An individual was not entitled to a judgement ordering the IRS Appeals Office to consider the underlying tax liability upon remand by the Tax Court to consider a pending offer-in-compromise (OIC). In response to a lien filing, the individual requested a withdrawal of the lien under the IRS Collection Appeals Program (CAP) and Code Sec. 6323(j), but did not request a Collection Due Process (CDP) hearing under Code Sec. 6320. The request for withdrawal was denied and the IRS subsequently issued a notice of proposed levy, to which the individual responded by requesting a CDP hearing under Code Sec. 6330. The individual also filed an OIC relating to the outstanding tax liability. At the CDP hearing, the IRS properly refused to consider the underlying tax liability, reasoning that the individual already had two opportunities to address his underlying liability (at a Code Sec. 6320 CDP hearing and the CAP hearing) and, thus, was precluded from raising the issue again pursuant to Reg. §301.6330-1(e)(3), Q&A-E7.

The individual's argument that Code Sec. 6330(c)(2)(B) and Code Sec. 6330(c)(4) contradict each other was dismissed because the two sections apply to two different issues. Code Sec. 6330(c)(2)(B) only applies to issues that an individual already had an opportunity to raise at a hearing, whether or not the issue was raised. Code Sec. 6330(c)(4) applies to issues which have already been decided. Further, the individual's argument that Reg. §301.6330-1(e)(3), Q&A-E7, should be invalidated because it is based upon an erroneous interpretation of Code Sec. 6330(c)(2)(B) and (c)(4) was dismissed.

Bradford M. Daniel v. Commissioner.

Dkt. No. 4968-07L , TC Memo. 2009-28, February 9, 2009.

[Appealable, barring stipulation to the contrary, to CA-11. --CCH.]

[ Code Secs. 6320 and 6330]

An individual was not entitled to a judgement ordering the IRS Appeals Office to consider his underlying tax liability upon remand by the Tax Court to consider his pending offer-in-compromise (OIC). In response to a notice of tax lien, the individual requested a withdrawal of the lien under the IRS Collection Appeals Program (CAP) and Code Sec. 6323(j), but did not request a Collection Due Process (CDP) hearing under Code Sec. 6320. The request for withdrawal was denied and the IRS subsequently filed a notice of levy. He was precluded from raising his tax liability with the IRS Appeals Office in his attempt to negotiate an OIC by Code Sec. 6330 and Reg. §301.6330-1(e)(3), Q&A-E7, because he failed to raise the issue at a CDP hearing for the tax lien. --CCH.


Martin J. Nash and Michael B. Axman, for petitioner; Nancy L. Karsh, for respondent.


MEMORANDUM OPINION

SWIFT, Judge: This matter is before us on respondent's motion for remand to respondent's Appeals Office and on petitioner's motion for partial summary judgment.

Because petitioner does not object to respondent's motion for remand, respondent's motion for remand to respondent's Appeals Office (on the issue as to whether petitioner's offer-in-compromise (OIC) should be accepted on the ground of doubt as to collectibility) will be granted. We are left, however, with the question raised in petitioner's motion for partial summary judgment to which respondent objects (whether on remand to respondent's Appeals Office petitioner's OIC also should be considered on the basis of doubt as to liability).

Unless otherwise noted, all section references are to the Internal Revenue Code.


Background

Petitioner resided in Florida at the time the petition was filed.

On petitioner's 1998 individual Federal income tax return, petitioner reported the sale of a flower business and a $266,085 Federal income tax liability relating thereto. With the filing of the return, however, petitioner paid only $6,000. Respondent assessed the $266,085 reported tax liability; and after no additional payments were received from petitioner, respondent filed a Federal tax lien against petitioner relating to the outstanding $260,085 balance in petitioner's 1998 Federal income taxes.

On December 17, 2004, respondent notified petitioner of the Federal tax lien filing and of his right to request a collection Appeals Office hearing under section 6320. Petitioner, however, anxious for relief from respondent's lien filing, on February 22, 2005, requested a withdrawal of respondent's tax lien filing under respondent's general Collection Appeals Program (CAP) and section 6323(j), not under the collection due process (CDP) provisions of section 6320.

Petitioner proceeded with the CAP appeal; and upon denial by respondent's Office of Compliance Services of the requested withdrawal of respondent's lien filing, petitioner appealed the decision to respondent's Office of Technical Services (Technical Services). Technical Services sustained the denial of the requested lien withdrawal, and petitioner appealed that decision under CAP to respondent's Appeals Office. After review, respondent's Appeals Office handling the CAP appeal sustained the denial of the requested lien withdrawal.

On April 28, 2005, respondent also issued to petitioner a notice of proposed levy action relating to petitioner's $260,085 outstanding 1998 Federal income taxes. Petitioner challenged respondent's proposed levy by filing with respondent's Appeals Office a CDP appeal under section 6330.

Also on April 28, 2005, petitioner separately submitted to respondent's OIC office an OIC relating to his $260,085 outstanding 1998 Federal income taxes based on doubt as to both liability and collectibility. 1

Upon learning of petitioner's pending CDP appeal and without acting on petitioner's OIC, respondent's OIC office forwarded petitioner's OIC to respondent's Appeals Office for consideration in connection with petitioner's CDP appeal.

On November 7, 2006, petitioner's section 6330 CDP hearing with respondent's Appeals Office was held. At the hearing respondent's Appeals officer refused to consider the correctness of petitioner's underlying 1998 Federal income tax liability on the ground that petitioner already had two prior opportunities to challenge that underlying tax liability (first, in a section 6320 CDP hearing relating to the tax lien filing and second, in the CAP proceeding.) 2 Also, in the section 6330 CDP hearing, respondent's Appeals officer did not consider petitioner's OIC. Petitioner's OIC remains outstanding.

On January 30, 2007, respondent's Appeals Office issued a notice of determination sustaining respondent's proposed levy.

On March 2, 2007, petitioner filed this action.

On July 2, 2007, respondent filed the instant motion for remand, and petitioner filed the instant motion for partial summary judgment.

The above motions were calendared for hearing on February 13, 2008, in Tampa, Florida. At the hearing the parties agreed to put the motions on hold until after petitioner provided to respondent for audit reconsideration documentation that might substantiate petitioner's entitlement to claimed net operating loss carrybacks that might significantly reduce or eliminate petitioner's outstanding 1998 Federal income tax liability. This audit reconsideration was to take place separate and apart from the instant CDP collection case and with the understanding that the instant CDP case would be held in abeyance pending the review.

Over the course of the next 8 months the parties negotiated and sought to settle this case, each making settlement offers but without success. Since early fall of 2008, in part because of an illness of petitioner's lead counsel no further progress has been made in this case, and the parties now ask this Court to act on the pending motions.


Discussion

As indicated, petitioner does not object to respondent's motion for remand of this case to respondent's Appeals Office for purposes of considering petitioner's OIC on the ground of doubt as to collectibility. Respondent's motion for remand will be granted.

Petitioner, however, moves for partial summary judgment, seeking an order that respondent's Appeals Office on remand consider petitioner's OIC on the basis of doubt as to liability.

Petitioner focuses on section 6330(c)(4) and emphasizes that under that section a taxpayer is precluded from raising an issue in a section 6330 proceeding only if the same issue was raised in a prior CDP proceeding or in some other administrative or judicial proceeding in which the taxpayer materially participated. Because he did not file an appeal under section 6320 of respondent's December 17, 2004, notice of Federal tax lien filing, petitioner obviously did not materially participate in any such proceeding; and petitioner contends that he now should be allowed to challenge his $266,085 1998 underlying Federal income tax liability in the instant section 6330 CDP hearing.

Petitioner also asks that section 301.6330-1(e)(3), Q&A-E7, Proced. & Admin. Regs., be invalidated in that it supports respondent's reading of section 6330(c)(2)(B) and (4).

On brief, petitioner states --

All levies are preceded by an assessment and a notice of lien. An interpretation which would require a section 6320 * * * [CDP Appeal] to be filed in order to raise the issue of the underlying tax liability would render section 6330(c)(2)(B) superfluous as it applies to section 6330 and conflict with section 6330(c)(4).

Petitioner's statement is erroneous on a number of points. First, not all tax assessments are followed by tax lien filings, not all levies are preceded by filed tax liens, and respondent may issue a notice of proposed levy without filing a notice of tax lien. A statutory lien arises upon assessment and subjects a taxpayer's property to the Federal tax lien. Sec. 6322. This occurs before a notice of Federal tax lien is filed or a notice of proposed levy is ever issued. Sec. 6321. Because the lien is already in place, a notice of intent to levy may be issued before a notice of tax lien is filed and regardless of whether a notice of tax lien is ever filed.

Second, the two statutory provisions in question address different types of issues. Section 6330(c)(2)(B) addresses only the issue as to the underlying tax liability and is triggered whenever a taxpayer had a prior opportunity to challenge same, whether the taxpayer did so or not. Section 6330(c)(4) addresses any other issue that is raised in a section 6320 or 6330 proceeding and is triggered only when the issue was considered and decided in a prior administrative or judicial proceeding and when the taxpayer materially participated in the prior proceeding.

Respondent's reading of section 6330(c)(2)(B) does not render superfluous section 6330(c)(4), and respondent's reading and application of the language of section 6330(c)(2)(B) does not conflict with the language of section 6330(c)(4).

Section 301.6330-1(e)(3), Q&A-E7, Proced. & Admin. Regs., reflects the same interpretation and application that we adopt of the statutory provisions before us. 3 The regulation provides a reasonable interpretation of the statute and is valid. See Inv. Research Associates, Inc. v. Commissioner, 126 T.C. 183 (2006); see also Lewis v. Commissioner, 128 T.C. 48 (2007); Bell v. Commissioner, 126 T.C. 356 (2006).

As respondent on brief explains with regard to section 6330(c)(2)(B) --

Requiring taxpayers to challenge an underlying liability with the first notice filed also promotes early, efficient, and complete resolution of legitimate disputes between the IRS and taxpayers concerning the validity of the federal tax lien. Such disputes are best resolved at the earliest stages of the collection process, because the agency and taxpayer records upon which resolution of disputes turns will be most contemporaneous and complete at the time of the first issuance of a notice.

Because petitioner could have filed an appeal of respondent's December 17, 2004, notice of tax lien filing and therein challenged his underlying 1998 Federal income tax liability, respondent's Appeals Office properly refused to allow petitioner to challenge his 1998 Federal income tax liability in the subsequent CDP appeal relating to respondent's notice of proposed levy. See Baltic v. Commissioner, 129 T.C. 178 (2007).

Appropriate orders will be issued.

1 Under petitioner's OIC, petitioner offered to pay respondent a total of $55,000 --$30,000 within 90 days, and $500 monthly thereafter for 50 months.

2 Respondent now acknowledges that petitioner's CAP appeal under sec. 6323(j) did not constitute a prior opportunity to litigate the underlying tax liability for purposes of sec. 6330(c)(2)(B).

3 Sec. 301.6330-1(e)(3), Q&A-E7, Proced. & Admin. Regs., states as follows:

Q-E7. What issues may a taxpayer raise in a CDP hearing under section 6330 if the taxpayer previously received a notice under section 6320 with respect to the same tax and tax period and did not request a CDP hearing with respect to that notice?

A-E7. The taxpayer may raise appropriate spousal defenses, challenges to the appropriateness of the proposed collection action, and offers of collection alternatives. The existence or amount of the tax liability for the tax for the tax period specified in the CDP Notice may be challenged only if the taxpayer did not already have an opportunity to dispute that tax liability. Where the taxpayer previously received a CDP Notice under section 6320 with respect to the same tax and tax period and did not request a CDP hearing with respect to that earlier CDP Notice, the taxpayer already had an opportunity to dispute the existence or amount of the underlying tax liability.B.M. Daniel, TC Memo. 2009-28, Dec. 57,730(M)

Issues raised at hearing. --Notice of Levy and Right to Hearing: Issues raised at hearing

The government was entitled to summary judgment with respect to married taxpayers' claim that their civil rights were violated in a Collection Due Process (CDP) hearing in which they attempted to challenge assessment of frivolous return penalties. The CDP hearing allows taxpayers to request judicial review of process, rather than to appeal the underlying merits of the case.

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

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.

An allegation that a fraud was perpetrated on the Tax Court in a deficiency action could not be raised for the first time in a subsequent collection action, but should have been raised in a motion to vacate the decision entered in the case in which the fraud occurred. Since the taxpayers had the opportunity to raise the allegation in their deficiency actions, the IRS Appeals office and the Tax Court were precluded from considering this means of challenging their underlying tax liability in a collection action.

S.G. Stroube, 130 TC --, No. 15, Dec. 57,470.

Married taxpayers were entitled to challenge the imposition of the frivolous return penalties both at their CDP hearing and in the subsequent Tax Court proceedings. For purposes of Code Sec. 6330(c)(2)(B), frivolous return penalties are an underlying tax liability that can be challenged in a CDP hearing. Further, the taxpayers did not receive a statutory notice of deficiency or otherwise have a prior opportunity to dispute the imposition of the penalties.

D.J. Callahan, 130 TC 44, Dec. 57,321.

In light of the decision in Callahan, 130 TC 44, Dec. 57,321, the Tax Court's decision, which dismissed an individual's petition on the ground that it lacked subject matter jurisdiction to redetermine the frivolous tax return penalty assessed under Code Sec. 6702 and to review the IRS's determination to collect the penalty by levy, was vacated and remanded for further consideration.

R.B. Wister, CA-9 (unpublished opinion), 2008-2 USTC ¶50,578, vac'g and rem'g an unreported Tax Court decision.

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, 4 FedAppx 526.

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. Aff'd, per curiam, CA-11 (unpublished opinion), 2007-2 USTC ¶50,644, 227 FedAppx 966.

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.

J.A. Laszloffy, 93 TCM 899, Dec. 56,832(M), TC Memo. 2007-31.

R.J. Guadagno, 93 TCM 1023, Dec. 56,869(M), TC Memo. 2007-64.

H.W.N. Chang, 93 TCM 1143, Dec. 56,911(M), TC Memo. 2007-100.

M.K. Creamer, 94 TCM 266, Dec. 57,089(M), TC Memo. 2007-266.

J.E. Anderson, 94 TCM 257, Dec. 57,088(M), TC Memo. 2007-265.

A-Z Optics, Inc., 93 TCM 877, Dec. 56,828(M), TC Memo. 2007-27.

M. Silverman, 94 TCM 403, Dec. 57,146(M), TC Memo. 2007-316.

S.T. Bray, 95 TCM 1417, Dec. 57,418(M), TC Memo. 2008-113.

W.O. Taylor, 95 TCM 1602, Dec. 57,466(M), TC Memo. 2008-151.

R.C. Parker, 96 TCM 45, Dec.57,499(M), TC Memo. 2008-178.

G.L. Alejos, 96 TCM 18, Dec. 57,488(M), TC Memo. 2008-169.

J.P. Freije, 131 TC --, No. 1, Dec. 57,483.

S. Hernandez, CA-9 (unpublished opinion), 2008-1 USTC ¶50,335, aff'g, per curiam, an unreported Tax Court decision.

V. Olender, 96 TCM 125, Dec. 57,526(M), TC Memo. 2008-205.

C.R. Wagenknecht, Jr., 96 TCM 49, Dec. 57,500(M), TC Memo. 2008-179.

D. Maga, 95 TCM 1629, Dec. 57,479(M), TC Memo. 2008-162.

An IRS settlement officer did not abuse her discretion when she issued a notice of determination without considering a married couple's offer-in-compromise (OIC) that was based only on doubt as to liability. Because the taxpayers received a notice of deficiency and had an opportunity to challenge the underlying tax liability, but failed to do so, they could not challenge the amount of their tax liability at their CDP hearing. Such an OIC was a prohibited challenge to the underlying tax liability. The settlement officer also exercised discretion in a reasonable way by issuing a notice of determination that sustained the lien but postponed the collection by levy until other IRS employees considered the OIC and various late-filed returns.

P.P. Baltic, 129 TC 178, Dec. 57,213.

Similarly:

E.S. Yesse, 95 TCM 1615, Dec. 57,473(M), TC Memo. 2008-157.

The IRS's decision to proceed with a collection action against a married couple for two years of income tax liabilities was inappropriate because the liabilities had been discharged in bankruptcy. Although taxpayers cannot contest their underlying tax liability in a Collection Due Process hearing, the issue of whether tax liabilities are discharged in bankruptcy is not relevant to the underlying tax liability but goes to the appropriateness of the collection action. Since the taxpayers' tax liabilities fell outside of the three-year lookback period prior to the filing of their third bankruptcy petition, the liabilities were properly discharged by the bankruptcy court.

J.E. Imarah, 95 TCM 1541, Dec. 57,447(M), TC Memo. 2008-137.

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.

Similarly:

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.

R.A. Westby, 94 TCM 71, Dec. 57,011(M), TC Memo. 2007-194.

J.E. Anderson, 94 TCM 257, Dec. 57,088(M), TC Memo. 2007-265.

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

M.A. Gazi, 94 TCM 474, Dec. 57,176(M), TC Memo. 2007-342.

A individual whose previous Tax Court petition was dismissed for lack of jurisdiction could not raise the same underlying tax liability at a later Collection Due Process (CDP) hearing. The taxpayer had received a notice of deficiency for the tax year at issue and had petitioned the Tax Court regarding that deficiency. However, he failed to comply with the Tax Court's order to file a proper petition and his case was dismissed. Therefore, he could not raise the issue at the CDP hearing he requested after receiving a notice of levy for the same liability.

J. Shere, 95 TCM 1039, Dec. 57,309(M), TC Memo. 2008-8.

An individual who received deficiency notices for the tax years at issues was prohibited from challenging his underlying tax liabilities for those years. Although the taxpayer explicitly declined to accept delivery of the deficiency notices, the receipt requirement of Code Sec. 6330(c)(2)(B) is presumptively met in such circumstances.

S.A. D'Onofrio, 95 TCM 1106, Dec. 57,328(M), TC Memo. 2008-25.

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 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. 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.

N. Montgomery, 122 TC 1, Dec. 55,501 (Acq.) (AOD 2005-03, December 16, 2005).

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.

An IRS Appeals officer erred in failing to credit a married couple's tax overpayment for one year against their liabilities. The taxpayers were entitled to challenge the existence or amount of their underlying tax liability at the Collection Due Process proceeding (N. Montgomery, 122 TC 1, Dec. 55,501 (2004)). The case was remanded to the Appeals officer for the appropriate credit. However, with respect to a second tax year, the couple failed to substantiate their overpayment and refund claims.

D.R. Cooley, 87 TCM 1025, Dec. 55,558(M), TC Memo. 2004-49.

A taxpayer who reports an amount of tax on a return is not precluded from challenging the accuracy of that amount in a Code Sec. 6330 hearing. N. Montgomery, 122 TC 1, Dec. 55,501 (2004), followed. In the instant case, the IRS was entitled to summary judgment because the taxpayer averred no facts sufficient to show error in assessments on the basis of his tax returns, or otherwise with respect to a notice of determination, failed to raise a justiciable issue.

R.E. Poindexter, 122 TC 280, Dec. 55,604, aff'd CA-2, 2005-2 USTC ¶50,508, 132 FedAppx 919.

A taxpayer who had a hearing with the IRS Appeals Office was precluded under Reg. §301.6330-1(e)(3), Q&A-E2 from disputing the assessed additions to tax again in an action under Code Sec. 6330. Furthermore, that regulation is valid because it implemented a congressional mandate in a reasonable manner. The legislative history of P.L. 105-206 indicates that Congress intended to preclude taxpayers who were previously afforded a conference with the Appeals Office from raising the underlying liabilities again in a collection review hearing and before the Tax Court.

J.E. Lewis, 128 TC 48, Dec. 56,876.

Similarly:

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

J. Giamelli, 129 TC 107, Dec. 57,155.

An individual could challenge his underlying tax liability during his CDP hearing because he did not receive a notice of deficiency in time to petition the court. The IRS did not produce any evidence that a deficiency notice was sent to his address in prison where he resided at the time a notice was sent to his home and during the period in which he could have petitioned the court. The fact that the taxpayer's wife petitioned the court in response to a notice sent to her home only showed that she received the notice and that it was mailed to the couple's personal residence; it did not show that the taxpayer received the notice.

M.L. Conn, 96 TCM 72, Dec. 57,507(M), TC Memo. 2008-186.

An individual's arguments that the Paperwork Reduction Act protected him from tax liability were rejected in a deficiency proceeding for the same year; thus, they could not be raised at his Collection Due Process (CDP) hearing, and the Appeals officer did not abuse his discretion in rejecting them. Furthermore, because the underlying tax liability was no longer at issue and the individual had used the collection review process to needlessly delay collection, the suspension of a levy on his property was terminated.

N.P. Schneller, 96 TCM 101, Dec. 57,517(M), TC Memo. 2008-196.

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.

Although a taxpayer who never received a deficiency notice was entitled to contest his underlying tax liability as part of an appeal of a levy action, his failure to produce any documentation showing error in the amount of tax due entitled the IRS to summary judgment. The IRS conceded that the notice of deficiency mailed to the taxpayer's last known address was returned by the post office. Therefore, the taxpayer was granted an opportunity to challenge the existence or amount of his liability in seeking review of an IRS Appeals notice of determination upholding a levy relating to such assessment. However, the taxpayer's failure to produce evidence or show any error in the determinations made in the notice of deficiency entitled the IRS to summary judgment.

S. Jumaa, 94 TCM 67, Dec. 57,009(M), TC Memo. 2007-192.

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 (CDP) hearing. However, the taxpayer was prohibited from challenging his underlying tax liability relating to six other tax years where he signed a consent to assessment.

J.R. Rivera, 85 TCM 832, Dec. 55,040(M), TC Memo. 2003-35.

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.

In consolidated cases, the IRS was entitled to summary judgment with respect to collection of the transferee tax liabilities of individuals who challenged their underlying tax liabilities as transferees of a corporation for its tax liability. The provisions of Code Sec. 6330(c)(2)(B) prevented them from challenging in a collection proceeding the existence and amount of their transferee tax liabilities. The taxpayers unsuccessfully contended that they received no statutory notices of deficiency but only statutory notices of transferee liability; the notices of transferee liability were the equivalent of notices of deficiency. Moreover, the statute did not set forth two alternative criteria authorizing challenges to underlying tax liability in collection proceedings. The taxpayers could only have challenged their underlying tax liabilities if they had lacked another opportunity to raise the challenge by virtue of not having received a notice of deficiency or otherwise.

D.L. Oyer, 85 TCM 1510, Dec. 55,193(M), TC Memo. 2003-178.

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.

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.

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.

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.

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.

M. Smith, Dec. 57,554(M), TC Memo. 2008-229.

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.

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.

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.

T.G. Totten, DC Wash., 2007-1 USTC ¶50,502.

B.V. Musto, DC N.J. (unpublished opinion), 2008-1 USTC ¶50,286.

J.D. McClure, Jr., 95 TCM 1539, Dec. 57,446(M), TC Memo. 2008-136.

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 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.

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.

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.

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.

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.

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.

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.

Similarly:

C.E. Salazar, 95 TCM 1149 Dec. 57,342(M), TC Memo. 2008-38.

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'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 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.

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 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.

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

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.

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 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, 129 TC 58, Dec. 57,099.

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, 94 TCM 271, Dec. 57,092(M), TC Memo. 2007-269.

A married couple who had only 12 days left to file a Tax Court petition when they received a notice of deficiency could challenge the existence or amount of the underlying tax liability during a collection due process (CDP) hearing under Code Sec. 6330. The IRS mailed a notice of deficiency to the taxpayers following an audit, but the couple had moved and did not receive the notice until approximately two and one-half months later. The taxpayers did not file a petition with the Tax Court, but requested a CDP hearing in which they challenged the underlying tax liability and the IRS's decision not to postpone the audit. The taxpayers were not precluded from challenging the underlying tax liability in the CDP hearing because they had not received the notice of deficiency in time to petition the Tax Court for a redetermination of the deficiency. Similar cases have held that taxpayers who received a notice of deficiency and had at least thirty days remaining in the filing period also had sufficient time to petition the Tax Court. The taxpayers in this case, however, received the notice with only 12 days left in the filing period, and had taken steps to receive the notice once they learned it had been issued.

A.L. Kuykendall, 129 TC 77, Dec. 57,118.

A taxpayer was allowed to challenge the underlying liability of a federal tax lien because the notice of federal tax lien was sent to the incorrect address. The taxpayer and his wife frequently moved and improperly filed returns for the year of their marriage. The taxpayer filed a return for a later year, which was processed more than two months after the IRS received it. In that two-month period, the taxpayer filed a Form 2848 which indicated a new address. The IRS sent the notice of federal tax lien to the address listed on the return, effectively meaning that the delay in processing reverted the taxpayer's mailing address to his old one, cancelling the effect of the Form 2848.

R.M. Downing, 94 TCM 319, Dec. 57,116(M), TC Memo. 2007-291.

A taxpayer did not meet his burden of proving that he paid an amount toward his tax due where the transcript of account for the relevant tax year of the petitioner showed a dishonored check for such amount and the taxpayer did not produce any evidence to refute the inference from the transcript that the taxpayer's check was returned for insufficient funds. In addition, the Tax Court rejected the taxpayer's attempt to raise computational issues that he had not raised at his Collection Due Process (CDP) hearing. The court did not have the authority to review issues if they had not been raised with IRS Appeals.

R.T. Hardie, 94 TCM 453, Dec. 57,168(M), TC Memo. 2007-335.

An individual who failed to pay his total tax liabilities for two tax years could not challenge the underlying tax liabilities or challenge the IRS's filing of a lien to collect the unpaid taxes. Although the individual argued that he was entitled to offset his unpaid tax liabilities with alternative minimum tax (AMT) that he had already paid, he did not claim the appropriate credit on his returns and did not show that he was entitled to the credit. In addition, the IRS settlement officer did not abuse her discretion by determining that the lien on the taxpayer's property was appropriately filed and would remain in effect until his tax liabilities were satisfied. The individual did not demonstrate that any of the collection alternatives he proposed were appropriate and that the IRS erred by rejecting them.

H.Y. Awlachew, 94 TCM 561, Dec. 57,199(M), TC Memo. 2007-365.

The government was entitled to summary judgment with respect to a taxpayer's frivolous suit which challenged the use of summary disposition, where all administrative procedures were properly followed. The taxpayer failed to raise either an issue of material fact or any issue of law that would preclude the entry of summary judgement under Tax Court Rule 121. The notice of determination and related materials submitted by the IRS confirmed that the presiding officer performed the review required by Code Sec. 6330(c), even though the taxpayer's arguments were found to be irrelevant and frivolous attempts to disrupt the collection process.

G. Broderick, 95 TCM 1003, Dec. 57,303(M), TC Memo. 2008-2.

The IRS's determination to proceed with a proposed levy on an individual's retirement account to collect her unpaid income tax liability was proper. The taxpayer was barred under Code Sec. 6330(c)(4) from raising a prepayment credits issue in the collection review proceeding. She had already raised that issue in refund claims that she submitted to the IRS for prior tax years and had participated meaningfully in the previous administrative proceeding concerning those claims.

R.L. Richmond, 95 TCM 1222, Dec. 57,364(M), TC Memo. 2008-59.

An enforcement action to collect penalty amounts was prevented due to the IRS's misunderstanding of the applicable law and misapplication of such law at a Code Sec. 6330 hearing. At issue was whether a taxpayer was sufficiently disabled at the proper time to toll the statute of limitations under Code Sec. 6511(h).

R.A. Perkins, 95 TCM 1196 Dec. 57,408(M), TC Memo. 2008-103.

An IRS settlement officer abused her discretion by failing to consider changes to his financial circumstances in assessing his offer in compromise. During the telephone hearing, the settlement officer refused to consider the taxpayer's offer in compromise because it was for an amount less than what the IRS had determined he could pay when it rejected the taxpayer's previous offer. However, the settlement officer was required to consider the taxpayer's claims that his financial circumstances had changed and that he was unable to pay the amount that the IRS had previously determined it could collect. Although the issue of his ability to pay had been raised and considered in a previous CDP hearing, the taxpayer was not precluded from raising the issue of his changed financial circumstances because the issue was relevant to the proposed levy.

J. Cavanaugh, DC N.J. (unpublished opinion), 2004-2 USTC ¶50,420.

A taxpayer who received notices of deficiency but failed to petition the Tax Court was not permitted to challenge the tax liability at his CDP hearing. Although the IRS had conceded certain amounts making up the underlying tax liability, such a concession had no impact on whether the other component assessments were valid or subject to challenge. The taxpayer's view that the underlying liability for a tax year was a single, unitary whole, and if the IRS adjusted that amount, it was required to send a new notice and demand, was rejected. Rather, the validity of each discrete assessment turns on whether the taxpayer was given notice of and had the ability to challenge such assessment, which was not imperiled by the IRS's concessions with respect to another discrete assessment.

S.J. Hoffenberg, 95 TCM 1549, Dec. 57,449(M), TC Memo. 2008-139.

The IRS did not abuse its discretion in sustaining a lien notice and could proceed with collection against a taxpayer who was afforded a hearing and opportunity to challenge the validity of the tax lien, the appropriateness of the collection actions, and the underlying tax liability. The administrative officer's determination had a sound basis in fact and law and was neither arbitrary nor capricious. The taxpayer, who untimely filed his return and did not pay his income tax liabilities, was unsuccessful in asserting that the hearing officer's failure to consider his financial responsibilities and revised offer-in-compromise in determining whether to sustain the lien notice was an abuse of discretion. The offer-in-compromise was submitted and rejected before the IRS issued the lien notice, the taxpayer failed to raise any collection alternatives, the intrusiveness of the collection action was properly weighed against the need for efficient collection of taxes, and the assessment of taxes and recordation of the lien were consistent with all appropriate statutes and regulations.

M.P. Coghlan, Dec. 57,568(M), TC Memo. 2008-241.

An individual who failed to petition the Tax Court after receiving a notice of deficiency for the tax year at issue could not challenge the tax liability at his Collection Due Process (CDP) hearing. He had the opportunity to present his argument that no deficiency existed based on his carryback theory before the Tax Court. However, he failed to do so and, therefore, could not challenge the deficiency at the CDP hearing.

R.B. Pallack, CA-9, 2008-2 USTC ¶50,607.

The IRS's determination to uphold a levy against an individual who failed to challenge to the appropriateness of the collection action or offer alternative means of collection was proper. The individual did not challenge the existence or amount of the underlying liability in his request for a Collection Due Process (CDP) hearing or in his petition for review. Moreover, he failed to participate in the scheduled CDP hearing and failed to provide the settlement officer with requested information.

G.D. Vence, CA-11, 2008-2 USTC ¶50,608.

See also, ¶38,184.35.

The Tax Court properly upheld the IRS's determination to collect an individual's unpaid taxes by levy. The Tax Court properly concluded that the individual could not challenge the underlying tax liability because he received a notice of the deficiency and failed to file a timely petition for redetermination. Contrary to the individual's contention, the notice of deficiency was not invalid.

J.A. Laszloffy, CA-9, 2008-2 USTC ¶50,624.

The Tax Court remanded a Notice of Determination to IRS Appeals after determining that there was no documentation regarding the proper mailing of the notice of deficiency. Under Code Sec. 6330(c)(1), the Appeals officer was required to verify that the IRS duly mailed a notice of deficiency prior to the assessment of tax. Whether the taxpayer raised the notice of deficiency issue at the CDP hearing, or not, was irrelevant. If there was no notice of deficiency mailed, the assessment was invalid and the lien would be improper.

M.D. Hoyle, 131 TC --, No. 13, Dec. 57,598.

The Tax Court properly precluded a married couple from challenging the timeliness of the IRS assessments. The couple could not raise their underlying tax liability at a Collection Due Process (CDP) hearing because they had received a notice of deficiency from the IRS and had petitioned the Tax Court to redetermine that deficiency,

R.H. Golden, CA-6, 2009-1 USTC ¶50,101.

The Tax Court properly upheld the IRS's determination to collect a married couple's outstanding tax liabilities by levy. The couple was precluded from challenging in a Collection Due Process (CDP) hearing the IRS's failure to show how the payments made by them were properly credited to their liability because they had a previous opportunity to challenge their underlying tax liability. They had settled their original Tax Court case, which dealt with the underlying assessment, had filed several offers in compromise, and had admitted that they had a previous opportunity to dispute their tax liability.

B. Block, CA-2, 2009-1 USTC ¶50,118.

An IRS Appeals officer did not abuse his discretion by sustaining a notice of a federal tax lien to collect an individual's unpaid federal income tax liability. The Appeals officer ascertained that the administrative requirements for the lien had been met, assessed the issues raised by the individual and reasonably determined that the proposed lien balanced the need for efficient collection of taxes with the legitimate concern that the collection action would be no more intrusive than necessary. Since the individual failed to respond to the notice of deficiency, she was precluded from challenging the existence or amount of the tax liability at her subsequent Collection Due Process (CDP) hearing. Moreover, the individual was not treated unfairly because the Tax Court had granted her time to file her returns and had advised her to resolve her delinquent tax liability through an offer-in-compromise.

M.Z. Reichle, CA-2, 2009-1 USTC ¶50,144.