The opinion of the court was delivered by: RICHARD B. SURRICK, District Judge
On September 4, 2002, a Complaint for Redetermination was filed by
STA Painting Co. ("STA"), pursuant to 26 U.S.C. § 6330, seeking
review of the determinations of an Internal Revenue Service ("IRS")
Appeals Officer issued on August 15, 2002, sustaining certain collection
activities by the IRS against Plaintiff for non-payment of employment
taxes. Defendant IRS has moved for summary judgment seeking affirmation
of the Appeal Officer's determinations. (Doc. No. 8.) Plaintiff has filed
a cross motion for summary judgment seeking remand alleging that the
Appeals Officer's decision rejecting an installment agreement was an
abuse of discretion. (Doc. No. 9.) For the following reasons, we will
grant Defendant's motion and deny Plaintiff's cross motion.
STA, a commercial painting contractor, filed this suit seeking review
of three determinations by James J. Polsenki ("Appeals Officer")
rejecting Plaintiff's attempt to settle its employment tax deficiency
through an installment agreement rather than through lien or levy of its
assets. Plaintiff has properly sought review of the Appeals Officer's
determinations pursuant to 26 U.S.C. § 6330(d).
In May of 2001, the IRS sent STA a notice of intent to levy for its
failure to pay employment taxes for the periods ending June 30, 2000,
September 30, 2000, and December 31, 2000. This notice informed STA of
its right to a collection due process ("CDP") hearing pursuant to
26 U.S.C. § 6330(a)(1).*fn1 On June 15, 2001, STA requested a CDP
hearing and provided the IRS with specific reasons why a levy was
inappropriate. STA requested payment through an installment plan. (Def.'s
Mot. for Summ. J. Ex. 1.) STA met with the Appeals Officer twice in
September of 2001, to discuss its liability. It proposed an installment
agreement in which it would pay $3,000 a week until the principal for
each quarter had been paid off, and a lump sum payment of $85,000 to be
paid by December 31, 2001. (Def.'s Mot. for Summ. J. Ex. 5.) STA claims
that pursuant to this installment proposal, twenty-one $3,000 payments or
$63,000 was paid to the IRS between October 5, 2001, and August 30, 2002.
STA also made lump sum payments to the IRS of $6956.64 on September 19,
2001, and $8024.30 on September 23, 2001. Despite these payments, on
August 15, 2002, the Appeals Officer advised STA that it was ineligible
for an installment agreement due to its lack of compliance and that a
levy was the appropriate collection action. (Def.'s Mot. for Summ. J. Ex.
In June of 2001, the IRS also notified Plaintiff that it was filing a
notice of a lien, pursuant to 26 U.S.C. § 6320,*fn2 for the
deficiency in employment taxes for the periods ending June 30, 2000 and
September 30, 2000. (Def.'s Mot. for Summ. J. Ex. 2.) Again, STA
requested a CDP hearing appealing the notice of the lien, arguing that
the appeal of the
aforementioned levy action (described above) prevented the IRS from
filing a "collection action," while the appeal was pending. (Def.'s Mot.
for Summ. J. Ex. 3.) After meeting with the Appeals Officer, the IRS
responded to this argument on August 15, 2002, informing STA that since
it did not meet any of the requirements for withdrawal of the notice of
lien, this lien would remain in full force and effect until the liability
was fully paid. (Def.'s Mot. for Summ. J. Ex. 7.)
In September of 2001, the IRS sent STA a notice of intent to levy for
STA's failure to pay employment taxes for the period ending March 31,
2001. STA again requested a CDP hearing, incorporating the arguments made
to the IRS in its earlier CDP requests. (Def.'s Mot. for Summ. J. Ex. 4.)
STA's proposal for an installment agreement covered this period of
delinquency as well. (Def.'s Mot. for Summ. J. Ex. 5.) In addition, STA
discussed the installment plan with the Appeal Officer on December 11,
2001. Again, the IRS denied STA's request, advising that STA was
ineligible for the installment agreement due to its lack of compliance.
(Def.'s Mot. for Summ. J. Ex. 8.)
II. Review of the IRS Determination
Summary Judgment Standard of Review
Summary judgment is appropriate "if the pleadings, depositions, answers
to interrogatories, and admissions on file, together with the affidavits,
if any, show that there is no genuine issue as to any material fact and
that the moving party is entitled to judgment as a matter of law." FED.
R. CIV. P. 56(c). The party moving for summary judgment bears the
initial burden of demonstrating that there are no facts supporting the
non-moving party's legal position. See Celotex Corp. v.
Catrett, 477 U.S. 317, 322-24 (1986).
The parties in this matter have agreed that it may be disposed by cross
summary judgment and that discovery is inappropriate. The parties
agree that the only issue in this case is whether the decisions of the
Appeals Officer were correct as a matter of law. Although the parties
move for summary judgment, we shall construe the motions as motions for
judgment, seeking affirmance or reversal of the IRS's
Standard of Review for Appeal Officer Determination
This case is properly before us under 26 U.S.C. § 6330(d)(1)(B)
which provides that "the person may, within 30 days of a determination
under this section, appeal such determination if the Tax Court
does not have jurisdiction of the underlying tax liability, to a district
court of the United States."*fn4 Even though § 6330 provides for
judicial review, it is silent with respect to the standard of review to
be applied by the district court. The Third Circuit has not yet spoken to
the issue, however, district courts in this and other districts> have
applied an abuse of discretion standard. Christian v. Comm'r of
IRS, No. Civ. A. 02-9120, 2003 WL 21499013, *1 (E.D. Pa. June 5,
2003): see also Danner v. United States, 208 F. Supp.2d 1166,
1170 (E.D. Wash. 2002);
MRCA Info. Servs. v. United States, 145 F. Supp.2d 194,
199 (D. Conn. 2000) (comprehensive review of the House Report
accompanying the enactment of the IRS Restructuring and Reform Act of
1998, H.Rep. No. 105-599 at 266 (1998), concluding that an abuse of
discretion standard of review is appropriate when a district court
reviews an IRS Appeal officer's determination pursuant to
26 U.S.C. § 6330). We will also apply that standard.
The abuse of discretion standard requires a court to determine whether
the administrative decision was based on a consideration of the relevant
factors and whether or not there was a clear error of judgment.
Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416
(1971). Moreover, an agency must articulate a "rational connection
between the facts found and the choice made." Bowman Trans. v.
Arkansas-Best Freight, 419 U.S. 281, 285 (1974). `"The task of this
court, is not to determine whether in its own opinion . . . `that an
installment agreement would best serve both the interest of the IRS and
[taxpayer], `but to determine whether there is an ...