T.C. Memo. 2007-142
UNITED STATES TAX COURT
ORLUN K. JONES, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 10990-06L. Filed June 5, 2007.
Donald W. MacPherson, for petitioner.
Rachael J. Zepeda, for respondent.
MEMORANDUM OPINION
THORNTON, Judge: This case is before the Court on
respondent’s motion for summary judgment.1 We shall grant
respondent’s motion.
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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Background
The record reveals or the parties do not dispute the
following:
Petitioner failed to file Federal income tax returns for
1985, 1986, 1987, 1988, 1989, 1990, 1991, and 1992. By three
separate notices of deficiency dated December 8, 1995, respondent
determined these deficiencies in and additions to petitioner’s
tax:
Additions to Tax
Sec. Sec.
Year Deficiency 6651(a)(1) 6654
1985 $37,138 $9,285 $2,128
1986 95,433 23,858 4,619
1987 105,703 26,426 5,708
1988 71,986 17,997 4,601
1989 516,660 129,165 34,941
1990 717,686 179,422 47,254
1991 1,023,198 255,800 58,855
1992 1,307,844 326,961 57,040
Petitioner received the notices of deficiency but did not
petition the Tax Court with respect thereto.
On November 2, 2004, respondent mailed petitioner a Notice
of Intent to Levy and Notice of Your Right to a Hearing for
taxable years 1985 through 1992. This notice indicated that
petitioner’s unpaid liability, including interest, totaled $14.8
million. In response to this notice, on November 23, 2004,
petitioner submitted a Form 12153, Request for a Collection Due
Process Hearing, challenging the proposed levy on grounds of
doubt as to liability and doubt as to collectibility. On January
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24, 2005, respondent mailed to petitioner a Notice of Federal Tax
Lien Filing and Your Right to a Hearing Under IRC 6320 for
taxable years 1985 through 1992. In response to this notice, on
February 8, 2005, petitioner submitted a Form 12153, Request for
a Collection Due Process Hearing, challenging the filing of the
Federal tax lien on the ground that “the tax assessment numbers
are grossly overstated”.
On November 1, 2005, a telephonic hearing was held between
petitioner’s representative and respondent’s Appeals officer.
Petitioner submitted no offer-in-compromise or other collection
alternative during the hearing.
By two separate notices of determination dated May 11, 2006,
respondent sustained the proposed levy action and the filing of
the notice of Federal tax lien.2 On June 12, 2006, while
residing in California, petitioner filed a timely petition for
review of respondent’s determinations.
2
The notices of determination indicate that in telephone
calls on Feb. 23 and 27, 2006, petitioner’s representative was
asked what petitioner would like to do with respect to collection
alternatives but “No meaningful response was received.” The
notices of determination indicate that the Appeals officer
nevertheless considered collection alternatives but concluded
that they were inappropriate because petitioner’s Form 433A,
Collection Information Statement for Individuals, was incomplete
and contained “numerous unexplained and seemingly contradictory
statements”.
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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 where there is no genuine issue of any material fact, and
a decision may be rendered as a matter of law. Rule 121(a) and
(b); see 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). 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). When a motion for summary judgment is
made and properly supported, the adverse party may not rest upon
mere allegations or denials of the pleadings but must set forth
specific facts showing that there is a genuine issue for trial.
Rule 121(d).
Because petitioner received statutory notices of deficiency
with respect to the taxable years at issue but failed to petition
this Court to redetermine the deficiencies, he is not entitled to
challenge his underlying tax liability in this collection
proceeding. See sec. 6330(c)(2)(B); Sego v. Commissioner, 114
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T.C. 604, 610 (2000). Accordingly, we review the Appeals
officer’s determinations for abuse of discretion. See id.
Petitioner contends that on February 8, 2005 (the same date
he submitted a Form 12153 requesting a hearing with respect to
the Federal tax lien filing), he requested audit reconsideration.
Petitioner contends that he repeatedly requested that the Appeals
officer’s determination should await the results of the requested
audit reconsideration, so that petitioner could determine what
collection alternative, if any, might be appropriate. Petitioner
contends that the Appeals officer abused his discretion by
issuing his determinations before the request for audit
reconsideration had been acted upon.3
We disagree. Pursuant to the applicable regulations, the
Appeals Office shall “attempt to conduct a * * * [section 6330
hearing] and issue a Notice of Determination as expeditiously as
possible under the circumstances.” Sec. 301.6330-1(e)(3), Q&A-
E9, Proced. & Admin. Regs.; see Murphy v. Commissioner, 125 T.C.
301, 322 (2005) (“‘there is neither a requirement nor reason that
the Appeals officer wait a certain amount of time before
rendering his determination as to a proposed levy’” (quoting
Clawson v. Commissioner, T.C. Memo. 2004-106)), affd. 469 F.3d 27
3
Petitioner contends that on Feb. 15, 2007, he received
notification from the IRS of audit reconsideration and has since
submitted information and returns to the audit reconsideration
agent.
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(1st Cir. 2006). The Appeals officer did not abuse his
discretion by declining to delay his determinations to await the
uncertain outcome of petitioner’s eleventh-hour request for audit
reconsideration and the uncertain outcome of any audit
reconsideration that might be granted.
Petitioner contends that notwithstanding section
6330(c)(2)(B), which precluded him from challenging his
underlying liability in the collection hearing, he should have
been permitted to make an offer-in-compromise on the basis of
doubt as to liability, pursuant to sections 6330(c)(2)(A)(iii)
and 7122. The short answer is petitioner never made any offer-
in-compromise. Accordingly, the Appeals officer did not abuse
his discretion in failing to consider any offer-in-compromise.
See Kindred v. Commissioner, 454 F.3d 688, 696 (7th Cir. 2006)
(characterizing as “frivolous” an argument that the taxpayers
should have been allowed to submit an offer-in-compromise in a
collection hearing, where the taxpayers never actually made an
offer-in-compromise); Kendricks v. Commissioner, 124 T.C. 69, 79
(2005).
On the basis of our review of the record, we conclude that
there is no genuine dispute as to a material fact. Petitioner
has failed to make a valid challenge to the appropriateness of
respondent’s intended collection action or offer alternative
means of collection. In the absence of a valid issue for review,
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we conclude that respondent is entitled to judgment as a matter
of law and sustain respondent’s determinations sustaining the
proposed levy and the filing of the notice of Federal tax lien.
To reflect the foregoing,
An appropriate order
and decision will be entered.