T.C. Memo. 2009-72
UNITED STATES TAX COURT
GLEN ROBERT BROEMER, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 12000-07L. Filed March 31, 2009.
Glen Robert Broemer, pro se.
Michael W. Tan, for respondent.
MEMORANDUM OPINION
GERBER, Judge: This matter is before the Court on
respondent’s motion for summary judgment under Rule 121.1
1
Petitioner also filed a motion to compel responses to
interrogatories pursuant to Rule 71, which is addressed in this
opinion. Unless otherwise indicated, all Rule references are to
the Tax Court Rules of Practice and Procedure, and all section
references are to the Internal Revenue Code.
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Respondent seeks summary judgment on the question of whether
collection may proceed in accordance with notices of
determination sent to petitioner. Respondent made the
determination to proceed to collect by levy petitioner’s 1990,
1993, and 2003 tax liabilities and a frivolous return penalty for
2004. Petitioner seeks review of that determination under
section 6330.
The issues for consideration are: (1) Whether respondent’s
determination to proceed with collection was an abuse of
discretion and (2) whether petitioner’s motion to compel
responses to interrogatories was timely or appropriate.
Background
Petitioner resided in California at the time his petition
was filed. He failed to file Forms 1040, U.S. Individual Income
Tax Return, for his 1990 and 1993 tax years. For each year
respondent prepared substitutes for returns under section 6020(b)
and determined deficiencies in income tax with additions to tax.
Although petitioner was sent statutory notices of deficiency, he
did not petition this Court in response to those notices.
Respondent assessed the deficiencies with additions to tax and
interest and on March 16, 2001, filed notices of Federal tax
lien. Petitioner did not seek review of respondent’s actions
under section 6320. Respondent’s records indicate that
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collection due process (CDP) notices were mailed to petitioner on
March 11, 2001.
Petitioner filed a late return for the 2003 tax year.
Respondent determined additions to tax and interest for that
year. Petitioner did not fully pay the assessed tax liability.
On October 2, 2006, respondent sent petitioner a notice of intent
to levy for 2003.
Petitioner filed a return for the 2004 tax year, but
respondent deemed the return and accompanying statements to be
frivolous. Respondent accordingly assessed a $500 penalty under
section 6702. On October 2, 2006, respondent sent petitioner a
notice of intent to levy for the 2004 frivolous return penalty.
On October 10, 2006, petitioner requested a CDP hearing for
1990, 1993, 2003, and 2004. The CDP hearing2 was conducted by
telephone on April 13, 2007. At that time, petitioner’s total
unpaid tax liability for the 1990, 1993, 2001, 2002, 2003, 2004,
and 2005 tax years was $28,072.3
2
The hearing was treated as an equivalent hearing for 1990
and 1993. However, respondent was unable to produce a certified
mail list proving the CDP notices were sent and conceded the
timeliness of petitioner’s CDP request. Under Craig v.
Commissioner, 119 T.C. 252 (2002), the equivalent hearing is thus
treated as a collection due process hearing (CDP).
3
The record does not indicate whether CDP notices were given
to petitioner for the 2002 and 2005 tax years, and petitioner
apparently did not request a CDP hearing for those years. For
2001, petitioner’s CDP request was untimely, and respondent’s
determination is therefore not subject to review.
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At the CDP hearing petitioner did not contest the amount or
existence of his tax liability. He raised only the issue of
“estoppel”. He argued that the proposed collection action should
not proceed while he had claims pending against the Government
and that the value of those claims far exceeded the amount of his
tax liability. He further contended that the wrongful acts of
another Government agency “estopped” respondent from collecting
his unpaid tax.
Petitioner’s alleged claims against the Government stem from
his belief that he is or was the victim of a far-reaching
Government conspiracy that began no later than the 1970s.
Petitioner has filed two suits in the U.S. District Court for the
Central District of California for constitutional violations and
torts allegedly committed by the Government and its employees in
furtherance of a conspiracy. Petitioner’s District Court
proceedings were combined into a single case. At the time of the
CDP hearing, the District Court had dismissed the majority of
petitioner’s claims, leaving only three causes of action:
Nuisance, intentional infliction of emotional distress, and
breach of fiduciary duty.
Petitioner’s allegations in the District Court case are far
reaching and involve the Central Intelligence Agency (CIA).
Petitioner’s allegations against the Government do not involve
respondent or the Internal Revenue Service (IRS). For purposes
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of deciding whether there was an abuse of discretion we need not
decide the issues pending in the District Court proceeding.
At the CDP hearing, petitioner did not provide any
documentary proof of his allegations in the District Court case.
Respondent, however, examined documents from the District Court
and noted that the court had dismissed the majority of
petitioner’s claims. Respondent determined that the District
Court case was not close to resolution and was unlikely to
produce a monetary award to petitioner. Because petitioner had
not submitted any financial data and had not proposed any
alternatives, respondent decided to proceed with collection and
issued notices of determination for the years in issue.4
Petitioner filed a petition with the Court to seek review of
respondent’s determination to proceed with collection of the
unpaid tax liabilities for the years in issue. Respondent moved
for summary judgment, and a hearing was held on September 8,
2008. Subsequently, on October 27, 2008, petitioner filed a
motion to compel responses to interrogatories.
Discussion
I. Respondent’s Motion for Summary Judgment
Summary judgment may be granted when there is no genuine
issue of material fact and a decision may be rendered as a matter
4
The decision letters issued for 1990 and 1993 are treated
as notices of determination under Craig v. Commissioner, supra.
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of law. Rule 121(b); Sundstrand Corp. v. Commissioner, 98 T.C.
518, 520 (1992), affd. 17 F.3d 965 (7th Cir. 1994). The opposing
party cannot rest upon mere allegations or denials in his
pleadings and must “set forth specific facts showing that there
is a genuine issue for trial.” Rule 121(d). The moving party
bears the burden of proving there is no genuine issue of material
fact, and factual inferences will be read in a manner most
favorable to the party opposing summary judgment. Dahlstrom v.
Commissioner, 85 T.C. 812, 821 (1985); Jacklin v. Commissioner,
79 T.C. 340, 344 (1982). In this case, there is no dispute about
a material fact and, accordingly, the issues may be decided on
the basis of a summary judgment motion.
If a taxpayer neglects or refuses to pay a Federal income
tax liability within 10 days after notice and demand for payment,
the Commissioner may collect the tax by levy upon the person's
property. Sec. 6331(a). The Commissioner generally must provide
the taxpayer written notice of the right to a hearing before the
levy is made. Sec. 6330(a). Upon a timely request, the taxpayer
is entitled to an administrative hearing before an impartial
officer or employee of the Appeals Office. Sec. 6330(b).
Following the hearing, the Appeals officer must determine
whether the collection action is to proceed, taking into account
the verification the Appeals officer has made, the issues raised
by the taxpayer at the hearing, and whether the collection action
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balances the need for the efficient collection of taxes with the
legitimate concern of the taxpayer that any collection action be
no more intrusive than necessary. Sec. 6330(c)(3).
We have jurisdiction to review the determination if we have
jurisdiction over the type of tax involved in the case. Sec.
6330(d)(1); Iannone v. Commissioner, 122 T.C. 287, 290 (2004).
Under section 6330(d), as recently amended, we have jurisdiction
to consider the intent to levy for a frivolous return penalty
even though such penalties remain outside of our established
jurisdiction for deficiency cases. We review on an abuse of
discretion standard when the underlying tax liability is not in
issue. Goza v. Commissioner, 114 T.C. 176, 182 (2000).
Petitioner did not contest the existence or amount of his
underlying tax liability at the CDP hearing, so we need not
consider that issue. See Giamelli v. Commissioner,
129 T.C. 107 (2007); Magana v. Commissioner, 118 T.C. 488, 493-
494 (2002); sec. 301.6330-1(f)(2), Q&A-F5, Proced. & Admin. Regs.
Under the abuse of discretion standard, petitioner is
required to show that respondent’s actions were arbitrary,
capricious, or without sound basis in fact. See Knorr v.
Commissioner, T.C. Memo. 2004-212.
Respondent’s determination to proceed with collection was
based on petitioner’s failure to present viable alternatives.
The only issue or alternative petitioner raised at the CDP
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hearing was “estoppel”. Petitioner contends that the Appeals
officer was dismissive of his “estoppel” claim and refused to
consider the relevant facts and arguments. Though the notices of
determination state “Evaluation of * * * [petitioner’s] claims is
beyond the scope of this hearing”, the Appeals officer’s
declaration and the notices of determination themselves confirm
that the claim was indeed considered. In determining whether
that treatment of petitioner’s “estoppel” claim was arbitrary or
capricious, we note that petitioner has couched his claim in the
form of two separate theories: Offset and equitable estoppel.
A. Offset
Petitioner had pending tort claims against various
Government officials and agencies (which did not include the
IRS). The argument petitioner presented to the Appeals officer
was that the value of those claims exceeds and fully offsets the
amount of his tax liabilities. He therefore claimed that
respondent should be estopped from collecting his unpaid tax
liabilities.
The Tax Court is a Court of limited jurisdiction lacking
general equitable powers. Commissioner v. McCoy, 484 U.S. 3, 7
(1987). While we may apply equitable principles in deciding
matters over which we are specifically granted jurisdiction, we
may not exercise general equitable powers to expand that
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statutorily prescribed jurisdiction. Woods v. Commissioner, 92
T.C. 776, 784-787 (1989).
At the time of the CDP hearing petitioner’s tort claims had
not been liquidated or established. Evaluating the Appeals
officer’s decision to reject his offset argument would require us
to determine the merits and value of the underlying claims. None
of the cases petitioner cites give the Court jurisdiction to
adjudicate torts. Furthermore, we have previously held that we
do not have jurisdiction to hear these types of offset claims.
Watts v. Commissioner, T.C. Memo. 1995-196 (claim that taxpayer
was given the office of president and owed “presidency wages”);
Akins v. Commissioner, T.C. Memo. 1993-256 (claim that the
Federal Government was liable for taxpayer’s injuries due to
negligent enforcement of criminal laws), affd. without published
opinion 35 F.3d 577 (11th Cir. 1994); Randall v. Commissioner,
T.C. Memo. 1993-207 (taxpayer-doctor’s claim that another
Government agency acted as third party’s insurer and was liable
for services rendered), affd. without published opinion 29 F.3d
621 (2d Cir. 1994).
Petitioner argues that declining to hear the offset claim
denies him an opportunity to be fully heard and deprives him of
due process. In the case of an IRS levy, review is accomplished
through the procedures provided in section 6330. Petitioner did
receive the hearing he was entitled to and was therefore given
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the opportunity to present whatever arguments he may have had.
Having chosen not to avail himself of that opportunity and
present any supporting evidence, petitioner cannot now complain
that he is being denied due process. Even if petitioner had
presented evidence of his tort claims against other Government
agencies, those claims were unproven and unliquidated and, at the
time of his Appeals hearing, pending in the District Court.
Though petitioner phrases his offset claim in terms of
equity, essentially he is pursuing a claim for damages against
the Government. His only venue for relief on such a claim is in
District Court, where he already has two cases pending. We lack
jurisdiction to consider such claims, and neither section 6320
nor 6330 provides jurisdiction to hear such claims. Likewise,
the Appeals officer was not in a position to adjudicate whether
petitioner’s claims, against the Government had merit. More
importantly, being unliquidated, petitioner’s claims could not be
considered as assets that would be part of a collection
alternative.
B. Equitable Estoppel
Petitioner also argued that respondent was equitably
estopped from collecting the unpaid tax because of the wrongful
actions of the CIA. Petitioner did not claim that respondent had
directly engaged in any wrongdoing. Thus, the Appeals officer’s
decision to reject the equitable estoppel argument was not
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arbitrary or capricious because petitioner did not allege any
affirmative misconduct by respondent. See Wilkins v.
Commissioner, 120 T.C. 109, 112 (2003); Norfolk S. Corp. v.
Commissioner, 104 T.C. 13, 60 (1995), affd. 140 F.3d 240 (4th
Cir. 1998). Petitioner presented several extraordinary theories
attributing the CIA’s alleged wrongdoing to respondent under
color of agency law, but he provided no evidence to support his
wild assertions. In sum, petitioner’s allegations were unfounded
and remained part of a plenary proceeding which, at the time of
the Appeals hearing, had no bearing on the question of whether
respondent could proceed with collection.
C. Conclusion
We lack the jurisdiction to consider petitioner’s offset
claim, and petitioner did not present the Appeals officer with a
plausible claim for asserting offset or equitable estoppel.
Because petitioner presented no other viable alternatives,
respondent’s determination to proceed with
collection was not an abuse of discretion. For the reasons
stated, we shall grant respondent’s motion for summary judgment.
II. Petitioner’s Motion To Compel
Petitioner served interrogatories on respondent after the
filing of the summary judgment motion. He then moved to enforce
responses to the interrogatories.
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A motion to compel discovery must be filed no later than 45
days before the date set for call of the case from a trial
calendar, unless otherwise authorized by the Court. Rule
70(a)(2). The date set for calendar call was September 8, 2008.
Petitioner filed his motion to compel after that date. Because
petitioner’s motion to compel was untimely, his motion will be
denied. Significantly, a factual basis sufficient to decide the
merits of this case is contained in the Court’s official record,
which includes pleadings, respondent’s summary judgment motion
and petitioner’s response, trial transcript, and exhibits.
To reflect the foregoing,
An appropriate order and
decision will be entered for
respondent.