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Судебные дела / Зарубежная практика  / Joseph B. BORGES and Maria R. Borges, Plaintiffs, v. UNITED STATES of America, Defendant., United States District Court, D. New Mexico., 317 F.Supp.2d 1276, No. 02-1109 MV/LAM., March 3, 2004

Joseph B. BORGES and Maria R. Borges, Plaintiffs, v. UNITED STATES of America, Defendant., United States District Court, D. New Mexico., 317 F.Supp.2d 1276, No. 02-1109 MV/LAM., March 3, 2004

24.06.2008  

Joseph B. BORGES and Maria R. Borges, Plaintiffs, v. UNITED STATES of America, Defendant.

United States District Court, D. New Mexico.

317 F.Supp.2d 1276

No. 02-1109 MV/LAM.

March 3, 2004.

Robert H. Jacobvitz, David T. Thuma, Jacobvitz, Thuma & Walker, Thomas How╜ard Toevs, Hurley, Toevs, Styles, Hamblin & Panter, PA, Albuquerque, NM, for Plaintiffs.

Christopher R. Egan, Trial Attorney, Tax Division, Dallas, TX, for Defendant.

MEMORANDUM OPINION AND ORDER

VAZQUEZ, District Judge.

THIS MATTER comes before the Court on Defendant's Motion to Strike Plaintiffs' Expert, filed June 3, 2003, [Doc. No. 19] , Defendant's Motion for Summary Judg╜ment, filed June 20, 2003, [Doc. No. 23] , and Plaintiffs' Motion for Leave to Amend Complaint or for Remand, filed June 23, 2003, [Doc. No. 25] . The Court, having considered the motions, briefs, relevant law and being otherwise fully informed, finds that Defendant's Motion for Sum╜mary Judgment will be DENIED and De╜fendant's Motion to Strike Plaintiffs' Ex╜pert and Plaintiffs' Motion for Leave to Amend Complaint or for Remand will be DENIED as moot .

FACTUAL BACKGROUND

Plaintiffs Joseph and Maria Borges ("Plaintiffs") challenge the Internal Revenue Service ("IRS") Appeals' approval of a levy against the Plaintiffs' assets to collect delinquent employment taxes. 1 In Febru╜ary, 2002, the IRS sent Plaintiffs a Notice of Intent to Levy to collect $414,997.05 in delinquent employment taxes owed by Plaintiffs' dairy, J & M Dairy, for tax years 1999 and 2000. Plaintiffs timely re╜quested a collection due process hearing with IRS Appeals. Pursuant to this re╜quest, IRS Appeals held various confer╜ences with Plaintiffs' representative, Sue Taylor, from May 2002 through July 2002.

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1. ═ On Defendant's Motion for Summary Judg╜ment, the facts must be taken in the light most favorable to Plaintiffs; accordingly, in the recitation of the facts, the Court will de╜scribe the facts as supported by the Plaintiffs' evidence.

************

On May 30, 2002, IRS Appeals Officer Angela Carmouche held a telephone con╜ference with Taylor. During this confer╜ence, Taylor told Carmouche that Plain╜tiffs wanted to pay the delinquent taxes through an installment plan because a levy would destroy J & M Dairy. Taylor also mentioned that for 2001-a year not at issue in this case-Plaintiffs had incorrect╜ly filed a Form 941 rather than a Form 943 and requested that all debits and cred╜its attached to the Form 941 be moved to a correct Form 943. Carmouche requested that Plaintiffs provide financial disclosures by June 25, 2002.

On June 28, 2002, Carmouche held a second telephone conference with Taylor. Carmouche had not received Plaintiffs' fi╜nancial disclosures yet, so Taylor and Car╜mouche discussed other compliance issues. J & M Dairy had previously declared bankruptcy and Plaintiffs were paying bankruptcy debts, including employment taxes from 1995 and 1996 ("pre-petition taxes"), pursuant to a chapter 11 plan. Carmouche questioned whether Plaintiffs' bankruptcy obligations would prevent them from honoring an installment plan. Carmouche also expressed concern about recent underdeposits of J & M Dairy's 2002 employment taxes. The parties dis╜cussed the fact that several payments in╜tended for Plaintiffs' post-petition liabili╜ties had been applied erroneously to Plaintiffs' pre-petition liabilities.

Shortly after the second telephone con╜ference, Carmouche received a letter from Taylor enclosing Plaintiffs' financial disclo╜sures and J & M Dairy's expense details; formally requesting the Form 941 to Form 943 adjustment for 2001; and proposing a monthly installment plan for payment of the 1999-2000 taxes. Plaintiffs proposed minimum installment payments of $2,500 a month on the 1999-2000 taxes with an increase of $3,595 per month, for a total of $6,095 per month, after Plaintiffs had fin╜ished paying their pre-petition taxes. The letter did not indicate when the pre-peti╜tion taxes would be paid but did state that Plaintiffs had made approximately 46 pay╜ments of $3,500 towards the $176,544.20 owed in pre-petition taxes. The financial disclosures and other tax return reports showed that J & M Dairy's cash method net income had decreased from a $436,971 profit in 1998 to a $594,737 loss in 2001. Plaintiffs Collection Information State╜ment indicated that J & M Dairy's 2002 first quarter net income was $900.

On July 22, 2002, Carmouche received another letter from Taylor that explained the 2002 tax deposits and the corrective action taken for payment of the under╜deposited amount; provided the dates and amounts of Plaintiffs' final payments on their bankruptcy obligations; and enclosed a statement regarding J & M Dairy's con╜tributions to the local economy. The statement provided, in part, that closing J & M Dairy would create a hardship on the dairy's 55 employees and their families as well as on the surrounding rural communi╜ties, where the dairy spends over $9.000,000.00 annually. The letter re╜quested that IRS Appeals approve an interim installment agreement until Plain╜tiffs qualified for an offer in compromise.

Carmouche determined that an install╜ment plan would not be viable for three reasons. First, Plaintiffs had a history of compliance problems. Second, J & M Dairy's financial information did not show enough cash flow to make reasonable in╜stallment payments. Third, a monthly payment of $2,500 would not even cover the interest on Plaintiffs' tax debt. In addition, Carmouche determined that Plaintiffs did not qualify to make an offer of compromise due to the missing 2002 tax deposit and because Plaintiffs had incor╜rectly filed a Form 941 for tax year 2001 instead of a Form 943.

On July 26, 2002, Carmouche held a conference with Taylor and explained her decision not to grant an installment plan. On July 29, 2002, Taylor sent a letter proposing an alternative installment plan based on the price of milk. Under this plan, the proposed $2,500 minimum month╜ly payment to the IRS would be increased by $1,000 for each $1 increase in the monthly "mailbox" milk price above $12. This increase would be in addition to the increase when Plaintiffs' pre-petition taxes were paid. In her letter, Taylor reiterated that the proposed levy would cause the dairy to close, resulting in hardship to the dairy's employees and possible death to the dairy cows and cattle, and requested that the IRS accept the installment agree╜ment as an interim measure until Plaintiffs qualified to submit an offer in compromise. Carmouche discussed this proposal with Taylor, but, again, decided against an in╜stallment plan.

On August 6, 2002, IRS Appeals issued a Notice of Determination sustaining the IRS levy against Plaintiffs. The Notice concludes that a levy was appropriate be╜cause no viable collection alternative had been proposed. Plaintiffs' proposed installment plan was rejected because Plain╜tiffs had not demonstrated the financial ability to make the proposed installment payment; the proposed payment of $2,500 would be insufficient to full pay the liabili╜ty and Plaintiffs would not have available funds to increase installment payments to the IRS in any significant amount until their bankruptcy obligations were satisfied in October 2005; and Plaintiffs had a histo╜ry of poor compliance. The Notice stated that while an offer in compromise "may be a viable collection alternative," Plaintiffs would not be eligible to submit such an offer until the following month, at the ear╜liest.

Plaintiffs timely filed their Complaint in this Court, seeking to have this Court overrule or reverse the decision of the Appeals Office and require the IRS to (1) suspend the enforcement action; (2) give due and proper consideration to an install╜ment agreement and an offer in compro╜mise; and (3) consider less intrusive ac╜tions against Plaintiffs in collecting the delinquent taxes. Defendant filed a mo╜tion for summary judgment arguing that IRS Appeals did not abuse its discretion when it decided not to grant an installment plan.

Plaintiffs subsequently filed a motion for leave to amend their complaint to chal╜lenge the correct amount of payroll taxes owed by Plaintiffs for tax years 1999 and 2000 or, in the alternative, for a remand to IRS Appeals to hold a hearing with a sufficient record of the evidence or argu╜ments presented as well as the analysis used by the appeals officer in making the determination. Defendant opposes the amendment on the grounds that it is futile and causes undue delay and opposes the remand on the grounds that the record is sufficient. Defendant has also filed a mo╜tion to strike Plaintiffs' expert witness on the grounds that the Court's review is limited to the information before the Ap peals Officer when the challenged decision was made and therefore expert testimony that was not provided to the Appeals Offi╜cer may not be considered by the Court.

LEGAL STANDARD

I. Summary Judgment

Summary judgment is appropriate "if the pleadings, depositions, answers to in╜terrogatories, and admissions on file, to╜gether with the affidavits, if any, show that there is no genuine issue as to any materi╜al fact and that the moving party is enti╜tled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); Jones v. Kodak Medi╜cal Assistance Plan, 169 F.3d 1287, 1290 (10th Cir.1999). Under Rule 56(c), "the mere existence of some alleged factual dis╜pute between the parties will not defeat an otherwise properly supported motion for summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Rather, "[o]nly disputes over facts that might af╜fect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson, 477 U.S. at 248, 106 S.Ct. 2505.

Initially, the moving party bears the burden of demonstrating the absence of a genuine issue of material fact. See Shapolia v. Los Alamos Nat'L Lab., 992 F.2d 1033, 1036 (10th Cir.1993). There is no requirement that the moving party ne╜gate the nonmovant's claim. See Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the moving party meets its burden, the nonmoving party must show that genuine issues remain for trial "as to those dis╜positive matters for which it carries the burden of proof." Applied Genetics Int'l Inc. v. First Affiliated Secs., Inc., 912 F.2d 1238, 1241 (10th Cir.1990) (citations omitted). Rather than "merely show there is some metaphysical doubt as to the material facts," the nonmoving party is required to "go beyond the pleadings and, by affidavits or depositions, answers to interrogatories, and admissions on file, designate specific facts showing there is a genuine issue for trial." Kaus v. Stan╜dard Ins. Co., 985 F.Supp. 1277, 1281 (D.Kan.1997), aff'd, 162 F.3d 1173 (10th Cir.1998). There is no issue for trial un╜less there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. See Anderson, 477 U.S. at 248, 106 S.Ct. 2505. Upon a motion for summary judgment, the Court "must view the facts in the light most favorable to the nonmovant and allow the nonmovant the benefit of all reasonable inferences to be drawn from the evi╜dence." Kaus, 985 F.Supp. at 1281.

II. Leave to File Amended Complaint

Under Rule 15 of the Federal Rules Of Civil Procedure, leave to file an amended complaint is within the discretion of the Court and shall be freely given. Fed.R.Civ.P. 15. Absent an apparent rea╜son to refuse leave to amend, such as undue delay, bad faith, dilatory motive, repeated failure to cure deficiencies through amendment, prejudice to an op╜posing party, or futility of amendment, a party should be given leave to amend. See, e.g., Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962).

DISCUSSION

I. Statutory Structure

In July 1998, the Internal Revenue Ser╜vice Restructuring and Reform Act of 1998 was enacted. Title 26 U.S.C. ╖ 6331 pro╜vides that

(a) Authority of Secretary-If any person liable to pay any tax neglects or refuses to do so within 10 days after notice and demand, it shall be lawful for the Secretary to collect such tax . . . by levy upon all property and rights to property . . . belonging to such person.

26 U.S.C. ╖ 6331.

Before proceeding with the levy, howev╜er, the IRS must provide the taxpayer notice of the right to a hearing on the matter. 26 U.S.C. ╖ 6331. The taxpayer then has a right to request a collection due process hearing ("CDP hearing") with the IRS Office of Appeals. 26 U.S.C. ╖ 6330(a)(3)(B). The requirements for a collection due process hearing are set out in 26 U.S.C. ╖ 6330. First, "[t]he appeals officer shall at the hearing obtain verifica╜tion from the Secretary that the require╜ments of any applicable law or administra╜tive procedure have been met." 26 U.S.C. ╖ 6330(c)(1). Thereafter, the taxpayer "may raise . . . any relevant issue relating to the unpaid tax ...." 26 U.S.C. ╖ 6330(c)(2)(A). The taxpayer may also raise challenges to the existence or amount of the underlying tax liability for any tax period if the person did not receive any statutory notice of deficiency for such tax liability or did not otherwise have an op╜portunity to dispute such tax liability. 26 U.S.C. ╖ 6330(c)(2)(B). Finally, the ap╜peals officer must consider "whether any proposed collection action balances the need for the efficient collection of taxes with the legitimate concern of the person that any collection action be no more intru╜sive than necessary." 26 U.S.C. ╖ 6330(c)(3)(C).

After the hearing, the Appeals Officer must send a Notice of Determination to the taxpayer that summarizes the matters raised during the hearing and that re╜sponds to any offers or objections made by the taxpayer. Under 26 U.S.C. ╖ 6330(c)(3), the determination must be based on: (1) the verification that the re╜quirements of any applicable law or admin╜istrative procedure have been met; (2) the issues raised by the taxpayer; and (3) the proper balance between the need for effi╜cient tax collection and the legitimate con╜cern that any collection action be no more intrusive than necessary. 26 U.S.C. ╖ 6330(c)(3).

If the taxpayer is dissatisfied with the administrative determination, he or she may seek judicial review within 30 days of the Notice of Determination being issued either in the Tax Court or the appropriate United States District Court if the Tax Court does not have jurisdiction. 26 U.S.C. ╖ 6330(d)(1). Judicial review is limited to matters properly raised at the administrative hearing. 26 C.F.R. ╖ 301.6330-1T(f).

II. Jurisdiction.

Pursuant to ╖ 6330, the Tax Court has exclusive jurisdiction over ap╜peals if it has jurisdiction over the alleged underlying tax liability. See, e.g., True v. Commissioner, 108 F.Supp.2d 1361, 1364 (M.D.Fla.2000) (claimant is required to bring a ╖ 6330 appeal in the Tax Court, so long as the Tax Court has jurisdiction of the underlying tax liability). If the Tax Court does not have jurisdiction, then the appeal goes to a district court. See ╖ 6330(d). The underlying tax liability in this case is employment tax. The Tax Court does not have jurisdiction over em╜ployment tax liabilities. See id.; see also Moore v. Commissioner, 114 T.C. 171, 2000 WL 283865 (2000) (district court, not the Tax Court, has deficiency jurisdiction over a redetermination of employment tax╜es); STA Painting Co. v. I.R.S., No. Civ.A. 02-CV-7133, 2004 WL 257393 (E.D.Pa. Feb. 11, 2004) (Tax Court does not have jurisdiction with respect to employment tax liability); Abu Awad v. United States, 294 F.Supp.2d 879 (S.D.Texas 2003) (same). Because the Tax Court does not have jurisdiction over employment tax lia╜bilities, the district court is the proper court in which to seek review of an admin╜istrative determination regarding the as╜sessment of employment taxes.

III. Standard of Review

Title 26 U.S.C. ╖ 6330(d) provides for judicial review of the IRS's administra╜tive determinations. The statute is silent, however, with respect to the standard of review that the reviewing court must ap╜ply. The Tenth Circuit has not yet ad╜dressed the appropriate standard of review under ╖ 6330. Other courts, however, have uniformly adopted the standard of review set forth in the conference report accompanying the IRS Restructuring Act. See, e.g., Goza v. Commissioner, 114 T.C. 176, 181-182, 2000 WL 283864 (2000); MRCA Information Services v. United States, 145 F.Supp.2d 194, 199 (D.Conn. 2000). This report provides that in cases where the validity of the underlying tax liability itself is properly at issue, the ad╜ministrative determination will be re╜viewed de novo. Where the validity of the underlying tax liability is not properly part of the appeal, the taxpayer may challenge the determination of the Appeals Officer for abuse of discretion. H.R. Conf. Rep. No. 105-599, at 266 (1998).

While courts have uniformly adopted the standard of review set forth in the confer╜ence report, courts have differed in their interpretation of what standard of review the conference report provides is applica╜ble when a taxpayer's appeal challenges the validity of the underlying tax liability as well as other administrative determina╜tions. 2 Some courts have applied a de novo standard of review to all issues raised in an appeal if the validity of the underlying tax liability is one of the issues being appealed. See, e.g., Tornichio v. United States, 263 F.Supp.2d 1090, 1095 (N.D.Ohio 2002) (reviewing all issues raised in appeal de novo because the valid╜ity of the tax liability was properly part of the appeal). Other courts review the va╜lidity of the underlying tax liability de novo and all other administrative decisions challenged in the appeal under an abuse of discretion standard. See, e.g., Jones v. Commissioner, 338 F.3d 463, 466 (5th Cir. 2003) (reviewing underlying tax liability de novo and other administrative determina╜tions for an abuse of discretion). The Court finds the latter approach more per╜suasive as there appears to be no compel╜ling reason for the standard of review for similar administrative determination to vary depending solely upon whether the validity of the underlying tax liability is one of the determinations being disputed. Consequently, absent any guidance from the Tenth Circuit, the Court will follow those courts that review the validity of the underlying tax liability de novo and the remainder of the issues raised in the ap╜peal under an abuse of discretion standard.

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2. ═ While Plaintiffs' Complaint does not chal╜lenge the validity of the underlying tax liabili╜ty, Plaintiffs have filed a motion to amend their complaint to put the amount of their tax liability at issue. Consequently, the Court must determine if a different standard of re╜view will apply to this appeal if Plaintiffs' motion to amend is granted.

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Under the abuse of discretion standard, a "decision will not be disturbed unless the appellate court has a definite and firm conviction that the lower court made a clear error of judgment or exceeded the bounds of permissible choice in the circum╜stances." McEwen v. City of Norman, 926 F.2d 1539, 1553-54 (10th Cir.1991) (quoting United States v. Ortiz, 804 F.2d 1161, 1164 n. 2 (10th Cir.1986)). An abuse of discretion occurs when the decision is "arbitrary, capricious or whimsical," or re╜sults in a "manifestly unreasonable judg╜ment." United States v. Wright, 826 F.2d 938, 943 (10th Cir.1987). The Court's abuse of discretion review is limited to the information available to the Appeals Offi╜cer when the decision was made. See, e.g., Sego v. Commissioner, 114 T.C. 604, 610, 2000 WL 889754 (2000) (matters raised after the hearing do not reflect on whether the determinations are an abuse of discre╜tion).

IV. Motion for Summary Judgment

The Notice of Determination indicates, and Plaintiffs do not dispute, that the IRS Appeals Officer complied with all of the applicable law and procedures. Plaintiffs assert, however, that the Appeals Officer made a number of errors, and, as a result, did not properly balance the need for the efficient collection of taxes with the legiti╜mate concern that any collection action be no more intrusive than necessary.

Plaintiffs contend that even though they questioned whether IRS records of their tax liabilities were accurate, the Appeals Officer issued her decision rejecting Plain╜tiffs' proposed collection alternatives prior to determining the correct amount of taxes due. As a result, the Appeals Officer de╜termined that Plaintiffs were not financial╜ly able to pay an installment plan based, in part, on the erroneous determination that Plaintiffs owed $709,431.70 in taxes, includ╜ing over $170,000 in pre-petition taxes, when Plaintiffs' pre-petition taxes had been paid in full.

The record reveals that Plaintiffs raised the issue of the correct amount of their outstanding taxes, in particular, whether payments intended for Plaintiffs' 1999-2000 taxes had been misapplied to Plain╜tiffs' pre-petition taxes even after the pre╜petition taxes had been paid in full. The Notice of Determination notes that "sever╜al payments intended for the post-petition liabilities were applied erroneously to peri╜ods covered by the bankruptcy" and "that taxpayer is working with Compliance to transfer misapplied payments to the liabili ties for which they were intended." The Appeals Officer issued her decision on collection alternatives, however, without first confirming the correct amount of Plaintiffs' outstanding tax liability. 3 As a result, the Notice of Determination overstated Plain╜tiffs' total tax liability by at least $170,000. 4

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3. ═ The fact that Plaintiffs' pre-petition tax lia╜bilities were substantially less than the amount stated in the Notice of Determination was apparent from Plaintiffs' June 27, 2002 letter to the Appeals Officer in which Plain╜tiffs stated that they had made 36 payments of approximately $3,500 each (approximately $161.000.00) toward their pre-petition tax lia╜bilities.

4. ═ Defendant has submitted a declaration stat╜ing that Plaintiffs' current employment tax liabilities are $450,454.00.

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Failure to resolve the correct amount of Plaintiffs' outstanding taxes resulted in ad╜ditional errors in the Notice of Determina╜tion. For example, the Notice of Determi╜nation rejected a proposed installment payment of $2,500 per month as inade╜quate and noted that a significant increase in this payment would not be possible until October 2005, when Plaintiffs completed payments under their bankruptcy plan. At the time the Notice was issued, howev╜er, Plaintiffs' pre-petition taxes had been paid in full and, therefore, Plaintiffs' pro╜posed installment payment was actually $6,095 per month, not $2,500. If the Ap╜peals Officer had resolved the issue of Plaintiffs' outstanding employment tax lia╜bilities prior to issuing the Notice, the Appeals Officer would have known that Plaintiffs' pre-petition liabilities had been paid in full and could have evaluated the proposed installment plan accordingly. 5

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5. ═ While the burden is on Plaintiffs to provide accurate financial information, in this case, Plaintiffs raised the issue of whether pay╜ments intended for their 1999-2000 tax liabil╜ities had been misapplied to their pre-petition liabilities. The information on how the pay╜ments were applied, and, consequently, how much remained to be paid, was contained in IRS records and was not in the Plaintiffs' possession.

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Plaintiffs challenged the amount of their total tax delinquency at their CDP hearing. The Appeals Officer, however, issued her Notice of Determination prior to determining the amount of Plaintiffs' tax delinquency. As a result, the Notice of Determination rejected Plaintiffs' request for an installment plan based on erroneous information, including an overstatement of Plaintiffs' outstanding employment taxes by at least $170,000.00 and an understate╜ment of Plaintiffs' proposed monthly pay╜ment by $3,095. These errors may or may not have affected the Appeals Officer's ul╜timate determination. However, the Court finds that when a challenge to the amount of delinquent taxes has been raised and the viability of a proposed col╜lection alternative depends, in part, on the amount of taxes due, issuing the Notice of Determination prior to determining the correct amount of taxes due is an abuse of discretion. Therefore, the Court will re╜mand this matter to IRS Appeals for a new CDP hearing and Notice of Determi╜nation.

Given the Court's determination that this matter must be remanded to IRS Appeals due to the Appeals Officer's fail╜ure to resolve the amount of Plaintiffs' outstanding tax liability prior to issuing the Notice of Determination, the Court will not reach the remaining errors al╜leged by Plaintiffs. The Court notes, however, that the Appeals Officer rejected Plaintiffs installment plan, in part, due to her determination that J & M Dairy was "on the brink of collapse." The Appeals Officer appears to have based her deter╜mination, in part, on Schedule F of Plain╜tiffs' tax return. Plaintiffs contend, how╜ever, that "it is basic knowledge that Schedule F of a tax return filed by a farmer, including a dairy farmer, does not reflect the financial health of the business operation." Plaintiffs assert that other in╜formation reported on the same tax re╜turn, and therefore available to the Ap╜peals Officer, shows that J & M Dairy was profitable. The record before the Court is insufficient to determine what financial analysis was performed by the Appeals Officer. On remand, IRS Appeals is in╜structed to prepare a record that contains sufficient information on the financial anal╜ysis undertaken by the Appeals Officer to permit this Court to determine if the Ap╜peals Officer abused his or her discretion. See, e.g., Mesa Oil, Inc. v. U.S., No. Civ.A. 00-B-851, 2000 WL 1745280, *7 (D.Colo. Nov. 21, 2000) (holding that the informality of a CDP hearing "does not completely obviate the need for a record of some sort. While a full stenographic record is not required, there must be enough informa╜tion contained in the documentation creat╜ed by the IRS for a court to draw conclu╜sions about statutory compliance and whether the [Appeals Officer] abused his or her discretion.").

V. Plaintiffs' Motion to Amend and Defendant's Motion to Strike

Plaintiffs have filed a motion to amend their complaint to seek a determination of the amount of employment taxes owed, or in the alternative, for a remand to the IRS Appeals Office with direction to hold a hearing with a sufficient record of the evidence or arguments presented and the analysis used by the Appeals Officer. As discussed above, the record reveals that Plaintiffs properly raised the issue of the correct amount of their outstanding tax liability at the CDP hearing, and are therefore entitled to appeal the issue to this Court. However, given the Court's determination that this matter must be remanded to IRS Appeals for a new CDP hearing and Notice of Determination, at which time Plaintiffs may raise the issue of the correct amount of their outstanding tax liabilities and the IRS will be afforded the opportunity to resolve this issue in the first instance, the Court will deny Plain╜tiffs' motion to amend their complaint as moot. For the same reasons, Defendant's Motion to Strike Plaintiffs' Expert also will be denied as moot.

CONCLUSION

IT IS THEREFORE ORDERED that Plaintiffs' Motion for Leave to Amend Complaint or for Remand, filed June 23, 2003, [ Doc. No. 25 ] is DENIED as moot .

IT IS FURTHER ORDERED that De╜fendant's Motion to Strike Plaintiffs' Ex╜pert, filed June 3, 2003, [ Doc. No. 19 ] is DENIED as moot .

IT IS FURTHER ORDERED that De╜fendant's Motion for Summary Judgment, filed June 20, 2003, [ Doc. No. 23 ] is hereby DENIED . This matter is hereby remand╜ed to IRS Appeals for a new Collection Due Process hearing before a different Appeals Officer to determine the amount of employment tax liabilities owed by Plaintiffs and, after Plaintiffs' outstanding employment tax liabilities have been deter╜mined, consideration of potential collection alternatives. In addition to the evidence and argument presented at the hearing, the record of this hearing should contain sufficient information on the analysis un╜dertaken by the Appeals Officer, including the analysis of Plaintiffs' financial condi╜tion, to permit this Court to determine if the Appeals Officer abused his or her dis╜cretion.

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