T.C. Memo. 2007-175
UNITED STATES TAX COURT
WENDELL RAY HOLLOWAY, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 8779-06L. Filed July 3, 2007.
Wendell Ray Holloway, pro se.
Denise A. DiLoreto and Paul J. Krazeise, Jr., for
respondent.
MEMORANDUM OPINION
COHEN, Judge: This case was commenced in response to a
Notice of Determination Concerning Collection Action(s) Under
Section 6320 and/or 6330, sustaining a proposed levy to collect
petitioner’s Federal income taxes for 1999, 2000, and 2001. (In
the notice of determination, a proposed levy with respect to 2003
- 2 -
and 2004 was not sustained.) The issue for decision is whether
it was an abuse of discretion to sustain the proposed levy.
Unless otherwise indicated, all section references are to the
Internal Revenue Code in effect for the years in issue.
Background
Petitioner is a self-employed attorney who resided in
Kentucky at the time that his petition was filed. Petitioner was
married to Tammy S. Holloway (Ms. Holloway or petitioner’s former
spouse) from March 21, 1988, through December 16, 2003.
Petitioner and Ms. Holloway filed joint Federal income tax
returns for 1999, 2000, and 2001. Petitioner’s joint return
reflected amounts owed of $10,896.72 for 1999, $11,127 for 2000,
and $11,969 for 2001. The amounts were unpaid, and the taxes
shown on the returns were assessed.
In 2004, respondent’s Innocent Spouse Unit in Covington,
Kentucky, determined that Ms. Holloway was entitled to relief
under section 6015(f) for the underpayments shown on the joint
returns for 1999, 2000, and 2001. According to respondent’s
records, notices were sent to petitioner before and after the
decision to grant relief to his former spouse.
On May 31, 2005, Revenue Officer Sheila Stewart (Stewart)
sent to petitioner a Final Notice–-Notice of Intent to Levy and
Notice of Your Right to a Hearing, listing the amounts that were
owed on petitioner’s tax liabilities for 1999 through 2004 as
- 3 -
totaling $81,287.21. Petitioner requested a section 6330
hearing. Attached to his request was a document entitled “Notice
of Appeal, Challenge and Objection, Request for Production of
Documents, Demand for Hearing and Judicial Review, and
Counterclaim and Offset and To Dismiss Notice”. In that
document, petitioner set forth a melange of claims, including
that the Revenue officer had failed to make available to him
payment plans; that the IRS had erroneously granted relief to his
former spouse; that 2003 and 2004 liabilities were not properly
the subject of levy; that petitioner was not liable for penalties
and interest; that petitioner had a counterclaim and offset for
property taken from him when he was a minor; and numerous vague
and unsupported claims of violation of procedural regulations,
due process, and equal protection. Petitioner requested a face-
to-face hearing close to his residence. In a letter dated
September 11, 2005, he explained his position that he had sold
cattle herds during 2000 to meet the demands of his former wife,
who started divorce proceedings in 1999. He stated: “It is my
understanding that my ex-wife was granted innocent spouse status
about July 2003 even though she is the one that spent all the
money and that is the reason the two cattle herds had to be
sold.” Petitioner requested that the hearing be delayed because
of his domestic situation and his professional responsibilities.
- 4 -
A hearing was subsequently set for February 9, 2006, by
Settlement Officer Danny L. Williams (Williams). In a letter
dated January 24, 2006, petitioner requested a delay, and a
hearing was set for March 15, 2006. Prior to and during the
hearing, petitioner demanded certain information concerning the
grant of relief under section 6015(f) to his former spouse.
Williams sent to petitioner instructions for submitting a Freedom
of Information Act request. A hearing was conducted on March 15,
2006, and additional documents were sent by petitioner to
Williams after the hearing. There was no tape-recording or
transcript of the section 6330 hearing conducted by Williams with
petitioner on March 15, 2006, nor was one requested by petitioner
prior to the section 6330 hearing date. On April 13, 2006, the
Notice of Determination Concerning Collection Action(s) Under
Section 6320 and/or 6330, signed by an Appeals Team Manager, was
sent to petitioner.
The notice of determination set forth petitioner’s various
claims and accepted only petitioner’s contention with respect to
2003 and 2004. The notice analyzed petitioner’s financial
information and concluded that an offer-in-compromise was not a
viable collection alternative because he had more than sufficient
equity in his assets to pay his liability in full. The notice
stated that petitioner had been given notice of and an
opportunity to participate in the action on his former spouse’s
- 5 -
section 6015 claim, that he had not responded, and that he had
admitted receiving the notices but ignored them because
contesting them might affect his child custody battle. After
discussing each of petitioner’s claims, the notice sustained the
proposed levy action to collect the liabilities owed for 1999,
2000, and 2001.
Discussion
Petitioner requested and received a hearing under section
6330. Section 6330(c)(2) provides:
SEC. 6330(c). Matters Considered at Hearing.–-In
the case of any hearing conducted under this section--
* * * * * * *
(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
- 6 -
otherwise have an opportunity to dispute such
tax liability.
Petitioner’s liabilities were self-reported and arguably the
subject of challenge at the hearing. See Montgomery v.
Commissioner, 122 T.C. 1, 8 (2004). However, at no time has
petitioner raised a viable challenge to the amounts assessed
against him. His arguments boil down to a claim that the
Internal Revenue Service (IRS) is precluded from collecting
interest and penalties because of procedural errors. Although he
broadly alleges issues as to the amounts of tax, he has not
identified or proven any errors as to the assessed amounts.
Petitioner’s primary contention, which permeates several
different claims of violation of “due process”, is that the IRS
erroneously granted section 6015(f) relief to his former spouse.
Petitioner claims that he is entitled to raise this issue under
section 6330(c)(2)(A)(i). He argues that his wife and her
demands during divorce proceedings caused the unpaid liabilities
and that he did not receive adequate notice before she was
granted relief. He did not, however, present any persuasive or
admissible evidence in support of those claims.
In the petition in this case, in numerous meritless motions,
and in his posttrial briefs, petitioner has merely repeated his
broad unsupported assertions that he has been denied due process
of law and that the IRS has not proceeded properly. Despite the
opportunity to testify at trial, petitioner declined to do so,
- 7 -
preferring instead to submit this case on the stipulation and his
written arguments.
Respondent, on the other hand, filed a motion for summary
judgment based on a declaration of Williams “setting out the
relevant documents contained in the administrative file from the
CDP hearing”. Respondent contends that:
Testimony and/or evidence outside of the
administrative record may be admissible if the
administrative record does not completely disclose all
of the factors considered by the agency or if there is
a dispute over what happened during the hearing
process. Murphy v. Commissioner, 125 T.C. 301 (2005)
(new evidence regarding an irregularity in the conduct
of a hearing or some defect in the record may be
presented at trial, even if the record rule is
applicable). See also Robinette, 439 F.3d, at 461 (“Of
course, where a record created in informal proceedings
does not adequately disclose the basis for the agency’s
decision, then it may be appropriate for the reviewing
court to receive evidence concerning what happened
during the agency proceedings.” (citation omitted)).
The administrative record in this case, however, not
only completely discloses all of the factors that
respondent’s settlement officer considered in making
his determination, but also confirms that he did not
omit any relevant factor required to make such
determination, and petitioner has failed to allege
material facts or otherwise make a prima facie showing
that any exceptions to the record rule apply.
Respondent also alleged:
On February 10, 2005, petitioner met with
respondent’s Revenue Officer Sheila Stewart in
respondent’s Owensboro, Kentucky office to discuss
petitioner’s unpaid income tax liabilities. During
that meeting, petitioner told Revenue Officer Stewart
that he had received the prior correspondence sent to
him by respondent’s Innocent Spouse Unit in Cincinnati,
Ohio, regarding the innocent spouse relief claim filed
by Tammy S. Holloway and that he did not contest or
otherwise dispute such claim by her because he feared
- 8 -
that it may affect the disposition of his child custody
dispute with her in their pending divorce action.
Declaration Exhibit Y.
The declaration of Williams was attached to respondent’s motion,
but there was no declaration from Stewart. Exhibit Y was an
unsigned printout of a “case history” of petitioner and
Ms. Holloway. Because petitioner disputed the completeness of
the administrative record and the factual assertions made,
including his alleged admissions to Stewart concerning his
receipt of notice of the claims of Ms. Holloway, respondent’s
motion for summary judgment was denied. Respondent did not call
any witnesses at trial.
Although respondent repeats in the briefs the allegations of
statements made to Stewart and claims that those statements are
admissions and exceptions to the hearsay rule, there is no
evidence that petitioner made the statements to Stewart.
Petitioner denies making the statements, though not under oath.
Thus, there is no admissible evidence in the record as to whether
the statements were made or not made. For the reasons explained
below, we conclude that the disputed admissions are irrelevant to
our decision.
Respondent also argues that we are bound by the
administrative record in this case, notwithstanding petitioner’s
disputes about omissions from and inadequacy of the
administrative record. Because no testimony was offered at
- 9 -
trial, we do not need to consider whether testimony in addition
to the administrative record may be considered. The stipulation
includes documents that were not included in the administrative
record in this case, and respondent has maintained a relevance
objection to those documents. Because we agree with respondent’s
relevance objection, we need not address respondent’s contention
that we are limited to the administrative record.
Married taxpayers who elect to file a joint Federal income
tax return are jointly and severally liable for the entire tax
due for the year of the return. Sec. 6013(d)(3). A spouse (a
requesting spouse) may seek relief from joint and several
liability by following the procedures established in section
6015. If the disputed liability involves nonpayment of taxes
shown on a joint return, the only relief available is under
section 6015(f). See Washington v. Commissioner, 120 T.C. 137,
146-147 (2003). Thus, the relief pursued by and granted to
Ms. Holloway was relief under section 6015(f).
Under the circumstances of this case, petitioner is fully
responsible for the unpaid amounts, whether or not Ms. Holloway
is also responsible. Petitioner has provided neither reason nor
authority supporting his assertion that relief given to
Ms. Holloway should preclude the proposed levy against his assets
or that his claim is the type of “spousal defense” contemplated
under section 6330. Neither he nor the Court has the ability to
- 10 -
require the IRS to collect unpaid amounts from her rather than
from him. Cf. Baranowicz v. Commissioner, 432 F.3d 972 (9th Cir.
2005); Kovitch v. Commissioner, 128 T.C. 108 (2007); Maier v.
Commissioner, 119 T.C. 267 (2002), affd. 360 F.3d 361 (2d Cir.
2004); Miller v. Commissioner, 115 T.C. 582, 586-588 (2000),
affd. 21 Fed. Appx. 160 (4th Cir. 2001).
Petitioner contends that the failure to record the hearing
and the failure to have certain documents in the form of
admissible evidence make the determination “null, void, and
unenforceable”; that the assignment of his hearing to a
Settlement Officer rather than an Appeals Officer and the
issuance of the notice of determination signed by an Appeals Team
Manager were denials of due process and render the notice
“unenforceable”; and that certain IRS employees were not
competent to take the steps reflected in the administrative
record. Although petitioner had the option, under section 7521,
to request in advance that the hearing be recorded, he has
stipulated that he did not make such a request. Despite his
rhetoric, petitioner has not shown any requirement of law that
was not followed by the persons involved. He has not
acknowledged or distinguished law contrary to his contentions.
See, e.g., Living Care Alternatives of Utica, Inc. v. United
States, 411 F.3d 621, 624 (6th Cir. 2005); Cox v. Commissioner,
- 11 -
126 T.C. 237, 246-248 (2006); Elmore v. Commissioner, T.C. Memo
2003-123.
Petitioner has not addressed his financial circumstances
that were determined in the notice to preclude alternative means
of collection. He raises new issues, such as claims that certain
assets are exempt, only in his reply brief, and therefore those
issues will not be considered. Again his arguments are not
supported by evidence or authority. We need not and will not
address all of them. The abuse of discretion standard requires
the Court to decide whether the challenged determination was
arbitrary, capricious, or without sound basis in fact or law.
See Woodral v. Commissioner, 112 T.C. 19, 23 (1999). After
considering petitioner’s lengthy submissions and the lack of
evidentiary or legal support for his claims, we conclude that he
has shown neither error nor abuse of discretion in the notice of
determination.
Decision will be entered
for respondent.