Ouattara S. Mamadou ( 2022 )

United States Tax Court
T.C. Memo. 2022-121OUATTARA S. MAMADOU,
Petitioner
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent
—————
Docket No. 9759-21L. Filed December 19, 2022.
—————
Ouattara S. Mamadou, pro se.
Marissa J. Savit, Thomas A. Deamus, and Marie E. Small, for respond-
ent.
MEMORANDUM OPINION
LAUBER, Judge: In this collection due process (CDP) case, peti-
tioner seeks review pursuant to sections 6320(c) and 6330(d)(1) of the
determination by the Internal Revenue Service (IRS or respondent) re-
garding collection action for tax years 2015 and 2016. 1 Respondent has
filed a Motion for Summary Judgment contending that petitioner is not
entitled to challenge his underlying tax liabilities and that the settle-
ment officer (SO) did not abuse her discretion. We agree and accordingly
will grant the Motion.
1 Unless otherwise indicated, all statutory references are to the Internal Reve-
nue Code, Title 26 U.S.C., in effect at all relevant times, all regulation references are
to the Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all relevant times,
and all Rule references are to the Tax Court Rules of Practice and Procedure. We
round all monetary amounts to the nearest dollar.
Served 12/19/22
2
[*2] Background
The following facts are based upon the parties’ pleadings, Motion
papers, declarations, and attached Exhibits, which include the adminis-
trative record of the CDP proceeding. See Rule 121(b). Petitioner re-
sided in New York when he filed his Petition.
Petitioner filed timely Federal income tax returns for 2015 and
2016. The IRS commenced an examination of those returns upon receiv-
ing third-party reports showing items of income that petitioner had
failed to report. On March 22, 2018, the IRS issued petitioner a timely
notice of deficiency determining deficiencies of $28,364 and $15,980 for
2015 and 2016, respectively. The notice determined additional income
as shown in the third-party reports and disallowed certain itemized and
business expense deductions. 2
The notice of deficiency was sent by certified mail to petitioner at
his last known address, an apartment in Bronx, New York (Bronx ad-
dress). The Bronx address was the address shown on petitioner’s most
recently filed Federal income tax return, that is, his 2016 return filed on
April 15, 2017. The Bronx address is petitioner’s address of record with
this Court, and it is the address that he has used at all relevant times
in his correspondence with the IRS.
Petitioner did not timely petition this Court in response to the
notice of deficiency. Accordingly, on August 13, 2018, respondent as-
sessed the additional tax liabilities as determined in the notice. Peti-
tioner did not pay these liabilities upon notice and demand for payment.
On June 6, 2019, in an effort to collect petitioner’s 2015 and 2016
liabilities, the IRS filed a Notice of Federal Tax Lien (NFTL) and sent
petitioner a Letter 3172 (lien notice) notifying him of his right to a CDP
hearing. The lien notice was sent by certified mail and was addressed
to petitioner at the Bronx address.
Petitioner timely requested a CDP hearing, listing the Bronx ad-
dress as his current address. In his hearing request he did not propose
a collection alternative. Rather, he stated that he “ha[d] not been given
2 The notice of deficiency also determined accuracy-related penalties for both
years, but respondent has conceded (and abated) those penalties for inability to show
timely supervisory approval under section 6751(b)(1). See infra p. 4.
3
[*3] a chance to fight the deficiency determination” and wanted to chal-
lenge his underlying liability for each year.
The case was assigned to an SO from the IRS Office of Appeals
(Appeals) in Atlanta, Georgia. 3 On January 28, 2020, the SO sent peti-
tioner a letter, again mailed to the Bronx address, scheduling a tele-
phone CDP hearing for March 31, 2020. The SO indicated that peti-
tioner should call to reschedule if he could not keep that appointment.
The SO’s letter noted that the proposed conference would be peti-
tioner’s main opportunity to explain why he disagreed with the collec-
tion action and to discuss collection alternatives. The SO explained that
she would be unable to consider a collection alternative unless petitioner
sent her a completed Form 433–A, Collection Information Statement for
Wage Earners and Self-Employed Individuals, with supporting financial
information.
Petitioner did not call in for the scheduled conference, did not re-
quest that it be rescheduled, and did not supply any financial infor-
mation. On April 9, 2020, the SO sent petitioner a “last chance” letter
informing him that he had 14 days to call her or send additional infor-
mation; otherwise, she would close the case. Petitioner did not respond
to that letter. On July 27, 2020, following a “COVID 19 suspension,” the
SO sent petitioner another last chance letter. Again he failed to re-
spond.
In January 2021 the SO verified the propriety of the assessments
by reviewing copies of the notice of deficiency and the U.S. Postal Service
(USPS) certified mail list on which the notice appeared. On January 14,
2021, having received no communication from petitioner since his initial
request for a CDP hearing, the SO closed the case. On February 26,
2021, the IRS sent petitioner a notice of determination sustaining the
NFTL filing. The letter acknowledged petitioner’s assertion that he “did
not have the opportunity to dispute the notice of deficiency.” But be-
cause he supplied no relevant information and failed to participate in
the telephone conference, his dispute regarding his underlying liabilities
“was not considered.”
Petitioner timely petitioned this Court for review, listing his ad-
dress as the Bronx address. In his Petition he sought to challenge his
3 On July 1, 2019, the IRS Office of Appeals was renamed the IRS Independent
Office of Appeals. See Taxpayer First Act, Pub. L. No. 116-25, § 1001, 133 Stat. 981,
983 (2019).
4
[*4] underlying tax liabilities for 2015–2016. He stated that he was an
independent contractor and alleged that the IRS had failed to allow de-
ductions for his “self-employed expenses.”
On March 18, 2022, after several unsuccessful efforts to com-
municate with petitioner, respondent filed a Motion to Dismiss for Fail-
ure to Properly Prosecute. On April 6, 2022, petitioner filed a handwrit-
ten Response, asserting that he did not receive the notice of deficiency
for 2015–2016. He also attached a copy of IRS Form 668(Z), Certificate
of Release of Federal Tax Lien, indicating that the tax liens for 2015–
2016 had been released on February 9, 2022.
This case was called from the calendar in New York, New York,
on April 11, 2022. There was no appearance by or on behalf of petitioner.
Respondent appeared and explained that the tax liens had been released
in error. Counsel for respondent represented that, upon determining
that the IRS could not show timely supervisory approval for the penal-
ties, she asked the Service Center to abate the penalties, but it errone-
ously abated the deficiencies as well. Counsel explained that the erro-
neous abatement of the deficiencies had been reversed, but not in time
to prevent issuance of the Form 668(Z), which released the liens.
By Order served April 15, 2022, we denied without prejudice re-
spondent’s Motion to Dismiss. We subsequently set the case for a remote
hearing on June 13, 2022, in which petitioner participated by telephone.
He asserted that he had a lawyer, but no counsel has ever entered an
appearance for him in this case.
During the hearing we suggested that the case might be resolved
via motion for summary judgment. On June 29, 2022, we directed re-
spondent to file a motion for summary judgment by August 15, 2022,
and directed petitioner to respond by September 28, 2022. Our Order
warned petitioner that, “under Tax Court Rule 121(d), judgment may be
entered against a party who fails to respond to a motion for summary
judgment.” On August 5, 2022, respondent filed a Motion for Summary
Judgment, but petitioner failed to respond.
Discussion
A. Jurisdiction
In his CDP hearing request petitioner challenged his underlying
tax liabilities for 2015–2016. In the notice of determination the SO de-
termined that petitioner’s underlying liability challenge would not be
5
[*5] considered, that he was entitled to no collection alternative, and
that the NFTL filings were proper. Because of a clerical error, the tax
liens for 2015–2016 have been released, but the abatements of the defi-
ciency assessments have been reversed. Petitioner thus continues to
have outstanding tax liabilities for 2015–2016, and he seeks to dispute
those liabilities in this Court.
This Court has jurisdiction to review the “determination” made
by the IRS following a CDP hearing. See §§ 6330(d)(1), 6320(c). With-
drawal of a Federal tax lien, in and of itself, does not prevent us from
exercising jurisdiction over the remaining issues in a case. See First
Rock Baptist Church Child Dev. Ctr. v. Commissioner, 148 T.C. 380, 388
(2017); see also Vigon v. Commissioner, 149 T.C. 97, 104, 105–07 (2017).
Despite the inadvertent withdrawal of the liens, we retain jurisdiction
to consider petitioner’s challenge to his underlying tax liabilities and the
SO’s exercise of discretion.
B. Summary Judgment Standard
The purpose of summary judgment is to expedite litigation and
avoid costly, time-consuming, and unnecessary trials. Fla. Peach Corp.
v. Commissioner, 90 T.C. 678, 681 (1988). The Court may grant a motion
for summary judgment when the record reveals that there is no genuine
dispute as to any material fact and a decision may be rendered as a mat-
ter of law. Rule 121(b); Sundstrand Corp. v. Commissioner, 98 T.C. 518,
520 (1992), aff’d, 17 F.3d 965 (7th Cir. 1994). In deciding whether to
grant summary judgment, we construe factual materials and inferences
drawn from them in the light most favorable to the nonmoving party.
Sundstrand Corp., 98 T.C. at 520. However, the nonmoving party may
not rest upon mere allegations or denials in his pleadings; instead, he
must set forth specific facts demonstrating that a genuine dispute exists
for trial. Rule 121(d); see Sundstrand Corp., 98 T.C. at 520.
Because petitioner did not respond to the Motion for Summary
Judgment, we could enter a decision against him for that reason alone.
See Rule 121(d). We will nevertheless consider the Motion on its merits.
We conclude that no material facts are in genuine dispute and that this
case is appropriate for summary adjudication.
C. Standard of Review
Section 6330(d)(1) does not prescribe the standard of review that
this Court should apply in reviewing an IRS administrative determina-
tion in a CDP case. The general parameters for such review are marked
6
[*6] out by our precedents. Where the validity of a taxpayer’s underly-
ing liability is properly at issue, we review the IRS’s determination de
novo. Sego v. Commissioner, 114 T.C. 604, 610 (2000); Goza v. Commis-
sioner, 114 T.C. 176, 181–82 (2000). Where the taxpayer’s underlying
liability is not properly before us, we review the IRS’s determination for
abuse of discretion only. Jones v. Commissioner, 338 F.3d 463, 466 (5th
Cir. 2003); Goza, 114 T.C. at 182. 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).
D. Underlying Liabilities
A taxpayer may challenge his underlying tax liability at a CDP
hearing only if he “did not receive any statutory notice of deficiency for
such tax liability or did not otherwise have an opportunity” to dispute
it. § 6330(c)(2)(B). For purposes of determining whether a taxpayer can
raise a liability challenge under section 6330(c)(2)(B), actual receipt of
the statutory notice must be determined. See Sego, 114 T.C. at 610–11.
A notice of deficiency is presumed to have been received by the taxpayer
if it was properly mailed to him at his last known address. See
§ 6212(b)(1); Hoyle v. Commissioner, 131 T.C. 197, 200, 203–04 (2008),
supplemented by 136 T.C. 463 (2011). A taxpayer’s last known address
is generally the address appearing on his “most recently filed and
properly processed Federal tax return.” Treas. Reg. § 301.6212-2(a).
Respondent bears the burden of proving, by competent and per-
suasive evidence, the proper mailing of the notice of deficiency. Coleman
v. Commissioner, 94 T.C. 82, 90 (1990). Generally, if the IRS establishes
that the notice existed and produces a USPS certified mail list showing
that the notice was sent to the taxpayer’s last known address, the IRS
is entitled to a presumption of proper mailing. See O’Rourke v. United
States, 587 F.3d 537, 540 (2d Cir. 2009); Coleman, 94 T.C. at 90–91. If
a taxpayer fails to rebut this presumption, the Court may find that the
taxpayer received the notice. See Sego, 114 T.C. at 611.
Respondent has supplied a USPS certified mail list showing that
the notice of deficiency for 2015–2016 was sent via certified mail to pe-
titioner at his Bronx address. The SO subsequently verified that this
address was petitioner’s last known address. Petitioner does not dispute
that the Bronx address was his last known address, and several facts
support the conclusion that it has been his correct address at all relevant
times. Petitioner listed the Bronx address on his 2016 tax return, filed
7
[*7] April 15, 2017. He received the lien notice at the Bronx address
and showed the Bronx address as the return address on his CDP hearing
request. The Bronx address has been his address of record with this
Court at all relevant times: He listed the Bronx address as his address
on his Tax Court Petition, on a subsequent amendment to his Petition,
and in his Response to the Motion to Dismiss.
Petitioner asserted in his Response to the Motion to Dismiss that
he did not receive the notice of deficiency. But he has supplied no evi-
dence to support the plausibility of that assertion. He has evidently re-
sided at the Bronx address at least since April 2017, well before the no-
tice of deficiency was issued, and he has repeatedly received mail at that
address from the IRS and this Court. Petitioner’s allegations are insuf-
ficient to overcome the presumption of official regularity. See Sego, 114
T.C. at 611. We find that respondent has carried his burden of showing
that petitioner actually received the notice of deficiency. See Golditch v.
Commissioner, T.C. Memo. 2010-260, 100 T.C.M. (CCH) 477, 480 (citing
Sego, 114 T.C. at 611).
Assuming arguendo that petitioner did not receive the notice of
deficiency, he was entitled to dispute his underlying tax liabilities at the
CDP hearing. But this right entailed certain reciprocal obligations on
his part. To preserve an underlying liability challenge in this Court, a
taxpayer must properly raise that challenge at the CDP hearing.
Thompson v. Commissioner, 140 T.C. 173, 178 (2013); see Giamelli v.
Commissioner, 129 T.C. 107, 113 (2007). “An issue is not properly raised
if the taxpayer fails . . . to present to Appeals any evidence with respect
to that issue after being given a reasonable opportunity” to do so. Treas.
Reg. § 301.6320-1(f)(2), Q&A-F3; see Giamelli, 129 T.C. at 112–16. In
other words, the taxpayer must explain what he believes his correct tax
liability to be and supply the SO with some evidence to support that
position. See Giamelli, 129 T.C. at 112–16; Fleming v. Commissioner,
T.C. Memo. 2017-155, 114 T.C.M. (CCH) 180, 182 (citing McRae v. Com-
missioner, T.C. Memo. 2015-132, 110 T.C.M. (CCH) 89, 91); Treas. Reg.
§ 301.6320-1(f)(2), Q&A-F3.
Petitioner did not submit during the CDP hearing any evidence
that would tend to dispute the existence or amounts of his 2015–2016
tax liabilities. Indeed, he did not participate in the CDP hearing or com-
municate with the SO after filing his hearing request. See Sullivan v.
Commissioner, T.C. Memo. 2019-153, 118 T.C.M. (CCH) 415, 417. Be-
cause petitioner did not properly raise an underlying liability challenge
8
[*8] at the CDP hearing, that issue is not before this Court. We thus
review the SO’s action for abuse of discretion only.
E. Abuse of Discretion
In deciding whether the SO abused her discretion we consider
whether she: (1) properly verified that the requirements of applicable
law or administrative procedure were met, (2) considered relevant is-
sues petitioner raised, and (3) considered “whether any proposed collec-
tion action balances the need for the efficient collection of taxes with the
legitimate concern of [petitioner] that any collection action be no more
intrusive than necessary.” § 6330(c)(3); see § 6320(c). Our review of the
record establishes that the SO properly discharged all of her responsi-
bilities under sections 6320(c) and 6330(c).
The SO properly verified the assessments by requesting and re-
viewing the notice of deficiency and the certified mail list. She reasona-
bly concluded that petitioner did not qualify for a collection alternative.
Petitioner proposed no such alternative, and he declined to supply the
financial information requisite to determining whether he was entitled
to one. Either of these failings by itself is disqualifying. See Gentile v.
Commissioner, T.C. Memo. 2013-175, 106 T.C.M. (CCH) 75, 77 (no alter-
native proposed), aff’d, 592 F. App’x 824 (11th Cir. 2014); Coleman v.
Commissioner, T.C. Memo. 2010-51, 99 T.C.M. (CCH) 1213, 1215 (no fi-
nancial information provided), aff’d, 420 F. App’x 663 (8th Cir. 2011).
Finding no abuse of discretion in any respect, we will grant sum-
mary judgment for respondent. We note that petitioner is free to submit
to the IRS at any time, for its consideration and possible acceptance, a
collection alternative in the form of an offer-in-compromise or an install-
ment agreement, supported by the requisite financial information.
To reflect the foregoing,
An appropriate order and decision will be entered for respondent.