Court Opinion

ID: 4474695
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:11:06.041137+00
Date Added: 2024-06-11T14:51:04.536185
License: Public Domain

Marvel, J., dissenting: This Court continues its struggle with sections 6320 and 6330. In this case the majority holds that Mr. Giamelli’s estate (the estate) may not raise any issue before this Court that Mr. Giamelli did not raise at his section 6320 administrative hearing (section 6320 hearing)1 before the Internal Revenue Service (IRS) Appeals Office. Because the majority opinion rejects both issues raised by the estate without drawing a distinction between an issue that could have been raised at the administrative hearing and was not and an issue that arises because of a change in circumstances occurring after the administrative hearing was held and the notice of determination was issued, I respectfully dissent. In this case, Mr. Giamelli and his wife had filed a joint Federal income tax- return for 2001 but did not pay the tax that was due with the return. After assessing the tax reported on the return and requesting payment, respondent issued to the Giamellis a Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320. Mr. Giamelli, through counsel, timely requested an administrative hearing under section 6320. The majority opinion states that Mr. Giamelli informed the Appeals officer to whom his hearing request was assigned that he wished to enter into an installment agreement and that the Appeals officer and Mr. Giamelli discussed the installment agreement request during the ensuing months. The discussions did not result in an installment agreement because Mr. Giamelli was not current with his estimated tax payments for tax years after 2001 as required by existing IRS guidelines. After respondent issued a notice of determination to the Giamellis sustaining the tax lien filing for 2001, Mr. Giamelli filed a petition with this Court pursuant to sections 6320(c) and 6330(d). The only issue raised by Mr. Giamelli in his petition was his desire to be allowed to enter into an installment agreement to resolve his unpaid tax liability for 2001. Respondent and Mr. Giamelli subsequently reached an agreement regarding an installment agreement. Unfortunately, before a decision document could be executed by the parties, Mr. Giamelli was killed in an automobile accident. The majority opinion indicates that Mr. Giamelli’s estate, of which Mrs. Giamelli is the executrix, will be substituted as petitioner. Mrs. Giamelli, as executrix of the estate, repudiated the installment agreement and notified respondent that she wishes to disclose certain wrongdoings of her deceased husband that she believes will alter the underlying tax liability for 2001. Specifically, she wants to disclose alleged illegal payments that she believes are deductible and will reduce the tax liability reported on the 2001 joint return. Respondent filed a motion for summary judgment in which he alleges that there is no dispute regarding material facts and that respondent is entitled to summary disposition as a matter of law on the question of whether the Appeals Office abused its discretion in upholding respondent’s collection action. The majority opinion identifies two arguments raised by the estate’s attorney for the first time after Mr. Giamelli’s death. The first argument is that “Mr. Giamelli overstated his income tax liability [for 2001] in an effort to conceal fraudulent business dealings, and that consequently the estate is only a partial successor in interest to Mr. Giamelli.” Majority op. p. 112. The second argument is that the estate “is a separate person and is entitled to its own collection review hearing.” Majority op. pp. 115-116. Both arguments focus on an estate’s standing to raise issues in a section 6320 proceeding. However, the first argument addresses an issue with respect to Mr. Giamelli’s underlying tax liability that, at least in part, could have been raised by Mr. Giamelli at the section 6320 hearing but was not. The second argument addresses an issue that could not have been raised at the section 6320 hearing because Mr. Giamelli was still alive and there was no estate in existence to raise it. The majority opinion treats both arguments as an untimely attempt on the part of the estate to raise an issue regarding Mr. Giamelli’s underlying tax liability for 2001 that Mr. Giamelli could have raised at the section 6320 hearing but did not. The majority opinion concludes as follows: Because the only issue raised with the Appeals officer was the installment agreement, our review is limited to the determination reached by the Appeals officer to reject the proposed installment agreement because of Mr. Giamelli’s noncompliance. The argument that an estate is a separate person and is entitled to its own collection review hearing fails for the same reason. While the estate has cited no authority for this novel argument, and we know of none, such an argument is not timely. As discussed above, our review is limited to the determination issued by respondent’s Appeals Office. * * * [Majority op. pp. 115-116.] The majorityjustifi.es its summary dismissal of the estate’s argument that it is entitled to its own collection review hearing under section 6320 by its conclusion that the argument “is not timely.” However, the estate did not exist at any time during the section 6320 hearing process and consequently, could not have raised any issue before the Appeals Office. It is only because of the unexpected death of Mr. Giamelli in an automobile accident after the section 6320 hearing process had been completed and after Mr. Giamelli had filed his petition in this Court that the estate came into being and had any opportunity to raise issues regarding the lien filed with respect to Mr. Giamelli’s unpaid 2001 tax liability. The majority appears to assume that the only reason the estate is contending it should receive a separate notice under section 6320 is to permit the estate to receive a section 6320 hearing at which it could raise an issue about the amount of Mr. Giamelli’s 2001 tax liability. Although that may be true, the assumption obscures the fact that the estate has raised a legal issue under section 6320 that should be addressed on its merits before summary judgment is granted. That issue focuses on the standing of an estate to contest an unpaid tax liability of a taxpayer after the taxpayer has died,2 and it is not an issue that could have been raised at the section 6320 hearing by Mr. Giamelli. The majority’s conclusion that the issue was not timely raised makes no sense. Colvin, Swift, Laro, and Gale, JJ., agree with this dissenting opinion.  A hearing requested under sec. 6320 is conducted in accordance with sec. 6330(c), (d) (other than par. (2)(B) thereof), and (e).    Under Federal tax law, an estate is a separate taxable entity that may have an obligation to file both an estate tax return, see sec. 6018, and income tax returns, see sec. 6012(a)(3). Under State law, an estate typically has obligations regarding the payment of a decedent’s debts and the distribution of the decedent’s assets to beneficiaries.