Reinhart v. Comm'r

Decision Date16 October 2014
Docket NumberDocket No. 25917-11L.,T.C. Memo. 2014-218
PartiesKIM REINHART, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent.
CourtU.S. Tax Court

Mitchell I. Horowitz and Micah G. Forgarty, for petitioner.

Miriam C. Dillard, for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

KERRIGAN, Judge: The petition in this case was filed in response to a Decision Letter Concerning Equivalent Hearing under Section 6320 and/or 6330 of the Internal Revenue Code (decision letter) upholding a collection action regarding a notice of Federal tax lien (NFTL) filed on March 15, 2011, for the taxperiod ending June 30, 1992. The parties have stipulated that petitioner timely requested a collection due process (CDP) hearing as to the March 15, 2011, NFTL, that the settlement officer should have issued a notice of determination rather than a decision letter, and that the decision letter should be treated as a notice of determination under section 6330(d)(1) for jurisdictional purposes. See Craig v. Commissioner, 119 T.C. 252, 259 (2002).

The issue for consideration is whether respondent is time barred from collecting a trust fund recovery penalty for the tax period ending June 30, 1992 (1992 trust fund recovery penalty).

Unless otherwise indicated, all section 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.

FINDINGS OF FACT

Some of the facts have been stipulated and are found accordingly. The parties' stipulations of facts, with accompanying exhibits, are incorporated herein by this reference.

Petitioner and her husband, Byron Hatcher, were married in 1991 and remain married. The mailing address used at the time of filing this petition is a mailbox at a Pack Mart shipping business in Sebastian, Florida.

Petitioner was born in the United States and spent her childhood in the United States. Petitioner attended, but did not complete, college. Petitioner began her career in the early 1990s providing secretarial services including accounting and bookkeeping services.

In the early 1990s petitioner had a secretarial and bookkeeping services company in Daytona, Florida. This business lasted until 1996. Petitioner worked full time for her company, and she had no clients outside the United States.

In late 1996 petitioner's husband and Mr. Uhrig, a friend and business associate of petitioner, began a business venture called American Barristers which provided trust formation and incorporation services. Some of the business entities were incorporated in the Carribean. Petitioner handled the accounting aspects of these entities and trusts. Petitioner also performed bookkeeping services for Mr. Uhrig.

Petitioner had ownership interests in several entities, including Equity Mutual Funding, Inc. Petitioner had signature authority for a bank account ofPrudential Trustees and initiated numerous transfers of funds by mail, telephone, and facsimile.

In February 1991 petitioner and her husband purchased a home in Ponce Inlet, Florida, where they resided until the home was sold in May 1994. Petitioner moved into a condominium in Daytona Beach, Florida, which was purchased in May 1994 and sold in 1997. From 1999 until 2002 petitioner resided in a townhouse in Grant, Florida. In June 2002 petitioner moved to a boat that she and her husband owned and moored in City of Fort Pierce, Florida. Petitioner resided there until Hurricane Frances destroyed the boat in 2004. Petitioner did not use the boat to travel. In 2002 petitioner's husband rented an apartment in the Bahamas.

After Hurricane Frances destroyed her and her husband's boat, petitioner moved into a condominium in Sebastian, Florida, owned by her in-laws. In November 2004 petitioner purchased a condominium in Vero Beach, Florida, and she moved into this condominium in May 2005 when construction was completed. In September 2006 petitioner purchased a recreational vehicle kept at Lake Marian Paradise in Kenansville, Florida, until May 2011.

On July 15, 1993, respondent assessed the 1992 trust fund recovery penalty against petitioner for $59,374. This penalty is associated with one of petitioner'sclients who added her as a signatory to its bank account. On July 26, 1993, respondent filed a notice of lien against petitioner in Volusia County, Florida. The notice of lien stated that "unless notice of lien is refiled by * * * [August 14, 2002], this notice shall constitute the certificate of release of lien as defined in IRC 6325(a)." Respondent did not refile the notice of lien by August 14, 2002, and the notice of lien was automatically released. On or around December 30, 2010, respondent filed a Form 12474-A, Revocation of Certificate of Release of Federal Tax Lien, in Volusia County, Florida, with respect to the 1992 trust fund recovery penalty.

Petitioner and her husband filed a joint Federal income tax return for 2001 in February 2004. That 2001 return was mailed from the Bahamas in August 2003 and lists a Bahamian mailing address for petitioner and her husband. Petitioner and her husband's 2002, 2003, and 2004 joint tax returns list the same Bahamian mailing address. Petitioner's 2004 joint tax return included a Schedule C-EZ, Net Profit From Business, which listed a Bahamian mailing address for her consulting business.

On February 8, 2011, respondent mailed petitioner a Notice of Federal Tax Lien Filing and Your Right to a Hearing under IRC 6320, informing her that respondent had filed an NFTL with respect to the 1992 trust fund recoverypenalty. This NFTL was not recorded in the county of petitioner's last known address. On March 15, 2011, respondent mailed petitioner a second Notice of Federal Tax Lien Filing and Your Right to a Hearing under IRC 6320, informing her that respondent had filed an NFTL (this time, in the county of petitioner's last known address) with respect to the 1992 trust fund recovery penalty. This notice was mailed to the mailbox at Pack Mart in Sebastian, Florida, and this address was the last known address for petitioner.

On April 18, 2011, petitioner submitted a timely Form 12153, Request for a Collection Due Process or Equivalent Hearing (CDP hearing request), in response to the March 15, 2011, NFTL. Petitioner alleged that the filing of the NFTL was time barred.

Between July and September 2011 petitioner and a settlement officer spoke at least six times over the phone. For at least one of those conversations, the settlement officer initiated the call and reached petitioner on her cell phone, which had an area code that covered portions of central Florida.

On August 22, 2011, petitioner and the settlement officer had a telephone discussion during which petitioner stated that she had been unable to get her travel records from the Department of Homeland Security. The settlement officer told her that she did not need to provide those records to him but that he wouldconsider other documentation, such as a utility bill, that showed a United States address other than a mailbox. On September 14, 2011, the settlement officer received from petitioner copies of summonses, a copy of her passport pages, and other documentation.

On September 21, 2011, petitioner and the settlement officer held a telephone CDP hearing. The settlement officer told petitioner that he had reviewed the documents she gave him and none of the documents proved that she resided in the United States.

Respondent's administrative record include travel dates for petitioner from Department of Homeland Security records. These travel records show the following:

Arrival/Departure

Date

Arrival in Fla.

1/16/2001

Arrival in Fla.

2/19/2001

Arrival in Fla.

5/5/2001

Arrival in Fla.

6/20/2001

Arrival in Fla.

9/24/2001

Arrival in Fla.

3/25/2002

Arrival in Fla.

5/27/2002

Arrival in Fla.

6/17/2002

Arrival in Fla.

6/30/2002

Arrival in Fla.

7/27/2002

Arrival in Fla.

8/18/2002

Arrival in Fla.

9/3/2002

Arrival in Fla.

9/5/2002

Arrival in Fla.

9/28/2002

Arrival in Fla.

11/11/2002

Arrival in Fla.

11/13/2002

Arrival in Fla.

12/1/2002

Arrival in Fla.

12/4/2002

Departure to Nassau

12/13/2002

Arrival in Fla.

12/14/2002

Arrival at Hopkins International (Cleveland, Ohio) from Dorval Montreal

12/31/2002

Departure to Nassau

1/8/2003

Departure to Nassau

1/14/2003

Departure to Nassau

1/24/2003

Arrival in Fla.

1/29/2003

Departure to Nassau

2/27/2003

Arrival in Fla.

3/7/2003

Departure to Nassau

4/6/2003

Arrival in Fla.

4/11/2003

Departure to Nassau

4/16/2003

Arrival in Fla.

5/1/2003

Departure to Nassau

5/21/2003

Arrival in Fla.

6/5/2003

Departure to Nassau

6/23/2003

Arrival in Fla.

7/14/2003

Departure to Nassau

8/16/2003

Arrival in Fla.

8/23/2003

Departure to Nassau

9/7/2003

Arrival in Fla.

9/14/2003

Departure to Nassau

9/28/2003

Arrival in Fla.

10/3/2003

Departure to Nassau

11/2/2003

Arrival in Fla.

11/6/2003

Departure to Nassau

12/1/2003

Arrival in Fla.

12/5/2003

Arrival in Fla.

2/10/2004

Arrival in Fla.

3/2/2004

Arrival in Fla.

4/8/2004

Departure to Nassau

4/30/2004

Arrival in Fla.

5/10/2004

Departure to Nassau

6/16/2004

Arrival in Fla.

7/1/2004

Departure to Nassau

7/29/2004

Arrival in Fla.

8/30/2004

Departure to Nassau

8/25/2004

Departure to Nassau

8/31/2004

Arrival in Fla.

8/30/2004

Arrival in Fla.

9/1/2004

Arrival in Fla.

9/29/2004

Arrival in Fla.

10/8/2004

Departure to Nassau

11/4/2004

Arrival in Fla.

11/16/2004

Departure to Nassau

12/2/2004

Arrival in Fla.

12/8/2004

Departure to Nassau

1/3/2005

Arrival in Fla.

1/11/2005

Departure to Nassau

2/10/2005

Arrival in Fla.

2/17/2005

Departure to Nassau

3/6/2005

Arrival in Fla.

3/8/2005

Arrival in Fla.

5/2/2005

Departure to Nassau

5/18/2005

Arrival in Fla.

5/25/2005

Departure to Nassau

6/23/2005

Departure to Nassau

6/26/2005

Arrival in Fla.

7/7/2005

Departure to Nassau

9/12/2...

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