Docket No. IRS 23-530

FINAL DECISION

Respondent, Internal Revenue Service (“IRS” or “agency”), sought to collect from Petitioner, Peter Janangelo, a claim of debt in the amount of $5,128.96 for taxes owed on federal salary as the result of certain payments erroneously attributed to a Health Savings Account.¹ Mr. Janangelo filed a Petition for Hearing with the agency on October 3, 2023.²
This matter is before me on the Agency’s Motion for Summary Judgment. The Court will grant summary judgment when the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). My function at the summary judgment stage is not to weigh the evidence, but rather to determine whether there are genuine questions of fact for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). If the evidence and pleadings demonstrate that only questions of law are at issue, summary judgment is the proper method to resolve a case without a hearing. See Fed. R. Civ. P. 56(c); Maghan v. Bd. of Comm'rs of D.C., 141 F.2d 274, 275 (D.C. Cir. 1944). Here, Petitioner did not contest the amount of the debt, nor did he contest the agency’s submission of undisputed facts. I summarize the relevant undisputed facts below.

FACTS NOT IN DISPUTE

1. From 2009 to 2018, Petitioner enrolled in the American Postal Workers Union (APWU) High Option coverage using Federal Employee Health Benefits Program (FEHB) enrollment codes 471 and 472 according to his Statements of Earnings and Leave (Agency Exh. E at 70, 198, 330, 470, 618, 766, 918, 1074; Agency Exh. F, Statements of Earnings and Leave (2009-2018); Agency Exh. J; Agency Exh. K).
2. From 2009 to 2018, Petitioner made Health Savings Account (HSA) elections in the amount of $70,815 (Agency Exh. F at 1230–1239).
3. The HSA elections were treated as pre-tax for the purposes of calculating Petitioner’s salary (Agency Exh. C – IRS Pub. 969 (2009); Agency Exh. D – IRS Pub. 969 (2022); 26 U.S.C. § 223).
4. As a result, the agency did not collect Medicare or Social Security taxes from Petitioner’s salary on the HSA election amounts during the relevant time period (Agency’s Motion for Summary Judgment at 8–9 and documents cited therein).
5. Medicare taxes for the period of 2009 to 2018 attributed to his HSA election totaled $1,026.83 (Id.).
6. Social Security taxes for the period 2009 through 2018 attributed to his HSA election totaled $4,102.23 (Id.).

DISCUSSION

In a Debt Collection Act (DCA) case, the agency carries the burden of establishing that a debt exists. Cross v. United States Postal Service, DCA 15-78, 2015 WL 13647652 (September 14, 2015); Bruch v. United States Postal Service, DCA 14-362, 2015 WL 13647636 (June 17, 2015). The obligation to meet that burden in a salary overpayment case requires the agency to produce sufficient evidence that Petitioner owes the debt, and that the amount the agency seeks to collect is an accurate calculation of the alleged debt. Price v. United States Postal Service, AO 15-212, 2016 WL 10572233 (I.D. May 17, 2016).
In this case, the salary overpayment was triggered by contributions made by the employee to an HSA. Among the benefits of an HSA is that it permits the employee to elect to have a certain amount of money deducted from the employee’s pre-tax salary and placed into an approved HSA for use for qualified me dical expenses. 26 U.S.C. § 223. To qualify for an HSA, an individual must be enrolled or covered by an eligible health plan, specifically a High Deductible Health Plan (HDHP). Agency Exh. A at 4; Agency Exh. B at 15; Agency Exh. C at 25–26; Agency Exh. D at 48–49. HDHPs are defined in 26 U.S.C. § 223. HDHP plans have annual deductibles that are not less than $1,000 for individual coverage or twice that amount for family coverage. Id.
The APWU plan that Petitioner enrolled in is a fee-for-service plan (referred to as the High Option) and does not include HDHPs. Agency Exh. E at 70, 198, 330, 470, 618, 766, 918, 1074; Agency Exh. J; Agency Exh. K. The APWU High Option health plan does not meet the statutory requirements to be an HDHP as the plan deductible does not meet the statutory requirements cited above. Agency Exh. E at 86, 217, 354, 495, 643, 791, 943, 1099. Accordingly, Petitioner was not entitled to have his HSA election treated as a pre-tax contribution.
Petitioner’s defense raised in his Opposition to Summary Judgment rests on a now defunct ten-year statute of limitations under the DCA. As I previously noted in my Order and Memorandum of Telephone Conference dated January 10, 2024:

Mr. Janangelo cites the former statute of limitations in his opposition motion. But as the above shows, that citation is incorrect.
As none of the facts establishing the debt or its calculation are in dispute, the agency is entitled to judgment in its favor.
Agency’s Motion for Summary Judgment is GRANTED.

ORDER

The Petition is DENIED. The agency may collect the debt of $5,128.96 by involuntary administrative salary offset.