KANOFSKY v. COMM., Cite as
107 AFTR 2d 2011-XXXX, 04/21/2011
ALVIN S. KANOFSKY, Appellant v. COMMISSIONER OF INTERNAL REVENUE.
Case Information:
HEADNOTE
Reference(s):
OPINION
On Appeal from the United
States Tax Court (Tax Court No. 08-24784) Trial Judge: Honorable David Laro
Before: FUENTES, GREENAWAY, JR. AND COWEN, Circuit Judges
OPINION
Judge: PER
CURIAM
NOT PRECEDENTIAL
Appellant, pro se, appeals an order of the United States Tax Court
sustaining a proposed levy as a means of collecting Appellant's delinquent
federal income tax liability. For the following reasons, we will affirm.
I.
In December 2007, the United States Internal Revenue Service
(“IRS”) sent Appellant Alvin Kanofsky a notice of intent to levy in an effort
to collect his federal income tax delinquencies for the years 1996 through
2000. 1Kanofsky
requested a collection due process (“CDP”) hearing before the IRS Office of
Appeals regarding the proposed collection action. 2 His stated
reason for disagreeing with the proposed levy was that the Tax Court decision
regarding these underlying tax liabilities was currently on appeal in this
Court. Kanofsky did not file a bond with the Tax Court before his appeal, or at
any time thereafter.
The Settlement Officer assigned to his case requested from
Kanofsky in writing that he provide the officer with certain documents
necessary to proceed with the CDP hearing. Kanofsky's response did not provide
these documents, nor did it address any matters pertinent to the collection of
his tax liability or collection alternatives. On September 8, 2008, the IRS
Office of Appeals issued a Notice of Determination approving the proposed levy.
In the notice, the Office of Appeals advised Kanofsky that the proposed levy
was sustained because he did not present any issues that could be addressed in
a CDP action.
Kanofsky timely challenged that determination. A trial was held
before the Tax Court, and Kanofsky appeared as the sole witness. Kanofsky
attempted to raise claims that he had been prevented from pursuing his business
activities due to fraud and corruption and a “crime wave” in Philadelphia.
Trial Tr. 15 (Oct. 21, 2009). Kanofsky also attempted to admit as evidence a
large folder of documents consisting of docket sheets from criminal cases,
newspaper clippings, corporate records, financial information, and other
materials. The Tax Court sustained the IRS's objection to admitting this
evidence and testimony on the ground that it was not relevant. Further, the
court found these arguments to be an impermissible attempt by Kanofsky to
relitigate his underlying tax liability. When asked what basis he had for asserting
an abuse of discretion, Kanofsky testified that he felt that the Third Circuit
should have waited for his appeal to be resolved before imposing the levy, and
that the IRS “could have been more cooperative in seeking some sort of
accommodation.” Trial Tr. at 28.
Following the trial, the Tax Court entered a decision sustaining
the determination made by the Office of Appeals. Kanofsky filed a motion to
vacate that decision, based on what he described as “overwhelming evidence of
Fraud and Corruption.” On June 4, 2010, the Tax Court denied the motion.
Kanofsky now appeals.
II.
We have jurisdiction pursuant to 26 U.S.C. § 7482(a)(1). We have
plenary review over the Tax Court's conclusions of law, but we will not disturb
its factual findings unless they are clearly erroneous. Lattera v. Comm'r,
437 F.3d 399, 401 [97 AFTR 2d 2006-1048] (3d Cir. 2006); PNC
Bancorp, Inc. v. Comm'r,
212 F.3d 822, 827 [85 AFTR 2d 2000-1854] (3d Cir. 2000). Where, as
here, the underlying tax liability is not in issue, the determination of the
IRS Office of Appeals in a collection due process hearing is reviewed by both
the Tax Court and the Court of Appeals for abuse of discretion. See Kindred v.
Comm'r,
454 F.3d 688, 694 [98 AFTR 2d 2006-5472] (7th Cir. 2006); Living
Care Alternatives of Utica v. United States,
411 F.3d 621, 625 [95 AFTR 2d 2005-2668] (6th Cir. 2005).
III.
We find that the Tax Court correctly held that the Office of
Appeals acted within its discretion in permitting the propsed levy to proceed.
Kanofsky did not pay the balance due, and the IRS properly issued a notice of
intent to levy to collect the unpaid liabilities. During the CDP hearings,
Kanofsky failed to propose any collection alternatives or provide the
Settlement Officer with the required supporting financial information. Kanofsky
was not entitled to relitigate his tax liability during the CDP hearing, since
that issue had been determined by the Tax Court, in a decision affirmed by this
Court. Kanofsky v. Comm'r,
91 T.C.M. (CCH)
1045 [TC Memo 2006-79] (2006), aff'd, No. 07-1860,
2008 WL 857567 [101 AFTR 2d 2008-1501] (3d Cir. Apr. 1, 2008).
Moreover, Kanofsky was not entitled to a stay of assessment or collection
activity pending his appeal because he had not filed a bond with the Tax Court,
as specifically required by
§ 7485 of the Code. 3 See Burke v.
Comm'r,
124 T.C. 189, 191 n.4 (2005) (“Petitioner did not file an appeal
bond, [under §] 7485, and, therefore, respondent was free to proceed with
assessment and collection for the years in issue”).
Kanofsky's basis for his appeal includes arguments based on
obstruction of justice, corruption and fraud committed by public figures in
Pennsylvania and New Jersey. He also appears to argue that in imposing his tax
liability, consideration should have been given to his extensive whistleblower
activity in the University of Medicine and Dentistry of New Jersey health fraud
case. These arguments are not relevant to the imposition of a levy in
Kanofsky's case and do not advance his cause. Kanofsky also appears to raise
challenges to the underlying merits of his tax liability. These arguments have
been previously litigated and are beyond the scope of our review. Kanofsky
presents no viable argument that the Tax Court erred in finding that the Office
of Appeals did not abuse its discretion in sustaining the levy.
Accordingly, we will affirm.
Kanofsky's federal income tax liability was previously decided by
the Tax Court and affirmed by this Court. Kanofsky v. Comm'r,
91 T.C.M. (CCH) 1045 [TC Memo 2006-79] (2006), aff'd, No. 07-1860,
2008 WL 857567 [101 AFTR 2d 2008-1501] (3d Cir. Apr. 1, 2008). The
Supreme Court subsequently denied Kanofsky's petition for certiorari, 540 U.S.
823 (Dec. 8, 2008), as well as his later petition for rehearing, 129 S. Ct.
1406 (Feb. 23, 2009).
CDP hearings are informal proceedings that provide a delinquent taxpayer
with an opportunity to be heard before the IRS can levy upon his or her
property in order to satisfy outstanding tax liabilities. See generally 26
U.S.C. § 6330. CDP hearings need not be conducted face-to-face and may instead
consist of a telephonic conference or correspondence with a Settlement Officer.
Living Care Alternatives of Utica v. United States,
411 F.3d 621, 624 [95 AFTR 2d 2005-2668] (6th Cir. 2005). During
the hearing, the taxpayer is permitted to propose collection alternatives such
as a settlement or payment schedule, and the Settlement Officer ultimately must
determine whether the proposed levy “balances the need for the efficient
collection of taxes with the legitimate concern of the person that any
collection action be no more intrusive than necessary.”
26 U.S.C § 6330(c)(3). The Settlement Officer's decision generally
is reviewable by the Tax Court for abuse of discretion. See Kindred v. Comm'r,
454 F.3d 688, 694 [98 AFTR 2d 2006-5472] (7th Cir. 2006). On
appeal, the taxpayer may only raise issues raised during the CDP hearing.
As a
general rule, where a taxpayer has challenged a Notice of Deficiency by filing
a petition in the Tax Court, 26 U.S.C. § 6213 prohibits the IRS from assessing
the tax liability or attempting to collect it by means of a levy until the Tax
Court's decision has become final. See 26 U.S.C. § 6213(a). However, pursuant
to
§ 7485, assessment and collection shall not be stayed during an
appeal from Tax Court unless a taxpayer files a bond on or before the time he
files a notice of appeal. See 26 U.S.C. § 7485(a)(1).
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