T.C. Memo. 2009-3
UNITED STATES TAX COURT
A. J. JONES, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 19290-07L. Filed January 5, 2009.
Frederick J. O’Laughlin, for petitioner.
G. Chad Barton, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
MORRISON, Judge: This “collection due process” (“CDP”) case
is before the Court on respondent’s amended motion for summary
judgment to uphold his Appeals officer’s determination to sustain
a notice of intent to levy (the “levy”) on petitioner’s assets
for her 2002 income tax liability.
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Petitioner alleged in her petition that respondent had erred
by sustaining the levy and, specifically, by sustaining the levy
after allegedly finding that it was more intrusive than
necessary. Respondent moved for summary judgment on the grounds
that his Appeals officer had properly based his determination on
petitioner’s repeated failures to file tax returns, provide
requested information, and propose collection alternatives; and
that the Appeals officer actually determined that the levy was
not more intrusive than necessary but simply made a misstatement
in his notice of determination.
Petitioner did not respond to the motion with specific facts
showing that there is a genuine issue for trial. (The record
before the Court did enable us to consider her claim that the
Appeals officer determined the levy to be more intrusive than
necessary.) Instead, she conceded that she is statutorily
prohibited from challenging her underlying tax liability but
argued that we should review respondent’s determination of that
tax liability. We find that petitioner has conceded this
argument by failing to properly raise it in her petition. We
also find, in any case, that the argument is a circuitous, still
prohibited, challenge to her underlying tax liability, and that
petitioner has failed to set forth specific facts showing a
genuine issue for trial with respect to the liability. Upon
examination of the notice of determination, we find that the
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Appeals officer did not determine that the levy was more
intrusive than necessary but simply made a misstatement.
Finally, we refuse to further consider petitioner’s argument that
respondent erred by sustaining the levy because it is too broad
to give respondent and the Court notice of any particular issue
for decision.
Therefore, we will grant respondent’s motion.
FINDINGS OF FACT
Petitioner failed to timely file an income tax return for
2002. Respondent prepared on her behalf, with respect to her
2002 income tax, a “substitute for return.”1 Respondent issued,
and petitioner apparently received, a notice of deficiency for
her 2002 income tax in or around October 2005.2 Petitioner
1
Respondent has previously represented to this court that a
“substitute for return” means a return or partial return which
respondent prepares for a taxpayer who does not file a return.
Swanson v. Commissioner, 121 T.C. 111, 112 n.1 (2003); Spurlock
v. Commissioner, 118 T.C. 155, 156 n.2 (2002).
2
Respondent’s Jan. 18, 2007 computer transcript of
petitioner’s tax account indicates that he issued her a notice of
deficiency on or around Oct. 4, 2005: it lists transaction code
494, which means that a notice of deficiency (informally known as
a “90-day letter”) was issued, for that date. See 2
Administration, Internal Revenue Manual (CCH), pt.
5.18.1.10.2.1.2, at 18,273-69 through 18,273-70 (Jan. 25, 2008);
IRS Document 6209, ADP and IDRS Information, 8-27 (2003).
Petitioner’s concession in her response to respondent’s motion
that she “cannot dispute her underlying tax liability by statute”
implies her recognition that sec. 6330(c)(2)(B) did not permit
her to raise the issue at the CDP hearing because she received a
statutory notice of deficiency for the tax liability or otherwise
had an opportunity to dispute the liability. While petitioner’s
(continued...)
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failed to file a Tax Court petition to challenge the notice of
deficiency (and did not otherwise dispute the notice of
deficiency). Respondent then assessed the deficiency.
Respondent sent petitioner an IRS Notice CP 90, Final Notice,
Notice of Intent to Levy and Notice of Your Right to a Hearing,
for her unpaid 2002 income tax on August 21, 2006. Petitioner
duly requested a CDP hearing to contest the levy. She explained
in this request that “Taxpayer disagrees with the final notice of
intent to levy because a levy would cause a great hardship to
Taxpayer. Taxpayer does not have the ability to pay the entire
tax liability owned [owed] because both taxpayers [sic] are
disabled.”3
Respondent’s Appeals officer conducted the CDP hearing
through a series of communications with petitioner which
included, but were not limited to, a “face-to-face” (in-person)
meeting with her counsel. On October 23, 2006, respondent sent
petitioner and her counsel copies of a letter which acknowledged
2
(...continued)
receipt of the notice of deficiency would explain this most
simply, our analysis would not differ materially if there were a
different reason for her being statutorily unable to dispute her
underlying tax liability. (All section references are to the
Internal Revenue Code and all Rule references are to the Tax
Court Rules of Practice and Procedure, unless otherwise
indicated.)
3
Nothing before the Court explains or substantiates
petitioner’s allegation that she and (as we infer that she
alleges) her husband are disabled.
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petitioner’s request for a CDP hearing, explained that he had not
received her 2000, 2001, 2002, and 2003 tax returns, and asked
her to submit them by October 31, 2006. On December 6, 2006,
respondent sent them copies of a letter which scheduled a
conference call as part of petitioner’s CDP hearing, explained
the factors he would have to consider in the hearing, and
requested that she provide a completed Collection Information
Statement (a form statement of her finances), income tax returns
for 2000, 2001, 2003 and 2005,4 and any other federal tax returns
required to be filed, since he would need the foregoing materials
to consider alternatives to the levy. On December 20, 2006,
petitioner’s counsel requested a “face-to-face” (in-person)
meeting. On May 1, 2007, respondent sent petitioner and her
counsel copies of a letter which scheduled a conference call for
June 5, 2007, requested her Collection Information Statement and
2003, 2004, 2005, and 2006 tax returns, and stated in underlined
text: “Your POA [“power of attorney,” i.e., counsel] requested a
face-to-face conference to discuss the potential levy action.
Unless you become compliant and can present a serious plan of
action to pay, I do not believe a face-to-face meeting would be
4
The record before the Court does not indicate whether
petitioner filed her 2000 or 2001 return. The attachment to the
notice of determination upon the CDP hearing and petitioner’s
response to respondent’s motion for summary judgment state that
she did not file her 2002 return.
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productive. CDP should not be used as a forum to delay
collection.”
During the June 5, 2007 call, petitioner’s counsel said that
petitioner, in the Appeals officer’s account, was “basically
destitute and would provide proof thereof,” requested that a
face-to-face meeting be scheduled for June 20, 2007, and said
that petitioner would provide all delinquent tax returns and an
updated financial statement. At the June 20, 2007 face-to-face
meeting, petitioner’s counsel explained to the Appeals officer
that since petitioner was not cooperative in providing the
requested information he was not able to further assist her, and
he requested that the Appeals officer issue his notice of
determination.
The notice of determination, dated July 25, 2007, stated
under the heading “Summary and Determination” that:
Appeals has determined the Automated Call
Site/Customer Service Office (ACS) has met all legal
and administrative requirements with respect to the
issuance of the final notice of intent to levy, CP 90
Notice.
Your power of attorney (POA) requested and was
granted a face-to-face collection due process (CDP)
hearing on June 20, 2007. The CDP hearing was held
with your POA. He indicates that you did not provide
any documentation and there was no collection
alternative proposed.
Additionally, transcripts confirm that you are not
current with filing requirements. * * *
It is Appeals determination to sustain the
proposed levy action. The case will be remitted back
to the originating office to resume collection.
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The Appeals Office explained how it applied relevant fact and law
to arrive at the determination in an attachment to the notice of
determination.5 The attachment ended: “It is Appeals
determination the issuance of a notice of levy would not balance
the Government’s need to efficiently collect these tax
liabilities and is deemed more intrusive than necessary. The
accounts will be sent back to the originating ACS office to
resume collection.” (Emphasis added.)
Petitioner timely filed a petition with the Court for review
of respondent’s determination. The petition stated that she
resided in Oklahoma, which means that this case would generally
be appealable to the Court of Appeals for the Tenth Circuit. See
sec. 7482(b)(1).
OPINION
We are asked to decide whether summary judgment is
appropriate. Summary judgment is intended to expedite litigation
and avoid unnecessary and expensive trials. See, e.g., FPL
Group, Inc. v. Commissioner, 116 T.C. 73, 74 (2001). A motion
for summary judgment will be granted if the pleadings, answers to
interrogatories, depositions, admissions, and other acceptable
materials, together with the affidavits, if any, show that there
5
The notice of determination was issued by an IRS Appeals
team manager but reflected the factual and legal determinations
the Appeals officer had set forth in IRS Form 5402-c, Appeals
Transmittal and Case Memo - CDP (7/2006) for the manager’s
review.
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is no genuine issue as to any material fact and that a decision
may be rendered as a matter of law. See Rule 121(b); Elec. Arts,
Inc. v. Commissioner, 118 T.C. 226, 238 (2002).
The moving party has the burden of proving that no genuine
issue of material fact exists and that it is entitled to judgment
as a matter of law. See, e.g., Rauenhorst v. Commissioner, 119
T.C. 157, 162 (2002). “In conducting our analysis, we view all
of the facts in the light most favorable to the non-movant and
draw all reasonable inferences from the record in favor of the
non-moving party.” Young v. Dillon Cos., 468 F.3d 1243, 1249
(10th Cir. 2006). Since petitioner did not present any facts,
other than a copy of the notice of determination (whose content
is not in dispute) and acknowledgment of certain facts respondent
had presented in his motion, we rely on respondent’s version of
the facts.6 We do not find that any material inferences can be
drawn from them in either party’s favor.
Respondent moved for summary judgment on the grounds that
his Appeals officer correctly sustained the notice of intent to
levy. He argued that the determination was correct because
petitioner had repeatedly failed to file tax returns (see, e.g.,
6
We reject petitioner’s unexplained and unsubstantiated
allegations that she and, apparently, her husband are “disabled”
and that she was “destitute” as too vague to inform our
consideration of this case. (We note that she repeatedly failed
to provide the Appeals officer the financial statement that would
have reflected any lack of income or assets.)
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Giamelli v. Commissioner, 129 T.C. 107, 111-112 (2007)), provide
requested information (see, e.g., Prater v. Commissioner, T.C.
Memo. 2007-241; Roman v. Commissioner, T.C. Memo. 2004-20), or
propose a collection alternative (see, e.g., Chandler v.
Commissioner, T.C. Memo. 2005-99). He argued that the Appeals
officer did not find the levy to be more intrusive than
necessary, as petitioner had alleged in her petition, but merely
made what respondent alleged was a misstatement to this effect.
Rule 331(b)(4) provides that a petition in a lien or levy
action such as this case must contain “[c]lear and concise
assignments of each and every error which the petitioner alleges
to have been committed in the notice of determination”, and that
“any issue not raised in the assignments of error shall be deemed
to be conceded.”7 Petitioner’s assignment of error is as
follows: “Petitioner assigns error in the Determination that (A)
levy is appropriate; and (B) to send the account back to ACS
collection when the Appeals office found that the collection levy
was more intrusive than necessary.”
7
We have in other cases considered issues that the parties
belatedly raised (or even did not raise at all), but do not do so
routinely. See, e.g., Miller v. Commissioner, 114 T.C. 184, 192
(2000); Knapp v. Commissioner, 90 T.C. 430, 439 (1988), affd. 867
F.2d 749 (2d Cir. 1989); Clough v. Commissioner, T.C. Memo. 2007-
106 (relying on the Appeals officer’s “obvious” failure to verify
that the requirements of applicable law and administrative
procedures had been met, rather than the taxpayer’s entirely
meritless arguments, to find that he had abused his discretion in
sustaining a levy).
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In Poindexter v. Commissioner, 122 T.C. 280, 285 (2004),
affd. 132 Fed. Appx. 919 (2d Cir. 2005), we held in the context
of the Rule 331(b)(5) requirement for “[c]lear and concise
lettered statements of the facts on which the petitioner bases
each assignment of error” that Rule 331 requires the petition in
a lien or levy case to be sufficiently specific to enable
respondent to mount a defense (if he has one) and to tell the
Court what specifically it must decide. More generally, Rule
31(a) provides that “[t]he purpose of the pleadings is to give
the parties and the Court fair notice of the matters in
controversy and the basis for their respective positions.” Since
petitioner’s statement that she “assigns error in the
[d]etermination that[ ]levy is appropriate” is so vague that it
does not give respondent or the Court notice of any specific
issue, we consider it not to be a valid assignment of any error.
Petitioner is therefore deemed to have conceded all issues other
than her allegation that the Appeals officer determined that the
levy was "more intrusive than necessary.” These foreclosed
issues include petitioner’s argument in her response to
respondent’s motion for summary judgment that respondent abused
his discretion by not confirming his previous computation of her
tax liability in connection with the CDP hearing or confirming
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that she was required to file the returns the Appeals officer
requested.8
Petitioner did not set forth additional facts to support her
allegation that the levy was “more intrusive than necessary” in
her response to respondent’s motion for summary judgment.
However, we need only the record already before the Court to
consider this allegation. Upon examining the notice of
determination, including its explanatory attachment, we find that
the Appeals officer did not find the levy to be more intrusive
than necessary (in which event the levy might have been improper
under section 6330(c)(3)(C)) but, as respondent contends, merely
made a misstatement. The notice and attachment state, and
8
Since we find that the argument is essentially a
statutorily prohibited challenge to petitioner’s underlying tax
liability, we need not consider whether to except it from the
general requirement that all issues be raised in the pleadings.
See Baltic v. Commissioner, 129 T.C. 178 (2007) (an offer-in-
compromise based upon “doubt as to liability” is a challenge to
“underlying tax liability” within the meaning of sec.
6330(c)(2)(B), as is a request that the IRS conduct an “audit
reconsideration” to reconsider its changes to a taxpayer’s
liability (see IRS Publication 3598, What You Should Know About
the Audit Reconsideration Process (2007)), so respondent does not
abuse his discretion in refusing to delay collection pending such
an offer or audit reconsideration if the challenge is barred).
Even if we could consider the argument, we expect that it would
fail because petitioner’s incoherent, evasive language does not
allege, much less set forth specific facts to show, that
respondent’s previous tax computation was incorrect or that she
was not required to file the returns the Appeals officer
requested. Moreover, since nothing before the Court suggests
that respondent erred (other than the statement in the notice of
determination, which petitioner duly raised), we need not
consider raising any issue on our own in this case.
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petitioner does not dispute, that she did not challenge her tax
liability, propose any collection alternatives, or provide any
documentation (including her 2002, 2003, 2004, 2005 and 2006 tax
returns). Since each step of the Appeals officer’s analysis in
the notice and attachment is consistent with a proper
determination to sustain the levy, and nothing before the Court
suggests that he failed to consider any relevant fact or erred in
any consideration, to infer that he found the levy to be improper
would be unreasonable.
Since we find that petitioner could not prevail, we will
grant respondent’s motion.
To reflect the foregoing,
An order and decision will be
entered for respondent.