T.C. Memo. 2012-220
UNITED STATES TAX COURT
LA MARINE SERVICE, L.L.C., Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 28955-10L. Filed July 31, 2012.
William A. Neilson, for petitioner.
John K. Parchman, for respondent.
MEMORANDUM OPINION
FOLEY, Judge: The issue for decision is whether respondent abused his
discretion in determining to proceed with the collection of petitioner’s tax liabilities.
The parties submitted this case fully stipulated pursuant to Rule 122.1
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Unless otherwise indicated, all section references are to the Internal Revenue
(continued...)
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Background
Petitioner filed its quarterly Federal employment tax returns relating to the
taxable periods ending June 30 and September 30, 2004; March 31, June 30,
September 30, and December 31, 2005; March 31, June 30, September 30, and
December 31, 2006; and March 31, June 30, and September 30, 2007, but failed to
pay the full amount of tax reported on these returns. Respondent assessed a late-
filing addition to tax, a tax deposit penalty, and a failure to timely pay addition to
tax relating to each of these returns. Petitioner filed, but failed to pay the full
amount of tax reported on, its Federal unemployment tax return relating to 2007.
On March 18, 2010, respondent sent petitioner a Final Notice of Intent to
Levy and Your Right to a Hearing letter relating to the periods in issue. On April
16, 2010, petitioner timely requested a collection due process (CDP) hearing and
indicated that it wanted to propose a collection alternative. In a letter dated
September 30, 2010, respondent scheduled an October 21, 2010, CDP hearing and
requested that petitioner provide a collection information statement, financial
documentation, and proof that it was current with all Federal tax obligations. This
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(...continued)
Code in effect at all relevant times, and all Rule references are to the Tax Court
Rules of Practice and Procedure.
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CDP hearing was subsequently rescheduled, at petitioner’s request, to November 2,
2010.
On November 1, 2010, petitioner’s counsel informed respondent that
petitioner had applied for a loan to pay its tax liabilities and requested postponement
of its CDP hearing. In addition, petitioner proposed two collection alternatives: a
six-month stay of collection while it attempted to obtain a loan or, in the alternative,
an installment agreement. Petitioner asserted that it would submit a collection
information statement and the requested documentation with its request for an
installment agreement.
On November 2, 2010, respondent held a CDP hearing with petitioner’s
counsel. Petitioner failed to provide respondent with any requested documentation,
and on November 23, 2010, respondent issued notices of determination sustaining
the proposed collection action. On December 27, 2010, petitioner, whose principal
place of business was Belle Chasse, Louisiana, filed its petition with the Court.
After filing its petition, petitioner satisfied its tax liability relating to its 2007 Federal
unemployment tax return.
Discussion
Section 6330(a) provides that the Commissioner must notify the taxpayer of
his right to a hearing prior to levying on the taxpayer’s property. If the taxpayer
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submits a timely request for an administrative hearing, the hearing must be
conducted by the IRS Office of Appeals before an impartial officer. Sec.
6330(b)(1). During a collection hearing the taxpayer may raise relevant issues such
as the appropriateness of the proposed collection action and possible collection
alternatives. Sec. 6330(c)(2)(A).
The Appeals officer must verify that the requirements of applicable law and
administrative procedure have been met, consider issues properly raised by the
taxpayer, and consider whether the proposed collection action balances the need for
the efficient collection of taxes with the taxpayer’s legitimate concern that any
collection be no more intrusive than necessary. Sec. 6330(b), (c)(3). In reviewing
the Commissioner’s determination, the Court considers only matters that were
properly raised at the CDP hearing or otherwise brought to the attention of the
Appeals Office. See Pough v. Commissioner, 135 T.C. 344, 350 (2010); Giamelli
v. Commissioner, 129 T.C. 107, 115 (2007).
Petitioner contends that respondent erroneously assessed petitioner’s 20052
and 2007 Federal unemployment tax return liabilities. During its CDP hearing
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Petitioner references, what respondent refers to as, a “miscellaneous
penalty” relating to petitioner’s 2005 Federal unemployment tax return. The record
provides no description or additional information relating to this “penalty”.
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petitioner did not challenge its underlying tax liabilities relating to the periods in
issue. Therefore petitioner is precluded from contesting its underlying tax liabilities
before this Court. See Pough v. Commissioner, 135 T.C. at 350; Giamelli v.
Commissioner, 129 T.C. at 115. Accordingly, we review respondent’s
administrative determinations for abuse of discretion. See Goza v. Commissioner,
114 T.C. 176, 182 (2000). Petitioner contends that respondent abused his discretion
in rejecting petitioner’s proposed collection alternatives. Petitioner, however, has
failed to establish “clear taxpayer abuse and unfairness”. See Christopher Cross,
Inc. v. United States, 461 F.3d 610, 612 (5th Cir. 2006). Prior to the CDP hearing
the Appeals officer requested documentation relating to petitioner’s financial
condition. Respondent provided petitioner with sufficient time to submit the
requested documentation, and petitioner’s failure to do so provided a reasonable
basis for respondent to reject petitioner’s proposed collection alternatives. See
McLaine v. Commissioner, 138 T.C. __, __ (slip op. at 24-25) (Mar. 13, 2012)
(holding that it is not an abuse of discretion for the Commissioner to reject a
collection alternative because of a taxpayer’s failure to provide requested
documentation); Pough v. Commissioner, 135 T.C. at 351 (holding that the
Commissioner may set reasonable deadlines for a taxpayer to provide requested
documentation). Accordingly, respondent did not abuse his discretion. See
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McLaine v. Commissioner, 138 T.C. at __ (slip op. at 24-25); Pough v.
Commissioner, 135 T.C. at 351.
Contentions we have not addressed are irrelevant, moot, or meritless.
To reflect the foregoing,
Decision will be entered
for respondent.