Opinion
22438-19P
06-09-2023
WILLARD J. BELTON & MARTHA-ALEXANDER BELTON, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER AND DECISION
Emin Toro, Judge
This case was assigned to the undersigned judge on February 7, 2022. On January 24, 2023, the Court issued an Opinion (T.C. Memo. 2023-13) resolving some, but not all, of the issues in the case.
The Court described the factual background of this case and applicable legal principles in its Opinion, and we incorporate that discussion here. The Opinion held, among other things, that the Commissioner of Internal Revenue was not entitled to summary judgment on the issue of whether the Commissioner's certifications that Willard J. Belton and Martha-Alexander Belton each has a seriously delinquent tax debt, reflected in the Notices of Certification of Your Seriously Delinquent Federal Tax Debt to the State Department dated December 9, 2019 were properly made. This was so because the Commissioner had not yet shown that the requirements of section 7345(b)(1)(C) were satisfied for the 2015 tax year. Apart from that issue, we found that the requirements of section 7345 were satisfied.
Unless otherwise indicated, all statutory references are to the Internal Revenue Code, Title 26 U.S.C. (Code), in effect at all relevant times, and all Rule References are to the Tax Court Rules of Practice and Procedure. Parenthetical references to "Doc." are to documents as they are numbered in the docket record of this case.
Now before us are the Commissioner's Motion for Summary Judgment filed April 5, 2023 (Doc. 42), petitioners' Memorandum in Opposition to the Commissioner's Motion filed May 21, 2023 (Doc. 44), petitioners' Memorandum in Support of Memorandum filed May 21, 2023 (Doc. 45), the Commissioner's Reply to Petitioner's Response filed June 2, 2023 (Doc. 48), and petitioners' Reply to the Commissioner's Reply filed June 5, 2023 (Doc. 50). The Commissioner's Motion offers additional evidence and discussion regarding the Beltons' 2015 tax year and argues the Commissioner is entitled to summary judgment that the relevant section 7345 certifications were properly made. The petitioners' materials oppose the Commissioner's Motion. For the reasons set out below, we conclude that the Commissioner has demonstrated that there are no genuine issues of material fact in dispute and that he is entitled to judgment as a matter of law. Accordingly, we will grant his Motion.
I. Background
If the Commissioner certifies that a taxpayer has "a seriously delinquent tax debt," section 7345(a) provides that that certification shall be transmitted "to the Secretary of State for action with respect to denial, revocation, or limitation of [the taxpayer's] passport." The Code defines the term "seriously delinquent tax debt" in section 7345(b).
The question before us involves one aspect of that definition-namely, the requirement that the Internal Revenue Service (IRS) must have either (i) filed a notice of lien pursuant to section 6323 with respect to the debt or (ii) made levy pursuant to section 6331. I.R.C. § 7345(b)(1)(C). We previously held that, where the Commissioner seeks to satisfy the latter test, he must show that the levy in question did not contravene the requirements of section 6331. Belton v. Commissioner, T.C. Memo. 2023-13, slip. op. at 20-21.
In this case, the Commissioner contends that he properly made levy for the Beltons' tax years 2010, 2014, and 2015. After reviewing tax transcripts provided by the Commissioner, the Court found in Belton, T.C. Memo. 2023-13, that the Commissioner had satisfied the requirements of section 7345(b)(1)(C)(ii) for 2010 and 2014. Regarding 2015, however, the Opinion observed as follows:
Regarding the other years at issue-namely, 2004, 2005, 2006, 2007, 2008, 2009, and, for Mr. Belton, 2012-the Court found that the Commissioner had satisfied the alternative lien requirement of section 7345(b)(1)(C)(i).
[F]or 2015 the Beltons' TXMODA transcript and literal account transcript contain entries that raise questions about the validity of the Commissioner's levy. And the Commissioner has offered no account of those entries, as described further below.
Turning to the Commissioner's evidence for 2015, we note that the "First Levy Issued on Module" descriptor on the literal account transcript is dated June 12, 2017, which corresponds with the date for
action code 640 on the TXMODA transcript. Action code 600 on the TXMODA transcript is dated April 10, 2017.
The Beltons' account transcripts for 2015 indicate that the Beltons were pursuing collection alternatives around the same time the levy was made. A literal account transcript entry on March 21, 2017, states that there was a "[p]ending installment agreement." In what seems to be a contradiction, a second entry suggests that the installment agreement was "removed" the same day, while a third suggests that it was "removed" a month later, on April 18, 2017. Also on April 18, 2017, the IRS seems to have "[r]eceived [an] offer in compromise" from the Beltons, which it ultimately "denied" on March 15, 2018.0
As we have said, section 7345(b)(1)(C)(ii) requires that "a levy [be] made pursuant to section 6331." Section 6331 in turn sets out requirements that a levy must satisfy. As relevant here, section 633l(k) provides that no levy may be made (1) during the period that an offer-in-compromise or an offer for an installment agreement is pending, (2)during the period in which an installment agreement is in effect, or (3)during the 30 days following the rejection of an offer-in-compromise or an offer for an installment agreement. I.R.C. § 6331(k)(1) and (2).
There may very well be an explanation for the entries on the Beltons' 2015 account transcripts that is consistent with section 6331. But the Commissioner has not undertaken to provide it. For example, the Commissioner has not explained whether an installment agreement or an offer for an installment agreement was pending as of the levy date, or whether the levy was made during the 30 days following the rejection of an offer for an installment agreement. The Commissioner also has not explained the significance of the Beltons' April 18, 2017, offer-in-compromise request in light of action code 600 (dated April 10, 2017) and action code 640 (dated June 12, 2017). The obligation to provide such explanations rests with the party seeking summary judgment. See Rowen [v. Commissioner, 156 T.C. 101, 115-16 (2021)] (collecting authorities); see also Rule 121(d); Schneider v. Kissinger, 412 F.3d 190, 200 n.1 (D.C. Cir. 2005) ("[A] litigant has an obligation to spell out its arguments squarely and distinctly . . . ." (quoting United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990))). We are therefore unable to conclude at present that the Commissioner made levy "pursuant to section 6331" for taxable year 2015. See I.R.C. § 7345(b)(1)(C)(ii).Belton, T.C. Memo. 2023-13, slip. op. at 22-24.
Action code 600 is displayed on modules for tax accounts that are included in the State Income Tax Levy Program, or "SITLP," Internal Revenue Manual (XSM) 5.19.9.2.1(4) (Oct. 20, 2016), while action code 640 was "created to identify tax periods for which levy action has occurred," IRM 5.19.1.5.19.5(1) and (2) (Dec. 26, 2017).
II. The Commissioner's Motion
In the Motion now before us, the Commissioner undertakes to supplement his explanation for the 2015 tax year. Regarding that year, he states as follows:
SITLP [State Income Tax Levy Program] levies were made for petitioners' unpaid joint federal income tax liability for taxable year 2015, prior to the date of their certifications, on the following dates: April 10, 2017, and September 9, 2019
In addition to the SITLP levies, FPLP [Federal Payment Levy Program] levies were made for petitioners' unpaid joint federal income tax liability for the taxable year 2015, prior to the date of their certifications, on the following dates: September 9, 2019, and December 2, 2019.Mot. for Summ. J. ¶¶ 44-45.
FPLP is an automated levy program the IRS has implemented with the U.S. Department of the Treasury, Bureau of the Fiscal Service (BFS), to levy certain federal payments disbursed or administered through BFS. IRM 5.19.9.3 (Oct. 20, 2016).
The Commissioner's Motion reflects some confusion regarding whether the April 10, 2017, levy did or did not comply with section 6331's requirements due to the pending collection alternatives noted in the Court's Opinion. See id. at 19 n. 12, Ex. L at 4-5. But, in any event, he now argues that the IRS's subsequent levies suffice to satisfy section 7345(b)(1)(C)(ii).
In support of his contentions, the Commissioner offers a declaration by an IRS Senior Program Analyst who "reviewed IDRS modules related to [the Heltons'] unpaid federal income tax liabilities for the taxable year[] . . . 2015, as well as other relevant IDRS modules related to Mr. and Mrs. Belton and the certification of their liabilities as seriously delinquent tax debt." Mot. for Summ. J. Ex. K at 4.
With respect to 2015, the declaration states in relevant part as follows:
SITLP levies were made for Mr. and Mrs. Helton's unpaid joint federal income tax liability for taxable year 2015, prior to the date of their certifications, on the following dates: April 10, 2017, and September 9, 2019.
In addition to the SITLP levies, FPLP levies were made for Mr. and Mrs. Helton's unpaid joint federal income tax liability for the taxable year 2015, prior to the date of their certifications, on the following dates:
September 9, 2019, and December 2, 2019.
There were no pending requests for an installment agreement or offer in compromise on Mr. and Mrs. Belton's 2015 IDRS module, which would have prevented a levy from being properly made pursuant to section 6331 of the Internal Revenue Code for their unpaid federal joint income tax liability for taxable year 2015, on September 9, 2019, when both FPLP and SITLP levies were made or on December 2, 2019, when another FPLP levy was made.Id. ¶¶ 22-24.
Although the declaration does not cite to the relevant IRS transcripts, the statements in the declaration correspond to entries on the Beltons' TXMODA transcripts for 2015. And we see no entries on the literal account transcripts indicating that collection alternatives were pending at the time of the September 9, 2019, or December 2, 2019, levies. This, absent any further contentions from the Beltons, is sufficient to establish that the Commissioner satisfied the requirements of section 7345(b)(1)(C)(ii) for tax year 2015. See Belton, T.C. Memo. 2023-13, slip. op. at 19; see generally United States v. Chem. Found., Inc., 212 U.S. 1, 14-15 (1926) ("The presumption of regularity supports the official acts of public officers, and, in the absence of clear evidence to the contrary, courts presume that they have properly discharged their official duties.").
In their response to the Commissioner's Motion, the Beltons do not challenge that the IRS properly made levy pursuant to section 6331 for 2015 or any other year. And all their other arguments are addressed in the Court's prior Opinion or do not change the outcome here.We therefore conclude that, in view of the conclusions we reached in Belton, T.C. Memo. 2023-13, and the discussion above, the Commissioner is entitled to summary judgment that the section 7345 certifications issued to the Beltons in this case were properly made.
For example, the Beltons note that they have filed Form 911, Request for Taxpayer Advocate Assistance. They are of course entitled to pursue such assistance, but their filing has no bearing on the disposition of this case. Additionally, the Beltons appear to argue that the IRS should not have issued the certifications underlying this case because the Beltons reside in an area that was at various times subject to one or more disaster declarations. But, as the Commissioner explains in his Reply (Doc. 48), this argument is based on a misunderstanding of a discretionary exclusion in the Internal Revenue Manual. Finally, to the extent the Beltons intended their response as a Motion for Reconsideration, we deny the Motion as both untimely and without merit. See Rule 161.
To reflect the foregoing, it is hereby
ORDERED that respondent's Motion for Summary Judgment filed April 5, 2023 (Doc. 42), is granted. It is further
ORDERED AND DECIDED that respondent's certifications that Willard J. Belton and Martha-Alexander Belton each has a seriously delinquent tax debt, reflected in the Notices of Certification of Your Seriously Delinquent Federal Tax Debt to the State Department dated December 9, 2019, upon which this case is based, are sustained.