The opinion
T.C. Memo. 2010-280
UNITED STATES TAX COURT
THOMAS M. GILLUM, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 16110-07L. Filed December 22, 2010.
Kenneth R. Boiarsky, for petitioner.
Elizabeth Downs, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
THORNTON, Judge: Pursuant to sections 6320(c) and 6330(d),
petitioner seeks judicial review of respondent’s determination
sustaining the filing of a Federal tax lien with respect to
petitioner’s Federal income tax liabilities for 1998, 2000, 2001,
and 2002, and sustaining a proposed levy to collect petitioner’s
Federal income tax liabilities for each of the years 1996 through
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2002.1 Petitioner also seeks judicial review of various letters
that respondent allegedly sent to various entities, as
petitioner’s nominees or alter egos, denying them collection due
process hearings with respect to respondent’s filing of Federal
tax liens.
FINDINGS OF FACT
The parties have stipulated some facts, which we incorporate
by this reference. When he filed his petition, petitioner
resided in Arkansas.
Petitioner is a veterinarian. He operates his practice
under the business name Cloverdale Animal Hospital, LLC
(Cloverdale).
In 2004 petitioner was criminally prosecuted for willful
failure to file tax returns, in violation of section 7203, for
taxable years 1996 through 2002. In December 2005 petitioner
pleaded guilty to one count of criminal failure to file a Federal
income tax return for 2000. His criminal plea agreement
provided, inter alia, for entry of an order of mandatory
restitution under 18 U.S.C. section 3663A for “the full amount of
the taxes due and owing for all prosecution years.” The plea
agreement stated: “At this time, the United States and the
defendant agree that the amount of restitution payable by the
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code. All figures are rounded to the
nearest dollar.
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defendant is $416,210.” The plea agreement also stated: “Except
to the extent otherwise expressly specified herein, this
Agreement does not bar or compromise any civil or administrative
claim pending or that may be made against the defendant,
including but not limited to tax matters.” The plea agreement
stated further: “This Agreement is binding only upon the United
States Attorney’s Office for the Eastern District of Arkansas and
the defendant. It does not bind * * * any other federal, state
or local prosecuting, administrative, or regulatory authority.”
In its judgment filed December 12, 2005, the District Court
reduced the amount of restitution, labeled “criminal monetary
penalties”, to $246,226.2 The District Court also ordered a
schedule of payments, with a lump sum of $25 due immediately and
the balance due in monthly installments equaling 10 percent of
petitioner’s monthly gross income.3
While the criminal proceedings were pending against
petitioner, on August 13, 2004, he filed amended returns for
taxable years 1996, 1997, and 1998, and on September 7, 2004, he
2
This amount corresponded to the amount stated in the plea
agreement as representing petitioner’s total tax liability for
the years 1999 through 2001. The record does not conclusively
show why the District Court reduced the restitution in this
manner.
3
The record does not establish whether petitioner has
complied with the restitution order.
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filed an amended return for taxable year 1999.4 Also on
September 7, 2004, petitioner filed delinquent returns for
taxable years 2000, 2001, and 2002.
On October 25, 2004, respondent assessed the taxes that
petitioner had reported on his delinquent returns for 2000, 2001,
and 2002. On March 14, 2005, respondent assessed the tax that
petitioner had reported on his amended 1998 return, and on June
26, 2006, respondent assessed the taxes that petitioner had
reported on his amended returns for 1996, 1997, and 1999. In
each instance, respondent also assessed applicable additions to
tax and interest.
On October 18, 2006, respondent sent petitioner Letter 3172,
Notice of Federal Tax Lien Filing and Your Right to a Hearing
Under IRC 6320 (the lien notice), with respect to petitioner’s
taxable years 1998, 2000, 2001, 2002, and 2003. On October 26,
2006, respondent sent petitioner Letter 1058, Final Notice,
Notice of Intent to Levy and Notice of Your Right to a Hearing
(the levy notice), with respect to petitioner’s taxable years
1996 through 2003. The levy notice indicated that as of November
4
Insofar as the record shows, these were the first returns
that petitioner filed for these years. Apparently, they were
characterized as “amended” returns because respondent had
previously prepared substitutes for returns for petitioner’s
taxable years 1996 through 1999.
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25, 2006, petitioner would owe $839,856 of tax, penalties, and
interest for these years.5
On November 21, 2006, petitioner timely submitted Form
12153, Request for a Collection Due Process Hearing, indicating
that he disagreed with both the lien notice and the levy notice.6
The request covered petitioner’s tax years 1996 through 2002 but
not 2003. In his request petitioner asserted that the criminal
plea agreement and judgment reflected the full settlement of his
tax liabilities for 1996 through 2002. He asserted that “payment
on these years is exclusively covered under an agreed court order
for restitution”, that he was making payments to the IRS for
these tax years under this agreement, and that unless he failed
to meet his obligations under the court order, the IRS must
“cease and desist from further collection activity.” Petitioner
did not propose any collection alternative in his hearing
request.
On October 26, 2006, in anticipation of submitting a request
for a hearing, petitioner submitted Form 433-A, Collection
Information Statement for Wage Earners and Self-Employed
5
The notice indicates that $47,567 of this amount relates to
petitioner’s 2003 taxable year.
6
After petitioner submitted his request for a collection due
process (CDP) hearing, on Dec. 8, 2006, respondent issued to
petitioner a notice of deficiency with respect to petitioner’s
taxable years 1998 through 2002. The parties agree that the
deficiencies determined in the notice are not at issue in this
case.
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Individuals, with respect to himself, and on October 27, 2006,
petitioner submitted Form 433-B, Collection Information Statement
for Businesses, with respect to Cloverdale. On these forms
petitioner failed to provide complete information. For example,
on Form 433-A he did not provide requested bank account numbers
and routing information, detailed credit card information, the
estimated value of three vehicles, or required information with
respect to his personal assets and living expenses. In response
to a question asking whether he had transferred any assets for
less than their actual value within the past 10 years, he checked
“No” but then wrote “Possible”. The form required several
attachments, including proof of current expenses, which
petitioner failed to provide.
On Form 433-B petitioner did not provide detailed
information with respect to Cloverdale’s accounts receivable,
business assets, bank accounts, or available credit. In response
to a question requesting detailed information with respect to
Cloverdale’s income and expenses, petitioner replied “see
statement attached”, but did not attach any such statement. The
form also required several other attachments, which petitioner
failed to provide.
On May 15, 2007, the settlement officer held the first of
three telephone conferences with petitioner’s representative.
In this conference the settlement officer opined that neither the
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criminal plea agreement nor the judgment barred the IRS from any
civil or administrative actions with respect to petitioner’s
civil tax liabilities and did not compromise those liabilities.
The settlement officer asked the representative whether he wished
to propose any collection alternatives. The representative
proposed as a collection alternative that the IRS limit its
collection action to the terms of the plea agreement and
judgment. They agreed to have a second conference.
Before the second conference the settlement officer reviewed
the collection administrative case file, which included, among
other things: (1) A memorandum, dated February 22, 2007, from
Revenue Officer Robert Brown to IRS district counsel in Oklahoma
City, Oklahoma, requesting approval to file alter ego and nominee
liens and levies against several entities created by petitioner
(the request); (2) a memorandum from respondent’s associate area
counsel in Oklahoma City responding to the request (the
memorandum); and (3) several diagrams detailing petitioner’s
alleged alter ego and nominee activities.7
The request indicated on the basis of findings contained
therein that, notwithstanding his prior criminal conviction,
petitioner was still using various sham trusts, nominees, and
alter egos to shield assets and income from taxation. More
particularly, the request included findings that petitioner had
7
The record does not reveal who prepared these diagrams.
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funneled unreported cash payments from Cloverdale to grantor
trusts and other entities to pay his and his family’s personal
expenses, including cable TV bills, college tuition, life
insurance premiums, vacation expenses, car payments, and hardwood
flooring for petitioner’s residence. The request concluded that
petitioner had created certain nominee entities, including a
trust known as Lestat Ops, to hold personal assets and real
estate for the purpose of placing them out of the reach of
creditors, mainly the Government.8
The memorandum indicates that “nominee” refers to an entity
or person to whom a taxpayer has transferred property in an
attempt to conceal it. According to the memorandum, a Federal
tax lien encumbers such property because although a third party
may have legal title, the taxpayer actually owns the property and
enjoys its full use and benefit. The memorandum also indicates
that an alter ego generally involves a sham corporation or other
entity used by the taxpayer as an instrumentality to avoid his or
her own legal obligations. In the memorandum respondent’s
associate area counsel approved nominee liens against three
trusts created by petitioner, including Lestat Ops, as well as
against petitioner’s wife, and approved alter ego liens against
8
The request describes Lestat Ops as a trust which holds the
real estate upon which petitioner’s veterinary clinic is located
and indicates that the trust’s beneficiaries are petitioner’s
children.
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Cloverdale, another limited liability company, and two other
trusts that petitioner had created.
Cloverdale and Lestat Ops received from the IRS Letters
3172, dated May 15, 2007, providing notice of the filing of
Federal tax liens and advising of the right to a collection due
process (CDP) hearing. By letters dated June 20, 2007, requests
for CDP hearings with respect to these two entities were timely
submitted. Shortly thereafter, Cloverdale and Lestat Ops
received letters from Revenue Officer Robert Brown, dated June
25, 2007, acknowledging receipt of the hearing requests but
advising that CDP rights were not available to these entities
because petitioner previously had been afforded CDP rights with
respect to the same tax periods listed in the lien notices. The
letters indicated, however, that the entities were entitled to a
“Collection Appeal” with the revenue officer’s manager.
On May 21, 2007, the settlement officer held a second
telephone conference with petitioner’s representative.
Petitioner’s representative continued to maintain, as a
collection alternative to the proposed levy, that collection
should be limited to the amount specified in the criminal plea
agreement and judgment. The settlement officer indicated that he
had reviewed financial statements and related information in the
collection administrative file and concluded that the financial
statements did not provide full disclosure of petitioner’s income
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and assets. Consequently, he was unable to recommend acceptance
of petitioner’s proposed collection alternative. Petitioner’s
representative requested details of the alleged nondisclosure.
The settlement officer declined to discuss the details at that
time, indicating that he would research the matter. They agreed
to have another conference.
After seeking advice of IRS counsel, on May 24, 2007, the
settlement officer held the third and final telephone conference
with petitioner’s representative. The settlement officer
asserted that petitioner had failed to completely disclose his
income, expenses, and assets, making it impossible to adequately
evaluate his ability to pay. Without specifically referencing
the request or memorandum that he had reviewed, the settlement
officer asserted that petitioner had diverted income into various
entities and paid personal expenses through these entities for no
apparent legitimate business reason. He also asserted that
petitioner had attempted to place numerous assets beyond
respondent’s reach in various nominee or alter ego entities.
According to the settlement officer’s case activity record,
petitioner’s representative expressed surprise at this
information, indicated that petitioner apparently had not
disclosed all the facts to him, and stated that he understood why
the settlement officer could not consider a collection
alternative. After another discussion about the effect of the
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criminal plea agreement and judgment, the settlement officer
advised the representative that the proposed collection actions
would be sustained.
On June 15, 2007, respondent’s Office of Appeals mailed
petitioner a Notice of Determination Concerning Collection
Action(s) Under Section 6320 and/or 6330 (the determination),
sustaining the Federal tax lien filing and the proposed levy.
With respect to petitioner’s underlying liability the
determination stated:
In this case the taxpayer agreed to pay restitution for
the full amount of the taxes due for all prosecution
years (1996 through 2002), but the judge, who is not
bound by the plea agreement, subsequently ordered
payment of restitution in the amount that is equivalent
of the tax liability for only one count of the total
criminal case. The restitution amount relates to the
tax liability, but it is not the equivalent of the tax
liability. It is the determination of Appeals that
neither the plea agreement nor the court judgment
represent a settlement or compromise of the tax
liability, and do not bar IRS from taking additional
collection actions.
The determination also rejected petitioner’s proposed
collection alternative of limiting collection to the terms of the
criminal plea agreement and judgment, stating:
Appeals has determined from this review that the
taxpayer has not accurately reported income and
expenses, which make it impossible to determine his
true ability to pay the tax liability. The taxpayer
has done this by diverting income through various
entities (trusts, limited liability companies, and his
wife) and paying personal expenses through these
entities for no apparent reason other than to avoid
taxes and the collection of taxes. He has also placed
assets beyond the reach of IRS by purchasing them in
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the name of various entities he controls or
transferring them to these entities. It is clear that
the taxpayer maintains full use and benefits of these
assets, which include real estate, vehicles,
watercraft, and all-terrain vehicles. Because these
assets and any encumbrances against these assets have
not been disclosed, Appeals is not able to determine
their net equity and collection potential. For these
reasons Appeals cannot accept the only collection
alternative proposed by the taxpayer’s representative.
The determination also concluded that the proposed tax lien
filing and levy action properly balanced the need for efficient
collection of taxes with the concern that collection action be no
more intrusive than necessary.
Petitioner timely petitioned this Court for judicial review
of this determination. The petition also seeks judicial review
of letters which petitioner asserts respondent mailed on June 25,
2007, to four entities created by petitioner, including
Cloverdale and Lestat Ops, denying them the opportunity for CDP
hearings with respect to the filing of tax liens against them as
petitioner’s alleged nominees, transferees, or alter egos.9
OPINION
I. Statutory Framework
Section 6321 imposes a lien in favor of the United States on
all property and property rights of a person who is liable for
9
The record contains the June 25, 2007, letters, described
supra, from Revenue Officer Robert Brown to Cloverdale and Lestat
Ops. The petition seems to assert that two other entities,
Piraeus Group and MRMLBS, received similar letters also dated
June 25, 2007. The record does not contain copies of any such
letters.
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and fails to pay tax after demand for payment has been made. The
lien arises when assessment is made and continues until the
liability is paid or becomes unenforceable by lapse of time.
Sec. 6322. For the lien to be valid against certain third
parties, the Secretary must file a notice of Federal tax lien;
within 5 business days thereafter, the Secretary must provide
written notice to the taxpayer. Secs. 6320(a), 6323(a). The
taxpayer then has 30 days to request an administrative hearing
before an Appeals officer. Sec. 6320(a)(3)(B), (b)(1); sec.
301.6320-1(c)(1), Proced. & Admin. Regs. To the extent
practicable, a hearing requested under section 6320 is to be held
in conjunction with a related hearing requested under section
6330. Sec. 6320(b)(4).
Section 6330 requires the Secretary to furnish a person
notice and opportunity for a hearing before levying on the
person’s property. At the hearing, the person may raise any
relevant issue relating to the unpaid tax or proposed levy,
including spousal defenses, challenges to the appropriateness of
the collection action, and offers of collection alternatives.
The person may challenge the underlying tax liability if the
person did not receive a notice of deficiency or did not
otherwise have an opportunity to dispute the liability. Sec.
6330(c)(2)(B); Sego v. Commissioner, 114 T.C. 604 (2000). After
receiving a notice of determination, the person may seek judicial
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review in this Court. Sec. 6330(d)(1); Pension Protection Act of
2006, Pub. L. 109-280, sec. 855, 120 Stat. 1019. If the validity
of the underlying tax liability is properly at issue, we review
that issue de novo. Sego v. Commissioner, supra. Other issues
we review for abuse of discretion. Id.
II. Petitioner’s Challenge to His Underlying Liabilities
Petitioner contends that respondent erred in sustaining the
lien and levy notices because they contravene the criminal plea
agreement and judgment. Petitioner’s contention represents in
part a challenge to his underlying liabilities for 1996 through
2002.10 Respondent concedes that petitioner is entitled to make
such a challenge but contends that it is without merit.
Respondent assessed petitioner’s taxes for the years in
question on the basis of the amounts petitioner self-reported on
his amended or delinquent returns for these years. Petitioner
does not contend that he incorrectly reported his tax liabilities
on these returns. Rather, he contends that his aggregate tax
liability for 1996 through 2002 is limited to the $246,226 of
restitution ordered in the criminal judgment. We disagree.
Pursuant to 18 U.S.C. section 3663(a) (2006), a District
Court may order restitution to the victim of a criminal offense.
10
Petitioner has stipulated that his 2003 liability (which
was encompassed by the lien and levy notices but was not included
either in petitioner’s request for a CDP hearing or in
respondent’s determinations) is not at issue in this case.
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In some circumstances, as in petitioner’s criminal case,
restitution is mandatory. See 18 U.S.C. sec. 3663A (2006). An
order to pay restitution is a criminal penalty rather than a
civil penalty. Creel v. Commissioner, 419 F.3d 1135, 1140 (11th
Cir. 2005). Although restitution is based upon an estimation of
civil tax liability, it is not a determination of civil tax
liability and generally does not bar the Commissioner from
assessing a greater amount of civil tax liability. See Morse v.
Commissioner, 419 F.3d 829, 833-835 (8th Cir. 2005), affg. T.C.
Memo. 2003-332; Hickman v. Commissioner, 183 F.3d 535, 537-538
(6th Cir. 1999), affg. T.C. Memo. 1997-566; M.J. Wood Associates,
Inc. v. Commissioner, T.C. Memo. 1998-375. In fact, the
restitution statute expressly contemplates that a civil claim may
be brought after the criminal prosecution by providing that the
amount paid under a restitution order “shall be reduced by any
amount later recovered as compensatory damages for the same loss
by the victim in * * * any Federal civil proceeding”. 18 U.S.C.
3664(j)(2) (2006).11
11
Conversely, payments made pursuant to restitution orders
are applied against tax liabilities. See United States v.
Clayton, 613 F.3d 592 (5th Cir. 2010); United States v. Tucker,
217 F.3d 960, 962 (8th Cir. 2000); M.J. Wood Associates, Inc. v.
Commissioner, T.C. Memo. 1998-375. The record is silent as to
what amounts, if any, of restitution petitioner has paid. On
brief respondent states that petitioner’s “restitution payments
will ultimately be applied to his civil tax liability for the
taxable year 2000, and if in excess of that liability to other
years”. Petitioner, who filed no reply brief, has not challenged
(continued...)
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Petitioner relies upon Creel v. Commissioner, supra, in
support of his contention that respondent’s proposed collection
actions contravene the restitution order. Petitioner’s reliance
on Creel is misplaced. In Creel, the Court of Appeals found that
a restitution order, which specifically encompassed “‘any
interest and penalties which may be imposed by the Internal
Revenue Service’”, included the civil penalties that the
Commissioner later sought to recover in a civil suit. Id. at
1140. Furthermore, at the time of the civil suit the taxpayer in
Creel had fully settled the ordered restitution, and the U.S.
attorney had filed a satisfaction of judgment and had also
recorded a cancellation and release that of the judgment lien.
Id. Taking into account these unusual circumstances, the Court
of Appeals held that the Government had discharged the taxpayer’s
civil tax liabilities as part of the criminal case.
By contrast, petitioner’s plea agreement expressly states
that it “does not bar or compromise any civil or administrative
claim pending or that may be made against the defendant,
including but not limited to tax matters.” Further, the plea
agreement states that it is “binding only upon the United States
Attorney’s Office for the Eastern District of Arkansas and the
defendant” and “does not bind * * * any other federal, state or
11
(...continued)
this statement or the appropriateness of this treatment.
Consequently, we give this issue no further consideration.
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local prosecuting, administrative or regulatory authority.” The
criminal judgment refers to the restitution payments as “criminal
monetary penalties” and makes no mention of civil liabilities or
penalties. Furthermore, there is no evidence that petitioner has
satisfied his criminal restitution order or received any
discharge.
We conclude and hold that petitioner’s criminal plea
agreement and judgment ordering restitution did not discharge,
and do not limit respondent’s assessment and collection of,
petitioner’s civil tax liabilities for his taxable years 1996
through 2002.
III. Petitioner’s Proposed Collection Alternative
We review the settlement officer’s denial of a collection
alternative for abuse of discretion. See Sego v. Commissioner,
114 T.C. 604 (2000). The U.S. Court of Appeals for the Eighth
Circuit, to which any appeal of this case would lie, describes
the abuse of discretion standard as “markedly deferential: if
the amount of tax owed is not in dispute, courts may disturb the
administrative decision only if it constituted ‘a clear abuse of
discretion in the sense of clear taxpayer abuse and unfairness by
the IRS.’” Fifty Below Sales & Mktg., Inc. v. United States, 497
F.3d 828, 830 (8th Cir. 2007) (quoting Robinette v. Commissioner,
439 F.3d 455, 459 (8th Cir. 2006), revg. 123 T.C. 85 (2004)).
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The only collection alternative that petitioner has proposed
is to limit his 1996 through 2002 liability to $246,226; i.e.,
the amount of restitution ordered by the District Court in the
criminal proceeding. Insofar as this “collection alternative”
represents petitioner’s reassertion of his challenge to his
underlying civil tax liabilities, it was properly rejected for
the reasons just discussed. And for essentially those same
reasons, the restitution order does not require respondent to
adhere to the restitution payment schedule set forth therein to
collect petitioner’s civil tax liabilities.
Insofar as petitioner’s “collection alternative” might be
viewed as representing, in effect, an offer-in-compromise, the
settlement officer did not abuse his discretion in rejecting it.
The regulations set forth three grounds for compromising a
liability: (1) Doubt as to liability; (2) doubt as to
collectibility; and (3) promotion of effective tax
administration. Sec. 301.7122-1(b), Proced. & Admin. Regs. As
just discussed, petitioner has put forward no legitimate issue
regarding his civil tax liabilities. Nor has he expressly argued
that his collection alternative was for the promotion of
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effective tax administration.12 That leaves doubt as to
collectibility.
For purposes of evaluating an offer-in-compromise, doubt as
to collectibility exists “where the taxpayer’s assets and income
are less than the full amount of the liability.” Sec. 301.7122-
1(b)(2), Proced. & Admin. Regs. Because he submitted incomplete
Forms 433-A and 433-B, petitioner failed to provide the
settlement officer all financial information necessary to
evaluate his ability to fully pay his civil tax liabilities. For
that reason, if for no other, the settlement officer did not
abuse his discretion in rejecting any collection alternative
based on doubt as to collectibility. See, e.g., Kansky v.
Commissioner, T.C. Memo. 2007-40; Criner v. Commissioner, T.C.
Memo. 2003-328.
IV. Fair Hearing
Petitioner complains that he was denied a fair collection
hearing because the settlement officer did not disclose to his
12
The Commissioner may compromise a tax liability for
promotion of effective tax administration if: (1) Collection in
full could be achieved but would cause economic hardship; or (2)
if there are compelling public policy or equity considerations
identified by the taxpayer. Sec. 301.7122-1(b)(3), Proced. &
Admin. Regs.; see Speltz v. Commissioner, 124 T.C. 165, 172-173
(2005), affd. 454 F.3d 782 (8th Cir. 2006). Petitioner has not
argued and the record does not suggest that he meets these
conditions. Nor does the record suggest that petitioner raised
these issues at the collection hearing; accordingly, he is not
entitled to raise them in this proceeding. See Giamelli v.
Commissioner, 129 T.C. 107, 114 (2007).
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representative all the information in the collection
administrative file which the settlement officer had reviewed in
reaching his conclusions.13
Collection hearings are conducted in an informal setting
that does not include the right to discovery. See Katz v.
Commissioner, 115 T.C. 329 (2000), Davis v. Commissioner, 115
T.C. 35, 41-42 (2000). The information that the settlement
officer reviewed related to matters that should have been within
petitioner’s knowledge, and the settlement officer did in fact
share with petitioner’s representative the nature of his concerns
13
The materials which the settlement officer reviewed
included Revenue Officer Brown’s request to IRS district counsel
to file alter ego and nominee liens and levies and district
counsel’s memorandum approving the filing of alter ego and
nominee liens. Petitioner contends that these materials were not
included in the administrative file. The parties have
stipulated, however, that the stipulated exhibits, which include
the materials in question, “constitute the complete
administrative record in this case”. Petitioner has not raised,
and consequently we do not consider, any issue as to whether the
settlement officer’s review of such materials entailed any
improper ex parte communication.
Over respondents’ objection, petitioner called the
settlement officer as a witness at trial, attempting to show that
the settlement officer failed to adequately explain the reasons
for his determination. Cf. Robinette v. Commissioner, 439 F.3d
455, 461 (8th Cir. 2006) (indicating that judicial review based
on the administrative record may permit “the receipt of testimony
or evidence explaining the reasoning behind the agency’s
decision”), revg. 123 T.C. 85 (2004). The settlement officer’s
testimony, however, had little probative value or relevancy. On
brief respondent renews his objection to the settlement officer’s
testimony. Because we have not relied upon this testimony in our
analysis or holdings, it is unnecessary to address further
respondent’s objection.
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about petitioner’s nondisclosure of income and assets.14 More
fundamentally, as just discussed, petitioner’s failure to provide
the settlement officer all required financial information was
reason enough for the settlement officer to reject his collection
alternative. We do not see that the settlement officer’s
disclosure or nondisclosure of the materials in question had any
significant bearing on the fairness or outcome of petitioner’s
hearing.
V. Denial of CDP Hearings for Nominees and Alter Egos
Petitioner asserts that certain entities, including
Cloverdale and Lestat Ops, received nominee or alter ego lien
notices but were improperly denied CDP hearings.15 According to
the regulations, nominees and alter egos holding property for a
taxpayer are not entitled to CDP hearings. Sec. 301.6330-
1(b)(2), Q&A-B5, Proced. & Admin. Regs. In any event, we cannot
enter a decision affecting the entities in question because they
14
Shortly before the second telephone conference between
petitioner’s representative and the settlement officer on May 21,
2007, the IRS had mailed to Cloverdale and Lestat Ops (and,
according to petitioner’s allegations, at least two other
entities) nominee notices of Federal tax lien filing.
15
Respondent issued the nominee notices of Federal tax lien
filing for Cloverdale and Lestat Ops (and, according to
petitioner’s allegations, for at least two other entities) on May
15, 2007, months after respondent had issued petitioner the
notice of Federal tax lien filing upon which this case is
predicated.
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are not parties to this proceeding. See Dalton v. Commissioner,
135 T.C. , (2010) (slip op. at 15).
V. Conclusion
We sustain respondent’s determinations sustaining the filing
of the notice of Federal tax lien and the proposed levy.
Decision will be entered
for respondent.