Opinion
21152-21SL
08-26-2022
NATHAN PAUL PIERCE, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER AND DECISION
Joseph W. Nega, Judge.
This collection due process (CDP) case is currently calendared for trial at the session of the Court to be conducted in person commencing on Tuesday, September 6, 2022, in Fresno, California. On July 8, 2022, respondent filed a Motion for Summary Judgment (respondent's motion) and accompanying Declaration of Simarjit K Singh in Support of Motion for Summary Judgment.
By Order issued July 12, 2022, the Court directed petitioner to file a response to respondent's motion on or before August 12, 2022. As of the date of this Order, petitioner has not filed a response to respondent's motion. The Court could grant respondent's motion on that ground alone. See Rule 121(d). Nevertheless, the Court has considered the motion on its merits and concludes that there are no genuine issues of material fact in dispute and that respondent is entitled to judgment as a matter of law.
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.
I. Background
The following facts are drawn from the parties' pleadings and motion papers, including the attached declarations and exhibits. See Rule 121.
As a preliminary matter, petitioner listed his address on the Petition to commence this case as a PO Box in Redcrest, CA, and such address remains petitioner's address of record in this proceeding. Notably, at all relevant times prior to the filing of the Petition, such address was also petitioner's mailing address. Thus, all written communications sent by respondent to petitioner that are contained in the administrative record uniformly utilized such address. Petitioner listed such address on his Form 12153, Request for a Collection Due Process or Equivalent Hearing (Form 12153) sent to the Internal Revenue Service (IRS). Likewise, petitioner listed his telephone number on both the petition and the Form 12153; this was the only telephone number for petitioner contained in the administrative record.
Respondent issued to petitioner a Letter 3172, Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320 (NFTL), dated March 10, 2020, advising petitioner that a notice of federal tax lien had been filed with respect to his unpaid tax liabilities for tax year 2015.
On April 10, 2020, petitioner submitted a Form 12153, which was received by respondent on April 14, 2020. On the form, petitioner checked boxes for "Offer in Compromise" and "I Cannot Pay Balance" as collection alternatives. Petitioner additionally noted that he was "dealing with family and mental health issues" over the preceding five years, that he is "unemployed and unable to pay" his tax liability, and that he owes "$50,000 in defaulted student loans."
Respondent's Fresno ACS Office sent to petitioner a Letter 3884C, dated August 20, 2020, advising petitioner that respondent had received his Form 12153 and that respondent had attempted to contact petitioner by telephone to discuss possible alternatives to a hearing. The letter further advised that respondent had not received a completed Form 656, Offer in Compromise, and encouraged petitioner to submit either Form 433-F, Collection Information Statement, or Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals.
On September 11, 2020, respondent's Fresno ACS Office sent to petitioner a Letter 4473C, informing him that respondent had received his request for a Collection Due Process (CDP) Hearing and was forwarding it to the IRS Independent Office of Appeals (Office of Appeals).
Petitioner's hearing request was assigned to Settlement Officer Singh (SO Singh) in the Office of Appeals. On January 5, 2021, SO Singh issued to petitioner a Letter 4837, which scheduled a telephonic conference for February 4, 2021 (CDP hearing notice). In the CDP hearing notice, SO Singh proposed a streamlined installment agreement in the amount of $318.00 per month, until the tax liability was paid in full. SO Singh requested that petitioner complete Forms 656 and 433-A, advising that he "could not consider collection alternatives without the information requested." SO Singh also stated in relevant part that "[f]inancial documents are not required if you accept the proposed installment agreement."
Petitioner did not attend the CDP Hearing scheduled for February 4, 2021. SO Singh attempted to reach petitioner via petitioner's listed phone number at the scheduled date and time to conduct the hearing but was not able to make contact, and petitioner's voicemail box was full. Petitioner had not previously indicated that the date and/or time of the scheduled hearing were not convenient. SO Singh noted that no other phone numbers were available to reach petitioner.
Respondent issued Letter 4000, dated February 8, 2021, to petitioner. Therein, SO Singh referenced the February 4, 2021 CDP Hearing that petitioner failed to attend. SO Singh requested that petitioner contact respondent within 14 days of the letter date. The letter afforded petitioner another opportunity to provide information and informed petitioner that, after those 14 days passed, the Office of Appeals would make a determination based on the administrative file and any information provided.
On April 19, 2021, SO Singh made the determination to sustain the collection action. At that time, SO Singh noted that he had still received no response from petitioner. On May 7, 2021, respondent sent to petitioner a Notice of Determination Concerning Collection Action Under IRC Sections 6320 or 6330, (notice of determination), sustaining the NFTL. The notice of determination stated in relevant part that petitioner had failed to provide the requested information and documentation for a collection alternative.
On June 9, 2021, petitioner filed a Petition with this Court. In the Petition, petitioner alleged that he "never received" the CDP hearing notice and stated that he was "bombarded" by phone and mail scams, rendering him "unable to trust" the mail. Petitioner also stated that he "cannot afford" to make monthly payments in the amount of $318.00 (the streamlined installment agreement amount determined and proposed by respondent).
II. Discussion
A. Summary Judgment Standard
The purpose of summary judgment is to expedite litigation and avoid costly, time-consuming, and unnecessary trials. Fla. Peach Corp. v. Commissioner, 90 T.C 678, 681 (1998). 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). In deciding whether to grant summary judgment, we construe factual materials and draw inferences from them in the light most favorable to the nonmoving party. Sundstrand Corp., 98 T.C. at 520. However, the nonmoving party may not rest upon mere allegations or denials of his pleadings but, rather, must set forth specific facts showing that there is a genuine dispute for trial. Rule 121(d); see Sundstrand Corp., 98 T.C. at 520.
B. Standard of Review
Section 6330(d)(1) grants this Court jurisdiction to review the SO's determination in connection with a CDP hearing. Section 6330(c)(2) prescribes the matters that a taxpayer may raise at a CDP hearing, including spousal defenses, challenges to the appropriateness of the collection action, and collection alternatives. The existence or amount of the underlying tax liability may be contested at a CDP hearing only if the taxpayer did not receive a notice of deficiency or did not otherwise have an opportunity to dispute the tax liability. See § 6330(c)(2)(B); Sego v. Commissioner, 114 T.C. 604, 609 (2000); Goza v. Commissioner, 114 T.C. 176, 180- 81 (2000).
If the validity of the underlying tax liability is properly at issue, the Court will review the taxpayer's liability de novo. See Sego, 114 T.C. at 609-10. Where the validity of the underlying tax liability is not properly at issue, the Court will review the SO's administrative determination for abuse of discretion. Id. at 610. Abuse of discretion exists when a determination is arbitrary, capricious, or without sound basis in fact or law. Murphy v. Commissioner, 125 T.C. 301, 320 (2005), aff'd, 469 F.3d 27 (1st Cir. 2006).
Petitioner's underlying liability is not at issue in this proceeding. We thus review respondent's determination only for abuse of discretion.
C. Abuse of Discretion
We must determine whether SO Singh's decision sustaining the NFTL in lieu of other collection alternatives was an abuse of his discretion. Section 6330(c)(3) requires that the SO consider (1) the verification that the requirements of applicable law and administrative procedure have been met; (2) issues raised by the taxpayer; and (3) whether any proposed collection action balances the need for the efficient collection of taxes with the legitimate concern of the person that any collection be no more intrusive than necessary. Thompson v. Commissioner, 140 T.C. 173, 178-79 (2013).
In reviewing the determination, we do not substitute our judgment for that of the SO or make an independent determination of what would be an acceptable collection alternative. Id. at 179. If the SO "followed all statutory and administrative guidelines and provided a reasoned, balanced decision," we "will not reweigh the equities." Id.
1. Verification and Balancing Obligations
First, we briefly address whether SO Singh satisfied his obligations (1) to verify that the requirements of applicable law and administrative procedure were met and (2) to consider whether the proposed collection action balanced the need for the efficient collection of taxes with the concern that the collection be no more intrusive than necessary. We are satisfied that he did so.
Petitioner does not allege in his petition that SO Singh failed to properly verify that the requirements of applicable law or administrative procedure had been met. Thus, petitioner has conceded this issue. See Rule 331(b)(4); see also Dinino v. Commissioner, T.C. Memo. 2009-284, 2009 WL 4723652, at *7 (citing Rule 331(b)(4) for the proposition that the Court is required to consider the verification requirement under § 6330(c)(1) only if the taxpayer has adequately raised the issue in his petition).
Nevertheless, our review of the record establishes that SO Singh properly verified that the requirements of applicable law or administrative procedure were followed. In both his case activity notes and the notice of determination, SO Singh documented that he verified: (1) that assessment was properly made for tax year 2015; (2) that notice and demand was mailed to petitioner's last known address; (3) that a balance was due and owing when the notice of intent to levy was issued; and (4) that SO Singh had no prior involvement with respect to tax year 2015.
Likewise, in the notice of determination, SO Singh documented that he had conducted a balancing analysis and concluded that sustaining the NFTL was appropriate given petitioner's "failure to propose any collection alternatives." Accordingly, we find that SO Singh complied with § 6330(c)(1) and (3).
2. Collection Alternatives
In his Form 12153, petitioner checked the boxes for "Offer in Compromise" and "I Cannot Pay Balance" as collection alternatives. We do not ordinarily hold it an abuse of discretion for an SO to decline to consider a collection alternative when the taxpayer has failed to respond or submit requested financial information in a timely manner. See, e.g., Terry v. Commissioner, T.C. Memo. 2016-88, at *9 (no abuse of discretion in closing case where taxpayer failed to respond to installment agreement proposed by SO); Shanley v. Commissioner, T.C. Memo. 2009-17, 2009 WL 195929 at *5; Prater v. Commissioner, T.C. Memo 2007-241, 2007 WL 2389549, at *2; Chandler v. Commissioner, T.C. Memo. 2005-99, 2005 WL 1077491, at *3; Roman v. Commissioner, T.C. Memo. 2004-20, 2004 WL 157817, at *5. Petitioner has not advanced any argument or set forth any specific facts that would allow us to conclude that the Office of Appeals erred in its determination.
Rather, the record shows that SO Singh-and prior to him, the ACS Office- requested that petitioner submit Forms 656 and 433-A for respondent to consider collection alternatives. Petitioner had ample opportunity to submit his financial information but did not do so. SO Singh's determination to sustain the NFTL was not an abuse of discretion under these circumstances. See Giamelli v. Commissioner, 129 T.C. 107, 115-116 (2007); Tucker v. Commissioner, T.C. Memo 2014-103, at *29- 30; see also Pough v. Commissioner, 135 T.C. 344, 351 (2010) ("[W]hen an Appeals officer gives a taxpayer an adequate timeframe to submit requested items, it is not an abuse of discretion to move ahead if the taxpayer fails to submit the requested items."); Treas. Reg. § 301.6330-1(d)(2).
3. Notice to Petitioner
Petitioner's unsupported allegation that he failed to receive the CDP hearing notice (or otherwise disregarded such notice on the belief that it was not genuine correspondence from respondent) is insufficient to create a material fact issue that would defeat summary judgment. Rule 121(d) generally requires that a party opposing summary judgment "set forth specific facts showing that there is a genuine dispute for trial." Petitioner has failed to elaborate on his bare allegation in the Petition that he did not receive the CDP hearing notice, nor has he produced an affidavit or declaration supporting the allegation and establishing a genuine dispute with respondent's supported allegations. See, e.g., Rosenberg v. Commissioner, T.C. Memo. 2019-52, at *17 (petitioner's unsupported allegation that he did not receive mail or phone calls from the Commissioner did not constitute a fact issue). Consequently, petitioner has failed to carry his burden under Rule 121(d) of establishing the existence of a fact issue.
Further, even if petitioner had established a fact issue, we are not convinced that the alleged non-receipt would be sufficiently material as to whether SO Singh's determination was an abuse of discretion. Following petitioner's failure to appear at the CDP Hearing, SO Singh contacted petitioner both by letter and by attempted telephone call, and he waited more than two additional months after the letter's issuance before closing the case, with no contact from petitioner. Cf. McAvey v. Commissioner, T.C. Memo. 2018-142, at *18 (no abuse of discretion where settlement officer issued notice of determination after setting deadline and twice attempting to contact petitioner's representative); Scholz v. Commissioner, T.C. Memo. 2015-2, at *8 ("When an SO gives a taxpayer an adequate period of time in which to respond, it is not an abuse of discretion for the SO to move ahead after encountering radio silence from the taxpayer."); Shanley v. Commissioner, 2009 WL 195929, at *5-7 (no abuse of discretion where appeals officer closed case after taxpayer failed to timely respond to a 14-day deadline). SO Singh was under no obligation to wait indefinitely for petitioner, and the issuance of the notice of determination after failing to hear from petitioner was not an abuse of discretion. See Pough, 135 T.C. at 351.
III. Conclusion
In sum, petitioner has failed to set forth specific facts, by affidavit or otherwise, showing that there is a genuine dispute of fact. See Rule 121(d). After carefully reviewing the administrative record in support of respondent's motion, we see no basis to conclude that SO Singh abused his discretion in any respect in sustaining the NFTL. Finding no abuse of discretion, we conclude that respondent is entitled to judgment as a matter of law.
Upon due consideration and for cause, it is ORDERED that respondent's Motion for Summary Judgment, filed July 8, 2022, is granted. It is further
ORDERED AND DECIDED that the Notice of Determination Concerning Collection Action Under IRC Sections 6320 or 6330, dated May 7, 2021, upon which this case is based, is sustained, and respondent may proceed with the collection actions as determined in the Notice of Determination for the tax year 2015.