Estate of Deese v. Comm'r

MEMORANDUM OPINION

THORNTON, Judge: This matter is before the Court on respondent's motion for summary judgment, filed pursuant to Rule 121. ¹ As discussed in detail below, we shall grant respondent's motion.

On October 7, 1997, respondent received a Form 870-AD, Offer to Waive Restrictions on Assessment and Collection of Tax Deficiency and to Accept Overassessment, showing signatures of Bonnie W. Deese (Mr. Deese) and his wife Gladys Deese (Ms. Deese), consenting to the immediate assessment and collection of specified deficiencies in their joint Federal tax liabilities for taxable years 1990 through 1994. On December 26, 1997, Mr. Deese died. On February 9, 1998, respondent assessed these agreed-upon deficiencies along with interest.

On August 21, 2002, respondent sent the deceased Mr. Deese a Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC Section 6320 with *379 respect to taxable years 1991, 1993, and 1994. No collection hearing was requested in response to this notice.

On February 23, 2005, respondent sent the deceased Mr. Deese another Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC Section 6320, this time for taxable years 1990 through 1994. In response to this notice, on April 4, 2005, Ms. Deese, as personal representative of the deceased Mr. Deese, submitted a Form 12153, Request for a Collection Due Process Hearing (CDP hearing).

After a face-to-face hearing between respondent's Appeals officer, Ms. Deese, and her C.P.A. representative, respondent's Appeals Office issued petitioner a Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330 for taxable years 1990 and 1992. Respondent also issued petitioner a Decision Letter Concerning Equivalent Hearing Under Section 6320 and/or 6330 for taxable years 1991, 1993, and 1994. The notice and decision letter upheld the filing of notice of tax lien against the deceased Mr. Deese for the respective relevant years.

On July 19, 2006, the petition was timely filed. Ms. Deese, then residing in Georgia, signed the petition as "Personal Representative *380 for Bonnie W. Deese (deceased)". ² On September 5, 2007, respondent filed his motion for summary judgment. On September 6, 2007, we ordered petitioner to file a response to respondent's motion for summary judgment by October 3, 2007. The Court has received no response.

Summary judgment may be granted where there is no genuine issue of any material fact, and a decision may be rendered as a matter of law. Rule 121(a) and (b); see Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), affd. 17 F.3d 965 (7th Cir. 1994); Zaentz v. Commissioner, 90 T.C. 753, 754 (1988). When a motion for summary judgment is made and properly supported, *381 the adverse party may not rest upon mere allegations or denials of the pleadings but must set forth specific facts showing that there is a genuine issue for trial. Rule 121(d). If appropriate, a decision may be entered against a party who fails to respond to a motion for summary judgment. Id.

Section 6321 imposes a lien in favor of the United States on all property and property rights of a person who is liable for and fails to pay tax after demand for payment has been made. For the lien to be valid against certain third parties, the Secretary must file a notice of Federal tax lien; within 5 business days thereafter, the Secretary must provide written notice to the person against whom the lien is filed. Secs. 6320(a), 6323(a). Within 30 days commencing the day after the end of the 5 business days, the person may request an administrative hearing before an Appeals officer. Sec. 6320(b)(1); sec. 301.6320-1(c)(1), Proced. & Admin. Regs.

At the Appeals Office hearing, the person against whom the lien is filed generally may raise any relevant issue, including spousal defenses, challenges to the appropriateness of the Commissioner's intended collection action, and possible alternative means *382 of collection. Secs. 6320(b)(4), 6330(c)(2). At the hearing, the person may challenge the existence or amount of the underlying tax liability only if the person did not receive a notice of deficiency or did not otherwise have an opportunity to dispute the liability. Sec. 6330(c)(2)(B); see Sego v. Commissioner, 114 T.C. 604, 609 (2000); Goza v. Commissioner, 114 T.C. 176, 180-181 (2000). Once the Appeals Office issues a notice of determination, the person may seek judicial review in this Court. Secs. 6320(c), 6330(d)(1).

In the petition, Ms. Deese contends that she, as "the surviving spouse", should not be liable for the underlying tax liabilities. The proposed collection action and notice of determination upon which this case is based, however, relate only to the unpaid tax liabilities of the deceased Mr. Deese. Consequently, notwithstanding that Ms. Deese may be responsible for paying the underlying joint tax liabilities both in her individual capacity and in her capacity as the personal representative of Mr. Deese's estate, her personal liability in either capacity is outside the scope of judicial review in this proceeding.

Moreover, by submitting the Form 870-AD, consenting to the *383 immediate assessment and collection of their deficiencies, Mr. and Ms. Deese waived their right to a notice of deficiency and gave up any right to challenge their underlying liabilities in a collection proceeding. See sec. 6330(c)(2)(B); Aguirre v. Comm'r, 117 T.C. 324, 327 (2001); Rivera v. Comm'r, T.C. Memo 2003-35, affd. 102 Fed. Appx. 594 (9th Cir. 2004). ^3*384 Hence, to the extent that petitioner means to challenge the underlying liabilities of Mr. Deese, such a challenge is precluded in this collection proceeding.

We conclude that there is no genuine issue of material fact requiring a trial in this case. We hold that respondent is entitled as a matter of law to the entry of a decision sustaining the filing of the notice of tax lien.

An appropriate order and decision will be entered.