Waters v. Comm'r

T.C. Memo. 2007-13
UNITED STATES TAX COURT
CLETUS GAYLON WATERS, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 1561-06L. Filed January 17, 2007.
Cletus Gaylon Waters, pro se.
Melinda K. Fisher, for respondent.
MEMORANDUM OPINION
WELLS, Judge: This matter is before the Court on
respondent’s motion for summary judgment pursuant to Rule 121.1
1
Unless otherwise indicated, all Rule references are to the
Tax Court Rules of Practice and Procedure, and all section
references are to the Internal Revenue Code, as amended.
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The issue we must decide is whether respondent’s Appeals Office
abused its discretion in determining to proceed with collection
of petitioner’s tax liability for taxable years 1997 and 1998.
Background
At the time of filing the petition in the instant case,
petitioner resided in Leesburg, Virginia.
On June 22, 1998, petitioner filed his 1997 tax return
jointly with Sharon Lee Waters (Mrs. Waters), showing tax due
of $12,095.2 Petitioner had withheld payments of $15,000, and
respondent issued petitioner and Mrs. Waters a refund of $2,905
on June 22, 1998.
Respondent examined petitioner’s 1997 return and assessed
additional taxes on December 24, 2000, and November 3, 2003, of
$1,919, and $9,884, respectively. On October 24, 2005, the
outstanding balance, including interest and penalties, for
petitioner’s 1997 tax year was $14,763.21.
On November 29, 1999, petitioner filed his 1998 tax return
jointly with Mrs. Waters, showing tax due of $37,382.03.
Petitioner’s withholding for the 1998 year and payment submitted
with the return totaled $32,200. On January 27, 2000, petitioner
made a subsequent payment toward his liability for his 1998
taxable year of $5,868.02.
2
Sharon Lee Waters is not a party to this case.
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On December 16, 2002, petitioner filed an amended return
for his 1998 taxable year. On November 10, 2003, respondent
assessed additional taxes for petitioner’s 1998 taxable year of
$16,567. On October 24, 2005, the outstanding balance, including
interest and penalties, for petitioner’s 1998 taxable year was
$20,720.51.
On April 15, 2005, respondent sent petitioner and Mrs.
Waters a Notice of Federal Tax Lien Filing and Your Right to a
Hearing under IRC 6320 for taxable years 1997 and 1998. On May
23, 2005, petitioner filed a Form 12153, Request for Collection
Due Process Hearing.
By letter dated October 25, 2005, respondent’s Settlement
Officer, Mary Craca (Ms. Craca), informed petitioner that she had
been assigned to his case and set an appointment for a face-to-
face meeting in the Washington, D.C., Appeals Office at 1:00 p.m.
on November 8, 2005. Ms. Craca also stated in the letter that,
for her to consider collection alternatives, petitioner must
submit a completed Form 433-A, Collection Information Statement
for Wage Earners and Self-Employed Individuals, and 2001, 2002,
and 2003 tax returns.
On November 8, 2005, petitioner telephoned Ms. Craca and
left a message stating that he would not be able to attend the
hearing. Ms. Craca returned petitioner’s telephone call later
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that day, and they discussed petitioner’s tax accounts over the
telephone. Petitioner agreed that he owed the liabilities for
taxable years 1997 and 1998 and did not dispute the accuracy of
the assessed amounts. Petitioner likewise acknowledged that he
had not filed tax returns for 2001, 2002, and 2003. Petitioner
stated that he had an appointment with a return preparer the week
of November 14, 2005. Ms. Craca set a deadline of December 5,
2005, for petitioner to provide her with the returns.
Ms. Craca did not receive any correspondence, tax returns,
or financial information from petitioner by December 5, 2005.
Ms. Craca verified that she had no prior involvement with the
unpaid taxes at issue and that all legal and procedural
requirements for proceeding with a lien had been met. Ms. Craca
concluded that, because petitioner had not filed the required
returns and had not provided the requested financial information,
she could not consider collection alternatives. Ms. Craca then
closed the case, sustaining the proposed lien. Respondent sent
petitioner a Notice of Determination dated December 22, 2005.
By letter dated January 16, 2006, petitioner’s probation
officer3 submitted a letter to the Court, requesting that
respondent schedule a redetermination hearing, which letter the
3
Petitioner spent 15 months in prison for filing fraudulent
tax returns and fraud. He is now on supervised release for a
term of 3 years.
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Court filed as a petition in docket No. 1561-06L. On January 24,
2006, the Court ordered petitioner to file an amended petition by
March 10, 2006.
On February 1, 2006, petitioner filed a petition from the
Notice of Determination for taxable years 1997 and 1998, which
was designated as docket No. 2327-06L. On February 17, 2006,
respondent moved that the case at docket No. 2327-06L be closed
on grounds of duplication. On March 2, 2006, the Court closed
the case at docket No. 2327-06L and ordered that the petition in
that case become the amended petition in the instant case. The
amended petition does not assign error to respondent’s
determination, stating that petitioner’s income is exclusively
from Social Security payments and he is disabled.
On November 15, 2006, respondent filed the motion for
summary judgment. The Court ordered petitioner to respond to
the motion by December 20, 2006; however, petitioner has failed
to do so.
Discussion
Summary judgment is intended to expedite litigation and
avoid unnecessary and expensive trials and may be granted where
there is no genuine issue of material fact and a decision may be
rendered as a matter of law. Rule 121(a) and (b); Fla. Peach
Corp. v. Commissioner, 90 T.C. 678, 681 (1988). The moving party
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bears the burden of proving that there is no genuine issue of
material fact, and factual inferences are viewed in a light most
favorable to the nonmoving party. Craig v. Commissioner, 119
T.C. 252, 260 (2002); Dahlstrom v. Commissioner, 85 T.C. 812, 821
(1985). The party opposing summary judgment must set forth
specific facts that show that a genuine question of material fact
exists and may not rely merely on allegations or denials in the
pleadings. Grant Creek Water Works, Ltd. v. Commissioner, 91
T.C. 322, 325 (1988); Casanova Co. v. Commissioner, 87 T.C. 214,
217 (1986).
Section 6320(a)(1) requires the Secretary to give persons
liable to pay taxes written notice of the filing of a tax lien.
Section 6320(a)(3)(B) and (b)(1) provides that the notice shall
inform such persons of the right to request a hearing in
respondent’s Appeals Office.
Section 6320(c) provides that an Appeals Office hearing
generally shall be conducted consistently with the procedures set
forth in section 6330(c), (d), and (e). The Appeals officer must
verify at the hearing that the applicable laws and administrative
procedures have been followed. Sec. 6330(c)(1). At the hearing,
the person against whom the lien is made may raise any relevant
issues relating to the unpaid tax or the lien, including
appropriate spousal defenses, challenges to the appropriateness
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of collection actions, and collection alternatives. Sec.
6330(c)(2)(A). The person may challenge the existence or amount
of the underlying tax, however, only if he did not receive any
statutory notice of deficiency for the tax liability or did not
otherwise have an opportunity to dispute the tax liability. Sec.
6330(c)(2)(B).
Where the validity of the underlying tax liability is
properly in issue, the Court will review the matter de novo.
Where the validity of the underlying tax is not properly at
issue, however, the Court will review the Commissioner’s
administrative determination for abuse of discretion. Sego v.
Commissioner, 114 T.C. 604, 610 (2000); Goza v. Commissioner, 114
T.C. 176, 181-182 (2000).
Petitioner has not challenged the underlying tax liability
in his petition or any other filing. Accordingly, we review
respondent’s determination for abuse of discretion.
During the Appeals hearing, the only issue petitioner raised
was the possibility of collection alternatives. However,
petitioner failed to provide Ms. Craca with the requisite
documentation, including Form 433-A. Additionally, petitioner
failed to file tax returns for taxable years 2001, 2002, and
2003. Finally, petitioner never submitted a collection
alternative for Ms. Craca to consider. On the basis of the
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foregoing, we hold that no genuine issue of material fact exists
requiring trial and that respondent is entitled to summary
judgment. Accordingly, we hold that respondent’s determination
to sustain the lien was not an abuse of discretion.
To reflect the foregoing,
An appropriate order and
decision will be entered.