DocketNumber: Docket Nos. 24515-11L, 24516-11L
Citation Numbers: 2013 T.C. Memo. 110, 105 T.C.M. 1669, 2013 Tax Ct. Memo LEXIS 112
Judges: VASQUEZ
Filed Date: 4/16/2013
Status: Non-Precedential
Modified Date: 11/20/2020
Decisions will be entered for respondent.
VASQUEZ,
Some of the facts have been stipulated and are so found. The stipulation of facts and the attached exhibits are incorporated herein by this reference. Petitioner's principal place of business is in Texas.
John Lee is a cofounder of Precision Prosthetic. Mr. Lee handled petitioner's day-to-day operations until he was called to active military duty in November 2001. Petitioner continued operating 2013 Tax Ct. Memo LEXIS 112">*113 in Mr. Lee's absence, but it failed to keep up with its tax obligations.
In or around October 2005 Internal Revenue Service (IRS) Revenue Officer Alex Garcia contacted petitioner's office manager, Lisa Loza, regarding its outstanding tax liabilities. Revenue Officer Garcia informed Ms. Loza that petitioner needed to file: (1) Form 941, Employer's Quarterly Federal Tax Return, for the quarters ending September 30, 1999, through March 31, 2005; (2) Form 1120, U.S. Corporation Income Tax Return, for 2000 through 2004; and (3) Form *112 940, Employer's Annual Federal Unemployment Tax Return, for 1999 through 2004. Ms. Loza, fearful that the IRS would shut down petitioner, quickly prepared and filed the delinquent returns with the assistance of Revenue Officer Garcia. On February 3, 2006, petitioner filed Form 941 for the period ending December 31, 2005. Revenue Officer Garcia also assisted Ms. Loza in preparing this return. Petitioner fully paid the tax shown as due on the return with Federal tax deposits on September 1, November 21, and December 22, 2005, and payments on February 8, April 17, and July 3, 2006.
Sometime after returning from active duty in May 2007, Mr. Lee reviewed the Forms 2013 Tax Ct. Memo LEXIS 112">*114 941 filed in his absence and determined that they were incorrect. Mr. Lee filed several amended returns; some of the amended returns were accepted by the IRS and some were not. In particular, on April 2, 2010, petitioner filed Form 941-X, Adjusted Employer's Quarterly Federal Tax Return or Claim for Refund, for the quarter ending December 31, 2005, claiming a $12,683 credit. The IRS did not accept this return.
On March 1, March 11, and August 23, 2010, the IRS sent petitioner three Letters 1058, Final Notice—Notice of Intent to Levy and Notice of Your Right to a Hearing, concerning its unpaid civil penalty liability for 2004, unpaid *113 unemployment tax liabilities for 2005 and 2008, unpaid income tax liability for 2008, and unpaid employment tax liabilities for the quarters ending:
2004 | 2004 | 2004 | 2004 |
— | 2005 | 2005 | — |
— | — | 2006 | 2006 |
2007 | 2007 | 2007 | 2007 |
2008 | 2008 | 2008 | 2008 |
2009 | 2009 | 2009 | 2009 |
In response, petitioner timely requested a collection due process (CDP) hearing.
On July 26, 2011, Mr. Lee requested that the failure to file, failure to pay, and failure to deposit additions to tax assessed against petitioner be abated and that the IRS Office of Appeals (Appeals) accept amended Forms 2013 Tax Ct. Memo LEXIS 112">*115 941 for the quarters ending June 30, September 30, and December 31, 2005. Appeals Settlement Officer Bruce Hadzega instructed petitioner to provide a written request to abate the penalties and provide Forms 941c, Supporting Statement to Correct Information, in order to adjust the Forms 941 for 2005. On August 3, 2011, Settlement Officer Hadzega held a telephone conference with Mr. Lee. 2*114 During the hearing Mr. Lee stated that he did not wish to discuss collection alternatives, and Settlement Officer Hadzega explained the procedures for requesting abatement of additions to tax. It is unclear whether petitioner's Forms 941 for 2005 were discussed during the hearing. Settlement Officer Hadzega gave petitioner until August 5, 2011, to provide the necessary information regarding its request to abate the additions to tax. Petitioner did not provide the necessary information, and its request for abatement was denied. Appeals also did not process petitioner's Form 941 for the period ending December 31, 2005, and thus did not apply the claimed $12,683 overpayment towards its outstanding employment tax liabilities. 3 On September 22, 2011, the IRS issued to petitioner two Notices of Determination 2013 Tax Ct. Memo LEXIS 112">*116 Concerning Collection Action(s) Under
*116 Where the underlying tax liability is properly at issue, we review that determination de novo.
The Tax Court is a court of limited jurisdiction; we may exercise jurisdiction only to the extent expressly authorized by Congress.
Petitioner claims that it overpaid its employment tax liability for the quarter ending December 31, 2005, and the resulting credit should be applied to its outstanding employment tax liabilities. However, under An overpayment of a * * * [tax liability] that has been determined by the IRS or a court but has not been either refunded or applied to another liability may be an "available credit" that, under
Thus, the Court can consider only nonrefunded or not yet applied "available" credits arising in nondetermination years when determining whether a tax liability at issue has been reduced or eliminated.
Because it has not been determined that petitioner overpaid its employment tax liability for the quarter ending December 31, 2005, petitioner does not have an available credit for that period; instead, 2013 Tax Ct. Memo LEXIS 112">*121 it merely has a claim of an overpayment, which is disputed by the IRS. The Court lacks jurisdiction to determine whether *119 petitioner overpaid its employment tax liability for periods not subject to the notice of determination.
However, even if we had jurisdiction, petitioner would not be entitled to an overpayment credit for the period ending December 31, 2005, because it has failed to meet the threshold requirements for claiming a refund. 5 Petitioner has failed to meet the threshold requirement that the claim be timely filed.
Appeals did not abuse its discretion in determining to proceed with levies to collect petitioner's unpaid tax liabilities, notwithstanding petitioner's contention that its employment tax liability for the period ending December 31, 2005, was overpaid. Petitioner 2013 Tax Ct. Memo LEXIS 112">*123 has not advanced any other argument or introduced any other evidence that would allow us to conclude that the determinations to sustain the proposed levies constituted clear taxpayer abuse and unfairness by the IRS. Petitioner did not request that Settlement Officer Hadzega consider collection alternatives, and it failed to provide the information requested. Appeals determined that the requirements of applicable law and administrative procedure were met and concluded that sustaining the proposed levies appropriately balanced the need for efficient collection of taxes with petitioner's concerns regarding the *121 intrusiveness of the levy actions. Therefore, we hold that Appeals did not abuse its discretion when it issued notices of determination upholding the proposed levy actions.
In reaching our holdings, we have considered all arguments made, and to the extent not mentioned, we consider them irrelevant, moot, or without merit.
To reflect the foregoing,
1. Unless otherwise indicated, all section references are to the Internal Revenue Code in effect at all relevant times. All amounts are rounded to the nearest dollar.↩
2. Settlement Officer Hadzega and Mr. Lee had previously held a telephone conference on October 28, 2010, regarding petitioner's employment tax liabilities for the 2004 quarters. Following the hearing Settlement Officer Hadzega processed petitioner's amended Forms 941 for 2004 and credited any overpayments to subsequent tax periods.↩
3. Appeals also did not process petitioner's amended Forms 941 for the periods ending June 30 and September 30, 2005, but it does not dispute that decision.↩
4.
5. As a preliminary inquiry,
6. Petitioner filed its Form 941 on February 3, 2006. Under