Court Opinion

ID: 4474156
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:10:47.311239+00
Date Added: 2024-06-11T12:23:11.427765
License: Public Domain

Foley, J., dissenting: I respectfully disagree with the majority’s analysis and holding. In order to assert jurisdiction, deny petitioners their statutorily mandated hearing, and expedite the collection process, the majority have bifurcated this case into two opinions, both of which obfuscate the issues, ignore an unambiguous statute, and avoid addressing the most critical issue: Does the exchange of correspondence between respondent and petitioners constitute the hearing required by section 6330(b)(1)? The majority sidestep, rather than address, this issue and choose to focus exclusively on Rule 331(b) and petitioners’ Form 12153, Request for a Collection Due Process Hearing, petition, trial memorandum, and failure to submit a posttrial brief. There is nothing, however, in the majority opinion that justifies denying petitioners their statutorily mandated hearing. Let us be clear. Petitioners requested a hearing.1 Respondent rejected this request and proceeded to issue a determination.2 When this case was called for trial the documentary evidence indicated that a hearing had not been offered or held. As the trial judge, I was particularly concerned about whether section 6330 authorized respondent to issue a determination without first holding a hearing. Now I am troubled by the majority’s total disregard of the unambiguous hearing requirement of section 6330(b)(1). 1. Section 6330(b)(1) Unambiguously Requires a Hearing The majority state that “We do not construe the instant appeal as being predicated on allegations that respondent failed to offer petitioners a hearing per se.” Majority op. p. 188. I do not know what the words “per se” at the end of the foregoing sentence are intended to convey, but I do know that respondent’s failure to provide petitioners a hearing is a per se abuse of discretion. Despite the way the majority “construe the instant appeal”, petitioners filed Form 12153; requested in their petition that “this case be remanded to the Appeals Office” to “Hold a meaningful due process hearing as required by law”; and reiterated this request at trial when petitioners’ counsel stated: “I do not believe they’ve been afforded proper due process * * *, and I believe they should be allowed to have a hearing.” The majority, however, do “not believe that it is either necessary or productive to remand this case to IRS Appeals to consider petitioners’ arguments.” Majority op. p. 189 (emphasis added). They refuse to follow the unambiguous statutory mandate that if a hearing is requested, “such hearing shall be held by the Internal Revenue Service Office of Appeals.” Sec. 6330(b)(1) (emphasis added). The congressional mandate is binding.3 The majority’s assessment of “necessity” and “productivity” is irrelevant. Section 6330(b)(1) is bolstered by section 6330(e)(1)— another unambiguous provision. Section 6330(e)(1) provides that “if a hearing is requested * * *, the levy actions which are the subject of the requested hearing and the running of any period of limitations * * * shall be suspended for the period during which such hearing, and appeals therein, are pending.” Thus, because the hearing required by section 6330(b)(1) was not held, respondent cannot proceed with collection by levy against petitioners. Sec. 6330(e)(1). Respondent, who has the responsibility of administering the tax laws, merely contends that petitioners’ hearing was conducted via correspondence. Respondent does not contend that a hearing is unnecessary or optional. Indeed, a Chief Counsel Advisory issued 5 months after this case was submitted states: a taxpayer is entitled to a CDP hearing even if he will raise only frivolous or constitutional arguments because the appeals officer must cover the statutory requirements of sections 6330(c)(1) and (3)(C) of verification and balancing. [Chief Counsel Advisory 200123060 (June 8, 2001); emphasis added.] Respondent recognizes that if no hearing was conducted, an Appeals officer obviously could not have obtained at the hearing “verification from the Secretary that the requirements of any applicable law or administrative procedure have been met”, as required by section 6330(c)(1), or balanced 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”, as required by section 6330(c)(3)(C). Id. On the other hand, the majority deem the holding of a hearing unnecessary. Majority op. p. 189. The majority position is contrary to both petitioners’ and respondent’s interpretation of the statute. Section 6330(d)(1) charges us with the responsibility of reviewing, not making, respondent’s determination. Under the majority holding in Lunsford v. Commissioner, 117 T.C. 159 (2001) (Lunsford I), virtually any piece of paper entitled “Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330” confers jurisdiction on this Court and may ultimately deprive the taxpayer of his statutory right to a hearing. 2. Petitioners Were Not Offered a Hearing The majority sidestep the hearing issue entirely. Section 6330 requires that the Court decide whether the hearing requested by petitioners was held, and I shall do so. Respondent, citing Katz v. Commissioner, 115 T.C. 329 (2000), Konkel v. Commissioner, 86 AFTR 2d 2000-6939, 2001-1 USTC par. 50,520 (M.D. Fla. 2000), et al., contends that the exchange of correspondence between petitioners and respondent constitutes the hearing required by section 6330(b)(1). I reject this contention. Unlike the correspondence in Katz and Konkel, the correspondence between petitioners and respondent did not specify the manner in which the hearing would be conducted. In addition, respondent’s letter failed to clearly delineate that the exchange of correspondence would constitute the hearing required by section 6330(b)(1). Indeed, the letter to petitioners does not even mention a hearing. It merely directs that “If you wish to discuss other matters, such as resolution of the liability[,] please contact me by September 16, 1999.” Respondent’s contention is inconsistent with the aforementioned Chief Counsel Advisory. In this advisory, which related to a form letter of the type in this case, the Commissioner’s Chief Counsel opined that the “hearing envisioned by this letter does not satisfy the statutory requirements” of section 6330(b). Chief Counsel Advisory 200123060. It is worth noting that the form letter referred to in this advisory, unlike the letter sent to petitioners, stated that “your hearing will consist of review of your correspondence and consideration of information” in respondent’s possession. Id. Respondent’s letter to petitioners (see above description), which was far less informative, fails to meet the statutory requirements. While a taxpayer in a section 6330 hearing does not have the rights afforded in a formal proceeding, Davis v. Commissioner, 115 T.C. 35 (2000), such a taxpayer is entitled to know when and how the hearing will be conducted. The “exchange of correspondence” did not constitute the hearing required by section 6330(b)(1). Although the majority may disagree with my conclusion that the hearing required by section 6330(b)(1) was not held, they may not sidestep this issue and merely conclude that petitioners are not entitled to a hearing. 3. Rationale for Holding Is Unpersuasive In tandem, the majority’s holdings in Lunsford I and the majority opinion herein are groundless assertions of jurisdiction and authority. The only justification for the holding herein is that it would be a waste of time to conduct a hearing. This Court is not prescient. Although petitioners’ Form 12153, petition, and trial memorandum focus on one issue— the assessments — only petitioners know what issues might be raised at a hearing, particularly in light of the fact they are no longer represented by the disbarred attorney who wrote the documents submitted to the Court. Pursuant to section 6330(c)(2)(A), taxpayers “may raise at the hearing any relevant issue relating to the unpaid tax”. (Emphasis added.) The Appeals officer, in the letter which allegedly scheduled the hearing, wrote: “Appeals cannot consider” the validity of the assessments. To the contrary, pursuant to section 6330(c)(1), the Appeals officer must consider the validity of the assessments. Form 4340 is presumptive evidence of a valid assessment, Huff v. United States, 10 F.3d 1440, 1446 (9th Cir. 1993), but the presumption is rebuttable. Although the Appeals Office’s reliance on such form is not an abuse of discretion in a case in which the taxpayer makes no showing of irregularity, Davis v. Commissioner, supra at 41, a taxpayer, nevertheless, must have an opportunity to make the showing at the hearing required by section 6330(b)(1). The majority’s conclusion that respondent should not be required to conduct a hearing because it is not “either necessary or productive to remand this case to IRS Appeals to consider petitioners’ arguments”, majority op. p. 189, simply ignores and circumvents the statute. Neither Rule 331 nor petitioners’ receipt of Form 4340 forecloses relevant questions relating to the assessments or provides an excuse for us to ignore the section 6330(b)(1) hearing mandate. The bottom line is that a taxpayer who requests a hearing is entitled to one. Sec. 6330(b)(1). Neither respondent nor the Court has any discretion about that. Id. Until petitioners have the hearing they requested, sec. 6330(b)(1), respondent cannot proceed with collection of the tax, sec. 6330(e)(1). I have yet to find the statutory exceptions to section 6330(b)(1) and (e)(1) for individuals with whom the IRS does not want to deal. Yet the majority, in essence, have imprudently set forth such exceptions. The congressional mandates in section 6330(b)(1) and (e)(1) are unambiguous. The majority, in an attempt to expedite the collection process, have rewritten those provisions. The Court has no authority to do so. Chiechi, Laro, Vasquez, and Marvel, JJ., agree with this dissenting opinion.  Any reference to a request for a hearing shall be considered a reference to a request meeting the requirements of sec. 6330(a)(3)(B) (i.e., a timely request) unless otherwise stated.    References to a “determination” are not intended to imply whether it is a determination that meets the requirements of sec. 6330(c), (d), and (e).    When interpreting an unambiguous statute, it is not necessary to consider the legislative history. Nevertheless, we note that the legislative history accompanying sec. 6330 further supports our position. Congress promulgated sec. 6330 to establish “formal procedures designed to insure due process where the IRS seeks to collect taxes by levy”. S. Rept. 106-174, at 67 (1998), 1998-3 C.B. 537, 603. The Senate Finance Committee stated that the Commissioner would, pursuant to sec. 6330, be required to "afford taxpayers adequate notice of collection activity and a meaningful hearing before the IRS deprives them of their property.” Id..-, see also H. Conf. Rept. 105-599, at 263 (1998), 1998-3 C.B. 747, 1017 (“If * * * the taxpayer demands a hearing, the proposed collection action may not proceed until the hearing has concluded and the appeals officer has issued his or her determination.”). The temporary regulations relating to sec. 6330 are fully consistent with the legislative history of the statute. See sec. 301.6330-lT(d)(l), Temporary Proced. & Admin. Regs., 64 Fed. Reg. 3410 (Jan. 22, 1999) (“If a taxpayer requests a CDP hearing under section 6330(a)(3)(B) * * *, the CDP hearing will be held with Appeals.”).