                               T.C. Memo. 2018-71



                         UNITED STATES TAX COURT



                    SANFORD SOLNY, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 10647-17L.                        Filed May 22, 2018.



      Joseph Y. Balisok, for petitioner.

      Peggy Gartenbaum and Theresa G. McQueeney, for respondent.



                           MEMORANDUM OPINION


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

seeks review pursuant to sections 6320(c)1 and 6330(d) of the determination by the



      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] Internal Revenue Service (IRS or respondent) to uphold the filing of a notice

of Federal tax lien (NFTL). The IRS initiated the collection action with respect to

petitioner’s Federal income tax liabilities for 2000, 2003, 2005, and 2006. Re-

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

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

proposed collection action was proper as a matter of law. We agree and accord-

ingly will grant the motion.

                                    Background

      The following facts are based on the parties’ pleadings and respondent’s

motion papers, including the attached declarations and exhibits. See Rule 121(b).

Petitioner resided in New York when he filed his petition.

      During the years in question petitioner received wages for his work as an

attorney at a New York law firm. The IRS determined that he had underreported

this income and issued him a notice of deficiency, from which he timely petitioned

this Court.2 After the parties had executed a stipulation of settled issues resolving

all issues in the case, we entered a decision determining that petitioner for 2000,

2003, 2005, and 2006 had income tax deficiencies of $50,453, $74,747, $52,743,

      2
        The IRS in that notice of deficiency also determined deficiencies for peti-
tioner’s 2002 and 2004 tax years. Those liabilities are not the subject of any col-
lection action in this case.
                                          -3-

[*3] and $15,491, respectively. Solny v. Commissioner, T.C. Dkt. No. 28479-12

(Feb. 9, 2012).

      On August 16, 2016, the IRS filed an NFTL, which reflected petitioner’s

then-outstanding tax liabilities of $194,142, and informed him that he had until

September 22, 2016, to request a CDP hearing. Petitioner requested a hearing sev-

eral weeks later. In his hearing request he stated that he could not pay the balance

due; that the NFTL should be withdrawn; and that he desired a collection alterna-

tive, i.e., an offer-in-compromise (OIC) or an installment agreement (IA). The

IRS received petitioner’s hearing request on September 20, 2016, and assigned it

to a settlement officer (SO).

      Upon receiving the case the SO concluded that petitioner’s hearing request

was untimely and therefore offered him an “equivalent hearing.” See sec.

301.6320-1(i)(1), Proced. & Admin. Regs. The SO reviewed the administrative

file and confirmed that petitioner’s tax liabilities for the years in question had been

properly assessed and that the IRS had met all other requirements of applicable

law or administrative procedure. The SO discovered that petitioner was not in

compliance with his tax filing obligations for 2007-2012 and 2015. Consequently,

the SO determined that petitioner would be ineligible for a collection alternative

unless he filed the delinquent returns.
                                         -4-

[*4] On February 21, 2017, the SO sent petitioner and his counsel a letter sched-

uling a telephone hearing for March 15, 2017. This letter stated that the SO could

not consider collection alternatives unless petitioner submitted, by March 8, 2017,

a Form 433-A, Collection Information Statement for Wage Earners and Self-Em-

ployed Individuals, supporting financial information, and a form relating to peti-

tioner’s request to withdraw the NFTL.

      Neither petitioner nor his counsel called in for the March 15, 2017, hearing.

Later that day the SO sent to both of them a “last chance” letter. This letter ex-

plained that the hearing would not be rescheduled but that the SO would still con-

sider collection alternatives if he received, by March 29, 2017, the previously re-

quested forms and financial information. Petitioner does not dispute that he and

his counsel received this letter.

      Neither petitioner nor his counsel submitted any of the requested financial

information. On March 29, 2017, petitioner called the SO and attempted to add

his attorney to the call so that the attorney could update the SO on the status of

petitioner’s delinquent tax returns. Petitioner’s attorney was busy with another

call and could not be conferenced in. Neither petitioner nor his attorney attempted

to contact the SO later that day.
                                         -5-

[*5] Having received no further communication from petitioner or his counsel,

the SO closed the case on March 30, 2017. On April 11, 2017, the IRS issued pe-

titioner a “decision letter” in which it sustained the NFTL filing.3 Petitioner peti-

tioned this Court 30 days after the decision letter. On July 7, 2017, respondent

filed his answer, in which he conceded that petitioner’s CDP hearing request was

timely.4 Respondent accordingly agreed that the decision letter should be treated

as a notice of determination for purposes of section 6330(d) and that the petition

was timely. On January 19, 2018, respondent filed a motion for summary judg-

ment, to which petitioner timely responded.

                                     Discussion

A.    Jurisdiction

      The Tax Court is a court of limited jurisdiction, and we must ascertain whe-

ther the case before us is one that Congress has authorized us to consider. Sec.

7442. Where the IRS Appeals Office issues a notice of determination to the tax-



      3
       The IRS will ordinarily issue a decision letter after completing an equiva-
lent hearing. See Moorhous v. Commissioner, 116 T.C. 263, 270 (2001); sec.
301.6330-1(i)(1), Proced. & Admin. Regs.
      4
        Respondent determined that the IRS date stamp on the Form 12153,
Request for a Collection Due Process or Equivalent Hearing, adequately showed
that petitioner had mailed his hearing request on or before the September 22, 2016,
deadline.
                                         -6-

[*6] payer after a CDP hearing, the taxpayer has 30 days following the issuance of

that letter to petition this Court for review. Secs. 6320(c), 6330(d)(1). This

Court’s jurisdiction depends upon the issuance of a valid determination letter and

the filing of a timely petition for review. Orum v. Commissioner, 123 T.C. 1, 8

(2004), aff’d, 412 F.3d 819 (7th Cir. 2005).

      Respondent properly recognizes that we have jurisdiction to decide this

case. Where the taxpayer has made a timely request for a CDP hearing and is

inadvertently issued a decision letter (instead of a notice of determination), that

letter constitutes a “determination” for purposes of section 6330(d)(1). See Craig

v. Commissioner, 119 T.C. 252, 259 (2002). Here, petitioner received a hearing in

response to a timely CDP request. The decision letter issued to him following

completion of that hearing thus provides a proper basis for invoking this Court’s

jurisdiction. See Wilson v. Commissioner, 131 T.C. 47, 51 (2008); Orum, 123

T.C. at 11-12; Craig, 119 T.C. at 259.

B.    Summary Judgment Standard and Standard of Review

      The purpose of summary judgment is to expedite litigation and avoid costly,

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

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
                                         -7-

[*7] 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

judgment, 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.

However, the nonmoving party may not rest upon mere allegations or denials of

his pleadings but instead must set forth specific facts showing that there is a

genuine dispute for trial. Rule 121(d); see Sundstrand Corp., 98 T.C. at 520.

      Neither section 6320(c) nor section 6330(d)(1) prescribes the standard of

review that this Court should apply in reviewing an IRS administrative determina-

tion in a CDP case. But our case law tells us what standard to adopt. Where the

validity of the taxpayer’s underlying tax liability is properly at issue, we review

the IRS’ determination de novo. Goza v. Commissioner, 114 T.C. 176, 181-182

(2000). Where (as here) the taxpayer’s underlying liability is not before us,5 we

review the IRS decision for abuse of discretion only. See id. at 182. Abuse of

discretion exists when a determination is arbitrary, capricious, or without sound




      5
       Petitioner cannot now challenge his underlying tax liability for 2000, 2003,
2005, or 2006 because he received a notice of deficiency for those years. See sec.
6330(c)(2)(B); Sego v. Commissioner, 114 T.C. 604, 609 (2000); sec.
301.6320-1(e)(3), Q&A-E2, Proced. & Admin. Regs.
                                         -8-

[*8] basis in fact or law. Murphy v. Commissioner, 125 T.C. 301, 320 (2005),

aff’d, 469 F.3d 27 (1st Cir. 2006).

C.    Analysis

      In determining whether the SO abused his discretion we consider whether

he: (1) properly verified that the requirements of any applicable law or admini-

strative procedure had 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 * * * [pe-

titioner] that any collection action be no more intrusive than necessary.” See sec.

6330(c)(3).

      Our review of the record establishes that the SO reviewed petitioner’s tran-

scripts of account to verify that the liabilities in question had been properly as-

sessed. In his CDP hearing request, petitioner checked the box for NFTL

withdrawal, but he failed to submit any documentation to show that he met any of

the categories justifying NFTL withdrawal under section 6323(j). Petitioner has

alleged no error of fact or law by the SO on this point.

      Petitioner first contends that the SO improperly denied him a face-to-face

hearing at the closest IRS Appeals Office. The regulations provide that a “CDP

hearing may, but is not required to, consist of a face-to-face meeting.” Secs.
                                        -9-

[*9] 301.6320-1(d)(2), Q&A-D6, 301.6330-1(d)(2), Q&A-D6, Proced. & Admin.

Regs. We have repeatedly held that the IRS is not required to afford a taxpayer a

face-to-face hearing and that a hearing conducted by telephone, correspondence,

or document review will suffice.6 See, e.g., Katz v. Commissioner, 115 T.C. 329,

337-338 (2000); Williamson v. Commissioner, T.C. Memo. 2009-188, 98 T.C.M.

(CCH) 110, 112; Stockton v. Commissioner, T.C. Memo. 2009-186, 98 T.C.M.

(CCH) 103, 106.

      Petitioner next argues that his failure to participate in the hearing or provide

the requested financial information was due to the SO’s failure to communicate

with petitioner’s counsel. Specifically, he contends that his counsel did not re-

ceive a copy of the SO’s first letter (sent February 21, 2017) and that the SO failed

to respond to his counsel’s phone calls and voicemail messages.

      The SO sent two separate letters to petitioner and to his counsel regarding

the hearing. Petitioner does not deny having received both letters. The letters to


      6
       Although the SO offered petitioner an equivalent hearing, equivalent hear-
ings--whether by telephone or face-to-face--are conducted in substantially the
same manner as CDP hearings. See sec. 301.6320-1(i)(1), Proced. & Admin.
Regs.; Internal Revenue Manual pt. 8.22.4.3(1) (Mar. 29, 2012) (instructing SOs
to conduct equivalent hearings by “follow[ing] the same procedures and consi-
der[ing] the same issues as a CDP hearing”). Petitioner does not contend that he
suffered any prejudice because the SO reviewed his case in an “equivalent hear-
ing” format.
                                        - 10 -

[*10] petitioner’s counsel were mailed to his current address of record with this

Court. His counsel does not deny having received the March 15 “last chance”

letter, which set March 29 as the final deadline to submit information.

      Evidently in response to that letter, petitioner called the SO on March 29

and attempted unsuccessfully to add his attorney to the call. Petitioner and his

counsel have only themselves to blame for the attorney’s failure to join that call

and for their mutual failure to communicate with the SO subsequently. Petitioner

was clearly aware of his responsibility to provide financial information to the SO,

but he repeatedly neglected to provide anything. Given this track record, the SO

did not abuse his discretion in closing the case on March 30.

      In his CDP hearing request petitioner sought a collection alternative in the

form of an OIC or an IA. But he did not supply any of the required forms or ne-

cessary financial information. We have consistently held that it is not an abuse of

discretion for an Appeals officer to reject collection alternatives and sustain col-

lection action where (as here) the taxpayer has failed, after being given repeated

opportunities, to supply the necessary information. See Huntress v. Commission-

er, T.C. Memo. 2009-161, 98 T.C.M. (CCH) 8, 10-11; Prater v. Commissioner,

T.C. Memo. 2007-241, 94 T.C.M. (CCH) 209, 210; Roman v. Commissioner, T.C.

Memo. 2004-20, 87 T.C.M. (CCH) 835, 838. In any event, petitioner was not in
                                        - 11 -

[*11] compliance with his tax filing obligations for several post-2006 tax years.

The SO could properly have rejected any proposed collection alternative on this

ground alone. See Cox v. Commissioner, 126 T.C. 237, 258 (2006), rev’d on

other grounds, 514 F.3d 1119 (10th Cir. 2008); Hull v. Commissioner, T.C.

Memo. 2015-86, 109 T.C.M. (CCH) 1438, 1441.

      Finding no abuse of discretion in any respect, we will grant summary judg-

ment for respondent and affirm the proposed collection action. We note that peti-

tioner is free to submit to the IRS at any time, for its consideration and possible

acceptance, a collection alternative in the form of an OIC or IA, supported by the

necessary financial information.

      To reflect the foregoing,


                                                 An appropriate order and decision

                                        will be entered for respondent.
