Opinion
13602-22L
04-09-2024
TODD SKLAR & KAREN SKLAR, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER AND DECISION
Kathleen Kerrigan Chief Judge
On February 14, 2024, respondent filed a Motion for Summary Judgment. Respondent seeks to sustain a Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330 (notice of determination) dated May 20, 2022. The notice of determination sustained respondent's levy action concerning liabilities from tax years 2008-12 and 2014-15. The Court ordered petitioner to respond to respondent's motion by March 13, 2024. To date the Court has not received a response from petitioner.
There are no genuine issues of material fact in this case and we conclude that respondent is entitled to judgment as a matter of law as provided herein.
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.
Background
The following facts are based on the parties' pleadings and motion papers, including the attached declarations and exhibits. Petitioners resided in Massachusetts when they timely filed their Petition.
Petitioners have outstanding tax liabilities from 2008-2012 and 2014-15. The liabilities for 2008-12 and 2014 total $118,962 and stem from petitioners' joint returns filed for those years with insufficient withholding and/or estimated tax payments. We granted summary judgment for respondent in a prior case relating to the 2008-12 and 2014 liabilities, in which petitioners sought review of respondent's filing of a notice of federal tax lien. With respect to the 2015 liability, petitioners were issued a notice of deficiency determining a deficiency of $6,190 and an accuracy-related penalty of $799 resulting from unreported cancellation of debt and taxable retirement income. Petitioners did not contest the notice of deficiency.
On August 23, 2021, respondent issued to each petitioner a Notice of Intent to Levy and Your Collection Due Process (CDP) Right to a Hearing. On September 29, 2021, petitioners faxed to respondent their Form 12153-C, Request for a Collection Due Process or Equivalent Hearing. Petitioners did not request any available collection alternatives. Petitioner only stated they were unable to pay, requested to negotiate the amount due, and argued that ten years had passed since some of the years in issue. Respondent requested from petitioners financial information supporting their inability to pay the liabilities.
Petitioners' CDP hearing was assigned to a settlement officer who sent petitioners a Letter 4837, Appeals Received Your Request for a Collection Due Process Hearing. That letter scheduled petitioners' CDP hearing for March 15, 2022, and requested they submit documents supporting their assertions that they are unable to pay by March 7, 2022. Petitioners did not submit the requested documents but participated in the CDP hearing. The settlement officer explained that the statute of limitations for collection had not lapsed and extended the date by which petitioners could submit financial documents to March 21, 2022.
Following the hearing, the settlement officer sent petitioners a Last Chance Letter, explaining that if petitioners failed to submit requested financial information by that date a decision would be rendered on the basis of the administrative file. Petitioners again failed to submit the requested documents.
On May 20, 2022, the settlement officer issued to each petitioner a notice of determination sustaining respondent's levy. The appeals officer found the levy was not more intrusive than necessary, verified that all applicable laws and administrative procedures were met, and that no collection alternative was proposed.
Discussion
Summary Judgment Standard
Summary judgment may be granted where the pleadings and other materials show that there is no genuine dispute as to any material fact and that a decision may be rendered as a matter of law. Rule 121(a); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), aff'd, 17 F.3d 965 (7th Cir. 1994). The burden is on the moving party (in this case, respondent) to demonstrate that there is no genuine dispute as to any material fact and that he or she is entitled to judgment as matter of law. FPL Grp., Inc. & Subs. v. Commissioner, 116 T.C. 73, 74-75 (2001). The Court will view any factual inferences in the light most favorable to the nonmoving party. Bond v. Commissioner, 100 T.C. 32, 36 (1993). The nonmoving party may not rest upon mere allegations or denials in his or her pleadings but must set forth specific facts showing there is a genuine dispute for trial. Sundstrand, 98 T.C. at 520.
Standard of Review
Section 6330(d)(1) grants this Court jurisdiction to review administrative determinations made by the IRS Independent Office of Appeals (Appeals). Where the validity of a taxpayer's underlying liability is properly at issue, we review the determination de novo. See Sego v. Commissioner, 114 T.C. 604, 610 (2000); Goza v. Commissioner, 114 T.C. 176, 181-82 (2000). We review all other determinations for abuse of discretion. Hoyle v. Commissioner, 131 T.C. 197, 200 (2008), supplemented by 136 T.C. 463 (2011). In reviewing for abuse of discretion, we will sustain Appeals' determination unless it 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).
The Court may consider a challenge to the underlying liability only if the taxpayer properly raised it during the CDP proceeding before the appeals officer. Giamelli v. Commissioner, 129 T.C. 107, 115 (2007). A taxpayer may challenge the underlying tax liability during a CDP proceeding if the taxpayer did not receive a statutory notice of deficiency for the liability or did not otherwise have the opportunity to dispute the liability. § 6330(c)(2)(B). The liabilities from 2008-12 and 2014 were the subject of a prior collection action that was reviewed by this Court in which petitioners also failed to properly contest the liabilities. With respect to 2015, petitioners did not contest the notice of deficiency. Therefore, we review for abuse of discretion.
Abuse of Discretion
Section 6331(a) authorizes the Secretary to levy upon property and taxpayers' rights to property if a taxpayer is liable for taxes and fails to pay those taxes within 10 days after a notice and demand for payment is made. The Secretary is required to notify the taxpayer in writing of his or her right to a hearing before a levy is made. § 6330(a)(1).
Section 6330(c)(3) requires that the determination of a settlement 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. § 6320(c); see also Lunsford v. Commissioner, 117 T.C. 183, 184 (2001).
Petitioner has not disputed that the settlement officer made the proper verifications or considered all of the issues she raised. Regardless, our review of the record indicates that the appeals officer confirms that the settlement officer properly discharged all of her responsibilities under the applicable provisions, and, therefore, did not abuse her discretion. Petitioners merely stated they could not pay, that significant time had passed since the tax years in issue, and did not seek a collection alternative. The settlement officer confirmed that the statute of limitations had not lapsed, that the asserted penalties were properly approved, and made multiple requests for information to assess petitioners' ability to pay. See Pough v. Commissioner, 135 T.C. 344, 351 (2010) (finding no abuse of discretion where notice of determination sustaining respondent's collection action issued after taxpayers failed to provide information required to assess their ability to pay).
Finding no abuse of discretion we will grant respondent's Motion.
Upon due consideration, it is ORDERED that respondent's Motion for Summary Judgment dated February 14, 2024, is granted.
ORDERED and DECIDED that respondent's notice of determination dated May 20, 2022, upon which this case is based, is sustained.