T.C. Memo. 2015-129
UNITED STATES TAX COURT
JOHN A. HARTMANN, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 6825-14L. Filed July 13, 2015.
John A. Hartmann, pro se.
Daniel C. Munce, for respondent.
MEMORANDUM OPINION
KERRIGAN, Judge: The petition in this case was filed in response to a
Notice of Determination Concerning Collection Action(s) under Section 6320
and/or 6330 of the Internal Revenue Code dated February 26, 2014, upholding a
proposed levy collection action for tax years 2003, 2004, 2005, 2007, and 2008
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[*2] (tax years at issue). We must consider whether respondent’s determination to
proceed with the collection action regarding petitioner’s unpaid income tax
liabilities for the tax years at issue was proper.
Unless otherwise indicated, all section references are to the Internal
Revenue Code in effect at all relevant times, and all Rule references are to the Tax
Court Rules of Practice and Procedure.
Background
This case was fully stipulated under Rule 122. The stipulated facts are
incorporated in our findings by this reference. Petitioner resided in New Jersey
when he filed the petition.
Petitioner filed tax returns for the tax years at issue. On July 29, 2013,
respondent mailed petitioner a notice of intent to levy for the tax years at issue.
Petitioner filed timely a Form 12153, Request for a Collection Due Process or
Equivalent Hearing. On the Form 12153 petitioner indicated that he was
interested in an offer-in-compromise as a collection alternative. On the form he
also indicated that a reason for the collection alternative was that he was unable to
pay the balance because of age and illness. He did not contest the underlying
liabilities.
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[*3] On December 2, 2013, the Internal Revenue Service Office of Appeals
(Appeals) mailed petitioner a letter scheduling a hearing for January 7, 2014. In
the letter Appeals requested that petitioner complete and submit the following:
(1) an installment agreement or an offer-in-compromise; (2) a Form 433-A,
Collection Information Statement for Wage Earners and Self-Employed
Individuals; (3) a signed copy of petitioner’s Form 1040, U.S. Individual Income
Tax Return, for 2012; and (4) any additional information, including facts and
evidence, to support and explain petitioner’s failure to timely file his income tax
returns.
On December 10, 2013, petitioner mailed Appeals a letter indicating that he
was unavailable for a hearing on January 7, 2014, and suggesting alternative dates.
Appeals replied with a letter dated December 13, 2013, agreeing to reschedule the
conference to January 15, 2014, and reminding petitioner about the requested
information that had been listed in the December 2, 2013, letter.
On December 30, 2013, petitioner mailed Appeals another letter. In this
letter he submitted an informal offer for an installment agreement as follows:
(1) $50,000 payable on March 1, 2014; (2) $50,000 payable on September 1,
2014; (3) $25,000 payable on March 1, 2015; (4) $25,000 payable on September
1, 2015; and (5) the balance at a rate of $3,000 per month. He indicated that he
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[*4] did not fill out an offer-in-compromise form because his above payment
proposal was not “traditional”. He also attached a completed Form 433-A.
However, he did not provide any other documentation to support the information
reported on the Form 433-A. He also did not provide any evidence of health or
age-related problems.
The hearing was held on January 15, 2014. At the hearing the Appeals
officer informed petitioner that he was not in compliance with his filing obligation
because he had failed to file an income tax return for 2012 and had not made any
estimated tax payments. The Appeals officer also informed petitioner that no
collection alternative, including an offer-in-compromise or an installment
agreement, could be considered because petitioner had not filed his 2012 tax
return or provided any documentation to support his Form 433-A or his claimed
health or age-related problems.
On February 26, 2014, the Appeals officer issued the notice of
determination sustaining the proposed collection action. In the notice the Appeals
officer stated that the collection action was sustained because petitioner failed to
provide the requested supporting documentation.
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[*5] On November 24, 2014, petitioner filed his 2012 tax return.
Discussion
Section 6330 requires the Secretary to furnish a person notice and
opportunity for a hearing before an impartial officer or employee of Appeals
before levying on the person’s property. At the hearing the person may raise any
relevant issue relating to the unpaid tax or the proposed levy, including spousal
defenses, challenges to the appropriateness of the collection action, and offers of
collection alternatives. Sec. 6330(c)(2). The person may challenge the existence
or the amount of the underlying tax liability for any period only if the person did
not receive a notice of deficiency or did not otherwise have an opportunity to
dispute the liability. Sec. 6330(c)(2)(B); Sego v. Commissioner, 114 T.C. 604,
609 (2000).
Following a hearing the Appeals officer must determine whether proceeding
with the proposed levy action is appropriate. In making that determination, the
Appeals officer is required to take into consideration: (1) whether the
requirements of any applicable law or administrative procedure have been met;
(2) any issues appropriately raised by the taxpayer; and (3) whether the proposed
collection action balances the need for the efficient collection of taxes with the
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[*6] legitimate concern of the taxpayer that any collection action be no more
intrusive than necessary. Sec. 6330(c)(3); see also Lunsford v. Commissioner, 117
T.C. 183, 184 (2001). We note that the Appeals officer properly based his
determination on the factors required by section 6330(c)(3).
I. Standard of Review
Once Appeals issues a notice of determination, the person may seek review
in this Court. Sec. 6330(d)(1). Where, as here, the taxpayer does not challenge
the underlying liability, our review is for abuse of discretion. Sego v.
Commissioner, 114 T.C. at 610. An abuse of discretion occurs if Appeals
exercises its discretion “arbitrarily, capriciously, or without sound basis in fact or
law.” Woodral v. Commissioner, 112 T.C. 19, 23 (1999). The Court does not
conduct an independent review and substitute its judgment for that of the Appeals
officer. Murphy v. Commissioner, 125 T.C. 301, 320 (2005), aff’d, 469 F.3d 27
(1st Cir. 2006). If the Appeals officer follows all statutory and administrative
guidelines and provides a reasoned, balanced decision, the Court will not reweigh
the equities. Link v. Commissioner, T.C. Memo. 2013-53, at *12. We have held
that “in our review for an abuse of discretion under section 6330(d)(1) of
respondent’s determination, generally we consider only arguments, issues, and
other matter that were raised at the collection hearing or otherwise
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[*7] brought to the attention of the Appeals Office.” Magana v. Commissioner,
118 T.C. 488, 493 (2002).
II. Abuse of Discretion
Petitioner argues that the Appeals officer abused his discretion because he
did not properly consider petitioner’s proposed installment agreement, did not give
petitioner enough time to file his 2012 tax return, and did not take into
consideration petitioner’s advanced age and health. Respondent contends that the
Appeals officer did not abuse his discretion because petitioner did not provide the
requested information, including his 2012 return, the financial information to
support the Form 433-A, or any information to support his health and age-related
claims. Respondent further contends that he was not required to give petitioner
any time to file his 2012 return.
Judicial review of a notice of determination is limited to issues that the
taxpayer properly raised at the CDP hearing. Sec. 301.6330-1(f)(2), Q&A-F3,
Proced. & Admin. Regs. “An issue is not properly raised if the taxpayer fails to
request consideration of the issue by Appeals, or if consideration is requested but
the taxpayer fails to present to Appeals any evidence with respect to that issue
after being given a reasonable opportunity to present such evidence.” Id.
Additionally, a taxpayer is expected to provide all relevant information to the
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[*8] Appeals officer, including financial statements. See id. para. (e)(1). The
Appeals officer is unable to ascertain a taxpayer’s financial circumstances, and
consequently the appropriateness of a collection alternative, without financial
information. Yoel v. Commissioner, T.C. Memo. 2012-222, at *8. It is not an
abuse of discretion for an Appeals officer to reject a collection alternative and
sustain the proposed collection action on the basis of the taxpayer’s failure to
submit the requested financial information to the settlement officer. See Huntress
v. Commissioner, T.C. Memo. 2009-161; see also Olsen v. United States, 414 F.3d
144, 154 (1st Cir. 2005).
Petitioner failed to submit his completed 2012 tax return, financial
information to support his Form 433-A, and any documentation of his health or
age-related claims within the reasonable deadline given him by the Appeals
officer. Therefore, it was not an abuse of discretion for the Appeals officer to
recommend that the notice of determination be sustained as a result of petitioner’s
failure to provide him with the 2012 return and to submit the requested
information. See Murphy v. Commissioner, 125 T.C. 301. An Appeals officer is
not required to negotiate with a taxpayer indefinitely or wait any specific amount
of time after a CDP hearing to issue a notice of determination. Kreit Mech.
Assocs., Inc. v. Commissioner, 137 T.C. 123, 134 (2011); Clawson v.
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[*9] Commissioner, T.C. Memo. 2004-106; sec. 301.6330-1(e)(3), Q&A-E9,
Proced. & Admin. Regs. Accordingly, the Appeals officer was not required to
give petitioner any amount of time to file his 2012 return and did not abuse his
discretion by issuing the notice of determination.
Any contention we have not addressed is irrelevant, moot, or meritless.
Respondent’s determination to proceed with collection was not an abuse of
discretion.
To reflect the foregoing,
Decision will be entered
for respondent.