                  T.C. Summary Opinion 2007-79



                     UNITED STATES TAX COURT



     DOUGLAS LEROY AND NANCY HELENE MAXFIELD, Petitioners v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 8135-06S.              Filed May 22, 2007.


     Douglas Leroy and Nancy Helene Maxfield, pro sese.

     Michele A. Yates and Ann M. Welhaf, for respondent.


     PANUTHOS, Chief Special Trial Judge:    This case was heard

pursuant to the provisions of sections 6330(d) and 7463 of the

Internal Revenue Code in effect when the petition was filed.

Pursuant to section 7463(b), the decision to be entered is not

reviewable by any other court, and this opinion shall not be

treated as precedent for any other case.    Unless otherwise

indicated, subsequent section references are to the Internal

Revenue Code, and all Rule references are to the Tax Court Rules
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of Practice and Procedure.

     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 (the notice

of determination) sent to petitioners in April 2006.   The issue

for decision is whether respondent abused his discretion in

sustaining a proposed levy action against petitioners.

                             Background

     Some of the facts have been stipulated, and they are so

found.   The record consists of the stipulation of facts and

supplemental stipulation of facts with attached exhibits,

additional exhibits introduced at trial, and the testimony of

petitioner Douglas Maxfield.

     From at least 1995 through the time the petition was filed,

petitioners resided in Bowie, Maryland.   All references to

petitioner are to Douglas Maxfield.

     Petitioners filed a joint 1999 Federal income tax return.

In March 2003, respondent issued petitioners a notice of

deficiency determining, inter alia, that petitioners were not

entitled to certain claimed deductions.   Petitioners did not

petition the Court in response to the notice, and respondent

assessed tax, penalties, and interest against petitioners on

August 4, 2003.
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     Petitioners did not pay all of the amount assessed for 1999.

Respondent issued petitioners a Notice of Intent to Levy and

Notice of Your Right to a Hearing in July 2004.   Petitioners

timely submitted a Form 12153, Request for a Collection Due

Process Hearing.   Petitioners’ case was assigned to a settlement

officer, who conducted a telephone hearing with petitioners.

Petitioners attempted to challenge the underlying tax liability

during the hearing, but the settlement officer refused to

consider the issue because respondent had sent petitioners a

notice of deficiency.

     After the hearing, respondent issued the notice of

determination sustaining the proposed levy.   The notice of

determination states in part that the proposed levy was no more

intrusive than necessary and that the requirements of applicable

law and administrative procedure were met.    Petitioners filed a

timely petition for review of respondent’s determination.

                             Discussion

     Section 6331(a) authorizes the Secretary to levy upon

property and property rights of a taxpayer liable for taxes who

fails to pay those taxes within 10 days after a notice and demand

for payment is made.    Section 6331(d) provides that the levy may

be made only if the Secretary has given written notice to the

taxpayer 30 days before the levy.   Section 6330(a) requires the

Secretary to send a written notice to the taxpayer of the amount
                               - 4 -

of the unpaid tax and of the taxpayer’s right to a section 6330

hearing at least 30 days before the levy is begun.

     If a section 6330 hearing is requested, the hearing is to be

conducted by the Office of Appeals, and the Appeals officer

conducting it must verify that the requirements of any applicable

law or administrative procedure have been met.    Sec. 6330(b)(1),

(c)(1).   The taxpayer may raise at the hearing any relevant issue

relating to the unpaid tax, including a spousal defense or

collection alternative.   Sec. 6330(c)(2)(A).   The taxpayer also

may challenge the existence or amount of the underlying tax

liability at a hearing if the taxpayer did not receive a

statutory notice of deficiency with respect to the underlying tax

liability or did not otherwise have an opportunity to dispute

that liability.   Sec. 6330(c)(2)(B); Montgomery v. Commissioner,

122 T.C. 1 (2004).

     This Court has jurisdiction under section 6330 to review the

Commissioner’s administrative determinations.    Sec. 6330(d);

Iannone v. Commissioner, 122 T.C. 287, 290 (2004).    Where the

validity of the underlying tax liability is properly at issue, we

review the determination de novo.   When the underlying liability

is not properly at issue, the Court will review the

Commissioner’s determination for abuse of discretion.    Sego v.

Commissioner, 114 T.C. 604, 610 (2000); Goza v. Commissioner, 114

T.C. 176, 183 (2000).
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I.   Whether Petitioners Can Challenge the Underlying Tax
     Liability

     Petitioners contend that the assessment of tax was untimely.

In the alternative, petitioners contend that the adjustments in

the notice of deficiency are erroneous.    Each contention

constitutes a challenge to the underlying tax liability.     See

Hoffman v. Commissioner, 119 T.C. 140, 145 (2002); Butti v.

Commissioner, T.C. Memo. 2006-66.

     Respondent argues that petitioners cannot dispute the

underlying tax liability because they received a notice of

deficiency.   See sec. 6330(c)(2)(B).   Petitioners concede that

respondent mailed a notice of deficiency but assert that it was

never delivered to them.

     If the Commissioner properly mails a notice of deficiency to

a taxpayer’s last known address, a presumption arises that the

notice was delivered to the taxpayer in the normal course of the

mail.   Zenco Engg. Corp. v. Commissioner, 75 T.C. 318, 323

(1980), affd. without published opinion 673 F.2d 1332 (7th Cir.

1981); Hovind v. Commissioner, T.C. Memo. 2006-143.    The

Commissioner bears the burden of proving proper mailing of a

notice of deficiency.   Coleman v. Commissioner, 94 T.C. 82, 90

(1990).   Proper mailing may be shown by evidence of the

Commissioner’s mailing practices corroborated by direct testimony

or documentary evidence of mailing.     Magazine v. Commissioner, 89

T.C. 321, 326 (1987); Hovind v. Commissioner, supra.    A U.S.
                                 - 6 -

Postal Service certified mailing list reflecting delivery of a

document by the Commissioner to the Postal Service represents

direct evidence of mailing.     August v. Commissioner, 54 T.C.

1535, 1536-1537 (1970); Hovind v. Commissioner, supra.

     Respondent introduced the testimony of a settlement officer

who described respondent’s mailing practices.    Respondent also

introduced a certified mailing list indicating that a notice of

deficiency had been mailed to petitioners at their address in

Bowie, Maryland.   The settlement officer testified there was no

indication of irregularity in the preparation or mailing of the

notice of deficiency.1

     We find that respondent properly mailed the notice of

deficiency to petitioners’ last known address.    A presumption of

delivery therefore arises.    See Zenco Engg. Corp. v.

Commissioner, supra.     We conclude, however, that petitioners have

rebutted the presumption of delivery.    Our conclusion is based on

petitioner’s credible testimony as well as their history of



     1
       The settlement officer acknowledged that respondent’s
administrative file did not contain a copy of the notice that was
sent to petitioners. The Commissioner’s failure to produce a
copy of a notice of deficiency may indicate that no notice was
mailed. See Pietanza v. Commissioner, 92 T.C. 729, 735-736
(1989), affd. without published opinion 935 F.2d 1282 (3d Cir.
1991). However, that is not necessarily the case where, as here,
the Commissioner introduces a copy of a certified mailing list
and the corroborating testimony of an Internal Revenue Service
employee. See Webb v. Commissioner, T.C. Memo. 1996-449.
Because petitioners concede the notice was mailed, we need not
address this issue further.
                                - 7 -

aggressively asserting their rights in dealings with respondent.

See Butti v. Commissioner, supra.

     Petitioners have litigated in this Court previously.     In

Maxfield v. Commissioner, T.C. Summary Opinion 2006-27,

petitioners challenged respondent’s deficiency determinations for

the taxable years 2000 and 2001.    This supports petitioners’

contention that they always reply to respondent’s notices and

letters.

     Petitioners also have a long history of dealing with

respondent.    According to petitioners, respondent has examined at

least nine of their tax returns.    The parties acknowledge that

the examination of petitioners’ 1999 return was particularly

contentious.   For example, petitioners sent letters to the

Commissioner of Internal Revenue and the National Taxpayer

Advocate complaining about the examination.    One letter states in

part:   “On 14 February 2002 * * * [an Internal Revenue Service

agent] came out to my home and conducted an audit of my 1999 tax

return.    I produced all my 1999 tax records and for 9 and ½ hours

we went through the audit.   I enjoyed it, it was fun.”   While the

sarcasm in the letter is evident, we have no doubt that

petitioner derives a sense of satisfaction from challenging

respondent.

     Petitioners ultimately asked respondent to close the

examination and issue a notice of deficiency.    After respondent
                                 - 8 -

informed petitioners that a notice of deficiency had been issued

for 1999, petitioners repeatedly asked respondent for a copy of

the notice and proof of delivery.     When respondent was unable to

provide such information, see supra note 1, petitioner visited

the Bowie, Maryland, Post Office and asked a manager to conduct a

search of the Post Office’s records for delivery information.

The manager found no indication that the notice of deficiency had

been delivered.2

     Petitioners’ course of conduct indicates they would have

sought review of the notice of deficiency had they received it.

We therefore conclude that petitioners have rebutted the

presumption of delivery.     See Butti v. Commissioner, supra.

Because respondent introduced no other evidence establishing that

petitioners actually received the notice, we conclude that

petitioners can challenge the underlying tax liability.     See sec.

6330(c)(2)(B).     Our standard of review is de novo.   Sego v.

Commissioner, 114 T.C. at 610.




     2
       As respondent notes, petitioner introduced no evidence
concerning the length of time the Post Office maintains records
of certified mail deliveries. Thus, respondent argues that
petitioner’s failure to obtain delivery information may indicate
only that the Post Office deleted such information from its
files, and not that the Post Office failed to deliver the notice.
We agree the absence of delivery information does not necessarily
indicate that the notice was not delivered. Rather, we find
petitioner’s visit to the Post Office to be further evidence of
petitioners’ aggressiveness in challenging respondent’s
determinations. See Butti v. Commissioner, T.C. Memo. 2006-66.
                                 - 9 -

II.   Whether the Assessment of Tax Was Timely

      Petitioners contend that the assessment of tax for 1999 was

untimely.    In general, the Commissioner must assess tax within 3

years after the due date of a timely filed return.    Sec. 6501(a)

and (b)(1).    The due date of petitioners’ return was April 17,

2000.3    Because respondent did not assess tax until August 4,

2003, petitioners assert that the limitations period had expired.

We disagree.

      Pursuant to section 6503(a)(1), the period of limitations on

assessment is suspended during the 90-day period following the

mailing of a notice of deficiency and, where the taxpayer does

not petition the Court in response to the notice, for an

additional 60 days thereafter.     Estate of Mandels v.

Commissioner, 64 T.C. 61, 77 n.8 (1975).    A properly addressed

notice of deficiency is sufficient to suspend the running of the

assessment period even if the taxpayer never receives the notice.

Mollet v. Commissioner, 82 T.C. 618, 623-624 (1984), affd.

without published opinion 757 F.2d 286 (11th Cir. 1985); McGarvie

v. Commissioner, T.C. Memo. 1988-85.

      The notice of deficiency was properly addressed and mailed

to petitioners in March 2003, within 3 years of the due date of


      3
       In general, a tax return must be filed on or before the
15th day of April following the close of the calendar year. Sec.
6072(a). Because Apr. 15, 2000, was a Saturday, petitioners’ tax
return was due on the next business day, which was Apr. 17, 2000.
See sec. 7503.
                               - 10 -

their 1999 return.    Because petitioners did not petition the

Court in response to the notice, the assessment period did not

expire until September 15, 2003.4    See sec. 6503(a)(1).   Thus,

the assessment of tax on August 4, 2003, was timely.

     As discussed above, petitioners also wish to contest the

adjustments made in the notice of deficiency.    Respondent’s

refusal to consider this issue was an abuse of discretion.      See

sec. 6330(c)(2)(B).   The Court therefore will issue an order

setting this case for further trial on the issue of the

underlying tax liability.

     To reflect the foregoing,


                                      An appropriate order will

                                 be issued.




     4
       Three years after the due date of petitioners’ 1999 return
was Apr. 17, 2003. See supra note 3. Although 150 days after
that date was Sunday, Sept. 14, 2003, the assessment period was
extended until the next business day. See sec. 7503; see also
Orrock v. Commissioner, T.C. Memo. 1982-293 (holding that sec.
7503 applies to the acts of either a taxpayer or the
Commissioner); sec. 301.7503-1(a), Proced. & Admin. Regs.
