T.C. Memo. 2014-196
UNITED STATES TAX COURT
DORA E. CAUDLE, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 18735-13L. Filed September 24, 2014.
Dora E. Caudle, pro se.
Rebecca Jo Sable, for respondent.
MEMORANDUM OPINION
LAUBER, Judge: In this collection due process (CDP) case, petitioner
seeks review pursuant to section 6330(d)(1)1 of the determination by the Internal
1
All statutory references are to the Internal Revenue Code in effect at all
relevant times, and all Rule references are to the Tax Court Rules of Practice and
Procedure.
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[*2] Revenue Service (IRS or respondent) to uphold collection actions.
Respondent has moved for summary judgment under Rule 121, contending that
there are no disputed issues of material fact and that the decision to sustain the
collection actions was proper as a matter of law. We agree and accordingly will
grant the motion.
Background
Petitioner did not file a Federal income tax return for 2005 or 2006. The
IRS prepared a substitute for return (SFR) for each year that met the requirements
of section 6020(b). On the basis of the SFRs, the IRS sent petitioner, by certified
mail on July 6, 2009, separate notices of deficiency for 2005 and 2006.
Each notice of deficiency was addressed to petitioner at a Front Royal,
Virginia, address. This was her last known address and is also her current address
as shown in this Court’s records. Respondent attached to his summary judgment
motion copies of U.S. Postal Service (USPS) Forms 3877 showing that articles
with tracking numbers matching those on the notices of deficiency were mailed to
petitioner at this address. The USPS track and confirm delivery service indicates
that the notices of deficiency were delivered to petitioner on July 8 and 10, 2009,
respectively. Petitioner did not petition this Court for redetermination of the
deficiencies, and on November 16, 2009, the IRS assessed the tax for both years.
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[*3] In an effort to collect the assessed tax for 2005 and 2006, the IRS sent peti-
tioner Letter 1058, Final Notice of Intent to Levy and Notice of Your Right to a
Hearing and a notice of Federal tax lien filing (NFTL). Petitioner timely requested
a CDP hearing. On August 17, 2010, a settlement officer (SO) from the IRS
Appeals Office scheduled a telephone CDP hearing for October 6, 2010. The SO
informed petitioner that, in order for him to consider a collection alternative, she
would need to submit a completed Form 433-A, Collection Information Statement
for Wage Earners and Self-Employed Individuals, as well as copies of signed tax
returns for 2004, 2007, 2008, and 2009 and proof of estimated tax payments for
2010.
On September 23, 2010, petitioner informed the SO that she would be un-
able to participate in the telephone conference and requested a face-to-face CDP
hearing. The SO granted this request and set a deadline of February 16, 2011, for
submission of the requested information. He scheduled the face-to-face CDP
hearing for March 8, 2011, and told petitioner that, in order to contest her
underlying tax liability for 2005 and 2006, she would need to submit original tax
returns for those years.
Petitioner informed the SO that she would be unable to attend the face-to-
face CDP hearing after all. She requested that they continue their mail corres-
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[*4] pondence, and the SO agreed to this plan. He also reminded her that, in order
for him to consider a collection alternative, she would need to submit Form 433-A
and file tax returns for 2007-09. The SO set March 25, 2011, as the final deadline
for submission of these documents.
On March 25, 2011, petitioner faxed a letter to the SO stating that she did
not recall receiving a notice of deficiency for 2005 or 2006 and requesting proof
of delivery. She submitted no documentation of any kind with her response. The
SO thereupon reviewed petitioner’s case file; determined that the tax for 2005 and
2006 had been properly assessed; and determined that all other procedural
requirements had been satisfied. On April 21, 2011, the IRS sent petitioner a
Notice of Determination Concerning Collection Action(s) under Section 6320
and/or 6330 for tax years 2005 and 2006. Petitioner, while residing in Virginia,
timely sought review in this Court.
Discussion
A. Summary Judgment
The purpose of summary judgment is to expedite litigation and avoid un-
necessary and time-consuming trials. Fla. Peach Corp. v. Commissioner, 90 T.C.
678, 681 (1988). The Court may grant summary judgment when there is no genu-
ine dispute as to any material fact and a decision may be rendered as a matter of
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[*5] law. Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), aff’d, 17
F.3d 965 (7th Cir. 1994). Where the moving party properly makes and supports a
motion for summary judgment, “an adverse party may not rest upon the mere
allegations or denials of such party’s pleading,” but must set forth specific facts,
by affidavit or otherwise, showing that there is a genuine dispute for trial. Rule
121(d).
Petitioner’s response to the summary judgment motion alleges no dispute as
to any material fact. In the light of respondent’s motion, his supporting affidavits,
and petitioner’s response thereto, we conclude that no material facts are in dispute
and that this case may be adjudicated summarily.
B. Standard of Review
Neither section 6320(c) nor section 6330(d)(1) prescribes the standard of
review that this Court should apply in reviewing an IRS administrative
determination in a CDP case. The general parameters for such review are marked
out by our precedents. Where the validity of the underlying tax liability is at issue,
the Court reviews the Commissioner’s determination de novo. Goza v.
Commissioner, 114 T.C. 176, 181-182 (2000). Where the underlying tax liability
is not properly at issue, the Court reviews the IRS decision for abuse of discretion.
Id. at 182. Abuse of discretion exists when a determination is arbitrary,
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[*6] capricious, or without sound basis in fact or law. See Murphy v.
Commissioner, 125 T.C. 301, 320 (2005), aff’d, 469 F.3d 27 (1st Cir. 2006).
This Court may consider a taxpayer’s challenge to her underlying tax liabili-
ties in a CDP case only if she properly raised that challenge at her CDP hearing.
See secs. 301.6320-1(f)(2), Q&A-F3, and 301.6330-1(f)(2), Q&A-F3, Proced. &
Admin. Regs. An issue is not properly raised at the CDP hearing if the taxpayer
fails to request consideration of that issue by Appeals or if she requests
consideration but fails to present any evidence after being given a reasonable
opportunity to do so. Ibid.; see Thompson v. Commissioner, 140 T.C. 173, 178
(2013). Where, as here, the IRS prepares an SFR pursuant to section 6020(b), the
taxpayer may raise her liability in a CDP hearing if she did not receive a notice of
deficiency or otherwise have a prior opportunity to contest the liability. See secs.
6320(c), 6330(c)(2)(B).2
2
Generally, a taxpayer must actually receive the notice of deficiency for the
preclusion under section 6330(c)(2)(B) to apply. See Tatum v. Commissioner,
T.C. Memo. 2003-115. But see Onyango v. Commissioner, 142 T.C. __, __ (slip
op. at 11-12) (June 24, 2014) (holding that preclusion applies despite lack of
receipt where taxpayer declines to retrieve mail despite multiple reasonable
opportunities to do so); Sego v. Commissioner, 114 T.C. 604, 610 (2000) (same).
The IRS sent notices of deficiency for 2005 and 2006 to petitioner’s last known
address. Although USPS records confirm delivery of these notices, petitioner
asserts that she did not receive them. Because we conclude that petitioner is pre-
cluded from challenging her underlying tax liabilities for 2005-06 because she
(continued...)
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[*7] The SO informed petitioner that she could contest her underlying tax liabili-
ties for 2005 and 2006, but that, in order to do so, she needed to submit tax returns
for those years. Petitioner declined to participate in two scheduled CDP hearings.
She also declined to submit a tax return for 2005 or 2006 or any other documents
addressing her tax liabilities for those years, despite the SO’s having given her
generous extensions of time. Because petitioner submitted no evidence concern-
ing her 2005-06 tax liabilities, she did not properly raise that issue at the CDP
hearing. As a result, we cannot review her underlying liability for either year and
will accordingly review the SO’s determination for abuse of discretion only. See
Goza v. Commissioner, 114 T.C. at 182; secs. 301.6320-1(f)(2), Q&A-F3, and
301.6330-1(f)(2), Q&A-F3, Proced. & Admin. Regs.
C. Analysis
In deciding whether the SO abused his discretion in sustaining the proposed
collection actions, we consider whether he: (1) properly verified that the require-
ments of any applicable law or administrative procedure had been met; (2) con-
sidered any relevant issues petitioner raised; and (3) determined whether “any
2
(...continued)
presented no evidence at the CDP hearing, we need not decide whether she
actually received the notices of deficiency and would also be precluded from
challenging her 2005-06 tax liabilities for that reason.
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[*8] proposed collection action balances 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.” Sec. 6330(c)(3).
As to the first point, the SO determined that notices of deficiency for 2005
and 2006 were properly mailed to petitioner at her last known address and that she
failed to petition this Court within 90 days. See secs. 6212(b), 6213(a). The SO
accordingly determined that the tax for 2005 and 2006 was properly assessed on
November 16, 2009, which was more than four months after the notices of
deficiency were mailed. Although petitioner says she never received the notices,
her actual receipt vel non is irrelevant. In that regard, the SO was required to
verify only that the notices of deficiency were properly mailed and that
petitioner’s 2005-06 tax liabilities were duly assessed after she failed to petition
our Court. The record establishes that the SO properly verified that all
requirements of applicable law and administrative procedure had been met. See,
e.g., Cropper v. Commissioner, T.C. Memo. 2014-139.
We also find that, in sustaining the proposed collection actions, the SO pro-
perly balanced “the need for the efficient collection of taxes with the legitimate
concern of * * * [petitioner] that any collection action be no more intrusive than
necessary.” Sec. 6330(c)(3). Despite being afforded numerous opportunities to do
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[*9] so, petitioner did not submit Form 433-A; declined to submit any financial
information; and did not put any specific proposal for a collection alternative on
the table. A settlement officer does not abuse his discretion when he declines to
consider a collection alternative under these circumstances. See McLaine v. Com-
missioner, 138 T.C. 228, 243 (2012); Kendricks v. Commissioner, 124 T.C. 69, 79
(2005); Lance v. Commissioner, T.C. Memo. 2009-129; Schwersensky v. Com-
missioner, T.C. Memo. 2006-178.
Finally, petitioner contends that the SO abused his discretion in not afford-
ing her a face-to-face hearing. The regulations provide that a “CDP hearing may,
but is not required to, consist of a face to face meeting.” Secs. 301.6320-1(d)(2),
Q&A-D6, and 301.6330-1(d)(2), Q&A-D6, Proced. & Admin. Regs. If a face-to-
face hearing is not held, a hearing conducted by telephone, by correspondence, or
by review of documents will suffice for purposes of section 6320(b) or section
6330(b). See secs. 301.6320-1(d)(2), Q&A-D7, and 301.6330-1(d)(2), Q&A-D7,
Proced. & Admin. Regs.
The SO granted petitioner’s request for a face-to-face CDP hearing and
scheduled that hearing for March 8, 2011. Petitioner replied that she could not
attend that hearing, and it was she who requested that the parties thereafter com-
municate by mail. We have repeatedly held that a face-to-face CDP hearing is not
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[*10] required under section 6330. Katz v. Commissioner, 115 T.C. 329, 337-338
(2000); Williamson v. Commissioner, T.C. Memo. 2009-188; Stockton v.
Commissioner, T.C. Memo. 2009-186; Leineweber v. Commissioner, T.C. Memo.
2004-17. We have also held that an SO’s denial of a face-to-face hearing does not
constitute an abuse of discretion where a taxpayer fails to present relevant
arguments and refuses to provide requested financial information. See Zastrow v.
Commissioner, T.C. Memo. 2010-215; Moline v. Commissioner, T.C. Memo.
2009-110, aff’d, 363 Fed. Appx. 675 (10th Cir. 2010); Summers v. Commissioner,
T.C. Memo. 2006-219.
Once a taxpayer has been given a reasonable opportunity for a hearing but
fails to avail herself of it, the IRS may proceed to make a determination based on
the case file. See, e.g., Oropeza v. Commissioner, T.C. Memo. 2008-94, aff’d, 402
Fed. Appx. 221 (9th Cir. 2010); Taylor v. Commissioner, T.C. Memo. 2004-25,
aff’d, 130 Fed. Appx. 934 (9th Cir. 2005); secs. 301.6320-1(d)(2), Q&A-D7, and
301.6330-1(d)(2), Q&A-D7, Proced. & Admin. Regs. We conclude that the SO
did not abuse his discretion when he did so here.
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[*11] To reflect the foregoing,
An appropriate order and decision
will be entered.