T.C. Memo. 2005-198
UNITED STATES TAX COURT
MEHDI H. HAJIYANI, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 4008-04L. Filed August 16, 2005.
Mehdi H. Hajiyani, pro se.
Roger W. Bracken, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
GERBER, Chief Judge: Petitioner, pursuant to section
6330(d),1 seeks review of respondent’s determination to proceed
with collection (by means of levy) of petitioner’s unpaid 1993
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code, and all Rule references are to the Tax
Court Rules of Practice and Procedure.
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and 1994 Federal income tax liabilities. The issue for our
consideration is whether respondent abused his discretion by
determining to proceed with the proposed levy.
FINDINGS OF FACT2
At the time of the filing of the petition in this case,
petitioner resided in Rockville, Maryland. On April 11, 2001,
petitioner was provided with the opportunity to contest his 1992,
1993, and 1994 income tax deficiencies in a trial before this
Court. On December 12, 2001, the Court held in a Summary
Opinion, inter alia, that petitioner was engaged in a money-
lending business for the years 1992 to 1994 and was allowed to
deduct certain expenses associated with that business. See
Hajiyani v. Commissioner, T.C. Summary Opinion 2001-183.
In the above-referenced deficiency proceeding, the parties
were required to provide the Court with computations reflecting
the holdings in T.C. Summary Opinion 2001-183 for purposes of
entry of decision. See Rule 155. Respondent submitted a
computation, but petitioner did not. After a time, respondent
moved for an entry of decision in accord with his proposed
computation, which was based on the Court’s Summary Opinion.
On February 22, 2002, petitioner, through his attorney,
Kenneth Wall, filed an objection to the entry of decision,
2
The parties’ stipulation of facts is incorporated by this
reference.
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alleging that additional information for the year could alter the
decision to be entered. On February 27, 2002, this Court ordered
petitioner to file an alternative computation by March 25, 2002.
Petitioner failed to file an alternative computation, and on
April 26, 2002, a decision was entered determining deficiencies
in income tax for the taxable years 1993 and 1994 of $9,228 and
$17,369, respectively.
On January 4, 2003, respondent sent petitioner a Final
Notice of Intent to Levy and Notice of Your Right to a Hearing
(levy notice) for petitioner’s 1993 and 1994 taxable years. The
levy notice reflected an unpaid tax liability (including
interest) of $10,109 for the 1993 taxable year and $33,195 for
the 1994 taxable year.
On February 2, 2003, respondent received petitioner’s timely
Form 12153, Request for a Collection Due Process Hearing
(request), for taxable years 1992, 1993, and 1994. As a basis
for his request, petitioner attached documents showing that he
had objected to respondent’s original decision. Petitioner’s
original section 6330 hearing was scheduled for November 19,
2003, but it was rescheduled for a later date because of
conflicts. Petitioner failed to appear for the rescheduled
meeting. On February 4, 2004, respondent mailed petitioner a
Notice of Determination Concerning Collection Action(s) Under
Section 6320 and/or 6330 (final notice) determining that the
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proposed levy should be sustained. As of that date petitioner
had not proposed any collection alternatives. The sole issue
petitioner raised was whether he was liable for the unpaid 1993
and 1994 tax liabilities. On February 11, 2004, petitioner sent
an offer-in-compromise to respondent, offering to settle the
1992, 1993, and 1994 tax liabilities for $100 on the basis of
doubt as to liability.
OPINION
Petitioner essentially makes three arguments in support of
his position that respondent should not be allowed to proceed
with collection. First, petitioner argues that the Rule 155
computations in the deficiency proceeding for the 1993 and 1994
tax years are incorrect because they did not account for
petitioner’s claimed loss relating to his money-lending business
in 1992. Second, petitioner argues that his offer-in-compromise
was not considered. Finally, petitioner contends that part of
his tax liabilities was satisfied by offsets of tax refunds and
attachment of his bank accounts.
Section 6331(a) authorizes the Commissioner to levy on
property and property rights of a taxpayer who fails to pay a tax
liability after notice and demand. Sections 6331(d) and 6330(a),
however, require the Secretary, before proceeding with
collection, to send written notice to the taxpayer of the intent
to levy and of the taxpayer’s right to a hearing.
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Section 6330(c)(2)(A) provides that, 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. Section 6330(c)(1) requires that the Appeals officer
obtain verification that the requirements of any applicable law
or administrative procedure have been met.
When an Appeals officer issues a determination regarding a
disputed collection action, a taxpayer may seek judicial review
with the Tax Court or a District Court, as appropriate. Sec.
6330(d); see Davis v. Commissioner, 115 T.C. 35, 37 (2000); Goza
v. Commissioner, 114 T.C. 176, 179 (2000). The underlying tax
liability may be questioned if the taxpayer “did not receive any
statutory notice of deficiency for such tax liability or did not
otherwise have an opportunity to dispute such tax liability.”
Sec. 6330(c)(2)(B). Where the validity of the underlying tax
liability is properly at issue, the Court will review the matter
de novo. Sego v. Commissioner, 114 T.C. 604, 610 (2000). Where
the validity of the underlying tax is not at issue, the Court
will review the Commissioner’s administrative determination for
an abuse of discretion. Id.; Goza v. Commissioner, supra at 181-
182. Petitioner had the opportunity to dispute the underlying
tax liabilities and did so in the deficiency proceeding.
Therefore, the validity of the underlying tax liabilities may not
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be questioned, and we review respondent’s determination under an
abuse of discretion standard.
The main thrust of petitioner’s challenge concerns the
computations in the deficiency proceeding under Rule 155.
However, as noted, petitioner is not entitled to question the
underlying tax liabilities because he already has been provided
the opportunity to challenge his liabilities. See sec.
6330(c)(2)(B). In that regard, petitioner was provided with the
opportunity to submit a computation under Rule 155, but failed to
timely do so. Petitioner contends that Mr. Wall, his attorney,
did not submit a Rule 155 computation. Petitioner’s contention
with respect to his attorney’s failure does not change the
limitation upon petitioner or the Court with respect to
addressing the underlying merits of his 1993 or 1994 tax
liability. See sec. 6330(c)(2)(B).
With respect to petitioner’s second argument, concerning his
attempted offer-in-compromise, our review of the Commissioner’s
determination generally is limited to issues raised at the
section 6330 hearing. Magana v. Commissioner, 118 T.C. 488, 493
(2002). Petitioner’s offer-in-compromise was submitted after the
scheduled section 6330 hearing and the issuance of the final
notice. Accordingly, the offer-in-compromise could not have been
considered at the section 6330 hearing. There would, therefore,
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be no basis for the Court to hold that there was an abuse of
discretion with respect to the offer-in-compromise.3
Petitioner’s final argument is that a portion of his tax
liabilities had been satisfied through offset and other
collection by respondent. However, the specific amounts of
petitioner’s tax liabilities that remain unpaid have not been
addressed by him, and there is no evidence that respondent is
attempting to collect more than petitioner’s unpaid balance.
In summary, before the scheduled section 6330 hearing,
petitioner’s sole defense to the proposed levy was his challenge
to the underlying tax liability. Petitioner did not attend the
scheduled hearing, and through the time of the final notice he
did not offer spousal defenses, challenges to the appropriateness
of the collection action, or collection alternatives.
We, accordingly, hold that respondent did not commit error
or abuse his discretion in his determination to proceed with
collection.
To reflect the foregoing,
Decision will be entered
for respondent.
3
It should be noted that petitioner’s offer-in-compromise
was with respect to doubt as to liability, which would address
the merits of the underlying liability. Since petitioner is
precluded from questioning the underlying liabilities, his offer
would not provide him any relief in the setting of this
proceeding.