Court Opinion

ID: 4337317
Source: CourtListenerOpinion
Date Created: 2018-11-14 03:17:34.432515+00
Date Added: 2024-06-11T14:20:40.653628
License: Public Domain

T.C. Memo. 2008-250

                     UNITED STATES TAX COURT

                  JOHN G. NASH, Petitioner v.
         COMMISSIONER OF INTERNAL REVENUE, Respondent

    Docket No. 20728-07L.             Filed November 4, 2008.

    John G. Nash, pro se.

    Matthew A. Houtsma, for respondent.

                       MEMORANDUM OPINION

     SWIFT, Judge:   This matter is before us under Rule 121 on

respondent’s motion for summary judgment.    Unless otherwise

indicated, all section references are to the Internal Revenue

Code, and all Rule references are to the Tax Court Rules of

Practice and Procedure.
                                - 2 -

                              Background

      In this collection case under section 6330, petitioner

challenges respondent’s proposed levy relating to petitioner’s

outstanding Federal income taxes and accrued interest for 1984,

1985, and 19861 in the approximate total amount of $74,500, all

of which relates to petitioner’s investment in a so-called Hoyt

tax shelter partnership from the early 1980s.2

      On June 1, 1998, respondent timely assessed against

petitioner the above taxes for 1984, 1985, and 1986, and on

February 21, 2005, respondent timely mailed to petitioner a

notice of intent to levy and a notice of a right to a hearing

with respondent’s Appeals Office.

      On March 14, 2005, petitioner mailed to respondent a timely

request for a collection Appeals Office hearing relating to

respondent’s proposed levy.

      In connection with the Appeals Office hearing that was held

on July 17, 2007, and an informal offer-in-compromise (OIC) that

petitioner submitted to respondent on November 16, 2005,

     1
       In his petition, petitioner also challenged respondent’s
proposed levy relating to petitioner’s 1981 Federal income
taxes. Respondent now concedes that petitioner has fully paid
his 1981 Federal income tax liability and that no levy will be
made against petitioner with regard thereto.
     2
       For a description of Hoyt tax shelter partnerships see
Phillips v. Commissioner, 272 F.3d 1172 (9th Cir. 2001), affg.
114 T.C. 115 (2000), and Durham Farms #1 v. Commissioner, T.C.
Memo. 2000-159, affd. 59 Fed. Appx. 952 (9th Cir. 2003).
                               - 3 -

respondent’s Appeals officer requested petitioner to provide

financial information and a Form 433-A, Collection Information

Statement for Wage Earners and Self-Employed Individuals.    After

repeated unsuccessful requests, respondent’s Appeals officer set

a deadline of August 3, 2007, for petitioner to submit the

requested financial information.   Petitioner never provided the

requested information.

     On August 21, 2007, respondent’s Appeals Office mailed

petitioner a notice of determination sustaining respondent’s

proposed levy for petitioner’s outstanding tax liabilities for

1984, 1985, and 1986.    Respondent’s determination was based on

petitioner’s failure to produce the requested financial

information needed to consider and to act on petitioner’s

proposed OIC.

     On September 12, 2007, petitioner filed the petition giving

rise to this action.    In his petition, petitioner objects to the

proposed levy on the grounds (1) that the $74,500 in outstanding

Federal income taxes for 1984, 1985, and 1986 are barred from

further collection activity by the running of the 10-year

collection period of limitations under section 6502(a)(1), and

(2) that petitioner’s old age and ill health should justify a

writeoff by respondent of the outstanding $74,500 as

uncollectible.
                              - 4 -

                            Discussion

Period of Limitations

     As stated, on June 1, 1998, respondent timely assessed

petitioner’s taxes for 1984, 1985, and 1986, and as of the time

of filing of this action on September 12, 2007, the 10-year

collection period of limitations under section 6502 (running

from the date of assessment) had not expired.    Further, under

section 6330(e)(1), when petitioner requested his collection

Appeals Office hearing pursuant to section 6330 to challenge the

proposed levy, the collection period of limitations under

section 6502 was suspended for the period during which the

hearing and petitioner’s appeal therefrom to this Court are

pending.   Accordingly, the 10-year collection period of

limitations does not bar respondent’s proposed levy relating to

petitioner’s outstanding 1984, 1985, and 1986 Federal income

taxes.

Petitioner’s Old Age and Ill Health

     Old age and ill health may involve economic hardship and

under the regulations are factors relevant to one of several

grounds for compromising a Federal income tax liability (e.g.,

promoting effective tax administration).    See sec. 301.7122-

1(b)(3)(i), Proced. & Admin. Regs.    However, “An offer to

compromise a tax liability pursuant to section 7122 must be
                               - 5 -

submitted according to the procedures, and in the form and

manner, prescribed by [respondent].”   Sec. 301.7122-1(d)(1),

Proced. & Admin. Regs.   By not submitting a Form 433-A,

petitioner failed to provide respondent with the requested

financial information necessary for respondent to evaluate any

economic hardship to petitioner.

Summary Judgment

     Summary judgment is proper where there remains no genuine

issue of material fact and where the moving party is entitled to

judgment as a matter of law.   Beery v. Commissioner, 122 T.C.
184, 187 (2004).   In responding to a motion for summary

judgment, the opposing party has a duty to “set forth specific

facts showing that there is a genuine issue for trial.”    Rule

121(d); Celotex Corp. v. Catrett, 477 U.S. 317, 322-323 (1986).

     In a collection action where petitioner’s tax liability is

not at issue, we review the appropriateness of respondent’s

determination for abuse of discretion.   Sego v. Commissioner,

114 T.C. 604, 609-610 (2000); Goza v. Commissioner, 114 T.C.
176, 182 (2000).

     Petitioner’s failure to provide respondent’s Appeals Office

with requested financial information in connection with

petitioner’s proposed OIC fully supports respondent’s

determination to sustain respondent’s proposed levy action.
                              - 6 -

     For the reasons stated, we shall grant respondent’s motion

for summary judgment.

                                      An appropriate order and

                              decision will be entered.