                              T.C. Memo. 2015-210



                         UNITED STATES TAX COURT



                   DENNIS M. POWERS, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 11465-13L.                        Filed October 27, 2015.



      Dennis M. Powers, pro se.

      Alexandra E. Nicholaides, for respondent.



                           MEMORANDUM OPINION


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

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



      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. All dollar amounts are rounded to the nearest dollar.
                                        -2-

[*2] the Internal Revenue Service (IRS or respondent) to uphold a notice of

Federal tax lien (NFTL) filing and 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 determination to sustain the proposed

collection actions was proper as a matter of law. We agree and accordingly will

grant the motion.

                                    Background

      The following facts are based on the parties’ pleadings and attached exhi-

bits. See Rule 121(b). Petitioner resided in Michigan when he filed his petition.

      Petitioner did not file a Federal income tax return for 2006 or 2007. The

IRS prepared for each year a substitute for return (SFR) that met the requirements

of section 6020(b). On the basis of third-party information reports, the IRS deter-

mined that petitioner had received self-employment income of $106,690 and

$136,104 during 2006 and 2007, respectively. For each year the IRS allowed him

the standard deduction, one personal exemption, and a deduction for one-half of

the applicable self-employment tax.

      Respondent prepared notices of deficiency based on the SFRs, determining

tax deficiencies and penalties for 2006 and 2007. The IRS sent these notices to

petitioner by certified mail on December 27 and July 5, 2011, respectively. Both
                                          -3-

[*3] notices were sent to the address appearing on petitioner’s 2010 tax return,

which was petitioner’s last known address as shown in IRS records. Respondent

attached to his motion copies of U.S. Postal Service Substitute Forms 3877 show-

ing that articles with tracking numbers matching those on the notices of deficiency

were mailed to petitioner at this address. In his petition, petitioner admits that he

received the notices of deficiency. He did not petition this Court for redetermina-

tion of the deficiency for either year.

      Respondent assessed the tax and penalties for 2006 and 2007. In an effort

to collect these assessed liabilities, respondent delivered to petitioner, on

November 28, 2012, a Notice of Intent to Levy and Notice of Your Right to a

Hearing. Two weeks later, respondent sent petitioner a Letter 3172, Notice of

Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320.

      On December 28, 2012, petitioner timely submitted a Form 12153, Request

for a Collection Due Process or Equivalent Hearing. He did not explicitly request

either an installment agreement or an offer-in-compromise, but he checked the box

marked “I cannot pay balance.” Petitioner represented on this Form that, after re-
                                         -4-

[*4] ceiving the notices of deficiency, he had filed tax returns for 2006 and 2007

reporting taxable income lower than the amounts shown in those notices.2

      On February 6, 2013, an IRS settlement officer (SO) sent petitioner a letter

acknowledging receipt of the Form 12153 and scheduling a telephone CDP hear-

ing for March 6, 2013. In this letter the SO asked petitioner to provide a Form

433-A, Collection Information Statement for Wage Earners and Self-Employed

Individuals, along with supporting documents enabling her to verify income,

expenses, assets, and liabilities. The letter also requested that petitioner provide

signed copies of tax returns for 2006 and 2007.

      On March 6 petitioner asked that the CDP hearing be postponed to March

15, and the SO granted this request. On March 15 petitioner telephoned the SO

and requested a second postponement to March 22; the SO also granted this re-

quest. During that call the SO reminded petitioner that she had not received any of

the documentation requested in her February 6 letter. Petitioner indicated that he

would provide all of the requested documentation before March 22.

      2
        The IRS has no record of receiving these returns. Petitioner alleges that he
spoke with someone at an IRS service center who told him that his returns had
“probably” been received and were in processing. Whether petitioner actually
filed delinquent returns for 2006-2007 is not a material issue of fact. For purposes
of this CDP proceeding, the relevant fact is that petitioner neglected to submit
copies of these returns to the SO despite her repeated requests. See infra pp. 4-5,
9-10.
                                         -5-

[*5] On March 22 petitioner and the SO participated in the telephone CDP hear-

ing. The SO informed petitioner that she had not received any of the documents

requested in her February 6 letter. He replied that he had placed in the mail that

morning signed tax returns for 2006-2007 together with a Form 433-A and

supporting financial information.

      Petitioner told the SO that he wished to make arrangements to pay the re-

duced tax liabilities shown on the returns that he had allegedly mailed to her. He

indicated that his only income at the time consisted of Social Security benefits but

that he was in the process of seeking reemployment with his former employer. He

stated his desire to defer discussion of collection alternatives until he had con-

firmed his employment situation. The parties agreed that petitioner would call the

SO on April 4, 2013, at 1 p.m. to continue discussion of collection alternatives.

      The SO did not receive the tax returns or the Form 433-A that petitioner

said he had mailed on March 22. In his response to the summary judgment mo-

tion, petitioner states his assumption that these documents were lost in the mail.

He does not claim that he sent these documents via certified or registered mail, and

he has supplied no affidavit or exhibit that would support such a claim.

      Petitioner did not call in for the scheduled telephone conference on April 4,

and he did not contact the SO in an effort to reschedule this conference. The SO
                                        -6-

[*6] thereupon determined that the case should be closed because petitioner had

not requested a specific collection alternative and had supplied no financial

information. The SO reviewed the administrative file, verified that the tax for

2006 and 2007 had been properly assessed, and determined that all other

requirements of applicable law and administrative procedure had been met.

      On April 15, 2013, the IRS issued petitioner a Notice of Determination Con-

cerning Collection Actions(s) Under Section 6320 and/or 6330 sustaining the

NFTL filing and proposed levy action. Petitioner timely petitioned this Court for

review. His petition appears to seek review of his underlying tax liabilities for

2006 and 2007, asserting that “[t]he amounts due for 2006 and 2007 are less than

[those shown in] the IRS notices of deficiency.” His petition also alleges that his

“sole source of income is social security and a levy of that would constitute a

severe hardship” for him. Respondent moved for summary judgment and peti-

tioner filed a timely response to that motion.

                                     Discussion

      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
                                        -7-

[*7] 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.

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 showing that there is a

genuine dispute for trial. Rule 121(d). We conclude that this case is appropriate

for summary adjudication.

A.    Standard of Review

      Where the amount of a taxpayer’s underlying tax liability is properly at is-

sue in a CDP case, we review the IRS’ determination de novo. Goza v. Commis-

sioner, 114 T.C. 176, 181-182 (2000). Section 6330(c)(2)(B) permits a taxpayer

to challenge the existence or amount of his underlying liability only if he did not

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

liability. Where the taxpayer does not or cannot dispute his underlying tax liabi-

lities, we review the IRS’ determinations regarding nonliability issues for abuse of

discretion. Hoyle v. Commissioner, 131 T.C. 197, 200 (2008); Goza, 114 T.C. at

182. Abuse of discretion exists when a determination is arbitrary, capricious, or
                                         -8-

[*8] 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).

      The notices of deficiency for 2006 and 2007 were mailed to petitioner’s last

known address, and he concedes that he received these notices. He did not peti-

tion this Court within the time set by statute for redetermination of these deficien-

cies. See sec. 6213(a). Because petitioner had, but did not take advantage of, a

prior opportunity to contest his underlying tax liabilities for both years, he was not

entitled to challenge those liabilities in the CDP hearing. See sec. 6330(c)(2)(B).

We accordingly review the SO’s actions for abuse of discretion only.3

B.    Analysis

      In deciding whether the SO abused her discretion in sustaining the collec-

tion action we consider whether she: (1) properly verified that the requirements of

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


      3
        By inviting petitioner to submit copies of tax returns for 2006-2007, the SO
appeared willing to consider his underlying tax liabilities as part of a discussion of
collection alternatives. Where an Appeals officer exercises her discretion to ad-
dress an issue that the taxpayer is not entitled to raise during the CDP process, any
decision made with respect to that issue is not part of the notice of determination
and hence is not reviewable by this Court. See Ding v. Commissioner, T.C.
Memo. 2015-20, at *10; sec. 301.6320-1(e)(3), Q&A-E11, Proced. & Admin.
Regs. As it was, petitioner submitted no evidence to the SO concerning his
underlying tax liabilities; that issue was not properly presented to her and is not
before us.
                                         -9-

[*9] 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).

      It is clear from our review of the record that the SO examined petitioner’s

account transcripts and verified that the requirements of applicable law and ad-

ministrative procedure were followed. The SO properly balanced the need for

efficient collection of taxes with petitioner’s legitimate concern that collection

action be no more intrusive than necessary. The only question is whether the SO

properly considered any issues petitioner raised concerning his entitlement to a

collection alternative.

      Although petitioner told the SO that the levy would place a financial hard-

ship on him, he did not formally request any specific collection alternative. The

SO postponed the CDP hearing twice in order to accommodate petitioner and to

allow him additional time in which to submit the information necessary for her to

consider a collection alternative. Following the CDP hearing, she gave petitioner

another two weeks to supply this information, but he failed to do so. He failed to

call in for the telephone conference scheduled for April 4 and made no effort to

contact the SO to request that it be rescheduled. An Appeals officer does not
                                        - 10 -

[*10] abuse her discretion when she does not “take into account information that

she requested and that was not provided in a reasonable time.” Murphy, 125 T.C.

at 315.

      Petitioner asserts that he mailed the requested information to the SO on

March 22 and speculates that it “was lost in the mail.” He does not claim that he

sent these documents via certified or registered mail, and he has supplied no affi-

davit or exhibit that would support such a claim. The taxpayer generally bears the

risk of nondelivery when a tax return or other document, which was not sent by

registered or certified mail, is lost by the U.S. Postal Service. See Walden v.

Commissioner, 90 T.C. 947, 951 (1988). Petitioner’s unsupported allegation that

he mailed this information is insufficient to create a genuine dispute of material

fact. See Rule 121(d).

      The SO made repeated requests for petitioner’s tax returns and financial

information and waited a sufficient period to review these documents before

closing the file. “No statutory or regulatory provision requires that taxpayers be

afforded an unlimited opportunity to supplement the administrative record.”

Roman v. Commissioner, T.C. Memo. 2004-20, 87 T.C.M. (CCH) 835, 837.

Especially is that so where (as here) the record “is replete with explicit deadlines

that respondent generously extended for petitioner’s benefit.” Ibid. We find that
                                        - 11 -

[*11] the SO did not abuse her discretion by declining to offer petitioner a

collection alternative when he did not put any specific proposal on the table, did

not submit the necessary financial information, and did not call in for or seek to

reschedule the telephone conference during which collection alternatives were

supposed to be discussed. See Morlino v. Commissioner, T.C. Memo. 2005-203,

90 T.C.M. (CCH) 168, 172.

      To reflect the foregoing,


                                                 An appropriate order and decision

                                       will be entered.
