Opinion
12314-23L
02-22-2024
PECK ENTERPRISES INC., Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER AND DECISION
L. PAIGE MARVEL JUDGE.
On January 17, 2024, respondent filed a Motion for Summary Judgment. On January 18, 2024, we ordered petitioner to file a response to respondent's Motion for Summary Judgment on or before February 8, 2024. On February 7, 2024, petitioner filed a Response to Motion for Summary Judgment. We will grant respondent's Motion for Summary Judgment.
Background
On November 21, 2022, pursuant to substitutes for return prepared by respondent under section 6020(b), respondent assessed employment taxes for petitioner's quarterly tax periods ending December 31, 2021, March 31, 2022, and June 30, 2022. On December 22, 2022, respondent sent petitioner a Letter 3172, Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320 (lien notice). On January 27, 2023, petitioner mailed respondent a Form 12153, Request for a Collection Due Process or Equivalent Hearing (hearing request), requesting an offer-in-compromise and lien subordination; an attached letter stated an installment agreement had already been requested and petitioner wished to have the lien subordinated to allow petitioner to obtain financing for payment of the tax liabilities.
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.
On April 19, 2023, Appeals Officer Catherine A. Rojas (AO Rojas) mailed petitioner Letter 4837, Appeals Received Your Request for a Collection Due Process Hearing, confirming receipt of petitioner's hearing request and scheduling a conference for May 23, 2023. The Letter 4837 also requested that petitioner provide additional information to consider the issues petitioner raised in its hearing request.
On May 23, 2023, AO Rojas sent petitioner Letter 4000 stating that petitioner did not attend the scheduled conference and did not contact her to reschedule. The Letter 4000 gave petitioner until June 6, 2023, to contact AO Rojas or to provide the additional information needed to consider the issues petitioner raised in its hearing request. Petitioner did not contact AO Rojas or provide any additional information.
On July 7, 2023, the Internal Revenue Service Independent Office of Appeals(Appeals Office) issued petitioner a Notice of Determination Concerning Collection Actions under IRS Sections 6320 or 6330 of the Internal Revenue Code (notice of determination) sustaining the lien notice. The Appeals Office stated in the notice of determination that no response was received from petitioner and that none of the requested information was provided by petitioner. On August 4, 2023, petitioner timely filed its Petition in this case.
On July 1, 2019, the Internal Revenue Service Office of Appeals was renamed the Internal Revenue Service Independent Office of Appeals. See Taxpayer First Act, Pub. L. No. 116-25, § 1001, 133 Stat. 981, 983 (2019).
Discussion
We have jurisdiction to review the Appeals Office's determination concerning collection actions when the taxpayer petitions for review. See §§ 6320(c), 6330(d)(1). We have jurisdiction here because petitioner petitioned us for review of the notice of determination.
While we historically have held that a taxpayer must timely file a petition in order to invoke our jurisdiction in a lien or levy case, the Supreme Court of the United States has recently held to the contrary. See Boechler, P.C. v. Commissioner, 596 U.S. 199, 1501 (2022) ("Section 6330(d)(1)'s 30-day time limit to file a petition for review of a collection due process determination is an ordinary, nonjurisdictional deadline subject to equitable tolling."); see also Mellon v. Commissioner, T.C. Memo. 2023-108, at *14 n.12. In any case, petitioner timely filed its Petition.
Where the validity of the taxpayer's underlying liability is properly at issue, we review the underlying liability de novo. See Sego v. Commissioner, 114 T.C. 604, 609-10 (2000). We review the Appeals Office's determinations respecting any nonliability issues for abuse of discretion. See Goza v. Commissioner, 114 T.C. 176, 182 (2000). 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). Petitioner did not challenge the underlying tax liabilities assessed by respondent in its Petition, and any challenge to its underlying tax liabilities is therefore deemed conceded. See Rule 331(b)(4). Petitioner likewise did not challenge the underlying tax liabilities in its Response to Motion for Summary Judgment, and any challenge to its underlying tax liabilities is also forfeited for that reason. See Rowen v. Commissioner, 156 T.C. 101, 115-16 (2021). Accordingly, we review respondent's determination in the notice of determination only for abuse of discretion.
Summary adjudication is designed to expedite litigation and avoid unnecessary and expensive trials. Fla. Peach Corp. v. Commissioner, 90 T.C. 678, 681 (1988). Under Rule 121(a)(2), we 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. See Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), aff'd, 17 F.3d 965 (7th Cir. 1994). In resolving a motion for summary judgment, we view the facts and draw inferences therefrom in the light most favorable to the nonmoving party. Dahlstrom v. Commissioner, 85 T.C. 812, 821 (1985). The nonmoving party, however, may not rest on allegations or denials but must respond, setting forth specific facts and supporting those facts as required by Rule 121(c), to show that there is a genuine dispute of fact for trial. Rule 121(d); see Sundstrand Corp., 98 T.C. at 520. If the nonmoving party does not so respond, then we may enter a decision against the nonmoving party. Rule 121(d), (f)(3).
Petitioner's Response to Motion for Summary Judgment fails to comply with Rule 121(d) because it consists entirely of allegations or denials. In the absence of other acceptable materials (e.g., affidavits or declarations of third parties, depositions, admissions, or interrogatory answers), petitioner needed to set out specific facts or identify relevant materials via either a sworn affidavit or an unsworn declaration made under penalty of perjury pursuant to 28 U.S.C. § 1746 in order to establish the presence of a genuine dispute. See Rule 121(c); Koprowski v. Commissioner, 138 T.C. 54, 57-58 (2012); see also Schropp v. Commissioner, T.C. Memo. 2010-71, slip op. at 14-15. Petitioner's statements in its Response to Motion for Summary Judgment, however, are unsworn, and petitioner has not purported to make them under penalty of perjury or even by affidavit or declaration. Petitioner has failed to demonstrate by acceptable materials that there is a genuine issue for trial. Accordingly, we conclude that there is no dispute as to any material fact. Furthermore, as explained below, we conclude that it is appropriate to enter a decision in favor of respondent.
Petitioner has not shown pursuant to Rule 121(e) that it cannot present facts essential to justify its opposition.
Rule 121(c)(1)(B) is inapplicable because the materials cited by respondent (standing alone and left unopposed by any materials provided by petitioner) establish the absence of a genuine dispute of fact.
Section 6330(c)(3) requires that the determination of the appeals officer take into consideration: (1) whether the requirements of any applicable law or administrative procedure have been met; (2) any issues appropriately raised by the taxpayer; and (3) whether the collection action balances the need for the efficient collection of taxes with the legitimate concern of the taxpayer that the collection action be no more intrusive than necessary. See Lunsford v. Commissioner, 117 T.C. 183, 184 (2001). Our review of the record shows that AO Rojas discharged all of her responsibilities under these provisions and did not abuse her discretion in any respect. It is not an abuse of discretion to sustain a collection action if the taxpayer fails to submit requested information by a reasonable deadline set by the appeals officer. See Pough v. Commissioner, 135 T.C. 344, 351 (2010); Shanley v. Commissioner, T.C. Memo. 2009-17, slip op. at 11; see also Herrington v. United States, 416 F.2d 1029, 1032 (10th Cir. 1969) ("[N]either the Commissioner nor his agents can be expected to ferret out possible grounds for relief which a taxpayer might assert."). In any case, except as discussed below, petitioner has failed to object to respondent's determination in its Response to Motion for Summary Judgment, and any arguments not made in its Response to Motion for Summary Judgment are deemed conceded. See Rowen, 156 T.C. at 115-16.
Petitioner alleges in its Response to Motion for Summary Judgment that it did not receive either the Letter 4837 or the Letter 4000 sent by AO Rojas and that its non-receipt of these letters accounts for its failure to participate in the section 6320 hearing. Even if we considered the allegations or denials in petitioner's Response to Motion for Summary Judgment, it would not avail petitioner. We may, of course, find an abuse of discretion if an appeals officer acts unreasonably in terminating a section 6320 or 6330 hearing. See Long v. Commissioner, T.C. Memo. 2023-130; Meeh v. Commissioner, T.C. Memo. 2009-180; Judge v. Commissioner, T.C. Memo. 2009-135. Nonetheless, "[a] party moving for summary judgment is entitled to the benefit of any relevant presumptions that support the motion." Coca-Cola Co. v. Overland, Inc., 692 F.2d 1250, 1254 (9th Cir. 1982); see Abramo v. Commissioner, 78 T.C. 154, 163-64 (1982) (applying the presumption of correctness at the summary judgment stage of a deficiency case). As a general rule, public officers are entitled to the presumption of official regularity, which is that in the absence of clear evidence to the contrary, courts presume that public officers have properly discharged their official duties. See United States v. Chem. Found., Inc., 272 U.S. 1, 14-15 (1926); United States v. Ahrens, 530 F.2d 781, 785 (8th Cir. 1976). The presumption of regularity applies to the sending and delivery of letters scheduling conferences between a taxpayer and an appeals officer as part of a section 6320 or 6330 hearing. See Abu-Awad v. United States, 294 F.Supp.2d 879, 888 (S.D. Tex. 2003).
The administrative record reflects that AO Rojas sent the Letter 4837 and the Letter 4000 to petitioner's address. Although we assume arguendo for purposes of deciding respondent's Motion for Summary Judgment that petitioner did not receive the Letters 4837 and 4000, petitioner would need to produce clear evidence sufficient to overcome the presumption of regularity at trial. Petitioner's non-receipt of the letters, without more, would not constitute clear evidence sufficient to demonstrate that AO Rojas failed to send them or otherwise abused her discretion in terminating the section 6320 hearing. Petitioner evidently received the lien notice and the notice of determination, filing its hearing request and its Petition, respectively, shortly afterwards. At a minimum, a description of specific facts tending to support the possibility of an abuse of discretion in mailing the Letters 4837 and 4000, or tending to explain why petitioner may have received certain letters and not others, is needed to raise the possibility of a triable issue. Cf. Rule 121(d). While petitioner might have intended for us to infer the possibility of an abuse of discretion from its failure to receive the Letters 4837 and 4000, petitioner has not provided us with any specific facts concerning the regularity of its process for receiving mail or any other information that would allow us even to consider drawing this inference. Petitioner has failed to show that a genuine issue exists for trial. It is therefore
ORDERED that respondent's Motion for Summary Judgment, filed January 17, 2024, is granted. It is further
ORDERED AND DECIDED that the collection action as determined in the Notice of Determination Concerning Collection Actions under IRS Sections 6320 or 6330 of the Internal Revenue Code, dated July 7, 2023, upon which this case is based, is sustained in full.