Opinion
14031-20L
03-31-2022
MARK DAVID MAZZA & LISA ANA MAZZA, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER AND DECISION
David Gustafson Judge
This is a "collection due process" ("CDP") case brought under section 6330.Petitioners Mark David Mazza & Lisa Ana Mazza invoke our jurisdiction under section 6330(d)(1) to review a supplemental notice of determination by the Internal Revenue Service ("IRS") Independent Office of Appeals ("IRS Appeals") sustaining a notice of intent to levy ("NOIL") to collect unpaid Federal income tax liabilities for the 2012 and 2013 years. Respondent, the Commissioner of Internal Revenue, filed his motion for summary judgement (Doc. 9), to which the Mazzas failed to file a response. We will grant the Commissioner's motion.
Unless otherwise indicated, all statutory references are to the Internal Revenue Code, Title 26 U.S.C., in effect at all relevant times, all regulation references are to the Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all relevant times, and all Rule references are to the Tax Court Rules of Practice and Procedure. Dollar amounts are rounded. Parenthetical references to "Doc." are to documents as they are numbered in the docket record of this case, and the page numbers cited in such references are according to the numbering in the portable document format ("PDF") of the digital file.
Background
The following facts are derived from the parties' pleadings and the Commissioner's motion. The Mazzas have not disputed these facts.
IRS collection attempts
The Mazzas owe unpaid Federal income tax for the years 2012 and 2013, totaling approximately $3,273. (Doc. 10 at 16.) After issuing to the Mazzas notice and demand for payment, the IRS sent to the Mazzas a Notice CP90 "Intent to seize your assets and notice of your right to a hearing" dated April 15, 2019. (Doc. 10 at 16.) The notice advised the Mazzas of their right to request a CDP hearing with IRS Appeals. The Mazzas submitted a Form 12153, "Request for a Collection Due Process or Equivalent Hearing", upon which they identified the proposed levy action as the basis for the hearing. (Doc. 10 at 23.) On their Form 12153, the Mazzas checked only the box for "I Cannot Pay Balance", and they did not propose any collection alternative. (Doc. 10 at 23.)
CDP hearing
The Mazzas' request for a CDP hearing was assigned to Settlement Officer Valencia Turner ("SO Turner"). On December 12, 2019, SO Turner sent to the Mazzas an appointment letter scheduling the CDP hearing for February 4, 2020. (Doc. 10 at 27.) However, on January 12, 2020, the Mazzas sent a letter to SO Turner asserting their belief that they had received correspondence from her before and requesting that their CDP hearing be reassigned to another settlement officer. (Doc. 10 at 30.) Per the Mazzas' request, their CDP hearing was reassigned to Settlement Officer Cathy Benson ("SO Benson"), who sent to the Mazzas an appointment letter scheduling the CDP hearing for April 14, 2020. (Doc. 10 at 32.) The letter requested that, to enable IRS Appeals to consider any collection alternatives, the Mazzas provide a completed Form 433A, "Collection Information Statement for Wage Earners and Self-Employed Individuals", and file their Federal income tax returns for the years 2014, 2015, 2016, and 2018 prior to the CDP hearing. (Doc. 10 at 33.)
On March 22, 2020, the Mazzas sent to SO Benson a letter requesting a copy of their IRS administrative file and an indefinite extension of the CDP hearing to give them time to complete their unfiled Federal income tax returns. (Doc. 10 at 35.) SO Benson called the Mazzas for the CDP hearing twice on April 14, 2020, but was unable to reach them and did not receive a response. (Doc. 10 at 44) On April 21, 2020, SO Benson sent to the Mazzas a letter informing them that they had 14 days to submit the requested financial information and to file their missing Federal income tax returns, and that she would issue a determination in their CDP hearing if the information was not received by the deadline. (Doc. 10 at 36.) The Mazzas sent another letter to SO Benson on April 27, 2020, requesting that their CDP hearing be rescheduled. (Doc. 10 at 37.) However, in response to the covid-19 pandemic, the IRS had suspended all collection activity from April 1 to July 15, 2020, so the April 1 deadline had been superseded, and SO Benson did not issue a determination.
See I.R.S. News Release IR-2020-59 (March 25, 2020).
On August 3, 2020, SO Benson left the Mazzas a voicemail notifying them that their request for a copy of their administrative file was being processed. A copy of the Mazzas' IRS administrative file was sent to them on August 21, 2020. (Doc. 10 at 45.) On September 10, 2020, SO Benson followed up with the Mazzas by voicemail to schedule a date for their CDP hearing, and notified them that, if she did not hear from them by the end of the day, then she would send them a letter scheduling the CDP hearing. (Doc. 10 at 45.) After receiving no response, SO Benson sent to the Mazzas a letter scheduling their CDP hearing for September 30, 2020, and again requesting that they provide before the CDP hearing a completed Form 433A and file their delinquent tax returns. (Doc. 10 at 39.) SO Benson included with the letter a blank Form 433A for the Mazzas to complete and return before the CDP hearing. (Doc. 10 at 45.)
Twice on September 30, 2020, SO Benson called the Mazzas for the CDP hearing but was unable to reach them and did not receive a response. (Doc. 10 at 45.) SO Benson accordingly issued a notice of determination sustaining the proposed levy because the Mazzas did not offer any collection alternative or financial information, did not file their delinquent tax returns, and did not participate in the CDP hearing. (Doc. 10 at 50.) The notice of determination advised the Mazzas of their right to file a petition in United States Tax Court within 30 days.
Tax Court petition
The Mazzas timely filed their petition in the Tax Court, alleging that IRS Appeals abused its discretion because the Mazzas did not receive a Form 433A or a copy of their administrative file before the CDP hearing on September 30, 2020. (Doc. 1 at 3.) The Mazzas allege that SO Benson should have continued their CDP hearing again until they received the Form 433A and the copy of their administrative file. (Doc. 1 at 3.)
Tax Court proceedings
The Commissioner filed his motion for summary judgment on February 16, 2022. On February 18, 2022, the Court ordered (Doc. 13) the Mazzas to file a response to the Commissioner's motion no later than March 9, 2022. (Doc. 13 at 2.) In that order, we stated:
If petitioners disagree with the facts set out in paragraphs 4-28 of the Commissioner's motion for summary judgment (see Doc. 9, pp. 2-9), then their response should point out the specific facts in dispute. The response should state, by number, any assertion with which they disagree, should explain the reason for their disagreement, and should cite whatever evidence supports their position. If petitioners disagree with the Commissioner's argument as to the law in paragraphs 29-41 of the Commissioner's motion for summary judgement (Doc. 9, pp. 9-11), then their response should also set out their position on the disputed legal issues. Q&As that the Court has prepared on the subject: "What is a motion for summary judgment? How should I respond to one?", are available at the Court's website and are printed on the page attached to this order. If petitioners are unsure how to
proceed, they should promptly initiate a telephone conference with the Court and the Commissioner by placing a call to the Chambers Administrator of the judge signing this order . . . .
Petitioners should note that Tax Court Rule 121(d) provides, "If the adverse party [i.e., petitioners] do not so respond [to a motion for summary judgment], then a decision, if appropriate, may be entered against such party".On March 4, 2022, Mr. Mazza telephoned the chambers of the judge signing this order and requested a telephone conference, which was subsequently held on March 8, 2022. During that telephone conference, Mr. Mazza advised the Court that he did not receive the Commissioner's motion until February 26, 2022, apparently due to delays in the mailing of the Commissioner's motion. (Doc. 14 at 2.) After the telephone conference, we issued an order (Doc. 14) extending to March 16, 2022, the Mazzas' deadline to file a response to the Commissioner's motion. The Mazzas have not filed a response.
Discussion
The purpose of summary judgment is to expedite litigation and avoid unnecessary trials. Fla. Peach Corp. v. Commissioner, 90 T.C. 678, 681 (1988). The Court may grant summary judgment when there is no genuine dispute as to any 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). The moving party (here, the Commissioner) bears the burden of showing that no genuine issue of material fact exists, and the Court will view any factual material and inferences in the light most favorable to the nonmoving party (here, the Mazzas). See Dahlstrom v. Commissioner, 85 T.C. 812, 821 (1985). However, Rule 121(d) imposes a duty on a party opposing summary judgment:
When a motion for summary judgment is made and supported as provided in this Rule, an adverse party may not rest upon the mere allegations or denials of such party's pleading, but such party's response, by affidavits or declarations or as otherwise provided in this Rule, must set forth specific facts showing that there is a genuine dispute for trial. If the adverse party does not so respond, then a decision, if appropriate, may be entered against such party.Here, the factual assertions contained in the Commissioner's motion are undisputed.
In CDP cases (such as this one) where the underlying liability is not in dispute, we review IRS Appeals' determination for abuse of discretion. Downing v. Commissioner, 118 T.C. 22, 30-31 (2002). Applying that abuse-of-discretion standard, we decide whether IRS Appeals's determination to sustain the proposed levy action was 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).
During a CDP hearing, IRS Appeals must determine whether the proposed collection action may proceed. In making that determination, the appeals officer must consider the following: (1) whether the requirements of any applicable law or administrative procedure have been met; (2) any issues raised by the taxpayer, including (relevant here) challenges to the appropriateness of the collection action and proposed collection alternatives; and (3) whether the 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). The Commissioner's motion shows that, in the CDP hearing and the notice of determination, IRS Appeals did not abuse its discretion in sustaining the proposed levy action because SO Benson verified that the applicable law and administrative procedures for collection of unpaid taxes by levy were followed, the Mazzas neither proposed any collection alternatives nor did they submit the requested financial information and their delinquent Federal income tax returns, and SO Benson balanced the relative interests of the government and the Mazzas in collecting their unpaid taxes by levy. It is not an abuse of discretion by IRS Appeals to issue a determination if a taxpayer fails to submit requested information to consider a collection alternative within a given reasonable timeframe. Pough v. Commissioner, 135 T.C. 344, 351 (2010). Based on these facts and circumstance and in the absence of any genuine dispute of material fact, we hold that IRS Appeals did not abuse its discretion in sustaining proposed levy action and the Commissioner's motion should accordingly be granted.
Furthermore, as we pointed out to the Mazzas in our previous order, Rule 121(d) provides: "If the adverse party does not so respond [to a motion for summary judgment], then a decision, if appropriate, may be entered against such party." To the same effect, Rule 123(b) provides, "For failure of a petitioner properly to prosecute or to comply with these Rules or any order of the Court . . ., the Court may dismiss a case at any time and enter a decision against the petitioner." Under these rules, we reach the same result-dismissal of the case with a decision against the petitioners.
We point out, however, that the Mazzas are always free to submit-outside of the CDP process (and without an opportunity for court review)-a request for a collection alternative, but of course they will need to submit to the IRS the appropriate forms and financial information, and they will need to be current with their return-filing obligations. We also point out that, under Rule 162, a motion to vacate the decision we enter here could be made within 30 days of the entry of this decision. We do not perceive any potential merit to such a motion and therefore do not encourage it, but if the Mazzas wish to make such a motion, they could appear at the trial session in Philadelphia at 10:00 a.m. on April 18, 2022, and we would hear their motion to vacate.
In view of the foregoing, it is
ORDERED that respondent's motion for summary judgment is granted, for the reasons stated in that motion and in this order. It is further
ORDERED, in the alternative, that pursuant to Rules 121(d) and 123(b), this case is dismissed on the grounds that petitioners failed to comply with our order requiring them to file a response to the motion for summary judgment. It is further
ORDERED AND DECIDED that respondent may proceed with collection of petitioner's unpaid income tax liabilities for the 2012 and 2013 tax years, as described in the "Notice of Determination Concerning Collection Actions Under Sections 6320 or 6330 of the Internal Revenue Code" dated October 28, 2020.