T.C. Memo. 2011-171
UNITED STATES TAX COURT
JEFFREY S. KURTZ, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 10233-10L. Filed July 13, 2011.
Jeremy Bell, for petitioner.
Michael T. Shelton, for respondent.
MEMORANDUM OPINION
LARO, Judge: Petitioner, while residing in Illinois,
petitioned the Court under section 6330(d) to review a
determination of respondent’s Office of Appeals (Appeals)
sustaining a proposed levy upon petitioner’s property.1
1
Section references are to the Internal Revenue Code, and
(continued...)
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Respondent proposed the levy to collect a $20,532 deficiency in
petitioner’s 2005 Federal income tax, a $4,106 addition to tax
under section 6651(a)(1), and a $4,106 accuracy-related penalty
under section 6662(a). Respondent has filed with the Court his
motion for summary judgment under Rule 121. Although ordered to
do so, petitioner did not file a response to respondent’s motion.
We shall grant respondent’s motion.
Background
Respondent selected petitioner’s 2005 Federal income tax
return for audit. As a result of that audit, respondent issued
to petitioner a notice of deficiency dated August 7, 2008 (first
notice of deficiency). In the first notice of deficiency
respondent determined a $20,532 deficiency in petitioner’s 2005
Federal income tax, a $4,106 addition to tax under section
6651(a)(1), and a $4,106 accuracy-related penalty under section
6662.
Respondent also selected petitioner’s 2006 and 2007 Federal
income tax returns for audit. As a result of that audit,
respondent issued to petitioner and Nicole Jungstand Kurtz (Ms.
Kurtz) a second notice of deficiency dated August 7, 2008 (second
notice of deficiency). In the second notice of deficiency,
respondent determined deficiencies of $24,624 and $18,956 in
1
(...continued)
Rule references are to the Tax Court Rules of Practice and
Procedure. Some dollar amounts are rounded.
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petitioner’s 2006 and 2007 Federal income taxes, respectively,
accuracy-related penalties under section 6662(a) of $4,925 and
$3,791, respectively, and a $2,603 addition to tax under section
6651(a)(1) related to petitioner’s 2006 Federal income tax
return.
By letter dated March 15, 2009, petitioner’s representative
acknowledged receipt of the first and second notices of
deficiency. Petitioner did not petition the Court to challenge
respondent’s determinations in the first notice of deficiency.
Nor did petitioner and Ms. Kurtz petition the Court to challenge
respondent’s determinations in the second notice of deficiency.
Respondent assessed the liabilities determined in the first and
second notices of deficiency in due course.
On April 9, 2009, respondent sent to petitioner a Letter
1058, Final Notice of Intent to Levy and Notice of Your Right to
a Hearing (final levy notice), with respect to (1) petitioner’s
2005 Federal income tax liability, and (2) petitioner and Ms.
Kurtz’s 2006 and 2007 Federal income tax liabilities. The final
levy notice informed petitioner that respondent intended to levy
upon his property to collect unpaid tax liabilities for 2005,
2006, and 2007. The final levy notice also advised petitioner
that he was entitled to a hearing with Appeals to review the
propriety of the proposed levy.
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In response to the final levy notice petitioner sent to
respondent Form 12153, Request for a Collection Due Process or
Equivalent Hearing, for his 2005, 2006, and 2007 Federal income
tax liabilities. On that Form 12153 petitioner asserted that the
proposed levy was inappropriate because respondent’s auditor did
not evaluate the documentation which petitioner submitted in
connection with his audit. Petitioner did not request an
installment agreement or an offer-in-compromise on that Form
12153.
On March 19, 2010, a settlement officer in Appeals held a
face-to-face collection due process (CDP) hearing with
petitioner’s representative. The settlement officer determined
that petitioner had been provided with several opportunities to
dispute his 2005, 2006, and 2007 Federal income tax liabilities
but was unable to convince respondent’s auditor that he was not
liable for those taxes. Following the CDP hearing Appeals issued
to petitioner a notice of determination for 2005. Appeals also
issued to petitioner and Ms. Kurtz a notice of determination for
each of the years 2006 and 2007. By notice of determination
dated April 6, 2010 (notice), Appeals sustained the proposed
collection action for 2005.2
2
Appeals sustained the proposed collection action for
petitioner’s 2006 and 2007 Federal income tax liabilities by
separate notices of determination dated Apr. 6 and 13, 2010,
respectively.
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The notice stated that Appeals had verified or received
verification that the requirements of applicable law and
administrative procedure for the proposed levy had been met.
That notice also stated that collection alternatives were
discussed but none was initiated. That notice also determined
that petitioner had been given several prior opportunities to
dispute his 2005 Federal income tax liability but failed to do
so. Finally, the notice balanced the proposed collection action
with the concern that such action be no more intrusive than
necessary. On May 4, 2011, petitioner petitioned the Court.3
Discussion
We decide whether to grant respondent’s motion for summary
judgment in this collection review proceeding.4 Summary judgment
may be granted with respect to any part of the legal issue in
controversy “if the pleadings, answers to interrogatories,
depositions, admissions, and any other acceptable materials * * *
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); Craig v. Commissioner, 119 T.C. 252, 259-260 (2002). As
3
Petitioner and Ms. Kurtz also petitioned the Court in
response to the notices of determination for 2006 and 2007.
4
Respondent has filed separate motions for summary judgment
with respect to each petition filed in response to the 2005,
2006, and 2007 collection actions. We address these motions in
separate Memorandum Opinions because these cases were not
consolidated.
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the moving party, respondent bears the burden of establishing
that there is no genuine issue of material fact. Dahlstrom v.
Commissioner, 85 T.C. 812, 821 (1985); Jacklin v. Commissioner,
79 T.C. 340, 344 (1982). Although factual inferences will be
drawn in a light most favorable to petitioner as the nonmoving
party, petitioner cannot merely rest upon the allegations or
denials in the pleadings but must “set forth specific facts
showing that there is a genuine issue for trial.” See Rule
121(d); Dahlstrom v. Commissioner, supra at 820-821. Respondent
supports his motion for summary judgment with the pleadings, a
declaration from the Appeals manager who supervised petitioner’s
CDP hearing, and various exhibits. Petitioner, in failing to
respond to respondent’s motion for summary judgment, has failed
to raise any genuine issue of material fact. We therefore
conclude that this case is ripe for summary judgment.
Section 6331(a) authorizes the Commissioner to levy upon a
taxpayer’s property where that taxpayer is liable for taxes but
neglects or refuses to pay that liability within 10 days after
notice and demand for payment. Section 6330 generally provides
that the Commissioner may not proceed with collection by levy
until the taxpayer has been given written notice and an
opportunity for a hearing with an impartial Appeals officer. See
sec. 6330(a) and (b); Davis v. Commissioner, 115 T.C. 35, 37
(2000). Following the CDP hearing Appeals must issue a notice of
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determination which sets forth its findings and decisions. See
sec. 6330(c)(3); see also sec. 301.6330-1(e)(3), Q&A-E8, Proced.
& Admin. Regs. Section 6330(d)(1) allows for judicial review of
Appeals’ determination where the taxpayer files a timely petition
with the Court.
A taxpayer may generally challenge the existence or amount
of an underlying tax liability only if he or she did not receive
a statutory notice of deficiency for such liability or did not
otherwise have an opportunity to dispute that tax liability.
Sego v. Commissioner, 114 T.C. 604, 609 (2000); see also sec.
6330(c)(2)(B). Where the underlying tax liability is not at
issue, we review the Commissioner’s administrative determination
for abuse of discretion. Lunsford v. Commissioner, 117 T.C. 183,
185 (2001); Goza v. Commissioner, 114 T.C. 176, 181-182 (2000).
Abuse of discretion exists where Appeals acted arbitrarily,
capriciously, or without sound basis in fact or law. Murphy v.
Commissioner, 125 T.C. 301, 320 (2005), affd. 469 F.3d 27 (1st
Cir. 2006); Woodral v. Commissioner, 112 T.C. 19, 23 (1999).
Petitioner received a notice of deficiency for 2005 and
acknowledged receipt of that notice of deficiency through a
letter from his representative. Because petitioner did not file
a petition for redetermination within 90 days, he is precluded
from challenging his 2005 tax liability. See Martinez v.
Commissioner, T.C. Memo. 2010-181. We thus review Appeals’
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determination to sustain the proposed levy for abuse of
discretion. Goza v. Commissioner, supra.
Under section 6330(c)(3), the determination of an Appeals
officer must consider (A) the verification that the requirements
of applicable law and administrative procedure have been met, (B)
any relevant issues relating to the unpaid tax or proposed levy,
and (C) whether the proposed levy balances the need for efficient
collection of tax with the taxpayer’s legitimate concern that the
collection action be no more intrusive than necessary. Here, the
Appeals settlement officer addressed each of these requirements.
She reviewed the Internal Revenue Service’s transcripts and
computer records of petitioner’s account to determine that the
requirements of applicable law and administrative procedure had
been met. See Neugebauer v. Commissioner, T.C. Memo. 2003-292;
Hack v. Commissioner, T.C. Memo. 2002-243. The Appeals
settlement officer considered the issues petitioner raised but
determined that he could not contest the validity or amount of
his underlying tax liability because he had been given a prior
opportunity to do so. See Martinez v. Commissioner, supra.
Finally, the Appeals settlement officer balanced the need for
efficient collection of taxes against petitioner’s legitimate
concern that the proposed collection action be no more intrusive
than necessary.
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We conclude that Appeals did not abuse its discretion in
sustaining the proposed levy on petitioner’s property to satisfy
his 2005 Federal income tax liability. Accordingly, we will
grant respondent’s motion for summary judgment.
To reflect the foregoing,
An appropriate order and
decision will be entered.