                       T.C. Memo. 2004-133



                     UNITED STATES TAX COURT



                  SAID M. KARARA, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 7748-02L.              Filed June 2, 2004.



     Said M. Karara, pro se.

     D’Aun E. Clark, for respondent.



                       MEMORANDUM OPINION


     GERBER, Chief Judge:   Respondent moved for summary judgment

on the question of whether he may proceed with the collection of

petitioner’s 1993 and 1994 tax liabilities.    Respondent contends

that all section 63301 prerequisites have been met and that he

should be allowed to proceed with collection.   Petitioner filed a


     1
       All section references are to the Internal Revenue Code,
and all Rule references are to the Tax Court Rules of Practice
and Procedure, unless otherwise indicated.
                                - 2 -

cross-motion for summary judgment, raising several arguments as

to why respondent should not be permitted to proceed with

collection.   A hearing on the summary judgment motions was held

at Miami, Florida.

Background

     Petitioner resided in Naples, Florida, at the time his

petition was filed.   Petitioner’s 1993 and 1994 tax returns were

examined, and respondent determined an income tax deficiency for

each year.    Petitioner petitioned this Court with respect to both

years, and on July 29, 1999, this Court filed a memorandum

opinion in Karara v. Commissioner, T.C. Memo. 1999-253,

sustaining respondent’s determinations.     A decision was entered,

and petitioner filed an appeal to the Court of Appeals for the

Eleventh Circuit.

     On December 12, 1999, because of petitioner’s failure to

file a bond while the appeal was pending, respondent assessed the

1993 and 1994 income tax deficiencies.     Approximately 5 months

later on May 5, 2000, the Court of Appeals for the Eleventh

Circuit affirmed this Court’s decision without published opinion.

Karara v. Commissioner, 214 F.3d 1358 (11th Cir. 2000).     On

July 10, 2000, the Court of Appeals denied rehearing.

     On July 29, 2000, about 2 weeks following the Court of

Appeals’ denial of rehearing, respondent mailed to petitioner a

Final Notice-–Notice of Intent to Levy and Notice of Your Right

to a Hearing for the 1994 tax year.     Four days later, on August
                                 - 3 -

2, 2000, the Court of Appeals stayed issuance of the mandate

pending petitioner’s petition for writ of certiorari to the U.S.

Supreme Court.    On August 8, 2000, petitioner timely requested a

hearing for his 1994 tax year by submitting Form 12153, Request

for a Collection Due Process Hearing.      During subsequent

conversations with respondent, petitioner consented to the

inclusion of his 1993 tax year, in addition to his 1994 tax year,

for purposes of the section 6330 hearing.

     On October 6, 2000, petitioner filed a petition for writ of

certiorari with the Supreme Court.       Respondent had the option to

file a response to the petition, but declined to do so.

Therefore, in accordance with Supreme Court rules, the Solicitor

General timely filed a waiver of the right to respond on behalf

of respondent.    Approximately 3 weeks later, on November 6, 2000,

the Supreme Court denied petitioner’s petition for writ of

certiorari.    Karara v. Commissioner, 531 U.S. 980 (2000).

     On September 24, 2001, respondent applied an overpayment of

tax by petitioner in the amount of $300 toward his 1993 tax

liability.

     Petitioner and the Appeals officer engaged in telephone

conferences on September 5 and October 4 and 5, 2001.      During

these conferences, respondent notified petitioner that the

assessments were valid and subject to collection because of

petitioner’s failure to post a bond while his appeals were in

progress.    See sec. 7485.   In response, petitioner raised the
                                - 4 -

argument that respondent, in waiving the right to respond to the

petition for writ of certiorari, had also waived opposition to

the issues presented in the petition.    Petitioner also argued

that because of respondent’s waiver petitioner is entitled to a

$300 refund.

     On April 17, 2002, respondent issued a Notice of

Determination Concerning Collection Actions(s) Under Section 6320

and/or 6330 determining to proceed with collection of

petitioner’s 1993 and 1994 tax liabilities.

Discussion

     Respondent moved for summary judgment on the question of

whether he may proceed to collect petitioner’s 1993 and 1994

income tax liabilities.    Summary judgment is intended to expedite

litigation and avoid unnecessary trials.     Fla. Peach Corp. v.

Commissioner, 90 T.C. 678, 681 (1988).     A motion for summary

judgment may be granted if there is no genuine issue as to any

material fact.   See Rule 121(b); Elec. Arts, Inc. v.

Commissioner, 118 T.C. 226, 238 (2002).     The moving party bears

the burden of showing that there is no genuine issue of material

fact, and factual inferences will be read in a manner most

favorable to the party opposing summary judgment.     Bond v.

Commissioner, 100 T.C. 32, 36 (1993); Dahlstrom v. Commissioner,

85 T.C. 812, 821 (1985).   This case is ripe for summary judgment

with respect to petitioner’s 1994 tax year.    Genuine issues of
                                 - 5 -

material fact exist, however, with respect to petitioner’s 1993

tax year.

     I.   Section 6330 Hearing Prerequisites

     If a taxpayer neglects or refuses to pay a Federal tax

liability within 10 days of notice and demand, the Secretary is

authorized to collect such liability by levy on the taxpayer’s

property.   Sec. 6331(a).   Pursuant to section 6330(b), a taxpayer

has a right to a hearing before the Commissioner may levy.     We

first address whether respondent met the hearing prerequisites of

section 6330 with respect to petitioner’s 1993 and 1994 tax

years.

     Section 6330(b) provides that administrative hearings be

held by an impartial officer of the Internal Revenue Service

Office of Appeals.   If dissatisfied with the Appeals Office

determination, a taxpayer may seek judicial review of the

decision in this Court or a District Court of the United States

as applicable.   Sec. 6330(d).

     The matters to be considered at the hearing are specified by

section 6330(c), which provides:    (1) The Appeals officer shall

obtain verification that the requirements of applicable law and

administrative procedure have been met; (2) certain issues may be

heard, including spousal defenses, appropriateness of collection

activities, and collection alternatives; and (3) a challenge to

the underlying liability may be raised if the taxpayer did not
                              - 6 -

receive a statutory notice of deficiency or otherwise receive an

opportunity to dispute the liability.    Sec. 6330(c).

     Petitioner and an impartial Appeals officer conducted an

administrative hearing comprising three separate telephone calls.

For purposes of the hearing, petitioner and respondent agreed to

place petitioner’s 1993 and 1994 tax years at issue.     Because

this Court had previously entered a decision, the merits of

petitioner’s underlying tax liability were not at issue at the

administrative hearing and are not at issue here.    Therefore, we

review respondent’s administrative determination to proceed with

collection for an abuse of discretion.    Sec. 6330(c)(2)(B); Sego

v. Commissioner, 114 T.C. 604, 610 (2000).    Because petitioner

was not entitled to question the underlying tax liability, his

administrative hearing was limited to collection issues,

including spousal defenses, the appropriateness of respondent’s

intended collection action, and collection alternatives.

Petitioner raises two issues with respect to the appropriateness

of respondent’s collection actions.2

     Respondent assessed petitioner’s 1993 and 1994 tax

liabilities on December 12, 1999.   On July 29, 2000, respondent

issued to petitioner a Final Notice-–Notice of Intent to Levy and

Notice of Your Right to a Hearing for his 1994 tax year.     On


     2
       Petitioner does not challenge his underlying tax
liability, but rather challenges respondent’s ability to collect.
Petitioner contends that there was a waiver or some form of
estoppel connected with respondent’s waiver of respondent’s right
to respond to petitioner’s petition for writ of certiorari.
                                 - 7 -

brief and at the summary judgment hearing, petitioner argued that

during an August 7, 2000, telephone conversation, he and a

Department of Justice attorney agreed to stay further collection

activity with respect to petitioner’s 1993 and 1994 tax

liabilities until the decision of the Tax Court in his deficiency

suit became final.   Petitioner further contends that he raised

this issue at the administrative hearing and that it was an abuse

of discretion that the Appeals officer did not consider it.

Respondent acknowledges the agreement to stay collection and

maintains that there was compliance with its terms.

     Section 6330(e)(1) precludes the Commissioner from

proceeding with a proposed levy that is the subject of a hearing

while the hearing and any related appeals are pending.    See Craig

v. Commissioner, 119 T.C. 252, 258 (2002).    Therefore, as of

August 14, 2000, the date that respondent received petitioner’s

request for a hearing, respondent was precluded from proceeding

with levy actions pending the outcome of this appeal.    See Boyd

v. Commissioner, 117 T.C. 127, 130-131 (2001).    In that respect,

respondent has not pursued enforced collection since issuing the

Final Notice-–Notice of Intent to Levy and Notice of Your Right

to a Hearing on July 29, 2000.    Accordingly and irrespective of

the agreement to stay collection, since August 14, 2000,

respondent has otherwise been precluded from proceeding with levy

activity.
                                 - 8 -

     There is no indication in the summary judgment documents as

to whether petitioner raised the collection stay agreement issue

in the administrative hearing.    Moreover, it appears that

respondent complied with its terms.      The Supreme Court's denial

of the petition for writ of certiorari on November 6, 2000,

finalized the decisions of the Tax Court and the Court of Appeals

for the Eleventh Circuit.   In accordance with the agreement,

respondent did not resume any collection activity until

approximately 10 months after the Supreme Court’s denial of

petitioner’s petition for writ of certiorari.3

     Petitioner makes a second argument as to why respondent

should be precluded from proceeding with collection.     The essence

of petitioner’s argument is that respondent failed or waived the

right to respond to petitioner’s petition for writ of certiorari.

Petitioner further contends that the waiver of the right to

respond constitutes a waiver or bar to respondent with respect to

petitioner’s position that he owes no tax for 1993 and 1994.

     Petitioner bases his position on rule 15 of the Rules of the

Supreme Court, which, among other provisions, sets forth

procedures for waiver of the right to respond to a petition for

writ of certiorari.   Specifically, petitioner contends that the

waiver of the right to respond foreclosed respondent from taking

collection action against petitioner.     Petitioner’s reliance on


     3
       Respondent’s resumed collection activity, offsetting
against petitioner’s 1993 liability an overpayment from another
period, was unrelated to a levy on petitioner’s property.
                               - 9 -

rule 15 of the Rules of the Supreme Court is misplaced and

without substance.   The rule’s purpose relates solely to

procedural requirements for filing briefs in opposition, reply

briefs, and supplemental briefs with respect to petitions for

writs of certiorari.   The rule has no bearing on petitioner’s

underlying tax liability or on whether respondent may proceed

with collection activity.4   Respondent’s waiver was not a

concession with respect to petitioner’s tax liabilities.

     Respondent provided petitioner with an opportunity for a

hearing pursuant to section 6330(b).   The Appeals officer

properly considered and met the section 6330 hearing requirements

with respect to petitioner’s 1993 and 1994 tax years.

     II.   Section 6330 Notice Requirements

     The next issue we consider is whether respondent met the

notice requirements of section 6330(a) for petitioner’s 1993 and

1994 tax years.   Before proceeding with a levy, the Secretary

must meet several notice requirements.   Section 6330(a)(1)

provides that no levy may be made on any property of a taxpayer

unless the Secretary, before proceeding with the levy, has

notified the person in writing of the right to a hearing.

Section 6330(a)(2) specifies that such notice be:   (1) Given in

person; (2) left at the taxpayer’s dwelling or usual place of

business; or (3) sent by certified or registered mail to the


     4
       On brief, in addition to taking the rule completely out of
context, petitioner distorted its text by omitting relevant
phrases and adding language.
                              - 10 -

taxpayer’s last known address.   Further, such notice must be

furnished at least 30 days before the first levy action.    See

sec. 6330(a)(2).

     Petitioner received timely written notice of respondent’s

intent to levy and petitioner’s right to request a hearing for

his 1994 tax year.   However, the record does not reflect, one way

or the other, whether a notice of intent to levy was issued with

respect to petitioner’s 1993 tax year.   Petitioner raised this

issue with respondent before his administrative hearing.    For

simplicity, petitioner and respondent agreed to and held a

hearing with respect to both the 1993 and 1994 tax liabilities.

However, the plain meaning of section 6330(a)(1) is that no levy

may be made without proper notice to a taxpayer.   Petitioner’s

agreement to include his 1993 tax year cannot substitute for the

explicit notice requirements of section 6330(a)(2).   Respondent

may not proceed with a levy with respect to petitioner’s 1993 tax

liability without satisfying these requirements.

     Sufficient evidence was not produced for us to ascertain

whether respondent issued to petitioner a Final Notice-–Notice of

Intent to Levy and Notice of Your Right to a Hearing for his 1993

tax year.   This is a genuine issue of material fact, and

accordingly, the cross-motions for summary judgment with respect

to this issue are denied.   Apart from this single flaw,

respondent met all of the section 6330 prerequisites with respect

to petitioner’s 1993 and 1994 tax years.   The Appeals officer
                              - 11 -

verified that respondent had complied with all legal and

procedural requirements pertaining to the proposed levy.      In

addition, the Appeals officer balanced the need to efficiently

collect tax with concerns that the means of collection be no more

intrusive than necessary.   Finally, because of a lack of viable

collection alternatives, the Appeals officer concluded that the

proposed levy was legally and procedurally correct.

     Accordingly, we hold that respondent’s determination to

proceed with collection of petitioner’s 1994 tax liability was

not an abuse of discretion.

     To reflect the foregoing,


                                      An order will be issued

                                 granting in part and denying in

                                 part respondent’s motion for

                                 summary judgment and denying

                                 petitioner’s cross-motion.
