T.C. Memo. 2014-10
UNITED STATES TAX COURT
MICHAEL S. SHIRLEY, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 7603-12L. Filed January 13, 2014.
Michael S. Shirley, pro se.
Mark J. Tober, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
KERRIGAN, Judge: This case was commenced in response to three
Notices of Determination Concerning Collection Action(s) under Section 6320
and/or 6330 (notice of determination) upholding collection actions regarding the
following deficiencies and penalties for tax years 1998 and 2000-2008:
-2-
[*2]
Penalty
Year Deficiency Sec. 6682 Sec. 6702
1998 $9,345 --- ---
2000 8,770 --- ---
2001 1,760 $500 $500
2002 31,296 --- ---
2003 9,272 --- ---
2004 74,235 --- ---
2005 6,829 --- ---
2006 11,172 --- ---
2007 6,745 --- ---
2008 5,714 --- ---
Unless otherwise indicated, all section references are to the Internal
Revenue Code in effect at all relevant times. All monetary amounts are rounded to
the nearest dollar.
The issues for consideration are (1) whether petitioner is liable for a penalty
under section 6702 for tax year 2001, and (2) whether respondent’s determination
to proceed with the collection actions regarding petitioner’s unpaid income tax
liabilities for tax years 1998 and 2000-2008 and penalties for tax year 2001 was
proper.
-3-
[*3] FINDINGS OF FACT
Some of the facts are stipulated and are so found. We incorporate by
reference the stipulation of facts and the attached exhibits. Petitioner resided in
Florida when he filed the petition.
Petitioner’s Mailing Addresses
From 1998 to January 2005 petitioner resided in Angola, Indiana. He used
his residence address as his mailing address until April 2004; from April 2004 to
January 2005 he used a P.O. box in Angola, Indiana, as his mailing address. In
January 2005 petitioner moved to Granger, Indiana, and began using his residence
address as his mailing address. In December 2009 petitioner moved to Fort
Myers, Florida. Since then he has used his residence address there as his mailing
address.
Notices of Deficiency
Petitioner has outstanding tax liabilities for tax years 1998 and 2000-2008.
Between August 6, 2003, and March 14, 2011, respondent sent by certified mail
one notice of deficiency for each of tax years 1998 and 2000-2008. Respondent
addressed each notice of deficiency to petitioner at the mailing address that he
maintained on the date the notice was mailed.
-4-
[*4] None of the notices of deficiency was returned to the sender. Petitioner
denies receiving any notices of deficiency for the years in issue. Petitioner did not
file a petition with this Court in response to any of the notices of deficiency.
Petitioner’s Previous CDP Hearings
Petitioner did not file a Form 1040, U.S. Individual Income Tax Return, for
tax year 2001. On December 17, 2002, respondent prepared a substitute for return,
pursuant to section 6020(b), on petitioner’s behalf for tax year 2001. During 2004
respondent sent petitioner a Letter 1058, Final Notice of Intent to Levy and Notice
of Your Right to a Hearing (levy notice), and a Letter 3172, Notice of Federal Tax
Lien Filing and Your Right to a Hearing under IRC 6320, with respect to his
income tax liability for tax year 2001 and penalties for tax years 1997, 1998, 1999,
and 2000. The Letter 3172 informed petitioner that respondent had filed a notice
of Federal tax lien (NFTL) with respect to the same. In 2004 petitioner filed
timely a Form 12153, Request for a Collection Due Process or Equivalent Hearing
(CDP hearing request) regarding the 2004 levy notice and the filed 2004 NFTL.
Petitioner was provided a collection due process (CDP) hearing regarding
the 2004 levy notice and the filed 2004 NFTL. During his CDP hearing petitioner
provided respondent with an amended, but unsigned, income tax return for 2001
that reported $42,283 of income and a tax liability of $3,256. In 2005 respondent
-5-
[*5] issued a notice of determination sustaining the 2004 levy notice and the filed
2004 NFTL.
In 2005 respondent issued petitioner a levy notice and a Letter 3172
concerning petitioner’s income tax liabilities for tax years 1998, 2000, and 2002
and a penalty under section 6682 for tax year 2001 for providing false information
with respect to withholding. On or about November 1, 2005, petitioner provided
respondent with another amended tax return for tax year 2001. The tax return was
dated August 28, 2005, and showed petitioner’s income as zero. In 2005
petitioner filed timely a CDP hearing request regarding the 2005 levy notice and
the filed 2005 NFTL.
Petitioner was provided a CDP hearing regarding the 2005 levy notice and
the filed 2005 NFTL. In 2006 respondent issued a notice of determination
sustaining the 2005 levy notice and the filed 2005 NFTL.
Neither of these notices of determination is in issue in this case.
Petitioner’s Recent CDP Hearings
On July 19, 2011, respondent issued petitioner a levy notice for petitioner’s
income tax liabilities for tax years 2003, 2004, 2005, 2006, and 2007. The levy
notice also included the section 6682 penalty for tax year 2001 and an additional
$500 penalty, assessed on April 10, 2006, under section 6702 for filing a frivolous
-6-
[*6] income tax return. On August 15, 2011, petitioner filed timely a CDP hearing
request regarding the July 19, 2011, levy notice.
On August 17, 2011, respondent issued petitioner a levy notice for
petitioner’s income tax liability for tax year 2008. On September 15, 2011,
petitioner filed timely a CDP hearing request regarding the August 17, 2011, levy
notice.
On August 30, 2011, respondent issued petitioner a Letter 3172 for
petitioner’s income tax liabilities for tax years 1998 and 2000-2008 and the
penalties under sections 6682 and 6702 for tax year 2001. On October 6, 2011,
petitioner filed timely a CDP hearing request regarding the filed 2011 NFTL.
In all three of these CDP hearing requests petitioner requested a face-to-face
hearing at the Internal Revenue Service (IRS) Appeals Office closest to
petitioner’s residence. Petitioner also raised the following issues: (1) petitioner
wished to “verify whether or not the IRS followed all proper procedures as
required by law”; (2) “I don’t believe I am liable for the assessed tax”; (3) “I
should NOT be held responsible for the penalties accrued”; (4) petitioner wished
to “challenge this liability seeing that I never had a chance to challenge it before”;
and (5) “if this liability is indeed a proper assessment and can be proven that it is
authentic and owed, I would like to discuss what collection alternatives are
-7-
[*7] available to me, to include, but not limited to Offer in Compromise,
Installment Agreements, and any other payment arrangements that may be
available to me”. Petitioner also stated that it was not his intention to raise any
frivolous arguments. All three CDP hearing requests were assigned to the same
settlement officer.
On November 9, 2011, the settlement officer sent petitioner a letter
scheduling a telephone CDP hearing for December 20, 2011. The settlement
officer declined petitioner’s request for a face-to-face CDP hearing on the basis
that petitioner had asserted frivolous arguments in his CDP hearing request. The
settlement officer requested that petitioner provide a completed Form 433-A,
Collection Information Statement for Wage Earners and Self-Employed
Individuals, and a signed income tax return for tax year 2010.
On December 14, 2011, the settlement officer received a letter from
petitioner stating that he (1) would not be available for the telephone CDP hearing,
(2) wished to have a face-to-face CDP hearing on another date, (3) did not receive
any notices of deficiency, and (4) would like the settlement officer to identify
which of the issues he raised were frivolous.
On December 19, 2011, the settlement officer sent petitioner a followup
letter rescheduling the telephone CDP hearing for January 11, 2012, and denying
-8-
[*8] petitioner’s request for a face-to-face hearing. On January 9, 2012, the
settlement officer received a letter from petitioner indicating that he would not be
available for a telephone CDP hearing and requesting that the settlement officer
explain why he was not entitled to a face-to-face hearing.
On February 13, 2012, the settlement officer issued the three notices of
determination sustaining the July 19, 2011, levy notice, the August 17, 2011, levy
notice, and the filed 2011 NFTL.
On March 19, 2012, petitioner filed timely a petition. In his amended
petition he raised the following issues: (1) respondent did not meet all applicable
requirements in conducting the CDP hearing; (2) respondent did not allow
petitioner to challenge the underlying tax liabilities; (3) petitioner did not receive a
fair and impartial CDP hearing; (4) respondent did not inform petitioner of his
rights; (5) respondent did not provide petitioner with any admissible evidence to
support the determinations; (6) petitioner was not given a face-to-face hearing; and
(7) respondent did not permit petitioner to audio record the CDP hearing.
On December 7, 2012, respondent filed a motion to remand this case to the
IRS Appeals Office to hold a new CDP hearing. On December 11, 2012, we
granted respondent’s motion and ordered respondent to provide a face-to-face
CDP hearing no later than March 11, 2013.
-9-
[*9] The Supplemental CDP Hearing
The supplemental CDP hearing was assigned to a new settlement officer
who had no prior involvement in this case. The settlement officer discovered that
petitioner had previous CDP hearings regarding his income tax liabilities for tax
years 1998, 2000, 2001, and 2002 and the section 6682 penalty for tax year 2001.
The settlement officer determined that petitioner was not entitled to a second CDP
hearing for those liabilities for those tax years. On January 14, 2013, the
settlement officer sent petitioner a letter which (1) scheduled a face-to-face
meeting for February 27, 2013, (2) explained his determination with respect to tax
years 1998, 2000, 2001, 2002 and the section 6682 penalty for tax year 2001, (3)
stated that if petitioner wished to challenge the underlying liabilities for any
remaining tax years, he would need to provide amended income tax returns for
those years he wished to challenge, (4) requested that petitioner provide a
reasonable cause explanation for any penalty abatement, and (5) requested that
petitioner provide a Form 433-A and other financial information if petitioner
wished to be considered for a collection alternative. The letter also provided
information regarding frivolous arguments and requested that petitioner provide
the requested documents by February 11, 2013. The settlement officer provided
- 10 -
[*10] petitioner with a copy of a Form 4340, Certificate of Assessments,
Payments, and Other Specified Matters, and a computer transcript for each year in
issue.
On January 16, 2013, the settlement officer sent petitioner an additional
letter explaining that petitioner could not challenge the underlying tax liabilities
for tax years 2004-08 because respondent had issued notices of deficiency for
those years.1
On February 12, 2013, the settlement officer received a letter from
petitioner denying the receipt of any notices of deficiency and demanding that the
settlement officer provide evidence to prove that petitioner was liable for any
penalties for tax year 2001. Petitioner did not provide any amended returns or
other information concerning his underlying liabilities for the years in issue or any
of the requested documents.
On February 13, 2013, the settlement officer mailed petitioner a letter
informing petitioner that since he had not received any documentation justifying a
face-to-face hearing, he would conduct the February 27, 2013, CDP hearing by
1
It is unclear why the settlement officer did not include tax year 2003 in his
letter to petitioner. The record demonstrates that respondent issued petitioner a
notice of deficiency for tax year 2003 on May 10, 2005, and that the settlement
officer had a copy of the 2003 notice of deficiency.
- 11 -
[*11] telephone. The settlement officer requested that petitioner provide any
documents he would want the settlement officer to consider during the CDP
hearing.
Petitioner did not call the settlement officer on February 27, 2013. The
settlement officer did not receive any further correspondence from petitioner. On
March 7, 2013, the settlement officer issued petitioner the supplemental notice of
determination sustaining all three notices of determination.
OPINION
I. Introduction
This case involves review of (1) respondent’s determination that petitioner
is liable for a section 6702 frivolous return penalty for tax year 2001, and (2)
respondent’s determination to proceed with the collection actions regarding
petitioner’s unpaid income tax liabilities for tax years 1998 and 2000-2008 and
penalties for tax year 2001. For reasons discussed below, we find that petitioner’s
liability for the 2001 section 6702 frivolous return penalty is the only underlying
liability that petitioner is entitled to challenge before this Court. Thus, we address
the issue de novo. We review respondent’s remaining determinations, including
the determination to proceed with collection of the 2001 frivolous return penalty
by levy and lien, for abuse of discretion.
- 12 -
[*12] A. Jurisdiction
Section 6320(a)(1) requires the Secretary to provide written notice to a
taxpayer when the Secretary has filed an NFTL against the taxpayer’s property and
property rights. See also sec. 6321. Additionally, the Secretary must notify the
taxpayer of his or her right to a collection due process hearing. Sec. 6320(a)(3)(B)
and (C).
Section 6331(a) authorizes the Secretary to levy upon the property and
property rights of a taxpayer who fails to pay a tax within 10 days after notice and
demand. Before the Secretary may levy upon the taxpayer’s property, the
Secretary must notify the taxpayer of the Secretary’s intention to make the levy.
Sec. 6331(d)(1). The Secretary must also notify the taxpayer of his or her right to
a CDP hearing. Sec. 6330(a)(1).
If the taxpayer requests a CDP hearing, the hearing is conducted by the
Appeals Office. Sec. 6330(b)(1). At the hearing the taxpayer may raise any
relevant issue relating to the unpaid tax or the proposed collection action. Sec.
6330(c)(2)(A). Once the settlement officer makes a determination, the taxpayer
may appeal the determination to this Court. Sec. 6330(d)(1).
Section 6330(d)(1) provides this Court with jurisdiction to review an appeal
from the Commissioner’s determination to proceed with collection activity
- 13 -
[*13] regardless of the type of underlying tax involved. For purposes of section
6330(a)(1), a “tax” may include the liability for a section 6702 frivolous return
penalty. Sec. 6671(a); Lindberg v. Commissioner, T.C. Memo. 2010-67, slip op.
at 15. We have held that our jurisdiction under section 6330 includes the review
of the Commissioner’s determination to collect a section 6702 frivolous return
penalty by levy. See Callahan v. Commissioner, 130 T.C. 44, 48-49 (2008);
Lindberg v. Commissioner, T.C. Memo. 2010-67.
Section 6330(d)(1) also provides this Court with jurisdiction to review the
Commissioner’s administrative determinations. When this Court remands a case
to the Appeals Office and it comes back to us after a supplemental determination
is issued, we review the supplemental determination. See Hoyle v. Commissioner,
136 T.C. 463, 468 (2011); Kelby v. Commissioner, 130 T.C. 79, 86 (2008).
Petitioner was not entitled to a second CDP hearing regarding his income
tax liabilities for tax years 1998, 2000, 2001, and 2002 and the section 6682
penalty for tax year 2001 because he had already had a CDP hearing for those
liabilities for those years. See secs. 6320(b)(2), 6330(b)(2). One of the three
notices of determination in issue included those liabilities for those years, for
which there was already a CDP hearing. Even though petitioner was not entitled
- 14 -
[*14] to a second CDP hearing for those liabilities for those years, we have
jurisdiction to determine whether the Appeals officer abused his discretion for
those years. See Kim v. Commissioner, T.C. Memo. 2005-96; cf. Wilson v.
Commissioner, 131 T.C. 47 (2008) (holding that we do not have jurisdiction to
review an internally inconsistent second notice of determination issued regarding a
tax year for which there was a previous notice of determination issued to the
taxpayer and the taxpayer did not request timely a CDP hearing).
B. Standard of Review
Where the validity of the underlying tax liability is properly at issue, we
review that matter de novo. Sego v. Commissioner, 114 T.C. 604, 610 (2000);
Goza v. Commissioner, 114 T.C. 176, 182 (2000). A taxpayer may challenge the
underlying tax liability during a CDP hearing if the taxpayer did not receive a
statutory notice of deficiency for such liability or did not otherwise have the
opportunity to dispute such liability. Sec. 6330(c)(2)(B); see also Montgomery v.
Commissioner, 122 T.C. 1, 9 (2004). A prior CDP hearing regarding a tax year is
considered a prior opportunity to challenge the underlying liability relating to that
tax year. Sec. 301.6320-1(e)(3), Q&A-E2, Proced. & Admin. Regs.
The Court considers an underlying tax liability on review only if the
taxpayer properly raised the issue during the CDP hearing. Secs. 301.6320-
- 15 -
[*15] 1(f)(2), Q&A-F3, 301.6330-1(f)(2), Q&A-F3, Proced. & Admin. Regs.; see
also Giamelli v. Commissioner, 129 T.C. 107, 115 (2007). A taxpayer did not
properly raise an underlying tax liability if the taxpayer failed to present the
settlement officer with any evidence regarding the liability after being given a
reasonable time. See sec. 301.6320-1(f), Q&A-F3, Proced. & Admin. Regs.
Petitioner is entitled to challenge the assessment of the frivolous return
penalty under section 6702 because the notice of deficiency for tax year 2001 was
issued before the penalty was assessed, and petitioner did not have an opportunity
to dispute the assessment.2 See sec. 6703(b). Accordingly, we review de novo
petitioner’s liability for the section 6702 penalty for tax year 2001.
Petitioner is not entitled to challenge the underlying liability for any other
issue or tax year before us.
Petitioner is not entitled to challenge the underlying income tax liabilities
for tax years 1998 and 2000-2002 and the section 6682 penalty for 2001 because
petitioner had prior CDP hearings with respect to those tax years. The prior CDP
hearings constitute a prior opportunity to dispute both the underlying income tax
liabilities for those tax years and his liability for the section 6682 penalty.
2
Petitioner had a CDP hearing in 2004 regarding his income tax liability for
2001. This occurred before the assessment of the penalty pursuant to sec. 6702.
- 16 -
[*16] Petitioner’s underlying income tax liabilities for 1998 and 2000-2002 (other
than the 2001 section 6702 penalty) are not properly before us. See sec.
6330(c)(2)(B); Sego v. Commissioner, 114 T.C. at 611.
Petitioner is also not entitled to challenge the underlying liabilities for tax
years 1998 and 2000-2008 because respondent sent petitioner notices of
deficiency by certified mail for those tax years. Each of the notices of deficiency
was sent to petitioner’s last known address as listed in respondent’s records on the
date it was sent. Petitioner has not offered any evidence that the addresses to
which the notices of deficiency were mailed were incorrect. On the record
presented respondent has established that each notice of deficiency was sent to
petitioner. Petitioner has offered only his own self-serving testimony that he did
not receive the notices. Petitioner had opportunities to dispute his income tax
liabilities for all years in issue for which he received notices of deficiency but
declined to do so. See Sego v. Commissioner, 114 T.C. at 611; Campbell v.
Commissioner, T.C. Memo. 2013-57 (noting that in the absence of clear evidence
to the contrary, the presumptions of official regularity and delivery justify the
conclusion the statutory notice was sent and that attempts to deliver were made);
Lehmann v. Commissioner, T.C. Memo. 2005-90. Petitioner was precluded from
- 17 -
[*17] raising the underlying liabilities during the CDP hearing for any of the tax
years in issue.
Petitioner is also not entitled to challenge the underlying liability for tax
year 2003 because he did not properly raise the 2003 underlying liability during
the supplemental CDP hearing. We do not have authority to consider section
6330(c)(2) issues that were not raised before the Appeals Office. Giamelli v.
Commissioner, 129 T.C. at 115. Petitioner did not properly raise the issue of the
underlying tax liability for tax year 2003 during his CDP hearing, because he
failed to present the settlement officer with any evidence regarding the liability
after being given a reasonable time. See sec. 301.6320-1(f), Q&A-F3, Proced. &
Admin. Regs.; see also Delgado v. Commissioner, T.C. Memo. 2011-240. Thus,
we do not have authority to consider petitioner’s underlying liability for tax year
2003.
Consequently, petitioner cannot challenge the underlying liabilities for tax
years 1998 and 2000-2008 (other than the 2001 section 6702 penalty).
The Court reviews administrative determinations by the Commissioner’s
Appeals Office regarding nonliability issues for abuse of discretion. Hoyle v.
Commissioner, 131 T.C. 197, 200 (2008); Goza v. Commissioner, 114 T.C. at 182.
Because nonliability issues are before us, we review the determinations regarding
- 18 -
[*18] those issues for abuse of discretion. In determining abuse of discretion, we
consider whether the determination was arbitrary, capricious, or without sound
basis in fact or law. See, e.g., Murphy v. Commissioner, 125 T.C. 301, 320
(2005), aff’d, 469 F.3d 27 (1st Cir. 2006); Woodral v. Commissioner, 112 T.C. 19,
23 (1999). The Court does not conduct an independent review and substitute its
judgment for that of the settlement officer. Murphy v. Commissioner, 125 T.C. at
320. If the settlement officer follows all statutory and administrative guidelines
and provides a reasoned balanced decision, the Court will not reweigh the equities.
Link v. Commissioner, T.C. Memo. 2013-53, at *12.
II. Section 6702 Penalty
A taxpayer is liable for a frivolous return penalty under section 6702 if three
requirements are met. See Callahan v. Commissioner, 130 T.C. at 51; Lindberg v.
Commissioner, T.C. Memo. 2010-67. First, the taxpayer must have filed a
document that purports to be an income tax return. Sec. 6702(a)(1). Second, the
purported return must have either not contained information on which the
substantial correctness of the self-assessment may be judged or contained
information that on its face indicated that the self-assessment was substantially
incorrect. Id. Third, the defect must have been based on a position which was
frivolous or reflected a desire (which appeared on the purported return) to delay or
- 19 -
[*19] impede the administration of Federal tax laws. Sec. 6702(a)(2). The amount
of the penalty is $500. Sec. 6702(a). The Commissioner bears the burden of proof
with respect to whether a taxpayer is liable for a frivolous return penalty. Sec.
6703(a).
Respondent produced petitioner’s 2001 Form 1040, which reported zero
income, deductions, and tax liability (zero return). The Form 1040 constitutes a
document that purports to be an income tax return. See Callahan v.
Commissioner, 130 T.C. at 51. Petitioner’s zero return contained information that
on its face indicated that the self-assessment was substantially incorrect. Blaga v.
Commissioner, T.C. Memo. 2010-170, slip op. at 14. Courts have held repeatedly
that a “zero return” reporting no income and no tax liability reflects a frivolous
position. Id., slip op. at 14-15; see also Tickel v. United States, 815 F.2d 706 (6th
Cir. 1987); Himes v. United States, 802 F.2d 458 (6th Cir. 1986).
Respondent has met the burden of proof and satisfied all three requirements
of section 6702. We find petitioner liable for a section 6702 penalty of $500 for
filing a zero return for tax year 2001.
III. Supplemental Notice of Determination
Following a CDP hearing the settlement officer must determine whether to
sustain the filing of the NFTL or proposed levy. In making that determination,
- 20 -
[*20] section 6330(c)(3) requires the settlement officer to consider: (1) whether
the requirements of any applicable law or administrative procedure have been met;
(2) any issues appropriately raised by the taxpayer; and (3) whether the proposed
lien or levy action balances the need for the efficient collection of taxes and the
legitimate concern of the taxpayer that any collection action be no more intrusive
than necessary. Lunsford v. Commissioner, 117 T.C. 183, 184 (2001); Diamond
v. Commissioner, T.C. Memo. 2012-90, slip op. at 6-7; see also sec. 6320(c).
We note that the settlement officer properly based his determination on the
required factors. The settlement officer (1) verified that all legal and procedural
requirements had been met, (2) considered the issues petitioner raised, and (3)
determined that the proposed collection actions appropriately balanced the need for
the efficient collection of taxes with the legitimate concern of petitioner that the
collection action be no more intrusive than necessary.
A taxpayer is entitled to only one CDP hearing regarding the first issuance of
a Letter 3172 or levy notice for a given tax period or periods with respect to the
unpaid tax shown on the Letter 3172 or levy notice if the taxpayer requests timely
such a hearing. Secs. 301.6320-1(b)(1), 301.6330-1(b)(1), Proced. & Admin.
Regs.; see also Orum v. Commissioner, 123 T.C. 1, 10 (2004), aff’d, 412 F.3d 819
(7th Cir. 2005). Petitioner received previous CDP hearings regarding his income
- 21 -
[*21] tax liabilities for tax years 1998, 2000, 2001, and 2002 and the section 6682
penalty for tax year 2001. The settlement officer did not abuse his discretion in the
supplemental determination by refusing to consider these years because petitioner
is not entitled to relief pursuant to section 6320 or 6330. See Kim v.
Commissioner, T.C. Memo. 2005-96.
Petitioner contends that the settlement officer did not meet all applicable
requirements in conducting the CDP hearing. If no face-to-face, telephone
conference, or any other oral communication takes place, review of the documents
in the case file will constitute the CDP hearing for the purposes of section 6330(b).
Sec. 301.6330-1(d)(2), Q&A-D7, Proced. & Admin. Regs. The record confirms
that petitioner and the settlement officer exchanged a number of letters concerning
petitioner’s tax matters. After petitioner failed to submit any of the requested
documents or to call the settlement officer for a telephone CDP hearing on the
appointed date, the settlement officer reviewed his file and determined that the filed
NFTL and levies should be sustained. We find that petitioner was provided a CDP
hearing which complied with all applicable requirements and the settlement officer
did not abuse his discretion in sustaining the filed NFTL and levies.
Petitioner contends that it is an abuse of discretion for the settlement officer
to refuse to offer him a face-to-face CDP hearing. We have previously held that a
- 22 -
[*22] settlement officer does not necessarily abuse his or her discretion by refusing
to offer a face-to-face CDP hearing. LaForge v. Commissioner, T.C. Memo. 2013-
183, at *11 (noting that a face-to-face hearing is not required under section 6330;
noting further that an Appeals officer’s denial of a face-to-face hearing does not
constitute an abuse of discretion when the taxpayer fails to provide requested
financial information); Williamson v. Commissioner, T.C. Memo. 2009-188, slip
op. at 8 (noting that it is not an abuse of discretion if a settlement officer denies a
taxpayer’s request for a face-to-face hearing after determining that the hearing
would not be productive on account of the taxpayer’s frivolous or groundless
arguments).
CDP hearings are informal and do not require the Appeals officer and the
taxpayer to hold a face-to-face meeting. Sec. 301.6330-1(d)(2), Q&A-D6, Proced.
& Admin. Regs. A CDP hearing may, but is not required to, consist of a face-to-
face meeting, one or more written or oral communications between an Appeals
officer and the taxpayer, or some combination thereof. Id. A face-to-face CDP
hearing concerning the taxpayer’s underlying liability will not be granted if the
request for a hearing or other taxpayer communications indicate that the taxpayer
wishes only to raise irrelevant or frivolous issues concerning that liability.
Similarly, a face-to-face CDP hearing concerning a collection alternative will not
- 23 -
[*23] be granted unless other taxpayers would be eligible for the alternative in
similar circumstances. Sec. 301.6330-1(d)(2), Q&A-D8, Proced. & Admin. Regs.
Petitioner was initially offered a face-to-face hearing as part of the
supplemental CDP hearing on remand. The settlement officer requested that
petitioner provide (1) an amended income tax return for any applicable year for
which petitioner wished to challenge the underlying liability, (2) a reasonable cause
explanation for any penalty abatement, and (3) a Form 433-A and other financial
information if petitioner wished to be considered for a collection alternative.
Petitioner did not comply with any of the settlement officer’s requests for
documentation. Petitioner did not propose any settlement alternatives, nor did he
provide a Form 433-A or other documentation to allow the settlement officer to
consider collection alternatives. Since petitioner did not provide any
documentation, the settlement officer changed the form of the CDP hearing to a
telephone hearing. We find that it was not an abuse of discretion for the settlement
officer to deny petitioner’s request for a face-to-face hearing.
Petitioner contends that his CDP hearing was not fair and impartial. Section
6330(b)(3) provides that “[t]he hearing under this subsection shall be conducted by
an officer or employee who has had no prior involvement with respect to the
unpaid tax specified in subsection (a)(3)(A) before the first hearing under this
- 24 -
[*24] section or section 6320.” The settlement officer who conducted the
supplemental CDP hearing on remand had no prior involvement in petitioner’s tax
matters for the tax years in issue. The settlement officer also complied with the
requirements of section 6330(c)(3). We find that the petitioner received a fair and
impartial CDP hearing.
Petitioner contends that respondent did not inform him of his rights. The
Secretary must notify the taxpayer of his or her right to a CDP hearing. Secs.
6320(a)(3)(B), 6330(a)(1). The notice must provide the taxpayer with information
regarding (1) the amount of the tax, (2) a statement concerning the taxpayer’s right
to request a CDP hearing, (3) administrative appeals available to the taxpayer, and
(4) the statutory provisions and procedures relating to the release of liens or levies
on property. See secs. 301.6320-1(a)(2), Q&A-A10, 301.6330-1(a)(3), Q&A-A6,
Proced. & Admin. Regs. We find that the notices of determination issued by
respondent provided all of the required information concerning petitioner’s rights.
Petitioner contends that respondent did not provide petitioner with any
admissible evidence to support the determinations. Section 6330(c)(1) does not
require the Appeals officer to rely on any particular document in satisfying the
verification requirement and does not require that the Appeals officer actually give
the taxpayer a copy of the verification upon which he or she relied. Craig v.
- 25 -
[*25] Commissioner, 119 T.C. 252, 262 (2002); Nestor v. Commissioner, 118 T.C.
162, 166 (2002). The settlement officer provided petitioner with a copy of a Form
4340 and a computer transcript for each year in issue. A Form 4340 constitutes
presumptive evidence that a tax has been validly assessed pursuant to section 6203.
Davis v. Commissioner, 115 T.C. 35, 40 (2000). We have held specifically that it
is not an abuse of discretion for an Appeals officer to rely on Form 4340 to comply
with section 6330(c)(1). Nestor v. Commissioner, 118 T.C. at 166; Davis v.
Commissioner, 115 T.C. at 41. We have also held that it is similarly not an abuse
of discretion for an Appeals officer to rely on a computer transcript of account to
comply with section 6330(c)(1). Schroeder v. Commissioner, T.C. Memo. 2002-
190; Mann v. Commissioner, T.C. Memo. 2002-48. We find that the settlement
officer did provide petitioner with evidence of his determinations.
Finally, petitioner contends that respondent did not permit him to audio
record the CDP hearing. In Keene v. Commissioner, 121 T.C. 8 (2003), we held
that a taxpayer is entitled to audio record his section 6330 hearing with the Appeals
Office pursuant to section 7521(a)(1). Petitioner, however, did not specifically
request, and the settlement officer did not deny any request, to record the
supplemental CDP hearing. In addition, petitioner did not call the settlement
officer on the appointed date to conduct the telephone CDP hearing.
- 26 -
[*26] We find that the settlement officer did not abuse his discretion. Any
contention we have not addressed is irrelevant, moot, or meritless.
To reflect the foregoing,
Decision will be entered
for respondent.