Court Opinion

ID: 4337311
Source: CourtListenerOpinion
Date Created: 2018-11-14 03:17:18.232614+00
Date Added: 2024-06-11T07:51:33.935221
License: Public Domain

T.C. Memo. 2008-241

                       UNITED STATES TAX COURT

                MICHAEL P. COGHLAN, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent

     Docket No. 19460-06L.               Filed October 28, 2008.

     Michael P. Coghlan, pro se.

     Gregory J. Stull, for respondent.

               MEMORANDUM FINDINGS OF FACT AND OPINION

     FOLEY, Judge:    The issue for decision is whether respondent

abused his discretion in sustaining the decision to file a notice

of Federal tax lien relating to petitioner’s 2000 and 2002 tax

liabilities.
                                 - 2 -

                          FINDINGS OF FACT

     On October 30, 2003, petitioner untimely filed his 2000

Federal income tax return on which he reported, but did not pay,

a $39,514 outstanding liability and elected married filing

separately status.   In a notice and demand for payment issued on

November 24, 2003, respondent determined that petitioner was

liable for the self-reported underpayment and section 6651(a)(1)

and (2)1 additions to tax bringing his total outstanding

liability to $58,929.

     On May 5, 2004, respondent placed petitioner’s 2000 account

in currently noncollectible (CNC) status, and on May 15, 2004,

issued petitioner a Final Notice of Intent to Levy and Notice of

Your Right to a Hearing relating to petitioner’s 2000 and 2002

unpaid income tax liabilities.    On June 16, 2004, respondent

received petitioner’s Form 12153, Request for a Collection Due

Process Hearing, in which petitioner disputed the proposed levy.

On November 19, 2004, Ms. Norman, a settlement officer, held a

face-to-face hearing (levy hearing) with petitioner.    During the

levy hearing, petitioner disputed the balance due with respect to

the 2000 tax liability.   Respondent, in a Notice of Determination

Concerning Collection Action(s) Under Section 6320 and/or 6330

(notice of determination) issued on March 24, 2005, recommended

     1
       Unless otherwise indicated, all section references are to
the Internal Revenue Code of 1986, as amended and in effect for
the years in issue.
                                - 3 -

that petitioner’s CNC status remain in effect until his financial

status improved.

     On May 1, 2005, petitioner submitted to respondent a $6,492

offer-in-compromise (OIC).   On June 12, 2005, petitioner

increased the OIC to $12,000.   On October 3, 2005, respondent

rejected the revised OIC, and petitioner appealed the rejection.

Respondent subsequently sustained his decision.

     On October 13, 2005, respondent issued petitioner a Notice

of Federal Tax Lien Filing and Your Right to a Hearing Under IRC

6320 (lien notice) relating to 2000 and 2002.   On November 11,

2005, petitioner filed the Form 12153 to dispute the validity of

the tax lien and the underlying liability relating to 2000.     On

January 26, 2006, Mr. Engelbrecht, a settlement officer in

Memphis, scheduled a telephone hearing for February 28, 2006.     By

a letter dated February 7, 2006, petitioner requested a face-to-

face hearing.

     On February 13, 2006, the Memphis Appeals Office transferred

the hearing request to respondent’s Chicago Appeals Office.     In a

letter dated May 18, 2006, Ms. Dismukes, a settlement officer in

Chicago, scheduled a June 19, 2006, telephone hearing with

petitioner.   On June 15, 2006, petitioner, who had financial

information he wanted the settlement officer to review, left Ms.

Dismukes a voice mail message requesting a face-to-face hearing.

On June 16, 2006, Ms. Dismukes returned petitioner’s call.
                                 - 4 -

During the telephone conversation, petitioner requested that the

lien be released, explained the circumstances relating to the

filing of his 2000 income tax return, and reiterated his desire

for a face-to-face hearing.   In response, Ms. Dismukes explained

the Appeals process, informed petitioner that he had not

established a basis for withdrawal of the lien, and scheduled a

face-to-face hearing for June 30, 2006.    On June 28, 2006,

petitioner left Ms. Dismukes a voicemail message stating that he

would like to reschedule the hearing.    Ms. Dismukes did not

return petitioner’s call or reschedule the hearing.

     On August 22, 2006, respondent issued a notice of

determination denying petitioner’s appeal relating to the filing

of the tax lien.   On September 25, 2006, petitioner, while

residing in Illinois, filed his petition with this Court seeking

a review of the notice of determination.

                              OPINION

     Section 6320 provides for Tax Court review of the

Commissioner’s administrative determinations to proceed with the

collection of tax liabilities.    Section 6320(b)(1) provides that

if a taxpayer requests a hearing, “such hearing shall be held by

the Internal Revenue Service Office of Appeals.”    Section 6320(c)

provides that section 6330 shall apply to the conduct and

judicial review of the hearing.    Section 6320 hearings are

informal proceedings and may, but are not required to, consist of
                               - 5 -

a face-to-face meeting, one or more written or oral

communications between an Appeals officer and the taxpayer, or

some combination thereof.   Sec. 301.6320-1(d)(2), Q&A-D6, Proced.

& Admin. Regs.; see Katz v. Commissioner, 115 T.C. 329, 337

(2000).   Ordinarily, a taxpayer who presents in the request

relevant, nonfrivolous reasons for disagreement with the proposed

levy will be offered an opportunity for a face-to-face hearing at

the Appeals Office closest to the taxpayer’s residence.    Sec.

301.6320-1(d)(2), Q&A-D7, Proced. & Admin. Regs.

     The taxpayer may raise at the Appeals Office hearing any

relevant issue relating to the unpaid tax or the lien notice

including spousal defenses, challenges to the appropriateness of

the collection actions, and offers of collection alternatives.

Sec. 6330(c)(2)(A).   A taxpayer may also raise the underlying tax

liability if the person did not receive a notice of deficiency

for, or did not otherwise have an opportunity to dispute, the tax

liability.   Sec. 6330(c)(2)(B).   Following the hearing, the

Appeals Officer must determine whether the collection action may

proceed, taking into account verification that all requirements

of any applicable law or administrative procedure have been met,

relevant issues raised during the hearing, and whether the

collection action balanced the need for the efficient collection

of taxes with the intrusiveness of the collection action.    See

sec. 6330(c)(3).
                               - 6 -

     Petitioner contends that he was not afforded an appropriate

hearing and that Ms. Dismukes failed to meet him face-to-face.

Ms. Dismukes and petitioner had a telephone conversation on June

16, 2006, during which petitioner raised issues relating to the

tax liability and the lien action.     On multiple occasions,

petitioner requested a face-to-face hearing to allow him to

present information regarding his financial status and

responsibilities (i.e., child support payments, counseling

expenses, and health insurance premiums).     Petitioner further

contends that he was not given the opportunity to assert that

these financial considerations were justifications to abate his

tax liability.

     Even though petitioner was not afforded a face-to-face

hearing, he has not been prejudiced.     Furthermore, petitioner

requested that the Court not remand his case to the Appeals

Office.   It is neither necessary nor productive to remand this

case.   See Nestor v. Commissioner, 118 T.C. 162, 167 (2002);

Lunsford v. Commissioner, 117 T.C. 183, 189 (2001).     Moreover,

release of the lien is not justified.     See sec. 6325(a).

     Petitioner also contends that he was defrauded by his former

wife who elected married filing separately, rather than married

filing jointly, status.   Petitioner claims that his tax liability

would have been lower had they filed a joint 2000 return.

Petitioner, however, had the opportunity to dispute the
                                - 7 -

underlying liability at the levy hearing and, thus, is not

entitled to challenge the underlying liability.    See Bell v.

Commissioner, 126 T.C. 356, 358-359 (2006).    Where the validity

of the liability is not properly part of the appeal, the Court

reviews the Appeals officer’s administrative determination for

abuse of discretion.    See Davis v. Commissioner, 115 T.C. 35, 39

(2000); see also Goza v. Commissioner, 114 T.C. 176, 181-182

(2000).

       Petitioner contends that, in determining whether to sustain

the lien notice, respondent abused his discretion by failing to

consider petitioner’s financial responsibilities and the revised

OIC.    Respondent’s determination, however, had a sound basis in

fact and law and was not arbitrary or capricious.    First, the OIC

was submitted and rejected before respondent issued the lien

notice.    Second, petitioner did not raise any collection

alternatives.    Third, respondent, pursuant to section 6330(c)(3),

properly weighed the intrusiveness of the collection action

against the need for the efficient collection of taxes.      Finally,

the assessment of taxes and the recordation of the lien were

carried out in accordance with all appropriate statutes and

regulations.    Accordingly, we sustain respondent’s determination.

       Contentions we have not addressed are irrelevant, moot, or

meritless.
                            - 8 -

To reflect the foregoing,

                                         Decision will be entered

                                    for respondent.