ARMSTRONG v. COMMISSIONER

T.C. Memo. 2002-224

UNITED STATES TAX COURT

TERRI ARMSTRONG, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 10744-01L. Filed September 9, 2002.

Terri Armstrong, pro se.

Inga C. Plucinski, for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

CHIECHI, Judge: The petition in this case was filed in

response to a “NOTICE OF DETERMINATION CONCERNING COLLECTION

ACTION(S) UNDER SECTION 6320 and/or 6330" (notice of determina-

tion).

We must consider whether respondent abused respondent’s

discretion in determining in the notice of determination to
 - 2 -

proceed with collection with respect to each of petitioner’s

taxable years 1992 and 1995. We hold respondent did not.

FINDINGS OF FACT

Some of the facts have been stipulated and are so found.

Petitioner resided in Orem, Utah (Orem), at the time she

filed the petition in this case.

On October 18, 1996, petitioner and her then husband, John

Armstrong (Mr. Armstrong),1 filed jointly Form 1040, U.S. Indi-

vidual Income Tax Return (Form 1040), for their taxable year 1995

(1995 return).2 On October 28, 1998, they filed jointly Form

1040 for their taxable year 1992 (1992 return). Although peti-

tioner and Mr. Armstrong reported Federal income tax (tax) due in

each of their 1992 and 1995 returns, at the time that they filed

each of those returns, petitioner and Mr. Armstrong did not pay

the tax shown due in each such return.

As reflected in Form 4340, Certificate of Assessments,

Payments, and Other Specified Matters (Form 4340), with respect

1
Mr. Armstrong is not a party in the instant case. At an
undisclosed time after Oct. 12, 1996, but before Aug. 8, 2000,
petitioner and Mr. Armstrong divorced.
2
During July 1996 through at least Oct. 1996, petitioner and
Mr. Armstrong were in the Dominican Republic. On Oct. 12, 1996,
petitioner and Mr. Armstrong executed Form 2848, Power of Attor-
ney and Declaration of Representative (power of attorney), in
which they appointed Richard W. Souther (Mr. Souther) as their
attorney-in-fact and authorized him to sign and file Form 1040
with respect to their taxable year 1995. Pursuant to that power
of attorney, Mr. Souther executed and filed the 1995 return for
petitioner and Mr. Armstrong.
 - 3 -

to taxable years 1992 and 1995 of petitioner and Mr. Armstrong,3

respondent assessed on the dates shown the following amounts of

tax, an addition to tax, and interest:

Date of Addition Total
Year Assessment Tax to Tax Interest Liability
1992 2/22/1999 $8,604.00 --- $4,808.21 $13,412.21
1
1995 11/25/1996 300,609.00 $9,758.24 13,278.23 323,659.47

1
Form 4340 for taxable year 1995 of petitioner and Mr.
Armstrong also reflects a $14 charge for “FEES AND COLLECTION
COSTS”, making the total liability for that year $323,659.47.

As reflected in Form 4340 with respect to petitioner’s

taxable year 1992, respondent credited $1,000 of tax withheld to

the account of petitioner and Mr. Armstrong for their taxable

year 1992, thereby reducing their unpaid liability for that year

to $12,412.21.

As reflected in Form 4340 with respect to petitioner’s

taxable year 1995, respondent credited $6,653 of tax withheld, an

estimated tax payment of $50,000, and a payment of $49,995.94 to

the account of petitioner and Mr. Armstrong for their taxable

year 1995, thereby reducing their unpaid liability for that year

to $217,010.53.

On August 8, 2000, respondent issued to petitioner a final

notice of intent to levy (notice of intent to levy) with respect

3
For convenience, we shall hereinafter refer to respective
Forms 4340 with respect to taxable years 1992 and 1995 of peti-
tioner and Mr. Armstrong as respective Forms 4340 with respect to
petitioner’s taxable years 1992 and 1995.
 - 4 -

to petitioner’s taxable years 1992 and 1995. That notice stated

in pertinent part:

Your Federal tax is still not paid. We previously
asked you to pay this, but we still haven’t received
your payment. This letter is your notice of our intent
to levy under Internal Revenue Code (IRC) Section 6331
and your right to receive Appeals consideration under
IRC Section 6330.

We may file a Notice of Federal Tax Lien at any
time to protect the government’s interest. A lien is a
public notice to your creditors that the government has
a right to your current assets, including any assets
you acquire after we file the lien.

If you don’t pay the amount you owe, make alterna-
tive arrangements to pay, or request Appeals consider-
ation within 30 days from the date of this letter, we
may take your property, or rights to property, such as
real estate, automobiles, business assets, bank ac-
counts, wages, commissions, and other income. * * *

* * * * * * *

The amount you owe is * * *

Unpaid Amount
Form Tax from Prior Additional
Number Period Notices Penalty & Interest Amount You Owe
[1] [2]
1040 12/31/1992 12412.21 3005.76 15417.97
[1] [2]
1040 12/31/1995 217010.53 148214.35 365224.88
Total: 380642.85
1
The amount shown for each of the years 1992 and 1995 under
the heading “Unpaid Amount from Prior Notices” is the same as the
amount of the balance shown due in Form 4340 with respect to each
of petitioner’s taxable years 1992 and 1995.
2
The amount shown for each of the years 1992 and 1995 under
the heading “Additional Penalty & Interest” is the additional
amount of penalties and/or interest for each such year that is not
reflected in Form 4340 with respect to each of petitioner’s
taxable years 1992 and 1995.

In response to the notice of intent to levy, on September 7,

2000, petitioner filed Form 12153, Request for a Collection Due
 - 5 -

Process Hearing (Form 12153). Petitioner attached the following

statement to Form 12153:

I. NOTICE OF INTENT TO LEVY - Explanation for Disagree-
ment

Income. (1) There was a failure to issue
Notices of Deficiency; (2) There was a failure to
generate an assessment list; (3) There was a failure of
the Commissioner to certify and transmit the assessment
list; (4) There was a failure to record the assessment;
(5) There was a failure to provide record of assess-
ment; and, (6) There was a failure to send Notice of
Assessment.

On May 17, 2001, the Internal Revenue Service (IRS) Appeals

officer (Appeals officer) assigned to petitioner’s case sent

petitioner a letter (May 17, 2001 letter) in response to peti-

tioner’s Form 12153. That letter stated in pertinent part:

I have received your Request for a Collection Due
Process Hearing dated September 7, 2000, and I have
reviewed the information in the administrative file.
The assessments for both the 1992 and 1995 returns are
based upon returns that were either signed by you and
Mr. Armstrong (1992) or by an authorized representative
because you were out of the country (1995). No liabil-
ity questions exist for these two years. If you be-
lieve either assessment is incorrect you should file an
amended Form 1040X for these years correcting the tax
liability.

As part of IRC § 6330 two items that need to be ad-
dressed as part of a collection due process hearing are
alternative and least intrusive means of collection.
In order to facilitate the resolution of your Request
for a Collection Due Process Hearing, provide the
following information no later than June 1, 2001.

1. A completed Form 433A, Collection Information
Statement for Individuals.
2. A completed Form 433B, Collection Information
Statement for Businesses (if self employed)[.]
3. Copies of your last six months bank statements.
 - 6 -

4. Information regarding any higher than normal or
unusual expenses.
5. Information regarding the real property you own.
i.e. appraised value, purchase price, mortgage
holders, balance due, equity.

I have scheduled a telephone Appeals hearing for
Wednesday, June 6, 2001, at 09:00 a.m. Please let me
know if you are unable to hold your hearing at this
date and time. * * *

* * * * * * *

If you have any questions or concerns, please contact
me at telephone number, * * *, or address, Internal
Revenue Service-Appeals, * * *, Denver, Colorado,
80204.

Petitioner did not respond to the May 17, 2001 letter and

did not provide the Appeals officer with the information re-

quested in that letter. Nor did petitioner advise the Appeals

officer that she objected to the telephonic hearing scheduled on

June 6, 2001, and that she wanted a face-to-face hearing.

On May 31, 2001, the Appeals officer unsuccessfully at-

tempted to contact petitioner by telephone in order to reschedule

petitioner’s telephonic hearing that had been scheduled for June

6, 2001. When petitioner did not answer her telephone, the

Appeals officer left a message on petitioner’s answering machine

informing her that he had rescheduled petitioner’s telephonic

hearing to June 7, 2001, at 9 a.m.

Although petitioner received the message that the Appeals

officer had left on her answering machine on May 31, 2001,

petitioner did not contact him to object to the telephonic
 - 7 -

hearing rescheduled for June 7, 2001, nor did she inform him that

she wanted a face-to-face hearing.

On June 7, 2001, the Appeals officer unsuccessfully at-

tempted to contact petitioner in order to conduct the telephonic

hearing that he had rescheduled for that day.

On June 14, 2001, the IRS Appeals Office sent petitioner

another letter (June 14, 2001 letter). That letter restated

certain portions of the May 17, 2001 letter and further stated in

pertinent part:

You failed to be available for our rescheduled Due
Process telephone hearing. Because the time for the
hearing was rescheduled you are advised that you have
30 calendar days from the date of this letter to con-
tact me to schedule a mutually convenient time to hold
your Due Process Hearing. Please contact me at the
above telephone number between 8:00 a.m. and 4:00 p.m.,
Monday through Friday. If I should be unavailable to
answer the telephone please leave a message with sev-
eral times when you will be available for my return
call. Please also advise me of the number you can be
reached at when I call back.

If I do not hear from you I will make a determination
on your request for a due process hearing based upon
the available information contained in your administra-
tive file. A Notice of Determination would then be
issued providing you with an opportunity to pursue this
matter in the appropriate Federal Court.

I would like to restate the information that was in my
May 17, 2001, letter to you. * * *

* * * * * * *

If you have any questions or concerns, please contact
me at telephone number, * * *, or address, Internal
Revenue Service-Appeals, * * *, Denver, Colorado,
80204.
 - 8 -

Petitioner did not respond to the June 14, 2001 letter and

did not provide the IRS Appeals Office with the information

requested in that letter.

On July 14, 2001, Mr. Armstrong, who at the time was no

longer married to petitioner,4 called the Appeals officer and

left a message on his answering machine that petitioner and he

would be filing an amended tax return for each of their taxable

years 1992 and 1995. Mr. Armstrong did not indicate that peti-

tioner wanted to schedule a face-to-face hearing with the Appeals

officer. In fact, Mr. Armstrong did not indicate that petitioner

wanted to schedule any type of hearing with the Appeals officer

and did not indicate any times when petitioner would be available

to speak to the Appeals officer.

Petitioner declined the opportunities offered to her by the

IRS Appeals Office to have a hearing with respect to respondent’s

notice of intent to levy.

On July 24, 2001, the IRS Appeals Office issued to peti-

tioner under section 63305 a notice of determination with respect

to petitioner’s taxable years 1992 and 1995. That notice stated

in pertinent part:

4
The record does not disclose that Mr. Armstrong had a power
of attorney or similar document signed by petitioner authorizing
him to represent petitioner before the IRS Appeals Office.
5
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect at all relevant times.
 - 9 -

Summary of Determination

It is Appeals determination that Collection is allowed
to proceed with enforced collection actions.

Attached to the notice of determination was a document entitled

“ENCLOSURE TO NOTICE OF DETERMINATION”. That document stated in

pertinent part:

• All provisions of IRC § 6330 and IRC § 6320 have
been met. The Secretary has provided sufficient
verification that the requirements of applicable
law or administrative procedures have been met.

• Your request for a Collection Due Process Hearing
was made under IRC § 6330 to prevent proposed
collection action and to question the underlying
assessment. You alleged that the assessment was
invalid for various and sundry reasons, none of
which addressed the actual tax liability. The
returns were reviewed and it was found the taxes
are based upon returns that you filed and thus the
correctness of the assessed tax is not an issue.
You did not respond to the correspondence sent you
or to be available for a scheduled hearing. You
did not advise Appeals of your inability to be
available for the hearing or of a better time to
hold the hearing. You did not respond to an at-
tempt to reschedule the hearing. You refused to
provide any financial information, including the
financial information necessary to make a determi-
nation of least intrusive and alternative means of
collection. Therefore:

• It is Appeals determination that the proposed
collection action balances the need for efficient
collection of taxes with the taxpayer’s legitimate
concern that any collection action be no more
intrusive than necessary because of the lack of
financial information to explore alternative col-
lection resolutions and your failure to be avail-
able for the Collection Due Process Hearing.

As of the time of the trial in the instant case, petitioner

and Mr. Armstrong had not filed an amended tax return for taxable
 - 10 -

year 1992 or taxable year 1995.

OPINION

Where, as is the case here, the validity of the underlying

tax liability is not placed at issue, the Court will review the

administrative determination of the IRS Appeals Office for abuse

of discretion. Sego v. Commissioner, 114 T.C. 604, 610 (2000);

Goza v. Commissioner, 114 T.C. 176, 181-182 (2000).

In petitioner’s opening brief, petitioner asks us to con-

sider the following issues: (1) Whether “petitioner was entitled

to an in person hearing” and (2) whether “the Individual Master

File Transcripts[6] * * * [and] Certificates of Assessments and

Payments were admissible in evidence?”7

We turn first to the evidentiary issues that petitioner

6
As discussed below, petitioner objects to the admissibility
into evidence of, inter alia, certain documents that she refers
to as the “Individual Master File Transcripts” (IMF transcripts).
We assume that petitioner is referring to the documents entitled
“Internal Revenue Service transcript(s)” (IRS transcripts) that
were part of a joint exhibit that the parties attached to, and
incorporated into, the stipulation of facts that they offered
into evidence at the beginning of the trial in this case. The
Court admitted into evidence and made part of the record in this
case the stipulation of facts together with the exhibits attached
thereto. Consistent with the parties’ stipulation of facts in
the instant case, we shall refer to those transcripts as IRS
transcripts.
7
Petitioner raises no other issues on brief. We conclude
that petitioner has abandoned any other issues that she raised in
the petition and at trial. See Rybak v. Commissioner, 91 T.C.
524, 566 n.19 (1988). Assuming arguendo that we had not con-
cluded that petitioner abandoned any other issues that she raised
in the petition and at trial, on the record before us, we find no
merit in such other issues.
 - 11 -

raises. With respect to the admissibility into evidence of the

IRS transcripts, as noted above, those transcripts were part of a

joint exhibit that the parties attached to, and incorporated

into, the stipulation of facts that they offered into evidence at

the beginning of the trial. At that time, the Court admitted

into evidence and made part of the record in this case that

stipulation of facts together with the exhibits attached thereto.

Although petitioner failed to preserve in the stipulation of

facts any objection to the IRS transcripts, she objected at trial

to the admissibility into evidence of those transcripts because

“they appear that they are a form of the individual master file

and * * * those aren’t admissible * * * because it’s not read-

able.” The Court overruled petitioner’s objection at trial. On

brief, petitioner renews her objection.

Petitioner contends on brief that the IRS transcripts are

“not admissible as a matter of law.” That is because, according

to petitioner, those transcripts are “indecipherable” and “To be

considered at all, it [sic] can only be considered when admitted

with the 6209 Manual.” In support of her contention that the IRS

transcripts are inadmissible “as a matter of law”, petitioner

relies on Huff v. United States, 10 F.3d 1440 (9th Cir. 1993),

and United States v. Buford, 889 F.2d 1406 (5th Cir. 1989). We

find those cases to be distinguishable from the instant case and

petitioner’s reliance on them to be misplaced. Neither Huff nor
 - 12 -

Buford addressed the admissibility into evidence of the IMF

transcripts involved in those cases. We have considered peti-

tioner’s renewed objection to the admissibility into evidence of

the IRS transcripts, and we decline to change our ruling at trial

with respect to those transcripts.8

With respect to the admissibility into evidence of respec-

tive Forms 4340 with respect to petitioner’s taxable years 1992

and 1995, respondent offered those forms into evidence at trial,

petitioner had no objection to them, and the Court admitted them

into evidence and made them part of the record in this case. On

brief, petitioner objects for the first time to the admissibility

into evidence of respective Forms 4340 with respect to peti-

tioner’s taxable years 1992 and 1995. By failing to make a

timely objection at trial, petitioner has waived her objection to

the admissibility into evidence of those forms.9

8
We note that, even though the IRS transcripts are part of
the instant record, we have not relied on those transcripts in
reaching our findings and conclusions herein.
9
Assuming arguendo that petitioner had not waived her
claimed evidentiary objection to respective Forms 4340 with
respect to petitioner’s taxable years 1992 and 1995, we would
nonetheless overrule that objection. In support of her position
that Forms 4340 in question are not admissible into evidence,
petitioner asserts on brief in pertinent part:

They [Forms 4340 in question] were generated after the
hearing date. The fact that the hearing itself didn’t
take place is irrelevant to the consideration. It is
clear that the statute places the burden on the Respon-
dent to establish “at the hearing” compliance with the
(continued...)
 - 13 -

See Fed. R. Evid. 103(a)(1); United States v. Jamerson, 549 F.2d

1263, 1266-1267 (9th Cir. 1977); Fuller v. Commissioner, 20 T.C.

308, 314 (1953), affd. 213 F.2d 102 (10th Cir. 1954).

We turn now to the only other issue that petitioner on brief

asks us to address, i.e., “Whether the petitioner was entitled to

9
(...continued)
law and procedure. That would mean that the hearing
officer would have had some form of admissible evidence
available “at the hearing.” Since the Certificates
[Forms 4340 in question] the Respondent are [sic] now
trying to use were created after scheduled date of the
hearing, it is clear that they would not have been
available “at the hearing” had it taken place.

Petitioner’s objection to Forms 4340 in question does not
appear to be an evidentiary objection. Petitioner seems to be
arguing that, because respective Forms 4340 with respect to
petitioner’s taxable years 1992 and 1995 were generated as of
Mar. 15, 2002, a date after the dates on which the Appeals
officer scheduled and rescheduled a telephonic hearing with
petitioner (i.e., June 6, 2001, and June 7, 2001, respectively),
those forms may not be used to establish compliance with the
requirement of sec. 6330(c)(1) that “The appeals officer * * * at
the hearing obtain verification from the Secretary that the
requirements of any applicable law or administrative procedure
have been met.” We reject any such argument. See Nestor v.
Commissioner, 118 T.C. 162 (2002). In this connection, peti-
tioner’s objection to Forms 4340 in question appears to be based
on her misunderstanding as to what Form 4340 is. Form 4340 is a
document or transcript that shows as of a stated date the infor-
mation as of that date with respect to a stated taxpayer regard-
ing assessments, payments, and other specified matters that
appears as of that date in the official records of the IRS with
respect to that taxpayer. That Form 4340 is generated as of a
stated date does not mean that the information reflected in such
form did not appear in the official records of the IRS before
such date. In this regard, respective Forms 4340 with respect to
petitioner’s taxable years 1992 and 1995 reflect, and we have
found, that respondent assessed (1) on Nov. 25, 1996, tax, an
addition to tax, and interest with respect to petitioner’s
taxable year 1995, and (2) on Feb. 22, 1999, tax and interest
with respect to petitioner’s taxable year 1992.
 - 14 -

an in person hearing”. As we understand her position, petitioner

contends that section 6330 entitled her to a formal face-to-face

hearing because there is “absolutely no doubt that Congress

intended that the Administrative Procedures Act govern [sic] (5

U.S.C. § 554 et. seq.) * * * would govern” and that therefore the

telephonic hearing that the Appeals officer offered her did not

comply with that section. We have previously held that hearings

under section 6330 are not formal adjudications. See Katz v.

Commissioner, 115 T.C. 329, 337-338 (2000); Davis v. Commis-

sioner, 115 T.C. 35, 41 (2000).10 We concluded in Davis v.

Commissioner, supra, that Congress, in providing for a hearing

under section 6330, did not intend to depart from the informal

IRS Appeals Office process already provided for under section

601.106(c), Statement of Procedural Rules.11 See Katz v. Commis-

sioner, supra. We reject petitioner’s contention that section

6330 entitled her to a formal face-to-face hearing under the APA.

Although not altogether clear, petitioner may also be

10
See also Barnhill v. Commissioner, T.C. Memo. 2002-116.
11
Consistent with Katz v. Commissioner, 115 T.C. 329 (2000),
Davis v. Commissioner, 115 T.C. 35 (2000), respondent issued
final regulations under sec. 6330, effective on Jan. 18, 2002,
with respect to any levy occurring on or after Jan. 19, 1999,
which provide, inter alia, that the formal hearing procedures
required under the Administrative Procedures Act, 5 U.S.C. secs.
551-559 (2000) (APA), do not apply to hearings under sec. 6330.
Sec. 301.6330-1(d)(2), Q&A-D6, Proced. & Admin. Regs. See also
sec. 301.6320-1(d)(2), Q&A-D6, Proced. & Admin. Regs., relating
to hearings under sec. 6320.
 - 15 -

contending that even if section 6330 did not entitle her to a

formal face-to-face hearing under the APA, that section entitled

her to an informal face-to-face hearing, and the Appeals officer

rejected her request to have such a hearing. We have found that

the Appeals officer scheduled a telephonic hearing with peti-

tioner on June 6, 2001,12 and rescheduled that telephonic hearing

to June 7, 2001. We have also found that petitioner never

advised the Appeals officer that she objected to the telephonic

hearing scheduled for June 6, 2001, or the telephonic hearing

rescheduled for June 7, 2001, or that she wanted a face-to-face

hearing. In fact, petitioner never responded to the various

letters sent to her by the IRS Appeals Office or the various

telephone messages left by the Appeals officer on her answering

machine. Although Mr. Armstrong telephoned the Appeals officer

on July 14, 2001, at a time when he was no longer married to

petitioner, and left a message on the Appeals officer’s answering

machine that petitioner and he would be filing an amended tax

return for each of the taxable years 1992 and 1995, Mr. Armstrong

did not indicate in that message that petitioner wanted to

schedule a face-to-face hearing with the Appeals officer. Nor

did Mr. Armstrong indicate that petitioner wanted to schedule any

12
The record does not disclose why the Appeals officer
decided to schedule a telephonic hearing with petitioner. We
take judicial notice that the distance between Denver, Colorado,
where the Appeals officer was located, and Orem, Utah, where
petitioner resided, is approximately 500 miles.
 - 16 -

type of hearing with the Appeals officer or indicate any times

when petitioner would be available to speak to the Appeals

officer. On the record before us, we reject any contention of

petitioner that section 6330 entitled her to a face-to-face,

albeit informal, hearing, which the Appeals officer refused to

grant her.13

Based upon our examination of the entire record before us,

we find that respondent did not abuse respondent’s discretion in

determining in the notice of determination to proceed with

collection with respect to each of petitioner’s taxable years

1992 and 1995.

We have considered all of petitioner’s contentions and

arguments that are not discussed herein, and we find them to be

without merit and/or irrelevant.

To reflect the foregoing,

Decision will be entered

for respondent.

13
Although not altogether clear, petitioner may also be
contending that sec. 6330 requires that a hearing between a
taxpayer and an Appeals officer take place in all events. We
reject any such contention. There is no requirement in sec. 6330
that an Appeals officer hold a hearing with a taxpayer who does
not want one. We have found in the instant case that the Appeals
officer provided petitioner with the opportunity to have a
telephonic conference with him, that she declined that opportu-
nity, and that she never requested a face-to-face, instead of a
telephonic, hearing.

Moreover, we are not persuaded that it would be necessary or
productive to remand this case to the IRS Appeals Office.
Lunsford v. Commissioner, 117 T.C. 183, 189 (2001).