Opinion
15392-23L
07-17-2024
JOSHUA JAMES MEADOWS, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER AND DECISION
PETER J. PANUTHOS SPECIAL TRIAL JUDGE.
This collection review case is before the Court on respondent's Motion for Summary Judgment, filed pursuant to Rule 121, on January 12, 2024. Although the Court directed petitioner to file a response to respondent's motion, petitioner failed to do so.
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.
Where the opposing party does not respond to a Motion for Summary Judgment, "a decision may be entered against that party." Rule 121(d). Despite petitioner's failure to respond, the Court fully considers the facts and circumstances presented to decide if summary judgment is appropriate.
In his motion for summary judgment, respondent contends that the Court should affirm the determination of the Internal Revenue Service (IRS) Office of Appeals not sustaining the decision to file the Notice of Federal Tax Lien to collect petitioner's unpaid federal income taxes for tax year 2017. 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 movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Rule 121(a)(2). Respondent's motion for summary judgment is well founded based on the averments therein. We conclude that there is no dispute as to a material fact and that respondent is entitled to judgment as a matter of law sustaining the notice of determination upon which this case is based.
On July 1, 2019, the IRS Office of Appeals was renamed the IRS Independent Office of Appeals. See Taxpayer First Act, Pub. L. No. 116-25, § 1001, 133 Stat. 981, 983 (2019). We will use the name in effect at the times relevant to this case, i.e., the Office of Appeals or Appeals.
Section 6330 provides procedures for administrative and judicial review of the Secretary's collection actions. In rendering an administrative determination in a collection review proceeding under section 6330, Appeals must verify that any applicable law or administrative procedure has been met in processing the case. § 6330(c)(1). Appeals also must consider any issues raised by the taxpayer relating to the collection action, including offers of collection alternatives, appropriate spousal defenses, and challenges to the appropriateness of collection action. § 6330(c)(2)(A). A taxpayer may challenge the existence or amount of his or her underlying tax liability if the taxpayer did not receive a notice of deficiency or did not otherwise have an opportunity to dispute such tax liability. § 6330(c)(2)(B). Finally, Appeals must consider whether the collection action balances the need for efficient collection against the taxpayer's concern that collection be no more intrusive than necessary. § 6330(c)(3)(C).
The Tax Court has jurisdiction to review the administrative determination made by Appeals. § 6330(d)(1). If the taxpayer's underlying tax liability is properly in dispute, we review Appeals' determination de novo. Goza v. Commissioner, 114 T.C. 176, 181-82 (2000). Otherwise, as is the case here, we review the determination for an abuse of discretion. Id. at 182. An abuse of discretion occurs if the Appeals Office exercises its discretion "arbitrarily, capriciously, or without sound basis in fact or law." Woodral v. Commissioner, 112 T.C. 19, 23 (1999).
The record establishes and/or the parties do not dispute the following background information. The liability for the 2017 tax year is from a notice of deficiency issued to petitioner on November 9, 2020. Petitioner did not file a petition in the Tax Court in response to the notice of deficiency, so respondent assessed the deficiency and accuracy-related penalty on March 22, 2021.
In an attempt to collect the amount owed, respondent sent petitioner a Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320, dated April 5, 2022, advising petitioner that the IRS had filed a lien with respect to petitioner's 2017 federal income tax liabilities. Petitioner thereafter timely submitted a Form 12153, Request for a Collection Due Process or Equivalent Hearing, in which he checked the boxes "Offer in Compromise" and "Withdrawal". Petitioner did not dispute the liability for tax year 2017. Petitioner also did not dispute the tax liability during the collection due process hearing or in the Petition filed in this case. Therefore, we conclude that petitioner's underlying liability is not properly at issue in this case.
"We do not conduct an independent review of what would be an acceptable offer in compromise." Murphy v. Commissioner, 125 T.C. 301, 320 (2005), aff'd, 469 F.3d 27 (1st Cir. 2006). In addition, "[i]n reviewing for abuse of discretion, we do not recalculate a taxpayer's ability to pay and substitute our judgment for that of the settlement officer." O'Donnell v. Commissioner, T.C. Memo. 2013-247, at *7. In the Petition, petitioner states "my monthly pay is variable" and "my future income cannot be assumed or estimated". The record reflects that the Appeals Settlement Officer used ten paystubs for the calendar year 2023 that petitioner provided to determine petitioner's current income in calculating petitioner's reasonable collection potential. Based on this record, the Appeals Settlement Officer did not abuse his discretion in calculating petitioner's reasonable collection potential and denying petitioner's offer in compromise.
The record reflects that the Appeals Settlement Officer properly verified that the requirements of all applicable laws and administrative procedures were met in the processing of petitioner's case. Although the Appeals Settlement Officer properly determined that petitioner may not challenge the existence or the amount of his underlying liability, the Appeals Settlement Officer granted a First-Time Penalty Abatement on the assessed penalty. In addition, the Appeals Settlement Officer determined not to sustain the decision to file the Notice of Federal Tax Lien and noted that the IRS withdrew the Notice of Federal Tax Lien because the Notice of Federal Tax Lien was filed prematurely. In sum, the Appeals Settlement Officer did not abuse his discretion in this case.
Accordingly, upon due consideration and for cause, it is
ORDERED that respondent's Motion for Summary Judgment, filed January 12, 2024, is granted. It is further
ORDERED AND DECIDED that the Notice of Determination Concerning Collection Actions under IRS Sections 6320 or 6330 of the Internal Revenue Code, dated September 1, 2023, upon which notice this case is based, is sustained.