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6330 - Collection Due Process Hearing Requests |
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Collection Due Process Hearing Requests |
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6330
Annotations: Collection Due Process Hearing Requests-Levy Notice of Levy
and Right to Hearing: Collection Due Process Hearing Requests [2000-2
USTC ¶50,592] Gary L. Johnson, Plaintiff v. Commissioner of
Internal Revenue and Teresa Kelley, Defendants U.S.
District Court, Dist. Ore., Civ. 99-6250-TC, 6/21/2000 AIKEN,
District Judge: Magistrate
Judge Coffin filed his Findings and Recommendation on THEREFORE,
IT IS HEREBY ORDERED that, I adopt Judge Coffin's Findings and
Recommendation. [2000-2
USTC ¶50,591] Gary L. Johnson, Plaintiff v. Commissioner of
Internal Revenue and Teresa Kelley, Defendants U.S.
District Court, Dist. Ore., Civ. 99-6250-TC,
COFFIN,
Magistrate Judge: Plaintiff
filed this action seeking a "redetermination of the
administrative decision of the IRS pursuant to Internal Revenue
Code Section 6330(d)(1)(B) and for damages pursuant to section
(7433)." Before the court is defendants' Motion to Dismiss
(#8). Plaintiff's
claims arise from actions taken by the Internal Revenue Service
(IRS) to collect plaintiff's alleged unpaid income tax liabilities
for the 1989-1993 tax years. Plaintiff alleges that he received a
"final notice of intent to levy with appeals rights to a
hearing." Complaint (#1) paragraph 10. Plaintiff further
alleges that his "representative immediately contacted the
agent and demanded an appeal." Because
plaintiff did not file a request or a Collection Due Process
hearing within the time prescribed under sections 6320 or 6330 of
the Internal Revenue Code, his case was treated as an
"equivalent hearing case." Complaint (#1) Exhibit C, p.
1. In a Decision Letter issued Defendants
contend: 1) plaintiff's claims against defendant Kelley 1 should be
dismissed pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a
claim because the A
suit against an IRS employee in his or her official capacity is
essentially a suit against the In
1998, Congress enacted 26 U.S.C. §6330 as part of the IRS
Restructuring and Reform Act of 1998, Pub. L. No. 105-206. That
statute provides that prior to the issuance of an administrative
tax levy, the IRS must give the taxpayer notice of an opportunity
for a Collection Due Process hearing before the Internal Revenue
Service Office of Appeals. 26 U.S.C. §6330(a), (b). Pursuant
to 26 U.S.C. §6330(a)(2) and (a)(3)(B), a taxpayer must request a
Collection Due Process hearing within 30 days of the date notice
of right to a hearing is given. Pursuant to Treasury Regulations a
taxpayer "must submit a written request for a CDP
[Collection Due Process] hearing with respect to a CDP notice
issued under Section 6330 within the 30-day period commencing the
day after the date of the CDP notice." Treasury Regulations
§301.6330-1T(c)(2), A-C3. The statute itself does not require the
request for a hearing to be in writing. The
regulations further provide that in the event a taxpayer fails to
file a written request for a Collection Due Process hearing within
the applicable 30-day time period, he or she will "forego the
right to a [Collection Due Process] hearing under section
6330." Treasury Regs. §301.6330-1T(c)(2), A-C7. When
a timely written request has not been filed, the taxpayer has the
right to an "equivalent hearing" under Treasury Regs. §301.6330-1t(i),
rather than the statutory Collection Due Process hearing. Treasury
Res. §301.6330-1T(c)(2), A-C7. The
"equivalent hearing" is provided for only by regulation
and is not mandated by Section 6330 itself. While the same issues
can be considered by the IRS at the equivalent hearing, a
taxpayers request for such a hearing does not act to suspend the
proposed levy. Treasury Regs. §301.6330-1T(i), Q-I3/AI3. Compare
26 U.S.C. §6330(e) (providing that the underlying levy action is
to be suspended when a taxpayer makes a timely request for a
statutory Collection Due Process hearing). Moreover, there is no
statutory provision for judicial review of an equivalent hearing.
Accordingly, a taxpayer generally cannot challenge the IRS
equivalent hearing Decision Letter in court. Treasury Regs. §301.6330-1T(i),
Q-I5/A-I5. 3 As
set forth above, the attachments to plaintiff's complaint indicate
that the IRS denied plaintiff's request for a statutory Collection
due process hearing because he did not file a timely written
request for a hearing and granted him an equivalent hearing
instead. Nowhere in the complaint does plaintiff allege that he
made a timely written request for a Collection Due Process
hearing. The allegations of the complaint suggest that such
request was made orally by plaintiff's "representative."
See, Complaint (#1), paragraph 10. As
noted above, there is nothing in the statute itself that requires
the request for a Collection Due Process hearing to be in writing.
That requirement is set for in the Treasury Regulations. In his
Reply (#11), plaintiff appears to challenge the validity of the
regulation requiring requests for such hearings to be in writing. Where
there is no language in the statute that addresses an issue,
"there is an implicit legislative delegation of authority to
the Commissioner to clarify" that issue. Miller v. United
States [95-2 USTC ¶50,485], 65 F.3d 687, 690 (9th Cir. 1995);
Redlark v. Commissioner [98-1 USTC ¶50,322], 141 F.3d 936,
939 (9th Cir. 1998) ("So long as the Commissioner issues
regulations the implement the congressional mandate in some
reasonable manner, [the courts] must defer to the Commissioner's
interpretation."); see also, 26 U.S.C. §7805
(providing statutory authority for the IRS to promulgate
regulations interpreting Section 6330). I
find that the regulatory requirement that requests for hearings be
in writing is consistent with Section 6330 and implements the
"congressional mandate in some reasonable manner."
Therefore, plaintiff's challenge to the requirement of the
regulation as set forth in his Reply (#11) is not persuasive. Having
failed to timely file a written request for a statutory Collection
Due Process hearing, plaintiff was entitled only to an equivalent
hearing under Treasury Regs. §301-6330-1T(i). The equivalent
hearing Decision Letter issued by the IRS on Even
assuming plaintiff had made a timely written for a statutory
Collection Due Process hearing, or assuming that there was some
merit to plaintiff's challenge to the requirement that such a
request be made in writing, this court would nonetheless lack
subject matter jurisdiction. Pursuant to 26 U.S.C. §6330(d), when
the IRS's proposed levy involves an underlying income tax
liability, judicial review over any determination made in a
Collection Due Process hearing lies in the United States Tax
court, not the district court. See, 26 U.S.C. §6330(d)(1);
Treasury Regs. §301.6330-1T(f)(2), Q-F#/A-F3; see also,
Krugman v. Commissioner [CCH Dec. 53,355], 112 T.C. 230, 236
n.6 (1999) (noting that with respect to an underlying tax
liability, "the Tax Court has jurisdiction to review
determinations under sec. 6330 relating to proposed levies.")
4 Therefore,
even assuming plaintiff had properly pursued his administrative
appeal rights under Section 6330, since the tax liabilities at
issue are income taxes, jurisdiction over any judicial review of
the IRS's appeal determination would lie in the United States Tax
Court. Based
on all of the foregoing, defendant's motion to dismiss plaintiff's
claim for "a redetermination" of the IRS Decision Letter
conclusion that the "collection enforcement action proposed
is the appropriate action in this case," should be allowed. Plaintiff
also seeks damages pursuant to 26 U.S.C. §7433 for defendants'
alleged "reckless collections actions." Plaintiff's
claim for damages appears to be based on the contention that the
IRS wrongfully denied his collection appeal as untimely and
wrongfully pursued collection of the underlying taxes after
plaintiff made an request for a collection appeal hearing. 26
U.S.C. §7433 provides for damages against the As
discussed above, the record before the court indicates that
defendants' alleged actions with respect to plaintiff's tax appeal
were entirely appropriate and consistent with the provisions of
the tax code and regulations. Plaintiff's general allegation of
"reckless collection actions" fails to state a claim
because it fails to specify any reckless, intentional or negligent
disregard of the tax code or regulations. Moreover,
plaintiff has not alleged or established that he has exhausted his
administrative remedies as required by Section 7433(d). 5 The
requirement that administrative remedies be exhausted prior to
filing suit is a prerequisite to the Summary:
Plaintiff's claims against defendant Kelley should be dismissed
because the United States if the only proper defendant under the
circumstances alleged in this case. Plaintiff's claim for judicial
review of the IRS appeal determination should be dismissed because
judicial review is only available from a determination made by the
IRS in a statutory Due Process hearing. Plaintiff failed to timely
file a written request for such a hearing and was granted an
"equivalent hearing" for which there is no right of
judicial review. Moreover, the proper jurisdiction for judicial
review of a Collection Due Process hearing is the United States
Tax Court. Plaintiff's claim for damages under 26 U.S.C. §7433
should be dismissed because plaintiff failed to exhaust his
administrative remedies. Based on all of the foregoing,
defendants' Motion to Dismiss (#8) should be allowed. This
recommendation is not an order that is immediately appealable to
the Ninth Circuit Court of Appeals. Any notice of appeal pursuant
to Rule 4(a)(1), Federal Rules of Appellate Procedure, should not
be filed until entry of the district court's judgment or
appealable order. The parties shall have ten (10) days from the
date of service of a copy of this recommendation within which to
file specific written objections with the court. Thereafter, the
parties have ten (10) days within which to file a response to the
objections. Failure to timely file objections to any factual
determinations of the Magistrate Judge will be considered a waiver
of a party's right to de novo consideration of the factual
issues and will constitute a waiver of a party's right to
appellate review of the findings of fact in an order or judgment
entered pursuant to the Magistrate Judge's recommendation. 1
"Teresa Kelley" is a registered pseudonym. See,
Memorandum of Law (#9) p. 1, fn. 2. 2
Plaintiff does not seriously contest this issue. See,
Plaintiff's Reply (#11) p. 2. ["Should this Court rule that
the 3
A limited exception to this rule applies when the issue raised
concerns innocent spouse relief. Treasury Regs. §301.6330-1T(i),
Q-I5/A-I5 (citing 26 U.S.C. §6015(e). 4
Plaintiff's failure to petition the proper court for review would
not, by itself, be fatal to his claims since section 6330(d)
permits refiling in the proper court. This provision has no
application to this case however, because judicial review is not
available in any court unless a timely written
request for a statutory Collection Due Process hearing has been
made. 5
The administrative remedies referenced in subsection (d) are
detailed in Treasury Regulation §301.7433-1(e). [Dec. 54,109] William B. Meyer v. Commissioner. Diane S. Meyer v. Commissioner [Code Secs. 6330 and
6702 ]
William
B. Meyer and Diane S. Meyer, pro se. Katrine Shelton and
Richard Goldman, for the respondent. OPINION DAWSON,
Judge: These
cases were assigned to Chief Special Trial Judge Peter J. Panuthos
pursuant to the provisions of section
7443A(b)(4) . 2 The Court
agrees with and adopts the opinion of the Special Trial Judge,
which is set forth below. OPINION
OF THE SPECIAL TRIAL JUDGE PANUTHOS,
Chief Special Trial Judge: These cases are before the Court on
respondent's Motions to Dismiss for Lack of Jurisdiction, as
supplemented. As discussed in detail below, we will dismiss these
cases for lack of jurisdiction on the ground that respondent's
Notices of Determination Concerning Collection Action are invalid. Background On
Petitioners
timely requested a hearing with the Internal Revenue Service
Office of Appeals (Appeals Office) pursuant to section 6330(a) . However,
the appeals officer assigned to petitioners' case did not offer or
schedule a hearing because his communications with petitioners led
him to believe that they were challenging respondent's collection
efforts solely on constitutional grounds. On
On
or about On
In
response to the petitions, respondent filed Motions to Dismiss for
Lack of Jurisdiction on the alternative grounds: (1) The petitions
were not filed within the 30-day period prescribed in section
6330(d)(1)(A) ; and (2) because the Court generally
lacks jurisdiction over the frivolous return penalty imposed under
section 6702 , section 6330(d) bars the
Court from reviewing respondent's determination to collect such
penalties. Petitioners
filed responses in opposition to respondent's motions to dismiss.
They assert that the determination letters are invalid inasmuch as
the Appeals Office issued the letters without first conducting a
hearing as mandated under section 6330(b) .
Petitioners' responses are tantamount to (and will be treated as)
motions to dismiss for lack of jurisdiction on the ground that the
determination letters are invalid. Respondent
subsequently supplemented his motions to dismiss, as directed by
the Court, by providing the Court with Postal Service Form 3877
confirming that the Appeals Office mailed the disputed
determination letters to petitioners on These
cases were called for hearing at the Court's motions session in Discussion The
Tax Court is a court of limited jurisdiction, and we may exercise
our jurisdiction only to the extent authorized by Congress. See sec. 7442 ; Judge v.
Commissioner [Dec.
43,902 ], 88 T.C. 1175, 1180-1181 (1987); Naftel v.
Commissioner [Dec. 42,414 ], 85 T.C. 527,
529 (1985). These cases are before the Court pursuant to the
collection review procedures set forth in section 6330 . 3 Before
proceeding with our analysis, we will briefly review the
applicable statutory provisions. Section 6331(a) provides
that, if any person liable to pay any tax neglects or refuses to
pay such tax within 10 days after notice and demand for payment,
the Secretary is authorized to collect such tax by levy upon
property belonging to the taxpayer. Section 6331(d) provides
that the Secretary is obliged to provide the taxpayer with notice,
including notice of the administrative appeals available to the
taxpayer, before proceeding with collection by levy on the
taxpayer's property. Section 6330 generally
provides that the Commissioner cannot proceed with the collection
of taxes by way of a levy on a taxpayer's property until the
taxpayer has been given notice of, and the opportunity for, an
administrative review of the matter in the form of an Appeals
Office hearing, and, if dissatisfied, given an opportunity for
judicial review of the administrative determination. See Section 6330(c) prescribes
the matters that may be raised by a taxpayer at an Appeals Office
hearing. In sum, section
6330(c) provides that a taxpayer may raise collection
issues such as spousal defenses, the appropriateness of the
Commissioner's intended collection action, and possible
alternative means of collection. Section
6330(c)(2)(B) provides that the existence and amount of
the underlying tax liability can be contested at an Appeals Office
hearing if the taxpayer did not receive a notice of deficiency for
the taxes in question or did not otherwise have an opportunity to
dispute such tax liability. See Sego v. Commissioner [Dec.
53,938 ], 114 T.C. 604 (2000); Goza v. Commissioner,
supra. Section 6330(d) provides
for judicial review of the Commissioner's administrative
determination in pertinent part as follows: SEC. 6330(d) . Proceeding
After Hearing.-- (1)
Judicial review of determination.--The person may, within 30 days
of a determination under this section, appeal such determination-- (A)
to the Tax Court (and the Tax Court shall have jurisdiction to
hear such matter); or (B)
if the Tax Court does not have jurisdiction of the underlying tax
liability, to a district court of the If
a court determines that the appeal was to an incorrect court, a
person shall have 30 days after the court determination to file
such appeal with the correct court. Section 6330(d) imposes
certain procedural prerequisites on judicial review of collection
matters. Much like the Court's deficiency jurisdiction, the
Court's jurisdiction under section 6330(d) is
dependent upon a valid determination letter and a timely filed
petition for review. See Rule 330(b). Like a notice of deficiency
under section 6213(a) , an
Appeals Office determination letter is a taxpayer's
"ticket" to the Tax Court. See Offiler v.
Commissioner [Dec. 53,912 ], 114 T.C.
492, 498 (2000). See also Mulvania v. Commissioner [Dec. 40,285 ], 81 T.C. 65,
67 (1983); see also Gati v. Commissioner [Dec. 53,500 ], 113 T.C.
132, 134 (1999). Moreover, a petition for review under section 6330 must be filed
with the appropriate court within 30 days of the mailing of the
determination letter. See McCune v. Commissioner [Dec. 53,988 ], 115
T.C.--(2000). In
addition to timely filing requirements, section 6330(d) limits the
Tax Court's jurisdiction to the review of collection actions in
which the underlying tax is of a type over which the Court
normally has jurisdiction. See Van Es v. Commissioner [Dec. 54,080 ], 115
T.C.--(2000) (dismissing a petition for review of a collection
action pertaining to the frivolous return penalty); Moore v.
Commissioner [Dec. 53,802 ], 114 T.C. 171
(2000) (dismissing a petition for review of a collection action
pertaining to trust fund taxes). As
indicated, respondent moves to dismiss on the alternative grounds:
(1) The petitions were not filed within the 30-day filing period
prescribed in section
6330(d)(1)(A) ; and (2) the underlying liabilities
(frivolous return penalties) are not matters over which the Court
normally has jurisdiction. Petitioners do not dispute either
point. However, they contend that the cases should be dismissed on
a third ground; i.e., that the determination letters are invalid. There
is no dispute that the Court lacks jurisdiction in these cases.
Because the basis for dismissal may affect whether respondent may
proceed with collection, we are obliged to determine the proper
ground for dismissal. Assuming that respondent failed to issue
valid determination letters, we will dismiss the cases on that
basis, rather than on either of the alternative grounds upon which
respondent's motions are based. See, e.g., Pietanza v.
Commissioner [Dec. 45,576 ], 92 T.C. 729,
735-736 (1989), affd. by unpublished opinion 935 F.2d 1282 (3d
Cir. 1991). The
Court has not previously considered the elements necessary for a
valid determination letter under section
6330 . Suffice it to say, section
6330(b) contemplates that an Appeals Office hearing, if
duly requested by the taxpayer, must precede the issuance of a
determination letter. See Offiler v. Commissioner, supra. Section
6330(b)(1) plainly states that if a taxpayer
"requests a hearing under subsection (a)(3)(B), such hearing
shall be held by the Internal Revenue Service Office of
Appeals." In
Katz v. Commissioner [Dec.
54,081 ], 115 T.C.--,--(2000) (slip op. at 14-15), we
recently held that the Commissioner had complied with the hearing
requirement under section
6330(b)(1) by offering the taxpayer a hearing at the
Appeals Office located nearest the taxpayer's residence. We
further concluded that, where the taxpayer had declined to attend
the scheduled hearing on the ground that the location of the
Appeals Office would impose an undue burden on his witnesses, the
taxpayer nevertheless received an acceptable Appeals Office
hearing by way of a telephone conference with the Appeals officer.
See id. at--(slip op. at 15); see The
record in this case shows that the Appeals Office did not provide
petitioners with an opportunity for a hearing either in person or
by telephone prior to issuing the disputed determination letters.
Consistent with the plain language of section 6330(b) , we
conclude that the disputed determination letters are invalid. The
Appeals officer's attempt to invest the determination letters with
legitimacy by scheduling a conference with petitioners after the
issuance of the determination letters was too late in light of the
clear mandate of section 6330 . Accordingly,
we shall deny respondent's Motions to Dismiss for Lack
Jurisdiction, as supplemented, and we shall dismiss these cases on
the ground that the determination letters are invalid. To
reflect the foregoing, Appropriate
orders of dismissal will be entered. 1
These cases are consolidated solely for the purpose of disposing
of the pending jurisdictional motions. 2
Unless otherwise indicated, all section references are to the
Internal Revenue Code. All Rule references are to the Tax Court
Rules of Practice and Procedure. 3
Sec. 6330 was enacted under
the Internal Revenue Service Restructuring and Reform Act of 1998
(RRA 1998), Pub. L. 105-206, sec.
3401 , 112 Stat. 685, 746, and is effective with
respect to collection actions initiated more than 180 days after 4
Sec.
6330(a)(3)(B) provides that the notice required under
this section must include the right of the taxpayer to request a
hearing. Sec. 6330(b)(1) provides: SEC. 6330(b) . Right to
Fair Hearing.-- (1)
In general.--If the person requests a hearing under subsection
(a)(3)(B) , such hearing shall be held by the Internal
Revenue Service Office of Appeals. [2002-1
USTC ¶50,251] Jerry L. Brantley, Petitioner v. District Director,
Jacksonville, Florida, in his individual capacity, and Does I-XX,
Respondents. 1
NIMMONS,
JR., District Judge: Filed
herein is Respondents' Motion to Dismiss (Dkt. 4) Petitioner's
"Verified Petition for Writ of Mandamus [or Writ of
Certiorari, Prohibition or other Writ as the Court deems
appropriate remedy [Code of Civil Procedures §1085, 1086, 1102,
1103]" (hereinafter "Petition") (Dkt. 2). I.
BACKGROUND The
facts giving rise to this Petition are set forth in the Petition,
wherein Petitioner, Jerry L. Brantley, alleges in relevant part: 5.
Petitioner on several separate occasions . . . requested, pursuant
to the Administrative Procedures Act, an 'Impartial Adjudicatory
Administrative Appeal Hearing. . . . All such requests were
ignored and thereby denied as a violation of Petitioner's Rights
to Due Process of the Law. 6.
The right of petitioner to be secure in his/her person, house,
papers and effects against and [sic] unreasonable government
seizure, is an unalienable right mandated in the 4th Amendment. .
. . *** 7.
. . . . The 4th and 5th Amendments were, in truth and substance,
created to prohibit the arbitrary, unlawful attack by the
Government on a Citizen's private property and to afford all
Citizens the right to due process and must be afforded an
opportunity for a fair and impartial hearing. . . . 8.
Petitioner has filed all proper claims and has adhered to all
administrative remedies and requirements. . . . *** 11.
Petitioner has complied or has attempted to comply with all
Administrative Procedures and was ignored by Respondent and denied
all such redress of grievances. All such remedies have, thereby,
been exhausted. *** 16.
Whereas, the deliberate bad-faith refusal of the respondent to
perform such ministerial duty owed to Plaintiff [sic] has
continued for quite some time, during which Petitioner was
deprived of money, property and/or lien or liens on his/her
person. Failure to perform duty by Respondent has resulted in
mental anguish, embarrassment, and defamation of character to
employer, bank, creditors, and others, creating additional damages
to Petitioner. The
Petition prays for the following relief: 1.
That the court issue a peremptory writ in the first instance
commanding respondent to: a)
Issue signed Release of Levy for the years [sic] 1995; b)
Issue signed Releases of Liens for the years [sic]1995; c)
Return property belonging to Petitioner, to which he has an
immediate right to the legal, beneficial and possessory interest
thereof, if applicable; and d)
Cease and desist all future collection activity against Petitioner
until such a time as respondent can substantiate the claim with
evidence and adhere to proper administrative procedure; 2.
That the court, alternatively, first issue a writ commanding
respondent(s) to perform the above ministerial duties or in the
alternative, appear to show cause and provide evidence why they
have no duty to do so, verifying that such information is true and
correct, under the penalty of perjury of the State of Florida; 3.
For damages as this Court deems just; and 4.
For costs of this proceeding and for such other and further relief
as the honorable court deems appropriate. Attached
to the Petition is an eight page "Memorandum of Points and
Authorities in Support of Petition for Writ of Mandate, Mandating
Return of Petitioner's Property Until Adhering to Due Process of
Law and Providing 4th Amendment Warrant." Petitioner has also
attached twenty pages of exhibits, including a "Notice of
Federal Tax Lien" for $8,113.84, which Petitioner received on
The
Petitioner originally filed this matter in II.
DISCUSSION In
evaluating the sufficiency of a complaint for purposes of a motion
to dismiss, as a general matter the allegations of the complaint
must be accepted as true, see Hishon v. King & Spalding,
467 U.S. 69, 73 (1984), and viewed in a light most favorable to
the plaintiff. See Cannon v. Macon County, 1 F.3d 1558,
1565 (11th Cir. 1993) (citing Scheuer v. Rhodes, 416 U.S.
232 (1974)). A petition, as submitted herein, is analogous to a
complaint. A complaint should not be dismissed for failure to
state a claim unless it appears "beyond a doubt that the
plaintiff can prove no set of facts in support of his claim which
would entitle him to relief." Conley v. Gibson, 355 A.
Insufficiency of Service of Process Respondents
argue that process was not properly served upon either the Service
of original process is made by delivering a copy of it to the
person to be served with a copy of the complaint, petition, or
other initial pleading or paper. . . . Respondent,
District Director of the Internal Revenue Service in As
to the Respondents claim that Petitioner's service fails under
federal law, the Court notes that under Rule 81(c), Federal Rules
of Civil Procedure, "[t]hese rules apply to civil actions
removed to the United States district courts from the state courts
and govern procedure after removal." (emphasis added). Even
assuming arguendo that service under Accordingly,
as to the insufficiency of the service of process, the Court finds
that the District Director has been properly served under the
applicable law and Respondents' motion to dismiss on these grounds
is due to be denied. B.
Proper Party A
review of the Petition reveals that the allegations involved in
this lawsuit concern the actions of IRS officers and agents acting
in their official capacities. Petitioner seeks to enjoin the IRS
officer and agents from collecting taxes and for other unspecified
damages and costs. While Petitioner attempts to state these claims
against the individual officers, "[t]he general rule is that
relief sought nominally against an officer is in fact against the
sovereign if the decree would operate against the latter." State
of An
action for damages is considered to be against the sovereign if
the resulting award for damages would be collected from the public
treasury. See Dugan v. Rank, 372 The
It
is settled that a taxpayer's exclusive remedy for the improper
collection of taxes is set forth in the Internal Revenue Code: (a)
In general.--If, in connection with any collection of Federal tax
with respect to a taxpayer, any officer or employee of the
Internal Revenue Service recklessly or intentionally, or by reason
of negligence disregards any provision of this title, or any
regulation promulgated under this title, such taxpayer may bring a
civil action for damages against the United States in a district
court of the United States. Except as provided in section 7432,
such civil action shall be the exclusive remedy for recovering
damages resulting from such actions. 26
U.S.C. §7433. While the exclusivity of this section does not
prohibit a taxpayer from bringing a cause of action against IRS
officers or agents for allegations of Constitutional violations in
connection with the collection of taxes, the courts which have
addressed this issue have declined to create a Bivens cause
of action. 8 The Court is
persuaded by the reasoning of these courts and, accordingly, any
claims of Constitutional violations in the collection of taxes
against individuals are due to be dismissed. Next,
the Court reviews Petitioner's claim that Respondents' actions
have resulted in his "mental anguish, embarrassment, and
defamation of character to employer, bank, creditors, and others.
. . ." First, even looking at the Petition in the light most
favorable to Petitioner, there are no factual allegations of
tortious behavior and, thus, no basis for these claims. The
allegations in the Petition merely reflect collection efforts by
the IRS. This claim is not properly brought against the individual
officers and agents as stated in §7433, but would be properly
brought against the Therefore,
as all claims brought against the individuals are either not
allowed or are required to be brought against the To
the extent that the Petition states a claim against the C.
Anti-Injunction Act To
the extent that Petitioner seeks to enjoin the Respondents from
continuing the collection process, this claim is due to be
dismissed because the Court is barred from restraining the IRS
under the Anti-Injunction Act, 26 U.S.C. §7421(a), which
provides, in pertinent part: (a)
Tax.--Except as provided in sections 6015(e), 6212(a) and (c),
6213(a), 6225(b), 6246(b), 6330(e)(1), 6331(i), 6672(c), 6694(c),
7426(a) and (b)(1), 7429(b), and 7436, no suit for the purpose of
restraining the assessment or collection of any tax shall be
maintained in any court by any person, whether or not such person
is the person against whom such tax was assessed. It
does not appear, from a thorough review of the Petition and its
attachments, that any of the statutorily listed exceptions apply. 9 Neither do
the claims herein fall within the judicial exception to the
Anti-Injunction Act. See Commissioner v. Shapiro [76-1 USTC
¶9266], 424 U.S. 614, 627 (1976) ("[A]n injunction may be
obtained against the collection of any tax if (1) it is 'clear
that under no circumstances could the government ultimately
prevail' and (2) 'equity jurisdiction' otherwise exists, i.e.,
[t]he taxpayer shows that he would otherwise suffer irreparable
injury") (citing Enochs v. Williams Packing &
Navigation Co., Inc. [62-2 USTC ¶9545], 370 U.S. 1, 7
(1962)). The
heavy burden of establishing exceptions to the Anti-Injunction Act
fall on the Petitioner. See McCabe v. Alexander [76-1 USTC
¶9216], 526 F.2d 963, 965 (5th Cir. 1976). Petitioner fails in
this respect. As no exceptions apply, this claim is due to be
dismissed. D.
Right to a Hearing The
Court turns now to the last remaining count against the Petitioner
did not complete and submit Form 12153; rather, Petitioner
responded to the Notice with a fifteen-page "Claim for
Release of Erroneous Notice of Lien/Levy" on Petitioner
argues that the IRS failed to respond to his request within thirty
days and that, therefore, his request had been ignored and thereby
denied. In that regard, the Court notes that Petitioner filed this
case on The
validity of Petitioner's claim is determined by the actions and
conduct of the IRS at the time Petitioner asserted his claim and
filed the subject Petition. The mere passage of time does not
breathe life into a claim that is without foundation. Whether any
such right to assert a claim, either in this Court or the Tax
Court, 11 regarding
denial of due process for the IRS's failure to hold a CDP hearing,
matured subsequent to the filing of this suit is not before the
Court. III.
CONCLUSION All
claims stated by Petitioner are due to be dismissed. As to whether
the dismissal should be with prejudice, the Eleventh Circuit
instructs that: [g]enerally,
"[w]here a more carefully drafted complaint might state a
claim, a plaintiff must be given at least one chance to amend the
complaint before the district court dismisses the action with
prejudice." Bank v. Pitt, 928 F.2d 1108, 1112 (11th
Cir. 1991). A district court need not, however, allow an amendment
(1) where there has been undue delay, bad faith, dilatory motive,
or repeated failure to cure deficiencies by amendments previously
allowed; (2) where allowing amendment would cause undue prejudice
to the opposing party; or (3) where amendment would be futile. Bryant
v. Dupree, 252 F.3d 1161, 1163 (11th Cir. 2001) (citing Foman
v. Davis, 371 Accordingly,
upon consideration thereof, it is hereby ORDERED: 1.
Respondents' Motion to Dismiss is GRANTED and this Petition
is dismissed with prejudice. 2.
The Clerk is directed to CLOSE this file and terminate all
pending motions and delete this case from the roll of pending
cases. DONE
AND ORDERED. 1
As styled in the Petition, the proper party designations are
"Petitioner" and "Respondents." After removal
to this Court, the parties were improperly designated
"Plaintiff" and "Defendants." The parties
shall hereafter conform with this style of the case. 2
It appears from the Petitioner's Complaint that Does I-XX, whose
identities are to be determined through the discovery process, are
also agents and officers of the IRS. 3
In Bonner v. City of Prichard, 661 F.2d 1206 (11th Cir.
1981) (en banc), the Eleventh Circuit adopted as binding
precedent all decisions rendered by the former Fifth Circuit prior
to 4
Under Rule 4i, proper service herein would have been effectuated
by delivering a copy of the Summons and Petition by registered or
certified mail to the civil process clerk at the office of the
United States attorney for the Middle District of Florida, to the
Attorney General of the United States in Washington, DC, and to
the individually-named officer or agency. 5
The comments in the Historical Notes section for the 2000
Amendments to Rule 4(i) are instructive: Paragraph
(3) is amended to ensure that failure to serve the 6
See Bivens v. Six Unknown Named Agents of Federal Bureau
of Narcotics, 403 7
See e.g., Lee v. Hughes, 145 F.3d 1272, 1275
(11th Cir. 1998) (wherein a federal employee who is not afforded
administrative or judicial remedy under Civil Service Reform Act
of 1978 is nonetheless precluded from bringing Bivens claim
to recover monetary damages for alleged constitutional
violations); Miller v. United States Dept. of Agri. Farm
Services Agency, 143 F.3d 1413, 1415 (11th Cir. 1998) (holding
that "[b]ecause of its better vantage point, Congress may
preclude a Bivens-type constitutional action by express
declaration or by creating an exclusive statutory remedy"); Stephens
v. Dept. of Health and Human Services, 901 F.2d 1571, 1574
(11th Cir. 1990) (holding that the Civil Service Reform Act
provides the exclusive remedy for preference-eligible, as well as
nonpreference-eligible, federal employees who challenge allegedly
prohibited personnel practices and that the employee's claim that
his constitutional rights had been violated did not provide a
separate basis for a Bivens claim). 8
See e.g., Fishburn v. Brown [97-2 USTC ¶50,742],
125 F.3d 979, 982-83 (6th Cir. 1997); Vennes v. An Unknown
Number of Unidentified Agents of the United States, 26 F.3d
1448, 1453-54 (8th Cir. 1994); McMillen v. United States Dep't
of Treasury, 960 F.2d 187, 190-91 (1st Cir. 1991); Schwarz
v. United States [2001-1 USTC ¶50,111], 234 F.3d 428, 434
(9th Cir. 2000); Gassaway v. United States [99-2 USTC ¶50,770],
188 F.3d 518, (10th Cir. 1999); Jenkins v. Internal Revenue
Service, 1994 WL 806075 *5 (N.D. Ga. 1994). 9
Sections 6015(e), 6212(a), 6212(c), and 6213(a) involve a notice
of deficiency. Sections 6225(a) and 6246(b) pertain to partnership
matters. Sections 6330(e)(1) and 6331 pertain to levy and
distraint. Section 6331(i) provides for an injunction for any
unpaid divisible tax. Section 6672 pertains to the failure to
collect and pay over tax or attempt to evade or defeat tax.
Section 6694 pertains to the understatement of a taxpayer's
liability by an income tax return preparer. Section 7426 pertains
to civil actions by persons other than taxpayers. Section 7429
pertains to review of jeopardy levy or assessment procedures.
Section 7436 pertains to proceedings for determination of
employment status. 10
The court notes that Temp. Treas. Reg. §6320-1T(c)(2), Q. &
A. C-1 states that a "written request in any form, which
requests a CDP hearing, will be acceptable." The Petitioner
did not specifically refer to 26 U.S.C. §6320 in his response,
but rather submitted a fifteen page, mostly single-spaced,
rambling letter wherein much of what is stated appears to be
without foundation or application to this matter. However,
Petitioner does entitle his submission: Claim
for Release of Erroneous Notice of Lien/Levy, Appeal Alleging
Procedural Errors in Filing of Notice of Tax Lien, Demand for
Impartial Judicial Appeal Hearing if Claim is Denied and
he does demand a certificate of release of notice of lien/levy.
This alone may have been sufficient to trigger the requirement
that the IRS conduct a CDP hearing. The Court does not herein
address whether Petitioner's prolix document sufficiently
requested such a hearing, but out of an abundance of caution
assumes that it did so. 11
The Court does not decide here whether the Tax Court would have
exclusive jurisdiction over a claim that Petitioner has been
denied due process because he has not yet had a hearing. [2002-1
USTC ¶50,309] Charles M.F. Van Gaasbeck, Plaintiff v. U.S.
District Court, Dist. Nev., CV-S-01-1004-KJD (PAL), DAWSON,
District Judge: This
matter is before the Court on Defendant's Motion to Dismiss (#4).
The Court has also considered Plaintiff's Objection (#6) and the
Declaration of Traci L. Patterson (#5). FACTUAL
HISTORY On
ANALYSIS Plaintiff
received the Notice of Intent to Levy on This
Court cannot consider the merits of Plaintiff's appeal for the
reasons that follow. First, the U.S. District Court lacks
jurisdiction over Plaintiff's claims because his request for
hearing was made almost 60 days late. Second, there is no right to
judicial review of decisions made by an appeals officer at an
equivalent hearing. See Moorhous v. Commissioner [CCH Dec.
54,316], 116 T.C. 263 (2001), Kennedy v. Commissioner [CCH
Dec. 54,315], 116 T.C. 255 (2001). Finally, even ignoring the
untimeliness of Plaintiff's claim and the fact that there is no
appeal from an equivalent hearing, any jurisdiction over this
matter would be in the tax court. Although Plaintiff alleges that
a tax court is not a court of law and is barred from ruling on
matters of law, he provides no authority for those statements. To
the contrary of Plaintiff's argument, 26 U.S.C. §6330(d)(1)
provides that the right to judicial review is in the tax court,
unless that court does not have jurisdiction. Federal
Courts are courts of limited jurisdiction. They can only
adjudicate those cases which the Constitution and Congress
authorize them to adjudicate. See Kokkonen v. Guardian Life
Ins. Co., 511 U.S 375 (1994). It is well established that the
tax court is a court of limited jurisdiction and that it may
exercise jurisdiction to the extent authorized by Congress. See
26 U.S.C. §7442; Commissioner v. McCoy [87-2 USTC ¶13,736],
484 U.S. 3, 7 (1987). Pursuant to 26 U.S.C. §6213(a), the tax
court has jurisdiction to redetermine deficiencies assessed by the
Commissioner. Pursuant to 28 U.S.C. §1340, a federal district
court has jurisdiction over taxpayer actions for a refund of taxes
paid in full, but not for assessed but unpaid taxes. See Flora
v. United States [60-1 USTC ¶9347], 362 U.S. 145 (1960); Geurkink
Farms, Inc. v. United States [71-2 USTC ¶9692], 452 F2d 643,
(7th Cir. 1971). A taxpayer may challenge a tax liability before
paying the deficiency by filing a timely petition with the tax
court. See Scar v. Commissioner [87-1 USTC ¶9277], 814
F.2d 1363, 1366 (9th Cir. 1987). A tax court is a court of law
notwithstanding Plaintiffs' unsupported statement to the contrary.
See Freytag v. Commissioner [91-2 USTC ¶50,321], 501 U.S.
868 (1991). The burden of establishing jurisdiction over civil
actions rests upon the party asserting it. Kokkonen, 377. CONCLUSION Here,
Plaintiff failed to file a timely petition. His request deals with
taxes and penalties assessed but not paid. The Court cannot
consider his challenges to the authority of the individual issuing
the notice of intent to levy, the early termination of the
equivalent hearing, denial of representation at the equivalent
hearing, or whether there is an underlying income tax liability,
because this Court does not have jurisdiction. The Court cannot
address the merits of any dispute unless it is first established
that there is subject-matter jurisdiction. Plaintiff has failed to
meet his burden to establish that the Court has subject-matter
jurisdiction. The
District Court lacking jurisdiction, Defendant's Motion to Dismiss
(#4) is granted and Plaintiff's Complaint is dismissed with
prejudice. [2001-2
USTC ¶50,675] Patrick Devore v. United States of America,
Internal Revenue Service, Revenue Agent working under the
unregistered pseudonym of Brent Johns, Revenue Agent Linda
Bradfield
Patrick
Devore, REED,
JR., District Judge: On
Background This
action primarily concerns alleged wrongful collection activities
by the Internal Revenue Service generally. We will not delve into
the facts of the case in detail as they have been set out in our
order (# 24) dated Section
7433(a) of title 26,
known as the Taxpayer's Bill of Rights, authorizes a taxpayer to
seek damages for the IRS' alleged disregard of a tax law or
regulation in collecting a tax. This statute, which waives the In
order to bring suit under section 7433, a plaintiff must exhaust
his administrative remedies. See Conforte v. United States
[93-1 USTC ¶50,274], 979 F.2d 1375, 1377 (9th Cir. 1992). Section
7433(d)(1)(A) states that a judgment for damages shall not be
awarded under section 7433 unless the court determines that the
plaintiff has exhausted the administrative remedies available to
such plaintiff within the IRS. The courts deem this requirement
jurisdictional. See, e.g., Fishburn v. Brown [97-2 USTC ¶50,742],
125 F.3d 979, 982 (6th Cir. 1997). The
plaintiff has failed to sufficiently allege exhaustion of
administrative remedies available to him within the IRS. Plaintiff
alleged that he had attempted to exhaust some administrative
remedies by requesting a hearing under section 6330 but that he
never received any notification that a hearing was scheduled. The
government has submitted evidence that a due process hearing was
scheduled on In
addition, the plaintiff has failed to demonstrate that the actions
taken by Agent Brent Johns and Linda Bradfield were recklessly or
intentionally done in disregard of Internal Revenue Code
regulations. The plaintiff argues that Agent Bradfield erroneously
determined that plaintiff owed money for tax years 1992, 1993, and
1994. Whether Agent Bradfield may be incorrect about whether the
plaintiff owes taxes does not prove she acted recklessly or
intentionally. Agent Johns initial failure to identify plaintiff's
letter as a request for a collection due process hearing was an
oversight, not an intentional act to deprive plaintiff of his
hearing. The evidence also fails to show that the delay in
scheduling the hearing was an intentional or reckless act. We
find that the plaintiff has not exhausted the administrative
remedies available to him within the IRS and section 7433 requires
him to do so. In addition, the evidence does not show that the IRS
acted with reckless or intentional disregard for their
regulations. Therefore, the defendants' motion to dismiss, being
treated as a motion for summary judgment, is granted. IT
IS HEREBY ORDERED THAT
defendants' motion to dismiss is GRANTED. The
clerk shall enter judgment accordingly. [CCA Letter Ruling 200152043]Chief
Counsel Advice 200152043, UIL
No. 6330.00-00 Notice
and opportunity for hearing before levy UIL
No. 9999.98-00 Miscellaneous
issues -
Not able to identify under present list [Code
Sec.
6330 ] MEMORANDUM
FOR ASSOCIATE AREA COUNSEL CINCINNATI (CC:SB:4:CIN) FROM:
Alan C. Levine, Chief, Branch 1 Collection, Bankruptcy, and
Summonses SUBJECT:
Whether Levy May be Challenged at CDP Hearing By
e-mail dated 1.
Whether a taxpayer, who was offered and failed to timely request a
Collection Due Process (CDP) hearing in response to a Final
Notice, Notice of Intent to Levy and Notice of Your Right to a
Hearing (L1058 or LT11) ("CDP Notice") may properly
challenge the appropriateness of the proposed levy in a subsequent
CDP proceeding arising from the filing of a notice of federal tax
lien. 2.
If the answer to the above question is answered affirmatively,
whether a levy, served after a CDP Notice is issued but no timely
request for a CDP hearing has been made, may be challenged at a
subsequent CDP proceeding arising from the filing of a notice of
federal tax lien. CONCLUSION: 1.
A taxpayer who was offered and failed to timely request a CDP
hearing in response to a CDP Notice cannot challenge the
appropriateness of the proposed levy in a subsequent CDP hearing
arising from the filing of a notice of federal tax lien. However,
an appeals officer may consider the effect of the levy on the
taxpayer in determining whether the filing of the notice of
federal tax lien was appropriate. 2.
A taxpayer cannot challenge a levy which was served after a CDP
Notice was issued but for which the taxpayer did not timely
request a CDP hearing at a subsequent CDP proceeding arising from
the filing of a notice of federal tax lien. The appeals officer
may, however, consider the effect of the levy on the taxpayer in
determining whether the filing of the notice of federal tax lien
was appropriate. ANALYSIS: 1.
You opine that a taxpayer may challenge the appropriateness of a
previous levy (one in which the taxpayer was offered but did not
timely request a CDP hearing), in a subsequent CDP hearing arising
from the filing of a tax lien. You base your opinion on the fact
that I.R.C. §6330(c)(2)(A)(ii) , which
is applicable to a section
6320 hearing under I.R.C. §6320(c)
, provides that, at a CDP hearing, a taxpayer may
challenge "the appropriateness of collection actions."
You also note that I.R.C. §6330(c)(4) provides that
an appeals officer cannot consider an issue if it was raised and
considered at a previous CDP hearing or other administrative or
judicial proceeding, and the taxpayer participated meaningfully in
said proceeding. Because the taxpayer did not challenge the levy
in a previous hearing, you conclude that the taxpayer may raise
the appropriateness of the levy in a lien CDP hearing. We
do not agree. The regulations under section
6330 specifically provide that if a taxpayer does not
request a CDP hearing with Appeals within the 30-day period
commencing the day after the date of the CDP Notice, the taxpayer
foregoes the right to a CDP hearing with respect to the tax and
tax period or periods shown on said Notice. Temp. Treas. Reg. §301.6330-1T(c)(2)Q&A-C7.
The requirement that a taxpayer request a timely hearing after
receipt of a CDP Notice under section 6330 in order to
obtain a hearing on the levy is reinforced in Temp. Treas. Reg. §301.6330-1T(a)(4)Q&A-B2
[taxpayer foregoes right to a CDP hearing if a timely request for
a hearing is not made following the first notification of a levy]
and Temp. Treas. Reg. §301.6330-1T(a)(4)Q&A-B4 [taxpayer must
request CDP hearing within 30 days of the date of the first CDP
Notice]. In other words, a taxpayer who fails to timely request a section 6330 CDP hearing
after receiving a CDP Notice listing a specific tax and tax period
or periods is not entitled to a second opportunity to challenge
the levy, regardless of how many levy notices the taxpayer
receives for that same tax and tax period or periods. Allowing a
taxpayer to challenge a levy in a section 6320 CDP hearing,
after the taxpayer failed to exercise the opportunity to challenge
the levy in a section 6330 CDP
hearing, would undermine the regulations. We
note that the regulations do not totally preclude a taxpayer from
challenging a levy even though the taxpayer did not timely request
a CDP hearing under section 6330 .
Specifically, Temp. Treas. Reg. §301.6330(i) provides that if a
taxpayer fails to request a section
6330 CDP hearing within the 30-day period, the taxpayer
may still request an administrative hearing, called an
"equivalent hearing," with Appeals. This hearing is
"held by Appeals and will generally follow Appeals procedures
for a CDP hearing," except that Appeals will issue a decision
letter rather than a notice of determination. A taxpayer may not
appeal to a court from a decision letter, but, under certain
circumstances, can seek Tax Court review of a denial of innocent
spouse relief under I.R.C. §6015 , pursuant to that
Code section. In
context, the reference to the "appropriateness of collection
actions" in both I.R.C. §6330(c)(2)
(A(i) and Temp. Treas. Reg. §301.6320(e), (setting
forth the matters which can be considered at a section
6320 CDP hearing), cannot mean that a taxpayer who
fails to request timely a CDP hearing concerning a proposed levy
may challenge the validity of the proposed levy in a CDP hearing
concerning the filing of a notice of tax lien. It is our opinion,
however, that in situations where the taxpayer fails to timely
request a section 6330 CDP hearing,
these provisions allow the appeals officer to consider the effect
(but not the validity) of the levy when determining if the filing
of the notice of federal tax lien was appropriate in a subsequent section 6320 CDP hearing.
For example, if a levy is expected to result in full payment of
the liability, the appeals officer may conclude that filing the
lien was unnecessary to protect the government's interest. On the
other hand, if the levy is not expected to result in full payment
or is unlikely to be executed for some reason, the appeals officer
may conclude that the filing of the lien was necessary and/or
appropriate to protect the government's interest. Finally, there
may be other additional fact situations which would permit the
appeals officer to consider the effect of a levy at a section 6320 CDP hearing. 2.
For the reasons set forth above, if a levy has been served
pursuant to a CDP Notice, a taxpayer cannot also challenge that
levy at a subsequent section 6320 CDP proceeding
if the taxpayer failed to timely request a CDP hearing. However,
as also noted above, under I.R.C. §6330(c)(2)(A)(i) , an
appeals officer may consider the effect of said levy when
determining if the filing of the notice of federal tax lien was
appropriate in a subsequent section 6320 CDP hearing. [Dec. 55,006(M)]Janice Bullock v. Commissioner. [Code
Sec. 6330]
The
IRS's motion to dismiss for lack of jurisdiction and to strike as
supplemented, collection actions against an individual with
respect to two tax years was granted. Evidence established that
the taxpayer was not issued a notice of determination concerning
collection actions for those years. Although the IRS served
notices of levy on the taxpayer's employer and bank, those actions
were initiated before the effective date of the IRS Restructuring
and Reform Act of 1998 (RRA 1998) (P.L. 105-206) and, thus, the
Tax Court did not have jurisdiction to review those matters.
Further, the application of a tax overpayment for one tax year to
offset the taxpayer's liability for another year did not
constitute a collection action that was subject to review. Janice
Bullock, pro se. Jerome D. Sekula and Jeffrey C. Venzie,
for the respondent. MEMORANDUM
OPINION ARMEN,
Special Trial Judge: This matter is before the Court on
respondent's Motion To Dismiss For Lack Of Jurisdiction And To
Strike, as supplemented. Respondent moves to dismiss and strike as
to the taxable years 1991 and 1992 on the ground that petitioner
was not issued a notice of determination concerning collection
action(s) for those years. As explained below, we shall grant
respondent's motion, as supplemented. Background On
On
On
As
indicated, respondent moved to dismiss for lack of jurisdiction
and to strike as to the taxable years 1991 and 1992. Respondent
contends that the Court lacks jurisdiction with regard to 1991 and
1992 on the ground that respondent has not issued to petitioner a
notice of determination with regard to those years. Respondent
avers that the notice of determination dated This
matter was called for hearing at the Court's motions session held
in Discussion The
Tax Court is a court of limited jurisdiction, and we may exercise
our jurisdiction only to the extent authorized by Congress. Naftel
v. Commissioner [Dec.
42,414], 85 T.C. 527, 529 (1985). The Court's
jurisdiction to review collection actions under sections 6320
(liens) and 6330 (levies) depends on the issuance of a notice of
determination and the filing of a timely petition for review. See Sarrell
v. Commissioner [Dec.
54,494], 117 T.C. 122, 125 (2001); Offiler v.
Commissioner [Dec.
53,912], 114 T.C. 492, 498 (2000). Section
6330 generally provides that the Commissioner cannot
proceed with the collection of taxes by levy on a taxpayer's
property until the taxpayer has been given notice of and the
opportunity for an administrative review of the matter (in the
form of an Appeals Office hearing), and if dissatisfied, with
judicial review of the administrative determination in the Tax
Court or Federal District Court, as appropriate. Section
6330 is effective with respect to collection actions
initiated more than 180 days after The
record in this case shows that, in 1996, respondent served notices
of levy on the City of The
record also shows that, on April 24, 2000, respondent applied
petitioner's overpayment for 1999 to offset petitioner's unpaid
taxes for 1992 and 1993. Although respondent initiated the offset
after the effective date of RRA 1998, respondent's application of
a taxpayer's overpayment for one taxable year to offset the
taxpayer's liability for another taxable year does not constitute
a collection action that is subject to review under sections 6320
or 6330. In particular, the Commissioner's authority to credit an
overpayment to offset any taxpayer's liability is set forth in section
6402. An offset under section
6402 is distinguishable from, and does not constitute,
a levy action. See Belloff v. Commissioner [93-2
USTC ¶50,396], 996 F.2d 607, 615-616 (2d Cir. 1993)
(comparing a levy with a "setoff"); Karara v. United
States, 90 AFTR 2d 2002-6264, 2002-2 USTC par. 50,667 (M.D.
Fla. 2002) (holding that the Commissioner's partial offset of the
taxpayer's liability for 1993 by crediting the taxpayer's $300
refund for 2000 did not violate section
6330(e)(1), which bars the Commissioner from issuing a
levy while collection review proceedings are pending); Trent v.
Commissioner [Dec.
54,938(M)], T.C. Memo. 2002-285 (holding that the
Commissioner's offset of the taxpayer's liability for one year by
crediting refunds from other years did not violate section
6015(e)(1)(B), which bars levy actions while a
taxpayer's claim for relief from joint and several liability on a
joint return is pending); sec.
301.6330-1(g)(2), Q&A-G3, Proced. & Admin.
Regs. In
sum, we shall grant respondent's motion to dismiss and to strike,
as supplemented, inasmuch as respondent has not issued a notice of
determination to petitioner with regard to any collection action
for either 1991 or 1992. To
reflect the foregoing, An
order will be issued granting respondent's motion to dismiss for
lack of jurisdiction and to strike, as supplemented. 1
Unless otherwise indicated, all section references are to the
Internal Revenue Code, as amended. [SCA Letter Ruling 200233001]Larry
Lee Schake v. Commissioner. [Code
Secs. 6212 and 6320]
An
individual's suit challenging the validity of a notice of
determination on the ground that it was not mailed to his
"correct address" was dismissed. The IRS mailed the
notice to the same return address used on the taxpayer's request
for a Collection Due Process hearing. Thus, the IRS properly sent
the notice of determination to the taxpayer's last-known address. [Code
Secs. 6330 and 7502]
The
Tax Court lacked jurisdiction over an individual's untimely
petition. Although he claimed that Tax Court personnel granted him
a grace period to file his petition because a storm prevented him
from getting to the post office in his rural hometown, the Court
had no authority to extend the Code Sec. 6330 statutory period for filing a petition,
Moreover, the taxpayer failed to present evidence that the filing
deadline for his petition was postponed by reason of a
presidentially-declared disaster. --CCH. Larry
Lee Schake, pro se. Lisa K. Hartnett and Richard Charles
Grosenick, for the respondent. MEMORANDUM
OPINION ARMEN,
Special Trial Judge: This matter is before the Court on
respondent's Motion To Dismiss For Lack Of Jurisdiction on the
ground that the petition was not filed within the 30-day period
prescribed in section 6330(d)(1)(A).1 As
explained below, we shall grant respondent's motion to dismiss. Background On
or about On
On
On
On
As
indicated, respondent moved to dismiss the petition for lack of
jurisdiction on the ground the petition was not timely filed.
Petitioner filed an objection to respondent's motion to dismiss.
Although the objection does not list petitioner's address, the
envelope in which the objection was mailed to the Court lists the Petitioner's
objection states in pertinent part as follows: Enclosed
postal receipt shows that the U.S. Postal service had difficulty
in contacting Mr. Schake.3
Therefore notice was not sent to my current address. It was sent
to my mother's address, and I didn't receive the notice until Jan
8th 2002. I
called the court and they said I had time to file for a hearing.
At this time I was living in the country sixteen miles for the
nearest postal service. When it was time to mail in the petition
there was a severe winter storm and the roads were closed Jan. 9th
and 10th. I contacted the court and they allowed me a grace period
due to the impossible road conditions. Respondent
filed a response to petitioner's objection asserting that the
notice of determination was mailed to petitioner's last known
address. This
matter was called for hearing at the Court's motions session held
in
The
Tax Court is a court of limited jurisdiction, and we may exercise
our jurisdiction only to the extent authorized by Congress. Naftel
v. Commissioner [Dec.
42,414], 85 T.C. 527, 529 (1985). The Court's
jurisdiction under sections 6320 and 6330 depends on the issuance
of a notice of determination and the filing of a timely petition
for review. See Sarrell v. Commissioner [Dec.
54,494], 117 T.C. 122, 125 (2001); Offiler v.
Commissioner [Dec.
53,912], 114 T.C. 492, 498 (2000). When
respondent issues a notice of determination to a person following
an administrative hearing regarding a lien or levy action,
sections 6320(c) (by way of cross-reference) and 6330(d)(1)
provide that the person will have 30 days following the issuance
of such notice to file a petition for review with the Tax Court or
the Federal District Court, as appropriate.4 Offiler
v. Commissioner, supra at 498; see McCune v. Commissioner [Dec.
53,988], 115 T.C. 114 (2000) (dismissing a petition for
lack of jurisdiction where the taxpayer failed to file his initial
petition for review with the Petitioner
challenges the validity of the notice of determination on the
ground that it was not mailed to his "correct address".
The record shows otherwise. Specifically, the notice of
determination was mailed to the same address that petitioner
listed as his return address both on his request for an
administrative hearing and in the petition that he filed with the
Court. Petitioner has not identified any other address to which
the notice of determination should have been mailed. Accordingly,
we conclude that the notice of determination was mailed to
petitioner at his last known address. See secs. 6320(a)(2)(C),
6330(a)(2)(C); see also Abeles v. Commissioner [Dec.
45,203], 91 T.C. 1019, 1035 (1988); sec.
301.6212-2, Proced. & Admin. Regs. Under
the circumstances, the issue remaining for decision is whether the
petition was timely filed. The record shows that respondent mailed
the notice of determination to petitioner on As
a final matter, petitioner asserts that he was unable to file a
timely petition with the Court due to inclement weather in
Nebraska and that he was informed by Court personnel that he would
be given a grace period to file his petition. It is well settled
that the Court has no authority to extend the statutory period for
filing a timely petition "whatever the equities of a
particular case may be and regardless of the cause for its not
being filed within the required period." Axe v.
Commissioner [Dec.
31,377], 58 T.C. 256, 259 (1972); see Ogden v.
Commissioner [Dec.
54,617(M)], T.C. Memo. 2002-15 (holding that the
statutory periods in section
6330 are jurisdictional and cannot be extended); cf. Kennedy
v. Commissioner [Dec.
54,315], 116 T.C. 255, 262 (2001) (noting that the
Commissioner may not waive the time restrictions imposed by section
6330). Further, petitioner has made no showing
whatsoever, nor does the record suggest, that the filing deadline
for his petition was postponed by reason of a
presidentially-declared disaster related to inclement weather. See
sec.
7508A and sec. 301.7508A-1, Proced. & Admin. Regs.,
regarding the Commissioner's authority to postpone certain
deadlines by reason of presidentially declared disasters or
terroristic or military actions. To
reflect the foregoing, An
order of dismissal for lack of jurisdiction will be entered.
[2003-1 USTC ¶50,337]Brian K. Wasson, Petitioner-Appellant v. Commissioner of Internal
Revenue, Respondent-Appellee. The
Tax Court properly determined that an individual was foreclosed
from challenging his underlying tax liability at trial. He
unsuccessfully contended that he did not owe the assessed amount
of taxes because insufficient evidence existed to support the
assessment. On appeal, he did not contest that he had received a
notice of deficiency. As he did not dispute it within 90 days,
pursuant to Code
Sec. 6213(a), he was barred from challenging the
liability at trial. Moreover, the IRS was not required to conduct
an audit before determining a deficiency, and it possessed
statutory authority under Code
Sec. 6020(b)(1) to file a substitute tax return for a
nonfiler. [ Code
Sec. 6330] The
IRS properly afforded an individual an opportunity for a
Collection Due Process (CDP) hearing. The case activity log of an
IRS Appeals officer showed that the officer repeatedly tried to
contact the taxpayer for several months regarding his CDP hearing
request. The taxpayer failed to support his claim that he
contacted the IRS on numerous occasions, presented no evidence of
contact at trial, and did not explain his lack of response to the
officer.
The
Tax Court did not abuse its discretion in denying an individual's
motion for a continuance on the grounds that his attorney withdrew
from the case. At trial, the taxpayer denied that he had ever
hired an attorney, and all of his documents were filed pro se.
Under Tax
Court Rule 133, no exceptional circumstances existed to
justify a continuance. [ Code
Sec. 6673] The
Tax Court did not abuse its discretion by imposing a sanction
against an individual under Code
Sec. 6673(a)(1). The Tax Court found that the taxpayer
had instituted the proceeding to delay the government's collection
actions. The finding was based not only on the taxpayer's comment
to a court reporter that he could "keep talking so that she
could make more money," for which he apologized to the court,
but also on his failure to cooperate with an IRS Appeals officer
or adequately stipulate facts and documents and his disingenuous
and misleading testimony.
ORDER
Brian
K. Wasson, proceeding pro se, appeals a tax court decision.
This case has been referred to a panel of the court pursuant to
Rule 34(j)(1), Rules of the Sixth Circuit. Upon examination, this
panel unanimously agrees that oral argument is not needed.
Fed.R.App.P. 34(a). [Dec. 55,253(M)] Antonio and Ernestine Thomas v. Commissioner.
Married
taxpayers who had an opportunity to challenge a notice of
deficiency were barred from raising any issues regarding their
underlying tax liability at their Collection Due Process (CDP)
hearing. Because the taxpayers entered into an agreement as to the
amount of their tax liability in one tax year, they were precluded
from arguing the amount of their tax liability at their CDP
hearing or in their petition. Consequently, the government was
entitled to proceed with its collection action.
The
IRS properly took into account payments made by married taxpayers
in determining their tax liability and, thus, the amount the IRS
sought to collect was correct. The government provided Form 4340,
which was presumed accurate, showing that six payments were made
against the taxpayers' liability in connection with one tax year.
The taxpayers unsuccessfully argued that a letter presented as
evidence reflected the accurate deficiency amount.
Married
taxpayers were not prejudiced by an IRS Appeal's officers decision
to issue a determination without an in-person Collection Due
Process hearing. The arguments raised by the taxpayers concerning
their liability were considered by the Court, and were found to
lack merit. Consequently, the government was entitled to proceed
with its collection action. [Code Secs. 6330 and 6871]
Married
taxpayers were not entitled to a discharge of their tax debt in
bankruptcy. The taxpayers filed an untimely return two years
before the filing of their bankruptcy petition. As an initial
matter, the Tax Court noted its jurisdiction to review whether a
tax liability for which collection is at issue in a Code Sec. 6330(d)(1) proceeding has been discharged in
bankruptcy.
Antonio
L. and Ernestine Thomas, pro se. Monica D. Armstrong, for
the respondent. MEMORANDUM
FINDINGS OF FACT AND OPINION GALE,
Judge: This case arises from a petition filed pursuant to sections
6320(c) and 6330(d)(1)(A).1 After
concessions,2 the
issue for decision is whether respondent's determination to
proceed with a collection with respect to petitioners' Federal
income tax liabilities for 1991 should be sustained. We hold that
it should. FINDINGS
OF FACT Most
of the facts have been stipulated and are so found. The parties'
stipulation of facts and the accompanying exhibits are
incorporated herein by this reference. At
the time of filing the petition in this case, petitioners resided
in Petitioners
filed their 1991 joint Federal income tax return (1991 return) on On
or about On
On
On
On
On
On
On
On
On
OPINION Section
6321 imposes a lien in favor of the Section
6320 provides that the Secretary shall furnish the person
described in section 6321 with written notice of the filing of a
notice of lien under section 6323. The notice required by section
6320 must be provided not more than 5 business days after the day
of the filing of the notice of lien. Sec. 6320(a)(2). Section 6320
further provides that the person may request administrative review
of the matter (in the form of an Appeals Office hearing) within 30
days beginning on the day after the 5-day period. Section 6320(c)
provides that the Appeals Office hearing generally shall be
conducted consistent with the procedures set forth in section
6330(c), (d), and (e). Section
6330(c)(2) prescribes the matters that a person may raise at an
Appeals Office hearing. Under that section, a person may raise any
relevant issue related to the unpaid tax or noticed lien, but may
only contest the existence or amount of the underlying tax
liability if the person did not receive a notice of deficiency for
the tax liability or did not otherwise have an opportunity to
dispute the tax liability. Sec. 6330(c)(2)(B); Sego v.
Commissioner [Dec.
53,938], 114 T.C. 604, 609 (2000); Goza v.
Commissioner [Dec.
53,803], 114 T.C. 176, 180-181 (2000). Section 6330(d)
provides for judicial review of the administrative determination
in the Tax Court or a The
Underlying Liabilities Although
petitioners allege various errors in the deficiency respondent
determined with respect to 1991, they may not raise these issues
in the instant proceeding. The underlying liabilities for 1991
that respondent seeks to collect4 were the
subject of a notice of deficiency that petitioners received.
Accordingly, pursuant to section 6330(c)(2)(B), petitioners are
precluded from challenging the existence or amount of the
underlying tax liabilities for 1991 in this proceeding.
Petitioners
also allege that they owe no tax for 1991 because all of their
liabilities for that year were discharged in the bankruptcy
proceeding. Petitioners further note that they amended their
bankruptcy petition specifically to include their 1991 income tax
liabilities. Respondent agrees that the return assessment was
discharged in that proceeding but contends that the examination
assessment was not. We
have jurisdiction to decide whether a tax liability for which
collection is at issue in a section 6330(d)(1) proceeding has been
discharged in bankruptcy. Respondent
argues that the examination assessment was not discharged in
bankruptcy pursuant to 11 U.S.C. secs. 523(a)(1)(A) and
507(a)(8)(A)(iii) (2000). Those sections provide collectively that
an income tax liability that is "not assessed before, but
assessable *** after" commencement of the bankruptcy
proceeding, is not dischargeable. Thus, respondent argues, the
examination assessment, which was not made before the commencement
of the bankruptcy proceeding on We
agree that the examination assessment was not dischargeable but
disagree with respondent's analysis. Specifically exempted from
the nondischargeability rule for income taxes that were not
assessed before but are assessable after commencement of
bankruptcy proceedings are income taxes with respect to which a
return was filed after its due date (including extensions) and
after 2 years before the filing of the bankruptcy petition. See 11
U.S.C. secs. 507(a)(8)(A)(iii), 523(a)(1)(B)(ii) (2000). Such
taxes are nondischargeable without regard to the timing of the
assessment. Petitioners' 1991 return was untimely filed on
September 28, 1993, which is after 2 years before the filing of
the bankruptcy petition on March 10, 1995.5
Accordingly, pursuant to 11 U.S.C. sec. 523(a)(1)(B)(ii) the
examination assessment was not discharged in the bankruptcy
proceedings.6
At
trial, petitioners raised an additional issue; namely, that any
amount owed with respect to 1991 that was not discharged in the
bankruptcy proceeding had been paid. In support of this
contention, petitioners introduced a letter issued to them from
respondent dated Petitioners'
argument has no merit. The To
the contrary, respondent has submitted a certified copy of Form
4340, Certificate of Assessments, Payments, and Other Specified
Matters, for petitioners' 1991 tax year. Absent some showing of
irregularity, which petitioners have not made, the Form 4340
provides presumptive proof of its contents. See Hansen v. Necessity
of a Face-to-Face Meeting Finally,
petitioners contend that their right to a hearing under section
6330(b) was compromised by the settlement officer's issuing the
determination letter without conducting a face-to-face meeting.
The parties have stipulated that a meeting scheduled for We
find it unnecessary to decide whether, in these circumstances,
petitioners' right to a hearing under section 6330(b) was
infringed upon when respondent's settlement officer refused to
offer petitioners a third opportunity for a face-to-face meeting.
The issues that petitioners have raised herein and indicated they
would have raised in a face-to-face meeting --namely, the
correctness of the 1991 deficiency and the bankruptcy discharge of
the 1991 liabilities or their payment --have been considered in
this proceeding and found to lack merit. Thus, regardless of
whether petitioners were initially accorded their right to a
hearing under section 6330(b), they have not been prejudiced, and
we do not believe it is "either necessary or productive"
to remand this case for a hearing on the claims we have found
legally insufficient to forestall collection. See Lunsford v.
Commissioner [Dec.
54,553], 117 T.C. 183, 189 (2001); Conclusion Petitioners
have not raised any spousal defenses, other challenges to the
appropriateness of the collection action, or collection
alternatives. We have considered every contention raised by
petitioners, and conclude that each is without merit. We therefore
hold that respondent may proceed with the proposed collection
action. To reflect the foregoing, An
appropriate order and decision will be entered. 1
Unless otherwise noted, all section references are to the Internal
Revenue Code, as amended. [Dec. 56,109(M)]John J. Delgado, Petitioner v. Commissioner, Respondent. The
IRS did not abuse its discretion in determining that it could
proceed with collection action against an individual who entered
zeros for the amounts of income, total tax and amount owed on his
tax returns for the three tax years in issue. The taxpayer failed
to raise a spousal defense, make a valid challenge to the
appropriateness of IRS's intended collection action, or offer
alternative means of collection. Although the taxpayer's position
regarding his right to a face-to-face and recorded Collection Due
Process (CDP) hearing was correct, he ignored the hearing
officer's request for specific relevant issues to discuss. He had
presented frivolous and groundless arguments for why he was not
liable to pay tax at the time he filed the zero income tax
returns, when he requested the hearing and when he spoke to the
settlement officer. Therefore, remand of the case for a
face-to-face CDP hearing was not necessary.
The taxpayer's position was frivolous and groundless, and he instituted and maintained the proceedings primarily for delay. No penalty was imposed, but the court warned the taxpayer that it would impose a penalty against him if he proceeded with his frivolous and groundless position in the future. John J.
Delgado, pro se; Monica J. Miller and Robert W. Dillard,
for respondent. MEMORANDUM
FINDINGS OF FACT AND OPINION VASQUEZ,
Judge: Pursuant to section
6330(d),1
petitioner seeks review of respondent's determination regarding
collection of his 1998, 1999, and 2000 income tax liabilities. FINDINGS
OF FACT 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. At the time he filed the petition,
petitioner resided in Petitioner
submitted to the Internal Revenue Service Forms 1040A, U.S.
Individual Income Tax Return, for 1998, 1999, and 2000. The Forms
1040A for 1998, 1999, and 2000 listed zeros for, among other
things, the amount of petitioner's income, adjusted gross income,
taxable income, tax, total tax, and amount owed. Attached to these
Forms 1040A were frivolous and groundless arguments about why
petitioner was not liable to pay tax. Respondent mailed petitioner
statutory notices of deficiency for 1998, 1999, and 2000 on On
On
On
or about On
On
On
or about On
On
On
On
As
of In
the petition, petitioner's only assignment of error was that
respondent did not allow or provide him a face-to-face section
6330 hearing pursuant to the regulations under section
6330, and that this also denied him the right to record
the section
6330 hearing. The
only issues that petitioner would raise, or would have raised, if
provided a face-to-face section
6330 hearing are frivolous and groundless issues and
arguments --e.g., that the Commissioner had no authority to assess
tax, that there is no definition of an income tax or income, that
there is no provision in the Internal Revenue Code that makes him
liable to pay taxes or file returns, and that he wanted Settlement
Officer Feist to show him where in the Internal Revenue Code it
provides that he (petitioner) is liable to file returns --and he
wanted to dispute the amount of his underlying tax liability.3 OPINION When
the Commissioner issues a determination regarding a disputed
collection action, section
6330(d) permits a taxpayer to seek judicial review with
the Tax Court or a U.S. District Court, as is appropriate. If the
underlying tax liability is properly at issue, we review that
issue de novo. Sego v. Commissioner [Dec.
53,938], 114 T.C. 604, 610 (2000); Goza v.
Commissioner [Dec.
53,803], 114 T.C. 176, 181 (2000). If the validity of
the underlying tax liability is not at issue, we review the
Commissioner's determination for abuse of discretion. Sego v.
Commissioner, supra at 610. Pursuant
to section
6330(c)(2)(A), a taxpayer may raise at the section
6330 hearing any relevant issue with regard to the
Commissioner's collection activities, including spousal defenses,
challenges to the appropriateness of the Commissioner's intended
collection action, and alternative means of collection. A
section
6330 hearing "may, but is not required to, consist
of a face-to-face meeting." Sec. 301.6330-1(d)(2),
Q&A-D6, Proced. & Admin. Regs. If a taxpayer wants a
face-to-face section
6330 hearing, the taxpayer must be offered an
opportunity for such a section
6330 hearing at the Appeals office closest to the
taxpayer's residence. Sec. 301.6330-1(d)(2), Q&A-D7, Proced.
& Admin. Regs. Although
respondent denied petitioner a face-to-face section
6330 hearing and the right to record the section
6330 hearing, we conclude that it is not necessary and
will not be productive to remand this case to the Appeals Office
for a face-to-face section
6330 hearing in order to allow petitioner to make his
frivolous arguments or to record the section
6330 hearing. See Lunsford v. Commissioner [Dec.
54,553], 117 T.C. 183, 189 (2001); see also Kemper
v. Commissioner [Dec.
55,214(M)], T.C. Memo. 2003-195. Furthermore, we need
not remand this case so respondent can consider petitioner's
challenge to his underlying liabilities as petitioner is precluded
from challenging his underlying liabilities for the years in issue
because he received notices of deficiency for the years in issue. Sec.
6330(c)(2)(B); Sego v. Commissioner, supra at
610-611; Goza v. Commissioner, supra at 182-183. Petitioner
has failed to raise a spousal defense, make a valid challenge to
the appropriateness of respondent's intended collection action, or
offer alternative means of collection. These issues are now deemed
conceded. See Rule 331(b)(4). After
examination of the entire record before us, we conclude that
respondent did not abuse his discretion in determining to proceed
with the collection action as determined in the notices of
determination with respect to petitioner's unpaid liabilities for
taxable years 1998, 1999, and 2000. Section
6673(a)(1) authorizes this Court to require a taxpayer
to pay to the United States a penalty not to exceed $25,000 if the
taxpayer took frivolous or groundless positions in the proceedings
or instituted the proceedings primarily for delay. A position
maintained by the taxpayer is "frivolous" where it is
"contrary to established law and unsupported by a reasoned,
colorable argument for change in the law." Coleman v.
Commissioner [86-1
USTC ¶9401], 791 F.2d 68, 71 (7th Cir. 1986); see also
Hansen v. Commissioner [87-2
USTC ¶9402], 820 F.2d 1464, 1470 (9th Cir. 1987) (section
6673 penalty upheld because taxpayer should have known
claim was frivolous). Petitioner
has advanced shopworn arguments characteristic of tax-protester
rhetoric that has been universally rejected by this and other
courts. Wilcox v. Commissioner [88-1
USTC ¶9387], 848 F.2d 1007 (9th Cir. 1988), affg. [Dec.
43,889(M)] T.C. Memo. 1987-225; Carter v.
Commissioner [86-1
USTC ¶9279], 784 F.2d 1006, 1009 (9th Cir. 1986). We
shall not painstakingly address petitioner's assertions "with
somber reasoning and copious citation of precedent; to do so might
suggest that these arguments have some colorable merit." Crain
v. Commissioner [84-2
USTC ¶9721], 737 F.2d 1417, 1417 (5th Cir. 1984). We
conclude that petitioner's position was frivolous and groundless
and that petitioner instituted and maintained these proceedings
primarily for delay. We take this opportunity to warn petitioner
that the Court will impose a penalty pursuant to section
6673 if he returns to the Court and proceeds in a
similar fashion in the future. To
reflect the foregoing, Decision
will be entered for respondent.
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