Ament v. Comm'r , 99 T.C.M. 1125 ( 2010 )

T.C. Memo. 2010-28
UNITED STATES TAX COURT
MARTIN AMENT, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
JANIE AMENT, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket Nos. 10911-07L, 10912-07L. Filed February 22, 2010.
A. Lavar Taylor, for petitioners.
Mindy S. Meigs, for respondent.
MEMORANDUM OPINION
KROUPA, Judge: These consolidated1 collection review
matters are before the Court in response to Notices of
1
These cases have been consolidated for purposes of trial,
briefing, and opinion.
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Determination Concerning Collection Action(s) Under Section 6320
and/or 63302 (determination notices) pertaining to trust fund
recovery penalties (TFRPs) assessed against petitioners for the
taxable periods ending September 30 and December 31, 2001, March
31, June 30, September 30, and December 31, 2002, and September
30, 2003 (periods at issue). We must determine whether it was
appropriate for respondent to assess the TFRPs against
petitioners. We find that the assessments were appropriate.
Background
Some of the facts have been stipulated and are so found.
The stipulations of fact and their accompanying exhibits are
incorporated by this reference. Petitioners resided in
California at the time they filed the petitions.
Petitioner Martin Ament (Mr. Ament) was the president and
chief executive officer of Martin M. Ament Enterprises, Inc.
(MMAE), and his wife, Janie Ament (Mrs. Ament) was vice president
of MMAE. MMAE manufactured cabinetry and accessories for
telecommunications equipment and data centers.
MMAE experienced great growth with the technology boom but
began incurring financial troubles in 2001. MMAE accrued more
than $419,000 of unpaid employment tax liabilities for the
periods at issue. Respondent thereafter sent petitioners notices
2
All section references are to the Internal Revenue Code
unless otherwise indicated.
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of proposed trust fund recovery penalty (TFRP) assessments
(Letters 1153) with respect to MMAE’s unpaid employment taxes.
The Letters 1153 provided petitioners with an opportunity for a
pre-assessment conference with respondent’s Appeals Office. MMAE
filed for chapter 11 bankruptcy (bankruptcy) shortly after
issuance of the Letters 1153.
Petitioners timely filed a written appeal in response to the
Letters 1153. Petitioners’ counsel participated in a conference
with Appeals Officer Maria E. Magers Roberts (AO Roberts).
Petitioners each signed a waiver extending the limitations period
for assessment of the TFRPs. AO Roberts and petitioners
subsequently agreed to settle the administrative appeal. Mr.
Ament agreed to the assessment of the total amount of the TFRPs,
and Mrs. Ament agreed to the assessment of a reduced amount of
TFRPs. As part of petitioners’ agreement with respondent,
respondent agreed to refrain from collection activity unless MMAE
defaulted on payment under its bankruptcy plan of reorganization
(bankruptcy plan). The bankruptcy plan required MMAE to pay the
Internal Revenue Service (IRS) a $56,9243 administrative claim, a
$113,013 priority claim, a $317,489 secured claim, and a $40,242
general unsecured claim.
Respondent assessed the penalties against petitioners
pursuant to the agreement reached in the Appeals conference.
3
All amounts are rounded to the nearest dollar.
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MMAE failed, however, to timely pay all the IRS claims required
by the bankruptcy plan. Respondent attempted to contact
petitioners regarding those payments by mail and by visiting
their last known address, but petitioners never responded.
Respondent thereafter sent notices of Federal tax lien filings
(lien filings) to petitioners to collect the unpaid TFRPs.
Petitioners timely filed separate requests for a collection due
process (CDP) hearing. Petitioners claimed that, even though
they had consented to the assessments of the TFRPs in their
agreement with AO Roberts, the assessments should be abated
because respondent had agreed to refrain from collection action
and the lien filings constituted collection action.
Settlement Officer Wendy Clinger (SO Clinger) held a CDP
hearing with petitioners’ counsel. Petitioners’ counsel argued
that the lien filings violated the terms of the limitations
period waiver, the terms of the agreements with AO Roberts, and
the terms of the bankruptcy plan. Petitioners’ counsel did not
dispute petitioners’ liability for the TFRPs and did not propose
any collection alternatives. SO Clinger reviewed the case
history and verified that respondent had properly assessed the
TFRPs. SO Clinger also received a memorandum from respondent’s
counsel advising her that MMAE was not fully current on its
bankruptcy plan payments. Respondent’s counsel nonetheless
recommended that the liens filed against petitioners be withdrawn
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to enable petitioners to obtain necessary financing for MMAE’s
operations. Withdrawing the liens would give petitioners an
opportunity to enable MMAE to make the required bankruptcy plan
payments.
SO Clinger concurred with counsel’s recommendation and
withdrew the liens filed against petitioners. SO Clinger
concluded in the determination notices to withdraw the liens, but
declined to abate the assessments of the TFRPs for the periods at
issue. Respondent sent petitioners determination notices with
respect to the TFRPs at issue. Petitioners timely filed
petitions contesting SO Clinger’s determination not to abate the
assessments of the TFRPs.
Discussion
We are asked to determine whether respondent must abate the
assessment of the TFRPs against petitioners. Respondent argues
that we should apply an abuse of discretion standard of review in
reviewing the determination notices. Petitioners contend that we
should apply a de novo standard in reviewing the determination
notices. Under either standard, we would reach the same result
on the record in this case. Accordingly, we need not decide
which standard of review applies. See Kohn v. Commissioner, T.C.
Memo. 2009-117; see also Green v. Commissioner, T.C. Memo. 2009-
105.
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Petitioners argue that SO Clinger should have abated the
assessments of the TFRPs against petitioners on the ground that
the assessments were procedurally defective. We disagree. Trust
fund penalties are not subject to the deficiency procedures
provided in sections 6212 and 6213. Sec. 6671(a); Shaw v. United
States, 331 F.2d 493, 494 (9th Cir. 1964); Moore v. Commissioner,
114 T.C. 171, 175 (2000). The IRS must mail the taxpayer a
notice (typically done through a Letter 1153) or notify the
taxpayer in person that it intends to assess a trust fund penalty
before the period for assessing the penalty expires. Sec.
6672(b)(1), (3).
SO Clinger reviewed the case history and verified that the
assessments were valid. She confirmed that petitioners received
the required Letters 1153 before they contested the notices in a
pre-assessment conference with AO Roberts. SO Clinger also
reviewed and considered, among other things, the limitation
period waivers petitioners executed. Petitioners agreed to the
assessments in their agreements with AO Roberts. Correspondence
between petitioners and Appeals concerning the execution of the
waivers further substantiates that petitioners agreed to the
assessment of the TFRPs. SO Clinger concluded that petitioners
received all notices and were accorded all rights to which they
were entitled regarding the assessments.
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Petitioners also argue that the lien filings violated their
agreement with AO Roberts. The liens were withdrawn.
Withdrawing the liens has no impact on the validity of the
assessments. Moreover, we note that petitioners provided no
records to SO Clinger to establish that MMAE had made the
bankruptcy plan payments or that MMAE was not in default. In
fact, SO Clinger reviewed the bankruptcy plan payments and found
that MMAE was indeed delinquent on its payments. Accordingly, we
affirm SO Clinger’s determination that the assessments at issue
were valid.
We have considered all arguments made in reaching our
decision, and, to the extent not mentioned, we conclude that they
are moot, irrelevant, or without merit.
To reflect the foregoing,
Decisions will be entered
for respondent.