Stone v. Commissioner Of Internal Revenue, 103118 FEDTAX, 4716-18SL

Docket Nº:4716-18SL
Opinion Judge:Diana L. Leyden Special Trial Judge
Case Date:October 31, 2018
Court:United States Tax Court




No. 4716-18SL

United States Tax Court

October 31, 2018


Diana L. Leyden Special Trial Judge

On March 7, 2018, petitioner timely filed a petition in this case. Petitioner seeks review of a Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330 (notice of determination), dated February 6, 2018.1 The notice of determination sustained a proposed levy with respect to petitioner's unpaid tax liability for 2011.

On August 8, 2018, respondent filed a motion for summary judgment (motion) under Rule 121. Respondent filed in support of the motion a declaration by Eva C. Holsey, Internal Revenue Service (IRS)2 Office of Appeals (Appeals Office) settlement officer and a declaration by Kevin R. Oveisi, Attorney in the IRS Office of Chief Counsel who is the attorney of record in this case.

The Court issued an order dated August 9, 2018, directing petitioner to file a response to respondent's motion on or before August 30, 2018. Petitioner did not file a response to respondent's motion by that date.

By order dated September 21, 2018, respondent's motion was assigned for disposition to the undersigned. See sec. 7443A(b)(4), (c). The Court issued an order dated September 21, 2018, setting the motion for a hearing on October 29, 2018, in Los Angeles, California. William B. Douglass appeared on behalf of respondent and argued in support of the motion. Petitioner did not appear.

Upon review of the record on respondent's motion, the Court concludes that there are not any genuine issues of material fact and that respondent is entitled to judgment as a matter of law.


Petitioner resided in California at the time the petition in this case was filed with the Court.

A. Petitioner's 2011 Tax Liability

Petitioner did not file a Federal income tax return for 2011. Pursuant to section 6020(b), respondent prepared a 2011 substitute for return.

The IRS sent by certified mail a notice of deficiency dated June 29, 2015, addressed to petitioner at "29215 Silverfern PL, Highland, CA 92346-5852150". Attorney Oveisi attested in his declaration that this address was petitioner's then last known address.

In the notice of deficiency the IRS determined, among other things, that petitioner: (1) failed to report income from cancellation of debt of $144, 037; and (2) was liable for additions to tax under section 6651(a)(1) and (2) and section 6654 for that year. Petitioner did not timely petition this Court for redetermination of the deficiency or additions to tax for 2011.

On November 9, 2015, the IRS assessed tax of $23, 419, an addition to tax under section 6651(a)(1) for late filing of $5, 269.28, an addition to tax under section 6651(a)(2) for late payment of tax of $5, 035.08, an addition to tax for underpayment of estimated tax of $463.62, and interest of $3, 153.64.3 The IRS mailed to petitioner a notice and demand for payment letter on December 14, 2015. Petitioner did not remit any payments to the IRS.

B. Notice of Intent to Levy

On October 9, 2017, the IRS issued to petitioner a Notice of intent to levy, Intent to seize your property or rights to property, (notice of intent to levy) with respect to petitioner's 2011 tax liability. The notice of intent to levy advised petitioner of his right to request a collection due process (CDP) hearing.

Petitioner timely submitted a Form 12153, Request for a Collection Due Process or Equivalent Hearing, to challenge the proposed levy with respect to his unpaid tax liability for 2011. Petitioner checked the box for an offer-in-compromise as a collection alternative. Petitioner also wrote: Due to the economic downturn in our economy, my business was grossly effected. I was no longer able to keep a rental property that I owned and It [sic] was foreclosed on. A few years later the amount that was dismissed now was considered income for me by the IRS. This resulted in tax plus penalties and interest of $41, 114.93. As of 2017 I am still not turning a profit in business and do not have the means to pay this or do I feel that I should be required to pay this.

Petitioner's CDP hearing request was assigned to settlement officer Eva C. Holsey (SO). The SO stated in the notice of determination that she had verified that she did not have prior involvement with petitioner for the tax year at issue in this case.

In the notice of determination the SO recited that she sent petitioner a letter dated November 29, 2017, and scheduled a hearing for January 23, 2018. The notice of determination also recited that in the November 29, 2017, letter the SO had requested petitioner to provide a Form 43 3 A, Collection Information Statement within 14 days of the date of the letter and signed copies of delinquent Federal income tax returns for 2014 and 2016, within 21 days from the date of the letter. The notice of determination recited that petitioner did not submit the requested information.

The SO recited in the notice of determination that on January 23, 2018, the SO and petitioner held a CDP telephone hearing, that petitioner informed her that he understood that the cancellation of debt was taxable income, and that he was still trying to prepare his 2014 and 2016 returns. During that hearing the SO informed petitioner that because he had not submitted the Form 43 3 A she could not consider any collection alternatives. On February 6, 2018, the SO issued the notice of determination sustaining the proposed levy.


A. Summary Judgment

Summary judgment is intended to expedite litigation and avoid unnecessary and expensive trials. Florida Peach Corp. v. Commissioner, 90 T.C. 678, 681 (1988). Either party may move for summary judgment upon all or any part of the legal issues in controversy. Rule 121(a). The Court may grant summary judgment only "if the pleadings, answers to interrogatories, depositions, admissions, and any other acceptable materials, together with the affidavits or declarations, if any, show that there is no genuine dispute as to any material fact and that a decision may be rendered as a matter of law." Rule 121(a) and (b); see Naftel v. Commissioner, 85 T.C. 527, 529 (1985).

Respondent, as the moving party, bears the burden of proving that no genuine dispute exists as to any material fact and that respondent is entitled to judgment as a matter of law. See FPL Group, Inc. v. Commissioner, 115 T.C. 554, 559 (2000);...

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