The decision paper is a staff action that is brief and contains the essential information the decision maker needs to reach a decision. The decision paper follows the informal memorandum format and should not exceed two pages (excluding supporting documents).
Writing decison memos is a critical to your career whether you are a policy maker, engineer, architect, consultant, or activist. Decision memos offer advice on critical decisions that you and others will be making. Decision memos recommend a course of action. As such your ability to covey complex information simply is key.

Describe whether, and to what extent, the collection of information involves the use of automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g. Permitting electronic submission of responses, and the basis for the decision for adopting this means of collection.

MEMORANDUM OPINION

LAUBER, Judge.

In this collection due process (CDP) case petitioners seek review pursuant to sections 6320(c) and 6330(d)(1)1 of the determination by the Internal Revenue Service (IRS or respondent) to uphold the filing of a notice of Federal tax lien (NFTL). Respondent has filed a motion for summary judgment, contending that the collection action should be sustained with respect to petitioners' income tax deficiency (plus interest thereon) for the taxable year 2003. We agree and accordingly will grant the motion.

Background

The following facts are based on the parties' pleadings and motion papers, including the attached declaration and exhibits. See Rule 121(b). Petitioners resided in Washington, D.C., when they petitioned this Court.

Petitioners' 2003 tax deficiency was the subject of previous litigation in this Court. See Barnes v. Commissioner, T.C. Memo. 2012-80, aff'd, 712 F.3d 581 (D.C. Cir. 2013). Petitioners jointly filed an untimely Federal income tax return for 2003 reporting a tax liability of $30,754. The IRS sent them a timely notice of deficiency determining a tax deficiency of $54,486, an accuracy-related penalty of $10,897, and a late-filing addition to tax of $5,691.

Petitioners timely petitioned this Court, and the case was tried on June 10, 2009. On July 26, 2010—after the parties had completed post-trial briefing but before this Court issued its opinion—petitioners filed a voluntary chapter 11 petition in the U.S. Bankruptcy Court for the District of Columbia. Pursuant to 11 U.S.C. sec. 362(a)(8) (2006), all proceedings in this Court were stayed.

The IRS participated in the bankruptcy case and filed a proof of claim (later amended) for tax deficiencies petitioners owed for multiple tax years. Neither the original nor the amended proof of claim included the 2003 liability, which was still being litigated in this Court. On July 15, 2011, petitioners' plan of reorganization (Plan) was confirmed. The Plan did not include the 2003 liability.

After the Plan was confirmed, the bankruptcy case remained open with the automatic stay in place while petitioners made payments. In November 2011 the bankruptcy court granted the IRS' motion to lift the automatic stay so that this Court could render an opinion on petitioners' 2003 liability. In that opinion we held that petitioners owed the deficiency, penalty, and addition to tax for 2003 as determined in the notice of deficiency, and a decision was entered on April 2, 2012. Petitioners appealed to the U.S. Court of Appeals for the D.C. Circuit, which affirmed. See Barnes v. Commissioner, 712 F.3d 581 (D.C. Cir. 2013), aff'g T.C. Memo. 2012-80.

Petitioners did not post an appeal bond, see sec. 7485(a), and the IRS assessed their 2003 liability on August 1, 2012. On November 28, 2017, in an effort to collect petitioners' tax liabilities for 2003, 2008, and 2009, the IRS sent them a Notice of Federal Tax Lien Filing and Your Right to a Hearing. White man listen richard wright summary. They timely requested a CDP hearing, and the case was assigned to a settlement officer (SO) in the IRS Appeals Office in Washington, D.C. The SO agreed to a partial release of the NFTL, finding that the 2008 and 2009 tax liabilities were included in petitioners' bankruptcy and the claims had been paid. But the SO sustained the lien filing as to 2003.

Petitioners contended that their tax liability for 2003 was uncollectible on the theory that the '10-year statute of limitations ha[d] tolled.' During a telephone conference in April 2018 the SO explained that petitioners could not dispute their 2003 liability because it had been finally determined by a decision of this Court. Further, because their 2003 liability was not assessed until August 1, 2012, the 10-year period of limitations on collection did not begin to run until that date. See sec. 6502(a)(1).

Petitioners also argued that their 2003 tax liability, like their 2008 and 2009 tax liabilities, had been discharged in bankruptcy. The SO consulted on this point with an IRS insolvency specialist. The specialist advised that the 2003 liability was a nondischargeable priority debt that was neither addressed in nor discharged by the Plan. See 11 U.S.C. sec. 507(a)(8)(A)(iii) (2006) (defining a 'priority debt' to include a tax liability that was 'not assessed before, but assessable,' when the bankruptcy case commenced); 11 U.S.C. sec. 523(a)(1)(A) (2006) (excepting certain priority debts from discharge).

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Petitioners proposed an offer-in-compromise, which was reviewed by the IRS Collection Division. It determined that petitioners could pay their outstanding tax liabilities in full and thus recommended rejection of the offer, a recommendation in which the SO concurred. The SO proposed a full-pay installment agreement with monthly payments of $16,666, but petitioners rejected that proposal and made no counterproposal. Unable to reach an agreement, the SO closed the case.

On March 13, 2019, the IRS issued petitioners a notice of determination sustaining the NFTL insofar as it covered their 2003 liability.2 On March 26, 2019, petitioners filed motions in the bankruptcy court asking that it reopen the case and rule that the 2003 liability had been discharged. Petitioners advanced the same argument in a timely filed petition to this Court seeking review of the notice of determination. The only issue raised in their petition concerned their tax liability for 2003.

On February 13, 2020, respondent moved for summary judgment, contending that the SO did not err in sustaining the NFTL as to the 2003 liability. Opposing that motion, petitioners urged that we defer action until the bankruptcy court had addressed their own motions. In his reply respondent conceded that the accuracy-related penalty and the late-filing addition to tax for 2003 had been discharged but maintained that the NFTL should be upheld as to the deficiency and accrued interest. On December 16, 2020, the bankruptcy court issued an opinion ruling that neither the 2003 deficiency nor the interest thereon had been discharged but that the accuracy-related penalty and late-filing addition to tax for 2003 had been discharged. See Memorandum Decision and Order Re Motion to Enforce Plan Injunction and Discharge Injunction Against the Internal Revenue Service, In re Barnes, No. 10-00743 (Bankr. D.D.C. Dec. 16, 2020), ECF No. 379 (Bankruptcy Decision).

Discussion

A. Summary Judgment Standard

The purpose of summary judgment is to expedite litigation and avoid costly, time-consuming, and unnecessary trials. See Fla. Peach Corp. v. Commissioner, 90 T.C. 678, 681 (1988). The Court may grant summary judgment when there is no genuine dispute as to any material fact and a decision may be rendered as a matter of law. See Rule 121(b); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), aff'd, 17 F.3d 965 (7th Cir. 1994). In deciding whether to grant summary judgment, we construe factual materials and inferences drawn from them in the light most favorable to the nonmoving party. See Sundstrand Corp., 98 T.C. at 520. However, the nonmoving party may not rest upon th