Alvin Kanofsky v. Commissioner of Internal Reven , 424 F. App'x 189 ( 2011 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 10-3691
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ALVIN S. KANOFSKY,
Appellant
v.
COMMISSIONER OF INTERNAL REVENUE
____________________________________
On Appeal from the United States Tax Court
(Tax Court No. 08-24784)
Trial Judge: Honorable David Laro
____________________________________
Submitted Pursuant to Third Circuit LAR 34.1(a)
April 21, 2011
Before: FUENTES, GREENAWAY, JR. AND COWEN, Circuit Judges
(Opinion filed: April 21, 2011)
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OPINION
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PER CURIAM
Appellant, pro se, appeals an order of the United States Tax Court sustaining a
proposed levy as a means of collecting Appellant’s delinquent federal income tax
liability. For the following reasons, we will affirm.
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I.
In December 2007, the United States Internal Revenue Service (“IRS”) sent
Appellant Alvin Kanofsky a notice of intent to levy in an effort to collect his federal
income tax delinquencies for the years 1996 through 2000. 1 Kanofsky requested a
collection due process (“CDP”) hearing before the IRS Office of Appeals regarding the
proposed collection action. 2 His stated reason for disagreeing with the proposed levy was
that the Tax Court decision regarding these underlying tax liabilities was currently on
appeal in this Court. Kanofsky did not file a bond with the Tax Court before his appeal,
or at any time thereafter.
The Settlement Officer assigned to his case requested from Kanofsky in writing
that he provide the officer with certain documents necessary to proceed with the CDP
hearing. Kanofsky’s response did not provide these documents, nor did it address any
1
Kanofsky’s federal income tax liability was previously decided by the Tax Court
and affirmed by this Court. Kanofsky v. Comm’r, 91 T.C.M. (CCH) 1045 (2006), aff’d,
No. 07-1860, 2008 WL 857567 (3d Cir. Apr. 1, 2008). The Supreme Court subsequently
denied Kanofsky’s petition for certiorari, 540 U.S. 823 (Dec. 8, 2008), as well as his later
petition for rehearing, 129 S. Ct. 1406 (Feb. 23, 2009).
2
CDP hearings are informal proceedings that provide a delinquent taxpayer with an
opportunity to be heard before the IRS can levy upon his or her property in order to
satisfy outstanding tax liabilities. See generally 26 U.S.C. § 6330. CDP hearings need
not be conducted face-to-face and may instead consist of a telephonic conference or
correspondence with a Settlement Officer. Living Care Alternatives of Utica v. United
States, 411 F.3d 621, 624 (6th Cir. 2005). During the hearing, the taxpayer is permitted
to propose collection alternatives such as a settlement or payment schedule, and the
Settlement Officer ultimately must determine whether the proposed levy “balances the
need for the efficient collection of taxes with the legitimate concern of the person that
any collection action be no more intrusive than necessary.” 26 U.S.C § 6330(c)(3). The
Settlement Officer’s decision generally is reviewable by the Tax Court for abuse of
discretion. See Kindred v. Comm’r, 454 F.3d 688, 694 (7th Cir. 2006). On appeal, the
taxpayer may only raise issues raised during the CDP hearing.
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matters pertinent to the collection of his tax liability or collection alternatives. On
September 8, 2008, the IRS Office of Appeals issued a Notice of Determination
approving the proposed levy. In the notice, the Office of Appeals advised Kanofsky that
the proposed levy was sustained because he did not present any issues that could be
addressed in a CDP action.
Kanofsky timely challenged that determination. A trial was held before the Tax
Court, and Kanofsky appeared as the sole witness. Kanofsky attempted to raise claims
that he had been prevented from pursuing his business activities due to fraud and
corruption and a “crime wave” in Philadelphia. Trial Tr. 15 (Oct. 21, 2009). Kanofsky
also attempted to admit as evidence a large folder of documents consisting of docket
sheets from criminal cases, newspaper clippings, corporate records, financial information,
and other materials. The Tax Court sustained the IRS’s objection to admitting this
evidence and testimony on the ground that it was not relevant. Further, the court found
these arguments to be an impermissible attempt by Kanofsky to relitigate his underlying
tax liability. When asked what basis he had for asserting an abuse of discretion,
Kanofsky testified that he felt that the Third Circuit should have waited for his appeal to
be resolved before imposing the levy, and that the IRS “could have been more
cooperative in seeking some sort of accommodation.” Trial Tr. at 28.
Following the trial, the Tax Court entered a decision sustaining the determination
made by the Office of Appeals. Kanofsky filed a motion to vacate that decision, based on
what he described as “overwhelming evidence of Fraud and Corruption.” On June 4,
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2010, the Tax Court denied the motion. Kanofsky now appeals.
II.
We have jurisdiction pursuant to 26 U.S.C. § 7482(a)(1). We have plenary review
over the Tax Court’s conclusions of law, but we will not disturb its factual findings
unless they are clearly erroneous. Lattera v. Comm’r, 437 F.3d 399, 401 (3d Cir. 2006);
PNC Bancorp, Inc. v. Comm’r, 212 F.3d 822, 827 (3d Cir. 2000). Where, as here, the
underlying tax liability is not in issue, the determination of the IRS Office of Appeals in a
collection due process hearing is reviewed by both the Tax Court and the Court of
Appeals for abuse of discretion. See Kindred v. Comm’r, 454 F.3d 688, 694 (7th Cir.
2006); Living Care Alternatives of Utica v. United States, 411 F.3d 621, 625 (6th Cir.
2005).
III.
We find that the Tax Court correctly held that the Office of Appeals acted within
its discretion in permitting the propsed levy to proceed. Kanofsky did not pay the
balance due, and the IRS properly issued a notice of intent to levy to collect the unpaid
liabilities. During the CDP hearings, Kanofsky failed to propose any collection
alternatives or provide the Settlement Officer with the required supporting financial
information. Kanofsky was not entitled to relitigate his tax liability during the CDP
hearing, since that issue had been determined by the Tax Court, in a decision affirmed by
this Court. Kanofsky v. Comm’r, 91 T.C.M. (CCH) 1045 (2006), aff’d, No. 07-1860,
2008 WL 857567 (3d Cir. Apr. 1, 2008). Moreover, Kanofsky was not entitled to a stay
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of assessment or collection activity pending his appeal because he had not filed a bond
with the Tax Court, as specifically required by § 7485 of the Code. 3 See Burke v.
Comm’r, 124 T.C. 189, 191 n.4 (2005) (“Petitioner did not file an appeal bond, [under §]
7485, and, therefore, respondent was free to proceed with assessment and collection for
the years in issue”).
Kanofsky’s basis for his appeal includes arguments based on obstruction of
justice, corruption and fraud committed by public figures in Pennsylvania and New
Jersey. He also appears to argue that in imposing his tax liability, consideration should
have been given to his extensive whistleblower activity in the University of Medicine and
Dentistry of New Jersey health fraud case. These arguments are not relevant to the
imposition of a levy in Kanofsky’s case and do not advance his cause. Kanofsky also
appears to raise challenges to the underlying merits of his tax liability. These arguments
have been previously litigated and are beyond the scope of our review. Kanofsky
presents no viable argument that the Tax Court erred in finding that the Office of Appeals
did not abuse its discretion in sustaining the levy.
Accordingly, we will affirm.
3
As a general rule, where a taxpayer has challenged a Notice of Deficiency by filing a
petition in the Tax Court, 26 U.S.C. § 6213 prohibits the IRS from assessing the tax
liability or attempting to collect it by means of a levy until the Tax Court’s decision has
become final. See 26 U.S.C. § 6213(a). However, pursuant to § 7485, assessment and
collection shall not be stayed during an appeal from Tax Court unless a taxpayer files a
bond on or before the time he files a notice of appeal. See 26 U.S.C. § 7485(a)(1).
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