Opinion
18912-19P
09-20-2021
David C. Barrick, Petitioner v. Commissioner of Internal Revenue, Respondent
ORDER AND DECISION
Ronald L. Buch, Judge
This case is before us on the Commissioner's motion for summary judgment. Because we find that the Commissioner did not err when he certified Mr. Barrick as an individual with a seriously delinquent tax debt, we grant the Commissioner's motion.
Facts
Mr. Barrick has amassed a total liability for 2013 and 2014 of at least $70,317. We will address each year in turn.
All monetary amounts are rounded to the nearest dollar.
Tax Year 2013
In 2014, David C. Barrick filed a frivolous tax return for his 2013 tax year. On December 22, 2014, the Commissioner assessed a $5,000 penalty against Mr. Barrick for filing that frivolous return. On January 12, 2015, Mr. Barrick filed his 2013 return. In addition to assessing the self-reported tax, the Commissioner assessed an addition to tax for failure to file a timely return, and interest.
See sec. 6702(a). Unless otherwise indicated, all section 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.
See secs. 6651(a)(1) and 6601(a), respectively.
On July 2, 2015, the Commissioner issued a notice of intent to levy for Mr. Barrick's 2013 penalty, tax, addition to tax, and interest. On November 9, 2015, Mr. Barrick requested a collection due process hearing. Because the request was untimely, the Commissioner granted him an equivalent hearing instead.
On June 16, 2016, after an equivalent hearing, the Commissioner sent Mr. Barrick a decision letter upholding the proposed levy for the 2013 liabilities, including interest, the first $5,000 penalty assessed, and penalties related to late filing.
During the collection process, the Commissioner assessed additional penalties of $5,000 and $10,000 for making further frivolous tax submissions. Those penalties were addressed in a later collection proceeding.
Tax Year 2014
Mr. Barrick untimely filed his 2014 return on December 17, 2015. In addition to assessing the self-reported tax, the Commissioner assessed an addition to tax for failure to file a timely return, an addition to tax for failure to timely pay the tax shown on the return, and interest.
See sec. 6651(a)(2).
The Commissioner also assessed two $5,000 penalties for frivolous tax submissions made with respect to 2014.
On September 29, 2016, the Commissioner issued a notice of intent to levy for Mr. Barrick's 2014 tax, penalties, and interest plus the frivolous tax submission penalties assessed during the 2013 collection process. Mr. Barrick did not request a collection hearing. On April 17, 2017, the Commissioner issued the levy proposed in the notice.
On July 27, 2018, the Commissioner placed a lien on Mr. Barrick's assets and notified Mr. Barrick of the lien on July 31, 2018. Mr. Barrick did not request a collection due process hearing.
At that point, Mr. Barrick had a total liability of $70,317.
On September 30, 2019, the Commissioner certified Mr. Barrick as an individual owing a seriously delinquent tax debt. Mr. Barrick received a notice of the certification, which included his total liability for 2013 and 2014.
On October 21, 2019, Mr. Barrick filed a petition with this Court while residing in Oklahoma. In his petition, Mr. Barrick makes frivolous allegations against the Commissioner and claims he never received notices of deficiency or determination for 2013, 2014, and 2015. On January 21, 2020, the Commissioner filed a motion to dismiss for lack of jurisdiction regarding all non-passport claims and Mr. Barrick's passport claim as to 2015. We granted the Commissioner's motion on August 18, 2020.
On October 20, 2020, the Commissioner filed a motion for summary judgment arguing that he did not err in certifying Mr. Barrick as an individual with seriously delinquent tax debt. Mr. Barrick did not respond.
Discussion
Under Rule 121(a), either party may move for summary judgment regarding all or any part of the legal issues in a controversy. We may grant summary judgment only if there is no genuine dispute of material fact. The party moving for summary judgment bears the burden of demonstrating that there is no genuine dispute of material fact. When a motion for summary judgment is properly made and supported, the nonmoving party may not rest upon mere allegations or denials in the pleadings, but must set forth specific facts showing a genuine dispute.
Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), aff'd, 17 F.3d 965 (7th Cir. 1994).
Section 7345 allows the Commissioner to certify that a taxpayer has a seriously delinquent tax debt. The Secretary of the Treasury transmits the Commissioner's certification to the Secretary of State, who may deny, revoke, or limit the taxpayer's passport. The Secretary of State, Secretary of Treasury, and Commissioner "are governed by separate and distinct rules, which impose different responsibilities on each and grant them varying degrees of discretion" during this process.
Rowen v. Commissioner, 156 T.C.___, ___ (slip op. at 16-17) (March 30, 2021).
A seriously delinquent tax debt is an unpaid, legally enforceable Federal tax debt of an individual (1) that has been assessed; (2) that is greater than $52,000, and (3) for which a lien has been filed pursuant to section 6323 and the administrative rights under section 6320 have lapsed or have been exhausted, or a levy is made under section 6331. A seriously delinquent tax debt does not include a debt that is being paid in a timely manner pursuant to an agreement or one where collection is suspended due to a collection due process hearing, an election under section 6015(b) or (c), or a request for relief under section 6015(f).
Sec. 7345(b)(1)(B) provides that the liability must be greater than $50,000, but after 2016, this amount is adjusted for inflation. Sec. 7345(f). The adjusted amount for 2019 was $52,000. See Rev. Proc. 2018-57, sec. 3.59, 2018-49 I.R.B. 827, 838.
In a case seeking judicial review of the certification of a seriously delinquent tax debt, we have jurisdiction to determine whether the Commissioner erred in certifying that a taxpayer has a seriously delinquent tax debt or that he erred in failing to reverse a certification. Our jurisdiction is limited to the actions of the Commissioner; we do not have jurisdiction to review any actions of the Secretary of State. If we determine that a certification was erroneous, we may order the Secretary of the Treasury to notify the Secretary of State of the error. We may grant no other form of relief.
Sec. 7345(e); Ruesch v. Commissioner, 154 T.C. 289, 295-296 (2020).
See Rowen v. Commissioner, 156 T.C. At __ (slip op. at 18-19).
Ruesch v. Commissioner, 154 T.C. at 294; Kaebel v. Commissioner, T.C. Memo. 2021-109, at *9.
Analysis
The Commissioner did not err when he certified Mr. Barrick as an individual with a seriously delinquent tax debt. The Commissioner assessed a $70,317 liability against Mr. Barrick, an amount well-above the $52,000 threshold. The Commissioner issued Mr. Barrick a notice of federal tax lien for the 2013 and 2014 taxable years in July 2018. Mr. Barrick had a 30-day period following issuance of the notice of federal tax lien during which he could exercise his administrative rights under section 6320. His opportunity to exercise these rights has lapsed. The Commissioner also issued a levy for Mr. Barrick's unpaid liability. The certification therefore met the requirements under section 7345(b)(1).
See sec. 6320(a)(3)(B).
Mr. Barrick appears to argue that because the Commissioner did not issue him notices of deficiency or notices of determination for the years at issue, the certification was in error. Mr. Barrick's claims must fail for multiple reasons. First and foremost, his claims are not properly before us in this case. As we held in Ruesch v. Commissioner, nothing in the text of section 7345 authorizes us to redetermine the underlying liability. Moreover, his claims are either unsupported or without merit. The liabilities underlying his passport revocation are a combination of self-assessed tax and assessable penalties, neither of which is subject to deficiency procedures. Thus, Mr. Barrick's claim that no notice of deficiency was issued is without merit; the Commissioner was not required to issue a notice of deficiency. Lastly, Mr. Barrick claims that the Commissioner did not send him notices of determination. A notice of determination is issued at the conclusion of a collection proceeding, which is initiated by making a timely request following either a notice of intent to levy or a notice of federal tax lien.But Mr. Barrick never made a timely request challenging either of these collection actions, so he was never entitled to receive a notice of determination.
Mr. Barrick also challenged his notice of deficiency and notice of determination for 2013-2015 as separate issues. We dismissed these claims for lack of jurisdiction.
Ruesch v. Commissioner, 154 T.C. at 296
Sec. 6703(b); Callahan v. Commissioner, 130 T.C. 44, 50-51 (2008) (stating that section 6702 penalties for filing a frivolous tax return are assessable penalties, to which statutory deficiency procedures do not apply).
Secs. 6330(a), (b), (d), 6320(a), (b).
The Commissioner's certification must be upheld. The Commissioner established that Mr. Barrick had a seriously delinquent tax debt. A liability in excess of the statutory threshold has been assessed, and collection rights have been exhausted. The liability is not being paid in a timely matter pursuant to an installment agreement, collection is not suspended due to a pending collection proceeding, and no request for innocent spouse relief under section 6015 is pending. Accordingly, it is
ORDERED that the Commissioner's motion for summary judgment filed October 20, 2020, is granted. It is further
ORDERED AND DECIDED that the Commissioner's certification set forth in the notice of certification dated September 30, 2019, is sustained.