Dominic Calafati v. Commissioner , 127 T.C. No. 16 ( 2006 )

127 T.C. No. 16
UNITED STATES TAX COURT
DOMINIC CALAFATI, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 17529-03L. Filed December 26, 2006.
P filed a motion for summary judgment in this sec.
6330, I.R.C., proceeding. In his petition, P disputed
R’s notice of determination concerning collection
action with respect to his 1998 tax liability on the
ground that he was not permitted by the IRS Appeals
Office to make an audio recording of his sec. 6330,
I.R.C., telephone hearing, in violation of sec.
7521(a)(1), I.R.C. P informed R before the telephone
hearing that he intended to audio record the hearing
pursuant to sec. 7521(a)(1), I.R.C., and Keene v.
Commissioner, 121 T.C. 8 (2003). R refused to permit P
to audio record the telephone hearing but did not
inform him of R’s post-Keene policy that a taxpayer
could audio record a face-to-face hearing. The parties
agreed to consider the scheduled telephone hearing
convened and then terminated, with no substantive
issues discussed, because P was not allowed to audio
record the hearing.
- 2 -
Held: Sec. 7521(a)(1), I.R.C., does not entitle P
to make an audio recording of his sec. 6330, I.R.C.,
telephone hearing with the IRS Appeals Office.
Held, further, because of the uncertainty
regarding a taxpayer’s ability to audio record a sec.
6330, I.R.C., hearing existing at the time of P’s sec.
6330, I.R.C., hearing, P’s motion for summary judgment
shall be granted in that the case is remanded for
further proceedings consistent with this Opinion.
David S. Brady, for petitioner.
Jack T. Anagnostis, for respondent.
OPINION
MARVEL, Judge: This matter is before the Court on
petitioner’s motion for summary judgment filed pursuant to Rule
121.1
Background
This is an appeal from respondent’s determination upholding
the proposed use of a levy to collect petitioner’s unpaid Federal
income tax liability for 1998. The only issues petitioner raises
are whether, pursuant to the provisions of section 7521(a)(1),
petitioner was entitled to audio record his section 6330
telephone hearing with the Internal Revenue Service Appeals
Office (the Appeals Office) and, alternatively, whether
1
All Rule references are to the Tax Court Rules of Practice
and Procedure, and all section references are to the Internal
Revenue Code in effect at all relevant times.
- 3 -
petitioner was entitled to be informed, before the beginning of
his section 6330 telephone hearing, of respondent’s post-Keene
policy that a face-to-face section 6330 hearing is the only
section 6330 hearing section 7521(a)(1) entitles a taxpayer to
audio record. Petitioner was a resident of Lansdale,
Pennsylvania, when his petition in this case was filed.
Petitioner timely filed his 1998 individual Federal income
tax return. On April 3, 2002, respondent issued a notice of
deficiency (notice) in which he determined that petitioner was
liable for an income tax deficiency of $8,173 and an accuracy-
related penalty, pursuant to section 6662(a), of $1,634.60 for
1998. Petitioner sent a letter dated May 14, 2002, to the
Internal Revenue Service (the Service) appealing the notice, but
he did not petition this Court to review the notice. On August
26, 2002, respondent assessed the deficiency for 1998.
On December 21, 2002, respondent issued a Final Notice of
Intent To Levy and Notice of Your Right to a Hearing with regard
to petitioner’s unpaid tax liability for 1998. On or around
December 30, 2002, petitioner timely submitted a Form 12153,
Request for a Collection Due Process Hearing (section 6330
hearing), in which he contended that “The administrative record
contains egregious errors, and the correction of those errors
will mitigate collection activity. Additionally, several
procedural errors were committed violating administrative due
- 4 -
process.” On July 8, 2003, after petitioner requested his
hearing, we released our Opinion in Keene v. Commissioner, 121
T.C. 8 (2003). In Keene, we held that a taxpayer was entitled to
audio record a face-to-face section 6330 hearing under section
7521(a).
By letter dated July 28, 2003, Appeals Officer Paula Stanton
(the Appeals officer) informed petitioner that his section 6330
hearing was scheduled to take place on August 12, 2003, at the
Service’s Philadelphia, Pennsylvania, Appeals Office.
Petitioner’s representative, Albert Wagner (Mr. Wagner),
telephoned the Appeals officer to reschedule the hearing for
August 18, 2003, and to request that the hearing be conducted by
telephone. Mr. Wagner also advised the Appeals officer that he
intended to audio record the telephone hearing. The Appeals
officer informed Mr. Wagner that audio recording would not be
permitted. In response, Mr. Wagner stated that he still wanted
to proceed with the telephone hearing.
On or around August 11, 2003, several days after the
telephone conversation with Mr. Wagner, the Appeals officer
received a facsimile dated August 7, 2003, from Mr. Wagner that
confirmed Mr. Wagner’s desire to participate in the August 18
telephone hearing and reiterated his intent to audio record the
hearing “pursuant to IRC §7521(a)(1)” and “the recent Tax Court
decision, * * * Keene v Commissioner”. The Appeals officer did
- 5 -
not advise petitioner or Mr. Wagner of respondent’s post-Keene
policy that a taxpayer would be permitted to audio record a face-
to-face section 6330 hearing but not a telephone hearing.
The telephone hearing scheduled for August 18, 2003, was
rescheduled for August 20, 2003, and was convened on that date.
At the beginning of the hearing, Mr. Wagner again informed the
Appeals officer that he intended to audio record the hearing, and
the Appeals officer again advised Mr. Wagner that the Appeals
Office’s policy did not permit audio recording. Mr. Wagner and
the Appeals officer agreed that they would consider the hearing
started and then terminated, with no substantive issues
discussed, because the Appeals officer would not permit audio
recording. After Mr. Wagner and the Appeals officer agreed the
hearing was terminated, the Appeals officer notified Mr. Wagner
that she would issue a notice of determination based on the
information in her administrative file. The parties stipulated
that petitioner would have continued with the telephone hearing
had he been permitted to audio record it.
On September 16, 2003, respondent issued a Notice of
Determination Concerning Collection Action(s) Under Section 6320
and/or 6330 (notice of determination) to petitioner. The notice
of determination informed petitioner that respondent had
determined that a levy was appropriate to collect the 1998 tax
liability.
- 6 -
On October 14, 2003, the petition contesting the notice of
determination was filed. The only error petitioner alleged was
that the section 6330 hearing was not conducted in accordance
with section 7521(a)(1). On December 4, 2003, respondent’s
answer, in which he denied he erred as alleged, was filed.
Petitioner subsequently filed a motion for summary judgment.
In his motion, petitioner asserts there is no dispute as to any
material facts and that he is entitled to audio record his
section 6330 telephone hearing as a matter of law. We held a
hearing on petitioner’s motion. Both petitioner and respondent
appeared and were heard. At the hearing, petitioner argued, in
the alternative, that he should have received some advance notice
of the fact that if he had requested a face-to-face meeting, then
he would have been allowed to record it. Respondent’s position
is that section 7521(a)(1), which authorizes taxpayers to record
“in-person interviews”, is not applicable to section 6330
telephone hearings and that respondent had no obligation to
notify petitioner of his policy regarding the recording of
section 6330 hearings.
Discussion
A. Summary Judgment
Summary judgment is a procedure designed to expedite
litigation and avoid unnecessary, time-consuming, and expensive
trials. Fla. Peach Corp. v. Commissioner, 90 T.C. 678, 681
- 7 -
(1988). Summary judgment may be granted with respect to all or
any part of the legal issues presented “if the pleadings, answers
to interrogatories, depositions, admissions, and any other
acceptable materials, together with the affidavits, if any, show
that there is no genuine issue as to any material fact and that a
decision may be rendered as a matter of law.” Rule 121(a) and
(b); see Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520
(1992), affd. 17 F.3d 965 (7th Cir. 1994); Zaentz v.
Commissioner, 90 T.C. 753, 754 (1988). The moving party bears
the burden of proving that there is no genuine issue of material
fact, and factual inferences will be read in a manner most
favorable to the party opposing summary judgment. Dahlstrom v.
Commissioner, 85 T.C. 812, 821 (1985).
B. Section 6330 Hearing
Section 6331(a) provides that if any taxpayer liable to pay
any tax neglects or refuses to pay such tax within 10 days after
notice and demand for payment, then the Secretary2 is authorized
to collect such tax by levy upon the taxpayer’s property.
However, section 6330(a) requires the Secretary to send written
2
The term “Secretary” means “the Secretary of the Treasury
or his delegate”, sec. 7701(a)(11)(B), and the term “or his
delegate” means “any officer, employee, or agency of the Treasury
Department duly authorized by the Secretary of the Treasury
directly, or indirectly by one or more redelegations of
authority, to perform the function mentioned or described in the
context”, sec. 7701(a)(12)(A).
- 8 -
notice to the taxpayer of the taxpayer’s right to request a
section 6330 hearing before a levy is made.
Section 6330 hearings are informal proceedings, not formal
adjudications. Katz v. Commissioner, 115 T.C. 329, 337 (2000);
Davis v. Commissioner, 115 T.C. 35, 41 (2000); sec. 301.6330-
1(d)(2), Q&A-D6, Proced. & Admin. Regs. Ordinarily, a taxpayer
is entitled under section 6330 to a face-to-face hearing with the
Appeals Office. Cox v. Commissioner, 126 T.C. 237, 246 (2006);
sec. 301.6330-1(d)(2), Q&A-D6 and D7, Proced. & Admin. Regs. If
the taxpayer chooses not to participate in a face-to-face
hearing, however, “the taxpayer will be given an opportunity for
a hearing by correspondence or by telephone.” Sec. 301.6330-
1(d)(2), Q&A-D7, Proced. & Admin. Regs. Once the taxpayer has
been given a reasonable opportunity for a hearing but has failed
to avail himself of that opportunity, the Appeals officer, after
reviewing the administrative file, may make a determination
regarding whether respondent’s proposed collection action may
proceed. See, e.g., Taylor v. Commissioner, T.C. Memo. 2004-25,
affd. 130 Fed. Appx. 934 (9th Cir. 2005); Leineweber v.
Commissioner, T.C. Memo. 2004-17.
C. Section 7521(a)(1) and the Right To Audio Record an
“In-Person Interview”
Section 7521(a)(1) provides that, upon advance request of a
taxpayer, an officer or employee of the Service shall permit the
taxpayer to make an audio recording of “any in-person interview
- 9 -
* * * relating to the determination or collection of any tax”.
However, neither section 7521(a)(1) nor the legislative history
of section 7521 “directly and clearly defines or otherwise
describes the term ‘in-person interview’.” Keene v.
Commissioner, 121 T.C. 14.
In his motion for summary judgment, petitioner contends that
a telephone interview conducted pursuant to section 6330
qualifies as an “in-person interview” within the meaning of
section 7521(a). Citing Keene, petitioner contends that he is
entitled under section 7521(a) to audio record his telephone
hearing. We consider petitioner’s contentions below.
1. Keene v. Commissioner and the Definition of “Interview”
In Keene, we considered for the first time whether section
7521(a)(1) entitles a taxpayer to audio record a section 6330
hearing. In that case, the taxpayer requested a section 6330
hearing with the Appeals Office and informed the Appeals Office
of his intent to audio record the hearing. Id. at 11. An
Appeals officer scheduled a face-to-face hearing with the
taxpayer but informed him that the Appeals Office would not allow
audio or stenographic recordings of Appeals Office cases. Id.
The taxpayer appeared for the face-to-face hearing. Id. at 13.
When the Appeals officer again informed the taxpayer that he
would not be allowed to record the hearing, the taxpayer decided
he did not want the hearing because he could not record it. Id.
- 10 -
The taxpayer subsequently filed a petition in this Court in
which he argued that he should have been permitted to record the
face-to-face hearing. Id. The Commissioner contended that the
taxpayer had no right to record the section 6330 proceeding
because a section 6330 hearing was not an “in-person interview”
within the meaning of section 7521(a)(1), section 7521 did not
apply to hearings conducted by the Appeals Office, and a section
6330 hearing was not covered by section 7521 because it was a
voluntary proceeding initiated by a taxpayer and was not an
inquisitorial interview conducted by the Examination or
Collection Division of the type described in section 7521. Id.
at 15-16. We rejected the Commissioner’s contentions.
In our analysis, we acknowledged that section 7521 and its
legislative history neither defined nor explained the term “in-
person interview”. Id. at 14. Consequently, applying well-
established principles of statutory interpretation, our analysis
focused on what constitutes an interview:
The term “interview” is defined by Webster’s Third
New International Dictionary Unabridged 1183-1184
(1993) as:
a meeting face to face: a private conversation; usu: a
formal meeting for consultation: CONFERENCE
Similar definitions appear in other dictionaries. For
example, the American Heritage Dictionary (4th ed.
1970) defines the term “interview” as “a face to face
meeting arranged for the discussion of some matter”;
Webster’s II New Riverside University Dictionary 639
(1984) defines the term as “a formal face-to-face
meeting”; and Webster’s New Collegiate Dictionary 600
- 11 -
(1979) defines the term as “a formal consultation” or
“a meeting at which information is obtained”.
Id. at 15.
Applying this analysis, we concluded that a section 6330
hearing has the “characteristics of an ‘interview’” because the
“meeting between the taxpayer and the Appeals officer is face-to-
face, private, arranged for the discussion of specific matters,
and formal in the sense that it is prescribed by law.” Id. at
16, 17 (emphasis added). We also concluded that
As the general and ordinary definitions of “interview”
suggest, we think the exchange of information that
occurs between a taxpayer and an Appeals officer during
an administrative hearing conducted under section 6330
constitutes an “in-person interview” within the meaning
of that term as used in section 7521(a)(1).
Id. at 16.
Because we were also persuaded that (1) a section 6330 hearing
“is an integral part of the tax collection process and therefore
relates to the ‘collection of any tax’ within the meaning of
section 7521(a)(1)”, (2) “denying the taxpayer’s right to audio
record would serve to undermine the safeguards in IRS collection
actions that Congress created in section 6330”, (3) the
Commissioner’s interpretation of section 7521 would have the
anomalous result of allowing audio recording of interviews that
we typically do not review but not allowing recording of
proceedings we are statutorily charged with reviewing, and (4)
having a transcript of the section 6330 hearing would facilitate
- 12 -
judicial review of the determination made by the Appeals Office
with respect to the Commissioner’s proposed levy, we held that
the taxpayer had a statutory right under section 7521(a)(1) to
audio record his section 6330 hearing. Id. at 17-19. However,
we did not specifically address when an interview qualifies as
“in-person” in Keene, presumably because that aspect of the
taxpayer’s argument was not contested by the Commissioner and
could not reasonably be disputed on the facts of the case. That
issue is now before us.
2. The Meaning of “In-Person” in Section 7521(a)
As we acknowledged in Keene, section 7521(a) does not define
the term “in-person interview”. Although we held in Keene that a
face-to-face section 6330 hearing qualified as an “in-person
interview” within the meaning of section 7521(a), we did not
decide whether other kinds of section 6330 hearings, such as the
telephone hearing involved in this case, also qualified as an
“in-person interview”.
Where a term is not defined by statute, it is appropriate to
accord the term its “ordinary meaning”. Nw. Forest Res. Council
v. Glickman, 82 F.3d 825, 833 (9th Cir. 1996); Keene v.
Commissioner, 121 T.C. 14. “And when there is no indication
Congress intended a specific legal meaning for the term, courts
may look to sources such as dictionaries for a definition.”
Keene v. Commissioner, supra at 14-15; see also Muscarello v.
- 13 -
United States, 524 U.S. 125, 127-132 (1998). The term “in-
person” is defined by Merriam Webster’s Collegiate Dictionary 867
(10th ed. 1997) as “in one’s bodily presence”. Similar
definitions appear in other dictionaries. For example, the
Oxford Dictionary and Usage Guide 440 (1995) and the American
Heritage Dictionary 978 (1976) define the term as “physically
present”, and the New Shorter Oxford English Dictionary, Vol. 2,
2171 (1993) defines the term as “with one’s own bodily presence”
or “personally”.
The ordinary meaning of the term “in person” supports
respondent’s argument that section 7521(a) refers to a face-to-
face meeting between the interviewer and the person being
interviewed. Specifically in the context of section 7521, an
“in-person interview” according to respondent contemplates an
interview between a taxpayer and/or the taxpayer’s representative
and an officer or employee of the Service relating to the
determination or collection of any tax. See sec. 7521(a). This
interpretation of the language of section 7521(a) is also
buttressed by section 7521(b) and its legislative history.
Section 7521(b)(1) provides that in the case of an “in-
person interview with the taxpayer” relating to either the
determination or collection of any tax, the Service is obligated
to provide certain information to the taxpayer either before or
at the initial interview. Sec. 7521(b)(1)(A) and (B). The
- 14 -
legislative history of section 7521 indicates that the Service
may meet this obligation with a “written statement handed to the
taxpayer” at or shortly before the initial in-person interview.
H. Conf. Rept. 100-1104, at 213 (1988), 1988-3 C.B. 473, 703.
Together, section 7521(b) and the legislative history suggest
that Congress envisioned an “in-person interview” as an interview
where both a Service representative and the taxpayer (or his
representative), see sec. 7521(c), are physically present and
able to “hand” information to each other. See also IRS Field
Serv. Advisory 200206055 (February 2002) and IRS General
Litigation Bulletin No. 355 (April 1990), which generally
distinguish section 7521 “in-person interviews” from “written
communication or telephone conversations” between the Service and
taxpayers.
We conclude, therefore, that the term “in-person interview”
in section 7521(a) refers to an interview in which the IRS
representative and the taxpayer and/or his representative are
face-to-face, that is, they are within each other’s physical
presence.
D. Application to Section 6330 Telephone Hearings
1. Whether Section 7521(a)(1) Entitles Petitioner To Make
an Audio Recording of His Section 6330 Telephone Hearing
Respondent contends that there is a material difference
between the section 6330 hearing in Keene and the section 6330
hearing at issue here. In Keene v. Commissioner, supra at 13,
- 15 -
the section 6330 hearing was a face-to-face meeting between the
taxpayer and the Appeals officer. In this case, the section 6330
hearing was telephonic and did not involve any face-to-face
meeting between petitioner and the Appeals officer. Respondent
argues that the term “in-person interview” in section 7521(a)(1)
requires a face-to-face meeting between the taxpayer and the
presiding Appeals officer. Petitioner contends, however, that
Keene confirms he is entitled to make an audio recording of his
section 6330 telephone hearing because the hearing relates to the
collection of tax and involves an exchange of information that
qualifies as an “in-person interview” as that term is used in
section 7521(a)(1) and that “it’s not an issue of whether it’s by
telephone or not”. We disagree with petitioner for the following
reasons.
First, petitioner’s position that Keene confirms he has a
right to audio record his section 6330 hearing pursuant to
section 7521(a)(1), regardless of whether it takes place face-to-
face, by telephone, or otherwise, is not persuasive. In Keene,
we held that section 7521(a)(1) entitled the taxpayer to audio
record his section 6330 hearing because the hearing was an “in-
person interview” with respect to the collection of tax. We
concluded that the hearing had the characteristics of a section
7521(a)(1) “in-person interview”, in part, specifically because
the hearing “between the taxpayer and the Appeals officer is
- 16 -
face-to-face”. Id. at 16-17 (emphasis added). Consequently, our
analysis in Keene does not show that we considered the format of
the section 6330 hearing irrelevant to our holding. Instead, our
analysis in Keene reveals that for purposes of our holding, we
only considered a face-to-face section 6330 hearing. See Wright
v. Commissioner, T.C. Memo. 2005-291 (“In Keene * * *, this Court
held that taxpayers are entitled, pursuant to section 7521(a)(1),
to audio record a face-to-face section 6330 hearing.” (Emphasis
added.)).
Second, petitioner’s interpretation of Keene is undermined
by our application of Keene since we issued the Opinion. We have
never applied our holding in Keene that a taxpayer is entitled to
audio record his section 6330 hearing to anything other than a
face-to-face meeting. See, e.g., Meyer v. Commissioner, T.C.
Memo. 2005-81, affd. without published opinion 98 AFTR 2d 2006-
6378, 2006-2 USTC par. 50539 (9th Cir., Aug. 31, 2006); Taylor v.
Commissioner, T.C. Memo. 2005-74; Frey v. Commissioner, T.C.
Memo. 2004-87; see also Yazzie v. Commissioner, T.C. Memo. 2004-
233 (the Court described the taxpayer’s section 6330 face-to-face
hearing as an “in-person conference”), affd. 153 Fed. Appx. 456
(9th Cir. 2005); Johnston v. Commissioner, T.C. Memo. 2004-224
(the Court again described the taxpayer’s section 6330 face-to-
face hearing as an “in-person conference”), affd. 153 Fed. Appx.
451 (9th Cir. 2005).
- 17 -
Third, and most significantly, we reject petitioner’s
position because, as the general and ordinary definitions of “in-
person” suggest, a section 6330 hearing that takes place by
telephone is not a hearing where the parties, or their
representatives, are within each other’s bodily presence, or “in-
person”. To hold that a section 6330 telephone hearing is an
“in-person interview” for purposes of section 7521(a)(1),
therefore, would be contrary to well-settled rules of statutory
construction because it would render the words “in-person” in
section 7521 meaningless. Duncan v. Walker, 533 U.S. 167, 174
(2001) (statute ought to be construed so that no clause,
sentence, or word is rendered superfluous, void, or
insignificant); Weinberger v. Hynson, Westcott & Dunning, Inc.,
412 U.S. 609, 633 (1973) (“all parts of a statute, if at all
possible, are to be given effect”). For these reasons, we hold
that section 7521(a)(1) does not entitle petitioner to make an
audio recording of his section 6330 telephone hearing.3
3
We recognize that several of the reasons we enumerated in
Keene to support our holding that sec. 7521(a)(1) entitles a
taxpayer to audio record his sec. 6330 face-to-face hearing would
apply equally to a taxpayer who participates in a sec. 6330
telephone hearing. For example, a sec. 6330 telephone hearing is
just as integral a part of the tax collection process as a face-
to-face hearing, and a transcript of a section 6330 telephone
hearing would facilitate judicial review of a determination made
by the Appeals Office with respect to a proposed levy by the
Commissioner just as a transcript of a face-to-face hearing
would. See Keene v. Commissioner, 121 T.C. 8, 17-18 (2003).
However, sec. 7521(a)(1) specifically limits a taxpayer’s right
(continued...)
- 18 -
2. Whether Respondent Was Obligated To Advise Petitioner of
His Post-Keene Policy on Audio Recording Section 6330
Hearings
Alternatively, petitioner argues that respondent had an
obligation to provide petitioner with information regarding his
post-Keene policy on audio recording section 6330 hearings so
that petitioner could have made an informed decision regarding
the type of hearing to request. Respondent disagrees, arguing
that petitioner was offered a face-to-face hearing and rejected
it in favor of a telephone hearing. However, respondent offered
the face-to-face hearing, and petitioner rejected it, before we
had decided Keene. We issued our opinion in Keene on July 8,
2003, more than a month before the August 20, 2003, telephone
hearing was convened. Respondent did not advise petitioner
either before the August 20, 2003, telephone hearing or at the
beginning of the telephone hearing when petitioner renewed his
request to audio record the hearing, that petitioner could only
audio record a face-to-face hearing.
Section 6330(a)(1) requires that the Secretary provide
notice to a taxpayer of his right to a hearing before a levy is
made on the taxpayer’s property or on his right to property.
3
(...continued)
to audio record collection interviews to those interviews that
take place “in-person”, and the “courts may not depart from the
statutory text because they believe some other arrangement would
better serve the legislative goals.” Herrgott v. U.S. Dist.
Court for N. Dist. of Cal. (In re Cavanaugh), 306 F.3d 726, 731-
732 (9th Cir. 2002).
- 19 -
Section 6330(a)(3) provides that the notice shall include, in
simple and nontechnical terms, the amount of the unpaid tax, the
right of the person to request the hearing, and the proposed
action by the Secretary and the rights of the person with respect
to such action. Section 6330(a)(3)(C)(ii) and (iii) specifically
requires that the person whose property may be subject to a levy
also be advised of “the procedures applicable to the levy and
sale of property under this title” and “the administrative
appeals available to the taxpayer with respect to such levy and
sale and the procedures relating to such appeals”. Section
6330(a) thus confirms that the Commissioner has an affirmative
obligation to notify a taxpayer whose property or rights to
property could be adversely affected by a proposed levy of his
administrative appeal rights and the procedures relating to such
appeal.
Respondent issued the notice advising petitioner of his
right to a section 6330 hearing before we decided Keene.4
Petitioner contends in effect that respondent’s obligations to
inform a taxpayer of his rights under section 6330 do not end
with the mailing of a notice. Petitioner maintains that
respondent had an obligation to inform him of his right under
4
We recognize that the notice furnished to petitioner under
sec. 6330 could not have included any explanation of his rights
under sec. 7521 and Keene v. Commissioner, supra, because our
Opinion in Keene had not yet been filed when the notice was
mailed to petitioner.
- 20 -
section 7521(a) to audio record a section 6330 face-to-face
hearing but not a telephone hearing. Under the circumstances of
this case, we do not have to reach this issue.
Respondent does not dispute for purposes of petitioner’s
motion that, on or before the date of petitioner’s section 6330
hearing, respondent had adopted, at least informally, an
administrative position regarding the effect of our opinion in
Keene on a taxpayer’s right to audio record a section 6330
hearing (post-Keene policy).5 In addition, respondent admits that
5
On Sept. 11, 2003, approximately 2 months after we filed
our Opinion in Keene, the Office of Chief Counsel issued Notice
CC-2003-031 (Sept. 11, 2003) to provide guidance to IRS personnel
as to “when the Internal Revenue Service Office of Appeals will
offer a taxpayer a face-to-face conference in a lien and levy
case arising under I.R.C. §6320 or §6330.” In Notice CC-2003-
031, the Office of Chief Counsel limited a taxpayer’s right to
obtain a face-to-face conference in a proceeding under sec. 6320
or 6330 in situations where the taxpayer has raised in his
hearing request only frivolous or groundless arguments. The
notice provides that, if a taxpayer who has raised only frivolous
or groundless arguments in his hearing request satisfies the
Appeals Office that he is prepared to discuss nonfrivolous
issues, the taxpayer may be offered a face-to-face conference,
and, if he requests to do so, the taxpayer may audio record the
conference in accordance with sec. 7521 and Keene v.
Commissioner, supra.
Effective May 27, 2004, the Service revised Internal Revenue
Manual (IRM) sec. 8.7.2, Special Collection Appeals Programs, to
establish procedures for recording face-to-face hearings before
the Appeals Office and to set forth requirements for making an
audio recording of an Appeals Office conference. Specifically,
IRM sec. 8.7.2.3.6 acknowledges our Opinion in Keene and confirms
that the Appeals Office will allow audio recordings of all types
of cases that have face-to-face conferences on issues that are
not deemed frivolous but will not allow recordings of telephone
conferences. Under 4 Administration, IRM (CCH), sec. 8.6.1, at
(continued...)
- 21 -
the Appeals officer did not advise petitioner or his
representative of respondent’s post-Keene policy prohibiting the
audio recording of section 6330 telephone hearings but permitting
the audio recording of a face-to-face hearing. Petitioner
understandably complains that respondent’s failure to inform him
of the policy deprived him of the opportunity to make an informed
decision regarding the format of his section 6330 hearing and his
right under section 7521 to audio record it.6 Petitioner states,
and respondent does not dispute, that if petitioner had known
about respondent’s policy, petitioner would have requested a
face-to-face hearing so that he could have exercised his right
under section 7521 to audio record his section 6330 hearing.
We are not aware of any Service publication or announcement
that would have put petitioner on notice of respondent’s post-
Keene policy before or at petitioner’s scheduled section 6330
hearing on August 20, 2003. The regulations in effect on August
5
(...continued)
27,203, Conference and Settlement Practice, see sec. 8.6.1.2.5.,
at 27,207, Audio and Stenographic Recording of Conferences, and
sec. 8.6.1.2.5.1, at 27,208, Recording Requirements, which were
amended, effective May 13, 2004, to provide for audio recording
of all cases that have face-to-face conferences on issues that
are not deemed frivolous.
6
Respondent does not allege that petitioner has asserted
only frivolous or groundless arguments in his hearing request,
nor does he contend that petitioner had no right to have a sec.
6330 face-to-face hearing. Rather, respondent contends that
petitioner was given the opportunity to have a sec. 6330 face-to-
face hearing but requested a telephone hearing instead.
- 22 -
20, 2003, did not set forth respondent’s post-Keene policy
regarding audio recording of section 6330 hearings, and
respondent did not issue any guidance regarding the policy until
September 11, 2003.
We recognize that our Opinion in Keene was not filed until
July 8, 2003, less than 2 months before petitioner’s section 6330
hearing was convened. We also recognize that the Service must
have some reasonable period of time to evaluate the effect of an
opinion like Keene and to educate its personnel regarding its
application. Nevertheless, it is uncontested that, as of August
20, 2003, respondent had concluded that the right to record a
section 6330 hearing that we recognized in Keene is limited to
those section 6330 hearings conducted face-to-face.
This Court may remand a case to the Internal Revenue Service
for a section 6330 hearing in appropriate circumstances. See
Lunsford v. Commissioner, 117 T.C. 183, 189 (2001); Kelby v.
Commissioner, T.C. Memo. 2005-25 (If a taxpayer is not afforded a
proper opportunity for a section 6330 hearing, we can remand for
a hearing if we believe it is necessary or productive). While we
acknowledge that petitioner was offered a face-to-face hearing
and rejected it in favor of a telephone hearing, we also
recognize that petitioner made his decision before Keene was
released and before respondent had issued any administrative
guidance regarding its post-Keene position. In light of Keene
- 23 -
and the unusual circumstances established by the undisputed facts
in this case, we conclude, in the exercise of our discretion,
that petitioner should be given the opportunity to have a face-
to-face hearing, which petitioner may audio record in accordance
with section 7521(a).7 Consequently, we shall grant petitioner’s
motion for summary judgment, in part, in that we shall remand
petitioner’s case to the Appeals Office for further proceedings
consistent with this Opinion, and we shall deny petitioner’s
motion to the extent that it asserts a right under section 7521
to audio record a section 6330 telephone hearing.
To reflect the foregoing,
An appropriate order
will be issued.
7
Respondent does not contend that petitioner has asserted
frivolous or groundless positions. Consequently, this is not a
case where it would be unproductive to remand the case. See,
e.g., Lunsford v. Commissioner, 117 T.C. 183, 189 (2001);
Williams v. Commissioner, T.C. Memo. 2005-94.