Opinion
15918-22L
07-01-2024
OLDER AZARD, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER AND DECISION
Elizabeth Crewson Paris, Judge
This case is before the Court on a petition for review of a Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330 (notice of determination) sustaining the filing of a Notice of Federal Tax Lien (NFTL) for petitioner's 2015, 2016, 2017, and 2019 tax years. On September 29, 2023, docket entry 25, respondent filed a Motion for Summary Judgment (Motion) seeking adjudication in his favor on the issue of whether the Settlement Officer abused his discretion in denying petitioner's request of an Offer in Compromise and sustaining the NFTL filing. Petitioner filed his Response to Motion for Summary Judgment (Response), docket entry 28, on October 27, 2023.
Unless otherwise indicated, all statutory references are to the Internal Revenue Code, Title 26 U.S.C., in effect at all relevant times, all regulation references are to the Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all relevant times, and all Rule references are to the Tax Court Rules of Practice and Procedure.
Background
The following facts are based on the parties' pleadings and motion papers, the attached declaration, and exhibits which comprise the administrative record. Petitioner resided in New Jersey when he timely filed the Petition.
Petitioner timely filed Forms 1040, Individual Income Tax Return, for each of the years at issue. For tax years 2015, 2016, and 2017, respondent determined deficiencies and issued separate Notices of Deficiency for each tax year. Petitioner did not file a petition in response to the Notices of Deficiency, and respondent assessed liabilities, along with penalties and interest. For tax year 2019, petitioner failed to pay the full amount of self-reported liability due shown on his return. Respondent additionally assessed an addition to tax for late payment, as well as interest.
On September 2, 2021, respondent mailed to petitioner Letter 3172, Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320, with respect to petitioner's unpaid tax liabilities for the years at issue. Petitioner timely submitted Form 12153, Request for a Collection Due Process or Equivalent Hearing, on which he checked the box for "Offer in Compromise" as a collection alternative. In the "Reason" box, petitioner explained that he "cannot pay [his] taxes due to the fact [his] wife is not working (since August 2019)." Petitioner did not request that the NFTL be subordinated, discharged, or withdrawn.
Petitioner's case was assigned to Settlement Officer Alan Caldwell in the IRS Independent Office of Appeals. By letter dated February 25, 2022, SO Caldwell confirmed receipt of petitioner's request and scheduled a hearing by telephone for April 5, 2022. In the letter, he also requested that petitioner provide him with a completed Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, and Form 656, Offer in Compromise, along with supporting documentation.
Petitioner did not provide the requested forms or documentation and did not attend the scheduled telephone conference. By letter dated April 8, 2022, SO Caldwell requested that petitioner contact him within 14 days to reschedule. The letter additionally requested that petitioner provide information and documentation necessary to consider an Offer in Compromise. Petitioner did not respond to the April 8, 2022, letter. On April 25, 2022, SO Caldwell called petitioner and left a voicemail requesting a return call. Petitioner did not return the call.
On May 23, 2022, having received no response from petitioner, SO Caldwell reviewed petitioner's file and concluded that all applicable laws and administrative procedures were met and that the filing of the NFTL was not overly intrusive. On June 16, 2022, he issued the Notice of Determination sustaining the filing of the NFTL and denying petitioner's request for an Offer in Compromise because no information was provided.
Petitioner timely petitioned this Court for review, requesting an Offer in Compromise or an Installment Agreement.
In the Petition, petitioner additionally alleges that he has not "received any review documents as far as the accuracy and correctness" of the assessed amounts and requests that all lien and levy actions be "put on hold" until "a thorough audit and assessment determines the correctness and veracity." Petitioner concedes in his Response that he is not entitled to challenge the underlying tax liabilities in the present proceeding.
Discussion
Summary judgment serves to "expedite litigation and avoid unnecessary and expensive trials." Fla. Peach Corp. v. Commissioner, 90 T.C. 678, 681 (1988). The Court 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); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), aff'd, 17 F.3d 965 (7th Cir. 1994). The moving party bears the burden of proving that there is no genuine dispute of material fact. Dahlstrom v. Commissioner, 85 T.C. 812, 821 (1985); Jacklin v. Commissioner, 79 T.C. 340, 344 (1982). In deciding whether to grant summary judgment, the Court construes factual matters and inferences drawn from them in a light most favorable to the nonmoving party. Sundstrand Corp. v. Commissioner, 98 T.C. at 520. The nonmoving party may not rest upon mere allegations or denials in its pleadings and must set forth specific facts showing there is a genuine dispute for trial. Rule 121(d); see also Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986).
Pursuant to section 6321 if a taxpayer liable to pay any tax neglects or refuses to pay the same after notice and demand for payment, a lien upon all of the taxpayer's property or rights to property shall arise in favor of the United States. Section 6320(a)(1) requires the Secretary to provide written notice to a taxpayer when the Secretary has filed an NFTL against the taxpayer's property or property rights. See also § 6323. The Secretary must also notify the taxpayer of his right to a Collection Due Process hearing. §§ 6320(a)(3), 6330(a).
If the taxpayer requests a Collection Due Process hearing, the hearing is conducted by the IRS Independent Office of Appeals. § 6320(b)(1). During the hearing, the Settlement Officer conducting the hearing must verify that the requirements of any applicable law or administrative procedure have been met. §§ 6320(c), 6330(c)(3)(A). The taxpayer may raise at the hearing any relevant issue relating to the unpaid tax or the collection action, including the appropriateness of the collection action and offers of collection alternatives. § 6330(c)(2)(A), (3)(B). The taxpayer may also raise at the hearing challenges to the existence or amount of the underlying liability if the taxpayer did not receive a statutory notice of deficiency or did not otherwise have an opportunity to dispute it. § 6330(c)(2)(B). Finally, the Settlement Officer must consider whether the collection action balances the need for efficient collection against the taxpayer's concern that the collection action be no more intrusive than necessary. § 6330(c)(3)(C).
The Court has jurisdiction to review the Settlement Officer's 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 all other determinations for abuse of discretion. Goza v. Commissioner, 114 T.C. 176, 182 (2000). Petitioner concedes that he may not challenge the underlying liability. Accordingly, the Court reviews the determination only for abuse of discretion.
Section 6330(c)(1) requires a settlement officer to "obtain verification from the Secretary that the requirements of any applicable law or administrative procedure have been met." The Court has authority to review satisfaction of the verification requirements regardless of whether the taxpayer raised that issue at the hearing. Hoyle v. Commissioner, 131 T.C. 197, 202-03 (2008), supplemented by 136 T.C. 463 (2011). Petitioner did not challenge the verification requirement, and the record in this case demonstrates that SO Caldwell properly verified that the requirements of applicable law or administrative procedure were met.
The Settlement Officer is also required to consider any relevant issue raised by the taxpayer during the hearing. § 6330(c)(2)(A), (3)(B). In his Collection Due Process hearing request, petitioner requested an Offer in Compromise and stated that he was unable to pay his tax liabilities because his wife has been unemployed since August 2019. SO Caldwell requested that petitioner submit completed Forms 433-A and 656 and supporting documentation. When petitioner did not provide the requested materials by the designated time and did not attended the scheduled Collection Due Process hearing, SO Caldwell provided petitioner an additional 14 days to provide the requested materials. Petitioner did not do so.
No abuse of discretion exists when a Settlement Officer rejects a taxpayer's collection alternative and sustains a proposed collection action where the taxpayer fails, after being given sufficient time, to supply the Settlement Officer with the required forms and supporting documentation. Wright v. Commissioner, T.C. Memo. 2010-24, 2012 WL 204181, at *3. Accordingly, the Court concludes that SO Caldwell did not abuse his discretion in declining petitioner's request for an Offer in Compromise.
In the Petition and the Response, petitioner additionally requests an Installment Agreement. Petitioner did not raise this issue in the Collection Due Process hearing request or during the hearing and, accordingly, may not now raise it before the Court. See Giamelli v. Commissioner, 129 T.C. 107, 115 (2007); Treas. Reg. § 301.6330-1(f)(2), Q&A-F3.
Petitioner does not allege that SO Caldwell 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." § 6330(c)(3)(C). The Court concludes that SO Caldwell properly considered the balancing obligation as required by section 6330(c)(3)(C).
Respondent has shown that there is no genuine dispute as to any material fact and that SO Caldwell did not abuse his discretion in sustaining the filing of the NFTL. Accordingly, the Court will grant summary judgment in favor of respondent and sustain the proposed collection action.
The Court notes that petitioner is free to submit to the IRS at any time, for its consideration and possible acceptance, a collection alternative in the form of an Installment Agreement or Offer in Compromise, supported by the necessary financial information.
Upon due consideration and for cause, it is
ORDERED that respondent's Motion for Summary Judgment, docket entry 25, is granted. It is further
ORDERED AND DECIDED that respondent's Notice of Determination Concerning Collection Action(s) under Section 6320 and/or 6330 for tax years 2015, 2016, 2017, and 2019, upon which this case is based, is sustained.