T.C. Memo. 2003-276
UNITED STATES TAX COURT
CARL AND LISA NEUGEBAUER, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 8568-02L. Filed September 23, 2003.
Carl and Lisa Neugebauer, pro se.
Karen Nicholson Sommers, for respondent.
MEMORANDUM OPINION
LARO, Judge: Petitioners, while residing in Murrieta,
California, petitioned the Court under section 6330(d) to review
respondent’s proposed collection activity in the form of a levy.
Respondent proposed this action to collect petitioners’ joint
Federal income tax liability for 1994 and 1995. Currently, the
case is before the Court on respondent’s motion for summary
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judgment under Rule 121(a). Petitioners responded to
respondent’s motion under Rule 121(b).
We shall grant respondent’s motion for summary judgment.
Section references are to the applicable versions of the Internal
Revenue Code. Rule references are to the Tax Court Rules of
Practice and Procedure.
Background
Petitioners filed joint Federal income tax returns for 1994
and 1995 reflecting refunds for both years. These returns were
later audited, and on or about April 19, 1999, respondent
assessed income tax deficiencies and related penalties and
interest against petitioners with respect to 1994 and 1995.
Petitioners failed to pay fully the amounts assessed and in
February 2000 ceased making monthly payments of $2,500 per month
as mandated by an installment payment agreement. On or about May
7, 2001, respondent issued to petitioners a letter entitled
“Final Notice - Notice of Intent to Levy and Notice of Your Right
to a Hearing Under IRC 6330".
On or about June 8, 2001, petitioners submitted a Form
12153, Request For A Collection Due Process Hearing. On January
10, 2002, petitioners submitted an offer in compromise and a
collection information statement in connection with their request
for a hearing. Respondent’s Appeal officer determined that the
offer in compromise should not be accepted because the offer and
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supporting financial information were incomplete. Petitioners
did not provide the complete information. On January 17, 2002, a
hearing was held between respondent’s Appeals officer and
petitioners’ counsel Judy E. Hamilton. In connection with the
hearing, the Appeals officer reviewed Internal Revenue Service
transcripts of account for petitioners’ 1994 and 1995 income tax
liabilities.
On April 12, 2002, respondent sent petitioners a Notice of
Determination Concerning Collection Action(s) Under Section 6320
and/or 6330 (Notice of Determination) regarding petitioners’ 1994
and 1995 income tax liabilities. On May 13, 2002, petitioners
filed with the Court a Petition for Lien or Levy Action. Neither
in the petition nor in the previous request for a hearing did
petitioners raise any issues with respect to the existence or the
amount of the underlying tax liability. Instead, petitioners
allege that they were denied their right to a hearing under
section 6330, that they were denied participation in the
proceedings relating to their offer in compromise, and that they
were subjected to punitive conduct by personnel of the Internal
Revenue Service (IRS). Petitioners ask the Court to remand this
case to Appeals for further consideration of an offer in
compromise or, alternatively, to transfer this case to the
appropriate Federal District Court.
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On July 11, 2003, respondent moved for summary adjudication
on all issues presented in this case. On August 20, 2003,
petitioners filed with the Court a reply to that motion.
Discussion
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(a) and (b); Sundstrand
Corp. v. Commissioner, 98 T.C. 518, 520 (1992), affd. 17 F.3d 965
(7th Cir. 1994). The moving party bears the burden of proving
that there is no genuine issue of material fact, and factual
inferences are drawn 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 will be shown in the discussion that follows, petitioners
raised no genuine issue as to any material fact. Respondent
supported his motion for summary judgment with the pleadings,
exhibits, and an affidavit of one of his attorneys. Petitioners’
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reply was supported by materials not responsive to the merits of
respondent’s motion. The reply also did not set forth any
specific facts showing a genuine issue for trial. We consider
“the pleadings, answers to interrogatories, depositions,
admissions, and any other acceptable materials, together with the
affidavits”, and find no genuine issue as to any material fact.
Rule 121(b). Accordingly, we conclude that this case is ripe for
summary judgment. Celotex Corp. v. Catrett, 477 U.S. 317 (1986).
Section 6331(a) provides that if any person liable to pay
any tax neglects or refuses to pay such tax within 10 days after
notice and demand for payment, the Secretary may collect such tax
by levy on the person’s property. Section 6331(d) states that at
least 30 days before enforcing collection by levy on the person’s
property, the Secretary must furnish the person with a final
notice of intent to levy, including notice of the administrative
appeals available to the person.
Under section 6330, the Commissioner cannot proceed with
collection by levy until the person has been given notice and the
opportunity for an administrative review of the matter (in the
form of an Appeals Office hearing) and, if dissatisfied, with
judicial review of the administrative determination. Davis v.
Commissioner, 115 T.C. 35, 37 (2000); Goza v. Commissioner, 114
T.C. 176, 179-180 (2000). In the case of such judicial review,
the Court will review a taxpayer’s liability under the de novo
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standard where the validity of the underlying tax liability is at
issue. A taxpayer’s underlying tax liability may be at issue if
he or she “did not receive any statutory notice of deficiency for
such tax liability or did not otherwise have an opportunity to
dispute such tax liability.” Sec. 6330(c)(2)(B). The Court will
review the Commissioner’s administrative determination for abuse
of discretion with respect to all other issues. Sego v.
Commissioner, 114 T.C. 604, 610 (2000).
Here, petitioners do not dispute the existence or the amount
of an underlying tax liability. Therefore, the proper standard
for our review of respondent’s determination is abuse of
discretion. Under section 6330(c)(3), the determination of an
Appeals officer must take into consideration (A) the verification
that the requirements of applicable law and administrative
procedures have been met, (B) issues raised by the taxpayer, and
(C) whether any proposed collection action balances the need for
the efficient collection of taxes with the legitimate concern of
the person that any collection be no more intrusive than
necessary.
Here, the Appeals officer addressed all these matters.
He satisfied the first requirement by reviewing the Internal
Revenue Service transcripts of petitioners’ account. Hill v.
Commissioner, T.C. Memo. 2002-272; Kuglin v. Commissioner, T.C.
Memo. 2002-51; Weishan v. Commissioner, T.C. Memo. 2002-88.
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The Appeals officer satisfied the second requirement by
considering the issues raised by petitioners. The only issue
raised by petitioners was their inability to pay the liability in
full and, in that regard, petitioners requested that they be
allowed to satisfy the liability through an offer in compromise.
The Appeals officer addressed this request by reviewing the
information submitted, explaining that it was incomplete, and
asking for additional information. Petitioners failed to submit
a properly completed Form 656, Offer in Compromise, and the
required financial information for the consideration of their
request.
As to the third requirement, the Appeals officer properly
balanced the need for efficient collection of taxes through the
proposed levy against the concern that any collection action be
no more intrusive than necessary. Petitioners failed to provide
the information required in order to consider an alternative
collection action.
Throughout the proceeding, petitioners’ conduct demonstrates
propensity to delay the collection of their outstanding tax
liabilities. We sustain respondent’s determination regarding the
proposed levy as a permissible exercise of discretion. We note
as to the allegations set forth in the petition that petitioners
did receive a hearing under section 6330, that petitioners were
given an opportunity to participate in an offer in compromise,
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and that petitioners’ unsupported allegations create no triable
issue of fact regarding the “punitive conduct” by the IRS
personnel.
Regarding petitioners’ request to refer this case to a
different forum, we observe that this Court has jurisdiction over
the appeal of the administrative determinations where the
underlying tax liability concerns unpaid income taxes, as opposed
to the other taxes. See, e.g., Goza v. Commissioner, supra;
Danner v. United States, 208 F. Supp. 2d 1166 (E.D. Wash. 2002);
Gillett v. United States, 233 F. Supp. 2d 874 (W.D. Mich. 2002).
Therefore, we decline to grant petitioners’ request.
We have considered all arguments raised by the parties and
have found those arguments not discussed herein to be irrelevant
and/or without merit. Accordingly,
An appropriate order and
decision will be entered for
respondent.