Court Opinion

ID: 4474575
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:11:01.444055+00
Date Added: 2024-06-11T14:53:52.530151
License: Public Domain

Wells, J., concurring: I respectfully write separately to express my belief that the majority opinion may have unnecessarily focused its analysis on contract law to decide whether respondent abused his discretion in the instant case. Section 6330(c)(3)(C) requires the Appeals officer to consider “whether any proposed collection action balances the need for the efficient collection of taxes with the legitimate concern of the person that any collection action be no more intrusive than necessary.” This provision requires the Appeals officer, when conducting a hearing under section 6330, to carry out a balancing of competing considerations between the Government and the person against whom the collection action is instituted. Given this balancing requirement, I do not believe the Appeals officer should be required to rigidly apply contract law in determining whether the Government should proceed with collection of a liability where that liability, as in the instant case, has been compromised in an agreement between the Government and the person against whom the collection action has been instituted.1 Such a requirement would detract from the flexibility and discretion Congress granted the Appeals officer in section 6330(c)(3)(C) to balance competing interests between the Government and those persons. Consequently, I believe the focus of the analysis in the instant case should be on whether respondent failed to undertake the balancing required under section 6330(c)(3)(C). On the basis of the trial Judge’s findings set out in the majority opinion in the instant case it is clear to me that respondent failed to balance the relatively slight harm to respondent of receiving an hours-late2 return against the great harm to petitioner of reinstating and collecting a large tax liability. The abuse of discretion in failing to undertake the required balancing becomes apparent when taking into account that petitioner had timely filed his other returns as agreed in the offer-in-compromise agreement, had made a good faith effort to timely file the 1998 return, and had paid all the tax due in that return and was due a refund. See majority op. pp. 87-88. Despite petitioner’s technical3 failure to timely file the 1998 return, respondent should have allowed petitioner to present evidence that favored petitioner’s position and should have taken those facts into account in balancing the competing interests between the Government and petitioner. Respondent should have considered that evidence, and on the basis of such evidence, should have determined not to proceed with collection. Respondent’s failure to do so under these circumstances is an abuse of discretion. Regarding Magana v. Commissioner, 118 T.C. 488 (2002), I question whether that case has any application to the instant case. The majority opinion properly distinguishes Magana on the grounds that petitioner is not raising a new issue. See majority op. p. 102. However, even if Magana could be read to exclude relevant and admissible evidence not raised during an Appeals Office hearing, it would have no application to the instant case. During the Appeals Office hearing in the instant case, petitioner attempted to present evidence relevant to his position, and respondent refused to consider it. If the Tax Court had no authority to develop a factual record in the instant case, there would not have been a sufficient record to determine whether respondent had abused his discretion. This is important because there are no formal procedures available for Appeals Office hearings. See sec. 301.6330 — 1(d)(1), Q&A-D6, Proced. & Admin. Regs. As this Court has stated, Appeals Office hearings historically have been informal, and in enacting section 6330, Congress did not intend to alter the nature of Appeals Office hearings. Davis v. Commissioner, 115 T.C. 35, 41 (2000). Thus, if the parties were not allowed to make a record in the trial before this Court, they could be precluded from presenting all of the evidence in support of their respective positions. Even the Commissioner has routinely sought to add evidence to the record in trials before this Court in order to bolster his determination in collection cases. See Chase v. Commissioner, T.C. Memo. 2002-93, affd. 55 Fed. Appx. 717 (5th Cir. 2002); Lindsey v. Commissioner, T.C. Memo. 2002-87, affd. 56 Fed. Appx. 802 (9th Cir. 2003); Holliday v. Commissioner, T.C. Memo. 2002-67, affd. 57 Fed. Appx. 774 (9th Cir. 2003). Regarding this issue, I also do not believe that allowing petitioner to present evidence in the instant case would mean that in other cases where a person refuses to comply with an Appeals officer’s reasonable request for relevant evidence at the hearing, we would be required to receive that evidence in a trial in this Court. In the instant case, petitioner attempted to present a wide array of evidence to support his position, and the Appeals officer refused to receive it. Thus, the case where a person refuses to furnish relevant evidence requested at the Appeals Office hearing is not before us and raises an issue the Court has not addressed and need not address. Accordingly, I agree with the conclusion of the majority opinion that respondent should be prevented from proceeding with collection in the instant case. Gerber, Foley, Marvel, and Wherry, JJ., agree with this concurring opinion.  I do not mean to suggest, however, that respondent could not have considered contract law issues, as well as other facts and issues, as part of the balancing required under sec. 6330(c)(3)(C).   By “hours-late” I mean hours after the “last collection” requirement of sec. 301.7502-l(c)(l)(iii)(B), Proced. & Admin. Begs.   I do not mean to imply that taxpayers are not required to comply with the technical requirements of the Internal Revenue Code and the regulations thereunder. However, respondent should have allowed petitioner to present evidence favoring petitioner’s position despite petitioner’s failure to comply with the last collection requirement of sec. 301.7502-l(cXl)(iii)(B), Proced. & Admin. Regs.