Opinion
Civil Action No. 1:04-CV-2898-RWS.
February 3, 2005
ORDER
This case is before the Court for consideration of Defendant's Motion to Dismiss [2]. After reviewing the record, the Court enters the following Order.
Plaintiff seeks judicial review of a Notice of Determination issued by the Internal Revenue Service with respect to civil tax penalties under 26 U.S.C. § 6702 for frivolous tax returns that she filed for the 1997 and 1998 tax years. See Complaint, Ex. A-1. The IRS issued the Plaintiff a notice of levy with respect to both tax years, and she requested a "collections due process" or "CDP" hearing in accordance with 26 U.S.C. § 6330. Plaintiff and her representatives failed to raise any collection alternatives or non-frivolous arguments during the CDP hearing. Instead, she demanded a "verified bill" from the IRS, and threatened a "Section 1203(b)" action under the IRS Restructuring and Reform Act of 1998. The IRS warned the Plaintiff that her arguments were frivolous and gave her an additional 10 days to raise any non-frivolous arguments. She failed to do so. As a result, the IRS Appeals Office sustained the civil penalties in a Notice of Determination issued May 19, 2004.
Pub.L. No. 105-206, section 1203(b) (now codified as a note to 26 U.S.C. § 7804) refers to actionable misconduct by an IRS employee within the performance of the employee's official duties.
The Plaintiff sought review of the Notice of Determination before the U.S. Tax Court through a petition docketed as Dkt. No. 10522-04L. The Tax Court dismissed the petition on September 2, 2004, correctly finding that it lacked jurisdiction over frivolous return penalties. The Plaintiff subsequently initiated the captioned proceeding on October 4, 2004. Defendant has filed a Motion to Dismiss which is presently before the Court for consideration. Federal Rule of Civil Procedure 12(b)(6) empowers the Court to grant a defendant's motion to dismiss when a complaint fails to state a claim upon which relief can be granted. In considering whether to grant or deny such a motion, the Court may look only to the pleadings. Fed.R.Civ.P. 12(b). In addition, the pleadings are construed broadly so that all facts pleaded therein are accepted as true, and all inferences are viewed in a light most favorable to the plaintiff. Cooper v. Pate, 378 U.S. 546, 546, 84 S. Ct. 1733, 12 L. Ed. 2d 1030 (1964); Conner v. Tate, 130 F. Supp. 2d 1370, 1373 (N.D. Ga. 2001). Thus, a motion to dismiss should be granted when "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99, 2 L. Ed. 2d 80 (1957); see Linder v. Portocarrero, 963 F.2d 332 (11th Cir. 1992). Motions to dismiss are disfavored and are rarely granted. Gasper v. La. Stadium Exposition Dist., 577 F.2d 897, 900 (5th Cir. 1978); Woodham v. Fed. Transit Admin., 125 F. Supp. 2d 1106, 1108 (N.D. Ga. 2000).
The Plaintiff incorrectly maintains that she was deprived of her constitutional and administrative rights. Where a taxpayer has been issued a notice of levy, 26 U.S.C. § 6330 permits the taxpayer to request a "collections due process" or "CDP" hearing before an IRS appeals officer. The issues that can generally be considered through this procedure are statutorily prescribed: (1) appropriate spousal defenses, (2) challenges to the appropriateness of collection actions, and (3) offers of collection alternatives. 26 U.S.C. § 6330(c)(2)(A). In addition, a taxpayer may challenge the existence or amount of the underling tax liability, but only "if the person did not receive any statutory notice of deficiency for such tax liability or did not otherwise have an opportunity to dispute such tax liability." 26 U.S.C. § 6330(c)(2)(B). See also Katz v. Comm'r, 115 T.C. 329, 339 (2000); Sego v. Comm'r, 114 T.C. 604, 609-10 (2000).
The scope of review at a CDP hearing is statutorily limited. The statute does not, for instance, enable the appeals officer to entertain frivolous requests, such as the Plaintiff's demands for a "verified bill" or return information (see Complaint at pg. 10), or for the "cross-examination" of information relied upon by the IRS. The Notice of Determination, attached to the Complaint, states that "Certified Transcripts of the assessments were mailed to the taxpayer," thus satisfying the information provision requirement of Treas. Reg. 301.6203-1. See United States v. Chila, 871 F.2d 1015, 1017-18 (11th Cir. 1989); United States v. Dixon, 672 F. Supp. 503 (M.D. Ala. 1987), aff'd per curiam, 849 F.2d 1478 (11th Cir. 1989). Moreover, it has also been held that an appeals officer may rely upon either a form 4340 or a computer printout of the transcript of account to verify the taxpayer's liability and that a valid assessment has been made.Roberts v. Comm'r, 118 T.C. 365 (2002); Crow v. Comm'r, T.C. Memo. 2002-149; Williams v. Comm'r, T.C. Memo. 2002-111; Howard v. Comm'r, T.C. Memo 2002-81
In a recent case involving facts very similar to those presented here, this Court granted a motion to dismiss, or in the alternative, motion for summary judgment, submitted by the Government, where a taxpayer raised arguments resembling those raised by the Plaintiff. In Gregory v. United States, 2003 WL 701218 (N.D. Ga. Jan. 15, 2003), the taxpayer challenged a Notice of Determination involving frivolous return penalties on the grounds that the appeal officer did not produce and present various documents during the CDP hearing and did not consider the arguments she made during the hearing. The Court agreed with the Government that the IRS was not required, inter alia, to "produce and present to Plaintiff the `verification from the Secretary' as required by Section 6330(c)," or to "produce any document signed by any [IRS] employee that would have supported the imposition of the `frivolous penalty' at issue." Id. at *2.
The determination of the IRS to proceed with collection activities is subject to review by this Court under an "abuse of discretion" standard. Gillett v. United States, 233 F. Supp. 2d 874, 882 (W.D. Mich. 2002); Goza v. Comm'r, 114 T.C. 176, 181-82 (2000). The IRS appeals office plainly afforded the Plaintiff all of the rights to which she was statutorily entitled in the context of a collections due process proceeding and correctly followed the requisite procedures in issuing its Notice of Determination.
Therefore, Defendant's Motion to Dismiss [2] is hereby GRANTED.
SO ORDERED.