T.C. Summary Opinion 2006-19
UNITED STATES TAX COURT
LYNDA DIANE SAMPSON-GRAY, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 7689-04S. Filed February 6, 2006.
Lynda Diane Sampson-Gray, pro se.
Joseph J. Boylan, for respondent.
THORNTON, Judge: This case was heard pursuant to the
provisions of section 7463 of the Internal Revenue Code.1 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, section references are to the
Internal Revenue Code, as amended.
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Pursuant to section 6330(d), petitioner seeks review of an
Appeals Office determination sustaining a levy on petitioner’s
State income tax refund. The issue for decision is whether
respondent abused his discretion in issuing the notice of
determination.
Background
Petitioner filed her 1991, 1992, and 1997 Federal income
tax returns late. Respondent assessed the taxes shown on the
returns and related additions to tax for failure to timely file
returns and pay taxes due.
On or about October 1, 2002, respondent levied $537.32 of
petitioner’s State tax refund. Respondent recorded this amount
as a payment on petitioner’s 1991 account, along with various
other payments, generating overpayment credits which respondent
transferred to petitioner’s 1992 and 1997 accounts.
On February 3, 2003, respondent issued to petitioner a
notice indicating that the IRS had levied $537.52 of her State
tax refund to pay her unpaid Federal tax (no year specified).
Petitioner timely mailed to respondent a request for a hearing
under section 6330 as to the levy.
Following exchanges of correspondence and a conference
between petitioner and representatives of respondent’s Appeals
Office, on April 5, 2004, the Appeals Office issued a Notice of
Determination, which states that it relates to petitioner’s 1997
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tax year.2 On the same date, the Appeals Office also issued to
petitioner a “Decision Letter Concerning Equivalent Hearing
Under Section 6320 and/or 6330 of the Internal Revenue Code”
(the decision letter), which states that it relates to
petitioner’s 1991 tax year but is otherwise essentially
identical to the Notice of Determination.3 The Notice of
Determination and the decision letter conclude identically that
the required procedures had been followed for the levy on the
State tax refund. The Notice of Determination and the decision
letter state identically:
Although the liability is fully satisfied, you did not
agree with our assessments, yet offered no substantive
evidence, arguments, or legal authority, to support
your position. I advised you to file * * * [a Form]
843 [Claim for Refund and Request for Abatement]
claim, since there are no other collection
alternatives necessary. The action by Compliance to
levy has been sustained.
2
An attachment to the Notice of Determination states that
because petitioner never received a Notice of Intent to Levy for
1992, “that year is not part of this hearing”.
3
Apparently, the decision letter was issued for 1991,
rather than a notice of determination, on the ground that
petitioner had timely failed to request a hearing with respect to
collection action relating to her 1991 tax year. Respondent
alleges that on Oct. 21, 2002, he issued to petitioner, with
respect to her 1991 tax liability, a Notice of Intent to Levy and
Notice of Your Right to Request a Hearing Under Section 6330 and
that petitioner did not request a hearing with respect to this
notice.
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Petitioner timely filed her petition in this Court,
indicating that she disagreed with respondent’s determinations
for 1991 and 1997. She requested a refund of $537.52.4
Discussion
If a person neglects or refuses to make payment of any
assessed Federal tax liability within 10 days of notice and
demand, the Secretary is authorized to collect the assessed tax
by levy on the person’s property. Sec. 6331(a). Section
6330(a) provides, however, that no levy may be made on any
property or right to property of any person unless the Secretary
has notified such person in writing of the right to a fair
hearing before making the levy. The person has 30 days after
issuance of the notice to request the hearing. Sec.
6330(a)(3)(B); sec. 301.6330-1(b)(1), Proced. & Admin. Regs.
Under section 6330(f)(2), if the Secretary has served a
levy on a State to collect a Federal tax liability from a State
tax refund, the requirement of notice and opportunity for
hearing before levy under section 6330 shall not apply.
Nonetheless, the taxpayer shall be given the opportunity for the
hearing described in section 6330 within a reasonable period of
4
After a hearing in which petitioner questioned
respondent’s computations for her liability, respondent reported
to the Court that a review by an IRS revenue officer had
determined that petitioner had overpaid the interest due on her
1991 income tax liability by $139.02 and that respondent had
abated this amount of interest.
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time after the levy. Sec. 6330(f) (flush language). We have
jurisdiction under section 6330(d) to review respondent’s
determination regarding the levy upon petitioner’s State tax
refund. See Clark v. Commissioner, 125 T.C. 108 (2005).
Respondent has filed a motion to dismiss for lack of
jurisdiction and to strike as to petitioner’s 1991 tax year, on
the ground that petitioner failed to timely request a hearing
within 30 days after the alleged issuance on October 21, 2002, of
a notice of intent to levy with respect to petitioner’s 1991 tax
liability. There is no dispute, however, that petitioner timely
requested a hearing with respect to the February 3, 2003, notice
of levy upon her State tax refund, and that the levied funds were
recorded as a payment against petitioner’s 1991 tax liability,
generating overpayment credits that respondent applied against
her 1992 and 1997 tax liabilities. On the same date that
respondent issued the Notice of Determination relating to
petitioner’s 1997 tax year, respondent also issued an “Equivalent
Hearing” decision letter concerning petitioner’s 1991 tax year.
That decision letter, coupled with petitioner’s timely petition
to this Court, serves to invoke this Court’s jurisdiction as to
petitioner’s tax year 1991 under section 6330(d)(1). See Craig
v. Commissioner, 119 T.C. 252 (2002). Accordingly, we shall deny
respondent’s motion.
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There is no dispute that petitioner’s 1991 and 1997 tax
liabilities have been fully satisfied and that respondent is no
longer pursuing any collection action with respect to those tax
liabilities. The only relief petitioner has sought in this
proceeding is a refund of $537.52, on the ground that the levy
has resulted in overpayment of her 1991 and 1997 taxes by that
amount. Although neither party has contested our jurisdiction to
consider petitioner’s refund claim in this section 6330
proceeding, jurisdiction may not be conferred upon the Court by
agreement or through equitable principles such as estoppel.
Clark v. Commissioner, supra at 109. This Court can, sua sponte,
question its jurisdiction at any time. Id.; Smith v.
Commissioner, 124 T.C. 36, 40 (2005).
This Court has recently held that it lacks jurisdiction in
section 6330 collection proceedings to determine the amount of an
overpayment or to order a refund or credit of taxes. Greene-
Thapedi v. Commissioner, 126 T.C. 1 (2006). Accordingly, this
Court lacks jurisdiction to consider petitioner’s claim for a
refund in this collection proceeding. Petitioner has not
alleged, and the record does not suggest, any procedural defect
in the levy upon her State tax refund such as might warrant the
Court’s exercise of its inherent equitable powers to order the
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Commissioner to return petitioner’s State tax refund to her.5
Cf. Zapara v. Commissioner, 124 T.C. 223 (2005) (requiring the
Commissioner to provide the taxpayer a credit with respect to
property that the Commissioner had seized pursuant to a jeopardy
levy but had improperly refused to sell in compliance with the
taxpayer’s request made pursuant to section 6335(f)); Chocallo v.
Commissioner, T.C. Memo. 2004-152 (requiring the Commissioner to
return to the taxpayer, with interest, the amount collected by
levy where the levy had been made without following the hearing
procedures required under section 6330(b)).
Although petitioner cannot pursue her claim for a refund in
this Court, she is not without a remedy, as she may file a claim
for refund with the IRS (as suggested in the Notice of
Determination and in the decision letter), and if the claim is
denied, sue for a refund in the Federal District Court or the
U.S. Court of Federal Claims. See McCormick v. Commissioner, 55
T.C. 138, 142 (1970); Koerner v. Commissioner, T.C. Memo. 1997-
144.
In light of the foregoing,
Decision will be entered
for respondent.
5
We expect respondent, however, to give petitioner proper
credit for the $139.02 of interest that respondent admits
petitioner overpaid for 1991.