Picchiottino v. Comm'r

T.C. Memo. 2004-231

UNITED STATES TAX COURT

KATHRYN ANN PICCHIOTTINO, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 784-04L. 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 her claims of inability to pay, R’s
determination to proceed with collection action is
sustained.

Kathryn Ann 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

For the taxable year 2001, petitioner filed a joint Form

1040, U.S. Individual Income Tax Return, with Scott Perry

Picchiottino (Mr. Picchiottino) on April 15, 2002, reporting a

tax liability of $12,629.2 Petitioner and Mr. Picchiottino did

not fully pay the liability reflected on the return. Respondent

assessed the liability for 2001 on June 10, 2002.3

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
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.
3
We note that respondent’s motion for summary judgment
contains an apparently inadvertent error in listing the same date
for the filing of the return and the assessment of the reported
liability. The attached transcript of account for 2001 shows the
correct dates.
 - 3 -

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

Notice of Intent To Levy and Notice of Your Right To A Hearing,

with respect to the 2001 liability.4 The notice listed a total

amount due, including statutory additions, of $5,410.37.

In response to the notice, petitioner and Mr. Picchiottino

timely submitted a Form 12153, Request for a Collection Due

Process Hearing, dated March 10, 2003. The Form 12153 was filed

with the Internal Revenue Service (IRS) on or before March 27,

2003. The form pertained to 20015 and contained the following

statement of disagreement with the proposed collection action:

“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

2001. Although petitioner and Mr. Picchiottino had checked boxes

on the filed Form 12153 dated March 10, 2003, discussed above,

indicating disagreement with both a filed notice of Federal tax

lien and a notice of levy, that Form 12153 was signed and sent by

petitioner and Mr. Picchiottino before the notice of lien was

4
Respondent issued to Mr. Picchiottino an identical Final
Notice of Intent To Levy and Notice of Your Right to a Hearing
with respect to the 2001 year.
5
This Form 12153 also listed 2002, but no collection
activity is reflected by the record with respect thereto.
 - 4 -

issued. The Form 12153 was 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 the Form 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. 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 Mr. Picchiottino a letter dated

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

briefly outlining the hearing process. Petitioner and

Mr. Picchiottino then submitted another Form 12153, pertaining to

1997, 1998, 1999, and 2001, 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:

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 -

“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 Scott
Picchiottino on November 7, 2003. It states only that
you wish a hearing after Superior Court Action FN 2003-
092649. 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. I am
extending to you the hearing opportunity that you had
originally requested on March 10, 2003.

I have enclosed a copy of my letter dated November 5,
2003. The hearing was scheduled with Scott
Picchiottino. I have left several messages for you to
schedule an independent hearing but you have not
responded to my messages. Please call me at (602)207-
8117 to schedule the hearing that you requested. If we
cannot schedule and hold your hearing by December 10,
2003, I will make my determination based on information
in the file and with no further opportunity for a
hearing. You are welcome to attend the November 25
hearing or to schedule an independent hearing with me.
If you no longer want a hearing, please sign and return
the enclosed withdrawal form.

You are entitled to a hearing under Sections 6320 and
6330 of the Internal Revenue Code (IRC) relative to the
2001 tax year. Your hearing request lists additional
years of liability that are not assessed in your name.
Those tax periods do appear to be community debts and
for which community property is subject to the Federal
Tax Lien.

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 Lien that was recorded for the
 - 6 -

2001 tax year.[7] The “uncollectible status” has no
direct bearing on the recorded lien; the provisions of
IRC 6325 afford the only bases for release of the 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 Notice 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.

Please call me and afford to me your current address.

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

attempt to reschedule a hearing, and did not otherwise contact

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

Mr. 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

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

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, she was
entitled only to a so-called equivalent hearing, not subject to
judicial review, with respect to the lien notice.
 - 7 -

and intrusiveness. With respect to the proposed levy,8 the

attachment summarized:

It is determined that the Notice of Intent to Levy be
sustained. The taxpayer asserts an inability to pay
but has not provided financial information to
substantiate the hardship claim. The financial
statement, dated January 20, 2003 and upon which
Compliance had made its currently-not-collectible
determination, had been prepared and signed by the
taxpayer’s husband. It did not report income and
assets of the taxpayer. The taxpayer did not complete
and return the financial statement I had sent to her on
November 13, 2003. * * *

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

and maintain household. Salary $35,000 yr” and “Statute for

enforcement lapsed due to IRS delays”.

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

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

Court.

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 Notice 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 -

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).

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
 - 9 -

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
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
 - 10 -

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
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).]
 - 11 -

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 and Mr. Picchiottino on their filed

return. No notice of deficiency was issued to petitioner, and

petitioner has not otherwise had an opportunity to dispute her

liability for 2001. 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 IRS delays”. 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

assessment was made within the pertinent period of limitations,

the tax may be collected by levy within 10 years after the
 - 12 -

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 2001 were assessed on

June 10, 2002, and the corresponding return had been filed on

April 15, 2002. Accordingly, assessment was well within the 3-

year period of limitations. Respondent received petitioner’s

Form 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 liability for the year in issue

is not time barred.9

2. “Inability to pay”

Petitioner’s claim regarding inability to pay bears upon

issues such as collection alternatives that the Court reviews for

abuse of discretion. Action constitutes an abuse of discretion

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
enacted by Congress. Fein v. United States, 22 F.3d 631, 634
(5th Cir. 1994).
 - 13 -

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 earlier financial information, furnished by

petitioner’s former husband, had generated the temporary “not

collectible” designation made by “Compliance”. These materials

were not signed by petitioner and did not report her income and

assets. Petitioner did not submit current financial information

when asked to do so. She also failed to appear for the scheduled

hearing and thus lost that opportunity to otherwise corroborate

her claims.
 - 14 -

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 her 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

and decision for respondent

will be entered.