Joseph D. and Wanda S. Lunsford v. Commissioner

117 T.C. No. 17

UNITED STATES TAX COURT

JOSEPH D. AND WANDA S. LUNSFORD, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 18071-99L. Filed November 30, 2001.

R issued a notice of intent to levy, and Ps
requested a hearing before an IRS Appeals officer (A)
pursuant to sec. 6330, I.R.C. The only issue that Ps
raised in their request was whether there was a valid
summary record of the assessments of the taxes in
question. A sent a letter to Ps that enclosed a Form
4340, Certificate of Assessments and Payments, showing
that the assessments were made and invited Ps to raise
additional issues, but Ps did not do so. A did not
schedule a face-to-face hearing. A issued a notice of
determination. Ps timely petitioned the Tax Court for
review. The only substantive issue raised in the
petition was whether the Form 4340 constituted
sufficient verification of the assessments.
Held: Our rules require petitioners to specify
the basis upon which they seek relief. Because the
only substantive issue that petitioners raised in this
judicial proceeding is whether A abused her discretion
by relying on a Form 4340 to verify the assessments,
and because we have previously decided in Davis v.
Commissioner, 115 T.C. 35 (2000), that such reliance is
 - 2 -

appropriate, R may proceed with the proposed collection
action.

Joyce M. Griggs, for petitioners.

Ross M. Greenberg, for respondent.

OPINION

RUWE, Judge: This case arises from a petition for judicial

review filed under section 6330(d)(1)(A).1 We have previously

decided that we have jurisdiction in this case. See Lunsford v.

Commissioner, 117 T.C. ___ (2001). For convenience, we combine

the facts, which are not in dispute, with our opinion.

Section 6331(a) authorizes the Commissioner to levy against

property and property rights where a taxpayer fails to pay taxes

within 10 days after notice and demand for payment is made.

Section 6331(d) requires the Secretary to send notice of an

intent to levy to the taxpayer, and section 6330(a) requires the

Secretary to send a written notice to the taxpayer of his right

to a hearing. Section 6330(b) affords taxpayers the right to a

“fair hearing” before an “impartial” IRS Appeals officer.

Section 6330(c)(1) requires the Appeals officer to obtain

verification that the requirements of any applicable law or

administrative procedure have been met. Section 6330(c)(2)(A)

1
Unless otherwise indicated, all section references are to
the Internal Revenue Code currently in effect, and all Rule
references are to the Tax Court Rules of Practice and Procedure.
 - 3 -

specifies issues that the taxpayer may raise at the Appeals

hearing. The taxpayer is allowed to raise “any relevant issue

relating to the unpaid tax or the proposed levy” including

spousal defenses, challenges to the appropriateness of collection

action, and alternatives to collection. Sec. 6330(c)(2)(A). The

taxpayer cannot raise issues relating to the underlying tax

liability if the taxpayer received a notice of deficiency or the

taxpayer otherwise had an opportunity to dispute the tax

liability. Sec. 6330(c)(2)(B).

Section 6330(c)(3), provides that a determination of the

Appeals officer shall take into consideration the verification

under section 6330(c)(1), the issues raised by the taxpayer, and

whether the proposed collection action balances the need for the

efficient collection of taxes with the legitimate concern of the

person that any collection action be no more intrusive than

necessary. Section 6330(d)(1) allows the taxpayer to appeal a

determination to the Tax Court or a district court. Section

6330(e)(1) suspends the levy action until the conclusion of the

hearing and any judicial review of the determination.

On April 30, 1999, respondent issued a notice of intent to

levy to petitioners. The proposed levy was to collect unpaid

income taxes of $83,087.85 for the taxable years 1993, 1994, and

1995. On May 24, 1999, petitioners filed a Form 12153, Request
 - 4 -

for a Collection Due Process Hearing,2 and raised only the

following issue:

I do not agree with the collection action of levy and
notice of intent to levy 4-30-99. The basis of my
complaint is what I believe to be the lack of a valid
summary record of assessment pursuant to 26 CFR §301.6203-
1. Without a valid assessment there is no liability.
Without a liability there can be no levy, no notice of
intent to levy, nor any other collection actions.[3]

On September 2, 1999, the Appeals officer wrote a letter to

petitioners indicating that the validity of assessments had been

verified and attached a Form 4340, Certificate of Assessments and

Payments, which clearly shows that the assessments in question

2
Various IRS forms refer to the Appeals hearing that is
contemplated by sec. 6330(b) as a “collection due process” or
“CDP” hearing.
3
The Form 12153, Request for a Collection Due Process
Hearing, was attached to a cover letter dated May 24, 1999, from
petitioners’ representative, Thomas W. Roberts, which stated:

The basis of my complaint is the perceived lack of a
valid summary record of assessment pursuant to 26 CFR
§301.6203-1. Without a valid assessment there is no
liability. I will need to receive a copy of the
summary record of assessment signed by the assessment
officer. You may send one to me or send me the
necessary forms to subpoena the document along with the
assessment officer’s name and address for delivery of
the subpoena. Upon receipt of that document I will
have several questions to ask the assessment officer.
I assume this can be done in the form of
interrogatories. Please forward the procedures for the
interrogatories and subsequent depositions of any
witnesses that I may wish to call.

Mr. Roberts also asked for copies of the “levy” or “levies”.
However, whether respondent can make such “levies” is the issue
before us.
 - 5 -

were made and remained unpaid. The Appeals officer concluded the

letter stating: “If you wish to discuss other matters, such as

resolution of the liability please contact me by September 16,

1999. Otherwise, we will issue a determination”. Petitioners

made no response to this letter. No further proceedings or

exchange of correspondence occurred prior to the Appeals

officer’s determination.

On November 3, 1999, a notice of determination was sent to

petitioners by the IRS Appeals Office which sustained the

proposed levy. The notice of determination concluded: (1) All

procedural, administrative, and statutory requirements were met;

(2) the Form 4340 satisfied the requirements of section 6203;4

(3) petitioners failed to present any collection alternatives;

and (4) the proposed levy was justified. On December 2, 1999,

petitioners filed a timely petition to the Tax Court.

We must decide whether petitioners are entitled to any

relief from the Appeals officer’s determination. Where the

underlying tax liability is properly at issue in the hearing, we

review that issue on a de novo basis. Goza v. Commissioner, 114

4
Sec. 6203 requires the Secretary to record the liability of
the taxpayer and to furnish a copy of the record of assessment to
the taxpayer on request. Sec. 301.6203-1, Proced. & Admin.
Regs., provides that an assessment officer shall make the
assessment and sign the “summary record of assessment. The
summary record, through supporting records, shall provide
identification of the taxpayer, the character of the liability
assessed, the taxable period, if applicable, and the amount of
the assessment.”
 - 6 -

T.C. 176, 181-182 (2000). However, where the underlying tax

liability is not at issue, we review the determination to see

whether there has been an abuse of discretion. Nicklaus v.

Commissioner, 117 T.C. 117, 120 (2001). In this case,

petitioners have not disputed the merits of the underlying tax

liability.

Our Rules require petitioners to specify the facts upon

which they rely for relief under section 6330. A petition filed

under section 6330 must contain “Clear and concise lettered

statements of the facts on which the petitioner bases each

assignment of error”. Rule 331(b)(5). Any issue not raised in

the assignments of error shall be deemed to be conceded. Goza v.

Commissioner, supra at 183.5

In the entire course of this judicial proceeding,

petitioners have raised only one substantive issue that they want

to be considered; i.e., whether there was a sufficient record

showing that the taxes in issue were assessed under section 6203

and section 301.6203-1, Proced. & Admin. Regs. In their petition

to the Tax Court, petitioners alleged the following facts in

support of their position:

6. The facts upon which the Petitioner relies, as the
basis of the Petitioner’s case, are as follows:

5
See also Merriweather v. Commissioner, T.C. Memo. 2001-88;
MacElvain v. Commissioner, T.C. Memo. 2000-320; Howard v.
Commissioner, T.C. Memo. 2000-319; Van Fossen v. Commissioner,
T.C. Memo. 2000-163.
 - 7 -

a) The appeals officer took the position that the
assessment is valid without verifying that there
was in fact an assessment.
b) The appeals officer stated that the courts
have ruled that a certified transcript “contains
all the documentation to which taxpayers are
entitled under 26 U.S.C. §6203" without meeting
his duty under 26 CFR §301.6320-T(e)(1) to verify
the existence of the underlying documents.
c) Although the transcript listed an assessment
date, the appeals officer did not verify that a
23C was actually prepared pursuant to his duty
under 26 CFR §301.6320-T(e)(1) and the
nonexistence of the properly prepared and signed
certificate of assessment pursuant to 26 U.S.C.
§6203 and 26 C.F.R. §301.6203-1 was placed in
issue.
d) Without the assessment officer being
identified from the assessment certificate neither
Petitioner nor the appeals officer can inquire of
the assessment officer for verification that he
performed his proper function in determining that
all conditions precedent, (procedural,
administrative and statutory) to the assessment
were performed.

Petitioners’ trial memorandum, which was filed on the day this

case was called for trial, stated the issue as follows:

ISSUES:
Whether the hearing officer met the requirements of
§6330 by making a determination without requiring the
Service to furnish, as timely requested by Petitioner,
the assessment document meeting the requirements of 26
CFR 301.6203-1, signed by an assessment officer and
certified under oath by the records clerk or other
authorized official.

Petitioners included a “Synopsis of Legal Authorities” in their

trial memorandum. This synopsis similarly discussed only the

issue of the existence of an assessment and its verification with

a Form 4340.
 - 8 -

When this case was called for trial, petitioners’ counsel

gave no indication that petitioners wanted to contest anything

other than the issue described in their pleadings and trial

memorandum. The Court ordered both parties to file posttrial

briefs. Petitioners did not file a posttrial brief.6 We

recently discussed the consequences to a party who fails to

advance arguments on brief. In Nicklaus v. Commissioner, 117

T.C. at 120 n.4, we stated: “We conclude that petitioners have

abandoned those other arguments and contentions. See Ryback v.

Commissioner, 91 T.C. 524, 566 n.19 (1988).”7 In the instant

case, we think it is at least as clear that petitioners have

abandoned any arguments that were not raised in their pleadings

and trial memorandum.

6
Generally, where a party fails to file a brief on an issue
before the Court, we have the authority to hold the party in
default under Rule 123(a) and enter decision against the
defaulting party or to dismiss the case under Rule 123(b) for
failure to prosecute or for failure to comply with the Rules of
this Court. See Rule 151(a) (“Briefs shall be filed” on order of
the Court). On numerous occasions, we in essence have defaulted
or dismissed issues for failure to brief them. Generally, we
have accomplished this result by considering the issue waived or
conceded. Stringer v. Commissioner, 84 T.C. 693, 704-708 (1985),
affd. without published opinion 789 F.2d 917 (4th Cir. 1986);
Furniss v. Commissioner, T.C. Memo. 2001-137; McGee v.
Commissioner, T.C. Memo. 2000-308; Pace v. Commissioner, T.C.
Memo. 2000-300; Hartman v. Commissioner, T.C. Memo. 1999-176.
7
We also note that in Nicklaus v. Commissioner, 117 T.C. 117
(2001), the taxpayers raised arguments similar to those raised by
petitioners herein. In that case, we examined the pleadings and
other documents submitted to this Court and concluded that the
taxpayers’ arguments were without merit.
 - 9 -

The argument that petitioners made in their trial memorandum

has already been rejected. In Davis v. Commissioner, 115 T.C. 35

(2000), the taxpayer argued that the collection action was

improper because of the lack of a “valid” summary record of

assessment. We held that it was not an abuse of discretion for

the Appeals officer to rely on a Form 4340 to verify that a valid

assessment existed.8 Id. at 40-41. Form 4340 provides at least

presumptive evidence that a valid assessment of a tax has been

made. Nicklaus v. Commissioner, supra at 121; Davis v.

Commissioner, supra at 40; Hefti v. IRS, 8 F.3d 1169, 1172 (7th

Cir. 1993), affg. 71A AFTR 2d 93-4833, 92-1 USTC par. 50,192

(C.D. Ill. 1992). A Form 4340 is not conclusive proof of an

assessment. For example, where the Form 4340 does not list a

“23C date” (i.e., the date on which the actual assessment was

made), further examination is required to determine whether an

assessment was made. See Huff v. United States, 10 F.3d 1440,

1446 (9th Cir. 1993); Brewer v. United States, 764 F. Supp. 309,

315-316 (S.D.N.Y. 1991). However, where the taxpayer can point

to no evidence of any irregularity in the assessment process, the

presumption of a valid assessment remains intact. Nicklaus v.

8
We note that the petition in this case is essentially the
same as the petition filed with this Court in Davis v.
Commissioner, 115 T.C. 35, 39 (2000). This is not surprising
since the petition was filed by Thomas W. Roberts, who also filed
the petition for the taxpayer in the Davis case. Mr. Roberts was
disbarred from practice before this Court on June 18, 2001, and
was removed as petitioners’ counsel on July 18, 2001.
 - 10 -

Commissioner, supra at 121; Guthrie v. Sawyer, 970 F.2d 733, 737-

738 (10th Cir. 1992); Geiselman v. United States, 961 F.2d 1, 6

(1st Cir. 1992); Hughes v. United States, 953 F.2d 531, 535 (9th

Cir. 1992); United States v. Chila, 871 F.2d 1015, 1017-1018

(11th Cir. 1989). In Davis v. Commissioner, supra, the taxpayer

failed to demonstrate any irregularity in the assessment

procedure, and we granted respondent’s motion for a judgment on

the pleadings. We held further that Appeals hearings were

intended by Congress to be informal and do not require testimony

under oath or the compulsory attendance of witnesses or the

production of all requested documents. Id. at 41-42.

In this case, petitioners were provided with a Form 4340

which showed the assessment date of the taxes in question. The

Appeals officer relied on the Form 4340 to verify that section

6203 and the applicable regulations thereunder were satisfied.

Petitioners have not pointed to any alleged facts or evidence to

suggest that there were any irregularities in the assessment

process.

The only substantive issue that petitioners have raised in

this judicial proceeding is whether the Appeals officer properly

relied on a Form 4340 to verify under section 6330(c)(1) that the

taxes were properly assessed. We do not construe the instant

appeal as being predicated on allegations that respondent failed

to offer petitioners a hearing per se. Rather, the gist of
 - 11 -

petitioners’ claim is that the Appeals officer has incorrectly

relied on Form 4340 for purposes of verifying the assessments and

that the Appeals officer has improperly refused to afford

petitioners certain alleged procedural rights with which to

challenge the Form 4340. We have already decided those issues

contrary to the position taken by petitioners. Davis v.

Commissioner, supra. The only relief petitioners are seeking is

a remand to Appeals to consider matters which we have previously

ruled on. The prayer for relief contained in the petition

states:

WHEREFORE, Petitioner prays that this case be remanded
to the Appeals Office with the following instructions:

a) Perform a complete verification as required by
26 C.F.R. §301.6320-T(e)(1),
b) Furnish existence thereof to Petitioner
including the documents requested in the due
process hearing request and
c) Hold a meaningful due process hearing as
required by law allowing Petitioner to examine all
records used by Respondent and to cross examine
those persons who created or otherwise relied upon
those records to create the alleged assessment
that begun the collection action,

so that Petitioner can be afforded due process of law
prior to any taking.

We do not believe that it is either necessary or productive to

remand this case to IRS Appeals to consider petitioners’

arguments. Thus, we shall decide this case by following our

opinion in Davis v. Commissioner, supra.
 - 12 -

Of course, there may be cases, where taxpayers were not

given a proper opportunity for an Appeals hearing, where it will

be appropriate for this Court to require that an Appeals hearing

be held. However, we do not believe that this should be done

where, as in this case, the only arguments that petitioners

presented to this Court were based on legal propositions which we

have previously rejected.

Procedurally, the case before us is similar to the situation

we faced in Goza v. Commissioner, 114 T.C. 176 (2000). In that

case the taxpayer objected to the notice of intent to levy, and

the case was sent to Appeals for a determination under section

6330. Appeals refused to hear the taxpayer’s challenge to the

underlying tax liability or to hear the taxpayer’s challenges

based on frivolous constitutional arguments. The Appeals notice

of determination stated:

Summary of Determination:

It has been determined that the requirements of all
applicable laws and administrative procedures have been
met.

As you were advised in our letter dated July 6, 1999,
challenges to the underlying liability may only be
raised as an issue if you did not receive a statutory
notice of deficiency or did not otherwise have an
opportunity to dispute the liability. You did receive
a statutory notice of deficiency in this case. You
were also informed that a hearing is not available for
constitutional issues such as those referenced in your
reply to the final notice, and you failed to raise any
issues that could be considered in a due process
hearing pursuant to IRC section 6330.
 - 13 -

It is therefore deemed that the proposed collection
action balances the need for efficient collection of
the taxes with the concern that the collection action
be no more intrusive than necessary. [Goza v.
Commissioner, supra at 178.]

The taxpayer raised the same issues in his petition which

included the following statement: “Petitioner reserves all

rights under the federal Constitution and common law, the filing

of this petition is not intended as a waiver of any of those

rights.” Id. at 179. We described petitioner’s constitutional

claims as frivolous. Id. at 183. We then granted the

Commissioner’s motion to dismiss for failure to state a claim

upon which relief can be granted stating:

Rule 331(b)(4) states that a petition for review
of an administrative determination filed pursuant to
section 6330 shall contain clear and concise
assignments of each and every error which the
petitioner alleges to have been committed in the levy
determination and any issue not raised in the
assignments of error shall be deemed to be conceded.
Rule 331(b)(5) states that such a petition shall
contain clear and concise lettered statements of the
facts on which the taxpayer bases each assignment of
error.

Petitioner failed to raise a valid challenge to
respondent’s proposed levy before the Appeals Office.
Petitioner continued to assert the same frivolous
constitutional claims in his petition for review filed
with the Court.

The validity of petitioner’s underlying tax
liability is not properly at issue in this proceeding.
Moreover, the petition does not assert (nor is there
any basis in the administrative record for the Court to
conclude) that respondent abused his discretion with
respect to spousal defenses or collection matters. See
sec. 6330(c)(2)(A). In the absence of a justiciable
claim for relief in the petition for review filed
 - 14 -

herein, we shall grant respondent’s motion to dismiss
for failure to state a claim upon which relief can be
granted. [Id. at 183.]

We have addressed all of the issues petitioners have raised

in this judicial proceeding. We hold that the Appeals officer

did not abuse her discretion by relying on the Form 4340 or by

refusing to produce other requested documents or witnesses and

that respondent may proceed with the proposed levy action.9

Respondent requests that we impose a section 6673(a)(1)

penalty on petitioners. Under the circumstances of this case, we

do not believe a penalty should be imposed on petitioners.

Respondent’s request is denied.

An appropriate order and

decision will be entered.

Reviewed by the Court.

WELLS, COHEN, SWIFT, GERBER, WHALEN, and THORNTON, JJ.,
agree with this majority opinion.

9
See also Watson v. Commissioner, T.C. Memo. 2001-213; Serv.
Engg. Trust v. Commissioner, T.C. Memo. 2001-181.
 - 15 -

HALPERN, J., concurring: I concur with the result reached

by the majority. In my concurring report in Lunsford v.

Commissioner, 117 T.C. ___ (2001), I have offered some comments

concerning our authority to dictate to respondent the nature of

the hearing required by section 6330(b). I incorporate those

comments herein by this reference.

WHALEN, BEGHE, and THORNTON, JJ., agree with this concurring
opinion.
 - 16 -

COLVIN, J., dissenting: I voted yes in Lunsford v.

Commissioner, 117 T.C. ____ (2001) (Lunsford I), because I

believe our jurisdiction in that case is provided by the notice

of determination. However, I dissent here because I believe the

fact that we have jurisdiction does not relieve respondent of the

duty to provide an opportunity for a hearing as required by

section 6330(b).

Because we have jurisdiction, if we had required respondent

to provide an opportunity to petitioner to have a hearing, we

could have then concluded the case by using whatever procedure is

appropriate (e.g., a trial or dispositive motion) without

requiring the taxpayer to file a new petition.

GALE, J., agrees with this dissenting opinion.
 - 17 -

LARO, J., dissenting: I respectfully disagree with the

opinions adopted by the majority and agree with the dissenting

views of Judge Foley. I write separately in this important case

to stress the importance of an appeal to a higher court. I also

write to stress what I consider to be the legislative mandate

that taxpayers must be afforded face-to-face collection due

process (CDP) hearings upon all proper requests. The U.S.

Department of Justice, the Internal Revenue Service (IRS) Office

of Chief Counsel (Chief Counsel) and the IRS Office of Appeals

(Appeals) have concluded that all taxpayers possess such a right

and that this right may not be denied. See Chief Counsel

Advisory 200123060 (June 8, 2001) (the advisory). But for the

majority, no one who has considered this issue has concluded

differently.

1. Majority’s Factual Finding of an Abandonment of Issues
is Contrary to the Well-Supported Finding of the Trial Judge

The majority conclude that petitioners have abandoned all

arguments and contentions not articulated clearly in their

pleadings and trial memorandum and that petitioners’ sole

argument in this case was one rejected by the Court in Davis v.

Commissioner, 115 T.C. 35 (2000). Judge Foley has concluded

differently. As I understand Judge Foley’s opinion, at issue in

this case (exclusive of the jurisdictional issue) is whether

Appeals held the requisite CDP hearing with petitioners (the

hearing requirement). Such a conclusion by Judge Foley is
 - 18 -

adequately supported by the record. Petitioners allege in their

petition that they want to meet with Appeals in person and that

the failure of Appeals to schedule a face-to-face conference has

deprived them of the ability to present their case. The petition

prays that the Court direct Appeals to “Hold a meaningful due

process hearing as required by law”.

The fact that the hearing requirement is at issue is also

seen clearly from the record and from the posttrial brief of

respondent, who, like Judge Foley, but unlike the majority, has

been involved in this judicial proceeding since its start. But

for an argument for sanctions under section 6673, the sole

argument that respondent advances on brief concerns the hearing

requirement.1 Although petitioners failed to file a posttrial

brief, their counsel, Ms. Griggs, stated at trial that “by not

having a hearing date they [petitioners] were not afforded an

adequate right to have a hearing.” Tr. at 4. Further, she

stated: “I do not believe that they’ve been afforded due process

proceedings in this [case by virtue of the lack of a CDP

hearing], and I believe they should be allowed to have a

hearing.” Id. at 5. The Court even clarified for the parties

that the hearing requirement remained at issue by stating: “All

1
Respondent’s specific argument on brief is that Appeals
need not hold a CDP hearing face-to-face and that the
correspondence between Appeals and petitioners constituted the
requisite hearing. Respondent’s brief predates the advisory and
is inconsistent with it.
 - 19 -

right. So that [the hearing] issue is not being conceded by

Petitioners.” Id.

I am at a loss to reconcile these statements with the

majority’s conclusions that: (1) “In the entire course of this

judicial proceeding, petitioners have raised only one substantive

issue that they want to be considered, i.e., whether there was a

sufficient record showing that the taxes in issue were assessed

under section 6203 and section 301.6203-1, Proced. & Admin.

Regs.”, (2) “When this case was called for trial, petitioner’s

counsel gave no indication that petitioners wanted to contest

anything other than the issue [discussed by the majority]”, and

(3) “We do not construe the instant appeal as being predicated on

allegations that respondent failed to offer petitioners a hearing

per se”. Majority op. pp. 6, 8, 10-11. The majority focuses

exclusively on their reading of the petition and makes no

reference to the statements at trial or, for that matter, Rule

41(b)(1), which mandates that an issue not raised in the

pleadings is treated as if raised in the pleadings when it is

tried with the express or implied consent of the parties. The

fact that the hearing requirement was tried by the express or

implied consent of the parties (and, therefore, is at issue in

this case) is evidenced not only by the statements of all of the

speakers at trial but by the fact that, with the exception of the

section 6673 argument, respondent limited his brief to that one
 - 20 -

issue. E.g., Knapp v. Commissioner, 90 T.C. 430, 439 (1988),

affd. 867 F.2d 749 (2d Cir. 1989); Ewart v. Commissioner, 85 T.C.

544, 547-548 (1985), affd. 814 F.2d 321 (6th Cir. 1987); Estate

of Belcher v. Commissioner, 83 T.C. 227, 227 n.2 (1984) (Court

reviewed); Sharon v. Commissioner, 66 T.C. 515, 527 n.5 (1976),

affd. 591 F.2d 1273, 1275 (9th Cir. 1978); see also Bishop v.

Commissioner, T.C. Memo. 2001-82; McGee v. Commissioner, T.C.

Memo. 2000-308.

The majority opinion contains no statement as to why the

majority do not respect the factual finding of the trial Judge

that the hearing requirement is at issue. Nor am I aware of any

legitimate reason why, under the facts herein, the majority alone

may consider that issue abandoned. The question of whether a

party has abandoned an issue involves a factual determination

that rests on the facts and circumstances of the case, and the

trial Judge is the one who is best able to make that

determination. See Bencker v. United States, 1992 U.S. Dist.

LEXIS 9869, 1992 WL 687180 (W.D. Mich. June 11, 1992) (court

applied a clearly erroneous standard in reviewing a bankruptcy

court’s finding that the IRS had waived an argument in the

bankruptcy court). I know of no principle of law that allows a

Judge who did not preside over a trial to conclude contrary to

the trial Judge that an issue has been abandoned.
 - 21 -

2. Pertinent Legislative History

Congress promulgated section 6330 to establish “formal

procedures designed to insure due process where the IRS seeks to

collect taxes by levy”. S. Rept. 105-174, at 67 (1998), 1998-3

C.B. 537, 603. The Internal Revenue Service Restructuring and

Reform Act of 1998, Pub. L. 105-206, sec. 3401, 112 Stat. 746, of

which section 6330 was a part, fortified taxpayer’s rights mainly

by the addition of new taxpayer rights. Its enactment followed a

year of Congressional investigations and hearings over the future

of the IRS, resulting in highly publicized criticisms of the

agency’s collection methods. Mesa Oil, Inc. v. United States, 86

AFTR 2d 2000-7312, 2001-1 USTC par. 50130 (D. Colo. 2000).

The Senate Finance Committee believed that the addition of

section 6330 would afford to taxpayers in dealing with the IRS

rights which were similar to the rights afforded to all persons

in dealing with any other creditor. S. Rept. 105-174, supra at

67, 1998-3 C.B. at 603. To this end, the committee declared, the

Commissioner would by virtue of section 6330 need henceforth to

“afford taxpayers adequate notice of collection activity and a

meaningful hearing before the IRS deprives them of their

property.” Id. The committee designed these procedures “to

afford taxpayers due process in collections” by the IRS and

believed that these procedures would “increase fairness to

taxpayers.” Id. The committee averred emphatically as to a
 - 22 -

proposed levy that a “taxpayer may demand a hearing to take place

before an appeals officer who has had no prior involvement in the

taxpayer’s case * * * [and] If the taxpayer demands a hearing

within that [prescribed] period, the proposed collection action

may not proceed until the hearing has concluded and the appeals

officer has issued his or her determination.” S. Rept. 105-174,

supra at 68, 1998-3 C.B. 604 (emphasis added); see also H. Conf.

Rept. 105-599, at 265 (1998), 1998-3 C.B. 747, 1019 (similar

language).

3. CDP Hearing Allowed as a Matter of Right

Section 6330(a) provides unambiguously that taxpayers have a

“right to a [CDP] hearing under this section before such levy is

made”. (Emphasis added.) Although the majority recognize that

Appeals did not honor petitioners’ request for a face-to-face CDP

hearing, the majority hold that petitioners are not entitled to

participate (let alone face-to-face with an Appeals officer) in

such a hearing.2 The majority acknowledge that petitioners’

request for the hearing was proper. Yet, the majority deny

petitioners their legislatively mandated right to meet with

Appeals in a CDP hearing because, they find, the petition fails

2
While the majority recognize that sec. 6330(a) and (b)
provide on their face that taxpayers have a right to a CDP
hearing, majority op. p. 2, the majority make no further
reference to this “right”.
 - 23 -

to set forth any position that this Court considers meritorious.3

The majority conclude without a citation to authority that

Appeals need not hold the hearing because “We do not believe that

it is either necessary or productive”. Majority op. p. 11.

The majority misapply relevant statutory text in that their

opinion conflicts directly with the explicit requirements of

section 6330(a) (taxpayers have a “right to a hearing”) and of

section 6330(b)(1) (“If the person requests a hearing under

subsection (a)(3)(B), such hearing shall be held by the Internal

Revenue Service Office of Appeals”. (Emphasis added.)).

Although the majority may be holding sub silentio that the Court

can waive this legislatively mandated right in certain cases, I

know of no grant of authority that would allow the Court do so

under the facts at hand, especially seeing that Chief Counsel has

advised Appeals that it “must” hold a face-to-face CDP hearing

with any taxpayer who requests one. See the advisory; cf.

Kennedy v. Commissioner, 116 T.C. 255, 262 (2001), wherein the

Court noted that “section 6330 does not authorize the

Commissioner to waive the time restrictions imposed therein.”

3
The majority essentially find that petitioners would have
made only one argument at their CDP hearing, had one in fact been
held. I disagree. In Davis v. Commissioner, 115 T.C. 35 (2000),
the taxpayer set forth in the request for a CDP hearing only the
argument that the Commissioner’s assessment was invalid for lack
of a valid summary record of assessment. At the CDP hearing, the
taxpayer advanced two additional arguments for consideration.
 - 24 -

In fact, respondent has not even asked the Court to consider the

right waived in the instant setting.

4. Need for Appeals To Obtain Verification at the Hearing

The majority fail to discuss persuasively the fact that

petitioners have alleged in paragraph 6(a) of their petition that

“The appeals officer took the position that the assessment is

valid without verifying that there was in fact an assessment.”

Under the statutory scheme, it would appear that petitioners are

correct in this assertion. The statute requires explicitly that

this verification must come “at the hearing”.4 Sec. 6330(c)(1)

(“The appeals officer shall at the hearing obtain verification

from the Secretary that the requirements of any applicable law or

administrative procedure have been met”. (Emphasis added.)).

The legislative history reinforces this result by stating that

“During the hearing, the IRS is required to verify that all

statutory, regulatory, and administrative requirements for the

proposed collection action have been met.” S. Rept. 105-174,

supra at 68, 1998-3 C.B. at 604 (emphasis added).

Absent a hearing, I do not see how the Commissioner can meet

this “at the hearing” verification requirement. The mere fact

that the verification may have come at a time other than “at the

hearing” is of no concern. Congress obviously believed it

4
The majority conveniently omit from their paraphrasing of
sec. 6330(c)(1) that the verification must occur “at the
hearing”. See majority op. p. 2.
 - 25 -

important to require explicitly and unambiguously that this

verification occur “at”, rather than before or after, the

hearing. As the Supreme Court has instructed lower courts as to

the proper approach to statutory construction:

canons of construction are no more than rules of thumb
that help courts determine the meaning of legislation,
and in interpreting a statute a court should always
turn first to one, cardinal canon before all others.
We have stated time and again that courts must presume
that a legislature says in a statute what it means and
means in a statute what it says there. When the words
of a statute are unambiguous, then, this first canon is
also the last: judicial inquiry is complete. [Conn.
Natl. Bank v. Germain, 503 U.S. 249, 253-254 (1992);
citations and quotation marks omitted.]

5. Right To Raise New Issues at the Hearing

Section 6330(c)(2)(A) provides unambiguously that a taxpayer

“may raise at the hearing any relevant issue relating to the

unpaid tax or the proposed levy”.5 (Emphasis added.) The

legislative history reinforces this result by also stating

unambiguously that a taxpayer is entitled to raise any relevant

issue at (as opposed to before) the hearing and that relevant

issues may “include (but not limited to)” the issues set forth in

section 6330(c)(2)(A). S. Rept. 105-174, supra at 68, 1998-3

C.B. at 604; see also H. Conf. Rept. 105-599, supra at 265, 1998-

3 C.B. at 1019 (similar language). I conclude that petitioners

were entitled to raise at a CDP hearing any relevant issue

5
The majority conveniently omit from their paraphrasing of
sec. 6330(c)(2)(A) that the taxpayer is allowed to raise any
relevant issue “at the hearing”. See majority op. p. 3.
 - 26 -

related to the Commissioner’s proposed levy and that the majority

are wrong in not allowing petitioners to have a CDP hearing at

which to raise relevant issues.

6. Substituting Their Judgment for the Judgment of Appeals

The CDP hearing allows the Appeals officer to exercise his

or her judgment as to the propriety of a proposed collection

action and to make a resulting determination from matters

discussed at the hearing. See, e.g., sec. 6330(c)(2) and (3).

Absent an Appeals officer’s consideration of issues at a hearing,

I do not believe that there is any determination of an Appeals

officer that this Court could sustain. Given the statement in

the legislative history that this Court is “expected to review

the appellate officer’s determination for abuse of discretion”,

S. Rept. 105-174, supra at 68, 1998-3 C.B. at 604; see also H.

Conf. Rept. 105-599, supra at 266, 1998-3 C.B. at 1020 (similar

language), I find inescapable the conclusion that where an

Appeals officer fails to hold a properly requested CDP hearing,

that there is an abuse of discretion. Indeed, to my mind, the

mere fact that the Appeals officer here did not comply with the

statute and hold the legislatively mandated hearing with

petitioners, as they properly requested, is a per se abuse of

discretion.

I disagree with the majority’s conclusion that we may decide

this case favorably to respondent on the basis of the record at
 - 27 -

hand. The notice of determination concludes that: (1) All

procedural, administrative, and statutory requirements were met;

(2) the Form 4340 satisfied the requirements of section 6203;

(3) petitioners failed to present any collection alternatives;

and (4) balancing of the taxpayer’s privacy interests and the

need for collection weighed in favor of the proposed levy.

Absent a hearing, I do not believe that the Court can properly

conclude that the Appeals officer did not abuse his discretion.

To be sure, the Appeals officer abused his discretion at least by

concluding that all statutory requirements had been met. How

could those requirements have been met when respondent never held

the statutorily required CDP hearing or performed at the

appropriate time the required verification?

The legislative history clarifies that the role of this

Court as to a proposed levy is limited to reviewing the Appeals

officer’s determination as to the propriety of a levy, as well as

assuring that the procedure requirements have been met. S. Rept.

105-174, supra at 68-69, 1998-3 C.B. at 604-605; see also H.

Conf. Rept. 105-599, supra at 266, 1998-3 C.B. at 1020 (similar

language). In contrast with the result of the majority’s

opinion, our role is not to substitute our judgment for that of

the Appeals officer as to the propriety of a levy. The conferees

provided specifically in their report that they expected that

“the appeals officer will prepare a written determination
 - 28 -

addressing the issues presented by the taxpayer and considered at

the hearing”, H. Conf. Rept. 105-599, supra at 266, 1998-3 C.B.

at 1020, and that the Court must review that determination.

7. The Advisory

The majority’s conclusion that Appeals need not hold a CDP

hearing with petitioners is inconsistent with, and unexplainably

significantly broader than, the Commissioner’s administrative

practice on this subject. In the advisory, the Chief Counsel

stated that a meeting between Chief Counsel, Appeals, and the

U.S. Department of Justice had resulted in the decision that

“Appeals would strive to grant, at a minimum, face-to-face

conferences to all requesting taxpayers.” The advisory was

generated when Las Vegas Appeals (L.V. Appeals) informed Chief

Counsel that L.V. Appeals intended to no longer schedule a

face-to-face or telephonic CDP conference when a taxpayer’s

request for a CDP hearing set forth only frivolous or

constitutional arguments. The Chief Counsel, upon consultation

with the U.S. Department of Justice and Appeals, concluded in the

advisory that the intended practice did not satisfy the statutory

requirements of section 6330. The Chief Counsel advised Appeals

(and Appeals agreed) that it had to conduct a face-to-face CDP

hearing with any taxpayer that requested such a hearing,

regardless of the matter set forth in the request, that the

manner of the hearing should be “informal”, and that the length
 - 29 -

of the hearing should hinge on the amount of time necessary to

discuss “relevant” issues. The advisory declares unequivocally

that: “A taxpayer is entitled to a CDP hearing even if he [or

she] will raise only frivolous or constitutional arguments

because the appeals officer must cover the statutory requirements

of sections [sic] 6330(c)(1) and (3)(C) of verification and

balancing.” (Emphasis added.) Pursuant to the legislative

mandate in section 6330(c)(1), “The appeals officer shall at the

hearing obtain verification from the Secretary that the

requirements of any applicable law or administrative procedure

have been met.” (Emphasis added.) Pursuant to the legislative

mandate of section 6330(c)(3)(C), the Appeals officer must

consider “whether any proposed collection action balances the

need for the efficient collection of taxes with the legitimate

concern of the person that any collection action be no more

intrusive than necessary.”

The fact that the majority does not give proper regard to

the Commissioner’s administrative practice is, to my mind, a

mistake. Section 6330 is a relatively new provision, and the

Commissioner is obviously looking to the Courts for guidance as

to the proper rules which he must apply to implement that

provision properly. Given the fact that he has announced that he

is now providing a CDP hearing to all taxpayers who request one,
 - 30 -

regardless of their motives, I believe it wrong for the majority

to undermine that position by usurpation.

FOLEY and VASQUEZ, JJ., agree with this dissenting opinion.
 - 31 -

FOLEY, J., dissenting: I respectfully disagree with the

majority’s analysis and holding.

In order to assert jurisdiction, deny petitioners their

statutorily mandated hearing, and expedite the collection

process, the majority have bifurcated this case into two

opinions, both of which obfuscate the issues, ignore an

unambiguous statute, and avoid addressing the most critical

issue: Does the exchange of correspondence between respondent

and petitioners constitute the hearing required by section

6330(b)(1)? The majority sidestep, rather than address, this

issue and choose to focus exclusively on Rule 331(b) and

petitioners’ Form 12153 (Request for a Collection Due Process

Hearing), petition, trial memorandum, and failure to submit a

posttrial brief. There is nothing, however, in the majority

opinion that justifies denying petitioners their statutorily

mandated hearing.

Let us be clear. Petitioners requested a hearing.1

Respondent rejected this request and proceeded to issue a

determination.2 When this case was called for trial the

1
Any reference to a request for a hearing shall be
considered a reference to a request meeting the requirements of
sec. 6330(a)(3)(B) (i.e., a timely request) unless otherwise
stated.
2
References to a “determination” are not intended to imply
whether it is a determination that meets the requirements of sec.
6330(c), (d), and (e).
 - 32 -

documentary evidence indicated that a hearing had not been

offered or held. As the trial judge, I was particularly

concerned about whether section 6330 authorized respondent to

issue a determination without first holding a hearing. Now I am

troubled by the majority’s total disregard of the unambiguous

hearing requirement of section 6330(b)(1).

1. Section 6330(b)(1) Unambiguously Requires a Hearing

The majority state that “We do not construe the instant

appeal as being predicated on allegations that respondent failed

to offer petitioners a hearing per se”. Majority op. pp. 10-11.

I do not know what the words “per se” at the end of the foregoing

sentence are intended to convey, but I do know that respondent’s

failure to provide petitioners a hearing is a per se abuse of

discretion.

Despite the way the majority “construe the instant appeal”,

petitioners filed Form 12153; requested in their petition that

“this case be remanded to the Appeals Office” to “Hold a

meaningful due process hearing as required by law”; and

reiterated this request at trial when petitioners’ counsel

stated: “I do not believe they’ve been afforded proper due

process * * *, and I believe they should be allowed to have a

hearing.” The majority, however, do “not believe that it is

either necessary or productive to remand this case to IRS Appeals

to consider petitioners’ arguments.” Majority op. pp. 11-12
 - 33 -

(emphasis added). They refuse to follow the unambiguous

statutory mandate that if a hearing is requested, “such hearing

shall be held by the Internal Revenue Service Office of Appeals.”

Sec. 6330(b)(1) (emphasis added). The congressional mandate is

binding.3 The majority’s assessment of “necessity” and

“productivity” is irrelevant.

Section 6330(b)(1) is bolstered by section 6330(e)(1)--

another unambiguous provision. Section 6330(e)(1) provides that

“if a hearing is requested * * *, the levy actions which are the

subject of the requested hearing and the running of any period of

limitations * * * shall be suspended for the period during which

such hearing, and appeals therein, are pending.” Thus, because

the hearing required by section 6330(b)(1) was not held,

3
When interpreting an unambiguous statute, it is not
necessary to consider the legislative history. Nevertheless, we
note that the legislative history accompanying sec. 6330 further
supports our position. Congress promulgated sec. 6330 to
establish “formal procedures designed to insure due process where
the IRS seeks to collect taxes by levy”. S. Rept. 105-174, at 67
(1998), 1998-3 C.B. 537, 603. The Senate Finance Committee
stated that the Commissioner would, pursuant to sec. 6330, be
required to “afford taxpayers adequate notice of collection
activity and a meaningful hearing before the IRS deprives them of
their property.” Id.; see also H. Conf. Rept. 105-599, at 263
(1998), 1998-3 C.B. 747, 1017 (“If * * * the taxpayer demands a
hearing, the proposed collection action may not proceed until the
hearing has concluded and the appeals officer has issued his or
her determination.”). The temporary regulations relating to sec.
6330 are fully consistent with the legislative history of the
statute. See sec. 301.6330-1T(d)(1), Proced. & Admin. Regs., 64
Fed. Reg. 3410 (Jan. 22, 1999) (“If a taxpayer requests a CDP
hearing under section 6330(a)(3)(B) * * *, the CDP hearing will
be held with Appeals.”).
 - 34 -

respondent cannot proceed with collection by levy against

petitioners. Sec. 6330(e)(1).

Respondent, who has the responsibility of administering the

tax laws, merely contends that petitioners’ hearing was conducted

via correspondence. Respondent does not contend that a hearing

is unnecessary or optional. Indeed, a Chief Counsel Advisory

issued 5 months after this case was submitted provides:

a taxpayer is entitled to a CDP hearing even if he will
raise only frivolous or constitutional arguments because the
appeals officer must cover the statutory requirements of
sections 6330(c)(1) and (3)(C) of verification and
balancing. [Chief Counsel Advisory 200123060 (June 8, 2001);
emphasis added.]

Respondent recognizes that if no hearing was conducted, an

Appeals officer obviously could not have obtained at the hearing

“verification from the Secretary that the requirements of any

applicable law or administrative procedure have been met”, as

required by section 6330(c)(1), or balanced the need for the

“efficient collection of taxes with the legitimate concern of the

person that any collection action be no more intrusive than

necessary”, as required by section 6330(c)(3)(C). Id. On the

other hand, the majority deem the holding of a hearing

unnecessary. Majority op. pp. 11-12.

The majority position is contrary to both petitioners’ and

respondent’s interpretation of the statute. Section 6330(d)(1)

charges us with the responsibility of reviewing, not making,

respondent’s determination. Under the majority holding in
 - 35 -

Lunsford v. Commissioner, 117 T.C. ___ (2001) (Lunsford I),

virtually any piece of paper entitled “Notice of Determination

Concerning Collection Action(s) Under Section 6320 and/or 6330”

confers jurisdiction on this Court and may ultimately deprive the

taxpayer of his statutory right to a hearing.

2. Petitioners Were Not Offered a Hearing

The majority sidestep the hearing issue entirely. Section

6330 requires that the Court decide whether the hearing requested

by petitioners was held, and I shall do so. Respondent, citing

Katz v. Commissioner, 115 T.C. 329 (2000), Konkel v.

Commissioner, 86 AFTR 2d 2000-6939, 2001-1 USTC par. 50,520 (M.D.

Fla. 2000), et al., contends that the exchange of correspondence

between petitioners and respondent constitutes the hearing

required by section 6330(b)(1). I reject this contention.

Unlike the correspondence in Katz and Konkel, the correspondence

between petitioners and respondent did not specify the manner in

which the hearing would be conducted. In addition, respondent’s

letter failed to clearly delineate that the exchange of

correspondence would constitute the hearing required by section

6330(b)(1). Indeed, the letter to petitioners does not even

mention a hearing. It merely directs that “If you wish to

discuss other matters, such as resolution of the liability[,]

please contact me by September 16, 1999."
 - 36 -

Respondent’s contention is inconsistent with the

aforementioned Chief Counsel Advisory. In this advisory, which

related to a form letter of the type in this case, the

Commissioner’s Chief Counsel opined that the “hearing envisioned

by this letter does not satisfy the statutory requirements” of

section 6330(b). Chief Counsel Advisory 200123060. It is worth

noting that the form letter referred to in this advisory, unlike

the letter sent to petitioners, stated that “your hearing will

consist of review of your correspondence and consideration of

information” in respondent’s possession. Id. Respondent’s

letter to petitioners (see above description), which was far less

informative, fails to meet the statutory requirements. While a

taxpayer in a section 6330 hearing does not have the rights

afforded in a formal proceeding, Davis v. Commissioner, 115 T.C.

35 (2000), such taxpayer is entitled to know when and how the

hearing will be conducted.

The “exchange of correspondence” did not constitute the

hearing required by section 6330(b)(1). Although the majority

may disagree with my conclusion that the hearing required by

section 6330(b)(1) was not held, they may not sidestep this issue

and merely conclude that petitioners are not entitled to a

hearing.
 - 37 -

3. Rationale for Holding Is Unpersuasive

In tandem, the majority’s holdings in Lunsford I and the

majority opinion herein are groundless assertions of jurisdiction

and authority. The only justification for the holding herein is

that it would be a waste of time to conduct a hearing. This

Court is not prescient. Although petitioners’ Form 12153,

petition, and trial memorandum focus on one issue--the

assessments, only petitioners know what issues might be raised at

a hearing, particularly in light of the fact they are no longer

represented by the disbarred attorney who wrote the documents

submitted to the Court.

Pursuant to section 6330(c)(2)(A), taxpayers “may raise at

the hearing any relevant issue relating to the unpaid tax”.

(Emphasis added.) The Appeals officer, in the letter which

allegedly scheduled the hearing, wrote: “Appeals cannot

consider” the validity of the assessments. To the contrary,

pursuant to section 6330(c)(1), the Appeals officer must consider

the validity of the assessments. Form 4340 is presumptive

evidence of a valid assessment, Huff v. United States, 10 F.3d

1440, 1446 (9th Cir. 1993), but the presumption is rebuttable.

Although the Appeals Office’s reliance on such form is not an

abuse of discretion in a case in which the taxpayer makes no

showing of irregularity, Davis v. Commissioner, supra at 41, a
 - 38 -

taxpayer, nevertheless, must have an opportunity to make the

showing at the hearing required by section 6330(b)(1).

The majority’s conclusion that respondent should not be

required to conduct a hearing because it is not “either necessary

or productive to remand this case to IRS Appeals to consider

petitioners’ arguments”, majority op. p. 11, simply ignores and

circumvents the statute. Neither Rule 331 nor petitioners’

receipt of Form 4340 forecloses relevant questions relating to

the assessments or provides an excuse for us to ignore the

section 6330(b)(1) hearing mandate.

The bottom line is that a taxpayer who requests a hearing is

entitled to one. Sec. 6330(b)(1). Neither respondent nor the

Court has any discretion about that. Id. Until petitioners have

the hearing they requested, sec. 6330(b)(1), respondent cannot

proceed with collection of the tax. Sec. 6330(e)(1). I have yet

to find the statutory exceptions to section 6330(b)(1) and (e)(1)

for individuals with whom the IRS does not want to deal. Yet the

majority, in essence, have imprudently set forth such exceptions.

The congressional mandates in section 6330(b)(1) and (e)(1) are

unambiguous. The majority, in an attempt to expedite the

collection process, have rewritten those provisions. The Court

has no authority to do so.

CHIECHI, LARO, VASQUEZ, and MARVEL, JJ., agree with this
dissenting opinion.