                    114 T.C. No. 12



                UNITED STATES TAX COURT



              HOWARD GOZA, Petitioner v.
     COMMISSIONER OF INTERNAL REVENUE, Respondent



Docket No. 15444-99L.                  Filed March 17, 2000.



     R issued a notice of deficiency to P for the
taxable years 1994, 1995, and 1996. P returned the
notice of deficiency to R marked "I hereby refute and
invalidate this unsigned Presentment without dishonor.
I do not owe this or any amount of money. All rights
reserved, without prejudice, UCCI-207." P did not file
a petition for redetermination with the Court. R
subsequently issued a notice of intent to levy to P
indicating that R intended to collect the taxes due for
the taxable years 1994, 1995, and 1996. P requested
and received an administrative review of the proposed
collection action. R issued a notice of determination
to P stating that all applicable laws and
administrative procedures had been met and that
collection would proceed. R further advised P that
challenges to the underlying liability would not be
considered since P received a notice of deficiency. P
filed a timely petition for review with the Court
contesting the notice of determination on the ground
that he is not liable for the underlying tax
                                - 2 -

     deficiencies, and, therefore, there is no basis for
     assessment and collection of the tax. R moved to
     dismiss for failure to state a claim upon which relief
     can be granted.

          Held: The Tax Court has jurisdiction to review a
     determination pursuant to sec. 6330(c) and (d), I.R.C.
     Held, further, where P timely received a statutory
     notice of deficiency, yet he failed to file a petition
     for redetermination with the Court, P was precluded
     from contesting the issue of the underlying tax
     liability during Appeals Office consideration pursuant
     to sec. 6330(c)(2)(B), I.R.C. Held, further, P's
     petition for review of R's administrative determination
     to proceed with collection fails to state a claim upon
     which relief can be granted. See sec. 6330(d), I.R.C.;
     Rule 331(b)(4) and (5), Tax Court Rules of Practice and
     Procedure.



     Howard Goza, pro se.

     Ashton P. Trice and Richard Goldman, for respondent.



                               OPINION


     COHEN, Chief Judge:    This case was assigned to Chief Special

Trial Judge Peter J. Panuthos pursuant to the provisions of

section 7443A(b)(4) and Rules 180, 181, and 183.   Unless

otherwise indicated, section references are to sections of the

Internal Revenue Code as amended, and Rule references are to the

Tax Court Rules of Practice and Procedure.   The Court agrees with

and adopts the opinion of the Special Trial Judge, which is set

forth below.
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                 OPINION OF THE SPECIAL TRIAL JUDGE

     PANUTHOS, Chief Special Trial Judge:    This matter is before

the Court on respondent's motion to dismiss for failure to state

a claim upon which relief can be granted.    As discussed in detail

below, we shall grant respondent's motion.

Background

     On December 17, 1997, respondent issued a notice of

deficiency to petitioner determining deficiencies in and

additions to his Federal income taxes for the years and in the

amounts as follows:

                                  Additions to Tax
     Year     Deficiency    Sec. 6651(a)(1)     Sec. 6654

     1994     $12,588           $3,147            $649
     1995      12,893            3,223             703
     1996      13,357            3,339             718

Respondent reconstructed petitioner's income for the years in

issue by relying on information produced by the Bureau of Labor

Statistics.

     On February 9, 1998, petitioner mailed the notice of

deficiency back to respondent with the following handwritten

statement appearing on the first page of the notice:     "I hereby

refute and invalidate this unsigned Presentment without dishonor.

I do not owe this or any amount of money.    All rights reserved,

without prejudice, UCCI-207."   The notice was accompanied by a

15-page "NOTICE OF DEFENSE" in which petitioner asserted that he
                                 - 4 -

is not liable for the taxes in question based on a number of

frivolous constitutional arguments.

     On February 17, 1999, respondent mailed a final notice of

intent to levy to petitioner pursuant to section 6331.      The

notice stated that petitioner owed taxes, penalties, and interest

totaling $23,816.20, $22,653.89, and $21,658.74, for the taxable

years 1994, 1995, and 1996, respectively, and that respondent was

preparing to collect these amounts.      The notice stated that

petitioner could request a "Collection Due Process Hearing" with

respondent's Appeals Office.

     On March 9, 1999, petitioner returned the notice of intent

to levy to respondent with the same handwritten statement

appearing on the notice of deficiency.      On August 24, 1999,

respondent's Atlanta Appeals Office issued a notice of

determination to petitioner which stated in pertinent part:

     We have reviewed the proposed collection action for the
     periods [1994, 1995, and 1996]. This letter is your
     legal Notice of Determination as required by law. * * *

     *        *        *          *          *        *        *

     Summary of Determination:

     It has been determined that the requirements of all
     applicable laws and administrative procedures have been
     met.

     As you were advised in our letter dated July 6, 1999,
     challenges to the underlying liability may only be
     raised as an issue if you did not receive a statutory
     notice of deficiency or did not otherwise have an
     opportunity to dispute the liability. You did receive
     a statutory notice of deficiency in this case. You
     were also informed that a hearing is not available for
                               - 5 -

     constitutional issues such as those referenced in your
     reply to the final notice, and you failed to raise any
     issues that could be considered in a due process
     hearing pursuant to IRC section 6330.

     It is therefore deemed that the proposed collection
     action balances the need for efficient collection of
     the taxes with the concern that the collection action
     be no more intrusive than necessary.

     On September 24, 1999, petitioner timely filed with the

Court a petition for review of respondent's determination letter.

The petition states in pertinent part that petitioner "requests a

Redetermination of income taxes allegedly owed to Respondent".

The petition includes allegations that it is unclear:   (1)

Whether the income tax is a direct or indirect tax, (2) what

income is subject to taxation, and (3) who is subject to the

Internal Revenue Code.   Petitioner concludes, among other things,

in his petition:

          Respondent is attempting to collect a tax on
     income not subject to the present income tax system,
     absent a willingness on the part of Petitioner to
     voluntarily self-assess himself on such income--which
     is clearly not the case.

          Petitioner reserves all rights under the federal
     Constitution and common law, the filing of this
     petition is not intended as a waiver of any of those
     rights.

     As indicated, respondent filed a motion to dismiss asserting

that the petition for review fails to state a claim for

relief in this collection review proceeding.   Respondent

maintains that, because petitioner received a notice of
                              - 6 -

deficiency for the years in issue (and therefore was presented

with an earlier opportunity to contest his tax liability in this

Court) the question of petitioner's liability for the underlying

taxes is not an issue that is subject to dispute in this

proceeding.

     This matter subsequently was called for hearing at the

Court's motions session in Washington, D.C.   Counsel for

respondent appeared at the hearing and presented argument in

support of the motion to dismiss.   No appearance was made by or

on behalf of petitioner at the hearing.

Discussion

     Section 6331(a) provides that, if any person liable to pay

any tax neglects or refuses to pay such tax within 10 days after

notice and demand for payment, the Secretary is authorized to

collect such tax by levy upon property belonging to the taxpayer.

Section 6331(d) provides that the Secretary is obliged to provide

the taxpayer with notice, including notice of the administrative

appeals available to the taxpayer, before proceeding with

collection by levy on the taxpayer's property.

     In the Internal Revenue Service Restructuring and Reform Act

of 1998 (RRA 1998), Pub. L. 105-206, sec. 3401, 112 Stat. 685,

746, Congress enacted new sections 6320 (pertaining to liens) and

6330 (pertaining to levies) to provide due process protections

for taxpayers in tax collection matters.   Section 6330 generally
                               - 7 -

provides that the Commissioner cannot proceed with the collection

of taxes by way of a levy on a taxpayer's property until the

taxpayer has been given notice of and the opportunity for an

administrative review of the matter (in the form of an Appeals

Office due process hearing), and if dissatisfied, with judicial

review of the administrative determination.   Section 6330(e)

generally provides for the suspension of the period of

limitations on collection during the period that administrative

and judicial proceedings are pending and for 90 days thereafter.

Section 6330 is effective with respect to collection actions

initiated more than 180 days after July 22, 1998 (January 19,

1999).   See RRA 1998 sec. 3401(d), 112 Stat. 750.

     Section 6330(c) prescribes the matters that may be raised by

a taxpayer at an Appeals Office due process hearing in pertinent

part as follows:

          SEC. 6330(c). Matters Considered at Hearing.--In
     the case of any hearing conducted under this section--

          (1) Requirement of investigation.-–The appeals
     officer shall at the hearing obtain verification from
     the Secretary that the requirements of any applicable
     law or administrative procedure have been met.

          (2) Issues at hearing.--

               (A) In general.-–The person may raise at the
          hearing any relevant issue relating to the unpaid
          tax or the proposed levy, including–-

                     (i) appropriate spousal defenses;

                     (ii) challenges to the appropriateness
                of collection actions; and
                               - 8 -

                     (iii) offers of collection alternatives,
                which may include the posting of a bond, the
                substitution of other assets, an installment
                agreement, or an offer-in-compromise.

               (B) Underlying liability.-–The person may
          also raise at the hearing challenges to the
          existence or amount of the underlying tax
          liability for any tax period if the person did not
          receive any statutory notice of deficiency for such
          tax liability or did not otherwise have an
          opportunity to dispute such tax liability.

          (3) Basis for the determination.-–The
     determination by an appeals officer under this
     subsection shall take into consideration–-

               (A) the verification presented under
          paragraph (1);

                (B) the issues raised under paragraph (2);
          and

               (C) whether any proposed collection action
          balances the need for the efficient collection of
          taxes with the legitimate concern of the person
          that any collection action be no more intrusive
          than necessary.

In sum, section 6330(c) provides for an Appeals Office due

process hearing to address collection issues such as spousal

defenses, the appropriateness of the Commissioner's intended

collection action, and possible alternative means of collection.

Section 6330(c)(2)(B) provides that the existence and amount of

the underlying tax liability can only be contested at an Appeals

Office due process hearing if the taxpayer did not receive a

notice of deficiency for the taxes in question or did not

otherwise have an earlier opportunity to dispute such tax

liability.
                               - 9 -

     Section 6330(d) provides for judicial review of the

Commissioner's administrative determination in pertinent part as

follows:

     SEC. 6330(d). Proceeding After Hearing.--

          (1) Judicial review of determination.-–The person
     may, within 30 days of a determination under this
     section, appeal such determination–-

                (A) to the Tax Court (and the Tax Court shall
           have jurisdiction to hear such matter); or

                (B) if the Tax Court does not have
           jurisdiction of the underlying tax liability, to a
           district court of the United States.

     If a court determines that the appeal was to an incorrect
     court, a person shall have 30 days after the court
     determination to file such appeal with the correct court.

     Thus, section 6330(d) provides that a taxpayer may file a

petition for review of the Commissioner's administrative

determination with the Tax Court where the underlying tax is of a

type over which the Court normally has deficiency jurisdiction.

See Moore v. Commissioner, 114 T.C. ___ (2000) (dismissing

petition for review of collection action on the ground that the

underlying trust fund taxes were not of a type over which the

Court normally has jurisdiction).

     Although section 6330 does not prescribe the standard of

review that the Court is to apply in reviewing the Commissioner's

administrative determinations, the subject is addressed in detail

in the legislative history of the provision.   In particular, H.

Conf. Rept. 105-599, at 266 (1998), states in pertinent part:
                               - 10 -

     Judicial review

          The conferees expect the appeals officer will
     prepare a written determination addressing the issues
     presented by the taxpayer and considered at the
     hearing. * * * Where the validity of the tax liability
     was properly at issue in the hearing, and where the
     determination with regard to the tax liability is part
     of the appeal, no levy may take place during the
     pendency of the appeal. The amount of the tax
     liability will in such cases be reviewed by the
     appropriate court on a de novo basis. Where the
     validity of the tax liability is not properly part of
     the appeal, the taxpayer may challenge the
     determination of the appeals officer for abuse of
     discretion. * * *

Accordingly, where the validity of the underlying tax liability

is properly at issue, the Court will review the matter on a de

novo basis.    However, where the validity of the underlying tax

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

Commissioner's administrative determination for abuse of

discretion.

Jurisdiction

     The Court's jurisdiction under section 6330 is contingent on

the issuance of a valid notice of determination and a timely

petition for review.    Further, a taxpayer may only file a

petition for review with this Court where the administrative

determination concerns a tax over which the Court generally has

jurisdiction.   See Moore v. Commissioner, supra.

     In the present case, respondent issued a determination

letter to petitioner, and petitioner filed a timely petition for

review with the Court.    In addition, the taxes that respondent
                              - 11 -

seeks to collect are income taxes over which the Court normally

has jurisdiction.   See secs. 6211, 6213.   Thus, despite the fact

that petitioner failed to invoke the Court's deficiency

jurisdiction by filing a petition for redetermination contesting

the notice of deficiency for 1994, 1995, and 1996, we hold that

section 6330(d) vests the Court with jurisdiction to review

respondent's administrative determination to proceed with a levy

to effect the collection of the taxes due from petitioner for

those years.

Sufficiency of the Petition for Review

     Section 6330(c)(2)(A) prescribes the issues that may be

raised by a taxpayer in an Appeals Office due process hearing,

including spousal defenses to collection, challenges to the

appropriateness of the Commissioner's intended collection action,

and offers of alternative means of collection.   Section

6330(c)(2)(B) provides that the Appeals Office due process

hearing is not a forum for the taxpayer to contest the existence

or amount of the underlying taxes unless the taxpayer did not

receive a notice of deficiency for the taxes in question or did

not otherwise have an earlier opportunity to dispute such tax

liability.

     Although petitioner received a notice of deficiency for the

taxable years 1994, 1995, and 1996, he did not avail himself of

the opportunity to file a petition for redetermination with the
                               - 12 -

Court pursuant to section 6213(a).      Consistent with section

6330(c)(2)(B), petitioner therefore was precluded from contesting

his liability for the underlying taxes before the Appeals Office.

Respondent's determination letter states that respondent

explained the effect of section 6330(c)(2)(B) to petitioner in a

letter dated July 6, 1999.   Nevertheless, petitioner persisted in

arguing before the Appeals Office that he was not liable for the

underlying taxes on constitutional grounds.

     While ignoring the proscription of section 6330(c)(2)(B),

petitioner likewise failed to assert before the Appeals Office

any of the claims enumerated under section 6330(c)(2)(A).      In

particular, 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 as directed

under section 6330(c)(2)(A).   Nor has he raised any such issue

before the Court.

     Rule 331(b)(4) states that a petition for review of an

administrative determination filed pursuant to section 6330 shall

contain clear and concise assignments of each and every error

which the petitioner alleges to have been committed in the levy

determination and any issue not raised in the assignments of

error shall be deemed to be conceded.      Rule 331(b)(5) states that

such a petition shall contain clear and concise lettered
                              - 13 -

statements of the facts on which the taxpayer bases each

assignment of error.

     Petitioner failed to raise a valid challenge to respondent's

proposed levy before the Appeals Office.    Petitioner continued to

assert the same frivolous constitutional claims in his petition

for review filed with the Court.

     The validity of petitioner's underlying tax liability is not

properly at issue in this proceeding.    Moreover, the petition

does not assert (nor is there any basis in the administrative

record for the Court to conclude) that respondent abused his

discretion with respect to spousal defenses or collection

matters.   See sec. 6330(c)(2)(A).   In the absence of a

justiciable claim for relief in the petition for review filed

herein, we shall grant respondent's motion to dismiss for failure

to state a claim upon which relief can be granted.

     We note that the decision in this case will indicate that we

sustain respondent's administrative determination to proceed with

collection against petitioner.    Our decision does not serve as a

review of respondent's determination as to petitioner's

underlying tax liability for 1994, 1995, or 1996.

     To reflect the foregoing,



                                 An appropriate order and

                          decision will be entered.
