T.C. Memo. 2003-4
UNITED STATES TAX COURT
MORRIS TABAK, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 11465-01L. Filed January 7, 2003.
R. Scott Shieldes and Karen Baker, for respondent.
MEMORANDUM OPINION
ARMEN, Special Trial Judge: This matter is before the Court
on respondent’s Motion For Summary Judgment, filed pursuant to
Rule 121.1 Respondent contends that there is no dispute as to
any material fact with respect to this lien action and that
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code, as amended, and all Rule references
are to the Tax Court Rules of Practice and Procedure.
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respondent’s determination not to withdraw the disputed notice of
Federal tax lien should be sustained as a matter of law.
Summary judgment is intended to expedite litigation and
avoid unnecessary and expensive trials. Fla. Peach Corp. v.
Commissioner, 90 T.C. 678, 681 (1988). Summary judgment may be
granted with respect to all or any part of the legal issues in
controversy "if the pleadings, answers to interrogatories,
depositions, admissions, and any other acceptable materials,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that a decision may be
rendered as a matter of law." Rule 121(b); see Rule 121(a);
Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), affd.
17 F.3d 965 (7th Cir. 1994); Zaentz v. Commissioner, 90 T.C. 753,
754 (1988); Naftel v. Commissioner, 85 T.C. 527, 529 (1985). The
moving party bears the burden of proving that there is no genuine
issue of material fact, and factual inferences will be read in a
manner most favorable to the party opposing summary judgment.
Dahlstrom v. Commissioner, 85 T.C. 812, 821 (1985); Jacklin v.
Commissioner, 79 T.C. 340, 344 (1982).
As explained in detail below, there is no genuine issue as
to any material fact, and a decision may be rendered as a matter
of law. Accordingly, we shall grant respondent’s motion for
summary judgment.
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Background
The record establishes and/or the parties do not dispute the
following:
A. Petitioner’s Tax Liabilities for 1997 and 1998
On or about August 19, 1998, Morris Tabak (petitioner) filed
with respondent a Form 1040, U.S. Individual Income Tax Return,
for the taxable year 1997. On the return, petitioner reported
adjusted gross income of $75,301 and a tax liability of $13,023,
which respondent assessed. Because petitioner paid only $0.58 of
the reported liability, respondent also assessed interest, an
addition to tax under section 6651(a)(2) for failure to pay tax,
and an addition to tax under section 6654(a) for failure to pay
estimated tax. Notice and demand for payment was sent to
petitioner on November 9, 1998.
On or about August 18, 1999, petitioner filed with
respondent a Form 1040, U.S. Individual Income Tax Return, for
the taxable year 1998. On the return, petitioner reported
adjusted gross income of $79,219 and a tax liability of $14,429,
which respondent assessed. Because petitioner paid only $138 of
the reported liability, respondent also assessed interest, an
addition to tax under section 6651(a)(2) for failure to pay tax,
and an addition to tax under section 6654(a) for failure to pay
estimated tax. Notice and demand for payment was sent to
petitioner on September 20, 1999.
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B. Post-assessment Payments Made by Petitioner
In 2000 and 2001, petitioner made a total of 4 payments in
the aggregate amount of $4,953.42 toward his unpaid liability for
1997.
In 2001, petitioner made a single payment in the amount of
$103 toward his unpaid liability for 1998.
As of April 20, 2001, the unpaid balance of petitioner’s
assessed liability was as follows:
Unpaid Balance
Year of Assessment
1997 $9,833.66
1998 15,768.19
25,601.85
C. Notice of Federal Tax Lien
On April 26, 2001, respondent filed a notice of Federal tax
lien with the County Clerk of Fort Bend County in Richmond,
Texas, in respect of petitioner’s outstanding tax liabilities for
1997 and 1998. Thereafter, on May 1, 2001, respondent sent
petitioner a Notice of Federal Tax Lien Filing and Your Right to
a Hearing Under IRC 6320, which petitioner received no later than
May 4, 2001.
D. Petitioner’s Request for a Hearing
On May 4, 2001, petitioner filed with respondent Form 12153,
Request for a Collection Due Process Hearing, in respect of his
tax liabilities for 1997 and 1998. In his request for a hearing,
petitioner stated that he did not agree with the filed notice of
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Federal tax lien because:
Lien will put me out of business. Also working on
obtaining a loan to pay off balance of $25,601.85.
Payments have been made.
E. The Appeals Office Hearing
On July 24, 2001, petitioner attended an administrative
hearing conducted by an Appeals officer from respondent’s Appeals
Office in Houston, Texas.
At the hearing,2 petitioner did not challenge the underlying
tax liability for either 1997 or 1998. Rather, petitioner
expressed concern that the notice of Federal tax lien would
negatively affect both his business and his ability to borrow.
In this regard, petitioner indicated that his financial situation
was not strong and that he had not been successful in obtaining
financing to satisfy his outstanding Federal tax liabilities.
The possibility of entering into an installment agreement or
filing an offer in compromise was discussed; however, because of
petitioner’s continuing failure to pay estimated tax and to be
current in his Federal tax obligations, the Appeals officer
indicated that it would not be possible to pursue either of those
alternatives.
2
Our findings for this paragraph are based on the Appeals
officer’s Case Memorandum. Petitioner has not challenged or
otherwise questioned any of the statements of fact appearing in
that memorandum.
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F. Respondent’s Notice of Determination
On August 9, 2001, respondent’s Appeals Office issued to
petitioner a Notice of Determination Concerning Collection
Action(s) Under Section 6320 and/or 6330 with regard to his tax
liabilities for 1997 and 1998. In the notice, the Appeals Office
concluded:
the Notice of Filing of a Federal Tax Lien was legally
and procedurally correct. There exists no basis for
withdrawal of the Notice.
G. Petitioner’s Petition
On September 13, 2001, petitioner filed with the Court a
Petition for Lien or Levy Action seeking review of respondent’s
notice of determination.3 In the petition, there are no
assignments of error or allegations of fact other than the terse
statement that petitioner disagrees with “Penalties + Interest”.
H. Respondent’s Motion For Summary Judgment
As stated, respondent filed a Motion For Summary Judgment.
Respondent contends that the petition contains nothing other than
a challenge to the underlying liability (for interest and
additions to tax), but that petitioner is precluded from pursuing
such a challenge because he failed to raise that issue in the
administrative hearing before the Appeals officer.
3
At the time that the petition was filed, petitioner
resided in Houston, Texas.
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Petitioner did not file an objection to respondent’s motion.
Respondent’s motion was called for hearing at the Court's
motions session in Washington, D.C. Counsel for respondent
appeared and presented argument in support of the pending motion.
In contrast, there was no appearance by or on behalf of
petitioner, nor did petitioner file a statement pursuant to Rule
50(c), the provisions of which were noted in the Court’s order
calendaring respondent’s motion for hearing.
Discussion
Section 6321 imposes a lien in favor of the United States on
all property and rights to property of a person when demand for
payment of that person’s liability for taxes has been made and
the person fails to pay those taxes. The lien arises when the
assessment is made. Sec. 6322. Section 6323(a) requires the
Secretary to file notice of Federal tax lien if such lien is to
be valid against any purchaser, holder of a security interest,
mechanic’s lienor, or judgment lien creditor. Behling v.
Commissioner, 118 T.C. 572, 575 (2002).
Section 6320 provides that the Secretary shall furnish the
person described in section 6321 with written notice of the
filing of a notice of lien under section 6323. The notice
required by section 6320 must be provided not more than 5
business days after the day the notice of lien is filed. Sec.
6320(a)(2). Section 6320 further provides that the person may
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request administrative review of the matter (in the form of an
Appeals Office hearing) within the 30-day period beginning on the
day after the 5-day period described above. Section 6320(c)
provides that the Appeals Office hearing generally shall be
conducted consistent with the procedures set forth in section
6330(c), (d), and (e).
Section 6330(c) provides for review with respect to
collection issues such as spousal defenses, the appropriateness
of the Commissioner's intended collection action, and possible
alternative means of collection. Section 6330(c)(2)(B) provides
that the existence or the amount of the underlying tax liability
can be contested at an Appeals Office hearing if the person did
not receive a notice of deficiency or did not otherwise have an
earlier opportunity to dispute such tax liability. Goza v.
Commissioner, 114 T.C. 176, 180-181 (2000); see Sego v.
Commissioner, 114 T.C. 604, 609 (2000). Section 6330(d) provides
for judicial review of the administrative determination in the
Tax Court or Federal District Court.
In his petition, petitioner failed to raise a spousal
defense, make a valid challenge to the appropriateness of
respondent’s intended collection action, or offer alternative
means of collection. These issues are now deemed conceded. Rule
331(b)(4); see Behling v. Commissioner, 118 T.C. at 579. Indeed,
the only disagreement expressed by petitioner in his petition
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relates to “Penalties + Interest”. We question whether this
terse assertion constitutes a challenge to the underlying tax
liability sufficient to raise a justiciable issue for decision by
this Court. However, we need not so decide because the fact of
the matter is that petitioner did not challenge the underlying
tax liability for either 1997 or 1998 at the administrative
hearing. Accordingly, under the circumstances present herein,
petitioner is precluded from doing so in the instant proceeding.
Sec. 301.6320-1(f)(2), Q&A-F5, Proced. & Admin. Regs.; see Miller
v. Commissioner, 115 T.C. 582, 589 n.2 (2000), affd. 21 Fed.
Appx. 160 (4th Cir. 2001); see also sec. 301.6330-1(f)(2), Q&A-
F5, Proced. & Admin. Regs.; Magana v. Commissioner, 118 T.C. 488,
493-494 (2002). We are unable to identify any special
circumstances in the instant proceeding that might cause us to
depart from this view.
In the absence of a valid issue for review, we conclude that
respondent is entitled to judgment as a matter of law sustaining
the notice of determination dated August 9, 2001.
In order to give effect to the foregoing,
An order granting respondent's
motion and decision for respondent
will be entered.