T.C. Memo. 2010-51
UNITED STATES TAX COURT
LARRY DELANO COLEMAN, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 4740-09L. Filed March 18, 2010.
Larry Delano Coleman, pro se.
Dennis R. Onnen, for respondent.
MEMORANDUM OPINION
ARMEN, Special Trial Judge: The instant proceeding arises
from a petition for judicial review filed in response to a Notice
Of Determination Concerning Collection Actions(s) Under Section
6320 and/or 6330.1 The issue for decision is whether respondent
1
Unless otherwise indicated, all subsequent section
(continued...)
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may proceed with the collection action as so determined. Pending
before the Court are: (1) Respondent’s Motion For Summary
Judgment, filed September 18, 2009, and (2) petitioner’s cross-
Motion For Summary Judgment, filed November 4, 2009.
Background
Petitioner resided in the State of Missouri when the
petition was filed.
Petitioner’s Tax Liabilities for 1999, 2004, 2005, and 2006
Petitioner filed Federal income tax returns for 2004, 2005,
and 2006 on April 2, April 1, and December 31, 2007,
respectively, but failed to fully pay the liabilities reflected
thereon. In addition, a trust fund recovery penalty (TFRP) was
assessed against petitioner pursuant to section 6672 for the
period ending December 31, 1999, with respect to unpaid
liabilities of Larry Delano Coleman, PC, petitioner’s former
legal practice.
Final Notices of Intent To Levy and Notice of Federal Tax Lien
On January 4, 2008, respondent sent petitioner a Final
Notice Of Intent To Levy And Notice Of Your Right To A Hearing
with regard to the proposed levy to collect his income tax
liabilities for tax years 2004 and 2005 and the TFRP. Petitioner
submitted a Form 12153, Request For A Collection Due Process Or
1
(...continued)
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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Equivalent Hearing, dated January 5, 2008, but received by
respondent on March 10, 2008.
On July 16, 2008, respondent sent petitioner a Final Notice
--Notice Of Intent To Levy And Notice Of Your Right To A Hearing
with regard to a proposed levy to collect petitioner’s income tax
liability for 2006. Petitioner submitted a Form 12153 dated
August 15, 2008.
On July 29, 2008, respondent sent petitioner a Notice Of
Federal Tax Lien Filing And Your Right To A Hearing Under IRC
6320 with regard to petitioner’s income tax liabilities for 2004,
2005, and 2006. Petitioner submitted a Form 12153 dated August
15, 2008.
On each of the Forms 12153 petitioner indicated that he
wished to pursue a collection alternative; namely, an installment
agreement or offer-in-compromise.2 In addition, on the Form
12153 dated January 5, 2008, petitioner wrote “Taxpayer Advocate
Service” next to “Other”.
Administrative Developments
Petitioner’s collection case for each of the foregoing
periods was assigned to Settlement Officer Deborah Landers (Ms.
Landers) of the IRS Office of Appeals in Kansas City, Kansas. In
2
The Court notes that on the Form 12153 dated Jan. 5,
2008, petitioner marked the box next to “Innocent Spouse Relief”.
The request for innocent spouse relief was made on behalf of
petitioner’s wife, who is not a party to the present action.
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a letter to petitioner dated September 2, 2008, Ms. Landers
scheduled a telephone conference for October 7, 2008. In
addition, Ms. Landers stated that in order for her to consider a
collection alternative, petitioner was required to make estimated
tax payments for 2008, submit a Form 433-A, Collection
Information Statement for Wage Earners and Self-Employed
Individuals, and file an income tax return for 2007.
In a letter dated September 5, 2008, petitioner requested
that his collection case be assigned to a different settlement
officer, as Ms. Landers had previously been involved in the TFRP
for 1999. Thereafter petitioner’s collection case was assigned
to settlement officer Keith R. Cummings (Mr. Cummings), also of
the IRS Office of Appeals in Kansas City, Kansas. In a letter to
petitioner dated October 3, 2008, Mr. Cummings scheduled a
telephone conference for October 17, 2008. In addition, Mr.
Cummings indicated that in order for a collection alternative to
be considered, petitioner was required to submit a Form 433-A and
a copy of his 2007 income tax return, which was due to be filed
on October 15, 2008.
Petitioner did not submit a Form 433-A or a copy of his 2007
tax return before the scheduled conference call. On October 17,
2008, petitioner and Mr. Cummings held a telephone conference.
During the conference petitioner conceded that he owed the income
taxes. Petitioner questioned the origin of the TFRP, and Mr.
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Cummings explained that the TFRP was based on petitioner’s unpaid
payroll taxes for his legal business; petitioner thereafter
admitted he was responsible for the unpaid taxes and requested
the payoff amount.3 During the conference petitioner requested
additional time to complete the Form 433-A, which Mr. Cummings
denied on the basis that petitioner had already been given
sufficient time to complete the Form 433-A. Petitioner also
mentioned that he would like to submit an offer-in-compromise but
would not have time to do so until November. Petitioner never
mentioned Taxpayer Advocate assistance.
On February 2, 2009, respondent issued petitioner a Notice
Of Determination Concerning Collection Action(s) Under Section
6320 and/or 6330 sustaining respondent’s proposed collection
actions for the income tax liabilities for 2004, 2005, and 2006,
and for the TFRP for 1999. The notice states that
3
Mr. Cummings’ contemporaneous notes of the telephone
conference state the following:
Underlying liability issues? No -- taxpayer was not audited
on CDP years at issue, concedes that he owes these taxes.
Had questions regarding trust fund recovery penalty.
Explained IRC 6672 -- had to do with unpaid payroll taxes
for his prior law practice. Taxpayer was unaware of this --
thought it had something to do w/income taxes. Said he
didn’t pick up the letters for 1153 TFRP letter because he
didn’t know what they were for. He explained that old biz
(law practice) that was the basis for unpaid payroll taxes
was his practice - - he admitted that he would be
responsible for the TF taxes, as there was no one else to
blame. Asked for payoff of TFRP. Gave today’s payoff.
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[petitioner has] been granted installment agreements in
the past by the Service dating back to 1998. These
agreements have defaulted on a somewhat regular basis
due to [petitioner’s] failure to make the agreed upon
payments, or the filing of subsequent Federal income
tax returns with new tax liabilities.
On February 27, 2009, petitioner filed the petition in this
case. In the petition he stated his reasons for disagreeing with
the notice of determination, as relevant herein, are:
(1) Civil penalty for 1999 was for a professional
corporation that did not exist in 1999.
* * * * * * *
(3) IRS will not enable installment agreement or
settlement, given difficult economic times.
Motions for Summary Judgment
As stated above, respondent filed the Motion For Summary
Judgment on September 18, 2009. In his motion respondent argues
that the settlement officer did not abuse his discretion in
sustaining respondent’s proposed collection action when he
refused to consider a collection alternative.
Petitioner’s Objection To Respondent’s Motion For Summary
Judgment was filed on October 23, 2009. In his objection
petitioner appears to contest the validity of the underlying
liability.4 Petitioner subsequently filed a cross Motion For
4
Any other arguments in petitioner’s objection are
unpersuasive and without foundation. See Crain v. Commissioner,
737 F.2d 1417, 1417 (5th Cir. 1984) (“We perceive no need to
refute these arguments with somber reasoning and copious citation
of precedent; to do so might suggest that these arguments have
(continued...)
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Summary Judgment on November 4, 2009. In his cross-motion
petitioner alleges that the TFRP was wrongfully assessed because
Larry Delano Coleman, PC, did not exist in 1999. Petitioner also
requested a refund of all payments made on a payment plan.
Respondent filed an Objection to petitioner’s cross-motion
for summary judgment on December 8, 2009. In his objection
respondent argues that petitioner is precluded from challenging
the underlying tax liability for the TFRP because petitioner did
not raise this issue during the administrative hearing. In
addition, respondent argues that the Court lacks jurisdiction to
order a refund in an action based upon a notice of determination.
Discussion
A. Summary Judgment
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 with respect to all or any part of the legal issues in
controversy “if the pleadings, answers to interrogatories,
depositions, admissions, and any other acceptable materials,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that a decision may be
rendered as a matter of law.” Rule 121(a) and (b).
4
(...continued)
some colorable merit.”).
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After carefully reviewing the record, we are satisfied that
there is no genuine issue as to any material fact, and a decision
may be rendered as a matter of law. Accordingly, we shall grant
respondent’s motion for summary judgment and deny petitioner’s
cross-motion for summary judgment.
B. Respondent’s Proposed Collection Actions
Section 6330 generally provides that the Commissioner cannot
proceed with collection by levy until the taxpayer has been given
notice and the opportunity for an administrative review of the
matter (in the form of an Appeals Office hearing) and, if
dissatisfied, the taxpayer may seek judicial review of the
administrative determination. See Davis v. Commissioner, 115
T.C. 35, 37 (2000); Goza v. Commissioner, 114 T.C. 176, 179
(2000).
Section 6330(c) prescribes the matters that a taxpayer may
raise at an Appeals Office hearing. In sum, section 6330(c)
provides that a taxpayer may raise collection issues such as
spousal defenses, the appropriateness of the Commissioner’s
intended collection action, and possible alternative means of
collection. Section 6330(c)(2)(B) provides that the existence
and amount of the underlying tax liability may be contested at an
Appeals Office hearing only if the person did not receive a
notice of deficiency for the tax in question or did not otherwise
have an opportunity to dispute the tax liability. See Sego v.
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Commissioner, 114 T.C. 604, 609 (2000); Goza v. Commissioner,
supra at 180-181. When the underlying tax liability was not
properly raised during the Appeals Office hearing, the taxpayer
may not raise the underlying tax liability on appeal of a notice
of determination. Giamelli v. Commissioner, 129 T.C. 107, 115
(2007). As made manifest by the settlement officer’s
contemporaneous notes of the Appeals conference, see supra note
3, petitioner did not challenge the existence or amount of the
underlying TFRP. Petitioner for the first time challenged his
underlying tax liability for the TFRP in his petition;
accordingly, this Court does not consider that issue.
Where the validity of the underlying tax liability is not
properly at issue, the Court will review the Commissioner's
administrative determination for abuse of discretion. Goza v.
Commissioner, supra at 181-182. The Court has described the
abuse of discretion standard as meaning “arbitrary, capricious,
or without sound basis in fact or law.” Giamelli v.
Commissioner, supra at 111 (citing Woodral v. Commissioner, 112
T.C. 19, 23 (1999)). In reviewing for abuse of discretion, we
generally consider “only arguments, issues, and other matter that
were raised at the collection hearing or otherwise brought to the
attention of the Appeals Office.” Magana v. Commissioner, 118
T.C. 488, 493 (2002); cf. Hoyle v. Commissioner, 131 T.C. 197
(2008) (an Appeals officer must verify compliance with applicable
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law under section 6330(c)(1) regardless of whether the taxpayer
raised the issue at the Appeals hearing). Any issue not raised
is now deemed to be conceded. See Rule 331(b)(4) (“Any issue not
raised in the assignments of error shall be deemed to be
conceded.”). Although special circumstances might cause us to
depart from this approach, we are unable to discern any such
circumstances in the present case.
Petitioner participated in a telephonic hearing on October
17, 2008. During the hearing petitioner wanted to discuss the
possibility of entering into an installment agreement. However,
petitioner had not submitted financial information and, at that
time, petitioner had not filed a tax return for 2007.5 This
Court has consistently held, as have other courts, that a
determination that a taxpayer is not entitled to a collection
alternative does not constitute an abuse of discretion if the
taxpayer did not provide financial information during the
administrative hearing and was not currently in compliance with
Federal tax laws, i.e., had not filed all required tax returns.
E.g., Olsen v. United States, 414 F.3d 144 (1st Cir. 2005) (no
abuse of discretion in rejecting an offer-in-compromise when the
5
The notice of determination indicates that petitioner’s
2007 Federal income tax return was filed delinquently in November
2008. This return shows an amount due as a result of
petitioner’s failure to have income tax withheld from his
paychecks and his failure to make quarterly estimated tax
payments. Respondent assessed tax, penalty, and statutory
interest.
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taxpayer failed to provide financial information during the
administrative hearing); Willis v. Commissioner, T.C. Memo. 2003-
302 (no abuse of discretion because taxpayer failed to provide
sufficient financial documentation); Moorhous v. Commissioner,
T.C. Memo. 2003-183 (no abuse of discretion because current
financial information was not provided by the taxpayer during the
administrative hearing); cf. Vinatieri v. Commissioner, 133 T.C.
__ (2009) (release of levy required despite noncompliance with
filing required returns when Commissioner acknowledged that
taxpayer had demonstrated financial hardship).
Furthermore, the settlement officer’s refusal to grant
additional time to complete the financial information was not an
abuse of discretion, as his approach was not inconsistent with
IRS guidelines. See Dinino v. Commissioner, T.C. Memo. 2009-284.
“There is no requirement that the Commissioner wait a certain
amount of time before making a determination as to a proposed
[collection procedure]”. Gazi v. Commissioner, T.C. Memo. 2007-
342. “Appeals will, however, attempt to conduct a CDP hearing
and issue a Notice of Determination as expeditiously as possible
under the circumstances.” Sec. 301.6330-1(e)(3), Q&A-E9, Proced.
& Admin. Regs. Both the letter from Ms. Landers dated September
2, 2008, and the letter from Mr. Cummings dated October 3, 2008,
requested that petitioner submit financial information so that a
collection alternative could be considered.
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In addition, petitioner received a de facto extension of
time, as it is the policy of the Appeals Office to consider
financial information submitted past the deadline and up to the
time of the issuance of the notice of determination. See Dinino
v. Commissioner, supra; 4 Administration, Internal Revenue Manual
(CCH) pt. 8.22.2.2.4.11(1)(c), at 27,997-373 (Oct. 30, 2007).
Thus, petitioner had until the notice of determination was issued
on February 2, 2009, i.e., more than 15 weeks after his request
for more time during the administrative hearing on October 17,
2009.
We conclude that there are no genuine issues of material
fact for trial and that respondent’s determination to proceed
with collection was not an abuse of discretion.
Conclusion
Finally, in reaching the conclusions described herein, we
have considered all arguments made by petitioner, and, to the
extent not mentioned above, we find them to be moot, irrelevant,
or without merit.
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To reflect the foregoing,
An appropriate order and
decision will be entered
granting respondent’s motion
for summary judgment and
denying petitioner’s cross-
motion for summary judgment.