Greene-Thapedi v. Comm'r of Internal Revenue

Decision Date12 January 2006
Docket NumberNo. 7940–01L.,7940–01L.
Citation126 T.C. 1,126 T.C. No. 1
PartiesLlwellyn GREENE–THAPEDI, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
CourtU.S. Tax Court

OPINION TEXT STARTS HERE

In her original petition, P challenged R's notice of determination sustaining a proposed levy to collect P's 1992 income tax. She contended, among other things, that R had failed to make a timely assessment of her 1992 tax liabilities and had included excessive interest accruals in her 1992 balance due; she sought a refund of certain amounts previously paid with respect to her 1992 account. After the petition was filed, P's 1992 balance due was eliminated by R's offset of P's 1999 overpayment, pursuant to sec. 6402 (a), I.R.C. P amended her petition in the Tax Court, seeking an increased refund. Held: Inasmuch as R agrees that there is no unpaid 1992 tax liability upon which a levy could be based and that no further collection action should be taken, P's challenges to the proposed levy are moot. Held, further, this Court lacks jurisdiction in this collection review proceeding to determine an overpayment or to order a refund or credit of taxes. Held, further, this case will be dismissed as moot.

Llwellyn Greene–Thapedi, pro se.

Robert T. Little and Michael F. O'Donnell, for respondent.

OPINION

THORNTON, J.

Pursuant to section 6330(d), petitioner seeks review of respondent's determination to proceed with a proposed levy.1

Background

When she petitioned this Court, petitioner resided in Chicago, Illinois.

Stipulated Decision for 1992 Taxable Year

On June 5, 1997, in a prior deficiency proceeding involving petitioner's 1992 taxable year, this Court entered a stipulated decision that petitioner had a $10,195 deficiency in income tax due but owed no additions to tax or penalties. The parties stipulated that interest would be assessed as provided by law and that effective upon entry of the decision by the Court, petitioner waived the restrictions contained in section 6213(a) prohibiting assessment and collection of the deficiency (plus statutory interest) until the decision of the Tax Court becomes final.

Collection Action on 1992 Liability

Respondent contends that on December 19, 1997, petitioner's 1992 deficiency was assessed and petitioner was sent a notice of balance due (including accrued interest) of $14,514.53. Petitioner disputes that any notice of balance due was ever sent. In any event, petitioner made no payment on her 1992 deficiency at that time.

On July 3, 2000, respondent sent petitioner a Form CP 504, “Urgent!! We intend to levy on certain assets. Please respond NOW.” (Form CP 504), for taxable year 1992, indicating that she owed $23,805.53.2 By checks dated July 18, 2000, petitioner paid respondent $14,514.53 on her 1992 account; i.e., the amount of her balance as of December 19, 1997.3 Contemporaneously, petitioner submitted to respondent a Form 12153, Request for a Collection Due Process Hearing, dated July 18, 2000, with respect to her 1992 tax year. 4 On the Form 12153, petitioner complained that the balance shown on respondent's Form CP 504 included erroneous penalties and interest accruals.

On January 9, 2001, respondent issued petitioner a Final Notice—Notice of Intent to Levy and Notice of Your Right to a Hearing (the Final Notice) with respect to her 1992 income tax liabilities, showing an assessed balance of $4,992.70, and stating that this amount did not include accrued penalties and interest.5 Petitioner submitted another Form 12153, dated January 17, 2001, again requesting a hearing with respect to her 1992 taxable year and stating: “I do not owe the money. Notice improper”.

Appeals Office Hearing and Notice of Determination

The Appeals Office hearing consisted of an exchange of correspondence and telephone conversations. During the hearing, petitioner contended that she was not liable for any interest accruals between December 19, 1997, and July 3, 2000, on the ground that she had not received the December 19, 1997, notice of balance due and was not notified of any balance due until July 3, 2000. By Notice of Determination dated May 22, 2001, respondent's Appeals Office sustained the proposed collection action.6

Tax Court Petition

On June 22, 2001, petitioner filed her petition in this Court.7 The petition disputed, among other things, interest and penalties with respect to her 1992 income tax liability and requested this Court to order respondent to credit or refund what she alleged to be her tax overpayment for 1992. The petition also alleged that petitioner had failed to receive a meaningful Appeals Office hearing as required by section 6330.

Respondent's Motion for Partial Summary Judgment

On October 17, 2002, respondent filed a motion for partial summary judgment with respect to the issue of whether petitioner was afforded the opportunity for an Appeals Office administrative hearing under sections 6320 and 6330. By Order dated February 25, 2003, this Court granted respondent's motion for partial summary judgment, holding that petitioner was provided with a meaningful opportunity for a collection due process hearing in this case.”

Petitioner's Motion To Add 1999 Taxable Year to This Proceeding

Respondent's just-described motion for partial summary judgment indicated, among other things, that after the filing of the petition, respondent had offset a $10,633 overpayment from petitioner's 1999 income tax account against petitioner's 1992 tax liability, resulting in full payment of petitioner's 1992 liability.8 On December 3, 2002, petitioner filed a motion for leave to amend her petition to add taxable year 1999 to this proceeding. In her motion, petitioner stated that she had been “caught by surprise” by the information in respondent's motion that respondent had offset her 1999 overpayment against her alleged 1992 tax liability. By Order dated January 30, 2003, this Court denied petitioner's motion for leave to amend her petition. The Order stated:

Respondent contends, and we agree, that petitioner is not permitted to dispute in this collection review proceeding respondent's application of an overpayment to offset all or part of the tax due for taxable year 1992 although the latter year is otherwise subject to review under section 6330. See, e.g., Trent v.. Commissioner, T.C. Memo.2002–285.

District Court Refund Suit

Petitioner then filed a refund suit in the United States District Court, Northern District of Illinois, Eastern Division, claiming a refund of her 1999 overpayment. The United States moved to dismiss on the ground that as a matter of law petitioner has no claim for a 1999 overpayment because the credit against the 1999 tax year no longer exists, having been applied against petitioner's outstanding 1992 tax liability pursuant to section 6402(a). By memorandum opinion and order entered December 11, 2003, the District Court denied the Government's motion to dismiss, on the ground that it could not determine as a matter of law that petitioner's 1999 overpayment did not exceed her 1992 liability, so that the Government's section 6402(a) duty to “refund any balance to such person” would not arise in the District Court case. The District Court stated:

Finally, the Court is mindful that although the Tax Court does not have concurrent jurisdiction over the issues in the present suit, which relates to the 1999 tax year, see Statland v. United States, 178 F.3d 465, 470–71 (7th Cir.1999), the Tax Court proceedings related to Plaintiff's 1992 tax liability will likely resolve certain facts necessary to the resolution of the present litigation. Therefore, this matter is stayed pending the outcome of the Tax Court proceedings.

Amended Petition

Petitioner subsequently filed an unopposed motion for leave to file an amended petition in these Tax Court proceedings. In her amended petition, petitioner contended that the Appeals Office erred in determining that the proposed levy with respect to her 1992 taxable year should proceed. She also challenged her liability for the 1992 deficiency and associated interest on the ground that respondent had failed to make timely notice and demand for payment.

Discussion

This Court previously dismissed this case as to petitioner's taxable years 1991 and 1997, leaving only 1992 at issue. Sometime after the petition was filed, respondent applied petitioner's 1999 overpayment to offset her 1992 tax liability. Consequently, respondent no longer claims any amount to be due and owing from petitioner with respect to her 1992 income tax account. On supplemental brief respondent states that he “intends to take no further collection action with respect to * * * [petitioner's] 1992 tax liability”. Accordingly, respondent contends that this case should be dismissed as moot. 9 For the reasons described below, we agree.

The Tax Court is a court of limited jurisdiction; we may exercise jurisdiction only to the extent expressly authorized by Congress. See, e.g., Henry Randolph Consulting v. Commissioner, 112 T.C. 1, 4 (1999). Our jurisdiction in this case is predicated upon section 6330(d)(1)(A), which gives the Tax Court jurisdiction “with respect to such matter” as is covered by the final determination in a requested hearing before the Appeals Office. See Davis v. Commissioner, 115 T.C. 35, 37 (2000). “Thus, our jurisdiction is defined by the scope of the determination” that the Appeals officer is required to make. Freije v. Commissioner, 125 T.C. 14, 25 (2005).

The Appeals officer's written determination is expected to address “the issues presented by the taxpayer and considered at the hearing.” H. Conf. Rept. 105–599, at 266 (1998), 1998–3 C.B. 747, 1020. At the hearing, the Appeals officer is required to verify that “the requirements of any applicable law or administrative procedure have been met.” Sec. 6330(c)(1); see sec. 6330(c)(3)(A).10 The Appeals officer is also required to address whether the proposed collection action balances the need for efficient tax collection with the...

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