T.C. Memo. 2015-57
UNITED STATES TAX COURT
ORLANDO L. ROBINSON AND TRACEY L. ROBINSON, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 8452-13L. Filed March 25, 2015.
Orlando L. Robinson and Tracey L. Robinson, pro sese.
Jonathan E. Behrens, for respondent.
MEMORANDUM OPINION
LAUBER, Judge: In this collection due process (CDP) case, petitioners
seek review pursuant to section 6330(d)(1)1 of the determination by the Internal
1
All statutory references are to the Internal Revenue Code in effect at all
relevant times. All Rule references are to the Tax Court Rules of Practice and
Procedure. We round all monetary amounts to the nearest dollar.
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[*2] Revenue Service (IRS or respondent) to uphold a notice of intent to levy.
Respondent has moved for summary judgment under Rule 121, contending that
there are no disputed issues of material fact and that his decision to sustain the
collection action was proper as a matter of law. We agree and will grant the
motion.
Background
Petitioners did not respond to the motion for summary judgment. The fol-
lowing uncontroverted facts are derived from the petition, the exhibits attached to
the summary judgment motion, and respondent’s other filings in this case. See,
e.g., Ulloa v. Commissioner, T.C. Memo. 2010-68. Petitioners resided in New
Jersey when they petitioned this Court.
Petitioners work in the financial services industry. They filed a joint
Federal income tax return for 2008 reporting a tax liability of $35,175, of which
$28,365 was satisfied by withholding. Petitioners enclosed no payment with the
return. The IRS assessed the tax plus applicable penalties and interest.
In an effort to collect the unpaid liability, the IRS sent petitioners a Final
Notice of Intent to Levy and Notice of Your Right to a Hearing. Petitioners re-
quested a CDP hearing, indicating that they did not dispute their tax liability for
2008 but desired an installment agreement. After conducting the hearing, the set-
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[*3] tlement officer (SO) determined that petitioners were not eligible for an
installment agreement. He sustained the collection action, and petitioners timely
sought review in this Court.
After filing his answer, respondent ascertained that the administrative file
was incomplete. He accordingly moved to remand the case for a supplemental
hearing before the IRS Appeals Office. We granted that motion on November 22,
2013, and a supplemental CDP hearing was scheduled for January 15, 2014.
Before the hearing the SO reviewed petitioners’ Form 433-A, Collection In-
formation Statement for Wage Earners and Self-Employed Individuals, which
disclosed certain real estate assets. During the hearing petitioners confirmed that
they owned three real estate properties with a combined equity of approximately
$70,000. The SO advised petitioners that, in order to be eligible for an installment
agreement, they had to first apply the equity in their real estate toward their
outstanding tax liabilities.
Petitioners stated that they had listed one property for sale but received no
offers. The SO noted that petitioners’ asking price for this property was 25%
higher than what their Form 433-A showed to be its fair market value; moreover,
they listed the property on a self-service real estate listing Web site and made no
effort to list the property elsewhere or employ a broker. On the basis of these
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[*4] facts, the SO concluded that petitioners had not made a good-faith effort to
sell the property. Because petitioners were unwilling to liquidate any of their real
estate, the SO informed them that he could not approve an installment agreement.
Accordingly, on February 19, 2014, the IRS issued a supplemental notice of deter-
mination sustaining the proposed levy.
On June 19, 2014, respondent moved for summary judgment, and the Court
ordered petitioners to file a response to this motion by August 24, 2014. The order
advised petitioners that “under Tax Court Rule 121(d), judgment may be entered
against a party who fails to respond to a Motion for Summary Judgment.” Peti-
tioners have not responded either to the motion or to the Court’s order.
Discussion
A. Summary Judgment and Standard of Review
The purpose of summary judgment is to expedite litigation and avoid costly,
time-consuming, and unnecessary trials. Fla. Peach Corp. v. Commissioner, 90
T.C. 678, 681 (1988). Under Rule 121(b) the Court may grant summary judgment
when there is no genuine dispute as to any material fact and a decision may be
rendered as a matter of law. Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520,
(1992), aff’d, 17 F.3d 965 (7th Cir. 1994). In deciding whether to grant summary
judgment, we construe factual materials and inferences drawn from them in the
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[*5] light most favorable to the nonmoving party. However, the nonmoving party
“may not rest upon the mere allegations or denials” of his pleadings but “must set
forth specific facts showing that there is a genuine dispute for trial.” Rule 121(d).
Petitioners were ordered to respond, but failed to respond, to the motion for
summary judgment. Although their petition challenged the original notice of de-
termination, they have made no filing that the Court could construe as alleging any
error in the supplemental notice of determination that is currently before us for
review. We would be amply justified in entering decision against petitioners for
these reasons alone. See Rules 121(d), 331(b)(4); Drake v. Commissioner, T.C.
Memo. 2006-151, 92 T.C.M. (CCH) 37, 40 n.9, aff’d, 511 F.3d 65 (1st Cir. 2007).
We will nevertheless consider the case on its merits. We find that there
exist no disputes of material fact and that the case is appropriate for summary
adjudication. Where (as here) taxpayers do not dispute their underlying tax lia-
bility, the Court reviews the IRS’ determination for abuse of discretion. Goza v.
Commissioner, 114 T.C. 176, 182 (2000). An abuse of discretion exists when a
determination is arbitrary, capricious, or without sound basis in fact or law. See
Murphy v. Commissioner, 125 T.C. 301, 320 (2005), aff’d, 469 F.3d 27 (1st Cir.
2006).
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[*6] B. Analysis
In deciding whether the SO abused his discretion we consider whether he:
(1) properly verified that the requirements of applicable law and administrative
procedure have been met; (2) considered any relevant issues petitioners raised; and
(3) determined whether the proposed collection action “balances the need for the
efficient collection of taxes with the legitimate concern of the person that any col-
lection action be no more intrusive than necessary.” Sec. 6330(c)(3).
We find that the SO conducted a thorough review of petitioners’ account
transcripts and verified that the requirements of applicable law and administrative
procedure were followed. We further conclude that the SO balanced the need for
the efficient collection of taxes with petitioners’ legitimate concern that the collec-
tion action be no more intrusive than necessary. We need only discuss whether the
SO fairly considered the issues petitioners raised.
The taxpayer may raise at a CDP hearing relevant issues relating to the col-
lection action, including offers of collection alternatives. See sec. 6330(c)(2)(A).
Petitioners’ hearing request stated their intention to propose an installment agree-
ment. Section 6159 authorizes the IRS to enter into a written agreement allowing
a taxpayer to pay a tax liability in installments if it concludes that the “agreement
will facilitate full or partial collection of such liability.” The IRS has discretion to
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[*7] reject a proposed installment agreement (subject to certain restrictions when
the liability is below $10,000). See Thompson v. Commissioner, 140 T.C. 173,
179 (2013); sec. 301.6159-1(a), (c)(1)(i), Proced. & Admin. Regs. This Court
gives due deference to the determinations the IRS makes in the exercise of this
discretionary authority. See Woodral v. Commissioner, 112 T.C. 19, 23 (1999);
Marascalco v. Commissioner, T.C. Memo. 2010-130, aff’d, 420 Fed. Appx. 423
(5th Cir. 2011). We will not substitute our judgment for that of the IRS, recalcu-
late a taxpayer’s ability to pay, or independently determine what would be an ac-
ceptable collection alternative. See Thompson, 140 T.C. at 179; O’Donnell v.
Commissioner, T.C. Memo. 2013-247.
It is not an abuse of discretion for a settlement officer to rely on guidelines
requiring taxpayers, in the absence of special circumstances such as old age, ill
health, or economic hardship, to liquidate assets in order to qualify for an install-
ment agreement. See Eichler v. Commissioner, 143 T.C. __, __ (slip op. at 16-17)
(July 23, 2014); Internal Revenue Manual pt. 5.14.1.4 (5) and (6) (June 1, 2010)
(“Taxpayers do not qualify for installment agreements if balance due accounts can
be fully or partially satisfied by liquidating assets[.]”). The SO concluded that
petitioners were ineligible for an installment agreement after determining that they
could fully or partially satisfy their tax liabilities by liquidating or borrowing
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[*8] against their assets (approximately $70,000 of equity in real estate). See
Hosie v. Commissioner, T.C. Memo. 2014-246 (finding no abuse of discretion
when settlement officer denied an installment agreement because the taxpayers
failed to liquidate assets).
Petitioners made no showing of ill health or economic hardship. And their
alleged inability to sell their real estate due to a lack of offers is not a “special cir-
cumstance” warranting exceptional relief. As the SO noted, petitioners made a
very limited effort to sell the property, and their asking price significantly
exceeded their own estimate of its fair market value. The SO did not abuse his
discretion in determining that petitioners had not made a good-faith effort to
liquidate assets and thus did not qualify for an installment agreement. Finding no
abuse of discretion in any respect, we will sustain the proposed collection action.
To reflect the foregoing,
An appropriate order and decision
will be entered.