Court Opinion

ID: 4332678
Source: CourtListenerOpinion
Date Created: 2018-11-14 00:48:45.334206+00
Date Added: 2024-06-11T14:20:04.542606
License: Public Domain

114 T.C. No. 11

                UNITED STATES TAX COURT

             JANET N. MOORE, Petitioner v.
     COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 16440-99L.                  Filed March 17, 2000.

     P was an officer of a corporation that failed to
pay Federal trust fund taxes. R determined that P is
liable for a penalty pursuant to sec. 6672, I.R.C.,
equal to the unpaid taxes. After R initiated a
collection action against P, P received a due process
hearing with R's Boston Appeals Office. R issued a
determination letter to P stating that R would proceed
with collection. P filed a petition for review of R's
administrative determination with the Court. R filed a
motion to dismiss for lack of jurisdiction.

     Held: The Court's jurisdiction to review an
administrative determination respecting a collection
matter is limited to cases where the underlying taxes
are of a type over which the Court normally has
deficiency jurisdiction. Secs. 6320(c), 6330(d),
I.R.C. Held, further, because the Court lacks
jurisdiction over the penalty that R is attempting to
collect, the Court lacks jurisdiction to review the
administrative determination in dispute.
                                - 2 -

     Janet N. Moore, pro se.

     John R. Mikalchus and Kerry Bryan, for respondent.

                               OPINION

     COHEN, Chief Judge:   This case was assigned to Chief Special

Trial Judge Peter J. Panuthos pursuant to the provisions of

section 7443A(b)(4) and Rules 180, 181, and 183.     Unless

otherwise indicated, section references are to sections of the

Internal Revenue Code as amended, and Rule references to the Tax

Court Rules of Practice and Procedure.   The Court agrees with and

adopts the opinion of the Special Trial Judge, which is set forth

below.

                OPINION OF THE SPECIAL TRIAL JUDGE

     PANUTHOS, Chief Special Trial Judge:   This matter is before

the Court on respondent's motion to dismiss for lack of

jurisdiction.   As discussed in detail below, we shall grant

respondent's motion.

Background

     Janet N. Moore (petitioner) was an officer of Atlas Elevator

Company (Atlas).   Atlas failed to pay over to the Government what

respondent refers to as Federal trust fund taxes (Federal

Insurance Contributions Act taxes under sections 3101 et seq.,

and employee income tax withholding under sections 3401 through
                                 - 3 -

3406 and 3509) for the periods ending March 31, 1994, and June

30, 1995.    Respondent subsequently determined that petitioner was

liable for a penalty pursuant to section 6672 equal to the unpaid

taxes.1

     Respondent subsequently initiated a collection action

against petitioner.    On September 2, 1999, respondent's Boston

Appeals Office issued a notice of determination to petitioner

stating in pertinent part:

     We have reviewed the proposed collection action for the
     periods [May 31, 1994 and June 30, 1995]. This letter
     is your legal Notice of Determination, as required by
     law. * * *

     If you want to dispute this determination in court, you
     have 30 days from the date of this letter to file a
     complaint in the appropriate United States District
     Court for a redetermination.

     *          *        *         *      *          *       *

     Summary of Determination:

     1. It has been determined that all requirements of
     administrative procedure and applicable law have been
     met with regards to the proposed collection action.

     1
          Sec. 6672(a) provides in pertinent part:

          SEC. 6672(a). General Rule.-–Any person required
     to collect, truthfully account for, and pay over any
     tax imposed by this title who willfully fails to
     collect such tax, or truthfully account for and pay
     over such tax, or willfully attempts in any manner to
     evade or defeat any such tax or the payment thereof,
     shall, in addition to other penalties provided by law,
     be liable to a penalty equal to the total amount of the
     tax evaded, or not collected, or not accounted for and
     paid over. * * *
                               - 4 -

     2. You have offered funds for settlement which are
     currently being litigated in the Atlas Elevator
     bankruptcy case. Receipt of these funds by the Service
     is dependent on bankruptcy law. The funds will not be
     sufficient to liquidate the entire corporate debt.
     Your personal financial statement indicates an ability
     to make monthly payments in the amount of $1,424 per
     month. Payments to junior creditors and college
     education expenses have been disallowed. You have
     declined to pay this amount and have offered no other
     alternatives other than settlement for whatever funds
     the Bankruptcy Court turns over.

     3. The proposed collection action is approved to the
     limit of $1,424 per month. This amount balances your
     concerns about the intrusiveness of the collection
     action with the need for the efficient collection of
     taxes. Any contemplated seizure of your personal
     residence is not approved. * * * [Emphasis added.]

     On September 30, 1999, petitioner filed with the Court a

petition for review of respondent's determination letter.   The

petition states in pertinent part that the amount that respondent

is attempting to collect from petitioner is unreasonable due to

financial hardship.

     As indicated, respondent filed a motion to dismiss for lack

of jurisdiction.   Respondent contends that the Court's

jurisdiction to review administrative determinations respecting

collection matters is limited to cases where the underlying tax

liability is of a kind within the Court’s normal deficiency

jurisdiction.   Respondent asserts that the Court lacks

jurisdiction over the Federal trust fund taxes at issue in this

case, and, therefore, the Court lacks jurisdiction to review

respondent's administrative determination to proceed with
                                 - 5 -

collection against petitioner.    Petitioner filed an objection to

respondent's motion to dismiss.

     This matter was called for hearing at the Court's motions

session in Washington, D.C.   Counsel for respondent appeared at

the hearing and argued in support of the motion to dismiss.    No

appearance was made by or on behalf of petitioner at the hearing.

Discussion

     Section 6321 provides that, if any person liable to pay any

tax neglects or refuses to pay the same after demand, the amount

shall be a lien in favor of the United States upon all property

and rights to property, whether real or personal, belonging to

such person.   Section 6323 generally requires the Commissioner to

file a Notice of Federal Tax Lien with the appropriate State

office or the local Federal District Court.

     Section 6331(a) provides that, if any person liable to pay

any tax neglects or refuses to pay such tax within 10 days after

notice and demand for payment, the Secretary is authorized to

collect such tax by levy upon property belonging to the taxpayer.

Section 6331(d) provides that the Secretary is obliged to provide

the taxpayer with notice, including notice of the administrative

appeals available to the taxpayer, before proceeding with

collection by levy on the taxpayer's property.

     In the Internal Revenue Service Restructuring and Reform Act

of 1998 (RRA 1998), Pub. L. 105-206, sec. 3401, 112 Stat. 685,
                               - 6 -

746, Congress enacted new sections 6320 (pertaining to liens) and

6330 (pertaining to levies) to provide due process protections

for taxpayers in tax collection matters.     Sections 6320 and 6330

are effective with respect to collection actions initiated more

than 180 days after July 22, 1998 (January 19, 1999).     See RRA

1998 sec. 3401(d), 112 Stat. 750.

     Section 6320(a)(1) requires the Commissioner to provide

notice to a person described in section 6321 of the filing of a

notice of lien under section 6323.     Section 6320(a)(3) and (b)

provides that the person described in section 6321 is entitled to

notice of and the opportunity for an administrative review of the

lien in the form of an Appeals Office due process hearing.

Section 6330 provides for a similar due process hearing where the

Commissioner has proposed to levy on the taxpayer's property.

Section 6320(c) adopts the procedures set forth in section

6330(c), (d), and (e) governing the issues that may be raised in

a due process hearing and the means for obtaining judicial review

of the matter.   See Goza v. Commissioner, 114 T.C. ___ (2000).

     Section 6330(d) provides for judicial review of an

administrative determination respecting a collection matter in

pertinent part as follows:

     SEC. 6330(d).   Proceeding After Hearing.--

          (1) Judicial review of determination.-–The person
     may, within 30 days of a determination under this
     section, appeal such determination–-
                                - 7 -

                 (A) to the Tax Court (and the Tax Court shall
            have jurisdiction to hear such matter); or

                 (B) if the Tax Court does not have
            jurisdiction of the underlying tax liability, to a
            district court of the United States.

     If a court determines that the appeal was to an incorrect
     court, a person shall have 30 days after the court
     determination to file such appeal with the correct court.

In short, section 6330(d) provides that a taxpayer may file a

petition for review of the Commissioner's administrative

determination with the Tax Court where the Court has jurisdiction

of the underlying tax liability.

     The Court's deficiency jurisdiction generally is limited to

the redetermination of income, estate, and gift taxes.    See secs.

6211, 6213(a).    While Congress clearly intended for section 6330

to provide an opportunity for judicial review of collection

matters, we interpret section 6330(d)(1)(A) and (B) together to

mean that Congress did not intend to expand the Court's

jurisdiction beyond the types of taxes that the Court may

normally consider.    Thus, section 6330(d)(1)(A) and (B) provides

for Tax Court jurisdiction except where the Court does not

normally have jurisdiction over the underlying liability.

     The Tax Court is a court of limited jurisdiction, and we may

exercise our jurisdiction only to the extent authorized by

Congress.    See Naftel v. Commissioner, 85 T.C. 527, 529 (1985).

In the present case, respondent is attempting to collect Federal
                                 - 8 -

trust fund taxes from petitioner by way of a penalty imposed

under section 6672.

     Section 6672(c)(2) contemplates that the Federal District

Court or the Court of Federal Claims shall have jurisdiction to

determine a taxpayer's liability for a penalty imposed under that

section.   The Tax Court does not have jurisdiction to redetermine

the taxes that respondent is attempting to collect in this case.

See Henry Randolph Consulting v. Commissioner, 112 T.C. 1 (1999).

     Consistent with section 6330(d)(1), it follows that this

Court does not have jurisdiction to review the administrative

determination at issue herein.    However, petitioner is not

without a remedy.   Pursuant to the final flush language of

section 6330(d)(1), petitioner has 30 days from the date of the

Court's order dismissing this case to file an appeal with the

appropriate Federal District Court.

     To reflect the foregoing,

                                 An order of dismissal

                          will be entered.