T.C. Memo. 2004-172
UNITED STATES TAX COURT
TIM W. HOLLIDAY, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 13020-02L. Filed July 22, 2004.
Tim W. Holliday, pro se.
Laurel M. Costen, for respondent.
MEMORANDUM OPINION
GALE, Judge: This case arises from a petition for review
under section 6330(d)1 of respondent’s determination to proceed
with a proposed levy to collect petitioner’s 1992, 1993, 1994,
1995, 1996, 1997, and 1998 Federal income tax liabilities. The
1
Unless otherwise noted, section references are to the
Internal Revenue Code as amended.
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issue for decision is whether respondent may proceed with the
proposed levy. We hold that he may.
Background
Petitioner was a resident of American Canyon, California,
when his petition was filed.
Petitioner timely filed a 1992 individual Federal income tax
return reporting tax due of $716. After correcting the return
for computational and clerical errors, respondent assessed the
tax due thereon of $1,061 on June 7, 1993.
Petitioner did not timely file a Federal income tax return
for 1993 or 1995. On October 6, 1997, respondent prepared a
substitute for return for each year, and on May 18, 1998,
respondent assessed tax of $2,903 for 1993 and $6,138 for 1995.2
Petitioner filed 1993 and 1995 individual Federal income tax
returns on September 21 and 18, 1998, respectively. Respondent
subsequently abated the assessment for each year to reflect the
tax reported on petitioner's returns after correcting for
computational and clerical errors.
Petitioner filed a 1994 individual Federal income tax return
on September 21, 1998; an assessment of $2,974 was made with
respect to that return.
2
Respondent concedes that notices of deficiency for these
years were not received by petitioner.
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Petitioner did not timely file a Federal income tax return
for 1996. On September 14, 1998, respondent prepared a
substitute for return, and 3 days later petitioner submitted a
return that was filed as an amended return. The return
petitioner submitted reported $5,805 of tax due, which respondent
assessed.
Petitioner timely filed 1997 and 1998 individual Federal
income tax returns, reporting tax due of $7,037 and $7,842,
respectively, which respondent assessed.
On September 21, 2000, petitioner filed amended returns for
1993, 1994, 1995, 1996, and 1997 reporting the tax due on each
amended return as zero. Respondent treated these amended returns
as claims for refund and denied them.
On April 9, 2001, respondent issued a Letter 1058, Final
Notice, Notice of Intent to Levy and Notice of Your Right to a
Hearing, to petitioner for the unpaid balances of the
aforementioned assessments for the tax years 1992, 1993, 1994,
1995, 1996, 1997, and 1998. On May 1, 2001, petitioner submitted
to respondent a Form 12153, Request for a Collection Due Process
Hearing. In his request, petitioner advised that he would have a
stenographer present at the hearing.
By letter dated May 3, 2002, the Appeals officer advised
petitioner that neither stenographic nor audio recording of the
hearing would be permitted. A hearing was held on May 22, 2002,
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during which petitioner was not permitted to make an audio or
stenographic recording. The Appeals officer also refused to
consider petitioner's arguments related to the underlying tax
liabilities covered by the levy notice.
On July 11, 2002, a notice of determination concerning
collection action(s) under section 6320 and/or 6330 was mailed to
petitioner in which the Appeals officer recommended proceeding
with the levy. On August 12, 2002, petitioner timely petitioned
this Court for review of the determination.
Discussion
Section 6331(a) provides that, if any person liable to pay
any tax neglects or refuses to pay such tax within 10 days after
notice and demand for payment, the Secretary is authorized to
collect such tax by levy upon property belonging to the taxpayer.
Section 6331(d) provides that the Secretary is obliged to provide
the taxpayer with notice, including notice of the administrative
appeals available to the taxpayer, before proceeding with
collection by levy.
Section 6330 generally provides that the Secretary cannot
proceed with the collection of taxes by way of a levy on a
taxpayer's property until the taxpayer has been given notice of,
and the opportunity for, an administrative review of the matter
(in the form of an Appeals Office hearing) and, if dissatisfied,
with judicial review of the administrative determination. See
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Davis v. Commissioner, 115 T.C. 35, 37 (2000); Goza v.
Commissioner, 114 T.C. 176, 179-180 (2000). Section 6330(c)(2)
specifies issues that the taxpayer may raise at the hearing. The
taxpayer may raise "any relevant issue relating to the unpaid tax
or the proposed levy" including spousal defenses, challenges to
the appropriateness of collection actions, and alternatives to
collection. Sec. 6330(c)(2)(A). The taxpayer also may challenge
the underlying tax liability if the taxpayer did not receive a
statutory notice of deficiency or did not otherwise have an
opportunity to dispute the tax liability. Sec. 6330(c)(2)(B).
Section 6330(c)(3) provides that the determination of the Appeals
officer shall take into consideration, inter alia, the issues
raised by the taxpayer. We review the determination de novo when
the underlying tax liability is in dispute, Goza v. Commissioner,
supra at 181-182, and under an abuse of discretion standard when
it is not, Sego v. Commissioner, 114 T.C. 604, 610 (2000); Goza
v. Commissioner, supra at 182.
Two of the principal arguments petitioner raises are that he
did not receive the hearing to which he was entitled under
section 6330 because he was not permitted to record the hearing
and that the Appeals officer refused to consider arguments
pertaining to the underlying tax liabilities (because petitioner
reported those liabilities as due on his returns). The hearing
in this case was conducted, and the determination issued, before
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our Opinions in Keene v. Commissioner, 121 T.C. 8 (2003), and
Montgomery v. Commissioner, 122 T.C. 1 (2004), in which we held,
respectively, that a taxpayer in a section 6330 hearing is
entitled to make an audio recording thereof, and to dispute the
underlying tax liability even where the taxpayer reported the
liability as due on his return.3 At trial, we afforded
petitioner the opportunity to raise any issue he considered
relevant to the proposed levy or the underlying tax liabilities.4
We consider those arguments below.
Petitioner argues that the notice of determination was
invalid, and we therefore lack jurisdiction, because the hearing
he received was defective in several respects. We disagree. The
defects in the hearing alleged by petitioner do not invalidate
the notice and deprive us of jurisdiction. See Lunsford v.
Commissioner, 117 T.C. 159, 164 (2001).
3
Certain portions of the underlying tax liabilities were
attributable to adjustments respondent made pursuant to sec.
6213(b)(1). However, we do not consider whether, pursuant to
sec. 6213(b)(2), petitioner previously had an “opportunity to
dispute” these portions within the meaning of sec. 6330(c)(2)(B)
because in this proceeding petitioner has, in any event, raised
only meritless arguments with respect to his underlying tax
liabilities.
4
In light of the fact that petitioner sought, but was
denied, recordation of the hearing, we resolve all doubts in
petitioner’s favor, treating any issue or argument he raised at
trial or in any written submission as having been raised at his
hearing.
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Petitioner next argues that his hearing was invalid and
collection may not proceed because the Appeals officer refused to
provide him with verification, and did not verify at the hearing,
that the requirements of any applicable law or administrative
procedure were met, as required under section 6330(c)(1).
Petitioner admitted in his petition and at trial that, at the
hearing, the Appeals officer would not allow petitioner to see
the Appeals officer’s copies of the transcripts of account. On
the basis of the foregoing, we are satisfied that the Appeals
officer obtained verification at the hearing; he was not required
to provide any such verification to petitioner. See Nestor v.
Commissioner, 118 T.C. 162, 166-167 (2002).
Petitioner next claims that he did not receive notice and
demand for payment (as required by section 6303(a)) with respect
to the liabilities for any of the taxable years in question, and
that the Appeals officer did not consider his contentions in this
regard. Petitioner’s claim of nonreceipt is belied by the
certified copies of Forms 4340, Certificate of Assessments,
Payments and Other Specified Matters, in evidence for each year,
which show that statutory notices of balance due were issued for
each year. Absent some showing of irregularity in the Forms
4340, which petitioner has not made, those records serve as
presumptive evidence that notice and demand pursuant to section
6303(a) was mailed to petitioner. See Hansen v. United States, 7
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F.3d 137, 138 (9th Cir. 1993); United States v. Chila, 871 F.2d
1015, 1019 (11th Cir. 1989); Craig v. Commissioner, 119 T.C. 252,
261-262 (2002). Respondent also relies on the notice of intent
to levy issued in this case as satisfying section 6303(a). See
Hughes v. United States, 953 F.2d 531, 536 (9th Cir. 1992);
Standifird v. Commissioner, T.C. Memo. 2002-245, affd. 72 Fed.
Appx. 729 (9th Cir. 2003). In light of the Appeals officer’s
review of the transcripts of account, we are satisfied that he
obtained sufficient verification that the requirements of
applicable laws and procedures had been met.
Petitioner also advanced a claim at trial that the period of
limitations for collection of his 1992 liability had expired.
The period for collection following assessment is 10 years. Sec.
6502(a). If a hearing is requested under section 6330(a)(3)(B),
the running of the period of limitations for collection is
suspended for the period during which the hearing, and appeals
therein, are pending. Sec. 6330(e)(1); Boyd v. Commissioner, 117
T.C. 127, 130-131 (2001). Further, the period for collection
shall not expire before the 90th day after the day on which there
is a final determination in the hearing. Sec. 6330(e)(1).
Petitioner's 1992 liability was assessed on June 7, 1993, and
petitioner requested a hearing under section 6330(a)(3)(B) on May
1, 2001; i.e., within the 10-year period following the June 7,
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1993, assessment. Accordingly, the period of limitations for
collection of petitioner's 1992 liability is suspended and has
not expired.
Further, with respect to the underlying tax liabilities,
petitioner contends that he asked the Appeals officer to tell him
which Internal Revenue Code section makes him liable for tax and
whether that section is within subtitle A. Petitioner further
claims that he inquired as to what “legislative regulation” makes
him liable for interest. In both instances, the Appeals officer
apparently refused to consider these inquiries. These are
frivolous issues that the Appeals officer might have responded to
but was certainly not required to consider. Suffice it to say
that petitioner reported wage income for each of the years in
question and such income is taxable pursuant to sections 1(a)-
(c), 61(a)(1), and 62. See also United States v. Romero, 640
F.2d 1014, 1016 (9th Cir. 1981). As to petitioner's interest
liability, section 6601 provides for the imposition of interest
on unpaid tax liabilities, and section 6601(g) provides for the
assessment and collection of that interest. See also sec.
301.6601-1, Proced. & Admin. Regs. In sum, the challenges to the
existence or amount of the underlying tax liabilities that
petitioner advanced either at his hearing or in the instant
proceeding are meritless.
Finally, petitioner raised a frivolous argument to the
effect that there had been no delegation of authority from the
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Secretary to issue the notice concerning his hearing under
section 6330 or to conduct it, and accordingly his hearing was
null and void for want of notice from, or its conduct by, the
Secretary himself. For the purposes presented here, the
Secretary has delegated the authority to issue a final notice of
intent to levy to certain IRS employees. See Delegation Order
191 (Rev. 3), effective June 11, 2001, Internal Revenue Manual,
sec. 1.2.2.5.3; see also Craig v. Commissioner, 119 T.C. 252, 263
(2002). The statute itself provides that the hearing is to be
conducted by an officer or employee of the IRS Office of Appeals,
not the Secretary. Sec. 6330(b)(1), (3).
Having considered all of petitioner’s arguments and found
them meritless, we conclude that the Appeals officer’s failure to
permit petitioner to make an audio or other recording of his
hearing was harmless error. Similarly, since petitioner has
raised only meritless arguments with respect to the underlying
tax liabilities, the Appeals officer’s refusal to consider
arguments concerning the underlying tax liabilities was also
harmless error. In these circumstances, we do not believe it is
“either necessary or productive” to remand this case for a
recorded hearing where an Appeals officer might consider
petitioner’s meritless arguments concerning his underlying tax
liabilities. See Lunsford v. Commissioner, 117 T.C. at 183, 189;
see also Keene v. Commissioner, 121 T.C. at 19-20; Kemper v.
Commissioner, T.C. Memo. 2003-195. As petitioner has not raised
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a spousal defense, challenged the appropriateness of collection
actions, or offered collection alternatives, and the arguments he
has raised are meritless, we sustain respondent’s determination
to proceed with the levy at issue. To reflect the foregoing,
Decision will be entered for
respondent.