T.C. Summary Opinion 2004-128
UNITED STATES TAX COURT
PAUL BRYAN BARRETT, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 16542-03S. Filed September 16, 2004.
Paul Bryan Barrett, pro se.
Timothy R. Maher, for respondent.
POWELL, Special Trial Judge: This case was heard pursuant
to the provisions of section 74631 of the Internal Revenue Code
in effect at the time the petition was filed. The decision to be
entered is not reviewable by any other court, and this opinion
should not be cited as authority.
1
Unless otherwise indicated, subsequent section references
are to the Internal Revenue Code in effect for the year in issue.
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This is a so-called collection case brought pursuant to
section 6330(d). The issue is whether petitioner may raise in
this proceeding a challenge to the correctness of an underlying
tax deficiency. Petitioner resided in Pompano, Florida, when the
petition was filed.
Background
The basic facts are not in dispute. During 1995 and 1996,
petitioner was in the construction business as a sole
proprietorship reporting income and deductions on Schedule C,
Profit or Loss From Business. On his 1995 Federal income tax
return petitioner claimed and received a refund of $971.
Respondent audited petitioner’s 1995 return and proposed to
disallow, inter alia, deductions for wages paid to employees of
petitioner’s company. It appears that the primary reason for the
disallowance of the deductions was that either the names or the
Social Security numbers of the alleged employees were false.
Rather than dispute the proposed adjustment, petitioner signed a
Form 4549-CG, Income Tax Examination Changes, dated March 31,
1997. Form 4549-CG, provides, in part
Consent to Assessment and Collection - I do not wish to
exercise my appeal rights with the Internal Revenue Service
or to contest in the 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 * * *.
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Respondent assessed an additional tax of $13,629. By letter
dated, October 10, 1997, petitioner sought to establish that the
amount of disallowed wages was incorrect. During the so-called
audit reconsideration process, petitioner supplied virtually
identical notarized statements containing the names of four of
the alleged employees. By letter dated July 30, 2001, petitioner
was informed that the Social Security numbers were either missing
or invalid. Petitioner was requested to submit “either their
correct social security numbers or cancelled checks showing the
amount you paid to them.” Petitioner supplied further names and
Social Security numbers (but apparently no cancelled checks),
and, as a result, respondent abated $1,637 of the prior
assessment based on the examination.
Petitioner filed his 1996 Federal income tax return that
showed a balance due of $306. Petitioner admits that he owes the
amount shown on that return.
Respondent filed a lien pursuant to sections 6321 and 6323
and issued a notice of lien filing to petitioner pursuant to
section 6320. Petitioner timely requested a hearing contending
only that the amount of the 1995 deficiency was incorrect. On
September 5, 2003, respondent denied relief on the ground that
petitioner had waived his right to challenge the collection of
his 1995 tax liability because he had signed Form 4549-CG
consenting to the assessment and collection. Petitioner filed a
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timely petition seeking review of that determination under
section 6330(d)(1).
Discussion
Section 6320(a)(1) provides that respondent shall notify in
writing the taxpayer against whom a lien arises or is filed.
Under section 6320(b), the taxpayer may request a hearing before
an impartial Appeals Officer. Section 6320(c) provides that
“subsections (c), (d) (other than paragraph (2)(B) thereof), and
(e) of section 6330 shall apply” to a hearing under section 6320.
Relevant here, section 6330(c)(2)(B) provides that a taxpayer may
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.
The issue here is whether section 6330(c)(2)(B) precludes
petitioner from raising the correctness of the underlying tax
liability for 1995 in a hearing under section 6320(b). As we
have pointed out, section 6320(c) incorporates the restriction
contained in section 6330(c)(2)(B).
This case is controlled by Aguirre v. Commissioner, 117 T.C.
324 (2001). As here, in Aguirre petitioners executed a Form 4549
containing the identical language set forth above and requested a
hearing solely to dispute the correctness of their underlying tax
liabilities. We held that petitioners had waived their right to
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review the underlying tax liabilities. We see no reason to
reiterate Aguirre here.2
Reviewed and adopted as the report of the Small Tax Case
Division.
To reflect the foregoing,
Decision will be entered
for respondent.
2
Petitioner contends that the revenue agent conducting the
audit misled him. The language on Form 4549-CG, Income Tax
Examination Changes, is quite clear, and we have great difficulty
in understanding the reason that petitioner claims that he was
misled.