Industrial Investors v. Cir , 353 F. App'x 90 ( 2009 )

FILED
NOT FOR PUBLICATION NOV 23 2009
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
INDUSTRIAL INVESTORS, No. 08-71467
Petitioner - Appellant, Tax Ct. No. 14928-04L
v.
MEMORANDUM *
COMMISSIONER OF INTERNAL
REVENUE,
Respondent - Appellee.
Appeal from a Decision of the
United States Tax Court
Submitted October 5, 2009 **
Pasadena, California
Before: HALL, W. FLETCHER and CLIFTON, Circuit Judges.
Industrial Investors (“Taxpayer”) appeals from the Tax Court’s decision
sustaining a notice of determination issued by the Office of Appeals, which
sustained a levy against Taxpayer for unpaid taxes.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously finds this case suitable for decision without
oral argument. See Fed. R. App. P. 34(a)(2).
Taxpayer can no longer challenge the amount of its underlying tax liability
because that has been fully adjudicated. I.R.C. § 6330(c)(2)(B). Therefore, the
Tax Court correctly reviewed the decision of the Office of Appeals for abuse of
discretion. See Sego v. Commissioner, 114 T.C. 604, 610 (2000). We review the
Tax Court’s decision de novo, which means we review the Office of Appeals for
abuse of discretion. See Fargo v. Commissioner, 447 F.3d 706, 709 (9th Cir.
2006). “Abuse of discretion occurs when a decision is based on an erroneous view
of the law or a clearly erroneous assessment of the facts.” Fargo, 447 F.3d at 709
(internal quotation marks omitted).
Taxpayer argues that the Office of Appeals abused its discretion by insisting
upon recording the August 8th meeting with Taxpayer’s lawyer W.G. Wells over
Wells’s objections. I.R.C. § 7521(a) permits an officer of the IRS to record “any
in-person interview with any taxpayer relating to the determination or collection of
any tax,” so long as the officer informs the taxpayer prior to the interview and
makes available a copy of the recording or transcript to the taxpayer. See also
I.R.M. § 8.6.1.4.1. (Nov. 6, 2007) (“IRC 7521(a) authorizes both taxpayers and the
IRS to audio record in-person interviews dealing with the determination or
collection of taxes.”); Keen v. Commissioner, 121 T.C. 8, 16 (2003) (holding that
taxpayer was entitled to audio record his Collection Due Process hearing). A
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Collection Due Process (“CDP”) hearing is an interview related to the collection of
taxes, I.R.C. § 6330, and the Appeals Officer, Adlai Climan, complied with all
requirements for recording. Therefore, the Office of Appeals did not abuse its
discretion by recording the meeting.
Taxpayer next argues that the CDP hearing violated an earlier Tax Court
order requiring an impartial Appeals Officer who had not seen a previous ex parte
communication regarding Taxpayer’s case. Appeals Team Manager Paula Mills,
who had seen the ex parte communication, was present at the August 8th meeting.
However, Climan, not Mills, was the Appeals Officer assigned to the case. Mills’s
presence was required because the conference was recorded and because Taxpayer
had previously raised frivolous arguments. I.R.M. § 8.6.1.4.2(11) (Nov. 6, 2007)
(“Two Appeals employees must be present at recordings where
frivolous/constitutional et. al. arguments have previously been presented.”).
Taxpayer presents no evidence that Mills improperly influenced Climan. To the
contrary, the Tax Court determined that Climan displayed great patience
throughout the process and was impartial. Therefore, Mills’s presence at the
hearing did not violate the earlier Tax Court order.
Taxpayer’s final argument is that the Office of Appeals abused its discretion
by reaching a determination without more meetings after the August 8th meeting
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was cut short by a power outage. The CDP hearing, however, consists of not just
the one meeting, but of all the correspondence between Taxpayer and the Office of
Appeals. The various letters in the record, including the conference itself and
Taxpayers’ declarations at that conference, all constitute parts of the CDP hearing.
All of those interactions, taken together, gave the Office of Appeals a sufficient
basis to make its determination.
Moreover, Taxpayer presented four declarations in writing at the August 8th
hearing. Those declarations failed to raise a single issue appropriate for
consideration at a CDP hearing. See I.R.C. § 6330(c)(2). Because Taxpayer failed
to raise any legitimate challenges either at the August 8th meeting or otherwise, the
Office of Appeals did not abuse its discretion in reaching its determination.
AFFIRMED.
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