T.C. Memo. 2004-94
UNITED STATES TAX COURT
JOHNNY OWINGS MILAM, JR. AND BRENDA RAMSEY MILAM, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 2538-02L. Filed April 6, 2004.
Johnny Owings Milam, Jr. and Brenda Ramsey Milam, pro sese.
Steven M. Webster, for respondent.
MEMORANDUM OPINION
GALE, Judge: This case is before us on respondent’s motion
for summary judgment under Rule 121.1 Respondent contends that
there is no dispute as to any material fact and that respondent’s
determination to proceed with the collection action at issue
1
Unless otherwise noted, 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.
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should be sustained as a matter of law. For the reasons
discussed below, we shall grant respondent’s motion.2
Summary judgment is intended to expedite litigation and
avoid unnecessary and expensive trials. Fla. Peach Corp. v.
Commissioner, 90 T.C. 678, 681 (1988). Summary judgment may be
granted with respect to all or any part of the legal issues in
controversy “if the pleadings, answers to interrogatories,
depositions, admissions, and any other acceptable materials,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that a decision may be
rendered as a matter of law.” Rule 121(a) and (b); Sundstrand
Corp. v. Commissioner, 98 T.C. 518, 520 (1992), affd. 17 F.3d 965
(7th Cir. 1994). The moving party bears the burden of proving
that there is no genuine issue of material fact, and factual
inferences are drawn in a manner most favorable to the party
opposing summary judgment. Dahlstrom v. Commissioner, 85 T.C.
812, 821 (1985); Jacklin v. Commissioner, 79 T.C. 340, 344
(1982).
In support of this motion for summary judgment, respondent
submitted exhibits, an affidavit, and certified Forms 4340,
Certificate of Assessments, Payments, and Other Specified
Matters, for petitioners’ taxable years 1996 and 1997.
2
Subsequent to a hearing, petitioners submitted their own
motion for summary judgment advancing arguments similar to those
we consider herein. We shall deny petitioners’ motion.
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Petitioners submitted an affidavit in opposition to respondent’s
motion. A hearing on the motion was also held.
Background
At the time they filed the petition in this case,
petitioners resided in Burgaw, North Carolina.
On April 27, 1999, respondent mailed petitioners a notice of
deficiency determining deficiencies in petitioners’ Federal
income taxes of $4,532 for 1996 and $5,007 for 1997. Petitioners
admit receiving the notice. Petitioners did not file a petition
for redetermination, and the deficiencies plus interest were
assessed on October 25, 1999. A Statutory Notice of Balance Due
covering the foregoing assessments was mailed to petitioners on
the same day.
On August 25, 2000, respondent filed a Form 668(Y)(c),
Notice of Federal Tax Lien, with the Clerk of Superior Court,
Pender County, North Carolina, covering petitioners’ 1996 and
1997 taxable years. On August 30, 2000, respondent mailed
petitioners a Notice of Federal Tax Lien Filing and Your Right to
a Hearing Under IRC 6320, covering those same years. In response
to the Notice, petitioners timely filed a Form 12153, Request for
a Collection Due Process Hearing. As grounds for their objection
to respondent’s lien, petitioners alleged the following:
The basis for my appeal is that the notice of lien
and the purported assessments and alleged tax
liabilities are not based on filed income tax returns
or competent evidence. Further, said notice of lien is
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deficient on it’s [sic] face because it is not in
compliance with 26 USC section 6065.
A face-to-face meeting was held between petitioners and an
Appeals officer on August 22, 2001. On November 5, 2001, the
Appeals officer issued a Notice of Determination Concerning
Collection Action(s) Under Section 6320 and/or 6330, wherein he
determined: (1) That the requirements of all laws and
administrative procedures had been met; (2) that petitioners had
had a prior opportunity to dispute the underlying tax liability
and were thus precluded from contesting it in the collection
proceeding; and (3) that no other issues had been raised. Based
on these findings, the Appeals officer determined that the lien
was appropriate.
On January 31, 2002, petitioners filed their petition in the
instant case. The petition raises several issues, including:
(1) Whether “procedurally proper” versions of various documents
were ever issued, including a notice of deficiency, a notice and
demand for payment, and a notice of Federal tax lien; (2) whether
petitioners’ liabilities were properly assessed; (3) whether the
Appeals officer failed to verify that the requirements of any
applicable law or administrative procedure were met, as required
by section 6330(c)(1); and (4) whether respondent erred by
failing to allow petitioners an examination interview and an
administrative appeal prior to issuance of the notice of
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deficiency. The petition also alleges that the underlying tax
liabilities are invalid.
Discussion
Section 6321 imposes a lien in favor of the United States on
all property and rights to property of a person liable for taxes
when a demand for the payment of a person’s liability for the
taxes has been made and the person fails to pay those taxes.
Such a lien arises when an assessment is made. Sec. 6322.
Section 6323(a) requires the Secretary to file a notice of
Federal tax lien if such lien is to be valid against any
purchaser, holder of a security interest, mechanic’s lienor, or
judgment lien creditor. Lindsay v. Commissioner, T.C. Memo.
2001-285, affd. 56 Fed. Appx. 800 (9th Cir. 2003).
Section 6320 provides that the Secretary shall furnish the
person described in section 6321 with written notice of the
filing of a notice of lien under section 6323. The notice
required by section 6320 must be provided not more than 5
business days after the day of the filing of the notice of lien.
Sec. 6320(a)(2). Section 6320 further provides that the person
may request administrative review of the matter (in the form of
an Appeals Office hearing) within 30 days beginning on the day
after the 5-day period. Section 6320(c) provides that the
Appeals Office hearing generally shall be conducted consistent
with the procedures set forth in section 6330(c), (d), and (e).
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Section 6330(c)(2) prescribes the matters that a person may
raise at an Appeals Office hearing. Under that section, a person
may raise any relevant issue related to the unpaid tax or notice
of lien, but the existence or amount of the underlying tax
liability may be contested only 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.”
Sec. 6330(c)(2)(B); Sego v. Commissioner, 114 T.C. 604, 608-609
(2000); Goza v. Commissioner, 114 T.C. 176, 180-181 (2000).
Section 6330(d) provides for judicial review of the
administrative determination in the Tax Court or a Federal
District Court, as may be appropriate. Where the underlying tax
liability is not at issue, the Court will review the Appeals
officer’s determination for abuse of discretion. Sego v.
Commissioner, supra at 610.
We note at the outset that the petition in the present case
raises several issues that it is not clear were raised with the
Appeals officer.3 However, because none of the issues raised in
the petition has any merit, we need not distinguish between
3
For example, the petition alleges that the notice of
deficiency is invalid because it was not signed under penalties
of perjury pursuant to sec. 6065. There is no evidence that this
issue was raised with the Appeals officer, although a similar
argument was made with respect to the Notice of Federal Tax Lien.
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issues raised at the administrative level and issues raised for
the first time in the petition.
A. Notice of Deficiency
Petitioners’ first allegation of error is that the notice of
deficiency they received for 1996 and 1997 was invalid because it
was not issued in compliance with section 6065, which generally
provides that documents or statements required to be made under
the internal revenue laws must be subscribed under penalties of
perjury. Petitioners’ argument is without merit. The
requirements of section 6065 are directed at documents
originating with the taxpayer, not respondent. Davis v.
Commissioner, 115 T.C. 35, 42 (2000). Therefore, respondent’s
failure to sign the notice of deficiency under penalties of
perjury does not invalidate it.
B. Verification Requirement
Petitioners also allege that the Appeals officer failed to
satisfy the requirements of section 6330(c)(1), which provides
that the Appeals officer must verify that any applicable law or
administrative procedure has been met. While the Notice of
Determination contains only a general, conclusory statement to
the effect that the applicable laws and administrative
requirements were met, we have examined certified copies of Forms
4340 covering petitioners’ 1996 and 1997 taxable years, and on
that basis we are satisfied that petitioners’ liabilities for
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those years were properly assessed, and that notice of the
assessments and demand for payment were properly made. Absent
some showing of irregularity, the Form 4340 provides presumptive
proof of its contents. Davis v. Commissioner, supra at 41. At
the hearing on respondent’s motion, petitioner husband alleged
several irregularities on the Forms 4340. We have examined these
allegations and find that they are either nonsensical,
contradicted by petitioners’ other admissions, immaterial, or
irrelevant to the collection action at issue. In sum, resolving
all factual inferences in petitioners’ favor, we find no
irregularity with respect to the assessment or collection action
at issue in this case which would cast doubt on the reliability
of the Forms 4340. Therefore, the Appeals officer’s conclusion
that all applicable laws and administrative requirements were met
was not an abuse of discretion.
C. Validity of the Assessments
Petitioners’ next allegation of error is that their 1996 and
1997 liabilities were not properly assessed. As support for this
claim, petitioners assert that the Appeals officer failed to
produce a copy of a “Record of Assessment” upon request.
Petitioners’ contention, even if true, is unavailing.
Section 6330(c)(1) requires only that the Appeals officer verify
that an assessment has been made; he need not provide such
verification to the taxpayer. Nestor v. Commissioner, 118 T.C.
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162, 166-167 (2002). As previously discussed, the certified
copies of the Forms 4340 for petitioners’ 1996 and 1997 taxable
years establish that petitioners’ liabilities for those years
were properly assessed after petitioners failed to respond to the
notice of deficiency.
D. Validity of the Notice and Demand for Payment
Petitioners’ next contention is that they did not receive a
“procedurally proper” Notice and Demand for Payment with respect
to 1996 and 1997, as required by sections 6321 and 6303.
The certified Forms 4340 indicate that a Statutory Notice of
Balance Due was sent to petitioners on October 25, 1999. When
questioned at the motion hearing, petitioner husband conceded
that he “got something” on that date from the IRS but refused to
concede that it was a Statutory Notice of Balance Due. We
accordingly find that petitioners have failed to show error or
irregularity in the Forms 4340 with respect to the issuance of a
Statutory Notice of Balance Due. A Notice of Balance Due
satisfies the requirement of notice and demand for payment under
section 6303. See Craig v. Commissioner, 119 T.C. 252, 262-263
(2002); Keene v. Commissioner, T.C. Memo. 2002-277; Hall v.
Commissioner, T.C. Memo. 2002-267. Therefore, petitioners’
contention lacks merit.
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E. Notice of Federal Tax Lien
Petitioners next contend that the Notice of Federal Tax Lien
Filing and Your Right to a Hearing Under IRC 6320 and the Notice
of Federal Tax Lien (filed with the Clerk of Superior Court in
Pender County, North Carolina) were invalid because they were not
signed under penalties of perjury as required by section 6065.
As previously discussed, documents prepared by respondent need
not comply with section 6065. Petitioners admit receiving the
Notice of Federal Tax Lien Filing. Consequently, petitioners
have identified no defect with respect to this notice of the
lien’s filing.
F. Examination Interview and Administrative Appeal
Petitioners also allege error in that they were not given
the opportunity for an “examination interview” or for an
administrative appeal prior to the issuance of the notice of
deficiency. However, it is well established that taxpayers have
no entitlement to any such interview or appeal prior to the
issuance of a notice of deficiency. See, e.g., Luhring v.
Glotzbach, 304 F.2d 560, 563 (4th Cir. 1962); Edwards v.
Commissioner, T.C. Memo. 2002-169 (and cases therein cited).
Accordingly, the failure by respondent to grant petitioners an
examination interview or administrative appeal prior to issuance
of the notice of deficiency in no way invalidates the notice with
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respect to which the liabilities at issue in this case were
assessed.
G. Underlying Tax Liabilities
Petitioners also raise several issues that attack the
validity of the underlying tax liabilities for 1996 and 1997.
Since petitioners received a notice of deficiency with
respect to those years and did not petition this Court regarding
that notice, they are now precluded from disputing the existence
or amount of the underlying tax liabilities. Sec. 6330(c)(2)(B);
Nestor v. Commissioner, supra.
H. Conclusion
Petitioners have not raised any spousal defenses, challenges
to the appropriateness of the collection action, or collection
alternatives. We have considered every contention raised by
petitioners, and conclude that there are no genuine issues of
material fact, and that respondent is entitled to judgment as a
matter of law. We shall therefore grant respondent’s motion for
summary judgment. To reflect the foregoing,
An appropriate order and
decision will be entered.