The opinion
T.C. Summary Opinion 2005-37
UNITED STATES TAX COURT
LIONEL BROWN, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 7461-04S. Filed March 30, 2005.
Lionel Brown, pro se.
Mindy S. Meigs, for respondent.
DEAN, Special Trial Judge: This case was heard pursuant to
the provisions of sections 6330(d) and 7463 of the Internal
Revenue Code in effect at the time that the petition was filed.
The decision to be entered is not reviewable by any other court,
and this opinion should not be cited as authority.
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This proceeding arises from a petition for judicial review
filed in response to a Notice of Determination Concerning
Collection Action(s) Under Section 6320 and/or 6330 (notice of
determination) sent to petitioner. Pursuant to section 6330(d),
petitioner seeks review of respondent’s determination to proceed
with collection of his income tax liabilities for 1997 and 2000.
The issue for decision is whether respondent’s Appeals officer
abused her discretion in sustaining a proposed levy to collect
petitioner’s unpaid income tax liabilities for 1997 and 2000.
The stipulation of facts and the exhibits received into
evidence are incorporated herein by reference. Petitioner
resided in Glendora, California, at the time the petition was
filed.
Background
Petitioner timely filed a Form 1040, U.S. Individual Income
Tax Return, for 1997 reflecting a tax liability of $7,135, but
failed to pay the liability in full. Respondent assessed the tax
as well as an addition to tax for failure to pay tax of $7.32
and credited petitioner’s account for Federal withholding taxes
of $4,449. Including interest, petitioner’s outstanding tax
liability for 1997 was $2,532.61 as of the date of the Notice of
Intent to Levy. Petitioner has not made any other payments
toward his liability for 1997.
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Petitioner timely filed a Form 1040 for 2000 reflecting a
tax liability of $11,976, but he failed to pay the liability in
full. Respondent assessed the tax as well as an addition to tax
for failure to pay tax of $8.80 and credited his account for
Federal withholding taxes of $10,215. Respondent also credited
$500 to petitioner’s account for the Immediate Tax Relief Credit
on August 6, 2001. Including interest, petitioner’s outstanding
tax liability for 2000 was $1,635.36 as of the date of the Notice
of Intent to Levy. Petitioner has not made any other payments
toward his liability for 2000.
Respondent mailed to petitioner a Final Notice of Intent to
Levy and Notice of Your Right to a Hearing, that, among other
things, informed petitioner that respondent intended to levy to
collect the 1997 and 2000 liabilities and that petitioner could
request a hearing with respondent’s Appeals Office. Petitioner
submitted a timely Form 12153, Request for a Collection Due
Process Hearing (hearing).
1. Petitioner’s Hearing
Respondent’s Appeals Officer, Janet E. Spaulding (Ms.
Spaulding), held a hearing with petitioner via telephone. During
the hearing, petitioner requested that Ms. Spaulding consider the
1988, 1998, and 1999 tax years, in addition to 1997 and 2000.
Ms. Spaulding informed petitioner that she could not
consider the 1988 year because a lien for that year was filed in
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1995. She could not consider the 1998 and 1999 years because
petitioner had previously received a hearing for those years in
September 2001.
During the hearing, petitioner also requested that Ms.
Spaulding consider collection alternatives to the proposed levy.
They discussed an installment agreement, but petitioner said he
could not afford the payments because he had been suspended from
his teaching position and was unemployed at the time. Ms.
Spaulding also discussed an offer in compromise, but petitioner
said he did not believe that it was a viable option because
several offers he had submitted in the past had been rejected and
he did not have the funds to submit another offer in compromise.
The final option Ms. Spaulding discussed with petitioner was
placing his account in “currently not collectible” status. In
order to facilitate this classification, Ms. Spaulding asked
petitioner to complete and submit a Form 433-A, Collection
Information Statement for Wage Earners and Self-Employed
Individuals. She also requested a statement from his employer
that he was not currently working for them and bank statements to
verify his income.
On at least four separate occasions, Ms. Spaulding requested
that petitioner complete and submit the forms. Petitioner did
not submit the completed documentation.
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Respondent issued to petitioner a notice of determination
that sustained the proposed use of a levy to collect petitioner’s
unpaid Federal income tax liabilities for taxable years 1997 and
2000. In the notice of determination, respondent concluded that
petitioner had not verified that he qualifies for currently not
collectible status or any other type of collection alternative.
2. The Petition and Motion
Petitioner submitted to this Court a timely petition
appealing respondent’s determination. Therein, petitioner
specified that he does not challenge the amount of the underlying
tax liabilities. He challenges the “appropriateness of
collection actions based on circumstances, etc” and the “offers
of collection alternatives as listed without reference to the law
as written and efforts to settle by citizen (L Brown)(sic).”
Respondent moved for summary judgment. The Court ordered
respondent’s motion set for hearing at the call of the calendar
in Los Angeles. After the hearing, the Court denied respondent’s
motion for summary judgment.
Discussion
Section 6330(a) provides that no levy may be made on any
property or right to property of any person unless the Secretary
has notified such person in writing of the right to a hearing
before the levy is made. If the person makes a request for a
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hearing, a hearing shall be held before an impartial officer or
employee of the IRS Office of Appeals. Sec. 6330(b)(1), (3).
At the hearing, a taxpayer may raise any relevant issue,
including appropriate spousal defenses, challenges to the
appropriateness of the collection action, and collection
alternatives. Sec. 6330(c)(2)(A). Additionally, a taxpayer may
contest the existence or amount of the underlying tax liability
if the taxpayer did not receive a notice of deficiency for the
tax in question or did not otherwise have an earlier opportunity
to dispute the tax liability. Sec. 6330(c)(2)(B); see also Sego
v. Commissioner, 114 T.C. 604, 609 (2000).
Following the hearing, the Appeals Office must make a
determination whether the proposed levy action may proceed. In
so doing, the Appeals Office is required to take into
consideration the verification presented by the Commissioner, the
issues raised by the taxpayer, and whether the proposed levy
action appropriately balances the need for efficient collection
of taxes with a taxpayer’s concerns regarding the intrusiveness
of the proposed levy action. Sec. 6330(c)(3).
This Court has jurisdiction to review the Commissioner’s
administrative determination under section 6330(d). If the
underlying tax liability is properly at issue, the Court reviews
that issue de novo. Sego v. Commissioner, supra at 610; Goza v.
Commissioner, 114 T.C. 176, 181 (2000).
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Petitioner did not receive a notice of deficiency for 1997
or 2000 because respondent assessed the amounts of tax petitioner
reported on his tax returns. The underlying tax liabilities,
however, are not properly at issue in this case because
petitioner did not raise them at his hearing and he specified in
the petition filed with this Court that he did not dispute the
amounts of those liabilities.
Where, as is the case here, the validity of the underlying
tax liability is not properly placed at issue, the Court will
review the administrative determination of the Appeals Office for
abuse of discretion as to the matters raised in the petition.
Sego v. Commissioner, supra at 610; Goza v. Commissioner, supra
at 181-183. An abuse of discretion occurs when an officer takes
action that is arbitrary, capricious, or without sound basis in
fact or law. See Woodral v. Commissioner, 112 T.C. 19, 23
(1999).
Petitioner “challenges the appropriateness of collection
actions based on circumstances, etc.,” and the “offers of
collection alternatives as listed without reference to the law as
written and efforts to settle by citizen (L Brown)(sic).”
Petitioner discussed collection alternatives, but failed to
provide any documentation or information regarding his financial
situation with which the Appeals officer could ascertain the
appropriateness of those alternatives. Petitioner did not
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present any evidence at trial that the Appeals officer failed to
consider collection alternatives or failed to apply the
appropriate law to petitioner’s circumstances.
The record is devoid of any evidence establishing that
respondent abused his discretion in determining to proceed with
collection of petitioner’s tax liabilities. On the record before
us, the Court finds that respondent did not abuse respondent’s
discretion in making that determination.
The Court has considered all of petitioner’s arguments and
contentions that are not discussed herein relating to whether
respondent may proceed with collection with respect to
petitioner’s taxable years 1997 and 2000, and the Court concludes
they are without merit or irrelevant.
Reviewed and adopted as the report of the Small Tax Case
Division.
To reflect the foregoing,
Decision will be entered
for respondent.