Ronald Byers v. Commissioner of IRS , 740 F.3d 668 ( 2014 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 25, 2013 Decided January 17, 2014
No. 12-1351
RONALD E. BYERS,
APPELLANT
v.
COMMISSIONER OF INTERNAL REVENUE SERVICE,
APPELLEE
On Appeal from Orders and
Decisions of the United States Tax Court
Ronald E. Byers, pro se, argued the cause and filed the
briefs for appellant.
Carlton M. Smith and Frank Agostino were on the brief
for amici curiae Peter Kuretski, et al. in support of appellant.
Teresa E. McLaughlin, Attorney, U.S. Department of
Justice, argued the cause for appellee. With her on the brief
was Marion E.M. Erickson, Attorney, U.S. Department of
Justice.
Before: TATEL and BROWN, Circuit Judges, and
EDWARDS, Senior Circuit Judge.
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Opinion for the Court filed by Senior Circuit Judge
EDWARDS.
EDWARDS, Senior Circuit Judge: Appellant Ronald Byers
seeks review of orders and decisions issued by the United
States Tax Court affirming a decision by the Internal Revenue
Service (“IRS”). The disputed IRS decision imposed a levy on
Appellant’s property to collect overdue income taxes for the
tax years 1999-2002.
Appellant does not seek review of the amount of the taxes
he owes. Rather, he raises a number of procedural and
substantive challenges emanating from an IRS Office of
Appeals Collection Due Process (“CDP”) hearing which
resulted in the contested levy. The IRS has moved for a change
of venue, arguing that this appeal should be transferred to the
United States Court of Appeals for the Eighth Circuit, where
venue properly lies. Appellant responds that venue is proper
here under 26 U.S.C. § 7482(b)(1) because he is not seeking a
redetermination of the amount of his taxes. In support of his
claim, Appellant points the court to an illuminating article,
James Bamberg, A Different Point of Venue: The Plainer
Meaning of Section 7482(b)(1), 61 TAX LAW. 445 (2008), in
which the author contends that
[a] plain meaning reading of the [statute] instructs that the
D.C. Circuit Court is the appropriate venue, the default
even, for all tax cases on appeal from the Tax Court that
are not expressly brought up in section 7482(b)(1). Thus,
it would appear that cases dealing with . . . “collection due
process” hearings . . . should all be appealed to the D.C.
Circuit Court.
Id. at 456-57. We agree and therefore deny the
Commissioner’s motion to transfer this case to the Eighth
Circuit.
3
On the merits, Appellant principally argues that the Tax
Court should be reversed because: (1) the CDP Settlement
Officer engaged in improper ex parte communications and
thus conducted Appellant’s CDP hearing arbitrarily and
unfairly; (2) Senior Judge Stephen J. Swift of the Tax Court
erred in denying Appellant’s request that he recuse himself
from ruling on Appellant’s Appointments Clause challenge to
the ability of the Chief Judge to recall Senior Judges to decide
cases before the Tax Court; (3) the Tax Court erred in
dismissing as moot the collection of Appellant’s 2003 tax
liability after the IRS abated the assessment for that year and
indicated that it was no longer pursuing a levy based on the
2003 assessment; and (4) the Tax Court erred in upholding the
levy determination after the 2003 tax assessment was no longer
under consideration. Appellant also raises a number of other
issues which do not warrant recitation here. After carefully
reviewing all of Appellant’s claims, we find no merit in any of
his challenges to the contested orders and decisions of the Tax
Court. We therefore affirm the judgment of the Tax Court.
I. BACKGROUND
A. Tax Redeterminations and Collection Due Process
Hearings
1. Redetermination of Tax Assessments
When the IRS finds a discrepancy between an individual’s
income tax filing and records from other sources, it may use a
“notice of deficiency” to inform the taxpayer that it intends to
collect the difference in owed taxes. 26 C.F.R. § 301.6212-1. If
a taxpayer fails to file a return, the IRS may create a substitute
tax form under 26 U.S.C. § 6020(b) and file a notice of
deficiency for the total amount it calculates as due.
A taxpayer who disagrees with the statement of the
amount of taxes owed in a notice of deficiency has two
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options: pay the amount assessed and then sue for a refund in
federal district court or the Court of Federal Claims under 28
U.S.C. § 1346(a), or refuse to pay the tax and file a petition in
Tax Court under 26 U.S.C. § 6213 for a “redetermination of the
deficiency.” Either of the two court proceedings may result in a
redetermination of the amount of taxes owed by the taxpayer.
2. Collection Due Process Hearings
In addition to seeking redeterminations, taxpayers may
also contest the IRS’s means of collecting overdue taxes. The
IRS can initiate a lien on a taxpayer’s property, 26 U.S.C.
§ 6321, and impose a levy on the taxpayer’s property, id.
§ 6331. In 1998, Congress established the CDP hearing
process to temper “any harshness caused by allowing the IRS
to levy on property without any provision for advance
hearing.” Olsen v. United States, 414 F.3d 144, 150 (1st Cir.
2005); Internal Revenue Service Restructuring and Reform
Act of 1998, Pub. L. No. 105-206, § 3401, 112 Stat. 685, 746
(codified at 26 U.S.C. §§ 6320, 6330). The statute requires
notice to the taxpayer of a right to a hearing before a levy or
lien is made and guarantees the right to a fair hearing before an
impartial officer from the IRS Office of Appeals. 26 U.S.C.
§§ 6320, 6330.
In a CDP hearing challenging a levy, a taxpayer may raise
“any relevant issue relating to the unpaid tax or the proposed
levy,” including “challenges to the appropriateness of
collection actions,” and “offers of collection alternatives.” Id.
§ 6330(c)(2)(A). The appeals officer then considers 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 intrusive than
necessary.” Id. § 6330(c)(3)(C). The law also affords a
taxpayer the right to appeal a CDP determination to the Tax
Court. Id. § 6330(d)(1).
 5
CDP proceedings are informal and may be conducted via
correspondence, over the phone, or face to face. See 26 C.F.R.
§§ 601.106(c), 301.6330-1(d). A taxpayer may challenge his
underlying tax liability at a CDP hearing, but only if he “did
not receive any statutory notice of deficiency for such tax
liability or did not otherwise have an opportunity to dispute
such tax liability.” 26 U.S.C. § 6330(c)(2)(B).
3. Appellate Review of Tax Court Redetermination
and Collection Due Process Decisions
Under the Internal Revenue Code, the federal courts of
appeals have jurisdiction to review Tax Court redetermination
and CDP decisions:
The United States Courts of Appeals (other than the United States
Court of Appeals for the Federal Circuit) shall have exclusive
jurisdiction to review the decisions of the Tax Court, except as
provided in section 1254 of Title 28 of the United States Code, in
the same manner and to the same extent as decisions of the district
courts in civil actions tried without a jury; and the judgment of any
such court shall be final, except that it shall be subject to review by
the Supreme Court of the United States upon certiorari, in the
manner provided in section 1254 of Title 28 of the United States
Code.
26 U.S.C. § 7482(a)(1).
Congress originally placed venue for all appeals from
decisions issued by the U.S. Board of Tax Appeals – later
renamed the U.S. Tax Court – in the regional circuits, unless
the individual did not file a return. 26 U.S.C. § 1141(b)(1)
(1940) (providing that “decisions may be reviewed by the
Circuit Court of Appeals for the circuit in which is located the
collector’s office to which was made the return of the tax in
respect of which the liability arises or, if no return was made,
then by the United States Court of Appeals for the District of
Columbia”).
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In 1966, Congress changed the venue provision, adding
two subsections that prescribed the proper venue for appeals
from Tax Court decisions concerning redetermination requests
sought by individuals and by corporations. Pub. L. No. 89-713,
§ 3(c), 80 Stat. 1107, 1108-09 (1966) (codified at 26 U.S.C.
§ 7482(b)(1)(A)-(B) (1970)). For both corporations and
individuals, the statute stated that the proper venue for appeals
involving redeterminations of liability was the federal court of
appeals for the circuit in which the taxpayer’s residence was
located. Id. However, for the appeal of any case not
enumerated in subsection (A) and (B), it assigned venue to the
D.C. Circuit. Id. In other words, in 1966, Congress deliberately
made the D.C. Circuit the default venue for tax cases.
Between 1966 and 1997, as Congress continued to expand
the jurisdiction of the Tax Court, it also amended § 7482(b)(1)
to add four more subsections, § 7482(b)(1)(C)-(F), that
established venue based on a taxpayer’s residency. See
Revenue Act of 1978, Pub. L. No. 95-600, § 336(c), 92 Stat.
2763, 2842; Employee Retirement Income Security Act of
1974, Pub. L. No. 93-406, § 1041(b), 88 Stat. 829, 950-51; Tax
Reform Act of 1976, Pub. L. No. 94-455, §§ 1042(d), 1306(b),
90 Stat. 1520, 1638-39, 1719; Tax Equity and Fiscal
Responsibility Act of 1982, Pub. L. No. 97-248, § 402, 96 Stat.
324, 668; Taxpayer Relief Act of 1997, Pub. L. No. 105-34,
§ 1239, 111 Stat. 788, 1028. After these various revisions, the
D.C. Circuit remained the default venue if “for any reason no
subparagraph [assigning venue to a regional circuit] applies.”
26 U.S.C. § 7482(b)(1). Unlike its approach when expanding
Tax Court jurisdiction to other areas, Congress did not alter the
venue provision when it created the CDP framework in 1998.
The applicable provisions of the statute now read as
follows:
(b) Venue
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(1) In general
Except as otherwise provided in paragraphs (2) and (3),
such decisions may be reviewed by the United States court of
appeals for the circuit in which is located–
(A) in the case of a petitioner seeking redetermination of
tax liability other than a corporation, the legal residence of
the petitioner,
(B) in the case of a corporation seeking redetermination of
tax liability, the principal place of business or principal
office or agency of the corporation, or, if it has no principal
place of business or principal office or agency in any
judicial circuit, then the office to which was made the return
of the tax in respect of which the liability arises,
(C) in the case of a person seeking a declaratory decision
under section 7476, the principal place of business, or
principal office or agency of the employer,
(D) in the case of an organization seeking a declaratory
decision under section 7428, the principal office or agency
of the organization,
(E) in the case of a petition under section 6226, 6228(a),
6247, or 6252, the principal place of business of the
partnership, or
(F) in the case of a petition under section 6234(c)–
(i) the legal residence of the petitioner if the petitioner is
not a corporation, and
(ii) the place or office applicable under subparagraph
(B) if the petitioner is a corporation.
If for any reason no subparagraph of the preceding sentence
applies, then such decisions may be reviewed by the Court of
Appeals for the District of Columbia. For purposes of this
paragraph, the legal residence, principal place of business, or
principal office or agency referred to herein shall be
determined as of the time the petition seeking redetermination
of tax liability was filed with the Tax Court or as of the time the
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petition seeking a declaratory decision under section 7428 or
7476 or the petition under section 6226, 6228(a), or 6234(c),
was filed with the Tax Court.
(2) By agreement
Notwithstanding the provisions of paragraph (1), such
decisions may be reviewed by any United States Court of
Appeals which may be designated by the Secretary and the
taxpayer by stipulation in writing.
26 U.S.C. § 7482(b) (emphasis added).
There is no question here regarding the Tax Court’s
exclusive jurisdiction over petitions for income tax
redeterminations and appeals from CDP determinations. Id.
§§ 6330(d), 6213(a), 7421. What is at issue in this case is the
proper venue for appeals challenging Tax Court decisions
concerning these CDP determinations.
B. Proceedings Below
Appellant is a self-employed taxpayer. In the tax years
1999 through 2002, Appellant failed to file federal tax returns.
The IRS, pursuant to 26 U.S.C. § 6020(b), prepared substitute
tax forms for Appellant and mailed him notices of deficiency
for each year. Byers v. Comm’r, 103 T.C.M. 1168
(2012). Appellant unsuccessfully challenged the amounts
listed in the deficiency determinations, which were upheld in
2007 by the Tax Court. Byers v. Comm’r, 94 T.C.M.
438 (2007). Because he resided in Minnesota, Appellant
sought review of the Tax Court’s decision in the Eighth
Circuit. See 26 U.S.C. § 7482(b)(1)(A). That court upheld the
Tax Court’s deficiency determinations, Byers v. Comm’r, 351
F. App’x 161 (8th Cir. 2009), and the Supreme Court denied
Appellant’s petition for certiorari, Byers v. Comm’r, 131 S. Ct.
79 (2010).
The Commissioner also asserted that Appellant owed
9
taxes for 2003. Appellant brought a separate challenge to this
determination in Tax Court. In 2010, the Tax Court concluded
that it lacked jurisdiction over taxable year 2003 because no
notice of deficiency was produced and because there “was no
indication or evidence that one was mailed” to Appellant. Mot.
to Dismiss on Ground of Mootness at 3-4, reprinted in
Appendix (“App.”) 6-7. The Commissioner did not appeal and
instead abated the 2003 assessment. Id.
In January 2009, prior to the Tax Court’s ruling as to
2003, the IRS collections department determined that
Appellant was subject to tax collection by levy for liabilities
(including penalties and interest) totaling $175,506.25 for the
years 1999, 2000, 2001, 2002, and 2003. Final Notice of Intent
to Levy, reprinted in App. 60-61. Appellant first challenged
the levy determination with the IRS Office of Appeals via a
CDP hearing. His challenge was denied. Notice of
Determination Concerning Collection Action(s) under Section
6320 and/or 6330, reprinted in App. 52-58.
Appellant appealed to the Tax Court. After the
Commissioner abated the 2003 assessment, the Commissioner
moved to dismiss as moot Appellant’s CDP petition with
respect to taxable year 2003. Mot. to Dismiss on Ground of
Mootness, reprinted in App. 4-8. The Tax Court granted this
motion, leaving taxable years 1999-2002 in dispute. Order,
reprinted in App. 9. The Tax Court then granted summary
judgment in favor of the Commissioner. Byers, 103 T.C.M.
(CCH) at 1170.
Appellant now seeks review in this court to overturn the
orders and decisions issued by the Tax Court denying his
appeal of the determination made by the IRS Office of Appeals
in his CDP hearing. Appellant does not seek a redetermination
of the underlying tax liabilities in this court. He merely
challenges the Tax Court’s decisions and orders relating to his
CDP hearing. The IRS has moved to transfer venue, arguing
10
that 26 U.S.C. § 7482 lays venue in the Eighth Circuit, where
Appellant resides.
II. ANALYSIS
A. Standard of Review
The parties’ dispute over the proper interpretation of the
venue provisions in 26 U.S.C. § 7482(b) “clearly raises a
question of law. Therefore we address it de novo.” SEC v.
Johnson, 650 F.3d 710, 714 (D.C. Cir. 2011) (citations
omitted).
We review decisions of the Tax Court “in the same
manner and to the same extent as decisions of the district
courts in civil actions tried without a jury.” 26 U.S.C.
§ 7482(a)(1). Thus, we apply de novo review to the Tax
Court’s determinations of law. Andantech L.L.C. v. Comm’r,
331 F.3d 972, 976 (D.C. Cir. 2003).
We also apply de novo review to decisions to grant
summary judgment, applying the same standards as the district
courts. See generally EDWARDS, ELLIOTT & LEVY, FEDERAL
STANDARDS OF REVIEW 44-50 (2d ed. 2013). “Those standards
are largely derived from Federal Rule of Civil Procedure 56
and the Supreme Court’s seminal decisions in [Anderson v.
Liberty Lobby, Inc., 477 U.S. 242 (1986)], and [Celotex Corp.
v. Catrett, 477 U.S. 317 (1986).]” Id. at 44. As required by
Rule 56(a), “[t]he court shall grant summary judgment if the
movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter
of law.” In applying this rule, “the mere existence of some
alleged factual dispute between the parties will not defeat an
otherwise properly supported motion for summary judgment;
the requirement is that there be no genuine issue of material
fact.” Liberty Lobby, 477 U.S. at 247-48.
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In a CDP case in which the merits of the underlying tax
liability are not at issue, this court reviews the determinations
made by the Office of Appeals for an abuse of discretion. See,
e.g., Tucker v. Comm’r, 676 F.3d 1129, 1135-37 (D.C. Cir.
2012).
B. Venue
The Internal Revenue Manual clearly states that “none of
subparagraphs (A)-(F) [in 26 U.S.C. § 7482(b)(1)] expressly
mentions a decision in a CDP case.” IRM 36.2.5.8(1). We
agree with this characterization of the statute, which makes the
Commissioner’s motion to transfer all the more puzzling. The
statute’s plain language says that, “[i]f for any reason no
subparagraph of the preceding sentence applies, then [Tax
Court] decisions may be reviewed by the Court of Appeals for
the District of Columbia.” 26 U.S.C. § 7482(b)(1). Because
none of the subparagraphs expressly mentions a decision in a
CDP case, this catch-all provision applies, and venue lies in
this court. As such, venue cannot be proper in the Eighth
Circuit unless the parties so stipulate in writing. Id.
§ 7482(b)(2). Appellant timely filed his appeal in this court
and he has not acceded to the IRS’s request to transfer the case.
Therefore, venue in this court is proper.
The IRS offers several arguments in support of its claim
that venue is proper only in the Eighth Circuit. As we explain
below, we find no merit in these arguments.
First, the IRS urges that since CDP hearings can in some
circumstances include “challenges” to the underlying tax
liability, they can appropriately be considered
“redeterminations.” Br. for the Appellee at 26. Relatedly, the
IRS asserts that if venue turns on whether a redetermination of
a tax liability is “properly at issue,” venue determinations will
invariably depend on the merits of each case. Id. at 27. Both
points miss the mark. It is true that the statutory venue
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provision places appeals in the circuit of a taxpayer’s residence
whenever the taxpayer is “seeking redetermination of tax
liability.” 26 U.S.C. § 7482(b)(1)(A). However, it is clear in
this case that Appellant is not seeking a redetermination of his
tax liability.
It may be the case, as the IRS argues, that some appeals
will involve challenges to Tax Court decisions concerning both
redeterminations and collection actions. In such cases, venue
may not be proper in the D.C. Circuit. But this possibility does
not justify shoehorning all CDP cases into the redetermination
venue provision. Just as we see in this case, it normally will be
obvious from the taxpayer’s statement of the issues whether an
appeal involves a challenge to a redetermination decision, a
CDP decision on a collection method, or both. Therefore, it
will not be difficult for this court to distinguish between the
two types of cases to determine whether venue is proper in the
D.C. Circuit.
Second, the IRS argues that “[i]t would not be reasonable
to suppose that in adopting the CDP provisions for the benefit
of taxpayers, Congress intended to inconvenience them by
requiring them to bring all appeals to this Court, absent
stipulation by the Commissioner under § 7482(b)(2), no matter
where they live.” Br. for the Appellee at 29. The IRS’s
suppositions regarding congressional intent carry hardly any
weight when the statutory provision at issue is absolutely clear.
Moreover, our holding is limited to appeals challenging only a
lien or levy determination; it does not reach an appeal
contesting both collection action and redetermination
decisions, which presumably would fall under subsection
(b)(1)(A) with venue lying in a regional court of appeals. See
26 U.S.C. § 7482(b)(1) (assigning regional venue “in the case
of a petitioner seeking redetermination of tax liability”
(emphasis added)).
Third, the IRS asserts that if Congress meant to limit
13
venue to the D.C. Circuit, it would have done so explicitly. Br.
for the Appellee at 30-31. This is a curious argument because
the plain terms of the statute settle the issue. See Bamberg,
supra, at 456-57. It is true that the regional circuits have taken
venue over CDP appeals in the past, and this court has granted
motions to transfer venue to other circuits. See Robinson v.
Comm’r, No. 13-1081 (D.C. Cir. July 5, 2013); Brown v.
Comm’r, No. 02-1012, 2002 WL 1364313 (D.C. Cir. May 13,
2002); Br. for the Appellee at 18; Br. for the Appellant at
51-52. However, the IRS has not identified – nor have we
found – a decision where the venue issue addressed here was
properly raised and fully addressed by a court of appeals.
Finally, the IRS argues that it is simply impractical for the
D.C. Circuit to hear all non-redetermination CDP cases. Br. for
the Appellee at 31-32. Our research, however, indicates that
the number of published decisions from the courts of appeals
involving appeals from Tax Court CDP decisions is far from
overwhelming. Furthermore, it is not unreasonable to assume
that, even after the issuance of our decision in this case, many
taxpayers who seek review of CDP decisions will agree with
the IRS to have their cases heard in a circuit other than the D.C.
Circuit. In any event, Congress determines the jurisdiction and
venue of this court and we have no authority to declare
otherwise. Cf. Cohens v. Virginia, 19 U.S. 264, 404 (1821)
(“We have no more right to decline the exercise of jurisdiction
which is given, than to usurp that which is not given.”); Union
Pac. R.R. Co. v. Bhd. of Locomotive Eng’rs, 558 U.S. 67, 71
(2009) (holding that “there is surely a starting presumption that
when jurisdiction is conferred, a court may not decline to
exercise it”).
Most of the arguments raised by the IRS rest on the
Commissioner’s view that it would be illogical, inconvenient,
and bad policy to apply § 7482(b)(1) as it is written and to hold
that the D.C. Circuit is the appropriate venue for appeals from
Tax Court CDP decisions. For example, the IRS argues that
14
Congress expressly provided, in § 7482(b), that venue for
an appeal is to be fixed at the outset of the case: the time
the taxpayer files his petition in the Tax Court. Any other
approach to laying venue would be at odds with this
express legislative judgment. Moreover, as the various
courts of appeals do not always agree, and it may take
some time for the Supreme Court to resolve any conflict
that develops between the Circuits, it is important for the
Tax Court to apply the precedent of the Circuit to which
appeal lies. And unless appellate venue is known at the
outset of the case, the Tax Court will not be able to
identify the Circuit with the controlling precedent that is
to be followed in making its decision under its Golsen
rule. See Golsen v. Commissioner, 54 T.C. 742 (1970),
aff’d, 445 F.2d 985 (10th Cir. 1971).
Br. for the Appellee at 27-28. Even if the IRS’s policy
argument raises a legitimate concern, this is a matter for
Congress, not the courts.
The IRS’s arguments “rest[] on reasoning divorced from
the statutory text,” which surely cannot carry the day.
Massachusetts v. EPA, 549 U.S. 497, 532 (2007). It is well
established that “when the statute’s language is plain, the sole
function of the courts – at least where the disposition required
by the text is not absurd – is to enforce it according to its
terms.” Hartford Underwriters Ins. Co. v. Union Planters
Bank, N. A., 530 U.S. 1, 6 (2000) (internal quotation marks
omitted). Indeed, § 7482(b)(1) may be “awkward, . . . but that
does not make it ambiguous on the point at issue.” Lamie v.
U.S. Tr., 540 U.S. 526, 534 (2004). And the fact that the IRS
has regularly moved to transfer venue to the regional circuits
pursuant to Internal Revenue Manual, Part 36.2.5.8 is
irrelevant. “[N]either . . . the [IRS] manual nor allegedly
longstanding agency practice can trump . . . the force of law.”
Cent. Laborers’ Pension Fund v. Heinz, 541 U.S. 739, 748
15
(2004).
Excluding a few exceptions that are not relevant here, the
plain text of § 7482(b)(1) says that the proper venue to seek
review of a Tax Court decision lies in the D.C. Circuit unless
one of the circumstances enumerated in subparagraphs (A)-(F)
applies. If the IRS believes that compliance with the statute as
written will result in “undesirable consequences,” then it must
“take its concerns to Congress.” Friends of the Earth, Inc. v.
EPA, 446 F.3d 140, 142 (D.C. Cir. 2006). Because none of the
circumstances enumerated in subparagraphs (A)-(F) are at
issue in this case and the parties have not stipulated to venue in
another circuit, we deny the IRS’s motion to transfer this case
to the Eighth Circuit.
We have no occasion to decide in this case whether a
taxpayer who is seeking review of a CDP decision on a
collection method may file in a court of appeals other than the
D.C. Circuit if the parties have not stipulated to venue in
another circuit.
C. Appellant’s Claims on the Merits
1. Ex Parte Communications
Appellant contends that the judgment of the Tax Court
should be reversed because his CDP hearing was tainted by ex
parte communications between the Office of Appeals
Settlement Officer and other IRS employees. The Tax Court
rejected this claim, finding that Appellant had “presented no
credible support for this claim.” Byers, 103 T.C.M. at
1170. The Tax Court determined that the CDP hearing record
“adequately confirms” that any communications between the
settlement officer and other IRS employees “related solely to
administrative, ministerial, or minor procedural matters,”
16
which are permissible under IRS procedures. Id. (citing Rev.
Proc. 2000-43, 2002-2 C.B. 404, 405). We can find no error.
As the IRS explains:
Under Revenue Procedure 2000-43, 2002-2 C.B. 404,
Appeals and Settlement Officers are prohibited from
having ex parte communications with other IRS
employees to the extent that such communications appear
to compromise their independence. Improper ex parte
communications include discussions of the strengths and
weaknesses of the issues or positions in the case. Rev.
Proc. 2000-43, Q&A-6. There is no evidence whatsoever
that the Settlement Officer engaged in any improper ex
parte communications with other IRS employees in her
handling of taxpayer’s CDP hearing. The Settlement
Officer disclosed the nature and extent of her
communications, which she engaged in solely for
administrative, ministerial or procedural purposes, such as
obtaining documents and information she needed in order
to conduct [the] taxpayer’s CDP hearing.
Br. for the Appellee at 45-46. We agree.
There is not one iota of evidence in the record to indicate
that the Settlement Officer impermissibly communicated with
other IRS employees or interested parties. The Settlement
Officer exchanged emails with someone in the IRS general
counsel’s office in an effort to obtain copies of the notices of
deficiency that she needed to conduct her review of
Appellant’s case. The ban on ex parte communications is
aimed at communications between offices that might actually
bias the appeals officer against the taxpayer, not at
communications that might help her obtain documents that she
is required to obtain. See Internal Revenue Service
Restructuring and Reform Act of 1998, Pub. L. No. 105-206,
§ 1001(a)(4), 112 Stat. 685, 689 (banning “ex parte
17
communications between appeals officers and other Internal
Revenue Service employees to the extent that such
communications appear to compromise the independence of
the appeals officers”). Nothing in the record indicates that the
independence of the Settlement Officer was in any way
compromised during the CDP hearing.
2. The Senior Tax Court Judge’s Refusal to Recuse
Himself from Consideration of Appellant’s
Appointments Clause Argument
On February 13, 2012, the Tax Court entered an order and
decision, sustaining the determination of the Office of Appeals
to allow collection by levy of Appellant’s tax assessments for
the years 1999-2002. Order & Decision, reprinted in App. 118.
On March 13, 2012, Appellant filed a timely motion to vacate
the order and decision of the Tax Court. On the same day,
Appellant filed a motion to recuse Senior Tax Court Judge
Swift from considering his motion to vacate. Appellant
contended that the Tax Court lacked jurisdiction to enter its
order and decision because Judge Swift was a Senior Judge
and, therefore, was not properly appointed under the
Appointments Clause of the Constitution, U.S. CONST. art. II,
§ 2, cl. 2, to perform judicial duties. The Commissioner
opposed both vacatur and recusal on the grounds that (1)
Appellant was merely repeating arguments that had already
been rejected by the Tax Court; (2) Appellant’s Appointments
Clause challenge was a new argument that could not be raised
for the first time in a motion to vacate; and (3) the
Appointments Clause argument was meritless. The Tax Court
denied both motions “for cause, and for the reasons set forth in
[the Commissioner’s] objection and response to [Appellant’s]
motions.” Order, reprinted in App. 119. We now affirm.
Appellant’s motion asserted that the Tax Court could not
act through Senior Judge Swift because 26 U.S.C. § 7447(c),
which allows for the recall of retired Tax Court judges to act as
18
Senior Judges, violates the Appointments Clause. Appellant
concedes, however, that he did not raise the Appointments
Clause issue until after Judge Swift had issued his judgment on
behalf of the Tax Court. See Reply Br. for the Appellant at 37.
Appellant’s claim is untimely. As the IRS notes: “This is a
purely legal argument that taxpayer could have raised earlier in
the proceeding, but chose not to. For that reason alone, the Tax
Court did not abuse its discretion in denying the motion to
vacate.” Br. for the Appellee at 56 (citing Cerand & Co., Inc. v.
Comm’r, 254 F.3d 258, 260 (D.C. Cir. 2001)). We agree.
Because Appellant did not timely raise his Appointments
Clause argument with the Tax Court, we “shall not pass upon
[Appellant’s] argument.” Cerand & Co., 254 F.3d at 260.
Furthermore, we have no reason to be concerned that the
actions of Senior Judge Swift were ultra vires. Under 26
U.S.C. § 7447(c), Senior Judges are empowered “to perform
such judicial duties” as are requested by the Chief Judge. It is
undisputed that Senior Judge Swift was properly recalled to
duty by the Chief Judge of the Tax Court. The statute further
provides that “[a]ny act, or failure to act, by an individual
performing judicial duties pursuant to this subsection shall
have the same force and effect” as an act taken by an active
judge on the Tax Court. Id. These statutory authorizations are
plainly constitutional. See Shoemaker v. United States, 147
U.S. 282, 301 (1893) (“It cannot be doubted, and it has
frequently been the case, that congress may increase the power
and duties of an existing office without thereby rendering it
necessary that the incumbent should be again nominated and
appointed.”).
3. The Tax Court’s Dismissal of Appellant’s Tax
Liability for the Year 2003 as Moot
In the proceedings before the Tax Court, the IRS moved to
dismiss as moot the claim relating to the levy to collect income
19
tax liability for the year 2003. The IRS pointed out that “[t]he
assessment for taxable year 2003 is based on a failure to timely
petition from a statutory notice of deficiency, but this entry on
petitioner’s tax account is incorrect.” Mot. to Dismiss on
Ground of Mootness at 2, reprinted in App. 5. The IRS
explained that, because of this error, “[t]he assessment for tax
year 2003 has been abated” and the Commissioner was no
longer pursuing a levy with respect to year 2003. Id. at 3,
reprinted in App. 6. The IRS thus moved to have the 2003
claim dismissed as moot, and the Tax Court granted the
motion.
Appellant argues that the Tax Court “erred by mooting
and striking 2003 from the case” because the year 2003
assessment “remained relevant to resolving the case’s
outcome.” Br. for the Appellant at 72. Appellant is mistaken.
With no levy being placed upon his property for the 2003 year,
there was no actual case in controversy regarding an appeal of
such a levy action. There was no appropriate course of action
for the Tax Court to take but to dismiss as moot the dispute as
to the year 2003 tax assessment.
4. Appellant’s Challenge to the Notice of
Determination Imposing the Levy
Finally, Appellant argues that the Tax Court erred in
upholding the levy determination after the 2003 tax assessment
was no longer under consideration. Appellant suggests that the
Settlement Officer “may not have” found that a levy was
proper if she had excluded the 2003 tax year in her initial
determination. Br. for the Appellant at 71. Appellant thus
appears to suggest that the Tax Court erred in deciding the case
on a record that was different from the one that was relied upon
by the Settlement Officer. Id. at 72.
In support of this claim, Appellant cites SEC v. Chenery
Corp., 318 U.S. 80, 87-88 (1943), for the proposition that the
20
Tax Court should not have based its decision on factors other
than those considered by the Settlement Officer in the first
instance. Under the Chenery doctrine, a reviewing court must
confine itself to the grounds upon which the record discloses
that the agency’s action was based. Id. at 87–88. “If those
grounds are inadequate or improper, the court is powerless to
affirm the administrative action by substituting what it
considers to be a more adequate or proper basis.” SEC v.
Chenery Corp., 332 U.S. 194, 196 (1947). Appellant’s
argument fails for two reasons: First, the claim is based on the
false premise that the Tax Court reviewed a record that was
different from the record considered by the Settlement Officer.
Second, the claim is not properly before this court because it
was never raised with the Tax Court in the first instance. Our
de novo review of the record confirms that the Tax Court did
not err in granting summary judgment for the IRS.
After the Tax Court dismissed the year 2003 claim as
moot, the IRS filed a motion for summary judgment asserting
that the underlying tax liabilities for the years 1999-2002 were
not at issue and that the IRS Appeals Office had not abused its
discretion in determining that Appellant was subject to levy.
Resp’t’s Mot. for Summ. J. at 9-13, Byers v. Comm’r, No.
3032-10L (T.C. May 19, 2011). The IRS further asserted that
Appellant had failed to offer any viable collection alternatives;
that Appellant had failed to submit any information necessary
to allow a collection alternative to be considered by the
Settlement Officer; and that, pursuant to the requirements of 26
U.S.C. § 6330, all of the legal and administrative prerequisites
to levy had been met. Id. at 13-15. The IRS’s motion for
summary judgment also included a declaration from the
Settlement Officer stating that “[t]he reasons for, and the facts
underlying [her] determination are found in the Notice of
Determination, dated November 24, 2009” and that those
reasons were applicable “with respect to petitioner’s unpaid
income tax liabilities for tax years 1999, 2000, 2001, and
2002.” Am. Decl. of Lupe Silva at 1, Byers v. Comm’r, No.
21
3032-10L (T.C. May 25, 2011). In other words, the final
Amended Declaration of the Settlement Officer did not rely on
the 2003 tax year.
Appellant’s response to the motion for summary
judgment, Pet’r’s Notice of Objection, Byers v. Comm’r, No.
3032-10L (T.C. Dec. 27, 2011), did not raise any genuine
disputes with respect to any of the material facts asserted by
the IRS. And, importantly, Appellant’s opposition to the
motion for summary judgment did not challenge the
admissibility of the Amended Declaration of the Settlement
Officer, nor did it claim that the record before the Tax Court
was different from the one that was relied upon by the
Settlement Officer with respect to taxable year 2003.
The Tax Court granted the motion for summary judgment,
holding that the IRS had not abused its discretion in allowing
the levy against Appellant to proceed. Byers, 103 T.C.M.
(CCH) at 1170. We agree with the Tax Court that summary
judgment in favor of the IRS is clearly supported by the record.
As noted above, following the Tax Court’s issuance of a
summary judgment in favor of the IRS, Appellant filed a
motion to vacate the Tax Court’s orders and decision. In his
motion to vacate, Appellant did not assert the Chenery
argument that he has raised with this court. Mot. to Vacate
Orders and Decision, Byers v. Comm’r, No. 3032-10L (T.C.
Mar. 13, 2012). The first time that Appellant raised this
argument as to taxable year 2003 was in his brief to this court.
Appellant does not suggest that the record before the Tax Court
was inadequate to support a levy. This is unsurprising because,
even without considering the year 2003 tax assessment,
Appellant admittedly owed more than $120,000 in back taxes
and had expressed no intent to pay them.
It is unnecessary to tarry over Appellant’s Chenery
argument. We hold that, on the record at hand, we need not
22
reach the Chenery question that has been raised by Appellant
because it comes too late. “It is well settled that issues and
legal theories not asserted at the District Court level ordinarily
will not be heard on appeal.” District of Columbia v. Air Fla.,
Inc., 750 F.2d 1077, 1084 (D.C. Cir. 1984); see also Breeden v.
Novartis Pharm. Corp., 646 F.3d 43, 56 (D.C. Cir. 2011)
(holding argument raised for first time on appeal forfeited);
Benoit v. U.S. Dep’t of Agric., 608 F.3d 17, 21 (D.C. Cir. 2010)
(same). This principle controls here because Appellant never
pursued his claim with the Tax Court in the first instance,
although he had at least two opportunities to do so. We have
discretion to consider untimely arguments if “exceptional
circumstances” are present, Flynn v. Comm’r, 269 F.3d 1064,
1068–69 (D.C. Cir. 2001), but we find no such circumstances
in this case.
In sum, we have no grounds to overturn the IRS’s levy
determination in this case.
III. CONCLUSION
For the foregoing reasons, we affirm the decisions of the
United States Tax Court.