T.C. Summary Opinion 2005-16
UNITED STATES TAX COURT
JAMES L. GEARY AND CAROL O. GEARY, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 11327-04S. Filed February 16, 2005.
James L. Geary and Carol O. Geary, pro sese.
Dennis R. Onnen and Robin Ferguson, for respondent.
ARMEN, Special Trial Judge: This case was heard pursuant to
the provisions of section 7463 of the Internal Revenue Code in
effect at the time that 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.
1
All subsequent section references are to the Internal
Revenue Code, as amended. All Rule references are to the Tax
Court Rules of Practice and Procedure.
- 2 -
This matter is before the Court on respondent’s Motion For
Summary Judgment, filed pursuant to Rule 121, as supplemented.
Respondent contends that there is no dispute as to any material
fact with respect to this levy action and that respondent’s
determination to proceed with collection of petitioners’
outstanding tax liability for the taxable year 2000 should be
sustained as a matter of law.
As explained in detail below, we shall grant respondent’s
motion, as supplemented.
Background
Petitioners resided in Bonner Springs, Kansas, at the time
that the petition was filed with the Court.
Petitioners timely filed their Form 1040, U.S. Individual
Income Tax Return, for 2000. On their return, petitioners listed
their address as 112 Lake Forest, Bonner Springs, Kansas 66012
(the Lake Forest address).2
Based on information provided by a third-party payor
indicating that petitioners might not have reported all of their
income on their 2000 return, respondent commenced an examination
of that return. On April 1, 2002, respondent sent petitioners a
2
Petitioners attached to their return a Schedule C, Profit
or Loss From Business, that also reflected the Lake Forest
address as the business address of petitioner James L. Geary. In
addition, petitioners attached to their return three Forms W-2,
Wage and Tax Statement, each of which showed the Lake Forest
address as petitioner Carol O. Geary’s address.
- 3 -
30-day letter proposing a deficiency in their income tax.
Respondent mailed the 30-day letter to petitioners at the Lake
Forest address. Petitioners received the 30-day letter.
On April 17, 2002, petitioners filed with respondent a
protest to the 30-day letter indicating their disagreement with
the proposed deficiency. In their protest, petitioners listed
their address as the Lake Forest address.
By notice of deficiency dated August 5, 2002, respondent
determined a deficiency in petitioners’ income tax for 2000 in
the amount of $4,201. Respondent sent the notice of deficiency
to petitioners by certified mail addressed to them at the Lake
Forest address.3
The deficiency in income tax was based on respondent’s
determination that petitioners failed to report on their 2000
return all of the income received by them during that year.
Petitioners did not file a petition for redetermination with
this Court in respect of the notice of deficiency. See sec.
6213(a). Accordingly, on December 30, 2002, respondent assessed
the deficiency, together with interest as provided by law, and
sent petitioners a notice and demand for payment. Petitioners
did not pay the amount owing.
3
The notice of deficiency was placed in the mail on Aug.
3, 2002, two days before the typewritten date appearing on the
notice. Nevertheless, the notice correctly informed petitioners
that the last day to file a petition for redetermination with
this Court was Monday, Nov. 4, 2002.
- 4 -
On April 17, 2003, respondent sent to petitioners a Final
Notice of Intent to Levy and Notice of Your Right to a Hearing
(final notice). Respondent sent the final notice to petitioners
at the Lake Forest address.
On May 5, 2003, petitioners filed with respondent a Form
12153, Request for a Collection Due Process Hearing. On the Form
12153, petitioners listed the Lake Forest address as their
address.
The only issue raised by petitioners in the Form 12153 was a
challenge to the existence or amount of the underlying liability.
During the course of the administrative phase of this case,
respondent’s Appeals Office in Kansas City, Missouri,
corresponded with petitioners at the Lake Forest address. The
Appeals Office also conducted a face-to-face hearing attended by
petitioner James L. Geary. The only issue raised by petitioners
before the Appeals Office was a challenge to the existence or
amount of the underlying liability.
On June 3, 2004, respondent’s Appeals Office sent to
petitioners a Notice of Determination Concerning Collection
Action(s) Under Section 6320 and/or 6330 (notice of
determination). The Appeals Office sent the notice of
determination to petitioners at the Lake Forest address.
In the notice of determination, the Appeals Office sustained
the levy action.
- 5 -
The attachment to the notice of determination states, in
part, that petitioners “disputed receiving the income asserted in
a prior Notice of Deficiency”, but that they “did not deny
receiving the August 05, 2002 Notice of Deficiency.”
On June 30, 2004, petitioners filed with the Court a
petition for levy action under section 6330(d). In the petition,
petitioners listed their address as the Lake Forest address.
Petitioners attached to the petition as an exhibit a copy of the
notice of determination and the aforementioned attachment.
The only issue raised by petitioners in the petition is a
challenge to the existence or amount of the underlying tax
liability.
As previously indicated, respondent filed a Motion For
Summary Judgment. In the motion, respondent asserts, in part, as
follows:
* * * As noted by [the Appeals officer] in the
attachment to the Notice of Determination, petitioners
did not deny receiving the August 5, 2002 notice of
deficiency, which was sent to the address where they
still reside. * * * Thus, petitioners may not raise the
underlying liability for 2000 as an issue in this case.
In objecting to the granting of respondent’s motion,
petitioners continued to challenge only the existence or amount
of the underlying tax liability.
Discussion
The Court may grant summary judgment when there is no
genuine issue of material fact and a decision may be rendered as
- 6 -
a matter of law. Rule 121(b); Sundstrand Corp. v. Commissioner,
98 T.C. 518, 520 (1992), affd. 17 F.3d 965 (7th Cir. 1994). We
conclude that there is no genuine issue of material fact and that
respondent is entitled to judgment as a matter of law.
Section 6330 generally provides that the Commissioner cannot
proceed with collection by levy until the taxpayer has been given
notice 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 Davis v. Commissioner, 115 T.C. 35, 37
(2000); Goza v. Commissioner, 114 T.C. 176, 179 (2000).
Section 6330(c) prescribes the matters that a person may
raise at an Appeals Office hearing. In sum, section
6330(c)(2)(A) provides that a person may raise collection issues
such as spousal defenses, the appropriateness of the
Commissioner's intended collection action, and possible
alternative means of collection. Section 6330(c)(2)(B) provides
that the existence and amount of the underlying tax liability can
be contested at an Appeals Office hearing only if the person did
not receive a notice of deficiency for the tax in question or did
not otherwise have an earlier opportunity to dispute the tax
liability. See Sego v. Commissioner, 114 T.C. 604, 609 (2000);
Goza v. Commissioner, supra. Section 6330(d) provides for
judicial review of the administrative determination in the Tax
- 7 -
Court or a Federal District Court, as may be appropriate.
As previously mentioned and as applicable herein, section
6330(c)(2)(B) bars a taxpayer from challenging the existence or
amount of the taxpayer’s underlying tax liability in a collection
review proceeding if the taxpayer received a notice of deficiency
and disregarded the opportunity to file a petition for
redetermination with this Court. See Nestor v. Commissioner, 118
T.C. 162, 165-166 (2002).
In their petition, petitioners challenge the existence or
amount of the underlying tax liability for 2000. Respondent
contends that petitioners are barred under section 6330(c)(2)(B)
from mounting such a challenge in the context of this collection
review proceeding because petitioners received the August 5, 2002
notice of deficiency for the tax in question. Respondent deduces
the factual predicate for this contention from the following: (1)
At all relevant times, petitioners have used as their mailing
address the Lake Forest address; (2) the August 5, 2002 notice of
deficiency was sent by certified mail to petitioners at the Lake
Forest address; (3) the notice of deficiency was not returned to
respondent by the U.S. Postal Service undelivered; (4)
respondent’s Appeals officer successfully corresponded with
petitioners using the Lake Forest address; and (5) petitioners
have never denied receiving the August 5, 2002 notice of
deficiency.
- 8 -
Based on the record in this case, and with due regard to
Rule 121(d), see Koenig v. Commissioner, T.C. Memo. 2003-40, we
conclude that petitioners received the August 5, 2002 notice of
deficiency.
In addition to the aforementioned five factors relied on by
respondent, we observe that at the hearing on respondent’s
motion, counsel for respondent produced a complete copy of the
August 5, 2002 notice of deficiency and represented that it had
been obtained from petitioners during discussions by the parties
preceding the hearing on respondent’s motion. Moreover, in an
Order issued prior to the hearing, the Court directed petitioners
to state whether or not they received the notice of deficiency.
In the Order, the Court went on to advise petitioners that in the
absence of their denial, the Court would proceed on the basis
that they actually received the notice of deficiency within a few
days after its date of mailing. Petitioners never denied
receipt; rather, they continued to challenge the existence or
amount of the underlying liability.
In view of the foregoing, we hold that petitioners are
barred, as a matter of law, from challenging the existence or
amount of the underlying tax liability for 2000 in the present
collection review proceeding. Sec. 6330(c)(2)(B).
Finally, petitioners have failed to offer an alternative
means of collection (such as an installment payment agreement or
- 9 -
an offer-in-compromise); petitioners have also failed to raise
properly any other justiciable issue. See sec. 6330(c)(2)(A).
Such matters are now deemed conceded. See Rule 331(b)(4) (“Any
issue not raised in the assignments of error shall be deemed to
be conceded.”).
Conclusion
In view of the foregoing, we conclude that there is no
genuine issue of material fact that would necessitate a trial in
this case and that respondent is entitled to judgment as a matter
of law.
Reviewed and adopted as the report of the Small Tax Case
Division.
To reflect the foregoing,
An appropriate order and
decision will be entered.