Edythe Fishbach v. Commissioner.

Dkt. No. 10912-04L , TC Memo. 2005-38, March 2, 2005.

[Appealable, barring stipulation to the contrary, to CA-2. --CCH.]

[Code Sec. 6320]
Collection: Tax liens: Notice of lien filing. --

An individual's petition to review the IRS's determination with respect to a tax lien on her property was dismissed. The taxpayer had received a notice of deficiency, but had not taken the opportunity to challenge her underlying liability. She was, consequently, barred from addressing the underlying liability in later hearings.

Edythe Fishbach, pro se; Marc L. Caine, for respondent.

MEMORANDUM OPINION

 

LARO, Judge: Petitioner petitioned the Court under sections 6320(c) and 6330(d) to review respondent's determination as to his notice of tax lien upon petitioner's property.¹ Respondent filed the notice of lien to collect 1996 Federal income taxes with related additions thereto totaling approximately $24,860.85.² Respondent has filed a motion for summary judgment under Rule 121, which petitioner opposes. We shall grant respondent's motion for summary judgment.

Background

 

Petitioner failed to file a Federal income tax return for 1996. On May 18, 1999, respondent mailed petitioner a notice of deficiency, determining a deficiency for 1996 of $20,871, with additions to tax under sections 6651(a)(1) and (2) and 6654(a) of $2,286.90, $1,219.68, and $483.27, respectively. On August 13, 1999, petitioner petitioned this Court to redetermine these amounts. See Fishbach v. Commissioner, docket No. 13906-99S. Because petitioner failed to prosecute her case, this Court dismissed it on February 20, 2001, and entered a decision for respondent in the amounts stated in the notice of deficiency.

 

On February 6, 2003, respondent mailed to petitioner a Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320. Petitioner filed a request for the referenced hearing and then ceased all communication with respondent, save for one cryptic Form 656, Offer in Compromise, which stated as its basis a doubt as to liability but contained no supporting documentation. Petitioner did not reply to respondent's efforts to schedule the hearing. On June 17, 2004, respondent mailed to petitioner a Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330, sustaining the proposed lien. This petition followed.

Discussion

 

Summary judgment may be granted with respect to any part of the legal issues in controversy if the records before the Court "show that there is no genuine issue as to any material fact and that a decision may be rendered as a matter of law." Rule 121(a) and (b); Craig v. Commissioner [Dec. 54,933], 119 T.C. 252, 259-260 (2002).

 

Respondent bears the burden of proving there is no genuine issue of material fact; all facts are interpreted in the light most favorable to petitioner. Craig v. Commissioner, supra at 260. However, petitioner must do more than merely allege or deny facts; she must set forth "specific facts showing that there is a genuine issue for trial." Rule 121(d); Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). Under this standard, petitioner has failed to raise any genuine issue of material fact, and summary judgment is appropriate.

 

Where a taxpayer liable for a tax liability fails to pay it after respondent demands payment a lien is by statute imposed upon all property and rights to property owned by the taxpayer. Sec. 6321. We review nonliability administrative determinations for abuse of discretion, and we review determinations as to the underlying tax liability de novo. See Sego v. Commissioner [Dec. 53,938], 114 T.C. 604, 610 (2000); Hoffman v. Commissioner [Dec. 54,882], 119 T.C. 140, 144-145 (2002).

 

Petitioner raises no valid legal arguments. She argues, in both her request for a hearing and in her petition to this Court, that she does not owe any tax for 1996. This she may not do. Petitioner, having received a notice of deficiency and having forgone the opportunity to challenge her underlying liability in her prior case, is barred from doing so in this case. See sec. 6330(c)(2)(B); Ginalski v. Commissioner [Dec. 55,620(M)], T.C. Memo. 2004-104.

C. Conclusion

We shall grant respondent's motion for summary judgment.

 

To reflect the foregoing,

 

An appropriate order and decision will be entered for respondent.

¹ Unless otherwise noted, section references are to the applicable versions of the Internal Revenue Code. Rule references are to the Tax Court Rules of Practice and Procedure.

² We say "approximately" as these amounts were computed before the present proceeding and have since increased on account of interest.

 

 

Michael Stein v. Commissioner.

Dkt. No. 10970-01L , TC Memo. 2004-124, May 24, 2004.

[Appealable, barring stipulation to the contrary, to CA-2. --CCH.]

[Code Sec. 6320]
Collection: Notice of federal tax lien: Appeal. --

An individual who filed no income tax returns, and who did not respond to IRS deficiency notices and other communications, was not allowed to contest the underlying tax liability in a proceeding to determine the validity of a notice of federal tax lien (NFTL). Attempts at resolving the liability through a compromise, installment plan, or other solution had been unsuccessful, largely because the taxpayer failed to file returns for the relevant years, respond to communications, or properly pursue appeal and other avenues for relief. The taxpayer had forfeited the right to contest the underlying tax liabilities through his procrastination and failure to respond to IRS mailings. Further, the IRS did not commit an abuse of discretion in sustaining the NFTL.

Michael Stein, pro se; John Aletta, for respondent.

MEMORANDUM OPINION

 

BEGHE, Judge: Petitioner failed to file timely Federal income tax returns for 1992, 1993, and 1994. Respondent filed "substitutes for return"¹ (SFRs) for those years, mailed petitioner statutory notices of deficiency to which he never responded, and thereafter assessed income tax liabilities against petitioner for those years.

 

As of March 8, 1999, petitioner's total unpaid tax liabilities for the above-mentioned years, including the unpaid assessed income tax liabilities, and additions to tax and interest, were as follows:

 

               Unpaid          Additions to Tax       Total Unpaid   

  Year      Assessments        and/or Interest        Liabilities    

  1992        $1,344.17            $1,068.95            $2,413.12    

  1993        5,505.15             1,910.12             7,415.27     

  1994       197,079.49            63,903.26           260,982.75    

 

On February 23, 2000, respondent filed a notice of Federal tax lien (NFTL) against petitioner's real property with respect to $203,928.81, the then-unpaid balance of petitioner's 1992 through 1994 tax liabilities. On July 26, 2001, respondent issued petitioner a notice of determination concerning collection action(s) under section 6320 and/or 6330,² which upheld respondent's NFTL.³

 

The issues for decision presented by petitioner's timely filed petition with this Court are:

 

1. Whether petitioner is liable for the deficiencies assessed by respondent. We hold petitioner is liable for the deficiencies because petitioner has not satisfied the conditions that would entitle him in this proceeding to contest respondent's deficiency determinations or assessments; and

 

2. whether respondent abused his discretion in sustaining the filing of the Federal tax lien against petitioner's property to secure petitioner's outstanding income tax liabilities for tax years 1992 through 1994. We hold respondent did not abuse his discretion in so doing.

Procedural Background

This case was tried in Hartford , Connecticut , on January 6, 2003. Respondent's opening brief was due April 7, 2003, and petitioner's answering brief was due June 5, 2003. On April 7, 2003, respondent filed his brief with the Court.

 

Petitioner filed five motions for extension of time to file his answering brief. These motions included three requests for extensions to obtain and review the trial transcript, a fourth request for extension because he did not receive notice of the granting of the request for the third extension until 2 days before the third extended due date, and a fifth request for extension pending adjudication of certain motions that petitioner stated "are concurrently being submitted to the Court in separate envelopes" but have never been received by the Court. The Court granted the first four of these motions, thereby extending the due date of petitioner's brief from June 5 to November 20, 2003.

 

The Court's order of November 5, 2003, denying petitioner's fifth motion filed November 3, 2003, was served by certified mail on petitioner at his specified mailing address, P.O. Box 210, Greenwich, Connecticut (the post office box address), and was returned unclaimed on November 28, 2003. Petitioner did not notify the Court of any change of his mailing address. On January 20, 2004, the Court ordered that a copy of the November 5, 2003, order be served on petitioner at the post office box address by certified mail and regular mail.

 

On March 10, 2004, the Court ordered petitioner and respondent to file, on or before March 22, 2004, a joint status report or separate status reports indicating whether and when petitioner filed Federal income tax returns for 1992 through 1994, and, if so, whether, notwithstanding the outstanding assessments and the lien controversy in the case at hand, respondent was examining those returns. Respondent's status report, filed March 19, 2004, indicated that petitioner had not filed the returns, and that, therefore, respondent was not in the process of examining them.

 

On April 6, 2004, petitioner filed a status report requesting an extension to file his brief and the motions he intended to file with his last extension request (but which he claimed to have failed by inadvertence to file). In this status report, petitioner asserted that "severe health problems" and his preoccupation with separate litigation as "a pro se defendant" had caused the delays in filing his brief and the motions. According to petitioner, the separate litigation involved "a dispute over fines imposed on petitioner by a condominium association" that had led to foreclosure litigation "involving the same condominium property that the Respondent has placed a lien on in the instant case." Petitioner stated he had not yet filed signed Federal income tax returns for the 1992 through 1994 tax years, but he was working with respondent's revenue officer to submit information to complete those returns. The Court denied petitioner's request for another extension of time to file his brief and notified petitioner that the Court would decide the case on the record and arguments previously submitted.

Factual Background

Some of the facts have been stipulated and are so found. The stipulation of facts and the attached exhibits are incorporated herein by this reference.

 

Petitioner testified that "for purposes of the trial" and when he filed the petition in this case, he resided at One Strawberry Hill Court , Unit 11-C, Stamford , Connecticut (the Strawberry Hill address). Petitioner testified he is a resident of Nevada for State income tax purposes.

 

Petitioner testified he is a self-employed engineer who travels up to 3 months at a time more than once a year. In Form 433-A, Collection Information Statement for Individuals, filed with the Internal Revenue Service (IRS) on November 11, 1998, petitioner said he was a "volunteer" and "not employed."

 

Petitioner does not receive wages or salary from which tax is withheld. During the tax years at issue, petitioner paid estimated taxes, and petitioner held accounts with financial institutions that withheld taxes from his interest and dividend income.

 

As of July 26, 2001, petitioner had failed to file Federal income tax returns for his tax years 1988 through 2000.⁴ There is no record information or other evidence that petitioner has filed returns for his 1992 through 1994 tax years.

 

Petitioner "[dropped] everything" in 1988 when both his elderly parents were ill with cancer. Petitioner's parents died in 1990. Since 1988, petitioner has had a "combination of health problems (including * * * surgery)".

 

Petitioner could not locate his 1987 return among his papers and other personal possessions that were packed in boxes as a result of residential moves. Petitioner eventually found a copy of his 1987 return before trial but made no effort to have it admitted into evidence. Petitioner asserted his 1987 return shows a capital loss carryover of $187,000 and an overpayment of tax exceeding $12,000, and he had unspecified losses in subsequent years, including 1988 through 1993.

 

During 1996, petitioner used his address at 25 West Elm Street, Greenwich, Connecticut (the Elm Street address), to receive Forms 1099-B, Proceeds From Broker and Barter Exchange Transactions, and Forms 1099-Div, Dividends and Distributions, from financial institutions that paid investment income to him.

 

On December 12, 1996, after having prepared SFRs for petitioner's tax years at issue, respondent mailed three notices of deficiency to petitioner determining income tax deficiencies of $15,812, $10,210, and $153,787 for petitioner's 1992, 1993, and 1994 tax years, respectively, failure to file additions to tax under section 6651(a)(1) of $211 for 1992 and $24,758 for 1994, and additions to tax under section 6654 of $689 for 1992 and $7,352 for 1994 for failure to pay estimated tax.⁵ Respondent sent the notices of deficiency by certified mail to the Elm Street address.

 

On January 8, 1997, the U.S. Postal Service returned to respondent the notices of deficiency and the covering envelopes stamped "unclaimed". The envelopes displayed no indication that petitioner was no longer using the Elm Street address or that this address was invalid.

 

Petitioner did not file petitions with the Court disputing the determinations set forth in the statutory notices.

 

On May 5, 1997, respondent assessed income tax liabilities against petitioner for the tax years at issue on the basis of the SFRs and petitioner's failure to petition the Court to dispute the deficiencies determined in the statutory notices.

 

On or about December 28, 1997, respondent's revenue officer Ronald Mele (Revenue Officer Mele) confirmed with postal employees that petitioner's previous mailing address was the Elm Street address. On January 28, 1998, Revenue Officer Mele confirmed with postal employees that petitioner was using his Strawberry Hill address as his mailing address and updated respondent's computer records accordingly.

 

During a telephone conversation sometime in 1998, petitioner instructed Revenue Officer Mele to use the post office box address as his mailing address rather than the Strawberry Hill address.

Respondent's Proposed Levy

On March 8, 1999, respondent sent petitioner by certified mail addressed to petitioner at his post office box address a final notice of intent to levy and notice of right to a hearing. On May 14, 1999, respondent received petitioner's untimely Form 12153, Request for a Collection Due Process Hearing. On June 7, 1999, respondent granted petitioner a so-called equivalent hearing under section 301.63301T(i), Temporary Proced. & Admin. Regs., 64 Fed. Reg. 3413 (Jan. 22, 1999), because petitioner's request was untimely. On September 13, 1999, respondent's Appeals Office issued petitioner a decision letter upholding the proposed levy.

 

In a letter dated October 22, 1999, Revenue Officer Mele informed petitioner that respondent would begin levying on his income sources and assets on November 5, 1999.

 

On or about November 8, 1999, petitioner submitted a Form 9423, Collection Appeal Request, in which he attributed the delays in filing his returns to respondent's failure to follow through on petitioner's request for capital loss carryover information from 1987 that he needed to file his returns for the tax years at issue. Petitioner's Form 9423 states that Revenue Officer Mele was unable to obtain petitioner's 1987 return.

 

On or about December 7, 1999, petitioner submitted to Revenue Officer Mele a request to enter into an installment agreement to pay his tax liabilities for 1992 through 1994. On January 11, 2000, Revenue Officer Mele sent a letter to petitioner's post office box address denying petitioner's request for an installment agreement because petitioner had not filed income tax returns for 1992 through 1999. The January 11, 2000, letter specifically instructed petitioner to send an appeal request to Revenue Officer Mele at his office address on or before February 11, 2000, if petitioner wished to appeal the denial of his installment agreement request. Petitioner did not appeal the denial of his installment agreement request.

Lien Proceeding

On January 31, 2000, Revenue Officer Donald Angotta (Revenue Officer Angotta) replaced Revenue Officer Mele for purposes of collecting petitioner's 1992 through 1994 tax liabilities.

 

On February 23, 2000, respondent filed an NFTL with respect to petitioner's 1992 through 1994 tax liabilities against petitioner's real property at the land record office in Stamford , Connecticut . The lien attached to the condominium unit petitioner owned at the Strawberry Hill address.

 

On February 23, 2000, respondent's lien unit office mailed petitioner Letter 3172, Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320, to the Strawberry Hill address, with a copy of the NFTL and a Form 12153.

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