Oyer v. Commissioner, Docket No. 11887-02L.
| Decision Date | 17 June 2003 |
| Docket Number | Docket No. 11888-02L.,Docket No. 11889-02L.,Docket No. 11893-02L.,Docket No. 11887-02L. |
| Citation | 85 T.C.M. 1510 |
| Parties | Dale L. Oyer, Transferee, et. al.<SMALL><SUP>1</SUP></SMALL> v. Commissioner. |
| Court | U.S. Tax Court |
John Harley Trader, for the petitioners.
Robert M. Fowler, for the respondent.
This matter is before the Court on respondent's motions for summary judgment in these consolidated cases. The issue for decision is whether respondent may proceed with collection of petitioners' transferee tax liabilities.
Summary judgment is intended to expedite litigation and avoid unnecessary and expensive trials. Fla. Peach Corp. v. Commissioner [Dec. 44,689], 90 T.C. 678, 681 (1988). Summary judgment may be granted where there is no genuine issue of any material fact and a decision may be rendered as a matter of law. Rule 121(a) and (b);2 see Sundstrand Corp. v. Commissioner [Dec. 48,191], 98 T.C. 518, 520 (1992), affd [94-1 USTC ¶ 50,092] 17 F.3d 965 (7th Cir. 1994); Zaentz v. Commissioner [Dec. 44,714], 90 T.C. 753, 754 (1988). The moving party bears the burden of proving that there is no genuine issue of material fact, and factual inferences will be read in a manner most favorable to the party opposing summary judgment. Dahlstrom v. Commissioner [Dec. 42,486], 85 T.C. 812, 821 (1985); Jacklin v. Commissioner [Dec. 39,278], 79 T.C. 340, 344 (1982). When a motion for summary judgment is made and properly supported, the adverse party may not rest upon mere allegations or denials of the pleadings but must set forth specific facts showing that there is a genuine issue for trial. Rule 121(d).
As discussed below, on the basis of our review of the record, we conclude that there is no dispute as to a material fact and that respondent is entitled to summary judgment as a matter of law.
The record establishes or the parties do not dispute the following:
A. The Corporation's Tax Deficiency
On September 15, 1999, respondent timely mailed to ABC Seamless Siding & Guttering, Inc. (the corporation), a notice of deficiency. In the notice, respondent determined that for its taxable year ending December 31, 1995, the corporation had an income tax deficiency and related penalties totaling $75,767.50. In response, the corporation timely petitioned this Court at docket No. 18699-99 ().
On February 15, 2001, this Court entered a stipulated decision in the corporation's deficiency case, determining that there was a $41,873 deficiency in the corporation's income tax for the taxable year 1995. The stipulated decision was signed for the corporation by the same counsel who represents petitioners in the instant cases.
B. Statutory Notices of Transferee Liability
On October 11, 2000, respondent mailed to petitioners substantially identical statutory notices of liability, determining that each petitioner was liable as a transferee of the corporation for its income taxes and penalties in the amount of $94,738.85 for the taxable year ending December 31, 1995.3 In response, petitioners filed substantially identical petitions with this Court in the following cases (the transferee liability cases): Dale L. Oyer, Docket No. 673-01; Acme Leasing Trust, docket No. 674-01; Shirley J. Oyer, Docket No. 675-01; and ABC Seamless Trust, docket No. 676-01.
C. Stipulated Decisions in Petitioners' Transferee Liability Cases
On March 2, 2001, before respondent had filed an answer in any of the transferee liability cases, this Court entered stipulated decisions in those cases, determining that each petitioner was liable as a transferee of assets of the corporation in the amount of $58,008 plus interest as provided by law from March 15, 1996, to the date of payment.4 Each stipulated decision was signed for the petitioner by the same counsel who represents petitioners in the instant cases.
D. Notices of Federal Tax Liens
On May 11, 2001, respondent filed notices of Federal tax lien with respect to each petitioner's transferee liability, showing an $89,079.25 unpaid balance of assessment with respect to each petitioner. In separate letters dated May 16, 2001, respondent notified each petitioner of this action and of the right to a hearing under section 6320.
E. Petitioners' Requests for Hearings
Each petitioner timely submitted a Form 12153, Request for a Collection Due Process Hearing. Attached to these Forms 12153 were substantially identical memoranda, asserting that each asserted tax lien was defective, erroneous, and improper because: (1) The stipulated decision in the corporation's deficiency case was jurisdictionally defective because the underlying notice of deficiency was invalid in that it determined a deficiency for the corporation's taxable year ending December 31, 1995, rather than for the corporation's final taxable period ending August 31, 1995; and (2) alternatively, each transferee's liability should be limited to $19,041, which petitioners seemed to suggest was the maximum value of assets that any of them actually received from the corporation.
F. The Appeals Office Hearings
On July 25, 2001, an Appeals officer held a telephone hearing with respect to the collection proceedings against petitioners ABC Seamless Trust and Acme Leasing Trust. On August 14, 2001, the Appeals officer held an in-person hearing with respect to the collection proceedings against petitioners Dale Oyer and Shirley Oyer.
On or about November 12, 2001, each petitioner submitted to the Appeals officer an offer in compromise based on doubt as to liability. In these offers in compromise, each petitioner offered to pay $50 to compromise the unpaid balance of assessment of transferee tax liability.
In addition, each petitioner submitted to respondent substantially identical documents dated November 15, 2001, and captioned "Amendment to Request for a Collection Due Process Hearing". In these documents, petitioners alleged that in determining their transferee liabilities, respondent had failed to take into consideration certain "additional liabilities" of the corporation that petitioners contended would more than offset the value of any assets that the corporation transferred to them.
G. Respondent's Notices of Determination
On June 13, 2002, respondent issued to each petitioner a Notice of Determination Concerning Collection Action(s) Under Sections 6320 and/or 6330 (the notices). In the notices, respondent determined that petitioners could not challenge their underlying tax liabilities in these collection proceedings because these liabilities had been determined in prior judicial actions. In the notices, respondent also determined that petitioners' offers in compromise based on doubt as to liability were unacceptable because each petitioner's underlying tax liability was based on a Tax Court decision and because each petitioner was noncompliant with income tax filing requirements. In the notices, respondent determined that all applicable legal and administrative procedures had been met and that collection actions could proceed against petitioners.
H. The Petitions
On July 18, 2002, petitioners filed with the Court substantially identical petitions challenging the notices.5 In the petitions, petitioners challenge their transferee tax liabilities and also challenge the Appeals officer's rejection of their offers in compromise.
I. Respondent's Motions for Summary Judgment
On January 31, 2003, respondent filed substantially identical motions for summary judgment in each petitioner's case. On February 13, 2003, petitioners filed substantially identical responses opposing respondent's motions for summary judgment in each case. On February 24, 2003, the Court held a hearing in Kansas City, Missouri, on respondent's motions for summary judgment.
Section 6321 imposes a lien in favor of the United States on all property and property rights of a person who is liable for and fails to pay taxes after demand for payment has been made. The lien arises when assessment is made and continues until the assessed liability is paid. Sec. 6322. For the lien to be valid against certain third parties, the Secretary must file a notice of Federal tax lien and, within 5 business days thereafter, provide written notice to the taxpayer. Secs. 6320(a), 6323(a). The taxpayer may then request an administrative hearing before an Appeals officer. Sec. 6320. Once the Appeals officer issues a determination, the taxpayer may seek judicial review in the Tax Court or a District Court, as appropriate. Sec. 6330(d).
Section 6330(c) prescribes the matters that a person may raise at an Appeals Office hearing, including spousal defenses, the appropriateness of the Commissioner's intended collection action, and possible alternative means of collection. Of particular significance here is section 6330(c)(2)(B), which provides:
(B) Underlying liability.—The person may also raise at the hearing challenges to the existence or amount of the underlying tax liability for any tax period if the person did not receive any statutory notice of deficiency for such tax liability or did not otherwise have an opportunity to dispute such tax liability.
Moreover, except in certain limited circumstances, a person is generally precluded from raising at the Appeals Office hearing any issue raised and considered in any previous administrative or judicial proceeding. Sec. 6330(c)(4).
In this collection proceeding, petitioners challenge their underlying tax liabilities as transferees of the corporation for its 1995 tax liability. More particularly, having previously agreed to this Court's stipulated decisions in the transferee liability cases, petitioners now seek in this collection proceeding to repudiate those stipulated decisions on various grounds. They argue, among other things, that respondent's notice of deficiency to...
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