Opinion
9840-23SL
09-05-2024
MICHAEL R. SMITH, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER AND DECISION
Jennifer E. Siegel, Special Trial Judge.
Petitioner filed the Petition to commence this case on June 21, 2023. In his Petition, he alleges assignments of error that largely pertain to his concerns about his liability for a tax debt now the subject of a proposed levy. The matter is before the Court on respondent's Motion for Summary Judgment, filed July 9, 2024. In his opposition to respondent's motion filed August 8, 2024, petitioner clarifies that "the errors or abuse in discretion really boil down to what happened prior to 2015." None of that, however, is properly before the Court, and, for the reasons discussed below, we will grant respondent's motion.
I. Background
Petitioner failed to file a federal income tax return for 2012. The Internal Revenue Service (IRS) prepared a substitute for return reflecting cancellation of indebtedness income. See §§ 61(a)(12), 6020(b). On June 22, 2015, the IRS issued him a Notice of Deficiency. He did not petition this Court. In due course, respondent assessed the amounts determined in the Notice of Deficiency.
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.
Respondent sent petitioner a notice of intent to levy. In response, petitioner filed a request for a collection review hearing. In his request, and as relevant here, petitioner wrote that he was challenging "the appropriateness of the proposed collection action" and sought to dispute the underlying liability.
At petitioner's request, a hearing with respondent's Independent Office of Appeals (Appeals Office) was conducted by mail. The settlement officer determined that petitioner was precluded from disputing the underlying liability. Petitioner offered no collection alternatives. Ultimately, the settlement officer sustained the proposed levy and issued a Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330 dated May 23, 2023.
After the case came before the Court, and to ensure that all procedural requirements had, in fact, been met, the case was remanded to respondent's Appeals Office. During the remand, petitioner was again offered the opportunity to pursue collection alternatives; petitioner did not provide the financial information requested. A supplemental notice of determination sustaining the proposed levy was issued on April 18, 2024.
II. Discussion
Summary judgment serves to "expedite litigation and avoid unnecessary and expensive trials." Fla. Peach Corp. v. Commissioner, 90 T.C. 678, 681 (1988). We may grant summary judgment when there is no genuine dispute of material fact and a decision may be rendered as a matter of law on all or any part of the legal issues in controversy. Rule 121(a); 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 facts and make inferences in a light most favorable to the nonmoving party. Sundstrand, 98 T.C. at 520. The nonmoving party must set forth specific facts showing there is a genuine dispute for trial. Rule 121(d); see also Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986).
As relevant here, a taxpayer may raise a challenge to the existence or amount of his underlying tax liability in a collection proceeding only if the taxpayer "did not otherwise have an opportunity to dispute such tax liability." § 6330(c)(2)(B). Petitioner had a prior opportunity to contest his tax liabilities for 2012 when he received the Notice of Deficiency. Regardless of the reasons therefore, he chose not to petition the Court and is precluded from disputing his tax liability as part of the collection proceeding. Giamelli v. Commissioner, 129 T.C. 107 (2007).
When the underlying liability is not at issue, we review collection determinations for an abuse of discretion. Goza v. Commissioner, 114 T.C. 176, 182 (2000). An abuse of discretion occurs if the Appeals Office exercises its discretion "arbitrarily, capriciously, or without sound basis in fact or law." Woodral v. Commissioner, 112 T.C. 19, 23 (1999).
Petitioner was offered the opportunity to discuss collection alternatives in both his original collection review hearing and in the supplemental hearing held during the pendency of this case. He was not current with his tax filing obligations, and he failed to submit the requested financial information needed to support a collection alternative. See Giamelli v. Commissioner, supra, 129 T.C. at 114-115; Magana v. Commissioner, 118 T.C. 488, 493 (2002); see also Kindred v. Commissioner, 454 F.3d 688, 696 (7th Cir. 2006) (explaining that it is not an abuse of discretion for the Appeals Office to decline to consider a collection alternative where no specific proposal is ever placed before the reviewing officer). On this record, we find no abuse of discretion.
III. Conclusion
We have considered all other arguments and materials presented by petitioner in reaching our conclusion, and, to the extent not discussed, they are moot, irrelevant, or without merit. They do not change our conclusion that there is no dispute as to a material fact and that respondent is entitled to judgment as a matter of law in this case.
Upon due consideration of the foregoing, it is ORDERED that respondent's Motion for Summary Judgment is granted. It is further
ORDERED AND DECIDED that respondent's notice of determination, as supplemented, is sustained and respondent may proceed with the proposed levy.