18-2647
Bletsas v. Commissioner of Internal Revenue

                                  UNITED STATES COURT OF APPEALS
                                      FOR THE SECOND CIRCUIT

                                              SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN
CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE
EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
“SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL.

        At a stated term of the United States Court of Appeals for the Second Circuit, held at the
Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the
18th day of November, two thousand nineteen.

PRESENT:    ROBERT D. SACK,
            PETER W. HALL,
            JOSEPH F. BIANCO,
                        Circuit Judges,
_____________________________________

Kathy Bletsas,

                                Petitioner–Appellant,

                                v.                                           No. 18-2647

Commissioner of Internal Revenue,

                  Respondent–Appellee.
_____________________________________

For Appellant:                                          FRANK AGOSTINO,        Agostino    &   Associates,
                                                        Hackensack, NJ

For Appellee:                                           RICHARD E. ZUCKERMAN, Principal Deputy Assistant
                                                        Attorney General (Deborah K. Snyder, Karen G.
                                                        Gregory, Tax Division, on the brief), Department of
                                                        Justice, Washington, DC

          Appeal from a judgment of the United States Tax Court (Lauber, J.).
       UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND

DECREED that the judgment is AFFIRMED.

       Petitioner–Appellant Kathy Bletsas appeals from the August 14, 2018 order of the United

States Tax Court (Lauber, J.) granting summary judgment to the Commissioner of Internal

Revenue in a dispute over the filing of the Notice of Federal Tax Lien with respect to civil penalties

asserted for the third and fourth quarters of 2014 and the first quarter of 2015. Bletsas does not

challenge her underlying tax liability. We assume the parties' familiarity with the underlying facts,

procedural history, and specification of issues for review.

       We review decisions of the tax court “in the same manner and to the same extent as

decisions of the district courts in civil actions . . ..” I.R.C § 7482(a)(1). This Court, therefore,

reviews de novo the Tax Court’s grant of summary judgment. Williams v. Comm’r, 718 F.3d 89,

91 (2d Cir. 2013). Where, as here, the underlying tax liability is not at issue, we review the

Commissioner’s determination for abuse of discretion. Reichle v. Comm’r, 303 F. App'x 987, 988

(2d Cir. 2008) (summary order) (“[I]f we conclude that the IRS appeals officer did not abuse his

discretion in upholding the lien imposed on the petitioners, then summary judgment was properly

granted and we will affirm the Tax Court’s decision.” (quoting Kindred v. Comm’r, 454 F.3d 688,

694 (7th Cir. 2006))).

       The underlying tax liability is not properly at issue on this appeal. Bletsas was an officer

and the sole shareholder of Delta, a New York corporation. Bletsas concedes that Delta did not

pay trust fund taxes for the third and fourth quarters of 2014 and the first quarter of 2015 and that

she did not respond to the IRS’ notice of proposed liability for the 2014 and 2015 taxes, which




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was sent to her by certified mail in 2015.1 Bletsas was, therefore, precluded from challenging her

trust fund recovery penalty liability at the subsequent collection-due-process hearing. 26 U.S.C.

§ 6330(c)(2)(B).

       In sustaining the proposed filing of the notice of a federal tax lien, the IRS Appeals Officer

did not abuse its discretion. When making this determination, the Tax Code requires that an IRS

Appeals Officer consider (1) whether the administrative requirements for a collection action have

been met, (2) the issues raised by the taxpayer at the hearing, and (3) “whether any 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.” 26 U.S.C.

§ 6330(c)(3). Bletsas claims that the IRS Appeals Officer failed to verify that the trust fund

recovery penalties were approved pursuant to § 6751(b). This assertion is not supported by the

record. The Appeals Officer reviewed the IRS records including the ICS History Transcript to

determine that the administrative requirements had been met. The ICS History Transcript shows

the revenue officer’s supervisor approved Form 4183 (which recommends a trust fund recovery

penalty assessment).2

       The IRS Appeals Officer found that the trust fund recovery penalties were appropriate

because Form 4180 was not provided by Bletsas and the Internal Review Manual provides that



1
  Bletsas argues that the Commissioner has not provided proof that the letter was delivered to
Bletsas. This is a red herring. Bletsas does not deny receiving the letter or challenge whether it
was properly issued. See I.R.C. § 6672(b); I.R.C. § 6212(b). In addition, the IRS Appeals Officer
verified that the letter had been properly issued.
2
  The Tax Court has held that approval of Form 4183 demonstrates approval of the trust fund
recovery penalties. We see no reason to question this conclusion, and Bletsas does not provide
one. See Blackburn v. Comm’r of Internal Revenue, No. 27721-14L, 2018 WL 1660758, at *3
(T.C. Apr. 5, 2018) (“Form 4183 provides a [] mechanism to demonstrate supervisory approval.”).

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trust fund penalties may be appropriate when financial information has not been provided.3 This

finding is consistent with the language in the manual and supported by the record.

       In sum, our review of the record demonstrates that the Appeals Officer reasonably

determined that the requirements of § 6330(c)(3) had been met, and we hold, therefore, that

summary judgment was properly granted by the Tax Court. We have reviewed the parties’

remaining arguments and find them to be without merit. The judgment of the Tax Court is

AFFIRMED.

                                                    FOR THE COURT:
                                                    Catherine O’Hagan Wolfe, Clerk of Court




3 The manual states that trust fund penalties “must be considered” based on procedures including
“[c]onduct[ing] financial analysis to determine whether the penalty, if assessed would be
collectible.” I.R.M. pt. 5.14.7.4.1(7) (Mar. 11, 2011).

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