T.C. Memo. 2014-98
UNITED STATES TAX COURT
CHARLES ALLISON MAYHUGH, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 23438-11L. Filed May 22, 2014.
Charles A. Mayhugh, pro se.
Robert J. Braxton, for respondent.
MEMORANDUM OPINION
WELLS, Judge: This case is before the Court on respondent’s motion for
summary judgment pursuant to Rule 121.1 Respondent issued to petitioner a
1
Unless otherwise indicated, section references are to the Internal Revenue
Code of 1986, as amended (Code) and in effect at all relevant times, and Rule
references are to the Tax Court Rules of Practice and Procedure.
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[*2] Notice of Determination Concerning Collection Action(s) Under Section
6320 and/or 6330 (notice of determination). In response to the notice of
determination, petitioner timely filed a petition pursuant to section 6330(d). The
issue we have been asked to decide is whether the Appeals Office abused its
discretion in sustaining respondent’s collection action.
Background
The facts set forth below are based upon examination of the pleadings,
moving papers, responses, and attachments. Petitioner resided in Virginia at the
time he filed his petition.
Petitioner timely filed his Federal income tax return for his 2009 tax year.
Respondent subsequently assessed against petitioner his unpaid tax of $23,074.27
for his 2009 tax year.
On January 25, 2011, respondent sent to petitioner a Letter 3172, Notice of
Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320, informing
him that respondent had filed a notice of Federal tax lien (NFTL) for petitioner’s
unpaid tax liability for his 2009 tax year. On February 28, 2011, respondent
received from petitioner a timely Form 12153, Request for a Collection Due
Process or Equivalent Hearing. On the Form 12153 petitioner requested to enter
into an installment agreement and to have the NFTL withdrawn because he alleged
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[*3] that it would adversely impact his relationships with his clients, who review
his credit report before contracting with him.2
On August 2, 2011, Settlement Officer Eva Holsey in the Appeals Office
sent petitioner a letter informing him that a CDP hearing via telephone conference
had been scheduled for September 7, 2011, to allow him an opportunity to discuss
the appropriateness of the collection action and potential collection alternatives.
The letter also directed petitioner to inform respondent by August 17, 2011, if the
scheduled conference date was inconvenient or if petitioner preferred a face-to-
face hearing. In the letter, Ms. Holsey confirmed that the Appeals Office had
received some bank mortgage statements and utility bills from petitioner.
However, Ms. Holsey found the information in those documents to be inadequate
and, therefore, requested that petitioner submit by August 17, 2011, additional
financial information as well as a Form 433-A, Collection Information Statement
for Wage Earners and Self-Employed Individuals. She also reiterated that the
2
Aside from the bare allegation of adverse impact on his client relationships,
petitioner submitted no additional factual information regarding his claim.
Additionally, on the Form 12153 petitioner requested a collection due process
(CDP) hearing for his 2007 and 2008 tax years, in addition to his 2009 tax year.
On June 11, 2011, respondent notified petitioner that no Federal tax lien or levy
action had been taken with regard to petitioner’s 2007 or 2008 tax year and,
therefore, that no CDP hearing could be scheduled with regard to those tax years.
Petitioner has not made any claims with regard to those years in his petition, so we
do not address them further. See Rules 31(a), 331(b)(4).
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[*4] Appeals Office could not consider collection alternatives without the
requested Form 433-A and other financial information.
On September 7, 2011, Ms. Holsey and petitioner participated in the
scheduled CDP hearing. Petitioner did not submit the requested Form 433-A or
financial information before the CDP hearing. During the CDP hearing petitioner
informed Ms. Holsey that his clients were banks that checked his credit before
contracting for his services and that an NFTL would have adversely affected his
ability to enter into such contracts, to generate income, and, therefore, to pay his
outstanding Federal income tax liability.
On September 13, 2011, the Appeals Office issued to petitioner a notice of
determination upholding the NFTL. On October 13, 2011, petitioner timely
petitioned this Court for review of respondent’s notice of determination.
Respondent filed a motion for summary judgment on November 27, 2012.
Petitioner did not submit a response to respondent’s motion for summary
judgment.
Discussion
Summary judgment is intended to expedite litigation and avoid unnecessary
and expensive trials and may be granted where the pleadings and other materials
show that there is no genuine dispute as to any material fact and that a decision
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[*5] may be rendered as a matter of law. Rule 121(a) and (b); Sundstrand Corp. v.
Commissioner, 98 T.C. 518, 520 (1992), aff’d, 17 F.3d 965 (7th Cir. 1994); Fla.
Peach Corp. v. Commissioner, 90 T.C. 678, 681 (1988). The moving party bears
the burden of proving that there is no genuine dispute as to any material fact, and
factual inferences are viewed in the light most favorable to the nonmoving party.
Bond v. Commissioner, 100 T.C. 32, 36 (1993); Sundstrand Corp. v.
Commissioner, 98 T.C. at 520. However, the party opposing summary judgment
must “go beyond the pleadings and by * * * [its] own affidavits, or by the
‘depositions, answers to interrogatories, and admissions on file,’” set forth specific
facts that show a genuine dispute as to a material fact exists. Celotex Corp. v.
Catrett, 477 U.S. 317, 324 (1986); see also Rule 121(d); King v. Commissioner,
87 T.C. 1213, 1217 (1986). Petitioner failed to respond to respondent’s motion for
summary judgment after being ordered to file a response and has failed to
otherwise indicate that there exists a genuine dispute as to some material fact that
would require trial. Consequently, we conclude that there is no genuine dispute as
to any material fact and that a decision may be rendered as a matter of law. Cheli
v. Commissioner, T.C. Memo. 2013-200, at *4-*5. Nevertheless, for
completeness, we will briefly address the main points that petitioner raised.
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[*6] Pursuant to section 6321, the Federal Government obtains a lien against “all
property and rights to property, whether real or personal” of any person liable for
Federal tax upon demand for payment and failure to pay. See Iannone v.
Commissioner, 122 T.C. 287, 293 (2004). However, section 6320(a)(1) requires
the Commissioner to give a taxpayer written notice of the filing of a Federal tax
lien upon that taxpayer’s property. The notice of filing must inform the taxpayer
of the right to request a hearing with the Appeals Office. Sec. 6320(a)(3).
If a taxpayer requests a hearing in response to an NFTL pursuant to section
6320, a hearing shall be held before an impartial officer or employee of the
Appeals Office. Sec. 6320(b)(1), (3). Section 6330(c) governs how a collection
due process hearing is conducted. See sec. 6320(c). At the hearing the taxpayer
may raise any relevant issue, including appropriate spousal defenses, challenges to
the appropriateness of the collection action, and collection alternatives. Secs.
6320(c), 6330(c)(2)(A). A taxpayer is precluded from contesting the existence or
amount of the underlying tax liability unless the taxpayer did not receive a notice
of deficiency for the liability in question or did not otherwise have an earlier
opportunity to dispute the liability. Sec. 6330(c)(2)(B); see also Sego v.
Commissioner, 114 T.C. 604, 609 (2000). The phrase “underlying tax liability”
includes the tax deficiency, additions to tax, and statutory interest. Gray v.
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[*7] Commissioner, 138 T.C. 295, 300 (2012), aff’d, 723 F.3d 790 (7th Cir. 2013);
Katz v. Commissioner, 115 T.C. 329, 339 (2000). If the validity of the underlying
tax liability is not properly in issue, we will review the Appeals Office’s
determination for abuse of discretion. Goza v. Commissioner, 114 T.C. 176,
181-182 (2000). However, where the validity of the underlying tax liability is
properly in issue, we will review that matter de novo. Id.
Following a hearing, the Appeals Office must determine whether to sustain
the filing of the NFTL. Pursuant to section 6330(d)(1), this Court has jurisdiction
to review the determination made by the Appeals Office in connection with the
section 6320 hearing. Sec. 6320(c). We have jurisdiction over this matter because
petitioner filed a timely petition for review in response to respondent’s valid
notice of determination to proceed with collection action. See sec. 6330(d)(1).
We do not review issues raised under section 6330(c)(2), including the
validity of the underlying liability, if the taxpayer did not raise those issues at the
CDP hearing. Giamelli v. Commissioner, 129 T.C. 107, 115 (2007); see also sec.
301.6330-1(f)(2), A-F3, Proced. & Admin. Regs. Moreover, in a lien or levy
action under section 6320 or section 6330 before this Court, the petition must
contain “[c]lear and concise assignments of each and every error which the
petitioner alleges to have been committed in the notice of determination.” Rule
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[*8] 331(b)(4). Any issue not raised in the assignments of error shall be deemed
conceded. Id. Because petitioner did not challenge the validity of the underlying
tax liability during the CDP hearing or in his petition, we conclude that he is
precluded from challenging the validity of the underlying tax liability. Giamelli v.
Commissioner, 129 T.C. at 115.
Because the validity of the underlying tax liability is not properly in issue,
we will review the Appeals Office’s determination for abuse of discretion. See
Sego v. Commissioner, 114 T.C. at 610; Goza v. Commissioner, 114 T.C. at
181-182. In reviewing for abuse of discretion, we will reject the determination of
the Appeals Office if the determination was arbitrary, capricious, or without sound
basis in fact or law. See Rule 142(a); Murphy v. Commissioner, 125 T.C. 301,
320 (2005), aff’d, 469 F.3d 27 (1st Cir. 2006). However, we do not substitute our
judgment for that of the Appeals Office, and we do not decide independently
whether we believe the lien should be withdrawn. See Murphy v. Commissioner,
125 T.C. at 320. Instead, we consider whether, in the course of making its
determination, the Appeals Office (1) verified that the requirements of applicable
law and administrative procedure have been met, (2) considered any relevant issue
raised by the taxpayer that relates to the unpaid tax or the proposed collection
action, and (3) determined whether any proposed collection action balances the
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[*9] need for the efficient collection of taxes with the legitimate concern of the
person that any collection action be no more intrusive than necessary. Sec.
6330(c)(1)-(3).
Petitioner contends that respondent abused his discretion by not
withdrawing the NFTL. Pursuant to section 6323(j), an NFTL may be withdrawn
without full payment and without prejudice under the following conditions: (1)
the filing of the NFTL was premature or otherwise not in accordance with
administrative procedures of the IRS; (2) the taxpayer had entered into an
installment agreement under section 6159 to satisfy the tax liability for which the
NFTL was imposed by means of installment payments, unless such agreement
provides otherwise; (3) withdrawal of the NFTL will facilitate collection of the tax
liability; and (4) with the consent of the taxpayer or the National Taxpayer
Advocate (NTA), the withdrawal of such notice would be in the best interest of the
taxpayer (determined by the NTA or the taxpayer) and the United States. See
Skidmore v. Commissioner, T.C. Memo. 2012-328, at *14-*15; sec.
301.6323(j)-1, Proced. & Admin. Regs. If the Commissioner determines
conditions for withdrawal are present, the Commissioner may, but is not required
to, authorize the withdrawal. Sec. 301.6323(j)-1(c), Proced. & Admin. Regs.
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[*10] In his petition, petitioner contends that his clients check his credit before
contracting for his services and that an NFTL would adversely affect his ability to
enter into such contracts, to generate income, and, therefore, to pay his
outstanding Federal income tax liability. However, during the CDP hearing and
throughout the instant case, petitioner neither averred facts through an affidavit or
other evidence nor advanced any detailed argument pursuant to section 6323(j) in
support of his contention. See Celotex Corp., 477 U.S. at 324. Accordingly, we
conclude that respondent did not abuse his discretion when he upheld the NFTL.
Petitioner also contends that respondent abused his discretion when he
denied petitioner’s request for an installment agreement. To be eligible for a
collection alternative, such as an installment agreement, the taxpayer must provide
required returns and provide requested financial information, including
Form 433-A, to the Appeals Office. Sec. 301.6159-1(b), Proced. & Admin. Regs.;
see also Lance v. Commissioner, T.C. Memo. 2009-129, 2009 WL 1563422, at
*3-*4; Schwersensky v. Commissioner, T.C. Memo. 2006-178, 2006 WL
2456484, at *4. The record establishes that Ms. Holsey requested that petitioner
submit before the scheduled CDP hearing a Form 433-A and additional
information. She also reiterated that the Appeals Office could not consider
collection alternatives without the requested information. Despite these requests,
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[*11] petitioner failed to submit the requested Form 433-A or financial
information before the CDP hearing and failed to request additional time to submit
the requested forms and information.3 Accordingly, respondent did not abuse his
discretion by denying petitioner’s request for an installment agreement. See
Balsamo v. Commissioner, T.C. Memo. 2012-109, 2012 WL 1231985, at *4;
Huntress v. Commissioner, T.C. Memo. 2009-161, 2009 WL 1883984, at *5;
Prater v. Commissioner, T.C. Memo. 2007-241, 2007 WL 2389549, at *2.
Petitioner has not advanced any argument or submitted any documentation
that would allow us to conclude that the determination to sustain the NFTL was
arbitrary, capricious, or without sound basis in fact. The Appeals Office
determined that the requirements of applicable law and administrative procedure
were met and concluded that the proposed NFTL appropriately balanced the need
for efficient collection of taxes with petitioner’s concerns regarding the
intrusiveness of the collection action. Consequently, we hold that the Appeals
3
In his petition, petitioner alleges that, despite not being offered an
installment agreement, he has been making monthly payments towards his
outstanding tax liabilities for his 2007, 2008, 2009, and 2010 tax years, and has
made estimated tax payments for his 2011 tax year. Respondent does not disagree
with petitioner. However, petitioner’s voluntary payments do not, on their own,
qualify him for an installment agreement. As we note above, petitioner must
provide the requested Form 433-A and supporting financial information if he
desires to enter into an installment agreement or other collection alternative.
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[*12] Office did not abuse its discretion when it issued a notice of determination
upholding the proposed NFTL.
In reaching these holdings, we have considered all the parties’ arguments,
and, to the extent not addressed herein, we conclude that they are moot, irrelevant,
or without merit.
To reflect the foregoing,
An appropriate order and decision
will be entered.