Onyeulo v. Comm'r

T.C. Summary Opinion 2008-87

UNITED STATES TAX COURT

CHARLES O. ONYEULO, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 17352-06S. Filed July 21, 2008.

Charles O. Onyeulo, pro se.

Marc L. Caine, for respondent.

PANUTHOS, Chief 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
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Revenue Code as amended, and all Rule references are to the Tax

Court Rules of Practice and Procedure.

This collection case is before the Court on respondent’s

motion for summary judgment filed pursuant to Rule 121 and

petitioner’s objection thereto.

Background

Petitioner lived in New York when he filed the petition.

The following facts are uncontested or established by the record.

Petitioner and his former spouse (hereafter Mrs. Onyeulo)

timely filed joint Federal income tax returns for 1996 and 1997.

Respondent examined those returns and determined deficiencies

related to disallowed deductions for a business petitioner owned

and operated. During the examination petitioner and respondent’s

examiner exchanged correspondence and held meetings. Petitioner

signed Forms 4549-CG, Income Tax Examination Changes, for 1996

and for 1997. There is nothing in the record indicating that

Mrs. Onyeulo signed either Form 4549-CG. The following language

appears directly above petitioner’s signature on each of the

Forms 4549-CG:

Consent to Assessment and Collection - I do not wish to
exercise my appeal rights with the Internal Revenue Service
or to contest in United States Tax Court the findings in
this report. Therefore, I give my consent to the immediate
assessment and collection of any increase in tax and
penalties * * *.

During the examination respondent learned that petitioner

and Mrs. Onyeulo had two separate residences: One in New York,
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the other in Ohio. Respondent mailed a statutory notice of

deficiency to petitioner and Mrs. Onyeulo at both the New York

and Ohio addresses. The notice of deficiency determined

deficiencies and accuracy-related penalties for 1996 and 1997

identical to the deficiencies and penalties listed in the Forms

4549-CG.1 Neither petitioner nor Mrs. Onyeulo filed a petition

in response to the notice of deficiency.2 Petitioner denied

receiving the notice of deficiency.

Respondent filed a notice of Federal tax lien reflecting tax

liabilities of $7,000 and $11,497 for 1996 and 1997,

respectively. Respondent mailed petitioner a Notice of Federal

Tax Lien Filing and Your Right to a Hearing Under IRC 6320.

Petitioner responded with a timely Form 12153, Request for a

Collection Due Process Hearing. Petitioner challenged the

1
Petitioner and Mrs. Onyeulo executed Form 872, Consent to
Extend the Time to Assess Tax, which extended the assessment
period to June 30, 2001. Respondent mailed the notice of
deficiency on Sept. 22, 2000. It is not clear from this record
why respondent issued a notice of deficiency to petitioner.
Respondent’s counsel could not explain why a notice was issued
given that petitioner signed Forms 4549-CG, Income Tax
Examination Changes.

The notice of deficiency and Form 4549-CG for 1996 reflect
a deficiency of $7,003 and a sec. 6662 penalty of $1,401. The
notice of deficiency and Form 4549-CG for 1997 reflect a
deficiency of $11,497 and a sec. 6662 penalty of $2,299.
2
At a time not apparent from the record, but after the
issuance of the notice of deficiency, respondent granted Mrs.
Onyeulo relief under sec. 6015 for the joint Federal income tax
liabilities for 1996 and 1997. She is not a party to this
proceeding.
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underlying tax liabilities, asserting that his business was not

profitable. He further asserted that respondent’s agents

mishandled petitioner’s documentation.

Petitioner raised only challenges to the underlying tax

liabilities during a telephone conference. The settlement

officer (SO) informed petitioner that he could not challenge the

underlying tax liabilities with the Appeals Office during the

collection hearing because he had previously had an opportunity

to dispute those liabilities. The SO advised petitioner that he

could seek an audit reconsideration to request review of the

determination and assessment.

Respondent issued a notice of determination concerning

collection action which stated that the SO verified that the

legal and procedural requirements had been met, addressed the

relevant issues petitioner raised, and considered whether the

proposed collection action balanced the need for efficient

collection with the concern that collection be no more intrusive

than necessary. Respondent sustained the filing of the Federal

tax lien.

In his timely petition for review of the collection action,

petitioner disputed the accuracy and fairness of the deficiency

determinations and asked the Court to vacate his tax liabilities

for 1996 and 1997.
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Respondent filed a motion for summary judgment, and

petitioner and respondent’s counsel appeared and were heard at a

hearing on the motion.

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 material fact and a

decision may be rendered as a matter of law. Rule 121(a) and

(b). The moving party bears the burden of proving that there is

no genuine issue of material fact, and factual inferences are

viewed in the light most favorable to the nonmoving party. Craig

v. Commissioner, 119 T.C. 252, 260 (2002); Dahlstrom v.

Commissioner, 85 T.C. 812, 821 (1985); Jacklin v. Commissioner,

79 T.C. 340, 344 (1982). The party opposing summary judgment

must set forth specific facts which show a genuine question of

material fact exists and may not rely merely on allegations or

denials in the pleadings. Grant Creek Water Works, Ltd. v.

Commissioner, 91 T.C. 322, 325 (1988); Casanova Co. v.

Commissioner, 87 T.C. 214, 217 (1986).

In reviewing the Commissioner’s decision to sustain

collection actions, where the validity of the underlying tax

liability is properly at issue, the Court reviews the

Commissioner’s determination of the underlying tax liability de
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novo. Sego v. Commissioner, 114 T.C. 604, 610 (2000); Goza v.

Commissioner, 114 T.C. 176, 181-182 (2000). The Court reviews

any other administrative determination regarding proposed

collection actions for an abuse of discretion. Sego v.

Commissioner, supra at 610; Goza v. Commissioner, supra at 182.

If the Court finds that a taxpayer is liable for deficiencies,

additions to tax, and/or penalties, then the Commissioner’s

administrative determination sustaining the collection action

will be reviewed for an abuse of discretion. See Downing v.

Commissioner, 118 T.C. 22, 31 (2002); Godwin v. Commissioner,

T.C. Memo. 2003-289, affd. 132 Fed. Appx. 785 (11th Cir. 2005).

A lien automatically attaches to the real and personal

property, and rights therein, of a person liable to pay any tax

who neglects or refuses to pay such tax after demand. Sec. 6321.

Section 6320 requires that the Secretary give the taxpayer

written notice of the filing of a tax lien. Section

6320(a)(3)(B) and (b)(1) provides that the notice shall inform

such person of the right to request a hearing in the

Commissioner’s Appeals Office. A collection hearing reviewing

the filing of a Federal tax lien follows the procedures set forth

in section 6330(c), (d), and (e). Sec. 6320(c).

Collection hearings are to be conducted by the

Commissioner’s Office of Appeals, and the Appeals officer

conducting the hearing must verify that the requirements of any
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applicable law or administrative procedure have been met. Sec.

6330(b)(1), (c)(1). At the hearing the taxpayer may raise “any

relevant issue” relating to the unpaid tax or the collection

action. Sec. 6330(c)(2)(A). The taxpayer may also raise

challenges to the existence or amount of the underlying tax

liability if the taxpayer did not receive any statutory notice of

deficiency with respect thereto or did not otherwise have an

opportunity to dispute the liability. Sec. 6330(c)(2)(B).

At the conclusion of the hearing, the Appeals officer must

determine whether and how to proceed with collection and shall

consider: (1) The verification that the procedural and statutory

requirements have been followed; (2) the relevant issues raised

by the taxpayer; (3) where permitted, the taxpayer’s challenges

to the underlying tax liability; and (4) whether the collection

action properly balances collection efficiency and intrusiveness.

Sec. 6330(c)(3).

Respondent contends that he is entitled to summary judgment

because the only issue petitioner raised during the collection

hearing was his challenge to the underlying tax liabilities.

Respondent argues that petitioner’s receipt of the notice of

deficiency and/or his other opportunity to dispute the underlying

tax liabilities precluded him from raising such a challenge,

citing section 6330(c)(2)(B).
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As noted, petitioner alleges that he did not receive the

notice of deficiency for 1996 and 1997. Because this is a

summary judgment proceeding, we view factual inferences in the

light most favorable to the nonmoving party. See Craig v.

Commissioner, supra at 260. The disputed receipt of the notice

of deficiency may raise a genuine issue of material fact;

however, there is an additional basis for denying petitioner the

opportunity to challenge the underlying tax liabilities. Section

6330(c)(2)(B) is stated in the disjunctive; a taxpayer may

challenge the existence or amount of the underlying tax liability

if he did not (a) receive a notice of deficiency or (b) otherwise

have an opportunity to dispute the tax liability.

The record shows that petitioner executed Forms 4549-CG for

1996 and 1997. By signing Forms 4549-CG a taxpayer acknowledges

that he had an opportunity to dispute the subject tax liabilities

and waives that right to challenge those liabilities before

payment. Zapara v. Commissioner, 124 T.C. 223, 228 (2005); Horn

v. Commissioner, T.C. Memo. 2002-207; see Aguirre v.

Commissioner, 117 T.C. 324, 327 (2001). Therefore, even though

petitioner disputes receiving the notice of deficiency, his

execution of the Forms 4549-CG satisfied the alternate prong of

section 6330(c)(2)(B) and precluded him from challenging the

underlying tax liabilities in the collection proceeding.
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Finally, as stated in the notice of determination, the SO

verified that the procedural and administrative requirements had

been met and considered whether the proposed collection action

balanced intrusiveness and collection efficiency. See sec.

6330(c)(3).

The only issue petitioner raised at the collection hearing,

in his petition, and at the hearing on the motion for summary

judgment was his challenge to the underlying tax liabilities. As

discussed, petitioner was precluded from challenging the

underlying tax liabilities before the SO. It follows that it was

not an abuse of discretion for the SO to refuse to entertain such

a challenge. We conclude that no genuine issue of material fact

remains and hold that respondent is entitled to judgment as a

matter of law. We shall grant respondent’s motion for summary

judgment. Respondent’s determination sustaining the Federal tax

lien is sustained.

To reflect the foregoing,

An appropriate order and

decision will be entered.