T.C. Memo. 2008-241
UNITED STATES TAX COURT
MICHAEL P. COGHLAN, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 19460-06L. Filed October 28, 2008.
Michael P. Coghlan, pro se.
Gregory J. Stull, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
FOLEY, Judge: The issue for decision is whether respondent
abused his discretion in sustaining the decision to file a notice
of Federal tax lien relating to petitioner’s 2000 and 2002 tax
liabilities.
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FINDINGS OF FACT
On October 30, 2003, petitioner untimely filed his 2000
Federal income tax return on which he reported, but did not pay,
a $39,514 outstanding liability and elected married filing
separately status. In a notice and demand for payment issued on
November 24, 2003, respondent determined that petitioner was
liable for the self-reported underpayment and section 6651(a)(1)
and (2)1 additions to tax bringing his total outstanding
liability to $58,929.
On May 5, 2004, respondent placed petitioner’s 2000 account
in currently noncollectible (CNC) status, and on May 15, 2004,
issued petitioner a Final Notice of Intent to Levy and Notice of
Your Right to a Hearing relating to petitioner’s 2000 and 2002
unpaid income tax liabilities. On June 16, 2004, respondent
received petitioner’s Form 12153, Request for a Collection Due
Process Hearing, in which petitioner disputed the proposed levy.
On November 19, 2004, Ms. Norman, a settlement officer, held a
face-to-face hearing (levy hearing) with petitioner. During the
levy hearing, petitioner disputed the balance due with respect to
the 2000 tax liability. Respondent, in a Notice of Determination
Concerning Collection Action(s) Under Section 6320 and/or 6330
(notice of determination) issued on March 24, 2005, recommended
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code of 1986, as amended and in effect for
the years in issue.
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that petitioner’s CNC status remain in effect until his financial
status improved.
On May 1, 2005, petitioner submitted to respondent a $6,492
offer-in-compromise (OIC). On June 12, 2005, petitioner
increased the OIC to $12,000. On October 3, 2005, respondent
rejected the revised OIC, and petitioner appealed the rejection.
Respondent subsequently sustained his decision.
On October 13, 2005, respondent issued petitioner a Notice
of Federal Tax Lien Filing and Your Right to a Hearing Under IRC
6320 (lien notice) relating to 2000 and 2002. On November 11,
2005, petitioner filed the Form 12153 to dispute the validity of
the tax lien and the underlying liability relating to 2000. On
January 26, 2006, Mr. Engelbrecht, a settlement officer in
Memphis, scheduled a telephone hearing for February 28, 2006. By
a letter dated February 7, 2006, petitioner requested a face-to-
face hearing.
On February 13, 2006, the Memphis Appeals Office transferred
the hearing request to respondent’s Chicago Appeals Office. In a
letter dated May 18, 2006, Ms. Dismukes, a settlement officer in
Chicago, scheduled a June 19, 2006, telephone hearing with
petitioner. On June 15, 2006, petitioner, who had financial
information he wanted the settlement officer to review, left Ms.
Dismukes a voice mail message requesting a face-to-face hearing.
On June 16, 2006, Ms. Dismukes returned petitioner’s call.
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During the telephone conversation, petitioner requested that the
lien be released, explained the circumstances relating to the
filing of his 2000 income tax return, and reiterated his desire
for a face-to-face hearing. In response, Ms. Dismukes explained
the Appeals process, informed petitioner that he had not
established a basis for withdrawal of the lien, and scheduled a
face-to-face hearing for June 30, 2006. On June 28, 2006,
petitioner left Ms. Dismukes a voicemail message stating that he
would like to reschedule the hearing. Ms. Dismukes did not
return petitioner’s call or reschedule the hearing.
On August 22, 2006, respondent issued a notice of
determination denying petitioner’s appeal relating to the filing
of the tax lien. On September 25, 2006, petitioner, while
residing in Illinois, filed his petition with this Court seeking
a review of the notice of determination.
OPINION
Section 6320 provides for Tax Court review of the
Commissioner’s administrative determinations to proceed with the
collection of tax liabilities. Section 6320(b)(1) provides that
if a taxpayer requests a hearing, “such hearing shall be held by
the Internal Revenue Service Office of Appeals.” Section 6320(c)
provides that section 6330 shall apply to the conduct and
judicial review of the hearing. Section 6320 hearings are
informal proceedings and may, but are not required to, consist of
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a face-to-face meeting, one or more written or oral
communications between an Appeals officer and the taxpayer, or
some combination thereof. Sec. 301.6320-1(d)(2), Q&A-D6, Proced.
& Admin. Regs.; see Katz v. Commissioner, 115 T.C. 329, 337
(2000). Ordinarily, a taxpayer who presents in the request
relevant, nonfrivolous reasons for disagreement with the proposed
levy will be offered an opportunity for a face-to-face hearing at
the Appeals Office closest to the taxpayer’s residence. Sec.
301.6320-1(d)(2), Q&A-D7, Proced. & Admin. Regs.
The taxpayer may raise at the Appeals Office hearing any
relevant issue relating to the unpaid tax or the lien notice
including spousal defenses, challenges to the appropriateness of
the collection actions, and offers of collection alternatives.
Sec. 6330(c)(2)(A). A taxpayer may also raise the underlying tax
liability if the person did not receive a notice of deficiency
for, or did not otherwise have an opportunity to dispute, the tax
liability. Sec. 6330(c)(2)(B). Following the hearing, the
Appeals Officer must determine whether the collection action may
proceed, taking into account verification that all requirements
of any applicable law or administrative procedure have been met,
relevant issues raised during the hearing, and whether the
collection action balanced the need for the efficient collection
of taxes with the intrusiveness of the collection action. See
sec. 6330(c)(3).
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Petitioner contends that he was not afforded an appropriate
hearing and that Ms. Dismukes failed to meet him face-to-face.
Ms. Dismukes and petitioner had a telephone conversation on June
16, 2006, during which petitioner raised issues relating to the
tax liability and the lien action. On multiple occasions,
petitioner requested a face-to-face hearing to allow him to
present information regarding his financial status and
responsibilities (i.e., child support payments, counseling
expenses, and health insurance premiums). Petitioner further
contends that he was not given the opportunity to assert that
these financial considerations were justifications to abate his
tax liability.
Even though petitioner was not afforded a face-to-face
hearing, he has not been prejudiced. Furthermore, petitioner
requested that the Court not remand his case to the Appeals
Office. It is neither necessary nor productive to remand this
case. See Nestor v. Commissioner, 118 T.C. 162, 167 (2002);
Lunsford v. Commissioner, 117 T.C. 183, 189 (2001). Moreover,
release of the lien is not justified. See sec. 6325(a).
Petitioner also contends that he was defrauded by his former
wife who elected married filing separately, rather than married
filing jointly, status. Petitioner claims that his tax liability
would have been lower had they filed a joint 2000 return.
Petitioner, however, had the opportunity to dispute the
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underlying liability at the levy hearing and, thus, is not
entitled to challenge the underlying liability. See Bell v.
Commissioner, 126 T.C. 356, 358-359 (2006). Where the validity
of the liability is not properly part of the appeal, the Court
reviews the Appeals officer’s administrative determination for
abuse of discretion. See Davis v. Commissioner, 115 T.C. 35, 39
(2000); see also Goza v. Commissioner, 114 T.C. 176, 181-182
(2000).
Petitioner contends that, in determining whether to sustain
the lien notice, respondent abused his discretion by failing to
consider petitioner’s financial responsibilities and the revised
OIC. Respondent’s determination, however, had a sound basis in
fact and law and was not arbitrary or capricious. First, the OIC
was submitted and rejected before respondent issued the lien
notice. Second, petitioner did not raise any collection
alternatives. Third, respondent, pursuant to section 6330(c)(3),
properly weighed the intrusiveness of the collection action
against the need for the efficient collection of taxes. Finally,
the assessment of taxes and the recordation of the lien were
carried out in accordance with all appropriate statutes and
regulations. Accordingly, we sustain respondent’s determination.
Contentions we have not addressed are irrelevant, moot, or
meritless.
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To reflect the foregoing,
Decision will be entered
for respondent.