t c memo united_states tax_court alvin s kanofsky petitioner v commissioner of internal revenue respondent docket no 24784-08l filed date alvin s kanofsky pro_se alex shlivko for respondent memorandum opinion laro judge petitioner petitioned the court under sec_6330 to review a determination of respondent’s office of appeals appeals sustaining a proposed levy upon petitioner’s property in kanofsky v commissioner tcmemo_2006_79 1unless otherwise indicated section references are to the continued 271_fedappx_146 3d cir we disallowed a portion of petitioner’s claimed trade_or_business_expenses for through on the grounds that the disallowed expenses were unrelated to petitioner’s business activities and upheld a portion of respondent’s determination of a sec_6662 negligence_penalty against petitioner following our decision in kanofsky i respondent sought to levy on petitioner’s property to collect approximately dollar_figure in federal income taxes for through subject years we decide whether appeals abused its discretion in sustaining the proposed levy we hold it did not background the parties’ stipulation of facts and the accompanying exhibits are incorporated herein by this reference and are so found i petitioner petitioner has been a full-time professor of physics at lehigh university since approximately he resided in bethlehem pennsylvania when his petition was filed continued applicable version of the internal_revenue_code 2we use the word approximately as these amounts were computed before this proceeding and have since increased on account of interest ii deficiency litigation a overview for each subject year petitioner filed a federal_income_tax return on which he reported on a schedule c profit or loss from business_expense deductions which offset any_tax liability for the year respondent issued to petitioner a notice_of_deficiency which i disallowed most of petitioner’s claimed schedule c expense deductions and ii determined a negligence_penalty for under sec_6662 b court’s decision and subsequent appeals on date petitioner petitioned the court to redetermine the disallowed trade_or_business expense deductions and the negligence_penalty in kanofsky i we found mostly for respondent and in doing so disallowed a portion of petitioner’s claimed trade_or_business_expenses and found petitioner liable for the negligence_penalty we entered our decision on date and on date denied a motion by petitioner to vacate or revise the decision petitioner appealed our decision to the u s court_of_appeals for the third circuit without filing a bond under sec_7485 to stay assessment and collection the court_of_appeals affirmed our decision on date 271_fedappx_146 3d cir on date petitioner again sought relief from the court_of_appeals by filing a petition for rehearing on decision of date affirming u s tax_court decision on date the court_of_appeals denied the petition for rehearing petitioner subsequently filed a petition for writ of certiorari with the supreme court of the united_states to review the court of appeal’s judgment certiorari was denied on date kanofsky v commissioner 129_sct_741 and petitioner’s petition for rehearing with the supreme court was denied on date kanofsky v commissioner 129_sct_1406 iii respondent’s collection action respondent pursued collection against petitioner during petitioner’s various appeals on date respondent issued to petitioner a final notice_of_intent_to_levy and notice of your right to a hearing final levy notice with respect to the collection of petitioner’s outstanding income_tax liabilities for the subject years the final levy notice provided petitioner with an opportunity to request a collection_due_process_hearing hearing with appeals which petitioner requested on date by filing form request for a collection_due_process or equivalent_hearing on the form petitioner reported that he disagreed with respondent’s proposed levy because his case was under appeal with united_states court_of_appeals for the third circuit petitioner did not propose any collection alternatives on that form iv hearing and subsequent correspondence on date appeals mailed to petitioner a letter which scheduled a telephone conference on date that letter among other things informed petitioner that if he desired appeals to consider collection alternatives then petitioner needed to provide respondent with a completed form 433-a collection information statement for wage earners and self-employed individuals with supporting documentation and to file federal_income_tax returns for and that letter also advised petitioner that he should be prepared to discuss collection alternatives petitioner subsequently requested a correspondence hearing and appeals granted petitioner’s request on date appeals mailed to petitioner a letter which again directed petitioner to the extent he desired to propose a collection alternative to the levy action to submit supporting documentation within days that letter recognized that petitioner had appealed this court’s decision to the court_of_appeals for the third circuit and advised petitioner that appeals does not consider irrelevant issues such as moral religious political constitutional conscientious or similar grounds petitioner did not submit any documents supporting his position within the specified 14-day period nor did he propose any collection alternatives during that time on date petitioner sent to respondent via facsimile a three-page letter stating that petitioner was unable to provide detailed comments in response to the date letter petitioner did not propose any collection alternatives nor did he file the requested financial forms and missing tax returns on date respondent denied petitioner’s request for relief from the proposed levy action by issuing to petitioner a notice_of_determination concerning collection action s under sec_6320 and or notice_of_determination with attachment the attachment stated that the proposed levy was sustained because petitioner did not present any information to dispute the appropriateness of the collection actions nor did petitioner submit a collection alternative appeals’ case activity report which is a written record of appeals’ actions during the hearing references the purported claims of fraud and corruption which petitioner asserted and deems them irrelevant to the hearing v current case on date petitioner petitioned the court to determine whether appeals abused its discretion in sustaining the proposed levy on petitioner’s property the court held a hearing on date during which petitioner was the only witness called by either party discussion i overview where as here the underlying tax_liability is not at issue we review an appeals determination solely for abuse_of_discretion see 114_tc_604 abuse_of_discretion exists where appeals acts arbitrarily capriciously or without a sound basis in law or fact 112_tc_19 petitioner advances two theories to support his argument that appeals abused its discretion first that respondent’s levy should have been stayed because of petitioner’s appeals to the court_of_appeals and the supreme court and second that appeals should have been more cooperative in its collection methods we are not persuaded by either argument 3petitioner also advances numerous assertions and arguments regarding fraud and corruption within the pennsylvania legislature and judiciary that he states impacted his ability to be fairly treated those assertions and arguments relate to the determination of petitioner’s underlying tax_liabilities an issue which was the subject of kanofsky i therefore even if we were to assume that these assertions are true such arguments relate to the determination of petitioner’s tax_liabilities which the court may not consider at this proceeding see 129_tc_107 of course res_judicata would otherwise appear to bar us from considering the tax_liability ii stay of collection action on account of appeal the first issue petitioner raised concerns the appropriateness of a collection action where the underlying tax_liability is the subject of a pending appeal petitioner argues that appeals abused its discretion by pursuing collection while his appeal of kanofsky i was still pending we disagree sec_6213 bars the commissioner from assessing a tax_liability until our decision becomes final and sec_7481 makes our decisions final when opportunities for appeal have been exhausted sec_7485 however supersedes sec_6213 by providing that assessment shall not be stayed during an appeal unless a taxpayer such as petitioner files a bond with the tax_court on or before the time his notice of appeal is filed see 124_tc_189 n kovacevich v commissioner tcmemo_2009_160 n see also 92_tc_940 discussing the reasons behind enactment of sec_7485 the record does not indicate that petitioner posted bond before his notice of appeal was filed or at any time accordingly petitioner is subject_to immediate collection action on the deficiency determined in kanofsky i see 979_f2d_868 d c cir affg 98_tc_70 schroeder v commissioner tcmemo_2005_48 hromiko v commissioner tcmemo_2003_107 iii appeals’ cooperative efforts in installment_payment program petitioner also contends that appeals abused its discretion in failing to be more cooperative in the collection of the amounts to be levied we disagree before a taxpayer’s property may be levied upon sec_6330 requires the commissioner to give the taxpayer notice of his intent to levy and notice of the right to a fair hearing before an impartial officer of appeals sec_6330 and b d at the hearing a taxpayer may challenge the appropriateness of collection actions and offer collection alternatives sec_6330 and iii at the hearing appeals must generally consider the above-stated issues raised by the taxpayer verify that the requirements of applicable law and administrative procedure have been met and consider whether any proposed collection action balances the need for the efficient collection_of_taxes with the legitimate concern of the taxpayer that any collection action be no more intrusive than necessary sec_6330 we find that appeals fully complied with its obligations to petitioner under sec_6330 appeals verified that respondent met the requirements of applicable law and administrative procedure in assessing and demanding payment for the tax_liabilities petitioner owed in issuing the final levy notice and in providing him with the hearing appeals was unable to consider any collection alternative because petitioner did not make an offer or comply with its requests to provide the financial information required to support any collection alternative and to file delinquent tax returns accordingly petitioner has not shown that appeals abused its discretion in furthering its collection efforts by levying on petitioner’s property iv conclusion we conclude that appeals did not abuse its discretion in sustaining the notice_of_intent_to_levy and we hold that collection by levy may proceed in so concluding we have considered all arguments made and to the extent that we have not specifically addressed them we conclude that it is unnecessary to do so or that they are without merit to reflect the foregoing decision will be entered for respondent


department of the treasury internal_revenue_service te_ge - eo mandatory review commerce street mc 4920-dal dallas tx government entities division release number release date legend org organization name date date org address xx date uil address address subordinate name subordinate’s employer_identification_number person to contact identification_number contact telephone numbers dear this letter is sent to inform you that org’s exemption under sec_501 of the internal_revenue_code has been revoked effective june 20xx as a result the subject organization is on longer covered under your group exemption this letter amends your group ruling to exclude this subordinate if you have any questions please contact the person whose name and telephone number are shown in the heading of this letter sincerely marsha a ramirez director eo examinations form 886a department of the sia - intemal revenue service explanation of items name of taxpayer org 20xx schedule no or exhibit year period ended 20xx legend org organization name xx date issue whether org qualifies for exemption under sec_501 of the internal_revenue_code where the organization has not filed form_990 facts org is an exempt_organization under sec_501 of the internal_revenue_code exempt_organization eo has not filed form_990 since tax_year ending 20xx during the examination it was requested that the exempt_organization prepare and submit delinquent forms for the tax periods ending 20xx and 20xx exempt_organization failed to respond to the internal_revenue_service correspondence and did not prepare and submit the forms law sec_6033 provides every organization exempt from tax under sec_501 shall file an annual return stating specifically the items of gross_income receipts and disbursements and such other information for the purposes of carrying out the internal revenue laws as the secretary may by forms or regulations prescribe and keep such records render under oath such statements make such other returns and comply with such rules and regulations as the secretary may from time to time prescribe sec_1_6001-1 in conjunction with sec_1_6001-1 provides that every organization exempt from tax under sec_501 and subject_to the tax imposed by sec_511 on its unrelated_business_income must keep such permanent books or accounts or records including inventories as are sufficient to establish the amount of gross_income deduction credits or other matters required to be shown by such person in any return of such tax such organization shall also keep such books_and_records as are required to substantiate the information required by sec_6033 sec_1_6001-1 states that the books_or_records required by this section shall be kept at all times available for inspection by authorized internal revenue officers or employees and shall be retained as long as the contents thereof may be material in the administration of any internal revenue law revrul_59_95 1959_1_cb_627 concerns an exempt_organization that was requested to produce a financial statement and statement of its operations for a certain year however its records were so incomplete that the organization was unable to furnish such statements the service held that the failure or inability to file the required information_return or otherwise to comply with the provisions of sec_6033 and the regulations which implement it may result in the termination of the exempt status of an organization previously held exempt on the grounds form 886-a rev department of the treasury - internal_revenue_service page -1- eee 886a deparement of the ‘treasury - incemal revenue service explanation of items name of taxpayer org 20xx schedule no or exhibit year period ended 20xx that the organization has not established that it is observing the conditions required for the continuation of exempt status in accordance with the above cited provisions of the code and regulations under sec_6001 and sec_6033 organizations recognized as exempt from federal_income_tax must meet certain reporting requirements these requirements relate to the filing of a complete and accurate annual information and other required federal tax forms and the retention of records sufficient to determine whether such entity is operated for the purposes for which it was granted tax-exempt status and to determine its liability for any unrelated_business_income_tax this organization has not filed form_990 by the due_date sec_6652 of the internal_revenue_code_of_1986 provides for a penalty of dollar_figure for each day the retum is late the maximum penalty for any one return is the lesser_of dollar_figure or of the gross_receipts of the organization for the year in the case of an organization having gross_receipts exceeding dollar_figure for any year the penalty is increased to dollar_figure per day with a maximum penalty of dollar_figure the penalty begins on the due_date for filing the form_990 the penalty may also be charged if the organization files an incomplete return or furnishes incorrect information taxpayer’s postion taxpayer agrees that they should have filed form_990 and that they are responsible for timely filing form_990 government ’s position taxpayer has not filed form_990 during the examination it was requested that the eo prepare and submit delinquent forms for tax years ending 20xx and 20xx the eo failed to prepare and submit the delinquent forms and did not respond to correspondence further the organization has failed to meet the reporting requirements under sec_6033 to be recognized as exempt from federal_income_tax under sec_501 accordingly the eo no longer qualifies for exempt status and should have its exempt status revoked effective 20xx the eo is also subject_to penalties for failure_to_file a form_990 conclusion org has not filed form_990 and has failed to meet the reporting requirements under sec_6033 to be recognized as exempt from federal_income_tax under sec_501 accordingly the eo no longer qualifies for exempt status and should have its exempt status revoked effective 20xx form_1120 should be filed by the organization form 886-a rev -68 department of the treasury - internal_revenue_service page -2- internal_revenue_service date org address department of the treasury te_ge eo s dearborn street- 17th floor chicago il taxpayer_identification_number form tax_year s ended person to contact id number contact numbers telephone fax certified mail - return receipt requested dear we have enclosed a copy of our report of examination explaining why we believe revocation of your organization's exempt status is necessary if you do not agree with our position you may appeal your case the enclosed publication the examination process explains how to appeal an internal_revenue_service irs decision publication also includes information on your rights as a taxpayer and the irs collection process if you request a conference we will forward your written_statement of protest to the appeals_office and they will contact you for your convenience an envelope is enclosed if you and appeals do not agree on some or all of the issues after your appeals_conference or if you do not request an appeals_conference you may file suit in united_states tax_court the united_states court of federal claims or united_states district_court after satisfying procedural and jurisdictional requirements as described in publication letter rev catalog number 34801v you may also request that we refer this matter for technical_advice as explained in publication exempt_organization appeal procedures for unagreed issues if a determination_letter is issued to you based on technical_advice no further administrative appeal is available to you within the irs on the issue that was the subject of the technical_advice if you accept our findings please sign and return the enclosed form_6018 consent to proposed adverse action we will then send you a final letter revoking your exempt status if we do not hear from you within days from the date of this letter we will process your case on the basis of the recommendations shown in the report of examination and this letter will become final in that event you will be required to file federal_income_tax returns for the tax period s shown above file these returns with the ogden service_center within days from the date of this letter unless a request for an extension of time is granted file returns for later tax years with the appropriate service_center indicated in the instructions for those returns you have the right to contact the office_of_the_taxpayer_advocate taxpayer_advocate assistance is not a substitute for established irs procedures such as the formal appeals process the taxpayer_advocate cannot reverse a legally correct_tax determination or extend the time fixed by law that you have to file a petition in a united_states court the taxpayer_advocate can however see that a tax matter that may not have been resolved through normal channels gets prompt and proper handling you may call toll-free and ask for taxpayer_advocate assistance if you prefer you may contact your local taxpayer_advocate at if you have any questions please call the contact person at the telephone number shown in the heading of this letter if you write please provide a telephone number and the most convenient time to call if we need to contact you thank you for your cooperation sincerely marsha a ramirez director eo examinations enclosures publication publication form_6018 report of examination envelope letter rev catalog number 34801v