t c memo united_states tax_court robert c curci petitioner v commissioner of internal revenue respondent docket no filed date robert c curci pro_se shawna a early for respondent memorandum opinion marvel judge this matter is before the court on respondent’s motion to dismiss for lack of prosecution background petitioner did not file federal_income_tax returns for and by a notice_of_deficiency dated date respondent determined deficiencies in income_tax and additions to tax under sec_6651 and a for and the years in issue as follows tax_year deficiency dollar_figure big_number big_number big_number sec_6651 dollar_figure dollar_figure dollar_figure dollar_figure sec_6654 dollar_figure dollar_figure dollar_figure dollar_figure on date we received and filed petitioner’s petition for redetermination of the deficiencies for the years in issue petitioner resided in bronx new york when his petition was filed in his petition petitioner argued that respondent’s calculation of petitioner’s capital_gains_and_losses was incorrect we set petitioner’s case for trial during our date new york new york trial session and mailed him a notice setting case for trial and a standing_pretrial_order dated date the standing_pretrial_order required the parties to 1all section references are to the internal_revenue_code in effect for the years at issue and all rule references are to the tax_court rules_of_practice and procedure 2in the notice_of_deficiency respondent also determined that petitioner received unreported income from wages interest dividends partnerships real_estate and nonemployee compensation respondent granted petitioner the standard_deduction for all years in issue and determined that petitioner was liable for a self-employment_tax on his nonemployee compensation_for respondent also adjusted petitioner’s personal_exemption for each year to reflect the increase in petitioner’s adjusted_gross_income petitioner did not contest these adjustments in his petition and consequently except for computational adjustments we deem these adjustments conceded see rule b prepare a stipulation of facts and stated that the failure of either party to cooperate in the preparation of such stipulation could result in sanctions the order also required each party to exchange documents that the party intended to use at trial and to prepare a pretrial memorandum and submit copies to the court and opposing party at least weeks before the first day of the trial session by letter dated date respondent’s appeals officer scheduled a settlement conference with petitioner for date when a settlement was not reached petitioner’s case was returned to the division counsel’s office and an attorney from that office scheduled an date meeting with petitioner for the purpose of preparing a stipulation of facts for trial petitioner attended the meeting but his documentation was incomplete the parties did not prepare a stipulation of facts on date both respondent’s counsel and petitioner appeared at calendar call and were heard respondent’s counsel reported that respondent was ready to proceed with trial petitioner requested additional time to prepare and submit his federal_income_tax returns for the years in issue we ordered the parties to submit decision documents or a status report on or before date on date petitioner informed respondent that petitioner had prepared a schedule of stock transactions for the years in issue and was waiting for an appointment to have his tax returns prepared on date petitioner told respondent that he had scheduled such an appointment for date and that he anticipated his returns being prepared and completed shortly thereafter on date we filed respondent’s status report in which respondent requested an additional days until date for the parties to file decision documents or a status report we granted the parties’ request for an extension by order dated date on date respondent requested that petitioner submit his delinquent returns on or before date respondent also warned petitioner that if petitioner did not make progress in preparing and filing his delinquent returns respondent would request that petitioner’s case be called for trial during the next new york new york trial session on date petitioner informed respondent that petitioner did not have his returns prepared respondent again warned petitioner that if he did not receive petitioner’s returns by date he would request that the case be restored to the general docket and calendared for trial at the next new york new york trial session on date petitioner informed respondent that he did not have his returns and did not know when they would be completed on date we filed respondent’s status report on date we ordered that the case be restored to the general docket and the case was set for trial during the court’s date new york new york trial session we sent petitioner a notice setting case for trial and a standing_pretrial_order dated date by letter dated date respondent requested that petitioner send copies of all relevant documents to respondent pursuant to 61_tc_691 respondent also warned petitioner that in light of petitioner’s history of inaction should he fail to provide the requested information respondent would object to any further continuances requested by petitioner file a motion to dismiss the case at the calendar call and request that the deficiencies and additions to tax asserted in the notice_of_deficiency be sustained on date respondent sent petitioner another letter requesting petitioner’s tax returns for the years in issue and any other documentation supporting his tax_return positions on date we filed respondent’s requests for admission petitioner did not file a response within days and consequently the requested admissions were deemed admitted under rule c on date respondent once again requested copies of petitioner’s delinquent tax returns by letter dated date respondent warned petitioner that if he did not submit his returns to respondent respondent would move to dismiss the case for failure by petitioner to properly prosecute on date both respondent’s counsel and petitioner appeared and were heard respondent’s counsel presented a motion to dismiss for lack of prosecution as a result of petitioner’s inaction when questioned about his continued inaction petitioner stated that he was probably the world’s biggest procrastinator and argued that his tax returns had become too complicated for him to prepare we took respondent’s motion to dismiss under advisement for days we advised petitioner that if he provided respondent with his supporting documentation and filed his delinquent returns we would favorably consider his actions when determining whether he acted willfully or in bad faith petitioner did not provide respondent with any of his delinquent returns or supporting schedules by the date deadline nor has he submitted any documents since that date 3petitioner also blamed his inaction on his responsibilities as the executor of a friend’s estate on his providing aid to an evicted friend and on two sick cats discussion the court may dismiss a case at any time and enter a decision against the taxpayer for failure properly to prosecute his case failure to comply with the rules of the court or any order of the court or for any cause that the court deems sufficient rule b dismissal is appropriate where the taxpayer’s failure to comply with the court’s rules and orders is due to willfulness bad faith or fault see 82_tc_592 in addition the court may dismiss a case for lack of prosecution if the taxpayer inexcusably fails to appear at trial and does not otherwise participate in the resolution of his claim rule a 97_tc_113 smith v commissioner tcmemo_2003_266 affd sub nom 103_fedappx_661 10th cir petitioner has disregarded the court’s rules and standing_pretrial_order by failing to cooperate meaningfully with respondent to prepare this case for trial petitioner’s pattern of procrastination and inaction made it impossible for the parties to exchange information conduct negotiations or prepare a stipulation of facts before trial petitioner’s several requests for more time to file his delinquent returns which were made fewer than days before scheduled trial session dates further underscore what appears to have been an intentional attempt on the part of petitioner to unreasonably delay the proceedings see 119_tc_276 petitioner was repeatedly warned by respondent’s counsel and by the court of the consequences of failing to prepare for trial and of failing to appear at trial despite those warnings petitioner repeatedly failed to make any reasonable effort to demonstrate his good_faith and willingness to prepare his case for trial although petitioner asserted that he was in the process of having his returns prepared he did not take meaningful steps to meet with his preparer or with respondent although he had plenty of time and opportunity to do so we conclude from these circumstances that petitioner’s claim that he intended to prepare and file his returns was simply another misguided attempt to procrastinate and delay we conclude therefore that petitioner has failed to comply with the court’s rules and orders and has failed properly to prosecute this case see rollercade inc v commissioner supra 4under rule a motion for continuance filed days or less before the trial date will be denied unless the ground for continuance arose within that period or there was good reason for not making the motion sooner petitioner requested additional time to file long overdue tax returns the absence of which petitioner admits is a result of his own procrastination pincite smith v commissioner supra petitioner’s course of conduct throughout the proceedings demonstrates that these failures are due to petitioner’s willfulness bad faith or fault and we conclude that dismissal of this case is appropriate petitioner has not raised any issue upon which respondent has the burden_of_proof see rule a 290_us_111 commissioner’s determinations in the notice_of_deficiency are presumed correct taxpayer bears the burden of proving them wrong to reflect the foregoing an appropriate order of dismissal and decision will be entered 5because petitioner has not introduced any credible_evidence with respect to any factual issue and has failed to cooperate with respondent’s requests for information documents meetings and interviews the burden_of_proof does not shift to respondent see sec_7491 in addition respondent has no obligation under sec_7491 to produce evidence that the sec_6651 and sec_6654 additions to tax are applicable because petitioner is deemed to have conceded the additions to tax by failing to assign error to the additions to tax in the petition see 123_tc_213 118_tc_358 even if respondent had an obligation to produce evidence of petitioner’s liability for the additions to tax respondent’s obligation would be satisfied by the deemed admissions


t c memo united_states tax_court brian r cunningham petitioner v commissioner of internal revenue respondent docket no 15427-13l filed date p failed to file federal_income_tax returns for at least eight years for three of those years r mailed notices of deficiency to p assessed the deficiencies determined thereon issued notice_and_demand for payment of the liabilities and when p did not pay issued to p a notice_of_intent_to_levy and a notice of the filing of a notice_of_federal_tax_lien nftl p timely requested a collection_due_process cdp hearing under sec_6330 and stated that he wanted a collection alternative--ie an offer-in-compromise oic an installment_agreement ia or currently not collectible cnc status--and wanted the lien filing withdrawn at the cdp hearing before the office of appeals appeals p submitted a financial statement on form 433-a collection information statement for wage earners and self-employed individuals but despite appeals’ request did not submit his delinquent tax returns nor documentation to corroborate his form 433-a p did not describe or substantiate any harm that he expected the nftl filing to cause him appeals issued a notice_of_determination sustaining the proposed levy and the filing of the nftl p filed a petition in this court and r moved for summary_judgment held in view of p’s failure_to_file his delinquent tax returns to provide information to corroborate his financial condition alleged on form 433-a or to describe or substantiate any harm expected to result from the nftl filing appeals did not abuse its discretion in denying cnc status or in not accepting any other collection alternative or in sustaining the filing of the nftl and sustaining the proposed levy brian r cunningham for himself olivia hyatt rembach for respondent memorandum opinion gustafson judge in this collection_due_process cdp case brought under sec_6330 we review the determination by the office of appeals appeals of the internal_revenue_service irs to sustain a proposed levy and the filing of a notice_of_federal_tax_lien nftl in order to collect the and income_tax of petitioner brian r cunningham respondent the commissioner of internal revenue filed a motion for summary all section references are to the internal_revenue_code the code in effect at all relevant times and all rule references are to the tax_court rules_of_practice and procedure judgment pursuant to rule asserting that trial is unnecessary and that we can resolve this case on the undisputed facts mr cunningham filed a response to the motion for summary_judgment for the reasons stated below we will grant the motion non-compliance background the irs’s records do not show any federal_income_tax returns filed by mr cunningham for the years through mr cunningham alleges he filed a return for and for purposes of summary_judgment we assume he has mr cunningham acknowledges that he filed no federal_income_tax returns for the years at issue and or the later years collection attempts the irs issued to mr cunningham notices of deficiency for the years in date in date and in date and assessed the respective deficiencies in date date and date the irs gave mr cunningham notice_and_demand for the liabilities on several mr cunningham did not produce to appeals or this court a copy of a return so even for purposes of summary_judgment we might arguably hold that appeals could reasonably rely on its records and conclude that he had not filed for but since the filing does not affect the outcome we can assume in mr cunningham’s favor occasions and then sent him in date a notice of proposed levy and in date a notice of the filing of a federal_tax_lien each of which advised mr cunningham of his right to request a cdp hearing cdp hearing request in date mr cunningham timely requested a hearing on form request for a collection_due_process or equivalent_hearing on the form he checked boxes indicating that he was interested in an installment_agreement ia and an offer-in-compromise oic he also checked boxes to indicate that he wanted the lien subordinated discharged or withdrawn mr cunningham attached to his form a three-page attachment letter to cdph request form that listed issues or contentions the attachment requested among other things that mr cunningham be placed in currently not collectible cnc status mr cunningham’s list of issues included i request reduction of the penalty under sec_6702 though no such penalty had been assessed against him his list also included the assertion that for all seizures occurring after date the revenue_officer must document in mr cunningham’s attachment consisted of selected and edited boilerplate from a form that this court sees from time to time see eg sullivan v commissioner tcmemo_2012_337 at n citing 136_tc_356 the case history that the accuracy of the tax_liability has been verified though the irs had made no such seizures mr cunningham’s attachment requested that the irs provide to him numerous documents the attachment also stated i agree to provide the requested financial information i will furnish you with your completed forms i have additional information to submit if the appeals officer needs more information or has any questions he can contact me in writing i can explain in more detail my exact position if i am informed where this additional information is needed however apart from the form 433-a collection information statement for wage earners and self-employed individuals discussed below he never provided any additional documentation mr cunningham’s attachment requested copies of the notice_and_demand letter day letter form 17-a summary record of assessment form 23-c or replacement form racs report and form_4340 ‘certificate of assessment and payments’ etc pursuant to cfr part the record of assessment with the pertinent parts of the assessment which set forth the name of the taxpayer the date of assessment the character of the liability assessed the taxable_period and the amount assessed a copy of my entire administrative file including the case activity record proof of accuracy of the tax_liability and the documentation of the research of said proof documentation of the case history that the accuracy of the tax_liability has been verified agency-level cdp hearing on date the appeals officer sent mr cunningham a letter setting the cdp hearing for date more than two months in the future and stating for me to consider alternative collection methods such as an installment_agreement or offer_in_compromise you must provide any items listed below in addition you must have filed all federal tax returns required to be filed our records show you have not filed an income_tax return since tax_year please provide the following documents a completed collection information statement form 433-a for individuals and or form 433-b for businesses you can find it on line at irs gov signed tax_return s for the following tax periods our records indicate they have not been filed type of tax income form_1040 period or periods and bank statements for the first months of copy of your paystub showing your wages and all deductions to your pay for the first three months of please send me the items requested above no later than ie days before the hearing i cannot consider collection alternatives at your conference without this information the version of form 433-a that mr cunningham completed ie form 433-a oic stated below the signature line remember to include all applicable attachments listed below copies of the most recent pay stub earnings statement etc from each employer copies of bank statements for the three most recent months copies of the most recent statement etc from all other sources of income such as pensions social_security rental income_interest and dividends court order for child_support alimony and rent subsidies copies of the most recent statement for each investment and retirement account copies of the most recent statement from lender s on loans such as mortgages second mortgages vehicles etc showing monthly payments loan payoffs and balances mr cunningham requested a delay in the date of the hearing by letter of date appeals extended the date of the hearing by days from april to date the letter also explicitly required the submission of documents four days earlier on date the deadline to provide the requested information is please refer back to my letter dated for a list of this needed information on date mr cunningham faxed to appeals a form 433-a but not the applicable attachments called for by the form nor the tax returns bank statements or paystub requested in appeals’ letter he attended the hearing on date the parties dispute the details of what was said and done at that hearing but there is no dispute that mr cunningham did not present the requested documentation at that hearing nor at any time thereafter on date appeals issued its notice_of_determination sustaining the lien and levy notices tax_court proceedings mr cunningham timely filed his petition in this court in date the commissioner filed a motion for summary_judgment on date the court’s order of date required mr cunningham to file a response and explained to him the nature of a motion for summary_judgment and the manner in which he should respond if mr cunningham disagrees with the facts set out in the irs’s motion then his response should point out the specific facts in dispute if he disagrees with the irs’s argument as to the law then his response should also set out his position on the disputed legal issues q as that the court has prepared on the subject what is a motion for summary_judgment how should i respond to one are available at ustaxcourt gov taxpayer_info_start htm start40 and are printed on the page attached to this order mr cunningham timely filed a response the court then held a telephone conference with the parties on date respondent’s counsel stated that many factual assertions in mr cunningham’s response are not correct but that for purposes of summary_judgment the court may assume the facts he states in his response discussion i applicable legal principles a summary_judgment standards where the pertinent facts are not in dispute a party may move for summary_judgment to expedite the litigation and avoid an unnecessary trial summary_judgment may be granted where there is no genuine dispute as to any material fact and a decision may be rendered as a matter of law rule a and b the party moving for summary_judgment ie the commissioner bears the burden of showing that there is no genuine dispute as to any material fact and factual inferences will be drawn in the manner most favorable to the party opposing summary_judgment ie mr cunningham see 85_tc_812 b collection review procedure if a taxpayer fails to pay any federal_income_tax liability after notice_and_demand sec_6331 authorizes the irs to collect the tax by levy on the taxpayer’s property and sec_6323 authorizes the irs to file an nftl to protect the government’s interests however congress has added to chapter of the code certain provisions in subchapter_c part i and in subchapter_d part i entitled due process for liens and due process for collections and those provisions must be complied with before the irs can proceed with a levy or sustain the filing of an nftl the irs must first issue a final notice_of_intent_to_levy and or a notice of filing an nftl and notify the taxpayer of the right to an administrative hearing sec_6320 and b a and b after receiving such a notice the taxpayer may request that administrative hearing sec_6320 b a b b which takes place before appeals sec_6330 if the taxpayer is dissatisfied with the outcome there he can appeal that determination to the tax_court sec_6320 sec_6330 as mr cunningham has done at the cdp hearing the appeals officer must determine whether the proposed collection action may proceed in the case of a notice_of_intent_to_levy the procedures for the agency-level cdp hearing before appeals are set forth in sec_6330 the procedures for the agency-level hearing regarding an nftl are the same as those set forth in sec_6330 for a notice_of_levy sec_6320 the appeals officer is required to take into consideration several things first the appeals officer must verify that the requirements of any applicable law and administrative procedure have been met by irs personnel sec_6330 the attachment to the notice_of_determination summarized the appeals officer’s compliance with these requirements and we discuss below mr cunningham’s contentions as to verification under sec_6330 second the taxpayer may raise at the hearing any relevant issue relating to the unpaid tax or the collection action including challenges to the appropriateness of the collection action and offers of collection alternatives sec_6330 some of mr cunningham’s contentions pertain to collection alternatives ie an oic an ia and cnc status which we will discuss below additionally the taxpayer may contest the existence and amount of the underlying tax_liability but only if he did not receive a notice_of_deficiency or otherwise have a prior opportunity to dispute the tax_liability sec_6330 mr cunningham now concedes he was not entitled to contest his underlying tax_liability in the cdp hearing in his petition mr cunningham alleged that he questioned the liability during the agency-level cdp hearing and was not satisfied that he had received the notice of deficiencies sic however after the commissioner’s motion for summary_judgment demonstrated the irs’s issuance and mailing of statutory notices of deficiency mr cunningham stated in his response respondent has since produced mailing lists showing the mailing of said notice of deficiencies continued finally the appeals officer must determine whether any proposed collection action 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 in this regard the notice_of_determination issued to mr cunningham stated the taxpayer did not provide the requested financial information and supporting documentation to support his request for an uncollectible status additionally the taxpayer is not in compliance with his filing_requirements therefore no collection alternatives could be granted at this time it is appeals’ determination that the levy action and the filed lien balances the need for efficient collection_of_taxes with the legitimate concern the actions are no more intrusive than necessary when as here the underlying liability of the taxpayer is not properly at issue the tax_court reviews appeals’ determination regarding the appropriateness of the collection action for abuse_of_discretion goza v commissioner 114_tc_5 continued and petitioner concedes the discussion of the liability for tax years the oic is authorized by sec_7122 ‘the decision to entertain accept or reject an offer_in_compromise is squarely within the discretion of the appeals officer and the irs in general ’ gregg v commissioner tcmemo_2009_19 slip op pincite quoting 454_f3d_688 7th cir consequently in reviewing appeals’ determination not to accept an oic we do not substitute our judgment for that of appeals and decide whether in our opinion an oic should have been accepted here see 112_tc_19 keller v commissioner tcmemo_2006_166 aff’d in part 568_f3d_710 9th cir instead we review continued that is we decide whether the determination was arbitrary capricious or without sound basis in fact or law see 125_tc_301 aff’d 469_f3d_27 1st cir ii analysis mr cunningham has asserted errors by appeals as to verification that the requirements of any applicable law or administrative procedure have been met under sec_6330 and as to several collection-related issues under sec_6330 and c a verification sec_6330 provides the appeals officer shall at the hearing obtain verification from the secretary that the requirements of any applicable law or administrative procedure have been met mr cunningham invokes this provision and disputes verification but his broad contention misses the mark he attempts to invoke this verification concept to criticize appeals’ alleged failure to verify adequately a wide variety of facts related to his entitlement to collection alternatives and cnc status in particular the facts he alleges about his financial hardship but the verification called for by this statute is more narrow continued appeals’ determination for abuse_of_discretion apart from any collection alternative or issue that the taxpayer might raise see 131_tc_197 appeals must verify that before the cdp hearing all legal and administrative requirements--ie the predicates for the collection notice that prompts the cdp hearing request--have been met thus t he basic requirements see sec_6331 d for which the appeals officer obtains verification are the issuance of a notice_of_deficiency see sec_6212 the irs’s timely assessment of the liability sec_6201 sec_6501 the giving to the taxpayer of notice_and_demand for payment of the liability sec_6303 and the giving to the taxpayer of notice of the proposed collection action and of the taxpayer’s right to a hearing sec_6330 sec_6331 carothers v commissioner tcmemo_2013_165 at n as is discussed above mr cunningham concedes the first requirement issuance of the notice_of_deficiency the commissioner’s memorandum shows and cites evidence for compliance with the other three and mr cunningham does not dispute them consequently the commissioner is entitled to summary_judgment on the issue of verification under sec_6330 b collection issues mr cunningham alleges that the irs abused its discretion with respect to various conclusions it reached in determining his financial circumstances and his reasonable collection potential denying him collection alternatives and cnc status and issuing a notice_of_determination without giving him sufficient time denial of collection alternatives mr cunningham indicated an interest in an oic and an ia but appeals did not enter into such an agreement with him for two independent reasons we sustain appeals’ action a mr cunningham was not in compliance the irs has a policy of not entering into an oic or an ia with a taxpayer who is not up to date in filing required tax returns this policy is not an abuse_of_discretion see wright v commissioner tcmemo_2012_24 huntress v commissioner tcmemo_2009_161 and applying this policy in mr cunningham’s instance was certainly not an abuse_of_discretion he had failed to file income_tax returns for at least eight years this is a remarkable failure mr cunningham makes two principal counter-arguments in this regard first he contends he should be excused for his non-compliance because he was unable to prepare any_tax returns because his accountant died and petitioner was unable to retrieve records mr cunningham alleges that the dead accountant’s family failed or refused to return his records so mr cunningham must reconstruct his records by getting information from third parties he does not corroborate this assertion even to the extent of stating when the accountant died or explaining how the accountant had eight years’ worth of mr cunningham’s records but had not prepared any returns but even if his accountant did die as alleged and no matter when he died and even if the accountant’s family thereafter refused mr cunningham’s requests this excuse falls flat it was mr cunningham’s duty to file returns and it is no one’s fault but his own that he allowed himself to become so far in arrears that preparing those returns now requires extraordinary and difficult effort it is now incumbent on him to exert that effort and appeals gave him 2½ additional months to do so his prior extreme failure over a period of at least eight years--and the in a separate case--cunningham v commissioner t c dkt no filed date --mr cunningham testified on date that the accountant died in if in the instant case we were to take judicial_notice of that testimony and assume it true it would not improve mr cunningham’s position in this case mr cunningham’s failure_to_file returns for and 2007--the latest of which was due in date--is not explained by that death in and when the cdp hearing concluded in date without the filing of any of the returns appeals did not abuse its discretion by concluding that mr cunningham’s noncompliance was unexcused and would not be cured by the allowance of a few more days or weeks unfortunate but almost predictable consequences of that long-term delinquency--do not now make him entitled to additional special indulgence by the tax collector second mr cunningham argues that his preparation of his delinquent returns was delayed by the irs’s supposed failure to provide documents he needed in order to prepare those returns he complains the only documents received from appeals were copies of petitioner’s transcripts for tax years no transcripts of account or wage transcripts were provided for tax years or and no transcripts for petitioner’s wife were received since filing joint returns is elective not mandatory see sec_6013 and since mr cunningham could have filed as a married_person filing separately sec_1 there is no apparent reason why he needed his wife’s transcripts in order to bring himself into compliance moreover he does not explain why he did not prepare returns for at least eight of the nine years--ie through 2012--for which he admits the irs did provide his transcripts a taxpayer cannot stop filing returns for eight years and then blame the irs for not promptly remedying his defaults mr cunningham’s request for a cdp hearing--laden with demands for documents--seems to show that he conceived of the hearing principally as an occasion in which the irs becomes obliged to give information to the taxpayer this is a serious misunderstanding a cdp hearing is principally the taxpayer’s opportunity to provide information about himself to the irs in order to induce the agency to forgo or temper its collection activity a taxpayer who requests a cdp hearing but then declines to provide information about himself is behaving self-contradictorily the boilerplate that mr cunningham attached to his cdp request reflects at best a distortion of the actual purpose of the cdp hearing and at worst a cynical attempt to use the procedure simply to attempt to burden the irs with pointless chores and to delay the collection of tax b mr cunningham failed to provide requested financial documentation appeals requested documentation of mr cunningham’s financial situation-- both on the form 433-a and in appeals’ letter--which documentation appeals intended to use to evaluate his financial situation and his entitlement to a collection alternative but mr cunningham failed to provide any of this documentation appeals does not abuse its discretion when it rejects a collection alternative because a taxpayer does not provide all of the necessary financial information during the cdp hearing process see eg 414_f3d_144 1st cir 138_tc_228 sullivan v commissioner at mr cunningham rejoins appeals did not request petitioners’ documentation substantiating the figures on the after the initial letter issued on date she the appeals officer emphasized the filing_requirements and petitioner agreed to file whatever tax returns were necessary no indication was given to taxpayer that more financial documentation was needed petitioner was unaware appeals was waiting for more documentation and no deadline was given to provide documentation petitioner would have provided proof of all figures on form_433 if he had been further requested to do so it is hard to tell what this contention means since appeals did request the information again after the initial letter--ie in the letter of date granting the requested extension which stated please refer back to my letter dated for a list of this needed information --and did set a deadline for providing the information ie date but even without that repetition in the march letter mr cunningham was not entitled to disregard appeals’ reasonable request in its initial letter and to take that request seriously only if appeals repeated it in some fashion rather it was incumbent on mr cunningham to provide upon appeals’ first request the information that would have shown his financial circumstances and his failure to do so justified appeals’ declining a collection alternative denial of cnc status in view of mr cunningham’s non-compliance and resulting ineligibility for other collection alternatives appeals considered mr cunningham’s possible eligibility for cnc status but appeals then denied that status mr cunningham argues that in so doing appeals failed to consider properly his financial circumstances and therefore failed to compute properly his inability to pay however since mr cunningham failed to substantiate that financial information appeals was not obliged to believe it and was not obliged to attempt to compute his ability to pay it is not an abuse_of_discretion to deny cnc status to a delinquent taxpayer who fails to prove his financial situation see sullivan v commissioner at for that reason we need not resolve the parties’ disputes about the details of his financial circumstance mr cunningham did not provide during his cdp hearing or thereafter the predicate for such a dispute denial of request for more time mr cunningham argues that appeals unreasonably failed to grant him more time to get into compliance and provide financial information it is not clear from the record that he actually requested more time but for present purposes we assume that he did request it at the cdp hearing on date and that appeals explicitly denied the request such a denial would have been reasonable and not an abuse_of_discretion appeals’ letter of date had informed mr cunningham of his need to file his delinquent returns of course mr cunningham had filed returns for years before and he does not pretend that he first learned of this duty in date the letter also informed him of his need to provide financial information about himself appeals gave him until date ie 2½ months including a two-week extension to prepare the returns and provide the information he prepared none of the returns not even the return that had been recently due on date and provided none of the information by date mr cunningham had given appeals no reason to suppose that he was diligently working to satisfy appeals’ requests or that he was a deserving recipient of latitude moreover since appeals issued its notice_of_determination well over a year ago it appears mr cunningham still has filed none of the returns if appeals reckoned that mr cunningham could not be counted on to use additional time to bring himself into compliance appeals evidently reckoned well mr cunningham argues petitioner is an average citizen attempting to do his best to comply with everything that everybody wants all at once and is really quite annoyed that respondent keeps repeating petitioner is not in compliance or saying petitioner is not working with respondent in either case mr cunningham’s expression of annoyance is not appropriate the average citizen is not years behind in his tax compliance the only reason that the irs wanted eight tax returns all at once is that they were all overdue most of them long overdue mr cunningham’s woefully incomplete response to appeals’ requests and his poor use of the extension that appeals did give him were good reasons not to grant him more time since more time would simply result in more delay sustaining the lien mr cunningham argues that appeals abused its discretion by sustaining the filing of the nftl because a lien may prohibit taxpayer from finding gainful employment or getting funding to begin a business adventure sic he thereby seems to argue that appeals failed to balance 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 under sec_6330 filing an nftl will usually be a much less intrusive collection mechanism than a levy since that filing simply holds the agency’s place in line so to speak while it waits for the taxpayer to acquire property that might be used to satisfy a tax_liability however it is true that a lien may adversely affect a taxpayer in the ways that mr cunningham suggests so even the mere filing of an nftl may sometimes call for some balancing of the irs’s collection need and the taxpayer’s concerns however mr cunningham gave no information whatsoever to show that the lien filing would actually cause him any particular disadvantage he described possible harm to a hypothetical taxpayer but he did not show or even allege harm to himself in seeking gainful employment or difficulty in obtaining funding for a proposed business venture if mr cunningham’s generality were sufficient to require the withdrawal of the nftl in this instance then that same generality could be invoked by every taxpayer in every instance and the irs could never file an nftl as we observed in kyereme v commissioner tcmemo_2012_174 slip op pincite rule d provides that an opposition to a motion for summary_judgment must set forth specific facts showing that there is a genuine issue for trial whereas petitioner did not state in any detail nor support with any evidence--not even his own affidavit or declaration--the allegations that would fully articulate his contention nor did he show that in the agency-level cdp hearing he made specific contentions supported by evidence--a showing he must make before making the contentions here see 129_tc_107 sec_301_6320-1 q a-f3 proced admin regs the same is true for mr cunningham appeals did not abuse its discretion in sustaining the proposed levy and the filing of the nftl nor in denying to mr cunningham an ia an oic or cnc status to reflect the foregoing an appropriate order and decision will be entered


t c memo united_states tax_court perry d mcbroom deceased and jackie s mcbroom petitioners v commissioner of internal revenue respondent docket no filed date margaret a martin for respondent memorandum opinion goldberg judge this case was assigned pursuant to the provisions of sec_7443a and rule sec_180 sec_181 and sec_182 and is before the court on respondent's motion for summary_judgment and motion to dismiss as to petitioner perry d mcbroom for lack of prosecution respondent determined a deficiency in petitioners' federal_income_tax for the taxable_year in the amount of dollar_figure and all section references are to the internal_revenue_code in effect for the year in issue all rule references are to the tax_court rules_of_practice and procedure additions to tax under sec_6653 and sec_6659 in the respective amounts of dollar_figure and dollar_figure and under sec_6653 in the amount of percent of the interest due on the underpayment_of_tax attributable to negligence or intentional_disregard_of_rules_and_regulations respondent also determined that interest due on the deficiency for would be computed pursuant to the increased interest rate imposed under sec_6621 for the reasons discussed below we grant respondent's motions background the income_tax adjustments at issue relate to the disallowance of the investment_tax_credit and of a partnership loss claimed with respect to petitioners' investment in florin farms this case is part of a larger group of cases designated as the hoyt farms group named after the organizer and operator of numerous cattle and sheep breeding partnerships w j hoyt sons and or walter j hoyt iii at the time of the filing of their petition petitioners were pro_se however on date an entry of appearance was filed on their behalf by messrs jim b dismukes and joel drum this case was set for a pretrial hearing in san francisco california on date for the purpose of determining whether the case would be tried and if so the most expeditious manner to proceed in light of the case of bales v commissioner tcmemo_1989_568 the bales case involved like cattle breeding partnerships formed by walter j hoyt iii at the pretrial hearing jim b dismukes filed a motion to withdraw as counsel which was granted in addition respondent filed an amendment to answer in which she determined an increased deficiency and additions to tax on date respondent filed a status report informing the court that petitioner perry d mcbroom mr mcbroom died on date and that petitioner jackie s mcbroom petitioner was interested in settling the case with respondent mr mcbroom died intestate in california a community_property_state and was survived by petitioner and adult children residing in texas petitioner accepted respondent's appeals_office offer on or about date however petitioner failed to comply with the terms of the settlement offer on date respondent served on petitioner and her counsel joel drum respondent's first request for admissions addressed to the petitioner jackie s mcbroom requesting that the facts set forth therein be admitted or denied pursuant to rule respondent's request was filed with this court on date petitioner did not respond the case was calendared for trial at a special session beginning on date in san francisco california on date respondent filed the pending motion for summary_judgment wherein she concedes the additions to tax under sec_6653 and and and the increased interest under sec_6621 respondent further concedes the increased deficiency and additions to tax asserted in her amended answer the motion was calendared for hearing at the special session on date joel drum the sole remaining counsel for petitioners filed a motion to withdraw which was granted at the special session on date there was no appearance by or on behalf of petitioner subsequently michael a bickford filed his entry of appearance on behalf of petitioner on date to date petitioner has not contested respondent's motion for summary_judgment on date respondent filed a motion to dismiss insofar as it pertains to petitioner perry d mcbroom for lack of prosecution as grounds in support of the motion respondent alleges that respondent was advised by petitioner that all property belonging to mr mcbroom passed on to her as his surviving_spouse and as a result no estate was created and no personal representative was appointed on date the court received notice from petitioner's counsel that petitioner would not be filing any further papers or requests of the court at this time dealing with the case in a supplemental motion to dismiss filed date respondent requested that we find a deficiency in income_tax for the taxable_year due from perry d mcbroom deceased in the amount of dollar_figure respondent also conceded all additions to tax under sec_6653 and and the increased interest rate under sec_6621 and the increased deficiency and additions to tax asserted in the amended answer petitioner had no objection to the granting of this motion motion for dismissal our jurisdiction over a case continues despite the death of a taxpayer even though there is no personal representative to act in the place of the decedent 50_tc_30 citing sec_7459 we stated in nordstrom that under circumstances such as those in the instant case one method of bringing the case to a conclusion is for the commissioner to move to dismiss the case for lack of prosecution id we went on to state it must be recognized we think that even though no representative of the decedent has come forward to press for the relief sought by the decedent when he was alive and filed his petition for redetermination there may be survivors whose monetary interests are capable of being affected by satisfaction of the liabilities which will be determined consequent upon a dismissal for lack of prosecution in recognition of the affectability of those interests it seems appropriate to give notice of the proceedings to those whose interests stand to be affected so that they may have an opportunity to be heard if they so desire or perhaps to seek the appointment of a personal representative by the appropriate court having jurisdiction over the decedent's_estate id pincite under this reasoning we issued an order directing the taxpayer her counsel and the commissioner to provide the court with the names and addresses of the heirs at law of the decedent as determined by the law of the jurisdiction wherein the decedent was a resident at the time of his death insofar as they could be reasonably ascertained until potential heirs were identified and notified we held the commissioner's motion under advisement in the instant case mr mcbroom resided in california at the time of his death under california law on the death of a married_person one-half of the decedent's community and quasi- community_property belongs to the surviving_spouse and the other half belongs to the decedent cal prob code secs west in the case of intestate_succession if the decedent leaves no child surviving the one-half which belongs to the decedent passes to the surviving_spouse leaving the surviving_spouse with all of the community and quasi-community_property id sec_6401 and b where a decedent leaves more than one child living the intestate share of the surviving_spouse in separate_property equals one-third of the intestate estate id subsec c a the remainder of the intestate estate passes to the issue of the decedent id sec_6402 under section of the california civil code west community_property is defined as all real_property situated in california and personal_property acquired during the marriage by a married_person while domiciled in california unless it is the separate_property of the husband or the wife neither party in this case presented information to indicate that any of the property of mr mcbroom was his separate_property rather than community_property or that mr mcbroom has heirs at law whose interests may be affected by our decision in this case under state law all of mr mcbroom's property passed upon his death to petitioner as his surviving_spouse consequently we are not presented with the problem faced in nordstrom v commissioner supra based on the foregoing and because there is no one willing or able to prosecute this case on behalf of mr mcbroom we grant respondent's motion to dismiss for lack of prosecution as supplemented summary_judgment in the motion for summary_judgment respondent contends that all of the facts necessary for our decision are set forth in respondent's first request for admissions filed date respondent notes that petitioner did not respond to respondent's first request for admissions and thus pursuant to rule c each matter set forth therein was automatically deemed admitted days after service of the request morrison v commissioner cal prob code sec west on jan this section was repealed along with other sections of the civil code and sections of the code of civil procedure evidence code and probate code the repealed provisions were then incorporated into the new california family code see cal fam code sec west 81_tc_644 65_tc_333 affd on other grounds 565_f2d_954 5th cir respondent contends that she is entitled to a decision under rule as a matter of law the court may grant summary_judgment 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 b 100_tc_32 see 85_tc_527 respondent as the moving party in this case bears the burden of proving that there is no genuine issue of material fact and that a decision may be rendered as a matter of law rule b bond v commissioner supra pincite 95_tc_594 78_tc_412 the court will view factual material and inferences drawn therefrom in the light most favorable to the party opposing the motion for summary_judgment 79_tc_340 espinoza v commissioner supra since petitioner has failed to respond to respondent's request for admissions the following statements set forth in the request for admissions are deemed admitted during the taxable_year petitioners were partners in one or more cattle partnerships formed by walter j hoyt iii namely florin farms petitioner accepted and executed a sacramento california appeals_office settlement offer which reads as follows i would like to settle my case on the basis of the offer first extended by the irs on date -- cash_out of pocket this will be a binding settlement only if you sign a closing_agreement form_906 and we countersign it on behalf of the commissioner of internal revenue when we sign the agreement form the one-year assessment_period of limitations on assessments described at i r c section f will begin if you elect to accept the irs out-of-pocket settlement offer please provide the following information and return it to us no later than july copies of all cancelled checks written to the hoyt organization or to others acting as agents of the hoyt organization if any copies of all annual statements provided to you by the hoyt organization a schedule which shows a break-down of how the payments to the hoyt organization were applied for example -- annual contribution to partnership capital -- ira contribution -- tax preparation fee and -- any other_amounts you can specifically identify pursuant to the out-of-pocket settlement agreement referred to in paragraph a petitioner is not entitled to any loss deductions from any cattle partnership for the taxable_year b petitioner is not entitled to any investment_tax_credit for the taxable_year c petitioner is not entitled to any deduction for cash_out of pocket in absence of an executed closing_agreement petitioner refused or neglected to execute a closing_agreement necessary to finalize the out_of_pocket_settlement offer there is a deficiency in income_tax due from petitioner for the taxable_year in the amount of dollar_figure respondent's motion is supported by the deemed admissions matters deemed admitted pursuant to rule are conclusively established and are sufficient to support the granting of a motion for summary_judgment morrison v commissioner supra pincite petitioner did not appear at the hearing on respondent's motion despite notice from this court and the deemed admissions clearly establish that no genuine issue of material fact exists as to the deficiency determination 85_tc_267 accordingly respondent is entitled summary_judgment with respect to such determination as a matter of law to reflect the foregoing an appropriate order and decision will be entered for respondent


department of the treasury i n t e r n a l r e v e n u e s e r v i c e w a s h i n g t o n d c date cc psi b06 ------------- genin-122264-11 o f f i c e o f t h e c h i e f c o u n s e l number release date uil 30d ------------------------ ----------------------------- ------------------------------------ dear ------------- you asked whether a taxpayer who is entitled to a dollar_figure credit under section sec_30d of the internal_revenue_code provides for a credit for certain new this is in response to your letter dated date to secretary geithner regarding the federal qualifed plug-in electric drive motor_vehicle credit his office requested that i respond to your inquiry qualified plug-in electric drive motor vehicles in general the amount of credit available depends on the amount of battery capacity for a particular vehicle the total amount of the credit allowed for a vehicle under sec_30d is limited to dollar_figure 30d but has tax_liability of less than dollar_figure for that year may carry the additional credit_amount over to the following tax_year in general individual taxpayers calculate their tax_liability on a yearly basis and a special provision must be found to allow a taxpayer to determine his or her tax_liability in one year using income deduction or credit items that occurred during a different year sec_30d does not contain such a special provision on the contrary sec_30d states there shall be allowed as a credit against the tax imposed by this chapter for the taxable_year an amount equal to the sum of the credit with respect to each new_qualified_plug-in_electric_drive_motor_vehicle placed_in_service by the taxpayer during the taxable_year thus the credit is only allowed in the year in which the vehicle is placed_in_service and may not be carried over to future years or back to past years purchaser of the vehicle is entitled to take the sec_30d credit as part of the calculation of the income of the trade_or_business if the trade_or_business has tax we note that if a sec_30d qualified_vehicle is used in a trade_or_business the genin-122264-11 liability of less than the dollar_figure credit_amount that amount may be carried back to prior years or forward to later years under the rules that apply to business credits please contact --------------------of my staff at -------------------- not a toll free call we hope this information is helpful to you if you require additional information sincerely charles b ramsey branch chief branch passthroughs special industries


t c memo united_states tax_court corrie miles petitioner v commissioner of internal revenue respondent docket no 16887-05l filed date thanasi k preovolos for petitioner karen nicholson sommers for respondent memorandum opinion vasquez judge pursuant to sec_6330 petitioner seeks review of respondent’s determination to proceed with collection of her unpaid and income_tax liabilities 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 the sole issue for decision is whether respondent may proceed with collection of petitioner’s and income_tax liabilities background some of the facts have been stipulated and are so found the stipulation of facts and the attached exhibits are incorporated herein by this reference at the time the petition was filed petitioner resided in california the and federal tax_liens petitioner and her former spouse gregory romine mr romine were married during the years in issue they divorced in on date petitioner and mr romine filed a joint federal_income_tax return for the return on the return petitioner and mr romine reported tax due of dollar_figure and withholding_tax credits of dollar_figure no payment accompanied the return on date respondent assessed the tax reported on the return interest and additions to tax on date respondent filed a notice_of_federal_tax_lien filing and your right to a hearing under sec_6320 nftl with the san diego petitioner and mr romine paid dollar_figure toward their tax_liability on date a credit_for_overpayment_of_tax from mr romine’ sec_2002 taxes was also applied against the liability additionally a payment of dollar_figure was made toward the liability on date county recorder’s office with respect to petitioner and mr romine’s income_tax_liability petitioner and mr romine filed a joint federal_income_tax return for the return reporting tax due of dollar_figure and withholding_tax credits of dollar_figure no payment accompanied that return on date respondent assessed the tax reported on the return interest and additions to tax on date respondent assessed additional tax of dollar_figure pursuant to an agreement executed by petitioner mr romine and respondent on date respondent filed an nftl with the san diego county recorder’s office with respect to petitioner and mr romine’s income_tax_liability petitioner’s bankruptcy proceedings on date petitioner filed a petition pursuant to chapter of the u s bankruptcy code in the u s bankruptcy court for the southern district of california the bankruptcy court in connection with her bankruptcy case petitioner filed a complaint to determine the dischargeability of her federal_income_tax liabilities for the tax years and on date the bankruptcy court entered a stipulation for entry of judgment and judgment thereon in which the bankruptcy a payment of dollar_figure was made toward the liability on date court determined that petitioner’s and tax_liabilities would be discharged upon the entry of an order granting petitioner a discharge in her bankruptcy case on date the bankruptcy court entered an order of discharge in petitioner’s bankruptcy case pursuant to u s c section petitioner’s individual_retirement_account on the date she filed her chapter bankruptcy petition petitioner owned an individual_retirement_account ira worth dollar_figure respondent’s collection efforts on date revenue_officer cindy alexander ms alexander was assigned to investigate enforcement of the federal tax_liens with respect to petitioner’s and tax_liabilities ms alexander determined that the federal tax_liens for and attached to petitioner’s ira to the extent of its value of dollar_figure on the date petitioner filed her petition in her bankruptcy case on date ms alexander sent petitioner a final notice--notice of intent to levy and notice of your right to a hearing with regard to petitioner’s and tax_liabilities notice_of_intent_to_levy on date petitioner sent to respondent a form request for a collection_due_process_hearing in the form petitioner stated that she disagreed with the collection action proposed in respondent’s notice_of_intent_to_levy and requested a hearing pursuant to sec_6330 petitioner’s sec_6330 hearing petitioner’s sec_6330 hearing was assigned to settlement officer cynthia chadwell settlement officer chadwell petitioner’s sec_6330 hearing consisted of phone calls and a written correspondence between settlement officer chadwell and petitioner’s representatives that occurred between march and july of as discussed infra petitioner raised two arguments during the hearing petitioner argued that respondent erroneously determined that the federal tax_liens continued to be valid against petitioner’s interest in her ira after her discharge from personal liability on the and income_tax liabilities in her chapter bankruptcy case petitioner also argued that respondent erroneously determined that the federal tax_liens remained valid after petitioner allegedly transferred the funds in her ira into a pension_plan administered by petitioner’s new employer settlement officer chadwell determined to proceed with the proposed levy and respondent issued to petitioner a notice_of_determination concerning collection action s under sec_6320 and or on date discussion sec_6331 provides that if any person liable to pay any_tax neglects or refuses to do so within days after notice_and_demand the secretary generally can collect such tax by levy upon all property and rights to property belonging to such person or on property on which there is a federal_tax_lien pursuant to sec_6331 the secretary is required to give the taxpayer notice of his intent to levy and within that notice must describe the administrative review available to the taxpayer before proceeding with the levy see also sec_6330 sec_6330 describes the administrative review process providing that a taxpayer can request an appeals hearing sec_6330 hearing with regard to a levy notice pursuant to sec_6330 a taxpayer may raise at the sec_6330 hearing any relevant issue with regard to the commissioner’s collection activities including spousal defenses challenges to the appropriateness of the commissioner’s intended collection action and alternative means of collection 114_tc_604 114_tc_176 although the nftls were filed before the effective date of sec_6320 and sec_6330 which apply to collection actions initiated after date the collection_due_process procedures apply to the matter before us because the levy notice was issued after that date see internal_revenue_service restructuring and reform act of publaw_105_206 112_stat_746 117_tc_63 when the commissioner issues a determination regarding a disputed collection action sec_6330 permits a taxpayer to seek review in this court if the underlying tax_liability is properly at issue we review that issue de novo sego v commissioner supra pincite goza v commissioner supra pincite if the validity of the underlying tax_liability is not at issue we review the commissioner’s determination for abuse_of_discretion sego v commissioner supra pincite we have previously held that this court has jurisdiction in a levy proceeding instituted pursuant to sec_6330 to determine whether a taxpayer’s unpaid tax_liabilities were discharged in bankruptcy 121_tc_111 120_tc_114 in washington we did not specifically address the appropriate standard of review to apply when determining whether a taxpayer’s tax_liabilities were discharged in bankruptcy where as in the matter before us the taxpayer has not received a notice_of_deficiency in this case the parties have stipulated that all of the evidence contained in the trial record was available to settlement officer chadwell in making her determination for the reasons discussed infra our review of that evidence causes us to sustain settlement officer chadwell’s determination to proceed with collection whether we apply an abuse_of_discretion or a de novo standard of review petitioner bears the burden_of_proof see rule a in her petition petitioner appears to argue that respondent erred in determining that the federal tax_liens for petitioner’s and income_tax liabilities were valid at the time they were filed during petitioner’s sec_6330 hearing petitioner’s counsel advised respondent that we do not disagree that the above mentioned sic liens are valid liens moreover at trial petitioner failed to introduce any evidence or raise any specific argument supporting her contention that the federal tax_liens were invalid as filed we conclude that petitioner has abandoned that issue 92_tc_661 petitioner further contends that respondent erroneously determined that the federal tax_liens continued to be valid against petitioner’s interest in her ira after her discharge from personal liability on the and income_tax liabilities in her chapter bankruptcy case we have specifically held that a discharge from personal liability in a chapter bankruptcy case does not extinguish a prepetition federal_tax_lien 122_tc_287 see also u s c sec_522 providing that exempt_property remains subject_to properly filed tax_liens even though the underlying tax claim may have been discharged 27_f3d_365 9th cir a preexisting lien on property however remains enforceable against that property even after an individual’s personal liability has been discharged petitioner also contends that respondent erroneously determined that the federal tax_liens remained valid after petitioner allegedly transferred the funds in her ira into a pension_plan administered by petitioner’s employer chapters inc petitioner contends that she rolled over her ira into the pension_plan which petitioner alleges was established under the employee_retirement_income_security_act_of_1974 erisa publaw_93_406 sec 88_stat_871 at both her sec_6330 hearing and at trial petitioner failed to produce any evidence to support her contention that she transferred her ira funds into an erisa-qualified pension_plan if a party fails to introduce evidence within that party’s possession we may presume in some circumstances that if produced the evidence would be unfavorable to that party 6_tc_1158 affd 162_f2d_513 10th cir this is true where the party that does not produce the evidence has the burden_of_proof or the other party has established a prima facie case id as noted supra petitioner bears the burden_of_proof in the matter before us petitioner repeatedly refused to supply respondent with any information regarding the account its status or its location we therefore conclude that no evidence in petitioner’s possession would establish that petitioner transferred the funds in her ira into an erisa-qualified pension_plan additionally petitioner’s argument that the lien on the ira was extinguished when petitioner transferred the funds in the ira into an erisa-qualified pension_plan is incorrect as respondent correctly notes the transfer of property subsequent to the attachment of the lien does not affect the lien for ‘it is of the very nature and essence of a lien that no matter into whose hands the property goes it passes cum onere’ 357_us_51 quoting 38_us_464 see also 317_us_338 29_us_124 petitioner also argues that the antialienation provisions of erisa prevent respondent from levying against petitioner’s alleged interest in the erisa-qualified pension_plan numerous courts--including on several occasions the u s court_of_appeals for the ninth circuit to which this case i sec_5 for example on date in response to a letter from respondent requesting information about petitioner’s ira funds petitioner’s counsel mr preovolos informed respondent only that currently the asset that you seek to levy is unavailable the record also indicates that chapters inc the employer that allegedly administered the erisa-qualified plan was formed in while petitioner was disputing the liens on her ira before respondent the mailing address for chapters inc appears to be petitioner’s personal mailing address appealable --have expressly rejected the argument that erisa antialienation provisions preclude enforcement of a federal tax levy see eg 476_f3d_1041 9th cir 343_f3d_1171 9th cir 222_f3d_655 9th cir anderson v united_states bankr b a p 9th cir see also 74_f3d_119 6th cir 32_f3d_180 5th cir finally petitioner argues that her alleged interest in the erisa-qualified plan does not constitute property or rights to property for the purpose of sec_6321 and thus is not subject_to lien or levy we need not pass on the merits of this argument as noted supra at the sec_6330 hearing and at trial petitioner failed to introduce any evidence to support her claim that she transferred the funds in her ira into an erisa- qualified_pension plan we therefore conclude that no evidence in petitioner’s control would establish that petitioner’s interest does not remain subject_to the federal tax_liens see wichita terminal elevator co v commissioner supra petitioner has failed to raise a spousal defense make a valid challenge to the appropriateness of respondent’s intended collection or offer alternative means of collection we therefore uphold respondent’s determination to proceed with collection of petitioner’s and income_tax liabilities in reaching all of our holdings herein we have considered all the parties’ arguments and to the extent not herein discussed we conclude that they are irrelevant or without merit to reflect the foregoing decision will be entered for respondent


internal_revenue_service number release date ---------------------------------- ----------------------------- --------------------------------------------- -------------------------------- in re --------------------------------------------- ----------------------------- -------------------------- ------------------------ - department of the treasury washington dc person to contact ---------------- id no ------------- cc ita telephone number --------------------- refer reply to plr-120528-05 date date legend a --------------------------------------------------------------- ------------------------------------------------- dates -------------------------- -------------------------- --------------------------- groups taxpayers and on attachment taxpayers and on attachment all other taxpayers on attachment dear -------------------- this letter responds to your letter and submissions of date supplementing a previous submission of march in which you requested on behalf of a above and forty other related parties the taxpayers - see attachment certain private letter rulings relating to the late-filing of forms election to have a tax_year other than a required tax_year specifically you requested that the taxpayers’ late-filed forms be considered timely filed under the authority contained in sec_301_9100-3 of the procedure and administration regulations we are pleased to address your concerns the information submitted indicates that each of the forty-one taxpayers on whose behalf rulings are requested is a partnership employing an overall accrual_method of accounting taxpayers are members of a tiered_structure as defined in sec_1_444-2t of the temporary income_tax regulations under sec_706 of the internal_revenue_code a partnership’s taxable_year must be its required_taxable_year unless among other exceptions not relevant here the partnership elects under sec_444 of the code to use a taxable_year other than its required_taxable_year sec_444 and permit an eligible_partnership to elect or change to a taxable_year only if the deferral_period of the taxable_year elected is not longer than the shorter of three months or the deferral_period of the taxable_year being changed the term deferral_period generally refers to the number of months between the beginning of the entity’s taxable_year and the close of the first required_taxable_year ending within such taxable_year in the instant circumstances taxpayers desired to elect a taxable_year ending november for their initial taxable_year which is a permitted taxable_year under sec_444 sec_444 of the code and sec_1_444-2t of the regulations provide in relevant part that entities that are part of a tiered_structure that consists only of partnerships all of which have the same taxable_year may make or continue an election under sec_444 of the code sec_1_444-3t of the regulations provides among other requirements that form_8716 must be filed by the earlier of i the 15th day of the fifth month following the month that includes the first day of the tax_year for which the election will first be effective or ii the due_date without regard to extensions of the income_tax return resulting from the sec_444 election sec_301_9100-1 of the regulations set forth rules respecting the granting of extensions of time for making certain elections under these rules the commissioner in his discretion may grant a reasonable extension of time to make a regulatory election under subtitle a provided the taxpayer acted reasonably and in good_faith and that the granting of relief will not prejudice the interests of the government sec_301_9100-2 sets forth rules governing automatic extensions for regulatory elections including elections to use other than the required tax_year under sec_444 if the provisions of section' do not apply to the taxpayer's situation as in the instant case the provisions of sec_301_9100-3 other extensions may apply sec_301_9100-3 sets forth standards that the commissioner will employ in determining whether to grant discretionary relief in situations that do not meet the requirements of sec_301_9100-2 the standards applied are whether the taxpayer acted reasonably and in good_faith in the matter and whether the granting of relief will prejudice the interests of the government generally a taxpayer will be deemed to have acted reasonably and in good_faith where for example the taxpayer reasonably relied on a qualified_tax professional and that professional failed to make or advise the taxpayer to make the election at issue in the instant circumstances group taxpayers’ forms electing to use a taxable_year ending november were due on or before date group taxpayers’ forms electing to use a taxable_year ending november were due on or before date and group taxpayers’ forms electing to use a taxable_year ending november were due on or before date due to an error or misunderstanding none of the forms was timely filed however the error was not due to any lack of due diligence or prompt action on the part of any taxpayer the information submitted and representations furnished by the taxpayers and their tax professionals establish that taxpayers acted reasonably and in good_faith in respect of this matter furthermore we have determined that the granting of relief in this case will not prejudice the interests of the government within the intendment of sec_301_9100-3 accordingly the requirements of sec_301_9100-3 for the granting of relief have been satisfied within days of the date of this ruling each taxpayer should file with the irs cincinnati service_center attn entity control a form_8716 electing to use a tax_year ending november effective for its first taxable_year ending either date date or date as appropriate a copy of this letter_ruling should accompany such submission and each taxpayer should type or print at the top of the form filed under sec_301_9100-3 of the regulations this ruling is further conditioned on taxpayers complying with sec_1 1t a which provides in relevant part that for each taxable_year that a partnership has an election under sec_444 in effect the partnership must i file a return as provided in sec_1_7519-2t and ii make any required_payment as provided in sec_1_7519-2t except for the specific ruling above which is restricted to the filing of forms we express or imply no opinion concerning the federal_income_tax consequences of the facts of this case under any other provision of the code or regulations that may be applicable thereto this letter_ruling is based on facts and representations provided by the taxpayers and their authorized representatives and is limited to the matters specifically addressed no opinion is expressed as to the tax treatment of the transactions considered herein under the provisions of any other sections of the code or regulations which may be applicable thereto or the tax treatment of any conditions existing at the time of or effects resulting from such transactions which are not specifically addressed herein because it could help resolve federal tax issues a copy of this letter should be maintained with the taxpayers’ permanent records pursuant to a power_of_attorney currently on file with this office the original of this letter_ruling is being sent to the taxpayers’ authorized representative and copies are being furnished to the taxpayers and their second-designated authorized representatives a copy of this letter is also being sent to the taxpayers’ appropriate irs industry director this ruling is directed only to the taxpayers who requested it sec_6110 of the internal_revenue_code provides that it may not be used or cited as precedent associate chief_counsel income_tax accounting s william a jackson by _________________________ william a jackson chief branch attachment enclosures copy of this letter copy for sec_6110 purposes attachment plr-119941-05 ---------------------------------------------------------------- -------------------------------------------------------------- plr- -------------------------------- plr-119947-05 --------------------------------------------------------------------------- plr-119950-05 --------------------------------------------------------- plr-119955-05 ------------------------------------------ plr- ---------------------------------------- plr-120150-05 ------------------------------------- plr-120154-05 -------------------------------------------------- plr-120199-05 ------------------------------------------------------- plr- --------------------------------------------- plr-120212-05 -------------------------------------------------- plr-120219-05 ----------------------------------------- plr-120220-05 ------------------------------------ plr-120218-05 --------------------------------------- plr-120222-05 ---------------------------- plr-120231-05 ------------------------------------------ plr-120233-05 ----------------------------------------------------- ---------------------------------------------------- plr-120235-05 ------------------------------------ plr-120236-05 -------------------------------------------------- plr-120237-05 ----------------------------------------------------------- plr-120239-05 ---------------------------------------------- plr-120248-05 ----------------------------------- plr-120249-05 -------------------------------------- plr-120252-05 -------------------------------------------- plr-120254-05 ---------------------------------------------------------- plr-120258-05 ----------------------------------------- plr-120263-05 ---------------------------------------------- plr-120268-05 --------------------------------------- plr-120270-05 -------------------------------------------------------------- plr-120507-05 ------------------------------------------- plr-120514-05 ------------------------- plr-120512-05 ------------------------ plr-120517-05 ------------------------------------------------- plr-120519-05 ----------------------------------------- plr-120526-05 -------------------------------- plr-120527-05 ---------------------------------------------------------- plr-120566-05 ------------------------------------------------- plr-120528-05 ----------------------------------------------- plr-120548-05 ------------------------------------------------- plr-120550-05 --------------------------------------- -------------------------------------------- plr-120552-05


internal_revenue_service number release date index number -------------------------------------------------- ---------------------------------------- ------------------------------------- ------------------------------------ department of the treasury washington dc third party communication none date of communication not applicable_person to contact ---------------------- id no ----------------- telephone number --------------------- refer reply to cc psi b03 plr-133047-11 date date company ------------------------------------------------------------------------------------------------- ----------------------- legend state date date date ---------- ------------------ ---------------------- ------------------- trust ------------------------------------------------------------- trust ---------------------------------------------------------------- trust ------------------------------------------------------------ trust ------------------------------------------------------------ trust ------------------------------------------------------- dear ------------------- this letter responds to a letter dated date submitted on behalf of company by company’s authorized representative requesting a ruling under sec_1362 of the internal_revenue_code plr-133047-11 facts company incorporated in state on date and elected to be an s_corporation effective date shares of company stock were transferred to trust trust trust trust and trust together the trusts on date company represents that the trusts qualify to be qualified subchapter_s trusts qssts under sec_1361 except that the beneficiary of each respective trust failed to make the election under sec_1361 therefore these trusts were not eligible s_corporation shareholders and company’s s_corporation_election terminated on date company represents that company and company’s shareholders have filed tax returns consistent with company being an s_corporation company further represents that the circumstances resulting in the termination of company’s s_corporation_election were inadvertent and were not motivated by tax_avoidance or retroactive tax planning company and its shareholders agree to make any adjustments consistent with the treatment of company as an s_corporation as may be required by the secretary with respect to the period specified by sec_1362 law and analysis sec_1361 provides that the term s_corporation means with respect to any taxable_year a small_business_corporation for which an election under sec_1362 is in effect for such year sec_1361 provides that for purposes of subchapter_s the term small_business_corporation means a domestic_corporation which is not an ineligible_corporation and which does not have as a shareholder a person other than an estate a_trust described in sec_1361 or an organization described in sec_1361 who is not an individual sec_1361 provides that for the purposes of sec_1362 a_trust all of which is treated under subpart e of part i of subchapter_j of chapter as owned by an individual who is a citizen or resident_of_the_united_states may be an s_corporation shareholder sec_1361 provides that in the case of a qsst with respect to which a beneficiary makes an election under sec_1361 a such trust will be treated as a_trust described in sec_1361 and b for purposes of sec_678 the beneficiary of such trust shall be treated as the owner of that portion of the trust which consists of stock in an s_corporation with respect to which the election under sec_1361 is made sec_1361 provides that a beneficiary of a qsst or his legal_representative may elect to have sec_1361 apply plr-133047-11 sec_1361 provides that for purposes of sec_1361 the term qualified_subchapter_s_trust means a_trust a the terms of which require that i during the life of the current income_beneficiary there shall be only income_beneficiary of the trust ii any corpus distributed during the life of the current income_beneficiary may be distributed only to such beneficiary iii the income_interest of the current income_beneficiary in the trust shall terminate on the earlier of such beneficiary's death or the termination of the trust and iv upon the termination of the trust during the life of the current income_beneficiary the trust shall distribute all of its assets to such beneficiary and b all of the income within the meaning of sec_643 of which is distributed or required to be distributed currently to individual who is a citizen or resident_of_the_united_states a substantially separate and independent share of a_trust within the meaning of sec_663 shall be treated as a separate trust for purposes of sec_1361 and sec_1361 sec_1362 provides that an election under sec_1362 shall be terminated whenever at any time on or after the 1st day of the 1st taxable_year for which the corporation is an s_corporation such corporation ceases to be a small_business_corporation sec_1362 provides that if an election under sec_1362 by any corporation was not effective for the taxable_year for which made determined without regard to sec_1362 by reason of a failure to meet the requirements of sec_1361 or to obtain shareholder consents or was terminated under sec_1362 or the secretary determines that the circumstances resulting in such ineffectiveness or termination were inadvertent no later than a reasonable period of time after discovery of the circumstances resulting in such ineffectiveness or termination steps were taken so that the corporation for which the election was made or the termination occurred is a small_business_corporation or to acquire the required shareholder consents and the corporation for which the election was made or the termination occurred and each person who was a shareholder in such corporation at any time during the period specified pursuant to f agrees to make such adjustments consistent with the treatment of such corporation as an s_corporation as may be required by the secretary with respect to such period then notwithstanding the circumstances resulting in such ineffectiveness or termination such corporation shall be treated as an s_corporation during the period specified by the secretary sec_1_1362-4 of the income_tax regulations provides that for purposes of sec_1_1362-4 the determination of whether a termination or invalid election was inadvertent is made by the commissioner the corporation has the burden of establishing that under the relevant facts and circumstances the commissioner should determine that the termination or invalid election was inadvertent the fact that the terminating event or invalidity of the election was not reasonably within the control of the corporation and in the case of a termination was not part of a plan to terminate the election or the fact that the terminating event or circumstance took place without the plr-133047-11 knowledge of the corporation notwithstanding its due diligence to safeguard itself against such an event or circumstance tends to establish that the termination or invalidity of the election was inadvertent conclusion based solely on the facts submitted and the representations made we conclude that company's s_corporation_election terminated on date when stock in company was transferred to impermissible shareholders we further conclude that the termination was inadvertent within the meaning of sec_1362 pursuant to the provisions of sec_1362 company will be treated as continuing to be an s_corporation on and after date unless company’s s_corporation_election is otherwise terminated under sec_1362 provided that the respective income beneficiaries for trust trust trust trust and trust file a qsst election with the appropriate service_center within days following the date of this letter to be effective date a copy of this letter should be attached to each of the qsst elections except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter specifically no opinion is expressed or implied regarding company’s eligibility to be treated as an s_corporation or the trusts’ eligibility to be qssts this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent in accordance with a power_of_attorney on file with this office we are sending a copy of this letter to company’s authorized representative the ruling contained in this letter is based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the ruling_request it is subject_to verification on examination sincerely james a quinn senior counsel branch office of the associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes