Opinion
32381-21L
12-28-2023
CSI 3000, INC., Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Lewis R. Carluzzo, Chief Special Trial Judge.
This I.R.C. section 6330(d) case is before the Court on respondent's motion for summary judgment, filed July 25, 2023. Petitioner's objections to respondent's motion are embodied in its response, filed September 11, 2023. The motion was heard in Chicago, Illinois, on September 25, 2023. Counsel for respondent appeared and argued in support of the motion; counsel for petitioner appeared in opposition to it.
The dispute between the parties focuses entirely on petitioner's liability for an addition to tax assessed with respect to petitioner's 2017 federal income tax liability (underlying liability). According to petitioner, the assessment of the underlying liability should be abated because petitioner had reasonable cause for failing to timely pay its 2017 corporate federal income tax liability.
For purposes of cases such as this one, petitioner's position is considered a challenge to the existence or the amount of the underlying liability. According to respondent, petitioner is not entitled to challenge the existence or the amount of the underlying liability in this proceeding because petitioner had a prior opportunity to do so. See I.R.C. section 6330(c)(2)(B); Montgomery v. Commissioner, 122 T.C. 1, 9 (2004). The administrative record shows that petitioner's claim to abatement of the addition to tax on the basis of reasonable cause was considered and rejected by respondent's Office of Appeals (abatement hearing) prior to the administrative hearing contemplated in I.R.C. section 6330. Much of the report generated from the abatement hearing has been redacted, apparently by agreement between the parties. Other than the outcome of the abatement hearing, the full extent of what occurred during that proceeding is not entirely clear.
The abatement hearing might have unfolded as respondent claims in its motion, which would support the motion. On the other hand, the abatement hearing might have proceeded as suggested by petitioner at the hearing, which would require that the motion be denied. At this stage of the proceedings, the uncertainty on the point prompts us to resolve factual inferences against respondent. See Sundstrand Corp. v. Commissioner, 98 T.C. 518 (1992), aff'd 17 F.3d 965 (7th Cir. 1994). That being so, it follows that respondent's motion must be denied.
Recognizing that the motion might be denied, at the hearing respondent suggested that if the motion was denied, the matter should be remanded to Appeals for consideration of petitioner's claim to reasonable cause. We see little point in doing so. It is clear that respondent's settlement officer considered petitioner's claim, even if relying only upon the reasoning and outcome of the abatement hearing. If the parties are unable to reach an agreement with respect to petitioner's underlying liability then the next step is to proceed to trial for a de novo review of petitioner's challenge to the underlying liability.
To give effect to the foregoing, it is
ORDERED that respondent's motion is denied. It is further
ORDERED that this case is set for trial at the Court's February 26, 2024, Chicago, Illinois, trial session scheduled to begin at a time and date certain of 1:30 p.m. on Monday, February 26, 2024, at the Kluczynski Federal Building, 230 S. Dearborn Street, Room 3908, Chicago, Illinois, 60604. It is further
ORDERED that the terms and conditions set forth in the Standing Pretrial Order previously served upon the parties remain in full force and effect, except the pretrial memoranda need only be updated as appropriate.