Opinion
2891-23L
12-21-2023
ORLANDO R. VASQUEZ, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER AND DECISION
Christian N. Weiler, Judge.
This case was called from the calendar for trial at the Court's San Antonio, Texas trial session commencing on December 11, 2023. This case involves the appeal of a Notice of Determination made by the Independent Office of IRS Appeals (Appeals) with respect to petitioner's Collection Due Process hearing. On September 22, 2023, the Administrative Record was filed by respondent along with a Certificate of Genuineness of the Administrative Record.
On October 12, 2023, respondent filed a Motion for Summary Judgment and attached a declaration by attorney K. Lyn Hillman. By order served on October 19, 2023, the Court set respondent's Motion for Summary Judgment for contradictory hearing on Tuesday, December 12, 2023, at 11:30a.m. (CT) and directed petitioner to file a response to respondent's Motion for Summary Judgment. Petitioner failed to file a written response to respondent's Motion for Summary Judgment and failed to appear at the hearing on December 12, 2023.
Considering the pleadings and motion papers of the parties and for the reasons detailed below, the Court finds that no genuine disputes remain as to material facts, and respondent is entitled to summary judgment as a matter of law. Accordingly, we will grant respondent's motion for summary judgment.
Background
The following facts are drawn from the parties' pleadings and motion papers. The facts stated are not findings of fact by this Court and are stated herein solely for the purpose of ruling on petitioner's Motion for Summary Judgment. Mr. Vasquez resided in Texas when he timely filed his petition.
On February 9, 2022, Mr. Vasquez requested a collection due process or equivalent hearing by submitting Form 12153 (CDP Request). The IRS acknowledged receipt of Mr. Vasquez's CDP Request for tax years 2010, 2018 and 2019 by letter on March 20, 2022, and forwarded his CDP Request to the Appeals office. Settlement Officer (SO) Andrea L. Etchison was assigned to Mr. Vasquez's CDP Request. SO Etchison determined that Mr. Vasquez had raised both frivolous and relevant issues, and, therefore, SO Etchison proceeded with his CDP Request as a hybrid case, addressing only the relevant issues.
By letter dated March 20, 2022, SO Etchison acknowledged receipt of Mr. Vasquez's CDP Request and scheduled a telephone hearing on April 26, 2022. SO Etchison's letter also informed petitioner that he raised issues in his CDP Request that constituted positions the IRS identifies as frivolous as listed in Notice 2010-33 or a position to delay or impede federal tax administration. Also in the March 20, 2022, letter, SO Etchison requested the following documents be provided by Mr. Vasquez before April 4, 2023: (1) An original Form 940 for tax year 2019; (2) A completed collection information statement Form 433-A for individuals; (3) Signed Forms 940 for tax periods ending 12/31/2020 and 12/31/2021, Forms 941 for tax periods ending 06/2021, 09/2021 and 12/2021, and Forms 1040 for tax years 2019 and 2020; (4) Proof that estimated tax payments were paid in full for the year to date; (5) Form 656, Offer in Compromise; and (6) Proof of timely deposit of federal employment taxes for the current quarter.
SO Etchison's research of Mr. Vasquez's liabilities showed the 2010 tax year was assessed in error by IRS. SO Etchison abated the assessments made against Mr. Vasquez for tax year 2010. SO Etchison also determined assessments related to tax year 2018 were made in error and she abated the assessments for tax year 2018 as well. As to tax year 2019, SO Etchison reviewed Integrated Data Retrieval System (IDRS) transcripts of account, and she determined that the assessment was properly made by IRS, notice and demand for payment letter was mailed to Mr. Vasquez's last known address within 60 days of assessment as required, and there was a balance due when the CDP Levy Notice was issued. SO Etchison also determined petitioner had an unpaid liability for tax year 2019.
Mr. Vasquez did not call for his telephone hearing; nor did he provide the documents requested by SO Etchison in her March 20, 2022, letter. SO Etchison ultimately sustained the IRS proposed levy for tax year 2019 and did not sustain the levy for tax year 2010. The Notice of Determination in this case was issued for tax years 2010 and 2019 on December 27, 2022. Mr. Vasquez filed his Petition with the Court on February 3, 2023.
Discussion
I. Summary Judgment Standard
The purpose of summary judgment is to expedite litigation and avoid unnecessary and time-consuming trials. FPL Grp., Inc. & Subs. v. Commissioner, 116 T.C. 73, 74 (2001); Fla. Peach Corp. v. Commissioner, 90 T.C. 678, 681 (1988). We may grant summary judgment when there is no genuine dispute of material fact and a decision may be rendered as a matter of law. Rule 121(a)(2); Elec. Arts, Inc. v. Commissioner, 118 T.C. 226, 238 (2002). However, it is not a substitute for trial; it should not be used to resolve genuine disputes over material factual issues. Elec. Arts. Inc., 118 T.C. at 238. When determining whether to grant summary judgment, we must view factual materials and inferences drawn therefrom in the light most favorable to the nonmoving party. See FPL Grp., Inc. & Subs., 116 T.C. at 75; Bond v. Commissioner, 100 T.C. 32, 36 (1993). The nonmoving party may not rest upon the mere allegations or denials of his pleadings but must set forth specific facts showing that there is a genuine dispute for trial. Rule 121(d); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), aff'd, 17 F.3d 965 (7th Cir. 1994).
On the basis of the record in this case we conclude that there is no genuine dispute as to a material fact. Consequently, we may render a decision as a matter of law.
II. Standard of Review
We have jurisdiction to review Appeals' determination pursuant to sections 6320(c) and 6330(d)(1). See Murphy v. Commissioner, 125 T.C. 301, 308 (2005), aff'd, 469 F.3d 27 (1st Cir. 2006). Where the underlying tax liability is at issue, the Court decides the issue of liability on a de novo basis. Sego v. Commissioner, 114 T.C. 604, 610 (2000). The Court reviews the administrative determination of Appeals regarding non-liability issues for abuse of discretion. Goza v. Commissioner, 114 T.C. 176, 182 (2000). In reviewing for abuse of discretion we must uphold Appeals' determination unless it is arbitrary, capricious, or without sound basis in fact or law. See Murphy, 125 T.C. at 320; Taylor v. Commissioner, T.C. Memo. 2009-27, 2009 WL 275721, at *9. We do not substitute our judgment for that of Appeals but consider "whether, in the course of making its determination, the Appeals Office complied with the legal requirements of an administrative hearing." Charnas v. Commissioner, T.C. Memo. 2015-153, at *7.
III. Underlying Liabilities
Mr. Vasquez did request relief from underlying liabilities on his CDP Request; however, he only raised frivolous arguments. Notwithstanding these frivolous arguments, SO Etchison abated the underlying liability for tax year 2010. For tax year 2019, SO Etchison reviewed the IDRS transcripts of account and determined that an assessment was properly made by IRS. Mr. Vasquez did not raise any underlying liability issues, other than frivolous arguments.
The Court's review of CDP cases is limited to issues that taxpayers raise at a CDP hearing. Giamelli v. Commissioner, 129 T.C. 107, 112-13 (2007); Magana v. Commissioner, 118 T.C. 488, 493 (2002); Treas. Reg. § 301.6320-1(f)(2), Q&A-F3. The Court will not consider Mr. Vasquez's underlying tax liability for 2019, since it was not properly raised during the CDP hearing. See Giamelli, 129 T.C. at 112-13; Magana, 118 T.C. at 493. Since the underlying liabilities are not properly at issue, and Mr. Vasquez only raised frivolous arguments in his CDP Request, we will accordingly review SO Etchison's actions for abuse of discretion. See I.R.C. § 6330(c)(2)(B); see also I.R.C. § 6320(c); Goza, 114 T.C. at 182.
IV. Abuse of Discretion
In deciding whether SO Etchison abused her discretion in sustaining the proposed levy action, we consider whether she (1) properly verified that the requirements of applicable law and administrative procedure have been met, (2) considered any relevant issues Mr. Vasquez raised, and (3) weighed "whether any proposed collection action balances the need for the efficient collection of taxes with the legitimate concern of [Mr. Vasquez] that any collection action be no more intrusive than necessary." See I.R.C. § 6330(c)(3); see also I.R.C. § 6320(c). Our review of the record establishes that SO Etchison satisfied all of these requirements.
A. Verification
Before issuance of a Notice of Determination, Appeals must verify that all requirements of applicable law and administrative procedure have been met. See I.R.C. § 6330(c)(1), (3)(A); see also I.R.C. § 6320(c). We have authority to review an SO's satisfaction of the verification requirement regardless of whether the taxpayer raised the issue at the CDP hearing. See Hoyle v. Commissioner, 131 T.C. 197, 200- 03 (2008), supplemented by 136 T.C. 463 (2011). Mr. Vasquez did not assert in his Petition that SO Etchison failed to satisfy this requirement. See Rule 331(b)(4) ("Any issue not raised in the assignments of error shall be deemed to be conceded."); Rockafellor v. Commissioner, T.C. Memo. 2019-160, at *12.
It is well established that a Form 4340 or a computer printout of a taxpayer's transcript of account, absent a showing of irregularity, provides sufficient verification of the taxpayer's outstanding liability to satisfy the requirements of section 6330(c)(1). See Davis v. Commissioner, 115 T.C. 35, 40-41 (2000); Roberts v. Commissioner, T.C. Memo 2004-100, 2004 WL 759262 at *7. We find no irregularity in the transcripts provided by respondent in his Motion for Summary Judgment, and we see no reason to doubt the veracity of these records. See Davis, 115 T.C. at 41; Tornichio v. Commissioner, T.C. Memo. 2002-291, 2007 WL 31663222 at *4-5.
On the basis of our review of the record before us, we find that SO Etchison conducted a thorough review of the materials relevant to Mr. Vasquez's CDP Request and verified that all applicable requirements were met. See I.R.C. § 6330(c)(1).
B. Issues Raised
In the CDP Request and in the Petition, Mr. Vasquez has only asserted frivolous positions, including that he is not subject to tax by the United States, or his tax liabilities are covered by the Uniform Commercial Code. His arguments are frivolous, without merit, and have been identified as such by the IRS in Notice 2010- 33, 2010-7 I.R.B. 609. We have also previously rejected similar arguments as frivolous. See Wilcox v. Commissioner, 848 F.2d 1007 (9th Cir. 1988), aff'g T.C. Memo.1987-225; Carter v. Commissioner, 784 F.2d 1006, 1009 (9th Cir.1986); Charczuk v. Commissioner, 771 F.2d 471 (10th Cir.1985), aff'g T.C. Memo. 1983-433; Michael v. Commissioner, T.C. Memo. 2003-26; Knelman v. Commissioner, T.C. Memo. 2000-268, aff'd, 33 Fed.Appx. 346 (9th Cir. 2002); Kaye v. Commissioner, T.C. Memo. 2014-145. Therefore, these frivolous arguments made by Mr. Vasquez in his Petition do not warrant discussion or analysis.
C. Balancing
Mr. Vasquez does not allege in his Petition, nor argue at any later point, that SO Etchison failed to consider "whether any proposed collection action balances the need for the efficient collection of taxes with the legitimate concern of the person that any collection action be no more intrusive than necessary." See I.R.C. § 6330(c)(3)(C). Therefore, Mr. Vasquez is deemed to have conceded this issue. See Rule 331(b)(4); see also Ansley v. Commissioner, T.C. Memo. 2019-46, at *19. In any case, there is no evidence in the record suggesting to us that SO Etchison abused her discretion in finding that the balancing requirement of section 6330(c)(3)(C) was met.
V. Conclusion
We find it appropriate to warn Mr. Vasquez that this Court, on its own motion, may impose penalties, and award to the United States up to $25,000, pursuant to section 6673(a)(1). Though we will not impose a penalty under section 6673 upon Mr. Vasquez in the instant case, we take this opportunity to warn him that penalties are likely to be imposed upon him in any future cases before this Court if he advances similar frivolous arguments made in his Petition.
We have considered all arguments made by the parties, and to the extent they are not addressed herein, we consider them to be moot, irrelevant, or without merit.
Upon due consideration, it is
ORDERED that respondent's Motion for Summary Judgment, filed October 12, 2023, is granted. It is further
ORDERED AND DECIDED that respondent's Notice of Determination Concerning Collection Actions under Section 6320 or 6330 of the Internal Revenue Code, dated December 27, 2022, upon which this case is based, is sustained.