Picchiottino v. Comm'r

T.C. Memo. 2004-232

UNITED STATES TAX COURT

SCOTT PERRY PICCHIOTTINO, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 785-04L. Filed October 12, 2004.

P filed a petition for judicial review pursuant to
sec. 6330, I.R.C., in response to a determination by R
that levy action was appropriate.

Held: Because the record shows that no period of
limitations precludes collection and because P failed
to submit any current financial documentation in
support of his claims of inability to pay, R’s
determination to proceed with collection action is
sustained.

Scott Perry Picchiottino, pro se.

Jonae A. Harrison, for respondent.
 - 2 -

MEMORANDUM OPINION

WHERRY, Judge: This case is before the Court on

respondent’s motion for summary judgment pursuant to Rule 121.1

The instant proceeding arises from a petition for judicial review

filed in response to a Notice of Determination Concerning

Collection Action(s) Under Section 6320 and/or 6330. The issue

for decision is whether respondent may proceed with collection

action as so determined.

Background

Petitioner filed Forms 1040, U.S. Individual Income Tax

Return, for the taxable years 1997, 1998, and 1999, using the

filing status of married filing separately. The 1997 return was

filed on August 28, 2002, and reported a tax liability of

$1,631.2 The 1998 return was filed on August 20, 2002, and

reported a tax liability of $7,853. The 1999 return was filed on

August 28, 2002, and reported a tax liability of $4,086. For the

taxable year 2001, petitioner filed a joint return with Kathryn

1
Unless otherwise indicated, all section references are to
the Internal Revenue Code of 1986, as amended, and all Rule
references are to the Tax Court Rules of Practice and Procedure.
2
We note that respondent’s motion for summary judgment
contains apparently inadvertent errors in listing for each tax
year the same date for the filing of the return and the
assessment of the reported liabilities. The attached transcripts
of account for each year show the correct dates.
 - 3 -

Ann Picchiottino (Ms. Picchiottino) on April 15, 2002, reporting

a tax liability of $12,629.3

Petitioner did not fully pay the liability reflected on any

of the four returns. Respondent assessed the liabilities for

1997, 1998, 1999, and 2001 on November 18, 2002, November 25,

2002, October 21, 2002, and June 10, 2002, respectively.

On March 8, 2003, respondent issued to petitioner two Final

Notices of Intent To Levy and Notice of Your Right To A Hearing.

One pertained to liabilities for 1997, 1998, and 1999, and listed

a total amount due, including statutory additions, of $18,188.83.

The other addressed 2001 and provided a total amount due, again

including statutory additions, of $5,410.37.

In response to the notices petitioner timely submitted two

Forms 12153, Request for a Collection Due Process Hearing, dated

March 10, 2003. The Forms 12153 were filed with the Internal

Revenue Service (IRS) on or before March 27, 2003. One was in

petitioner’s name only and addressed 1997, 1998, and 1999.4 The

other was in the names of petitioner and Ms. Picchiottino and

3
One of the documents in the record may indicate that the
amount reported on the 2001 return was $12,929. In any event, a
possible discrepancy or ambiguity on this point is immaterial
here in that it is clear the amount assessed was only $12,629.
4
The Form 12153, Request for a Collection Due Process
Hearing, also listed 2000, but the record reflects no collection
notice or other activity with regard to that year.
 - 4 -

pertained to 2001.5 The Forms 12153 contained identical

statements of disagreement with the proposed collection action;

i.e., “TOLD STATUS WAS ‘UNCOLLECTABLE’ by IRS Mrs. Hernandez

#8903695”.

On March 13, 2003, a Notice of Federal Tax Lien Filing and

Your Right to a Hearing was issued to petitioner with respect to

all 4 years. Although petitioner had checked boxes on the two

Forms 12153 discussed above indicating disagreement with both a

filed notice of Federal tax lien and a notice of levy, those

Forms 12153 were signed and sent by petitioner before the notice

of lien was issued. The Forms 12153 were therefore, in

respondent’s view, premature and without effect as to the lien

filing.6

By a letter dated April 21, 2003, the IRS responded to the

assertion in petitioner’s Forms 12153 regarding the

collectibility of the liabilities. The letter explained the

nature of the “not collectable” designation as follows: “Your

account has been placed in a currently not collectable status.

5
This Form 12153 also listed 2002, but again no collection
notice or other activity is reflected by the record with respect
thereto.
6
For the sake of completeness, we note that insofar as our
jurisdiction could be interpreted to extend to the Notice of
Federal Tax Lien Filing and Your Right to a Hearing, we would
sustain the lien filing by summary judgment on grounds
substantially identical to those discussed infra in connection
with the levy.
 - 5 -

You still owe the balance due and penalty and interest will

continue to accrue until the balance due has been paid in full,

but we are not enforcing collection until you are able to make

payments on the balance due at some point in the future.”

Thereafter, the case was assigned to the IRS Office of

Appeals in Phoenix, Arizona. Settlement Officer Thomas L. Tracy

(Mr. Tracy) sent petitioner and Ms. Picchiottino a letter dated

November 5, 2003, scheduling a hearing for November 25, 2003, and

briefly outlining the hearing process. Petitioner and

Ms. Picchiottino then submitted another Form 12153 with respect

to all 4 years dated November 7, 2003, and received by the IRS on

November 13, 2003. They checked the box indicating disagreement

with a filed notice of Federal tax lien and wrote: “Request

without predjudice [sic] that hearing be held after Superior

Court Action FN 2003-092649 is adjudicated.”

Mr. Tracy responded by a letter to petitioner dated November

13, 2003, stating:

I am in receipt of Form 12153 signed by you and Kathryn
Picchiottino on November 7, 2003. It states only that
you wish a hearing after Superior Court Action FN 2003-
092649 is adjudicated. I understand that this is your
divorce suit. I am sorry, but I cannot defer action on
your case for an extended and indefinite period of
time.

We mutually scheduled the November 25 hearing and if
that date is inconvenient, I will gladly reschedule to
accommodate you. If we cannot schedule and hold a
hearing by December 10, 2003, I will make my
determination from information in the file and with no
further hearing opportunity.
 - 6 -

Your original hearing request said only, “Told status
was ‘uncollectible’ by IRS Mrs. Hernandez #893695".
Indeed, Compliance did place your account in
temporarily not collectible status shortly after the
date of your hearing request.

The IRC 6320 hearing opportunity is relative to the
Notice of Federal Tax Liens that were recorded.[7] The
“uncollectible status” has no direct bearing on the
recorded liens; the provisions of IRC 6325 afford the
only bases for release of lien--that the account be
satisfied (paid), legally not enforceable or upon the
posting of a bond.

The IRC 6330 hearing opportunity arose upon the
issuance of a [sic] Notices of Intent to Levy, prior to
the “uncollectible status” determination that was made
by Compliance. If you wish for me to make an
independent determination of the collection status of
your account, the IRC 6330 issue, you must make full
financial disclosure. I have enclosed a blank Form
433A financial statement for that purpose. You are not
obliged to submit this form to me but if you wish me to
consider collection alternatives, I must have the form
submitted to me on or before the scheduled hearing
date.

Petitioner did not complete or return the financial form, did not

attempt to reschedule the hearing, and did not otherwise contact

Mr. Tracy. He did not appear for the conference, nor did

Ms. Picchiottino, so no hearing was held.

On January 8, 2004, respondent issued to petitioner the

aforementioned Notice of Determination Concerning Collection

Action(s) Under Section 6320 and/or 6330, sustaining the proposed

7
An attachment to the Notice of Determination Concerning
Collection Action(s) Under Section 6320 and/or 6330 underlying
this action stated that because petitioner’s Forms 12153 were
untimely with respect to the notice of Federal tax lien, he was
entitled only to an administrative, so-called equivalent hearing,
not subject to judicial review, with respect to the lien notice.
 - 7 -

levy action. An attachment to the notice addressed the

verification of legal and procedural requirements, the issues

raised by the taxpayer, and the balancing of efficient collection

and intrusiveness. With respect to the proposed levy, the

attachment summarized: “It is determined that the Notices of

Intent to Levy be sustained. The taxpayer asserts an inability

to pay but has not provided current financial information to

substantiate his hardship claim. There [sic] been no disclosure

of community assets that might be subject to levy.”8

Petitioner’s petition disputing the notice of determination

was filed with the Court on January 14, 2004, and reflected an

address in Tempe, Arizona. The petition makes two assignments of

error vis-a-vis respondent’s determination: “Inability to pay &

maintain household. No job, no unemployment” and “Statute for

enforcement lapsed due to inactivity by IRS agents”.

After the pleadings were closed in this case, respondent

filed the subject motion for summary judgment. Petitioner was

directed to file any response to respondent’s motion on or before

8
As regards the lien, with respect to which petitioner was
granted an opportunity for an “equivalent hearing”, the
attachment provided: “It is decided that the Notices of Federal
Tax Lien be sustained. The conditions of IRC 6325 for release of
lien have not been met; that the liability be satisfied, legally
unenforceable or upon the posting of a bond. Neither do the
conditions of IRC 6323(j) apply for withdrawal of the lien.” See
supra note 6.
 - 8 -

September 17, 2004. No such response has been received by the

Court.

Discussion

Rule 121(a) allows a party to move “for a summary

adjudication in the moving party’s favor upon all or any part of

the legal issues in controversy.” Rule 121(b) directs that a

decision on such a motion shall be rendered “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.”

The moving party bears the burden of demonstrating that no

genuine issue of material fact exists and that he or she is

entitled to judgment as a matter of law. Sundstrand Corp. v.

Commissioner, 98 T.C. 518, 520 (1992), affd. 17 F.3d 965 (7th

Cir. 1994). Facts are viewed in the light most favorable to the

nonmoving party. Id. However, where a motion for summary

judgment has been properly made and supported by the moving

party, the opposing party may not rest upon mere allegations or

denials contained in that party’s pleadings but must by

affidavits or otherwise set forth specific facts showing that

there is a genuine issue for trial. Rule 121(d).
 - 9 -

Collection Actions

A. General Rules

Section 6331(a) authorizes the Commissioner to levy upon all

property and rights to property of a taxpayer where there exists

a failure to pay any tax liability within 10 days after notice

and demand for payment. Sections 6331(d) and 6330 then set forth

procedures generally applicable to afford protections for

taxpayers in such levy situations. Section 6331(d) establishes

the requirement that a person be provided with at least 30 days’

prior written notice of the Commissioner’s intent to levy before

collection may proceed. Section 6331(d) also indicates that this

notification should include a statement of available

administrative appeals. Section 6330(a) expands in several

respects upon the premise of section 6331(d), forbidding

collection by levy until the taxpayer has received notice of the

opportunity for administrative review of the matter in the form

of a hearing before the IRS Office of Appeals. Section 6330(b)

grants a taxpayer who so requests the right to a fair hearing

before an impartial Appeals officer.

Section 6330(c) addresses the matters to be considered at

the hearing:

SEC. 6330(c). Matters Considered at Hearing.--In
the case of any hearing conducted under this section--

(1) Requirement of investigation.--The
appeals officer shall at the hearing obtain
verification from the Secretary that the
 - 10 -

requirements of any applicable law or
administrative procedure have been met.

(2) Issues at hearing.--

(A) In general.--The person may raise at
the hearing any relevant issue relating to
the unpaid tax or the proposed levy,
including--

(i) appropriate spousal defenses;

(ii) challenges to the
appropriateness of collection actions;
and

(iii) offers of collection
alternatives, which may include the
posting of a bond, the substitution of
other assets, an installment agreement,
or an offer-in-compromise.

(B) Underlying liability.--The person
may also raise at the hearing challenges to
the existence or amount of the underlying tax
liability for any tax period if the person
did not receive any statutory notice of
deficiency for such tax liability or did not
otherwise have an opportunity to dispute such
tax liability.

Once the Appeals officer has issued a determination

regarding the disputed collection action, section 6330(d) allows

the taxpayer to seek judicial review in the Tax Court or a

District Court, depending upon the type of tax. In considering

whether taxpayers are entitled to any relief from the

Commissioner’s determination, this Court has established the

following standard of review:

where the validity of the underlying tax liability is
properly at issue, the Court will review the matter on
a de novo basis. However, where the validity of the
 - 11 -

underlying tax liability is not properly at issue, the
Court will review the Commissioner’s administrative
determination for abuse of discretion. [Sego v.
Commissioner, 114 T.C. 604, 610 (2000).]

B. Analysis

As a threshold matter, the Court notes that the tax

liabilities at issue in this case derive from the amounts self-

reported by petitioner on his filed returns. No notices of

deficiency were issued to petitioner, and petitioner has not

otherwise had an opportunity to dispute his liabilities for these

years. Accordingly, to the extent that any of the statements in

the petition are properly construed as a challenge to the

underlying liabilities, petitioner is not precluded by section

6330(c)(2)(B) from making such a challenge in this proceeding.

Montgomery v. Commissioner, 122 T.C. 1, 9 (2004).

1. “Statute for enforcement”

Petitioner asserts in the petition: “Statute for

enforcement lapsed due to inactivity by IRS agents”. Although it

is unclear what precisely is meant by the “statute for

enforcement”, it is clear that no pertinent statute operates as a

time bar to respondent’s proposed collection activity in the

circumstances of this case.

Section 6501 sets forth limitations on assessment and

provides as a general rule that income taxes must be assessed

within 3 years after the filing of the underlying tax return.

Sec. 6501(a). Section 6502(a) then specifies that where
 - 12 -

assessment was made within the pertinent period of limitations,

the tax may be collected by levy within 10 years after the

assessment of the tax. A hearing request under section 6330 will

suspend the running of the period of limitations described in

section 6502 during the period that “such hearing, and appeals

therein, are pending.” Sec. 6330(e)(1).

Here, petitioner’s liabilities for 1997, 1998, 1999, and

2001 were assessed on November 18, 2002, November 25, 2002,

October 21, 2002, and June 10, 2002, respectively. The

corresponding returns were filed on August 28, 2002, August 20,

2002, August 28, 2002, and April 15, 2002, respectively.

Accordingly, assessment was well within the 3-year period of

limitations. Respondent received petitioner’s Forms 12153 on

March 27, 2003, at which time the applicable 10-year period of

limitations for collection by levy had not expired. The running

of this 10-year period was suspended by the Form 12153 and

remains suspended. Hence, collection of petitioner’s Federal

income tax liabilities for the years in issue is not time

barred.9

9
The Court also notes that to the extent petitioner’s
argument might attempt to raise the doctrine of laches, which
focuses on the concept of unreasonable and prejudicial delay, it
is well settled that the United States is not subject to the
defense of laches in enforcing its rights. United States v.
Summerlin, 310 U.S. 414, 416 (1940); Guaranty Trust Co. v. United
States, 304 U.S. 126, 132-133 (1938). Rather, timeliness of
Government claims is governed by the statutes of limitations
(continued...)
 - 13 -

2. “Inability to pay”

Petitioner’s claim regarding inability to pay, apparently on

account of unemployment, bears upon issues such as collection

alternatives that the Court reviews for abuse of discretion.

Action constitutes an abuse of discretion under this standard

where arbitrary, capricious, or without sound basis in fact or

law. Woodral v. Commissioner, 112 T.C. 19, 23 (1999).

Here, the record reflects no abuse of discretion by

respondent in declining to alter the proposed collection activity

on account of petitioner’s unsupported assertions of financial

difficulties. To enable the Commissioner to evaluate a

taxpayer’s qualification for collection alternatives or other

relief in the face of allegations of economic hardship, the

taxpayer must submit complete and current financial data.

Petitioner, however, never supplied a current Form 433-A,

Collection Information Statement for Wage Earners and Self-

Employed Individuals, or other financial information to

respondent, despite an express request and explanation of the

reason therefor from respondent. The notice of determination

indicates that “aged” financial information had generated the

temporary “not collectible” designation made by “Compliance”, but

that petitioner did not submit current materials when asked to do

9
(...continued)
enacted by Congress. Fein v. United States, 22 F.3d 631, 634
(5th Cir. 1994).
 - 14 -

so. Petitioner also failed to appear for the scheduled hearing

and thus lost that opportunity to otherwise corroborate his

claims.

Consequently, although the Court is sympathetic to any

economic difficulties petitioner may have encountered or be

encountering, it cannot be said that respondent acted arbitrarily

or capriciously in determining to proceed with levy when

petitioner submitted no documentation of his present financial

circumstances. See Newstat v. Commissioner, T.C. Memo. 2004-208.

The petition makes no assignments of error other than the

two contentions discussed above. As this Court has noted in

earlier cases, Rule 331(b)(4) states that a petition for review

of a collection action shall contain clear and concise

assignments of each and every error alleged to have been

committed in the notice of determination and that any issue not

raised in the assignments of error shall be deemed conceded. See

Lunsford v. Commissioner, 117 T.C. 183, 185-186 (2001); Goza v.

Commissioner, 114 T.C. 176, 183 (2000). Accordingly, the Court

concludes that respondent’s determination to proceed with

collection of petitioner’s tax liabilities was not an abuse of

discretion. The Court will grant respondent’s motion for summary

judgment. To reflect the foregoing,

An appropriate order

granting respondent’s motion
- 15 -

and decision for respondent

will be entered.