T.C. Summary Opinion 2008-58
UNITED STATES TAX COURT
MARKO FILIPOVICH, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 13302-06S. Filed May 21, 2008.
Marko Filipovich, pro se.
Mayer Y. Silber, for respondent.
GOLDBERG, Special Trial Judge: This case was heard pursuant
to the provisions of section 7463 of the Internal Revenue Code in
effect at the time the petition was filed. Pursuant to section
7463(b), the decision to be entered is not reviewable by any
other court, and this opinion shall not be treated as precedent
for any other case. Unless otherwise indicated, subsequent
section references are to the Internal Revenue Code.
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Petitioner filed a petition with this Court in response to a
Notice of Determination Concerning Collection Action(s) Under
Section 6320 and/or 6330 (notice of determination) for 2002 and
2003. Pursuant to section 6330(d), petitioner seeks review of
respondent’s determination. The issue for decision is whether
respondent abused his discretion by sustaining the filing of a
Federal tax lien.
Background
Some of the facts have been stipulated and are so found.
The stipulation of facts and the exhibits received into evidence
are incorporated herein by reference. At the time the petition
was filed, petitioner resided in Illinois.
Petitioner has a longstanding history of not paying his
Federal income taxes. Specifically, petitioner failed to pay his
Federal income taxes due for taxable years 1993 through 2003.
Petitioner filed his Forms 1040, U.S. Individual Income Tax
Return, for 2002 and 2003 on August 11, 2003, and December 14,
2004, respectively, and the amounts reported due for those years,
$4,991 and $11,337, respectively, were assessed.
A notice and demand for payment was mailed to petitioner
within 60 days of each assessment as required under section 6303.
In response, petitioner submitted an offer-in-compromise (OIC) on
June 6, 2005. In his OIC petitioner offered $750 to settle in
full his unpaid taxes for the years 1993 through 2003. On August
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19, 2005, the Internal Revenue Service (IRS) rejected
petitioner’s OIC, and petitioner protested by letter received by
the IRS on September 22, 2005. On November 10, 2005, respondent
notified petitioner that his protest was untimely and that his
file was being returned to the offer unit.
On August 19, 2005, Letter 3172, Notice of Federal Tax Lien
Intent to Levy and Your Right to a Hearing under Section 6320
(notice of Federal tax lien), was mailed to petitioner with
respect to the years at issue. The notice of Federal tax lien
indicated that a Federal tax lien could be filed at any time. A
notice of Federal tax lien was filed against petitioner on August
30, 2005, at the office of the Recorder of Deeds for DuPage
County, Illinois.
On September 9, 2005, petitioner submitted Form 12153,
Request for a Collection Due Process Hearing, in which he claimed
that the notice of Federal tax lien was filed as an act of
retaliation by the same Appeals officer who, he claimed, denied
his OIC. Petitioner also claimed that sustaining the notice of
Federal tax lien would “not be in the best interest of the
government” and that it would impair his ability to find a job.
On October 7, 2005, petitioner filed a bankruptcy petition
under chapter 7 of the Bankruptcy Code in the U.S. Bankruptcy
Court for the Northern District of Illinois. On January 30,
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2006, the bankruptcy court granted a discharge of petitioner’s
Federal tax liabilities for taxable years 1993 through 2001.
On March 7, 2006, the collection due process hearing was
held between petitioner and Appeals Officer Karin Banks (Ms.
Banks), who had earlier mailed to petitioner a letter that listed
the statutory requirements to obtain a withdrawal of a notice of
Federal tax lien pursuant to section 6323(j). During the hearing
petitioner presented an account of his financial situation and
reiterated his interest in making an OIC. On the basis of her
review of the financial information provided by petitioner, Ms.
Banks did not extend an offer to settle the tax liabilities owed.
Petitioner did not offer any arguments as to why the notice
of Federal tax lien should be withdrawn pursuant to section
6323(j). Petitioner only reiterated his position that the
Appeals officer who denied his $750 OIC filed the notice of
Federal tax lien in retaliation.
On June 6, 2006, the Appeals Office in Chicago issued
petitioner a notice of determination sustaining the filing of the
notice of Federal tax lien and finding that none of the statutory
requirements for withdrawal pursuant to section 6323(j) had been
met. In response to the notice of determination, petitioner
timely filed his petition with this Court on July 11, 2006.
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Discussion
As this case does not concern petitioner’s underlying
Federal income tax liabilities, the Court’s review falls under
the abuse of discretion inquiry of section 6330. See Sego v.
Commissioner, 114 T.C. 604, 610 (2000); Goza v. Commissioner, 114
T.C. 176, 182 (2000). This standard requires the Court to decide
whether respondent’s rejection of petitioner’s request to have
the Federal tax lien withdrawn was arbitrary, capricious, or
without sound basis in fact or law. See Woodral v. Commissioner,
112 T.C. 19, 23 (1999); Keller v. Commissioner, T.C. Memo. 2006-
166; Fowler v. Commissioner, T.C. Memo. 2004-163.
Section 6321 imposes a lien in favor of the United States on
all property and rights to property of a person liable for tax
and any additions to tax, penalties, interest, and costs that may
accrue in addition thereto if there has been a demand for payment
and the person has failed to pay. Iannone v. Commissioner, 122
T.C. 287, 293 (2004). This lien arises at the date of the
assessment. Sec. 6322. So that the Federal tax lien will take
precedence over other liens or security interest, the IRS must
file a notice of Federal tax lien. Sec. 6323(a); Behling v.
Commissioner, 118 T.C. 572, 575 (2002).
Section 6323(j) provides in pertinent part:
SEC. 6323(j). Withdrawal of Notice in Certain
Circumstances.--
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(1) In general.–-The Secretary may
withdraw a notice of lien filed under this
section * * * if the Secretary determines
that–-
(A) the filing of such notice was
premature or otherwise not in accordance
with administrative procedures of the
Secretary,
(B) the taxpayer has entered into an
agreement under section 6159 to satisfy the
tax liability for which the lien was
imposed by means of installment payments,
unless such agreement provides otherwise,
(C) the withdrawal of such notice
will facilitate the collection of the tax
liability, or
(D) with the consent of the taxpayer
or the National Taxpayer Advocate, the
withdrawal of such notice would be in the
best interests of the taxpayer (as
determined by the National Taxpayer
Advocate) and the United States.
Petitioner contends, for the following reasons, that Ms.
Banks abused her discretion by failing to withdraw the notice of
Federal tax lien: (1) Under section 6323(j)(1)(C)--because the
withdrawal of the notice would help facilitate the collection of
tax; and (2) under section 6323(j)(1)(D)--because it serves no
purpose other than to retaliate against petitioner and prevent
him from securing a job. For the reasons discussed infra, we
disagree with petitioner.
At the outset, we note that although petitioner has not
challenged the administrative procedures followed in the filing
of the notice of Federal tax lien, we find that the notice of
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Federal tax lien was not filed prematurely. The filing of the
Federal tax lien took place after assessment and notice and
demand, and at each step petitioner was properly notified.
Petitioner offered not one scintilla of evidence to show how
the withdrawal of the notice of Federal tax lien would facilitate
the collection of the liabilities owed. In fact, looking at the
long history of petitioner’s failure to pay Federal income taxes,
coupled with his filing a petition for bankruptcy under chapter
7, it is obvious to the Court that the IRS would have no easier
time collecting the liabilities without the filing of a notice of
Federal tax lien than with it being filed. It is our opinion
that the Appeals officer correctly determined that a withdrawal
of the notice of Federal tax lien would not be in the best
interests of the Government given petitioner’s history of
nonpayment and his financial status. Moreover, by sustaining the
notice of Federal tax lien, respondent properly protected the
Government’s interests in petitioner’s assets.
Petitioner also contends that an abuse of discretion
occurred when Ms. Banks refused to accept a second OIC at the
hearing. He claims that Ms. Banks’s rejection of that OIC, based
on her knowledge of his failure to pay past and current taxes,
constituted an abuse of discretion. We disagree. In Giamelli v.
Commissioner, 129 T.C. 107, 111-112 (2007), we held that a
“Reliance on a failure to pay current taxes in rejecting a
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collection alternative does not constitute an abuse of
discretion.” Moreover, during the hearing petitioner was never
clear as to what amount he would be willing to pay to settle his
outstanding liabilities. We view his demeanor at that hearing to
be nothing more than uncooperative so as to prolong this matter
and, accordingly, the time at which he would be finally required
to pay the amounts owed.
As to petitioner’s argument that the filing and sustaining
of the notice of Federal tax lien was an act of retaliation by
Ms. Banks, petitioner provided no specific evidence in support of
this accusation. Moreover, we are not convinced that Ms. Banks
was even the Appeals officer responsible for rejecting
petitioner’s original OIC. Even if she was, there is no evidence
to support petitioner’s contention that the notice of Federal tax
lien filed against him was the result of a personal vendetta on
the part of Ms. Banks. In short, we find petitioner’s assertion
that the notice of Federal tax lien was filed as a retaliatory
act to be both inflammatory and without merit.
Petitioner did not offer any evidence pursuant to section
6323(j)(1)(D) to support his contention that the National
Taxpayer Advocate determined that a withdrawal of the notice of
Federal tax lien would be in the best interests of petitioner and
the United States. The record contains a letter dated December
16, 2004, from the National Taxpayer Service in Chicago,
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Illinois. This letter does not contain any determination on the
part of the National Taxpayer Advocate. To wit, the letter was
sent to petitioner long before the notice of Federal tax lien was
filed. The letter only relates information regarding what
publications petitioner should refer to for an explanation of the
collections process.
Finally, petitioner did not offer any evidence to support
his contention that the withdrawal would allow him to secure a
job. This assertion is purely conjecture.
On our review of the record, we conclude that respondent’s
Appeals officer did not abuse her discretion in sustaining the
notice of Federal tax lien.
To reflect the foregoing,
Decision will be entered
for respondent.