Monique D. Long

• Court: United States Tax Court
• Decided: June 30, 2021
• Docket: 18068-19
• Status: Unpublished

Opinion

T.C. Memo. 2021-81

UNITED STATES TAX COURT

MONIQUE D. LONG, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 18068-19L. Filed June 30, 2021.

Monique D. Long, pro se.

Zachary B. Friedman and Rachael J. Zepeda, for respondent.

MEMORANDUM OPINION

LAUBER, Judge: In this collection due process (CDP) case petitioner seeks

review pursuant to sections 6320(c) and 6330(d)(1) of the determination by the

Internal Revenue Service (IRS or respondent) to uphold the filing of a notice of

Served 06/30/21 -2-

[*2] Federal tax lien (NFTL).1 Respondent has moved for summary judgment

under Rule 121, contending that there are no disputed issues of material fact and

that his determination to sustain the collection action was proper as a matter of

law. We agree and accordingly will grant the motion.

Background

The following facts are based on the parties’ pleadings and motion papers,

the attached declarations and exhibits, and the amended first stipulation of facts,

which includes the complete administrative record. See Rule 121(b).2 Petitioner

resided in Arizona when she filed her petition.

1 All statutory references are to the Internal Revenue Code in effect at all relevant times, and all Rule references are to the Tax Court Rules of Practice and Procedure. We round all monetary amounts to the nearest dollar. 2 In Robinette v. Commissioner, 123 T.C. 85, 95 (2004), rev’d, 439 F.3d 455 (8th Cir. 2006), we held that “when reviewing for abuse of discretion under section 6330(d), we are not limited by the Administrative Procedure Act * * * and our review is not limited to the administrative record.” The Court of Appeals for the Ninth Circuit has concluded that the record rule applies to CDP cases. See Keller v. Commissioner, 568 F.3d 710, 718 (9th Cir. 2009), aff’g in part T.C. Memo. 2006-166, and aff’g in part, vacating in part decisions in related cases. Under sec. 7482(b)(1)(G), appeal in this case would evidently lie to the Court of Appeals for the Ninth Circuit, and we therefore follow that court’s opinion. See Golsen v. Commissioner, 54 T.C. 742, 756-757 (1970), aff’d, 445 F.2d 985 (10th Cir. 1971). The stipulation recites the parties’ agreement that “all exhibits referred to herein and attached hereto may be accepted as authentic.” To the extent that any stipulated facts and exhibits lie outside the administrative record, we conclude that the parties have waived any objection on that ground. -3-

[*3] The IRS examined petitioner’s 2015 and 2016 Federal income tax returns

and disallowed dependency exemptions and related credits. On October 17, 2017,

the IRS issued petitioner a notice of deficiency for 2015, determining a deficiency

of $1,910. The IRS sent that notice via certified mail to petitioner’s last known

address, the same address petitioner has used in correspondence with the IRS and

her address of record with this Court. Tracking data from the United States Postal

Service (USPS) suggest that the letter was not successfully delivered and was

returned to the IRS.

On April 9, 2018, the IRS issued petitioner a notice of deficiency for 2016,

determining a deficiency of $6,878 and an accuracy-related penalty of $1,375.

That notice was sent by certified mail to the same address but was returned to the

IRS with notations on the envelope stating “UNCLAIMED,” “UNABLE TO FOR-

WARD,” and “RETURN TO SENDER.” Petitioner did not petition this Court in

response to either notice, and she has not paid either liability.

On December 11, 2018, after assessing the deficiencies, the IRS filed an

NFTL and sent petitioner a Notice of Federal Tax Lien Filing and Your Right to a

Hearing. She timely requested a CDP hearing. In her request she stated that she

was unaware of any outstanding tax liabilities because she “did not receive any -4-

[*4] taxes and * * * [her] dependents are in * * * [her] custody.” She checked the

box marked “I Cannot Pay Balance.”3

The case was assigned to a settlement officer (SO) in the IRS Appeals Of-

fice in Holtsville, New York. The SO reviewed the administrative file and con-

firmed that petitioner’s 2015 and 2016 liabilities had been properly assessed and

that all other legal requirements had been met. On July 12, 2019, the SO sent peti-

tioner a letter scheduling a telephone conference for August 13, 2019, explaining

that this would be petitioner’s main opportunity to explain why she disagreed with

the collection action and to discuss collection alternatives. Because petitioner had

indicated an inability to pay, the SO enclosed a Form 433-A, Collection Informa-

tion Statement for Wage Earners and Self-Employed Individuals, asking that peti-

tioner complete this form if she desired consideration of a collection alternative.

Petitioner received the letter but did not submit Form 433-A before the conference

call or subsequently.

During the call petitioner again stated that she did not understand the reason

for her underlying liabilities. The SO told her that the liabilities were attributable

to notices of deficiency for 2015 and 2016 and summarized the notices’ contents.

3 Petitioner also selected the box to request innocent spouse relief, see sec. 6015, but later explained that she checked this box by mistake. -5-

[*5] The SO explained that the notices were mailed to petitioner at her last known

address but were “never claimed” and were returned to the IRS unopened.

In response petitioner stated that she uses her grandmother’s address in cor-

respondence with the IRS but does not always receive her mail when it is sent

there. When the SO asked petitioner “how she wanted to resolve the balance,”

petitioner stated that she intended to pay the liabilities in full and asked for an ex-

tension of time to pay. The SO said she would grant a 90-day extension and noted

that petitioner could ask for an additional 30 days if needed. Petitioner did not re-

quest (and the parties did not discuss) any other collection alternative. The SO

told petitioner that the NFTL filing would be sustained but that the lien would be

removed once the balance was paid in full.

Because petitioner had stated her intention to pay the liabilities, the SO

asked her to complete Form 12257, Summary Notice of Determination, Waiver of

Right to Judicial Review of a Collection Due Process Determination. Execution

of this form closes out a CDP case and waives the taxpayer’s right to judicial re-

view. Petitioner signed the form on August 20, 2019, and the IRS received it on

August 26. But because the signed form did not make its way to the SO by the

deadline she had set, she proceeded to close the case. On September 11, 2019, the -6-

[*6] IRS issued a notice of determination sustaining the NFTL filing and granting

petitioner a 90-day extension of time to pay.

Petitioner timely petitioned this Court for review. In her petition she dis-

puted her underlying tax liability for 2015, stating that she was entitled to claim

her son as a dependent because he had “always been in * * * [her] custody.” She

did not dispute her underlying tax liability for 2016, mention her agreement to pay

the liabilities within the 90-day extension period, or allege that she was entitled to

any other collection alternative.

On January 14, 2021, respondent filed a motion for summary judgment.

The Court directed petitioner to respond to that motion by February 26, 2021,

warning that failure to respond could result in a decision against her. See Rule

121(d). She filed no response, and she did not appear when her case was called

from the calendar at the Court’s March 15, 2021, Phoenix, Arizona, trial session.

Discussion

A. Summary Judgment Standard

The purpose of summary judgment is to expedite litigation and avoid costly,

time-consuming, and unnecessary trials. Fla. Peach Corp. v. Commissioner, 90

T.C. 678, 681 (1988). The Court may grant summary judgment when there is no

genuine dispute as to any material fact and a decision may be rendered as a matter -7-

[*7] of law. Rule 121(b); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520

(1992), aff’d, 17 F.3d 965 (7th Cir. 1994). Where the moving party properly

makes and supports a motion for summary judgment, “an adverse party may not

rest upon the mere allegations or denials of such party’s pleading” but must set

forth specific facts, by affidavit or otherwise, showing that there is a genuine

dispute for trial. Rule 121(d).

Because petitioner did not respond to the motion for summary judgment, we

could enter a decision against her for that reason alone. See Rule 121(d). We will

nevertheless consider the motion on its merits. Finding no material facts in genu-

ine dispute, we conclude that this case is appropriate for summary adjudication.

B. Standard of Review

Neither section 6320(c) nor section 6330(d)(1) prescribes the standard of

review that this Court should apply in reviewing an IRS administrative determina-

tion in a CDP case. The general parameters for such review are marked out by our

precedents. Where the validity or amount of the taxpayer’s underlying liability is

properly at issue, we review the Commissioner’s determination of that issue de

novo. Goza v. Commissioner, 114 T.C. 176, 181-182 (2000). Where the taxpay-

er’s underlying liability is not before us, we review the IRS’ decision for abuse of

discretion only. Id. at 182. Abuse of discretion exists when a determination is -8-

[*8] arbitrary, capricious, or without sound basis in fact or law. See Keller v.

Commissioner, 568 F.3d 710, 716 (9th Cir. 2009), aff’g in part T.C. Memo. 2006-

166, and aff’g in part, vacating in part decisions in related cases; Murphy v.

Commissioner, 125 T.C. 301, 320 (2005), aff’d, 469 F.3d 27 (1st Cir. 2006).

C. Underlying Liabilities

Petitioner disputes her underlying tax liability for 2015. A taxpayer’s un-

derlying liability is properly at issue if she did not receive a statutory notice of de-

ficiency or did not otherwise have an opportunity to dispute the liability. Sec.

6330(c)(2)(B); Sego v. Commissioner, 114 T.C. 604, 609 (2000). Generally, a

notice of deficiency is valid if it was properly mailed to the taxpayer at her last

known address. Sec. 6212(b)(1); Hoyle v. Commissioner, 131 T.C. 197, 200,

203-204 (2008), supplemented by 136 T.C. 463 (2011). A taxpayer’s last known

address is generally the address appearing on her “most recently filed and properly

processed Federal tax return.” Sec. 301.6212-2(a), Proced. & Admin. Regs.

Petitioner does not dispute that the notice of deficiency for 2015 was pro-

perly mailed to her “last known address.” Sec. 6212(b)(1). This address appears

to be her grandmother’s, and petitioner has used it on all relevant correspondence,

including her CDP hearing request, the envelope containing the Form 12257, and

her petition to this Court. Petitioner has successfully received mail at this address -9-

[*9] in the past, including the IRS letter informing her of the CDP hearing and the

notice of determination sustaining the NFTL filing.

However, petitioner explained to the SO that she does not always get mail

sent to her grandmother’s address, and USPS records suggest that she did not per-

sonally receive either the 2015 or the 2016 notice of deficiency. Respondent ar-

gues that petitioner deliberately refused to accept delivery and should therefore be

deemed to have received both notices. See Sego, 114 T.C. at 606, 610-611 (con-

cluding that taxpayers repudiated their opportunity to dispute the tax liability by

deliberately refusing delivery of notices of deficiency).

For purposes of ruling on respondent’s motion, we will assume arguendo

that petitioner did not receive the notices of deficiency and did not deliberately re-

fuse them. But there is another barrier to her challenging her underlying liability

in this Court: A taxpayer is precluded from doing so if she did not properly raise

her underlying liability on the merits during the CDP hearing. Thompson v. Com-

missioner, 140 T.C. 173, 178 (2013); Giamelli v. Commissioner, 129 T.C. 107,

114 (2007). “An issue is not properly raised if the taxpayers fails * * * to present

to Appeals any evidence with respect to that issue after being given a reasonable

opportunity.” Secs. 301.6320-1(f)(2), Q&A-F3, 301.6330-1(f)(2), Q&A-F3, - 10 -

[*10] Proced. & Admin. Regs.; see Giamelli, 129 T.C. at 112-116; Miller v.

Commissioner, 115 T.C. 582, 589 n.2 (2000), aff’d, 21 F. App’x 160 (4th Cir.

2001).

In her CDP hearing request petitioner stated that she did not know why she

had outstanding tax liabilities, and she repeated that question at the start of the

conference call. But after the SO explained the background and summarized the

notices of deficiency, petitioner withdrew any challenge to her underlying liabili-

ties. Indeed, she stated that she intended to pay those liabilities in full and asked

for an extension of time to do so. At no time did petitioner submit any evidence to

the SO regarding her entitlement to a dependency exemption (or any other issue

relevant to her 2015 tax liability). See Sullivan v. Commissioner, T.C. Memo.

2019-153, 118 T.C.M. (CCH) 415, 417; Campbell v. Commissioner, T.C. Memo.

2019-127, 118 T.C.M. (CCH) 290, 292. Because petitioner’s underlying liability

is not properly before us as to either year in issue, we will review the IRS’ deci-

sion for abuse of discretion.

D. Abuse of Discretion

In deciding whether the SO abused her discretion in sustaining the NFTL

filing, we consider whether she: (1) properly verified that the requirements of ap-

plicable law or administrative procedure have been met, (2) considered any rele- - 11 -

[*11] vant issues petitioner raised, and (3) considered “whether any proposed

collection action balances the need for the efficient collection of taxes with the

legitimate concern of * * * [petitioner] that any collection action be no more

intrusive than necessary.” Sec. 6330(c)(3). Our review of the record establishes

that the SO properly discharged all of her responsibilities under section 6330(c).

Although petitioner in her CDP hearing request checked the box “I Cannot

Pay Balance,” she later informed the SO that she intended to pay her liabilities in

full. She ultimately requested only an extension of time to pay, and the SO grant-

ed that request. Petitioner never returned a completed Form 433-A as the SO had

requested. Because petitioner did not supply any financial information, the SO

was unable to evaluate her ability to pay or make any determination as to her eli-

gibility for a collection alternative. See Gentile v. Commissioner, T.C. Memo.

2013-175, 106 T.C.M. (CCH) 75, 77, aff’d, 592 F. App’x 824 (11th Cir. 2014);

sec. 301.6330-1(e)(1), Proced. & Admin. Regs.4

4 The fact that petitioner’s signed Form 12257 was delayed in reaching the SO does not suggest any abuse of discretion. If the SO had received and finalized that form, petitioner would be deemed to have waived her right to petition this Court. Thus, any error was to petitioner’s benefit. See Richlin v. Commissioner, T.C. Memo 2020-60, 119 T.C.M. (CCH) 1405, 1409 (“Form 12257 is typically used only when a CDP hearing reaches a result satisfactory to the taxpayer.”). - 12 -

[*12] Finding no abuse of discretion in any respect, we will grant summary judg-

ment for respondent and sustain the collection action. We note that petitioner is

free to submit to the IRS at any time, for its consideration and possible acceptance,

a collection alternative in the form of an offer-in-compromise or an installment

agreement, supported by the necessary financial information.

To reflect the foregoing,

An appropriate order and decision

will be entered for respondent.