T.C. Memo. 2008-8
UNITED STATES TAX COURT
JOHN SHERE, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 23280-06L. Filed January 23, 2008.
John Shere, pro se.
Neal O. Abreu, for respondent.
MEMORANDUM OPINION
MARVEL, Judge: This matter is before the Court on
respondent’s motion for summary judgment filed under Rule 121.1
1
All Rule references are to the Tax Court Rules of Practice
and Procedure, and all section references are to the Internal
Revenue Code.
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Background
This is an appeal from respondent’s determination upholding
the proposed use of a levy to collect petitioner’s unpaid Federal
income tax liability for 2002. Petitioner resided in California
when the petition was filed.
Petitioner failed to file a Federal income tax return for
2002. On July 27, 2004, respondent mailed a notice of deficiency
for 2002 to petitioner. On October 22, 2004, the Court received
a letter from petitioner that was filed as petitioner’s imperfect
petition at docket No. 20485-04. By order dated October 27,
2004, the Court directed petitioner to file a proper amended
petition and pay the Court’s filing fee on or before December 13,
2004. Petitioner failed to do so. By order dated February 8,
2005, the Court dismissed petitioner’s case at docket No. 20485-
04 for lack of jurisdiction on the grounds that petitioner failed
to file a proper amended petition or pay the filing fee as
ordered.
On July 11, 2005, respondent assessed the 2002 income tax
deficiency, interest, and additions to tax for late filing and
failure to pay and mailed a notice of balance due to petitioner.
On November 12, 2005, respondent sent petitioner a Final Notice
of Intent To Levy and Notice of Your Right to a Hearing for the
year at issue. Petitioner timely submitted a Form 12153, Request
for a Collection Due Process Hearing. In his request, petitioner
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asked for a face-to-face hearing and questioned whether the
Internal Revenue Service (the Service) “follows proper
procedure”, but petitioner raised no other issue regarding the
assessed liability or the Service’s intention to collect by levy.
On June 26, 2006, the settlement officer assigned to
petitioner’s case sent petitioner a letter acknowledging
petitioner’s request for a section 6330 hearing and scheduling a
telephone conference for August 1, 2006, “to discuss with me the
reasons you disagree with the collection action and/or to discuss
alternatives to the collection action.” The officer’s letter
also stated that if the time was not convenient or petitioner
preferred a face-to-face conference, petitioner should contact
the settlement officer within 14 days of the date of the letter.
In addition, the settlement officer requested that petitioner
submit certain information before his conference, including a
completed collection information statement and related
verification, signed tax returns for 2000, 2003, and 2005, and
proof of estimated tax payments for 2006.
By letter dated July 24, 2006, petitioner responded to the
June 26, 2006, letter. Among other things, petitioner complained
about the settlement officer’s setting a hearing date without
consulting with him, and he stated that he was not able to
participate in the August 1, 2006, telephone conference.
Petitioner also stated that he had requested a face-to-face
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hearing and that he “was under the impression that [he] would be
able to dispute the liability” at his hearing because he had had
no prior opportunity to dispute it.
By letter dated July 26, 2006, the settlement officer
informed petitioner that she had scheduled a telephone conference
call for August 22, 2006, and again requested that petitioner
submit a completed collection information statement and other
information within 14 days of the date of the letter. By letter
dated August 18, 2006, petitioner responded complaining that the
settlement officer had again ignored his request for a face-to-
face hearing and advising that he would not be able to
participate in the scheduled telephone conference.
By letter dated August 21, 2006, the settlement officer
wrote a third time to petitioner. She informed petitioner that
she had not received the requested information from him, and she
gave him 14 days from the date of the letter to submit the
information. She also informed petitioner that her office would
make a determination by reviewing the administrative file and
whatever information he submitted and that she would promptly
issue a determination letter with her findings. By letter dated
August 31, 2006, petitioner responded to the August 21, 2006,
letter writing that “I am lost as to what information you are
asking from me. Please let me know what you would accept as
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evidence to challenge and disprove the liability the IRS claims I
owe.”
Petitioner did not submit any of the requested information
to the settlement officer. On October 12, 2006, the Appeals
Office issued a notice of determination that the proposed levy
action was appropriate and could proceed. Attached to the notice
was a document summarizing the issues, the background, and the
discussion and analysis supporting the determination. The
following information was included in the attachment.
1. The Service mailed a notice of deficiency to petitioner
for 2002, and he petitioned the Tax Court. Because he had a
prior opportunity to appeal the underlying liability for 2002, he
could not raise any issue regarding the underlying liability at
the collection due process hearing.
2. Petitioner was offered a face-to-face hearing if he
identified any relevant, nonfrivolous issues in writing or by
calling as requested, but he did not do so.
3. Petitioner was offered the opportunity to discuss
collection alternatives to the proposed levy action if he
provided the requested financial information, but petitioner
failed to submit the information. In addition, petitioner was
not in compliance with his filing and payment obligations.
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4. The requirements of applicable law or administrative
procedures have been met, and the actions taken were appropriate
under the circumstances.
5. Petitioner did not identify any relevant, nonfrivolous
issue.
6. The proposed levy balances the need for efficient
collection with petitioner’s concern that any collection action
be no more intrusive than necessary.
By undated letter received by the Court November 13, 2006,
petitioner indicated that he wished to appeal the notice of
determination. The Court filed the letter as petitioner’s
imperfect petition and ordered him to file a proper amended
petition. On March 15, 2007, the Court received and filed
petitioner’s amended petition. In his amended petition,
petitioner alleged as follows:
During the Collection Due Process Hearing, it is
believed that the Respondent DID NOT satisfy ALL of the
appropriate requirements. The Petitioner was NOT
allowed to challenge the liability of the assessed tax,
therefore petitioner was NOT given a fair and impartial
hearing. Petitioner requested pertinent documents and
files, but respondent REFUSED to comply. Petitioner
also requested to be provided with acceptable evidence
that would further support the Respondents’ claim of
this assessed tax. Petitioner was not allowed to
dispute any discrepancies found within Respondents’
claim of tax liability. Petitioner was NOT properly
informed of his rights. Petitioner was not given due
process.
On August 23, 2007, the Court issued petitioner a notice
setting his case for trial during its January 28, 2008, San
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Francisco, California, trial session. On October 15, 2007,
respondent filed a motion for summary judgment. On October 18,
2007, the Court ordered petitioner to respond to respondent’s
motion for summary judgment by November 9, 2007. By motion filed
on November 9, 2007, petitioner requested an extension of time to
December 14, 2007, to respond to the motion for summary judgment.
Although the Court granted petitioner’s motion, he failed to
respond by the extended deadline.
Discussion
I. Summary Judgment
Summary judgment is a procedure designed to expedite
litigation and avoid unnecessary, time-consuming, and expensive
trials. Fla. 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 presented “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(b);
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 establishing
that there is no genuine issue of material fact, and factual
inferences will be drawn in a manner most favorable to the party
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opposing summary judgment. Dahlstrom v. Commissioner, 85 T.C.
812, 821 (1985); Jacklin v. Commissioner, 79 T.C. 340, 344
(1982). The nonmoving party, however, cannot rest upon the
allegations or denials in his pleadings but must “set forth
specific facts showing that there is a genuine issue for trial.”
Rule 121(d); Dahlstrom v. Commissioner, supra at 820-821.
II. Section 6330
Section 6330(a) provides that no levy may be made on any
property or right to property of any person unless the Secretary
has notified such person in writing of the right to a hearing
before the levy is made. If the person makes a request for a
hearing, a hearing shall be held before an impartial officer or
employee of the Service’s Office of Appeals. Sec. 6330(b)(1),
(3). At the hearing, a taxpayer may raise any relevant issue,
including appropriate spousal defenses, challenges to the
appropriateness of the collection action, and collection
alternatives. Sec. 6330(c)(2)(A). A taxpayer may contest the
existence or amount of the underlying tax liability at the
hearing if the taxpayer did not receive a notice of deficiency
for the tax liability in question or did not otherwise have an
earlier opportunity to dispute the tax liability. Sec.
6330(c)(2)(B); see also Sego v. Commissioner, 114 T.C. 604, 609
(2000).
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Following a hearing, the Appeals Office must make a
determination whether the proposed levy action may proceed. The
Appeals Office is required to take into consideration: (1)
Verification presented by the Secretary that the requirements of
applicable law and administrative procedures have been met, (2)
relevant issues raised by the taxpayer, and (3) whether the
proposed levy action appropriately balances the need for
efficient collection of taxes with a taxpayer’s concerns
regarding the intrusiveness of the proposed levy action. Sec.
6330(c)(3).
Section 6330(d)(1) grants this Court jurisdiction to review
the determination made by the Appeals Office in connection with
the section 6330 hearing. Where the underlying tax liability is
not in dispute, the Court will review the determination of the
Appeals Office for abuse of discretion. Lunsford v.
Commissioner, 117 T.C. 183, 185 (2001); Sego v. Commissioner,
supra at 610; Goza v. Commissioner, 114 T.C. 176, 182 (2000). An
abuse of discretion occurs if the Appeals Office exercises its
discretion “arbitrarily, capriciously, or without sound basis in
fact or law.” Woodral v. Commissioner, 112 T.C. 19, 23 (1999).
Petitioner failed to respond to the motion for summary
judgment. Consequently, we review the motion and supporting
affidavits and exhibits to decide whether to grant the motion.
Our review confirms that there is no material issue of fact
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fairly in dispute and that respondent is entitled to summary
disposition as a matter of law.
Petitioner’s principal complaint throughout the section 6330
hearing process was directed to the underlying tax liability and
his incorrect expectation that he could challenge that liability
at the section 6330 hearing. However, the law is clear that if a
taxpayer received a notice of deficiency with respect to the
underlying liability, the taxpayer may not contest the liability
in a section 6330 hearing. Sec. 6330(c)(2)(B). The undisputed
facts confirm that petitioner received a notice of deficiency for
2002. Petitioner submitted a letter evidencing his intention to
dispute the notice, which the Court treated as an imperfect
petition to protect petitioner’s right to contest the notice of
deficiency. The resulting case was dismissed for lack of
jurisdiction because petitioner failed to comply with this
Court’s order to file a proper amended petition.
Petitioner’s other complaint was that he had requested a
face-to-face hearing. However, the undisputed facts reveal that
the settlement officer advised petitioner that she would schedule
a face-to-face hearing if petitioner identified the relevant,
nonfrivolous issues he wanted to discuss at that hearing.
Petitioner did not do so. Respondent, acting in accordance with
his administrative procedures, scheduled two telephone hearings
that petitioner did not participate in. The undisputed facts
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establish that petitioner was given an opportunity for a hearing,
and he failed to take advantage of it. Respondent reasonably
concluded that the collection action could proceed after
reviewing the administrative record and determining that the
requirements of section 6330 had been satisfied.
We conclude on the record before us that respondent did not
abuse his discretion in determining that the proposed levy could
proceed. See Peter D. Dahlin Atty. at Law, P.S. v. Commissioner,
T.C. Memo. 2007-310; Davis v. Commissioner, T.C. Memo. 2007-160.
There is no genuine issue of material fact requiring a trial in
this case, and we hold that respondent is entitled to the entry
of a decision sustaining the proposed levy as a matter of law.
An appropriate order and
decision will be entered.