III. The status of the CDP "officer or employee" and "appeals GUSTAFSON, Judge: This case is an appeal, pursuant to sec- 1 Unless otherwise indicated, all section references are to the Internal Revenue Code ("Code", Appeals of the Internal Revenue Service (IRS) to sustain the filing of a notice of lien in order to collect Mr. Tucker's unpaid income taxes for the years 2000, 2001, and 2002. That determination was made after the Office of Appeals conducted a collection due process (CDP) hearing pursuant to section 6330(c) and a supplemental CDP hearing pursuant to a remand of this Court. The determination was reflected in an initial "Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330" and in a "Supplemental Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330". We will eventually review the merits of that collection determination. 2 Currently before us, however, is Mr. Tucker's motion for remand. That motion presents a question not about Mr. Tucker's tax liabilities nor about the collection decisions of the Office of Appeals in this case but about the constitutional validity of that Office's staffing of CDP proceedings that it conducts pursuant to section 6330(c). The settlement officers who conducted Mr. Tucker's CDP hearings and the team manager who signed and issued the notices of determination were all hired by the Commissioner of Internal Revenue pursuant to section 7804(a) and were not appointed by the President or the Secretary of the Treasury. Mr. Tucker contends, however, that the “appeals officer" in section 6330(c) is an "Officer of the United States" who, according to the Appointments Clause of Article II, Section 2, of the U.S. Constitution, must be appointed either by the President or by one of "the Heads of Departments" (in this case, the Secretary of the Treasury). Because the settlement officers who handled Mr. Tucker's CDP proceeding were not so appointed, Mr. Tucker contends that he has not yet been given the CDP hearing that Congress mandated, and he asks us to remand the matter for a valid hearing before a duly appointed officer. We will deny Mr. Tucker's motion to remand. We hold that the “officer or employee" in section 6320(b)(3) or 6330(b)(3), also referred to as an "appeals officer" in section 6330(c)(1) and (3), is not an "Officer of the United States" subject to the 2 In addition to the motion to remand that we address in this Opinion, there are also pending before us both respondent's motion for summary judgment asking the Court to sustain the supplemental notice of determination and Mr. Tucker's cross-motion for summary judgment asking that we hold that the supplemental notice reflected an abuse of discretion by the Office of Appeals. Those cross-motions address the merits of the CDP determination, and we do not decide them in this Opinion. Appointments Clause, for two reasons: First, there is no office "established by Law" to which the clause applies; and second, the CDP hearing officer does not exercise the "significant authority" that defines an "office" according to the relevant case law. Background The facts pertinent to Mr. Tucker's motion to remand can be stated very succinctly: He properly requested a CDP hearing pursuant to section 6320, and the employees of the Office of Appeals who conducted his CDP hearings and issued his notices of determination were not appointed by the President or the Secretary of the Treasury. Those facts can be elaborated in somewhat more detail without any dispute, on the basis of the pleadings, the parties' motion papers, and the supporting exhibits attached thereto. Tax years 2000, 2001, and 2002 Mr. Tucker failed to timely file tax returns for 2000, 2001, and 2002. In June 2003 he filed untimely Forms 1040, "U.S. Individual Income Tax Return", for those years, but he failed to pay any of the income tax liability shown on those returns. The IRS assessed the income tax liabilities that Mr. Tucker had self-reported but not paid. Almost a year later, on May 8, 2004, the IRS sent to Mr. Tucker a "Final Notice-Notice of Intent to Levy and Notice of Your Right to a Hearing", pursuant to sections 6330(a)(1) and 6331(d)(1), advising him of the IRS's intent to levy upon his property. Mr. Tucker did not timely request a hearing under section 6330 with respect to that notice. On July 22, 2004, the IRS sent to Mr. Tucker a "Notice of Federal Tax Lien Filing and Your Right to a Hearing", pursuant to section 6320(a)(1), advising him that the IRS had filed a notice of tax lien against him. Both notices reflected the income tax liabilities for 2000, 2001, and 2002. CDP hearing In response to the lien notice (but not the earlier notice of levy), Mr. Tucker submitted to the IRS on August 11, 2004, a Form 12153, "Request for a Collection Due Process Hearing". The CDP hearing was held as a telephone conference on May 31, 2005, between an IRS settlement officer and Mr. Tucker and his counsel; and subsequently, numerous letters were exchanged between the settlement officer and Mr. Tucker's counsel. Mr. Tucker's OIC On July 25, 2005, Mr. Tucker's counsel sent to the settlement officer a Form 656, “Offer in Compromise" (OIC), that proposed to settle Mr. Tucker's income tax liabilities for 1999, 2000, 2001, 2002, and 2003 for $36,772 payable in monthly payments of $317 over 116 months. In a letter dated November 18, 2005, the settlement officer rejected the OIC. The notice of determination, and the commencement of this case On January 9, 2006, a team manager in the Office of Appeals issued to Mr. Tucker a "Notice of Determination Concerning Collection Action(s) under Section 6320 and/or 6330", which determined to uphold the filing of a tax lien as to Mr. Tucker's income tax liabilities for 2000, 2001, and 2002. In response, Mr. Tucker timely filed a petition with this Court. Previous Tax Court proceedings, remand to the Office of Appeals, and supplemental notice of determination After filing his petition, Mr. Tucker filed a motion for summary judgment on June 9, 2006. Respondent opposed that motion and filed a motion for remand on July 17, 2006. By our order of July 27, 2006, we denied Mr. Tucker's motion for summary judgment and granted respondent's motion to remand the case to the IRS's Office of Appeals for further consideration of Mr. Tucker's July 2005 OIC and for issuance of a supplemental notice of determination no later than October 16, 2006. The Office of Appeals then assigned a settlement officer (i.e., a different settlement officer from the one who had conducted Mr. Tucker's initial CDP hearing) to conduct a supplemental CDP hearing and to reconsider Mr. Tucker's July 2005 OIC. The supplemental CDP hearing was held as a telephone conference on September 11, 2006, between the settlement officer and Mr. Tucker's counsel. On September 12, 2006, the same team manager who had issued the first notice of determination issued a "Supplemental Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330", which determined to reject Mr. Tucker's July 2005 OIC and to uphold the filing of a tax lien as to Mr. Tucker's income tax liabilities for 2000, 2001, and 2002. The hiring of the settlement officers and team manager Respondent concedes that, to date, no appeals officer, settlement officer, or team manager in the Office of Appeals has been appointed by the President, with or without the advice and consent of the Senate, or by the Secretary of the Treasury. Instead, the Office of Appeals personnel who were involved in Mr. Tucker's case were all hired by the Commissioner pursuant to section 7804(a). Mr. Tucker's motion to remand In response to the supplemental notice of determination, on November 21, 2006, Mr. Tucker filed an amendment to petition with this Court in order to appeal the supplemental notice of determination. On November 29, 2007, respondent filed a motion for summary judgment asking the Court to sustain the supplemental notice of determination. Mr. Tucker filed a cross-motion for summary judgment on February 27, 2008, and filed a motion for remand on September 2, 2008. We reserve the issues raised by the parties' cross-motions for summary judgment, and we now address Mr. Tucker's motion for remand. Discussion To consider the applicability of the Appointments Clause to the "officer or employee" under sections 6320(b)(3) and 6330(b)(3), we first analyze the origin and purposes of the Appointments Clause, then describe generally the Office of Appeals and its CDP function, and then apply Appointments Clause analysis to the role of the CDP "officer or employee”. |