T.C. Summmary Opinion 2003-111
UNITED STATES TAX COURT
CALVIN EARL HUMPHRIES, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 14064-02S. Filed August 8, 2003.
Calvin Earl Humphries, pro se.
John D. Faucher, for respondent.
COUVILLION, Special Trial Judge: This case was heard
pursuant to section 7463 in effect when the petition was filed.1
The decision to be entered is not reviewable by any other court,
and this opinion should not be cited as authority. Petitioner
seeks a review under section 6330(d) of a determination by
respondent's Appeals Office that respondent's action to collect
1
Unless otherwise indicated, section references
hereafter are to the Internal Revenue Code as amended.
- 2 -
by levy Federal income taxes owing by petitioner for the years
1992 and 1994 should proceed. That determination was preceded by
respondent's issuance to petitioner of a notice of intent to levy
and of petitioner's right to a hearing in connection with an
assessed balance of income taxes and statutory additions totaling
$8,349.62, $4,717.20, and $2,881.40, respectively, for 1992,
1994, and 1998. In his petition for review, petitioner did not
challenge respondent's determination to proceed with collection
for the year 1998.
Some of the facts were stipulated. Those facts, with the
exhibits annexed thereto, are so found and are made part hereof.
At the time the petition for review was filed, petitioner was a
legal resident of Houston, Texas.
An attachment to the notice of determination prepared by
respondent's Appeals officer states that, at the hearing,
petitioner "only argues that he did not owe the proposed taxes"
and that, under section 6330(c)(2)(B), "none of the three
disputed liabilities are appropriate for consideration as a part
of the Request for Collection Due Process Hearing". The
statement also states that "joint liability" was not at issue,
that collection alternatives were not offered, and concludes that
collection activity could proceed.
As noted earlier, petitioner did not challenge the
determination for the 1998 tax year in his petition to this
- 3 -
Court. As to the 1992 tax year, petitioner alleged he had not
filed a return for that year because he was not employed that
year. For the 1994 tax year, he alleged "nothing was wrong with
this return", and the refund for overpayment he received for 1994
"was due to me" and "why should I pay it back?"
In a trial memorandum and at trial, counsel for respondent
advised the Court that petitioner had filed an income tax return
for 1992, and, based on that return, respondent had allowed
petitioner a refund of $4,390, which was composed mostly of
earned income and diesel fuel credits. Thereafter, respondent
reversed that action and assessed a liability of $5,541.89
against petitioner for 1992. Counsel acknowledged that
respondent had no record of having issued a notice of deficiency
to petitioner for 1992 to reflect this change. Counsel agreed
that, since petitioner had never been afforded an opportunity to
challenge respondent's actions for that year, respondent
"concedes the issue with respect to petitioner's 1992 liability
and will abate that amount". As a result of respondent's
concession, the only remaining year before the Court is
petitioner's 1994 tax year.
With respect to the 1994 tax year, it appears (and the Court
concludes) that no notice of deficiency was issued to petitioner
for that year. The parties stipulated into evidence the copy of
Form 4549-CG, Income Tax Examination Changes, relating to
- 4 -
petitioner's 1994 tax return. That form bears petitioner's
signature along with stamped approvals by the Internal Revenue
Service and reflects a balance of $3,055.72 of tax and interest
owing by petitioner for the 1994 tax year. The Form 4549-CG
provides, just above petitioner's signature, the following:
Consent to Assessment and Collection - I do not wish to
exercise my appeal rights with the Internal Revenue Service
or to contest in United States Tax Court the findings in
this report. Therefore, I give my consent to the immediate
assessment and collection of any increase in tax and
penalties, and accept any decrease in tax and penalties
shown above, plus additional interest as provided by law.
It is understood that this report is subject to acceptance
by the District Director.
Petitioner acknowledged having signed the Form 4549-CG but
contends he signed the form believing that he would be allowed to
appeal the proposed changes to his 1994 return relating to the
disallowance of two child dependency exemptions claimed on his
1994 return. He recalled having telephone conversations with a
representative of the Internal Revenue Service and believed that,
by signing the Form 4549-CG, his objection to the proposed
changes would be considered. Petitioner contends he had no
intention of conceding the proposed changes to his 1994 return.
On this scenario, it is evident to the Court that no notice of
deficiency was issued to petitioner for 1994, and respondent
assessed the amounts conceded by petitioner.
Section 6331(a) provides that, if any person liable to pay
- 5 -
any tax neglects or refuses to pay such tax within 10 days of
notice and demand for payment, the Secretary may collect such tax
by levy upon the taxpayer's property. Section 6330 generally
provides that the Secretary cannot proceed with the collection of
taxes by way of a levy until the taxpayer has been given notice
and an opportunity for administrative review in the form of an
Appeals Office hearing. Section 6330(c) provides for an Appeals
Office due process hearing to address collection issues
including, among other things, alternative means of collection.
In connection with matters to be considered at a collection
due process hearing under section 6330, section 6330(c)(2)(B)
states:
(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.
It is evident from the above that a notice of deficiency was
never issued to petitioner for 1994; however, it is also evident
that petitioner was otherwise provided an opportunity, before the
assessment, to dispute his 1994 liability. Aguirre v.
Commissioner, 117 T.C. 324 (2001). He admitted so in his
testimony. Even if petitioner was not aware that he had waived
his rights to challenge the determination because of the Form
- 6 -
4549-CG, there is no evidence that petitioner ever protested the
effect of his waiver and agreement to an assessment in subsequent
events, such as responding to collection notices, etc. Moreover,
there is no indication that this issue was brought up by
petitioner at his hearing before the Appeals officer in
connection with respondent's notice of intent to proceed with
collection under section 6330. The statement attached to the
Notice of Determination by the Appeals officer provides no
information that petitioner's contention as to the Form 4549-CG
was even raised or considered at the hearing, nor did petitioner
at trial claim that it was raised at his hearing before the
Appeals officer. The Court, therefore, rejects petitioner's
claim that his prior consent to assessment and collection should
be disregarded. The validity of the underlying tax liability,
therefore, is not properly at issue. When, as here, the
underlying liability is not at issue, this Court reviews the
Commissioner's determination for abuse of discretion. Sego v.
Commissioner, 114 T.C. 604, 610 (2000). Accordingly, the Court
holds that there was no abuse of discretion by respondent in
determining that collection could proceed with respect to
petitioner's 1994 liability.
- 7 -
Reviewed and adopted as the report of the Small Tax Case
Division.
An appropriate order and
decision will be entered.