999, respondent sent petitioner a Final Notice--Notice of Intent to Levy and Notice of Your Right to a Hearing (the Final Notice). The Final Notice was issued in respect of petitioner's outstanding liabilities for 1990 through 1993. On November 23, 1999, petitioner submitted to respondent Form 12153, Request for a Collection Due Process Hearing. Petitioner's request stated in pertinent part: "The basis of my complaint is what I believe to be the lack of a valid summary record of assessment pursuant to 26 CFR § 301.6203-1." E. The Administrative Hearing On June 22, 2000, Veronica Lindersmith of respondent's Appeals Office in Las Vegas, Nevada, conducted an administrative hearing by way of a telephone conference with petitioner's representative, Thomas W. Roberts.2 By letter dated August 8, 2 The conference was conducted by telephone in order to accommodate Mr. Roberts, whose office was located out of state. - 6 - 2000, the Appeals officer provided Mr. Roberts with copies of Forms 4340 (Certificate of Assessments, Payments, and Other Specified Matters) for each of the years 1990, 1991, 1992, and 1993. Copies of the Forms 4340 are attached to respondent's motion for summary judgment, which was served on petitioner. F. Respondent's Notice of Determination On August 28, 2000, respondent sent petitioner a Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330. The notice stated that the Appeals Office had determined that it was appropriate for respondent to proceed with the collection of petitioner's outstanding tax liabilities for 1990 through 1993. G. Petitioner's Petition On September 29, 2000, petitioner filed with the Court a petition for lien or levy action seeking review of respondent's notice of determination.3 The petition includes allegations that: (1) The Appeals officer failed to obtain proper verification from the Secretary that the requirements of all applicable laws and administrative procedures were met as required by section 6330(c)(1); and (2) the Appeals officer failed to provide petitioner with requested documents such as a summary record of assessment. 3 At the time that the petition was filed, petitioner resided in Henderson, Nevada. - 7 - H. Respondent's First Motion For Summary Judgment On July 20, 2001, respondent filed a Motion For Summary Judgment And To Impose A Penalty Under I.R.C. Section 6673. Respondent's motion was called for hearing in Las Vegas, Nevada, on September 10, 2001. Petitioner appeared at the hearing and informed the Court that she intended to file tax returns for the years in issue. In response, counsel for respondent informed the Court that if petitioner were in compliance and if she were to concede the case, respondent would withdraw his request for the inposition of a penalty under section 6673. Under the circumstances, the Court denied respondent's motion for summary judgment in order to allow petitioner time to file her tax returns. I. Respondent's Second Motion for Summary Judgment Contrary to her representation to the Court, petitioner failed to file tax returns for the years in issue or to work with respondent's counsel toward that end. As a result, on February 8,- 2002, respondent filed a second Motion For Summary Judgment And To Impose A Penalty Under I©.R.C. Section 6673. It is this motion that is before us at this time. In his motion, respondent asserts that there is no dispute as to a material fact and that respondent is entitled to judgment as a matter of law. In particular, respondent contends that because petitioner received the notices of deficiency dated May - 8 - 17, 1994, and April 13, 1995, she cannot challenge the existence or amount of her underlying tax liabilities for 1990 through 1993 in this collection review proceeding. Respondent further contends that the Appeals officer's review of Forms 4340 with regard to petitioner's account for 1990 through 1993 satisfied the verification requirement imposed under section 6330(c)(1). . The Court issued a notice of filing to petitioner directing her to file an objection, if any, to respondent's motion. Petitioner failed to respond. Thereafter, pursuant to notice, respondent's motion was called for hearing at the Court's motions session in Washington, D.C. Counsel for respondent appeared at the hearing and presented argument in support of the pending motion. Although there was no appearance by or on behalf of petitioner at the hearing, she did file a statement pursuant to Rule 50(c). Discussion Section 6331(a) provides that if any person liable to pay any tax neglects or refuses to pay such tax within 10 days after notice and demand for payment, the Secretary is authorized to collect such tax by levy on the person's property. Section 6331(d) provides that 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 the administrative appeals available to the person. - 9 - Section 6330 generally provides that the Commissioner cannot proceed with collection by levy until the person has been given notice and the opportunity for an administrative review of the matter (in the form of an Appeals Office hearing) and, if dissatisfied, with judicial review of the administrative determination. See Davis v. Commissioner, 115 T.C. 35, 37 (2000); Goza v. Commissioner, 114 T.C. 176, 179 (2000). Section 6330(c) prescribes the matters that a person may raise at an Appeals Office hearing. In sum, section 6330(c) provides that a person may raise collection issues such as spousal defenses, the appropriateness of the Commissioner's intended collection action, and possible alternative means of collection. Section 6330(c)(2) (B) provides that the existence and amount of the underlying tax liability can be contested at an Appeals Office hearing only if the person did not receive a nctice of deficiency for the tax in question or did not otherwise have an earlier opportunity to dispute the tax liability. See Seco v. Commissioner, 114 T.C. 604, 609 (2000); Goza v. Ccmmissioner, supra. Section 6330(d) provides for judicial review of the administrative determination in the Tax Court or a Federal District Court, as may be appropriate. A. Summary Judoment Petitioner asserts that the Appeals officer failed to obtain verification from the Secretary that the requirements of all applicable laws and administrative procedures were met as - 10 - required by section 6330(c)(1). The record shows otherwise. In particular, the Appeals officer obtained and reviewed transcripts of account (Forms 4340) with regard to petitioner's taxable years 1990 through 1993. Federal tax assessments are formally recorded on a record of assessment. Sec. 6203. "The summary record, through supporting records, shall provide identification of the taxpayer, the character of the liability assessed, the taxable period, if applicable, and the amount of the assessment." Sec. 301.6203-1, Proced. & Admin. Regs. Section 6330(c)(1) does not require the Commissioner to rely on a particular document to satisfy the verification requirement imposed therein. Roberts v. Commissioner, 118 T.C. 365, 371 n.10 (2002), on appeal (ll" Cir. July 26, 2002); Weishan v. Commissioner, T.C. Memo. 2002-88; Lindsev v. Commissioner, T.C. Memo. 2002-87; Tolotti v. Commissioner, T.C. Memo. 2002-86; Duffield v. Commissioner, T.C. Memo. 2002-53; Kuglin v. Commissioner, T.C. Memo. 2002-51. In this regard, we observe that the Forms 4340 on which the Appeals officer relied contained all the information prescribed in section 301.6203-1, Proced. & Admin. Regs. See Weishan v. Commissioner, supra; Lindsey v. Commissioner, supra; Tolotti v. Commissioner, supra; Duffield v. Commissioner, supra; Kuolin v. Commissioner, supra. Petitioner has .not alleged any irregularity in the assessment procedure that would raise a question about the - 11 - validity of the assessments or the information contained in the Fcrms 4340. See Davis v. Commissioner, supra at 41; Mann v. Ccmmissioner, T.C. Memo. 2002-48. Accordingly, we hold that the Appeals officer satisfied the verification requirement of section 6330(c)(1). Cf. Nicklaus v. Commissioner,.117 T.C. 117, 120-121 (2001). Petitioner also contends that the Appeals officer failed to provide her with requested documents such as a summary record of assessment. We note that section 6330(c)(1) does not require that the Appeals officer provide the taxpayer with a copy of the verification at the administrative hearing. Nestor v. Ccmmissioner, 118 T.C. 162, 166 (2002). In any event, as previously discussed, the record shows that the Appeals officer provided petitioner with Forms 4340 for all of the years in 1ssue. Petitioner has failed to raise a spousal defense, make a valid challenge to the appropriateness of respondent's intended ccllection action, or offer alternative means of collection. These issues are now deemed conceded. Rule 331(b)(4). In the absence of a valid issue for review, we conclude that respondent is entitled to judgment as a matter of law sustaining the notice of determination dated August 28, 2000.4 4 Petitioner has not expressly challenged the existence or amount of her underlying tax liabilities in this collection review proceeding. However, to the extent that one might regard (continued...) - 12 - B. Imposition of a Penalty Under Section 6673 We turn now to that part of respondent's motion that moves for the imposition of a penalty on petitioner under section 6673. As relevant herein, section 6673(a)(1) authorizes the Tax Court to require a taxpayer to pay to the United States a penalty not in excess of $25,000 whenever it appears that proceedings have been instituted or maintained by the taxpayer primarily for delay or that the taxpayer's position in such proceeding is frivolous or groundless. The Court has indicated its willingness to impose such penalty in lien and levy cases. See Pierson v. Commissioner, 115 T.C. 576, 580-581 (2000). 4(...continued) the hearing on Sept. 10, 2001, petitioner's statement at that she intended to file tax returns for the years in issue as tantamount to such a challenge, we note that a taxpayer's receipt of a notice of deficiency, coupled with the taxpayer's failure to file a petition for redetermination with this Court, bars the taxpayer from challenging the existence or amount of his or her underlying tax liability. In this regard, we note that the notices of deficiency that were issued to petitioner were not returned undelivered to respondent by the U.S. Postal Service, and that petitioner has not denied that she received those notices. a triable issue of of her underlying liabilities. In any event, petitioner has adduced nothing to create fact regarding the existence or amount of any Sec. 6330(c)(2) (B). - 13 - In the present case, we shall give petitioner the benefit of the doubt and not impose a penalty under section 6673. Nevertheless, we admonish petitioner that the Court will consider imposing such a penalty should she return to the Court in the future and advance frivolous or groundless arguments or institute or maintain an action primarily for delay. In order to give effect to the foregoing, An order and decision will be entered granting respondent's motion for summary iudament and denying respondent's request for the imposition of a penalty under section 6673(a). Internal Revenue Service Department of the Treasury Date: March 15, 2000 Ginger Harmornick 320 Claro Ct. Henderson, NV 89014 Dear Ms. Harmornick: Western Region Glendale Appeals Office 330 N. Brand Ave., Ste..600 Glendale, CA 91203 Person to contact: Michael Glyer Telephone: (818) 242-8143 Refer reply to: AP:GLE:MG Identifying Number: 9-96224 ~ - · Thank you for replying to my previous letter and providing instructions for involving your representatives. fax states, Your three pages of questions I'm sending with this cover letter need to be satisfactorily answered in writing...." "Before any conference or hearing can take place the . Please remember that you initiated the request Process (CDP) hearing with Appeals by filing Form 12153. If you do not want a hearing, please sign and return the enclosed Form 12256. for a Collection Due I have answered many of your questions below, however, it is important to point out that allows challenges to the underlying liability to be raised in a CDP hearing if the person did not receive a statutory notice of deficiency or otherwise have an opportunity to dispute such tax liability. I have enclosed the text of sections 6320 and 6330 for your reference. Internal Revenue Code section 6330(c)(2)(B) only Here are my replies to your questionnaire: I provide these 1. Michael Glyer, Series 930, GS-13 Appeals Officer. answers in my capacity as the Appeals employee who has been assigned to handle your request to have a Collection Due Process Hearing with Appeals: 2. Nc. 3. Ycu state it is not necessary to answer if there is a negative answer of 2. 4. You state it is not necessary to answer if there is a negative answer of 2. I reviewed the transcript of your account and copies of 5. statutory notices of deficiency sent to you with respect to your 1990, the 1991, 1992 and 1993 Federal based upon information returns sent rece.1ved in the respective years income tax liabilities. The latter were to the IRS by payers of income you 6. No. 7. The payers did not state from what geographic location your income derived, however, since you would know that yourself, .please feel to provide that information if you feel it is relevant to your liability. free 8 & 9. The meaning of these questions is not easily interpreted -- 1.e. "was earned [client] was a non-resident alien" and "was earned [client] was a resident in a U.S. Possession?" However, it can be said that .the determination of your tax liability for 1990-1993 did not requireca finding that you were a nonresident alien or a resident o U.S. possession. . . • 10. What is an "appointment affidavit"? 11. Your tax liabilities derive from Internal Revenue Code subtitle A, Chapter 1, subchapter A; subtitle A, Chapter 2; and subtitle F, chapter 68, subchapter F. 12. No. 13. You state it is not necessary to answer if there is a negative answer of 12. I hope you will find these responses satisfactory. By April 10, 2000 please send me anything you would like to have considered with respect (1) challenges to the appropriateness of collection actions, and (2) your proposal for paying these liabilities. to the proposed levy that bears on Sincerely, Michael Glyer Appeals Officer cc: Thomas W. Roberts, CPA Ray Pope Internal Revenue Servich Las Vegas Appeals OfficL_) 4750 W. Oakey Las Vegas, NV 89102 Date: June 15, 2000 Thomas W. Roberts, CPA 8190 3eechmont #108 . Cincinnati, Ohio 45255 Depa g nt of the Treasury WesterE egion • Person to Contact: . Veronica Lindersmith Contact Person ID#: 88-23043 Telephone Numbers: 702-455-1399 FAX: 702-455-1175 Refer Reply to: AP:WR:SW:LV:VL In Re: Ginger Harmornick - CDP Teleconference Tax Period(s): 1990, 1991, 1992, 1993 Type of Tax: 1040 Date & Time of Conference: 6/22/2000 at 1:00 p.m. Pacific time PLACE: TELECONFERENCE Dear Mr. Roberts: This letter is to memorialize our conversation this afternoon. At 12:50 p.m., Pacific Daylight Savings Time, you called to cancel our teleconference scheduled for 1:00 p.m. today because you were unable to schedule a court reporter for the teleconference. We rescheduled the teleconference for June 22, 2000 at 1:00 p.m. Pacific Daylight Savings Time to allow you time to obtain the services of a court reporter. I'll call you at (352)383-9100. If you prefer that I call at another number, please let me know prior to the scheduled date and time. Please be advised, we will not be able to reschedule this conference again. If we cannot hold this conference scheduledfor 6/22/2000 at 1:00 p.m., I will make a determination based upon the information available in your administrativefile. Shortly thereafter, a Notice of Determination will be issued to you providing an opportunityfor you to pursue this matter in the appropriate Federal Court. If you have any questions, please call me at the number shown above. Thank you for your cooperation. . Cc: Ginger Harmornick Sincerely, Veronica Lindersmith Settlement Officer Internal Revenue Service m Las Vegas Appeals pffice (...) 4750 W..Oakey Las Vegas, NV 89102 Date: August 8, 2000 Thomas W. Roberts, Power of Attorney 8190 Beechmont #108 Cincinnati, Ohio 45255 Departm Western of the Treasury on Person to Contact: Veronica Lindersmith Contact Person ID#: 88-23043 Telephone Numbers: 702-455-1399 FAX: 702-455-1175 Refer Reply to: AP:WR:SW:LV:VL In Re: Collection Due Process Hearing for Ginger Harmornick Tax Period(s): 1990, 1991, 1992, 1993 Type of Tax: 1040 Dear Mr. Roberts: Enclosed are the certified assessment documents you requested. Per our conversation during the hearing, please respond within 10 days of the date of this letter (by August 18, 2000) if you have any new factual information to add to the information already on file. You mentioned that Ms. Harmornick was interested in resolving her tax liabilities with a 24 month installment agreement. As we discussed during the teleconference, Ms. Harmornick must first file all required income tax returns. We show no return filed for 1994, 1995, 1996, 1997, 1998, or 1999. If she prefers to resolve the liabilities with an installment agreement, she may prepare the returns and mail them to Ogden Service Center, Ogden Utah 84201. If she owes on these delinquent returns and is unable to pay the amounts in full with the returns, she should take the "Notice and Demand" letters for these returns to the Taxpayer Service counter in the Las Vegas IRS office at 4750 W. Oakey Blvd., Las Vegas, NV 89102 and they will discuss an installment agreement with her at that time. If you have any questions, please call me at the number shown above. Sincerely, Veronica Lindersmith Settlement Officer Cc: Ginger Harmornick Intçpnal Revenue Servic Las Vegas AM Offic 4750 W. Oakey Las Vegas, NV 89102 .. Date: May 16, 2000 Thomas W. Roberts 8190 Beechmont #108 Cincinnati, Ohio 45255 .. . . Depa Westerwegion ut of the Treasury Person to Contact: Veronica A Lindersmith Contact Person ID#: 88-23043 Telephone Numbers: 702-455-1399 FAX: 702-455-1175 Refer.Reply to: AP:WR:SW:LV:val In Re: Collection Due Process- Harmornick Tax Period(s): 1990, 1991. 1992, 1993 Date & Time of Conference: 6/15/2000, Thurs. At 1:00 PM Pacific Daylight Sygs Time PLACE: TELECONFERENCE Dear Mr. Roberts: This letter is to confirm our telephone conversation today. You called to request a hearing appointment to discuss your client, Ms. Harmornick's, Collection Due Process case involving her receipt of the "Final Notice - Intent to Levy" letter (Letter 1058). You requested a meeting this week to accommodate you since you were in Las Vegas. Due to the short notice of the request and my full schedule, I was unable to accommodate you. We agreed that you would call soon to set up another appointment when you could return to Las Vegas. I would like to set up a Teleconference for June 15* at 1:00 p.m. Pacific Time. Please call me by June 1, 2000 to confirm and provide the telephone number you want me to call for the teleconference. I'll call you on 6/15/2000 at 1:00 p.m. Pacific time to conduct the hearing. This will be an informal hearing. Please be aware that consistent with Internal Revenue Regulation Section 601.106(b), Statement of Procedural Rules, Appeals procedures do not extend to cases involving solely the failure or refusal to comply with the tax laws because of moral, religious, constitutional, conscientious, political, or similar grounds. If you wish to provide documentation or information other than what has been received to date, I will review the material. Please send the new material to me at the above address at least five days prior to the hearing. Thomas W. Roberts Your request for a hearing indicates yowdisagree with the proposed levy because "substitute fòr returns' were prepared and assessed by IRS. The file reflects your client was given an opportunity to dispute the assessments by presenting information to IRS, but failed to respond. Subsequently, a statutory notice of deficiency was issued to her. She then had the opportunity to petition Tax Court to dispute the assessments, but failed to do so. Therefore, it does not appear that she has the right to dispute the liability within the due process provisions. We must address the liabilities as they have already been billed. Once she has paid the tax, she may fo.llow the claim for refund procedures. However, if your client would like to file the applicable returns before:he hearing along with verification of any deductions claime'd, they can be processed as claims. Your c:ient has the right to propose alternative ways of paying the liability. If she chooses to enter ir_to an installment agreement3or consider an.offer-in- compromise, she must complete a Form 433A (Collection Informatiön Statement - enclosed). In addition, please keep in mind, to qualify for an installment agreement or an offer-in-compromise she must be in compliance filing all required tax returns. Computer records indicate she has not filed income tax returns for 1994, 1995, 1996, 1997, 1998 or 1999. I hope this hearing will resolve the case for Ms. Harmornick. Call me if you have any questions or need additional information. If you determine the hearing is no longer needed, please call me for the necessary documentation. Please he advised, if you are not available for the hearing, I will issue our decision based on the information in the case file. Enc. • CC: Ginger Harmornick Sincerely, Veronica A Lindersmith Settlement Officer 2 . . Features: __ Examination of EP/EO Follow-up _ Closing Agreement ____ Fraud Penalty Removal Transferee Assessment __ Form(s) 5479 Attached :. 3inger Harmornick 120 Claro Ct. Henderson , NV 89014 I axpayer(s) 11N: 469-62-1039 Workunit No.: 6100038010 lax Years:(*K1Y) :. t2/1990 12/1991 12/1992 12/1993 . 4. Related I axpayer: Name: TlN/SSN No: Workunit No: Year(s): Name: TIN/SSN No: Workunit No: Year(s): Name: TIN/SSN No: Workunit No: Year(s): Name: TIN/SSN No: Workunit No: Y ear(s): Appeals Transmittal lyorandum and Case Memo Date: _. Routmg 10: D.O. 8601 . APS Copy to: __ Examination _ Collection ___ EP/EO Other From: ,, eals Code: 062 Las Vegas Appeals Office . WE:SW:LV:AP:val (702),455-1399 Restricted Interest EP/EO Determination ___ Trust Fund Recovery Penalty (TFRP) ___ Form(s) 885-F/4668 Attached Joint Committee Audit Statement Attached _ Offer in Compromise International Issue __ Potential Competent Authority Case _X__ Other CDPLV Ci ype of Case: Due Process - Levy Tax $0.00 s. Disposal Information Agreed, Form No. 7. Prior Findmgs: 8. Revised Fmdmgs: Penalty $0.00 Foundation Classifi:ation Tax 50.00 __ Trial Preparation ___ SND To Be Issued - Copy Attached _ Other (See Remarks) Penalty SU.00 x Unaereed Review of Counsel Settlement Premature Referral (See Remarks) o. of Conterences . l axpayer's Rep. THOMAS ROBERTS 10. Other Information: District Counsel Att. Docket No. Exammer ACS .1. Remarks and/o- Supporting Statement: SEE A' "l'ACHED APPEALS CASE MEMO Senalty Reason Code(s): N/C Reason Code(s): ARDI Code(s): #7 ALL PERIODS Closing Code: Conference Reason Code(s): SUSTAINED Eignature/Date AO's Grade m #Forms $403: 14. Earliest Statute Date: Veronica A Lindersmith, Settlemqnt L5. Approved - X Associate Chi cer Marvin Weisba Associate Ch' f Form 5402-c Da : District Counsel Date: Internal Revenue Service - Department of the Treasury COLLECTION DUE PROCESS - LEVY TAXPAYER TYPE OF TAX PERIOD(S) HARMORNICK, Ginger 1040 1040 1040 1040 1990 1991 1992 1993 . SUMMARY OF ISSUES CDP NOTICE DATE (date CDP Req. received from TP) 11/23/1999 The taxpayer requested a Collection Due Process Hearing with Appeals under the provisions of Internal Revenue Code Section 6330 as to the appropriateness of the LT 11/40 (final notice) sent 10/25/1999. The assessments consist of SFR assessments on 1990, 1991, 1992, & 1993. The taxpayer espoused only frivolous arguments that have been repeatedly rejected by the courts. BRIEF BACKGROUND . • SFR assessments were made for 1990, 1991,.1992, and 1993. The taxpayer was given an opportunity to prepare and voluntarily file returns prior to the SFR assessments. She did not voluntarily file required returns. The assessments were made. The taxpayer states. "...without a valid assessment there is no liability". She requested a copy of the "summary record of assessment" which was provided to her. She refers to plans to subpoena the documents along with the assessment officer's name and address so she can ask the assessment officer questions which can be done in the form of interrogatories ánd subsequent depositions. She sent a 3 page list of questions for the Appeals Officer in Glendale, CA to answer. He answered the questions and sent them to the taxpayer giving her a deadline to respond so the hearing she requested could be scheduled. She then asked for the case to be transferred to Las Vegas. A teleconference was held with her Power-of-Attorney, Thomas Roberts, with the firm of Ray P. Pope, Mount Dora, Florida, on 6/22/2000. Mr. Roberts stated that if we could prove the assessments were legal, she would be glad to pay all that she owes in a 24 month installment agreement. But they would not agree to anything until they had a copy of the certificate of assessment to review. Advised that she would need to file the delinquent returns not yet filed (1994, 1995, 1996, 1997, 1998, and 1999) to qualify for an installment agreement. The Power-of-Attorney, Thomas Roberts said 1 (8/9/2000) they would file if they determined that earnings were actually income. They provided no new information to refute the assessments. They did not file correct returns to replace the SFR assessments. Settlement Officer requested the Certificate of Assessment for all the tax periods in question, as requested by the taxpayer. Copies were sent to the taxpayer after the hearing and additional time provided to submit any substantive new information to refute the assessments. No new information was sent. The f le reflects that TC 520 has been input on all applicable tax periods. DISCUSSION AND ANALYSIS: Based on the information available, the requirements of the applicable law and administrative procedures have been met. Internal Revenue Code § 6331(d) requires that the Internal Revenue Service notify a taxpayer at least 30 days before a Notice of Levy can be issued. The 30 day notice was mailed to the taxpayer via certified mail. Internal Revenue Code § 6330(a) states that no levy may be made unless the Internal Revenue Service notifies a taxpayer of the opportunity for a hearing with the Internal Revenue Service Office of Appeals. Letter 11/40 (final notice) was sent to the taxpayer and her power-of-attorney via certified mail. The :axpayer submitted her CDP hearing request timely. A hearing was conducted with the taxpayer's representative, Thomas Roberts, via teleconference (to accommodate him since he is located out of state) on June 22, 2000. The power-of-attorney advised this office he planned to • record the hearing and would have a court reporter in attendance at the Las Vegas Appeals Office. There was a recording made by this office, as well. ISSUES: CDP request was based on the issue the taxpayer raised as to the appropriateness of 1. the final notice letter (LT 11/40) because she challenges the constitutionality of the assessments that caused the issuance of the final notice. The taxpayer had several opportunities to address the SFR assessments by filing correct retui·ns. She failed to prepare and file correct returns. Due to her previous opportunities to deal with the assessment issue relating to the 1040 SFR assessments for 1990, 1991, 1992, and 1993, it is considered an underlying issue. The taxpayer may dispute the underlying liability only when she had no prior opportunity to dispute the liabilities. appropriateness of the notification of proposed enforced collection action and collection alternatives. IRC § 6330 outlines Appeals jurisdiction to hear an appeal to consider the (8/9/2000) 2. AL TERNA TIVES: Alternative means of collection were discussed (IA, OIC, and bond). TP's power-of-attorney stated she may be interested in a 24 month installment agreement. However, he did not want to pursue that option until they were provided the certificate of assessment. He was reminded that the taxpayer must be in full filing compliance to qualify for an installment agreement or offer-in-compromise and we show no return filed for 1994, 1995, 1996, 1997, 1998 or 1999. Mr. Roberts stated they would determine in Ms Harmornick's earnings are income. If they determine her earnings are income, they'll get the returns prepared and filed. Gave TP 10 days after she was mailed a copy of the certificate of . assessments to provide any additional factual information. Neither she nor her power-ofattorney, Thomas Roberts responded. INTRUSIVENESS Since Col1ë6tlöns followed their law and procedures, it is my opinion 3. that the Letter 1058 (final notice) action balanced the need for collecting the tax with the taxpayer's concern that collections be no more intrusive than necessary. MY EVALUATION The taxpayer failed to respond to contacts from ACS giving her an opportunity to prepare and file correct returns. The SFR assessments were made. The taxpayer requested a Due Process hearing on all the assessments, but failed to provide any substantive factual information to refute the assessments. The SFR assessments were an underlying issue that we could not discuss at this hearing because the taxpayer had prior opportunities to resolve and failed to do so. Collections followed established administrative procedures concerning the decision to send the taxpayer a final notice letter warning of the intent to enforce collection. Col.ections actions are sustained. 3 (8/9/2000) Schedule of Adjustments Issue No. Description Tax Period Examiner's Adjustment Appeals Change to Adjustment Appeals Adjustment Reason Code 1 Should 1058 be sent? 1990 1991 1992 1993 Yes Yes Yes Yes None None None None · , Yes Yes Yes Yes · . Reason codes (no narrative): A taxpayer now agrees accepted by examiner B C D taxpayer substantiated computational adjustment GINGER HARMORNICK/1990, 1991, 1992, 1993 VERONICA LINDERSMITH, SETTLEMENT OFFICER (8/8/2000) Department.of the Treasury Int?rnal Revenue Service P 9 sù Jö ? 74 5 . EXM00 Date: 1AY L7, 1,494 Tax Year Ended and Deficiency DEC. Person to Contact: 313 1990 1. Contact Telephone Number 91-'-344 -775D (NOT A TOLL FiiEE NLNBEF. Dear Taxpayer: DE Ay We have determined that there is a deficiency (increase) in your income tax as shown above. This letter is a NOTICE OF DEFICIENCY sent to you as required by law. The enclosed statement shows how we figured the deficiency. to contest this deficiency in court before making any payment, you have 90 days from the above If you want mailing da:e of this letter (150 days if addressed to you outside of the United States) to file a petition with the United States Tax Court for a redetermination of the deficiency. The petition should be filed with the United States Tax Court, 400 Second Street NW., Washington, D.C. 20217, and the copy of this letter should be attached to the petition. The time in which you must is fixed by law and the Court cannot consider your case if your petition is filed late. this letter is addressed to both a husband and wife, and both want to petition the Tax Court both must sign the petition or each must file a separate, signed petition. (90 or 150 days as the case may be) file a petition with the Court If If you dispute not more than $10,000 for any one tax year, a simplified procedure is provided by the Tax Court for small tax cases. You can obtain information about this procedure, as well as a petition form you can use, by writing to tt'e Clerk of the United States Tax Court at 400 Second Street NW., Washington, D.C. 20217. You should do this promptly if you intend to file a petition with the Tax Court. If you decide not to file a petition with the Tax Court, we would appreciate it nclosed waiver form. This will permit us to assess the deficiency quickly and will enclosed envelope is for your convenience. petition the Tax Court, date of this letter (150 days if this letter is addressed to you outside the United States). if you would sign and return the limit the accumulation of interest. The If you decide not to sign and return the statement and you do not timely the law requires us to assess and bill you for the deficiency after 90 days from the above mailing If you have any questions about this letter, please write to the person whose name and address are shown above, or the number shown above. there will be a If you prefer, you may call the 'IRS telephone number listed in your local directory. An IRS the office at the address shown on this letter is most familiar with your If this number is outside your local calling area, you may call that person at long distance charge to you. employee there will be able to help you, but case. When you send the information we requested or if you write to us with questions about this letter, please provide information. Please attach this your telephone number and the most convenient time for us to call letter to any correspondence to help us identify your case. Keep the copy for your records. if we need additional Thank you for your cooperation. Enclosures: y of this letter Envelope Sincerely yours, Commissioner By .LCTùr. C Form 5601 (Rev. 445) FORM 5564 (Rev. June 1992) Name and Adcfress of Taxpayer(s) Department ofMie Treasury - Inferna Revenue Service Symbols NOT CE OF DEFJCJENCY - WAIVER GlNER L HARfl0RNI.CK %C0 NEWTON .AVE N üK00KLYN PARK V (1N MAY th . 55449-11¿4 STOP 009 Kind of Tax Copy to Authorized Representative Tax Year Ended C . 3 L , 1° % . increase in Tax . $ 3 , 121• O C Penalties DEFICIENCY . I consent to the immediate assessment and collection of the deficiencies (increase in tax and penalties) shown above, plus any interest. Also, I waive the requirement under section 6532 (a) (1) of the Internal Revenue Code that a notice of claim disallowance be sent to me by certified mail for any overpayment shown on the attached report. I understand that the filing of this waiver is irrevocable and it will begin the 2-year period for filing suit for refund of the claims disallowed as if the notice of disallowance had been sent by certified or registered mail. 7) By Title . Note: If you consent to the assessment of the deficiencies shown in this waiver, please sign and return this form to limit the interest charge and expedite our bill to you. Please do not sign and return any prior notices you may have received. Your consent signature is required on this waiver, even if fully paid. Your consent will not prevent you from filing a claim for refund (after you have paid the tax) if you later believe you are so entitled; nor prevent us from later de:ermining, if necessary, that you owe additional tax; nor extend the time provided by law for each action. Date Date Date If you later file a claim and the Service disallows it, you may file suit for refund in a District Court or in the United States Claims Court, but you may not file a petition with the United States Tax Court. Who Must Sign: If you filed jointly, both you and your spouse must sign. Your attorney or agent may sign this waiver provided that action is specifically authorized by a power of attorney which, if not previously filed, must accompany this form. If this waiver is signed by a person acting in a fiduciary capacity (for example, an executor, administrator, or a trustee), Form 56, Notice Concerning Fiduciary Relationship, should, unless previously filed, accompany this form. If.you agree, please sign and return this form; keep one copy for your records. FORM 5564 (Rev. 6-92) ~~ ame and Address of.Taxpayer Department of the Treasury c Internal Revenue Service Income Tax Examination Changes |~Social Security or Employer Identification Number BINGER L HARMORNICK 9500 NEWTON AVE N 9ROOKLYN PARK , MN 55444-1124 | | Person with whom | examination changes | were discussed 469-62-1039 | Name and Title | |Return Form No. 1040 Year End: 12/31/90 Year End: | $ Year End: $ . Adjustments to income A. FILING STATUS B.EXEMPTIONS C. WAGES D. UNEMPLOYMENT COMPENSATION E.INTEREST INCOME F.STANDARD DEDUCTION $ | Total adjustments . Tauble income per return or as previous!y adjusted • Corrected taxable income Tax Pethod Filirc Status . Tax . Additional . C taxes ted tax liab!!ity -2,050 | 20,137 | 5,342 8 -3,250 20,187 | O 20 , 187 | Tax Table Single 3,121 O 3,121 | . Credits 8. C. D. . Balance (line 7 less total of lines 8A thru 80) 3,121 P!us Other Taxes A. B. C. .. Total corrected tax liability (line 9 + . Total . Adjustment tax shown on return or as previously adjusted to A. lines 10A - 100) | Earned Income Credit 3. Special Fuels Credit .. Deficiency -Increase in tax or (0verassessment -Decrease in tax) (line 11 less line 12 adjusted by line 13) 3. Adjustments to arepayment credits :. 8alance due or 3verpayment (line 14 adjusted by line 15) 3,121 O O O 3,121 -780 (excluding interest and penalties) 'he Internal Revenue Service has agreements with State tax agencies under which information about Federal decreases. $ including increases or If this change affects the amount of your State income tax, you should file the State form. is exchanged with the States. 2 ,341 $ tax, $ The IRS may order backup withholding at 31 percent after four notices have been issued to you oyer a 120-day oeriod interest, dividend, or patronage dividend income and do not pay the #0u maY be subject to backup Withholding if you underreport your -equired tax. and the tax has beer assessed and remains unoaid. icro R V11.0 (07/01/94) Page 1 of 2 Form 4S49-CG (Rev. 10-90' Name of Taxpayer:' GINGER L HARMOkNICK • ID Number: =====================================================================---==== Schedule (C) 469-62-1039 ·O4/25/94 Adjustment: WAGES PER RETURN: COFRECTED: ADJUSTMENT: 1990 +0 +20,137 +20.137 Exclanation WE HAVE ADJUSTED YOUR GROSS WAGES TO AGREE WITH THE AMOUNTS SHOWN ON F0FMS W-2. BUREAU OF ENGRAVING INC PAYER: Adjustment: TAX WITHHELD PEF RETURN: COPRECTED: ADZUSTMENT: 1990 +O +780 +780 Schedule( ) Expl snation: YOUR WITHHOLDING CREDIT(S) WAS/WERE ADJUSTED TO REFLECT AMOUNT(S) SHOWN ON YOUR FORM( S ) W-2 - BUREAU OF ENGRAVING INC PAYER : Adjustment: INTEREST INCOME .E TURN : P _ CORc'ECTED: ADZUSTMENT: 1990 +0 +8 +8 Schedule( ) Explanation: WE ADJUSTED YOUR INTEREST INCOME TO REFLECT THE AMOUNTS SHOWN ON FORM 1099-INT _ TCF BANK FS8 PAYER: Name of Taxpayer:· GINGER L HARMORNICK . ID .Number : ==---=================================================================== ___ Schedule (A) 04/25/94 469-62-1039 - .._ -_ Adjustment: FILING STATUS Explanation YOU HAVE BEEN ASSIGNED THE FILING STATUS AS DETERMINED BY ALL AVAILABLE INFORMATION. STATUS IS SINGLE. Schedule( ) Adjustment: EXEMPTIONS DER RETURN: CORRECTED: APTUSTMENT: • 1990 +O +1 +1 . Ex - anation VOU ARE ALLOWED ONE PERSONAL EXEMPTION. IS- $2,050.OO. . THE DEDUCTION TO INCOME IN 1990 _______________ ---=======---====---===============_______ Schedule( --- ) --_-_ Adjustment: STANDARD DEDUCTION DER RETURN: ORRECTED : ADJUSTMEN~: 1990 +O +3 .250 +3,250 - anaticn: ARE AL'..OWED THE STANDARD DEDUCTION FOR SINGLE FILING STATUS. Schedule( ) Adjustment: UNEMPLOYMENT COMPENSATION DER RETURN: CORREC TED ADJUSTMENT: 1990 +O +5 , 342 +5,342 Explanation: THE TOTAL AMOUNT OF UNEMPLOYMENT COMPENSATION RECEIVED AFTER DECEMBER 31 1986, IS FULLY TAXABLE AND MUST BE INCLUDED IN GROSS INCOME. DAYER: MINNESOTA DEPARTMENT OF JOBS.AND TRAINING . itelurn Form No. l I | 104 Year End: same of Taxpayer Department of the Treasury ; Internal Revenue Service Income Tax'E×amination Changes | Social Security or Employer Identification Number 3INGER L HARMORNICK . Penalties A. Deli tiquency IRC 6651( a )( 1 ) B.Estimated Tax IRC 6654 H. N. I penalties Taxes, Penalties, and Interest ance due or Overpayment of umm A. 8. Penalties (line 18, page 2) C. D. Amount due or refund (sum of Interest (IRC 6601) computed to 05/25/94 taxes (line 16, page 1) lines A, 8, and C) I i | |$ $ | | |$ · 469-62-1039 Year End: 12/31/90 | 585 |$ 148 | Year End: 733 $ 2,341 733 828 3 ,902 $ | |$ | $ $ 'ther Information: IMPORTANT NOTICE AND PAYMENT REMINDER OUR EXAMINATION OF YOUR RETURN RESULTED IN ADDITIONAL TAX . CHARGED INTEREST ON THIS TAX . OF YOUR RETURN TO 30 DAYS FROM THE DATE OF THIS REPORT . THE ADD-TIONAL TAX WE PROPOSE TO ASSESS, PLEASE HELP US RESOLVE THIS MATTER AS QUICKLY AS POSSIBLE BY SIGNING THE ENCLSOED REPORT AND MAILING YOUR PA"MENT TO OUR OFFICE WITHIN 30 DAYS FROM THE DATE OF THIS REPORT USING THE ENCLOSED PRE-ADDRESSED ENVELOPE PROVIDED . ADVANTAGE TO PAY THE AMOUNT DUE AS SOON AS POSSIBLE TO AVOID FURTHER YOU HAVE BEEN THE INTEREST WAS FIGURED FROM THE DUE DATE IT WOULD BE TO YOUR IF YOU AGREE WITH STEREST CHARGES. PLEASE SHOW YOUR SOCIAL SECURITY NUMBER AND THE TAX AR FOR WHICH THE PAYMENT IS INTENDED AND ATTACH A SIGNED COPY OF THIS REPORT TO HELP US INDENTIFY YOUR ACCOUNT PROPERLY , to Assessnent and Collection - ixaminer 's signature MAF CP:E:CE 913-344-7750 .onsent nited States Tax Court nerease in tax and penalties, and accept any decrease in tax and penalties shown above, plus any additional aw. is sub,iect LEASE NOTE: If a joint| Signature of Taxpayer eturn was filed, 80TH axpayers must sicn the findings in this report. Therefore, to acceptance by the District Director. I understant that this report Signature of Taxpayer I give my consent KCSC-09 | District | Date I do not wish to exercise my appeal rights with the Internal Revenue Service or to contest to the immediate assessment and collection of any interest as provided by Title | Date 04/25/94 in | Date | Date croRAR V11.0 (02/01/94) Page 2 of 2 Form 45L9-CG (Rev. 10-90)