Opinion
10634-23L
05-17-2024
MICHAEL L. FANELLI & YASNA FANELLI, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER AND DECISION
Cary Douglas Pugh, Judge
Petitioners seek review pursuant to section 6330(d)(1) of a determination by the Internal Revenue Service Independent Office of Appeals (Appeals) to uphold a Notice of Intent to Levy (levy notice) for tax year 2019. The notice of determination sustained the levy notice because petitioners did not provide to Appeals the documents it requested. Specifically, petitioners did not provide all supporting documentation to substantiate their Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals and did not file their 2021 federal income tax return. On February 20, 2024, respondent filed the administrative record and an accompanying certificate as to its genuineness, pursuant to Rule 93.
Unless otherwise indicated, statutory references are to the Internal Revenue Code, Title 26 U.S.C., in effect at all relevant times, and Rule references are to the Tax Court Rules of Practice and Procedure.
On February 22, 2024, respondent filed a Motion for Summary Judgment, along with a supporting Declaration asking that we sustain respondent's determination. Petitioners filed a Response to Motion for Summary Judgment on March 18, 2024. Respondent filed a Supplement to Motion for Summary Judgment on April 15, 2024. The Court held a hearing on respondent's Motion at the Court's April 22, 2024, San Francisco, California, trial session. Counsel for both parties appeared and were heard.
Respondent seeks summary adjudication that Appeals did not abuse its discretion in sustaining the levy notice because petitioners did not provide to Appeals the documents it requested. In their Response, petitioners claim that their 2021 federal income tax return, filed after the Petition was filed, now is available and they are ready to provide any supporting documents Appeals may need to consider a collection alternative.
It appears that the underlying liability is not in issue, so we review Appeals' determination for abuse of discretion. Goza v. Commissioner, 114 T.C. 176, 182 (2000); Sego v. Commissioner, 114 T.C. 604, 610 (2000). That means we must consider whether Appeals abused its discretion in sustaining the levy notice given petitioners' noncompliance with its document requests. We consistently have held that it is not an abuse of discretion for Appeals to sustain a collection action where the taxpayer has failed, after being given sufficient opportunities, to provide to Appeals the required financial information and to come into compliance with his tax return filing obligations. See Bailey v. Commissioner, T.C. Memo. 2016-94, at *10-11 (collecting cases).
Judicial review of the reasonableness of a determination generally does not give taxpayers yet another chance to provide information that they should have provided to Appeals earlier. Petitioners offer no authority in support of their request that we deny respondent's Motion and remand the case to Appeals because they now are ready to provide the information that Appeals requested. (Nor did they argue that Appeals did not give them a reasonable amount of time to provide the information or that Appeals' requests otherwise were unreasonable.) It certainly provides no basis for concluding that Appeals' determination, made without this information, was unreasonable. And this is the question we are to decide.
In deciding whether a settlement officer abused her discretion in sustaining a collection action we consider whether she (1) properly verified that the requirements of any applicable law or administrative procedure have been met, (2) considered any relevant issues the taxpayer raised, and (3) considered "whether any proposed collection action balances the need for the efficient collection of taxes with the legitimate concern of the [taxpayer] that any collection action be no more intrusive than necessary." § 6330(c)(3). The record shows that the settlement officer properly verified that the requirements of applicable law and administrative procedure were followed, considered relevant issues raised by petitioners, and properly balanced the need for the efficient collection of taxes with petitioners' legitimate concern that the collection action be no more intrusive than necessary. See id. We therefore find no abuse of discretion in any respect.
Finally, we note that our sustaining respondent's determination does not preclude petitioners from seeking a collection alternative; our granting respondent's Motion means that we will not have any further role to play.
Upon due consideration, and for cause, it is
ORDERED that respondent's Motion for Summary Judgment, filed February 22, 2024, as supplemented on April 15, 2024, is granted. It is further
ORDERED and DECIDED that respondent may proceed with the collection action as determined in the notice of determination dated June 8, 2023, upon which this case is based.