T.C. Summary Opinion 2006-68
UNITED STATES TAX COURT
GERALD R. TASSIELLI, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 22326-04S. Filed April 26, 2006.
Gerald R. Tassielli, pro se.
Daniel J. Parent, for respondent.
PANUTHOS, Chief Special Trial Judge: This case was heard
pursuant to the provisions of sections 6330(d) and 7463 of the
Internal Revenue Code in effect when 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. Unless otherwise
indicated, all subsequent section references are to the Internal
Revenue Code in effect at relevant times.
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This proceeding arises from a petition for judicial review
filed in response to a Notice of Determination Concerning
Collection Action(s) Under Section 6320 and/or 6330 (notice of
determination) sent to petitioner on October 27, 2004. The issue
for decision is whether respondent abused his discretion in
determining that the proposed levy action should proceed
regarding petitioner’s unpaid Federal income tax and related
liabilities for 1999.
Background
Some of the facts have been stipulated, and they are so
found. The record consists of the stipulation of facts with
attached exhibits and the testimony of petitioner. At the time
of filing the petition, petitioner resided in San Ramon,
California.
On his 1999 Federal income tax return, petitioner claimed an
overpayment of $11,198. Respondent determined that petitioner’s
tax return contained mathematical or clerical errors and adjusted
his personal exemption and itemized deductions. After
adjustments, respondent determined that petitioner’s overpayment
was $10,566.26.1 Respondent assessed additional tax resulting
1
Respondent did not refund the overpayment to petitioner.
Instead, respondent applied $6,195.86 to petitioner’s unpaid tax
liability for 1997 and $4,370.40 to his unpaid tax liability for
1998.
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from the adjustments and notified petitioner of the changes to
his tax return on February 5, 2001.
Several months later, respondent determined a $9,823
deficiency for petitioner’s taxable year 1999. The deficiency
was attributable solely to alternative minimum tax (AMT).2
Respondent issued petitioner a notice of deficiency on December
18, 2001, which states in part: “If you want to contest this
determination in court before making payment, you have until * *
* 90 days from the date of this letter * * * to file a petition
with the United States Tax Court.” The notice of deficiency
explains how to obtain a petition and provides the Tax Court’s
mailing address.
On March 18, 2002, petitioner sent a letter to the Internal
Revenue Service in Philadelphia, Pennsylvania, along with a copy
of the notice of deficiency. The letter states: “I do not agree
with the action taken against me reflected in the accompanying
letter. Hence, I would like to petition the U.S. Tax Court. I
want to contest this claim.” Petitioner did not send a copy of
the letter to the Tax Court. Respondent sent petitioner a letter
dated March 26, 2002, informing petitioner that if he wished to
challenge respondent’s determination, he must follow the
instructions contained in the notice of deficiency. Petitioner
2
Petitioner’s 1999 tax return did not include a computation
of his AMT liability.
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did not file a petition with the Tax Court based on that notice
of deficiency.
On December 18, 2003, respondent sent petitioner a Final
Notice Of Intent To Levy And Notice Of Your Right To A Hearing.
Petitioner timely submitted a Form 12153, Request for a
Collection Due Process Hearing. During the administrative
hearing with respondent’s Appeals Office, petitioner raised two
issues: (1) He disagreed with respondent’s calculation of his
AMT liability; and (2) he disputed respondent’s right to issue a
notice of deficiency after previously adjusting his tax return
based on mathematical or clerical errors. Petitioner did not
raise a spousal defense or offer a collection alternative. On
October 27, 2004, respondent issued a notice of determination to
petitioner sustaining the proposed levy action. The notice of
determination states that the Appeals officer verified that the
requirements of applicable law or administrative procedure had
been met, and that the levy action balanced the need for the
efficient collection of taxes with the concern that any
collection action be no more intrusive than necessary.
Discussion
Section 6331(a) authorizes the Secretary to levy upon
property and property rights of a taxpayer liable for taxes who
fails to pay those taxes within 10 days after the notice and
demand for payment is made. Section 6331(d) provides that the
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levy authorized in section 6331(a) may be made with respect to
unpaid tax only if the Secretary has given written notice to the
taxpayer 30 days before the levy. Section 6330(a) requires the
Secretary to send a written notice to the taxpayer of the amount
of the unpaid tax and of the taxpayer’s right to a section 6330
hearing at least 30 days before the levy is begun.
If a section 6330 hearing is requested, the hearing is to be
conducted by the Office of 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) and (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 also raise
challenges to 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); see Montgomery v.
Commissioner, 122 T.C. 1 (2004).
This Court has jurisdiction under section 6330 to review the
Commissioner’s administrative determinations. Sec. 6330(d); see
Iannone v. Commissioner, 122 T.C. 287, 290 (2004). When the
validity of the underlying tax liability is properly at issue, we
review the determination de novo. When the underlying liability
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is not properly at issue, the Court will review respondent’s
determination for abuse of discretion. Sego v. Commissioner, 114
T.C. 604, 610 (2000); Goza v. Commissioner, 114 T.C. 176, 183
(2000). Whether an abuse of discretion has occurred depends upon
whether the exercise of discretion is without sound basis in fact
or law. See Freije v. Commissioner, 125 T.C. 14 (2005);
Ansley-Sheppard-Burgess Co. v. Commissioner, 104 T.C. 367, 371
(1995).
In the present case, petitioner received a notice of
deficiency for the taxable year 1999. The letter he sent
respondent on March 18, 2002, was not a petition for
redetermination because it was not mailed to or filed with the
Tax Court. See sec. 6213(a). Petitioner therefore cannot
challenge the existence or amount of his underlying tax
liability. See Kaplowitz v. Commissioner, T.C. Memo. 2005-62.
We review for abuse of discretion.
Petitioner has not raised a spousal defense, offered a
collection alternative, or otherwise challenged the
appropriateness of respondent’s proposed collection action.
Petitioner’s dispute with respect to his AMT liability is a
challenge to his underlying tax liability, as is his contention
that respondent was not permitted to issue a notice of deficiency
after adjusting his tax return because of mathematical or
clerical errors. Even if petitioner were allowed to raise these
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issues with the Court, he has offered no evidence to indicate
that respondent incorrectly determined his AMT liability. In
addition, the Government is not prohibited from issuing a notice
of deficiency where it previously adjusted a taxpayer’s return
based on mathematical or clerical errors. See sec. 6213(b)(1);
Heasley v. Commissioner, 45 T.C. 448, 457 (1966); Ciciora v.
Commissioner, T.C. Memo. 2003-202.
Finally, we note that in his pretrial memorandum, petitioner
argues that we should reverse respondent’s determination because
“the enforcement of the [AMT] results in inequities”. He also
contends that Congress soon will enact legislation to repeal the
AMT, thereby rendering the issue in his case moot. These
arguments are also challenges to petitioner’s underlying tax
liability. Furthermore, we have rejected challenges to the AMT
based on equitable considerations, holding that such “policy
issues are in the province of Congress, and we are not authorized
to rewrite the statute.” Kenseth v. Commissioner, 114 T.C. 399,
407-408 (2000) (and cases cited therein); see also Anthes v.
Commissioner, 81 T.C. 1, 7 (1983), affd. without published
opinion 740 F.2d 953 (1st Cir. 1984) (“We must apply the law as
in effect during the taxable year in issue.”).
Based on our review of the record, we conclude that
respondent satisfied the requirements of section 6330 and did not
abuse his discretion in sustaining the proposed collection action
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against petitioner. Respondent’s determination therefore is
sustained.
Reviewed and adopted as the report of the Small Tax Case
Division.
To reflect the foregoing,
Decision will be entered
for respondent.