T.C. Memo. 2002-26
UNITED STATES TAX COURT
HARLEY GUNDERSON, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 16050-99L. Filed January 25, 2002.
Harley Gunderson, pro se.
Marty J. Dama, for respondent.
MEMORANDUM OPINION
VASQUEZ, Judge: This case is before the Court on
respondent’s motion under Rule 120,1 which, pursuant to Rule
120(b), the Court shall treat as respondent’s motion for summary
judgment under Rule 121.
1
Unless otherwise indicated, all Rule references are to
the Tax Court Rules of Practice and Procedure, and all section
references are to the Internal Revenue Code in effect for the
year in issue.
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The sole issue is whether respondent’s determination to
proceed with collection as to petitioner’s 1993 taxable year was
an abuse of discretion.
Background
At the time the petition was filed, petitioner resided in
Arlington, Texas.
On January 9, 1997, respondent sent petitioner a notice of
deficiency in his income tax for 1993. In response to this
notice, petitioner filed a timely petition with this Court. On
July 7, 1997, respondent made a master file assessment for the
amount of the 1993 deficiency.2 After realizing that a Tax Court
petition had been timely filed, respondent abated the master file
assessment on June 22, 1998.
On March 3, 1998, the Court entered a stipulated decision
that petitioner’s deficiency for 1993 was $5,954. Petitioner and
respondent both signed this decision document. On May 21, 1998,
respondent made a nonmaster file assessment of $5,954 to reflect
the stipulated decision.3
On February 2, 1999, respondent sent petitioner a Notice of
2
Master file assessments are assessments posted to the
master file computer in Martinsburg, W. Va. Assessment in
Appealed Cases, Internal Revenue Manual (IRM) (RIA), sec.
35.13.10.3 (2002).
3
Nonmaster file assessments are processed manually through
the service centers. Reference Guide: Examining Process, IRM,
sec. 104.3.1-1 (2002). The taxpayer’s tax account record
includes both master and nonmaster file assessments. Transcript
of Account Defined, IRM, sec. 8.17.3.1.1 (2002).
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Intent to Levy and Notice of your Right to a Hearing under
sections 6331 and 6330. On March 4, 1999, petitioner filed a
Request for a Collection Due Process Hearing. After respondent
conducted a hearing by telephone, respondent issued a notice of
determination. In the notice, respondent stated:
Your challenge to the appropriateness of the collection
action was that you felt the I.R.S. notice issued June
22, 1998, which showed the abatement for the premature
master file assessment showing nothing due on that
account, relieved you also of the non-master file
assessment made in accordance with the Tax Court’s
determination reflected in the decision document signed
by you and Judge Mary Ann Cohen and entered March 3,
1998. The notice reflects only internal accounting
changes. I.R.S. does not have authority to change the
Tax Court determination, and that was not the purpose
of the notice.
On October 8, 1999, petitioner filed a petition for Lien/Levy
Action under Code Section 6320(c) or 6330(d). In response to a
Court order, petitioner filed an Amended Petition for Lien or
Levy Action under Code Section 6320(c) or 6330(d) on November 29,
1999.4
Discussion
I. Summary Judgment
Respondent moved for summary judgment on the issue of
whether respondent’s determination to proceed with collection as
4
Petitioner filed a Motion for Leave to File an Amendment
to Petition (Embodying Amendment to Petition) in order to add his
wife, Mary L. Knotts, as a party-petitioner. Respondent objected
to the motion arguing that we lacked jurisdiction over Ms. Knotts
because a notice of determination was not issued to her. We
denied petitioner’s motion.
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to petitioner’s 1993 taxable year was an abuse of discretion.
Respondent argues that petitioner disputes only the underlying
liability of $5,954 and that the validity of the liability is not
properly before us.
Rule 121(a) provides that either party may move for summary
judgment upon all or any part of the legal issues in controversy.
Full or partial summary judgment may be granted only if it is
demonstrated that no genuine issue exists as to any material fact
and a decision may be rendered as a matter of law. See Rule
121(b); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520
(1992), affd. 17 F.3d 965 (7th Cir. 1994).
We conclude that there is no genuine issue as to any
material facts regarding whether respondent’s determination was
an abuse of discretion.
II. The Levy Action
Section 6331(a) provides that, if any person liable to pay
any tax neglects or refuses to do so within 10 days after notice
and demand, the Secretary can collect such tax by levy upon
property belonging to such person. Pursuant to section 6331(d),
the Secretary is required to give the taxpayer notice of his
intent to levy and within that notice must describe the
administrative review available to the taxpayer, before
proceeding with the levy. See also sec. 6330(a).
Section 6330(b) describes the administrative review process,
providing that a taxpayer can request an Appeals hearing with
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regard to a levy notice. At the Appeals hearing, the taxpayer
may raise certain matters set forth in section 6330(c)(2), which
provides, in pertinent part:
SEC. 6330(c). Matters Considered At Hearing.--In
the case of any hearing conducted under this section--
* * * * * * *
(2) Issues at hearing.--
(A) In general.--The person may raise
at the hearing any relevant issue relating to
the unpaid tax or proposed levy, including--
(i) appropriate spousal
defenses;
(ii) challenges to the
appropriateness of collection
actions; and
(iii) offers of collection
alternatives, which may include the
posting of a bond, the substitution
of other assets, an installment
agreement, or an offer-in-
compromise.
(B) Underlying liability.--The person
may also raise at the hearing challenges to
the existence or amount of the underlying tax
liability for any tax period if the person
did not receive any statutory notice of
deficiency for such tax liability or did not
otherwise have an opportunity to dispute such
tax liability.
Pursuant to section 6330(d)(1), within 30 days of the issuance of
the notice of determination, the taxpayer may appeal that
determination to this Court if we have jurisdiction over the
underlying tax liability. Van Es v. Commissioner, 115 T.C. 324,
328 (2000).
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Although section 6330 does not prescribe the standard of
review that the Court is to apply in reviewing the Commissioner’s
administrative determinations, we have stated that, where the
validity of the underlying tax liability is properly at issue,
the Court will review the matter on a de novo basis. Where the
validity of the underlying tax liability is not properly at
issue, however, the Court will review the Commissioner’s
administrative determination for abuse of discretion. Sego v.
Commissioner, 114 T.C. 604, 610 (2000); Goza v. Commissioner, 114
T.C. 176, 181 (2000).
We review respondent’s determination to proceed with the
levy action on an abuse of discretion basis because the validity
of the underlying tax liability is not properly at issue. At the
hearing and in his petition, petitioner raised several arguments
regarding the conduct of his audit and the amount of the
liability. Petitioner could not dispute the existence or the
amount of the underlying tax liability at the hearing because
petitioner received a notice of deficiency and did have the
opportunity to dispute such liability which resulted in the
stipulated decision.5 See sec. 6330(c)(2)(B).
In addition, petitioner did not assert in the petition any
5
The doctrine of res judicata, which applies to a
stipulated decision, precludes relitigation of the issues
involved in that tax litigation. Cincinnati Transit Inc. v.
Commissioner, 55 T.C. 879, 883 (1971), affd. 455 F.2d 220 (6th
Cir. 1972); Krueger v. Commissioner, 48 T.C. 824, 829 (1967);
Hamdan v. Commissioner, T.C. Memo. 2000-19.
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spousal defenses, any challenges to the appropriateness of the
collection actions, or any offers of collection alternatives.
See sec. 6330(c)(2)(A). There is no basis in the record for the
Court to conclude that respondent abused his discretion with
respect to any of these matters.
In reaching all of our holdings herein, we have considered
all arguments made by the parties, and, to the extent not herein
discussed, we find them to be irrelevant or without merit.
To reflect the foregoing,
An appropriate order and
decision will be entered granting
respondent’s motion for summary
judgment.