                              T.C. Memo. 2014-212



                         UNITED STATES TAX COURT



                STEPHEN HUNT HOWELL, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 6633-13L.                         Filed October 9, 2014.



      Stephen Hunt Howell, pro se.

      Christopher R. Moran, 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.
                                          -2-

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

Respondent has moved for summary judgment under Rule 121, contending that

there are no disputed issues of material fact and that his action in sustaining the

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,

e.g., Ulloa v. Commissioner, T.C. Memo. 2010-68. Petitioner resided in West

Virginia when he petitioned this Court.

      Petitioner did not file a Federal income tax return for 2009. The IRS pre-

pared a substitute for return that met the requirements of section 6020(b) and, on

October 24, 2011, mailed petitioner a notice of deficiency for 2009. The notice of

deficiency was addressed to petitioner at a Martinsburg, West Virginia, address.

This was his last known address and is also his current address as shown in this

Court’s records. Respondent attached to his summary judgment motion a copy of

U.S. Postal Service (USPS) Form 3877 showing that an article with a tracking

number matching that on the notice of deficiency was mailed to petitioner at this
                                         -3-

[*3] address. Petitioner does not dispute that he received the notice of deficiency,

and he did not contest the deficiency by filing a petition with this Court.

      On March 26, 2012, the IRS assessed the tax and certain penalties for 2009.

On October 1, 2012, having received no payment from petitioner, the IRS sent him

a Final Notice of Intent to Levy and Notice of Your Right to a Hearing with

respect to his 2009 tax liability. Petitioner timely submitted Form 12153, Request

for a Collection Due Process or Equivalent Hearing. He stated in this request: “I

don’t disagree with the amount of taxes. I just disagree with the interest and fees

when my medical condition adversely affects filing.”

      On December 17, 2012, a settlement officer (SO) from the IRS Appeals

Office mailed petitioner a letter acknowledging receipt of his Form 12153 and

scheduling a telephone CDP hearing for January 15, 2013. The SO informed

petitioner that, in order for her to consider a collection alternative, he needed to

provide a copy of a completed Form 433-A, Collection Information Statement for

Wage Earners and Self-Employed Individuals, together with supporting financial

information and signed income tax returns for 2006-2011.

      Petitioner provided no documentation and proposed no collection alterna-

tive before the scheduled CDP hearing. He failed to participate in that hearing and

did not request that it be rescheduled. On January 15, 2013, the SO mailed peti-
                                         -4-

[*4] tioner a “last chance” letter stating that, if she did not hear from him within

14 days, she would make her decision on the basis of the administrative file.

Petitioner submitted no information and did not contact the SO regarding his case.

      At this point the SO reviewed the administrative file and confirmed that the

tax for 2009 had been properly assessed; that all other requirements of applicable

administrative procedure had been met; and that petitioner did not qualify for any

collection alternative because he had failed to submit the required financial infor-

mation. She accordingly closed the case and, on February 15, 2013, sent petition-

er a notice of determination sustaining the levy.

      Petitioner timely sought review in this Court. On April 28, 2014, respon-

dent moved for summary judgment, and the Court ordered petitioner to file a

response to this motion by May 30, 2014. The 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 and Standard of Review

      The purpose of summary judgment is to expedite litigation and avoid

unnecessary and time-consuming trials. Fla. Peach Corp. v. Commissioner, 90
                                         -5-

[*5] T.C. 678, 681 (1988). The Court may grant summary judgment when there is

no genuine 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). 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).

      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 liability is 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).
                                         -6-

[*6] Section 6330(c)(2)(B) permits a taxpayer to challenge the existence or

amount of his underlying liability in a CDP proceeding only if he did not receive a

notice of deficiency or otherwise have a prior opportunity to contest that liability.

A notice of deficiency for 2009 was mailed to petitioner’s last known address, but

he failed to petition this Court. Moreover, he failed properly to raise the issue in

his CDP hearing and would thus be precluded from challenging his underlying

liability in any event. See Thompson v. Commissioner, 140 T.C. 173, 178 (2013)

(“A taxpayer is precluded from disputing the underlying liability if it was not

properly raised in the CDP hearing.”); sec. 301.6330-1(f)(2), Q&A-F3, Proced. &

Admin. Regs.2

      We accordingly review the SO’s actions with respect to 2009 only for abuse

of discretion. Because petitioner failed to respond to the motion for summary

      2
        Generally, a taxpayer must actually receive the notice of deficiency for the
preclusion under section 6330(c)(2)(B) to apply. See Tatum v. Commissioner,
T.C. Memo. 2003-115. But see Onyango v. Commissioner, 142 T.C. __, __ (slip
op. at 11-12) (June 24, 2014) (holding that preclusion applies despite lack of
receipt where taxpayer declines to retrieve mail despite multiple reasonable
opportunities to do so); Sego v. Commissioner, 114 T.C. 604, 610 (2000) (same).
The IRS sent a notice of deficiency for 2009 to petitioner’s last known address,
which is verified on the USPS Form 3877, and petitioner does not dispute
receiving it. Because we conclude that petitioner is precluded from challenging
his underlying tax liability for 2009 because he presented no evidence at the CDP
hearing, we need not decide whether he actually received the notice of deficiency
and would also be precluded from challenging his 2009 tax liability for that
reason.
                                         -7-

[*7] judgment, the Court could enter a decision against him for that reason alone.

See Rule 121(d). We will nevertheless consider the motion on its merits. We

conclude that there are no material facts in dispute and that this case is appropriate

for summary adjudication.

B.    Analysis

      In deciding whether the SO abused her discretion in sustaining the 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 legitimate concern

of * * * [petitioner] that any collection action be no more intrusive than

necessary.” See sec. 6330(c)(3).

      From our review of the record we conclude that the SO verified that the

requirements of applicable law and administrative procedure were followed.

Petitioner proposed no collection alternative, and the SO in sustaining the levy

properly balanced “the need for the efficient collection of taxes with the legitimate

concern of * * * [petitioner] that any collection action be no more intrusive than

necessary.” See id. The only issue left for us to decide is whether petitioner, at

his CDP hearing, raised any issue that has merit.
                                        -8-

[*8] In his request for a CDP hearing, petitioner stated: “I don’t disagree with

the amount of taxes.” However, he appeared to contest the imposition of interest

and penalties, stating that medical problems prevented him from timely filing his

2009 Federal income tax return. This is a challenge to his underlying tax liability

for 2009. See Montgomery v. Commissioner, 122 T.C. 1, 8 (2004) (“[The]

underlying tax liability consists of the amount that petitioners reported due on

their tax return along with statutory interest and penalties.”). As explained

previously, petitioner cannot now challenge his underlying 2009 tax liability

because he did not participate in the CDP hearing and submitted no evidence that

would have enabled the SO to consider waiving the penalty for failure to file on

time. Petitioner has therefore failed to present any claim that we can review. See

Giamelli v. Commissioner, 129 T.C. 107, 115 (2007); Magana v. Commissioner,

118 T.C. 488, 493 (2002).3

      Once a taxpayer has been given a reasonable opportunity for a hearing but

fails to avail himself of it, the Commissioner may proceed to make a determination

based on the case file. See, e.g., Oropeza v. Commissioner, T.C. Memo. 2008-94,

      3
       In his petition to this Court petitioner asserts: “Tax stated by IRS based on
spouse working in 2009. Spouse did not work in 2009.” The meaning of these
words is not entirely clear. To the extent that petitioner thereby seeks to challenge
his underlying tax liability for 2009, we cannot consider that challenge for the
reasons discussed in the text.
                                         -9-

[*9] aff’d, 402 Fed. Appx. 221 (9th Cir. 2010); Taylor v. Commissioner, T.C.

Memo. 2004-25, aff’d, 130 Fed. Appx. 934 (9th Cir. 2005); sec. 301.6330-1(d)(2),

Q&A-D7, Proced. & Admin. Regs. The IRS scheduled a telephone CDP hearing

for petitioner and, when he failed to call in, gave him a final opportunity to contest

the levy by mailing him a “last chance” letter. On the record before us, we find

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

himself of it. 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.
