On August 2, 2021, the Tax Court issued its opinion in Belair v. Commissioner (157 T.C. No. 2). The primary issue presented in Belair v. Commissioner was whether in a CDP nonliability case the traditional rules of summary judgment are appropriate.
Holding in Belair v. Commissioner
In a CDP nonliability case such as this, the Tax Court’s decision turns on whether the administrative record shows an abuse of discretion, and the Tax Court’s traditional rules of summary judgment are generally not appropriate. Instead, summary judgment serves as a mechanism for deciding, as a matter of law, whether Appeals’ determination is supported by the administrative record and is not arbitrary, capricious, or without sound basis in fact or law.
Procedural Background to Belair v. Commissioner
The petitioner, Mary T. Belair, timely petitioned the Tax Court after Appeals determined that she was not eligible for an installment agreement as she had requested. See IRC § 6320(c); IRC § 6330(d)(1).
After answering the petition, the IRS moved for summary judgment. The motion was supported by the declaration of the Appeals officer who drafted the notice of determination in question. The petitioner did not challenge the Appeals officer’s declaration, nor did she dispute the completeness of the administrative record. Thus, the IRS prevailed on its motion for summary judgment.
The Train Pulls into Crazytown
The IRS issued a notice of federal tax lien filing for 2013, 2014, and 2015. In response to the notice, the petitioner timely mailed a Form 12153 (Request for Collection Due Process or Equivalent Hearing) on April 3, 2019.
In that request petitioner indicated her interest in an installment agreement and claimed that she and her husband had won judgments in the tens of millions of dollars against a former United States Attorney for the District of Connecticut (U.S. attorney); these judgments, according to petitioner, were to be paid on April 15, 2019. The petitioner reiterated during the CDP conference that she was expecting $20 million as a result of a lawsuit against a former U.S. attorney.
The petitioner also requested that her case be transferred to an Appeals office in California because she believed the DOJ was using Appeals in Connecticut to “get at” her. The petitioner also wanted a California settlement officer who, she stated, “better understood the economy of California.”
Appeals concluded that petitioner did not qualify for a collection alternative because she had not filed her delinquent returns. On December 16, 2019, the Tax Court received and filed petitioner’s timely mailed petition.
Petitioner resided in California at that time. In her petition she contended that the notice of determination is “fraudulent upon its face” and that Appeals failed to assist her in getting information necessary for her Form 433-A.
The petitioner repeated her contention that she is owed a $20 million judgment from an “illegitimate” former U.S. attorney and alleged the Appeals office in Connecticut was biased against her for that reason. Petitioner did not seek to challenge the “underlying tax liability” that respondent seeks to collect through the filing of the NFTL.
On March 15, 2021, the petitioner filed a response to respondent’s motion for summary judgment, repeating claims that she had previously made in a letter of demands dated December 14, 2019. She contended that IRS personnel failed to adhere to IRS mission statements in failing to acknowledge an allegedly “illegitimate” and “corrupt” former U.S. attorney.
Petitioner’s written response centers on this former U.S. attorney, and petitioner requests that we question an IRS official and assist in combating “extensive conspiratorial treasons” at high levels of Government. Petitioner’s response does not seek to challenge, nor even make any mention of, the “underlying tax liabilities” that respondent seeks to collect through the filing of the NFTL.
Applicable Law—Summary Judgments
A party may move for summary judgment regarding all or any part of the legal issues in controversy. See Rule 121(a); Wachter v. Commissioner, 142 T.C. 140, 145 (2014). The Tax Court may grant summary judgment if the pleadings, stipulations and exhibits, and any other acceptable materials show that there is no genuine dispute as to any material fact and that a decision may be rendered as a matter of law. See Rule 121(a) and (b); see also CGG Americas, Inc. v. Commissioner, 147 T.C. 78, 82 (2016); Elec. Arts, Inc. & Subs. v. Commissioner, 118 T.C. 226, 238 (2002).
However, this summary judgment standard is not generally apt where the Tax Court must confine itself to the administrative record to decide whether there has been an abuse of discretion. In a “record rule” case (such as a nonliability CDP or a whistleblower case), there will not be a trial on the merits.
In such a case, summary judgment serves as a mechanism for deciding, as a matter of law, whether the action is supported by the administrative record and is not arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. See Van Bemmelen v. Commissioner, 155 T.C. at 64, 78-79 (2020).
Closure of CDP Hearing
It is not an abuse of discretion for Appeals to move ahead with its final determination after an Appeals officer gives a taxpayer an adequate timeframe to submit requested items and the taxpayer fails to submit those items. See Pough v. Commissioner, 135 T.C. 344, 351 (2010).
No “Nonfrivolous” Arguments
The petitioner failed to offer a single nonfrivolous argument or evidence for why a second hearing or a transfer of her case to an Appeals office in California would have somehow altered Appeals’ final determination. The Tax Court observed that a transfer of her case to a California Appeals office would not change her filing noncompliance.
Considering that petitioner failed to submit the delinquent returns and Form 433-A within a reasonable time, it was not an abuse of discretion for Appeals to refuse her request for a second hearing or to transfer the case to a California Appeals office. See Pough, 135 T.C. at 351.
(157 T.C. No. 2) Belair v. Commissioner
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