T.C. Memo. 2004-136
UNITED STATES TAX COURT
CHRISTINE WHITING, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 15090-02L. Filed June 10, 2004.
William E. Taggart, Jr., for petitioner.
Rebecca Duewer-Grenville, for respondent.
MEMORANDUM OPINION
MARVEL, Judge: Pursuant to section 6330(d),1 petitioner
seeks review of respondent’s determination to proceed with the
1
All section references are to the Internal Revenue Code in
effect at all relevant times, and all Rule references are to the
Tax Court Rules of Practice and Procedure.
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collection of petitioner’s 1999 and 2000 Federal income tax
liabilities.2
Background
The parties submitted this case fully stipulated under Rule
122. We incorporate the stipulated facts and accompanying
exhibits into our findings by this reference. Petitioner resided
in Mill Valley, California, when she filed the petition.
For the taxable year 1990 through the taxable year 2000,
petitioner failed to pay the amounts of tax shown as due on her
returns. On February 10, 2002, respondent sent to petitioner a
Final Notice - Notice of Intent to Levy and Notice of Your Right
to a Hearing for the taxable years 1990 through 2000. On or
about March 11, 2002,3 petitioner submitted Form 12153, Request
for a Collection Due Process Hearing, requesting a hearing under
section 6330 with respect to the taxable years 1990 through 2000.
In pertinent part, petitioner’s Form 12153 stated:
The taxpayer has prepared, and is prepared to submit,
an Offer-In-Compromise based on doubt as to liability,
doubt as to collectability, and effective tax
2
The parties agree that petitioner’s income tax liabilities
for the taxable years 1990 through 1998 were discharged in
bankruptcy. Although the parties’ briefs indicate disagreement
as to whether the discharge order applied to petitioner’s 1999
income tax liability, petitioner has not raised the issue before
this Court.
3
Although the parties stipulated that petitioner submitted
her Form 12153 on Mar. 11, 2002, both the second page of
petitioner’s Form 12153 and petitioner’s representative’s
signature on the first page are dated Mar. 12, 2002.
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administration as soon as the taxpayer’s request for a
collection due process hearing is placed in the hands
of a representative of the Internal Revenue Service who
will consider the taxpayer’s submission.
On July 11, 2002, petitioner’s authorized representative,
William Taggart, spoke on the telephone with Appeals Officer
Gerry Melick. On August 13, 2002, Mr. Taggart and Appeals
Officer Melick spoke on the telephone again. The record is
silent as to the substance of these two telephone conversations.
Neither Mr. Taggart nor petitioner had a face-to-face meeting
with Appeals Officer Melick.
On August 23, 2002, the Appeals Office issued a “Notice of
Determination Concerning Collection Action Under Section 6330"
(notice of determination) in which it sustained the proposed levy
action. In pertinent part, the notice of determination provided
the following explanation:
In Appeals, you were granted a due process hearing by
an appeals officer who had no prior involvement with
respect to the tax for the tax periods covered by the
hearing.
Relevant issues presented by the taxpayer: In your
protest you state that an offer in compromise has been
prepared and will be presented. However, an offer in
compromise or other alternative to collection action is
precluded by your chronic non-compliance.
Balancing efficient collection and intrusiveness:
* * * Because of your non-compliance and your failure
to make any effort to pay or otherwise resolve the
liabilities it is seen that levy action may well be the
least intrusive means of collection to be in any way
effective or efficient.
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On September 23, 2002, petitioner filed a petition with this
Court contesting respondent’s determination for the taxable years
1990 through 2001. On October 24, 2002, respondent filed a
motion to dismiss for lack of jurisdiction and to strike as to
the taxable year 2001. This Court granted respondent’s motion on
January 3, 2003. In her petition, petitioner alleged that the
Appeals Office failed “to provide Petitioner with a [section
6330] hearing and an opportunity to present an Offer-in-
Compromise * * * in violation of the Internal Revenue Code and
denied Petitioner due process of law.”
On November 22, 2002, petitioner filed a chapter 7
bankruptcy petition in the United States Bankruptcy Court for the
Northern District of California (the bankruptcy court). On
February 18, 2003, the bankruptcy court entered an order
discharging petitioner. At the time of her bankruptcy discharge,
petitioner had no assets.
Discussion
Section 6330(a) provides that no levy may be made on any
property or right to property of any person unless the Secretary
has notified such person in writing of the right to a hearing
before the levy is made. If the person makes a request for a
hearing, a hearing shall be held by the Internal Revenue Service
Office of Appeals. Sec. 6330(b)(1). At the hearing, a taxpayer
may raise any relevant issue, including appropriate spousal
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defenses; challenges to the appropriateness of the collection
action; and collection alternatives, such as an offer in
compromise. Sec. 6330(c)(2)(A). Additionally, at the hearing, a
taxpayer may contest the existence and amount of the underlying
tax liability if the taxpayer did not receive a notice of
deficiency for the tax in question or did not otherwise have an
opportunity to dispute the tax liability. Sec. 6330(c)(2)(B);
see also Sego v. Commissioner, 114 T.C. 604, 609 (2000).
Following a hearing, the Appeals Office must make a
determination whether the proposed levy action may proceed. In
so doing, the Appeals Office is required to take into
consideration the verification presented by the Secretary, the
issues raised by the taxpayer, and whether the proposed levy
action appropriately balances the need for efficient collection
of taxes with the taxpayer’s concerns regarding the intrusiveness
of the proposed levy action. Sec. 6330(c)(3). The taxpayer may
petition the Tax Court, or, in limited cases, a Federal District
Court for judicial review of the Appeals Office’s determination.
Sec. 6330(d).
If the taxpayer files a timely petition for judicial review,
the applicable standard of review depends on whether the
underlying tax liability is at issue. Where the underlying tax
liability is properly at issue, the Court reviews any
determination regarding the underlying tax liability de novo.
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Sego v. Commissioner, supra at 610. The Court reviews other
administrative determinations regarding the proposed levy action
for abuse of discretion. Id.
In the present case, the only issue that petitioner raises
is that respondent failed to provide a section 6330 hearing to
petitioner. Petitioner does not challenge the existence of the
underlying tax liability. Accordingly, we review respondent’s
determination to proceed with the levy action for abuse of
discretion.
Petitioner contends that it was an abuse of discretion for
respondent to treat the two telephone conversations between Mr.
Taggart and Appeals Officer Melick as a section 6330 hearing. By
failing to provide a section 6330 hearing, petitioner argues,
respondent prevented petitioner from presenting the factual
information and documentation that she had proposed to submit in
support of her offer in compromise. Petitioner further asserts
that, because respondent did not consider petitioner’s factual
information and documentation, respondent lacked a sufficient
basis for determining that the levy action could proceed.
In response, respondent contends that telephone conferences
are an acceptable format for section 6330 hearings and that the
two telephone conversations between Mr. Taggart and Appeals
Officer Melick qualified as a section 6330 hearing. According to
respondent, during the telephone conversations, Mr. Taggart and
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Appeals Officer Melick “discussed the substance of Petitioner’s
case”. Petitioner had the opportunity to submit an offer in
compromise or other documentation, respondent argues, but
petitioner chose not to avail herself of that opportunity.
Respondent also points out that hearings cannot continue
indefinitely and that the Appeals office must be able to deal
effectively with “nonresponsive taxpayers”.
In Katz v. Commissioner, 115 T.C. 329, 338 (2000), we held
that the oral and written communications between the taxpayer and
the Appeals officer constituted a section 6320(b) hearing.4
After the Commissioner received the taxpayer’s request for a
hearing, the Commissioner sent the taxpayer a letter setting a
date for the hearing. When the taxpayer insisted that the
location of the hearing was unacceptable, the Appeals officer
held a telephone conference with the taxpayer during which they
discussed the taxable year at issue. Thereafter, the Appeals
officer sent to the taxpayer a letter stating that the Appeals
Office was not inclined to withdraw the notice of Federal tax
lien. The taxpayer did not respond, and, approximately 3 months
later, the Appeals Office issued a notice of determination. We
concluded that the telephone conference was the Appeals officer’s
attempt to accommodate the taxpayer, that the taxpayer and the
4
Although sec. 6320(b) applies to hearings for Federal tax
lien filings, we extended our holding to sec. 6330 hearings. See
Katz v. Commissioner, 115 T.C. 329, 336 n.11 (2000).
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Appeals officer “did in fact discuss his case over the telephone
and that the Appeals officer heard and considered * * * [the
taxpayer’s] arguments.” Id. at 337-338; see also sec. 301.6330-
1(d)(2), Q&A-D6, Proced. & Admin. Regs.
In the present case, petitioner has not established that
respondent abused his discretion in determining that the two
telephone conversations between Mr. Taggart and Appeals Officer
Melick constituted a section 6330 hearing. Petitioner offered no
evidence with respect to the content of the two telephone
conversations.5 Without such evidence, we have no basis upon
which to conclude that respondent improperly characterized the
two telephone conversations as a section 6330 hearing.6
Petitioner bases her arguments in this case solely on her
belief that she was not afforded the hearing that section 6330
requires. Petitioner does not address what may be the critical
element of respondent’s determination. Respondent determined
that “an offer in compromise or other alternative to collection
5
In this fully stipulated case, the parties did not
stipulate regarding the content of the two telephone
conversations. Although both parties argued on brief regarding
the circumstances of the two telephone conversations, and
respondent argued that the parties “discussed the substance of
petitioner’s case”, the parties did not provide the Court with
any evidence.
6
The record in this case is silent regarding the
circumstances surrounding the two telephone calls, and we cannot
conclude that respondent abused his discretion regarding the
determination that a hearing was held without some proof to the
contrary.
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action is precluded by [petitioner’s] chronic non-compliance.”
We understand respondent’s determination to mean that
petitioner’s extensive history of noncompliance with the tax law
disqualifies her from eligibility for an offer in compromise or
other collection alternative. Petitioner offers us no evidence
and no argument regarding this critical part of respondent’s
determination. Even if petitioner had raised the issue, however,
we simply cannot ascertain from the record that respondent’s
determination regarding petitioner’s eligibility for an offer in
compromise was an abuse of discretion under the circumstances of
this case.
We have considered the remaining arguments of both parties
for results contrary to those expressed herein and, to the extent
not discussed above, find those arguments to be irrelevant, moot,
or without merit.
To reflect the foregoing,
Decision will be entered
for respondent.