An appropriate order and decision will be entered for respondent.
P, upon service retirement from the U.S. Army, became entitled to a pension, which the Army reported to R as taxable. The Department of Veterans Affairs subsequently assigned P a disability rating retroactive to the day after his retirement. P unavailingly petitioned the Army to reclassify his retirement as disability based, hoping to make his pension nontaxable. See
P did not file a Federal income tax return for 2011. R determined that P was liable for an income tax deficiency and failure-to-file and failure-to-pay penalties. R sent P a notice of deficiency, which P did not contest. R assessed the tax. P failed to pay, and R issued a final notice of intent to levy. P requested a collection due process hearing, wherein Appeals sustained the levy notice. P, seeking to challenge his underlying tax liability, timely petitioned this Court for review of the Appeals determination. R has moved for summary judgment.
Held: P is precluded under
Held, further, R is entitled to summary adjudication that Appeals did not abuse its discretion in sustaining the final notice of intent to levy.
LARO, Judge: In this collection due process (CDP) case, petitioner seeks review under
We have derived the recitations in this background section primarily from the undisputed portions of each party's statement of the facts, as drawn from the pleadings and other acceptable materials, including respondent's motion for summary judgment and the accompanying declaration and exhibits and petitioner's response thereto. Petitioner is a resident of Georgia. This case is appealable to the Court of Appeals for the Eleventh Circuit absent stipulation*173 of the parties to the contrary.
II. Petitioner's RetirementPetitioner is a disabled U. S. Army veteran. He retired from service on January 31, 2000, at the rank of chief warrant officer 3. His retirement was classified as regular by the Department of the Army (DA), a component of the Department of Defense. The Department of Veterans Affairs (VA) subsequently assigned him an overall 80% disability rating retroactive to February 1, 2000, and individual unemployability--resulting in disability compensation at a 100% rate--retroactive to December 19, 2002.
*175 Petitioner alleges that, by reason of the VA's retroactive determination, his retirement should have been classified by the DA as a disability retirement. The Army Board for Correction of Military Records denied petitioner's request to reclassify his retirement. Petitioner challenged this determination and brought other claims against the Government in the District Court for the Northern District of Georgia; his case was dismissed. See
Upon retiring from the Army, petitioner became entitled to a pension. However, because the DA classified his retirement as based on service rather than disability, the pension payments were reported as taxable income. For 2011 petitioner received a Form SSA-1099, Social Security Benefit Statement, from the *176 Social Security Administration reporting $19,770 of pension/annuity income, $8,500 of which respondent deemed taxable. Petitioner also received a Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., from the Defense Finance and Accounting Service, Cleveland Center, reporting a gross distribution of $28,822, all of it classified as taxable, and Federal income tax withholding of $20. Petitioner did not file a Federal income tax return for the 2011 taxable year.
IV. Respondent's Determination of Petitioner's Tax LiabilityRespondent on September 16, 2013, sent petitioner a notice about his failure to file a 2011 tax return and computing his 2011*175 adjusted gross income to be $37,322, his taxable income to be $27,822, and his net income tax due to be $3,728. Respondent also calculated a failure-to-file addition to tax of $838.80, a failure-to-pay addition to tax of $335.52, and interest charges of $210.10, resulting in a total proposed amount due of $5,112.42. The notice requested that petitioner file his 2011 income tax return by October 16, 2013, to avoid assessment of the proposed amount due. Petitioner neither paid the amount due nor filed his 2011 tax return.
On December 23, 2013, respondent issued to petitioner a notice of deficiency for the 2011 taxable year. The notice of deficiency contained the same *177 numbers as the previous notice, except that the failure-to-pay addition to tax was increased to $447.36 and the interest charges were increased to $272.54, resulting in a total amount due of $5,286.70. The notice of deficiency gave petitioner until March 24, 2014, to file his 2011 income tax return to avoid assessment of the amount due, including additional addition to tax and interest charges. The notice of deficiency also informed petitioner that if he disagreed with the amount due, he had the right to challenge it by*176 filing a petition with this Court by March 24, 2014. The notice of deficiency stated that if petitioner did not file his return, did not agree to respondent's assessment, or did not file a Tax Court petition by March 24, 2014, he would receive a bill from respondent for the additional tax owed plus any applicable penalties and interest. Respondent's records indicate that the notice of deficiency was sent to petitioner by certified mail from the Ogden, Utah, service center on December 23, 2013, with a tracking number of 7161 7617 9284 6184 7052 and postage of $3.10, and was delivered at 1:17 p.m. on December 27, 2013.
V. Respondent's Assessment of Tax Against PetitionerPetitioner did not petition this Court for redetermination of the deficiency and additions to tax. On May 19, 2014, respondent assessed tax due of $3,748 (reduced to $3,728 by the $20 reported as withheld on petitioner's Form 1099-R), *178 a failure-to-file addition to tax of $838.80, a failure-to-pay addition to tax of $484.64, and interest of $295.67 and, according to petitioner's account transcript supplied by respondent, issued a corresponding notice to petitioner.
VI. Respondent's Efforts To Collect the Tax AssessedA.*177 Final Notice of Intent to LevyPetitioner did not pay the assessed liability. On February 16, 2015, respondent issued the FNIL to petitioner. The FNIL indicated that petitioner owed $5,347.11, representing the total amount assessed on May 19, 2014, as well as an additional failure-to-pay addition to tax of $279.60 and additional interest charges of $121.33, resulting in a total amount due of $5,748.04. The FNIL indicated that the Government might seize petitioner's property to satisfy his unpaid Federal tax liability but that he could appeal the proposed seizure of his assets by requesting a collection due process (CDP) hearing under
On May 22, 2015, petitioner's case was assigned to IRS Office of Appeals Settlement Officer Kristine Padua (SO Padua) in Fresno, California, and respondent sent petitioner a letter informing him that his case had been received and assigned to SO Padua. In her initial review on May 28, 2015, SO Padua determined that respondent had satisfied the relevant procedural requirements.
On May 28, 2015, SO Padua sent petitioner a letter informing him that she had scheduled a telephone conference with him on June 30, 2015, at 10:30 a.m. (PST), to discuss his case. The letter informed petitioner that he could not challenge the underlying liability in a CDP hearing if he received a notice of deficiency or had the opportunity to dispute the liability. The letter further notified him that the IRS created his 2011 tax return because he did not file a return for that year and if he disagreed with the balance due he should submit an original return by June 18, 2015. Petitioner was advised that for SO Padua to consider alternative collection methods such as an installment agreement or offer in compromise, he should submit by June 18, 2015, a Form 433-A, Collection Information Statement for Wage Earners*179 and Self-Employed Individuals, and *180 certain supporting documentation, along with signed copies of his previously unfiled tax returns for the 2009, 2010, 2012, 2013, and 2014 taxable years. The letter also explained that SO Padua verified that she had no prior involvement with petitioner for the taxes or year at issue and that the CDP hearing would determine whether respondent had met all the requirements of any applicable law and administrative procedure.
Although petitioner sent to SO Padua a facsimile letter dated June 22, 2015, stating that he had sent evidentiary documents by certified mail regarding his claim of Federal income tax exemption, the documents were the same as those attached to his Form 12153. SO Padua never received the information she had specifically requested from petitioner.
Petitioner and SO Padua participated in the scheduled telephone conference on June 30, 2015. SO Padua explained that all required procedures had been followed. Petitioner argued that his income was exempt from taxation and that he was going to use his right to request a court hearing to have his information heard. SO Padua advised petitioner that if he did not provide his returns and financial*180 information, no alternative to enforced collection would be available and the FNIL would be sustained; petitioner understood and had no questions.
*181 On July 10, 2015, SO Padua confirmed that (1) the notice of deficiency issued to petitioner had reflected his address, and (2) per U.S. Postal Service tracking information the notice had been delivered to petitioner's address. Accordingly, she concluded that petitioner had had a prior opportunity to dispute the liability. On July 13, 2015, SO Padua sustained the determination, closed the case, and submitted it for review to her Appeals team manager, who concurred in SO Padua's proposed collection action.
VII. Notice of DeterminationOn July 15, 2015, respondent issued a Notice of Determination Concerning Collection Action(s) Under
On August 24, 2016, respondent filed a motion for summary judgment and later amended that motion. The Court held a hearing in this case on October 24, *182 2016, in Atlanta, Georgia. On June 28, 2017, petitioner responded to the motion for summary judgment as amended.
DiscussionI. Legal Standard for Summary JudgmentEither party may move for summary judgment on some or all of the legal issues in dispute. See
Petitioner has raised no dispute as to any material fact. With no material facts in dispute, this case is ripe for summary adjudication.*182
*183 II. Collection of Unpaid Tax LiabilitiesThe Secretary has collection authority over taxes imposed by the Code.
Within 30 days of a CDP determination by the IRS Office of Appeals, a taxpayer may petition this Court for review of that determination.
Respondent contends that petitioner is seeking to challenge his underlying tax liability,*184 which he is precluded from doing because he had a prior opportunity to challenge it when respondent issued the notice of deficiency for the 2011 taxable year. See
Since the underlying tax liability is not at issue, respondent asserts, this Court reviews the IRS Office of Appeals determination for abuse of discretion. See, e.g.,
Petitioner argues that his Army pension should be considered nontaxable. Emphasizing that this Court's mission is to serve as a national forum to resolve disputes between taxpayers and the IRS, he disagrees with respondent that the sole issue in this case is the Government's compliance with CDP procedures.
Petitioner concedes that (1) he did not file his Federal income tax return for 2011, (2) he did not pay any tax alleged due by respondent, and (3) the IRS strictly complied with CDP procedures. He maintains, however, that the primary dispute is whether the underlying tax liability should be imposed, given the
Petitioner urges this Court to deny respondent's motion for summary judgment and to find that petitioner's Army pension is nontaxable. In the alternative, petitioner requests that this Court issue an order suspending any collection actions by respondent against petitioner until the Supreme Court and the Department of Justice have disposed of his ongoing claims and appeals.
V. AnalysisPetitioner has had a long and distinguished career in the military, and we respect and honor his faithful service and sacrifice for his country. At the same*187 time we are a court established under
Petitioner's sole argument is that his Army pension should be excluded from gross income by reason of his VA disability rating. In other words, petitioner is challenging not respondent's CDP procedures but rather the underlying tax liability. He may do so only if he did not receive a notice of deficiency or otherwise have an opportunity to dispute the liability.
*189 The proper method for petitioner to challenge the taxability of his Army pension would have been by a petition to this Court within 90 days of the mailing of the notice of deficiency, see
We agree with respondent that he did not abuse his discretion. Respondent's case activity record shows that SO Padua scrupulously documented her review of petitioner's case and her correspondence and conversation with petitioner. The evidence and the notice of determination itself demonstrate that SO Padua (1) properly verified that the requirements of any applicable law or administrative procedure were met, (2) considered all relevant issues petitioner raised, and (3) considered*189 whether the proposed collection action balanced the need for efficient collection of taxes with petitioner's legitimate concern that the action be no more intrusive than necessary. See
Furthermore, respondent's determination that petitioner is not entitled to a collection alternative was not an abuse of discretion because petitioner did not *190 request one and did not provide a completed Form 433-A or supporting financial information during the CDP proceeding, nor was he in compliance with Federal tax laws, having not filed income tax returns for the 2009 through 2014 taxable years. See, e.g.,
On the basis of the record*190 in this case, we can find no procedural or substantive defect in respondent's determination to sustain the NFIL. SO Padua and the IRS Office of Appeals did not act arbitrarily, capriciously, or without sound basis in fact or law. See
Because there is no genuine dispute as to any material fact, see
We have determined as a matter of law that respondent did not abuse his discretion in sustaining the FNIL*191 in this case and thus is entitled to summary adjudication on that point. Petitioner sought to challenge the underlying tax liability, but the time to have done so passed when he did not timely petition this Court for redetermination of his deficiency. We do not have general equitable jurisdiction,
Petitioner, however, is not entirely without remedy. He may pay the full amount assessed by the Government and submit a claim for refund or credit. See
We have considered all of the parties' arguments, and to the extent not discussed above, conclude that those arguments are irrelevant, moot, or without merit.
*193 To reflect the foregoing and petitioner's concession,
An appropriate order and decision will be entered for respondent.
Footnotes
1. Unless otherwise indicated, section references are to the Internal Revenue Code (Code) applicable at all relevant times. Rule references are to the Tax Court Rules of Practice and Procedure.↩
2. Petitioner submitted his petition for writ of certiorari dated October 26, 2016, to the Supreme Court; it was received there on October 31, 2016. The petition evidently was returned unfiled by the Clerk of the Supreme Court for failure to comply with that Court's rules. Petitioner has provided to this Court a copy of his motion dated December 17, 2016, to extend the time to refile the petition for writ of certiorari. Its subsequent disposition is not known.↩