T.C. Memo. 2019-60
UNITED STATES TAX COURT
KEVIN SCOTT MILLEN, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 15726-18L. Filed May 30, 2019.
Kevin Scott Millen, pro se.
Amber B. Martin and William Walter Kiessling, for respondent.
MEMORANDUM OPINION
LAUBER, Judge: In this collection due process (CDP) case, petitioner
seeks 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, and 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. The
IRS initiated the collection action with respect to petitioner’s Federal income tax
liability for 2014. Before the Court are the parties’ cross-motions for summary
judgment. We will grant respondent’s motion and deny petitioner’s.
Background
The following facts are based on the parties’ pleadings and motion papers,
including the declaration and exhibits accompanying respondent’s motion. See
Rule 121(b). Petitioner resided in Tennessee when he filed his petition.
On April 30, 2015, petitioner filed a delinquent Form 1040A, U.S. Indivi-
dual Income Tax Return, for 2014. He reported, but did not pay, a tax liability of
$3,083. On October 6, 2015, he entered into an installment agreement (IA) under
which he was to pay the balance of his 2014 tax liability in monthly installments
of $40. By its terms, the IA was to remain in effect only so long as petitioner
stayed current on his other Federal tax obligations.
In April 2017 petitioner filed his 2016 tax return, on which he reported, but
did not pay, the balance shown as due. Concluding that petitioner’s failure to pay
the tax due violated the terms of the IA, the IRS terminated that agreement in June
2017 and proceeded to collect the balance of his 2014 liability. On September 21,
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[*3] 2017, the IRS mailed petitioner a Letter 11, Notice of Intent to Levy and
Notice of Your Right to a Hearing, showing a 2014 balance due of $3,002.
Petitioner timely requested a CDP hearing, indicating that he could not pay
that amount. He stated that he “ha[d] never missed a payment” on the IA, specu-
lating that if the IRS had not received the money, it was the fault of his local post
office. He did not address the actual reason the IRS had terminated his IA, name-
ly, that he had failed to keep current with his ongoing tax obligations.
The IRS assigned the case to a settlement officer (SO) from the IRS Appeals
Office. The SO reviewed petitioner’s tax records and determined that he had not
filed a tax return for 2015. On April 12, 2018, she sent petitioner a letter schedul-
ing a telephone hearing for May 15, 2018. She informed him that, if he wished to
pursue a new IA, he needed to submit Form 433-A, Collection Information State-
ment for Wage Earners and Self-Employed Individuals, and copies of signed tax
returns for 2015 and 2017, the latter of which was due for filing (absent extension)
on April 17, 2018. The SO set deadlines of April 26, 2018, for submitting the fi-
nancial information and May 3, 2018, for submitting the tax returns.
Petitioner called the SO several days later and insisted that he had filed a
return for 2015, as well as an amended return for 2014. The SO replied that the
IRS had no record of receiving either and asked petitioner to submit copies (or
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[*4] new versions) of both. At petitioner’s request, the SO sent him an account
transcript for 2014. She enclosed with the transcript a letter informing him that he
had also accrued for 2014 a liability of $263 for an individual shared responsi-
bility payment (ISRP) under section 5000A(b) because he had failed to maintain
minimum essential health insurance coverage.2
Petitioner informed the SO that he wished to dispute the ISRP liability as
well as the liability that was the subject of the levy notice. On April 24, 2018, he
faxed to her the following documents: (1) an incomplete 2015 return, signed and
dated April 16, 2018; (2) a letter asking the SO to investigate the U.S. Postal Ser-
vice (USPS) for the supposed loss of his original 2015 return; and (3) an undated
health insurance card bearing his name but showing no description of coverage
and no effective date.
The CDP hearing was held as scheduled on May 15, 2018. The SO asked
petitioner to clarify some entries on his recently submitted 2015 return. He inter-
2
Under the Patient Protection and Affordable Care Act, Pub. L. No. 111-
148, sec. 1501(b), 124 Stat. at 244-249 (2010) (codified at sec. 5000A), a taxpayer
accrues an ISRP liability if he or she fails to maintain adequate health insurance
coverage (called “minimum essential coverage”) for a particular year. See sec.
5000A(a), (f)(3). Section 5000A(c), which sets forth the formula for calculating
the amount of ISRP liability, was amended in 2017 such that taxpayers generally
will not accrue ISRP liability for periods after 2018. See Tax Cuts and Jobs Act of
2017, Pub. L. No. 115-97, sec. 11081, 131 Stat. at 2092.
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[*5] rupted her inquiry by insisting that he had timely submitted an earlier version
of his 2015 return. Relying on his account transcript, the SO stated that the IRS
had no record of an earlier filed return. In any event, she explained that the IA had
been terminated, not for petitioner’s failure to file a 2015 return, but for his failure
to pay timely his 2016 tax liability. The SO expressed willingness to consider a
new IA, but emphasized that petitioner first needed to clear up some ambiguities
on his recently submitted 2015 tax return and submit a copy of his 2017 return,
which had been due for filing one month previously. At this point petitioner ac-
cused the SO of lying, declared that he would take his case to court, and abruptly
ended the call.
The SO reviewed the administrative file, verified that petitioner’s 2014 in-
come tax liability had been properly assessed, and confirmed that all other require-
ments of law and administrative procedure had been satisfied. She concluded that:
(1) petitioner could not challenge his self-reported liability for 2014 because he
had failed to submit basic supporting evidence (e.g., an amended return for 2014);
(2) she lacked jurisdiction to consider petitioner’s challenge to the $263 ISRP
liability because “it was not part of the * * * Notice of Intent to Levy dated Sep-
tember 21, 2017”; and (3) she could not consider a collection alternative because
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[*6] petitioner had submitted an incomplete 2015 return and refused to supply the
information necessary to complete it.
On August 2, 2018, the IRS issued a notice of determination sustaining the
proposed levy, and petitioner timely sought review in this Court. On August 27,
2018, petitioner filed a motion asserting that the IRS was “making mistakes on not
giving me my money,” demanding that he be paid “a fee of $500,000 plus the
ability to never have to file taxes again.” We denied that motion two days later.
On February 6, 2019, respondent filed a motion for summary judgment. On
February 15, 2019, petitioner submitted documents that we filed as a response to
respondent’s motion and a cross-motion for summary judgment. Petitioner’s
cross-motion reiterates his demand that the IRS be ordered to pay him $500,000
and that he be granted relief from any future tax obligations.
Discussion
A. Summary Judgment
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). 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. Rule 121(b); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992),
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[*7] 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
light most favorable to the nonmoving party. Sundstrand Corp., 98 T.C. at 520.
However, the nonmoving party may not rest upon mere allegations or denials of
his pleadings but instead must set forth specific facts showing that there is a
genuine dispute for trial. Rule 121(d); see Sundstrand Corp., 98 T.C. at 520. We
conclude that the question before us may appropriately be adjudicated summarily.
B. Standard of Review
Neither section 6320(c) nor section 6330(d)(1) prescribes the standard of
review that this Court should apply in reviewing an IRS administrative determina-
tion in a CDP case. But our case law tells us what standard to adopt. Where the
validity of the taxpayer’s underlying tax liability is properly at issue, we review
the IRS’ determination de novo. Living Care Alts. of Utica, Inc. v. United States,
411 F.3d 621, 626 n.5 (6th Cir. 2005). Where the taxpayer’s underlying liability is
not before us, we review the IRS’ decision for abuse of discretion only. Goza v.
Commissioner, 114 T.C. 176, 182 (2000). Abuse of discretion exists when a de-
termination is “arbitrary, capricious, or without sound basis in fact or law.” Hol-
loway v. Commissioner, 322 F. App’x 421, 423 (6th Cir. 2008) (“We have held
that an administrative agency abuses its discretion where there is no evidence to
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[*8] support its decision, or the agency misapplies the law.”), aff’g T.C. Memo.
2007-175.
C. Underlying Liability
A taxpayer can challenge the existence or amount of an underlying liability
if it is for a “tax period specified on the CDP Notice,” sec. 301.6330-1(e)(3),
Q&A-E2, Proced. & Admin. Regs., and if he had no prior opportunity to dispute
it, Sego v. Commissioner, 114 T.C. 604, 609 (2000). However, “[a] taxpayer is
precluded from disputing the underlying liability if it was not properly raised in
the CDP hearing.” Thompson v. Commissioner, 140 T.C. 173, 178 (2013); see
Giamelli v. Commissioner, 129 T.C. 107, 114 (2007). “‘An issue is not properly
raised if the taxpayer fails * * * to present * * * any evidence with respect to that
issue after being given a reasonable opportunity’ to do so.” Moriarty v. Commis-
sioner, T.C. Memo. 2017-204, 114 T.C.M. (CCH) 441, 443 (quoting section
301.6330-1(f)(2), Q&A-F3, Proced. & Admin. Regs.), aff’d per order, 2018 WL
4924349 (6th Cir. Sept. 19, 2018); see Obeirne v. Commissioner, T.C. Memo.
2018-210, at *9.
The SO correctly determined that petitioner could not challenge the $3,083
income tax liability that he reported on his delinquent 2014 return. He did not
submit an amended 2014 return showing what he believed his correct tax liability
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[*9] to be. Nor did he submit any other evidence relevant to his 2014 tax liability.
Indeed, he had previously executed an IA in which he agreed to pay that liability
in full.
The SO likewise did not err in declining to consider petitioner’s challenge
to his $263 ISRP liability for 2014. Whether or not the SO had jurisdiction to con-
sider this issue,3 petitioner failed to submit sufficient evidence to raise a proper
challenge. A determination of ISRP liability for a nonexempt, nonincarcerated
taxpayer turns solely on whether that person had minimum essential coverage dur-
ing the year in question. See sec. 5000A(a), (d). The only relevant document peti-
tioner submitted to the SO was an undated insurance card, faxed to the IRS in
April 2018, that had no description of coverage, no effective date, and no indica-
tion that petitioner was actually covered by insurance during 2014.
3
The IRS is generally foreclosed from seeking to collect ISRP liabilities by
lien or levy. Sec. 5000A(g)(2)(B). The SO determined that she lacked jurisdiction
to consider petitioner’s challenge to his 2014 ISRP liability, even though it had
been assessed for the same tax year as the income tax liability in question, because
it was not assessed until after the issuance of the levy notice on September 21,
2017. We have no need in this case to consider the correctness of that conclusion
or (more generally) the circumstances in which ISRP liabilities may properly be
disputed in a CDP hearing.
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[*10] In his motion for summary judgment, respondent urged that petitioner failed
to mount a proper challenge to his underlying liability for 2014. Petitioner de-
clined to respond to that contention, asserting no specific facts regarding insurance
coverage that could give rise to a material factual dispute. See Rule 121(d). Con-
cluding as we do that petitioner did not properly raise his underlying liability at
the CDP hearing, we review the SO’s action for abuse of discretion only. See
Thompson, 140 T.C. at 178; Alamo v. Commissioner, T.C. Memo. 2017-215, 114,
114 T.C.M. (CCH) 489, 496, aff’d, 751 F. App’x 583 (5th Cir. 2019).
D. Abuse of Discretion
In determining whether the SO abused her discretion we consider whether
she: (1) properly verified that the requirements of applicable law or administrative
procedure had been met, (2) considered any relevant issues petitioner raised, and
(3) determined whether “any proposed collection action balances the need for the
efficient collection of taxes with the legitimate concern of * * * [petitioner] that
any collection action be no more intrusive than necessary.” See sec. 6330(c)(3).
Our review of the record establishes that the SO properly discharged all of her
responsibilities under section 6330(c).
Putting aside his frivolous arguments, petitioner advanced two contentions
at the CDP hearing. First, he asserted that he had made all required monthly pay-
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[*11] ments under his IA, that if the IRS had not received these payments it was
USPS’ or the IRS’ fault, and that the IRS had thus erred in terminating that agree-
ment. But the SO never contended that petitioner had failed to make the required
$40 monthly payments. Rather, the IRS terminated the IA because petitioner had
forfeited his entitlement by becoming delinquent in his tax obligations for 2016.
Second, petitioner contended that the IRS had failed to process his 2015 tax
return, which he insisted he had timely filed. The SO reviewed his account tran-
scripts and rejected this contention as unfounded. An SO does not abuse her dis-
cretion in relying on certified tax transcripts where the taxpayer has shown no evi-
dence of a procedural irregularity. See Roberts v. Commissioner, 329 F.3d 1224,
1228 (11th Cir. 2003), aff’g per curiam 118 T.C. 365 (2002); Craig v. Commis-
sioner, 119 T.C. 252, 262 (2002); Davis v. Commissioner, 115 T.C. 35, 40-41
(2000); May v. Commissioner, T.C. Memo. 2014-194, 108 T.C.M. (CCH) 324,
326, supplemented by T.C. Memo. 2016-43, aff’d sub nom. Best v. Commissioner,
702 F. App’x 615 (9th Cir. 2017). Petitioner has shown no procedural irregularity
and has supplied no reason to believe that the IRS lost or declined to process a
timely filed 2015 return. In any event, in determining whether petitioner was in
compliance with his ongoing tax obligations, the SO was willing to consider the
revised 2015 return (signed and dated April 16, 2018) that petitioner submitted at
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[*12] the CDP hearing. But this return was incomplete, and petitioner adamantly
refused to answer the SO’s questions about its ambiguities.
Finally, the SO did not abuse her discretion by declining to consider a col-
lection alternative. Petitioner terminated the CDP hearing peremptorily, and the
SO had no obligation to offer a collection alternative to an unwilling recipient.
See Alamo, 114 T.C.M. (CCH) at 497 (“A taxpayer may not refuse to deal with the
IRS Office of Appeals * * * and then argue that it abused its discretion in issuing
an unfavorable determination.”); Cavazos v. Commissioner, T.C. Memo. 2008-
257, 96 T.C.M. (CCH) 341, 344 (“It is not an abuse of discretion for an appeals
officer to sustain a levy and not consider any collection alternatives when the tax-
payer has proposed none.”). Petitioner also refused to submit the required finan-
cial information, including a Form 433-A, and that refusal alone is grounds for an
Appeals officer to reject collection alternatives and sustain the proposed collection
action. Solny v. Commissioner, T.C. Memo. 2018-71, at *10; Cavazos, 96 T.C.M.
(CCH) at 343. Finding no abuse of discretion in any respect, we will grant respon-
dent’s motion for summary judgment, deny petitioner’s cross-motion, and sustain
the collection action.
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[*13] To reflect the foregoing,
An appropriate order and decision
will be entered for respondent.
Kevin Scott Millen v. Commissioner
Combined Opinion