Opinion
10443-20L
08-06-2024
Afsaneh E. Hawkins, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER & DECISION
Mark V. Holmes Judge
This case was on the Court's April 4, 2022 Los Angeles, California trial calendar. It is an appeal from respondent's determination to sustain enforced collection of petitioner's 2012 and 2013 tax debt by levy. When it was first on the calendar, Mrs. Hawkins asked us to remand it to IRS Appeals (Appeals) so that sheand her husband could make an offer in compromise (OIC). Respondent agreed, and we remanded in the expectation that Appeals would conduct a supplemental hearing to collect more, and more recent, documents and financial information from the Hawkinses.
Mrs. Hawkins is the sole petitioner because only her notice of determination was included in the petition. But the tax debts arise from a joint return and the record shows that both Mr. and Mrs. Hawkins submitted the offer in compromise.
On remand, the IRS issued a supplemental notice of determination that sustained the levy again. Respondent has moved for summary judgment.
Background
In February 2019, Early and Afsaneh Hawkins received a notice of intent to levy to collect the couple's outstanding income liability for the 2012 and 2013 tax years. The California couple timely requested a collection due process (CDP) hearing, and specifically asked for an OIC. Once in Appeals, they sent their assigned settlement officer (SO) a Form 433-A (the IRS form on which a taxpayer presents a full picture of her financial condition), but did not call in at the scheduled time of the hearing. The SO concluded that the Hawkinses' Form 433-A was incomplete. She sent them a letter stating what she needed and gave them 14 days to send the missing financial information. It took months for them to finally touch base, but in the end their attorney did send Appeals additional financial records.
They submitted materials challenging determinations for the tax periods of 2008, 2010, 2011, 2012, 2013, and 2017 in the petition. However, pre-trial proceedings resulted in the case being limited to only tax years 2012 and 2013.
The SO rejected their offer because she concluded that they could pay the entire balance based off their reasonable collection potential (RCP). She then issued the notice of determination that led to this case.
After we remanded the case, the Hawkinses increased their offer to more than $36,000 (on a tax debt for the two years at issue that had grown to more than $125,000). The Hawkinses also submitted another Form 433-A. But, when the SO again asked for more information, they never replied and by this point had become delinquent in their taxes for later years.
Because the IRS won't grant an OIC when taxpayers don't submit complete financial information or become delinquent for later years, the SO issued a supplemental notice of determination in which she again decided to uphold the levy.
Respondent then moved for summary judgment upholding this supplemental notice.
Analysis
When we remand a case to the IRS we review only the supplemental determination. Kelby v. Commissioner, 130 T.C. 79, 86 (2008). Because Mrs. Hawkins resided in California with her husband when they originally petitioned the court, this case is appealable to the Ninth Circuit. See § 7482(b)(1)(G)(i). Our scope of review is therefore limited to the administrative record. Keller v. Commissioner, 568 F.3d 710, 718 (9th Cir. 2009).
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.
Our standard of review is for abuse of discretion because Mrs. Hawkins does not challenge her underlying tax liability. See Sego v. Commissioner, 114 T.C. 604, 610 (2000); Goza v. Commissioner, 114 T.C. 176, 181-82 (2000). The Commissioner abuses his discretion when he makes an error of law, makes a clearly erroneous finding of fact, or when he rules irrationally. Antioco v. Commissioner, 105 T.C.M. (CCH) 1234, 1237 (2013). Our review is also limited to the reasons that the Commissioner gives in his notice. See Jones v. Commissioner, 104 T.C.M. (CCH) 364, 367.
Mrs. Hawkins raises several issues in her response to the Commissioner's motion. She does not, however, challenge any of the relevant facts-that she didn't comply with the SO's request for additional information, or that she had not kept current with her taxes for later years. That makes her response-which focuses on her reasons for not challenging the underlying liability and blaming Mr. Hawkins for choosing to try for a collection alternative instead-beside the point.
We have consistently held that there is no abuse of discretion when respondent rejects a request for a collection alternative because the taxpayer fails to submit her complete financial information. See, e.g., Sullivan v. Commissioner, 104 T.C.M. (CCH) 713, 718 (2012); see also Loveland v. Commissioner, 151 T.C. 78, 88 (2018) (citations omitted). We have also consistently held that there is no abuse of discretion when respondent rejects a request for a collection alternative because a taxpayer hasn't kept current with her tax obligations for later years. See Giamelli v. Commissioner, 129 T.C. 107, 111-12 (2007).
There is no abuse of discretion here. It is therefore
ORDERED that respondent's motion for summary judgment is granted. It is also
ORDERED and DECIDED that respondent may proceed with the collection of petitioner's liabilities for the 2012 and 2013 tax years, as described in the supplemental notices of determination concerning collection action(s)under section 6320 and/or 6330, dated March 7, 2023.