2014 T.C. Memo. 80
Tax Ct.2014Background
- Michael H. Boulware (Hawaii resident) was assessed income tax deficiencies for 1998, 1999, 2001, and 2002 following this Court's decision in HIE Holdings, Inc. v. Commissioner; the Tax Court judgment was affirmed on appeal and certiorari was denied.
- Boulware did not post a bond to stay collection pending appeal; the Ninth Circuit denied his motion to stay collection. The IRS filed Notice of Federal Tax Liens and issued a Notice of Intent to Levy.
- Boulware timely requested a Collection Due Process (CDP) hearing (timely as to the levy but untimely as to the lien), requested an installment agreement and a face-to-face meeting, and submitted Forms 433-A and other financial documentation.
- Appeals Settlement Officer Kimberly Martin concluded Boulware was not in full compliance (had not made required 2011–2012 estimated tax payments), refused to liquidate significant liquid assets (a 401(k) and life insurance with cash values), and found his true monthly payment capacity far exceeded his $12,500/month proposal. She denied the installment proposal and declined a face-to-face conference as unnecessary.
- The Tax Court reviewed only the levy determination under IRC §6330(d), applied abuse-of-discretion review, and entered judgment for the Commissioner.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Appeals abused its discretion by denying Boulware's proposed installment agreement | Requiring current estimated-tax compliance and liquidation of assets before allowing an installment agreement was improper; pending appeal and nature of retirement/life-insurance assets are "special circumstances" | Appeals properly exercised discretion: taxpayer was not in compliance, refused liquidation of available assets, and proposed payments did not reflect ability to pay | Denial affirmed — no abuse of discretion (Appeals acted within discretion on compliance, liquidation, and payment-amount grounds) |
| Whether Appeals abused its discretion by denying a face-to-face CDP hearing | Requested a face-to-face meeting to discuss collection alternatives and the case | Appeals may provide telephone or written CDP hearings; face-to-face not required where taxpayer is ineligible for the requested collection alternative | Denial affirmed — telephone conference and written exchanges sufficed; face-to-face not required when taxpayer ineligible |
Key Cases Cited
- HIE Holdings, Inc. v. Commissioner, 521 Fed. Appx. 602 (9th Cir. 2013) (underlying appeals affirming Tax Court deficiency decision)
- Keller v. Commissioner, 568 F.3d 710 (9th Cir. 2009) (administrative-record limitation on judicial review in §6330(d) matters)
- Thompson v. Commissioner, 140 T.C. 173 (Tax Ct. 2013) (Commissioner has discretion to accept or reject installment agreements under §6159)
- Goza v. Commissioner, 114 T.C. 176 (Tax Ct. 2000) (taxpayer cannot challenge underlying liability in CDP if previously had opportunity to dispute it)