Wednesday, September 26, 2007

Back Taxes IRC 6330 - notice of levy must be received

"Receipt of a statutory notice of deficiency for this purpose means receipt in time to petition the Tax Court for a redetermination of the deficiency asserted in the notice of deficiency." Sec. 301.6330-1(e)(3) Q&A-E2, Proced. & Admin. Regs. Therefore, section 6330(c)(2)(B) contemplates actual receipt by the taxpayer.


Alan Lee and Debi Marie Kuykendall v. Commissioner.Dkt. No. 16232-06L , 129 TC --, No. 9,

September 25, 2007. [Code Sec. 6330]
Collection of tax:Collection Due Process hearing: Procedures: Underlying tax liability. --
R mailed a notice of deficiency to Ps' last known address, but Ps did not receive it because they had moved. During a subsequent examination of their 2000 return, Ps were informed that a notice of deficiency for 1999 had been sent to them. At Ps' request, the examiner faxed a copy of the 1999 notice of deficiency to them that day, when only 12 days remained in the 90-day period within which to petition this Court. Ps did not petition this Court. R then issued a final notice of intent to levy with respect to 1999. In response, Ps requested a sec. 6330, I.R.C., hearing. R's Appeals Office determined that Ps had an opportunity to petition this Court for review, and therefore they could not contest the underlying tax liability. Ps now seek to challenge the underlying tax liability before this Court.

Held: Under sec. 301.6330-1(e)(3) Q&A-E2, Proced. & Admin. Regs., 12 days was insufficient time to allow Ps to petition this Court for redetermination of a notice of deficiency. Therefore, Ps were not barred from contesting the underlying tax liability at their sec. 6330, I.R.C., hearing.
OPINION

HAINES, Judge: This case is before the Court on respondent's motion for summary judgment filed pursuant to Rule 121.1 Respondent's motion argues that petitioners were statutorily barred from challenging the existence or amount of the underlying tax liability in their section 6330 hearing because they received a notice of deficiency, and therefore, they are barred from challenging the liability before this Court.
Background

Petitioners, Alan Lee and Debi Marie Kuykendall (husband and wife) resided in Middletown, California, at the time the petition was filed.

Ms. Kuykendall was primarily employed as an accountant and bookkeeper. She also worked part time as a shift lead supervisor at a restaurant. On February 28, 2002, while working at the restaurant, Ms. Kuykendall was assaulted and robbed at gunpoint. She suffered from severe physical and psychological difficulties as a result of the assault. She was subsequently diagnosed with posttraumatic stress disorder.


In a letter dated April 29, 2002, respondent notified petitioners that their 1999 Federal income tax return had been selected for review. On May 23, 2002, Ms. Kuykendall requested that respondent delay the examination because of her medical difficulties. Respondent's examiner denied the request. On July 10, 2002, respondent sent petitioners an audit report showing the changes made to petitioners' 1999 return. Petitioners were allowed until September 3, 2002, to submit documents pertaining to their 1999 return. Petitioners did not respond.

On May 1, 2003, respondent issued a notice of deficiency to petitioners' last known address determining a tax deficiency of $4,591 for 1999. In the notice of deficiency, respondent disallowed petitioners' unreimbursed employee business expenses claimed on Schedule A, Itemized Deductions, of $18,169, and certain Schedule C, Profit or Loss From Business, expenses, totaling $8,063.

On July 18, 2003, Ms. Kuykendall called respondent's examiner regarding a letter she had received related to petitioners' 2000 tax year. During the conversation, Ms. Kuykendall was informed that a notice of deficiency for 1999 had been mailed to them. Ms. Kuykendall informed respondent that petitioners had moved and that they did not receive the notice of deficiency. At Ms. Kuykendall's request, the examiner faxed a copy of the notice of deficiency to petitioners that day. With respect to the notice of deficiency, petitioners did not file a petition with this Court.

On February 14, 2004, respondent sent petitioners a Final Notice of Intent to Levy and Notice of Your Right to a Hearing for 1999. On March 7, 2004, petitioners submitted a Form 12153, Request for a Collection Due Process Hearing. In their request for relief, petitioners disputed the underlying tax liability by asserting that the disallowed business expenses were valid. They also disputed the examiner's decision not to postpone the examination. On May 6, 2004, respondent's Appeals Office sent a letter to petitioners, offering them a hearing. On May 19, 2004, Ms. Kuykendall sent a letter to respondent's Appeals Office, accompanied by several documents relating to the disallowed business deductions.

On August 17, 2004, Appeals Officer Terrence Riddle conducted a face-to-face hearing with Ms. Kuykendall. At the hearing, petitioners sought to challenge the underlying tax liability by providing documentation to substantiate the disallowed deductions. Officer Riddle determined that petitioners could not properly challenge the underlying tax liability at the hearing because they previously had the opportunity to petition this Court for review of the deficiency. As to the examiner's decision not to postpone the audit, Officer Riddle determined that petitioners were allowed a reasonable amount of time in which to respond to the audit report.

On July 20, 2006, respondent issued a notice of determination sustaining the proposed collection action for 1999. Petitioners timely filed a petition with this Court. In the petition, they sought to challenge the underlying tax liability by asserting that the disallowed deductions were valid. Petitioners also challenged respondent's failure to postpone the examination of their 1999 return.

On June 19, 2007, respondent filed a motion for summary judgment on all issues in the case. On July 27, 2007, petitioners filed their response.
Discussion

Summary judgment is intended to expedite litigation and avoid unnecessary and expensive trials. Fla. Peach Corp. v. Commissioner, 90 T.C. 678, 681 (1988). The Court may grant summary judgment when there is no genuine issue of material fact and a decision may be rendered as a matter of law. Rule 121(b); 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. Dahlstrom v. Commissioner, 85 T.C. 812, 821 (1985); Naftel v. Commissioner, 85 T.C. 527, 529 (1985). The Court will view any factual material and inferences in the light most favorable to the nonmoving party. Dahlstrom v. Commissioner, supra at 821; Naftel v. Commissioner, supra at 529.

Before the Commissioner may levy on any property or property right, the taxpayer must be provided written notice of the right to request a hearing during the 30-day period before the first levy. Sec. 6330(a).
If the taxpayer requests a hearing, an Appeals officer of the Commissioner must hold the hearing. Sec. 6330(b)(1). At the hearing, the taxpayer may raise any relevant issue relating to the unpaid tax or the proposed levy, including appropriate spousal defenses, challenges to the appropriateness of collection actions, and offers of collection alternatives. Sec. 6330(c)(2)(A).

Section 6330(c)(2)(B) limits the taxpayer's ability to challenge the underlying tax liability during the hearing. Specifically, the taxpayer may "raise at the hearing challenges to the existence or amount of the underlying tax liability for any tax period if the person did not receive any statutory notice of deficiency for such tax liability or did not otherwise have an opportunity to dispute such tax liability." Id.

"Receipt of a statutory notice of deficiency for this purpose means receipt in time to petition the Tax Court for a redetermination of the deficiency asserted in the notice of deficiency." Sec. 301.6330-1(e)(3) Q&A-E2, Proced. & Admin. Regs. Therefore, section 6330(c)(2)(B) contemplates actual receipt by the taxpayer.2 Tatum v. Commissioner, T.C. Memo. 2003-115.

We have not previously addressed the issue of how much time is required under section 301.6330-1(e)(3) Q&A-E2, Proced. & Admin. Regs. for a taxpayer to petition this Court for redetermination of a deficiency. However, we have addressed similar questions in determining whether a taxpayer who failed to file a timely petition with this Court was prejudiced by an improperly addressed notice. Our decisions in those cases inform our analysis of the current issue.

The jurisdiction of this Court is dependent on the timely filing of a petition. Rule 13(c). In a deficiency suit, a taxpayer is generally given 90 days from the issuance of a notice of deficiency to petition this Court for review. Sec. 6213(a). However, we have jurisdiction to decide whether a taxpayer had insufficient time to properly file a petition because he was prejudiced by an improperly addressed notice. Looper v. Commissioner, 73 T.C. 690, 699 (1980).

In general, we have held that when a notice of deficiency is actually received by the taxpayer with at least 30 days remaining in the filing period, the taxpayer had sufficient time to petition this Court for review. See, e.g., Mulvania v. Commissioner, 81 T.C. 65, 67-69 (1983) (74 days remaining); Masino v. Commissioner, T.C. Memo. 1998-118 (69 days remaining); Fileff v. Commissioner, T.C. Memo. 1990-452 (60 days remaining); George v. Commissioner, T.C. Memo. 1990-147 (52 days remaining); Bulakites v. Commissioner, T.C. Memo. 1998-256 (45 days remaining); Loftin v. Commissioner, T.C. Memo. 1986-322 (30 days remaining); Eger v. Commissioner, T.C. Memo. 1984-325 (30 days remaining).

However, when a notice was received with only 17 days remaining in the filing period, we held that the taxpayer had insufficient time to petition this Court. Looper v. Commissioner, supra at 699. Similarly, the Court of Appeals for the Eleventh Circuit held as a matter of law that receipt of a notice of deficiency with only 8 days remaining in the filing period was insufficient to permit the timely filing of a petition. Sicker v. Commissioner, 815 F.2d 1400 (11th Cir. 1987).

In this case, petitioners received the notice of deficiency with 12 days remaining to petition this Court. Petitioners did not deliberately avoid receipt of the notice. In fact, upon realizing that they did not receive it, petitioners asked respondent's examiner to fax it to them immediately. Since petitioners received the notice of intent to levy, Ms. Kuykendall has diligently sought to dispute the underlying tax liability by requesting a section 6330 hearing and providing respondent's Appeals officer documentation supporting the disallowed deductions.

Applying the standards set forth in Mulvania v. Commissioner, supra, and Looper v. Commissioner, supra, to section 301.6330-1(e)(3) Q&A-E2, Proced. & Admin. Regs., we hold that 12 days was insufficient time for petitioners to petition this Court for redetermination of the notice of deficiency. Therefore, petitioners were entitled to challenge the existence or the amount of the underlying tax liability during their section 6330 hearing.

By setting forth specific facts, petitioners have shown there is a genuine issue of material fact as to whether the deductions disallowed by the notice of deficiency should be allowed. See Rule 121(d). We shall, therefore, deny respondent's motion for summary judgment and remand the case to respondent's Appeals Office for further proceedings consistent with this Opinion.

To reflect the foregoing,

An appropriate order will be issued.
1 Unless, otherwise indicated, section references are to the Internal Revenue Code, as amended. Rule references are to the Tax Court Rules of Practice and Procedure. Amounts are rounded to the nearest dollar.2 If, however, the notice of deficiency was not received because the taxpayers deliberately refused delivery, they may not seek to challenge the underlying tax liability at a sec. 6330 hearing or before this Court. Sego v. Commissioner, 114 T.C. 604, 611 (2000). Respondent does not argue, nor would we find, that petitioners deliberately refused delivery of the notice of deficiency.

Alvin S. Brown, Esq
Tax Attorney

703.425.1400
www.irstaxattorney.com

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1 comment:

Alvin Brown & Associates said...

R. Kintzler, DC Nev., 2001-2 USTC ¶50,696.

An individual failed to allege facts to support a finding that an Appeals officer at his Collection Due Process (CDP) hearing abused his discretion. Notices of determination received by the taxpayer indicated that the IRS complied with applicable law and procedures, and that the objections raised by the taxpayer were properly considered. The Appeals officer also found that collection by levy was appropriate under the circumstances. There was no evidence of error by the Appeals officer, and his judgment was affirmed.

E.P. Geller, DC Ohio, 2001-2 USTC ¶50,703.

The district court remanded to the IRS Office of Appeals a married taxpayers' suit seeking a judicial determination that civil penalties assessed against them for filing frivolous tax returns were improper. The taxpayers were entitled to a CDP hearing on the merits of the issue.

R.D. Joling, DC Ore., 2001-2 USTC ¶50,771.

Taxpayers who failed to timely file Tax Court petitions after receiving a notice of deficiency were barred from raising any issue regarding their underlying tax liability at the collection due process hearing.

H. Goza, 114 TC 176, Dec. 53,803.

Similarly.

T.H. Pierson, 115 TC 576, Dec. 54,152.

S. Sego, 115 TC 603, Dec. 53,938.

R.D. Van Fossen, 79 TCM 2049, Dec. 53,887(M), TC Memo. 2000-163. Aff'd, CA-9 (unpublished opinion), 2001-1 USTC ¶50,263.

W.A. Hoffman, Jr., 79 TCM 2220, Dec. 53,932(M), TC Memo. 2000-198.

R. Baxter, 82 TCM 897, Dec. 54,545(M), TC Memo. 2001-300.

E.P. Tolotti, Jr., 83 TCM 1436, Dec. 54,702(M), TC Memo. 2002-86. Aff'd, CA-9, 2003-2 USTC ¶50,637, 70 FedAppx 971.

W.A. Weishan, 83 TCM 1443, Dec. 54,704(M), TC Memo. 2002-88. Aff'd, CA-9 (unpublished opinion), 2003-1 USTC ¶50,512

L.C. Jackson, 83 TCM 1537, Dec. 54,718(M), TC Memo. 2002-100.

S.D. Coleman III, 83 TCM 1748, Dec. 54,761(M), TC Memo. 2002-132.

D. Smeton, 83 TCM 1781, Dec. 54,771(M), TC Memo. 2002-140.

M. Crow, 83 TCM 1853, Dec. 54,783(M), TC Memo. 2002-149.

W. Waller, Jr., DC Nev., 2003-1 USTC ¶50,123.

J.J. Green, 86 TCM 355, Dec. 55,290(M), TC Memo. 2003-264.

R.. Muldavin, 84 TCM 107, Dec. 54,821(M), TC Memo. 2002-182.

G. Bentley, DC Ohio, 2002-2 USTC ¶50,123.

M. Roberts, 84 TCM 270, Dec. 54,861(M), TC Memo. 2002-221.

D. Schmith, 84 TCM 413, Dec. 54,897M), TC Memo. 2002-52.

J. Schroder, 84 TCM 141, Dec. 54,829(M), TC Memo. 2002-190.

J. Tornichio, 84 TCM 578, Dec. 54,944(M), TC Memo. 2002-291.

R. Villwock, 84 TCM 325, Dec. 54,877(M), TC Memo. 2002-235.

R. Wagner, 84 TCM 96, Dec. 54,819(M), TC Memo. 2002-180.

D. Land, 85 TCM 462, Dec. 54,909(M), TC Memo. 2002-263.

W. Davidson, 84 TCM 156, Dec. 54,833(M), TC Memo. 2002-194.

G. Blair, 84 TCM 137, Dec. 54,828(M), TC Memo. 2002-189.

C.P. Bartolomeo, DC Pa., 2003-2 USTC ¶50,706, 292 FSupp2d 728.

T. White, DC Wash., 2003-2 USTC ¶50,696.

A. Sciola, 86 TCM 681, Dec. 55,368(M), TC Memo. 2003-334.

L.M. Hiltz, 87 TCM 973, Dec. 55,545(M), TC Memo. 2004-38.

J.L. Jensen, 87 TCM 1340, Dec. 55,640(M), TC Memo. 2004-120.

T.C. Johnson, 87 TCM 1115, Dec. 55,584(M), TC Memo. 2004-73.

E.P. Heaphy, 87 TCM 1022, Dec. 55,557(M), TC Memo. 2004-48.

W.B. Meyer,, 89 TCM 1046, Dec. 55,991(M), TC Memo. 2005-81. Aff'd, on another issue, CA-9 (unpublished opinion), 2006-2 USTC ¶50,539, 200 FedAppx 676.

W.B. Meyer, 89 TCM 1049, Dec. 55,992(M), TC Memo. 2005-82. Aff'd, on another issue, CA-9 (unpublished opinion), 2006-2 USTC ¶50,539, 200 FedAppx 676.

M.K. Dues, 89 TCM 1253, Dec. 56,022(M), TC Memo. 2005-109.

K P. Krueger, 89 TCM 1241, Dec. 56,017(M), TC Memo. 2005-105.

W.J. Kubon, 89 TCM 1001, Dec. 55,981(M), TC Memo. 2005-71.

B.J. Casey, 88 TCM 332, Dec. 55,770(M), TC Memo. 2004-228.

L.A. Yazzie, 88 TCM 355, Dec. 55,775(M), TC Memo. 2004-233.

O. Scibilia, 89 TCM 1043, Dec. 55,989(M), T.C. Memo. 2005-79.

J.F. Dalton, 89 TCM 678, Dec. 55,908(M), TC Memo. 2005-7.

R. Hamzik, 88 TCM 316, Dec. 55,765(M), TC Memo. 2004-223.

R.R. Romano, 90 TCM 138, Dec. 56,116(M), T.C. Memo. 2005-193.

J. Kaplowitz, 89 TCM 948, Dec. 55,971(M), TC Memo. 2005-62.

R.H. Golden, 90 TCM 33, Dec. 56,091(M), TC Memo. 2005-170.

R.L. Moore, 89 TCM 1112, Dec. 56,005(M), TC Memo. 2005-93.

L.J. Gittinger III, CA-5, 2005-2 USTC ¶50,481, aff'g unreported Tax Court decision.

A.L. Poe, 89 TCM 1248, Dec. 56,020(M), TC Memo. 2005-107.

R.E. Adams, CA-9 (unpublished opinion), 2005-1 USTC ¶50,288, aff'g unreported Tax Court decision.

R.S. Quigley, 89 TCM 1486, Dec. 56,071(M), TC Memo. 2005-153.

R.J. Florance, Jr., 89 TCM 945, Dec. 55,970(M), TC Memo. 2005-61. Aff'd, per curiam, CA-5 (unpublished opinion),2006-1 USTC ¶50,250.

W.J. Doing, CA-9 (unpublished opinion), 2005-1 USTC ¶50,287, aff'g an unreported Tax Court decision.

D. Holguin, CA-9 (unpublished opinion), 2005-1 USTC ¶50,380, aff'g 85 TCM 1245, Dec. 55,135(M), TC Memo. 2003-125.

T.L. Wetzel, 90 TCM 266, Dec. 56,135(M), TC Memo. 2005-211.

G.L. Bailey, 90 TCM 392, Dec. 56,170(M), TC Memo. 2005-241.

N.P. Schneller, 91 TCM 1170, Dec. 56,515(M), TC Memo. 2006-100.

G.K.J. Yuen, 92 TCM 1, Dec. 56,557(M), TC Memo. 2006-138.

K.E. Hovind, 92 TCM 12, Dec. 56,562(M), TC Memo. 2006-143.

N.I. Goodman, 92 TCM 349, Dec. 56,649(M), TC Memo. 2006-220.

B.A. Kansky, 93 TCM 921, Dec. 56,842(M), TC Memo. 2007-40.

N.E. Dehring, 93 TCM 1135, Dec. 56,907(M), TC Memo. 2007-96.

E.G. Castleman, 93 TCM 1313, Dec. 56,959(M), TC Memo. 2007-143.

R. Fransen, 94 TCM 193, Dec. 57,059(M), TC Memo. 2007-237.

An individual was precluded from challenging her underlying tax liability during her Collection Due Process (CDP) hearing because she received a notice of deficiency and had an opportunity at that time to dispute her tax liability. An earlier Tax Court Summary Opinion involving the same tax liability and in which a decision was entered was final and determinative as to that liability.

J.H. Ginalski, 87 TCM 1249, Dec. 55,620(M), TC Memo. 2004-104.

E.E. Alvarez, 86 TCM 603, Dec. 55,351(M), TC Memo. 2003-319.

J.R. Forrest, 90 TCM 343, Dec. 56,156(M), TC Memo. 2005-228.

M.R. Hassell, 92 TCM 273, Dec. 56,621(M), TC Memo. 2006-196.

M.C. Hollen,, 94 TCM 188, Dec. 57,057(M), TC Memo. 2007-235.

An individual contention at his CDP hearing that the period of limitations for assessment and collection of his tax liabilities for eight years had expired was an impermissible challenge to the existence of his underlying tax liability because he failed to establish that he did not receive notices of deficiencies for the taxes in question.

B.L. Moore, 82 TCM 930, Dec. 54,550(M), TC Memo. 2001-305.

An individual taxpayer was not entitled to challenge his underlying tax liability in a Collection Due Process (CDP) appeal before the district court. His complaint, filed in response to the notice of determination issued by the IRS following the CDP hearing, attempted to attack his underlying tax liability. However, a taxpayer may not use a CDP hearing to dispute such a liability unless he had no previous opportunity to do so. Because the taxpayer specifically stated that he had had a prior opportunity to dispute his tax liability, the district court granted the government's motion for summary judgment.

J.R. Lance, DC S.C., 2004-1 USTC ¶50,268.

The IRS's determination to proceed with a levy action on an individual's property for his tax deficiency did not constitute an abuse of discretion. The validity of the taxpayer's underlying tax liability was not at issue as he had received a notice of deficiency and had the opportunity to dispute his liability in his Collection Due Process (CDP) hearing. Moreover, the taxpayer failed to assert any spousal defenses, any challenges to the appropriateness of the collection actions or any offers of collection alternatives at the CDP hearing and signed a stipulated agreement as to the amount of his tax deficiency.

H. Gunderson, 83 TCM 1143, Dec. 54,630(M), TC Memo. 2002-26.

An individual was properly precluded at a Code Sec. 6330 hearing from contesting his underlying tax liability for six tax years because he received notices of deficiency for those years. The Secretary's authority to issue Notices of Deficiency was properly delegated to the District Director and also to the Director of the Service Center.

M.E. Nestor, 118 TC 162, Dec. 54,655.

An individual who failed to timely pay employment taxes owed by his sole proprietorship unsuccessfully challenged a Collection Due Process (CDP) determination upholding an IRS tax lien and the underlying assessment of penalties. The taxpayer failed to prove that he did not receive notification letters from the IRS or that any irregularity existed in the IRS's assessment or collection procedures. Moreover, he raised no challenges to the propriety of the penalties, the lien, or the levy during the CDP process because he failed to attend the scheduled hearings. His failure to exhaust available administrative remedies barred him from obtaining judicial review. No showing was made that the Appeals officer abused his discretion or reached an erroneous conclusion regarding the propriety of the lien and proposed levy.

N. Abu-Awad, DC Tex., 2003-2 USTC ¶50,716, 294 FSupp2d 879.

An IRS Appeals officer did not abuse his discretion at a married couple's Collection Due Process (CDP) hearing when he determined that the requirements of applicable law had been met and that the taxpayers had been afforded the statutorily required administrative procedures. The IRS had issued notices of intent to levy in connection with Code Sec. 6682 penalties imposed as a result of the taxpayers' failure to provide a reasonable basis for their claimed "exempt" status. Instead of raising spousal defenses, challenging the appropriateness of the intended collection action, or exploring alternative means of collection, the taxpayers argued their underlying tax liability at the CDP hearing.

R.E. Adams, DC Nev., 2002-1 USTC ¶50,295.

Similarly.

D.P. Pinsonneault, DC Nev., 2002-1 USTC ¶50,319.

The IRS Appeals Office did not abuse its discretion in failing to consider an argument that a taxpayer had failed to bring to its attention in connection with his Collection Due Process hearing. The taxpayer's case did not involve an allegation of recent, unusual illness, hardship, or special circumstance that justified an exception to the general rule.

R.B. Magana, 118 TC 488, Dec. 54,765.

The government was granted summary judgment in connection with a former corporate president's suit alleging that he was denied a fair CDP hearing in connection with the government's assessment of a trust fund recovery penalty against him for the corporation's unpaid withholding taxes. The president questioned only his personal, as opposed to corporate, liability and his ability to pay. Thus, he failed to challenge the amount or the appropriateness of the liability itself. Moreover, a recovery letter sent to the individual clearly described the procedures that he had to follow in order to protest the IRS's collection action. Accordingly, the IRS's refusal to consider his challenges to the underlying tax liability, rather than to the collection activity proposed at his CDP hearing, was proper.

R. Dami, DC Pa., 2002-1 USTC ¶50,433.

Reg. §301.6320-1(e)(3), Q&A-E11, was reasonable and was consistent with the plain language of Code Sec. 6330(c)(2)(B). Thus, because the taxpayer received a notice of deficiency and did not file a timely Tax Court petition challenging the asserted tax liability, he was not entitled to challenge that liability during the collection review process. Even though the Appeals officer at the taxpayer's collection due process (CDP) hearing allowed him to offer information relevant to the existence or amount of his tax liability, that decision did not result in a waiver of the provisions of Code Sec. 6330(c)(2)(B).

H.F. Behling, 118 TC 572, Dec. 54,787.

The IRS's determination to proceed with a levy action on an individual's property for his tax deficiency did not constitute an abuse of discretion. The validity of the taxpayer's underlying tax liability was not at issue as he had received a notice of deficiency and had the opportunity to dispute his liability in his Collection Due Process (CDP) hearing. The taxpayer failed to assert any spousal defenses, any challenges to the appropriateness of the collection actions or any offers of collection alternatives at the CDP hearing. Moreover, his various claims alleging that the Appeals officer failed to follow proper procedure were rejected.

W.A. Carroll, DC Tenn., 2002-2 USTC ¶50,500, 217 FSupp2d 852.

Chief Counsel determined that a taxpayer who was offered a Collection Due Process (CDP) hearing but failed to timely request it could not challenge the appropriateness of the proposed levy in a subsequent CDP proceeding arising from the filing of a notice of federal tax lien. However, an appeals officer could consider the effect of the levy on the taxpayer in determining whether the filing of the notice of federal tax lien was appropriate.

CCA Letter Ruling 200152043, November 15, 2001.

A corporate taxpayer's allegation that an Appeals Officer failed to collect and credit funds owed to the taxpayer by another government agency to its outstanding tax liabilities was dismissed. Because the taxpayer essentially objected to its underlying tax liability, such arguments were properly disregarded during the CDP hearing.

Triad Microsystems, Inc., DC Calif., 2003-1 USTC ¶50,106.

A nonfiler's Tax Court petition seeking a review of the IRS Appeals officer's Collection Due Process (CDP) determination to levy upon his property in satisfaction of his delinquent taxes was dismissed absent proof that the amount of his assessed tax liability was incorrect. Because the taxpayer had not received a deficiency notice prior to the IRS's collection attempt, the Appeals officer attempted to discuss his underlying tax liability at the CDP hearing; however, the taxpayer refused to answer any questions or provide the requested information.

S.M. Smith, Jr., 84 TCM 647, Dec. 54,958(M), TC Memo. 2002-304.

A civil penalty was properly imposed against an individual for filing a frivolous return. Because no genuine issue of material fact existed over the verification of all legal and administrative requirements, the individual's Collection Due Process determination was valid.

W. Gifford, DC Nev., 2003-1 USTC ¶50,144.

An individual who had been provided with a notice of deficiency but declined the opportunity to dispute it was not permitted to challenge his tax liability in the district court. A notice of deficiency provided to a taxpayer prior to the effective date of Code Sec. 6330 satisfies the "opportunity to dispute" requirement of Code Sec. 6330(c)(2)(B). Moreover, the court noted that the taxpayer rights provided by Code Sec. 6330 ensure that a taxpayer is afforded an opportunity to dispute the underlying tax liability, regardless of whether that opportunity is given before or after the effective date of Code Sec. 6330.

D.E. Walker, DC Calif., 2003-1 USTC ¶50,157.

The Tax Court's finding that an individual taxpayer had been sent a refund was clear error and, therefore, the finding was vacated and remanded for further factual determinations. The IRS had failed to credit the taxpayer for amounts withheld, was unable to account for the taxpayer's refund, and had discrepancies in its records. Instead, the IRS relied on a 21-R internal computer report that showed a "freeze code" to show that the taxpayer had been mailed a refund. Moreover, the IRS's records on the appropriate amount of statutory interest the taxpayer owed were contradictory, and the testimony of the Appeals officer was not conclusive. Records presented by the IRS did not indicate the amount of interest that had accrued, how it was calculated, or whether the taxpayer's payment stopped the running of interest on that amount.

R. Wright, CA-2, 2004-2 USTC ¶50,343, 381 F3d 41.

Married taxpayers' receipt of a deficiency notice precluded them from challenging in the Tax Court the amount or existence of their underlying tax liability. These issues had not been disputed within 90 days after the notice of deficiency was mailed; consequently, the IRS determination on the collection of the taxpayer's deficiency by levy was sustained.

P.F. Nichols, 84 TCM 697, Dec. 54,976(M), TC Memo. 2002-317.

A corporation was denied relief from an IRS Appeals officer's Collection Due Process (CDP) determination regarding its liability for FUTA and employment taxes absent credible proof that the determination was legally incorrect or that the Appeals officer abused his discretion. The court refused to consider additional arguments raised by the taxpayer that had not been considered at the CDP hearing.

The Inner Office, Inc., DC Tex., 2003-1 USTC ¶50,185.

An individual who did not cooperate with the IRS Appeals Office by appearing for or rescheduling an offered Collection Due Process (CDP) hearing was not entitled to another opportunity for a hearing. Her only dispute involved her underlying tax liability, and she was barred from challenging that liability due to her failure to file a Tax Court petition after receiving a deficiency notice. Further, because the taxpayer was precluded from disputing the existence or amount of her underlying tax liability and did not assert spousal defenses, challenge the appropriateness of the collection action, or offer any collection alternatives, the IRS's administrative deficiency determination was sustained.

C.L. Moore, 85 TCM 727, Dec. 55,002(M), TC Memo. 2003-1.

An individual who failed to challenge his underlying tax liability at his prior Collection Due Process administrative hearing was precluded from disputing his penalties and interest in the Tax Court. As a result, the government was entitled to summary judgment. In his Tax Court petition, the taxpayer failed to raise a spousal defense, make a valid challenge to the appropriateness of the IRS's intended collection via tax lien, or offer alternative means of collection, and such issues were deemed conceded.

M. Tabak, 85 TCM 735, Dec. 55,005(M), TC Memo. 2003-4.

Jurisdiction was lacking over an individual's Tax Court challenge to his underlying tax liabilities for three tax years because he failed to file a petition with respect to his notice of deficiency. Thus, he failed to properly place the validity of his underlying tax liability at issue. The IRS did not abuse its discretion in complying with the applicable tax collection procedures for the tax years at issue.

A.B. Jombo, 85 TCM 774, Dec. 55,023(M), TC Memo. 2003-20.

A Collection Due Process (CDP) determination upholding a tax lien imposed against a delinquent taxpayer's property was was not an abuse of discretion. The taxpayer, who received deficiency notices from the IRS but did not challenge the assessments by filing a Tax Court petition, was barred from contesting the deficiencies.

M. Eiselstein, 85 TCM 794, Dec. 55,025(M), TC Memo. 2003-22.

An individual's receipt of two deficiency notices precluded him from challenging the amount or existence of his underlying tax liability. Consequently, the IRS's determination on the collection of the taxpayer's deficiency by levy was sustained. Moreover, there was no evidence of abuse of discretion by the IRS Appeals officer who arranged the taxpayer's collection due process (CDP) hearing.

E.D. Shaffer, CA-10, 2003-1 USTC ¶50,232, 55 FedAppx 532.

An individual who received deficiency notices regarding the assessment of deficiencies and penalties for four tax years, challenged the determinations for three of those years in one Tax Court case, and attempted to challenge the remaining deficiency in a second case, was barred from again contesting the existence and amount of his underlying tax liabilities in a Collection Due Process (CDP) proceeding. Because the taxpayer offered none of the available remedies under Code Sec. 6330(c), the IRS's motion to dismiss the case for failure to state a justiciable claim was granted.

J.G. Beery, 85 TCM 842, Dec. 55,044(M), TC Memo. 2003-38.

An individual's challenge to collection procedures was dismissed where the taxpayer failed to reveal any irregularities in the IRS' actions. The taxpayer, who failed to report any income or tax due, was appropriately prohibited from challenging his underlying tax liability during a Collection Due Process (CDP) hearing because he received a notice of deficiency, failed to respond, and failed to articulate the basis for his objection to the tax liability.

W.G. Koenig, 85 TCM 850, Dec. 55,046(M), TC Memo. 2003-40.

A Collection Due Process determination allowing for the collection of deficiencies against an individual who filed a zero-income return and contended that she was not subject to tax was sustained. The taxpayer was not permitted to challenge the existence or amount of her unpaid taxes because she failed to file a Tax Court petition contesting the findings in the IRS's deficiency notice.

C.D. Flathers, 85 TCM 969, Dec. 55,067(M), TC Memo. 2003-60.

Similarly:

D.A. Fink, 85 TCM 976, Dec. 55,068(M), TC Memo. 2003-61.

A frivolous return penalty was properly imposed against an individual who, despite the receipt of earned income, filed a zero-income return and questioned the IRS's authority to collect taxes. The taxpayer failed to establish that the Appeals officer at his Collection Due Process hearing abused her discretion in disregarding issues that he attempted to raise that did not relate to spousal defenses, the appropriateness of the collection actions, and offers of collection alternatives. The taxpayer had previously been given an opportunity to challenge the penalty when the IRS notified him by letter that his tax form should be corrected; however, he took no action at that time.

M.B. Loze, DC La., 2003-1 USTC ¶50,298.

A taxpayer's challenge to the validity of a Collection Due Process (CDP) determination holding him liable for frivolous return penalties was rejected, and his claim for compensatory and punitive damages against the government was dismissed. Because the taxpayer, who had not received a deficiency notice, challenged the validity of the underlying tax liability, the district court's standard of review was de novo. However, the taxpayer's failure to state a claim upon which relief could be granted resulted in the dismissal of the action.

J. Tornichio, DC Ohio, 2003-1 USTC ¶50,285, 263 FSupp2d 1090.

An individual's challenge to a Collection Due Process determination was rejected where he failed to show that an IRS Appeals officer abused his discretion. The taxpayer's underlying tax liability was not at issue because he failed to file a Tax Court petition following his receipt of notices of deficiency for two tax years and, for a third year, he failed to argue that the amounts he reported on his return for that year were reported in error.

S.D. Kaye, 85 TCM 1017, Dec. 55,082(M), TC Memo. 2003-74.

The IRS was granted summary judgment on a notice of intent to levy an individual for an unpaid tax liability. The taxpayer filed a late return alleging zero income and zero taxes due for a tax year. The IRS properly followed all applicable procedures and, thus, did not abuse its discretion in deciding to proceed with the collection action as pursuant to the notice of determination.

A. Williams, 85 TCM 1048, Dec. 55,091(M), TC Memo. 2003-83.

Similarly:

R.H. Frank, 85 TCM 1066, Dec. 55,096(M), TC Memo. 2003-88.

The Tax Court properly determined that an individual was foreclosed from challenging his underlying tax liability at trial. He unsuccessfully contended that he did not owe the assessed amount of taxes because insufficient evidence existed to support the assessment. On appeal, he did not contest that he had received a notice of deficiency. As he did not dispute it within 90 days, pursuant to Code Sec. 6213(a), he was barred from challenging the liability at trial. Moreover, the IRS was not required to conduct an audit before determining a deficiency, and it possessed statutory authority under Code Sec. 6020(b)(1) to file a substitute tax return for a nonfiler.

B.K. Wasson, CA-6 (unpublished opinion), 2003-1 USTC ¶50,337, 59 FedAppx 808.

The Collection Due Process (CDP) determination denying innocent spouse relief to a wife who, with her family, engaged in a systematic plan to place assets beyond the reach of the IRS was upheld. She knew of the understatements generated by the improper tax shelter deductions, significantly benefited from the unpaid liabilities, and attempted to conceal family assets. Thus, it was not inequitable to deny her relief from joint tax liability.

N.B. Doyle, 85 TCM 1108, Dec. 55,104(M), TC Memo. 2003-96.

The Tax Court properly granted summary judgment in favor of the government in an individual's suit challenging collection of his tax liabilities for two tax years. The Tax Court properly concluded that the taxpayer was precluded from challenging his underlying tax liability during his Collection Due Process (CDP) hearing because he received a statutory notice of deficiency, and that the IRS Appeals officer who conducted the CDP hearing properly verified the existence and propriety of tax assessments.

W. Barasch, CA-9 (unpublished opinion), 2003-1 USTC ¶50,383, 59 FedAppx 235.

The IRS did not abuse its discretion in proceeding with a collection action against an individual where the taxpayer failed to establish that the Appeals officer did not follow appropriate Collection Due Process (CDP) procedures. The taxpayer was not prohibited from disputing her underlying tax liability where she was not allowed to raise frivolous arguments during her CDP hearing, including her contention that the statutory notice of deficiency was invalid.

A.W. Nebres, 85 TCM 1144, Dec. 55,110(M), TC Memo. 2003-102.

The Collection Due Process (CDP) determination permitting the IRS to proceed with collection of an individual's deficiency and a delay penalty was upheld. Because the taxpayer had received statutory notice of deficiency, he was precluded from challenging his underlying tax liability at the CDP hearing. The imposition of sanctions against him was not an abuse of discretion based on the finding that he had instituted the action primarily for purposes of delay.

H.E. Call, CA-9, 2003-1 USTC ¶50,387, 59 FedAppx 234.

The government was denied summary judgment in a suit in which a married couple challenged an adverse Collection Due Process determination because it failed to overcome genuine issues of material fact regarding the assessments that the taxpayers pointed to on the record. Although the government addressed at length a number of procedural issues, it failed to reach the taxpayers' allegation that the wife's FICA tax liabilities were improperly assessed as income tax liabilities.

H. Langer, DC Minn., 2003-1 USTC ¶50,400.

An individual was precluded from contesting her underlying tax liability at a Collection Due Process (CDP) hearing where the issue had previously been addressed in an earlier Tax Court decision. Moreover, the taxpayer was precluded from raising the issue of her underlying tax liability where she was given prior opportunity to make such objections, and failed to do so.

E.L. Wooten, 85 TCM 1193, Dec. 55,122(M), TC Memo. 2003-113.

Married taxpayers who were not present to accept delivery of a notice of deficiency sent to them by the IRS were allowed to challenge the validity of the deficiency and penalty assessed against them at their Collection Due Process (CDP) hearing. Both taxpayers credibly testified that they did not receive a notice of attempted delivery from the United States Postal Service (USPS) and that they did not know that the USPS was attempting to deliver a certified letter to them. Accordingly, the avoidance exception to actual receipt was not applicable and they were afforded the opportunity to dispute their tax liability for the year in issue.

C.B. Tatum, Jr., 85 TCM 1200, Dec. 55,125(M), TC Memo. 2003-115.

Similarly:

C.P. Durrenberger, Jr., 87 TCM 1000, Dec. 55,552(M), TC Memo. 2004-44.

On reconsideration, an order granting partial summary judgment against the secretary/treasurer of a corporation on the issue of his liability for unpaid trust fund recovery penalties and interest was reversed. It was not clear whether the taxpayer had the opportunity to dispute his underlying tax liability before the IRS made its assessment. There was a question of fact as to whether the deficiency notice went unclaimed because it was not mailed to the proper address.

B.S. Pollack, DC Tenn., 2005-1 USTC ¶50,285, 406 F3d 323, rev'g in part, 2004-2 USTC ¶50,391, 327 FSupp2d 907.

On reconsideration, an individual was considered to have been given the opportunity to contest the determination of the IRS even though he claimed that he never received a notice of the determination. There is no difference between an unclaimed certified letter and a refused one. Because the address on the unclaimed certified letter containing the notice was the taxpayer's correct address, he was considered to have failed to accept delivery; therefore, he had the opportunity to dispute the underlying tax liability.

B.S. Pollack, DC Tenn., 2005-2 USTC ¶50,654.

An IRS Appeals officer did not abuse his discretion in determining that the IRS was entitled to proceed with collection of an individual's delinquent taxes and penalties. The validity of the underlying tax liability was not properly placed at issue by the taxpayer at the Collection Due Process (CDP) hearing.

S.R. Burton, 85 TCM 1203, Dec. 55,126(M), TC Memo. 2003-116.

An individual's receipt of a deficiency notice precluded him from challenging the amount or existence of his underlying tax liability in a collection review proceeding. Consequently, the IRS's determination on the collection of the taxpayer's deficiency by levy was sustained.

P. Maton, DC Ill., 2003-1 USTC ¶50,406.

Similarly:

M.D. Johnson, DC Ga., 2003-2 USTC ¶50,721.

The IRS's Collection Due Process (CDP) determination spanning four tax years was upheld where, in properly contesting his underlying tax liability, an individual failed to establish that he was entitled to claimed loss deductions. The taxpayer unsuccessfully advanced tax-protestor type arguments to support his contention that he was not responsible for the underlying tax liability. Moreover, no abuse of discretion was established, and the collection alternatives were deemed conceded because they were not raised during the CDP hearing. As a result, the IRS was permitted to proceed with collection.

E.C. Aston, 85 TCM 1260, Dec. 55,139(M), TC Memo. 2003-128.

An IRS Appeals officer did not abuse her discretion in issuing a Collection Due Process (CDP) determination permitting the IRS to proceed to levy against a corporate provider of services for mentally and physically challenged individuals in order to collect delinquent taxes. Because the company failed to timely offer any alternatives to levy, the intrusiveness of the levy was properly deemed commensurate with the need to collect taxes. Counsel for the corporation had been granted an extension of time in which to submit an offer-in-compromise or other alternative to levy, but he failed to do so.

Community Residential Services, Inc., DC N.C., 2003-1 USTC ¶50,458.

The IRS's determination to proceed with a collection action against an individual for income tax liabilities was not an abuse of discretion. The merits of the taxpayer's claim of entitlement to itemized deductions had previously been determined in court; thus, in the taxpayer was not entitled to contest the underlying tax liability in the Collection Due Process (CDP) hearing. Since the taxpayer did not raise any other issues about the conduct of the hearing or verification that administrative procedures had been followed, he did not show any abuse of discretion by the IRS.

S.G. Orr, 85 TCM 1319, Dec. 55,156(M), TC Memo. 2003-141.

The IRS did not abuse its discretion in proceeding with collection by levy of married taxpayers' unpaid tax liability for one tax year and the husband's tax liability for another tax year. The taxpayers could not seek redetermination of their liability for the earlier tax year, did not timely request credit for any overpaid FICA taxes, and the IRS did not abuse its discretion in denying their request to apply FICA credits against their unpaid tax liabilities. In a prior Tax Court proceeding, the taxpayers stipulated to the amount of credits for increased federal income tax withholdings, including FICA taxes. The taxpayers presented no evidence that their excess withholdings for the tax year at issue exceeded those amounts. With respect to other alleged FICA overpayments, such years were not before the IRS Office of Appeals at the taxpayers' Collection Due Process hearing. The taxpayers also did not file, within the applicable statutory period, a claim for refund or credit of any overpaid FICA tax, or present evidence that they made deposits or that any FICA taxes were assessed after the applicable period of limitations had expired.

J.J. Maloney, 85 TCM 1325, Dec. 55,158(M), TC Memo. 2003-143.

An Appeals officer's Collection Due Process (CDP) determination permitting the IRS to proceed to levy in order to collect an individual's delinquent taxes was not an abuse of discretion. The taxpayer's underlying tax liabilities were properly at issue because he had not received a notice of deficiency; however, because he persisted in advancing frivolous arguments, those liabilities were sustained. He was provided with a fair opportunity to address all relevant issues at the CDP hearing, but failed to do so.

T.V.F. Struhar, 85 TCM 1350, Dec. 55,162(M), TC Memo. 2003-147.

The IRS's determination to proceed with collection of delinquent taxes from a nonfiling individual was not time-barred and was not an abuse of discretion. Her claim that the assessment period had expired was a challenge to the underlying tax liability that should have been made in a deficiency proceeding, not a collection proceeding.

S.S. Rodriguez, 85 TCM 1414, Dec. 55,168(M), TC Memo. 2003-153.

An IRS Appeals officer's determination following a CDP hearing that a frivolous return penalty was properly imposed against a taxpayer, who filed a zero-income return and contended that his wages were not subject to tax, was upheld.

J.C. Pesci, DC Nev., 2003-1 USTC ¶50,498.

Similarly:

L. Goodyke, DC Nev., 2003-1 USTC ¶50,529.

R. Rodriguez, DC Ariz., 2006-2 USTC ¶50,482.

The IRS did not abuse its discretion in determining to proceed with collection of an individual's tax liabilities for three tax years following a Collection Due Process (CDP) hearing. The taxpayer failed to introduce credible evidence that funds from his bankruptcy estate were used to pay the liabilities at issue, and he conceded that the IRS did not receive the amount. Additionally, the taxpayer unsuccessfully argued that the IRS abused its discretion in proceeding with collection because he had expended $18,000 prosecuting various claims against the government; he was entitled to no credit against his unpaid tax based on such costs.

J.J. Wingert, 85 TCM 1488, Dec. 55,187(M), TC Memo. 2003-172.

An individual who failed to file a Tax Court petition after receiving a deficiency notice was not entitled to contest the merits of her underlying tax liability at a Collection Due Process hearing. The mere fact that the Appeals officer did consider a part of the merits, although not required to do so, did not result in a waiver of the restrictions on the taxpayer with respect to the remaining underlying issues that were not addressed. Rationale in H.R. Behling, 118 TC 572, Dec. 54,787 (2002), followed.

F. Pahamotang, 85 TCM 1506, Dec. 55,192(M), TC Memo. 2003-177.

A corporation that provided janitorial and cleaning services failed to comply with its employment tax obligations at the time of its Collection Due Process (CDP) hearing and, as a result, was properly denied collection alternatives. Evidence established that the taxpayer failed to meet its semi-weekly deposit obligations that were determined pursuant to a plan of reorganization in bankruptcy in the five quarters preceding its CDP hearing. Moreover, the taxpayer failed to timely file its returns in two quarters preceding the hearing.

PCT Services, Inc., DC Ga., 2003-2 USTC ¶50,536.

The IRS did not abuse its discretion in determining to proceed with a collection action against an individual with respect to two tax years. Although the taxpayer did not receive a notice of deficiency with respect to his unpaid liability for either tax year, the contentions and arguments he raised in his Appeals office hearing, petition, and trial memorandum, and which challenged the existence or the amount of each such unpaid liability, were frivolous and/or groundless. The court determined, sua sponte, to impose the delay penalty because the court previously had warned the taxpayer about such arguments.

I. Israel, 86 TCM 23, Dec. 55,217(M), TC Memo. 2003-198.

Taxpayers who failed to file Tax Court petitions after receiving a notice of deficiency were barred from raising any issues regarding their underlying tax liability at their Collection Due Process (CDP) hearing.

W.O. Smith, 86 TCM 62, Dec. 55,225(M), TC Memo. 2003-205.

An individual who failed to file a Tax Court petition after receiving a notice of deficiency was barred from raising any issues regarding his underlying tax liability at his Collection Due Process (CDP) hearing.

J.R. Peacock, 86 TCM 64, Dec. 55,226(M), TC Memo. 2003-206.

Married taxpayers were precluded from challenging their underlying tax liabilities at a Collection Due Process hearing and on appeal. They had received a statutory notice of deficiency for their tax liabilities and had litigated the merits of their liabilities in the Tax Court.

X.J.R. Avula, CA-8, 2004-2 USTC ¶50,310, 105 FedAppx 127.

Married taxpayers who had an opportunity to challenge a notice of deficiency were barred from raising any issues regarding their underlying tax liability at their Collection Due Process (CDP) hearing. Because the taxpayers entered into an agreement as to the amount of their tax liability in one tax year, they were precluded from arguing the amount of their tax liability at their CDP hearing or in their petition.

A. Thomas, 86 TCM 216, Dec. 55,253(M), TC Memo. 2003-231.

The district court dismissed an individual's challenge to an adverse CDP determination where evidence established that the IRS followed proper hearing procedures. The taxpayer was appropriately prohibited from disputing her underlying tax liability because she received a notice of deficiency and did not contest the liability at that time.

D.J. Barnett, DC Fla., 2003-2 USTC ¶50,612.

An individual who was assessed the trust fund recovery penalty was precluded from challenging his liability for the penalty at a Collection Due Process (CDP) hearing because that issue had already been addressed and determined during earlier proceedings. Thus, the federal district court lacked jurisdiction to review the liability issue that the IRS properly refused to reexamine.

H. Plettner, DC Ill., 2003-2 USTC ¶50,620.

Similarly:

W.F. Currie, DC Ga., 2005-2 USTC ¶50,458.

R.R. Pennington, DC Tex., 2006-2 USTC ¶50,474.

The Tax Court properly dismissed an individual's challenge to an adverse Collection Due Process (CDP) determination where the taxpayer attempted to dispute his underlying tax liability during his CDP hearing. The taxpayer received a notice of deficiency and failed to object to the tax liability at that time.

E.P. Tolotti, Jr., CA-9 (unpublished opinion), 2003-2 USTC ¶50,637, 70 FedAppx 971, aff'g 83 TCM 1436, Dec. 54,702(M), TC Memo. 2002-86.

The IRS was entitled to proceed with collection of civil penalties assessed against a taxpayer who failed to report his salary income because at his Collection Due Process hearing, the taxpayer failed to raise a spousal defense, validly challenge the IRS's intended collection action or propose an alternative means of collection.

W. Wilson, 84 TCM 360, Dec. 54,810(M), TC Memo. 2002-42.

The IRS was entitled to proceed with levy against a delinquent individual because he failed to raise any valid allegations of error in the collection process. The taxpayer was collaterally estopped from raising, in the Tax Court's Code Sec. 6330 proceeding, issues regarding return assessments. In prior litigation (DC Texas, 2001-2 USTC ¶50,735), a federal district court held that the return assessments were validly entered, adequately noticed, and not dependent upon the prior issuance of notices of deficiency. The district court also concluded that the taxpayer's execution of a Form 900 was a valid extension of the period of limitations on collection. The taxpayer was not collaterally estopped from litigating issues regarding examination assessments.

J. Perez, 84 TCM 501, Dec. 54,924(M), TC Memo. 2002-274.

The IRS's decision in its notice of determination to proceed with its levy action against an individual employed at a radio station was upheld. At his Collection Due Process hearing, the taxpayer failed to prove that the IRS did not apply purported overpayments to his outstanding tax liability and, thus, account for all payments that he made to the Service with respect to the tax years in issue. With the exception of one adjustment, the Tax Court was able to reconcile the series of adjustments made by the IRS to the taxpayer's account during the years in issue. Accordingly, it was entitled to proceed with its collection activities.

M. Sponberg, 84 TCM 77, Dec. 54,816(M), TC Memo. 2002-177.

Following a Collection Due Process (CDP) hearing, the government was entitled to proceed with collection efforts against an individual who was assessed frivolous return penalties in connection with the filing of zero-income returns. Tax-protest arguments raised by the taxpayer in opposition to the government's motion for summary judgment were rejected as meritless. Having failed to challenge the penalty assessment prior to the CDP hearing, the taxpayer was barred from contesting the existence or amount of the assessed liability. Moreover, he failed to establish that documents sent to him by the IRS were invalid or that IRS personnel lacked authority to proceed against him. Thus, no showing was made to justify further delay in the government's collection efforts.

S. Rennie, 84 TCM 611, Dec. 54,949(M), TC Memo. 2002-296.

An individual was permitted to challenge his underlying tax liability relating to seven tax years where the IRS conceded that a notice of deficiency was not issued to him, and that he had not been given the appropriate opportunity to request a Collection Due Process hearing. The taxpayer's case was remanded upon a showing that an irregularity occurred in the assessment procedure. However, the taxpayer was prohibited from challenging his underlying tax liability relating to six other tax years because he signed a consent to assessment, thereby waiving his right to a notice of deficiency and opportunity to contest his tax liability.

J. Rivera, 85 TCM 832, Dec. 54,040(M), TC Memo. 2003-35.

An individual who did not dispute his underlying tax liability at his Collection Due Process hearing was not entitled to additional deductions. The taxpayer he had reached an agreement with the IRS as to additional liabilities, and the amounts were assessed. Moreover, the taxpayer presented no credible evidence that his underlying tax liabilities for any of the years in issue were incorrect. He unsuccessfully contended that the proceeds of a foreclosure on his house should have paid off the liabilities at issue. However, he failed to raise a spousal defense, make a valid challenge to the appropriateness of the intended collection action, or offer alternative means of collection; the issues were deemed conceded under Tax Court Rule 331.

D. Stewart, 84 TCM 292, Dec. 54,866(M), TC Memo. 2002-225.

The IRS was permitted to proceed with collection against an individual who gave no bona fide basis for his objection to the Service's collection actions. The Tax Court had given the taxpayer an opportunity to contest his underlying tax liabilities for two years at a Collection Due Process (CDP) hearing because he had received no deficiency notices for those years. However, he did not attend the CDP hearing, attempted to delay the hearing, did not challenge the existence or amount of his underlying deficiencies, and raised previously rejected frivolous arguments in response to an order to show cause. Because he instituted and maintained the proceeding solely for delay, the court concluded that the IRS's collection determination was not an abuse of discretion.

M. Nestor, 84 TCM 410, Dec. 54,896(M), TC Memo. 2002-251.

Taxpayer was entitled to contest his underlying tax liability following the issuance of a notice of intent to levy because he had never received the deficiency notice mailed to him by the IRS.

B. Merriweather, 84 TCM 294, Dec. 54,816(M), TC Memo. 2002-226.

The validity of married taxpayers' underlying liability was properly at issue in the Code Sec. 6330(d) appeal from a Collection Due Process (CDP) determination, and the review was to be conducted under the de novo standard. By raising the issue of whether the limitations period had expired at the CDP hearing, the taxpayers challenged their underlying tax liability. The IRS's assessment was the result of the taxpayers' voluntarily filed amended return. No deficiency notice had been issued to them, and they did not otherwise have an opportunity to dispute their tax liability.

P. Hoffman, 119 TC 140, Dec. 54,882.

The government was entitled to summary judgment with respect to married taxpayers' suit challenging the validity of a notice of determination issued to them after their Collection Due Process hearing. The taxpayers, who had filed a zero-income tax return, failed to raise an issue of material fact as to the validity of the notice. Their argument that the notice was invalid because it was not issued by the Secretary of the Treasury and that IRS employees are not Treasury delegates was summarily rejected. Moreover, a Form 4340 was valid to show notice of assessment and demand for payment of the amounts that the taxpayers owed.

B. Blanchard, DC Ohio, 2002-2 USTC ¶50,712.

An Appeals officer's determination following a Collection Due Process (CDP) hearing permitting the government to proceed with collection of a company's delinquent payroll taxes was upheld. The Notice of Determination established that the Appeals officer had complied with the applicable law and procedures in reaching her decision. The taxpayer, which was provided with proper notice and an opportunity to raise all relevant issues at the CDP hearing, failed to provide the updated financial information and installment payment proposal requested by the Appeals officer. The issues raised by the taxpayer were duly considered, and its interests and concerns were balanced against the need for efficient tax collection. The decision to enforce the levy was reasonable, and no abuse of discretion occurred.

Cardinal Healthcare, Inc., DC Ill., 2002-1 USTC ¶50,582.

A Collection Due Process (CDP) determination allowing for the collection of frivolous return penalty against an individual who filed zero-income returns and contended that the requirement that he file returns violated his Fifth Amendment rights was valid. The taxpayer was permitted to challenge the validity of the penalty at the CDP hearing because the statutory deficiency procedures do not apply to such penalties and, thus, he had no prior opportunity to dispute the assessment.

W. Dean, DC Fla., 2002-2 USTC ¶50,802.

Married taxpayers failed to set forth a valid argument to support their claim that a notice of determination issued to them should be vacated. They raised the same issues in the district court that they had raised in their Collection Due Process (CDP) hearing. Their tax protest arguments were rejected, as was their challenge to the frivolous return penalty imposed in connection with their return that contained zeros while an attached Form W-2 showed income. Moreover, their conclusory allegation that their CDP hearing was improperly conducted was unsupported, as were their contentions that the Treasury Secretary was required to send the notice of determination, and that computer generated transcripts were invalid to show notice and amounts owed.

R. Harrison, DC Nev., 2002-2 USTC ¶50,719.

An individual's suit against the government challenging a levy in response to his nonpayment of a frivolous return penalty was dismissed. Imposition of the penalty was proper as his Form 1040 lacked information such that its correctness could not be judged. Moreover, a document attached to the Form 1040 indicated that the omissions from the Form 1040 were attributable to a frivolous position. He received proper notice and opportunity to appeal the penalty prior to his Collection Due Process hearing in which he failed to raise any relevant issues, focusing instead on the validity of the underlying taxes. All other assertions were dismissed as meritless.

D. Hoffman, DC Wash., 2002-2 USTC ¶50,499, 209 FSupp2d 1089.

An individual who, despite having received taxable wages, filed a zero-income return was held to be liable for the frivolous return penalty following a Collection Due Process (CDP) hearing. The taxpayer's allegation that he was denied a fair and/or meaningful CDP hearing was rejected because the record showed that the IRS complied with the requirements of Code Sec. 6320 and Code Sec. 6330 and he was afforded every opportunity to address issues of his choosing. Moreover, the taxpayer did not have a right to discovery in connection with his CDP hearing, and the IRS did not fail to produce documentation that he was entitled to receive. The mere fact that the notice of a right to a CDP hearing was sent by an IRS official, rather than by the Treasury Secretary, did not invalidate the notice.

B.R. Kelly, DC Mo., 2002-2 USTC ¶50,615, 209 FSupp2d 981.

A Collection Due Process (CDP) determination imposing frivolous return penalties against married taxpayers was valid. The penalties were appropriately imposed after the taxpayers reported zero income and tax liability on their return, despite attached W-2 forms indicating earnings in the years at issue. At the CDP hearing, the taxpayers were permitted to challenge the penalties as their underlying tax liability because, under Code Sec. 6703, the statutory deficiency procedures did not apply and the taxpayers had no prior opportunity to dispute the penalties.

P. Lemieux, DC Nev., 2002-2 USTC ¶50,720, 230 FSupp2d 1143.

A Collection Due Process determination that a frivolous return penalty was properly imposed against an individual who filed a zero-income return and contended that his wages were not subject to tax was upheld. The taxpayer's allegations that the Appeals officer had acted improperly were disregarded in light of the fact that he used the hearing as a forum for discussing matters beyond those permitted by Code Sec. 6330, and never addressed such relevant issues as spousal defenses, challenges to the propriety of the collection actions, and collection alternatives. The issues that he attempted to raise before the Appeals officer and the court were meritless and did not present a genuine issue for trial. Thus, the government's motion for summary judgment was granted.

A. Reynoso, DC Nev., 2002-2 USTC ¶50,775.

An IRS Appeals officer properly performed the statutory balancing test regarding enforced collection of an individual's tax liabilities at a Collection Due Process hearing. The taxpayer made no alternative proposal for the collection of his taxes, and the proposed levy action was no more intrusive than necessary. Moreover, his argument that material issues of fact existed as to whether he cooperated with the IRS in his attempts to obtain an offer in compromise was rejected because he failed to submit an offer to the IRS for processing and consideration.

A. Richter, DC Calif., 2002-2 USTC ¶50,607.

Following a Collection Due Process (CDP) hearing, the government was entitled to proceed with collection efforts against an individual who was assessed frivolous return penalties in connection with the filing of zero-income returns. Tax-protest arguments raised by the taxpayer were rejected as meritless. Having failed to challenge the penalty assessment under Code Sec. 6703 prior to the CDP hearing, the taxpayer was barred from contesting the existence or amount of the assessed liability. Moreover, he failed to establish that documents sent to him by the IRS were invalid or that IRS personnel lacked authority to proceed against him. Thus, no showing was made to justify further delay in the government's collection efforts.

P. Tkac, DC Md., 2002-2 USTC ¶50,653.

A Collection Due Process (CDP) determination allowing for the collection of frivolous return penalties against an individual who filed zero-income returns and contended that his wages were not subject to tax was valid. The taxpayer was permitted to challenge the validity of the penalties at the CDP hearing because the statutory deficiency procedures do not apply to such penalties and, thus, he had no prior opportunity to dispute the assessment.

J. Uveges, DC Nev., 2002-2 USTC ¶50,740.

Taxpayers who spuriously claimed no income or expenses on their tax return were precluded from contesting their underlying tax liability at a Collection Due Process (CDP) hearing because they had been provided with sufficient notice and demand for payment of taxes but had not timely dispute their tax liability. The Appeals officer did not abuse his discretion in concluding that the taxpayers were afforded the applicable administrative procedures but failed to raise spousal defenses, challenge the appropriateness of the collection action, and propose alternative means of collection. The purported collection alternative proposed by the taxpayers concerning payment of the penalty did not qualify as an alternative to collection by levy. Instead, it was a proposed condition to payment of the underlying liability, and the Appeals officer did not err in rejecting the plan.

D. Bentley, DC Ohio, 2002-2 USTC ¶50,751.

An IRS Appeals officer did not abuse his discretion at an individual's Collection Due Process hearing in determining that the requirements of applicable law had been met and that the taxpayer had been afforded the statutorily required administrative procedures. The taxpayer failed to raise any spousal defenses, challenge the appropriateness of an intended collection action, or suggest possible alternative means of collection. Instead, he contested his underlying tax liability and raised frivolous tax protests regarding the taxability of his wages.

R. Filson, DC Tex., 2002-2 USTC ¶50,682.

An individual received notice and opportunity for a hearing prior to the IRS levy, and received a Collection Due Process hearing, at which the declined to challenge matters allowable under Code Sec. 6330(c)(2). He did not challenge the appropriateness of the intended method of collection, offer alternative means of collection, or raise a spousal defense. Moreover, the taxpayer's frivolous claims that the IRS employees who imposed the penalties had to be named, and that the Appeals officer failed to identify the regulations that required payment of the penalty, were rejected.

L. Gillett, DC Mich., 2002-2 USTC ¶50,742, 233 FSupp2d 874.

See also, ¶38,184.35.

The IRS was entitled to levy on an individual's pension in order to collect a tax liability for five tax years. The taxpayer was not entitled to a determination as to the amount of his pension subject to the liens and, implicitly, a determination that no other assets of the taxpayer were subject to the IRS liens. The taxpayer failed to make such argument before the IRS Appeals officer at his collection due process hearing because he raised no alternatives to collection. The Tax Court noted that it would be inappropriate to anticipate, determine and limit the scope of the liens on the record in the case. The amount of liability was not disputed; the taxpayer's arguments only addressed collectibility.

L. Fusaro, 86 TCM 731, Dec. 55,381(M), TC Memo. 2003-345.

An IRS Appeals officer's determination that the filing of a notice of federal tax lien against an individual was appropriate was not an abuse of discretion. At the Collection Due Process Hearing, the individual had an opportunity to raise all relevant issues relating to the existence and/or amount of his unpaid tax liabilities. He also had the opportunity to challenge the appropriateness of the IRS's tax lien. Rather than take advantage of the opportunity, he chose to espouse groundless and frivolous arguments, which were summarily rejected by the Tax Court.

R.H. Hathaway, 87 TCM 819, Dec. 55,516(M), TC Memo. 2004-15.

Similarly:

A.L. Daugherty, CA-10, 2004-1 USTC ¶50,145, 86 FedAppx 409, aff'g unreported Tax Court decision.

An IRS Appeals officer did not abuse his discretion in issuing a Collection Due Process (CDP) determination permitting the collection of the trust fund recovery penalty and interest from a corporate treasurer/responsible person. The treasurer's claim that the government improperly failed to credit a third party's payments to his account was moot because the amounts had either been credited to his account or the government's erroneous deletion of a credit was being corrected.

J.A.P. Leiter, DC Kan., 2004-1 USTC ¶50,162.

A taxpayer could not challenge his liability for the trust fund recovery penalty at a collection due process hearing. The taxpayer failed to dispute the liability within the appropriate limitation period, prior to assessment. The IRS notified the taxpayer of the proposed assessment and the taxpayer had 60 days to appeal the determination before the assessment. Moreover, the taxpayer agreed to the assessment and could not now be excused absent sufficient legal basis.

B.N. Muller III, DC Tenn., 2004-1 USTC ¶50,239.

Similarly:

C. Jackling, DC N.H., 2005-1 USTC ¶50,159, 352 FSupp2d 129.

A taxpayer was not barred from contesting her liability for interest on a trust fund penalty at her Collection Due Process Hearing. The IRS's attempt to collect amounts after settling the taxpayer's trust fund obligation and payment of the liability constituted an attempt to collect on a new tax that had not been assessed. Because the tax was not previously assessed she should have been entitled to contest the liability at the Collection Due Process Hearing.

P.J. Hudson, DC N.Y., 2004-1 USTC ¶50,241.

An IRS Appeal's Officer's decision that an individual taxpayer's waiver of restriction on assessment was not obtained through duress, coercion, fraud or misrepresentation was not an abuse of discretion. Informing the taxpayer that the IRS would proceed against him and that the IRS could file a lien against or levy his property did not constitute duress but, rather, notice that the IRS would use the lawful means provided by statute to assess and collect taxes.

G.L. Shireman, 87 TCM 1448, Dec. 55,679(M), TC Memo. 2004-155.

Installment Agreements

The Tax Court dismissed an individual's challenge to an adverse Collection Due Process (CDP) determination. The court rejected the taxpayer's argument that the balance due under a proposed installment agreement was excessive. The proposed agreement properly accounted for taxes, penalties and interest.

L.M. Hiltz, 87 TCM 973, Dec. 55,545(M), TC Memo. 2004-38.

An IRS Appeal's officer did not abuse his discretion in declining a delinquent taxpayer's alternative collection offer. The taxpayer proposed paying the IRS $30,000 in cash and entering into an installment agreement in exchange for release of an IRS lien against his business property. Release of the lien have allowed the taxpayer to sell the property to his brother for $135,000 under its appraisal value. However, the sale price less encumbrances would have yielded significantly less than the IRS was owedand would have deprived the IRS of its security under the lien. In addition, the proposed sale was not an arms-length transaction and the taxpayer had a history of noncompliance.

D.A. Tilley, DC Pa., 2004-1 USTC ¶50,259.

An IRS Appeals Office did not abuse its discretion in proposing an installment agreement to married taxpayers to satisfy their unpaid tax liabilities. The record established that the office's consideration of the taxpayers' collection alternative was a reasonable determination based on a financial analysis of the couple's monthly income and expenses and their ability to pay.

R. Eliason, 84 TCM 297, Dec. 54,868(M), TC Memo. 2002-227.

The IRS Appeals Office did not abuse its discretion in denying a radio broadcasting corporation's request for an installment agreement during the course of its Collection Due Process hearing. The taxpayer had an employment tax liability in excess of $1 million, was not current on its tax obligations, was having financial problems, and was faced with an escalating tax liability. The taxpayer failed to support its proposed installment agreement with financial information showing that it would be able to repay both the delinquent amounts and the current taxes as they became due. Additionally, the Appeals officer properly refused to delay the collection proceedings pending a sale or refinancing absent proof that such a transaction could be accomplished within a reasonable period of time.

Stop 26-Riverbend, Inc., DC Ohio, 2003-1 USTC ¶50,360.

The IRS was entitled to proceed with a levy against taxpayers following their collection due process (CDP) hearing. The taxpayers presented neither evidence nor argument that an installment agreement was an appropriate alternative to the levy; thus, the IRS Appeals Officer's refusal to accept their proposal for an installment agreement was not an abuse of discretion.

C.A. Black , 84 TCM 656, Dec. 54,963(M), TC Memo. 2002-307.

There was no evidence that an IRS Appeal Officer abused his discretion by denying a delinquent company's request for an installment agreement instead of a levy. Although he included the proposal on his written request for a CDP hearing, he failed to raise the issue during the actual hearing. Additionally, even if the taxpayer was able to show that it could pay the installments, the IRS was not obligated to accept its proposal in lieu of a levy.

Kitchen Cabinets, Inc., DC Tex., 2001-1 USTC ¶50,287.

An IRS Appeals officer's refusal to enter into an installment agreement with an individual and her decision to uphold an IRS proposed collection action did not constitute an abuse of discretion. The taxpayer did not suffer undue hardship as a result of a lien and levy. The officer considered the taxpayer's arguments and properly balanced the interest of pursuing the least intrusive method of collection with the need to efficiently administer the tax laws in the collection of revenue and found that the tax lien against the taxpayer's accounts was the proper collection method. Thus, sustaining the lien and levy was not an unjustifiable and arbitrary action or one that had been made without rational explanation or a departure from established policies.

L. Rupert, DC Idaho, 2006-2 USTC ¶50,425.

The IRS Appeals officer who denied a corporation's proposed installment payment agreement for its unpaid taxes and penalties in lieu of a tax levy did not abuse his discretion. His rejection was reasonable because it was based on the corporation's history of nonpayment and its continued delinquent tax practices with regard to unrelated outstanding tax liabilities. Although the Appeals officer was required to consider the proposal, he was not required to accept it if there was evidence that entering into an installment payment agreement would be futile. Further, even if, as contended by the corporation, the Appeals officer misunderstood the agreement, his decision to reject the proposal was justifiable given the corporation's delinquent tax practices.

USA Financial Services, Inc., DC Va., 2006-2 USTC ¶50,594, 459 FSupp2d 440.

The IRS could proceed with collection activities against a delinquent taxpayer with respect to one tax year, but its levy with respect to a subsequent tax year was remanded for a Collection Due Process (CDP) hearing. The taxpayer received an adequate CDP hearing with respect to the first year at issue when an IRS Appeals officer met with his representative. The taxpayer understood that the meeting was the appropriate venue for him to raise any issues relevant to his assessment and IRS collection efforts, even though the meeting was prompted by his request for records under the Freedom of Information Act. Further, there was no abuse of discretion in the IRS decision to proceed with the levy, especially in light of the taxpayer's continuing failure to provide information about his financial situation and proposed collection alternatives. With respect to the deficiency for the second year at issue, however, there was no indication that the IRS had ever given the taxpayer an opportunity to present his claims. The Appeals officer's correspondence with the taxpayer and his representative referenced only the first year at issue.

R. Newstat,, 88 TCM 254, Dec. 55,747(M), TC Memo. 2004-208.

The IRS could proceed with collection against delinquent taxpayer, with respect to a tax year for which the IRS had initially not given the taxpayer the opportunity to present his claims in an earlier administrative hearing involving a previous tax year (see R. Newstat, 88 TCM 254, Dec. 55,747(M), T.C. Memo. 2004-208). The IRS Appeals Officer issued a supplemental notice of determination upholding the levy after the taxpayer put off his opportunity for an administrative hearing and then, more than four months after the hearing was to take place, failed to submit proof of his entitlement to business expense deductions. The determination to proceed with the levy was not an abuse of discretion. The taxpayer failed to provide information about his financial situation on Form 433-A, Collection Information Statement, which was a prerequisite for consideration of an alternative collection arrangement.

R. Newstat,, 90 TCM 486 , Dec. 56,191(M), TC Memo. 2005-262.

The IRS did not abuse its discretion in finding an assessment against married taxpayers to be valid and in sustaining a proposed levy. Fraud was present, which has an indefinite period of limitations. Therefore, Form 872 ceased to apply and the IRS could assess taxes at any time. Also, the IRS's alleged error in making a first assessment during the 90-day period during which the taxpayers could file a petition in response to the notice of deficiency was de minimis and harmless and did not invalidate a later, correct assessment.

J.A. DelVecchio, 88 TCM 295, Dec. 55,759(M), TC Memo. 2004-218. Aff'd per curiam, CA-11 (unpublished opinion), 2006-1 USTC ¶50,154, 166 FedAppx 431.

The IRS had the burden of showing that an individual received a notice of deficiency or otherwise had an opportunity to dispute the deficiency. However, the IRS failed to introduce any evidence that the notice of deficiency addressed to the taxpayer was actually submitted to the United States Postal Service (USPS) for delivery or that the USPS attempted delivery of the notice. Further, the receipt of the notice of deficiency by the taxpayer's attorney-in-fact could not be imputed to the taxpayer. Therefore, the taxpayer was entitled to contest his underlying tax liability at a collection due process hearing.

G.K. Calderone, Sr., 88 TCM 378, Dec. 55,783(M), TC Memo. 2004-240.

The only "underlying tax liabilities" that can be challenged at a CDP hearing are those for which the IRS has given notice of its intent to collect by levy. Consideration of precluded issues by the hearing officer is discretionary and not subject to judicial review.

Francis P. Harvey & Sons, Inc., DC Mass., 2005-1 USTC ¶50,154.

A Collection Due Process hearing correctly concluded that an individual could not offset his unpaid tax liability for one year with purported Schedule C losses sustained in three subsequent years. No evidence was offered during the taxpayer's Collection Due Process hearing or at trial concerning the manner in which the losses were incurred or why they were incurred. The taxpayer did not produce returns on which the losses were reported. The taxpayer's return for the year in dispute was untimely and the limitations period for filing an amended return had expired.

J.W. Winters, Jr., 89 TCM 693, Dec. 55,914(M), TC Memo. 2005-13.

Married taxpayers had the opportunity to dispute an underlying tax liability in their bankruptcy court case when the IRS submitted a proof of claim for their unpaid tax liability. Thus, they were not entitled to raise the issue at their subsequent Collection Due Process (CDP) hearing.

J. Kendricks, 124 TC 69, Dec. 55,950.

An IRS Appeals Officer did not abuse his discretion in concluding that a Notice of Intent to Levy regarding tax liabilities arising from a notice of final partnership administrative adjustments had been rendered moot by virtue of an installment agreement voluntarily entered into by the taxpayer with the IRS.

D. Hudspath, 89 TCM 1051, Dec. 55,993(M), TC Memo. 2005-83. Aff'd, per curiam, CA-4 (unpublished opinion), 2006-1 USTC ¶50,296.

A married couple's challenge to an Appeals determination to proceed with collection was rejected because the taxpayers failed to convince the court that they had raised the validity of the Form 4549-CG adjustments at the Collection Due Process hearing.

R. Turner-Simmons, 89 TCM 1413, Dec. 56,052(M), TC Memo. 2005-135.

The government's motion for summary judgment was denied where material issues --what arguments the taxpayer raised and what actually transpired at the Code Sec. 6330 hearing --were in dispute. Specifically in dispute was whether the taxpayer submitted requested documents or completed an offer in compromise, as well as what documents should be contained in the taxpayer's administrative record.

J.W. Mandody, 89 TCM 1445, Dec. 56,060(M), TC Memo. 2005-142.

Taxpayers who alleged that they had overstated their tax liability on their tax return were entitled to challenge the existence or amount of the reported tax liability at a Collection Due Process (CDP) hearing. The taxpayers did not receive a statutory notice of deficiency and raised the issue of their underlying tax liability in a request for a Code Sec. 6330 hearing.

I. Molina, 88 TCM 441, Dec. 55,801(M), TC Memo. 2004-258.

Approval of levies was an abuse of discretion where the liability to be collected was partly based on an item improperly treated as a math error. The validity of those items could not be considered de novo, since the IRS could not use the review of an improper math error correction as a back door to raise an issue on which it had not issued a notice of deficiency. The taxpayer's right to dispute the underlying tax liability in a Code Sec. 6330 proceeding does not cure an assessment made in violation of the taxpayer's right to a deficiency proceeding.

J.P. Freije, 125 TC 14, Dec. 56,095.

The IRS did not abuse its discretion in determining to proceed with collection of an individual's unpaid tax liability. The taxpayer could not challenge the validity of the underlying tax liability because his entitlement to deductions in connection with his business had already been litigated in a prior Tax Court proceeding.

M.H. Hajiyani,, 90 TCM 153, Dec. 56,121(M), TC Memo. 2005-198.

The taxpayer had received notices of deficiency for all of the tax years at issue and had filed petitions for redetermination challenging those notices. Therefore, the taxpayer was barred under Code Sec. 6330(c)(2)(B) from contesting his underlying tax liability at his CDP hearing.

R.W. Howard, 89 TCM 1135, Dec. 56,012(M), TC Memo. 2005-100.

Although Code Sec. 6330(c)(2)(B) generally entitles taxpayers to raise the issue of an underlying liability if they did not receive a notice of deficiency or otherwise have an opportunity to dispute the liability, the individual here, who did not receive notices of deficiency, was not entitled to proactively prevent delivery of the notices by giving an old address and subsequently failing to inform the IRS of new addresses. Furthermore, although the Appeals officer had refused to allow a stenographer to record the collection due process hearing, whereupon the individual refused to proceed, the Tax Court declined to remand the case. No purpose would be served by a remand or additional hearings.

D.A. Lehmann, 89 TCM 1084, Dec. 56,001(M), TC Memo. 2005-90.

An IRS Appeals officer abused his discretion when he determined to proceed to collect by levy a 48-cent tax liability, plus penalties and interest. The IRS failed to produce any evidence of how it calculated the penalties or that it was appropriate to impose such penalties. Moreover, the evidence that was produced by the IRS indicated that the taxpayer's liability for the year at issue was paid in full.

J.J. Norris, 90 TCM 381Dec. 56,165(M), TC Memo. 2005-237.

An IRS Appeals officer's determination to proceed with collection against a self-employed attorney who made numerous mistakes in calculating his tax liability was not an abuse of discretion. Aside from unsuccessfully challenging his underlying tax liability at his Collection Due Process hearing, the taxpayer did not raise any relevant issues relating to the proposed levy and offered no collection alternatives. The taxpayer could challenge the tax liability because the IRS was not required to, and did not, issue a notice of deficiency.

J.W. Richmond, Jr., 90 TCM 383, Dec. 56,167(M), TC Memo. 2005-238.

The IRS did not abuse its discretion when it decided to proceed with collection against a married couple who did not contest their income tax liability but claimed that they had insufficient assets to pay the amount owed. The taxpayers did not assert any spousal defenses, make any challenges to the appropriateness of the collection actions or offer collection alternatives, other than an offer in compromise that was going to be submitted at an unspecified future date. They also did not attend the CDP hearing or submit any financial information requested by the hearings officer.

L.D. Carifee, 90 TCM 328, Dec. 56,152(M), TC Memo. 2005-224.

The IRS did not abuse its discretion when it determined that collection of an individual's tax liability could proceed. The taxpayer was given the opportunity before the Tax Court to identify legitimate issues to warrant further consideration of the merits of his case but he continued to focus on the denial of a recorded hearing and offered no substantive issues of merit.

H.E. Call,90 TCM 601 , Dec. 56,222(M), TC Memo. 2005-289. Aff'd, CA-9 (unpublished opinion), 2007-1 USTC ¶50,492.

An individual who executed a Form 4549 could not challenge her underlying tax liability at a Collection Due Process (CDP) hearing. By signing Form 4549 she waived her right to challenge the amount or existence of the proposed tax assessments and, therefore, was deemed to have had an opportunity to dispute her tax liabilities. Thus, she was precluded from challenging them at a CDP hearing.

G. Pomerantz, 90 TCM 628, Dec. 56,229(M), TC Memo. 2005-295.

Similarly:

L.R. Coleman, 94 TCM 254, Dec. 57,085(M), TC Memo. 2007-263.

An individual who received a notice of the IRS's intention to assess him with a penalty, but who failed to file an administrative appeal, could not contest his liability for the penalty at a Collection Due Process (CDP) hearing. Because the taxpayer did not file an administrative appeal, he was precluded, under Code Sec. 6330, from contesting his liability for the penalty at his CDP hearing.

C. Stearns, DC Conn., 2006-1 USTC ¶50,152, 438 F3d 739.

An individual's failure to submit an income tax return for the year at issue should not have prevented consideration of his claims regarding bases and interest deductions. Even though he did not file a tax return, the evidence the individual presented proving loss on the sale of stock and regarding a mortgage interest deduction was credible and corroborated by documentation. Consequently, the individual did not have an outstanding tax liability for the year at issue, and the IRS's collection action was not sustained.

R.L. Sherer, 91 TCM 759 ,Dec. 56,435(M), TC Memo. 2006-29.

An IRS Appeals Officer did not abuse his discretion by upholding the IRS's proposed collection activity against an individual after a Collection Due Process (CDP) hearing. The taxpayer could not contest the underlying tax liability on appeal, having failed to do so at the CDP hearing. Although the taxpayer asserted at the CDP hearing that the liability had been discharged in bankruptcy, that assertion did not rise to the level of a challenge to liability.

J.E. Eby, DC Ohio, 2006-1 USTC ¶50,244.

The IRS failed to provide the taxpayer, a prison inmate representing himself, with a notice of deficiency. The IRS sent the notice of deficiency by certified mail to the taxpayer at the prison, and it did arrive at the prison. However, the taxpayer claimed he never received it, and the taxpayer had a long history of quickly responding to all legal notices in order to preserve his rights. Therefore, the taxpayer was entitled to a hearing at which he could challenge the existence or amount of the underlying tax liability.

T. Butti, 91 TCM 1177 ,Dec. 56,472(M), TC Memo. 2006-66.

An individual's challenge to the merits of his underlying trust fund recovery penalty was not properly before the federal district court because the issue could not be raised at a Collection Due Process (CDP) hearing. Correspondence showed that he had the opportunity to contest the merits of his underlying tax liability prior to the CDP hearing. Therefore, he was statutorily precluded from raising the issues at a hearing.

R. Plumb, DC Fla., 2006-1 USTC ¶50,271.

The IRS was entitled to proceed with the collection of unpaid taxes, penalties and interest resulting from married individuals reporting zero income tax on their tax returns when they had earned income in all six years. The individuals filed a request for a collection due process hearing, attaching a statement advocating only tax-protestor type arguments. Further, they failed to schedule a hearing, offered no collection alternatives and did not raise any hardship argument with the appeals officer.

H.W. Winans, 90 TCM 521, Dec. 56,203(M), TC Memo. 2005-271.

Summary judgment was granted against an individual who sought to dispute his underlying tax liability in a Collection Due Process hearing. By signing Form 2848, the taxpayer authorized a representative to conduct tax matters on his behalf. Because the representative signed Forms 4549, Income Tax Examination Changes, on the taxpayer's behalf, the taxpayer waived his right to contest the underlying tax liability. Even if the representative executed the waivers without seeking his consent, the taxpayer was bound by his representative's acts because the IRS had no reason to know that the representative's conduct may have been improper.

F. Deutsch, 91 TCM 846, Dec. 56,433(M), TC Memo. 2006-27.

An IRS Appeals officer did not abuse his discretion by rejecting a company's proposed installment agreement as a collection alternative for its unpaid federal employment and unemployment taxes. After the company president refused to provide personal financial information, the Appeals officer properly determined that the collection alternative was not supported by relevant financial information to show that the proposed payments could be made. Hence, the Appeals officer's decision to issue a notice of determination denying the company's request for a collection alternative was not arbitrary, capricious or unjustifiable. Rather, he identified rational grounds for his decision and indicated that he conducted the required balancing analysis between efficient collection and intrusiveness.

Cohen Enterprises, DC Pa., 2006-1 USTC ¶50,323.

An individual who received a notice of determination after he failed to appear at his Collection Due Process (CDP) hearing but did not petition the Tax Court to contest the determination could not contest the underlying tax liability at a subsequent CDP hearing. Although the IRS erroneously denied the taxpayer an opportunity to contest the liability at the first CDP hearing, he was given the opportunity to petition the Tax Court, at which time he would have been entitled to contest the underlying liability. However, because the taxpayer failed to petition the Tax Court, he could not contest the underlying liability at the subsequent hearing. Therefore, the IRS did not abuse its discretion and could proceed with the proposed collection action.

G.A. Bell, 126 TC 356, Dec. 56,526.

The IRS has recommended acquiescence in N. Montgomery, 122 TC 1, Dec. 55,501. In Montgomery, married taxpayers who alleged that they had overstated their tax liability on their tax return were entitled to challenge the existence or amount of the reported tax liability at a Collection Due Process (CDP) hearing. The IRS's contention that persons who report their tax liability on a duly filed return are barred from disputing that liability at a CDP hearing was rejected. Instead, the taxpayers, who did not receive a deficiency notice and were not given an opportunity to dispute the tax liability, were entitled to Code Sec. 6330 relief. The plain language of Code Sec. 6330 extends substantive and procedural protections to taxpayers who are confronted with a lien, or proposed levy, but who did not have a prior opportunity to challenge their tax liability.

AOD 2005-03, December 16, 2005.

The IRS Commissioner did not abuse his discretion by rejecting a married couple's offer-in-compromise based on economic hardship and exceptional circumstances. The couple's considerable accumulation of wealth and the speculative nature of their medical expenses did not support their argument that medical expenses for the husband's progressive dementia would bankrupt them in about a decade. The couple's ability to pay basic living expenses would not be impaired by significantly greater health care expenses. Further, the legislative history did not support the conclusion that denial of the offer was an abuse of discretion nor was the IRS Appeals officer required to negotiate with the couple on their offer.

C.G. Fargo, CA-9, 2006-1 USTC ¶50,326, aff'g 87 TCM 815, Dec. 55,514(M), TC Memo. 2004-13.

The IRS did not abuse its discretion when it sustained a proposed levy to collect an individual's unpaid income tax liability. The individual never challenged the appropriateness of the collection action, nor did he offer any collection alternative. The individual never disputed the IRS's determinations; instead, he indicated to the IRS that he wished to cooperate but he needed written confirmation that any information he provided would not be used against him in a criminal investigation or prosecution.

F.B. Gibbs, 92 TCM 29, Dec. 56,569(M), TC Memo. 2006-149.

An IRS Appeals office determination to proceed with the proposed levy to collect a self-employed real estate agent's tax liability was not an abuse of discretion. The individual had the opportunity to challenge the correctness of his tax liability but he chose not to do so. Instead, the only issues he raised were frivolous tax protestor-type arguments.

M.A. Clampitt, 92 TCM 99, Dec. 56,582(M), TC Memo. 2006-161.

The IRS did not abuse its discretion in determining to proceed with the levy and collection of an individual's tax liability. The IRS was granted summary judgment because the taxpayer made only frivolous tax protester type arguments throughout the entire Code Sec. 6330 administrative process. When the taxpayer could not be contacted for a scheduled telephone conference, the taxpayer's Collection Due Process Hearing was based on correspondence received from the taxpayer. The Appeals officer was impartial and verified that all applicable laws and procedures were followed.

J.R. Wood, 92 TCM 294, Dec. 56,629(M), TC Memo. 2006-203.

The IRS did not abuse its discretion when it issued a notice of determination to support a civil penalty imposed on a married couple because the couple filed a patently frivolous zero return for the tax year at issue. The couple had the opportunity to participate in a Collection Due Process hearing, yet they persisted in asserting meritless, frivolous arguments that had been considered and consistently rejected.

R. Dibble, DC Mich., 2006-2 USTC ¶50,493.

The IRS did not abuse its discretion in rejecting an offer-in-compromise and sustaining a proposed levy action against a taxpayer who was a partner in a cattle breeding partnership through which he claimed deductions for farming losses and carried back related net operating losses that gave rise to refunds. The Tax Court rejected the taxpayer's argument that the longstanding nature of the case required the IRS to accept his offer-in-compromise. Further, the IRS's reliance on an example in the Internal Revenue Manual was not arbitrary or capricious. Also, the mere fact that certain "equitable facts" present in the case did not persuade the IRS did not mean that they were not considered. Finally, the IRS did not fail to balance the need for efficient collection of taxes with the concern that the collection action not be more intrusive than necessary. The IRS did seek to collect the taxpayer's outstanding tax liability through less intrusive means --an installment agreement. But the taxpayer rejected it.

M. Keller, 92 TCM 114, Dec. 56,587(M), TC Memo. 2006-166.

Similarly:

G.W. McDonough, 92 TCM 386, Dec. 56,665(M), TC Memo. 2006-234.

An IRS Appeals officer did not abuse his discretion during a married couple's Collection Due Process (CDP) hearing process by refusing to consider collection alternatives and in sustaining liens against their assets. The couple failed to participate in the CDP hearing process in a meaningful manner or make an offer-in-compromise and submit it to the Appeals officer for consideration. They sought to submit the offer-in-compromise to attack their underlying liability; however, they did not provide the required financial information or attend their scheduled hearing. Further, they did not submit Form 8857 or provide any other notice of their intention to raise a spousal defense. Finally, their claim that the statute of limitations had expired constituted a challenge to their underlying tax liability; however, they had received a notice of deficiency and, thus, had a previous opportunity to challenge the underlying liability.

D. Kindred, CA-7, 2006-2 USTC ¶50,518, aff'g an unreported District Court decision.

The notice of determination concluding that frivolous return penalties were appropriately imposed on an individual who had filed frivolous tax returns was proper. The individual received notice and opportunity to be heard; he could not complain that he was not afforded a fair Collection Due Process (CDP) hearing because there was no face-to-face conference since he had requested that the hearing be conducted via correspondence. The individual failed to raise any legitimate issues relating to the underlying tax liability, or matters specifically permitted under Code Sec. 6330, to warrant a face-to-face hearing. The CDP hearing was conducted by an impartial IRS Appeals officer who was not obligated to conduct a face-to-face hearing. Further, the arguments he advanced in support of his request for a face-to-face hearing were patently frivolous.

G. Priest, DC Ill., 2006-2 USTC ¶50,571.

A taxpayer who did not receive a refund for a particular year or notice from the IRS that his refund for that year had not been applied to deficiencies for previous tax years was entitled to an abatement of interest under Code Sec. 6404(e). Evidence provided by the IRS showing that the taxpayer had received a refund was contradictory, contained numerous errors and lacked credibility. Moreover, the IRS had provided an incorrect payoff figure to the taxpayer, which was a ministerial error that entitled the taxpayer to the abatement. On remand from CA-2, 2004-2 USTC 50,343, 381 F3d 41.

R. Wright, 92 TCM 525, Dec. 56,708(M), TC Memo. 2006-273.

An IRS Appeals officer's decision to enforce collection of penalties assessed against a married couple for filing frivolous returns did not amount to an abuse of discretion. Denial of the couple's request for an in-person, pre-payment, post-assessment appeal of their penalty assessments did not invalidate the Appeals officer's decision. The IRS was not required to provide personal approval of the penalties because Code Sec. 6751 does not apply to penalties automatically calculated through electronic means. Since, the taxpayers were given the opportunity to raise any issue relevant to their tax liabilities or other nonfrivolous challenges to their underlying tax liabilities at their Collection Due Process hearing, there was no abuse of discretion in not permitting the couple to bring their challenge to the penalties in a separate proceeding. Finally, the IRS's requirement that the couple pay the full penalty for a facially invalid tax filling before obtaining review was not an abuse of discretion.

K.F. Deyo, Jr., DC Conn., 2007-1 USTC ¶50,152.

An IRS settlement officer did not abuse her discretion when she sustained the filing of a notice of federal tax lien and a proposed levy action to collect employment tax obligations owed by a medical services provider. Her reliance on the written financial projection provided by the taxpayer while making the determination, rather than on the oral statements offered by the taxpayer's representatives regarding renegotiations with other creditors at the CDP hearing was proper. The taxpayer's contention that the determination notice did not include the monthly payment amount it proposed at its CDP hearing was not significant because the settlement officer had included that information in her log and stated in her declaration that she was aware of it when she made her determination. Additionally, her decision was not based on an erroneous view of the law or assessment of facts.

Pain Relief Specialists Northwest, P.C., DC Ore., 2007-1 USTC ¶50,309.

An IRS appeals officer was not required to prolong a Collection Due Process hearing with two married individuals simply to entertain their frivolous, tax protestor arguments. The couple had simply presented meritless arguments throughout the hearing and had rebuffed the appeals officer's attempts to discuss alternatives to proceeding with collection.

R.A. Belmont, 93 TCM 981, Dec. 56,859(M), TC Memo. 2007-55.

The Tax Court properly concluded that an individual could not challenge the extent of his tax liabilities for tax years at issue because he previously had an opportunity to dispute those liabilities. The individual's counsel, who was explicitly authorized to act on his behalf, signed an IRS Form 4549, Income Tax Examination Changes, thereby consenting to an assessment of liability against the individual and to a waiver of the right to contest such liability in the Tax Court.

F. Deutsch, CA-2, 2007-1 USTC ¶50,339, 478 F3d 450.

There was no abuse of discretion by an IRS Appeals officer in determining that collection by levy should proceed of an individual's unpaid tax liabilities for three tax years. The individual did not show that disallowance of partnership losses claimed on his individual returns for the years at issue was erroneous, and he offered no credible evidence showing that the IRS's determination was arbitrary, capricious, or without sound basis in law. The partnerships were properly subjected to the unified audit and litigation procedures and a tax attorney who introduced the individual to the partnerships was eligible to serve as tax matters partner of the partnerships. The IRS's criminal investigation of the individual did not convert the partnership items on his tax returns to nonpartnership items. Failure of the Appeals officer to specifically address the merits the individual's argument as to the conversion of partnership items did not warrant a remand of the case for another hearing. Finally, he was not denied due process by being unable to access records allegedly held by the IRS. The documents taken were personal in nature and had nothing to do with the partnerships.

R. Tashjian, 93 TCM 998, Dec. 56,864(M), TC Memo. 2007-59.

The IRS did not abuse its discretion in sustaining its proposed collection actions against an attorney who argued that his income was not includible in gross income and raised various other tax-protestor arguments. The attorney could not challenge the validity of the underlying tax liability because he had received a notice of deficiency but did not file a petition with the Tax Court in response. The attorney's argument that he was denied his Sixth Amendment right to confront and cross-examine parties who provided the IRS with bank records used to reconstruct the attorney's income was an improper challenge to the underlying tax liability. In addition, the IRS Appeals officer did not abuse her discretion by relying on TXMODA transcripts of account to verify that the assessment procedures were followed and that all other requirements of applicable law and administrative procedures were met.

G.E. Harp, 93 TCM 1087, Dec. 56,892(M), TC Memo. 2007-83.

The executor of an estate could not challenge the assessment of additions to tax imposed for the late filing of an estate tax return in a Collection Due Process hearing because the issue was previously considered and rejected in an IRS Appeals conference.

N. Sblendorio Est., 93 TCM 1130, Dec. 56,905(M), TC Memo. 2007-94.

The IRS was entitled to enforce a federal tax lien against an individual relating to unreported discharge of indebtedness income. The taxpayer argued that she did not receive the notice of deficiency associated with the underlying tax liability when it was originally mailed. Nonetheless, she participated in an equivalent hearing after a second levy notice was sent. During the hearing, the taxpayer had the opportunity to discuss and dispute with the IRS' Appeals Office her underlying tax liability. Since the notice of federal tax lien related to the same tax liability and same tax year, the taxpayer could not contest that liability when opposing the notice of federal tax lien.

D.L. Newsome, 93 TCM 1193, Dec. 56,923(M), TC Memo. 2007-111.

An IRS determination to proceed with collection against an individual was not an abuse of discretion. The individual had previously instituted a legal action disputing the validity of the IRS determination of deficiency and was found liable for the deficiency and additional penalties. He was, therefore, precluded from raising the issue again. Furthermore, the determination to proceed with collection was not an abuse of discretion because the taxpayer, through his attorney, had a hearing through telephone and correspondence. He failed to provide the requested information and form and no offer in compromise was submitted; consequently, the Appeals officer satisfied the requirements under Code Sec. 6330(b).

W.F. Middleton, 93 TCM 1222, Dec. 56,933(M), TC Memo. 2007-120.

An IRS Appeals officer's consideration and rejection of a married couple's collection alternative, an installment agreement, was reasonable and not an abuse of discretion. Her determination not to consider the taxpayers' proposed installment agreement because they were not current with their estimated tax payments at the time of their Collection Due Process (CDP) hearing was based on procedures contained in the Internal Revenue Manual. The taxpayers' arguments that their proposed installment agreement was appropriate and that a levy was more intrusive than necessary and would cause undue hardship were rejected.

T.C. Schwartz, 93 TCM 1377, Dec. 56,972(M), TC Memo. 2007-155.

Although appropriate spousal defenses can be raised at a hearing before a levy, innocent spouse relief granted to the taxpayer's spouse is not the kind of spousal defense that can be raised. Moreover, whether the taxpayer's spouse has been granted relief from her joint liability for the tax is irrelevant as to whether, and how much tax, the taxpayer owes.

W.R. Holloway, 94 TCM 25, Dec. 56,992(M), TC Memo. 2007-175.

An IRS Appeals officer's Collection Due Process (CDP) hearing determination that a notice of deficiency was valid for the taxpayer's 1996 tax year even though it mistakenly referred to the taxpayer's 1995 tax year was not an abuse of discretion. The taxpayer could not have been reasonably confused or misled as to the tax year involved since the deficiency notice only contained figures and adjustments relating to his 1996 gift tax liability, which had been the subject of an ongoing dispute with the IRS for three years.

J.A. Upchurch, 94 TCM 40, Dec. 56,998(M), TC Memo. 2007-181.

The IRS's determination to proceed with collection of an individual's income tax liabilities for two tax years based on substitute returns was sustained. The taxpayer was allowed to challenge the validity of the underlying tax liability but he failed to make a valid challenge, offer alternative means of collection, or offer any spousal defenses. Instead, the taxpayer advanced shopworn tax-protester arguments that have been universally rejected by the Tax Court and the other courts.

J.B. Wood III, 94 TCM 168, Dec. 57,045(M), TC Memo. 2007-225.

In the absence of any reason why the taxpayers could not access the equity from their residence immediately, an Appeals officer did not abuse his discretion by determining that the taxes were currently collectible and that the collection should not be delayed to allow the taxpayers more time to sell or refinance the house.

K.F. Foley, 94 TCM 210, Dec. 57,064(M), TC Memo. 2007-242.

A taxpayer's challenges to her underlying tax liability were rejected because they had not been raised in a petition disputing the notice of deficiency. Other claims were rejected because they related to years for which the taxpayer had already filed a Tax Court petition (Anderson, Dec. 55,121(M)). However, when the taxpayer had neither received a deficiency notice nor had any previous opportunity to contest her tax liability, the Tax Court considered the claim de novo. The requirement that the Appeals officer obtain verification "that the requirements of any applicable law or administrative procedure have been met" does not require the IRS to take any particular action against an employer who failed to meet his withholding obligations before proceeding with collection actions against the employee.

J.E. Anderson, Dec. 57,088(M), TC Memo. 2007-265.

An individual was precluded from challenging his underlying tax liability at his Collection Due Process hearing for the years at issue because he had received notices of deficiency for those years and did not file a Tax Court petition at the time he received the notices. The taxpayer's only other arguments consisted of the contention that the IRS was not authorized to levy on his property and other frivolous arguments. Therefore, the IRS's proposed levy was sustained.

M.K. Creamer, Dec. 57,089(M), TC Memo. 2007-266.

An individual was entitled to challenge his underlying tax liability at a Collection Due Process (CDP) hearing, but the IRS Appeals officer's refusal to allow him to do so was harmless error because his arguments with respect to the liability were frivolous and groundless. The taxpayer was entitled to challenge the liability both because the self-assessed portion of the liability had not been considered in a prior appeal and because, at the time the taxpayer became entitled to the CDP hearing, he had no previous opportunity to challenge the liability. The failure to allow the taxpayer to challenge the liability was, however, harmless error because his only arguments with respect to the liability were frivolous.

R.L. Perkins, Dec. 57,099, 129 TC --, No. 7.

An IRS Appeals officer was not required to consider an individual's underlying income tax liability in a Collection Due Process hearing. The taxpayer had the opportunity to contest her underlying tax liability but failed to file a petition in response to a notice of deficiency. The failure to file a petition was not excused by giving the deficiency notice to the police as part of their investigation into whether the stock transactions causing the deficiency were effected with funds stolen from the taxpayer. Also, the evidence did not support her contention that her medical condition prevented her from filing a petition. Furthermore, she could not base arguments on the Americans With Disabilities Act (ADA) because the provisions of the ADA do not apply to federal courts.

Y. Thomas, Dec. 57,092(M), TC Memo. 2007-269.