T.C. Memo. 2005-135
UNITED STATES TAX COURT
RAYMOND AND CYNTHIA TURNER-SIMMONS, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 3151-03L. Filed June 9, 2005.
Raymond and Cynthia Turner-Simmons, pro sese.
John W. Sheffield III, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
HALPERN, Judge: This case is before the Court to review a
determination made by respondent’s Appeals Office (Appeals) that
respondent may proceed to collect by levy unpaid taxes with
respect to petitioners’ 1995 tax year (1995). We review that
determination pursuant to section 6330(d)(1).
- 2 -
Unless otherwise indicated, all section references are to
the Internal Revenue Code of 1986, as amended, and all Rule
references are to the Tax Court Rules of Practice and Procedure.
FINDINGS OF FACT
The parties have filed a stipulation of facts, which, with
accompanying exhibits (except for 2-R and 4-J1), is incorporated
herein by this reference. Petitioners resided in Atlanta,
Georgia, at the time the petition was filed.
Petitioners filed a joint Federal income tax return for 1995
(the 1995 return), showing a balance due of $2,478.83.
Respondent examined the 1995 return and determined a deficiency
in tax of $5,282 (the deficiency). The examination concluded
with petitioners signing an Internal Revenue Service (IRS) Form
4549-CG, Income Tax Examination Changes (the Form 4549-CG). The
Form 4549-CG recites only computational changes based on reported
self-employment income and a reported pension distribution. By
signing the Form 4549-CG, petitioners agreed to immediate
assessment and collection of the deficiency and interest due to
March 1, 1997, and waived their appeal rights with the IRS and
their right to contest the deficiency in the Tax Court.
1
Exhibit 2-R was admitted into evidence independent of the
stipulation of facts. Exhibit 4-J was objected to by petitioner
and not admitted at trial. On brief, respondent states that he
no longer relies on Exhibit 4-J; therefore, we shall not receive
it into evidence.
- 3 -
Petitioner wife wrote the following on the signature page of the
Form 4549-CG:
Upon receipt of this letter, I spoke with Mrs.
Dillard on January 31, 199[ ] [illegible]. She
explained and was very helpful in pointing out the
additional taxes. We do not dispute the amount
and are presently in an installment agreement with
the IRS and will continue to make monthly payments
to pay off the amount in full. Thank you.
Respondent computes that petitioners have a remaining,
unpaid income tax liability for 1995 of $2,995.07 (the
remaining liability).2 On December 20, 2001, respondent
issued to petitioners a notice of intent to levy and of
petitioners’ right to a hearing under section 6330.
Petitioners requested a hearing under section 6330, and,
pursuant to the request, petitioner wife met with Appeals
Officer Murphy on January 6 and 14, 2003 (the section 6330
hearing). At the section 6330 hearing, petitioners did not
2
That amount is respondent’s computation of the remaining
liability as of approximately the time of trial. Respondent
computes that amount as follows:
1995 Return Liability Payment
Return as filed $ 4,901.00 --
Withholding -- $2,422.17
Estimated tax penalty 120.63 --
Failure to pay penalty 12.39 --
Interest 15.22 --
Form 4549-CG 5,282.00 --
Payments -- 4,914.00
$10,331.24 $7,336.17
Remaining liability $ 2,995.07 --
- 4 -
raise as an issue or dispute the adjustments in the Form
4549-CG. The only issue raised by petitioners at the
section 6330 hearing was that they claimed that they had
already paid their 1995 income tax liability. Petitioners
presented no evidence beyond petitioner wife’s statements
that they had paid that liability.
On January 24, 2003, Appeals mailed to petitioners a
Notice of Determination Concerning Collection Action(s)
Under Section 6320 and/or 6330 (the determination). The
determination addresses the issues raised by petitioners in
protesting the levy, states that the levy is necessary to
ensure efficient collection of taxes, and confirms that
respondent has met the requirements of the applicable laws
and administrative procedures.
OPINION
I. Sections 6330 and 6331
Section 6331(a) authorizes the Secretary to levy
against property and property rights where a taxpayer liable
for taxes fails to pay those taxes within 10 days after
notice and demand for payment is made. Section 6331(d)
requires the Secretary to send written notice of an intent
to levy to the taxpayer, and section 6330(a) requires the
Secretary to send a written notice to the taxpayer of his
- 5 -
right to a section 6330 hearing at least 30 days before any
levy is begun.3
If a section 6330 hearing is requested, the hearing is
to be conducted by Appeals, and, at the hearing, the Appeals
officer conducting it must verify that the requirements of
any applicable law or administrative procedure have been
met. Sec. 6330(b)(1), (c)(2). The taxpayer may raise at
the hearing any relevant issue relating to the unpaid tax or
the proposed levy. Sec. 6330(c)(2)(A). The taxpayer may
contest the existence or amount of the underlying tax
liability at a hearing if the taxpayer did not receive a
statutory notice of deficiency with respect to the
underlying tax liability or did not otherwise have an
opportunity to dispute that liability. Sec. 6330(c)(2)(B).
At the conclusion of the hearing, the Appeals officer
must determine whether and how to proceed with collection,
taking into account, among other things, collection
alternatives proposed by the taxpayer and whether any
proposed collection action balances the need for the
efficient collection of taxes with the legitimate concern of
the taxpayer that the collection action be no more intrusive
than necessary. See sec. 6330(c)(3).
3
A taxpayer receiving a notice of Federal tax lien has
hearing rights similar to the hearing rights accorded a taxpayer
receiving a notice of intent to levy. See sec. 6320(c).
- 6 -
We have jurisdiction to review the Appeals officer’s
determination where we have jurisdiction over the type of
tax involved in the case. Sec. 6330(d)(1)(A); see Iannone
v. Commissioner, 122 T.C. 287, 290 (2004). Generally, we
may consider only those issues that the taxpayer raised
during the section 6330 hearing. See sec. 301.6330-1(f)(2),
Q&A-F5, Proced. & Admin. Regs.; see also Magana v.
Commissioner, 118 T.C. 488, 493. Where the underlying tax
liability is properly at issue, we review the determination
de novo. E.g., Goza v. Commissioner, 114 T.C. 176, 181-182
(2000). Where the underlying tax liability is not at issue,
we review the determination for abuse of discretion. Id. at
182. Whether an abuse of discretion has occurred depends
upon whether the exercise of discretion is without sound
basis in fact or law. See Ansley-Sheppard-Burgess Co. v.
Commissioner, 104 T.C. 367, 371 (1995).
II. Arguments of the Parties
Petitioners dispute the adjustments on the Form 4549-CG
(the adjustments). They also argue that none of their 1995
income tax liability remains unpaid. Respondent argues that
petitioners failed to raise the adjustments during the
section 6330 hearing and that they did not either during
that hearing or at trial provide any evidence showing
- 7 -
any payments in excess of those credited to their account by
respondent.
III. Discussion
While petitioners claim that they raised the
adjustments at the section 6330 hearing, respondent’s record
of what occurred at the hearing states that the only issue
petitioners raised was the amount petitioners had paid.
Petitioners have failed to convince us that they raised the
adjustments during the section 6330 hearing. Also, they
have failed to convince us that, as they claimed at trial,
they were coerced into signing the Form 4549-CG.4 At trial,
4
If a taxpayer signs a Form 4549-CG under duress or
coercion, the waivers contained therein of the taxpayer’s rights
to contest the deficiency are invalid. Zapara v. Commissioner,
124 T.C. __, __ (2005) (slip op. at 10). In Zapara, we held:
“[A] taxpayer who has signed a Form 4549-CG waiving his right to
challenge the proposed assessments should be deemed to have had
an opportunity to dispute his tax liabilities and is thereby
precluded from challenging those liabilities.” Id. Previously,
in Aguirre v. Commissioner, 117 T.C. 324, 327 (2001), we held
that, by signing a Form 4549-CG, the taxpayers “expressly waived
the opportunity to obtain prepayment judicial review of their tax
liability for those years.” As reported above, sec.
6330(c)(2)(B) provides that the taxpayer may contest the
existence or amount of the underlying tax liability at a sec.
6330 hearing if the taxpayer did not receive a statutory notice
of deficiency with respect to the underlying tax liability or did
not otherwise have an opportunity to dispute that liability. It
is unclear from the two cases whether a taxpayer who signs a Form
4549-CG following an examination of his return loses his right to
raise the underlying tax liability in a subsequent sec. 6330
hearing because (1) he waived his right to administrative or
judicial consideration of the underlying liability by choosing
not to receive a statutory notice of deficiency or (2) the
examination preceding execution of the Form 4549-CG constituted
(continued...)
- 8 -
petitioners produced no evidence that would show any error
in the adjustments. They produced no evidence showing that
respondent has made any error in crediting their account for
all payments received from them with respect to their 1995
income tax liability, nor did they establish that the
remaining liability is any less than respondent claims it to
be. Whatever standard of review we apply to Appeals’
determination to proceed with collection by levy of the
4
(...continued)
an opportunity to dispute the tax liability recited on the form.
The former interpretation is suggested by Aquirre, in which we
supported our holding by citing Sego v. Commissioner, 114 T.C.
604, 611 (2000), for the proposition that a taxpayer who
deliberately refuses to accept delivery of a notice of deficiency
repudiates his opportunity to contest the notice at Appeals or in
Tax Court. The distinction could be important in a case with
facts different from those before us today. Consider, for
example, a taxpayer who disagrees with an examiner’s proposed
increase in his tax liability and exercises his right to appeal
within the IRS by protesting the proposed increase to Appeals.
Suppose that Appeals rejects his protest, and the Commissioner
sends to the taxpayer’s last known address a notice of deficiency
that conforms to the requirements of sec. 6212. Suppose further
that the notice goes astray and is never delivered, and,
therefore, the taxpayer loses his opportunity to petition the Tax
Court for a redetermination of the deficiency. See sec. 6213(a).
Is the taxpayer precluded from raising the underlying tax
liability in a sec. 6330 hearing (and, if necessary, before the
Tax Court) because he already had an opportunity to dispute the
tax liability, or is he not precluded from raising the liability
because he signed no Form 4549-CG and waived no rights to any
administrative or judicial consideration? If he can raise the
underlying tax liability in a sec. 6330 hearing and, if
dissatisfied with the resolution of the hearing, before the Tax
Court, then in effect the actual receipt rule of sec.
6330(c)(2)(B) replaces the last-known-address-is-adequate rule of
sec. 6212 as a trigger for Tax Court jurisdiction, at least to
the extent the taxpayer wishes to dispute the underlying tax
liability.
- 9 -
remaining liability--and even assuming that petitioners
raised the issue of the adjustments in the Form 4549-CG at
the section 6330 hearing--petitioners have failed to prove
that Appeals erred in determining to proceed with collection
of that liability.
IV. Conclusion
We sustain the determination.
To reflect the foregoing,
Decision will be entered
for respondent.