*1 GILLUM, Appellant, M. Thomas
v. INTERNAL
COMMISSIONER
REVENUE, Appellee.
No. 11-1664. Appeals, States Court
United
Eighth Circuit. Nov. 2011.
Submitted: April
Filed: Rehearing En Banc
Rehearing and 14, 2012.
Denied June *2 El Boiarsky, argued,
Kenneth Robert Prado, NM, petitioner. for Gregory, argued, Washington, Karen G. DC, respondent. SMITH, COLLOTON,
Before GRUENDER, Judges. Circuit SMITH, Judge. Circuit sought judicial Thomas M. Gillum review of the Commissioner of Internal Revenue’s notice of determination sustaining pro- posed levy delinquent to collect Gillum’s income tax liabilities for 1996-2002 and a filing tax-lien for 1998 and 2000-2002 tax liabilities. sought Gillum also review of the Commissioner’s denial of collection due (CDP) process hearings purported to his trial, nominees and egos. Following alter the tax upheld court1 the Commissioner’s sustaining determinations notice of the federal tax lien and levy. Additionally, the tax court held that it affecting could not enter decision Gil- purported lum’s egos nominees and alter they parties because were not pro- ceeding. appeals, arguing that he was denied a fair because the (IRS) Internal Revenue Service settlement officer relied on information that was not contained the administrative record in making additionally his determination. He argues purported that his nominees and egos hearing. were entitled to a CDP affirm. We Thornton, Judge. 1. The Honorable Michael B. United States Tax Court income, monthly percent gross of his be- Background2 I. ginning days judg- after the date of the Prosecution A. Criminal ment. operates a veterinarian who *3 proceedings criminal While the were (“Clo- Hospital, Animal LLC Cloverdale pending, Gillum filed tax returns for 1996- verdale”). in prosecuted was 2004 for He Thereafter, 2002. the IRS assessed the income tax returns failure to file federal reported on taxes that Gillum had his de- 2005, In entered 1996-2002. for years. In linquent returns for those each with the plea agreement into a United instance, the added associated tax and IRS District of Attorney for the Eastern States sent notice and demand interest. The IRS guilty to one pleaded Arkansas in which he payment for on the date of each to Gillum failure to file a federal count of criminal After to pay, assessment. Gillum failed plea for 2000. In the income tax return 6, 2006, him on the IRS advised October agreed entry of an agreement, Gillum a going that it was to file notice of federal mandatory restitution under 18 order of tax lien. Gillum did not adminis- § full amount of the 3663A for “the U.S.C. lien-filing trative review of the all owing prosecution and for taxes due time. plea agreement provided The
years.” lien Notices of federal dated October time, the States and the this United “[a]t Montgomery were recorded in amount of resti- agree that the defendant Arkansas, County, County and Pulaski by the defendant payable tution 23, 2006, 24, 2006, October October $416,210.” agreement did “not plea The securing respectively, thereby Gillum’s de- any civil or administra- compromise bar linquencies for 1998 and 2000-2003. On may or that be made pending tive claim 18, 2006, October the IRS sent Gillum defendant, including but not against the Filing “Notice Tax Lien of Federal Furthermore, matters.” it limited to tax Right Hearing Your to a Under IRC only upon the United States “binding 6320” for 1998 and 2000-2003. On Octo- for the Eastern District Attorney’s Office 26, 2006, Gillum a “Final ber the IRS sent and the defendant. It d[id] of Arkansas Levy of Intent Notice Notice[:] federal, any ... other state or not bind Hearing” under Right Notice of Your administrative, regu- prosecuting, local unpaid § 26 U.S.C. 6330 to collect Gillum’s latory authority.” tax liabilities for 1996-2003. 12, 2005, judgment
In a filed December Gillum sent On October 26 433-A,” to five the district court sentenced Gillum In- a “Form entitled “Collection him Wage and ordered years probation formation Statement for Earners monetary Individuals,” penalties” Self-Employed the total criminal and a “pay “[rjestitution.”3 $246,226 433-B,” The dis- “Form “Collection Infor- entitled Businesses,” pay ordered Gillum to the mation Statement for to the trict court also $246,266 withheld documentation that monthly payments equal to ten IRS. Gillum representing background agreement [Gillum’s] as total factual in this case is exten- 2. The complicated by through criminal liability years Gillum's 2001.” sive for the process prosecution, Comm’r, (CCH) the civil-collection 100 T.C.M. Gillum v. taxes, delinquent and the substantial Gillum's (2010). at *1 n. 2 2010 WL record. explanation record contains no [djistrict "why the reduced the restitu- [c]ourt explained, "[t]his the tax court amount As tion in this manner.” Id. plea corresponded to the amount stated in the years exclusively the forms. on these covered under required he was to submit with provide the account numbers agreed He failed an court order for restitution to the accounts, personal Gillum, bank which were for his “mak- According IRS.” he was Liv- held in the name of “TMG Revocable ing payments for these tax IRS card, Trust,” ing personal or for his credit and, years agreement, under unless name of Ani- which was “Cloverdale obligations to meet his under [he] fail[ed] 43B-A, mal.” Form stated that order, agreed court must judgments against him and there were no and desist from cease further beneficiary any that he was not the activity.” propose Gillum did not col- monthly trust. He also stated that his hearing request. lection alternatives *4 $6,532.75, living expenses totaled but he 14, 2006, Appeals On December the IRS He categorize expenses. failed to also acknowledging sent a letter Office Gillum give did not the estimated value of three receipt hearing request its of his CDP possession required vehicles in his or other informing him that IRS settlement officer personal information about his In assets. David P. would Sehroeder conduct response question to the of whether he had hearing. attorney hired Kenneth Gillum any transferred assets for less than their representative. as his CDP On past years, actual value in the ten Gillum 26, 2007, April Sehroeder sent a letter to checked the box for “No” and wrote “Pos- Gillum, copy Boiarsky, with a schedul- next to sible” the box for ‘Tes.” On Form 15, ing May a telephone hearing on 2007. 433-B, Gillum omitted bank and credit Sehroeder stated the letter that he card account provide numbers and did not any prohibited previous not recall “d[id] required details about accounts receiv- periods involvement with tax is- [the] [at able, assets, credit, business available or but that if Gillum believed that sue]” monthly expenses. income He stated involvement, prior Sehroeder had then Gil- “possible” that it was that business income “notify lum needed immedi- [Sehroeder] would increase.
ately.” Sehroeder also listed “nonfrivolous B. Hearing IRS hearing, issues” for discussion at the CDP Office including levy alternatives to “[c]ollection 21, 2006, timely On November Gillum as full payment liability, such install- “Request submitted his for a Collection agreement, ment in compromise offer Hearing” Due Process under 26 U.S.C. temporary suspension of if collection action §§ indicating disagree- 6320 and his imposes action a hardship condition.” levy ment with both the lien and the notice though Sehroeder stated that even these notice.4 In request, argued that options “may not be considered plea agreement judgment his criminal filing,” an ‘alternative’ to a notice of lien liability reflected his “tax years 1996 they could still “be discussed at a lien through 2002” “and that all further at- hearing.” Sehroeder informed Gillum that tempts by the collect on these he could years request are invalid.” He determination as to requested “that the any ap- IRS cease and whether “the notice of lien desist from further years propriate qualified] collection efforts tax 1996 and if for a [Gillum] through 2002 due to the fact payment options, lien withdrawal or other lien such request years through parties "After [Gillum] submitted his for a able 2002. The (CDP) process hearing, agree collection due on Dec. that the deficiencies determined 8, 2006, Gillum, [the IRS] issued to a notice notice are not at issue in this case." [Gillum] deficiency respect with *2 [Gillum’s] tax- 2010 WL n. 6. [Schroeder [Gillum’s] Schroeder instructed file with finan- the] as subordination.” “any information Schroeder cial statement and related Gillum to send documents.” your hearing you me to consider want Schroeder then file [the] con- “[r]eviewed days it within from 433-A, 433-B, so I receive taining [Form] [Form] [the] date this letter.”5 for opinion to file nominee and liens, ego approval and counsel’s object to Schroeder con- did on this request.” memo lien and on hearing, May ducting the CDP first held the of three Schroeder May Schroeder conducted telephone Boiarsky, with conferences Gil- second telephone conference Bo- During representative.6 lum’s tele- iarsky. Immediately prior hearing, to the conference, opined phone Schroeder 433-A, “reviewed [Form] plea judgment agree- “neither the nor 433-B, [Form] and [the] nominee/alter ment civil adminis- bars IRS in the collection info[rmation] administra- to the full lia- trative actions related file.” Schroeder noted that tive] “[t]he bility, agreement plea nor do [the B voluntarily signed 433-A and were un- the tax judgment] compromise liability.” *5 penalty der it perjury, and is clear from Boiarsky Schroeder asked whether he developed by the information that R/O Appeals Office “to con- wanted the IRS has [Gillum] not disclosed all assets and Boiarsky sider collection alternatives.” income, and taking still actions to shield that, he responded although was not income assets from IRS other and/or position his un- “conceding creditors.” concluded Schroeder agreement judg- derstanding of the options cannot be considered “Collection ment,” “want collection he did alterna- under these During circumstances.” Boiarsky additionally tives considered.” conference, telephone Boiarsky no had ob- paying everything “stated that [Gillum] jections filing, to the tax-lien so Schroeder IRS, and he proposed he makes to [the] the filing. They sustained “then discussed limit to the its collection [the] proposed levy collection to the alternatives agreement terms plea and court action,” and Boiarsky again proposed “that judgment.” replied Schroeder that he IRS limit collection action to [the] its would the collection “retrieve administra- specified plea agreement amount in the file, which contains current financial tive] judgment and court as this is [Gillum’s] it, info[rmation], call review and him back ability pay.” maximum But Schroeder 2PM to May [on at] conclude hearing.” [the] [Boiarsky] had] informed re- [he viewed financial statements and conference, telephone the first Following lated in the collection infofrmation] ad- to collection” Schroeder “[w]ent “[m]et officer) (revenue concluded that with file and ].” ministrative] Schroe- [a] [R/O provide financial gave der officer an statements did not full “ex-parte the revenue disclosure assets warning.” limitation The revenue officer of income and con- “gave “had several files on trolled and therefore [Gillum]” [Gillum] explained Additionally, preparatory 5. 6. Schroeder case Schroeder that Gil- recorded his hearing request timely lum's for a hearing work and the three notes from tele- respect levy for to the 1996-2002 phone Activity conferences in the “Case Rec- for 1998 the tax-lien and 2000- ord.” that, at the time of the but request, lien had a notice of tax not been filed for day, was unable to recommend next Schroeder reviewed Downs’s re- [Schroeder] acceptance [Boiarsky’s] proposal sponse. Downs advised Schroeder “to ad- limit collection to the terms of the resti- equately why disclose the amount offered tution. why is not sufficient and it does not ade- quately potential.” reflect collection Boiarsky In for response, “asked details of Thereafter, non-disclosure,” but Schroeder “de- Schroeder “[r]eviewed [the] clined to discuss this at the time.” case file administrative] Boiarsky that again Schroeder told he would prepare infofrmation] for con- [a] for “research this disclosure [Boiarsky].” ference with possibly guid- collection details and seek very it is clear that concludefd] ance from Counsel.” Schroeder stated accurately has not in- reported [Gillum] that he would call later in the expenses, come and it im- makes hearing. week to conclude the After the possible Appeals accurately deter- ended, conference Schroeder was “con- ability pay. mine true He has done cerned much about how infofrmation] by tunneling income paying per- give [Boiarsky] regarding [Schroeder’s] expense through sonal various entities [Boiarsky’s] proposed determination that apparent legitimate for no business rea- acceptable collection alternative is not un- son. finding der the circumstances.” After not Schroeder also found that Gillum had any guidance related to the collection-dis- closure issue on the IRS Office’s placed beyond assets the reach of credi- website, Schroeder case “[d]iscussed [the] tors, though enjoys even he full use and *6 acting [Appeals Manag- Team [the] benefit of these assets and is the Appeals Manager The Team er].” had owner. de[]facto Because these assets never encountered the issue before and any and encumbrances to these assets “was concerned about ex-parte issue.” [an] disclosed, have not voluntarily been Ap- Appeals Schroeder advised the Team Man- peals is unable to make a determination ager that he “had no discussion of [the] regarding equity net and po- collection Collection, only issues with but ha[d] tentialof [sic] them. lied on the collection administrative] file.” Schroeder, According to Gillum’s “assets May On sought ad- boats(includ- estate, vehicles, include real attorney vice from IRS Lisa Downs. houseboat) [sic], ing a and ATVs.” ex-parte Downs “found no issue with May Schroeder conducted reliance on [Schroeder’s] infofrmation] the final telephone conference with Boiar- the collection case file as administrative] sky. Schroeder Boiarsky told that he had basis for determination regarding [a] col- “again reviewed the information in the lection alternatives.” Downs and Schroe- collection file and ... administrative] also der “discussed the nominee/alter concluded that collection al- situation.” The issue was “to what extent accepted ternative cannot be under the Appeals obliged discuss/explain/dis- circumstances.” Schroeder informed Bo- [Boiarsky] close to the basis for the deter- iarsky mination—i.e., “clearly documentation the financial statements adequately show[ed]” Gillum failed to ... fully [Gillum] submitted do not dis- expenses. disclose his income and Boiar- close the assets and income available to sky responded by ego activity.” his that he was unaware of [Gillum] nominee/alter Downs told Schroeder that she would con- this information and Gillum had not sider the fully issue and call him back. The disclosed these actions to his own also documentation and Boiarsky stated that he contained infor- legal counsel. could not con- in an why Appeals by mation secured Collection effort “understood pro- alternative a collection verify taxpayer’s sider financial state- and time.” Schroeder posed levy th[is] ments. determined Appeals has disagree- their then discussed taxpayer this review has and “the intent effect of ment accurately income and reported ex- regarding restitution judgment the court penses, impossible it make[s] ability to administra- ... on IRS’s [the] ability pay determine his true tax pointed tively out collect.” Schroeder liability. done taxpayer The has not limit collection of “that order did diverting various through income enti- then stated “that le- the tax.” Schroeder (trusts, liability companies, ties limited requirements have gal procedural and wife) personal paying and and ex- followed, filing lien been penses through ap- these entities for no levy intent the notice of issuance of avoid parent reason other than to taxes ac- and these collection appropriate, were and collection of taxes. He has also are sustained.” tions therefore placed beyond assets the reach of [the] Appeals the IRS Of- On June by purchasing them in the name of Determination fice issued its “Notice various entities he controls or transfer- Action(s) Concerning Collection Under ring them It to these entities. is clear Section 6330.” notice 6820 and/or that the full use taxpayer maintains the tax-lien determination sustained assets, benefit these which include and the proposed for 1998 and 2000-2002 estate, vehicles, watercraft, real and all- levy for It verified that 1996-2002. terrain these vehicles. Because assets requested, timely the settle- against encumbrances these as- the hearing ment who conducted officer disclosed, Appeals sets have not been prior speci- no involvement with the had equity not able their net to determine legal procedural periods, fied For these potential. rea- requirements According were satisfied. accept only sons cannot col- *7 determination, the proposed the of notice by proposed lection alternative the tax- levy was the sustained because “neither payer’s representative. plea agreement judgment nor the court The notice also con- of determination compromise of represent a settlement filing that proposed cluded tax lien not bar liability, and do IRS [the] “the levy properly action balanced need for collection taking additional actions.” efficient of taxes” with “con- also The of determination addressed notice cern that the collection action be no more of Collection Alterna- “Consideration necessary.” intrusive than tives,” the issue “not though even was by (Boiarsky) raised representative [ ] C. Notices to Cloverdale as an in the CDP or hear- issue” Ops and LeStat of determination ex- ing. The notice During that, pendency of Gillum’s CDP plained 2007, 15, hearing, May the IRS sent proposal,] Appeals re- [t]o evaluate this Cloverdale, alter of letters as Gil- viewed the collection administrative case lum, Ops,” and a as “LeStat trust known file. file contained financial state- This (forms 433-B) pro- as nominee These letters of Gillum. ments 433-A tax liens notice of vided taxpayer pen- were under signed 26, a right It advised entities of CDP perjury alties of on October hearing. By letters dated employees’ June produced actions a “CDP hear- timely requested these two entities CDP ing impartial” [that] neither fair nor 25, 2007, hearings. On June IRS Revenue and denied process. Gillum due As to the Officer Robert Brown sent letters to Clo- letters, June Gillum asserted that Ops acknowledging verdale and LeStat officer, the revenue supervisor, ceipt hearing requests advising but Schroeder “refused to discuss or explain they the entities that were “not entitled to why Clinic, LLC, Cloverdale Animal LeS- a taxpayer CDP as the previ- has tat Ops, Pireaus Group, and MRMLBS ously rights been afforded CDP nominees, were considered to be transfer- indicated, these tax periods.” same Brown ees, alter-egos taxpayer” however, that the entities were “entitled to “declined to just elaborate as to how Appeal Collection immediate [his] such explanation discussion or might ‘place manager.” the Government’s in jeopardy[.’]” interests Gillum contended that
D. denial “[t]he Tax Court rights with respect nominee, to the July timely peti- Gillum transferee, and alter-ego matters consti- tioned judicial the tax court for review of tutes a denial of constitutional pro- due the IRS Office’s determination. cess.” Gillum asked that the tax court overrule “the determinations the Notice of De- In accordance with Tax Court Rule termination.” Additionally, sought Gillum 91(e), Gillum and the agreed
judicial review of the June 2007 letters stipulation facts, which was “conclusive.” the IRS sent to four entities that According to stipulation, “[a]ny rele- created, including Cloverdale and materiality vance or objection may be Ops, denying LeStat them the opportunity made with respect to any part all or of this for CDP hearings with respect to the fil- stipulation submission, at the time of but ing of tax against liens them as Gillum’s nominees, all other alleged transferees, evidentiary objections are waived egos.7 In petition, specifically unless expressed Gillum asserted within this levy filing stipulation.” and tax-lien were “invalid they because are in contra- stipulated administrative record in- vention of plea agreement and court (1) cluded, alia, inter Schroeder’s Case order.” Additionally, alleged (2) Activity Record; (3) 433-A; Form Schroeder and other IRS employees “re- (4) 433-B; Form a memorandum dated *8 fused to explain discuss or the factual ba- February 2007, from IRS Revenue Of- sis” determination, for the notice of denied ficer Brown to IRS district in counsel him an opportunity to address the facts City, Oklahoma, Oklahoma requesting ap- underlying the determination, notice of proval to ego file alter and and nominee liens “declined to just elaborate as to how any against and such levies several explanation discussion or entities Gillum might (“Brown ‘place (5) the Government’s created request”); interests in jeop- several dia- ardy[.’]” According Gillum, to grams detailing IRS alleged Gillum’s "The record contains the June received similar letters also dated June letters, supra, described [IRS] Revenue 2007. The copies record not does contain Officer Robert Brown to Cloverdale and Les- Gillum, any such letters.” 2010 WL Ops. petition tat The seems to assert that two 5393884, at *5 n. 9. entities, MRMLBS, other Group Pir[ea]us and (6) activities8; trial, the During stipulation a memo- facts and nominee Area from IRS Associate Counsel objection. randum exhibits were admitted without City in Meneely K Oklahoma Bruce Schroeder was sole witness. Schroe- request (“Meneely to Brown sponding that der testified record administrative memorandum”). as in “complete,” was certified his declara- tion. that Schroeder confirmed “the facts counsel, trial, Boiarsky,
Prior to Gillum’s upon making that in relied deter- [he] [his] memorandum indicat- pretrial submitted Schroeder, part [were] he call minations of the administrative ing that would officer, as a to elicit witness record.” settlement
testimony that Schroeder Boiarsky then had Schroeder read the to or the factual explain refused discuss entitled paragraph “Consideration of Col- any basis CDP determina- lection Alternatives” contained the no- tions; that, accordingly, opportunity no Boiarsky tice of determination. focused any to to address [Gillum] was afforded that, on the paragraph’s statement in eval- upon underlying facts relied uating alternative, Gillum’s collection determinations; that making those he had Schroeder reviewed the collection ad- any expla- stated such discussion case file. file ministrative This “contained “place nation Government’s would documentation and information secured that he jeopardy”; interests in fur- verify Collection an effort to tax- just as to how ther declined elaborate financial payer’s Boiarsky statements.” explanation might such discussion Schroeder, asked “The documentation and interests “place Government’s referred in that information notice of
jeopardy.” determination, where in the administrative trial, morning the tax court record is that documentation informa- arguments heard on Commissioner’s Boiarsky gave tion?” Schroeder the com- subpoena quash for Schroe- motion record, plete and Schroeder testimony corresponding der’s motion Activity then reviewed the Record Case Boiarsky argued in limine. that the court contained therein. testified deny the motions. The court should asked AX, he “Exhibit Boiarsky’s was that whether “contention” activities,” Mr. Gillum’s which was con- was “the administrative record incom- tained in the Ex- administrative record. Boiarsky responded, “In plete,” request. hibit AX was Brown Schroe- Boiarsky regard, yes.” argued that “the der confirmed that supply he did an give ... failed to ade- appeals officer Boiarsky Brown during the explanation for the quate determination.” however, hearing; he testified that grounds, on those the court decided Based he did discuss document Boiarsky “an permit opportunity general “in terms.” Schroeder also identi- develop least this evidence.” court fied other documents in the administrative say point prepared “not at this in making record that he relied on might some there not be evidence that is *9 AZ,” the determination—“Exhibit Menee- missing from the administrative record” memorandum, AY,” ly “Exhibit it was know at and noted that “hard to this “work from the revenue officer point.” product prepared *3 "The record does not reveal who n. 7. Gillum, diagrams.” WL these file, though actually. Again, dia- his memoran- obtained from by Mr. dum to and from counsel. gram[m]ing employed the schemes Schroeder, he According sup- Gillum.” Q. [by All Boiarsky]: right. But information, plied along this you that information information that is Boiarsky “in Forms 433-A 433-B to upon making your determina- general terms.” determination; your tions notices of is that correct? information in The Thereafter, following exchange oc- collection— curred Schroeder: between Yes, [by yes. A. Schroeder]: Q. I [by Boiarsky]: Okay. If under- Q. [by Boiarsky]: But that informa- sir, your testimony, stand it’s that the part tion is not of administrative here, administrative record which under- record? authored, you lies the determination that [by part record contains the A. Not of Schroeder]: necessary support information those administrative record. determinations; is that correct? The Q. [by Boiarsky]: And was not dis- administrative record the infor- contains during closed me the collection due necessary support mation the conclu- process proceeding? you sions that reached and the determi- [by Only general A. Schroeder]:
nations? terms. A. [by That is not cor- Schroeder]: cross-examination, attorney rect. whether, Downs asked Schroeder “[w]hen Q. Boiarsky]: [by please Then clari- compiled [he] record deter- [his] [his] fy me. that for mination, that record ... contained] [by A. I guess Schroeder]: issue information that relied on from [he] or not the whether revenue officer’s collection file.” specifically Counsel part case file is the administrative ferred Schroeder to three documents— record; asking? is that what we’re AX, AY[,] “Exhibits and AZ.” Schroeder
Q. Boiarsky]: [by No. confirmed that he took three docu- “[t]hose ... ments the revenue officer’s case [by A. I Again, Schroeder]: don’t file.” if know the entire revenue officer case
file in there. tax court sustained the IRS’s “de-
Q. [by Boiarsky]: you’re but It’s not terminations sustaining certainly free to look at record notice Federal tax lien and the you as being complete certified to see if Gillum, levy.” 2010 WL at *8. you it’s Do there. not know whether it’s First, the rejected court Gillum’s challenge there? liabilities, underlying to his concluding that “criminal [by plea agreement
A. I Gillum’s Schroeder]: don’t know pile judgment ordering what’s in restitution did papers right not dis- now. charge, do not limit [the IRS’s] assess- Q. [by Boiarsky]: Okay. you’d If of, ment and collection civil tax [Gillum’s] like to take a moment then look? years liabilities for his taxable complete There’s the file. should It be through 2002.” Id. at *7. fairly easy identify the collection offi- record, cer’s would it not? Second, the court concluded Schroe- [by A. That reject- Schroeder]: Yes. file’s der not abuse “did his discretion here. Parts of that are ing file here collection alternative based on *10 par- record because collectibility.” “[t]he at *8. The administrative Id. as doubt the “only stipulated stipulated ... that collection alter- ties have found that court exhibits, to limit in which include the materials [Gillum] [was] that native $246,226; liability to through complete ‘constitute the adminis- question, his 1996 i.e., amount of restitution ordered in case[.’]” trative record this Id. proceed- in the criminal District Court court also noted that because Schroeder’s at The court found that Id. *7. ing.” testimony probative trial “had little value discretion in did not abuse his Schroeder rel[y] relevancy,” upon or it did “not as an this “collection alternative” rejecting testimony analysis holdings.” in [its] there “offer-in-compromise” because was Id. collectibility, liability as to nor no doubt the tax to ad- Finally, court declined that collection al- “argued his
had Gillum Ops dress whether Cloverdale LeStat promotion of was for the effec- ternative hearings as improperly were denied CDP *7-8. Id. at tive tax administration.” of Gillum egos or nominees “because Third, rejected Gillum’s the tax court they parties proceeding.” to this are a fair collec- “that he was denied argument Id. *8. hearing the settlement officer tion because his all representative not disclose to did II. Discussion information in the collection adminis- file the settlement officer had trative appeal, argues that the (1) in his reaching conclusions.” Id. reviewed in upholding court the IRS’s erred “[cjollection court, According to at *8. notice of determination because he was not in hearings are conducted an informal set- (2) failing hearing afforded a fair CDP right that does not include the ting egos recognize his asserted alter out discovery.” The court pointed Id. and nominees were entitled to a CDP that the offi- information settlement “[t]he hearing. related matters
cer reviewed petitioner’s should have been within knowl- Hearing A. Fairness CDP did in fact edge, and settlement officer in argues the tax court erred petitioner’s representative share fair concluding that he was afforded a petitioner’s of his concerns nature about Schroeder, hearing because the set- nondisclosure of income and assets.” Id. officer, information that tlement relied on And, emphasized court that Gillum’s part was not of the administrative record “all failure to submit Schroeder as- making his determination. Gillum quired financial information reason § guarantees that 26 serts U.S.C. reject officer to enough the settlement an right him fair before Id. The court his collection alternative.” right and a impartial settlement officer not see that the settlement officer’s “d[id] judicial underlying on the review based or nondisclosure of the materi- disclosure to Gil- According administrative record. bearing in question significant als had lum, provid- admitted at trial to of [Gillum’s] on the fairness or outcome an record ing incomplete footnote, court hearing.” Id. In a not- He the tax court. contends that Schroe- that Schroeder had reviewed Brown ed information upon der nonrecord Meneely memorandum determinations, thereby de- making n. his Id. at *8 making determination. basis adequate tax court of an priving claim that rejected The court Gillum’s that even for review. Gillum contends were not included these documents *11 644 may Tax
though levy “there be information available in the Court because the of administrative file portion underlying liability revealed related to for [Gillum’s] tending support the determinations unpaid (citing income tax.” Id. 26 C.F.R. 301.6330—1(f)(2)). reached,” such § is insufficient information of “Review the admin- uphold “because with- determination markedly istrative decision is deferential: admittedly out of all information disclosure if of tax not in dispute, the amount owed is deprived upon, any Court is may courts disturb deci- any opportunity real to evaluate unfairness only sion if it constituted ‘a clear abuse of partiality, including or circumstances of taxpayer discretion in the sense of clear ” bias, communication, parte ex improper by Fifty abuse and unfairness the IRS.’ ‘prior pro- involvement’ which the statute Marketing, Below Sales & Inc. v. United hibits.” (8th States, Cir.2007) 497 F.3d 830 Robinette, 459). (quoting 439 F.3d
“Congress created an administrative the IRS [W]here followed statutes commonly proceeding, known as a ‘collec- regulations grants governing of re- process hearing,’ tion due the Internal lief, Comm’r, Speltz see v. 454 F.3d Restructuring Revenue Service and Re- (8th Cir.2006), 784-85 and the appeals Comm’r, form Act of 1998.” v. Robinette Cir.2006). officer took into (8th taxpayer’s account 439 F.3d 458 Subsec- (a) statutory alternative and the § 26 “requires tion of U.S.C. no- test, balancing prescribed followed the taxpayer right tice to the of a to a hearing procedures, gave decision, a (b) reasoned levy made,” before a is and subsection rely any improper and did not on crite- “guarantees right to a fair hearing contrary ria or facts are to the impartial before an officer the Inter- evidence, may we simply not reverse nal Revenue of Appeals.” Service Office weighed because we would eq- have During hearing, taxpayer Id. the CDP differently appeals uities than the officer permitted to “‘any raise relevant issue Comm’r, did. Orum v. See F.3d relating unpaid the proposed tax or (7th Cir.2005). 820-21 levy,’ including ‘challenges to the appropri- actions,’ ateness of collection and ‘offers of Id. This court’s review of the lower court’s alternatives, may include (“Our decision is de novo. Id. review of ” ... an offer-in-compromise.’ (quot- Id. novo.”). the district court’s decision de 6330(c)(2)(A)). ing § 26 U.S.C. ap- “The purposes of Tax Court “[F]or re peals officer then must consider whether view” of a “Notice of Determination issued any proposed collection action ‘balances by Appeals,” “the administrative record” the need for the efficient collection taxes consists of legitimate person concern file, including taxpayer’s [t]he case any collection action no be more intru- hearing, any other written necessary.’” (quoting sive than Id. communications and information from 6330(c)(3)(C)). § U.S.C. taxpayer or the taxpayer’s author- 6330(d)(1) Section “affords ized representative submitted in connec- right judicial review of the determina tion with the CDP hearing, notes made officer, tion by impartial hearing by employee an officer either the Tax Court or a United States oral taxpayer communications with the Court, District depending whether or the taxpayer’s representa- authorized tive, Tax jurisdiction.” Court has Id. In the Appeals memoranda created case, present “[j]udicial employee review ... was officer or in connection with
645
tax
hearing,
any
agree
docu-
with the
court that Gillum
other
We
the CDP
fair
wpon by
relied
the was not denied a
based
ments or materials
making
in
employee
purported
or
on
reliance on infor-
Schroeder’s
officer
under
part
section
not
determination
mation
was
administra-
6330(c)(3)....
making
record in
tive
his determination.
First,
assertion,
contrary to Gillum’s
A(4)
301.6330-1(0(2), Q &
Reg.
Treas.
not admit
providing
Schroeder did
an
added).
(2006)
Thus,
(emphasis
administrative
incomplete
record
the tax
of a
process
“court’s review
collection due
transcript
court.
trial
reveals that
appeals
an
officer
decision rendered
confirmed that the administra-
Schroeder
6330 is limited
the admin-
under section
“complete”
record was
and that “the
tive
officer,
appeals
before the
istrative record
upon making
in
[he]
[his]
facts
Fifty
subject
exceptions----”
to [some]
part of the
[were]
determinations
adminis-
Sales,
Second, collectibility.” (citing Kansky as to Id. assuming even that Schroeder v. (CCH) Comm’r, (2007); rely did 93 documents outside of the ad T.C.M. 921 Cri record, Comm’r, (CCH) ministrative such was harmless.ner v. error 86 T.C.M. Sanders, (2003))9 Cf v. Shinseki 556 U.S. . challenge rejecting brief he Nowhere Gillum’s does not abuse his discretion in Gillum’s alternative; instead, the tax court's conclusion that Schroeder did he jurisdiction matter because there was no Egos Alter and Nominees
B. of a issuance notice of determination” as also that “[b]ecause contends sent an IRS revenue officer to letters ... fair hearing question [was not] CDP purported Gillum’s nominees and alter to a right the denial impartial, Id. egos. respect the lien Furthermore, nominee and alter against asserted the tax court “[could not] ... properly of [Gillum] [cannot] entities affecting enter a decision [nominees admits that [they] be sustained.” Gillum egos] [are] because 6320(b)(2) provide § “does indeed [parties] U.S.C. ... proceeding.” *14 this Dalton hearing C.I.R., (2010) each tax only 393, one CDP for 26 (citing v. 135 T.C. 401 improper 301.6330-l(b)(3)). he that “an year,” but maintains § C.F.R. ” counted that ‘one.’ hearing” cannot “be as III. Conclusion Furthermore, argues although he egos are not permitted nominees alter Accordingly, judgment we affirm the of under hearing a CDP 26 C.F.R. court. the tax 301.6320—1(b)(2), ‘person’ § “the relevant [Gillum], party to here is is a [Gillum] COLLOTON, Judge, dissenting. Circuit Thus, Gillum concludes proceeding.” this This appeal challenges the Tax Court’s to the requested that he is entitled CDP review, 6330(d), § pursuant to 26 U.S.C. of hearing on behalf of his asserted nominees appeals a determination of an officer of egos. and alter in a Internal Revenue Service process hearing. hearing con-
In ar due response, Commissioner levy a lien and a made jurisdiction cerned of gues that tax court lacked property on the of Thomas M. Gillum. See an to review letters from IRS revenue 6330(b). 6320(b), §§ and 26 U.S.C. purported egos officer complains that Tax Court conducted jurisdiction nominees because the court’s 6330(d)(1) judicial incomplete review an adminis- § on 26 is limited under U.S.C. view, my record. claim has by trative In this reviewing Ap the IRS determinations merit, I and the error is not harmless. agree. peals Office. We therefore the case to the would remand “In cases the IRS to collect where seeks the ad- supplementation Tax Court for by levy, tax means of a lien or unpaid by that ministrative record and a decision jurisdiction an Tax Court has to review complete on a record. court by the adverse determination IRS Office Comm’r, a principle v. 600 F.3d It is basic of administrative Appeals.” Cleveland (7th Cir.2010). 739, Here, judicial con- of action an 741 law review should be conducted agency in his that the “asserted nomi- cedes brief complete and alter matters were neither administrative record. nee in principle ... No- the Adminis- nor considered This embodied addressed Thus, Act, provides tice of Determination.” “as trative Procedure [Gillum] concedes, reviewing never court shall review the “whole was a Office 706; § a 5 see matter and did not issue record.” U.S.C. Citizens involved Park, result, v. 401 Volpe, Inc. notice of Id. As a Preserve Overton determination.” 814, 28 136 subject- not 91 L.Ed.2d “the Tax Court have U.S. S.Ct. [does] part of the only argues a fair that was not administra- that he was afforded formation making his determination. on in- tive record because Schroeder relied 648
(1971) (“[R]eview is to be based on
sponse
parties
that the
had stipulated
full
Gillum,
administrative record that was
complete.
before the
record was
(CCH)
Secretary
at
the time he made his deci-
T.C.M.
2010 WL
sion.”)
added) (footnote
Commissioner,
n.
however,
*8
13. The
(emphasis
omit-
ted).
should not be heard
rely
on such
prevents
party
The rule
from with-
stipulation when
appeals
officer
holding
subse-
evidence unfavorable to its case or
quently admits before the Tax Court that
defending a
post-hoc
determination with
he relied on information that was not
rationalizations. Walter 0. Boswell Mem’l
among the stipulated exhibits. “For
Heckler,
Hosp. v.
F.2d
go
view to
record,
forward on a partial
we
(D.C.Cir.1984). This court
concluded
would have to be convinced that the selec-
Commissioner,
Robinette v.
When Gillum argued to the Tax Court Gillum deprived appropriate judi that the administrative record was incom- cial review of the on a com plete, E-7; App. 7-9, Brief of Petitioner at plete administrative record. par That the Commissioner, Gillum v. 100 T.C.M. tial record presented to the Tax Court (CCH) (2010) (No. 16110-07L), 562 may include sufficient evidence to support WL the Tax only Court’s appeals officer’s determination is not partial only With to affirm. grounds record, cannot know we would have sus- the Tax Court
whether appeals the determination
tained record, or whether complete on a
officer Tax should be by Court
such decision full record. appeal with a
affirmed record, also whole can-
Without the por- explore whether undisclosed impermissible record show
tions officer, appeals
“prior involvement” 6330(b)(3), §
see other U.S.C. fairness of the challenging
grounds process hearing.
due reasons, I would vacate the
For these Tax Court and remand the
decision for consideration of
case to the Tax Court appeal on full administrative
Gillum’s
record. *16 America,
UNITED STATES
Appellant,
v. HURT;
Bobby R. L. Sue
Hurt, Appellees.
No. 11-1925. Appeals,
United States Court of
Eighth Circuit. Jan. 2012.
Submitted: April
Filed: