Andrew Banks, Petitioner

UNITED STATES TAXICOURT

ANDREW BANKS, Petitioner v . COMMISSIONER OF INTERNAL REVENUE, Responden t Michael B . VanLandingham , for petitioner .

Michael T . Sargent , for responde n GUSTAFSON,- Judge : This case was eard pursuant to the .

provisions of section 74631 of the Internal Revenue Code i n effect when-the petition was filed . "Prsuant to section 740 ;3(b) , the decision to be entered is not reviewable by any other court , 'Unless otherwise noted, citations herein of sections r fe r citations of ales to the Internal Revenue Code (26 U .S .C ), and refer to the Tax Court Rules of Practi e and Procedure .

and this opinion shall not be treated as precedent for any othe r case . .

This case is an appeal by petitioner Andrew Banks unde r sections 6320(c) and 6330(d), seeking our review of the of the Internal Revenue Service (IRS) sustaining the filin g Al .11 - of a notice of Federal ta x lien relating to Mr . Banks's unpaid income tax liabilities fo r tax years 2000, 2001, and 2002 . The issue for decision .is IF whether the IRS abused its discretion in sustaining the filing a of a,notiee of Federal tax lien . We hold that it did not .

Background 111 This case was submitted fully stipulated pursuant t o Rule 1'22 .` . The stipulation of facts filed December 8, 20k⁰⁸, an d the attached exhibits are incorporated herein by this reference .

Mh At . the time that he filed his petition, Mr . Banks resided i n South Carolina .

Mr . Banks filed his 2000 Form 1040, U .S . Individual Income Tax Return, almost 11 months late on March 11, 2002 . The return reported a balance due of $1,879 and,an estimated tax penalty of ~j l $96 . i€ Banks did not claim head of household filing status , dependency exemption deductions, or an earned income credit o n his 2000 return .

Shortly thereafter, on or before April 15, 2002 , . timely filed his 2001' Form 1040, ' showing' an overpayment- $2,252 . On November 15, 2002, the IRS issued to Mr . Banks a statutory notice 'of deficiency for tax ear 2001 wherein the IRS determined a deficiency of $4,877 .90 in Mr . Banks's 2001 inc me tax . This deficiency was based on the RS's disallowance o f (i) :Mr . Banks's head of household fili n status, (ii) the dependency exemption deduction claimed or a minor child, an (iii) the earned income tax credit . Th 'notice of deficiency was mailed to Mr . Banks's last known address . The last day to petition the Tax Court for a redetermi n ation of this deficienc y was February 13, 2003 . Mr . Banks failed to do so .

Mr . Banks timely filed his 2002 Frm 1040 showing a n overpayment of $776 . On September 19 , Mr . Banks a notice of deficiency for tax year 2002 wherein t IRS determined a deficiency of $3,375 n Mr . Banks ' s 2002 in ome tax . Just as before, this deficiency as based on the IRS's disallowance of (i) Mr . Banks's head o household filing status', (ii) .the dependency exemption deductio claimed for a minor .

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child, and (iii) the earned income tax credit . The notice :o .deficiency was mailed to Mr . Banks's 1 stknown address . Th last day to petition the Tax Court for a redetermination of thi s deficiency was December 18, 2003 . Mr .

Banks failed to do s o On February 28, 2005, the IRS received a letter fro m Mr . Banks's accountant, Mary E . Dwyer, C .P .A ., "requesting t hat .

the tax years of 2001,and 20021be open d for : reconsideratio n * * * [because] Mr . Banks has provided [her] . with severa l documents that will show he was the legal guardian of [hi s it daughter] for the years 2001 and.2002 . The record does .not reflect that Mr . Banks's 2001 and 2002 years were ever reopene d for reconsideration.

On June 23, 2005 , ..the IRS filed ;with the Register of Deed s of Charleston . County, .,', South Carolina , a notice of Federal tax lien relating to Mr . °Banks's unpaid income tax liabilities fo r 2000,. :2001,- and 2002 . On June 28, .2005, the IRS issuedit o Mr . Banks a Notice of, Federal Tax Lien Filing and Your Right to a Hearing Under IRC 632;0 regarding his,,unpaid taxes for 2000, 2001, and 2002 . On Augusta 2005, Mr . Banks timely requested a collection due process (CDP)' hearingoby submitting . to the IRS .Due Process or Equivalent aForm 12153, Request for a Collection Hearing . In his request for a hearing, Mr . Banks stated :

My tax return was denied for these years because the IRS refuses to accept the amount of proof that .I am a single parent . And, therefore the money I should have receive[d] to help support my daughter, dependent, has placed me in ';debt . k E On October 24 ; 2005, the IRS's Office of Appeals sent a letter to Mr . Banks acknowledging,that the Office of Appeals .had receive d his request for a CDP hearing . Then, by letter dated Novembe r 18, 2005, the settlement officer scheduled Mr . Banks's telephone CDP hearing for December 15, 2005 . In that November 18 lette r the settlement officer explained the ;; CDP process, advised iE P 5 - Mr . Banks of his right to a face-to-f ac e hearing, and instructe d Mr . Banks that in order for the Office of Appeals "to consi d alternative collection methods such as an installment agreem nt :

or offer in compromise , you must provi e any items listed be ow .

In addition, you must have filed all federal tax returns, due The items listed below were :

(cid:127) A completed Collection Information Statement (Form 433- A for individuals and/or Forti 433-B for businesses . ) (cid:127) Signed tax return(s) for thelfollowing periods . records indicate they have nddt been filed : Type of Tax : Period or Periods : (cid:127) Decemberl³¹, 2003 & Decembe r Income 200 4 The settlement officer asked for the requested information b submitted within 14 days and stated : "I cannot consider collection alternatives at your confer nce without this information . " Mr . Banks failed to contact the settlement officer at t he time designated for his CDP . hearing .

By letter dated Decem er , 15, 2005, the settlement officer gave r . Banks anothe r opportunity to reschedule his CDP hearing and/or submi t information for her consideration . Mr Banks availed himself f the opportunity to reschedule his CDP'hearing, and his telephon e CDP hearing was held on January 11, 206 . At the time of th e hearing, Mr . Banks had yet to supply the settlement officer with 1[ it ,During Mr . Banks's CDP hearing, he informed the settlemen t 6 - officer that he wished to . withdraw his request for a CDP hearing, .

and he?~ requested information regarding .the reopening of the ~E examination of his 2001 and 2002 Federal income tax returns .

By letter, dated January ip 11,-2006, the settlement officer sent to Mr . Banks a Form 12256-c, Withdrawal of Request for Collectio n Due Process Hearing, requesting that Mr . Banks sign .and retur n I~ .

the form no later than January 18, 2006 . The settlement office r also forwarded to Mr . Banks IRS Publication 3598, whic h describe s IE the IRS's audit reconsideratio n process .

lMr . Banks failed to return the Form 12256-c to the settlement officer by that January 18 deadline . Furthermore , Mr . Banks had still failed to provide the settlement officer with his financial information and outstanding tax returns . a s requested in her November 18 letter .,; As a result, on February 2, 2006, the office of Appeals issued to Mr . Banks a Notice of Determination Concerning Collection Action(s) Unde r } Section 6320 and/or 6330, which sustained the filing of the notice of . Federal taxi lien . The Office of Appeals upheld th e filing because Mr . Banks "failed to provide the requested financial information so a collection alternative could,b e decided * * * [and] [t]here is no record of Form 1040 for period s ending December 31, 2003 and December 31, 2004 ."

On March 2 , . 2006, Mr . Banks timely petitioned this Court t o 7 - review the notice of determination .is s Paragraph⁴ of his petition summarize s My tax problems relate to dependency issues and proof .o residency . I don't have a long form birth certificate orj this dependent, but, I have supplied many documents pro rin g my case including the rulings from the Family Court of Charleston, S .C . giving me custod~ of this dependent . believe a blood test is going to cost me six or seven hundred dollars .

Discussio n I .

Applicable Legal . Principles A .

: Collection Review Procedur e If a taxpayer fails to pay .any Fe eral income tax liabi lity after notice and demand, section 6321 Imposes alien in favor of the United States on all the property of the delinquent taxpayer , and section 6323(f) authorizes the .IRS lien .

However, Congress has added to chapter-64 of the Inte r Revenue Code provisions (,in subchapter C, part I, and i n subchapter D, part I) for "Due Process for Liens" and "Du e provisions after filing a tax lien . Within 5 business day s IRS must provide written notice of that filing .to the taxp a Sec . 6320(a) . After receiving such a notice, the taxpaye r request an administrative hearing befo e the-Office of Appeals .

Sec . 6320(b)(1) .

8 - The pertinent procedures for the administrative hearing, known,as the CDP hearing, are set forth .in section 6330(c) .

First ;,., the appeals officer must obtain verification from the Secretary that the requirements of any applicable law or , administrative procedure have been met . Sec . 6330(c)(1 ) Second, the taxpayer may raise any issue relevant to .the unpai d tax or proposed collection action at the hearing, including challenges to the appropriateness of!the collection action and offers of collection alternatives . Sec . 6330(c)(2)(A) Additionally, the taxpayer may contest the existence and amount of the underlying tax liability, but only if he did not receive a notice of deficiency or otherwise have an_opportunity to disput e the tax liability . Siec . 6330(c) (2) (B ) ";The appeals officer must determine whether the lien should be released . The appeals officer is required to take into consideration : I . .- (1) -verification from the Secretary that th e requirements of any applicable law and administrative procedure have been met" (see sec . 6330(c)(3)(A), citing sec . 6330i(c)(1)) ; (2) relevant issues raised by,the taxpayer (see sec .

6330(c) (3) (B) , citing sec . 6330(c)(2) .) ; and (3) "whether an y proposed collection action balances the need for the efficient collection of taxes with the legitimate concern of the person that any collection action be no more intrusive than necessary" (see sec . 6330(c)(3)(C)) . If the Office of Appeals then issues a 19 - notice of determination to uphold the lien, the taxpayer may appeal the determination to this Court within 30 days ( see s cs :

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6320(c), 6330(d)(1)), as Mr, . Banks has done . On review, the Court will generally consider only arguments, issues , and otier matters that were actually raised by the taxpayer at the CDP, b hearing .

Giamelli v . Commissioner , 12 T .C . 107,'115 (2007) Magana v .. Commissioner , 118 T .C . 488, 93 (2002) .

B .

Standard of Review Where the underlying tax liabilit is properly at issue in a section 6330 hearing, the Court will review the matter de no,,, o .

Davis v . Commissioner , 115 T .C . . 35, 39I ( 2000 ) . However' ,-whelre the underlying liability is not at issue, we review the determination of the . Office of Appeals for an abuse o f discretion .

Goza v . Commissioner,-114 T .C . 176 (2000) .

Mr . Banks has 3 tax . years at issue in this CDP review, i .e .

, 2000, 2001, and 2002 .

Mr . Banks's - tax liability for 2000 was a self-reported liability that he has not challenged .

His petition. states that his "tax problems relate to dependency issues"--i .e ., issue' not implicated on his 2000 return . Theref re, the underlying liability for 2000 is not in dispute .

As for 2001 and 2002 , Mr . Banks does challenge his underlying liability for each, f those years , in that he disagrees with the IRS ' s adjustment to his filing status, dependency exemptio deductions , and ear ed' ~~ - 10 - i i income tax credit . However, Mr . Banks stipulated . that the IRS mailed the notices of : deficiency for .:2001 and 2002 to his last known, .address as required by law . Mr . Banks therefore had a prior opportunity to challenge the validity of those underlying tax liabilities by petitioning the Tax Court from those notices of deficiency. ., Mr . Banks failed to do so and accordingly is barred under section 6330(c)(2)(B) from challenging in thi s proceeding the existence or amount of his underlying tax liabilities for tax years 2001 and 2002 . See Goza v .

H, .

Commissioner , supra .

Therefore, since Mr . Banks's underlying liabilities,kfo r 2000,° 2001, -and 2002 are not properly, at issue,- we review th e IRS's determination for an abuse of discretion ; that is, we decide whether the determinations were arbitrary, capricious, o r without sound basis in fact or law . See Murphy v . Commissioner , 125 T .C . 301, 320 (2005), affd . 469 F .3d 27 (1st Cir . 2006) ; Sego V . Commissioner , . 114 T .C . 604, 610 (2000)_ .

, II .

The Office of Appeals Did Not Abuse Its Discretion by Upholding the Filing of the Notice of Federal Tax Lie n ii Mr . Banks . was required by Rule 331(b)(4) to make "[c]lea r and concise assignments of each and every error which * * * he alleges to have been committed in the: notice of determination ."

Mr . Banks did not do so . His petition simply reiterated hi s disagreement withthe IRS's changes to his tax returns . At best, this is a continued challenge to the underlying liability, which - 1 have already determined is not properly before us .

1 we Furthermore , under Rule 331(b)( 4), any issue not raised in t e .petition' s assignments of error "shall be deemed to be conce ed" Therefore , because Mr . Banks did not assign any errors to th notice of determination, we could decide this case in { respondent's favor on that ground alone . See .(cid:127) Swain v .

Commissioner , 118 T .C . 358 (2002) ., Nonetheless, we address the question whether the Office of Appeals abused its discretion by uphol ing the Federal tax lien, and we find that, for-three reasons, the appeals officer aced ` reasonably in determining that the Fed ral tax lien wa s appropriate .

First, the appeals officer's determination to sustain .the l proposed collection action was reasonable in view of-Mr . Bar ks' s failure to provide the requested financial information, i .e .

Form 433-A, Collection Information Statement for Wage Earne s and Self-Employed Individuals . It is not n abuse of discretion for an appeals officer to sustain the prop sed collection action on the basis of the taxpayer's failure to submit requested fin ncial information . See Cavazos v . Commissio er, T .C . Memo . 2008- 57 ; Prater v . Commissioner , T .C . Memo . 2007-241 ; Chandler v .

Commissioner , T .C . Memo . 2005 - 99 ; Roma 1 v . Commissioner ; Memo . 2004-20 .

12 - Second, the appeals officer's determination was reasonabl e in view .of :Mr . Banks's failure to file his income tax returns fo r 2003 ° and 2004 . Mr . Banks had been advised that his 2003 and 2004 returns were overdue, yet he never fulfilled his filing obligations . It is not an abuse of discretion-for an appeals officer to sustain a proposed collection action when the taxpayer is not in compliance with current tax obligations . See Giamelli v . Commissioner , supra at 111-112 .

Third, the appeals officer ' s determination was reasonable i n view-pf Mr . Banks's failure tolraise ;;during the CDP hearing any relevant issues or appropriate defenses pertaining to the proposed collection action and his failure to .offer any ;, collection alternatives for the appeals officer to consider . It is not an abuse of discretion for an,appeals officer to :sustain a proposed collection action and not consider any collection alternatives when the, ; taxpayer has proposed none . See Kendricks v . Commissioner , 124 T .C . 69, 79 (2005) .

To .reflect,the foregoing, Decision will be entered fo r respondent .

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