Opinion
7243-21L
02-10-2023
REVENUE GUARD MEDICAL CLAIMS MANAGEMENT, L.L.C., Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER OF DISMISSAL
Diana L. Leyden Special Trial Judge
On June 28, 2021, respondent filed a Motion to Dismiss on Ground of Mootness (respondent's motion), to which petitioner filed an Objection on July 15, 2021 (petitioner's objection). Petitioner filed a Motion for Judgment on the Pleadings on August 5, 2021 (petitioner's motion), to which respondent filed a Notice of Objection on July 5, 2022 (respondent's objection).
By order served September 19, 2022, respondent's motion and petitioner's motion were assigned to the undersigned for disposition. On September 28, 2022, the Court held a conference call with the parties. In response to the Court's orders, served September 30, 2022, and October 19, 2022, petitioner filed a Reply to Motion for Judgment on the Pleadings on October 26, 2022 (reply).
The Court held a remote hearing on December 7, 2022, on respondent's motion and petitioner's motion. By Order served December 8, 2022, the Court took both motions under advisement and directed the parties to file memoranda of law on or before February 6, 2023. Both petitioner and respondent filed separate memorandums of law on February 6, 2023.
Background
On October 9, 2019, the Internal Revenue Service (IRS) issued a Final Notice - Notice of Intent to Levy and Notice of Your Right to a Hearing Under 6320 and/or Section 6330. Petitioner filed a timely request for a Collection Due Process (CDP) hearing with the IRS Office of Appeals (Appeals Office) pursuant to section 6330(b)(1) and disputed the validity of the notice of deficiency that had been issued by the IRS with respect to petitioner's Form 1120 for the taxable year ending December 31, 2015 (tax year 2015).
The Court uses the term "IRS" to refer to administrative actions taken outside of these proceedings. The Court uses the term "respondent" to refer to the Commissioner of Internal Revenue, who is the head of the IRS and is respondent in this case, and to refer to actions taken in connection with this case.
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.
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 Office.
The Appeals Office issued a notice of determination which is far from clear and contains some contradictory statements. However, the parties agree that the Appeals Office determined that the notice of deficiency had been issued to an invalid address and determined that the assessed deficiency should be abated and the proposed levy should not be sustained. Further, the Appeals Office submitted a Request for Adjustment to have the underlying tax, additions to tax and/or penalties and interest abated for the tax year in issue and they were abated. Still further, the IRS withdrew a federal tax lien that had been filed for the tax year in issue.
On March 3, 2021, petitioner timely filed a Petition for Lien or Levy Action Under Code Section 6320(c) or 6330(d).
Discussion
I. Parties' Position on Respondent's Motion to Dismiss on Ground of Mootness
Respondent in respondent's motion asserts that because the Appeals Office Appeals Officer (AO) determined that the notice of deficiency with respect to 2015 was invalid, abated the underlying tax, additions to tax and/or penalties, and interest, did not sustain the proposed levy, and withdrew the filed federal tax lien. Because there is not any remaining unpaid liability and respondent is no longer pursuing the proposed collection action, this case is moot and it must be dismissed on the ground of mootness. See Greene-Thapedi v. Commissioner, 126 T.C. 1, 6-7 (2006).
Petitioner in its objection contends that it raised at the CDP hearing the issue of the statute of limitations on assessment having expired for tax year 2015 and because the AO did not make a determination as to that issue the case should not be dismissed as moot.
II. Parties' Position on Petitioner's Motion for Judgment on the Pleadings
Petitioner in petitioner's motion requests that the Court determine that (a) no valid Notice of Deficiency was ever issued to it, (b) the Final Notice and Notice of Intent to Levy are void, and (c) the statute of limitations for any assessment for tax year 2015 has expired. Respondent in respondent's objection contends that as to (a) and (b) those issues were resolved at the CDP hearing. As to (c) respondent contends that the Court is not permitted in a CDP proceeding to determine a deficiency or to hold that the assessment statute of limitations has expired.
III. The case will be dismissed as moot
After considering the parties' motions and objections the Court agrees with respondent that the case must be dismissed on ground of mootness and disagrees with petitioner that the issue of the statute of limitations on assessment is properly in issue.
Whether the statute of limitations on assessment has expired goes beyond deciding whether the Appeals Office abused its discretion in making its determination. In both Giamelli v. Commissioner, 129 T.C. 107 (2007), and Hoyle v. Commissioner, 131 T.C. 197 (2008), the Court emphasized that the scope of judicial review is limited by the scope of administrative review.
In the instant case if, as petitioner hypothesizes, the IRS were to issue another notice of deficiency for the tax year ending December 31, 2015, petitioner would have the right to challenge such notice of deficiency by timely filing a petition with the Court and raise the issue of the statute of limitations on assessment. Thus, in contrast to the taxpayer in Vigon v. Commissioner, 149 T.C. 97 (2017), petitioner would be able to avail itself of the deficiency procedures. This case is more analogous to Frieje v. Commissioner, 125 T.C. 14, (2005), in which the Court held that an invalid assessment due to the failure to issue a notice of deficiency cannot be cured by allowing the taxpayer to dispute the deficiency in a Court CDP proceeding. Id. at 36; see also Hoyle v. Commissioner, 131 T.C. at 205.
Petitioner's argument against granting respondent's motion is premised on unsupported concerns that the IRS may still try to determine and assess liabilities against petitioner for the tax year in issue. The Court does not have any statutory authority to act on hypothetical concerns. What the IRS did-issuing an invalid notice of deficiency, assessing tax, additions to tax, penalties, and interest, proposing a levy, and filing a federal tax lien-has been reversed. The notice of deficiency that had been issued was determined to be invalid, the tax, additions to tax, penalties, and interest were abated, and the federal tax lien was withdrawn. There is not any current action by the IRS that the AO did not consider or that can be considered by the Court.
Upon due consideration, it is
ORDERED that petitioner's Motion for Judgment on the Pleadings, filed August 5, 2021, is denied. It is further
ORDERED that respondent's Motion to Dismiss on Ground of Mootness filed June 28, 2021, is granted and this case is dismissed as moot.