T.C. Summary Opinion 2007-173
UNITED STATES TAX COURT
GREG GRIFFIN, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 5870-06S. Filed October 9, 2007.
Greg Griffin, pro se.
Karen N. Sommers, for respondent.
DEAN, Special Trial Judge: This case was heard pursuant to
the provisions of section 7463 of the Internal Revenue Code in
effect at the time the petition was filed. Pursuant to section
7463(b), the decision to be entered is not reviewable by any
other court, and this opinion shall not be treated as precedent
for any other case. Unless otherwise indicated, subsequent
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section references are to the Internal Revenue Code in effect for
the year in issue, and all Rule references are to the Tax Court
Rules of Practice and Procedure.
This is an appeal under section 6330(d)(1) from respondent's
determinations to uphold the filing of the Notice of Federal Tax
Lien (NFTL) and to proceed with proposed levy action. Respondent
contends that petitioner waived his right to challenge collection
of his tax liabilities for 1988 and 1989 because he signed Forms
4549-CG, Income Tax Examination Changes.1 The issues for
decision are whether: (1) Petitioner is precluded from
challenging the underlying tax liabilities in this proceeding;
and (2) respondent’s determinations to uphold the filing of the
NFTL and to proceed with the proposed levy were an abuse of
discretion.
Background
Some of the facts have been stipulated and are so found.
The stipulation of facts and the exhibits received into evidence
are incorporated herein by reference. At the time the petition
was filed, petitioner resided in Imperial, California.
Petitioner failed to file Federal income tax returns for
1988 and 1989. Respondent issued to petitioner notices of
1
In general, Form 4549-CG provides a waiver whereby the
taxpayer consents to the immediate assessment and collection of
the tax and waives the right to the issuance of a notice of
deficiency and any rights to appeal.
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deficiency with respect to 1988 and 1989. Petitioner did not
file timely petitions with this Court in response to the notices
of deficiency, and the deficiencies were assessed.
On March 17, 1997, petitioner filed his 1988 and 1989
Federal income tax returns. Respondent abated the assessments
down to the amount shown on petitioner’s returns. Thereafter,
petitioner requested audit consideration, and respondent
initiated an examination of petitioner’s return. During the
examination, the revenue agent proposed additional assessments
for each year, and petitioner signed Forms 4549-CG on June 21,
1999. The Forms 4549-CG show deficiencies of $3,036 and $2,695
for 1988 and 1989, respectively.
Respondent issued a Letter 1058, Final Notice of Intent to
Levy and Notice of Your Right to a Hearing, on June 23, 2005. On
June 24, 2005, respondent’s revenue officer filed an NFTL at the
County Recorder, San Diego, California. On June 29, 2005,
respondent’s revenue officer issued a Letter 3172(DO), Notice of
Federal Tax Lien Filing and Your Right to a Hearing under IRC
6320. Petitioner submitted a Form 12153, Request for a
Collection Due Process Hearing, with respect to both notices.
Respondent consolidated the hearings into one proceeding. In
communications with the Appeals officer, petitioner sought to
challenge the underlying tax liabilities and would not offer any
alternatives to collection. Because petitioner intended to seek
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audit reconsideration, the face-to-face hearing was not held, and
the Appeals officer issued the Notice of Determination.
Discussion
1. Challenges to the Underlying Tax Liabilities
Section 6321 imposes a lien in favor of the United States on
all property and rights to property of a person liable for taxes,
interest, additional amounts, additions to tax, and costs that
may accrue in addition thereto if there has been a demand for
payment and the person has failed to pay. The lien arises at the
time of assessment. Sec. 6322. In order for the Federal tax
lien to have priority over other liens or security interests, the
Secretary must file an NFTL. Sec. 6323(a); Behling v.
Commissioner, 118 T.C. 572, 575 (2002).
Generally, section 6320(a) states that the Secretary must
give the person against whom a Federal tax lien is filed written
notice of the lien’s filing within 5 business days after the date
of its filing. Section 6320(b) also provides the taxpayer with
an opportunity for a hearing before the Office of Appeals. The
hearing is conducted pursuant to subsections (c), (d), and (e) of
section 6330. Sec. 6320(c).
Section 6331(a) authorizes the Secretary to levy upon
property and property rights of a taxpayer liable for taxes who
fails to pay the taxes within 10 days after a notice and demand
for payment. Section 6331(d) provides that the levy may be made
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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 the taxpayer’s right to a hearing at least 30 days before
the Service can collect a tax by levy.
At the hearing, the taxpayer may raise challenges to the
existence or amount of the underlying tax liability if the person
did not receive a notice of deficiency or did not otherwise have
an opportunity to dispute the tax liability. Sec. 6330(c)(2)(B).
This Court has decided that for purposes of section
6330(c)(2)(B), if a taxpayer signed a Form 4549-CG and waived his
right to challenge the proposed assessments, then he is deemed to
have had an opportunity to dispute his tax liabilities and is
thereby precluded from challenging them. Zapara v. Commissioner,
124 T.C. 223, 228 (2005); Aguirre v. Commissioner, 117 T.C. 324,
327 (2001).
Putting aside petitioner’s receiving notices of deficiency
and failing to respond, which precludes review by this Court
under section 6330(c)(2)(B), he signed the Forms 4549-CG. He
thereby explicitly waived his right to contest the existence or
the amount of the underlying liabilities in this Court and is
deemed to have had a prior opportunity to dispute his liabilities
within the meaning of section 6320(c)(2)(B). Accordingly,
respondent’s determination is sustained.
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2. Abuse of Discretion
A taxpayer may appeal the Commissioner’s determination with
this Court within a 30-day period starting on the day after the
date of the Notice of Determination. Sec. 6330(d)(1). In
reviewing the Commissioner’s determination, this Court applies an
abuse of discretion standard. Sego v. Commissioner, 114 T.C.
604, 610 (2000).
In making a determination, the Appeals officer must consider
the following: (1) Whether any applicable law or administrative
procedure has been followed; (2) the issues properly raised by
the taxpayer; and (3) whether the proposed collection action
balances the need for the efficient collection of taxes with the
taxpayer’s legitimate concern that the collection action be no
more intrusive than necessary. Sec. 6330(c)(3).
The applicable laws and administrative procedures were
satisfied since petitioner received the required notices and was
advised of his rights for a hearing within the timeframes
mandated by sections 6303, 6320, and 6330.
The Appeals officer did not consider any issues raised by
petitioner because: (1) The underlying tax liabilities were not
properly at issue; and (2) she could not consider any collection
alternatives since petitioner refused to suggest any, he refused
to provide the required financial information, and he chose not
to proceed with the hearing.
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The Appeals officer balanced the need for efficient
collection of taxes against petitioner’s concern over the
action’s intrusiveness.
Had petitioner proceeded with the hearing, an alternative
collection action might have been considered. The Court notes
that there was sufficient evidence introduced at trial indicating
that if petitioner goes through the proper procedural steps
(i.e., requesting audit reconsideration or submitting an offer-
in-compromise), he might receive administrative relief.
Therefore, the Court concludes that respondent’s Appeals
officer did not abuse her discretion in upholding the filing of
the NFTL and the proposed levy action. Accordingly, respondent’s
determination is sustained.
To reflect the foregoing,
An appropriate decision will
be entered.