Opinion
18902-22L
04-05-2024
JENNY MARIE JACKSON, 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, upholding the filing of a Notice of Federal Tax Lien (NFTL) for unpaid tax liabilities for tax years 2016, 2017, 2018, and 2019. On September 29, 2023, docket entry 18, respondent filed a Motion for Summary Judgment (Motion) with accompanying exhibits. On March 11, 2024, docket entry 27, petitioner filed her Response to Motion for Summary Judgment. In the Motion, respondent contends that there are no genuine issues of material fact and that the determination should be upheld as a matter of law.
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.
Background
Petitioner resided in North Carolina when she timely filed the Petition.
By Letter 3172, Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320, dated November 12, 2021, respondent notified petitioner that an NFTL had been filed with respect to unpaid self-assessed tax liabilities for tax years 2016, 2017, 2018, and 2019 and advising her of her right to request a Collection Due Process hearing. Petitioner submitted Form 12153, Request for a Collection Due Process or Equivalent Hearing (CDP Hearing Request), dated November 16, 2021. On the CDP Hearing Request, petitioner checked boxes requesting discharge or withdrawal of the NFTL and requested the collection alternatives "Offer in Compromise" and "I Cannot Pay Balance." Petitioner also explained that she had "requested a hearing prior to lien with no response from IRS. I earned less than 20K [sic] in 2020. My business suffered from the pandemic. I am a single income earner with a disabled child. My income is volatile. I cannot afford to pay."
Petitioner's case was assigned to Settlement Officer Shih-Min Lee. On May 13, 2022, the Settlement Officer sent petitioner Letter 4837, advising her that the Collection Due Process hearing had been scheduled for June 13, 2022, and requesting a completed Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, a completed Form 656, Offer in Compromise, along with supporting financial documentation and other information. Petitioner mailed a completed Form 433-A, but the Settlement Officer did not receive it prior to the Collection Due Process hearing.
On May 13, 2022, petitioner and the Settlement Officer held the Collection Due Process hearing. The Settlement Officer verified that the assessments were properly made, notice and demand for payment was mailed to petitioner's last known address, there was a balance due when the NFTL was filed, and that she had no prior involvement with respect to the specific tax periods at issue.
During the Collection Due Process hearing, petitioner and the Settlement Officer discussed the issues petitioner raised in her CDP Hearing Request. The Settlement Officer explained that in order to consider an Offer in Compromise, petitioner would need to file her delinquent 2021 tax return and provide proof of estimated tax payments for 2022. Petitioner requested that, if an Offer in Compromise was not available, she would like an Installment Agreement to pay the tax liability. The Settlement Officer explained that she would likewise need to file her 2021 tax return and provide proof of estimated tax payments for 2022. The Settlement Officer additionally explained that petitioner had not demonstrated an appropriate basis for discharge or withdrawal of the NFTL, but if an Offer in Compromise were accepted or the tax liability satisfied, the NFTL would be released. Petitioner did not raise a dispute as to the underlying liability.
The Settlement Officer set a deadline of June 20, 2022, for petitioner to submit the unfiled return and proof of estimated tax payments, as well as to provide the Forms 433-A and 656. The Settlement Officer timely received the requested Forms and financial information, but petitioner did not file her 2021 tax return or provide proof of estimated tax payments for 2022. On July 27, 2022, the Settlement Officer issued the Notice of Determination, sustaining the proposed collection action. Petitioner timely petitioned this Court for review.
Discussion
Summary judgment serves to "expedite litigation and avoid unnecessary and expensive trials." Fla. Peach Corp. v. Commissioner, 90 T.C. 678, 681 (1988). Summary judgment may be granted with respect to all or any part of the legal issues in controversy if the pleadings, answers to interrogatories, depositions, admissions, and other acceptable materials, together with affidavits or declarations, if any, show that there is no genuine dispute as to any material fact and that a decision may be rendered as a matter of law. See Rule 121(a)(2). The moving party bears the burden of proving that there is no genuine issue of material fact. Dahlstrom v. Commissioner, 85 T.C. 812, 821 (1985); Jacklin v. Commissioner, 79 T.C. 340, 344 (1982). Facts are viewed in the light most favorable to the nonmoving party. Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), aff'd, 17 F.3d 965 (7th Cir. 1994).
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 her 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). 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 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). Because petitioner did not challenge the underlying tax liability, the Court reviews the determination only for abuse of discretion.
The record in this case includes copies of petitioner's account transcripts for the years at issue. Such transcripts may be used to satisfy the verifications requirements of section 6330(c)(1). Roberts v. Commissioner, 118 T.C. 365, 371 n.10 (2002), aff'd, 239 F.3d 1224 (11th Cir. 2003). The account transcripts and other documents in the record show that the Settlement Officer properly verified that the requirements of applicable law or administrative procedure have been met.
The Settlement Officer also addressed all issues raised by petitioner during the Collection Due Process hearing. In the CDP Hearing request, petitioner requested discharge or withdrawal of the NFTL and requested an Offer in Compromise. She additionally checked the box "I Cannot Pay Balance." During the hearing, petitioner also requested an Installment Agreement. Petitioner did not submit an application for subordination or discharge of the NFTL, and the Settlement Officer was accordingly unable to consider whether such actions were appropriate. The Settlement Officer explained that petitioner was ineligible for an Offer in Compromise or an Installment Agreement because she had not submitted the necessary financial documentation and was not in compliance with her filing obligations. The Settlement Officer allowed petitioner additional time to provide the requested materials. Although petitioner did provide a completed Form 433-A and financial information, she did not file her delinquent return or submit proof of 2022 estimated tax payments.
No abuse of discretion exists when a Settlement Officer rejects a taxpayer's collection alternative and sustains a proposed collection action where the taxpayer is not in compliance with ongoing filing obligations. See, e.g., Wolfson v. Commissioner, T.C. Memo. 2022-46; Hull v. Commissioner, T.C. Memo. 2015-86. Accordingly, the Court concludes that the Settlement Officer did not abuse her discretion in not granting the requested collection alternatives.
Petitioner does not allege that Settlement Officer 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 the Settlement Officer 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 the Settlement Officer did not abuse her 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.
Upon due consideration and for cause, it is ORDERED that respondent's Motion for Summary Judgment 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 2016, 2017, 2018, and 2019, upon which this case is based, is sustained.