Opinion
6798-16 L
06-28-2022
David S. Golomb, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER AND DECISION
John O. Colvin, Judge
This case is before the Court on respondent's motion for summary judgment (motion) and respondent's first supplement to that motion (supplement). For reasons discussed below, we will grant respondent's motion.
In the motion, respondent contends that the settlement officer (SO) did not abuse his discretion in concluding that petitioner is not eligible for a collection alternative. We agree with respondent.
Background
On January 28, 2015, respondent issued to petitioner a notice of intent to levy stating that petitioner was liable for trust fund recovery penalties (TFRPs) for taxable quarters ending December 31, 2012, and June 30, September 30, and December 31, 2013. On February 18, 2016, after a collection due process (CDP) hearing, respondent issued a Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330 of the Internal Revenue Code. In it, respondent sustained the levy notice. Petitioner timely filed a petition invoking our jurisdiction under section 6330(d)(1).
Monetary amounts are rounded to the nearest dollar. Unless otherwise indicated, section references are to the Internal Revenue Code in effect at all relevant times. Rule references are to the Tax Court Rules of Practice and Procedure.
In March 2017, petitioner and respondent filed motions to remand the case for a supplemental CDP hearing, in part, to "determin[e] if * * * deposits to petitioner's business account" affect the amount of petitioner's outstanding personal tax owed. We granted those remand motions.
On remand, the SO held a supplemental CDP hearing. During that hearing, the SO and petitioner discussed whether petitioner was eligible to be placed in currently not collectible (CNC) status and whether an offer in compromise (OIC) of $1,000 would be appropriate. Petitioner told the SO that he could not pay any of his unpaid Federal tax because, according to petitioner, a liability he had under the Perishable Agricultural Commodities Act (PACA) had priority over his Federal tax liability. The SO asked petitioner to provide documentation supporting his claim that he had a PACA debt that had priority over his Federal tax debt. Petitioner provided a self-written, undated document to the SO in which he said that PACA creditors have priority over all other creditors, including secured creditors, to PACA trust assets. Petitioner did not provide any other substantiation of his PACA claims.
During the supplemental hearing petitioner also discussed two $10,000 payments that he made to the IRS in June 2014. The SO's notes provide as follows:
Next he [petitioner] brought up the two $10,000 payments that weren't applied to his TFRP as he requested. In this call he was able to show, per the transcripts he provided, what payments he was talking about. On the * * * transcript he said the two $10,000 payments on 06/12/2014 and 06/16/2014 are the ones where he went into the walk-in IRS office and said he wanted them applied to his trust fund tax and was told to write his EIN# [employer identification number] on the checks. I [the SO] asked him to clarify that he said trust fund taxes. He said yes, trust fund taxes.
On May 30, 2017, the SO sent a supplemental notice of determination, again sustaining the levy notice. In the notice the SO concluded that petitioner's self-created PACA document was not persuasive. The SO rejected petitioner's request for CNC status and his OIC proposal. The SO also said that "the [two $10,000] payments were made before * * * [petitioner's] TFRP assessments were made in August of 2014." In the supplemental notice the SO mentioned petitioner's TFRPs but not his trust fund taxes.
Respondent filed a supplemental motion for summary judgment on April 10, 2018. In a subsequent status report, petitioner said that he had been working with the Taxpayer Advocate Service (TAS) and that a TAS agent told him the two $10,000 payments had been credited to the wrong account and that the IRS had agreed to move the $20,000 payment to the correct account.
Respondent provided a letter from the TAS agent who had worked with petitioner. The TAS agent stated how the IRS had applied the $20,000. The TAS agent concluded that $4,300 of the $20,000, which was initially applied to interest and penalties for the tax period ending March 31, 2013, should instead be applied to petitioner's trust fund tax liability for the tax period ending June 30, 2013. The TAS analysis prepared as a result of petitioner's request for assistance from TAS is described in detail in a status report filed by respondent in 2019.
Discussion
Summary judgment is designed to expedite litigation and avoid unnecessary and expensive trials. Fla. Peach Corp. v. Commissioner, 90 T.C. 678, 681 (1988). Summary judgment may be granted with respect to all or part of the legal issues presented "if there is no genuine dispute as to any material fact and that a decision may be rendered as a matter of law." Rule 121(a) and (b); see Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), aff'd, 17 F.3d 965 (7th Cir. 1994). All factual inferences will be drawn in a manner most favorable to petitioner, the nonmoving party. See id.
A. Whether the SO's conclusion that petitioner was not eligible for a collection alternative was an abuse of discretion
Respondent contends that the SO appropriately determined petitioner was not eligible for CNC status and rejected the OIC because petitioner had accessible funds that would "fully pay [his] * * * IRS liabilities." When reviewing whether an SO appropriately denied a collection alternative, including an OIC or CNC status, we the SO's actions for an abuse of discretion. Goza v. Commissioner, 114 T.C. 176, 182 (2000). An abuse of discretion occurs if the appeals officer exercises his or her judgment "arbitrarily, capriciously, or without sound basis in fact or law." See Giamelli v. Commissioner, 129 T.C. 107, 111 (2007).
The SO asked petitioner to substantiate that his PACA liabilities had priority over his IRS liabilities. Petitioner provided a self-written document stating that he was liable under PACA. The SO's determination that this document was insufficient to establish that petitioner's PACA liabilities had priority over his IRS liabilities was not an abuse of discretion. In addition, the record shows no abuse of discretion in the SO's consideration of other issues such as petitioner's housing expenses and, in light of petitioner's age, his 401(k) account.
B. Whether the crediting of two $10,000 payments petitioner made in June 2012 is before the Court in this case; and if so, whether those payments were properly credited
In 2017, during the remand of this case, petitioner said that IRS had not properly credited to his trust fund recovery penalty liability two $10,000 payments he made to the IRS in June 2014. Apparently petitioner did not designate the taxable period to which to credit those payments, and the IRS credited them to the quarter ending March 31, 2012. The record shows that for that quarter, petitioner had trust fund tax liability but had no trust fund recovery penalty liability. Thus, for the period ending March 31, there was no trust fund recovery penalty liability to which the payments could be credited. Thereafter, a TAS agent told petitioner that the $10,000 payments had been credited to the wrong account and that the IRS had agreed to move the $20,000 payment to the correct account. The TAS analysis performed in response to petitioner's request for assistance shows that the IRS correctly handled these payments. Thus, we need not further consider issues relating to the crediting of these payments.
C. Conclusion
Based upon the foregoing, it is
ORDERED that respondent's Motion for Summary Judgment, as supplemented, is granted. It is further
ORDERED and DECIDED that the determinations set forth in the Notice of Determination Concerning Collection Actions Under IRC Sections 6320 or 6330 of the Internal Revenue Code, dated February 18, 2016, upon which this case is based, are sustained.
We point out to Mr. Golomb that Rule 162 permits a party to file a motion to vacate a decision within 30 days after the decision has been entered. If he has information showing this order and decision should be vacated, he may file a motion for reconsideration within 30 days from the date of entry of the decision in this case.