T.C. Summary Opinion 2007-159
UNITED STATES TAX COURT
DIMITRIOS T. MANOUSOS AND ANNE M. MANOUSOS, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 22246-06S. Filed September 10, 2007.
Anne M. Manousos, pro se.
Aaron D. Gregory and Micah A. Levy, for respondent.
ARMEN, Special Trial Judge: This case was heard pursuant to
the provisions of section 7463 of the Internal Revenue Code in
effect when the petition was filed.1 Pursuant to section
7463(b), the decision to be entered is not reviewable by any
1
Unless otherwise indicated, all subsequent section
references are to the Internal Revenue Code, as amended, and all
Rule references are to the Tax Court Rules of Practice and
Procedure.
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other court, and this opinion shall not be treated as precedent
for any other case.
This matter is before the Court on respondent’s Motion For
Summary Judgment, as supplemented. In his motion, respondent
moves for a summary adjudication in his favor in this collection
review case involving a proposed levy for 2002. For reasons
discussed hereinafter, we shall grant respondent’s motion.
Background
At the time that the petition was filed, petitioner
Dimitrios T. Manousos (Mr. Manousos) and petitioner Anne M.
Manousos (Mrs. Manousos) resided in Virginia Beach, Virginia. We
shall refer to Mr. and Mrs. Manousos collectively as petitioners.
Petitioners’ Income Tax Liability for 2002
Petitioners timely filed a Federal income tax return for
2002. On their return, petitioners reported a tax liability,
which they paid in full through a combination of withholding and
a remittance enclosed with their return.2
Subsequently, respondent examined petitioners’ return. By
notice dated July 29, 2004, respondent determined a deficiency of
2
On their return, petitioners claimed five exemptions
($15,000) and itemized their deductions on Schedule A, Itemized
Deductions. Included among those deductions were State and local
taxes in the amount of $5,570 and various miscellaneous
deductions in the net amount of $17,074. See sec. 67, imposing a
2-percent floor on miscellaneous itemized deductions.
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$2,636. The deficiency was attributable solely to the
alternative minimum tax (AMT).3
Respondent mailed a notice of deficiency to Mr. Manousos and
a duplicate original to Mrs. Manousos. Both documents were sent
by certified mail, and each was mailed to petitioners’ Joplin
Lane address in Virginia Beach, Virginia. That address was at
the time, and has remained through the present day, petitioners’
mailing address.
Petitioners did not contest respondent’s deficiency
determination by filing a petition for redetermination with this
Court. See sec. 6213(a). Accordingly, upon petitioners’
default, respondent assessed the deficiency, together with
statutory interest, on December 6, 2004. On that same date,
respondent sent petitioners a statutory notice of balance due,
i.e., notice and demand for payment. See sec. 6303(a).
Petitioners did not pay the full amount due.
Final Notice of Intent To Levy
On March 18, 2006, respondent sent to petitioners a Final
Notice/Notice of Intent to Levy and Notice of Your Right to a
Hearing (final notice). See sec. 6330(a). Respondent sent the
3
In computing the AMT, no deduction is allowed for various
deductions, specifically including: (1) State and local taxes
otherwise deductible on a Schedule A; (2) itemized miscellaneous
deductions; and (3) exemptions. See sec. 56(b)(1). Therefore,
for AMT purposes, petitioners were deprived of deductions worth
$37,644 that were otherwise allowable under the “regular”, i.e.,
sec. 1, income tax.
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final notice to petitioners in respect of their outstanding
liability for 2002, which, at that time, was approximately $1,407
(without regard to statutory accruals of interest and penalty).
Administrative Developments
Petitioners timely filed with respondent a Form 12153,
Request for a Collection Due Process Hearing. In the Form 12153,
petitioners focused only on the existence or amount of their
underlying liability.
By letter dated August 16, 2006, respondent’s settlement
officer advised petitioners that, inter alia:
For me to consider alternative collection methods such
as an installment agreement or offer in compromise, you
must provide any items listed below. In addition, you
must have filed all federal tax returns required to be
filed.
The “items listed below” included a completed Collection
Information Statement (Form 433-A for individuals and/or Form
433-B for businesses) and signed income tax returns for 2003,
2004, and 2005. Regarding the latter, the settlement officer
stated that “Our records indicate they have not been filed”.
The settlement officer subsequently conducted a telephonic
conference with Mrs. Manousos.
Petitioners never submitted a Collection Information
Statement or proposed a specific collection alternative, nor did
petitioners file all of the requested returns during the time
that their case was pending before respondent’s Appeals Office.
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Ultimately, on October 4, 2006, respondent’s Appeals Office
sent to petitioners a Notice of Determination Concerning
Collection Action(s) Under Section 6320 and/or 6330. The notice
of determination sustained the proposed levy.
The Attachment to the notice of determination, authored by
the settlement officer, included the following statement:
You stated that you were not interested in the setting
up of a payment plan. It was explained to you that [a]
payment [plan] could not be considered as you were not
compliant in filing all your tax returns. You were
still interested in the liability issue. The
Settlement Officer explained that you had prior
opportunity to question the liability issue and this
could not be considered at the hearing.
Petitioners’ Petition
On October 31, 2006, petitioners filed a petition with this
Court, appealing from the October 4, 2006 notice of
determination. The petition focuses solely on the existence or
amount of petitioners’ underlying liability for 2002.
Respondent’s Motion For Summary Judgment
As previously stated, respondent filed a Motion For Summary
Judgment, which motion was subsequently supplemented. In his
motion, respondent relies on section 6330(c)(2)(B). In that
regard, respondent states, in part, as follows:
In both their CDP [Collection Due Process] hearing
request and their petition, the petitioners challenged
the underlying tax liability for the tax year 2002.
Pursuant to section 6330(c)(2)(B), the petitioners
cannot raise during the CDP hearing the existence or
amount of the underlying tax liability if petitioners
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received a statutory notice of deficiency for that tax
liability.
* * * * * * *
The petitioners received a statutory notice of
deficiency for the tax year 2002. * * * More
specifically, as noted above, respondent properly
mailed the statutory notice of deficiency to the
petitioners’ last known address on July 29, 2004.
* * * Respondent is entitled to rely upon presumptions
of official regularity and delivery where the record
reflects proper mailing of the statutory notice of
deficiency. * * * There is no evidence that the
statutory notice of deficiency was returned to the
Service, nor have the petitioners ever denied its
receipt. Thus, the presumptions of official regularity
and delivery have not been rebutted. * * *
Accordingly, Settlement Officer Chapman properly
determined that the petitioner[s] [were] precluded from
disputing the underlying tax liability under section
6330(c)(2)(B).
Petitioners filed a Response to respondent’s motion. In
their Response, petitioners continue to focus on the underlying
tax liability, but they do not deny receipt of the July 29, 2004
notice of deficiency.
Hearing on Respondent’s Motion For Summary Judgment
Mrs. Manousos and counsel for respondent appeared at the
hearing on respondent’s Motion For Summary Judgment. At the
hearing, Mrs. Manousos stated that petitioners were unable to
specifically recall whether or not they had received the July 29,
2004 notice of deficiency.
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Discussion
Summary Judgment
Summary judgment is intended to expedite litigation and
avoid unnecessary and expensive trials. Fla. Peach Corp. v.
Commissioner, 90 T.C. 678, 681 (1988). Summary judgment may be
granted with respect to all or any part of the legal issues in
controversy “if the pleadings, answers to interrogatories,
depositions, admissions, and any other acceptable materials,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that a decision may be
rendered as a matter of law.” Rule 121(a) and (b).
After carefully reviewing the record, we are satisfied that
there is no genuine issue as to any material fact, and a decision
may be rendered as a matter of law. Accordingly, we shall grant
respondent’s Motion For Summary Judgment, as supplemented.
Respondent’s Proposed Levy
Section 6330 generally provides that the Commissioner cannot
proceed with collection by levy until the person has been given
notice and the opportunity for an administrative review of the
matter (in the form of an Appeals Office hearing) and, if
dissatisfied, with judicial review of the administrative
determination. See Davis v. Commissioner, 115 T.C. 35, 37
(2000); Goza v. Commissioner, 114 T.C. 176, 179 (2000).
Section 6330(c) prescribes the matters that a person may
raise at an Appeals Office hearing. In sum, section 6330(c)
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provides that a person may raise collection issues such as
spousal defenses, the appropriateness of the Commissioner's
intended collection action, and possible alternative means of
collection. Section 6330(c)(2)(B) provides that the existence
and amount of the underlying tax liability can be contested at an
Appeals Office hearing only if the person did not receive a
notice of deficiency for the tax in question or did not otherwise
have an earlier opportunity to dispute the tax liability. See
Sego v. Commissioner, 114 T.C. 604, 609 (2000); Goza v.
Commissioner, supra. Section 6330(d) provides for judicial
review of the administrative determination.
In the present case, petitioners seek only to challenge the
existence or amount of their underlying liability for 2002.
However, petitioners are legally precluded from doing so if they
received the July 29, 2004 notice of deficiency and chose not to
contest respondent’s determination by filing a petition for
redetermination with this Court. Sec. 6330(c)(2)(B).
In this regard, there is nothing in the record to suggest
that petitioners did not receive the July 29, 2004 notice of
deficiency. Indeed, duplicate originals of the notice of
deficiency were mailed to petitioners by certified mail at their
last known address, which is also their current address.
Respondent represents that there is nothing in his files to
suggest that either of the notices was returned undelivered to
respondent by the U.S. Postal Service. In addition, petitioners
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have never denied receipt, see Rule 121(d), and Mrs. Manousos
candidly admitted at the hearing that petitioners could not
recall whether or not they had received the notice of
deficiency.4 Moreover, other notices and letters, such as the
final notice, the settlement officer’s correspondence, and the
notice of determination were all sent to petitioners at the same
address as the notice of deficiency, and all such notices and
letters were received by petitioners.
In Zenco Engg. Corp. v. Commissioner, 75 T.C. 318, 323
(1980), affd. without published opinion 673 F.2d 1332 (7th Cir.
1981), we held that “There is a strong presumption in the law
that a properly addressed letter will be delivered, or offered
for delivery, to the addressee.” Further, it is clear that in
general, and in the absence of clear evidence to the contrary,
compliance with certified mail procedures raises a presumption of
official regularity in delivery and receipt with respect to
notices sent by the Commissioner. See United States v. Zolla,
724 F.2d 808, 810 (9th Cir. 1984); United States v. Ahrens, 530
F.2d 781, 784-785 (8th Cir. 1976); Clough v. Commissioner, 119
T.C. 183, 187-188 (2002).
4
Respondent’s Motion For Summary Judgment, and to a lesser
extent the settlement officer’s attachment to the notice of
determination, make plain respondent’s view that petitioners did,
in fact, receive the July 29, 2004 notice of deficiency. Thus,
petitioners had every incentive to contest that matter if it were
not factually accurate.
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The foregoing presumptions, coupled with the factors
previously discussed, oblige us to conclude that petitioners
received the July 29, 2004 notice of deficiency. As a
consequence, section 6330(c)(2)(B) bars petitioners from
challenging the existence or amount of their outstanding
liability for 2002. See Bailey v. Commissioner, T.C. Memo. 2005-
241.
Conclusion
Petitioners have failed to make a valid challenge to the
appropriateness of respondent’s intended collection action, offer
an alternative means of collection, or raise a spousal defense.
See Rule 331(b)(4) (“Any issue not raised in the assignments of
error shall be deemed to be conceded.”). In the absence of a
valid issue for review, we conclude that respondent is entitled
to judgment as a matter of law sustaining the October 4, 2006
notice of determination. Accordingly, we shall grant
respondent’s Motion For Summary Judgment, as supplemented, and
thereby sustain the determination of the Appeals Office
permitting respondent to proceed with collection for 2002.
To give effect to the foregoing,
An order granting respondent’s
Motion For Summary Judgment, as
supplemented, and decision for
respondent will be entered.