Court Opinion

ID: 4334856
Source: CourtListenerOpinion
Date Created: 2018-11-14 01:54:28.740137+00
Date Added: 2024-06-11T14:48:09.804599
License: Public Domain

122 T.C. No. 15

                UNITED STATES TAX COURT

        ROBERT EUGENE POINDEXTER, Petitioner v.
     COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 14428-01L.             Filed March 29, 2004.

     P reported tax on his 1994 and 1996 Federal income
tax returns but did not remit those amounts. R
assessed those amounts and demanded payment thereof.
After several years of continued nonpayment, R issued
to P a notice of intent to levy. P timely requested a
hearing pursuant to sec. 6330, I.R.C. At the hearing,
P asserted that the amounts of tax shown on his 1994
and 1996 returns are incorrect but would not say
whether he believed his correct income to be higher or
lower than the amounts reported. R subsequently issued
to P a notice of determination upholding the proposed
collection action. P timely petitioned the Court for
review, and R moved for summary judgment.

     1. Held: A taxpayer who reports an amount of tax
on his tax return is not precluded from challenging the
accuracy of that amount at a sec. 6330, I.R.C.,
hearing. Montgomery v. Commissioner, 122 T.C. 1
(2004), followed.
                                - 2 -

          2. Held, further, summary judgment is appropriate
     since P has averred no facts sufficient to show error
     in the taxes assessed on the basis of his 1994 and 1996
     returns or otherwise with respect to the notice of
     determination.

     Elizabeth A. Maresca and Katherine Scovin (specially

recognized), for petitioner.

     Peggy Gartenbaum, for respondent.

                               OPINION

     HALPERN, Judge:   This case is before the Court to review a

determination made by one of respondent’s Appeals officers (the

determination) that respondent may proceed to collect by levy

unpaid income taxes assessed by respondent against petitioner for

1994 and 1996 (the assessments).   We review such determinations

pursuant to section 6330(d)(1).1   Petitioner has assigned error to

the determination, and, as we understand that assignment, it is

principally that, in making the determination, the Appeals

officer failed to consider the accuracy of the assessments, which

petitioner claims do not reflect his true income tax liabilities

for the years in question.   Respondent denies that the Appeals

officer erred, and he moves for a summary disposition in his

favor (the motion), that the determination be sustained, on the

     1
        Unless otherwise indicated, all section references are to
the Internal Revenue Code of 1986, as amended, and all Rule
references are to the Tax Court Rules of Practice and Procedure.
                               - 3 -

following grounds:   (1) Since petitioner reported the unpaid

taxes on returns he made, the Appeals officer properly refused to

consider the accuracy of the assessments; (2) even if the Appeals

officer erred in refusing to consider the accuracy of the

assessments, petitioner has failed to aver facts sufficient to

show error in the assessments; and (3) petitioner has failed to

aver facts showing any other error in the determination.

     Summary judgment may be granted with respect to all or any

part of the legal issues in controversy “if the pleadings,

answers to interrogatories, depositions, admissions, and any

other acceptable materials, together with affidavits, if any,

show that there is no genuine issue as to any material fact and

that a decision may be rendered as a matter of law.”   Rule

121(b).   We are satisfied that there is no genuine issue as to

any material fact and that a decision may be rendered as a matter

of law.   For the reasons that follow, we shall grant the motion

on the basis of respondent’s second and third grounds and enter

an appropriate order and decision in respondent’s favor.

                            Background

     The following facts are gathered from the pleadings, the

parties’ trial memoranda, the motion and declaration of Peggy

Gartenbaum, one of respondent’s counsel, submitted in support of

the motion, petitioner’s opposition to the motion, and other
                                 - 4 -

items constituting the record.    There appears to be no

disagreement as to the following facts.

     Petitioner filed his 1994 Federal income tax return (the

1994 return) on April 16, 1997, reporting tax of $2,084, no

withholding or estimated tax payments, and an estimated tax

penalty of $107.   Petitioner did not remit any amount with the

1994 return.   On May 19, 1997, respondent assessed the tax

liability shown on the 1994 return and issued to petitioner a

notice and demand for payment with respect thereto.

     Petitioner filed his 1996 Federal income tax return (the

1996 return) on April 15, 1997, reporting tax of $66,874, no

withholding or estimated tax payments, and an estimated tax

penalty of $270.   Petitioner did not remit any amount with the

1996 return.   On June 2, 1997, respondent assessed the tax

liability shown on the 1996 return and issued to petitioner a

notice and demand for payment with respect thereto.

     Petitioner did not make the payments demanded, and, on

January 23, 2001, respondent notified petitioner of his intent to

levy with respect to petitioner’s unpaid tax liabilities for 1994

and 1996.   In response, petitioner timely submitted to respondent

Form 12153, Request for a Collection Due Process Hearing.     In the

request, petitioner, a songwriter, stated his belief that the

taxes shown on the 1994 and 1996 returns (together, the returns)

are incorrect.   He explained that he was in a dispute with
                                 - 5 -

certain record companies over royalties due him in connection

with songs he had written.    He asked the assistance of the

Internal Revenue Service (IRS) to subpoena information from the

record companies so that he could make proper returns.2   Other

than asking for such assistance, he did not propose any

alternatives to collection.

     On November 15, 2001, an Appeals officer held the hearing

petitioner had requested.    At the hearing, petitioner stated that

he had filed the returns so as not to get into trouble and that

he had not paid the taxes shown because he did not believe the

amounts to be correct.   He would not say whether he believed his

correct income to be higher or lower than the amounts reported.

Although the Appeals officer concluded on the basis of section

6330(c)(2)(B) that petitioner’s underlying tax liabilities were

not properly at issue, he advised petitioner that he could file

amended returns adjusting the tax shown on the returns.

Petitioner declined to do so.3

     As required by section 6330(c)(1), the Appeals officer

verified that the requirements of applicable laws and

     2
        Both at and before the hearing petitioner requested,
petitioner was advised that the IRS had no authority to intervene
in his dispute with the record companies by subpoenaing
information from them for him.
     3
        Subsequently, petitioner was provided with blank Forms
1040X, Amended U.S. Individual Income Tax Return, along with the
accompanying instructions, for his use should he change his mind
(apparently, he has not done so).
                                - 6 -

administrative procedures had been met.   He also made the

determination required by section 6330(c)(3)(C) that the proposed

collection action (levy) balanced the need for efficient

collection of taxes with petitioner’s legitimate concerns that

any collection action be no more intrusive than necessary.     On

December 5, 2001, a manager in the Appeals Office issued to

petitioner a Notice of Determination Concerning Collection

Action(s) Under Section 6320 and/or 6330 (i.e., the

determination), sustaining the proposed collection action.

      In the petition, petitioner states his disagreement with the

assessments, claiming that they are inaccurate because of (1)

false and fraudulent information stated on the returns, (2)

errors in the assessment procedures, (3) reliance on incorrect

written advice from the IRS, (4) error and failure of the IRS in

following its own procedures and advice, (5) improper execution

of levies, and (6) erroneous and inconsistent tax information

contained in the determination.

                            Discussion

I.   Overview of Section 6330

      Section 6330 entitles a taxpayer to notice of the taxpayer’s

right to request a hearing before certain lien and levy actions

are taken by the Commissioner in furtherance of the collection

from the taxpayer of unpaid Federal taxes.   If a hearing is

requested, the Appeals officer conducting the hearing must verify
                                - 7 -

that the requirements of any applicable law or administrative

procedure have been met.    Sec. 6330(c)(1).    The taxpayer

requesting the hearing may raise “any relevant issue relating to

the unpaid tax or the proposed levy”.      Sec. 6330(c)(2)(A).    The

taxpayer may raise challenges “to the existence or amount of the

underlying tax liability”, however, only if he “did not receive

any statutory notice of deficiency for such tax liability or did

not otherwise have an opportunity to dispute such tax liability.”

Sec. 6330(c)(2)(B).   Following the hearing, the Appeals officer

must determine whether the collection action is to proceed,

taking into account the verification the Appeals officer has

made, the issues raised by the taxpayer at the hearing, and

“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(c)(3).     We have jurisdiction to

review such determinations where we have jurisdiction of the

underlying tax liability.    Sec. 6330(d)(1)(A).

II.   Section 6330(c)(2)(B) Is Not Limited to Taxpayer Challenges
      to Liabilities Asserted by the Commissioner That Differ in
      Amount From Taxpayer-Determined Liabilities

      Respondent’s first ground for summary judgment is that,

since petitioner reported the unpaid taxes on returns he made,

the Appeals officer properly refused to consider the accuracy of

the assessments.   Although respondent concedes that petitioner
                                 - 8 -

neither received a statutory notice of deficiency for 1994 or

1996 nor otherwise had an opportunity to dispute his liabilities

as assessed for those years, respondent argues that section

6330(c)(2)(B) allows a taxpayer to challenge the underlying tax

liability only when the taxpayer is challenging a liability

asserted by the Commissioner that differs in amount from the

taxpayer’s self-determined liability (i.e., the amount set forth

on a return the taxpayer made).     In Montgomery v. Commissioner,

122 T.C. 1 (2004), we rejected exactly that argument, and that

case governs here.    We therefore reject respondent’s first ground

for summary judgment.

III.    Petitioner Has Failed To Aver Facts Sufficient To Show
        Error in the Assessments

       Respondent’s second ground for summary judgment is that,

even if the Appeals officer erred in refusing to consider the

accuracy of the assessments, petitioner has failed to aver facts

sufficient to show error in the assessments.    We have set forth

the gist of petitioner’s averments under the heading Background,

above, and we agree with respondent that petitioner has failed to

raise a justiciable issue.

       Rule 331 addresses the commencement of a levy action under

section 6330(d).     Such an action is commenced by the filing of a

petition, Rule 331(a), and Rule 331(b) specifies the content of

the petition.    Rule 331(b)(4) and (5) requires the petition to

contain:
                               - 9 -

          (4) Clear and concise assignments of each and
     every error which the petitioner alleges to have been
     committed in the notice of determination. * * *

          (5) Clear and concise lettered statements of the
     facts on which the petitioner bases each assignment of
     error.

     Pursuant to section 6330(c)(2)(B), petitioner was entitled

to challenge at his Appeals Office hearing the existence or

amount of the underlying tax liabilities for 1994 and 1996 giving

rise to the assessments.   If the validity of those underlying tax

liabilities is properly at issue, we review the matter de novo.

Sego v. Commissioner, 114 T.C. 604, 610 (2000).     For the validity

of those underlying tax liabilities to be properly at issue,

however, petitioner must comply with Rule 331.    His pleading must

contain a sufficient specificity of facts so that the Court can

conduct a meaningful hearing to determine whether respondent can

proceed with the collection of those liabilities.     Petitioner’s

averments make clear that he disagrees with his income tax

liabilities as shown on the returns.   However, other than

claiming that the returns contain false and fraudulent

information and may be based on incorrect written advice from the

IRS, petitioner fails to specify the basis of his disagreement;

i.e., he fails to identify the items of income, deduction, or

credit, or the computations, that are incorrect.    Without such

specificity, how could respondent possibly mount a defense, and

what precisely is it that the Court is to decide?
                              - 10 -

     Apparently, the root of petitioner’s disagreement with the

returns is his dispute with certain record companies over

royalties.   Petitioner has tried to involve respondent in that

dispute by asking respondent to subpoena information from the

record companies so that he could make what he believes would be

more accurate returns.   Respondent claims that neither section

6330 nor any other provision of the Internal Revenue Code

authorizes the IRS to aid petitioner as he has requested and

there is no evidence that Congress intended taxpayers to use

section 6330 to redress grievances against third parties.

Respondent further claims that petitioner presented no evidence

of the proper amount of royalties due him, nor any evidence

supporting his claim that the record companies violated his

copyrights or that he even has copyrights to any songs.

Petitioner, in his opposition to the motion, does not contradict

any of those assertions.

     Petitioner may well have a dispute with the record

companies, and the returns may or may not be accurate, but

petitioner has placed nothing before us regarding the underlying

liabilities that we can properly adjudicate.   Like the taxpayers

in Horn v. Commissioner, T.C. Memo. 2002-207, and Smith v.

Commissioner, T.C. Memo. 2002-59, whose efforts to dispute their

“self-assessed” liabilities we rejected, petitioner was not

prepared to allege and prove the facts showing his returns were
                                  - 11 -

incorrect.    See also Montgomery v. Commissioner, supra at 19

(Marvel, J., concurring).       We conclude that respondent’s second

ground (together with his third ground, discussed next) justifies

summary judgment.

IV.   Petitioner Has Failed To Aver Facts Showing Any Other Error
      in the Determination

       Although petitioner avers errors in the assessment

procedures and in other procedures, and improper execution of

levies, he sets forth no factual basis for those claims.       Indeed,

respondent has yet to make any levies with respect to the

assessments.       Except as we have discussed with respect to the

Appeals officer’s refusal to consider the accuracy of the

assessments, we see no error in the determination.

V.    Conclusion

       Petitioner has failed to put before us grounds on which we

could find that the Appeals officer erred in the determination.

On that basis, respondent is entitled to summary disposition in

his favor.

       To reflect the foregoing,

                                             An appropriate order and

                                        decision will be entered for

                                        respondent.