                              T.C. Memo. 2020-72



                        UNITED STATES TAX COURT



                  RONALD C. NIMMO, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 7441-19L.                         Filed June 1, 2020.



      Ronald C. Nimmo, pro se.

      Rachel L. Rollins and Jeffrey E. Gold, 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) of determinations by the Inter-

nal Revenue Service (IRS or respondent) to sustain collection actions for his 2014-
                                        -2-

[*2] 2017 taxable years.1 Respondent has moved for summary judgment under

Rule 121, contending that there are no disputed issues of material fact and that his

determinations to sustain the collection actions were 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 motion papers,

including the attached declarations and exhibits. Petitioner resided in the U.S.

Virgin Islands when he filed his petition.

      Petitioner filed timely Federal income tax returns for 2014-2017 reporting

self-employment income. For each year he failed to pay the tax shown as due on

his return. The IRS assessed the tax shown as due and additions to tax for failure

to pay. As of August 2018 petitioner’s outstanding liabilities for these years (in-

cluding interest) exceeded $15,000.

      In an effort to collect these unpaid liabilities the IRS proceeded with two

collection actions. On August 1, 2018, it sent him a Notice of Intent to Levy and

Notice of Your Rights to a Hearing (levy notice) covering tax years 2014-2016.




      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.
                                        -3-

[*3] On September 6, 2018, it sent him a Notice of Federal Tax Lien Filing and

Your Right to a Hearing (lien notice) for tax years 2014-2017.

      In response to these notices petitioner timely submitted separate Forms

12153, Request for a Collection Due Process or Equivalent Hearing. On both

forms he checked the box indicating that he was interested in an installment agree-

ment (IA). On neither form did he indicate an intention to challenge his underly-

ing tax liability for any period.2

      On September 7, 2018, petitioner’s hearing request regarding the levy notice

was assigned to a settlement officer (SO) in the IRS Appeals Office in Miami,

Florida. The SO reviewed the administrative file and confirmed that the tax liabil-

ity in question had been properly assessed and that all other requirements of ap-

plicable law and administrative procedure had been met. The SO noted that peti-

tioner was not current on his estimated tax payments.

      On September 18, 2018, the SO sent petitioner a letter scheduling a tele-

phone conference for November 2, 2018. The letter informed petitioner that, in

order for the SO to consider an IA or other collection alternative, petitioner needed

to provide proof that he had made estimated tax payments for 2018 and to submit


      2
       On one form he checked the box for “Innocent Spouse Relief.” Petitioner
does not appear to have filed a joint return for any year at issue.
                                         -4-

[*4] Form 433-A, Collection Information Statement for Wage Earners and Self-

Employed Individuals, along with supporting financial information. The SO asked

petitioner to submit these documents before the conference, but he did not do so.

        Petitioner did not call the SO for the scheduled conference or otherwise

contact her. On November 2, 2018, the SO sent him a “last chance” letter. She

noted that he had missed the conference and invited him to send her, within 14

days, any information that he wished her to consider.

        Petitioner’s hearing request regarding the lien notice, which covered 2017

as well as 2014-2016, was assigned to the same SO around the same time. After

reviewing the administrative file, she confirmed that petitioner’s 2017 tax liability

had been properly assessed and that all other requirements of applicable law and

administrative procedure had been met. She noted that petitioner was still not

current on his 2018 estimated tax obligations and that he had not filed a return for

2013.

        On November 8, 2018, the SO sent petitioner a letter scheduling a telephone

conference for the lien notice. This letter reminded him of the need to submit

proof that he had made estimated tax payments for 2018 and to supply a fully com-

pleted Form 433-A with supporting financial information. The SO also requested

that petitioner submit a signed tax return for 2013.
                                        -5-

[*5] On November 29, 2018, petitioner called the SO, and that call served as the

telephone conference for the lien notice. Petitioner expressed his desire to enter

into an IA. The SO reviewed with him the documents he needed to submit in

order to be eligible for an IA. She advised him that, if she did not receive the

documentation by the first week of January, she would close the case.

      Because of a lapse in Government funding, the SO was furloughed from

December 22, 2018, until January 25, 2019. Upon returning to work she found a

letter from petitioner dated December 28, 2018. This letter explained that he had

been experiencing financial difficulty during the previous two years following a

hurricane that struck the U.S. Virgin Islands. He stated that he was close to

completing a Form 433-A and that the SO should expect to receive that form and

an estimated tax payment within 48 hours.

      That December 28, 2018, letter was the last communication the SO received

from petitioner. On March 25, 2019, having received no Form 433-A, no proof of

2018 estimated tax payments, and no proof that petitioner had filed a return for

2013, the SO decided to close the case. On April 8, 2019, the IRS issued separate

notices of determination sustaining the proposed levy and the lien filing.

      Petitioner timely petitioned this Court for review. In his petition he asserted

that he had “proposed an alternative method of paying * * * [his] tax liability” and
                                         -6-

[*6] had “submitted Form 433-A for an installment agreement.” On February 12,

2020, respondent filed a motion for summary judgment, to which we directed

petitioner to respond. He filed no response.

                                     Discussion

A.    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). Under Rule 121(b) we 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. 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. Ibid. However, the nonmoving party may

not rest upon the mere allegations or denials in his pleadings, but must set forth

specific facts, by affidavit or otherwise, showing that there is a genuine dispute for

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

      Because petitioner did not respond to the motion for summary judgment, we

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
                                         -7-

[*7] no material facts in genuine dispute and that this case is appropriate for

summary adjudication.3

      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

(as here) there is no dispute as to the taxpayer’s underlying tax liability,4 we re-

view the IRS decision for abuse of discretion. Goza v. Commissioner, 114 T.C.

176, 182 (2000). 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).




      3
       Petitioner asserted in his petition that he had submitted a Form 433-A to
the SO. This assertion is contradicted by the SO’s sworn declaration, in which she
avers that petitioner “did not send any of the required financial information.” The
SO’s contemporaneous case activity record similarly states that, when she decided
to close the case on March 25, 2019, “[n]o documentation [had been] received.” A
party may not defeat summary judgment by relying on the bare allegations of his
pleadings. See Rule 121(d).
      4
       Petitioner did not dispute his underlying tax liabilities for 2014-2017 dur-
ing the CDP hearing, although he was entitled to do so. See sec. 6330(c)(2)(B);
Montgomery v. Commissioner, 122 T.C. 1, 8-9 (2004). A taxpayer must properly
present an underlying liability challenge at the CDP hearing in order to preserve
that challenge for judicial review. See Giamelli v. Commissioner, 129 T.C. 107,
113 (2007); secs. 301.6320-1(f)(2), Q&A-F3, 301.6330-1(f)(2), Q&A-F3, Proced.
& Admin. Regs.
                                         -8-

[*8] B.      Abuse of Discretion

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

tion actions, we consider whether she: (1) properly verified that the requirements

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

relevant issues petitioner raised, and (3) considered “whether any proposed collec-

tion action balances the need for the efficient collection of taxes with the legiti-

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

than necessary.” Sec. 6330(c)(3). Our review of the record establishes that the SO

properly discharged all of her responsibilities under section 6330(c).

      A taxpayer at a CDP hearing may propose a collection alternative, such as

an offer-in-compromise or an IA. But petitioner made no concrete proposal, and

the SO was not obligated to make one for him. See Gentile v. Commissioner, T.C.

Memo. 2013-175, 106 T.C.M. (CCH) 75, 77, aff’d, 592 F. App’x 824 (11th Cir.

2014); Veneziano v. Commissioner, T.C. Memo. 2011-160, 102 T.C.M. (CCH)

22, 24. The SO gave petitioner numerous opportunities, during two separate CDP

hearings, to submit the financial information that would enable her to evaluate his

ability to pay and his eligibility for a collection alternative. Petitioner promised

but failed to submit this information. An SO is not required to wait indefinitely

for the taxpayer to submit requested documents. See, e.g., McMurtry v. Commis-
                                         -9-

[*9] sioner, T.C. Memo. 2019-22; Samaniego v. Commissioner, T.C. Memo.

2019-7. The SO waited two months after the deadline she had set, and she did not

abuse her discretion in closing the case at that point.

      Finally, we have consistently held that an SO does not abuse her discretion

when she declines to consider collection alternatives for a taxpayer who has failed

to file all required returns and to make required estimated tax payments. See Gia-

melli v. Commissioner, 129 T.C. 107, 111-112 (2007); Starkman v. Commission-

er, T.C. Memo. 2012-236. “Compliance with filing * * * [and] paying estimated

taxes * * * must be current from the date the installment agreement begins.”

Internal Revenue Manual pt. 5.14.1.4.2(19) (July 16, 2018). The requirement of

current compliance as a condition of executing an IA “ensures that current taxes

are paid and avoids ‘the risk of pyramiding tax liability.’” Hull v. Commissioner,

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

Commissioner, T.C. Memo. 2007-155, slip op. at 8); see Orum v. Commissioner,

412 F.3d 819, 821 (7th Cir. 2005), aff’g 123 T.C. 1 (2004).

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

ment for respondent and sustain the collection actions. We note that petitioner is

free to submit to the IRS at any time, for its consideration and possible acceptance,
                                       - 10 -

[*10] a collection alternative in the form of an IA or offer-in-compromise,

supported by the necessary financial information.

      To reflect the foregoing,


                                                An appropriate order and decision

                                      will be entered for respondent.
