Smith v. Comm'r

T.C. Memo. 2007-117
UNITED STATES TAX COURT
LYNNE M. SMITH, Petitioner, AND STANLEY J. SMITH, Intervenor v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 8644-05. Filed May 9, 2007.
Philip J. Vecchio, for petitioner.
Stanley J. Smith, pro se.
John R. Mikalchus, for respondent.
MEMORANDUM OPINION
CHIECHI, Judge: This case is before the Court on respon-
dent’s motion to dismiss for lack of jurisdiction (respondent’s
motion). Respondent filed respondent’s motion after the Court
issued Billings v. Commissioner, 127 T.C. 7 (2006), and before
Congress enacted the Tax Relief and Health Care Act of 2006
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(Act). We shall grant respondent’s motion.
Background
In support of respondent’s motion, respondent relies on
Billings v. Commissioner, supra, in which the Court held that it
lacks jurisdiction under section 6015(e)1 to review a determina-
tion under section 6015(f) where no deficiency has been asserted.
Stanley J. Smith, intervenor in this case, filed a response
to respondent’s motion in which he indicated that respondent’s
motion should be granted.
Petitioner filed a response to respondent’s motion (peti-
tioner’s response) in which she indicated that respondent’s
motion should be denied. In support of her position, petitioner
argued in petitioner’s response that “Billings is not wholly
dispositive of this proceeding.” That is because, according to
petitioner, respondent made a wrongful levy with respect to her
taxable years 1998 and 2002, and “the Tax Court has jurisdiction
to address wrongful levy refund claims and equitable relief under
Internal Revenue Code section 6330.”
About five months after the Court issued its opinion in
Billings v. Commissioner, supra, Congress passed the Act. The
Act amended section 6015(e)(1) to provide that the Court may
review respondent’s denial of relief under that section in any
1
All section references are to the Internal Revenue Code in
effect before its amendment by the Act.
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case where an individual requested relief under section 6015(f).
Tax Relief and Health Care Act of 2006, Pub. L. 109-432, div. C,
sec. 408(a), 120 Stat. 2922, 3061. That amendment applies “with
respect to liability for taxes arising or remaining unpaid on or
after the date of the enactment of this Act.” Id. sec. 408(c),
120 Stat. 3062. The date of enactment of the Act was December
20, 2006.
On January 10, 2007, the Court issued an Order (January 10,
2007 Order) in which it directed each party to address the
Court’s jurisdiction in this case in light of the amendment that
the Act made to section 6015(e)(1).
Respondent filed a response to the Court’s January 10, 2007
Order (respondent’s response to the Court’s Order) in which
respondent stated in pertinent part:
4. The balance of tax due for taxable years 1998
and 2002 was paid on April 27, 2006 pursuant to a levy
issued to Anthony Arcodia, Jr., an attorney who was
holding in escrow the proceeds of the sale of the
former residence of the petitioner and the intervenor.
5. The tax liabilities, including interest and
penalties, for which petitioner is seeking relief
pursuant to I.R.C. § 6015(f) were both fully paid on
April 27, 2006, which date is prior to the enactment of
the Act. Thus, the liabilities at issue did not remain
unpaid as of the date of enactment. As a result, the
amendments to I.R.C. § 6015(e) made by the Act * * * do
not apply to the present case. Because the amendments
do not apply, I.R.C. § 6015(e) as it existed before the
amendments and the law concerning that statute apply to
the present case.
6. Before the amendments, I.R.C. § 6015(e), by its
terms, only granted the Tax Court jurisdiction “[i]n the
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case of an individual against whom a deficiency has been
asserted.”
* * * * * * *
8. In this case respondent has not determined a defi-
ciency for the years at issue. Therefore, respondent re-
spectfully states that the Tax Court lacks jurisdiction over
this case.
On February 28, 2007, petitioner filed a response to the
Court’s January 10, 2007 Order (petitioner’s response to the
Court’s Order) in which petitioner stated in pertinent part:
the question in the case at hand is whether or not the
liability for taxes remains unpaid on the date of
enactment of the Tax Relief and Health Care Act of
2006. Petitioner maintains that the liability for
taxes remains unpaid on the date of enactment because
Respondent’s levy of escrow funds was wrongful, Peti-
tioner was denied collection due process, and Peti-
tioner has timely filed a demand to have the levied
funds restored to the escrow account * * *
On April 4, 2007, respondent filed a reply to petitioner’s
response to the Court’s Order (respondent’s reply) in which
respondent stated in pertinent part:
5. First, respondent was not prohibited from
pursuing collection action in this case under I.R.C. §
6015. The restrictions on collection action while a
claim for relief under I.R.C. § 6015 is pending with
this Court, imposed by I.R.C. § 6015(e)(1)(B) (as in
effect at the time of the levy), only apply to requests
for relief under I.R.C. § 6015(b) or (c). Because
petitioner was requesting relief pursuant to I.R.C. §
6015(f), respondent was not prevented from pursuing
collection action to collect the tax liabilities in
this case.
6. Second, in a stand-alone case such as this,
where jurisdiction is predicated on I.R.C. § 6015(e),
the only issue is whether petitioner is entitled to
relief under I.R.C. § 6015. Block v. Commissioner, 120
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T.C. 62, 64-5 (2003). Therefore, petitioner cannot
raise the validity of the levy in this case.
7. Thus, as argued in detail in Respondent’s
Response to the Court’s Order dated January 10, 2007,
the Court does not have jurisdiction in this case
because (1) the amendments made by the Act do not apply
to this case because the liabilities at issue were
full[y] paid prior to the effective date; and (2) the
Court lacks jurisdiction under former I.R.C. § 6015(e)
because respondent did not determine a deficiency
against petitioner. * * *
8. Even assuming, arguendo, that the Court can
consider the validity of the levy, the levy was valid.
* * * * * * *
11. More specifically, on February 7, 2006,
Revenue Officer Ebenhoch issued Letter 1058A, “Final
Notice - Notice of Intent to Levy and Notice of Your
Right to a Hearing” (hereinafter referred to as the
“CDP notice”), by certified mail to petitioner at 12
Oxford Road, Slingerlands, New York 12159. * * *
This letter constituted petitioner’s Collection Due
Process notice for a proposed levy action to collect
the outstanding joint tax liabilities for the 1998
* * * and 2002 tax years. Revenue Officer Ebenhoch
also mailed a copy of the CDP notice to petitioner’s
attorney, Philip J. Vecchio. * * *
12. On February 15, 2006, Revenue Officer
Ebenhoch received the return receipt from the CDP
notice indicating that the notice had been accepted for
delivery. According to the return receipt, it was
signed by Lynn [sic] M. Smith on February 14, 2006.
* * *
13. On March 28, 2006, Revenue Officer Ebenhoch
issued a Notice of Levy to Anthony Arcodia, Jr. to levy
on the escrow funds. * * *
14. On April 27, 2006, Revenue Officer Ebenhoch
received two checks from Anthony Arcodia, Jr. totaling
$68,597.57. Of this amount, $50,537.97 was applied to
fully pay the joint balances due for the 1998, 2001,
and 2002 tax years of the petitioner and the inter-
venor. * * *
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15. In Petitioner’s Response [to the Court’s
Order], petitioner states in paragraph 5 that respon-
dent issued a “notice of levy” against an escrow ac-
count on February 7, 2006. As evidenced by the preced-
ing discussion, the CDP notice was issued on this date
while the Notice of Levy was issued on March 28, 2006.
16. Petitioner had 30 days from the issuance of
the CDP notice in which to request in writing a collec-
tion due process hearing with respondent’s Office of
Appeals. I.R.C. §§ 6330(a)(2) and (b)(1); Treas. Reg.
§ 301.6330-1(c)(2)(Answer C-1).
17. Respondent has no record of petitioner filing
Form 12153 or any other written request with respondent
requesting a collection due process hearing within 30
days after the mailing of the CDP notice. Exhibit D to
Petitioner’s Response [to the Court’s Order] indicates
that counsel for petitioner first contacted Revenue
Officer Ebenhoch on March 29, 2006, which date was more
than 30 days after the issuance of the CDP notice.
Moreover, counsel for petitioner states in paragraph 9
to Petitioner’s Response [to the Court’s Order] that he
contacted respondent’s Appeals Officer Estelle Gottlieb
on March 30, 2006. He states in paragraph 10 that “by
virtue of this latter request of Ms. Gottlieb, Peti-
tioner’s Counsel intended that a hearing be held with
respect to the Notice of Levy.” Again, this contact
date occurred more than 30 days after the mailing of
the CDP notice. Thus, even if petitioner is construed
to have informally made a request for a collection due
process hearing pursuant to this contact, said request
was not timely and petitioner was not entitled to a
hearing.
Discussion
The amendment to 6015(e)(1) that the Act made applies only
“with respect to liability for taxes arising or remaining unpaid
on or after”, Tax Relief and Health Care Act of 2006, Pub. L.
109-432, div. C, sec. 408(c), 120 Stat. 2922, 3062, December 20,
2006, the date of the enactment of the Act. Petitioner admits
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that, pursuant to a levy issued to Anthony Arcodia, Jr. (Mr.
Arcodia), an attorney who was holding in escrow the proceeds of
the sale of the former residence of petitioner and the inter-
venor, Mr. Arcodia paid on April 27, 2006, the liability for tax
with respect to, inter alia, each of petitioner’s taxable years
1998 and 2002. Although petitioner makes various claims in
petitioner’s response to the Court’s Order that that levy was
unlawful, the fact remains that there was no liability for tax
for petitioner’s taxable year 1998 or her taxable year 2002 that
remained unpaid on or after December 20, 2006, the date of the
enactment of the Act.2
We hold that the amendment to section 6015(e)(1) that the
Act made does not apply in the instant case. We further hold
that we do not have jurisdiction over the instant case to deter-
mine whether petitioner is entitled to relief under section
6015(f) where no deficiency has been asserted with respect to
petitioner’s taxable year 1998 or her taxable year 2002. Bill-
ings v. Commissioner, 127 T.C. 7 (2006).
2
Assuming arguendo (1) that we had the authority in the
instant case to determine whether the levy issued to Mr. Arcodia
was valid and (2) that we were to determine that that levy was
invalid, the fact nonetheless remains that there was no liability
for tax for petitioner’s taxable year 1998 or her taxable year
2002 that remained unpaid on or after Dec. 20, 2006, the date of
the enactment of the Act. That would be true even if petitioner
were entitled to a refund of the amount that Mr. Arcodia paid on
Apr. 27, 2006, with respect to the tax liability for each of
those years.
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To reflect the foregoing,
An order granting respondent’s
motion to dismiss for lack of ju-
risdiction will be entered.