Opinion
3587-20SL
12-27-2021
Metropolitan Cleaners Inc Petitioner v. Commissioner of Internal Revenue Respondent
ORDER
Daniel A. Guy, Jr. Special Trial Judge
This collection review case is before the Court on respondent's motion for summary judgment, with a supporting declaration, filed pursuant to Rule 121. Petitioner failed to file a response to respondent's motion. As discussed in detail below, we will direct respondent to file a supplement to his motion.
Background
Petitioner filed delinquent Forms 1120S for the taxable years 2010 to 2016 (years in issue). Respondent assessed additions to tax for late filing of the returns for the years in issue under section 6699.
When petitioner failed to remit payment, respondent filed a Federal tax lien and notified petitioner of that action and of its right to an administrative hearing before the Independent Office of Appeals (Appeals Office). Petitioner timely requested an administrative hearing, indicating that it could not pay the balance owed and requesting that the lien be withdrawn.
Petitioner's representatives participated in an Appeals Office administrative hearing and explained that although petitioner had ceased doing business in 2007, petitioner had been advised to continue to file Federal income tax returns to preserve its rights in ongoing litigation in state court. Although the Appeals Office requested that petitioner submit a formal request for abatement of the tax in question (i.e., a request signed by a corporate officer under the penalties of perjury), petitioner failed to do so.
The record reflects that, in addition to requesting that the lien be withdrawn, petitioner asserted that it could not pay the balance due and submitted to the Appeals Office a Form 433B (financial statement). Although the Appeals Office case activity notes and the notice of determination refer to the Form 433B, and summarize the information contained therein, the Form 433B was not included as part of the administrative record submitted to the Court in connection with respondent's motion for summary judgment. The information summarized in the case activity notes suggests that petitioner ceased business activity many years ago and had no income and no assets at the time the Form 433B was submitted to the Appeals Office. Equally important, neither the case activity notes nor the notice of determination includes a definitive statement that petitioner failed to show that it is unable to pay the balance due for the years in issue.
On the record presented, it appears that petitioner is unable to pay the balance due and the Court has doubts that the interests of justice would be served by sustaining the lien or continuing any collection action in this case. Under the circumstances, the Court will direct respondent to file a supplement to his motion for summary judgment explaining (1) why the Form 433B was not included as part of the administrative record previously submitted to the Court, (2) why the information contained in the Form 433B was insufficient to demonstrate that petitioner is unable to pay the balance due, and (3) whether this matter should be remanded to the Appeals Office for further proceedings. .
Upon due consideration, it is
ORDERED that, on or before January 20, 2022, respondent shall file a supplement to respondent's motion for summary judgment, as more fully described in this Order.