Opinion
11343-19L
08-24-2021
Ralph W. Baumgardner, Jr. & Patricia L. Baumgardner, Petitioners v. Commissioner of Internal Revenue, Respondent
ORDER
Courtney D. Jones Judge
This case is scheduled for trial at the remote trial session of the Court scheduled to commence at Baltimore, Maryland, on November 1, 2021. On June 27, 2019, petitioners Ralph W. Baumgardner, Jr. & Patricia L. Baumgardner (the Baumgardners) filed a petition to commence this case. Attached thereto was a notice of determination concerning collection actions under section 6320 or section 6330 (notice of determination) regarding tax year 2013.
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, unless otherwise indicated.
Despite the Baumgardners' contention that both the 2012 and 2013 tax years are at issue, no notice of determination regarding tax year 2012 was in the record. As such, on August 3, 2021, we ordered the Baumgardners to show cause as to why the Court has jurisdiction over their 2012 tax year. On August 6, 2021, the Baumgardners filed a response, alleging that the Court has jurisdiction over the 2012 tax year because they included the unpaid tax liabilities for that year in their proposed Offer in Compromise (OIC) collection alternative to the proposed levy.
This Court is a court of limited jurisdiction, and we may exercise that jurisdiction only to the extent authorized by Congress. Naftel v. Commissioner, 85 T.C. 527, 529 (1985). The Court's jurisdiction to review certain collection activity by the Internal Revenue Service under sections 6320 and 6330 depends on the issuance of a valid notice of determination and the timely filing of a petition with the Court for review. Orum v. Commissioner, 123 T.C. 1 (2004), aff'd, 412 F.3d 819 (7th Cir. 2005); Moorhous v. Commissioner, 116 T.C. 263, 269 (2001); see also Rule 330(b).
The Baumgardners have not filed a valid notice of determination for the 2012 tax year. The record is thus clear that we retain jurisdiction to review respondent's proposed collection of tax for only the 2013 tax year. See Sullivan v. Commissioner, T.C. Memo. 2009-4, 2009 WL 20979, at *8. While the Baumgardners may be correct in asserting that it was necessary to include the unpaid liabilities from the 2012 tax year in their OIC, this act does not confer jurisdiction to review the collection of that liability upon this Court. See sec. 6330(d)(1).
However, we do have the jurisdiction to review a settlement officer's rejection of an OIC that encompasses both a CDP liability and a non-CDP liability. See Ansley v. Commissioner, T.C. Memo. 2019-46, at *5 n.8; Sullivan v. Commissioner, at *8-*9. We can take into account all the liabilities that were proposed to be compromised when we consider whether the settlement officer abused his or her discretion in rejecting that offer. Gallagher v. Commissioner, T.C. Memo. 2018-77, at *10 n.5. What we lack jurisdiction to do is to consider any challenge to the Baumgardners' underlying tax liability for the non-CDP year. See id.
Upon due consideration and for cause, it is
ORDERED that the Court's Order to Show Cause, dated August 3, 2021, is hereby made absolute. It is also
ORDERED that so much of this case as it relates to tax year 2012 is dismissed for lack of jurisdiction.