Opinion
17082-22SL
04-14-2023
THORNELL JOHNSON, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
ADAM B. LANDY SPECIAL TRIAL JUDGE
This collection due process (CDP) case is not calendared for trial at a session of the Court. On July 22, 2022, Mr. Johnson filed a petition disputing the Commissioner's denial of his Claim for Refund of Tax Return Preparer and Promoter Penalties on IRS Form 6118 and sustaining the proposed levy action for the taxable years at issue. The Court served the petition on the Commissioner on August 4, 2022. Pursuant to Rule 36, the Commissioner was required to file an Answer on or before October 3, 2022. The Commissioner failed to do so.
Unless otherwise indicated, all statutory references are to the Internal Revenue Code, and all Rule references are to the Tax Court Rules of Practice and Procedure.
On October 4, 2022, Mr. Johnson filed a Motion to Dismiss, pursuant to Rule 53, requesting that this Court dismiss this case on the basis that the Commissioner failed to file an Answer within the time prescribed by Rule 36. On October 5, 2022, the Commissioner filed a Motion for Leave to File Out of Time Answer and lodged therewith an Answer denying he erred and all other material allegations for lack of present knowledge or information. In his motion, the Commissioner stated that due to administrative error within his counsel's office the deadline to file the Answer was overlooked, and counsel did not become aware of the error until October 4, 2022. On January 19, 2023, Mr. Johnson filed a Motion for Summary Judgment, pursuant to Rule 121, without a declaration, attachment, or memorandum of facts and law, arguing that he is entitled to summary adjudication on the basis that the Commissioner failed to file a timely Answer.
In response to the Court's Order served January 31, 2023, the Commissioner filed an objection to the Motion to Dismiss and Motion for Summary Judgment, respectively, arguing that (1) Mr. Johnson has not shown how he is prejudiced if the Court grants his motion lodging the Answer only two days after the due date, (2) the substance of the proceedings deals with a penalty already assessed and whether his Independent Office of Appeals has abused its discretion in sustaining the proposed levy action, and (3) this Court should deny Mr. Johnson's Motion for Summary Judgment because it is simply a recitation of the Motion to Dismiss and does not address the legal issues in controversy.
Mr. Johnson filed an objection to the Commissioner's Motion for Leave arguing that (1) the Commissioner improperly assessed a penalty pursuant to I.R.C. § 6694(b), (2) improperly denied his request for relief on IRS Form 6118 and failed to provide him with the proper determination letter to seek judicial relief in the U.S. District Court or U.S. Court of Federal Claims, and (3) the Court should deny the Commissioner's motion because he has failed to follow the law and his own administrative procedures.
I. Motion to Dismiss and Motion for Leave to File Out of Time Answer
Although the Commissioner filed the Motion for Leave and lodged his Answer two days late, Mr. Johnson has not shown that the delay has caused him to be at a disadvantage or any form of prejudice. This Court has the discretion in the interest of justice to allow pleadings to be filed out of time, and the Court will allow the Commissioner to file his Answer out of time in this case. See Rule 25; see also Betz v. Commissioner, 90 T.C. 816, 817-18 (1988).
II. Motion for Summary Judgment
Summary judgment serves to "expedite litigation and avoid unnecessary and expensive trials." Fla. Peach Corp. v. Commissioner, 90 T.C. 678, 681 (1988). We may grant summary judgment when there is no genuine dispute of material fact, and a decision may be rendered as a matter of law. Rule 121(b); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), aff'd, 17 F.3d 965 (7th Cir. 1994). In deciding whether to grant summary judgment, we construe factual materials and inferences drawn from them in a light most favorable to the nonmoving party. Sundstrand Corp., 98 T.C. at 520. The nonmoving party may not rest upon mere allegations or denials in its pleadings and must set forth specific facts showing there is a genuine dispute for trial. Rule 121(d); see also Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986).
Considering Mr. Johnson's motion, the parties' filings to-date, and the facts in light most favorable to the Commissioner, we find that there exists a genuine dispute of material fact as to whether Mr. Johnson is entitled to summary adjudication in his favor upon all of issues presented in his motion.
Upon due consideration of the parties' motion and for cause, it is
ORDERED that Mr. Johnson's Motion to Dismiss, filed October 4, 2022, at Doc. 7, is denied. It is further
ORDERED that the Commissioner's Motion for Leave to File Out of Time Answer, filed October 5, 2022, at Doc. 8, is granted. It is further
ORDERED that the Clerk of Court shall file the Commissioner's Answer, lodged October 5, 2022, at Doc. 9, as of the date this Order is served. It is further
ORDERED that Mr. Johnson's Motion for Summary Judgment, filed January 19, 2023, at Doc. 13, is denied.