Opinion
12678-20P
03-13-2023
WINFRED NICHOLSON, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER OF DISMISSAL
Alina I. Marshall Judge
This passport case is currently before the Court on respondent's dispositive motions. Section 7345 is captioned "Revocation or Denial of Passport in Case of Certain Tax Delinquencies." It provides that, if the Commissioner certifies that an individual has a "seriously delinquent tax debt," the Secretary of the Treasury "shall transmit such certification to the Secretary of State for action with respect to denial, revocation, or limitation of a passport." § 7345(a). A taxpayer aggrieved by such action may petition this Court "to determine whether the certification was erroneous or whether the Commissioner has failed to reverse the certification." § 7345(e)(1). If this Court "determines that such certification was erroneous, then the [C]ourt may order the Secretary to notify the Secretary of State that such certification was erroneous." § 7345(e)(2).
Unless otherwise indicated, all section references are to the Internal Revenue Code, Title 26 U.S.C., in effect at all relevant times, and all Rule references are to the Tax Court Rules of Practice and Procedure.
The petition commencing the case was filed on October 29, 2020, and petitioner appears to have resided in Virginia at that time. Petitioner attached to the petition a Notice CP508C, Notice of Certification of Your Seriously Delinquent Federal Tax Debt to the State Department (Notice of Certification) that was issued to him by respondent on or about February 10, 2020. The certified tax debt was composed of petitioner's income tax liabilities for tax years 2008-2015 and civil penalties for tax years 2013-2015. Petitioner also attached to the petition a Form 668-W, Notice of Levy on Wages, Salary, and Other Income (Notice of Levy on Wages) that was issued to BHI Energy, an employer of petitioner, by respondent on October 1, 2020. Like the Notice of Certification, the Notice of Levy on Wages referenced petitioner's income tax liabilities for tax years 2008-2015 and civil penalty liabilities for tax years 2013- 2015. In the petition, petitioner contends that respondent has undertaken "unlawful collection action" and seeks "review of jeopardy levy" under sections 7429 and 7442. By way of remedy, he requests (1) "an ORDER for [RELEASE OF LEVY] filed on October 1, 2020", (2) an "ORDER for [CERTIFICATION of REVERSE]", and (3) "return of all properties taken through Levies".
On February 19, 2021, respondent filed a motion to dismiss on the ground of mootness with respect to petitioner's passport claims and a motion to dismiss for lack of jurisdiction as to jeopardy levy allegations with respect to petitioner's non-passport claims. In the motion to dismiss on the ground of mootness, respondent contends that, subsequent to the filing of the petition, he reversed petitioner's certification as an individual owing seriously delinquent tax debt and notified the State Department of the reversal such that petitioner has already received all the relief he is entitled to under section 7345. In the motion to dismiss for lack of jurisdiction as to jeopardy levy allegations, respondent contends that he has not issued any levy reviewable by the Court under section 7429. Respondent further contends that he has not issued any notice or determination that would confer jurisdiction on the Court to review the Notice of Levy on Wages, other collection actions, or the underlying liabilities for the tax periods listed on the Notice of Levy on Wages, and that petitioner has not attached any such notice or determination to the petition. Petitioner objects to the granting of both motions.
I. Background
On July 17, 2017, respondent mailed to petitioner a notice of intent to levy and notice of your rights to a hearing, dated July 12, 2017, for petitioner's income tax liabilities for the 2008-2012 tax years (July 17, 2017 Levy Notice). The July 17, 2017 Levy Notice was sent to petitioner at his last known address by certified mail. The notice was returned to respondent unclaimed. On July 27, 2017, respondent mailed to petitioner a notice of lien filing and right to a hearing also with respect to petitioner's income tax liabilities for the 2008-2012 tax years (July 27, 2017 Lien Notice). Petitioner timely requested a collection due process (CDP) hearing in response to the July 27, 2017 Lien Notice. On or before May 31, 2018, a notice of determination sustaining the lien filing, dated March 6, 2018, was sent by certified mail to petitioner's last known address (March 6, 2018 Notice of Determination). Petitioner alleges, however, that respondent never issued such notice.
On June 20, 2018, respondent mailed to petitioner a notice of intent to levy and right to a hearing for petitioner's income tax liabilities for his 2013-2015 tax years (June 20, 2018 Levy Notice). This notice was also sent to petitioner at his last known address by certified mail. On June 28, 2018, respondent mailed petitioner a notice of lien filing and right to a hearing with respect to those same liabilities (June 28, 2018 Lien Notice). Petitioner timely requested a CDP hearing in response to those notices. On or before February 13, 2019, a notice of determination sustaining the proposed levy action and lien filing, dated November 6, 2018, was sent by certified mail to petitioner's last known address (November 6, 2018 Notice of Determination). As with the March 6, 2018 Notice of Determination, however, petitioner alleges the November 6, 2018 Notice of Determination was never issued.
On October 16, 2019, respondent mailed to petitioner a notice of intent to levy for the civil penalties for the 2013-2015 tax years (October 16, 2019 Levy Notice). On October 29, 2019, respondent mailed to petitioner a notice of lien filing and right to a hearing for those same penalties (October 29, 2019 Lien Notice). The October 16, 2019 Levy Notice and October 29, 2019 Lien Notice were not sent to petitioner's last known address.
On or about February 10, 2020, respondent certified petitioner as an individual owing seriously delinquent tax debt under section 7345, sent notice to petitioner, and notified the State Department of the certification. Petitioner's certified tax debt was composed of petitioner's income tax liabilities for the 2008-2015 tax years and civil penalty liabilities for the 2013-2015 tax years.
On August 5, 2020, respondent mailed to petitioner by certified mail to his last known address another notice of intent to levy and right to a hearing for the civil penalties for the 2013-2015 tax years (August 5, 2020 Levy Notice). Petitioner did not request a CDP hearing within 30 days in response to the August 5, 2020 Levy Notice.
On December 7, 2020, respondent reversed petitioner's certification because, at the time the certification was made on February 10, 2020, petitioner's rights to an administrative hearing under sections 6230 and 6330 for the 2013-2015 civil penalties had not lapsed or expired, meaning the certification was erroneous under section 7345(b)(1)(C). Respondent subsequently sent notice of the reversal to petitioner and notified the State Department of the certification's reversal.
II. Discussion
This Court is a court of limited jurisdiction and may exercise jurisdiction only to the extent expressly authorized by Congress. § 7442; Naftel v. Commissioner, 85 T.C. 527, 529 (1985). Jurisdiction must be shown affirmatively, and petitioner, as the party invoking our jurisdiction in the case at bar, bears the burden of proving we have jurisdiction over his case. Le v. Commissioner, 114 T.C. 268, 270 (2000), aff'd, 22 Fed.Appx. 837 (9th Cir. 2001); Wheeler's Peachtree Pharmacy, Inc. v. Commissioner, 35 T.C. 177, 180 (1980). In order to meet his burden, petitioner must establish affirmatively all facts giving rise to our jurisdiction. Id.
A. Motion to Dismiss on the Ground of Mootness-Passport Claims
This Court's jurisdiction over passport claims is defined by section 7345(e), captioned "Judicial review of certification." It provides that a taxpayer who has been notified by the Commissioner of his certification as an individual who has a "seriously delinquent tax debt" "may bring a civil action . . . against the Commissioner in the Tax Court." § 7345(e)(1). The statute specifies no time limit for the commencement of such an action. Cf. § 6213(a).
In his petition, petitioner seeks an "ORDER for [CERTIFICATION of REVERSE]". We have jurisdiction to consider this request. See § 7345(e); Ruesch v. Commissioner, 154 T.C. 289 (2020) (Ruesch I), aff'd in part, vacated and remanded in part, 25 F.4th 67 (2d Cir. 2022) (Ruesch II). Respondent, however, has subsequently reversed petitioner's certification and so notified the Secretary of State. As such, petitioner has received all of the relief that he has requested, and which we could grant, with respect to the certification. See Ruesch II, 25 F.4th at 71-72; Ruesch I, 154 T.C. at 295, 298-299. As a result, his challenge in that respect is now moot. Id.
In Ruesch I, the taxpayer's section 7345 certification was also reversed. The Tax Court dismissed certain of the taxpayer's passport claims for mootness and certain others, regarding her underlying liabilities, for lack of statutory jurisdiction. See Ruesch I, 154 T.C. at 291. In Ruesch II, the U.S. Court of Appeals for the Second Circuit affirmed the Tax Court's dismissal for mootness but held all remaining claims should have been dismissed on that basis as well because questions concerning the doctrine of mootness "are antecedent to and should ordinarily be decided before other issues such as statutory jurisdiction". Ruesch II, 25 F.4th at 71. Absent stipulation to the contrary, any appeal in this case would appear to lie with the U.S. Court of Appeals for the Fourth Circuit. § 7482; Golsen v. Commissioner, 54 T.C. 742, 757 (1970), aff'd, 445 F.2d 985 (10th Cir. 1971). We note that the Fourth Circuit has held similarly to the Second Circuit with respect to the doctrine of mootness. See U.S. v. Hardy, 545 F.3d 280, 284-285 (4th Cir. 2008).
It is unclear to us from petitioner's filings the extent to which he may also be seeking to challenging the underlying liabilities or collection actions described above pursuant to section 7345. This is because his filings, including his response to respondent's motion to dismiss on the ground of mootness filed April 12, 2021, are generally comprised of arguments rejected by this Court and others as being meritless and frivolous. We see no need to catalog petitioner's arguments and painstakingly address them. As the U.S. Court of Appeals for the Fifth Circuit has remarked: "[w]e perceive no need to refute these arguments with somber reasoning and copious citation of precedent; to do so might suggest that these arguments have some colorable merit." Crain v. Commissioner, 737 F.2d 1417, 1417 (5th Cir. 1984). We would emphasize, however, that even if we could consider such challenges under section 7345, petitioner has still received all the relief to which he is entitled under that section. See Ruesch II, 25 F.4th at 71-72; Ruesch I, 154 T.C. at 295, 298-299; see also, Garcia v. Commissioner, 157 T.C. 1, 9-10 (2021) ("[T]he only relief that the statute authorizes us to grant is to order respondent to notify the Secretary of State that such certification was erroneous." (internal quotations omitted)).
But see, Adams v. Commissioner, 160 T.C.,, slip op at. 12-13 (Jan. 24, 2023) (in a case where the taxpayer's section 7345 certification remained in effect, the Court recently readopted its holding from Ruesch I that we do not have jurisdiction to review the liabilities underlying the certification of a seriously delinquent tax debt).
As such, we will grant respondent's motion to dismiss petitioner's passport claims on the ground of mootness.
In support of this motion, respondent provided upon order of the Court Forms 4340, Certificates of Assessments, Payments, and Other Specified Matters, with respect to each of petitioner's income tax liabilities for tax years 2008-2015 and civil penalties for tax years 2013-2015. Petitioner contends these forms failed to comply with § 6065, which requires that "any . . . document required to be made under any provision of the internal revenue laws or regulations shall contain or be verified by a written declaration that it is made under the penalties of perjury." We note that the requirements of § 6065 are directed at documents originated by the taxpayer, not the Commissioner. See Davis v. Commissioner, 115 T.C. 35, 42 (2000).
B. Motion to Dismiss for Lack of Jurisdiction as to Jeopardy Levy Allegations-Non-Passport Claims
To the extent petitioner challenges the Notice of Levy on Wages, other collection actions, and the underlying liabilities for the tax periods listed on the Notice of Levy on Wages on grounds other than section 7345 (petitioner's non-passport claims), respondent moves to dismiss these claims for lack of jurisdiction.
In a deficiency case, the jurisdiction of the Court generally depends on (1) the issuance by the Commissioner of a notice of deficiency, and (2) the filing of a petition within 90 days after the notice of deficiency is mailed. § 6213 ; Hallmark Research Collective v. Commissioner, 159 T.C. (Nov. 29, 2022); Rule 13(a) and (c). The notice of deficiency has been described as "the taxpayer's ticket to the Tax Court" because without it, generally there can be no prepayment judicial review by this Court of the deficiency determined by the Commissioner. Mulvania v. Commissioner, 81 T.C. 65, 67 (1983). In pertinent part, section 6213(a) further provides: "[t]he Tax Court shall have no jurisdiction to enjoin any action or proceeding or order any refund under this subsection unless a timely petition for a redetermination of the deficiency has been filed and then only in respect of the deficiency that is the subject of such petition."
Similarly, this Court's jurisdiction to review lien and levy actions with respect to taxpayer liabilities generally depends on (1) the issuance of a notice of determination by the Internal Revenue Service Independent Office of Appeals (Appeals) under section 6320 or 6330 with respect to the collection action, and (2) the filing by the taxpayer of a petition within 30 days of Appeals' determination. §§ 6320(c), 6330(d)(1); Smith v. Commissioner, 124 T.C. 36, 38-39 (2005); Offiler v. Commissioner, 114 T.C. 492, 498 (2000); Rule 330(b); but see, Boechler, P.C., v. Commissioner, 142 S.Ct. 1493 (Apr. 21, 2022). Much like with its deficiency jurisdiction, the Court shall "have no jurisdiction . . . to enjoin . . . [such a collection action] unless a timely appeal has been filed" with respect to the corresponding notice of determination, and then "only in respect of the unpaid tax or proposed. . . [collection action] to which the determination being appealed relates." §§ 6320(c); 6330(e)(1).
In his petition, petitioner seeks review of the Notice of Levy on Wages pursuant to section 7429, which provides for judicial review of a jeopardy levy. The Notice of Levy on Wages, however, is not a jeopardy levy. Even if it was, section 7429 would not provide us jurisdiction to review that notice as petitioner has failed to offer any evidence that there is a pending deficiency case before this Court with respect to any of the liabilities and periods underlying the Notice of Levy on Wages. See § 7429(b)(2)(B) (providing that the Tax Court will have jurisdiction to review a jeopardy levy determination only where a petition for a redetermination of a deficiency under section 6213(a) was timely filed with the Court before the making of the levy that is the subject of review and one or more of the taxes and taxable periods before the Court because of the deficiency petition is the subject of the jeopardy levy); McWilliams v. Commissioner, 103 T.C. 416, 421 (1994) ("This Court has jurisdiction when a case regarding the taxes that are the subject of the jeopardy assessment is pending before us.").
We note that petitioner has filed two other cases before this Court at Docket No. 1380-20L and Docket No. 16609-17. Both of these cases, however, have been dismissed previously for lack of jurisdiction, and their dismissals have been affirmed by the U.S. Court of Appeals for the Fourth Circuit in Nicholson v. Commissioner, 837 Fed.Appx. 199 (4th Cir. 2021), and Nicholson v. Commissioner, 731 Fed.Appx. 235 (4th Cir. 2018), respectively.
On March 22, 2021, petitioner filed his opposition to respondent's motion to dismiss for lack of jurisdiction as to jeopardy levy allegations. Petitioner did not deny the jurisdictional positions set forth in respondent's motion, but instead made meritless, frivolous arguments there too. See Crain v. Commissioner, 737 F.2d at 1417.
No notice of determination was issued to petitioner within 30 days of October 29, 2020, the date on which petitioner filed the petition. §§ 6320(c), 6330(d)(1). Similarly, no notice of deficiency issued to petitioner within 90 days of that date. § 6213. Petitioner has offered no evidence or argument that he has petitioned, or seeks to petition, any particular notice of determination or notice of deficiency. He alleges that respondent did not properly issue notices of determination with respect to certain collection actions, but offers no evidence or detail other than his broad assertions. Respondent diligently searched his records and contacted IRS personnel in an attempt to determine whether any notice or determination has been issued that would confer jurisdiction on this Court to hear petitioner's claims regarding his underlying liabilities or the collection actions taken by respondent. Respondent was unable to find any record of a notice of deficiency or notice of determination that would permit petitioner to invoke this Court's jurisdiction with his October 29, 2020 petition. Petitioner has failed to establish that this Court has jurisdiction to review the Notice of Levy on Wages, other collection actions, or the underlying liabilities for the tax periods listed on the Notice of Levy on Wages. See Le, 114 T.C. at 270 (2000); Wheeler's Peachtree Pharmacy, Inc., 35 T.C. at 180. We will grant respondent's motion to dismiss for lack of jurisdiction as to jeopardy levy allegations.
We have considered the parties' other arguments and, to the extent they are not discussed herein, find them to be irrelevant, moot, or without merit.
Accordingly, it is
ORDERED that respondent's motion to dismiss for lack of jurisdiction as to jeopardy levy allegations, filed on February 19, 2021, is granted. It is further
ORDERED that respondent's motion to dismiss on the ground of mootness, filed on February 19, 2021, is granted and this case is dismissed as moot.