Medical Practice Solutions, LLC v. Comm'r

T.C. Memo. 2010-98

UNITED STATES TAX COURT

MEDICAL PRACTICE SOLUTIONS, LLC, CAROLYN BRITTON, SOLE MEMBER,
Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent*

Docket No. 14664-08L. Filed May 4, 2010.

Carolyn Britton, pro se.

Nina P. Ching, for respondent.

SUPPLEMENTAL MEMORANDUM OPINION

GUSTAFSON, Judge: This case is an appeal under

section 6330(d)1 by petitioner Medical Practice Solutions, LLC

*
This opinion supplements Med. Practice Solutions, LLC v.
Commissioner, T.C. Memo. 2009-214.
1
Except as otherwise noted, all section references are to
(continued...)
 - 2 -

(the LLC), brought by its sole member Carolyn Britton.

Ms. Britton seeks our review of the determination by the Internal

Revenue Service (IRS) to sustain the filing of a notice of

Federal tax lien and to uphold a proposed levy against

Ms. Britton in order to collect from her the employment tax

liabilities of the LLC for the three taxable quarters ending

September 30, 2006, December 31, 2006, and June 30, 2007. Her

arguments here include some that we rejected in her prior suit,

Med. Practice Solutions, LLC, Carolyn Britton, Sole Member v.

Commissioner, 132 T.C. 125, 126 (2009), on appeal (1st Cir., July

13, 2009) (hereinafter, Medical Practice I). After our remand,2

the case is before us on the parties’ cross-motions for summary

judgment. We will deny Ms. Britton’s motion and grant

respondent’s motion.

1
(...continued)
the Internal Revenue Code (Code, 26 U.S.C.), and all Rule
references are to the Tax Court Rules of Practice and Procedure.
2
The parties originally submitted this case as fully
stipulated pursuant to Rule 122. We decided that respondent’s
Office of Appeals had abused its discretion in determining to
proceed with collection without verifying that all legal and
procedural requirements had been met (as section 6330(c)(1)
requires), and we remanded the case to the Office of Appeals to
clarify the record as to that verification. See Med. Practice
Solutions, LLC v. Commissioner, T.C. Memo. 2009-214. After
conducting a supplemental hearing, the Office of Appeals issued a
supplemental notice of determination stating that a verification
had been made. The parties have now briefed that verification
issue and have renewed their arguments about the additional
issues in the case.
 - 3 -

Background

At the time Ms. Britton filed her petition, she resided in

Massachusetts.

Assessment and non-payment of self-reported payroll taxes

Ms. Britton was the sole member3 of the LLC for the calendar

quarters ending September 30, 2006, December 31, 2006, and

June 30, 2007. She does not allege that she elected to treat the

LLC as a corporation (and she previously stipulated, Medical

Practice I, 132 T.C. at 126, that she did not elect to treat the

LLC as a corporation). Ms. Britton timely filed the LLC’s Forms

941, Employer’s Quarterly Federal Tax Return, for each of those

quarters. As in Medical Practice I, id., those returns named not

Ms. Britton personally but “MEDICAL PRACTICE SOLUTIONS LLC” as

the taxpayer. The returns gave the LLC’s employer identification

number (EIN) and its business address in Beverly, Massachusetts.

Ms. Britton signed the first two of those returns, and

3
Ms. Britton does not deny that she was the sole member of
the LLC. On the contrary, she stipulated the fact in Medical
Practice I, 132 T.C. at 126; and on the signature block on her
opposition in this case she identifies herself as “Carolyn
Britton, Sole Member” (as she has done in her filings in this
case since March 4, 2009). However, Ms. Britton submitted with
her opposition and cross-motion the declaration of her
representative and husband, Randy Britton, who states that he did
not ever tell the appeals officer how many members there were.
Nonetheless, the settlement officer concluded in the first CDP
hearing that Ms. Britton was the sole member; the notices of
determination identified her as “SOLE MBR”; and Ms. Britton does
not claim that she disputed the settlement officer’s conclusion
at any time in the original or supplemental hearing.
 - 4 -

Ms. Britton’s husband Randy Britton signed the third as “Power of

Attorney”. As in Medical Practice I, id., the LLC left unpaid

some of the tax liabilities reported on each of those returns.

The IRS duly assessed the liabilities under the LLC’s name and

EIN.4 On various dates in 2007 the IRS gave Ms. Britton notice

of the balances due for the three quarters.

IRS collection activity

On December 10, 2007, the IRS issued a Final Notice of

Intent to Levy and Notice of Your Right to a Hearing for the two

quarters ending December 31, 2006, and June 30, 2007;5 and on

December 18, 2007, the IRS issued a Notice of Federal Tax Lien

Filing and Your Right to a Hearing Under IRC 6320 for the three

quarters ending September 30, 2006, December 31, 2006, and June

30, 2007. As in Medical Practice I, id., the notices were issued

not to the LLC but to Ms. Britton. However, the notices were

sent not to Ms. Britton’s home address in Lexington but to the

Beverly address; but Ms. Britton did receive the notices. The

notices referred to the LLC’s EIN and identified the liabilities

4
Ms. Britton contends that the record does not show
assessments against the LLC, but the self-authenticating
Forms 4340, Certificate of Assessments, Payments, and Other
Specified Matters, which the appeals officer provided to
Ms. Britton during the supplemental hearing, plainly show the
assessments.
5
The record does not show why the notice of intent to levy
covered only two periods, while the notice of Federal tax lien
covered three periods.
 - 5 -

as arising from Forms 941. The notices informed Ms. Britton of

her right to request a collection due process (CDP) hearing

before the IRS’s Office of Appeals and enclosed for that purpose

blank Forms 12153, Request for a Collection Due Process or

Equivalent Hearing.

Before Ms. Britton’s CDP hearing was conducted by the IRS

Office of Appeals (discussed below), IRS collection personnel

continued their work on her liabilities to some extent.

Beginning January 16, 2008, collection personnel corresponded

with Ms. Britton’s husband about the Brittons’ request that the

lien on her home be released, because (the Brittons alleged)

Ms. Britton had no equity in the house, since Ms. Britton owed a

mortgage to Mr. Britton. According to the collection personnel’s

record, Ms. Britton alleged that she “gave her husband Randy a

$100,000 mortgage after the LLC taxes accrued and were assessed,

and one week before the NFTL [notice of Federal tax lien] was

recorded”, but “Mr. Britton did not provide proof that there was

actual transfer of value in exchange for the mortgage granted to

him”. In late January the collection personnel decided not to

discharge the lien, and on February 6, 2008, the IRS sent the

Brittons a letter advising them that their application for a

discharge was not accepted.
 - 6 -

CDP proceedings

Ms. Britton timely requested a collection due process (CDP)

hearing before the Office of Appeals with respect to both

collection notices by submitting to the IRS on January 9, 2008, a

Form 12153.6 The Form 12153 names Ms. Britton as the person

requesting the hearing, gives the LLC’s EIN, states the Beverly

address, and refers to the Form 941 liabilities. Ms. Britton did

not propose a collection alternative on her Form 12153 but rather

requested withdrawal of the lien and requested penalty abatement.

As in Medical Practice I, 132 T.C. at 126-127, she argued in her

Form 12153 that the “[c]ollection action is against the wrong tax

payer [sic]; the IRS check the box rules are invalid”.

On February 19, 2008, an IRS appeals officer7 sent a letter

to Ms. Britton scheduling her CDP hearing before the Office of

Appeals for March 4, 2008. The letter was addressed to--

6
The Form 12153 bore Ms. Britton’s name (not the name of the
LLC) and was signed by Ms. Britton’s husband and attorney-in-
fact, Randy Britton.
7
The employee who conducted the CDP hearing is identified in
the hearing record as a “settlement officer”. Section 6330(c)(1)
and (c)(3) refers to the person who conducts the CDP hearing as
an “appeals officer”; but section 6330(b)(3) refers to the person
as “an officer or employee”, and section 6330(b)(1) and (d)(2)
refers more generally to the “Internal Revenue Service Office of
Appeals”. We use the statutory term “appeals officer” throughout
this opinion.
 - 7 -

MEDICAL PRACTICE SOLUTIONS LLC
CAROLYN BRITTON SOLE MBR

--at the Beverly address. On March 3, 2008, Ms. Britton’s

husband and representative requested a face-to-face hearing. To

accommodate this request the appeals officer rescheduled the CDP

hearing to March 6, 2008. On March 6, 2008, the CDP hearing was

held between Mr. Britton and the appeals officer. Mr. Britton

disputed whether the notice of lien was properly filed under

section 6323 because it listed Ms. Britton and her personal

address, but the notice required by section 6320 was sent to the

Beverly address. The appeals officer advised Mr. Britton that he

would look into the lien issue. Mr. Britton inquired about an

installment agreement, but he did not propose one. As a result,

the appeals officer advised Mr. Britton that Ms. Britton had

until April 9, 2008, to provide proof of the LLC’s compliance

with filing and payment obligations and to propose any collection

alternatives for consideration.

Following the CDP hearing, the appeals officer researched

the lien issue and determined that the lien had been properly

filed against Ms. Britton because the LLC is a disregarded

entity. During the course of the appeals officer’s research he

discovered that Ms. Britton had petitioned this Court (i.e., in

Medical Practice I, docket No. 14668-07L) with respect to a

notice of determination for prior tax periods of the LLC. Those

other periods were still under the jurisdiction of the IRS’s
 - 8 -

Office of Chief Counsel and this Court. As a result, the appeals

officer phoned Ms. Britton’s attorney-in-fact to inform him that

the IRS’s Office of Appeals could not consider any collection

alternatives because of the pending CDP appeal with respect to

the other periods. Furthermore, the appeals officer determined

in his final review of Ms. Britton’s case on April 22, 2008, that

even apart from the pending CDP appeal, Ms. Britton would not be

eligible for any collection alternatives because the LLC was not

current with Federal tax deposit requirements.

On May 9, 2008, the Office of Appeals issued two Notices of

Determination Concerning Collection Action(s) Under Section 6320

and/or 6330: one sustaining the filing of the notice of Federal

tax lien for tax periods ending September 30, 2006, December 31,

2006, and June 30, 2007, and one sustaining the proposed levy to

collect the unpaid taxes for tax periods ending December 31,

2006, and June 30, 2007. As in Medical Practice I, both notices

were “sent to Britton as the sole member of the LLC”. 132 T.C.

at 127. That is, the name of the recipient stated on the notice

was--

MEDICAL PRACTICE SOLUTIONS LLC
CAROLYN BRITTON SOLE MBR

--and the address used for the notice was the Beverly address.

In attachments to the notices, the appeals officer stated:

“With the best information available, the requirements of various

applicable law or administrative procedures have been met”.
 - 9 -

However, the attachments to the notices did not describe the

“best information available” that the appeals officer used to

verify that the requirements had been met. The attachments do

state that “[t]ranscripts of the taxpayer’s accounts show the

Service Center issued [notice and demand]” for payment. However,

the attachments do not indicate that transcripts were also

consulted to verify that proper assessments had been made.

Prior proceedings in this case

On June 16, 2008, Ms. Britton timely petitioned this Court

to review the notices of determination. The petition alleges

seven points of error that can be grouped into the following four

issues (which we discuss below in parts II.A through II.D):

(A) whether the appeals officer obtained the requisite

verification that “applicable law or administrative

procedure” had been satisfied under section

6330(c)(1);8

(B) whether Ms. Britton is personally liable for the tax

liabilities of the LLC;

(C) whether the appeals officer erred in refusing to

consider a collection alternative; and

8
We construe broadly the petition of Ms. Britton as a pro se
litigant. See Rule 31(d); Swope v. Commissioner, T.C. Memo.
1990-82. The petition’s references to defects in the assessment
and in the issuance of notices and to lack of “proper procedure”
were sufficient to plead a dispute as to whether verification was
obtained as required by section 6330(c)(1).
 - 10 -

(D) whether the lien on Ms. Britton’s house should have

been released given her alleged lack of equity in it.9

On March 16, 2009, the parties jointly moved under Rule 122

that the case be decided on the basis of a stipulated record. We

found that the stipulated record showed verification of only one

of the four legal and administrative requirements that should

have been verified (i.e., it showed that Ms. Britton was given

notice of intent to levy, see secs. 6330(a)(1), 6331(d)(1), and

notice of the filing of a Federal tax lien, see sec. 6320(a)(1),

and of her right to a hearing, see secs. 6320(a)(3)(B),

6330(a)(3)(B), 6331(d)(4)(C)). However, we found that the record

did not show verification of the other three requirements (i.e.,

the IRS’s timely assessment of the liability, see

secs. 6201(a)(1), 6501(a); the taxpayer’s failure to pay the

liability, see secs. 6321, 6331(a); and the giving to the

taxpayer of notice and demand for payment of the liability, see

sec. 6303, before any levy, see sec. 6331(a)). Consequently, we

did not address issues (B), (C), and (D) above. Rather, by our

9
We previously stated that Ms. Britton did not raise her
contention as to equity in her home in her Form 12153 (requesting
the CDP hearing) nor at the CDP hearing. Med. Practice
Solutions, LLC v. Commissioner, T.C. Memo. 2009-214 n.7.
Respondent allows, however, that if her Form 12153 is “liberally
constru[ed]”, then the issue may have been implicitly raised in
the contention in Form 12153 that “the filing of the notice [of
lien] was * * * not in accordance with administrative
procedures”. We therefore assume that the issue was raised in
Ms. Britton’s request for a CDP hearing, and we discuss it below
in part II.D.
 - 11 -

order of September 16, 2009, we remanded the case to the Office

of Appeals so that it could “clarify the record as to

verification”.

Compliance with the order of remand

The appeals officer who had conducted the first CDP hearing

had retired, and a different appeals officer was appointed to

conduct the supplemental hearing. She examined the file

developed during the first CDP hearing, and she found transcripts

and other documents that had been consulted by the prior appeals

officer. She concluded that the documents showed the prior

appeals officer had verified the fulfillment of the legal and

administrative requirements.

The appeals officer also did her own independent review and

verified that the legal and administrative requirements had been

satisfied. On November 3, 2009, she mailed to Mr. and

Ms. Britton copies of a Form 4340 for each of the periods, each

of which shows a timely assessment, an unpaid balance, and the

mailing of a “Statutory Notice of Balance Due” before the mailing

of a “Statutory Notice of Intent to Levy” and “Federal Tax Lien”.

The Forms 4340 identify the taxpayer as--

MEDICAL PRACTICE SOLUTIONS LLC
BRITTON CAROLYN SOLE MBR

--and they all bear the LLC’s EIN. Having thus obtained the

verification required by section 6330(c)(1), the Office of

Appeals issued a supplemental notice of determination.
 - 12 -

The parties reported on their compliance with the Court’s

remand order, and they then cross-moved for summary judgment.

Discussion

I. Applicable legal principles

A. Collection review principles

1. Agency-level action

If a taxpayer fails to pay any Federal income tax liability

after notice and demand, chapter 64 of the Code provides two

means by which the IRS can collect the tax: First, section 6321

imposes a lien in favor of the United States on all the property

of the delinquent taxpayer, and section 6323(f) authorizes the

IRS to file notice of that lien. Second, section 6331(a)

authorizes the IRS to collect the tax by levy on the taxpayer’s

property.

However, Congress has added to chapter 64 of the Code

certain provisions (in subchapter C, part I, and in subchapter D,

part I) as “Due Process for Liens” and “Due Process for

Collections”. The IRS must comply with those provisions after

filing a tax lien and before proceeding with a levy. Within five

business days after filing a tax lien, the IRS must provide

written notice of that filing to the taxpayer. Sec. 6320(a).

After receiving such a notice, the taxpayer may request an
 - 13 -

administrative hearing before the Office of Appeals.10

Sec. 6320(b)(1). Similarly, before proceeding with a levy, the

IRS must issue a final notice of intent to levy and notify the

taxpayer of the right to an administrative hearing before the

Office of Appeals. Sec. 6330(a) and (b)(1). Administrative

review is carried out by way of a hearing before the Office of

Appeals under section 6330(b) and (c); and if the taxpayer is

dissatisfied with the outcome there, it can appeal that

determination to this Court under section 6330(d), as Ms. Britton

has done.

The pertinent procedures for the agency-level CDP hearing

are set forth in section 6330(c). First, the appeals officer

must obtain verification from the Secretary that the requirements

of any applicable law or administrative procedure have been met.

Sec. 6330(c)(1) (discussed below in part II.A). Second, the

taxpayer may “raise at the hearing any relevant issue relating to

the unpaid tax or the proposed levy,” including challenges to the

appropriateness of the collection action and offers of collection

alternatives. Sec. 6330(c)(2)(A). (Such issues are discussed

below in parts II.C, II.D, and II.E.) Additionally, the taxpayer

may contest the existence and amount of the underlying tax

10
To the extent practicable, a CDP hearing concerning a lien
under section 6320 is to be held in conjunction with a CDP
hearing concerning a levy under section 6330, and the conduct of
the lien hearing is to be in accordance with the relevant
provisions of section 6330. See sec. 6320(b)(4), (c).
 - 14 -

liability, but only if he did not receive a notice of deficiency

or otherwise have an opportunity to dispute the tax liability.

Sec. 6330(c)(2)(B). (Ms. Britton’s challenge of the underlying

liability is discussed below in part II.B.) After considering

those issues, the Office of Appeals issues its notice of

determination. See sec. 6330(c)(3).

2. Judicial review

If the taxpayer is not satisfied with the determination of

the Office of Appeals, the taxpayer may “appeal such

determination to the Tax Court”. Sec. 6330(d)(1). Where

underlying liability is at issue (pursuant to section

6330(c)(2)(B)), we review de novo the determination of the Office

of Appeals as to the underlying tax liability. We review IRS

determinations of issues other than liability for abuse of

discretion, Goza v. Commissioner, 114 T.C. 176, 182 (2000)--that

is, whether the determination was arbitrary, capricious, or

without sound basis in fact or law, see Murphy v. Commissioner,

125 T.C. 301, 320 (2005), affd. 469 F.3d 27 (1st Cir. 2006); Sego

v. Commissioner, 114 T.C. 604, 610 (2000).

This Court has held that an appeal pursuant to section 6330

is resolved by a de novo trial, Robinette v. Commissioner, 123

T.C. 85 (2004), revd. 439 F.3d 455 (8th Cir. 2006), but the Court

of Appeals for the First Circuit follows the “record rule”. That

is, subject to “limited exceptions”, “the administrative record
 - 15 -

rule * * * applies to a taxpayer’s CDP hearing appeal to the Tax

Court”, so that the Tax Court “could not consider evidence

outside of the administrative record in ruling on a taxpayer’s

CDP hearing appeal”, and “judicial review normally should be

limited to the information that was before the IRS when making

the challenged rulings.” Murphy v. Commissioner, 469 F.3d at 31.

In this case, because an appeal would lie to the U.S. Court of

Appeals for the First Circuit, we follow its precedent. See

Golsen v. Commissioner, 54 T.C. 742 (1970), affd. 445 F.2d 985

(10th Cir. 1971). Consistent with Murphy, respondent’s motion

for summary judgment relies solely on the record of the CDP

hearing.

B. Summary judgment standards

Where the pertinent facts are not in dispute, a party may

move for summary judgment to expedite the litigation and avoid an

unnecessary trial. Fla. Peach Corp. v. Commissioner, 90 T.C.

678, 681 (1988). Summary judgment may be granted where there is

no genuine issue as to any material fact and a decision can be

rendered as a matter of law. Rule 121(a) and (b); see Sundstrand

Corp. v. Commissioner, 98 T.C. 518, 520 (1992), affd. 17 F.3d 965

(7th Cir. 1994).

The party moving for summary judgment bears the burden of

showing that there is no genuine issue as to any material fact,

and factual inferences will be drawn in the manner most favorable
 - 16 -

to the party opposing summary judgment. Dahlstrom v.

Commissioner, 85 T.C. 812, 821 (1985). Respondent’s motion

carries that burden and is fully supported by the appeals

officer’s declaration and by the Forms 4340, which are self-

authenticating under Rule 902(11) of the Federal Rules of

Evidence.

II. Respondent’s entitlement to summary judgment

Respondent has shown that there is no genuine issue as to

any material fact and that he is entitled to judgment as a matter

of law. We discuss here the issues that Ms. Britton has raised,

none of which effectively contradicts respondent’s showing.

A. Respondent has shown verification as required by
section 6330(c)(1).

Section 6330(c)(1) requires the appeals officer conducting a

CDP hearing to “verify that the requirements of any applicable

law or administrative procedure have been met.” Hoyle v.

Commissioner, 131 T.C. 197, 199, 201-203 (2008). In the case of

a self-reported tax liability, the basic legal requirements for

which the appeals officer must obtain verification in order to

sustain the filing of a notice of Federal tax lien or to

determine to proceed with a levy are:

• the IRS’s timely assessment of the liability,
secs. 6201(a)(1), 6501(a);

• the taxpayer’s failure to pay the liability,
secs. 6321, 6331(a);
 - 17 -

• the giving to the taxpayer of notice and demand for
payment of the liability, sec. 6303, before any levy,
sec. 6331(a); and

• the giving to the taxpayer of notice of intent to levy,
secs. 6330(a)(1), 6331(d)(1), or notice of the filing
of a Federal tax lien, sec. 6320(a)(1), and of the
taxpayer’s right to a hearing, secs. 6320(a)(3)(B),
6330(a)(3)(B), 6331(d)(4)(C).

We previously found that the documents from the initial CDP

hearing that were put into the record of this case by the

stipulation of the parties did not show verification of the first

three of those requirements, and we remanded the case to the

Office of Appeals to clarify those matters.

Respondent has now demonstrated that the verification was

obtained--i.e., that the IRS made timely assessments, that it

gave Ms. Britton notice and demand for payment, that Ms. Britton

did not fully pay the liabilities, and that the IRS gave her

notice of the lien and the proposed levy and of her right to a

hearing. At the supplemental hearing, the appeals officer both

reconstructed the information available at the original CDP

hearing (which she confirmed by reviewing documents in the

administrative record that had not previously been included in

our record in this appeal) to confirm that these requirements

were verified at that hearing and made her own verification of

these requirements with, inter alia, updated information on

Forms 4340 from the IRS’s records. Respondent’s motion sets out
 - 18 -

in detail, with citations of the IRS’s records, its compliance

with the applicable requirements.

Ms. Britton suggests no error in respondent’s analysis.

Rather, her principal contention as to verification is in effect

a restatement of her contention that she is not liable for the

LLC’s employment taxes. That is, she contends that the Office of

Appeals did not obtain verification that the liabilities had been

assessed against her, rather than against the LLC. We now turn

to that contention.

B. Ms. Britton and the LLC are not distinct taxpayers, and
she is liable for its taxes.

As is noted above, section 6330(c)(2)(B) permits some

taxpayers to “raise at the [CDP] hearing challenges to the

existence or amount of the underlying tax liability”, and

respondent does not dispute that Ms. Britton was eligible to

raise such challenges at her hearing. Ms. Britton makes several

related arguments that challenge her liability, and they all rest

on her insistence that she and the LLC are distinct taxpayers

with distinct liabilities and the right to distinct notices and

filings. This premise, however, is flawed both as a matter of

law and as a matter of fact.

As for the law, Ms. Britton attempts to dispute here the

validity of the “check-the-box” regulations, 26 C.F.R. section

301.7701-3(b), Proced. & Admin. Regs., pursuant to which an LLC

that does not elect corporate status is treated as a disregarded
 - 19 -

entity. In Ms. Britton’s prior case, however, we held that the

regulation is valid and that when a single-member LLC fails to

pay its employment taxes, collection may proceed against the

single member as if “the LLC and its sole member are a single

taxpayer or person to whom notice is given.” Medical Practice I,

132 T.C. at 127.11

Consequently, Ms. Britton’s arguments about the liability of

the LLC versus her own liability, or assessments being made

against the LLC and not herself, or the use of the LLC’s EIN

rather than her Social Security number, or the presence of both

her name and the LLC’s name on the demand for payment and the

Forms 4340, or notices of the lien and of the proposed levy being

given to herself rather than to the LLC--all of these arguments

fail because Ms. Britton and the LLC are, as we explicitly held,

“a single taxpayer or person to whom notice is given.” Id. When

the IRS thereafter issued notices of lien and proposed levy to

Ms. Britton, it addressed the correct taxpayer. When the Office

of Appeals sustained the lien and proposed levy in notices of

11
Our decision in Medical Practice I aligned itself with
uniform authority, including the judgment of two Courts of
Appeals. See McNamee v. Dept. of the Treasury, 488 F.3d 100 (2d
Cir. 2007); Littriello v. United States, 484 F.3d 372 (6th Cir.
2007). We note, however, that for employment taxes related to
wages paid on or after January 1, 2009 (i.e., after the periods
in issue), a disregarded entity is treated as a corporation for
purposes of employment tax reporting and liability. 26 C.F.R.
sec. 301.7701-2(c)(2)(iv), Proced. & Admin. Regs.
 - 20 -

determination issued to Ms. Britton as sole member of the LLC, it

made no mistake.

Ms. Britton seems to lay special stress on the fact that

respondent “admits” that the IRS “only assessed the tax liability

against MPS under its Employee Identification Number”, rather

than under Ms. Britton’s number. However, the IRS’s issuance of

an Employer Identification Number does not necessarily indicate

the existence of a distinct taxpayer. On the contrary, some

individuals have “both a social security number * * * and an

employer identification number”. 26 C.F.R. sec. 301.6109-

1(d)(4)(ii), Proced. & Admin. Regs.12 An individual who is an

employer or a sole proprietor is instructed to apply for and use

an EIN for use in the employment context. See 26 C.F.R.

sec. 31.6011(b)-1(a)(ii), Employment Tax Regs.; sec. 301.6109-

1(a)(ii)(D), Proced. & Admin. Regs. Ms. Britton put the LLC’s

EIN on the returns, thereby inducing the IRS to record the

employment tax assessments under that number. She could not, by

that act, frustrate the principle that a disregarded entity’s

employment tax liability is the liability of the LLC’s sole

12
“Social security number” is defined in 26 C.F.R.
sec. 301.7701-11, Proced. & Admin. Regs., and “employer
identification number” is defined in 26 C.F.R. sec. 301.7701-12,
Proced. & Admin. Regs. See also 26 C.F.R. sec. 301.6109-1(a)(1),
Proced. & Admin. Regs. (describing the principal types of
taxpayer identifying numbers).
 - 21 -

member. If her use of that EIN was a technical error,13 it was

her error; and she could not by such an error avoid her liability

for employment taxes. Consequently, when the IRS assessed the

employment taxes under the LLC’s EIN, Ms. Britton became liable.

As for the facts, there can be no plausible suggestion that

Ms. Britton was confused or misled about the IRS’s assertion of

her liability for the LLC’s employment taxes. She signed and

filed two of the LLC’s three Form 941 returns that gave rise to

the liabilities, and her husband and representative signed the

third. On her own Form 12153 requesting the CDP hearing, she

gave her own name and the LLC’s EIN and the Beverly address. The

IRS’s notice of lien and notice of intent to levy for the “941”

taxes were both issued in Ms. Britton’s name; and the notices of

determination included her name along with the name of the LLC.

Ms. Britton’s petition insists that the notices of lien and

proposed levy “were improperly sent to the business address of

Medical Practice Solutions, LLC”,14 and respondent states that

13
26 C.F.R. sec. 301.6109-1(h)(2), Proced. & Admin Regs.,
provides that “a single owner entity that is disregarded as an
entity separate from its owner under § 301.7701-3, must use its
owner’s taxpayer identifying number (TIN) for federal tax
purposes.” The record in this case does not show that
Ms. Britton has ever obtained a distinct TIN for herself (apart
from the LLC’s EIN), and we therefore cannot rule out the
possibility that the LLC’s EIN is in fact Ms. Britton’s TIN.
14
It is not clear whether the use of the Beverly address on
the notices was incorrect. The Code requires that such notices
be “(A) given in person; (B) left at the dwelling or usual place
(continued...)
 - 22 -

instead they “should have been sent to petitioner’s home address”

in Lexington; but respondent correctly asserts that any such

error was harmless, since Ms. Britton did in fact receive the

notices in time to request a CDP hearing and did in fact request

and receive a hearing.15

As we held in Medical Practice I, Ms. Britton and the LLC

“are a single taxpayer”. She is liable for its employment taxes.

C. Ms. Britton has abandoned her contention that the
Office of Appeals abused its discretion by failing to
consider an installment agreement.

In her petition Ms. Britton argued that she should have been

allowed to enter into an installment agreement to pay the

14
(...continued)
of business of such person; or (C) sent by certified or
registered mail, return receipt requested, to such person’s last
known address”. See sec. 6330(a)(2) (emphasis added); see also
sec. 6320(a)(2). If Ms. Britton and the LLC are “a single
taxpayer or person to whom notice is given”, Medical Practice I,
132 T.C. at 127 (emphasis added), then a notice mailed to the
LLC’s address has arguably been mailed to the sole member’s
address.
15
Cf. Estate of Brandon v. Commissioner, 133 T.C. ___, ___
(2009) (slip op. at 8) (“the intent of section 6320 was fulfilled
because the estate received notice, made a timely request for,
and received, a hearing relating to the” notice of Federal tax
lien); Mulvania v. Commissioner, 81 T.C. 65, 67-68 (1983) (an
erroneously addressed notice of deficiency under sec. 6212 is
nevertheless valid if the taxpayer receives actual notice of the
Commissioner’s determination in a timely fashion); Barmes v. IRS,
116 F. Supp. 2d 1007, 1014 (S.D. Ind. 2000) (an erroneously
addressed notice and demand under sec. 6303 is nevertheless valid
where the notice “contained * * * [the taxpayer’s] name, stated
the amount of tax owing, and reached * * * [the taxpayer] at the
address of his business. Therefore, the formal requirements of
the statute have been met. To be sure, [the taxpayer] * * * had
actual notice of the assessment”).
 - 23 -

liabilities at issue. However, while her representative did

express to the appeals officer an interest in such an agreement,

Ms. Britton never actually proposed any installment agreement;

and the appeals officer determined in April 2008 that she was

ineligible for an installment agreement because she was “not in

compliance with federal tax deposits”.16 In our previous opinion

in this case we did not decide this issue, but we noted “the

apparent lack of merit in her contentions about collection

alternatives” and observed that “[t]he Office of Appeals does not

abuse its discretion to reject a collection alternative where (as

appears, from the record before us, to be the case here) the

taxpayer did not propose a specific alternative, see Cavazos v.

Commissioner, T.C. Memo. 2008-257”. Med. Practice Solutions, LLC

v. Commissioner, T.C. Memo. 2009-214 (slip op. at 14-15 and

n.14).

Ms. Britton has not renewed this argument in any subsequent

filing; and we find that she has abandoned it.

D. The Office of Appeals did not abuse its discretion by
declining to discharge the lien on Ms. Britton’s house.

Before Ms. Britton’s CDP hearing with the Office of Appeals,

IRS collection personnel had decided not to discharge the lien on

16
See Giamelli v. Commissioner, 129 T.C. 107, 111-112 (2007)
(“Internal Revenue Service guidelines require a taxpayer to be
current with filing and payment requirements to qualify for an
installment agreement”); see Internal Revenue Manual pt.
5.14.1.4.1(19) (Sept. 26, 2008) (“Compliance with filing, paying
estimated taxes, and federal tax deposits must be current from
the date the installment agreement begins” (emphasis added)).
 - 24 -

her house. She had argued that she had no equity in the house,

but the IRS determined that Ms. Britton “gave her husband Randy a

$100,000 mortgage after the LLC taxes accrued and were assessed,

and one week before the NFTL [notice of Federal tax lien] was

recorded”, and that “Mr. Britton did not provide proof that there

was actual transfer of value in exchange for the mortgage granted

to him”. We assume, see supra note 9, that general language in

her initial request for a CDP hearing-- “the filing of the notice

[of lien] was * * * not in accordance with administrative

procedures”--raised this issue in the CDP context. For purposes

of respondent’s motion for summary judgment, we also assume (as

Mr. Britton states in his declaration) that at the first hearing

with the original appeals officer, Mr. Britton “raised the issue

of equity in the home”.

However, there is no other information in the CDP hearing

record that relates to this issue. In particular, there is no

information in the CDP hearing record about the value of the

house or about any mortgage loans or their unpaid balances.17

17
The only information that Mr. Britton’s declaration cites
is from prior communication not with the Office of Appeals but
with collection personnel--i.e., the “ICS History Transcript”
that does recount, at 19-27, exchanges of information about
mortgages. “The Integrated Collection System (ICS) provides
workload management, case assignment/tracking, inventory control,
electronic processing, and case analysis tools to support the
SB/SE [Small Business/Self-Employed] organization collection
fieldwork.” IRM 5.1.20.2.2.1(1) (May 27, 2008) (emphasis added).
Thus, the information exchanges recounted in the ICS History
Transcript are communications not with Appeals but with SB/SE
collection personnel. The transcript therefore does nothing to
(continued...)
 - 25 -

From the Court’s previous opinion Ms. Britton was on notice that

the issue was not even apparent--much less substantiated--in the

CDP hearing record. In this appeal Ms. Britton did not allege

that any information was omitted from the CDP record, did not

attempt to supplement the record in any way, and did not request

or attempt to substantiate this issue in the supplemental hearing

on remand.

Given this cursory and paperless “rais[ing]” of this issue,

we cannot find, even entertaining all presumptions in

Ms. Britton’s favor, that the appeals officer abused her

discretion by failing to consider whether the lien on

Ms. Britton’s house should be discharged. The record before her

included nothing to support an argument that a discharge was

warranted.

E. Ms. Britton shows no lack of an “Impartial Officer”.

After the supplemental CDP hearing, Ms. Britton raised an

additional argument under the rubric of “ex-parte communica-

tions”. Sections 6320(b) (concerning notices of liens) and

6330(b) (concerning notices of proposed levy) are both entitled

“Right to Fair Hearing”, and they both set out, in equivalent

language, certain principles that are to govern the CDP hearing.

One of those principles is in sections 6320(b)(3) and 6330(b)(3),

17
(...continued)
show what information (if any) Ms. Britton provided during her
CDP hearing.
 - 26 -

which are both entitled “Impartial Officer” and which both

provide:

The hearing under this subsection shall be conducted by
an officer or employee who has had no prior involvement
with respect to the unpaid tax * * * before the first
hearing under this section * * *.

To further implement this impartiality principle, the

Commissioner promulgated Revenue Procedure 2000-43, 2000-2 C.B.

404, which provides that appeals officers are not allowed to have

ex-parte communications with other IRS employees that would

appear to compromise the independence of their review function.

See Indus. Investors v. Commissioner, T.C. Memo. 2007-93,

93 T.C.M. (CCH) 1126, 1128 (2007), affd. 353 Fed. Appx. 90 (9th

Cir. 2009). Ex-parte communications are “communications that

take place between Appeals and another Service function without

the participation of the taxpayer or the taxpayer's

representative” and are “prohibited to the extent that such

communications appear to compromise the independence of Appeals.”

Rev. Proc. 2000-43, sec. 3, Q&A-1, 2000-2 C.B. at 405.

Ms. Britton invokes this ex-parte communications principle

in an attempt to invalidate the CDP proceedings that have been

conducted in this case, but she distorts the actual principle.

She seems to argue that because printouts of IRS transcripts were

generated by personnel other than the appeals officer herself who

made the verification, her work involved impermissible “ex parte

communications”, and she lacked independence and failed to be an

impartial officer. However, by requiring the appeals officer to
 - 27 -

“obtain verification from the Secretary”, sec. 6330(c)(1)

(emphasis added), the statute plainly reflects the expectation

that information will be obtained from other personnel, see also

Rev. Proc. 2000-43, sec. 3, Q&A-5, 2000-2 C.B. at 405-406

(describing permissible communication with non-Appeals

personnel).

“Ex parte communications” with IRS collection personnel

might compromise the independence of the Office of Appeals; but

if (as it appears) Ms. Britton objects to the appeals officer’s

consultation with her colleagues in the Office of Appeals, then

she misunderstands the applicable principles. Generally,

“[i]ntra-Appeals communications during the deliberation process

do not compromise or appear to compromise that independence.

Appeals employees may communicate freely with other Appeals

employees without inviting the taxpayer/representative to

participate.” Id., Q&A-3, 2000-2 C.B. at 405.

To the extent Ms. Britton complains about the appeals

officer’s consultation with attorneys from the Office of Chief

Counsel who are responsible for this litigation, she similarly

misunderstands the ex-parte communications principles. Revenue

Procedure 2000-43, sec. 3, Q&A-11, 2000-2 C.B. at 406-407, states

that “[d]ocketed cases will be handled in accordance with

Rev. Proc. 87-24, [sec. 2.06] 1987-1 C.B. 720 [, 721],” which

sensibly allows consultation between Appeals and the Office of

Chief Counsel.
 - 28 -

Focusing on the statutory requirement that the appeals

officer must have had “no prior involvement”, Ms. Britton seems

to argue that once an employee in the Office of Appeals has had

any connection with her case, he is disabled by that “prior

involvement” from working on the next phase of her case and

therefore taints the proceedings by his involvement. However,

what sections 6320(b)(3) and 6330(b)(3) actually prohibit is

“prior involvement with respect to the unpaid tax * * * before

the first hearing under this section”. (Emphasis added.) This

prohibition has no application to Office of Appeals personnel

who, before Ms. Britton requested her CDP hearing, had no prior

involvement with the LLC’s employment taxes for the three periods

at issue here. Any personnel eligible to work on her CDP hearing

are thereafter eligible to work on any supplemental hearing.

To reflect the foregoing,

An appropriate order and

decision will be entered.