Shrier v. Comm'r ( 2006 )

T.C. Memo. 2006-181
UNITED STATES TAX COURT
BARRY SHRIER, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 8725-05L. Filed August 29, 2006.
Cheryl R. Frank and Gerald W. Kelly, Jr., for petitioner.
Vivian N. Rodriguez, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
FOLEY, Judge: The issue for decision is whether respondent
abused his discretion in proceeding with collection of
petitioner’s income tax liabilities relating to 1989 through
2000.
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FINDINGS OF FACT
On May 15, 2003, respondent issued petitioner a Final Notice
of Intent to Levy and Notice of Your Right to a Hearing relating
to 1989 through 2000 (the years in issue). In the notice,
respondent determined that petitioner was liable for taxes and
additions to tax totaling $130,835 and $41,445, respectively,
relating to the years in issue.
On May 27, 2003, petitioner timely filed a Form 12153,
Request for a Collection Due Process Hearing (request), and
stated that he did “not have sufficient assets to cover the
assessed liabilities.” On November 11, 2003, petitioner sent
respondent a Form 433-A, Collection Information Statement for
Wage Earners and Self-Employed Individuals. On November 25,
2003, petitioner supplemented his Form 433-A with copies of
statements relating to petitioner’s checking, credit card, and
telephone accounts. Petitioner also attached a copy of a
statement relating to a car lease in the name of Leo Shrier,
petitioner’s father.
On November 25, 2003, respondent conducted a telephone
conference with petitioner. During the conference, petitioner
requested that his account be placed in “currently not
collectible status” because he was unemployed. On February 13,
2004, petitioner’s counsel informed respondent that petitioner
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was employed and would submit an offer-in-compromise (OIC)
relating to his income tax liabilities. While petitioner was
unemployed, petitioner’s parents made several deposits into his
checking account (deposits). In a letter dated February 27,
2004, respondent requested that petitioner provide an “affidavit
from * * * [petitioner’s] parents as to the amount of money they
gave him and * * * cancelled checks corresponding to the
deposits.” Respondent also asked petitioner to explain the car
lease expense.
On March 23, 2004, petitioner submitted to respondent a Form
656, Offer in Compromise, in the amount of $2,000 based on doubt
as to collectibility (March OIC). Petitioner attached an updated
Form 433-A to the March OIC but did not attach any additional
financial documents. In a letter dated November 17, 2004,
respondent requested additional financial information. In a
second letter, also dated November 17, 2004, respondent requested
that petitioner “provide the documents specified on Form 433A
* * * [and] an affidavit from * * * [petitioner’s] parents as to
the amount of money they gave him.” Respondent warned petitioner
that if the requested documents were not received by December 17,
2004, the March OIC would not be accepted.
On December 17, 2004, petitioner sent respondent an amended
OIC in the amount of $2,000 based on doubt as to collectibility
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and effective tax administration (December OIC). Petitioner
attached to the December OIC an updated Form 433-A, statements
relating to petitioner’s checking account, statements relating to
an employee profit-sharing plan, and wage statements from his
current employer.
In a letter dated March 3, 2005, respondent stated that the
December OIC was insufficient because petitioner did not provide
the requisite documentation relating to petitioner’s ability to
pay. Respondent also informed petitioner that his claimed living
expenses (e.g., food, housing, and transportation) were in excess
of the allowable amount. Respondent also asserted that
petitioner had not disclosed that he was living with another
individual.
On April 15, 2005, respondent issued petitioner a Notice of
Determination Concerning Collection Action(s) Under Section 6320
and/or 6330 relating to 1989 and 1991 through 2000. On May 12,
2005, petitioner, while residing in Aventura, Florida, filed his
petition with the Court relating to the years in issue and 2001.
On July 15, 2005, respondent issued petitioner a Decision Letter
Concerning Equivalent Hearing Under Section 6320 and/or 6330 of
the Internal Revenue Code relating to 1990.
On March 2, 2006, the Court filed respondent’s motion to
dismiss for lack of jurisdiction and to strike as to the taxable
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year 2001. On March 29, 2006, the Court granted respondent’s
motion.
OPINION
Petitioner does not dispute the underlying tax liabilities.
Where the validity of the liability is not at issue, the Court
reviews the Commissioner’s administrative determination for abuse
of discretion. Goza v. Commissioner, 114 T.C. 176, 182 (2000).
Respondent’s determination will be sustained unless the
determination is arbitrary, capricious, clearly unlawful, or
without sound basis in fact or law. Woodral v. Commissioner, 112
T.C. 19, 23 (1999).
Petitioner contends that respondent abused his discretion by
not accepting the December OIC. Section 71221 authorizes
respondent to grant an OIC as an alternative to pursuing a
collection action, but petitioner must provide detailed financial
statements and supporting documentation. Sec. 301.7122-1(d)(2),
Proced. & Admin. Regs. Respondent, on numerous occasions,
requested supporting documentation from petitioner. Petitioner,
however, failed to provide the requested information. Indeed,
respondent was unable to properly evaluate the December OIC
because petitioner did not provide the supporting documentation
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years in issue.
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relating to petitioner’s expenses (i.e., housing, food,
transportation, and health care) and certain deposits.
Accordingly, respondent did not abuse his discretion by not
accepting an OIC and proceeding with the proposed collection
action. Id.
Contentions we have not addressed are irrelevant, moot, or
meritless.
To reflect the foregoing,
Decision will be entered
for respondent.