George P. Klika v. Commissioner, TC Memo 2012-225 , Code
Sec(s) 6320; 6323; 6330.
GEORGE PETER KLIKA, Petitioner v. COMMISSIONER OF INTERNAL
REVENUE, Respondent .
Case Information:
Code Sec(s):
6320; 6323; 6330
Docket: Docket
No. 16334-10L.
Date Issued:
08/6/2012
HEADNOTE
XX.
Reference(s): Code Sec. 6320; Code Sec. 6323; Code Sec. 6330
Syllabus
Official Tax Court Syllabus
Counsel
George Klika, pro se.
Jonathan Ono, for respondent.
MEMORANDUM OPINION
KROUPA, Judge: This collection review matter is before the
Court in response to a Notice of Determination Concerning Collection Action(s)
Under Section 6320 and/or 6330 1 (determination notice). The sole issue for
decision is [*2] whether respondent's determination to proceed with the proposed
collection action was an abuse of discretion. We hold it was not.
Background
This case was submitted fully stipulated under Rule 122. The
stipulation of facts and the accompanying exhibits are incorporated by this
reference. Petitioner resided in Hawaii when he filed the petition.
Petitioner is an attorney over 65 years old and does not
travel long distances well, restricting his travel from the Big Island of
Hawaii to Honolulu on Oahu.
Petitioner filed an individual income tax return for 2003
but failed to pay the tax shown on the return. Respondent thereafter assessed
petitioner's reported tax liability for 2003 along with related penalties and
interest. Respondent sent petitioner a Form 1058, Final Notice of Intent to
Levy and Notice of Your Right to a Hearing, regarding the outstanding tax
liability for 2003. Petitioner timely requested a collection due process
hearing (hearing), seeking an installment agreement or an offer-in-compromise,
and lien withdrawal as collection alternatives. Petitioner claimed in the
letter that he suffered from a financial hardship due to a physical disability
affecting his ability to work and earthquake damage to his home.[*3] Respondent
assigned Settlement Officer Karen O'Neal (Ms. O'Neal) to conduct petitioner's
hearing. Ms. O'Neal sent petitioner a letter scheduling a telephone hearing.
The letter informed petitioner that he needed to notify respondent's Appeals
Office if he preferred a face-to-face hearing. The letter also informed
petitioner that, if he wanted collection alternatives considered, he needed to
file an income tax return for 2009 and provide a completed Form 433-A,
Collection Information Statement for Wage Earners and Self-Employed Individuals,
or Form 433-B, Collection Information Statement for Businesses, along with
supporting documentation.
Petitioner requested a face-to-face hearing. Ms. O'Neal
notified petitioner that to qualify for a face-to-face hearing he had to file
the 2009 income tax return and provide a completed Form 433-A with supporting
documents. Petitioner sent Ms. O'Neal his 2009 tax return and a letter
questioning whether Form 433-A must be submitted as a condition to receiving a
face-to-face hearing. Ms. O'Neal responded to petitioner by letter. She
reiterated the requirements to qualify for a face-to-face hearing. Petitioner
in response sent Ms. O'Neal a letter declining to provide the financial
information. Petitioner requested in that same letter that Ms. O'Neal place a moratorium
on collection for one year to allow him to find employment.[*4] Without any
further documentation, Ms. O'Neal sent petitioner the determination notice
sustaining the proposed collection action.
Petitioner timely filed a petition.
Discussion
We are asked to decide whether Ms. O'Neal abused her
discretion in determining the proposed levy action was appropriate to collect
petitioner's unpaid tax liability for 2003. We begin with the general rules
that apply to collection actions.
The Commissioner may collect a tax by levy upon the property
of the taxpayer liable if the taxpayer neglects or refuses to pay the tax
liability within 10 days after notice and demand for payment. Sec. 6331(a). The
Commissioner generally must provide the taxpayer written notice of the right to
a hearing before the levy is made. Sec. 6330(a). The taxpayer is entitled, upon
request, to a hearing before the Appeals Office. Sec. 6330(b)(1). The taxpayer
may raise at that hearing any relevant issues relating to the unpaid tax or the
proposed collection action. Sec. 6330(c)(2). Relevant issues include any
appropriate spousal defenses, challenges to the appropriateness of collection
and possible alternative means of collection such as an installment agreement
or an offer-in-compromise. Sec. 6330(c)(2)(A). Taxpayers are expected to
provide all[*5] relevant information requested by the Appeals officer for
consideration of the facts and issues involved in the hearing. Sec.
301.6330-1(e)(1), Proced. & Admin. Regs.
After the hearing, the Appeals officer is required to make a
determination that addresses relevant issues the taxpayer raised, verify that
all requirements of applicable law and administrative procedure have been met
and balance 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. Sec. 6330(c)(3).
We now turn to the standard of review. Where, as is the case
here, the validity of the underlying tax liability is not properly placed at
issue, the Court will review the Commissioner's determination for abuse of
discretion. 2 Goza v.
Commissioner, 114 T.C. 176, 182 (2000). We must consider
whether the Commissioner's actions were arbitrary, capricious or without sound
basis in fact in reviewing an administrative determination for abuse of
discretion. See Woodral v. Commissioner, 112 T.C. 19, 23 (1999). The taxpayer
bears the burden of proving ,[*6] abuse of discretion. Rule 142(a); Titsworth
v. Commissioner, T.C. Memo. 2012-12 [TC Memo 2012-12].
Petitioner did not file a pretrial memorandum or a posttrial
brief. Consequently, we look to the petition and the stipulation of facts to
discern petitioner's challenges to the determination notice. We now turn to
petitioner's challenges.
I. Consideration of Relevant Issues Petitioner contends in
the petition that Ms. O'Neal abused her discretion by not considering issues he
raised during the hearing. Those issues include (1) whether Ms. O'Neal
considered petitioner's purported financial hardship, (2) whether respondent
wrongfully levied on petitioner's Social Security benefits, (3) whether
respondent wrongfully denied petitioner's appeal of a terminated installment
agreement and (4) whether respondent provided petitioner inaccurate advice concerning
appealing a rejected offer-in-compromise. We find that Ms. O'Neal did not abuse
her discretion.
First, petitioner contends that Ms. O'Neal did not consider
his financial hardship. The determination notice indicates that Ms. O'Neal did
consider petitioner's purported financial hardship. Petitioner made only bare
allegations[*7] that he had a financial hardship. Moreover, petitioner declined
to provide any financial information for an independent determination.
Second, petitioner contends that Ms. O'Neal did not consider
whether respondent wrongfully levied on his Social Security benefits or whether
respondent wrongfully denied his appeal of a terminated installment agreement.
3 A taxpayer must request that an issue be considered and present evidence to
Appeals on an issue for it to be properly raised during a hearing. Sec.
301.6320-1(f)(2), Q&A-F3, Proced. & Admin. Regs. Moreover, only issues
properly raised at a collection due process hearing can be a part of an Appeals
officer's determination. Giamelli v. Commissioner, 129 T.C. 107, 113 (2007).
Here, petitioner failed to request during the hearing that
Ms. O'Neal consider whether respondent wrongfully levied on his Social Security
benefits. He first requested consideration of this issue in the petition.
Moreover, the record does not reflect that petitioner offered Ms. O'Neal
credible evidence demonstrating that respondent wrongfully levied on his Social
Security benefits, [*8] even assuming he had requested consideration. Thus,
petitioner failed to properly raise this issue.
Petitioner did contend during the hearing that respondent
had wrongfully denied his appeal of a terminated installment agreement.
Petitioner did not properly raise the issue at the hearing, however, because he
failed to introduce credible evidence with respect to the issue.
Finally, petitioner contends that Ms. O'Neal did not
consider whether respondent provided inaccurate advice to him concerning
appealing a rejected offer-in-compromise. 4 It is unfortunate when a taxpayer
receives inaccurate information. We have recognized, however, that incorrect
legal advice from an IRS employee does not have the force of law and cannot
bind the Commissioner or this Court. See Schwalbach v. Commissioner, 111 T.C.
215, 228 n.4 (1998); Richmond v. Commissioner, T.C. Memo. 2009-207 [TC Memo 2009-207];
Atkin v. Commissioner, T.C. Memo. 2008-93 [TC Memo 2008-93]. Accordingly, any
past representations by respondent to petitioner are not relevant to the
proposed collection action and need not have been considered by Ms. O'Neal.[*9]
II. Collection Alternatives Petitioner argues that Ms. O'Neal abused her
discretion in determining that petitioner failed to present any collection
alternatives. Petitioner argues that he did present a collection alternative by
asking for a 1-year moratorium on collection. We disagree. We have consistently
held that it is not an abuse of discretion to sustain a collection action where
the taxpayer has failed to provide requested financial information that would
have permitted consideration of collection alternatives.See Long v.
Commissioner, T.C. Memo. 2010-7 [TC Memo 2010-7]; Huntress v. Commissioner,
T.C. Memo. 2009-161 [TC Memo 2009-161]; Nelson v. Commissioner, T.C. Memo.
2009-108 [TC Memo 2009-108]; Prater v. Commissioner, T.C. Memo. 2007-241 [TC
Memo 2007-241].
Here, Ms. O'Neal informed petitioner that he had to submit
Form 433-A along with supporting documentation for collection alternatives to
be considered. Ms. O'Neal thereafter gave petitioner several chances to provide
the requested financial information before issuing the determination notice.
Petitioner declined to submit the requested financial information. We therefore
find that Ms. O'Neal did not abuse her discretition by determining that
petitioner failed to qualify for collection alternatives.[*10] III. Lien
Withdrawal Request Petitioner contends that Ms. O'Neal abused her discretion by
not granting him lien withdrawal relief. 5 The Commissioner may withdraw a
notice of Federal tax lien (NFTL) if (1) he determines the filing of the NFTL
was premature or not in accordance with administrative procedures; (2) the
taxpayer has entered into an installment agreement, unless the agreement
provides otherwise; (3) withdrawal will facilitate collection; or (4) with the
taxpayer's consent the lien's withdrawal would be in the best interests of the
taxpayer and the United States. Sec. 6323(j).
Petitioner has not presented any credible evidence that the
NFTL was filed prematurely or contrary to administrative procedure. Nor had
petitioner entered into an installment agreement when the determination notice
was issued. Accordingly, we focus on whether lien withdrawal would have
facilitated collection or would have been in the best interests of petitioner
and the United States.[*11] Petitioner did not submit any evidence to demonstrate
that lien withdrawal would either facilitate collection or be in the best
interests of petitioner and the United States. Petitioner simply asserts that
the NFTL respondent filed negatively affects his credit rating and ability to
obtain employment. Petitioner's bare assertion is insufficient to establish
that lien withdrawal would facilitate collection and would be in the United
States' best interests. Moreover, we generally have no authority to grant
relief based on a taxpayer's claim that a lien adversely affected his or her
credit rating or employment prospects. See Gerakios v. Commissioner, T.C. Memo.
2004-203 [TC Memo 2004-203].
IV. Face-to-Face Hearing Request Petitioner appears to argue
in the petition that Ms. O'Neal abused her discretion by denying him a
face-to-face hearing. This Court and other courts have held that a face-to-face
hearing is not required under section 6330. Katz v. Commissioner, 115 T.C. 329
(2000); Williamson v. Commissioner T.C. Memo. , 2009-188; Stockton v. Commissioner,
T.C. Memo. 2009-186 [TC Memo 2009-186]; Leineweber v. Commissioner, T.C. Memo.
2004-17 [TC Memo 2004-17]. We have also held that an Appeals officer's denial
of a face-to-face hearing does not constitute an abuse of discretion when a
taxpayer refuses to provide requested financial information. See Rice v.
Commissioner, T.C. Memo. 2009-169 [TC Memo 2009-169]; Moline v. Commissioner,
T.C. Memo.[*12] 2009-110, aff'd, 363 Fed. Appx. 675 [105 AFTR 2d 2010-843]
(10th Cir. 2010); Summers v. Commissioner, T.C. Memo. 2006-219 [TC Memo
2006-219].
Here, Ms. O'Neal twice notified petitioner that he must
submit Form 433-A with supporting documentation to qualify for a face-to-face
hearing. Petitioner failed to submit the requested information after being
provided a reasonable opportunity to do so.
V. Conclusion Petitioner did not raise any other meritorious
challenges to Ms. O'Neal's determination to sustain the collection action. Nor
did petitioner otherwise introduce any credible evidence or persuasive
arguments that would convince us that the determination to sustain the levy was
arbitrary, capricious or without foundation in fact or law.
In conclusion, the record reflects that Ms. O'Neal verified
that all requirements of applicable law and administrative procedure had been
met, considered relevant issues (e.g., collection alternatives) petitioner
raised and balanced the need for the efficient collection of taxes with
petitioner's legitimate concern that any collection action be no more intrusive
than necessary. We therefore conclude that Ms. O'Neal did not abuse her
discretion by sustaining the proposed levy action to collect petitioner's
outstanding tax liabilities for 2003.[*13] We have considered all arguments
made in reaching our decision and, to the extent not mentioned, we conclude
that they are moot, irrelevant or without merit.
To reflect the foregoing, Decision will be entered for
respondent.
1
All section
references are to the Internal Revenue Code, and all Rule references are to the
Tax Court Rules of Practice and Procedure, unless otherwise indicated.
2
The 2003 tax
liability was self-reported, and petitioner did not contest the existence or
amount of his underlying tax liability at the hearing. We therefore need not
address on a de novo basis whether petitioner is liable for the liability. See
Giamelli v. Commissioner, 129 T.C. 107 (2007).
3
The record reflects
that a Final Notice Before Levy on Social Security Benefits was sent to
petitioner during the hearing. The record, however, does not reflect that
respondent actually levied on petitioner's Social Security benefits while
collection was suspended. If there was a levy, it is more likely to have been
regarding another taxable year as collection is suspended while this case is
outstanding. Additionally, there is nothing in the record to show that
respondent wrongfully terminated an installment agreement with petitioner.
4
We note that,
besides petitioner's self-serving claim, there is nothing in the record
indicating that respondent provided petitioner any advice on appealing the
rejection of an offer-in-compromise.
5
The record reflects
that a Federal tax lien arose in 2007 with respect to petitioner's unpaid tax
liability for 2003. The record is unclear, however, whether respondent ever
filed a notice of Federal tax lien with respect to petitioner's unpaid tax
liability for 2003 (or any other year). Nevertheless, we consider whether
petitioner is entitled to lien withdrawal relief for 2003 with respect to any
notice of Federal tax lien that may have been filed for that year.
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