*21 Special trial judge opinion adopted en banc. Respondent's motion for summary judgment denied. Remanded to allow petitioner to audio record appeals office hearing.
P filed a petition for levy action under
I.R.C., disputing R's notice of determination concerning
collection action with respect to his 1991 tax liability on the
ground that he was not permitted by the IRS Appeals Office to
make an audio recording of his
of
petition again asserting his claimed right to audio record such
hearing. P had previously submitted documents to R in his
request for a collection due process hearing that asserted
several frivolous and groundless arguments. R informed P by
letter that he could make no audio recording. P gave R the
required advance request to record. P appeared for the hearing
but was told by R that he could not record it. P decided that he
did not want to have a hearing if he could not record it, and he
left with his recording equipment. P contends that sec.
*22 his
interview". R contends that P does not have a right to audio
record the hearing because it is not an "interview"
within the meaning of
I.R.C., to make an audio recording of his
the Internal Revenue Service Appeals Office.
*9 OPINION
DAWSON, Judge : This case was assigned to Special Trial Judge Robert N. Armen, Jr., pursuant to the provisions of
*23 OPINION OF THE SPECIAL TRIAL JUDGE
ARMEN, Special Trial Judge: This matter is before the Court on respondent's Motion for Summary Judgment, filed pursuant to
Background
Petitioner was a resident of Las Vegas, Nevada, when he filed his petition herein.
*10 This case involves the 1991 tax year. 2 Petitioner and his spouse, Fanny Keene, filed a timely joint Federal income tax return on which they reported wages of $ 32,047; taxable IRA distributions of $ 21,996; taxable pensions and annuities of $ 47,764; a business income loss of $ 48,483 on Schedule C from the operation of Hizzoner's Restaurant; and total tax of $ 9,327 with Federal income tax withheld of $ 2,837, and tax owed of $ 6,845. Respondent assessed the amount due as reported on the return. In 1992 and 1993 installment payments totaling $ 1,400 were made and applied to the amount of tax assessed. On or about May 14, 1993, petitioner*24 filed for bankruptcy, and that proceeding was closed on February 4, 1994. During the years 1995, 1996, and 1997, overpaid credits totaling $ 552.97 were applied to the 1991 amount assessed. Also in 1997, there was a subsequent payment by levy of $ 523.17 and a miscellaneous payment of $ 494.22; both amounts were applied to the 1991 income tax liability. Five payments of $ 350 each were later made and applied to the 1991 tax liability.
On or about February 10, 2001, a Form 1040X, Amended U.S. Individual Income Tax Return, for the year 1991 was filed showing that no income tax was due for that year and claiming*25 a refund of $ 2,837, which was the amount of Federal income tax withheld. The explanation petitioner gave for filing the 1991 amended return was:
Due to my ignorance, I mistakenly reported as "income"
what were actually "sources" of income. In addition, the
amounts that I incorrectly listed as "income" were, in
fact, amounts that are exempt from taxation.
There was a three-page attachment to the amended return in which petitioner (not his spouse) made frivolous and groundless arguments why he did not owe the assessed tax.
By letter dated April 25, 2001, the amended return and attachment were determined by the Examination Branch, Ogden Compliance Service Center, to be frivolous. On November 1, 2001, after receiving additional groundless statements from petitioner, the Director of IRS Compliance Services disallowed petitioner's claim for refund.
*11 On January 21, 2002, respondent issued to petitioner a Final Notice -- Notice Of Intent To Levy And Notice Of Your Right To A Hearing with regard to petitioner's unpaid Federal income tax for 1991.
On February 11, 2002, petitioner submitted to respondent a Form 12153, Request for a Collection Due Process*26 Hearing, which attached a statement setting forth the following contentions:
I never received a "notice and demand" for payment for
any 1991 income taxes.
I claim there is no underlying, statutory liability in
connection with the income taxes at issue.
I claim there is no statute requiring me "to pay" the
income taxes at issue.
No law authorizes the IRS to claim that I owe more in income
taxes than the "zero" I reported on my 1991 amended
1040X income tax return.
The IRS Decoding manual provides additional proof that I cannot
own more in 1991 income taxes than the "zero" shown on
my 1991 income tax return.
The Secretary has not authorized any action for the collection
of taxes and penalties as required by
The Attorney General has not directed that any action against me
for the enforced collection of any income taxes and penalties
for the year 1991 "be commenced" as is required by
In addition to everything else,
have no authority to seize property in payment of income taxes.
Petitioner concluded his statement with a declaration of his intent to tape record the requested hearing.
By letter dated May 3, 2002, Appeals Officer Donna Fisher (the Appeals officer) informed petitioner that his hearing was scheduled for May 16, 2002. The Appeals officer's letter also stated:
Further, no audio or stenographic recordings are allowed on
Appeals cases effective as of May 2, 2002, forward. Therefore,
your request to tape record and/or bring a court reporter to the
Collection Due Process hearing is denied.
By letter dated May 10, 2002, petitioner informed the Appeals Office that he would not be able to attend the hearing scheduled for May 16, 2002, and requested that it be rescheduled. Petitioner also requested that the Appeals officer provide him with the statutory or regulatory authority barring him from recording the hearing.
*12 By letter dated May 14, 2002, the Appeals officer informed petitioner that his hearing was rescheduled for June 3, 2002. The Appeals officer also enclosed with her letter a copy*28 of an internal, apparently unpublished, Memorandum to All Appeals Area Directors dated May 2, 2002, from the Acting Chief of the Office of Appeals in Washington, D.C., which stated as follows:
Effective immediately, audio and stenographic recordings will no
longer be allowed on Appeals cases. Taxpayers and/or
representatives who have already requested such recording will
be informed of the change in practice immediately, and advised
that the request cannot be allowed.
Prior to enactment of
voluntarily allowed audio recordings. Appeals decided to follow
this practice at that time.
for the allowance of audio recordings of conferences relative to
the determination or collection of a tax, between the taxpayer
and the Internal Revenue Service, provided that the Service was
given at least ten (10) days advance notice of the taxpayer's
intent to record the conference.
Although Appeals makes liability and collectibility
determinations, Appeals' *29 procedures differ from Examination and
Collection function contacts that are not discretionary for the
taxpayer. Contact with Appeals is discretionary for the
taxpayer, and as such, recording has always been discretionary
for Appeals.
It should also be noted that Appeals was deliberately excluded
in
as Counsel determined that
Appeals.
Recently Appeals has had several incidents of audio recordings
being altered to imply Appeals employees were making
inappropriate comments. In some cases, those altered recordings
were broadcast on the radio. We are also aware of instances
where excerpts of stenographic records were combined in
inappropriate ways and published in anti-tax newsletters and
other anti-government publications.
These actions have had the result of undermining the appearance
of Appeals' competence, impeding Appeals ability to adequately
function in its role as a dispute resolution function. These
incidents*30 have interfered with our customers' perception of our
ability to carry our Appeals' mission to be fair and impartial
in our considerations; and therefore cannot be allowed to
continue.
In addition, Appeals has always been concerned that the practice
of recording conferences and hearings could inappropriately
interfere with the informal nature of Appeals conferences, and
therefore might improperly impede settlement.
Therefore, the decision has been made to eliminate all audio as
well as stenographic recordings of Appeals conferences and
hearings. That decision is effective immediately upon the date
of this memorandum.
This memorandum supersedes guidance issued in Internal Revenue
Manual 8.7.2.3.4 and 8.6.1.2.5 on the subject of recording
hearings and conferences. The IRM will be updated to reflect
these changes during the next regular update of that section.
*13 On June 3, 2002, petitioner, after giving to the Appeals Office his advance request to record, appeared for the hearing. When the Appeals officer informed him that he would not be permitted to use*31 an audio recorder, petitioner decided that he did not want to have a hearing if he could not record it, so he left with his recording equipment.
On June 11, 2002, respondent issued to petitioner a Notice of Determination Concerning Collection Actions(s) Under
On July 12, 2002, petitioner filed with the Court a timely Petition for Lien or Levy Action. The only issue raised in the petition pertains to the Appeals officer's decision to preclude petitioner from recording the hearing. The petition states in pertinent part:
Petitioner states that the determination action by the Appeals
Office in this instant case was not only inappropriate, biased
and prejudiced, but also an illegal action designed to deny the
petitioner his due process rights to make a full and complete
official record of a hearing with the government a potential
adversarial relationship.
On August 12, 2002, petitioner filed an Amended Petition*32 elaborating on his argument that he should have been permitted to audio record the hearing.
After filing an answer to the amended petition, respondent filed the motion for summary judgment that is pending before the Court. Respondent maintains that there is no dispute as to material facts and that he is entitled to judgment as a matter of law sustaining the notice of determination dated June 11, 2002. Respondent's position is that
*33 This matter was called for hearing at the Court's motions session held in Washington, D.C. Counsel for respondent appeared at the hearing and was heard. Although there was no appearance by or on behalf of petitioner at the hearing, he filed with the Court a written statement pursuant to
Discussion
Summary judgment is intended to expedite litigation and avoid unnecessary and expensive trials. See
*34
The term "interview" is defined by Webster's*35 Third New International Dictionary Unabridged 1183-1184 (1993) as:
a meeting face to face: a private conversation; usu: a formal
meeting for consultation: CONFERENCE
Similar definitions appear in other dictionaries. For example, the American Heritage Dictionary (4th ed. 1970) defines the term "interview" as "a face to face meeting arranged for the discussion of some matter"; Webster's II New Riverside University Dictionary 639 (1984) defines the term as "a formal face-to-face meeting"; and Webster's New Collegiate Dictionary 600 (1979) defines the term as "a formal consultation" or "a meeting at which information is obtained".
Petitioner contends that he is entitled to make an audio recording of his
*36 To the contrary, respondent contends that petitioner has no statutory right to audio record a
There are several reasons why we conclude that petitioner is entitled to audio record his
First, the distinction that respondent seeks to draw between the terms "interview" and "hearing" in the context of
A
Second, we reject the distinction that respondent seeks to draw between what he describes as the inquisitorial nature of a taxpayer interview by the Examination or Collection Division and the voluntary nature of a
Third, respondent's interpretation of
Fourth, respondent's interpretation of
Fifth, respondent's interpretation of
In addition, when reviewing for abuse of discretion, we generally consider "only arguments, issues, and other matter that were raised at the collection hearing or otherwise*41 brought to the attention of the Appeals Office".
Finally, we observe that
*19 Conclusion
Accordingly, we hold that, pursuant to
Respondent's counsel acknowledged at oral argument on the motion for summary judgment that, if the Court decides the audio recording issue against respondent, the proper action would be to remand the case and allow petitioner to have a hearing that he could record. Therefore, in these circumstances, we shall remand this case to respondent's Appeals Office with direction that petitioner be offered a
Our conclusion in this case that petitioner is entitled to audio record his
To reflect the foregoing,
An appropriate order will be issued.
Reviewed by the Court.
WELLS, GERBER, COLVIN, HALPERN, LARO, FOLEY, VASQUEZ, GALE, THORNTON, MARVEL, HAINES, GOEKE, and WHERRY, JJ., agree with this majority opinion.
* * * * *
CONCURRENCE OF JUDGE HALPERN
HALPERN, J., concurring: I agree with the majority that
With certain restrictions, and subject to certain conditions, not here relevant,
*46
In
GALE and MARVEL, JJ., agree with this concurring opinion.
* * * * *
CONCURRENCE OF JUDGE VASQUEZ
VASQUEZ, J., concurring: I agree with the majority opinion; however, I write separately to address two additional points.
1. We Are Not Invalidating the Regulations
The majority opinion does not invalidate
CDP hearings are much like Collection Appeal Program (CAP)
hearings in that they are informal in nature and do not require
the Appeals officer or employee and the taxpayer, or the
taxpayer's representative, to hold a face-to-face meeting. A CDP
hearing may, but is not required to, consist of a face-to-face
*49 meeting, one or more written or oral communications between an
Appeals officer or employee and the taxpayer or the taxpayer's
representative, or some combination thereof. A transcript or
recording of any face-to-face meeting or conversation between an
Appeals officer or employee and the taxpayer or the taxpayer's
representative is not required. * * *
The "is not required" language contained in the regulations means that the actions described therein are permissible but not mandatory.
The regulations first provide that a face-to-face meeting is not required. This, however, does not prohibit face-to-face meetings -- many
Likewise, the regulations do not prohibit recording or transcription of any face-to-face meeting or conversation, they merely provide that a recording or transcription of the
*23 Furthermore, allowing taxpayers to*50 record the hearing does not require that the Commissioner do so as well. Although the Commissioner also may choose to record the hearing,
If the Secretary had sought to prohibit recordings and transcriptions (and face-to-face meetings for that matter), he could have chosen such phrases as a recording "is not allowed", "is not permitted", "is prohibited", or "shall not be made". He did not. The regulations instead contain the language "is not required" which permits, but does not mandate, a recording. 2
*51 2. Welcoming a Transcript
Having a transcript of the
Until now, in order to determine what issues taxpayers raised at the
I have tried a number of cases in which it was difficult to determine what issues the taxpayer raised at the
*24 Instead of merely having the notice of determination or the testimony of witnesses as evidence of what issues the taxpayer raised at the hearing, now the parties will be able to submit as evidence*52 a transcript of the hearing. In
LARO, FOLEY, MARVEL, and GOEKE, JJ., agree with this concurring opinion.
* * * * *
CONCURRENCE OF JUDGE WHERRY
WHERRY, J., concurring: Respondent has taken the position that
First, it is significant that the express language of
Second, neither legislative history nor administrative pronouncements directs a different result. Legislative history *25 with respect to
For purposes of
redesignated
interview" means a meeting between an officer or employee of
the Examination function, the Employee Plans and Exempt
Organization function, or the Collection function of the
Service, and a taxpayer or authorized representative, as defined
in
of any tax is at issue.
* * * * * * *
LEGAL EFFECT: This document serves as an
"administrative pronouncement" as that term is described
in
relied upon to the same extent as a revenue ruling or revenue
procedure.
Because the Office of Appeals is typically treated by the Service as an independent function, separate and distinct from the Examination, Employee Plans and Exempt Organization, and*55 Collection functions, respondent maintains that a hearing with an Appeals officer is not an in-person interview within the ambit of
Notice 89-51 is not controlling here since, by its own terms, its legal effect is similar to that of revenue rulings and revenue procedures. This Court and the Court of Appeals for the Ninth Circuit, to which appeal in the instant case would normally lie, have indicated that revenue rulings "do not rise to the dignity of those 'rules and regulations' which under the authority of
*26 Moreover, notwithstanding
General Guidelines
(1) The audio recording of an Appeals conference is
generally permitted, if the taxpayer, or the taxpayer's
authorized representative requests it, and supplies the
recording equipment. In such cases, the appeals officer will
also make an audio recording of the conference with IRS
equipment.
(2)
may make audio recordings of interviews with the IRS that
determine liability or collectibility. Although Appeals
conferences differ in nature from taxpayer interviews in the
auditing or collecting functions, Appeals*57 still decides
liability or collectibility on cases in which those issues have
been referred to us. Procedures for making audio recordings
are described in Notice
employees will follow the provisions of
allowing recordings in cases within Appeals jurisdiction.
[Emphasis added.]
In fact, Appeals officers from time to time have performed limited audit functions when necessary to expediently resolve tax cases. Further, in recent years, both Congress and the Service have increasingly utilized Appeals officers and settlement officers during the examination and collection phases of a tax case. See, e.g.,
*59 When Congress enacted
Third, several considerations of fairness or practicality support the taxpayer's right to record hearings under
GERBER, LARO, FOLEY, MARVEL, and GOEKE, JJ., agree with this concurring opinion.
* * * * *
DISSENT OF JUDGE SWIFT
SWIFT, J., dissenting: I agree with the Lunsford treatment of the taxpayers' frivolous arguments that is reflected in the Kemper opinion being released simultaneously herewith.
In addition to the grounds set forth herein in Judge Chiechi's dissenting opinion, as the basis for my dissent I respectfully add the following.
The Regulations
Q& A-D6 of both
A-D6. The formal hearing procedures required under the
Administrative Procedure Act*62 ,
to CDP hearings. CDP hearings are much like Collection Appeal
Program (CAP) hearings in that they are informal in nature and
do not require the Appeals officer or employee and the taxpayer,
or the taxpayer's representative, to hold a face-to-face
meeting. A CDP hearing may, but is not required to, consist of a
face-to-face meeting, one or more written or oral communications
*29 between an Appeals officer or employee and the taxpayer or the
taxpayer's representative, or some combination thereof. A
transcript or recording of any face-to-face meeting or
conversation between an Appeals officer or employee and the
taxpayer or the taxpayer's representative is not required. The
taxpayer or the taxpayer's representative does not have the
right to subpoena and examine witnesses at a CDP hearing.
I interpret the above regulations broadly to provide a rule that the recording of CDP Appeals hearings may not be required regardless of whom it is that physically is to provide the recording equipment (the IRS or the taxpayer) and regardless*63 of whom it is that technically is to make the recording (the IRS or the taxpayer).
Contrary to the regulations as I read them, Keene holds in the affirmative, majority op. p. 17, that the IRS was required to allow Keene to record his CDP Appeals hearing and orders a new hearing be scheduled for Keene that is to be recorded.
This opinion effectively invalidates the above regulations.
Recent cases in the Federal District Courts have treated taxpayers' requests to tape record CDP Appeals hearings as discretionary with the IRS and have treated taxpayers' refusals to participate in the CDP Appeals hearings unless they were permitted to tape record these hearings as a waiver of the taxpayers' right to a face-to-face hearing. See
Also attached to the Complaint is*64 what purports to be a
transcript of the Collection Due Process Hearing. The hearing
was tape recorded by plaintiff and he has prepared the
transcript of it. The transcript is not certified. Moreover,
from the court's research, the Collection Due Process hearings
are supposed to be informal and there is not [a] requirement
that the hearings be recorded. [
Frivolous Arguments
Keene's frivolous arguments are well documented. In an attachment to Keene's CDP Appeals hearing request, Keene provides a detailed, single-spaced, multipage explanation of the underlying arguments for his appeal of respondent's proposed *30 collection action. Keene's lengthy explanation is full of scripted, frivolous, tax protester arguments. Therein, Keene claims that his rights as a taxpayer were ignored by the IRS from the beginning, and he asserts that the only acceptable remedy is for the IRS to "start all over again". He states as follows:
The IRS has ignored most of my rights even though I have pointed
this out, in detail, time after time in letters originating as
far back as 11/7/1991. I have carefully*65 documented the IRS'
total disregard of my rights to date. Should the IRS deny this
request for a due process hearing it will only be adding to the
overwhelming evidence I have accumulated showing the IRS'
illegal denial of my rights to hearings and information.
Now, should you [the Appeals officer], finally decide to grant
me a simple hearing at this very late stage in the due process
system I will expect you to find that this entire matter, for
the tax period 1040 ending 12/31/1991, be remanded back to the
very beginning of this process. This remand must go back to
include all of the hearings and all of the information due me as
outlined in my previous letters. Otherwise my rights will have
been violated. * * *
The written explanation attached to Keene's CDP hearing request itself provides the Court with an adequate record of Keene's arguments that serve as the underlying basis for his challenge to respondent's proposed collection action. A tape recording to establish that record is not necessary. It is overwhelmingly clear that there is no merit to Keene's underlying arguments, *66 and I believe that, under
At the most, if some delay is to be tolerated in disposing of Keene's petition challenging respondent's proposed collection action, an order should be issued asking Keene to advise the Court in writing, within a specified time period, what underlying arguments he would make (if he were given another opportunity to have a CDP Appeals hearing and to have the hearing recorded) that are not already reflected in the referred-to written attachment to his CDP hearing request. If Keene files a response to such an order containing only frivolous arguments, this case could easily be disposed *31 of without ever addressing the legal issue raised under
I acknowledge that, in the few nonprotester CDP cases that seem to exist, recorded transcripts of CDP Appeals hearings may be helpful, and nothing that we adopt in the Kemper or Keene opinions will prevent the IRS and taxpayers*67 from agreeing to record CDP Appeals hearings in appropriate situations.
In summary, to conclude that the IRS should be required to record CDP Appeals hearings or to permit taxpayers to record such hearings -- whenever taxpayers make such requests and regardless of how difficult the taxpayers and how frivolous their underlying arguments -- strikes me as contrary to the above regulations, as inappropriate judicial meddling with respondent's Appeals hearings, as inefficient use of judicial resources, and as conducive to further delay in the collection of taxes the Federal Government desperately needs.
* * * * *
DISSENT OF JUDGE CHIECHI
CHIECHI, J., dissenting: In holding that
In order to resolve the issue whether
*70 Congress enacted all the provisions of
*33 It was not until 1998, 10 years after Congress made
The majority begins its analysis of the meaning of the phrase "in-person interview" in
Neither
*72 and clearly defines or otherwise describes the term "in-
person interview". Where a term is not defined in the
statute, it is appropriate to accord the term its "ordinary
meaning".
is no indication that Congress intended a specific legal meaning
for the term, courts may look to sources such as dictionaries
for a definition.
in which the Court stated that
"where a statute is clear on its face, * * * we would
require unequivocal evidence of legislative purpose before
construing the statute so as to override the plain meaning of
the words used therein." [Fn. ref. omitted.]
Majority op. pp. 10-11.
The majority fails to apply the rules of statutory construction on which it claims to rely when, in determining the meaning of the phrase "in-person interview" in
In determining what Congress had in mind when it used the phrase "in-person interview" in
(b) Safeguards. --
(1) Explanations of processes. -- An officer or
employee of the Internal Revenue Service shall before or at
an initial interview provide to the taxpayer --
(A) in the case of an in-person interview with
the taxpayer relating to the determination of any tax,
an explanation of the audit process and the taxpayer's
rights under such process, or
(B) in the case of an in-person interview with
the taxpayer relating to the collection of any tax, an
explanation of the collection process and the
taxpayer's rights under such process.
Not only
Prior to initial in-person audit interviews, the IRS must
explain to taxpayers the audit process and taxpayers' rights
under that process. In addition, prior to initial in-person
collection interviews, the IRS must explain the collection
process and taxpayers' rights under that process. For this
purpose, routine telephone conversations initiated by either the
taxpayer or the IRS are not considered initial interviews. A
written statement handed to the taxpayer at an audit or
collection interview or within a short time before the interview
is sufficient. * * *
H. Conf. Rept. 100-1104, at 213
In contrast to the in-person audit interviews and the in- person collection interviews that Congress intended
*79 Thus, it makes perfect sense that, when Congress enacted
In this connection, it is important*80 to keep in mind that the majority's holding under
It is a cardinal rule of statutory construction that, when Congress made
*82 I shall not specifically address and explain why each of the various reasons set forth by the majority for its holding under
In support of its conclusion that the phrase "in- person interview" in
respondent's interpretation of
the anomalous result of allowing the audio recording of
Examination Division interviews, which are proceedings that we
typically do not review, see
recording of
we are statutorily charged with reviewing, see
Majority op. p. 15.
The foregoing statement is incorrect. We are no more charged with reviewing "
In reviewing a notice of determination under
*84 As another reason for concluding that the phrase "in- person interview" in
respondent's interpretation of
complicate judicial review of the determination made by the
Appeals Office with respect to the Commissioner's proposed levy
or filing of the notice of Federal tax lien. For example, when a
taxpayer's underlying tax liability is not properly at issue in
the administrative hearing, we review the Appeals Office's
determination for abuse of discretion. * * * Having a transcript
of the administrative hearing would certainly facilitate that
review. * * *
Majority op. pp. 15-16.
The foregoing rationale for holding that
The majority also states as a ground for concluding that
when reviewing for abuse of discretion, we generally consider
"only arguments, issues, and other matter that were raised
at the collection hearing or otherwise brought to the attention
of the Appeals Office". *86 * * * Having a transcript would
eliminate a possible dispute between the parties concerning the
scope of the issues that were raised by the taxpayer in the
administrative hearing. Moreover, not having a transcript may
contravene the intent of Congress in providing for a fair and
impartial administrative hearing and may have a negative impact
on this Court's review of the Appeals Office determination.
Majority op. p. 16.
The foregoing rationale is another unsound basis for the majority's holding under
*41 Having held that
we shall remand this case to respondent's Appeals Office with
direction that petitioner be offered a
may be audio recorded pursuant to section
Majority op. pp. 17-18.
The result mandated by the majority is that respondent must offer another hearing under
I believe that the result in Lunsford and the result in the instant case are irreconcilable. In an effort to reconcile such results, the majority points out that there is a difference between Lunsford and the instant case in that the petition in Lunsford alleged groundless legal arguments on which the taxpayers in Lunsford based their claim for relief for another hearing, whereas in the instant case the sole allegation in the petition relates to a procedural defect; i.e., respondent's failure to allow petitioner to make an audio recording of his *42 Appeals hearing. The difference on which the majority relies to support its remand in the instant case is a distinction without significance. We have previously reminded taxpayers who institute proposed levy (and lien) cases in the Court that
By remanding the instant case to Appeals for a hearing that petitioner may audio record, the majority is allowing petitioner to raise issues that he did not raise or plead, as required by
In
COHEN and SWIFT, JJ., agree with this dissenting opinion.
Footnotes
1. All Rule references are to the Tax Court Rules of Practice and Procedure, and, unless otherwise indicated, all section references are to the Internal Revenue Code, as amended.↩
2. See
Keene v. Commissioner, T.C. Memo 2002-277">T.C. Memo 2002-277 , in which we granted the Commissioner's motion for summary judgment sustaining the determination to proceed with the collection of the taxpayer's Federal income tax liabilities for 1997 and 1998, and imposed a penalty of $ 5,000 undersec. 6673(a)(1) . That case did not involve thesec. 7521(a)(1)↩ audio recording issue presented in the instant case.3.
Sec. 7521 , which is entitled "Procedures Involving Taxpayer Interviews", provides in part:SEC. 7521(a) Recording of Interviews. --(1) Recording by Taxpayer. -- Any officer or employee of
the Internal Revenue Service in connection with any in-person
interview with any taxpayer relating to the determination or
collection of any tax shall, upon advance request of such
taxpayer, allow the taxpayer to make an audio recording of such
interview at the taxpayer's own expense and with the taxpayer's
own equipment.
(2) Recording by IRS Officer or Employee. -- An officer or
employee of the Internal Revenue Service may record any
interview described in paragraph (1) if such officer or employee
--
(A) informs the taxpayer of such recording prior to
the interview, and
(B) upon request of the taxpayer, provides the
taxpayer with a transcript or copy of such recording but
only if the taxpayer provides reimbursement for the cost of
the transcription and reproduction of such transcript or
copy.↩
4. See H. Conf. Rept. 100-1104 (Vol. II), at 212-214 (1988), 1988-3 C.B. 473, 702-704.↩
5. Petitioner has cited and relied on several existing sections of the Internal Revenue Manual, as well as Publication 1 entitled "Your Rights as a Taxpayer", sec. IV, par. 2, sentence 2, which states that taxpayers "may make sound recordings of any meeting with our examination, appeal, or collection personnel". Although we recognize that these are not statements of statutory or regulatory rights, audio recordings by taxpayers of Appeals conferences have been permitted since the early 1980s, and the practice continued after the enactment of
sec. 7521(a)(1) in 1988 andsecs. 6320 and 6330↩ in 1998. It was not until May 2, 2002, in its unpublished Memorandum to All Appeals Area Directors that the Appeals Office began denying taxpayers the right to make audio recordings in Appeals cases.6. In contrast, the procedure involving the conduct of the meeting is informal. See
Davis v. Commissioner, 115 T.C. 35">115 T.C. 35 , 41 (2000), wheresec. 7521(a)↩ was not considered.1. See
Lunsford v. Commissioner, 117 T.C. 159">117 T.C. 159 , 170-171 (2001) (Halpern, J.↩, concurring).1. I realize, however, as a practical matter that if a taxpayer records the hearing the Commissioner will likely record it also.↩
2. Other answers contained in
sec. 301.6330-1(d)(2) , Proced. & Admin. Regs. contain "mandatory" language.Sec. 301.6330-1(d)(2), Q&A-D1 , Proced. & Admin. Regs. ("The taxpayer is not entitled to another CDP hearing undersection 6330 if the additional assessment represents accrual of interest, accrual of penalties, or both."),Q&A-D5, Proced. & Admin. Regs . ("The taxpayer must sign a written waiver."), andQ&A-D7, Proced. & Admin. Regs.↩ ("The taxpayer must be offered an opportunity for a hearing at the Appeals office closest to [sic] taxpayer's residence or, in the case of a business taxpayer, the taxpayer's principal place of business.") (Emphasis added.)1. While the Service Litigation Guideline Memorandum GL- 17 (GL-17) is more explicit in stating that it is the Service's position "that
section 7521 does not apply to an administrative appeals conference", it is a litigating position not controlling on this Court. The authority cited in GL-17 for excluding Appeals conferences fromsec. 7521 is Notice 89-51. As noted above, I find that authority unpersuasive.GL-17 also makes a distinction between those third-party interviews where a witness is compelled to testify by legal process, such as a summons or subpoena, vis-a-vis those situations where the witness testifies voluntarily. The memorandum notes that pursuant to the Administrative Procedures Act (APA),
5 U.S.C. secs. 551-559 , 701- 706 (2000) , if the testimony of the witness was compelled by legal process, recording should be allowed since that witness would underAPA sec. 555(c) be entitled, at his or her cost, to a copy of the official transcript of his or her testimony.The compelled versus voluntary distinction, however, is irrelevant to taxpayer interviews which are governed by
sec. 7521 . The result under that section should not be affected by whether or not the taxpayer interview was compelled by legal process or was voluntary.Sec. 7521 , unlikeAPA sec. 555(c)↩ , does not differentiate between voluntary and compelled taxpayer interviews.2. [sic]
Under Lunsford v. Commissioner, 117 T.C. 183">117 T.C. 183 , 188-189↩ (2001), generally frivolous CDP cases can and should be dealt with summarily by the courts.1. As an illustration of petitioner's past conduct, see
Keene v. Commissioner, T.C. Memo. 2002-277 , where the Court granted summary judgment and imposed a penalty undersec. 6673(a)(1)↩ in the amount of $ 5,000.2. I disagree with the suggestion in footnote 6 of the majority opinion that
Davis v. Commissioner, 115 T.C. 35">115 T.C. 35 (2000), addressed only the procedure involving the conduct of a hearing before Appeals undersec. 6330(b) (andsec. 6320(b) ). Although the ultimate holding in Davis was that a hearing before Appeals pursuant tosec. 6330 does not include the right to subpoena witnesses, the following passage makes it clear that Davis focused not only on the procedure but also on the nature and function of Appeals:When Congress enacted
section 6330 and required thattaxpayers be given an opportunity to seek a pre-levy hearing
with Appeals, Congress was fully aware of the existing nature
and function of Appeals. Nothing in
section 6330 or thelegislative history suggests that Congress intended to alter the
nature of an Appeals hearing so as to compel the attendance or
examination of witnesses. * * * The references in
section 6330 to a hearing by Appeals indicate that Congress contemplated thetype of informal administrative Appeals hearing that has been
historically conducted by Appeals and prescribed by section
601.106(c), Statement of Procedural Rules.
Davis v. Commissioner, supra at 41 .Assuming arguendo that the majority were correct in suggesting that Davis addressed only the procedure involving the conduct of an Appeals hearing under
sec. 6330(b) (andsec. 6320(b) ), the right to make an audio recording at an "in-person interview" provided insec. 7521(a)(1) relates only to a procedure involving the conduct of such an "in-person interview". As discussed below, Congress enactedsec. 7521(a)(1) into the Code as one of several procedures involving "in-person interviews" set forth insec. 7521 . Indeed,sec. 7521 is entitled "PROCEDURES INVOLVING TAXPAYER INTERVIEWS". See H. Conf. Rept. 100-1104, at 212(1988), 3 C.B. 473">1988-3 C.B. 473↩ , 702.3.
Sec. 7521 sets forth procedures regarding "Recording of Interviews",sec. 7521(a) , "Safeguards" and "Right of Consultation" with respect to such interviews,sec. 7521(b)(1) and (2) , and "Representatives Holding Power of Attorney" who appear at such interviews,sec. 7521(c)↩ .4.
Sec. 601.106(f)(5) and (6) , Statement of Procedural Rules, provides in pertinent part:(f) Conference and practice requirements. Practice
and conference procedure before Appeals is governed by Treasury
Department Circular 230 as amended (
31 CFR Part 10 ), and therequirements of Subpart E of this part. In addition to such
rules but not in modification of them, the following rules are
also applicable to practice before Appeals:
* * * * * * *
(5) Rule V. In order to bring an unagreed income,
profits, estate, gift, or Chapter 41, 42, 43, or 44 tax case in
prestatutory notice status, an employment or excise tax case, a
penalty case, an Employee Plans and Exempt Organization case, a
termination of taxable year assessment case, a jeopardy
assessment case, or an offer in compromise before the Appeals
office, the taxpayer or the taxpayer's representative should
first request Appeals consideration and, when required, file
with the district office (including the Foreign Operations
District) or service center a written protest setting forth
specifically the reasons for the refusal to accept the findings.
If the protest includes a statement of facts upon which the
taxpayer relies, such statement should be declared to be true
under the penalties of perjury. The protest and any new facts,
law, or arguments presented therewith will be reviewed by the
receiving office for the purpose of deciding whether further
development or action is required prior to referring the case to
Appeals. * * *
(6) Rule VI. A taxpayer cannot withhold evidence
from the district director of internal revenue and expect to
introduce it for the first time before Appeals, at a conference
in nondocketed status, without being subject to having the case
returned to the district director for reconsideration. Where
newly discovered evidence is submitted for the first time to
Appeals, in a case pending in nondocketed status, that office,
in the reasonable exercise of its discretion, may transmit same
to the district director for his or her consideration and
comment.↩
5. At a minimum, if Congress had intended for the Appeals hearing under
sec. 6330(b) (andsec. 6320(b) ) to constitute an "in-person interview" for purposes ofsec. 7521 , Congress would have so stated in the legislative history ofsec. 6330(b) (andsec. 6320(b) ). It did not.The fact that from 1989 until May 2002 IRS Appeals exercised its discretionary authority and permitted audio recordings of hearings before it does not mean that the IRS's position was that
sec. 7521(a)(1) required such audio recordings. That was made clear inNotice 89-51 ,1 C.B. 691">1989-1 C.B. 691 (Notice 89-51), and Litigation Guideline Memorandum GL-17.Notice 89-51 states in part:For purposes of
section 7520 of the Code [laterredesignated
section 7521 ], the term "taxpayerinterview" means a meeting between an officer or employee of
the Examination function, the Employee Plans and Exempt
Organization function, or the Collection function of the
Service, and a taxpayer or authorized representative, as defined
in
section 7520(b)(2) , when the determination or the collectionof any tax is at issue.
Litigation Guideline Memorandum GL-17 provides in part:
It is also our position that
section 7521 does not apply toan administrative appeals conference * * *
* * * IRM 8626 does not create any right to make a verbatim
recording; it simply states that the Commissioner or his/her
delegate has the discretion to allow a recording. * * *
Since 1989 until May 2, 2002, when Appeals, in an unpublished internal memorandum to all Appeals Area Directors, exercised its discretionary authority to end the audio recording of conferences or hearings before Appeals that it had previously allowed, Notice 89-51 and Litigation Guideline Memorandum GL-17 represented the interpretation of the IRS that the phrase "in-person interview" in
sec. 7521 does not apply to any Appeals conference or hearing but applies only to in-person audit interviews and in- person collection interviews. Congress is presumed to have had knowledge of that interpretation by the IRS of the phrase "in- person interview" insec. 7521 when in 1998 it added the provisions for a hearing before Appeals insec. 6330(b) (andsec. 6320(b) ) without mentioningsec. 7521 and by using the term "hearing" instead of "interview". SeeFla. Natl. Guard v. Fed. Labor Relations Auth., 699 F.2d 1082">699 F.2d 1082 , 1087↩ (11th Cir. 1983) ("Congress is deemed to know the executive and judicial gloss given to certain language and thus adopts the existing interpretation unless it affirmatively acts to change the meaning.").6. In reviewing a notice of deficiency under
sec. 6213 , our standard of review is usually de novo. There are, however, instances in which, in reviewing a notice of deficiency, our standard of review is abuse of discretion (for example, in cases involving a change in accounting method determined by the IRS). Regardless of whether our standard of review in a deficiency case is de novo or abuse of discretion, we typically do not go behind the notice of deficiency.Greenberg's Express, Inc. v. Commissioner, 62 T.C. 324">62 T.C. 324 , 327↩ (1974).7. In reaching the result to remand for an Appeals hearing that petitioner may audio record, the majority relies on respondent's acknowledgment that if the Court were to decide the audio recording issue against respondent, the proper action would be to remand the case and allow petitioner to have a hearing that he may audio record. Respondent's position as to what the Court should do if it were to hold against respondent on the issue presented under
sec. 7521(a) (1) ↩ is not binding on the Court and does not justify rrmanding the case to Appeals. The Court has never hesitated in the instant case, to reject the IRS's (or the taxpayer's) view of what the proper action should be in the event that the Court were to resolve an issue adversely to that party.