                        T.C. Memo. 2003-328



                      UNITED STATES TAX COURT



                 JERRY D. CRINER, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 7126-02L.             Filed November 25, 2003.


     Jerry D. Criner, pro se.

     Bruce K. Meneely, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     MARVEL, Judge:   On March 28, 2002, respondent mailed to

petitioner a Notice of Determination Concerning Collection

Action(s) Under Section 63201 and/or 6330 (notice of



     1
      Section references are to the Internal Revenue Code of
1986, as amended and in effect at the time the petition was
filed.
                               - 2 -

determination) for unpaid Federal income tax liabilities of

petitioner for 1990 through 1993.   In response to that notice and

pursuant to sections 6320 and 6330(d), petitioner timely

petitioned this Court to review the determination to proceed with

collection by filing a nominee Notice of Federal Tax Lien (NFTL).

     The issue for decision is whether the Appeals Office abused

its discretion in upholding respondent’s filing of a nominee NFTL

in this case.

                         FINDINGS OF FACT

Background

     Petitioner resided in Claremore, Oklahoma, when he filed his

petition in this case.

     From 1975 to 1996, approximately, excluding the periods of

time that he was incarcerated, petitioner derived at least some

portion of his income from cheating at gambling.   By his own

estimate, since 1975, petitioner has earned substantial income by

cheating at gambling.

     At various times during the 1980s through the mid-1990s,

petitioner was prosecuted in Nevada, New Jersey, and Oklahoma for

money laundering, structuring monetary transactions, felony theft

by deception, possession of slot machine cheating devices, fraud,

and burglary, and he served time in prison.   In connection with

the Nevada prosecution, petitioner was arrested in Tulsa,

Oklahoma, on May 13, 1987.   Petitioner had at least $30,000 in
                               - 3 -

cash in his possession at the time of his May 13, 1987, arrest.

     Sometime during 1984 or 1985, petitioner established the

Wesley Brown Society, allegedly an Oklahoma corporation.

Petitioner was the president and sole owner of the Wesley Brown

Society.   Petitioner bought and sold real estate through the

Wesley Brown Society, purchasing at least four properties and

recording the title to those properties in the name of the Wesley

Brown Society.   Petitioner also purchased a car, registering it

in the name of the Wesley Brown Society as lessee.    The Wesley

Brown Society did not file Federal or State tax returns.

     Petitioner does not have a checking account and does not

maintain any tax or financial records.    Petitioner pays his

living expenses with money orders or out of accounts titled in

the names of family members.

The Claremore Property

     The property where petitioner and his family reside is

located at 20154 Carefree Valley Drive, Claremore, Oklahoma

74017-91012 (the Claremore property).    The Claremore property

consists of a large, two-story house on 8.5 acres, located about

15 minutes by car outside the city of Claremore, Oklahoma.      The


     2
      The Claremore property address is also shown as Route 2,
Box 2-3, Claremore, Oklahoma 74017-9101. The legal description
of the property is shown on the amended Notice of Federal Tax
Lien as “Lot 3 in Block 2 of Amended Plat of Carefree Valley, an
addition in Section 8, Township 21, North Range 17 East of the
I.B.&M., Rogers County, Oklahoma, according to the recorded Plat
thereof.”
                                 - 4 -

Claremore property was purchased on April 3, 1987, from James T.

and Virginia L. Arnold for $135,000 and was titled in the name of

Alice Criner, petitioner’s mother.       No mortgage was recorded

against the property in connection with the 1987 purchase.       The

record in this case contains no evidence of the source of the

funds used to purchase the Claremore property in 1987.3

     When the Claremore property was purchased in 1987, Alice

Criner was in her mid-sixties.    She had worked for St. John’s

Hospital for approximately 30 years.       When Alice Criner retired

sometime in the early 1980s, she was a cafeteria supervisor.        In

1987, Alice Criner’s income consisted of retirement benefits from

St. John’s Hospital and possibly Social Security benefits.

     Alice Criner lived in the Claremore property for an unknown

length of time between April 1987 and 1989.       She never owned a

car and did not know how to drive.       For the last few years of her

life, Alice Criner suffered from advanced-stage Parkinson’s

disease.   Sometime between April 1987 and her death in 1989,

Alice Criner became too ill to live at the Claremore property and

was moved into a care facility in Broken Arrow, Oklahoma.       Alice

Criner died intestate on August 21, 1989.       Each of Alice Criner’s

six children received approximately $1,400 in death benefits from

a life insurance policy as a result of her death.


     3
      Alice Criner’s daughter, Jeannie McLelland, testified that
she did not know where her mother would have gotten the funds to
purchase the Claremore property in 1987.
                                - 5 -

     Petitioner lived at the Claremore property “many times”

before taking up permanent residence there in 1995.      For example,

petitioner, his wife, and their two children resided at the

Claremore property from January 1988 through April 23, 1990, and

again from April 1, 1992, through June 13, 1993.      Petitioner has

taken care of the Claremore property since at least 1989 and has

improved the property from time to time.      For example, he

constructed a pond and installed a spa on the Claremore property.

     Petitioner also has maintained, and continues to maintain,

utility accounts with respect to the Claremore property.        For

example, in order for a property owner in Rogers County,

Oklahoma, to obtain water rights, he or she was required to

submit proof of his or her property ownership to the Rural Water

District No. 7 in Rogers County, Oklahoma.      On May 1, 1987, Rural

Water District No. 7 in Rogers County, Oklahoma, issued a benefit

unit certificate for water rights to petitioner for the Claremore

property.   On May 1, 1987,   petitioner became the tap owner with

respect to the Claremore property.      Petitioner also has an

account with Verdigris Valley Electric Cooperative with respect

to the Claremore property.4

     On April 27, 1993, petitioner purchased a cashier’s check in

the amount of $6,292.91, payable to the Rogers County Treasurer


     4
      The Claremore property account with Verdigris Valley
Electric Cooperative has never been listed under the name of
Alice Criner.
                               - 6 -

for ad valorem property taxes on the Claremore property for 1989,

1990, 1991, and 1992.   Petitioner also paid the 1993 ad valorem

property taxes on the Claremore property with a check drawn on

the account of “Cass Criner, a minor, Jerry Criner, custodian,

UTMA”.   On November 29, 2000, petitioner’s 18-year-old son,

Candon Criner, purchased a cashier’s check in the amount of

$1,233.86, payable to the Rogers County Treasurer.   At that time,

Candon Criner probably was not living at the Claremore property

and would not have had the money to buy the cashier’s check

without petitioner or one of petitioner’s brothers or sisters

giving him the funds.

Petitioner’s Tax Liabilities

     Petitioner did not file Forms 1040, U.S. Individual Income

Tax Return, for 1990 through 1993. Petitioner signed a Form 870,

Waiver of Restrictions on Assessment and Collection of Deficiency

in Tax and Acceptance of Overassessment, on July 31, 1996,

consenting to the assessment of deficiencies in income tax and

additions to tax under section 6651(a)(1) for 1990 through 1993.

Respondent assessed the deficiencies in income tax and the

additions to tax under section 6651(a)(1) for 1990 through 1993

on September 9, 1996.

     On December 4, 2001, petitioner’s collection matter was

assigned to Revenue Officer Dale Baustert.   Mr. Baustert’s review

of the file revealed that collection actions had been initiated
                                - 7 -

against condominiums allegedly owned by petitioner in New Jersey

and were still pending and that a request for a nominee NFTL with

respect to the Claremore property had not been completed.

     On December 11, 2001, Mr. Baustert submitted a memorandum

requesting authorization to file a nominee NFTL against the

Claremore property to the Office of District Counsel in Oklahoma

City, Oklahoma (Counsel).   The memorandum request was sent

through Dale Spannagel, group manager.   In the memorandum, Mr.

Baustert outlined the facts that formed the basis for his belief

that petitioner was the equitable owner of the Claremore

property:   (1) No mortgage was recorded when the Claremore

property was ostensibly purchased by Alice Criner, indicating a

cash purchase; (2) petitioner had a long history of placing real

and personal property in nominee names of his family members and

the Wesley Brown Society; (3) on April 26, 1990, petitioner’s ex-

wife recorded a quitclaim deed divesting herself of any interest

that she had in the Claremore property; (4) Rogers County

Treasurer’s records indicate that petitioner, his wife, and their

children have paid the ad valorem property taxes on the Claremore

property; and (5) petitioner claimed to have “an arrangement”

with his siblings to watch after the home, but he did not produce

any affidavits from them when asked to do so by the revenue

officer.    The memorandum also noted that the Claremore property

was listed for sale with Peck Realty for an asking price of
                              - 8 -

$179,000.

     On January 15, 2002, Counsel issued an advisory opinion to

Revenue Officer Baustert approving his request to file a nominee

NFTL against the Claremore property.   The January 15, 2002,

opinion listed the following facts in support of its conclusion

authorizing the filing of a nominee NFTL:   (1) The Claremore

property was purchased free and clear at a time when petitioner

had considerable amounts of cash that he had earned illegally;

(2) title to the Claremore property is in the name of a close

relative, i.e., petitioner’s mother; (3) petitioner had admitted

to a revenue officer that he owns a partial interest in the

Claremore property; (4) petitioner had paid the property taxes on

the residence and had lived in the residence for many years; (5)

petitioner has a history of placing property that he owns in the

names of other persons or entities; (6) petitioner failed to

produce affidavits from his brothers and sisters confirming under

oath that they have an ownership interest in the Claremore

property; (7) petitioner’s ex-wife filed a quitclaim deed

releasing any ownership interest that she held in the property in

April 1990; and (8) Counsel had already authorized on similar

facts the filing of a nominee NFTL against certain New Jersey

condominiums titled in the name of petitioner’s wife.

     On January 17, 2002, Mr. Baustert filed a nominee NFTL

against the Claremore property with the County Clerk, Rogers
                               - 9 -

County, Claremore, Oklahoma.   On January 31, 2002, Mr. Baustert

filed a corrected NFTL against the Claremore property with the

County Clerk, Rogers County, Claremore, Oklahoma.   Both the

original and the corrected NFTL identified the “Claremore

property” and listed the taxpayer as “Alice Criner as the Nominee

of Jerry D. Criner”.

     On January 17, 2002, respondent mailed to petitioner a

“Notice of Federal Tax Lien Filing and Your Right to a Hearing

Under IRC 6320” covering 1990 through 1993.    On January 30, 2002,

petitioner timely submitted Form 12153, Request for a Collection

Due Process Hearing, requesting a hearing under section 6320 (the

hearing).   In his request for a hearing, petitioner stated that

he disagreed with the nominee NFTL because the Claremore property

belonged to his deceased mother.

     In a letter to petitioner dated February 20, 2002,

Settlement Officer Scott Penny (Mr. Penny or hearing officer)

acknowledged receipt of petitioner’s hearing request and asked

petitioner to provide documentation to substantiate his claim

that the Claremore property listed in the nominee NFTL belonged

to his deceased mother.   Mr. Penny specifically requested

documentation showing Alice Criner’s ability to purchase the

property for $135,000 in April 1987, probate records showing

distribution of Alice Criner’s estate, and any other

documentation to support petitioner’s claim.   In the February 20,
                              - 10 -

2002, letter, Mr. Penny noted that, based on his review of

petitioner’s file, it appeared that all legal and administrative

procedures were met by respondent in filing the NFTL against

Alice Criner as nominee of petitioner.

     On February 25, 2002, petitioner sent a letter to Mr. Penny

expressing concern that Mr. Penny had already come to a

conclusion regarding the validity of the nominee NFTL without

“seeing, hearing or reviewing” petitioner’s proof that he did not

own the Claremore property.   Petitioner also expressed doubt that

a person employed by the Internal Revenue Service (IRS) or any

other branch of the Federal Government could review the evidence

and reach a fair and impartial ruling.   Petitioner also advised

Mr. Penny that he wanted to record the hearing, and he inquired

as to whether petitioner and his sister and up to 30 witnesses

would be reimbursed for the expense of attending the hearing.

Petitioner enclosed with the letter Form 2848, Power of Attorney

and Declaration of Representative, designating his sister,

Jeannie McLelland, as his representative.

     On March 7, 2002, Mr. Penny sent a letter to petitioner

informing him that the hearing had been scheduled for March 22,

2002, and that, in accordance with petitioner’s request, the

hearing would be recorded but at no cost to the Government.    The

letter also stated that, because the hearing was petitioner’s

hearing, witnesses would not be allowed to speak during the
                              - 11 -

hearing.5

     On March 22, 2002, petitioner and his sister, Jeannie

McLelland, attended the hearing.   Among other things, petitioner

and Ms. McLelland placed on the record of the hearing a statement

that they had intended to call approximately 12 witnesses but

that they were told by Mr. Penny before the hearing that their

witnesses could not appear and testify.   Mr. Penny acknowledged

their statement and did not deny its accuracy, but he also

reminded petitioner of his request for testimony in the form of

affidavits under oath.   During the hearing, Mr. Penny also

explained that he had reviewed the information in petitioner’s

case file and had verified that all applicable laws and

administrative procedures governing the filing of a nominee NFTL

had been met.

     During the hearing, petitioner argued that his deceased



     5
      Petitioner did not raise any issue regarding Mr. Penny’s
apparent prohibition of live testimony from witnesses at the
hearing or at the trial before this Court. Petitioner did not
argue in his trial memorandum or posttrial brief that the
prohibition regarding live testimony deprived him of a fair
hearing. Moreover, we note that, although Mr. Penny specifically
requested, before the hearing, that petitioner bring to the
hearing affidavits under oath from each of his siblings to
document his claim that they own interests in the Claremore
property, petitioner failed to do so. We conclude on these facts
that the prohibition with regard to live testimony at the hearing
did not deprive petitioner of the opportunity to present relevant
testimony through affidavits under oath. Petitioner could have
made a factual record in support of his position by submitting
affidavits from his witnesses at the hearing, but petitioner
failed to do so.
                              - 12 -

mother owned the Claremore property and that, therefore, the

nominee NFTL was unlawful.   Petitioner and Jeannie McLelland

explained that their mother had died without a will, that she had

left the property to her six children, that her estate had not

gone through probate, and that the property would remain in her

name forever.   Petitioner conceded, however, that he owned a one-

sixth interest in the Claremore property by virtue of his

mother’s death.   At the hearing, Mr. Penny again asked for

documentation showing the ability of petitioner’s mother to

purchase the Claremore property in 1987 without the encumbrance

of a mortgage, but petitioner did not produce the requested

documentation at the hearing or at any time after the hearing.

     Petitioner also argued at the hearing that the assessments

against him for 1990 through 1993 were invalid because he had

rescinded his signature on the Form 870.   Petitioner did not

raise any spousal defenses or propose any specific collection

alternatives during the hearing.6

     On March 28, 2002, respondent’s Appeals Office issued a

notice of determination in which it determined the following:

     1.   All legal and administrative procedures for filing a

nominee NFTL were met.

     2.   The Appeals officer had had no prior involvement with



     6
      Petitioner had previously filed two offers in compromise
which respondent either rejected or requested be withdrawn.
                               - 13 -

respect to petitioner’s 1990 through 1993 income tax liabilities.

     3.     Petitioner did not raise any spousal defenses during

the hearing, and, consequently, none were considered.

     4.     Petitioner had signed a Form 870 agreeing to the

assessment of the 1990 through 1993 income tax deficiencies and

waiving his right to judicial review, thereby precluding any

challenge to the amount of the underlying liabilities.7

     5.     All legal and administrative requirements for the

filing of a nominee NFTL, including the requirement to request

and obtain Counsel’s approval, had been satisfied.    Counsel’s

approval of the NFTL was based on documentation sufficient to

show that petitioner was the sole owner of the Claremore

property.    Moreover, petitioner had admitted during the hearing

that he owned an interest in the Claremore property.

     6.     No collection alternatives were discussed because an

agreement could not be reached regarding the extent of

petitioner’s ownership interest in the Claremore property.

     7.     The filing of the nominee NFTL balanced the need for

efficient collection of taxes with the legitimate concern of the

taxpayer that the collection action be no more intrusive than

necessary and was appropriate under the circumstances.



     7
      Petitioner did not contest this part of the Appeals
Office’s determination in his petition, at trial, or in his
posttrial brief. Consequently, we do not address it in this
opinion.
                              - 14 -

     In response to the notice of determination, petitioner

mailed a letter dated March 30, 2002, to this Court that this

Court treated as a timely, but imperfect, petition appealing

respondent’s determination for 1990 through 1993.   By order dated

April 5, 2002, this Court directed petitioner to file a proper

amended petition.   On August 1, 2002, petitioner filed an amended

petition in which he alleged as follows:

          (a) The Notice of Determination is invalid, as the
     Appeals Team Manager whose name appears on the Notice
     of Determination did not make a determination that lien
     action against Petitioner should be sustained for any
     of the years at issue.

          (b) The Notice of Federal Tax Lien which forms the
     basis of this case is invalid, as the Revenue Officer
     whose name appears on the Notice of Federal Tax Lien
     was not authorized to file nominee Notices of Federal
     Tax Lien without the written approval of his direct
     supervisor issued pursuant to §3421 of the Internal
     Revenue Service Restructuring and Reform Act of 1998
     (RRA ‘98).

          (c) The Appeals Officer who conducted Petitioner’s
     Collection Due Process (CDP) hearing had prior
     involvement in Petitioner’s case, prior to the hearing
     taking place, with respect to the tax for the tax
     periods covered by the hearing, in violation of I.R.C.
     §6320(b)(3), Treasury Regulation §301.6320-1(d)(1), and
     Treasury Regulation §301.6320-1(e)(1).

          (d) The Appeals Officer who conducted Petitioner’s
     CDP hearing determined, before the said hearing was
     concluded, that lien action against Petitioner was
     appropriate, in violation of I.R.C. §6330(c)(3)(A),
     I.R.C. §6330(c)(3)(B), and I.R.C. §6330(c)(3)(C) (each
     by and through I.R.C. §6320(e)).

          (e) Respondent erred by determining it was
     appropriate to cause the filing, against certain real
     property, of a nominee Notice of Federal Tax Lien with
     respect to Petitioner. Respondent’s determination was
                             - 15 -

     arbitrary.

          (f) Respondent erred by determining that all
     applicable laws and administrative procedures to
     support his nominee lien action against Petitioner had
     been met, although he neither considered the
     applicability of the laws of the State of Oklahoma, nor
     considered Petitioner’s status under those laws, with
     respect to the real property that is the subject of his
     nominee Notice of Federal Tax Lien.

          (g) Respondent erred by determining that
     Petitioner had not proposed reasonable collection
     alternatives to Respondent’s lien action.

          (h) Respondent erred by not considering, exploring,
     or eliciting from Petitioner, what collection actions
     less intrusive than lien action would balance the
     government’s need to efficiently collect the tax
     liabilities at issue with Petitioner’s legitimate
     concern that the collection action be made by the
     method least intrusive to him.

          (i) With respect to the tax liability for the year
     1993, Respondent abused his discretion by determining
     it was appropriate to cause the filing, against certain
     real property, of a nominee Notice of Federal Tax Lien
     with respect to Petitioner, when he had already caused
     the filing of a Notice of Federal Tax Lien against
     Petitioner for the year 1993.

          (j) Respondent abused his discretion by asserting
     against Petitioner a nominee theory with respect to
     specific real property, the existence and ownership of
     which was known to Respondent at least four years prior
     to the filing of his nominee Notice of Federal Tax
     Lien, yet which specific real property was never deemed
     by him to be the property of Petitioner.

The errors identified in paragraphs (a), (b), (i), and (j) were

not raised by petitioner at the hearing and were not considered

by the Appeals Office in its notice of determination.
                                - 16 -

                                OPINION

     All property and rights to property of a taxpayer become

subject to a lien in favor of the United States on the date a tax

liability is assessed against a taxpayer, if the taxpayer fails

to pay the tax liability after notice and demand for payment.

Secs. 6321 and 6322.   Until an NFTL is filed, however, the lien

is without validity and priority against certain persons such as

judgment lien creditors of the taxpayer.    Sec. 6323(a).

     After the Commissioner files the NFTL, the Commissioner must

provide the taxpayer with written notice of the filing, informing

the taxpayer of his right to request an administrative hearing on

the matter.   Sec. 6320(a)(1), (3)(B).    If the taxpayer makes a

timely request for an administrative hearing, section 6320(c)

requires that the hearing be conducted pursuant to section

6330(c), (d), and (e).   Section 6330(c)(2) provides that a person

may raise any relevant issue relating to the disputed collection

action and may contest the existence or amount of the underlying

tax liability if the person did not receive a notice of

deficiency or did not otherwise have the opportunity to dispute

the underlying tax liability.    See also Sego v. Commissioner, 114

T.C. 604, 610 (2000); Goza v. Commissioner, 114 T.C. 176, 180-181

(2000).

     Following the hearing, the hearing officer is required to

issue a notice of determination regarding the disputed collection
                               - 17 -

action.    In the determination, the hearing officer must confirm

that he or she took into consideration the verification presented

under section 6330(c)(1).    Sec. 6330(c)(3)(A); sec. 301.6320-

1(e), Proced. & Admin. Regs.    In addition, the determination must

take into consideration any issues appropriately raised by the

taxpayer, offers by the taxpayer for collection alternatives, and

whether the disputed collection action represents a balance

between the Government’s need for efficient collection of taxes

and the taxpayer’s concerns regarding the intrusiveness of the

proposed collection action.    Sec. 6330(c).   If the taxpayer

disagrees with the hearing officer’s determination, the taxpayer

has the right to seek judicial review of the determination by

appealing to this Court or, if this Court lacks jurisdiction over

the underlying tax liability, to a Federal District Court.       Sec.

6330(d).

     If the taxpayer files a timely petition for judicial review,

the applicable standard of review depends upon whether the

underlying tax liability is at issue.    Where the underlying tax

liability is not at issue, the Court will review the Appeals

officer’s determination for abuse of discretion.     Sego v.

Commissioner, supra at 610.

     In his amended petition, petitioner enumerates a plethora of

“errors” allegedly committed by the Appeals Office in making its

determination upholding the nominee lien filed against the
                              - 18 -

Claremore property.   Several of the errors involve arguments that

were not raised at the hearing or considered by the Appeals

Office in its notice of determination.   We shall divide

petitioner’s alleged errors into two categories--those that were

raised at the hearing and addressed in the notice of

determination and those that were not--and evaluate them

accordingly.   Because petitioner concedes that he is not

contesting the underlying tax liabilities, we shall review the

Appeals Office’s determination for abuse of discretion.     Id.

A.   Errors Raised at the Hearing

     The errors listed in the amended petition that were raised

by petitioner, either explicitly and implicitly, at the hearing

and/or addressed in the notice of determination are as follows:

     1.   Respondent erred in determining that the hearing officer

had no prior involvement with respect to the unpaid tax at issue

in this proceeding.

     2.   Respondent erred in determining that the requirements of

applicable laws and administrative procedures relative to the

issuance and filing of the nominee NFTL had been satisfied and

that the nominee NFTL was valid.

     3.   Respondent erred by not considering reasonable

collection alternatives to respondent’s nominee NFTL and by

concluding that the filing of the nominee NFTL balanced

respondent’s need for efficient collection of taxes with
                                - 19 -

petitioner’s concern that the collection action be no more

intrusive than necessary.

     We consider each of the listed arguments below.

     A.1.   Impartial Officer

     Section 6320(b)(3) provides, in pertinent part, that any

hearing with respect to a lien under section 6320 “shall be

conducted by an officer or employee who has had no prior

involvement with respect to the unpaid tax”.     Petitioner alleges

two errors in respondent’s determination regarding the

impartiality of the hearing officer.     The first is that the

hearing officer “had prior involvement * * * with respect to the

tax for the tax periods covered by the hearing”, contrary to

section 6320(b)(3), and the second is that the hearing officer

had “determined, before the said hearing was concluded, that lien

action against Petitioner was appropriate”.

     Section 6320 requires that any hearing conducted under that

section must be conducted by an impartial officer.     Section

6320(b)(3), however, defines an impartial officer as “an officer

or employee who has had no prior involvement with respect to the

unpaid tax specified in section (a)(3)(A) before the first

hearing under this section or section 6330.”     The impartiality

requirement ensures that a hearing officer has had no prior

involvement in the determination and assessment of the underlying

tax liability that is the subject of the hearing.
                                - 20 -

     The record confirms that the hearing officer in this case

did not have any prior involvement with respect to the underlying

tax liability before the hearing.    Consequently, respondent did

not abuse his discretion in determining that the section

6320(b)(3) requirement was met.

     We also reject petitioner’s assignment of error alleging

that the hearing officer had prejudged the issues raised by

petitioner.   Section 6320(b)(3) limits the definition of

“impartial officer” as noted above, and that definition does not

address, and arguably does not permit, a challenge to the

objectivity of the hearing officer who presides over a hearing

under sections 6320 and 6330.    However, we shall assume without

deciding, for purposes of this analysis, that sections 6320 and

6330 permit a challenge in appropriate cases to a demonstrably

biased hearing officer.   See secs. 6320(c), 6330(c)(2)(A) (A

person may raise at the hearing any relevant issue relating to

the proposed collection action including the enumerated issues).

     We have reviewed the transcript of the hearing, and we can

see no evidence of prejudgment or bias.   The hearing officer made

an effort to explain to petitioner that petitioner must

demonstrate that the filing of the nominee NFTL was not valid.

It appears that petitioner’s allegation of bias was directed at

the hearing officer’s refusal to invalidate the nominee NFTL

based on evidence that the Claremore property was titled in Alice
                               - 21 -

Criner’s name.   Petitioner’s allegation of bias is not supported

by the record in this case.

     A.2.   Validity of the Nominee NFTL

     Section 6321 provides:

          SEC. 6321. If any person liable to pay any tax
     neglects or refuses to pay the same after demand, the
     amount (including any interest, additional amount,
     addition to tax, or assessable penalty, together with
     any costs that may accrue in addition thereto) shall be
     a lien in favor of the United States upon all property
     and rights to property, whether real or personal,
     belonging to such person.

The language of section 6321 “is broad and reveals on its face

that Congress meant to reach every interest in property that a

taxpayer might have.”   United States v. Natl. Bank of Commerce,

472 U.S. 713, 719-720 (1985); see also Drye v. United States, 528

U.S. 49, 56 (1999).   Among the property interests reached by

section 6321 is an equitable interest owned by or for the benefit

of a taxpayer in property titled in the name of a nominee.         G.M.

Leasing Corp. v. United States, 429 U.S. 338, 350-351 (1977);

United States v. Miller Bros. Constr. Co., 505 F.2d 1031 (10th

Cir. 1974).   Section 6321 authorizes the Government, among other

things, to file a nominee NFTL against property of a taxpayer in

the hands of an alter ego or nominee.      G.M. Leasing Corp. v.

United States, supra at 351.

     Petitioner makes a vigorous and sometimes confusing attack

on the nominee NFTL utilized by respondent in this case.     As we

understand petitioner’s arguments, they are as follows:
                                - 22 -

     a.   Petitioner’s deceased mother owns the Claremore

property;

     b.   petitioner does not own an equitable or legal interest

in the Claremore property and did not own such an interest when

the disputed NFTL was filed;

     c.   even if petitioner is deemed to own an interest in the

Claremore property, it is only a partial interest and a nominee

NFTL should only be used when a taxpayer who is not the owner of

record actually owns all of the property in question;

     d.   respondent was required to consider, but did not

consider, Oklahoma law in reaching his determination that the

filing of a nominee NFTL was appropriate;

     e.   even if the filing of a nominee NFTL was arguably

appropriate, respondent did not follow the necessary

administrative procedures in order to file a proper nominee NFTL.

     We group these arguments in three categories and address

them below.

            a.   Petitioner’s Interest in the Claremore
                 Property

     The validity of any lien under section 6321 depends in the

first instance on whether the taxpayer owned property or held an

interest in property to which the lien may attach.     Sec. 6321.

Section 6321 does not create property rights but merely attaches

federally defined consequences to rights created under State law.

United States v. Natl. Bank of Commerce, supra at 722.
                                - 23 -

Consequently, in order to address petitioner’s arguments, we must

first examine whether the Appeals Office abused its discretion in

determining that petitioner had an interest in the Claremore

property.

     While the priority of competing claims to property is

determined under Federal law, whether a taxpayer owns an interest

in, or exercises a right with respect to, property is determined

under State law.   Aquilino v. United States, 363 U.S. 509 (1960).

However, “The question whether a state-law right constitutes

‘property’ or ‘rights to property’ is a matter of federal law.”

United States v. Natl. Bank of Commerce, supra at 727; see also

Drye v. United States, supra at 58.

     Petitioner argues that he was not the beneficial owner of

the Claremore property under Oklahoma law.    He undercut his

argument during the hearing and before this Court, however, by

admitting that he owned an interest in the Claremore property by

reason of his mother’s death.    Alice Criner died intestate in

1989 and was survived by six children.    Okla. Stat. Ann. tit. 84,

§213B.2.a (West Supp. 2003), provides that, if there is no

surviving spouse, the decedent’s estate is distributed in

undivided equal shares to the surviving children of the decedent

and the issue of any deceased child.8    Under Oklahoma State law,


     8
      Oklahoma State law also provides that, when a person dies
intestate leaving real property, title to the real property vests
                                                   (continued...)
                                - 24 -

petitioner, as one of six surviving children of Alice Criner,

inherited an interest in the Claremore property in 1989 when

Alice Criner died.    Consequently, we hold that the Appeals Office

did not abuse its discretion in determining that petitioner owned

an interest in the Claremore property.

            b.   Respondent’s Decision To Use a Nominee NFTL

     Petitioner contends that the filing of a nominee NFTL is

inappropriate when a taxpayer owns only a partial interest in the

property.    We disagree.   A nominee NFTL lien may be used whenever

legal title to property is held by a third party but equitable

ownership, in whole or in part, resides with the taxpayer.     G.M.

Leasing Corp. v. United States, supra.     It enables the

Commissioner to perfect a lien under section 6323 on property in

which a taxpayer has an interest that is titled in the name of a

third party.     Id.; see also Drye v. United States, 528 U.S. 49

(1999) (holding that a disclaimer by the sole heir of an

intestate decedent did not prevent a Federal tax lien with regard

to the heir’s unpaid tax liabilities from attaching to his

inheritance); Wilkinson v. United States, 770 F. Supp. 1085



     8
      (...continued)
immediately in the decedent’s heirs, subject only to
administration proceedings. The heirs may immediately convey
their interest in such property to another. DeWitt v. Cavender,
878 P.2d 1077 (Okla. Ct. App. 1994); Fessler v. Fariss, 304 P.2d
332, 340 (Okla. 1956); Davis v. Morgan, 95 P.2d 856 (Okla.
1939); see also Okla. Stat. Ann. tit. 84, sec. 213B.2.a. (West
Supp. 2003).
                              - 25 -

(W.D.N.C. 1991); United States v. Drexler, 60 AFTR 2d 87-5091,

87-2 USTC par. 9493 (E.D. Okla. 1985).

     We are aware, of course, that the Appeals Office determined

that petitioner was the sole equitable owner of the Claremore

property.9   Petitioner argues that Oklahoma State law does not

contemplate ownership in nominee form10 and that the Appeals

Office did not consider Oklahoma law in making its determination

upholding the nominee lien.   We reject petitioner’s arguments for

several reasons.

     First, petitioner concedes that he owns an interest in the


     9
      At the hearing, petitioner did not offer any of the
information previously requested by Mr. Penny and Revenue Officer
Baustert regarding petitioner’s claim that his siblings had an
interest in the Claremore property. The silence of petitioner’s
siblings undermines petitioner’s claim that each of them owns an
interest in the Claremore property but does not necessarily
prevent them from asserting any ownership right that they may
have. A person who claims an ownership interest in property
subject to a Federal tax lien may bring a quiet title action to
challenge the lien against the property. See 28 U.S.C. sec. 2410
(2000). Generally, the Federal District Courts have jurisdiction
over any civil action arising under any Act of Congress providing
for internal revenue. 28 U.S.C. sec. 1340 (2000).
     10
      Petitioner’s argument on this point is erroneous as a
matter of Oklahoma State law because the concept of nominee
ownership is recognized thereunder. When legal title to real
property is conveyed to one person and another person furnishes
the consideration for the property, a presumption arises under
Oklahoma State law that the person who furnished the funds to
purchase the property intended to acquire the equitable interest
in that property. Boatright v. Perkins, 894 P.2d 1091 (Okla.
1995). See also 60 Okla. Stat. Ann., tit. 60, sec. 137 (West
1994 & Supp. 2003), which provides that “When a transfer of real
property is made to one person, and the consideration therefor is
paid by or for another, a trust is presumed to result in favor of
the person by or for whom such payment is made.”
                                - 26 -

Claremore property, although he disputes that he is the sole

owner as respondent contends.    Because of petitioner’s

concession, the hearing officer did not have to review Oklahoma

State law to decide whether petitioner owns the requisite

property interest to which the Federal tax lien in this case

attaches.

     Second, a nominee NFTL is a collection device, and a

determination by respondent to use a nominee NFTL is governed by

Federal law, not by Oklahoma State law.      See G.M. Leasing Corp.

v. United States, 429 U.S. at 350-351.      Only the determination of

whether a taxpayer owns an interest in, or holds rights to,

property is governed by State law.       Drye v. United States, supra

at 478; Aquilino v. United States, supra.

     Third, even if the hearing officer was required to consider

Oklahoma State law, petitioner has failed to show that he was

prejudiced by any failure on the part of the hearing officer to

do so.   Although the transcript of the hearing reflects that the

hearing officer did not research Oklahoma State law, the hearing

officer referred to the substance of intestacy laws of Oklahoma

in his discussions regarding the interest in the Claremore

property that petitioner admits he inherited by reason of his

mother’s death in 1989.

     Fourth, Oklahoma State law recognizes the principle of

equitable or beneficial ownership on which the nominee lien is
                                - 27 -

based.   In Carey v. Winslow, 122 P. 174 (Okla. 1912), the

Oklahoma Supreme Court found that, although certain stock was

titled in the name of a third party, the judgment debtor, who had

previously held legal title, had never parted with the beneficial

ownership of the stock.   The court held that the stock remained

subject to the judgment debtor’s debts.   See also Baxley v.

Timms, 316 P.2d 871 (Okla. 1957), in which the Oklahoma Supreme

Court acknowledged that it was possible for a person to hold bare

legal title to real property while the beneficial interest in the

property remained in another.

     We hold, therefore, that the Appeals Office did not abuse

its discretion in determining that a nominee NFTL was a valid and

appropriate collection procedure in this case.

           c.   Nominee Lien Procedures

     Petitioner argues that, even if the use of a nominee NFTL is

an appropriate collection procedure, respondent did not follow

required administrative procedures in obtaining approval to file

the nominee NFTL.   Specifically, petitioner contends that

respondent skipped a required review step when Revenue Officer

Baustert forwarded his memorandum requesting authorization to

file the nominee NFTL directly to Counsel.

     The Internal Revenue Manual (IRM) requires that, before a

nominee NFTL is filed, the Collection Office must obtain written

approval from Counsel.    2 Administration, Internal Revenue Manual
                              - 28 -

(CCH), sec. 5.12.1.18.1(3), at 16,836.   The request for approval

must show that, while a third party may have legal title to the

property, the taxpayer owns an interest in the property and

enjoys its full use and benefit.   See 2 Administration, Internal

Revenue Manual (CCH), sec. 5.17.2.4.8.2, at 17,865.    Factors

which the IRM lists as support for the filing of a nominee NFTL

include the following:   (1) The taxpayer previously owned the

property,11 (2) the nominee paid little or no consideration for

the property, (3) the taxpayer retains possession or control of

the property, (4) the taxpayer continues to use and enjoy the

property conveyed just as the taxpayer had before such

conveyance, (5) the taxpayer pays all or most of the expenses of

the property, and (6) the conveyance was for tax avoidance

purposes.   Id.

     In accordance with the procedures outlined in the IRM,

Revenue Officer Baustert submitted a memorandum, dated December

11, 2001, to Counsel, requesting that a nominee NFTL be

authorized with respect to the Claremore property.    The

memorandum listed several factors in support of the request that

are enumerated in the IRM.   On January 15, 2002, Counsel approved

Revenue Officer Baustert’s request after reviewing the evidence



     11
      Even if a taxpayer never transferred a particular asset to
the current titleholder, a lien for his taxes may attach to it if
purchased with funds he supplied. E.g., LiButti v. United
States, 107 F.3d 110, 125 (2d Cir. 1997).
                             - 29 -

supporting his request as well as additional information Counsel

had obtained regarding petitioner’s collection file.

     At trial, petitioner argued that the following section in an

ICS transcript12 relating to petitioner’s case proved that Mr.

Baustert did not follow established guidelines in making his

request for approval to file the nominee Notice of Federal Tax

Lien:

     Reviewed copy of nominee lien approval received during
     ICS downtime – control opened to maintain some advisory
     record thereof. Unless something was missed during ICS
     downtime, RO submitted request directly to counsel
     rather than following usual procedures of routing it
     through advisory. As such, there was no advisory
     review, record, or control. It is unclear why it was
     not sent to counsel through advisory. Although it is
     acknowledged that advisory review is not required by
     the IRM, it has been established practice here in the
     absence of extraordinary circumstances.

The hearing officer testified at trial that he reviewed the ICS

transcript in making his determination.   He explained that,

although the advisory group normally reviewed the requests to

decide if any additional supporting documentation was required,

collection officers sometimes worked directly with Counsel,

bypassing the advisory review.   According to Mr. Penny, the

revenue officer was dealing with another nominee NFTL on property

allegedly owned by petitioner in another location, so the revenue

officer had already established a direct path to Counsel.   We


     12
      An ICS transcript is a case file transcript that is
maintained by the IRS to document case file actions taken by IRS
personnel.
                               - 30 -

find Mr. Penny’s testimony credible on the subject of advisory

review, and we note that such review was not one of the required

steps enumerated in the IRM.   We hold, therefore, that the

Appeals Office did not abuse its discretion in determining that

the requirements of any applicable law or administrative

procedure have been met with respect to the nominee NFTL at issue

in this case.

     A.3.   Consideration of Collection Alternatives

     Petitioner also contends that respondent erred by not

considering reasonable collection alternatives to respondent’s

nominee NFTL and disputes that the filing of the nominee NFTL

properly balanced respondent’s need for efficient collection of

taxes with petitioner’s concern that the collection action be no

more intrusive than necessary.   Petitioner, however, did not

submit a completed Form 433-A, Collection Information Statement -

Wage Earner, or Form 433-B, Collection Information Statement -

Business, to document his claimed inability to pay.    Even if

petitioner had submitted completed Forms 433-A and 433-B, the

disagreement between petitioner and respondent regarding the

extent of his ownership interest in the Claremore property

precluded any determination of petitioner’s actual ability to pay

the unpaid tax liabilities at issue.

     We also note that petitioner did not offer any collection

alternatives that would adequately protect respondent’s need to
                               - 31 -

perfect a lien with respect to petitioner’s ownership interest in

the Claremore property.    At the trial in this case, petitioner

had testified that the Claremore property would remain titled in

the name of his deceased mother.    Under the circumstances

involved in this case, the nominee NFTL was a reasonable

collection procedure that enabled respondent to perfect a Federal

tax lien with respect to the Claremore property.    We conclude

therefore that the Appeals Office did not abuse its discretion in

upholding the filing of the nominee NFTL.

B.   Errors Not Raised at the Hearing

      In an appeal from a notice of determination under sections

6320 and 6330, we ordinarily consider only those matters that

were raised in the hearing and/or considered in the notice of

determination.   Magana v. Commissioner, 118 T.C. 488, 493-494

(2002); Miller v. Commissioner, 115 T.C. 582, 589 n.2 (2000).      As

we stated in Magana v. Commissioner, supra at 493,

      it would be anomalous and improper for us to conclude
      that respondent’s Appeals Office abused its discretion
      under section 6330(c)(3) in failing to grant relief, or
      in failing to consider arguments, issues, or other
      matter not raised by taxpayers or not otherwise brought
      to the attention of respondent’s Appeals Office. * * *

      Petitioner raised several issues for the first time in his

petition that were not raised in the hearing or addressed in the

notice of determination:    (1) Whether the Appeals team manager

whose name appears on the notice of determination actually made a

determination as required by sections 6320 and 6330; (2) whether
                              - 32 -

Revenue Officer Baustert had the requisite authority to file the

nominee NFTL without the written approval of his direct

supervisor; (3) whether respondent abused his discretion by

filing a nominee NFTL after he had already caused an NFTL to be

filed against petitioner for 1993; and (4) whether respondent

abused his discretion by asserting a nominee theory with respect

to certain real property, the existence and ownership of which

was known to respondent at least 4 years before the nominee NFTL

was filed.   With the exception of the issue in (1) above, which

challenges the adequacy of the notice of determination,

petitioner should have raised the above-listed issues with the

hearing officer at the hearing so that the Appeals Office could

address the issues in its notice of determination.   Petitioner

did not do so, and, as a result, the notice of determination did

not address those issues.   We decline, therefore, to consider

issues that could have been raised, but were not raised, at the

hearing and addressed in the notice of determination.     Magana v.

Commissioner, supra.

     With respect to petitioner’s challenge to the notice of

determination, petitioner offered no evidence at trial or

argument on brief to support his contention that the Appeals team

manager whose name appears on the letter portion of the notice of

determination did not make the determinations in the notice.

Moreover, petitioner’s argument misconstrues the notice of
                                - 33 -

determination, which consists of a cover letter and a summary of

the hearing officer’s determination regarding the matters

considered at the hearing.     The Appeals team manager who signed

the letter portion of the notice of determination on behalf of

the Appeals Office refers to the determination made as “our

determination”.     The summary attached to the letter bears no

signature and summarizes the determination made in petitioner’s

case.     That summary is extracted verbatim from an “Appeals

Transmittal and Case Memo” that was prepared by Mr. Penny and

transmitted to the Appeals team manager, who approved Mr. Penny’s

determination on behalf of the Appeals Office.     Taken in context,

the determination in question is one made by Mr. Penny and

approved by Mr. Penny’s supervisor on behalf of the Appeals

Office.     Petitioner has failed to show that the determination in

question is not a proper determination under section 6330.

Conclusion

        Based on the record before us, we hold that the Appeals

Office did not abuse its discretion in determining that

respondent’s filing of a nominee NFTL with respect to the

Claremore property was an appropriate collection action in this

case.
                             - 34 -

     We have considered the remaining arguments of both parties

for results contrary to those expressed herein and, to the extent

not discussed above, find those arguments to be irrelevant, moot,

or without merit.

     To reflect the foregoing,


                                        Decision will be entered

                                   for respondent.
