T.C. Memo. 2009-16
UNITED STATES TAX COURT
WARREN LEE BRANDT, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 787-07L. Filed January 26, 2009.
Warren Lee Brandt, pro se.
Kristin M. Timmons, for respondent.
MEMORANDUM OPINION
SWIFT, Judge: This matter is before us on respondent’s
motion for summary judgment under Rule 121. Petitioner does not
dispute any of the material facts relied upon in respondent’s
motion for summary judgment. Unless otherwise indicated, all
section references are to the Internal Revenue Code, and all Rule
references are to the Tax Court Rules of Practice and Procedure.
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In this collection case under section 6320 petitioner
challenges respondent’s notice of Federal tax lien filing
relating to $70,434 in outstanding Federal employment taxes
petitioner owes in connection with his law practice.
Background
At the time the petition was filed, petitioner resided in
Wisconsin. Petitioner is a lawyer and practices law in the
community in which he resides.
During the periods in issue petitioner employed a legal
assistant to aid him in carrying out day-to-day activities of his
law practice. Petitioner’s law practice periodically withheld
and remitted to respondent employment taxes withheld from
employee wages. Petitioner generally relied on his legal
assistant to prepare and timely file Federal employment tax
returns and to remit to respondent the employment taxes that were
due in connection with wages paid to employees.
For 1998, for the last quarter of 2000, and for 2001, 2002,
and 2003, however, petitioner’s legal assistant prepared but did
not file with respondent the Federal employment tax returns that
were due.
For the above periods petitioner’s legal assistant also did
not remit to respondent any of the employment taxes that were
due. Rather, petitioner’s legal assistant embezzled from
petitioner the employment taxes owed to respondent.
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In September 2004 petitioner discovered his legal
assistant’s failure to file the above Federal employment tax
returns and her embezzlement. Petitioner thereafter filed with
respondent the Federal employment tax returns, but petitioner did
not remit to respondent the employment taxes reported due
thereon.
On March 29, 2006, respondent mailed to petitioner a notice
of Federal tax lien filing with respect to the total $70,434 in
employment taxes, interest, and penalties that were due for the
above periods.
On May 5, 2006, petitioner timely filed with respondent a
Form 12153, Request for a Collection Due Process Hearing. At
that time petitioner had not filed his 2004 or 2005 individual
Federal income tax return.
On July 11, 2006, respondent and petitioner participated in
a collection due process (CDP) hearing. During the CDP hearing
petitioner stated that he was willing to assign to respondent his
rights to an $88,500 Wisconsin State court civil judgment that
petitioner had obtained against his former legal assistant.
Petitioner also stated that he was willing to assign to
respondent all rights to restitution that he someday might
receive as a result of an anticipated criminal prosecution of his
legal assistant for embezzlement. Petitioner acknowledged to
respondent’s Appeals officer that the resolution of any
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criminal prosecution against his legal assistant would take
time, and petitioner therefore also offered to enter into an
offer-in-compromise with respondent.
The Appeals officer granted petitioner an extension until
August 8, 2006, to submit to respondent a financial information
statement and a formal offer-in-compromise and to file with
respondent his 2004 and 2005 individual Federal income tax
returns.
Petitioner, however, did not submit to respondent a
financial statement, a formal offer-in-compromise, or his 2004
and 2005 individual Federal income tax returns by the August 8,
2006, deadline, and on December 4, 2006, respondent issued a
notice of determination sustaining the notice of Federal tax lien
filed against petitioner.
On January 9, 2007, petitioner filed his petition herein.
Discussion
When no material fact remains at issue, we may grant summary
judgment as a matter of law. Rule 121(b); Fla. Country Clubs,
Inc. v. Commissioner, 122 T.C. 73, 75-76 (2004), affd. on other
grounds 404 F.3d 1291 (11th Cir. 2005).
At no point herein has petitioner contested his liability
for the employment tax liabilities for the periods in issue. We
review respondent’s Appeals Office determination for abuse of
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discretion. See Sego v. Commissioner, 114 T.C. 604, 610 (2000);
Goza v. Commissioner, 114 T.C. 176, 181-182 (2000).
Although petitioner’s argument is not completely clear,
petitioner appears to be arguing that respondent’s Appeals Office
should have treated as an offer-in-compromise petitioner’s offer
to assign to respondent the $88,500 civil judgment and any
judgment for restitution that might be awarded against his former
legal assistant.
In light of petitioner’s failure to file with respondent
his 2004 and 2005 Federal income tax returns and petitioner’s
failure to submit to respondent a financial statement and a
formal offer-in-compromise, respondent clearly did not abuse
his discretion in establishing a deadline for petitioner to
submit a proper offer-in-compromise and in not treating as
an eligible offer-in-compromise petitioner’s willingness to
assign to respondent civil judgments petitioner had been
awarded or that he might be awarded. See Kendricks v.
Commissioner, 124 T.C. 69, 79 (2005); Cavazos v. Commissioner,
T.C. Memo. 2008-257; see also Prater v. Commissioner, T.C. Memo.
2007-241; Roman v. Commissioner, T.C. Memo. 2004-20; Rodriguez v.
Commissioner, T.C. Memo. 2003-153; Londono v. Commissioner, T.C.
Memo. 2003-99; McCorkle v. Commissioner, T.C. Memo. 2003-34;
Internal Revenue Manual, pt. 5.8.3.4.1(1)(A) (Sept. 1, 2005).
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For the reasons stated, we shall grant summary judgment in
favor of respondent.
We have considered petitioner’s other arguments and find
them unpersuasive.
To reflect the foregoing,
An appropriate order and
decision will be entered
for respondent.