Katz v. Comm'r of Internal Revenue
| Decision Date | 13 October 2000 |
| Docket Number | No. 16718–99L.,16718–99L. |
| Citation | 115 T.C. No. 26,115 T.C. 329 |
| Parties | Scott William KATZ, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent |
| Court | U.S. Tax Court |
OPINION TEXT STARTS HERE
Taxpayer petitioned for review of IRS' determination to proceed with collection on deficiency previously determined by Tax Court. IRS moved for summary judgment. The Tax Court, Vasquez, J., held that: (1) telephone conference constituted pre-levy hearing; (2) taxpayer failed to state claim on which relief could be granted; and (3) taxpayer was not entitled to abatement of interest.
Motion granted.
P received a notice of deficiency for his 1990 tax year. After P petitioned this Court to redetermine that deficiency determination, the Court entered a stipulated decision providing for a tax deficiency, additions to tax, and statutory interest. R subsequently filed a lien, and P, in turn, requested an Appeals hearing from R's Appeals Office pursuant to sec. 6320 (b), I.R.C. P refused to appear at the Appeals hearing on the grounds that the location of the Appeals hearing was inconvenient to P and his witnesses. After an Appeals officer discussed the collection matter with P via telephone, the Appeals officer issued to P a notice of determination under sec. 6330, I. R.C. P subsequently petitioned this Court to review the Appeals officer's determination under sec. 6330, I.R.C. R now moves for partial summary judgment with regard to the tax deficiency, additions to tax, and interest that are the subject of R's collection activities.
Held: P received an adequate opportunity for an Appeals hearing pursuant to sec. 6320(b), I.R.C. In any event, the communications between the Appeals officer and P constituted an Appeals hearing under sec. 6320(b), I.R.C.
Held, further, P's challenge to the merits of R's assessment of the tax deficiency and additions to tax fails to state a claim on which relief can be granted.
Held, further, because the Court has jurisdiction under sec. 6404(i), I.R.C., over interest abatement cases, the Court has jurisdiction to review the Appeals officer's determination with regard to the interest that is the subject of R's collection activities. However, the Appeals officer did not abuse his discretion in making the determination.
Scott W. Katz, Petitioner, pro se.
Kenneth A. Hochman and John T. Lortie, for respondent.
Petitioner filed a petition in response to respondent's Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330 (notice of determination).1 In his petition, petitioner alleges that the Internal Revenue Service Office of Appeals (Appeals Office) failed to hold a meaningful hearing as required by section 6320(b) (Appeals hearing). Petitioner further challenges the merits of a tax deficiency and additions to tax previously redetermined by the Court in a decision entered for his 1990 tax year, and interest assessed thereon. Respondent has moved for partial summary judgment on the grounds that petitioner has been afforded the opportunity for an Appeals hearing, that the tax deficiency and additions to tax are properly due, and that the interest has been properly calculated. There are no genuine issues of material fact to preclude us from deciding this matter.2 We therefore decide the legal issues before us.
At the time the petition was filed, petitioner resided in West Palm Beach, Florida. For the sole purpose of deciding the motion for partial summary judgment, we summarize the relevant facts.3
On September 19, 1996, respondent issued a notice of deficiency with regard to petitioner's 1990 tax year. On October 2, 1996, petitioner filed a petition with this Court seeking a redetermination of the tax deficiency and additions to tax determined by respondent in the notice of deficiency (original tax dispute). On February 6, 1998, petitioner moved the U.S. Bankruptcy Court for the Southern District of Florida to reopen his 1990 bankruptcy case to settle the dispute with the Commissioner regarding his “1990 income tax liability.” On March 10, 1998, the bankruptcy court denied the request, ruling that petitioner's “1990 tax liabilities were not discharged in * * * [the] bankruptcy case.” In re Katz, No. 90–39248–BKC–RAM (Bankr.S.D.Fla., Mar.10, 1998). On May 14, 1998, with regard to the original tax dispute, we entered a decision stipulated by the parties setting out the amounts of the tax deficiency and additions to tax and providing for statutory interest.4 See Katz v. Commissioner, Docket No. 21359–96 (May 14, 1998). The amounts of the tax deficiency and additions to tax redetermined in the decision were much lower than the amounts set forth in the notice of deficiency. Subsequently, respondent assessed the tax deficiency, additions to tax, and interest.
On February 23, 1999, respondent filed a Notice of Federal Tax Lien (lien filing) with regard to the amounts assessed for the 1990 tax year in the county recorder's office for Palm Beach County, Florida. On February 27, 1999, respondent transmitted to petitioner a “Notice of Federal Tax Lien Filing and Your Right to a Hearing under IRC 6320”. On or about March 31, 1999, pursuant to section 6320(b), petitioner requested an Appeals hearing from respondent's Appeals Office. In his request, petitioner contested the entire amount listed in the lien filing. Petitioner contended that “any tax money allegedly owed for 1990” was discharged pursuant to his bankruptcy action and that (in any event) interest should not have accrued during the bankruptcy proceeding.
On May 24, 1999, an Appeals officer 5 assigned to the South Florida region mailed petitioner a letter scheduling petitioner's requested Appeals hearing for June 8, 1999, at an Appeals Office in Sunrise, Florida. The Appeals officer stated in the letter: The Appeals officer explained that “an earlier conference may be possible if held in my office or conducted by telephone.” The Appeals officer further explained to petitioner the procedures of the Appeals hearing:
This conference will be informal. You may present facts, arguments, and legal authority to support your position. If you plan to introduce new evidence or information, send it to me at least 10 days before the conference. Statements of fact should be presented as affidavits or signed under penalties of perjury.
On that same day, independent of the letter drafted by the Appeals officer, petitioner mailed a letter to the Appeals officer reasserting his request for an Appeals hearing. In the letter, petitioner requested that the Appeals hearing “take place in West Palm Beach, Florida since all of the witnesses live and work in West Palm Beach, Florida.”
On June 7, 1999, after receiving the Appeals officer's letter dated May 24, 1999, petitioner again transmitted a letter to the Appeals officer requesting “that any and all hearings be held in West Palm Beach, Florida.” Petitioner further stated that
On June 21, 1999, petitioner and the Appeals officer had a telephone conversation in which they discussed petitioner's 1990 tax year. During the telephone conversation, the Appeals officer informed petitioner that Appeals hearings were not available in West Palm Beach, Florida, but rather were conducted in Sunrise, Florida. On June 23, 1999, the Appeals officer followed up the telephone conversation with a letter in which he stated that he saw “no basis for recommending abatement of the 1990 income tax liability.” The Appeals officer also informed petitioner that he could (1) petition the Tax Court to review the lien filing following the issuance of a notice of determination by the Appeals officer or (2) settle with the Internal Revenue Service (IRS). 6 On September 28, 1999, following inaction by petitioner, the Appeals officer issued a notice of determination deciding “not to withdraw the Notice of Federal Tax Lien.” 7 In the notice of determination, the Appeals officer explained that petitioner's “tax was not dischargeable” pursuant to applicable bankruptcy law and that petitioner had “signed a stipulation waiving the restrictions prohibiting assessment and collection of the deficiency and additions to tax (plus statutory interest) for the taxable year 1990”.
Petitioner, thereafter, petitioned this Court to review respondent's determination pursuant to section 6330. In the petition, petitioner contends that (1) he has never received (or had the opportunity for) an Appeals hearing, (2) the Tax Court decision with regard to the tax deficiency and additions to tax should be vacated because of the previous bankruptcy action, and (3) respondent is not entitled to interest for the period during which he was in bankruptcy proceedings.
Section 6321 provides that, if any person liable to pay any tax neglects or refuses to do so after demand, the amount shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person. Pursuant to section 6323, the Commissioner generally is required to file a Notice of Federal Tax Lien with the appropriate State office for the lien to be valid against certain third parties.
After the Commissioner conducts the lien filing, section 6320(a)(1) requires the Commissioner to provide notice to the taxpayer of the lien. 8 In addition, under section 6320(a)(3)(B) and (b), the Commissioner must provide the taxpayer with notice of and an opportunity for an...
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