T.C. Memo. 2002-100
UNITED STATES TAX COURT
LAUREN C. JACKSON, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 12329-01L. Filed April 15, 2002.
Thomas R. Ceraso, for petitioner.
Frank A. Falvo and Kathleen Duignan, for respondent.
MEMORANDUM OPINION
ARMEN, Special Trial Judge: This matter is before the Court
on respondent’s Motion To Dismiss For Failure To State A Claim
Upon Which Relief Can Be Granted. As explained in detail below,
we shall grant respondent’s motion.
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Background
On January 6, 1999, respondent sent petitioner a notice of
deficiency. In the notice, respondent determined a deficiency in
petitioner’s Federal income tax for the taxable 1996 year in the
amount of $2,838.
On January 9, 1999, petitioner received the aforementioned
notice of deficiency. However, petitioner never commenced an
action for redetermination in this Court.
On March 12, 2001, respondent sent petitioner a Final
Notice/Notice of Intent to Levy and Notice of Your Right to a
Hearing in respect of petitioner’s outstanding liability for
1996. Thereafter, on March 29, 2001, respondent received from
petitioner a Form 12153, Request for a Collection Due Process
Hearing. In the Form 12153, the only reason given by petitioner
why she disagreed with respondent’s proposed collection action
was “disagree with assessed balance”.
Petitioner’s request for a hearing was assigned to
respondent’s Appeals Office in Pittsburgh, Pennsylvania. During
the course of the administrative proceeding, petitioner raised no
issue other than her underlying tax liability for the assessed
deficiency. The Appeals officer advised petitioner of the
limitation set forth in section 6330(c)(2)(B) on challenging her
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underlying liability.1 Nevertheless, on or about June 13, 2001,
the Appeals officer advised petitioner that he would postpone
issuing a notice of determination in order to allow her to submit
a request to respondent’s Examination Division for audit
reconsideration of her 1996 tax liability. However, petitioner
apparently failed to do so, and, on August 31, 2001, the Appeals
Office issued its Notice of Determination sustaining respondent’s
proposed collection action.
On October 1, 2001, petitioner filed with the Court a
Petition for Lien or Levy Action seeking review of respondent’s
notice of determination.2 The only issue raised in the petition
is a challenge to petitioner’s underlying tax liability.
As previously stated, respondent filed a Motion To Dismiss
For Failure To State A Claim Upon Which Relief Can Be Granted.
Respondent contends that petitioner is barred by section
6330(c)(2)(B) from challenging the existence or amount of her tax
liability in this collection review proceeding because she
received a notice of deficiency.
Petitioner filed a Response, objecting to respondent’s
motion. In her Response, petitioner alleges that she “never had
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code, as amended, and all Rule references
are to the Tax Court Rules of Practice and Procedure.
2
At the time that the petition was filed, petitioner
resided in Pittsburgh, Pa.
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the opportunity to dispute the tax liability”. Thereafter,
respondent’s motion was called for hearing at the Court's motions
session in Washington, D.C. Although petitioner did not appear
at the hearing, she filed a written statement pursuant to Rule
50(c) in which she continues to allege that she “never had the
opportunity to dispute the tax liability”.
Discussion
Section 6331(a) provides that if any person liable to pay
any tax neglects or refuses to pay such tax within 10 days after
notice and demand for payment, the Secretary is authorized to
collect such tax by levy on the person’s property. Section
6331(d) provides that at least 30 days before enforcing
collection by way of a levy on the person's property, the
Secretary is obliged to provide the person with a final notice of
intent to levy, including notice of the administrative appeals
available to the person.
Section 6330 generally provides that the Commissioner cannot
proceed with collection by way of a levy until the person has
been given notice and the opportunity for an administrative
review of the matter (in the form of an Appeals Office hearing)
and, if dissatisfied, the person may obtain judicial review of
the administrative determination. See Davis v. Commissioner, 115
T.C. 35, 37 (2000); Goza v. Commissioner, 114 T.C. 176, 179
(2000).
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Section 6330(c) prescribes the matters that a person may
raise at an Appeals Office hearing. In sum, section 6330(c)
provides that a person may raise collection issues such as
spousal defenses, the appropriateness of the Commissioner's
intended collection action, and possible alternative means of
collection. Section 6330(c)(2)(B) provides that the existence
and amount of the underlying tax liability can be contested at an
Appeals Office hearing only if the person did not receive a
notice of deficiency for the taxes in question or did not
otherwise have an earlier opportunity to dispute the tax
liability. See Sego v. Commissioner, 114 T.C. 604, 609 (2000);
Goza v. Commissioner, supra. Section 6330(d) provides for
judicial review of the administrative determination in the Tax
Court or a Federal District Court, as may be appropriate.
Petitioner admits that on January 6, 1999, respondent sent
her a notice of deficiency for the taxable year 1996. Petitioner
also admits that she received the notice of deficiency 3 days
later on January 9, 1999. Petitioner does not explain why she
could not have filed a petition for redetermination with this
Court if she, in fact, disputed respondent’s deficiency
determination. See sec. 6213(a). We therefore reject her
allegation that she “never had the opportunity to dispute the tax
liability”.
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Under the circumstances, section 6330(c)(2)(B) bars
petitioner from challenging the existence or the amount of her
underlying tax liability for 1996 in this collection review
proceeding. See Goza v. Commissioner, supra.
Petitioner has failed to raise a spousal defense, make a
valid challenge to the appropriateness of respondent’s intended
collection action, or offer alternative means of collection.
These issues are now deemed conceded. Rule 331(b)(4). In the
absence of a justiciable issue for review, we conclude that
petitioner has failed to state a claim for relief, and we shall
therefore grant respondent’s motion to dismiss.
Finally, we mention section 6673(a)(1). That section
authorizes the Tax Court to require a taxpayer to pay to the
United States a penalty not in excess of $25,000 whenever it
appears that proceedings have been instituted or maintained by
the taxpayer primarily for delay or that the taxpayer's position
in such proceeding is frivolous or groundless. The Court has
indicated its willingness to impose such penalties in collection
review cases. Pierson v. Commissioner, 115 T.C. 576 (2000);
Yacksyzn v. Commissioner, T.C. Memo. 2002-99 (imposing a penalty
in the amount of $1,000); Watson v. Commissioner, T.C. Memo.
2001-213 (imposing a penalty in the amount of $1,500).
In the present case, petitioner did not challenge the
constitutionality of the Federal income tax or make the type of
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frivolous or groundless arguments that we commonly encounter in
tax protester cases; however, we fail to comprehend on what basis
petitioner prosecuted this case given her admission that she
actually received the January 6, 1999, notice of deficiency 3
days after it was issued. One might therefore wonder whether
petitioner instituted this case primarily for delay. Under the
circumstances, however, we shall give petitioner the benefit of
the doubt, and we shall not impose a penalty on her pursuant to
section 6673(a)(1).
In order to give effect to the foregoing,
An appropriate order granting
respondent's motion and decision
will be entered.