122 T.C. No. 9
UNITED STATES TAX COURT
JOYCE E. BEERY, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 7452-03L. Filed March 1, 2004.
On Aug. 14, 2002, R issued to P a final notice
disallowing her claims for relief from joint and
several liability on a joint return for the taxable
years 1989 to 1994. On Nov. 12, 2002, P filed with the
Court a timely petition at docket No. 17597-02
challenging R’s final notice disallowing her claims for
relief from joint and several liability under sec.
6015, I.R.C. The “stand alone” I.R.C. sec. 6015 case,
Joyce E. Beery, Petitioner, Jerome G. Beery,
Intervenor, docket No. 17597-02, is currently pending
before this Court.
Meanwhile, on Nov. 6, 2002, R issued to P a Final
Notice of Intent to Levy and Notice of Your Right to a
Hearing for the taxable years 1989 to 1994. On Nov.
15, 2002, R issued to P a Notice of Federal Tax Lien
Filing and Notice of Your Right to a Hearing for the
taxable years 1989 to 1994.
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On Apr. 17, 2003, R issued to P a Notice of
Determination Concerning Collection Action(s). In the
notice, R conceded that it was improper to propose to
levy on P’s property prior to a final determination
regarding her claims for relief under sec. 6015, I.R.C.
On the other hand, R determined that filing the notice
of Federal tax lien with regard to P’s tax liabilities
for 1989 to 1994 was appropriate despite her pending
claims for relief under sec. 6015, I.R.C.
P filed a timely petition for lien or levy action
under secs. 6320 and 6330, I.R.C., challenging R’s
notice of determination on the ground that R was barred
from filing a Federal tax lien against P prior to the
entry of a final determination respecting her claims
for relief under sec. 6015, I.R.C. R filed a motion
for summary judgment. P filed an objection to R’s
motion.
Held: R was not barred under secs. 6015, 6320, or
6330, I.R.C., from filing a Federal tax lien against P
prior to the entry of a final determination respecting
P’s claims for relief from joint and several liability
under sec. 6015, I.R.C. Held, further, R’s motion for
summary judgment will be granted.
Joyce E. Beery, pro se.
Glenn P. Thomas and Dennis R. Onnen, for respondent.
OPINION
DAWSON, Judge: These cases were assigned to Chief Special
Trial Judge Peter J. Panuthos, pursuant to the provisions of
section 7443A(b)(4) and Rules 180, 181, and 182.1 The Court
1
Section references are to the Internal Revenue Code, as
amended. Rule references are to the Tax Court Rules of Practice
and Procedure.
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agrees with and adopts the opinion of the Special Trial Judge,
which is set forth below.
OPINION OF THE SPECIAL TRIAL JUDGE
PANUTHOS, Chief Special Trial Judge: This matter is before
the Court on respondent’s motion for summary judgment, filed
pursuant to Rule 121. As discussed in detail below, we shall
grant respondent’s motion.
Background2
In Beery v. Commissioner, T.C. Memo. 1996-464 (docket No.
26995-93), we sustained respondent’s determination that Joyce
Beery (petitioner) and her husband were liable for tax
deficiencies and accuracy-related penalties for 1989, 1990, and
1991. In Beery v. Commissioner, docket No. 8802-96, we sustained
respondent’s determination that petitioner was liable for tax
deficiencies for 1992, 1993, and 1994. The Court’s decision in
docket No. 8802-96 was affirmed on appeal by unpublished opinion.
See Beery v. Commissioner, 166 F.3d 346 (10th Cir. 1998).
On August 14, 2002, respondent issued to petitioner a final
notice disallowing her claims for relief from joint and several
liability on a joint return for the taxable years 1989 to 1994.
On November 12, 2002, petitioner filed with the Court a timely
2
The record reflects and/or the parties do not dispute the
following facts.
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petition at docket No. 17597-02 challenging respondent’s final
notice under section 6015.
In the interim, on November 6, 2002, respondent issued to
petitioner a Final Notice of Intent to Levy and Notice of Your
Right to a Hearing for the taxable years 1989 to 1994. On
November 15, 2002, petitioner submitted to respondent a Request
for a Collection Due Process Hearing under section 6330.
On November 15, 2002, respondent issued to petitioner a
Notice of Federal Tax Lien Filing and Notice of Your Right to a
Hearing for the taxable years 1989 to 1994. On December 12,
2002, petitioner submitted to respondent a Request for a
Collection Due Process Hearing under section 6320.
On April 17, 2003, respondent issued to petitioner a Notice
of Determination Concerning Collection Action(s) for the years
1989 to 1994. Respondent conceded in the notice of determination
that it was improper to propose to levy on petitioner’s property
prior to the entry of a final determination regarding her claims
for relief under section 6015. On the other hand, respondent
determined that it was not improper to file a Federal tax lien
against petitioner prior to the entry of a final determination
regarding her claims for relief under section 6015.
On May 19, 2003, petitioner filed with the Court a petition
for lien or levy action challenging respondent’s notice of
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determination.3 Petitioner’s sole contention is that it was
improper for respondent to file a Federal tax lien with respect
to her unpaid taxes for 1989 to 1994 prior to the entry of a
final determination with respect to her claims for relief from
joint and several liability under section 6015 for those same
taxable years.
After filing an answer to the petition, respondent filed a
motion for summary judgment. Petitioner filed an objection to
respondent’s motion repeating her assertion that it was improper
for respondent to file a Federal tax lien against her.
Discussion
Summary judgment is intended to expedite litigation and to
avoid unnecessary and expensive trials. Florida 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
3
The parties do not dispute that the petition in this case
was timely filed under secs. 6330 and 7502(a). At the time the
petition was filed, petitioner resided in Los Alamos, New Mexico.
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(7th Cir. 1994); Zaentz v. Commissioner, 90 T.C. 753, 754 (1988);
Naftel v. Commissioner, 85 T.C. 527, 529 (1985).
The record in this case reflects that there is no dispute as
to a material fact. We agree with respondent that he is entitled
to judgment as a matter of law.
Lien and Levy Actions
Section 6321 imposes a lien in favor of the United States on
all property and rights to property of a person liable for taxes
when a demand for the payment of the taxes has been made and the
person fails to pay those taxes. Section 6322 provides that the
lien imposed under section 6321 generally arises when the
Commissioner makes an assessment. However, section 6323(a)
provides that the lien imposed under section 6321 is not valid
against any purchaser, holder of a security interest, mechanic’s
lienor, or judgment lien creditor until the Secretary has filed a
notice of Federal tax lien with the appropriate authorities.
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 Federal tax lien under section 6323. Such notice
must be provided not more than 5 business days after the day of
the filing of the notice of lien. Sec. 6320(a)(2). Section 6320
further provides that the person may request administrative
review of the matter (in the form of an Appeals Office hearing)
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within 30 days 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(d) provides for
judicial review of the administrative determination in the Tax
Court or Federal District Court, as appropriate.
Section 6330(e) provides that levy actions and the running
of the period of limitations relating to collections (and other
actions) shall be suspended for the period during which an
Appeals Office hearing, and appeals therein, are pending.4
4
Sec. 6330(e)(1) provides:
SEC. 6330(e) Suspension of collections and statute of
limitations.--
(1) In general.-–Except as provided in paragraph
(2), if a hearing is requested under subsection
(a)(3)(B), the levy actions which are the subject of
the requested hearing and the running of any period of
limitations under sec. 6502 (relating to collection
after assessment), sec. 6531 (relating to criminal
prosecutions), or sec. 6532 (relating to other suits)
shall be suspended for the period during which such
hearing, and appeals therein, are pending. In no event
shall any such period expire before the 90th day after
the day on which there is a final determination in such
hearing. Notwithstanding the provisions of sec.
7421(a), the beginning of a levy or proceeding during
(continued...)
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Section 6330(e) generally authorizes the Court to enjoin a levy
or proceeding that is begun during the time the suspension under
that provision is in effect.
Claims for Relief From Joint and Several Liability
Section 6013(d)(3) provides that if a husband and wife make
a joint Federal income tax return, “the tax shall be computed on
the aggregate income and the liability with respect to the tax
shall be joint and several.” However, section 6015(a) provides
that, notwithstanding section 6013(d)(3), an individual who has
made a joint return may elect to seek relief from joint and
several liability on such return.
Congress vested this Court with jurisdiction to review a
taxpayer’s election to claim relief from joint and several
liability on a joint return under varying circumstances. See
King v. Commissioner, 115 T.C. 118, 121-122 (2000); Corson v.
Commissioner, 114 T.C. 354, 363-364 (2000). In the instant case,
petitioner filed a so-called stand-alone petition (at docket No.
17597-02) seeking judicial review of respondent’s disallowance of
her claims for relief from joint and several liability. See sec.
4
(...continued)
the time the suspension under this paragraph is in
force may be enjoined by a proceeding in the proper
court, including the Tax Court. The Tax Court shall
have no jurisdiction under this paragraph to enjoin any
action or proceeding unless a timely appeal has been
filed under subsection (d)(1) and then only in respect
of the unpaid tax or proposed levy to which the
determination being appealed relates.
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6015(e)(1); Mora v. Commissioner, 117 T.C. 279 (2001); Fernandez
v. Commissioner, 114 T.C. 324, 328-329 (2000).5
Section 6015(e)(1)(B)(i) generally provides that “no levy or
proceeding in court” shall be made, begun, or prosecuted against
an individual making an election under section 6015 for
collection of any assessment to which such election arises until
the close of the 90-day period for filing a petition with the
Court under section 6015 or, if a petition is filed with the
Court, until the decision of the Court has become final (the
prohibited period).6 Section 6015(e)(1)(B)(ii) generally
5
A person may also request relief from joint and several
liability on a joint return in a deficiency case brought under
sec. 6213(a), see King v. Commissioner, 115 T.C. 118, 121-122
(2000), and in a petition for review of a lien or levy action,
see secs. 6320(c), 6330(c)(2)(A)(i).
6
Sec. 6015(e)(1)(B) provides:
(B) Restrictions applicable to collection of
assessment.--
(i) In general.--Except as otherwise provided in
sec. 6851 or 6861, no levy or proceeding in court shall
be made, begun, or prosecuted against the individual
making an election under subsection (b) or (c) for
collection of any assessment to which such election
relates until the close of the 90th day referred to in
subparagraph (A)(ii), or, if a petition has been filed
with the Tax Court under subparagraph (A), until the
decision of the Tax Court has become final. Rules
similar to the rules of sec. 7485 shall apply with
respect to the collection of such assessment.
(ii) Authority to enjoin collection actions.–-
Notwithstanding the provisions of sec. 7421(a), the
beginning of such levy or proceeding during the time
(continued...)
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authorizes the Court to enjoin any “such levy or proceeding” made
or begun during the prohibited period.
We find no support in section 6015 for petitioner’s position
in this case. As previously mentioned, section 6015(e)(1)(B)(i)
bars the Commissioner (during the prohibited period) from making
or bringing a “levy or proceeding in court” against an individual
making an election under section 6015. The provision does not
expressly prohibit the Commissioner from filing a Federal tax
lien against such an individual. Considering that section
6015(e)(1)(B)(i) specifically precludes the Commissioner from
proceeding with a levy against an individual claiming relief
under section 6015, we think that same provision would have
included express language barring the Commissioner from filing a
Federal tax lien against such an individual if Congress intended
to prohibit such actions.7
In addition, we see no indication that the term “proceeding
6
(...continued)
the prohibition under clause (i) is in force may be
enjoined by a proceeding in the proper court, including
the Tax Court. The Tax Court shall have no
jurisdiction under this subparagraph to enjoin any
action or proceeding unless a timely petition has been
filed under subparagraph (A) and then only in respect
of the amount of the assessment to which the election
under subsection (b) or (c) relates.
7
See Trent v. Commissioner, T.C. Memo. 2002-285 (holding
that the Commissioner was not barred by sec. 6330(e)(1)(B) from
offsetting the taxpayer’s overpayments for later years against an
earlier tax liability for which the taxpayer had claimed relief
under sec. 6015).
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in court” as set forth in section 6015(e)(1)(B)(i) was intended
to refer to the filing of a Federal tax lien. In short, the
plain and ordinary meaning of the term “proceeding in court”
suggests the filing of a formal lawsuit or complaint by the
Government against an individual as opposed to the more informal
administrative procedures employed by the Commissioner in the
filing of a Federal tax lien.8 See, e.g., 2 Administration,
Internal Revenue Manual (CCH), sec. 5.12.1.14.1, at 16,829.
Thus, we hold that respondent was not prohibited from filing the
Federal tax lien in dispute under section 6015.
Inasmuch as the petition in this case was filed as a
petition for lien or levy action, we must also consider whether
sections 6320 and 6330 barred respondent from filing the Federal
tax lien against petitioner. Sections 6320 and 6323 authorize
the Commissioner to file a notice of Federal tax lien before
notifying the taxpayer of his or her right to request an
8
Respondent has adopted the following definition of the
term “proceeding in court”. Sec. 1.6015-7(c)(4)(ii), Income Tax
Regs., provides:
(ii) Proceedings in court. For purposes of this
paragraph (c), proceedings in court means suits filed
by the United States for the collection of Federal tax.
Proceedings in court does not refer to the filing of
pleadings and claims and other participation by the
Internal Revenue Service or the United States in suits
not filed by the United States, including Tax Court
cases, refund suits, and bankruptcy cases.
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administrative hearing with regard to the lien. The record
reflects that respondent complied with these provisions. We also
observe that there is no provision in section 6320 or 6330 that
prohibits the Commissioner from filing a Federal tax lien against
a person who has pending a claim for relief under section 6015.
Consistent with the preceding discussion, and considering
the provisions of sections 6320, 6330, and 6015 together, we hold
that Congress did not prohibit the Commissioner from filing a
Federal tax lien against a taxpayer while such taxpayer has
pending a claim for relief from joint and several liability under
section 6015. Congress did, however, bar the Commissioner from
levying on such taxpayer’s property during the prohibited period.
Sec. 6015(e)(1)(B)(i). Respondent conceded the latter point in
the notice of determination issued to petitioner. There being no
other issue for consideration, we shall grant respondent’s motion
for summary judgment.
To reflect the foregoing,
An appropriate order
and decision for respondent
will be entered.