                   T.C. Summary Opinion 2005-8



                     UNITED STATES TAX COURT



                  JOHN A. SEAVEY, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 14217-03S.            Filed January 13, 2005.



     John A. Seavey, pro se.

     Carina J. Campobasso, for respondent.



     DEAN, Special Trial Judge:   This case was heard pursuant to

the provisions of sections 6330(d) and 7463 of the Internal

Revenue Code in effect at the time that the petition was filed.

Unless otherwise indicated, subsequent section references are to

the Internal Revenue Code as in effect during the years at issue.

The decision to be entered is not reviewable by any other court,

and this opinion should not be cited as authority.
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     This proceeding arises from a petition for judicial review

filed in response to a Notice of Determination Concerning

Collection Action(s) Under Section 6320 and/or 6330 (notice of

determination) sent to petitioner.      Pursuant to sections 6320(c)

and 6330(d), petitioner seeks review of respondent's

determination to proceed with collection of his income tax

liabilities of $7,154.21 for 1992, $439.61 for 1998, and $135.51

for 2000.    The issue for decision is whether the settlement

officer abused her discretion in sustaining, as an appropriate

collection measure, the filing of a Notice of Federal Tax Lien on

petitioner's property and rights to property.

     The stipulation of facts and the exhibits received into

evidence are incorporated herein by reference.     Petitioner

resided in Southwest Harbour, Maine, at the time the petition was

filed.

                             Background

     Petitioner filed a Form 1040, U.S. Individual Income Tax

Return, dated April 19, 1997, for 1992 reflecting a tax liability

of $3,608.    In June 1997, respondent assessed additions to tax

for late filing and failure to pay tax of $811.80 and $902,

respectively.     Including interest, petitioner's outstanding tax

liability for 1992 is $7,154.21 as of the date of the filing of

the Notice of Federal Tax Lien.    As interest is still accruing,
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the amount due has increased.    Petitioner has not made any

payments toward his liability for 1992.

     Petitioner timely filed a Form 1040EZ, Income Tax Return for

Single and Joint Filers With No Dependents, for 1998 reflecting a

tax of $2,141 with a balance due of $435.71.    Respondent credited

petitioner's 1998 tax account for Federal tax withholdings and

excess FICA of $1,705.29 on April 15, 1999.

     In May 1999, respondent assessed an addition to tax for

failure to pay tax of $2.18.    Including interest, petitioner's

outstanding tax liability for 1998 is $439.61 at the time of

filing of the Notice of Federal Tax Lien.    Petitioner has not

made any other payments toward his liability for 1998.

     Petitioner timely filed a Form 1040A, U.S. Individual Income

Tax Return, for 2000 reflecting a tax of $2,389 with a balance

due of $414.   Respondent credited petitioner's 2000 tax account

for Federal tax withholdings and excess FICA of $1,975 on

April 15, 2001.   Respondent also credited $300 to petitioner's

account for the Immediate Tax Relief Credit on August 20, 2001.

Including interest, petitioner's outstanding tax liability for

2000 is $135.51 at time of filing of the Notice of Federal Tax

Lien.   Petitioner has not made any other payments toward his

liability for 2000.

     Respondent mailed to petitioner a Notice of Federal Tax Lien

Filing and Your Right to a Hearing Under IRC 6320 for 1992, 1998,
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and 2000, reflecting a balance due of $7,729.33.     Petitioner

replied by returning to respondent a Form 12153, Request for a

Collection Due Process Hearing.

1.   Petitioner's Hearing

     In his request for a hearing, petitioner alleged that he had

attempted unsuccessfully to enter into a payment agreement to

satisfy his outstanding liability.      The Appeals Office sent him

Form 433-A, Collection Information Statement for Wage Earners and

Self-Employed Individuals, to ascertain the feasibility of

collection alternatives.    Petitioner submitted some financial

information, and Settlement Officer Jean Frazier (Ms. Frazier)

held a telephone conference with petitioner.

     During the conference, petitioner informed Ms. Frazier that

he wanted to submit an offer in compromise.     Ms. Frazier provided

petitioner with Form 656, Offer in Compromise (OIC), and

requested some additional information and documentation as well

as an estimated tax payment.    Petitioner provided the information

and documentation requested but failed to sign the OIC and did

not submit an estimated tax payment.     Ms. Frazier nevertheless

reviewed the information petitioner provided and concluded that

he had the ability to pay his tax liability in full.

     At this point, petitioner began to dispute the underlying

tax liability.   Ms. Frazier explained to petitioner that the tax

liability was based on returns petitioner had filed.     She gave
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petitioner transcripts of his tax accounts.   These transcripts

reflected the tax liabilities petitioner reported on his returns,

plus additions to tax, interest, and collection costs.    The

parties were unable to resolve the matter, and Ms. Frazier issued

a notice of determination sustaining respondent's Notice of

Federal Tax Lien as the appropriate means of collecting

petitioner's unpaid liabilities for 1992, 1998, and 2000.

2.   The Petition

     The petition petitioner filed with this Court covered tax

years 1990, 1992, 1998, 2000, 2001, and 2002.   Because the notice

of determination addressed only 1992, 1998, and 2000,

respondent's motion to dismiss for lack of jurisdiction and to

strike as to the remaining years was granted.

     In his petition, petitioner states:

     I dispute the amounts I am being billed for. Some
     years are correct, others the IRS claim [sic] to be
     self-reported income taxes but which start out with a
     balance due of $7,159.21. This has yet to be verified
     but accrues interest and penalties.

     During certain years I was financially eligible for an
     offer in compromise but could not get my case reviewed.
     I disagree with the determination.

                            Discussion

     Section 6320 entitles a taxpayer to notice of the taxpayer's

right to request a hearing after a notice of lien is filed by the

Commissioner in furtherance of the collection from the taxpayer

of unpaid Federal taxes.   The taxpayer requesting the hearing may
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raise any relevant issue with regard to the Commissioner's

intended collection activities, including spousal defenses,

challenges to the appropriateness of the Commissioner's intended

collection action, and alternative means of collection.    Secs.

6320(b), (c); 6330(c); see Sego v. Commissioner, 114 T.C. 604,

609 (2000); Goza v. Commissioner, 114 T.C. 176, 180 (2000).

     The taxpayer may raise challenges "to the existence or

amount of the underlying tax liability", however, only if he "did

not receive any statutory notice of deficiency for such tax

liability or did not otherwise have an opportunity to dispute

such tax liability."     Sec. 6330(c)(2)(B).

     Pursuant to sections 6320(c) and 6330(c)(2)(B), petitioner

was entitled to challenge the existence or amount of the

underlying tax liabilities for 1992, 1998, and 2000 at his

Appeals Office hearing.    If the validity of those underlying tax

liabilities is properly at issue, the Court reviews the matter de

novo.    Poindexter v. Commissioner, 122 T.C. 280, 284 (2004); Sego

v. Commissioner, supra at 610.

        Petitioner has failed to aver or prove facts sufficient to

show error in the assessments.     Indeed, petitioner testified that

he does not disagree with the amount of tax respondent determined

he owes.     He disputes the “fines and penalties” assessed on the

outstanding tax liabilities.
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     Section 6651(a)(1) imposes an addition to tax for failure to

file a Federal income tax return by its due date, determined with

regard to any extension of time for filing previously granted.

The addition to tax equals 5 percent for each month that the

return is late, not to exceed 25 percent.    Sec. 6651(a)(1).

     Section 6651(a)(2) provides for an addition to tax for

failure to pay taxes shown on a return on or before the payment

due date.   The addition to tax is one-half percent of the amount

shown as tax on a return for each month or fraction thereof

during which the failure to pay continues, not exceeding 25

percent in the aggregate.    Sec. 6651(a)(2).

     The additions to tax under section 6651(a)(1) and (2) do not

apply, however, if the failure is due to reasonable cause and not

due to willful neglect.     United States v. Boyle, 469 U.S. 241,

245 (1985); Jackson v. Commissioner, 864 F.2d 1521, 1527 (10th

Cir. 1989), affg. 86 T.C. 492 (1986); Crocker v. Commissioner, 92

T.C. 899, 912 (1989).   "Reasonable cause" requires the taxpayer

to demonstrate that he exercised ordinary business care and

prudence.   United States v. Boyle, supra at 246.   "Willful

neglect" is defined as a "conscious, intentional failure or

reckless indifference."     Id. at 245.

     Petitioner agrees that his return for 1992 was not filed

timely and that he has not fully paid his tax liabilities shown

as due on the returns for the 3 subject years.    Petitioner has
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not produced any evidence that he had reasonable cause or a lack

of willful neglect in failing to timely file his 1992 return and

failing to pay the taxes shown on his 1992, 1998, and 2000

returns.

     Petitioner has not alleged or proven that the settlement

officer abused her discretion in finding that he had the ability

to pay his tax liabilities in full.       Because petitioner has

failed to present grounds on which this Court could find that the

settlement officer abused her discretion in sustaining the Notice

of Federal Tax Lien on petitioner's property, the Court sustains

respondent's administrative determination to proceed with

collection against petitioner.

     Reviewed and adopted as the report of the Small Tax Case

Division.

     To reflect the foregoing,


                                         A decision will be entered for

                                 respondent.
