                  T.C. Summary Opinion 2004-166



                     UNITED STATES TAX COURT



                   DINA DESALVO, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 22361-03S.            Filed December 6, 2004.


     Dina DeSalvo, pro se.

     Marie Small, for respondent.



     GOLDBERG, Special Trial Judge:   This case was heard pursuant

to the provisions of section 7463 of the Internal Revenue Code in

effect at the time the petition was filed.   The decision to be

entered is not reviewable by any other court, and this opinion

should not be cited as authority.   Unless otherwise indicated,

subsequent section references are to the Internal Revenue Code in

effect for the years in issue, and all Rule references are to the

Tax Court Rules of Practice and Procedure.
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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 Code Section 6320(c) or 6330(d).      This

case was set for trial at the New York, New York Trial Session

beginning on May 24, 2004.    However, on April 9, 2004, respondent

filed a Motion for Summary Judgment under Rule 121, together with

exhibits.   Petitioner did not file an objection to respondent’s

motion, even though the Court permitted her to do so.    A hearing

on the motion was held in New York, New York.    Both respondent

and petitioner appeared and were heard.

                              Background

     Petitioner filed Federal income tax returns for taxable

years 1993, 1994, and 2000.    With respect to taxable years 1993

and 1994, respondent conducted an examination of petitioner’s

returns.    Respondent and petitioner reached a settlement for each

of these years which resulted in deficiencies.    On April 15,

1996, and November 29, 1996, petitioner executed Forms 870,

Waiver of Restriction on Assessment and Collection of Deficiency

of Tax, for taxable years 1993 and 1994, respectively.

Respondent assessed the 1993 and 1994 tax deficiencies and

interest on June 17, 1996, and February 3, 1997, respectively.

With respect to taxable year 2000, petitioner failed to pay all

of the liability reported on her return as due.    Accordingly,
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respondent assessed the unpaid liability, interest, and an

addition to tax for failure to pay tax under section 6651(a)(2).

     On or about August 18, 1997, petitioner entered into an

installment payment agreement which included the years 1993 and

1994.   The terms of the agreement required petitioner to comply

with future filing requirements, to pay all tax liabilities, and

to submit to future review to determine whether petitioner’s

financial circumstances warranted a change in payment terms.

Petitioner was subsequently asked to provide updated financial

information, but failed to do so.   Petitioner’s failure to pay

her 2000 tax liability, as well as her violation of the above

provisions requiring the submission of updated financial

information upon request, caused petitioner to be in default of

her installment agreement.

     Respondent sent to petitioner’s last known address a Notice

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

Section 6320 (lien notice), dated March 4, 2003, advising

petitioner that a notice of Federal tax lien had been filed with

respect to her unpaid liabilities for taxable years 1993, 1994,

and 2000, and that petitioner could receive a hearing with

respondent’s Office of Appeals.

     On March 24, 2003, petitioner timely filed a Form 12153,

Request for a Collection Due Process Hearing for taxable years
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1993 and 1994.   On March 31, 2003, petitioner timely filed a

second Form 12153 for taxable years 1993, 1994, and 2000.

      On May 22, 2003, a telephone conference was held between

petitioner and a settlement officer at respondent’s Office of

Appeals.   In a letter dated May 23, 2003, the settlement officer

confirmed the above telephone conversation and petitioner’s

request to handle her case and conduct her hearing by telephone

and correspondence due to her health.

      After the telephone conference, the settlement officer

requested additional financial information from petitioner and

provided her with a copy of MFTRA-X Transcripts for petitioner’s

tax liabilities for taxable years 1993, 1994, and 2000.   In a

letter dated July 30, 2003, the settlement officer notified

petitioner that, based on the information provided by petitioner,

he could not recommend acceptance of petitioner’s offer in

compromise, and he provided his specific reasoning.

      On December 4, 2003, respondent’s Office of Appeals issued

to petitioner a Notice of Determination Concerning Collection

Action(s) Under Code Section 6230(c) or 6330(d).

                            Discussion

I.   General Rules

      Summary judgment is intended to expedite litigation and

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

Commissioner, 90 T.C. 678, 681 (1988).    Summary judgment is
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appropriate when “the pleadings, answers to interrogatories,

depositions, admissions, and any other acceptable materials,

together with the affidavits, if any, show that there is no

genuine issue as to any material fact, and that a decision may be

rendered as a matter of law.”     Rule 121(a) and (b); Sundstrand

Corp. v. Commissioner, 98 T.C. 518, 520 (1992), affd. 17 F.3d 965

(7th Cir. 1994).

      The moving party bears the burden of proving that there is

no genuine issue of material fact, and factual inferences are

drawn in a manner most favorable to the party opposing summary

judgment.   Dahlstrom v. Commissioner, 85 T.C. 812, 821 (1985);

Jacklin v. Commissioner, 79 T.C. 340, 344 (1982).

II.   Contention of the Parties

      Petitioner contends that she is not liable for the

deficiencies and that summary judgment is inappropriate because:

(1) She never received the lien notice; (2) the “penalty for at

least three years should * * * be removed”1 because she has been

requesting a hearing on such “penalties” for 3 years; and (3) her

offer in compromise was inappropriately denied.

      Respondent contends that summary judgment is appropriate

because:    (1) Even if petitioner did not receive the lien notice,


      1
      Petitioner refers to a penalty for all 3 years; however,
the record reflects that there are no penalties assessed for the
taxable years 1993 and 1994; only an addition to tax was assessed
for 2000.
                                 - 6 -
she timely submitted a Form 12153, she was given a Collection Due

Process Hearing to satisfy the requirements under section 6320

and section 6330, and the validity and priority of the

Government’s lien is not conditioned on notification to the

taxpayer under the law; (2) petitioner’s argument in her petition

to the Tax Court, that the “penalty for at least three years

should also be removed”, was not raised in petitioner’s Request

for a Collection Due Process Hearing or during the hearing

itself, and it cannot be raised for the first time in this Court;

and (3) the settlement officer’s rejection of petitioner’s offer

in compromise was not raised in her petition to this Court, and

is therefore deemed conceded under Rule 331(b)(4).

III.    Receipt of Lien Notice

       Respondent first argues that even if petitioner did not

receive the lien notice, she timely submitted a Form 12153, she

was given a Collection Due Process Hearing to satisfy the

requirements under section 6320 and section 6330, and the

validity and priority of the Government’s lien is not conditioned

on notification to the taxpayer under the law.

       Section 6321 imposes a lien in favor of the United States

upon all property and rights to property of a taxpayer where

there exists a failure to pay any tax liability after demand for

payment.    Within 5 business days after filing notice of a lien

pursuant to section 6323, the Secretary must notify the taxpayer
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of her right to a fair hearing before an impartial Appeals

officer, generally to be conducted in accordance with the

procedures described in section 6330(c), (d), and (e).     Sec.

6320.

     Before proceeding with a lien, the Secretary must meet

several notice requirements.    Section 6320(a)(1) provides that

the Secretary shall notify in writing the taxpayer described in

section 6321 of the filing of a notice of lien under section

6323.   Section 6320(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 taxpayer’s last known address.      Further, such notice must be

furnished not more than 5 business days after the day of the

filing of the notice of lien.    See id.

     Section 301.6320-1, Proced. & Admin. Regs., addresses the

consequences of a taxpayer’s not receiving or accepting a

Collection Due Process Notice (CDP Notice) that is properly sent

by certified mail to the taxpayer’s last known address.     Section

301.6320-1(a)(2), Q&A-11, Proced. & Admin. Regs., provides:

           A CDP Notice properly sent by certified or registered
           mail to the taxpayer’s last known address * * * is
           sufficient to start the 30-day period, commencing the
           day after the end of the five business day notification
           period, within which the taxpayer may request a CDP
           hearing. Actual receipt is not a prerequisite to the
           validity of the CDP Notice.
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      The record reflects that respondent sent by certified mail

to petitioner’s last known address a Notice of Federal Tax Lien

Filing and Your Right to a Hearing Under Section 6320, dated

March 4, 2003.   Although petitioner timely submitted a Form 12153

with respect to taxable years 1993, 1994, and 2000, petitioner

contends that she never received the aforementioned notice and

only became aware of the lien when she went to her bank to secure

a mortgage.   This Court finds that the evidence in the record

demonstrates that petitioner received the notice and was aware of

the lien.   Petitioner received a hearing based on her right under

sections 6320 and 6330.   Even assuming that petitioner did not

receive the notice, the record is sufficient to show that

respondent met all of the section 6320 prerequisites with respect

to petitioner’s 1993, 1994, and 2000 tax years.   There is no

genuine issue of material fact, and this Court holds for

respondent as a matter of law.

IV.   Underlying Tax Liability

      Respondent also contends that petitioner’s argument that the

“penalty for at least three years should also be removed” was not

raised in petitioner’s Request for a Collection Due Process

Hearing or during the hearing itself, and therefore cannot be

raised for the first time in this Court.

      Section 6330(c) addresses the matters to be considered at a

section 6320 hearing:
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          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

                         (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.

     Once an Appeals officer has issued a determination regarding

the disputed collection action, the taxpayer may seek judicial

review of the determination.   Sec. 6330(d)(1).

     Under section 6330(c)(2)(B), a taxpayer may contest an

underlying deficiency only if he did not have an opportunity to

seek a redetermination before assessment.   See, e.g., Landry v.

Commissioner, 116 T.C. 60, 62 (2001).
                                - 10 -
     Giving petitioner the benefit of the doubt, this Court finds

that petitioner’s argument in her petition calls into question

the issue of her underlying liability for the deficiencies

assessed as to taxable years 1993 and 1994.    However, the record

shows that both parties agreed to the deficiencies and petitioner

executed a Form 870, Waiver of Restriction on Assessment and

Collection of Deficiency of Tax, for taxable years 1993 and 1994.

Therefore, by signing the Form 870, petitioner consented to the

assessment and collection of the deficiencies and interest for

1993 and 1994 and waived the opportunity to petition the Court to

redetermine the deficiencies.     Aguirre v. Commissioner, 117 T.C.

324 (2001); Rivera v. Commissioner, T.C. Memo. 2003-35, affd. 102

Fed. Appx. 595 (9th Cir. 2004).

     Petitioner failed to pay the amount of tax shown on her 2000

Federal income tax return.   Once again, giving petitioner the

benefit of the doubt, this Court finds that petitioner’s argument

in her petition calls into question the issue of her underlying

liability for the unpaid amount and addition to tax for the

taxable year 2000.   As discussed above, under section 6330(c),

the validity of the underlying tax liability may be raised at the

CDP hearing only if the taxpayer “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); see Tornichio v. United States, 263 F. Supp. 2d
                              - 11 -
1090, 1095 (N.D. Ohio 2002); Loofbourrow v. Commissioner, 208 F.

Supp. 2d 698, 706 (S.D. Tex. 2002).     “A ‘notice of deficiency’ is

only required in situations where there is a deficiency * * * and

not in situations where, as here, a taxpayer fails to pay the

amount of tax shown on the returns.”     Jones v. Commissioner, 338

F.3d 463, 466 (5th Cir. 2003); accord Perez v. United States, 312

F.3d 191, 196-197 (5th Cir. 2002).     Where a taxpayer receives

notice of a tax liability and has been afforded an opportunity to

dispute such tax liability at the administrative level, he may

not subsequently raise a judicial challenge to the underlying

liability pursuant to section 6330(d)(1).     See Van Fossen v.

Commissioner, 4 Fed. Appx. 526 (9th Cir. 2001), affg. T.C. Memo.

2000-163.   “An opportunity to dispute a liability includes a

prior opportunity for a conference with Appeals that was offered

either before or after the assessment of the liability.”     Sec.

301.6330-1(e)(3), A-E2, Proced. & Admin. Regs.

     In the present case, petitioner did not raise the issue of

her underlying liability as to the taxable year 2000 at her CDP

hearing and did not dispute such underlying liability with the

settlement officer.   Therefore, petitioner’s underlying liability

as to the taxable year 2000 was not addressed in respondent’s

notice of determination and is not reviewable in her present

judicial challenge to this Court.
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      As to petitioner’s argument that the lien on her account

should be removed because “penalty for at least three years

should also be removed”, this Court finds that there is no

genuine issue of material fact, and we hold for respondent as a

matter of law.

V.   Offer in Compromise

      Respondent further contends that the settlement officer’s

rejection of petitioner’s offer in compromise was not raised in

petitioner’s petition to this Court and is therefore deemed

conceded under Rule 331(b)(4).

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

collection action shall contain clear and concise assignments of

each and every error alleged to have been committed in the notice

of determination, and that any issue not raised in the

assignments of error shall be deemed conceded.   See Lunsford v.

Commissioner, 117 T.C. 183, 185-186 (2001); Goza v. Commissioner,

114 T.C. 176, 183 (2000).   Accordingly, this Court concludes that

petitioner has conceded the determination of the settlement

officer that her offer in compromise was unacceptable.

     However, even if petitioner had raised this issue in her

petition to this Court, on the basis of the record we conclude

that summary judgment is appropriate.

     Under an abuse of discretion standard, “we do not interfere

unless the Commissioner’s determination is arbitrary, capricious,
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clearly unlawful, or without sound basis in fact or law.”       Ewing

v. Commissioner, 122 T.C. 32, 39 (2004); see also Woodral v.

Commissioner, 112 T.C. 19, 23 (1999).    Review for abuse of

discretion includes “any relevant issue relating to the unpaid

tax or the proposed levy”, including “challenges to the

appropriateness of collection actions” and “offers of collection

alternatives” such as offers in compromise.   Sec. 6330(c)(2)(A).

Questions about the appropriateness of the collection action

include whether it is proper for the Commissioner to proceed with

the collection action as determined in the notice of

determination, and whether the type and/or method of collection

chosen by the Commissioner is appropriate.    See, e.g., Swanson v.

Commissioner, 121 T.C. 111, 119 (2003).

     As previously noted, offers in compromise are a specifically

mentioned collection alternative, and they are therefore reviewed

under an abuse of discretion standard.    Sec. 6330(c)(2)(A)(iii).

Additionally, whether respondent may proceed with collection of

petitioner’s unpaid liabilities is a challenge to the

appropriateness of collection.    See sec. 6330(c)(2)(A)(ii);

Swanson v. Commissioner, supra.

     Therefore, had petitioner raised the issue of the rejection

of her offer in compromise in her petition to this Court, we

would still hold summary judgment to be appropriate because there
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is no genuine issue of material fact within the record that would

show the settlement officer abused his discretionary power.

     Due to the above reasoning, this Court finds that there is

no genuine issue of material fact in the present case, and we

hold for the respondent as a matter of law.   Respondent’s Motion

for Summary Judgment is granted.

     Reviewed and adopted as the report of the Small Tax Case

Division.

                                     An appropriate order and

                         decision will be entered granting

                         respondent’s Motion for Summary

                         Judgment.
