Court Opinion

ID: 4336917
Source: CourtListenerOpinion
Date Created: 2018-11-14 03:05:02.701932+00
Date Added: 2024-06-11T14:47:24.854234
License: Public Domain

T.C. Memo. 2008-8

                      UNITED STATES TAX COURT

                    JOHN SHERE, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent

     Docket No. 23280-06L.              Filed January 23, 2008.

     John Shere, pro se.

     Neal O. Abreu, for respondent.

                        MEMORANDUM OPINION

     MARVEL, Judge:   This matter is before the Court on

respondent’s motion for summary judgment filed under Rule 121.1

     1
      All Rule references are to the Tax Court Rules of Practice
and Procedure, and all section references are to the Internal
Revenue Code.
                                 - 2 -

                            Background

     This is an appeal from respondent’s determination upholding

the proposed use of a levy to collect petitioner’s unpaid Federal

income tax liability for 2002.    Petitioner resided in California

when the petition was filed.

     Petitioner failed to file a Federal income tax return for

2002.   On July 27, 2004, respondent mailed a notice of deficiency

for 2002 to petitioner.   On October 22, 2004, the Court received

a letter from petitioner that was filed as petitioner’s imperfect

petition at docket No. 20485-04.    By order dated October 27,

2004, the Court directed petitioner to file a proper amended

petition and pay the Court’s filing fee on or before December 13,

2004.   Petitioner failed to do so.      By order dated February 8,

2005, the Court dismissed petitioner’s case at docket No. 20485-

04 for lack of jurisdiction on the grounds that petitioner failed

to file a proper amended petition or pay the filing fee as

ordered.

     On July 11, 2005, respondent assessed the 2002 income tax

deficiency, interest, and additions to tax for late filing and

failure to pay and mailed a notice of balance due to petitioner.

On November 12, 2005, respondent sent petitioner a Final Notice

of Intent To Levy and Notice of Your Right to a Hearing for the

year at issue.   Petitioner timely submitted a Form 12153, Request

for a Collection Due Process Hearing.       In his request, petitioner
                               - 3 -

asked for a face-to-face hearing and questioned whether the

Internal Revenue Service (the Service) “follows proper

procedure”, but petitioner raised no other issue regarding the

assessed liability or the Service’s intention to collect by levy.

     On June 26, 2006, the settlement officer assigned to

petitioner’s case sent petitioner a letter acknowledging

petitioner’s request for a section 6330 hearing and scheduling a

telephone conference for August 1, 2006, “to discuss with me the

reasons you disagree with the collection action and/or to discuss

alternatives to the collection action.”   The officer’s letter

also stated that if the time was not convenient or petitioner

preferred a face-to-face conference, petitioner should contact

the settlement officer within 14 days of the date of the letter.

In addition, the settlement officer requested that petitioner

submit certain information before his conference, including a

completed collection information statement and related

verification, signed tax returns for 2000, 2003, and 2005, and

proof of estimated tax payments for 2006.

     By letter dated July 24, 2006, petitioner responded to the

June 26, 2006, letter.   Among other things, petitioner complained

about the settlement officer’s setting a hearing date without

consulting with him, and he stated that he was not able to

participate in the August 1, 2006, telephone conference.

Petitioner also stated that he had requested a face-to-face
                               - 4 -

hearing and that he “was under the impression that [he] would be

able to dispute the liability” at his hearing because he had had

no prior opportunity to dispute it.

     By letter dated July 26, 2006, the settlement officer

informed petitioner that she had scheduled a telephone conference

call for August 22, 2006, and again requested that petitioner

submit a completed collection information statement and other

information within 14 days of the date of the letter.    By letter

dated August 18, 2006, petitioner responded complaining that the

settlement officer had again ignored his request for a face-to-

face hearing and advising that he would not be able to

participate in the scheduled telephone conference.

     By letter dated August 21, 2006, the settlement officer

wrote a third time to petitioner.   She informed petitioner that

she had not received the requested information from him, and she

gave him 14 days from the date of the letter to submit the

information.   She also informed petitioner that her office would

make a determination by reviewing the administrative file and

whatever information he submitted and that she would promptly

issue a determination letter with her findings.   By letter dated

August 31, 2006, petitioner responded to the August 21, 2006,

letter writing that “I am lost as to what information you are

asking from me.   Please let me know what you would accept as
                               - 5 -

evidence to challenge and disprove the liability the IRS claims I

owe.”

     Petitioner did not submit any of the requested information

to the settlement officer.   On October 12, 2006, the Appeals

Office issued a notice of determination that the proposed levy

action was appropriate and could proceed.    Attached to the notice

was a document summarizing the issues, the background, and the

discussion and analysis supporting the determination.    The

following information was included in the attachment.

     1.   The Service mailed a notice of deficiency to petitioner

for 2002, and he petitioned the Tax Court.    Because he had a

prior opportunity to appeal the underlying liability for 2002, he

could not raise any issue regarding the underlying liability at

the collection due process hearing.

     2.   Petitioner was offered a face-to-face hearing if he

identified any relevant, nonfrivolous issues in writing or by

calling as requested, but he did not do so.

     3.   Petitioner was offered the opportunity to discuss

collection alternatives to the proposed levy action if he

provided the requested financial information, but petitioner

failed to submit the information.   In addition, petitioner was

not in compliance with his filing and payment obligations.
                                 - 6 -

     4.   The requirements of applicable law or administrative

procedures have been met, and the actions taken were appropriate

under the circumstances.

     5.   Petitioner did not identify any relevant, nonfrivolous

issue.

     6.   The proposed levy balances the need for efficient

collection with petitioner’s concern that any collection action

be no more intrusive than necessary.

     By undated letter received by the Court November 13, 2006,

petitioner indicated that he wished to appeal the notice of

determination.   The Court filed the letter as petitioner’s

imperfect petition and ordered him to file a proper amended

petition.   On March 15, 2007, the Court received and filed

petitioner’s amended petition.    In his amended petition,

petitioner alleged as follows:

     During the Collection Due Process Hearing, it is
     believed that the Respondent DID NOT satisfy ALL of the
     appropriate requirements. The Petitioner was NOT
     allowed to challenge the liability of the assessed tax,
     therefore petitioner was NOT given a fair and impartial
     hearing. Petitioner requested pertinent documents and
     files, but respondent REFUSED to comply. Petitioner
     also requested to be provided with acceptable evidence
     that would further support the Respondents’ claim of
     this assessed tax. Petitioner was not allowed to
     dispute any discrepancies found within Respondents’
     claim of tax liability. Petitioner was NOT properly
     informed of his rights. Petitioner was not given due
     process.

     On August 23, 2007, the Court issued petitioner a notice

setting his case for trial during its January 28, 2008, San
                               - 7 -

Francisco, California, trial session.    On October 15, 2007,

respondent filed a motion for summary judgment.    On October 18,

2007, the Court ordered petitioner to respond to respondent’s

motion for summary judgment by November 9, 2007.    By motion filed

on November 9, 2007, petitioner requested an extension of time to

December 14, 2007, to respond to the motion for summary judgment.

Although the Court granted petitioner’s motion, he failed to

respond by the extended deadline.

                            Discussion

I.   Summary Judgment

     Summary judgment is a procedure designed to expedite

litigation and avoid unnecessary, time-consuming, and expensive

trials.   Fla. Peach Corp. v. Commissioner, 90 T.C. 678, 681

(1988).   Summary judgment may be granted with respect to all or

any part of the legal issues presented “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 121(b);

Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), affd.

17 F.3d 965 (7th Cir. 1994); Zaentz v. Commissioner, 90 T.C. 753,

754 (1988).   The moving party bears the burden of establishing

that there is no genuine issue of material fact, and factual

inferences will be drawn in a manner most favorable to the party
                                - 8 -

opposing summary judgment.    Dahlstrom v. Commissioner, 85 T.C.
812, 821 (1985); Jacklin v. Commissioner, 79 T.C. 340, 344

(1982).    The nonmoving party, however, cannot rest upon the

allegations or denials in his pleadings but must “set forth

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

Rule 121(d); Dahlstrom v. Commissioner, supra at 820-821.

II.    Section 6330

       Section 6330(a) provides that no levy may be made on any

property or right to property of any person unless the Secretary

has notified such person in writing of the right to a hearing

before the levy is made.    If the person makes a request for a

hearing, a hearing shall be held before an impartial officer or

employee of the Service’s Office of Appeals.      Sec. 6330(b)(1),

(3).    At the hearing, a taxpayer may raise any relevant issue,

including appropriate spousal defenses, challenges to the

appropriateness of the collection action, and collection

alternatives.    Sec. 6330(c)(2)(A).    A taxpayer may contest the

existence or amount of the underlying tax liability at the

hearing if the taxpayer did not receive a notice of deficiency

for the tax liability in question or did not otherwise have an

earlier opportunity to dispute the tax liability.      Sec.

6330(c)(2)(B); see also Sego v. Commissioner, 114 T.C. 604, 609

(2000).
                                 - 9 -

     Following a hearing, the Appeals Office must make a

determination whether the proposed levy action may proceed.       The

Appeals Office is required to take into consideration:    (1)

Verification presented by the Secretary that the requirements of

applicable law and administrative procedures have been met, (2)

relevant issues raised by the taxpayer, and (3) whether the

proposed levy action appropriately balances the need for

efficient collection of taxes with a taxpayer’s concerns

regarding the intrusiveness of the proposed levy action.    Sec.

6330(c)(3).

     Section 6330(d)(1) grants this Court jurisdiction to review

the determination made by the Appeals Office in connection with

the section 6330 hearing.    Where the underlying tax liability is

not in dispute, the Court will review the determination of the

Appeals Office for abuse of discretion.     Lunsford v.

Commissioner, 117 T.C. 183, 185 (2001); Sego v. Commissioner,

supra at 610; Goza v. Commissioner, 114 T.C. 176, 182 (2000).       An

abuse of discretion occurs if the Appeals Office exercises its

discretion “arbitrarily, capriciously, or without sound basis in

fact or law.”     Woodral v. Commissioner, 112 T.C. 19, 23 (1999).

     Petitioner failed to respond to the motion for summary

judgment.     Consequently, we review the motion and supporting

affidavits and exhibits to decide whether to grant the motion.

Our review confirms that there is no material issue of fact
                               - 10 -

fairly in dispute and that respondent is entitled to summary

disposition as a matter of law.

     Petitioner’s principal complaint throughout the section 6330

hearing process was directed to the underlying tax liability and

his incorrect expectation that he could challenge that liability

at the section 6330 hearing.   However, the law is clear that if a

taxpayer received a notice of deficiency with respect to the

underlying liability, the taxpayer may not contest the liability

in a section 6330 hearing.   Sec. 6330(c)(2)(B).   The undisputed

facts confirm that petitioner received a notice of deficiency for

2002.   Petitioner submitted a letter evidencing his intention to

dispute the notice, which the Court treated as an imperfect

petition to protect petitioner’s right to contest the notice of

deficiency.   The resulting case was dismissed for lack of

jurisdiction because petitioner failed to comply with this

Court’s order to file a proper amended petition.

     Petitioner’s other complaint was that he had requested a

face-to-face hearing.   However, the undisputed facts reveal that

the settlement officer advised petitioner that she would schedule

a face-to-face hearing if petitioner identified the relevant,

nonfrivolous issues he wanted to discuss at that hearing.

Petitioner did not do so.    Respondent, acting in accordance with

his administrative procedures, scheduled two telephone hearings

that petitioner did not participate in.   The undisputed facts
                              - 11 -

establish that petitioner was given an opportunity for a hearing,

and he failed to take advantage of it.   Respondent reasonably

concluded that the collection action could proceed after

reviewing the administrative record and determining that the

requirements of section 6330 had been satisfied.

     We conclude on the record before us that respondent did not

abuse his discretion in determining that the proposed levy could

proceed.   See Peter D. Dahlin Atty. at Law, P.S. v. Commissioner,

T.C. Memo. 2007-310; Davis v. Commissioner, T.C. Memo. 2007-160.

There is no genuine issue of material fact requiring a trial in

this case, and we hold that respondent is entitled to the entry

of a decision sustaining the proposed levy as a matter of law.

                                         An appropriate order and

                                    decision will be entered.