Nestor v. Comm'r

Colvin, Judge:

On April 7, 2000, respondent sent petitioner a Notice of Determination Concerning Collection Action(s) Under Sections 6320 and/or 6330 (the lien or levy determination), in which respondent determined to proceed with collection of deficiencies in petitioner’s income tax, additions to tax, interest, and the frivolous return penalty1 for 1990 through 1997 (1990-97).

In this opinion, we decide:

(1) Whether petitioner may contest his underlying tax liability for tax years 1992-97. We hold that he may not.

(2) Whether respondent’s determination to proceed with collection with respect to petitioner’s tax years 1992-97 was an abuse of discretion. We hold that it was not.

Section references are to the Internal Revenue Code as amended.

FINDINGS OF FACT

Some of the facts have been stipulated and are so found. Petitioner resided in California when he filed the petition in this case.

A. Petitioner’s Tax Returns and the Notices of Deficiency

Petitioner filed purported Federal income tax returns for 1990-96 in May 1997, and he timely filed a purported 1997 return on April 15, 1998.2 On each return, he reported that he had no wages, other income, or tax liability. After petitioner filed those tax returns and before October 1999 (when respondent issued the notice of intent to levy discussed at paragraph B, below), respondent assessed the frivolous return penalty under section 6702 for 1990-97.

Respondent issued notices of deficiency to petitioner for each of his 1990-97 tax years determining deficiencies and additions to tax as follows:

Additions to tax
Year Deficiency Sec. 6651(a) Sec. 6654
1990 $2,006 $493.00 $129.46
1991 1,834 455.75 104.73
1992 2,201 550.25 -0-
1993 2,021 493.75 -0-
1994 1,954 254.02 -0-
1995 2,899 202.93 -0-
1996 2,951 29.49 156.93
1997 2,996 89.88 -0-

Petitioner received the notices of deficiency for 1992-97, but he did not file a petition for redetermination of the deficiencies for 1992-97.

B. The Lien and Levy Proceeding

On October 21, 1999, respondent issued to petitioner a Notice of Intent to Levy and Notice of Your Right to a Hearing relating to petitioner’s 1990-97 tax years. On November 17, 1999, petitioner filed a Form 12153, Request for a Collection Due Process Hearing, for tax years 1990-983 in which he contended: (1) There was “no valid, underlying assessment” of taxes; (2) he did not receive the “statutory ‘notice and demand’” for payment of the taxes at issue; (3) he did not receive a valid notice of deficiency; and (4) he had no underlying tax liability. In his request for a hearing, petitioner asked that the Appeals officer have at the hearing: (1) Verification that “the requirements of any applicable law or administrative procedure have been met”, for example, a copy of the statutory notice and demand for payment; (2) a copy of Form 23C, Summary Record of Assessment, and the “pertinent parts of the assessment which set forth the name of the taxpayer, the date of the assessment, the character of the liability assessed, the taxable period, and the amount assessed”; (3) delegation of authority from the Secretary to the person (other than the Secretary) who signed the verification required under section 6330(c)(1); and (4) proof that notices of deficiency were sent to petitioner.

C. The Section 6330 Hearing and Respondent’s Notice of Determination

On December 28, 1999, respondent’s Appeals Office conducted a hearing in petitioner’s case for tax years 1990-97. Petitioner attended the hearing. He was not given an opportunity to challenge his underlying tax liability for 1990-97 at the hearing. At the hearing, he asked the Appeals officer to provide verification that the requirements of any applicable law or administrative procedures had been met, to give him copies of a notice and demand for payment, and to show him “anything that indicated [he] owed income tax” or that he was required to pay Federal income tax. The Appeals officer did not comply with petitioner’s requests and told petitioner that the hearing was limited to alternatives to collection. At the hearing, petitioner did not challenge the appropriateness of the intended method of collection, offer an alternative means of collection, or raise a spousal defense to collection.

On April 7, 2000, respondent sent petitioner a Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330 (the determination letter), in which respondent stated that all applicable laws and administrative procedures had been met and that collection from petitioner of his tax liability for 1990-97 would proceed. On May 8, 2000, petitioner filed a petition for lien or levy action under section 6320(c) or 6330(d).

OPINION

A. Whether Petitioner May Contest His Underlying Tax Liabilities for 1992 — 97

Petitioner contends that he was improperly precluded at the section 6330 hearing from challenging his underlying tax liability for tax years 1992-97. He bases this on the claim that the notices of deficiency he received were not valid because they were not prepared or issued by the Secretary and because the Director of the Service Center who prepared and issued them did not give petitioner a copy of the order delegating authority from the Secretary to her.

Petitioner’s contention lacks merit. The Secretary or his delegate may issue notices of deficiency. Secs. 6212(a), 7701(a)(ll)(B) and (12)(A)(i). The Secretary’s authority to issue notices of deficiency was delegated to the District Director and also to the Director of the Service Center who issued the notices of deficiency in this case. See Stamos v. Commissioner, 95 T.C. 624, 630-631 (1990), affd. without published opinion 956 F.2d 1168 (9th Cir. 1992); Kellogg v. Commissioner, 88 T.C. 167, 172 (1987); Perlmutter v. Commissioner, 44 T.C. 382, 385 (1965), affd. 373 F.2d 45 (10th Cir. 1967); secs. 301.6212-l(a), 301.7701-9(b), Proced. & Admin. Regs. A taxpayer may contest the existence or amount of the underlying tax liability at the section 6330(b) hearing only if the taxpayer did not receive a notice of deficiency for such tax liability or did not otherwise have an opportunity to dispute such tax liability. Sec. 6330(c)(2)(B). Section 6330(c)(2)(B) bars petitioner from contesting the existence or amount of his tax liabilities for 1992-97 because he received notices of deficiency for those years.

B. Whether Respondents Determination To Proceed With Collection as to Petitioner’s 1992 — 97 Tax Years Was an Abuse of Discretion

The Appeals officer verified that the Internal Revenue Service (irs) had met the requirements of any applicable laws and administrative procedures. See sec. 6330(c)(1); sec. 301.6330-l(e)(l), Proced. & Admin. Regs. The second sentence of section 6203 provides that the Secretary shall, upon request of the taxpayer, provide the taxpayer a copy of the record of assessment.

Petitioner points out that the Appeals officer did not have at the hearing the documents (the notice and demand for payment, verification that the requirements of applicable law or administrative procedure have been met, Form 23C, other assessment records, and the delegation order to the person other than the Secretary who signed the verification) that petitioner had requested in his request for a section 6330(b) hearing. Petitioner contends that he was entitled to receive assessment records under section 6203. Petitioner also contends that the Appeals officer’s verification was incorrect, and that the assessments were invalid, because he did not receive those documents at the hearing. The Appeals officer used Forms 4340, Certificate of Assessments and Payments, to verify the assessments. Even though petitioner specified Form 23C, it was not an abuse of discretion for the Appeals officer to use Forms 4340 for purposes of complying with section 6330(c)(1). Davis v. Commissioner, 115 T.C. 35, 41 (2000).

Section 6330(c)(1) does not require the Appeals officer to give the taxpayer a copy of the verification that the requirements of any applicable law or administrative procedure have been met. Section 301.6330-l(e)(l), Proced. & Admin. Regs., requires that the Appeals officer obtain verification before issuing the determination, not that he or she provide it to the taxpayer. There is no requirement under internal revenue laws or regulations that the Appeals officer give the taxpayer a copy of the delegation of authority from the Secretary to the person (other than the Secretary) who signed the verification required under section 6330(c)(1).

The Appeals officer did not give petitioner a copy of the record of assessment at or before the hearing as petitioner had requested. Respondent gave petitioner copies of the Forms 4340 prior to the trial in this case. The Forms 4340 that respondent gave petitioner before trial showed that the amounts at issue were properly assessed, and petitioner did not show at trial any irregularity in the assessment procedure that would raise a question about the validity of the assessments. Requiring the Appeals officer to provide petitioner with a second copy of petitioner’s Forms 4340 at this time would delay disposition of this case. Petitioner was not prejudiced in any way by the fact that he first received copies of those records after the section 6330 hearing. Thus, whether or not the second sentence of section 6203 is an “applicable law or administrative procedure” referred to in section 6330(c)(1), it is clear that no bona fide interest would be served by further delaying the collection of petitioner’s tax liability for 1992-97.

Petitioner contends that the notice of intent to levy improperly failed to identify the Code sections which establish his alleged tax liability. He contends that the assessment of tax was improper because he filed tax returns for 1990-97 which showed that he owed no income taxes for those years. He also asserts that respondent may not assess tax because section 6201 provides for self-assessment and only petitioner can determine what tax he owes.

Petitioner’s contentions are frivolous. There is no requirement that the notice of intent to levy identify the Code sections which establish the taxpayer’s liability for tax, additions to tax, or penalties.

Section 6330(c)(2)(A) permits a taxpayer to challenge the appropriateness of the intended method of collection, offer alternatives to collection, or raise a spousal defense to collection. Petitioner gives no bona fide basis for his claim that the collection action was not appropriate. We conclude that respondent’s determination to proceed with collection of the tax liabilities assessed against petitioner for those years was not an abuse of discretion.4

Accordingly,

An appropriate order will be issued.

Reviewed by the Court.

Wells, Cohen, Gerber, Ruwe, Whalen, Halpeen, and Thornton, JJ., agree with this majority opinion. Marvel J., concurs in result only.

We will dismiss for lack of jurisdiction the portion of this case that relates to the frivolous return penalties for tax years 1992-97. Van Es v. Commissioner, 115 T.C. 324, 328-329 (2000).

Petitioner’s 1997 return bears the date “04-14-97”. The parties stipulated that petitioner filed his 1997 return on or before Apr. 15,1998.

The record is silent as to why petitioner requested a hearing with respect to tax year 1998. Because respondent’s notice of intent to levy did not include 1998, that year is not in issue here.

We also hold herein that petitioner’s contentions discussed in par. B (pp. 166-167) lack merit for years 1990-91.