                         T.C. Summary Opinion 2015-57



                         UNITED STATES TAX COURT



               LUCREZIA IONA CANADAY, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 162-15S L.                         Filed September 15, 2015.



      Lucrezia Iona Canaday, pro se.

      Elizabeth C. Mourges, for respondent.



                              SUMMARY OPINION


      GERBER, Judge: This case is subject to the provisions of section 7463 of

the Internal Revenue Code in effect when the petition was filed.1 Pursuant to


      1
      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
                                                                       (continued...)
                                         -2-

section 7463(b), the decision to be entered is not reviewable by any other court,

and this opinion shall not be treated as precedent for any other case. The petition

was filed in response to a Notice of Determination Concerning Collection

Action(s) Under Section 6320 and/or 6330 (notice of determination). Pursuant to

section 6330(d), petitioner seeks review of respondent’s determination to proceed

with the levy relating to her 2008 income tax liability. This matter is before the

Court on respondent’s motion for summary judgment (motion) pursuant to Rule

121. Respondent contends that no genuine issue exists as to any material fact and

that the determination to collect petitioner’s 2008 income tax liability by levy

should be sustained. Petitioner has not responded to the motion despite an order

from this Court instructing her to do so.2

                                    Background

      At the time the petition was filed, petitioner resided in Maryland. On her

2008 Federal income tax return, filed April 15, 2009, petitioner claimed a first-

time homebuyer credit (refundable credit). Respondent audited the 2008 return

and on May 4, 2011, petitioner filed an amended return for her 2008 tax year in


      1
      (...continued)
Court Rules of Practice and Procedure.
      2
       On June 11, 2015, the Court ordered petitioner to file a response on or
before July 13, 2015. She did not do so.
                                         -3-

which she did not claim the refundable credit. On the basis of the amended return,

respondent issued a notice and demand for additional tax. In 2013 petitioner

submitted a request for audit reconsideration concerning the refundable credit.

Respondent disallowed petitioner’s request in 2014.

       Respondent sent petitioner a Letter 1058, Final Notice of Intent to Levy and

Notice of Your Right to a Hearing, dated July 7, 2014, advising her that

respondent intended to levy to collect the unpaid 2008 tax liability, interest, and

penalty and that she could request a hearing with the Internal Revenue Service

Office of Appeals (Appeals). Petitioner submitted a timely Form 12153, Request

for a Collection Due Process or Equivalent Hearing, on August 2, 2014, in which

she contested the underlying liability. On October 16, 2014, Appeals mailed

petitioner a letter acknowledging receipt of her Form 12153 and scheduling a

telephone hearing for November 4, 2014. Appeals’ letter noted that only payment

arrangements would be discussed during the hearing because petitioner’s request

for audit reconsideration constituted a prior opportunity to dispute the underlying

liability.

       A telephone hearing was held with respondent’s settlement officer on

November 4, 2014, as had been scheduled. Petitioner attempted to dispute the

underlying liability during the telephone hearing, but was advised that her request
                                         -4-

for audit reconsideration had been fully disallowed and that if she was not

interested in collection alternatives, the settlement officer would have no

alternative but to sustain the proposed levy. On November 26, 2014, Appeals

issued the notice of determination sustaining respondent’s notice of intent to levy.

      Petitioner filed a timely petition with this Court requesting review of

respondent’s determination.

                                     Discussion

      Summary judgment is intended to expedite litigation and to avoid

unnecessary and expensive trials. Shiosaki v. Commissioner, 61 T.C. 861, 862

(1974). Summary judgment may be granted where the pleadings and other

materials 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(b); see Schlosser v.

Commissioner, T.C. Memo. 2007-298, 2007 Tax Ct. Memo LEXIS 300, at *6,

aff’d, 287 F. App’x 169 (3d Cir. 2008). The burden is on the moving party to

demonstrate that no genuine dispute as to any material fact remains and that she is

entitled to judgment as a matter of law. FPL Grp., Inc. & Subs. v. Commissioner,

116 T.C. 73, 74-75 (2001). In all cases, the evidence is viewed in the light most

favorable to the nonmoving party. Bond v. Commissioner, 100 T.C. 32, 36

(1993). However, the nonmoving party is required “to go beyond the pleadings
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and by * * * [her] own affidavits, or by the ‘depositions, answers to

interrogatories, and admissions on file,’ designate ‘specific facts showing that

there is a genuine issue for trial.’” Celotex Corp. v. Catrett, 477 U.S. 317, 324

(1986); see also Rauenhorst v. Commissioner, 119 T.C. 157, 175 (2002); FPL

Grp., Inc. & Subs. v. Commissioner, 115 T.C. 554, 559 (2000).

      Section 6331(a) provides that if any person liable to pay any tax neglects or

refuses to pay such tax within 10 days after notice and demand for payment, then

the Secretary is authorized to collect such tax by levy upon the person’s property.

Section 6331(d) provides that, at least 30 days before enforcing collection by way

of a levy on the person’s property, the Secretary is obliged to provide the person

with a final notice of intent to levy, including notice of the administrative appeals

available to the person.

      If a taxpayer requests a hearing in response to a notice of intent to levy, she

may raise at that hearing any relevant issue relating to the unpaid tax or the

proposed levy. Sec. 6330(c)(2). Relevant issues include possible alternative

means of collection such as an installment agreement. Sec. 6330(c)(2)(A)(iii). A

taxpayer may challenge the underlying liability if the taxpayer did not receive a

statutory notice of deficiency or did not otherwise have an opportunity to dispute

the liability. Sec. 6330(c)(2)(B).
                                          -6-

       If the underlying liability is not at issue, the Court reviews the notice of

determination to decide whether there was an abuse of discretion. Olsen v. United

States, 414 F.3d 144, 150 (1st Cir. 2005); Callahan v. Commissioner, 130 T.C. 44,

50-51 (2008); Goza v. Commissioner 114 T.C. 176, 181-182 (2000).

      The determination of Appeals must take into consideration: (1) the

verification that the requirements of applicable law and administrative procedure

have been met; (2) issues raised by the taxpayer; 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 be no more intrusive than

necessary. Sec. 6330(c)(3); see Lunsford v. Commissioner, 117 T.C. 183, 184

(2001).

      Petitioner’s 2008 tax return was audited, and in response she filed an

amended 2008 return in which she did not claim the refundable credit. On the

basis of petitioner’s amended return, respondent reversed the refundable credit and

made notice and demand on petitioner for payment of the resulting liability.

Petitioner later requested audit reconsideration for the refundable credit.

Respondent denied petitioner relief; the refundable credit was not reinstated.

      Respondent sought to collect the outstanding tax liability by levy, and

petitioner again attempted to raise the merits of the underlying liability for the 2008
                                          -7-

tax year (presumably the refundable credit). Petitioner did not raise any other issue

with respect to the proposed collection action. Because respondent believed that

petitioner had had an opportunity to dispute the merits of the underlying 2008 tax

liability, the settlement officer denied petitioner an opportunity to dispute the

liability at the Appeals collection hearing.

      Although petitioner did contest the merits of the underlying liability before

the collection hearing, she was not allowed a prior opportunity to contest the

liability before Appeals. In Lewis v. Commissioner, 128 T.C. 48, 61 n.9 (2007),

this Court considered section 6330(c)(2)(B) and noted that we read section

6330(c)(2)(B) to allow “a taxpayer who has had neither a conference with Appeals

nor an opportunity for a conference with Appeals to raise the underlying liability in

a collection review proceeding before Appeals and this Court.”

      Petitioner has not had a prior opportunity to challenge her underlying

liability within the meaning of section 6330(c)(2)(B) and, therefore, respondent’s

motion must be denied.

      We accordingly hold that the determination to proceed with collection was

an abuse of the settlement officer’s discretion and remand this proceeding so that

petitioner can be afforded the opportunity to contest the merits of her underlying

2008 tax liability.
                            -8-

To reflect the foregoing,


                                         An appropriate order will be

                                  issued denying respondent’s motion

                                  and remanding this matter for

                                  consideration of the underlying

                                  liability.
