Summary
holding that an appeals officer did not abuse his discretion by rejecting an OIC made by a taxpayer with a history of noncompliance with payroll tax laws
Summary of this case from United States v. RodenOpinion
NO. 4:03-CV-110-A
December 15, 2003
MEMORANDUM OPINION and ORDER
Came on for consideration the motion of defendant, the United States of America, for summary judgment. Plaintiff, Magnolia Media Group Ltd. ("Magnolia"), has not responded to the motion. The court, after reviewing the motion, the evidentiary material submitted by the United States, the record, and applicable authorities, concludes that the motion should be granted for the reasons set forth below.
I. Background
Magnolia instituted this action on February 12, 2003, and its active pleading is its original complaint. The active pleading of the United States is her first amended answer to Magnolia's complaint.
Magnolia brings this action pursuant to 26 U.S.C. § 6330(d) as an appeal of an Internal Revenue Service ("IRS") appeals officer's determination that a lower-level IRS decision to collect unpaid employment taxes through the use of a levy was appropriate. The relevant facts in this action are undisputed, as Magnolia has failed to respond to the summary judgment motion. Additionally, Magnolia has not responded to requests for admission, and thus the matters to which those requests are addressed are deemed admitted. See FED. R. CIV. P. 36.
Magnolia owes the United States a total of $64,198.58 in unpaid federal employment taxes for the combined tax periods ending June 30, 2001, and September 30, 2001. In compliance with the Internal Revenue Code, the IRS provided Magnolia with notice of its intent to levy and a corresponding collection due process hearing. See 26 U.S.C. § 6330. Through its power of attorney, Magnolia appeared at the hearing and proposed an installment agreement as its only alternative to collection by levy. This alternative was rejected by the IRS, because Magnolia had defaulted on two previous installment agreements, and, at the time of Magnolia's proposal, it continued to accrue new federal employment taxes that went unpaid. The hearing resulted in the appeals officer concluding that levying Magnolia's assets was no more intrusive than necessary for efficient collection of taxes due.
Magnolia timely appealed the appeals officer's decision to this court and argues that collection by levy is not reasonable in light of the facts and circumstances of this case, and it was not permitted a sufficient period of time to propose alternatives to collection by levy. Magnolia further alleges that the alternative it did propose was rejected by the United States, and such rejection was unreasonable and an abuse of discretion.
The court can find no authority to support a claim that Magnolia was not permitted sufficient time to propose alternatives. See 26 U.S.C. § 6330(c). There is no dispute that the United States complied with the statutory requirements for time and method of notice.See id. § 6330(a)(2). Furthermore, Magnolia admits in its complaint that it did, in fact, propose an alternative — another installment agreement. Thus, the court will not further address the argument that Magnolia was not allowed sufficient time to propose alternatives.
The complaint contains similar allegations regarding "collection methods." However, the record is unclear as to how "collection methods" differ from the proposed levy.
II. Analysis
A district court has jurisdiction over an appeal of a determination under 26 U.S.C. § 6330 if the Tax Court does not have jurisdiction of the underlying tax liability. See 26 U.S.C. § 6330(d)(1)(B). As the Tax Court is without jurisdiction over suits involving liability for employment tax, see 26 C.F.R. § 601.102(b)(2)(i), this court has jurisdiction over Magnolia's appeal. Also, because the underlying tax liability is undisputed, the court reviews the IRS appeals officer's decision for an abuse of a discretion. See MRCA Information Servs. v. United States. 145 F. Supp.2d 194, 199 (D. Conn. 2000).The court finds that the decision to collect unpaid taxes through the use of a levy and to reject the offer of a third installment agreement as an alternative means of collection was not an abuse of discretion.See id. at 199-200. Magnolia defaulted on two previous installment agreements entered into with the United States and was continuing to accrue new unpaid tax liabilities at the time it was seeking a third installment agreement.
III. ORDER
For the reasons discussed,
The court ORDERS that the motion for summary judgment of the United States be, and is hereby, granted, and that the above-styled and numbered action against the United States be, and is hereby, dismissed.
SIGNED