T.C. Memo. 2001-191
UNITED STATES TAX COURT
JAMES AND MARGARETTE MCMAHAN, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 14282-99L. Filed July 25, 2001.
Joyce Griggs, for petitioners.
Ross M. Greenberg, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
FOLEY, Judge: The issues for decision are whether
respondent obtained verification of Federal income tax
assessments and whether petitioners are liable for a section
6673(a)(1) penalty. All section references are to the Internal
Revenue Code as amended.
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FINDINGS OF FACT
When the petition was filed, petitioners resided in Goliad,
Texas. On December 11, 1997, respondent issued a notice of
deficiency relating to petitioners’ 1993, 1994, and 1995 Federal
income taxes, but petitioners did not petition for
redetermination of the deficiencies.
On February 16, 1999, respondent issued each petitioner a
Notice of Intent to Levy and Notice of Your Right to a Hearing.
On March 3, 1999, petitioners filed a Request for a Collection
Due Process Hearing (i.e., Form 12153) and contended that there
was no “valid summary record of assessment”. On March 31, 1999,
respondent’s Appeals officer obtained Certificates of Assessments
and Payments (i.e., Form 4340) relating to petitioners’ years in
issue. In a letter dated May 19, 1999, the Appeals officer
responded to petitioners’ request, scheduled a hearing, and typed
the following information at the top right side of the page:
Date and Time of Conference:
Thursday, June 10, 1999, at
9:00AM
Place:
IRS Appeals Office
5835 Callaghan Rd., STE 220
San Antonio TX 78228
Neither petitioners nor their counsel appeared or rescheduled the
hearing.
On June 18, 1999, the Appeals officer informed petitioners’
counsel by telephone that he was going to make a determination
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based on the information in respondent’s administrative file. On
the same date, petitioners’ counsel replied: “It will be much
better if you and I communicate by letter or fax.” On June 22,
1999, the Appeals officer sent the Forms 4340 by telecopier to
petitioners’ counsel and requested a call by June 29, 1999, to
schedule a conference. On June 22, 1999, petitioners’ counsel
acknowledged receipt of the Forms 4340, requested Forms 23 C and
17 (i.e., Notice and Demand), and stated: “Upon receipt of these
documents we can probably handle the hearing telephonically.” On
June 23, 1999, the Appeals officer wrote that the Forms 4340 “are
accepted by the Courts in establishing the validity of an
assessment” and “I plan to close out your case in 30 days and
issue a determination letter.” On August 5, 1999, respondent
issued a Notice of Determination Concerning Collection Action(s)
Under Section 6330, determining that his proposed collection
action was to be sustained. At trial, on January 8, 2001,
respondent moved for the imposition of the section 6673(a)(1)
penalty.
OPINION
Section 6330(b)(1) provides that if a taxpayer requests a
hearing, “such hearing shall be held by the Internal Revenue
Service Office of Appeals.” Section 6330(c)(1) states: “The
appeals officer shall at the hearing obtain verification from the
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Secretary that the requirements of any applicable law or
administrative procedure have been met.”
Section 6330(d) provides for Tax Court review of the
Commissioner’s administrative determination. Where the validity
of the underlying liability is properly at issue, the Court will
review the matter de novo. Davis v. Commissioner, 115 T.C. 35,
39 (2000). In cases where the validity of the liability is not
properly part of the appeal, the Court reviews the Commissioner’s
administrative determination for abuse of discretion. See id.;
see also Goza v. Commissioner, 114 T.C. 176, 181-182 (2000).
Petitioners do not dispute the underlying liabilities, or
the adequacy of the scheduled hearing, but contend that section
6330(c)(1) requires the production of Form 23 C. This Court
previously has addressed such a contention, holding that “it was
not an abuse of discretion for Appeals to rely on a Form 4340
* * * for the purpose of complying with section 6330(c)(1).”
Davis v. Commissioner, supra at 41. Accordingly, respondent’s
administrative determination was not an abuse of discretion.
Respondent contends that petitioners’ position is frivolous
and instituted primarily for delay and that, pursuant to section
6673(a)(1), the Court should impose a penalty on them. We
conclude, however, that it is not appropriate to impose such a
penalty in this case.
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Contentions we have not addressed are irrelevant, moot, or
meritless.
To reflect the foregoing,
An appropriate order and
decision will be entered.