T.C. Summary Opinion 2013-48
UNITED STATES TAX COURT
LAW OFFICES OF ROBERT A. CUSHMAN, LLC, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 17309-12S L. Filed June 13, 2013.
Robert A. Cushman (a member), for petitioner.
William C. Bogardus, for respondent.
SUMMARY OPINION
PANUTHOS, Chief Special Trial Judge: This case was heard pursuant to
the provisions of section 7463 of the Internal Revenue Code in effect when the
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petition was filed.1 Pursuant to section 7463(b), the decision to be entered is not
reviewable by any other court, and this opinion shall not be treated as precedent
for any other case.
This case is before the Court on petitioner’s2 request for review of
respondent’s determination sustaining the filing of a notice of Federal tax lien
(NFTL) with respect to unpaid employment tax liability for the period ending
December 31, 2005. The sole issue for decision is whether respondent abused his
discretion in sustaining the NFTL for the period ending December 31, 2005, and
not granting petitioner’s request for additional time for a face-to-face meeting with
respondent’s settlement officer (SO).
Background
Some of the facts have been stipulated, and we incorporate the stipulation
and the accompanying exhibits by this reference. At the time the petition was
filed, petitioner’s principal place of business was in Connecticut.
1
Unless otherwise indicated, all section references are to the Internal
Revenue Code of 1986, as amended. All Rule references are to the Tax Court
Rules of Practice and Procedure.
2
Petitioner was represented by Robert A. Cushman. Mr. Cushman signed
the petition as a member of the L.L.C.
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On January 3, 2012, respondent mailed to petitioner an NFTL for unpaid
employment taxes for the tax period ending December 31, 2005. The NFTL
showed a tax liability of $6,698.54 for that tax period, which is the same liability
the Court sustained in Law Offices of Robert A. Cushman, LLC v. Commissioner,
T.C. Summary Opinion 2011-37, filed March 29, 2011.3 There, the Court
concluded that respondent (1) properly assessed petitioner’s employment tax
liability for the period ending December 31, 2005, (2) did not abuse his discretion
in conducting petitioner’s CDP hearing through correspondence and telephone
calls, and (3) did not abuse his discretion in denying petitioner’s request for an
installment agreement. Petitioner timely submitted a Form 12153, Request for a
Collection Due Process or Equivalent Hearing. On the Form 12153 petitioner
checked the box stating “I Cannot Pay Balance” and requested that respondent
withdraw the NFTL. Petitioner also asserted that the deposit penalty law had
changed and that there would have been no penalty under the current law, that
some balances had been paid off but not properly allocated, and that a Form 433-
3
In Law Offices of Robert A. Cushman, LLC v. Commissioner, T.C.
Summary Opinion 2011-37, petitioner requested judicial review of respondent’s
determination sustaining a levy with respect to the tax period ending December
31, 2005, the same period at issue in this case.
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B, Collection Information Statement for Businesses, dated January 21, 2010, was
never considered.
Settlement Officer Michael J. Matuszczak (SO Matuszczak) sent a letter to
petitioner on March 2, 2012, acknowledging receipt of petitioner’s Form 12153.
SO Matuszczak sent another letter to petitioner on March 29, 2012, scheduling a
telephone collection due process (CDP) hearing for May 16, 2012, and informing
petitioner that any request to reschedule the CDP hearing had to be made by April
12, 2012. The March 29, 2012, letter advised that petitioner had had a prior
opportunity to dispute the underlying liability and that petitioner therefore would
not be able to dispute the underlying liability at this CDP hearing. The letter also
stated that petitioner had to submit a completed Form 433-B and must have timely
paid in full any required Federal tax deposits for SO Matuszczak to consider
collection alternatives. The letter further stated that petitioner had to submit a
completed and signed Form 12277, Application for Withdrawal of Filed Form
668(Y), Notice of Federal Tax Lien, if petitioner wanted respondent to consider
withdrawal of the NFTL.
On April 12, 2012, Mr. Cushman, as an individual, mailed to respondent a
completed Form 12277. On the form Mr. Cushman stated that a CDP hearing was
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pending and that he was unable to obtain credit with the lien affecting his credit
score.
At some point after receiving the March 29, 2012, letter scheduling the
telephone CDP hearing, petitioner contacted SO Matuszczak to request a face-to-
face hearing. The face-to-face hearing was scheduled for May 23, 2012. On May
22, 2012, petitioner’s office sent a fax to SO Matuszczak requesting to reschedule
the May 23, 2012, CDP hearing to June 1, June 6, or June 8 because of Mr.
Cushman’s schedule. Mr. Cushman did not appear at or call SO Matuszczak for
the CDP hearing scheduled for May 23, 2012, and aside from the Form 12277 Mr.
Cushman submitted as an individual, petitioner did not submit any of the
information requested in the March 29, 2012, letter.
On June 8, 2012, respondent mailed petitioner a Notice of Determination
Concerning Collection Action(s) Under Section 6320 and/or 6330 sustaining the
NFTL. The notice of determination stated that petitioner only requested
withdrawal of the NFTL and did not request any collection alternative or submit
financial information requested for consideration of collection alternatives.
Petitioner filed the petition, asserting among other things that a CDP
hearing was not held even though petitioner had provided several potential dates
for a hearing and that the Form 433-B dated January 21, 2010, was never
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considered. Petitioner’s only argument at trial was that it did not have a CDP
hearing because the SO failed to grant the requested extension for a hearing date.
Petitioner asserted that it is seeking “just a * * * face-to-face hearing” and that if
the Court were to remand the case to respondent’s Appeals Office, petitioner
would propose that respondent withdraw the NFTL as requested and discuss
collection alternatives.
Discussion
1. General CDP Requirements
If a taxpayer fails to pay any Federal income tax liability after notice and
demand, a lien in favor of the United States is imposed on all the property of the
delinquent taxpayer. Sec. 6321. Section 6320(a) provides that within five
business days after filing a notice of tax lien, the IRS must provide written notice
of that filing to the taxpayer. After receiving such notice, the taxpayer may
request an administrative hearing before the Appeals Office. Sec. 6320(a)(3)(B).
A CDP hearing concerning a lien under section 6320 is to be conducted in
accordance with the relevant provisions of section 6330. Sec. 6320(c). We have
jurisdiction under section 6330(d)(1) to review the Commissioner’s determination
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that the NFTL was proper and that the Commissioner may proceed to collect by
it.4
In reviewing the Commissioner’s decision to sustain collection actions,
where the validity of the underlying tax liability is properly at issue, the Court
reviews the Commissioner’s determination of the underlying tax liability de novo.
Sego v. Commissioner, 114 T.C. 604, 610 (2000); Goza v. Commissioner, 114
T.C. 176, 181-182 (2000). The Court reviews any other administrative
determination regarding proposed collection actions for abuse of discretion. Sego
v. Commissioner, 114 T.C. at 610; Goza v. Commissioner, 114 T.C. at 182.5 An
abuse of discretion occurs when the exercise of discretion is without sound basis
in fact or law. Murphy v. Commissioner, 125 T.C. 301, 308 (2005), aff’d, 469
F.3d 27 (1st Cir. 2006).
4
The Pension Protection Act of 2006, Pub. L. No. 109-280, sec. 855, 120
Stat. at 1019, amended sec. 6330(d) and granted this Court jurisdiction over all
sec. 6330 determinations made after October 16, 2006. Perkins v. Commissioner,
129 T.C. 58, 63 n.7 (2007).
5
Petitioner does not dispute the validity of the underlying tax liability in this
proceeding. In any event petitioner previously had an opportunity to dispute this
liability in a CDP hearing with respect to a levy for the same tax period. See Law
Offices of Robert A. Cushman, LLC, v. Commissioner, T.C. Summary Opinion
2011-37; see also sec. 6330(c)(4).
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At the collection hearing, a taxpayer may raise any relevant issues relating
to the unpaid tax or proposed levy, including spousal defenses, challenges to the
appropriateness of the collection actions, and offers of collection alternatives.
Sec. 6330(c)(2)(A). In addition, he may challenge the existence or amount of the
underlying tax liability, but only if he did not receive a notice of deficiency or
otherwise have an opportunity to dispute such liability. Sec. 6330(c)(2)(B).
The Appeals officer must verify that the requirements of applicable law and
administrative procedure have been met, consider the 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 action be no more intrusive than necessary. Sec. 6330(b), (c)(3).
Petitioner asserts that respondent abused his discretion in sustaining the NFTL
because respondent refused to reschedule petitioner’s face-to-face CDP hearing.
2. Denial of Face-to-Face Hearing
Petitioner argues that it did not receive a CDP hearing and that its Form
433-B was not considered. Although a CDP hearing may consist of a face-to-face
conference, a proper hearing may also occur by telephone or by correspondence
under certain circumstances. Barry v. Commissioner, T.C. Memo. 2011-127, 2011
WL 2260418, at *5 (citing Katz v. Commissioner, 115 T.C. 329, 337-338 (2000)).
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Requests for a face-to-face CDP hearing in order to discuss a collection alternative
“will not be granted unless other taxpayers would be eligible for the alternative in
similar circumstances.” Sec. 301.6320-1(d)(2), Q&A-D8, Proced. & Admin.
Regs. To be eligible for a collection alternative, the taxpayer must provide
required returns, make required deposits of tax, and provide requested financial
information, including Form 433-B, to the Appeals Office. Id.; see also Rivas v.
Commissioner, T.C. Memo. 2012-20, 2012 WL 141745, at *6; Williams v.
Commissioner, T.C. Memo. 2008-173, 2008 WL 2834275, at *9. On its Form
12153 petitioner requested withdrawal of the NFTL and did not request collection
alternatives. SO Matuszczak requested petitioner to submit a Form 433-B and
supporting documentation within 14 days of his March 29, 2012, letter if
petitioner wished to discuss collection alternatives. Petitioner never submitted a
current Form 433-B or supporting financial information, and therefore petitioner
was not eligible for a collection alternative. Consequently, respondent’s Appeals
Office did not abuse its discretion by denying petitioner’s request to reschedule
the face-to-face hearing, and petitioner was afforded a reasonable opportunity to
be heard for the tax period at issue. See Roman v. Commissioner, T.C. Memo.
2004-20.
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3. Refusal To Grant Continuance and Denial of Collection Alternatives
Petitioner further contends that respondent’s Appeals Office abused its
discretion when it denied petitioner’s request for a continuance of the CDP
hearing and did not consider collection alternatives. While an Appeals officer’s
unreasonable denial of a request for more time to submit financial information or
other evidence may be an abuse of discretion, see Shanley v. Commissioner, T.C.
Memo. 2009-17, 2009 WL 195929, at *5; see also Sullivan v. Commissioner, T.C.
Memo. 2012-337, at *20, we conclude that the denial by the Appeals Office was
not an abuse of discretion.
Petitioner learned of the CDP hearing scheduled for May 16, 2012, when it
received the March 29, 2012, letter from SO Matuszczak. The March 29, 2012,
letter clearly informed petitioner that it should make any requests to reschedule the
CDP hearing by April 12, 2012. The letter also requested a current Form 433-B so
that SO Matuszczak could determine whether petitioner qualified for any
collection alternatives.
SO Matuszczak agreed to reschedule the CDP hearing to May 23, 2012.
When petitioner requested to reschedule the hearing for the second time, petitioner
made the request on May 22, 2012, just one day before the scheduled hearing date.
Petitioner had not provided the financial information requested in the March 29,
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2012, letter and requested the extension because of Mr. Cushman’s scheduling
problem, not because petitioner needed more time to complete the requested
financial information.
A taxpayer may raise collection alternatives that may include an installment
agreement or an offer-in-compromise. Secs. 6320(c), 6330(c)(2)(A)(iii).
Petitioner did not request any collection alternatives. In the March 29, 2012,
letter, the SO requested a current Form 433-B so that he could determine whether
petitioner qualified for any collection alternatives. Petitioner did not provide a
current Form 433-B but, in its petition, asserted that a Form 433-B dated January
21, 2010, was not considered. We have consistently held that it is not an abuse of
discretion for the Appeals Office to reject collection alternatives and sustain the
proposed collection action on the basis of the taxpayer’s failure to submit
requested financial information. See Huntress v. Commissioner, T.C. Memo.
2009-161; Prater v. Commissioner, T.C. Memo. 2007-241; Roman v.
Commissioner, T.C. Memo. 2004-20. Petitioner was aware that SO Matuszczak
had requested current financial information, and petitioner failed to provide it.
On these facts, we cannot find that the denial of the extension because of
petitioner’s failure to submit requested financial information was arbitrary,
capricious, or without sound basis in fact and law. Furthermore, it was not an
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abuse of discretion for the Appeals Office to reject collection alternatives because
of a lack of necessary financial information. Petitioner has not shown that
respondent’s determination to sustain the NFTL because of its unpaid tax
liabilities for the tax period ending December 31, 2005, and failure to submit a
current Form 433-B was arbitrary, capricious, or without sound basis in fact or
law.
4. Conclusion
On the basis of our findings stated above, we sustain respondent’s
determination for the tax period ending December 31, 2005. We also conclude
that there was no abuse of discretion in conducting petitioner’s CDP hearing
through correspondence and telephone calls and no abuse of discretion in denying
petitioner collection alternatives.
We have considered the parties’ arguments and, to the extent not discussed
herein, we conclude the arguments to be irrelevant, moot, or without merit.
To reflect the foregoing,
Decision will be entered for
respondent.