Opinion
Civil Action No. 02-356
December 13, 2002
Suzanne Diehl Stewart (pro se), Greensburg, PA, for plaintiff's
U.S. Attorney's Office, Attn: Paul E. Skirtich, Esq., AUSA, for defendant
OPINION and ORDER OF COURT SYNOPSIS
Pending is a Motion for summary Judgment filed by Defendant, the Internal Revenue Service ("IRS"). (Docket No. 7). Pro Se Plaintiff, Suzanne Diehl Stewart, t/d/b Diehl Moving and Storage ("Stewart"), filed a Brief in Opposition. (Docket NO. 9). The IRS filed a Reply. (Docket NO. 10). Based on my Opinion set forth below, said Motion (Docket NO. 7) is granted.
I. BACKGROUND
In May of 2001, the IRS sent to Plaintiff a Final Notice of Intent to Levy and a Notice of Federal Tax Lien for unpaid employment tax liabilities assessed for all four quarters of 1998. See, Vezdel Decl., ¶ 3-4. On June 16, 2001, Plaintiff filed a request for a collection due process hearing regarding the same. Id. at ¶ 5. In April of 2001, the IRS sent to Plaintiff a Final Notice of Intent to Levy and a Notice of Federal TAX Lien for unpaid employment tax liabilities assessed for the third quarter of 2000. See, Vezdel Decl., ¶¶ 6-7. On May 24, 2001, Plaintiff filed a request of a collection due process hearing regarding the same. Id. at ¶ 8. In May of 2001, the IRS sent to Plaintiff a Final Notice of Intent to Levy and a Notice of Federal Tax Lien for unpaid employment tax liabilities assessed for the fourth quarter of 2000. See, Vezdel Decl., ¶¶ 9-10. On June 14, 2001, Plaintiff filed a request of a collection due process hearing regarding the same. Id. at ¶ 11. All three requests for hearings raised the same defense: that the employment taxes due had been paid, but credited incorrectly and as a result the penalties and interest were incorrect. Id. at ¶ 12.
IRS Appeals Officer Lois Vezdel was assigned to conduct the collection due process hearing for all three requests. Id. at ¶ 13. Vezdel had no prior involvement with the outstanding penalties which were the subject of the proposed levy against Plaintiff. Id. Vezdel responded to Plaintiff's request for a hearing by letter and by telephone. Id. at ¶ 14. on September 4, 2001, Vezdel held a telephonic collection due process hearing, which was attended by Esther Diehl, the representative of Plaintiff. Id. at ¶ 15. During the hearing, Ms. Vezdel agreed to send Plaintiff current IRS transcripts for her to review, so that any potential error with the application of payments could be identified. Id. at ¶ 16. The transcripts were sent in September of 2001.
Vezdel followed up twice with Plaintiff by correspondence dated October 26, 2001 and November 29, 2001, but Plaintiff did not respond as requested. Id. at ¶ 17. Vezdel also attempted to contact Plaintiff by telephone on November 26, 2001, but received no response. Id. at ¶ 18. Based on Plaintiff's failure to respond and charged with the duty to make a determination, Vezdel determined that the issuance of a notice of levy and the filing of federal tax liens were not improper and were commensurate with the need to collect revenue. Id. at ¶ 19. To that end, Vezdel prepared an Appeals case Memorandum prior to the issuance of the Notice of Determination. Id. at ¶ 20. On January 17, 2002, the Appeals Office mailed Plaintiff the Notice of Determination, which was based on Vezdel's recommendation and evaluation of the appeals hearing. Id. at ¶ 22. over a month after the Notice of Determination was mailed to Plaintiff, Plaintiff responded to the transcripts and requested to meet to resolve the issues. Id. at ¶ 23.
On February 14, 2002, pursuant to 26 U.S.C. § 6330 (d), Plaintiff filed this action seeking judicial review of the IRS's collection due process hearing determination regarding unpaid federal employment taxes for all four quarters of 1998 and the third and fourth quarters of 2000. On October 15, 2002, the IRS filed a Motion for summary Judgment arguing that there is no genuine issue of material fact remaining and that there was no abuse of discretion by the Appeals Officer. (Docket NO. 7). Plaintiff filed a Brief in Opposition. (Docket NO. 9). IRS filed a Reply. (Docket No. 10). The case is now ripe for review.
II. LEGAL ANALYSIS
Since this is an employment tax matter, jurisdiction is proper in this court. See, 26 U.S.C. § 6330 (d)(1)(B) and 67 Fed. Reg. § 301.6330-1(f)QAF3 (January 18, 2002).
A. Scope of Review
Section 6330 of the internal Revenue code, which provides for a pre-levy hearing and judicial review of the administrative determination made following that hearing was added to the internal Revenue Code by § 3401 of the IRS Restructuring and Reform Act of 1998, 112 Stat. 685, 747-49. 26 U.S.C. § 6330. While § 6330(d) provides for a judicial review of a determination of the collection hearing made pursuant to a § 6330, § 6330 does not set forth a scope of review. The Third Circuit had not yet ruled upon the type of review to be applied in these cases. Legislative history, however, is instructive, it indicates that only where the validity of the underlying tax liability is at issue should the scope of review be de novo. Otherwise, the scope of review should be abuse of discretion. H.R. Conf. Rep. NO. 105-599, at 266 (1998); see also, Gillett v. United States of America, 2002 WL 31409592, No. 5:01-CV-104 (W.D. Mich. Sept. 20, 2002); Uveges v. United States of America, 2002 WL 31476651, No. CV-S-0101348RLH LRL (D. Nev. Sept. 16, 2002). in this case, the underlying tax liability is not at issue. As a result, I will apply the abuse of discretion scope of review.
Under an abuse of discretion review, the determination should be affirmed unless I find with a "definite and firm conviction that a clear error of judgment has district court's decision rests upon a clearly erroneous finding of fact, an errant conclusion of law, or an improper application of law to fact." American Civil Liberties Union of New Jersey v. Black Horse Pike Regional Bd. of Educ., 84 F.3d 1471, 1476 (3d Cir. 1996), quoting, international Union, UAW v. Mack Trucks, Inc., 820 F.2d 91, 95 (3d (Cir. 987).
B. Requirements of § 6330
In 1998, congress enacted § 6330 as part of the IRS Restructuring and Reform Act of 1998. 26 U.S.C. § 6330. The statute dictates that prior to the issuance of a tax levy, the IRS must provide the taxpayer with notice of an opportunity for a collection due process hearing before the IRS Office of Appeals. 26 U.S.C. § 6330 (a), (b). At the hearing, the appeal officer is required to obtain verification from the Secretary that the requirements of any applicable law or administrative procedure have been met. 26 U.S.C. § 6330 (C)(1). in addition, the taxpayer has the opportunity at the hearing to raise any relevant issue. 26 U.S.C. § 6330 (c)(2). The determination is to be based on: 1) the aforementioned verification; 2) the issues raised by the taxpayer; and 3) the proper balance between the need for efficient tax collection and the legitimate concern that any collection action be no more intrusive than necessary. 26 U.S.C. § 6330 (c)(3). Within thirty (30) days after the issuance of the determination, the taxpayer may appeal the determination to the United States Tax court, or if the Tax court does not have jurisdiction of the underlying tax liability, to a United States District Court. 26 U.S.C. § 6330 (d)(1).
Here, the Notice of Determination indicates that Vezdel complied with all of the applicable laws and procedures. See, Exhibit O. Specifically, the Notice of Determination reflects that the requirements regarding notice to the taxpayer, the taxpayer's opportunity to raise all relevant issues at a hearing, and the absence of any prior involvement by Vezdel were all in compliance with 26 U.S.C. § 6330. In response, however, Plaintiff essentially contends the determination is in error because she paid all of the employment taxes, but that they were credited incorrectly and as a result she was inappropriately charged interest and penalties. I disagree. The record reflects that Vezdel attempted to do everything in her power to aid Plaintiff in supporting her argument, but that Plaintiff simply did not respond to her requests. In particular, at the telephonic hearing, Plaintiff advanced this argument, but did not supply any supporting documents. As a result, Vezdel mailed the current IRS transcripts to her for review, so that any potential error with the application of payments could be identified. Vezdel Dec. at ¶ 16. The transcripts were sent in September of 2001. Despite repeated attempts to contact Plaintiff for supporting documentation, Plaintiff failed to introduce any evidence on her behalf. Id. at ¶ 17-18. Thus, Vezdel was forced to prepare an Appeals Case Memorandum based upon the record before her. On January 17, 2002, the Appeals Office mailed Plaintiff the Notice of Determination, which was based on Vezdel's recommendation and evaluation of the appeals hearing. Id. at ¶ 22. consequently, I find that Plaintiff was afforded the proper opportunity to support her position and failed to do so in a timely manner.
Plaintiff attempts to provide this Court with supporting documentation that was not provided to Vezdel. As noted above, however, my review is limited to determining whether the appeals officer, Vezdel, abused her discretion and failed to meet the requirements of 26 U.S.C. § 6330(c). Therefore, said documents do not aid me in this review.
After a review of the record, I find the decision of Vezdel to be reasonable. There is no evidence of error by Vezdel that would support a finding of abuse of discretion. Therefore, I find that the requirements of § 6330 were met and there is no evidence that Vezdel abused her discretion. According, Defendant is entitled to summary judgment.
ORDER OF COURT
AND NOW, this 13th day of December, 2002, after careful consideration of the submissions of the parties and for the reasons set forth in the accompanying Opinion, it is ordered that Defendant's Motion for Summary Judgment (Docket No. 7) is granted.
The clerk shall mark this case "CLOSED" forthwith.