Opinion
18880-19L
03-08-2022
THOMAS ANDREW CLARKE, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER AND DECISION
Travis A. Greaves Judge
Respondent filed a Rule 121 motion for summary judgment on November 19, 2021, asking us to sustain his determination that deems petitioner's $46,135.19 unpaid 2013 Federal income tax liability currently not collectible (CNC). We grant the motion because the Internal Revenue Service (IRS) Office of Appeals (Appeals) granted petitioner's request for CNC status, and petitioner has not set forth specific facts showing there is a genuine dispute for trial.
The IRS Office of Appeals became known as the IRS Independent Office of Appeals on July 1, 2019. See Taxpayer First Act, Pub. L. No. 116-25, sec. 1001, 133 Stat. at 985 (2019).
Background
Respondent issued Letter 11, Notice of Intent to Levy and Notice of Your Right to a Hearing, dated September 17, 2018, to petitioner as to his unpaid 2013 Federal income tax liability. Petitioner filed Form 12153, Request for a Collection Due Process [CDP] or Equivalent Hearing, on line 8 of which he checked the boxes labeled "Installment Agreement" and "I Cannot Pay Balance," and explained that an "[e]xisting installment agreement should still be in place."
In a letter to petitioner scheduling the CDP hearing, Settlement Officer Jeffrey Chambers (SO Chambers) explained that to consider petitioner's request for an installment agreement, petitioner needed to submit Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, which demonstrates his ability to pay. During the telephonic CDP hearing, SO Chambers explained that the agreement petitioner had in place was a continuous wage levy, not an installment agreement, and offered to consider an installment agreement on condition that petitioner provide Form 433-A. Petitioner refused to complete the form on the ground that he already had an installment agreement. Appeals issued a notice of determination sustaining the proposed levy on September 16, 2019. Petitioner sought review of the determination in this Court, and his Petition asserts the following:
• "Installment Agreement was in place";
• "Continuous Monthly Wage Levy was terminated";
• "Advised Settlement Office of desire to continue with Installment Agreement";
• "The amount due is incorrect"; and
• "Fees, interest & penalties [were] excessive."
Respondent first moved for summary judgment on March 24, 2021, denying that petitioner ever had an installment agreement. The Court denied the motion without prejudice on May 18, 2021, and remanded the case to Appeals "for a supplemental hearing to reconsider petitioner's financial circumstances, taking into account all of petitioner's income, expenses, assets, and liabilities as reported by petitioner in his supporting financial documentation, and issue a supplemental determination letter as to whether petitioner qualifies for a collection alternative or whether the tax liabilities at issue are entitled to 'currently not collectible' status."
Even if petitioner had an installment agreement, the IRS has the right to terminate such an agreement on 30 days' notice if the taxpayer fails to provide a financial condition update (i.e., file Form 433-A) as requested. § 6159(b)(4)(C), (b)(5); Treas. Reg. § 301.6159-1(c)(3)(v), (e)(2)(ii)(C), (e)(4).
Appeals issued a supplemental determination letter dated September 17, 2021, which concluded that "the Notice of Intent to Levy was appropriately issued based on applicable laws and procedures." Based on financial information petitioner provided after the remand, however, the letter explained that the "proposed levy action is not sustained since Appeals has deemed your account as currently not collectible."
Respondent filed the motion for summary judgment currently before the Court on November 19, 2021, seeking "summary adjudication in respondent's favor upon all issues in this case" and denying that petitioner challenged his underlying liability in the CDP hearing. On December 31, 2021, petitioner submitted the following one-sentence response to respondent's motion: "There is [sic] more than 5 errors, omissions, and unfactual [sic] statements included in the motion for Summary Judgment."
Discussion
The purpose of summary judgment is to expedite litigation and avoid costly and unnecessary trials. Fla. Peach Corp. v. Commissioner, 90 T.C. 678, 681 (1988). We may grant a motion for summary judgment when there is no genuine dispute of material fact and a decision may be rendered as a matter of law. Rule 121(b); Fla. Peach Corp., 90 T.C. at 681. Furthermore, we construe the facts and draw all inferences in the light most favorable to the nonmoving party to decide whether summary judgment is appropriate. Bond v. Commissioner, 100 T.C. 32, 36 (1993). The nonmoving party may not rest upon the mere allegations or denials of his pleading, but must set forth specific facts showing that there is a genuine dispute for trial. Rule 121(d); Bond, 100 T.C. at 36.
Petitioner's response to respondent's motion asserts that there are "unfactual [sic] statements" in respondent's motion, but does not set forth specific facts showing that there is a genuine dispute for trial as to any of the issues petitioner claims to have raised at his CDP hearing. We could enter decision against petitioner for that reason alone, but we nevertheless will consider the motion on its merits. Cf. Chadwick v. Commissioner, 154 T.C. 84, 89 (2020). We conclude that no material facts are in dispute and that the case may be adjudicated summarily.
Section 6330(a) prohibits a levy on any property or right to property of any person until the Secretary of the Treasury or his delegate "has notified such person in writing of their [sic] right to a hearing under this section before such levy is made." See also § 7701(a)(11)(B) (defining "Secretary" as "the Secretary of the Treasury or his delegate"). Section 6330(b) allows the taxpayer a CDP hearing before Appeals, at which section 6330(c)(2) permits the taxpayer to raise "any relevant issue relating to the unpaid tax or the proposed levy," including the existence or amount of the underlying tax liability, the "appropriateness of collection actions," and "offers of collection alternatives" including "an installment agreement."
Section 6330(d)(1) allows the taxpayer to petition this Court for review of the determination. This Court considers only the issues raised in the petition, see Rule 331(b)(4); Moya v. Commissioner, 152 T.C. 182, 187 (2019), and the taxpayer may not raise new issues before the Tax Court that he did not raise before Appeals, see Giamelli v. Commissioner, 129 T.C. 107, 112-14 (2007); Treas. Reg. § 301.6320-1(f)(2). A taxpayer does not properly raise an issue during his CDP hearing, including an issue concerning his underlying tax liability, if he "fails to present to Appeals any evidence with respect to that issue after being given a reasonable opportunity to present such evidence." First Rock Baptist Church Child Dev. Ctr. v. Commissioner, 148 T.C. 380, 389 (2017) (quoting Treas. Reg. § 301.6320-1(f)(2)). The Court reviews the underlying tax liability de novo if it is properly at issue, and reviews all other determinations for abuse of discretion. Goza v. Commissioner, 114 T.C. 176, 181-82 (2000).
Petitioner claims to have raised at least three issues at the CDP hearing, and the record confirms he raised at least two. By checking the box labeled "Installment Agreement" on Form 12153, petitioner sought a written agreement with the IRS allowing him to pay his 2013 liability in installments determined based on his ability to pay. See § 6159; Treas. Reg. § 301.6159-1. By checking the box labeled "I Cannot Pay Balance" on the same form, petitioner requested CNC status, whereby the IRS suspends collection action altogether because the taxpayer is unable to pay. See generally Internal Revenue Manual pt. 5.16.1 (Apr. 13, 2021). Petitioner also claims he disputed the amount of his 2013 liability in the CDP hearing.
Appeals granted petitioner's request for CNC status, so any dispute as to his request for CNC status or an installment agreement is moot. Cf. Savoy v. Commissioner, T.C. Memo. 2014-162, at *24 (finding taxpayer's complaint about the appropriateness of collection actions moot where Appeals granted CNC status in a supplemental notice of determination), aff'd per curiam 589 Fed.Appx. 187 (4th Cir. 2015).
Petitioner is not entitled to challenge his underlying liability in this Court. He did not indicate on Form 12153 that he disagreed with the liability, despite the form's instruction that he register such disagreement on line 8 and has not presented evidence that he otherwise raised this issue at his CDP hearing or submitted evidence of his liability to Appeals. Cf. First Rock Baptist Church, 148 T.C. at 389 (holding that the taxpayer was not entitled to challenge its underlying liability where there was no evidence that it raised this issue during its CDP hearing).
It is therefore, ORDERED that respondent's motion for summary judgment, filed November 19, 2021, is granted. It is further
ORDERED and DECIDED that the supplemental notice of determination dated September 17, 2021, modifying the notice of determination dated September 16, 2019, for taxable year 2013 on which this case is based, is sustained.