Court Opinion

ID: 4672829
Source: CourtListenerOpinion
Date Created: 2021-03-30 17:00:50.114576+00
Date Added: 2024-06-11T08:03:09.528488
License: Public Domain

In the

    United States Court of Appeals
                    For the Seventh Circuit
                      ____________________
No. 20-2056
JASON J. JEFFERS,
                                              Petitioner-Appellant,
                                v.

COMMISSIONER OF INTERNAL REVENUE,
                                             Respondent-Appellee.
                      ____________________

              Appeal from the United States Tax Court.
          No. 9791–18 L — Elizabeth Crewson Paris, Judge.
                      ____________________

   ARGUED FEBRUARY 10, 2021 — DECIDED MARCH 30, 2021
                ____________________

   Before MANION, KANNE, and ROVNER, Circuit Judges.
    MANION, Circuit Judge. Jason Jeﬀers owes several thousand
dollars in federal taxes. He has incessantly challenged his tax
liability at every turn—except the one operative point in time:
after receiving notice of a federal tax lien on his property. The
IRS seeks to levy on Jeﬀers’s property in satisfaction of his
debt. Instead of contesting the propriety of the levy or oﬀering
collection alternatives, he asks this Court to ﬁnd he is owed
tax refunds. Jeﬀers covertly disguises several arguments re-
lated to his underlying tax liability, attempting to breach our
2                                                             No. 20-2056

jurisdictional boundaries through the use of collection and
levy language. We restrict our review to issues properly be-
fore the Court. Because Jeﬀers had a prior opportunity to con-
test his underlying tax liability, we aﬃrm.
                            I. Background
2008 and 2009 Tax Liability 1
    In filing his 2008 taxes, Jeffers underreported his income.
His tax return claimed a refund for some $11,000, which was
paid. But Jeffers was audited, and as a result, the IRS notified
him of the discrepancy between his income and his 2008 tax
return.2 Consequently, he was assessed additional taxes and
penalties a year later. Approximately six years after that, he
filed an amended 2008 tax return seeking an additional tax
refund for $1,620.
    Jeffers filed his 2009 tax return late. He self-reported he
owed more than $12,000 in taxes without including any pay-
ment. The IRS accepted the late filing. It assessed the unpaid
amount plus interest and penalties. Jeffers and the IRS en-
tered into an installment agreement, but it was terminated

    1 While the record contains information on the 2007 through 2010 tax
periods, only facts relating to the 2008 and 2009 tax periods are relevant to
this appeal. Jeffers resolved issues related to his 2007 tax return, and he
conceded liability with respect to the 2010 tax period in his motion to re-
consider the tax court’s decision.
    2 Because there was no statutory notice of deficiency in the record, the

tax court assumed, in Jeffers’s favor, that he did not receive a notice of
deficiency. We assume the same. See generally I.R.C. § 7482(a)(1) (explain-
ing that courts of appeal review the tax court’s decisions “in the same
manner and to the same extent as decisions of the district courts in civil
actions tried without a jury”).
No. 20-2056                                                                 3

when he failed to make any payments. In February 2017, he
filed an amended return claiming he was owed a $500 refund.
Notice of Federal Tax Lien and Levy
    On September 20, 2012, the IRS mailed Jeffers proper no-
tice of the tax lien on his property. The lien attached with re-
spect to unpaid debt from both the 2008 and 2009 tax periods.
See generally I.R.C. §§ 6320(a), 6321. The notice informed Jef-
fers of his right to a Collection Due Process (“CDP”) hearing, 3
but he did not request one.
    On February 23, 2017, after the amended tax returns were
submitted but before they were processed, the IRS notified
Jeffers of its intent to levy on his property. See generally I.R.C.
§ 6330(a) (requirement of notice before levy). The notice in-
formed Jeffers of his right to a CDP hearing. This time, Jeffers
timely requested a hearing. The request stated Jeffers had “in-
curred significant rental real estate losses” for tax years 2008
and 2009, so he had submitted amended returns that were
“awaiting adjustment.” Consequently, he argued, “[c]ollec-
tion activities such as levies are premature in these facts and
circumstances.”
Decision of the Settlement Officer
    Jeffers’s case was assigned to Officer Morgan, an IRS Of-
fice of Appeals settlement officer. Jeffers contested his under-
lying liability, 4 rather than the levy. Officer Morgan found the

    3 For a helpful overview of the CDP framework, see Our Country Home

Enterprises, Inc. v. Commissioner, 855 F.3d 773, 777–80 (7th Cir. 2017), and
Gyorgy v. Commissioner, 779 F.3d 466, 472 (7th Cir. 2015).
    4  Underlying tax liability is not specifically defined in the Code. Basi-
cally, it means “the amounts that the Commissioner assessed for a partic-
ular tax period,” including “an amount assessed following the issuance of
4                                                           No. 20-2056

liability issue was precluded, since Jeffers had a prior oppor-
tunity to raise the issue when the IRS gave notice of the fed-
eral tax lien in September 2012. Jeffers requested to speak with
the appeals team manager. The team manager confirmed that
the liability issue was precluded. The team manager told Jef-
fers the Office of Appeals would consider an installment
agreement, but Jeffers responded he could not afford the pro-
posed agreement. No agreement was made on an alternative
to collection. The Office of Appeals issued a notice of deter-
mination sustaining the proposed levy action. Jeffers properly
contested the notice of determination by filing a petition in tax
court.
Tax Court Decision
    On petition for review of the notice of determination, Jef-
fers argued the settlement officer abused his discretion in fail-
ing to allow Jeffers to contest his underlying tax liability and
for failing to consider his amended tax returns. Jeffers asked
the tax court for tax refunds. The Commissioner of Internal
Revenue moved for summary judgment. The tax court
granted the Commissioner’s motion. It found Jeffers could not
challenge his underlying tax liability because he received no-
tice of the federal tax lien and had the opportunity to dispute
his tax liability then. The court also found the settlement of-
ficer was not obligated to consider the amended tax returns
because under Badaracco v. Commissioner, there is no right to
have one’s amended return considered. 464 U.S. 386, 393
(1984). The tax court found there was no abuse of discretion
and ordered that the Commissioner may proceed with

a notice of deficiency,” a self-assessed debt, or a combination. Montgomery
v. Comm’r, 122 T.C. 1, 11–12 (2004).
No. 20-2056                                                    5

collection. Jeffers filed a motion to reconsider which the tax
court denied. He timely appealed to this Court.
                        II. Discussion
A.     Jurisdiction and Standard of Review
    We have jurisdiction to review the tax court’s decision un-
der § 7482(a)(1) of the Internal Revenue Code. We review the
tax court’s grant of summary judgment de novo. See Musa v.
Comm’r, 854 F.3d 934, 938 (7th Cir. 2017); see also I.R.C.
§ 7482(a)(1). When a taxpayer’s underlying tax liability is not
a proper issue in the case, this Court reviews the Office of Ap-
peals’s administrative determinations for abuse of discretion.
Kindred v. Comm’r, 454 F.3d 688, 694 (7th Cir. 2006).
B.     Challenge to Underlying Tax Liability
    Jeﬀers ﬁrst argues summary judgment should not have
been granted because material facts were in dispute. He for-
feited this argument. See generally Fed. R. App. P. 28(a)(8)(A)
(requiring contentions, reasons, and authorities). In a single
paragraph, Jeﬀers fails to make a meaningful argument. He
simply states the tax court ignored numerous disputes of ma-
terial fact and cites more than 200 pages of record. We will not
scour the record in an attempt to formulate a cogent argument
when Jeﬀers has presented none. See United States v. Dunkel,
927 F.2d 955, 956 (7th Cir. 1991) (“Judges are not like pigs,
hunting for truﬄes buried in briefs.”). Further, it is clear from
the record and the parties’ arguments that no material fact is
in dispute.
6                                                           No. 20-2056

    While Jeﬀers raises unclear and improper 5 arguments, we
focus on the main issue, as required by our jurisdictional lim-
itations. See I.R.C. § 7482 (explaining this Court reviews the
tax court’s decisions “in the same manner and to the same ex-
tent as decisions of the district courts in civil actions tried
without a jury”); see also Our Country Home, 855 F.3d at 780
(“[T]he tax court’s review is limited to the issues raised in the
CDP hearing.”). We must decide whether Jeﬀers was properly
precluded from challenging his underlying tax liability in the
CDP hearing.
    Under § 6330 of the Internal Revenue Code, a taxpayer can
raise challenges to “the existence or amount of the underlying
tax liability for any tax period,” if the taxpayer (1) “did not
receive any statutory notice of deﬁciency for such tax liabil-
ity” or (2) “did not otherwise have an opportunity to dispute
such tax liability.” I.R.C. § 6330(c)(2)(B). A deﬁciency is the
amount by which income tax imposed by the Code exceeds
any surplus of (1) the amount the taxpayer stated on his or her
tax return plus previously assessed deﬁciencies minus (2) the
amount of any rebates. Id. § 6211(a). Once the Secretary of
Treasury determines that there is a deﬁciency, “he is author-
ized to send notice of such deﬁciency to the taxpayer.” Id.
§ 6212(a).
    We, like the tax court, assume Jeﬀers did not receive a no-
tice of deﬁciency for the 2008 tax period because there is in-
suﬃcient evidence of such notice in the record. The parties

    5Jeffers asks this Court to investigate a bare allegation of misconduct
by the Commissioner’s Chief Counsel. He also makes a series of argu-
ments related to his underlying liability, asking this Court to order re-
funds issued.
No. 20-2056                                                             7

agree that Jeﬀers did not receive any notice of deﬁciency for
the 2009 tax period because he self-reported a balance due.
Thus, the issue is whether he “otherwise” had an opportunity
to raise the issue. Id. § 6330(c)(2)(B).
    The Treasury Regulations interpret § 6330 and clarify
what constitutes an “opportunity.” The relevant provision
states:
        If the taxpayer previously received a CDP No-
        tice under section 6320 [the provision for notice
        of a federal lien] with respect to the same tax
        and tax period and did not request a CDP hear-
        ing with respect to that earlier CDP Notice, the
        taxpayer had a prior opportunity to dispute the
        existence or amount of underlying tax liability.
26 C.F.R. § 301.6330–1(e)(3)(Q&A-E7). A taxpayer need not
have pursued an opportunity for it to act as a bar to future
challenges of underlying tax liability. Our Country Home, 855
F.3d at 788 (“Section 6330(c)(2)(B) speaks to opportunities to
dispute liability, not opportunities that a taxpayer actually ex-
ercised.”).
    Jeﬀers received prior § 6320 notice on September 20, 2012,
when the IRS notiﬁed him of a federal lien on his property.
He does not contest receipt of this notice. Jeﬀers did not ask
for a CDP hearing at that point,6 thereby forfeiting his chance

    6 Counsel stated Jeffers could not have requested a CDP hearing at
that point because he was conducting a preliminary inquiry into the facts
of the case in 2012. We fail to see why doing so would prevent the request
of a CDP hearing that could be scheduled after further inquiry. See Our
Country Home, 855 F.3d at 780 (explaining the procedural informality of
CDP proceedings).
8                                                           No. 20-2056

to dispute liability in the CDP hearing he later requested after
receiving the notice of intent to levy.
    In response, Jeﬀers argues the regulation is invalid. 7 How-
ever, we aﬀord “considerable weight” to an agency’s “con-
struction of a statutory scheme it is entrusted to administer.”
Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837,
844 (1984). Analysis under Chevron is a two-step process.
“First, we determine whether the statute is silent or ambigu-
ous on the question at issue … .” Brumﬁeld v. City of Chicago,
735 F.3d 619, 626 (7th Cir. 2013). Second, if the statute is either
silent or ambiguous, we “determine whether the agency has
promulgated a reasonable interpretation of the statute; if so,
we defer to that interpretation.” Id.
    First, the statute itself does not deﬁne “opportunity.” See
generally I.R.C. § 7701 (deﬁnitions). We have recognized the
statute is ambiguous concerning what types of proceedings
constitute an “opportunity.” Our Country Home, 855 F.3d at
785–86 (examining whether “opportunity” includes both ju-
dicial and administrative opportunities). Further, nothing in
the statute as a whole addresses whether a prior CDP notice
constitutes an “opportunity,” or whether the deﬁnition of an
opportunity includes only such opportunities as are pursued.
Thus, we continue to ﬁnd § 6330(c)(2)(B) is ambiguous.
    Second, we consider whether the regulation is a reasona-
ble interpretation of the statute. An interpretation need not be
the only interpretation, or even deemed the “most reasonable
by the courts.” Entergy Corp. v. Riverkeeper, Inc., 556 U.S. 208,
218 (2009). The interpretation set forth by the regulation has

    7 His precise argument on the point is unclear, despite his citation to
the record and legal authority (albeit non-binding legal authority).
No. 20-2056                                                                   9

already been advanced by this Court. See Our Country Home,
855 F.3d at 788 (“Section 6330(c)(2)(B) speaks to opportunities
to dispute liability, not opportunities that a taxpayer actually
exercised.”).
    This interpretation is sensible considering the purposes of
CDP hearings. In essence, Congress enacted the Internal Rev-
enue Service Restructuring and Reform Act of 1998 as a pro-
cedural protection for taxpayers to oppose IRS collection ac-
tions, with mere incidental review of underlying liability in
speciﬁcally enumerated instances. Id. at 779; see also Kindred,
454 F.3d at 695. The regulation reasonably interprets an “op-
portunity” in light of this purpose by precluding challenges
to underlying liability when a taxpayer received a CDP notice
for the same tax and tax period even if the taxpayer did not
request a CDP hearing because the operative point is that the
taxpayer could have done so. Cf. Opportunity to be Heard,
BLACK’S LAW DICTIONARY (11th ed. 2019) (“The chance to ap-
pear in a court or other tribunal and present evidence and ar-
gument before being deprived of a right by governmental au-
thority.” (emphasis added)). For these reasons, the regulation
reasonably interprets the statute and was properly applied.
    Jeﬀers’s principal argument in attacking the regulation’s
validity is that it conﬂicts with § 6330(c)(4)(A). 8 His interpre-
tation of the various statutory provisions construes the sec-
tions in a strained attempt to force them to conﬂict.

    8 Jeffers also makes a two-sentence allegation the regulation conflicts
with § 6402, the section concerning IRS authority to make tax refunds or
credits. See generally I.R.C. § 6402(a). Not only is this bare allegation insuf-
ficient, but at its core, it is simply an attempt to convince this Court to
examine the merits of his refund claim. We decline.
10                                                  No. 20-2056

    Jeﬀers claims the regulation “directly contradicts” the stat-
ute, because unlike issues precluded by § 6330(c)(4)(A), Jeﬀers
did not participate in an earlier hearing. There is no tension
between § 6330(c)(2)(B), as interpreted by the regulation, and
§ 6330(c)(4)(A). Both concern matters that may be considered
at a CDP hearing. I.R.C. § 6330(c). The former is narrower than
the latter; it concerns only whether underlying liability can be
raised. Id. § 6330(c)(2)(B). The latter precludes any issue that
“was raised and considered at a previous hearing under sec-
tion 6320 or in any other previous administrative or judicial
proceeding” in which the taxpayer meaningfully partici-
pated. Id. § 6330(c)(4)(A). As our sister circuit explained:
       Section 6330(c)(2)(B) and (c)(4) share much in
       common. Both provisions incorporate the prin-
       ciples of claim preclusion and issue preclusion,
       respectively, into the CDP context. They are mo-
       tivated by the same idea: CDP hearings do not
       aﬀord taxpayers a chance to relitigate questions
       that have already been settled or should have
       been. Subsection (c)(2)(B) concerns liability
       challenges that a taxpayer had a chance to raise,
       while (c)(4) applies to all issues that were actu-
       ally disputed.
Iames v. Comm’r, 850 F.3d 160, 167 (4th Cir. 2017). While there
is some overlap between the provisions, they work in har-
mony to ensure CDP hearings are conducted eﬃciently and
can predominantly focus on the collection action rather than
subsidiary issues. The issue of liability should only be raised
when a taxpayer “would otherwise fall through the cracks.”
Id. at 166. For these reasons, the Commissioner was entitled to
No. 20-2056                                                  11

judgment as a matter of law and summary judgment was
properly granted.
    Because the issue of underlying liability was not properly
before the tax court, we do not address Jeﬀers’s arguments he
is entitled to a $1,620 refund for the 2008 tax year or a $500
refund for the 2009 tax year. See Our Country Home, 855 F.3d
at 780 (explaining the tax court cannot consider precluded
challenges to liability).
C.     Sustaining the Levy
    It is also worth noting there was no abuse of discretion in
sustaining the levy. Kindred, 454 F.3d at 694. Jeﬀers did not
challenge the appropriateness of the collection action or oﬀer
any collection alternatives. Instead, he continuously insisted
upon arguing about his underlying liability. The only argu-
ment he makes now about collection alternatives is without
merit: he contends his refund claims are a suitable collection
alternative. Regardless of the language he uses, refund claims
are not collection alternatives. See I.R.C. § 6330(c)(2)(A)(iii)
(explaining collection alternatives include “the posting of a
bond, the substitution of other assets, an installment agree-
ment, or an oﬀer-in-compromise”). Refunds concern underly-
ing liability. For the reasons already stated, he was properly
precluded from raising the issue.
                       III. Conclusion
  Accordingly, we AFFIRM the tax court’s grant of sum-
mary judgment.