T.C. Summary Opinion 2007-23
UNITED STATES TAX COURT
ROBERT E. AUSTIN, JR., Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 12118-04S. Filed February 20, 2007.
Robert E. Austin, Jr., pro se.
Michael D. Zima, for respondent.
COUVILLION, Special Trial Judge: This case was heard
pursuant to section 7463 in effect when 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.
Some of the facts were stipulated. Those facts, with the
annexed exhibits, are so found and are incorporated herein by
1
Unless otherwise indicated, subsequent section references
are to the Internal Revenue Code as amended.
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reference. At the time the petition was filed, petitioner was a
legal resident of Leesburg, Florida.
Petitioner seeks a review under section 6320(b) of the
filing of a notice of lien under section 6323 with respect to his
Federal income taxes for the years 1997, 2000, and 2001. As of
June 15, 2004, petitioner’s unpaid tax liabilities were $48,122,
$3,227.99, and $36,897.19, respectively, for 1997, 2000, and
2001. Prior to respondent’s issuance of the tax lien notice,
petitioner had made an offer in compromise for settlement of
these liabilities; however, that offer was not considered because
petitioner was not “compliant” in the filing of his 2002 Federal
income tax return and, additionally, had not made estimated tax
payments for the year 2003.
Petitioner filed Federal income tax returns for the 3 years
at issue. For the year 1997, petitioner filed as a single
person. Petitioner married Carolyn Bair during 1998, and they
filed joint Federal income tax returns for the 2 other years at
issue, 2000 and 2001. Petitioner’s spouse is not a party in this
proceeding.
Petitioner is an attorney and is engaged in the practice of
law. No notices of deficiency were issued with respect to the 3
years at issue. The unpaid taxes arise from underpayments by
petitioner of the taxes shown on his income tax returns.
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Following issuance by respondent’s notice of the filing of a
tax lien with respect to the years at issue, 1997, 2000, and
2001, petitioner timely requested a hearing. That hearing was
conducted by telephone between respondent’s Appeals officer and
petitioner’s certified public accountant, Mr. Shaw. A notice of
determination was thereafter issued based upon the failure to
make payments on the amounts due and the failure to offer a
viable collection alternative. However, in the course of the
contacts between petitioner’s representative and the Appeals
officer, the Appeals officer believed that petitioner was having
financial difficulties and requested that petitioner provide him
with financial information by a certain date. That information,
however, was never provided, and the Appeals officer noted in the
notice of determination: “Since I received no financial
information, I could not determine a collection alternative.”
The Appeals officer concluded that issuance of the notice of
determination was appropriate, and petitioner thereafter filed
his petition in this Court timely. Petitioner did not challenge
the underlying tax liability with the Appeals officer.
Petitioner contends he is entitled to a carryover of net
operating losses that his spouse sustained in a real estate
activity prior to their marriage and that these losses offset the
tax liabilities that are the subject of this case. Petitioner,
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therefore, challenges the underlying deficiencies for the 3 years
at issue. Respondent, however, takes exception to petitioner’s
claim.
As noted earlier, there were no notices of deficiency issued
to petitioner for the years at issue, 1997, 2000, and 2001.
Section 6330(c)(2)(B) states:
(B) Underlying liability.-–The person may also raise at
the hearing challenges to the existence or amount of the
underlying tax liability for any tax period if the person
did not receive any statutory notice of deficiency for such
tax liability or did not otherwise have an opportunity to
dispute such tax liability.
Petitioner did not avail himself of the opportunity to challenge
the lien and the tax liability with the Appeals officer. In
fact, the Appeals officer left the door open for such a challenge
as he indicated a belief in his determination notice that
petitioner may have been experiencing financial difficulties and
held the door open for that specific reason. At that time,
petitioner would have had the opportunity to challenge the
underlying liabilities. He failed to do that. The underlying
tax liabilities, therefore, are not properly at issue. When, as
here, the underlying liability is not at issue, this Court
reviews the Commissioner’s determination for abuse of discretion.
Sego v. Commissioner, 114 T.C. 604, 610 (2000). Accordingly, the
Court holds that there was no abuse of discretion by respondent
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in determining that collection could proceed with respect to
petitioner’s liabilities for the years in question.
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
for respondent.