                               T.C. Memo. 2016-98



                         UNITED STATES TAX COURT



                    DENNIS NORMAN, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 17780-14L.                        Filed May 16, 2016.



      Dennis Norman, pro se.

      John D. Ellis, for respondent.



                           MEMORANDUM OPINION


      LAUBER, Judge: In this collection due process (CDP) case, petitioner

seeks review pursuant to section 6330(d)(1)1 of the determination by the Internal



      1
       All statutory references are to the Internal Revenue Code in effect at all
relevant times, and all Rule references are to the Tax Court Rules of Practice and
Procedure. We round all monetary amounts to the nearest dollar.
                                         -2-

[*2] Revenue Service (IRS or respondent) to uphold a notice of intent to levy. The

IRS has moved for summary judgment under Rule 121, contending that there are

no disputed issues of material fact and that its determination to sustain the

proposed levy was proper as a matter of law. We agree and accordingly will grant

the motion.

                                     Background

      Petitioner did not respond to the motion for summary judgment. The fol-

lowing uncontroverted facts are derived from the petition, the exhibits attached to

the summary judgment motion, and respondent’s other filings in this case. See

Ulloa v. Commissioner, T.C. Memo. 2010-68. Petitioner resided in Maryland

when he petitioned this Court.

      Petitioner did not file a Federal income tax return for 2001 or for any subse-

quent year. For tax years 2001-2006 the IRS prepared substitutes for returns

(SFRs) that met the requirements of section 6020(b) and issued petitioner notices

of deficiency based on the SFRs. Petitioner did not petition this Court in response

to any of these notices, and the IRS assessed the tax liabilities at issue.

      In an effort to collect these outstanding liabilities the IRS sent petitioner a

Notice of Intent to Levy and Notice of Your Right to a Hearing, and he timely

requested a CDP hearing. He thereby sought a hearing with respect to the pro-
                                          -3-

[*3] posed levy; stated that he could not pay the balance due; and asked the IRS to

“discharge interest.” He did not propose any collection alternative.

      On May 5, 2014, a settlement officer (SO) from the IRS Appeals Office

wrote petitioner at the address shown on his CDP hearing request to acknowledge

receipt of that request and to inform him that she had scheduled a telephone CDP

hearing for June 12. The SO was unable to confirm from her file that petitioner

had received the notices of deficiency for the years at issue. Accordingly, this

letter told him that, if he wished to challenge his underlying tax liabilities for

2001-2006, he should file tax returns for those years by May 27; and that, if he

wished a collection alternative, he should provide a completed Form 433-A,

Collection Information Statement for Wage Earners and Self-Employed

Individuals, and executed tax returns for 2007-2013. Petitioner supplied none of

these documents before the hearing. In his petition he claimed that he did not

receive the May 5 letter.

      On June 12, at the scheduled time for the hearing, the SO called petitioner at

the telephone number on his CDP hearing request. He did not answer. The SO

left a voice mail message asking him to call her back, but he did not. Later that

day the SO sent petitioner a “last chance” letter advising him that she would make

a determination based on information in the administrative file and any additional
                                         -4-

[*4] information that he supplied. Petitioner does not dispute receiving this letter.

Although the letter included the SO’s phone number, petitioner made no effort to

contact her to reschedule the CDP hearing.

      On June 25 petitioner sent the SO a Form 433-A representing that his

monthly income exceeded his monthly expenses by $2,607. On the basis of this

representation, the SO determined that petitioner was not eligible for currently not

collectible (CNC) status. Because petitioner had declined to submit tax returns for

2001-2006, the SO determined that he had forfeited any opportunity to challenge

his underlying tax liabilities for those years. Because petitioner had proposed no

specific collection alternative and had refused to submit tax returns for 2007-2013,

the SO found that he was ineligible for an offer-in-compromise or an installment

agreement. The SO concluded that interest on his assessed liabilities should not

be abated because he had submitted no evidence to support his request. Finally,

the SO verified, on the basis of petitioner’s account transcripts, that the tax for

2001-2006 had been properly assessed. On July 3, 2014, the IRS issued petitioner

a notice of determination sustaining the proposed levy.

      Petitioner timely petitioned this Court for review of respondent’s determina-

tion. On August 3, 2015, the IRS moved for summary judgment, and the Court

ordered petitioner to file a response to that motion by September 8, 2015. Our
                                        -5-

[*5] order advised petitioner that “under Tax Court Rule 121(d), judgment may be

entered against a party who fails to respond to a motion for summary judgment.”

Petitioner has not responded either to respondent’s motion or to the Court’s order.

                                     Discussion

A.    Summary Judgment

      The purpose of summary judgment is to expedite litigation and avoid un-

necessary and time-consuming trials. Fla. Peach Corp. v. Commissioner, 90 T.C.

678, 681 (1988). The Court may grant summary judgment when there is no genu-

ine dispute as to any material fact and a decision may be rendered as a matter of

law. Rule 121(b); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992),

aff’d, 17 F.3d 965 (7th Cir. 1994). In deciding whether to grant summary judg-

ment, we construe factual materials and inferences drawn from them in the light

most favorable to the nonmoving party. Sundstrand Corp., 98 T.C. at 520. How-

ever, where the moving party properly makes and supports a motion for summary

judgment, “an adverse party may not rest upon the mere allegations or denials of

such party’s pleading” but must set forth specific facts, by affidavit or otherwise,

showing that there is a genuine dispute for trial. Rule 121(d).

      Because petitioner failed to respond to the motion for summary judgment,

the Court could enter a decision against him for that reason alone. See Rule
                                         -6-

[*6] 121(d). We will nevertheless consider the motion on its merits. In light of

the IRS motion, its supporting affidavits, and petitioner’s pleadings, we find that

there exists no dispute as to any material fact and that summary adjudication is

appropriate.

B.    Standard of Review

      Section 6330(d)(1) does not prescribe the standard of review that this Court

should apply in reviewing an IRS administrative determination in a CDP case.

The general parameters for such review are marked out by our precedents. Where

the validity of the underlying tax liability is at issue, the Court reviews the IRS

determination de novo. Goza v. Commissioner, 114 T.C. 176, 181-182 (2000).

Where the underlying tax liabilities are not properly at issue, the Court reviews the

IRS determination for abuse of discretion. Id. at 182. Abuse of discretion exists

when a determination is arbitrary, capricious, or without sound basis in fact or law.

See Murphy v. Commissioner, 125 T.C. 301, 320 (2005), aff’d, 469 F.3d 27 (1st

Cir. 2006).

      Because she could not confirm that petitioner had received the notices of

deficiency for 2001-2006, the SO indicated that he could challenge his underlying

tax liabilities at the CDP hearing. However, this Court may consider such a chal-

lenge only if the taxpayer properly raised it before the IRS. See sec. 301.6330-
                                         -7-

[*7] 1(f)(2), Q&A-F3, Proced. & Admin. Regs. An issue is not properly raised

during the CDP hearing if the taxpayer fails to request consideration of the

relevant issue or requests consideration but fails to present evidence after being

given a reasonable opportunity to do so. See Thompson v. Commissioner, 140

T.C. 173, 178, (2013).

      The SO repeatedly told petitioner that, if he disagreed with the amount of

tax shown on the SFRs, he had to submit tax returns for 2001-2006 setting forth

what he believed his correct tax liabilities to be. Petitioner refused to do so. Be-

cause he submitted no relevant documentation of any kind, he did not properly

challenge his underlying tax liabilities during the CDP hearing and cannot dispute

those liabilities here. See Thompson, 140 T.C. at 178. We will accordingly re-

view the SO’s determination for abuse of discretion only. Goza, 114 T.C. at 182.

C.    Analysis

      In deciding whether the SO abused her discretion in sustaining the proposed

levy, we consider whether she: (1) properly verified that the requirements of any

applicable law or administrative procedure have been met; (2) considered any

relevant issues petitioner raised; and (3) determined whether “any proposed

collection action balances the need for the efficient collection of taxes with the
                                         -8-

[*8] legitimate concern of * * * [petitioner] that any collection action be no more

intrusive than necessary.” See sec. 6330(c)(3).

      The SO examined petitioner’s account transcripts and confirmed that his tax

liabilities for 2001-2006 had been properly assessed. Petitioner has not challenged

the SO’s satisfaction of the verification requirement.2 Our review of the record

establishes that the SO verified that all other requirements of applicable law and

administrative procedure were likewise met and properly balanced the need for the

efficient collection of taxes with petitioner’s legitimate concerns.

      Petitioner did not propose an installment agreement or an offer-in-compro-

mise but asserted in his CDP hearing request that he could not pay the balance

due. In order to be entitled to CNC status, a taxpayer must demonstrate that, on

the basis of his assets, equity, income, and expenses, he has no apparent ability to

make payments on the outstanding tax liability. See Foley v. Commissioner, T.C.

Memo. 2007-242, 94 T.C.M. (CCH) 210, 211. Petitioner stated on his


      2
        Our Rules governing the content of the petition in a CDP case explicitly
provide that “[a]ny issue not raised in the assignments of error shall be deemed to
be conceded.” Rule 331(b)(4). In general, therefore, the taxpayer must adequately
raise the verification issue in his petition in order for this Court to consider it. See
Triola v. Commissioner, T.C. Memo. 2014-166, at *9 (noting that petition did not
allege that assessment was improper and deeming issue conceded); Dinino v.
Commissioner, T.C. Memo. 2009-284, 98 T.C.M. (CCH) 559, 564 (noting that
verification issue must be “adequately raised” in petition (citing Rule 331(b)(4))).
                                             -9-

[*9] Form 433-A that his monthly income exceeded his expenses by $2,607. The

SO did not abuse her discretion in determining that he was ineligible for CNC

status.

          Petitioner asked the IRS to “discharge interest.” Pursuant to section

6404(e)(1), interest can be abated only if (among other things) an IRS officer or

employee has been “erroneous or dilatory in performing a ministerial or manager-

ial act.” See Allcorn v. Commissioner, 139 T.C. 53, 56 (2012); Krugman v.

Commissioner, 112 T.C. 230, 230 (1999). Petitioner alleged no facts to support

his request for interest abatement, and the SO did not abuse her discretion in

denying it.

          Petitioner likewise errs in asserting that he did not receive a fair hearing.

The SO sent him, at the address he had provided, multiple letters requesting finan-

cial information and executed tax returns. After petitioner did not participate in

the scheduled CDP hearing, the SO gave him another opportunity to contest the

proposed levy by mailing him a final letter dated June 12. Petitioner does not

dispute that he received this letter; indeed, the record shows that he submitted a

Form 433-A in response to it. Whether or not petitioner can be excused for

missing the original hearing, he was clearly at fault, after receiving the June 12

letter, for failing to contact the SO to reschedule the hearing. The SO did not
                                       - 10 -

[*10] abuse her discretion by making a determination based on the case file once

petitioner was given a reasonable opportunity for a hearing but failed to avail

himself of it. See, e.g., Oropeza v. Commissioner, T.C. Memo. 2008-94, 95

T.C.M. (CCH) 1367, aff’d, 402 F. App’x 221 (9th Cir. 2010); Taylor v.

Commissioner, T.C. Memo. 2004-25, 87 T.C.M. (CCH) 848, aff’d, 130 F. App’x

934 (9th Cir. 2005); sec. 301.6330-1(d)(2), Q&A-D7, Proced. & Admin. Regs.

Finding no abuse of discretion in any respect, we will grant summary judgment for

respondent and affirm the proposed collection action.

      To reflect the foregoing,


                                                An appropriate order and decision

                                          will be entered.
