David Andrew Lufkin, Sr.

T.C. Memo. 2021-71UNITED STATES TAX COURT
DAVID ANDREW LUFKIN, SR., Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 7653-17L. Filed June 8, 2021.
David Andrew Lufkin, Sr., pro se.
Martha J. Weber, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
GREAVES, Judge: This collection due process (CDP) case was tried before
Judge Robert P. Ruwe on June 3, 2019.1 Petitioner seeks review of respondent’s
1
After this trial the Court issued an order proposing to reassign this case to
another judicial officer for purposes of preparing the opinion and entering a
decision based on the record of trial, or, alternatively, allowing the parties to
(continued...)
Served 06/08/21
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[*2] notice of determination that sustained a proposed levy under section 6330
with respect to employment taxes reportable on Form 941, Employer’s Quarterly
Federal Tax Return (Form 941 liabilities), for the periods ending September 30
and December 31, 1998 (periods at issue).2 Petitioner asserts that he is not liable
for the Form 941 liabilities for the periods at issue. He also argues that the periods
of limitations for the Form 941 liabilities expired and that respondent failed to
follow all applicable laws and procedures in his attempt to assess and collect those
liabilities. Petitioner failed to offer sufficient evidence to substantiate his claims;
therefore, we decide this case in respondent’s favor.
FINDINGS OF FACT
The following facts are based on the admissible record, including the
parties’ pleadings, trial testimonies, and posttrial briefs. Petitioner resided in
Tennessee when he petitioned this Court.
1
(...continued)
request a new trial or supplement the record. The parties consented to
reassignment of the case and did not request a new trial or request to supplement
the record. By order dated August 31, 2020, this case was submitted to Judge
Travis A. Greaves.
2
Unless otherwise noted, all section references are to the Internal Revenue
Code in effect for the relevant times, and all Rule references are to the Tax Court
Rules of Practice and Procedure.
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[*3] Respondent assessed the Form 941 liabilities, which arose in connection
with petitioner’s law practice, for the periods at issue on December 14, 1998, and
June 21, 1999, respectively.3 After petitioner underwent multiple chapter 7
bankruptcy proceedings between 2000 and 2011, respondent issued petitioner a
Final Notice of Intent to Levy and Notice of Your Right to a Hearing (CDP notice)
on October 8, 2014, in an effort to collect the Form 941 liabilities.
In response to the CDP notice petitioner timely submitted Form 12153,
Request for a Collection Due Process or Equivalent Hearing, on October 24, 2014.
The case was assigned to Settlement Officer Alan Eddelman (SO Eddelman) in
December 2016. SO Eddelman participated in a telephone collection due process
hearing (CDP hearing) with petitioner in January 2017. Petitioner asserted that he
was not liable for the Form 941 liabilities because another entity had assumed
them. Petitioner argued in the alternative that the periods of limitations for
collection of the Form 941 liabilities had expired and that they had been
3
The above assessment dates are based on the dates included in the notice of
determination.
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[*4] discharged in one of his prior bankruptcy proceedings.4 Petitioner did not
propose any collection alternative during the CDP hearing.
After the CDP hearing respondent issued the notice sustaining the proposed
levy. Respondent attached SO Eddelman’s report to the notice of determination,
wherein SO Eddelman stated that he had “verified the requirements of any
applicable law or administrative procedure were met.” Specifically, he found that
Internal Revenue Service (IRS) “records confirmed the proper issuance of the
notice and demand, Notice of Intent to Levy and/or Notice of Federal Tax Lien
* * * filing, and notice of a right to a * * * [CDP] hearing.” SO Eddelman
concluded that “none of the available facts show that the Form 941 liabilities for
the periods ending September 30, 1998 and December 31, 1998 were assumed,
acquired, or somehow transferred from * * * [petitioner] to any other entity.” He
also determined that the periods of limitations for collection had been suspended
during petitioner’s bankruptcy proceedings. Petitioner timely petitioned this Court
seeking review of the proposed levy for the periods at issue.
4
Although he raised the issue during the CDP hearing, petitioner did not
allege in his petition that the Form 941 liabilities were discharged in bankruptcy.
Therefore we do not address this argument as part of our review. See Rule
34(b)(4).
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[*5] OPINION
Section 6330(b) allows a taxpayer to challenge a proposed levy before the
IRS Office of Appeals (Appeals)5 in a CDP hearing, see sec. 301.6330-1(b)(1),
Proced. & Admin. Regs., and section 6330(d) provides for Tax Court review of an
Appeals determination to sustain the levy. A taxpayer may challenge in a CDP
hearing the existence or amount of the underlying tax liability that the IRS is
seeking to collect, provided that the taxpayer did not already have a chance to
challenge it. Sec. 6330(c)(2)(B); Katz v. Commissioner, 115 T.C. 329, 339
(2000). If a taxpayer fails to properly raise the underlying liability at the CDP
hearing, he is precluded from challenging it. Thompson v. Commissioner, 140
T.C. 173, 178 (2013) (citing Giamelli v. Commissioner, 129 T.C. 107, 114
(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.” Moriarty v. Commissioner, T.C. Memo. 2017-204, at *9
(quoting section 301.6330-1(f)(2), Q&A-F3, Proced. & Admin. Regs.), aff’d, 2018
WL 4924349 (6th Cir. Sept. 19, 2018).
5
This office is now named the “Independent Office of Appeals”. Taxpayer
First Act, Pub. L. No. 116-25, sec. 1001, 133 Stat. at 983 (2019).
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[*6] Where a taxpayer properly challenges the validity of his underlying liability
for the period in question, we review the matter on a de novo basis. Goza v.
Commissioner, 114 T.C. 176, 181-182 (2000). Petitioner has the burden of proof
regarding his underlying liabilities. See Rule 142(a); Thompson v. Commissioner,
140 T.C. at 178. Other than the merits of the underlying liabilities, we review an
Appeals determination for abuse of discretion. Goza v. Commissioner, 114 T.C.
at 182.
Petitioner made the following claims with this Court as part of his appeal of
respondent’s determination: (1) that another person or entity6 is liable for the
Form 941 liabilities for the periods at issue and made payments with respect to
these liabilities to the IRS;7 (2) the periods of limitations for collection of the Form
6
Petitioner suggested various entities and people are liable for the Form 941
liabilities, including his former law practice, David A. Lufkin, P.C., a Tennessee
professional corporation, and a “Knox County Chancery Court appointed * * *
receiver”.
7
SO Eddelman’s summary report indicates that petitioner alleged during the
CDP hearing that another entity legally assumed the Form 941 liabilities for the
periods at issue. Because petitioner did not specifically raise this argument with
this Court, we do not address it here other than to note that a taxpayer cannot
divest himself of his tax liabilities or otherwise transfer his obligations to a third
party. See Rule 34(b)(4); Old Colony Trust Co. v. Commissioner, 279 U.S. 716,
729 (1929).
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[*7] 941 liabilities in this case expired;8 and (3) SO Eddelman failed to recognize
that respondent and his agents did not follow all applicable laws and
administrative procedures in attempting to collect the Form 941 liabilities. We
address each allegation separately below.
I. Liable Taxpayer
Petitioner asserts that he is not the taxpayer liable for the Form 941
liabilities for the periods at issue. He raised this underlying liability argument in
the CDP hearing,9 and we therefore review it de novo, with petitioner bearing the
burden of proving that respondent’s determination was in error. See Rule 142(a);
Welch v. Helvering, 290 U.S. 111, 115 (1933).
Petitioner produced no substantive evidence establishing how another entity
or person was either liable for the Form 941 liabilities or submitted payments to
the IRS for the liabilities. He alleged that in 2000 respondent seized the
documentation necessary to prove his claim, but that respondent either lost or
8
Although unspecified by petitioner, we construe his challenge to the
periods of limitations as relating to the applicable statute of limitations with
respect to respondent’s attempted collection (as opposed to assessment) of the
Form 941 liabilities for the periods at issue.
9
The record does not show, and respondent does not argue, that petitioner
had an opportunity to challenge the Form 941 liabilities before the CDP hearing.
Thus, petitioner was not precluded under sec. 6330(c)(2)(B) from raising them at
the CDP hearing, nor is this Court precluded from reviewing them.
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[*8] destroyed this documentation following the purported seizure. In effect,
petitioner asks us to relieve him of his burden of proof and overlook his failure to
offer any evidence as to this issue. We decline to do so. See Am. Police & Fire
Found., Inc. v. Commissioner, 81 T.C. 699, 706-707 (1983) (finding that the
taxpayer’s burden of going forward with the evidence did not shift merely because
the Commissioner unintentionally lost the taxpayer’s records); Malinowski v.
Commissioner, 71 T.C. 1120, 1125 (1979) (same).
We therefore conclude that petitioner failed to satisfy his burden to show
how respondent’s determination as to the Form 941 liabilities was made in error or
to demonstrate how an applicable exception applied in his case.
II. Limitations Periods
Petitioner also argued that the periods of limitations on collection expired,
an affirmative defense that places the burden of proof on petitioner. See Rules 39,
142(a); Jordan v. Commissioner, 134 T.C. 1, 5-6 (2010), supplemented by T.C.
Memo. 2011-243. Although our precedent is somewhat ambiguous as to whether
the expiration of the period of limitations on collection is properly considered a
challenge to the underlying tax liability (and therefore subject to de novo review)
or subject to an abuse of discretion standard of review, see Weiss v.
Commissioner, 147 T.C. 179, 187 (2016), aff’d, 2018 WL 2759389 (D.C. Cir.
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[*9] May 22, 2018), we conclude that the result would be the same under either
standard as petitioner produced no evidence to establish when the periods of
limitations expired.
An examination of the record against the applicable periods of limitations
also confirms that they have not expired. Section 6502(a) requires that any levy or
proceeding to collect a tax must be made or begun within 10 years after
assessment of the tax. This 10-year limitations period is suspended, however,
while a taxpayer’s CDP case is pending with Appeals or this Court. Sec. 6330(e).
The limitations period is also suspended any time the IRS is prohibited from
taking collection action because of a bankruptcy proceeding and does not end until
six months after the bankruptcy action ends. Sec. 6503(h); see also 11 U.S.C.
sec. 362(a), (c) (2000) (providing an automatic stay on any act to collect a claim
that arose before the commencement of a bankruptcy case, with any stay
remaining in effect until a discharge is granted or denied in a chapter 7 bankruptcy
case). The period of limitations started on December 14, 1998, for the portion of
the Form 941 liabilities that arose for the period ending September 30, 1998, and
on June 21, 1999, for the portion that arose for the period ending December 31,
1998, and each was suspended during petitioner’s bankruptcy proceedings
between 2000 and 2011. Thus, even under a conservative calculation, more than
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[*10] 10 years had not elapsed on the applicable periods of limitations for the
Form 941 liabilities when respondent issued the CDP notice in 2014.
Petitioner also alleged in his petition without additional support that even if
the periods of limitations had not expired, the equitable doctrine of laches
(prejudicial delay) operates to preclude respondent’s collection of the Form 941
liabilities. It is well settled that the United States is not generally subject to the
doctrine of laches in enforcing its rights. See Guar. Trust Co. v. United States,
304 U.S. 126, 132-133 (1938) (citing United States v. Thompson, 98 U.S. 486,
489 (1878)). Even if this doctrine applied, the Court deems petitioner to have
abandoned this alternative argument as he did not raise it either at trial or in his
posttrial brief. See Mendes v. Commissioner, 121 T.C. 308, 312-313 (2003).
III. Verification
Petitioner asserts that SO Eddelman’s determination to sustain the proposed
collection action was erroneous because he failed to verify and take into
consideration alleged failures by respondent to follow all applicable laws and
administrative procedures in his attempt to assess and collect the Form 941
liabilities. Section 6330(c) requires that (1) the settlement officer obtain
verification that “the requirements of any applicable law or administrative
procedure have been met” and (2) “any proposed collection action balances the
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[*11] need for the efficient collection of taxes with the legitimate concern of the
* * * [taxpayer] that any collection action be no more intrusive than necessary.”
While a settlement officer is required to perform the verification duty regardless of
whether the taxpayer raises it at a CDP hearing, see Hoyle v. Commissioner, 131
T.C. 197, 201 (2008), supplemented by 136 T.C. 463 (2011), the taxpayer has the
burden of going forward with a prima facie case (and burden of proof) as to any
alleged error, see Rule 142(a); Woodral v. Commissioner, 112 T.C. 19, 23 (1999);
Nguyen v. Commissioner, T.C. Memo. 2020-97, at *17; Morris v. Commissioner,
T.C. Memo. 2016-16, at *19; Titsworth v. Commissioner, T.C. Memo. 2012-12,
2012 WL86670, at *6; Dinino v. Commissioner, T.C. Memo. 2009-284, 2009 WL
4723652, at *7.
Petitioner offered no coherent or persuasive argument as to a specific failure
by respondent or SO Eddelman. For example, petitioner repeatedly alleged that
respondent’s supposed destruction of all records pertinent to the Form 941
liabilities amounted to a violation of procedural due process under the Thirteenth
Amendment to the Constitution. Petitioner failed to establish any nexus between
his CDP case and the Thirteenth Amendment, which deals exclusively with the
abolishment of slavery and involuntary servitude. See Faraco v. Commissioner,
29 T.C. 674, 677 (1958), aff’d, 261 F.2d 387 (4th Cir. 1958); Rau v.
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[*12] Commissioner, T.C. Memo. 1966-254. In another instance petitioner
challenged respondent’s decision to pursue him in 2014 for liabilities that arose in
1998 as an “inefficient collection” and “overly burdensome” means of collecting
these liabilities, even though, as discussed above, petitioner did not show how
another taxpayer is liable for the Form 941 liabilities or how the periods of
limitations for collection had expired. Petitioner also expressed dissatisfaction
with an approximately two-year delay in having his CDP case assigned to SO
Eddelman but cited only conjectural harm in his petition with respect to this delay
and failed to elaborate further as to how this inconvenience constituted sufficient
grounds for dismissal of the present action.
Outside of the above open-ended arguments, petitioner offered no specific
assignment of error at trial or in his posttrial brief as to which laws or procedures
were not followed by respondent, his agents, or SO Eddelman.10 Nothing in the
record indicates that SO Eddelman failed to properly discharge his responsibilities
under section 6330(c), with his report specifically confirming in multiple instances
that all applicable laws and procedures were followed in petitioner’s case. We
10
The Court deems as conceded any related claim as to this issue which was
not specifically raised by petitioner at trial or in his posttrial brief. See Mendes v.
Commissioner, 121 T.C. 308, 312-313 (2003).
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[*13] therefore decline to consider petitioner’s broad and unsubstantiated
allegations on this point further in the absence of specific evidence of irregularity.
Accordingly, on the basis of the arguments and evidence presented, we find
no abuse of discretion on the part of respondent, his agents, or SO Eddelman with
respect to the decision to proceed with collection on the proposed levy.11
To reflect the foregoing,
Decision will be entered
for respondent.
11
This conclusion is unaffected by whether the scope of our review is
limited to the administrative record.