Opinion
435-23L
11-03-2023
SEAN C. PREGIBON & KERRY L. PREGIBON, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER AND DECISION
Jennifer E. Siegel Special Trial Judge
This matter is before the Court on respondent's Motion for Summary Judgment, filed June 7, 2023. For the reasons explained more fully below, we will grant the motion.
Background
On August 11, 2021, respondent issued to petitioners a Notice of Intent to Levy and Your Collection Due Process Right to a Hearing with respect to unpaid balances for their Federal income tax for 2013, 2014, and 2015. Petitioners timely submitted a Form 12153, Request for a Collection Due Process Hearing, indicating that they sought a collection alternative.
On September 15, 2022, an IRS Settlement Officer (SO) in the IRS Independent Office of Appeals (Appeals Office) held a telephone hearing with petitioners' counsel. During the hearing, petitioners' counsel explained that petitioners were waiting for tax credits to be available from their business to be used to offset all or part of their outstanding personal tax liabilities for 2013, 2014, and 2015. It was made clear during the hearing that the availability of these business credits was the only thing petitioners wished to discuss.
The SO looked into the matter, found that there were no remaining business credits available, and provided petitioners with the opportunity to submit information in support of a collection alternative. Petitioners did not submit the requested information.
On December 23, 2022, respondent issued a Notice of Determination Concerning Collection Actions under IRS Sections 6320 or 6330 of the Internal Revenue Code sustaining the proposed levy. On January 18, 2023, petitioners filed the Petition commencing this case, explaining that they had "hired a payroll service to handle payroll matters regarding their business for tax years 2013 through 2015" and thus should receive an Employee Retention Credit and be eligible for relief from "the failure to file and failure to pay penalties."
In response to the Motion for Summary Judgment, petitioners explained that "Petitioner believes that credits are available to reduce Petitioners' tax liability resulting from adjustments in Petitioners' business tax liabilities" and that "the Court must evaluate the Petitioners' credits resulting from adjustments to Petitioners' business income before this case can be resolved."
Discussion
Summary judgment is intended to expedite litigation and avoid unnecessary and expensive trials. Florida Peach Corp. v. Commissioner, 90 T.C. 678, 681 (1988). Summary judgment may be granted with respect to all or any part of the legal issues in controversy if there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Rule 121(a); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), aff'd 17 F.3d 965 (7th Cir. 1994); Naftel v. Commissioner, 85 T.C. 527, 529 (1985).
Unless otherwise indicated, all statutory references are to the Internal Revenue Code, Title 26 U.S.C., in effect at all relevant times, and all Rule references are to the Tax Court Rules of Practice and Procedure.
Section 6330 provides procedures for administrative and judicial review of respondent's collection actions. In short, a taxpayer receiving a notice of a proposed levy may request an administrative hearing with the IRS Independent Office of Appeals. The Appeals Office is obliged to verify that the requirements of any applicable law or administrative procedure have been met. § 6330(c)(1). The taxpayer may raise at the administrative hearing any relevant issue relating to the unpaid tax or the collection action, including appropriate spousal defenses, challenges to the appropriateness of the collection action, and offers of collection alternatives. § 6330(c)(2)(A). The taxpayer may also be able to raise challenges to the existence or amount of the underlying tax liability. § 6330(c)(2)(B). Petitioners did not raise the issue of their underlying liability at the CDP hearing, and thus it is not before the Court now. See Thompson v. Commissioner, 140 T.C. 173, 178 (2013) ("A taxpayer is precluded from disputing the underlying liability if it was not properly raised in the CDP hearing.").
Where, as here, the taxpayer's underlying liability is not properly in dispute, we review the IRS determination for abuse of discretion. Jones v. Commissioner, 338 F.3d 463, 466 (5th Cir. 2003); Goza v. Commissioner, 114 T.C. 176, 181-82 (2000). Abuse of discretion exists when a determination is arbitrary, capricious, or without sound basis in fact or law. See Murphy v. Commissioner, 125 T.C. 301, 320 (2005), aff'd, 469 F.3d 27 (1st Cir. 2006). Nothing in the record suggests that respondent abused his discretion.
The record in this case includes a Form 4340, Certificate of Assessments, Payments, and Other Specified Matters, for the years in issue. Such transcripts of account may be used to satisfy the verification requirements of section 6330(c)(1). Roberts v. Commissioner, 118 T.C. 365, 371 n.10 (2002), aff'd 329 F.3d 1224 (11th Cir. 2003). The transcripts of account and other documents in the record show that the SO properly verified that the requirements of any applicable law or administrative procedure have been met. § 6330(c)(1). Petitioners have not alleged any irregularity that would cast doubt on the validity of the assessments or the information contained in the Forms 4340. In addition, petitioners abandoned their request for a collection alternative by failing to submit the requested information. We have consistently held that an SO does not abuse his discretion when he sustains a collection action after a taxpayer fails to propose a collection alternative or provide the necessary financial information to support one. See, e.g., Hartmann v. Commissioner, 638 F.3d 248, 250-251 (3d Cir. 2011); see also Rule 331(b)(4).
Petitioners' alleged factual dispute relates only to their business, a separate entity, which is not a party to this case. Contrary to petitioners' assertion, the resolution of this case concerning petitioners' personal Federal income taxes for 2013, 2014, and 2015 does not require an evaluation of the business's payroll records.
Our review of the record establishes that the SO properly discharged all of her responsibilities under section 6330(c), and, under the circumstances, we conclude that there is no genuine dispute as to any material fact; respondent is entitled to judgment as a matter of law sustaining the notice of determination.
Upon due consideration and for cause, it is
ORDERED that respondent's Motion for Summary Judgment is granted. It is further
ORDERED AND DECIDED that respondent's notice of determination is sustained, and he may proceed with the proposed collection action.