Opinion
6085-20SL
01-12-2022
GEORGE MAYSONET AND DOROTHY MAYSONET, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER AND DECISION
Cary Douglas Pugh Judge
Petitioners timely filed a petition in this case seeking review of a Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330 (notice of determination). The notice of determination sustained a proposed levy with respect to petitioners' unpaid Federal income tax liability for 2017.
Unless otherwise indicated, all statutory references are to the Internal Revenue Code, Title 26 U.S.C., all regulation references are to Code of Federal Regulations, Title 26 (Treas. Reg.), and all Rule references are to the Tax Court Rules of Practice and Procedure.
This case was set for trial at the Court's November 29, 2021, Miami, Florida remote trial session. On September 30, 2021, respondent filed a Motion for Summary Judgment, supported by a Declaration of Anthony R. Adane and Declaration of Settlement Officer Arleen Maginn (SO Maginn) pursuant to Rule 121. We directed petitioners to respond by November 4, 2021.
On October 22, 2021, respondent filed a Motion for Continuance stating that the resolution of the pending Motion for Summary Judgment would obviate the need for trial and advising that petitioners do not object. By Order dated October 25, 2021, we continued this case for trial, retained jurisdiction, and set respondent's motion for summary judgment for hearing on November 29, 2021.
On November 4, 2021, respondent filed a Status Report, advising the Court that on "November 2, 2021, petitioners' representative informed respondent's counsel that Mrs. Maysonet had recently passed away and of Mr. Maysonet's intent to request more time from the Court to respond to the Motion for Summary Judgment." By order dated November 9, 2021, we struck respondent's motion for summary judgment from the hearing on November 29, 2021, and extended the due date for petitioners' response to November 29, 2021. Petitioners have yet to file a response and we conclude that we may resolve respondent's motion without waiting any longer for a response or a hearing.
Rule 121(b) provides in part that after a motion for summary judgment and opposing response are filed: "A decision shall thereafter be rendered if the pleadings * * * and any other acceptable materials, together with the 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." Summary judgment is intended to expedite litigation and avoid unnecessary and expensive trials. Florida Peach Corp. v. Commissioner, 90 T.C. 678, 681 (1988).
Our review of the record identified no material factual disputes and we conclude that respondent is entitled to judgment as a matter of law for the reasons summarized below.
Background
The following facts are derived from the parties' pleadings and motion papers, including accompanying declarations and exhibits. See Rule 121(b). Petitioners resided in Florida at the time the petition was filed.
On March 11, 2019, the IRS sent petitioner a Notice CP90, Intent to Seize Your Assets and Notice of Your Right to a Hearing with respect to petitioners' unpaid income tax liabilities for 2017 (notice of intent to levy). Petitioners timely filed a request for a collection due process (CDP) hearing. The essence of petitioners' request was that they were victims of, and were still recovering from, Hurricane Irma's effects.
On October 16, 2019, SO Maginn sent petitioners a contact letter acknowledging receipt of their CDP hearing request and scheduling a telephone hearing for November 7, 2019. SO Maginn informed petitioners that before she could consider an alternative collection method petitioners needed to send her Collection Information Statement for Wage Earners and Self-Employed Individuals (Form 433- A) within 14 days and signed tax returns for 2012 and 2013 within 21 days.
On November 7, 2019, petitioners called SO Maginn for the telephone conference. SO Maginn reiterated that if petitioners were interested in collection alternative, they had to submit Form 433-A, file their 2013 tax return and make estimated tax payments. She also told them that the proposed levy would be sustained if the requested information was not received by November 14, 2019. Petitioners did not challenge the underlying liability and raised no other issues.
SO Maginn determined that only the 2013 tax return was required for petitioners to be compliant with their filing obligation and eligible to request a collection alternative.
On January 3, 2020, petitioners submitted Form 433-A, Form SSA-1099 (Social Security Benefit Statement) for 2013, and other financial documents, but no tax return for 2013, maintaining that they were not required to file one. Reviewing the documents they submitted, SO Maginn determined that petitioners had $37,411.80 of gross income in 2013 and were required to file a tax return for that year.
On February 4, 2020, SO Maginn called petitioners and informed them that they had to file their 2013 tax return to be eligible for a collection alternative. She further advised them that the proposed levy would be sustained and a Notice of Determination would be issued unless their 2013 tax return was filed prior to preparation of closing documents.
On February 10, 2020, SO Maginn sustained the levy. And on February 18, 2020, respondent issued to petitioners the notice of determination at issue. Petitioners filed their 2013 tax return on March 16, 2020, almost four months after SO Maginn's initial deadline.
No evidence of filing appears in the record but petitioners asserted this in their petition so we will accept it for purposes of our analysis of respondent's pending motion only, not as a finding of fact.
Discussion
I. Standard of Review
Where the amount of a taxpayer's underlying tax liability is properly at issue in a CDP case, we review the IRS' determination de novo. Goza v. Commissioner, 114 T.C. 176, 181-182 (2000). Section 6330(c)(2)(B) permits a taxpayer to challenge the existence or amount of his underlying liability only if he did not receive a notice of deficiency or otherwise have a prior opportunity to contest that liability. Where the taxpayer does not or cannot dispute his underlying tax liabilities, we review the IRS' determinations regarding nonliability issues for abuse of discretion. Hoyle v. Commissioner, 131 T.C. 197, 200 (2008), supplemented by 136 T.C. 463 (2011); Goza, 114 T.C. at 182.
Nothing in the record indicates that petitioners at any time throughout the administrative or judicial proceedings attempted to challenge their underlying tax liability. Accordingly, we review respondent's determination to proceed with collection for abuse of discretion. Abuse of discretion exists when a determination is arbitrary, capricious, or without sound basis in fact or law. See Murphy v. Commissioner, 125 T.C. 301, 320 (2005), aff'd, 469 F.3d 27 (1st Cir. 2006). The burden is on the taxpayer to prove that the settlement officer abused her discretion. Rules 142(a), 122(b); See Woodral v. Commissioner, 112 T.C. 19, 23 (1999).
II. Analysis
In deciding whether the SO abused her discretion in sustaining the 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 petitioners raised; and (3) determined whether "any proposed collection action balances the need for the efficient collection of taxes with the legitimate concern of * * * [petitioners] that any collection action be no more intrusive than necessary." See § 6330(c)(3).
The record shows that SO Maginn examined petitioners' account transcripts and verified that the requirements of applicable law and administrative procedure were followed. She properly balanced the need for efficient collection of taxes with petitioners' legitimate concern that collection action be no more intrusive than necessary. The only question is whether SO Maginn properly considered their entitlement to a collection alternative. Specifically, petitioners argue that they filed their 2013 tax return on March 16, 2020, "as requested" and became filing compliant and eligible for a collection alternative. The record does not support petitioners' position.
SO Maginn made repeated requests over several months for petitioners' 2013 tax return and gave them one last chance before closing the file, even after they indicated that they had no filing obligation. "No statutory or regulatory provision requires that taxpayers be afforded an unlimited opportunity to supplement the administrative record." Roman v. Commissioner, T.C. Memo. 2004-20, 87 T.C.M. (CCH) 835, 837 (holding that it was not an abuse of discretion for an Appeals officer to reject collection alternative when taxpayer did not respond for two months after given the opportunity to provide additional documents). The record here demonstrates that she gave petitioners multiple opportunities to comply and addressed their claim that they did not have a filing obligation. See id.
We find that SO Maginn did not abuse her discretion by declining to offer petitioners a collection alternative when they did not bring themselves into filing compliance by filing the 2013 tax return when requested. See, e.g., Cavazos v. Commissioner, T.C. Memo. 2008-257 (holding that it was not an abuse of discretion for an Appeals officer to reject collection alternatives on the ground that the taxpayer was noncompliant with current tax obligations); Lyons v. Commissioner, T.C. Memo. 2014-32 (holding that it was not an abuse of discretion for the Appeals officer to reject collection alternatives when taxpayers failed to submit requested financial information or come into compliance with filing obligations).
Conclusion
After reviewing the record before us, we conclude that there is no genuine dispute as to any material facts, and respondent is entitled to a decision as a matter of law. Therefore, upon due consideration of the foregoing, it is
ORDERED that respondent's Motion for Summary Judgment, filed on September 30, 2021, is granted. It is further
ORDERED AND DECIDED that the determinations set forth in the Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330, dated February 18, 2020, for petitioners' unpaid Federal income tax liability for 2017, and upon which this case is based, are sustained in full.