                        T.C. Memo. 2002-188



                      UNITED STATES TAX COURT



          PAUL V. & DOROTHY S. KAZUNAS, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 10686-01L.              Filed August 5, 2002.



     Paul V. and Dorothy S. Kazunas, pro sese.

     Russell K. Stewart, for respondent.



                        MEMORANDUM OPINION


     COHEN, Judge:   Respondent sent to petitioners a Notice of

Determination Concerning Collection Action(s) Under Section 6320

and/or 6330 after conducting a hearing under section 6330.   The

hearing was conducted at petitioners’ request in response to a

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

Under I.R.C. 6320 for 1990, 1991, 1992, and 1996.   Petitioners
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contend that they did not receive refunds to which they were

entitled for 1984, 1987, and 1995 and that the amounts not

refunded should be applied to their outstanding liabilities.

Unless otherwise indicated, all section references are to the

Internal Revenue Code in effect for the years in issue.

                            Background

     Some of the facts have been stipulated, and the stipulated

facts are incorporated in our findings by this reference.

Petitioners resided in Marlton, New Jersey, at the time that they

filed their petition.

     On March 22, 2001, the Internal Revenue Service sent to

petitioners a notice of filing of a notice of tax lien with

respect to income tax owing for 1990, 1991, 1992, and 1996.     The

total taxes that were the subject of the lien approximated

$17,115.   Petitioners requested a hearing under section 6330.   At

the hearing, petitioners contended that they had not received

refunds totaling approximately $14,000 for 1984, 1987, and 1995.

At the hearing, petitioners were presented with transcripts of

their accounts for 1984, 1987, 1990, 1991, 1992, 1995, and 1996.

     Subsequent to the hearing, canceled checks that were

endorsed by petitioners were located.    The checks reflected

refunds of $7,611.83 for 1984 and $1,003.38 for 1995.    Although

the transcript of petitioners’ account for 1987 reflected a
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refund of $5,616.86 paid October 23, 1989, a copy of the canceled

check could not be retrieved due to the age of the item.

     At the hearing, petitioners were given the opportunity to

submit an offer in compromise, but they declined to complete a

statement of the information needed for such an offer.

Petitioners acknowledged that, if completed, the collection

information statement would establish that they would not qualify

for an offer in compromise because they have sufficient assets,

including equity in their home, to pay the disputed liability in

full.

     At the hearing, petitioners offered to pay a sum that was

either $1,249 (according to the notice of determination) or

$1,429 (according to the Stipulation of Facts).   The Appeals

officer determined that the offer of payment was unacceptable.

                             Discussion

     Petitioners do not dispute amounts due and owing for 1990,

1991, 1992, and 1996, the years reflected in the notice of

Federal tax lien.   They claim, however, that they are entitled to

credit for an overpayment for 1987 for which they never received

a refund.   In this regard, we review respondent’s determination

de novo.    Landry v. Commissioner, 116 T.C. 60, 62 (2001).

     Petitioners acknowledged that the transcript of their

account for 1987 reflects a refund check issued, but Mr. Kazunas

testified that he did not recall receiving the check.
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Petitioners originally denied, however, that they received

refunds for two other years and acknowledged those refunds only

after being presented with copies of the canceled checks endorsed

by them.   In addition, Mr. Kazunas acknowledged that he made no

inquiries pursuing a tax refund in excess of $5,600 for 1987

until he saw the transcript of petitioners’ account for 1987.        We

conclude that petitioners’ recollection is unreliable as evidence

that the refund was not received.

     There is no evidence that the amounts assessed are

erroneous.   Petitioners’ offer to pay less than 10 percent of the

amount due, absent their qualifying for an offer in compromise,

was unacceptable.   Respondent’s notice of determination was not

erroneous.

     At trial, petitioners raised issues that were not raised at

the Appeals hearing.   No special circumstance here justifies our

consideration of issues not raised at the hearing.         See Magana v.

Commissioner, 118 T.C. 488 (2002).

     To reflect the foregoing,

                                              Decision will be entered

                                         for respondent.
