T.C. Memo. 2003-205
UNITED STATES TAX COURT
WINSTON O. AND PAULET P. SMITH, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 14601-01L. Filed July 15, 2003.
Winston O. and Paulet P. Smith, pro sese.
Lorianne D. Masano, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
FOLEY, Judge: The issue for decision is whether respondent
may proceed with his proposed collection activity relating to
petitioners’ 1982, 1983, 1986, and 1987 tax liabilities.
FINDINGS OF FACT
On December 7, 1998, petitioners and respondent executed an
installment agreement, and petitioners signed Form 900, Tax
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Collection Waiver, relating to petitioners’ 1982, 1983, 1986, and
1987 tax liabilities. The Form 900 extended, until December 31,
2004, the period of limitations relating to collection of
petitioners’ tax liabilities. On January 1, 2000, petitioners
and respondent executed a second installment agreement.
Petitioners later defaulted on the second agreement.
On May 8, 2001, petitioners met with Revenue Officer
Shoesmith, with whom they discussed a possible offer-in-
compromise and another installment agreement. Shoesmith
recommended to her supervisor that respondent reject these
collection alternatives because she believed that, among other
things, petitioners failed to file returns relating to numerous
years, had withheld information relating to their wherewithal to
pay, and were trying to avoid paying their taxes.
On July 2, 2001, respondent sent petitioners a Notice of
Defaulted Installment Agreement Under IRC 6159(b) and a Notice of
Intent to Levy Under IRC 6331(d) relating to their 1982, 1983,
1986, 1987, and 1999 unpaid tax liabilities. Petitioners’ 1999
tax liability has been satisfied.
On July 16, 2001, respondent received petitioners’ Form
12153, Request for a Collection Due Process Hearing, in which
petitioners contended that their outstanding tax liability
relates only to 1999, they have been making installment payments,
they provided updated financial information, respondent’s revenue
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officer acted improperly and maliciously, and they were taking
steps to pay their outstanding tax liabilities.
By letter dated July 26, 2001, Shoesmith indicated that
petitioners’ case was being sent to respondent’s Appeals Office,
and petitioners had not submitted requested financial
information. On July 31, 2001, respondent received a letter in
which petitioners contended that they substantially complied with
respondent’s requests for financial information and had
legitimate reasons for their failure to respond more fully.
By letter dated October 11, 2001, respondent sent
petitioners literal transcripts relating to the years at issue.
The transcripts verified the amount and timely assessment of
petitioners’ tax liabilities relating to all years in issue
(i.e., 1982 on December 8, 1986, 1983 on September 29, 1987, and
1986 and 1987 on July 25, 1988).
On October 17, 2001, Settlement Officer Salinger and
petitioners participated in a section 63301 hearing.
Petitioners contended that the period of limitation relating to
collection (collection period) expired with respect to
petitioners’ 1982 and 1983 tax liabilities and attempted to
dispute such underlying liabilities (i.e., presentation of
evidence to substantiate entitlement to unspecified deductions).
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years in issue.
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Petitioners requested abatement of their 1982 and 1983
liabilities and abatement of penalties and interest relating to
all of their outstanding tax liabilities. Petitioners further
contended that the proposed collection would be unduly intrusive.
Salinger did not consider any of petitioners’ claims regarding
additional deductions relating to 1982.
On October 22, 1992, and December 7, 1993, petitioners filed
bankruptcy petitions that were discharged on December 17, 1993,
and July 13, 1994, respectively. By letter dated October 18,
2001, respondent explained how the filing of petitioners’
bankruptcy petitions and execution of Form 900 extended the
collection period.
In a letter dated November 9, 2001, petitioners contended
that the collection period relating to their 1982 and 1983
liabilities began to run on September 17 and November 5, 1984,
(i.e., the dates the respective returns were filed), petitioners’
bankruptcy filings extended the collection period by only 180
days, and Form 900 was executed outside the collection period.
Petitioners further asserted that the correct amount of their
liability had yet to be determined. In a letter dated November
13, 2001, Salinger rejected petitioners’ contentions and urged
petitioners to provide the requested financial information.
Salinger also contended the following: (1) Respondent correctly
calculated penalties and interest relating to 1982, posted
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credits and payments relating to 1982, and calculated the balance
due at the time the lien was filed; (2) two consecutive
bankruptcy petitions extended the collection period; (3) Form 900
was signed prior to expiration of the collection period; (4) the
installment agreements were not in effect due to petitioners’
default; and (5) the collection periods relating to 1982 and 1983
had not expired.
By Notice of Determination Concerning Collection Action(s)
Under Section 6320 and/or 6330, dated November 15, 2001,
respondent determined that the collection period relating to
petitioners’ 1982 and 1983 tax liabilities had not expired,
petitioners may not claim additional deductions with respect to
1982 and 1983, petitioners offered no collection alternatives,
and, thus, it was appropriate to proceed with collection.
On January 25, 2002, petitioners, while residing in Lutz,
Florida, filed an amended petition in which they contend that the
settlement officer improperly refused to consider petitioners’
alleged entitlement to additional deductions relating to 1982 and
1983, petitioners’ consent to an extension of the collection
period was invalid because Form 900 was signed after the
collection period had expired, and respondent miscalculated their
unpaid tax liabilities.
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OPINION
Petitioners contend that respondent erred in not considering
their claim to additional deductions relating to their 1982 tax
assessment. Petitioners, however, received a statutory notice of
deficiency relating to 1982 and, thus, are precluded from raising
their additional deduction claim in this proceeding. Sec.
6330(c)(2)(B); see Goza v. Commissioner, 114 T.C. 176 (2000).
Petitioners further contend that respondent may not collect
petitioners’ 1982 and 1983 tax liabilities because the period for
collection, pursuant to section 6502, expired. On December 8,
1986, respondent timely assessed petitioners’ 1982 tax liability.
The collection period would have expired on December 8, 1996, had
there been no actions tolling the running of the period.
Petitioners’ 1992 and 1993 bankruptcy petitions, however,
extended the expiration date until at least December 7, 1998, the
date petitioners executed Form 900. See sec. 6503(h). Form 900
further extended the collection period to December 31, 2004.
Thus, the collection period relating to petitioners’ 1982 tax
liabilities had not expired as of the date of petitioners’
request for a section 6330 hearing (i.e., July 16, 2001) and is
further extended, pursuant to section 6330(e)(1), during the
hearing and while the appeals are pending. Similarly, the
collection period relating to petitioners’ 1983 tax liabilities
has not expired.
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Respondent provided petitioners with transcripts relating to
petitioners’ tax liabilities, took adequate steps to work with
petitioners toward a resolution of such liabilities, gave due
consideration to all of petitioners’ contentions relating to the
unpaid tax, and decided to proceed with the proposed collection
activity. Accordingly, respondent committed no error and may
proceed with the proposed collection activity.
Contentions we have not addressed are irrelevant, moot, or
meritless.
To reflect the foregoing,
Decision will be entered
for respondent.