                         T.C. Memo. 2007-208



                       UNITED STATES TAX COURT



                   CORRIE MILES, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 16887-05L.               Filed July 31, 2007.



     Thanasi K. Preovolos, for petitioner.

     Karen Nicholson Sommers, for respondent.



                         MEMORANDUM OPINION


     VASQUEZ, Judge:    Pursuant to section 6330(d),1 petitioner

seeks review of respondent’s determination to proceed with

collection of her unpaid 1997 and 1998 income tax liabilities.



     1
        Unless otherwise indicated, all section references are to
the Internal Revenue Code as amended, and all Rule references are
to the Tax Court Rules of Practice and Procedure.
                               - 2 -

The sole issue for decision is whether respondent may proceed

with collection of petitioner’s 1997 and 1998 income tax

liabilities.

                            Background

     Some of the facts have been stipulated and are so found.

The stipulation of facts and the attached exhibits are

incorporated herein by this reference.   At the time the petition

was filed, petitioner resided in California.

The 1997 and 1998 Federal Tax Liens

     Petitioner and her former spouse, Gregory Romine (Mr.

Romine), were married during the years in issue.   They divorced

in 2003.   On September 16, 1998, petitioner and Mr. Romine filed

a joint Federal income tax return for 1997 (the 1997 return).    On

the 1997 return, petitioner and Mr. Romine reported tax due of

$254,400 and withholding tax credits of $24,700.   No payment

accompanied the return.2

     On October 26, 1998, respondent assessed the tax reported on

the 1997 return, interest, and additions to tax.   On January 8,

1999, respondent filed a Notice of Federal Tax Lien Filing and

Your Right to a Hearing Under IRC 6320 (NFTL) with the San Diego




     2
        Petitioner and Mr. Romine paid $65,000 toward their 1997
tax liability on Jan. 19, 1999. A credit for overpayment of tax
from Mr. Romine’s 2002 taxes was also applied against the 1997
liability. Additionally, a payment of $175,964.37 was made
toward the 1997 liability on Nov. 12, 2003.
                               - 3 -

County Recorder’s office with respect to petitioner and Mr.

Romine’s 1997 income tax liability.

     Petitioner and Mr. Romine filed a joint Federal income tax

return for 1998 (the 1998 return) reporting tax due of $77,733

and withholding tax credits of $24,915.   No payment accompanied

that return.3

     On June 7, 1999, respondent assessed the tax reported on the

1998 return, interest, and additions to tax.   On July 3, 2000,

respondent assessed additional tax of $54,368 pursuant to an

agreement executed by petitioner, Mr. Romine, and respondent.

On October 19, 1999, respondent filed an NFTL with the San Diego

County Recorder’s office with respect to petitioner and Mr.

Romine’s 1998 income tax liability.

Petitioner’s Bankruptcy Proceedings

     On May 19, 2003, petitioner filed a petition pursuant to

chapter 7 of the U.S. Bankruptcy Code in the U.S. Bankruptcy

Court for the Southern District of California (the Bankruptcy

Court).   In connection with her bankruptcy case, petitioner filed

a complaint to determine the dischargeability of her Federal

income tax liabilities for the tax years 1996, 1997, and 1998.

On July 22, 2003, the Bankruptcy Court entered a stipulation for

entry of judgment and judgment thereon in which the Bankruptcy



     3
        A payment of $741.48 was made toward the 1998 liability
on May 24, 2002.
                               - 4 -

Court determined that petitioner’s 1996, 1997, and 1998 tax

liabilities would be discharged upon the entry of an order

granting petitioner a discharge in her bankruptcy case.     On

August 25, 2003, the Bankruptcy Court entered an order of

discharge in petitioner’s bankruptcy case pursuant to 11 U.S.C.

section 727 (2000).

Petitioner’s Individual Retirement Account

     On the date she filed her chapter 7 bankruptcy petition,

petitioner owned an individual retirement account (IRA) worth

$142,545.90.

Respondent’s Collection Efforts

     On December 4, 2003, Revenue Officer Cindy Alexander (Ms.

Alexander) was assigned to investigate enforcement of the Federal

tax liens with respect to petitioner’s 1997 and 1998 tax

liabilities.   Ms. Alexander determined that the Federal tax liens

for 1997 and 1998 attached to petitioner’s IRA to the extent of

its value of $142,545.90 on the date petitioner filed her

petition in her bankruptcy case.   On March 18, 2004, Ms.

Alexander sent petitioner a Final Notice--Notice of Intent to

Levy and Notice of Your Right To a Hearing with regard to

petitioner’s 1997 and 1998 tax liabilities (notice of intent to

levy).   On April 14, 2004, petitioner sent to respondent a Form

12153, Request for a Collection Due Process Hearing.   In the Form

12153, petitioner stated that she disagreed with the collection
                               - 5 -

action proposed in respondent’s notice of intent to levy and

requested a hearing pursuant to section 6330(b).

Petitioner’s Section 6330 Hearing

     Petitioner’s section 6330 hearing was assigned to Settlement

Officer Cynthia Chadwell (Settlement Officer Chadwell).

Petitioner’s section 6330 hearing consisted of phone calls and a

written correspondence between Settlement Officer Chadwell and

petitioner’s representatives that occurred between March and July

of 1998.   As discussed infra, petitioner raised two arguments

during the hearing.   Petitioner argued that respondent

erroneously determined that the Federal tax liens continued to be

valid against petitioner’s interest in her IRA after her

discharge from personal liability on the 1997 and 1998 income tax

liabilities in her chapter 7 bankruptcy case.   Petitioner also

argued that respondent erroneously determined that the Federal

tax liens remained valid after petitioner allegedly transferred

the funds in her IRA into a pension plan administered by

petitioner’s new employer.   Settlement Officer Chadwell

determined to proceed with the proposed levy, and respondent

issued to petitioner a Notice of Determination Concerning

Collection Action(s) Under Section 6320 and/or 6330 on July 29,

2005.
                               - 6 -

                            Discussion

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

any tax neglects or refuses to do so within 10 days after notice

and demand, the Secretary generally can collect such tax by levy

upon all property and rights to property belonging to such person

or on property on which there is a Federal tax lien.    Pursuant to

section 6331(d), the Secretary is required to give the taxpayer

notice of his intent to levy and within that notice must describe

the administrative review available to the taxpayer before

proceeding with the levy.   See also sec. 6330(a).

     Section 6330(b) describes the administrative review process,

providing that a taxpayer can request an Appeals hearing (section

6330 hearing) with regard to a levy notice.4    Pursuant to section

6330(c)(2)(A), a taxpayer may raise at the section 6330 hearing

any relevant issue with regard to the Commissioner’s collection

activities, including spousal defenses, challenges to the

appropriateness of the Commissioner’s intended collection action,

and alternative means of collection.     Sego v. Commissioner, 114

T.C. 604, 609 (2000); Goza v. Commissioner, 114 T.C. 176, 180

(2000).


     4
        Although the NFTLs were filed before the effective date
of secs. 6320 and 6330, which apply to collection actions
initiated after Jan. 18, 1999, the collection due process
procedures apply to the matter before us because the levy notice
was issued after that date. See Internal Revenue Service
Restructuring and Reform Act of 1998, Pub. L. 105-206, sec. 3401,
112 Stat. 746; Parker v. Commissioner, 117 T.C. 63 (2001).
                                - 7 -

     When the Commissioner issues a determination regarding a

disputed collection action, section 6330(d) permits a taxpayer to

seek review in this Court.   If the underlying tax liability is

properly at issue, we review that issue de novo.    Sego v.

Commissioner, supra at 610; Goza v. Commissioner, supra at 181.

If the validity of the underlying tax liability is not at issue,

we review the Commissioner’s determination for abuse of

discretion.   Sego v. Commissioner, supra at 610.

       We have previously held that this Court has jurisdiction

in a levy proceeding instituted pursuant to section 6330(d)(1) to

determine whether a taxpayer’s unpaid tax liabilities were

discharged in bankruptcy.    Swanson v. Commissioner, 121 T.C. 111,

120-121 (2003); Washington v. Commissioner, 120 T.C. 114, 120-121

(2003).   In Washington, we did not specifically address the

appropriate standard of review to apply when determining whether

a taxpayer’s tax liabilities were discharged in bankruptcy where,

as in the matter before us, the taxpayer has not received a

notice of deficiency.   In this case, the parties have stipulated

that all of the evidence contained in the trial record was

available to Settlement Officer Chadwell in making her

determination.   For the reasons discussed infra, our review of

that evidence causes us to sustain Settlement Officer Chadwell’s

determination to proceed with collection whether we apply an
                                 - 8 -

abuse of discretion or a de novo standard of review.    Petitioner

bears the burden of proof.   See Rule 142(a).

     In her petition, petitioner appears to argue that respondent

erred in determining that the Federal tax liens for petitioner’s

1997 and 1998 income tax liabilities were valid at the time they

were filed.   During petitioner’s section 6330 hearing,

petitioner’s counsel advised respondent that “[we] do not

disagree that the above mentioned [sic] liens are valid liens”.

Moreover, at trial, petitioner failed to introduce any evidence

or raise any specific argument supporting her contention that the

Federal tax liens were invalid as filed.    We conclude that

petitioner has abandoned that issue.     Petzoldt v. Commissioner,

92 T.C. 661, 683-687 (1989).

     Petitioner further contends that respondent erroneously

determined that the Federal tax liens continued to be valid

against petitioner’s interest in her IRA after her discharge from

personal liability on the 1997 and 1998 income tax liabilities in

her chapter 7 bankruptcy case.    We have specifically held that a

discharge from personal liability in a chapter 7 bankruptcy case

does not extinguish a prepetition Federal tax lien.     Iannone v.

Commissioner, 122 T.C. 287 (2004); see also 11 U.S.C. sec.

522(c)(2)(B) (providing that exempt property remains subject to

properly filed tax liens even though the underlying tax claim may

have been discharged); Connor v. United States, 27 F.3d 365, 366
                                - 9 -

(9th Cir. 1994) (“A preexisting lien on property, however,

remains enforceable against that property even after an

individual’s personal liability has been discharged.”).

       Petitioner also contends that respondent erroneously

determined that the Federal tax liens remained valid after

petitioner allegedly transferred the funds in her IRA into a

pension plan administered by petitioner’s employer, Chapters,

Inc.    Petitioner contends that she rolled over her IRA into the

pension plan, which petitioner alleges was established under the

Employee Retirement Income Security Act of 1974 (ERISA), Pub. L.

93-406, sec. 2003, 88 Stat. 871.

       At both her section 6330 hearing and at trial, petitioner

failed to produce any evidence to support her contention that she

transferred her IRA funds into an ERISA-qualified pension plan.

If a party fails to introduce evidence within that party’s

possession, we may presume in some circumstances that, if

produced, the evidence would be unfavorable to that party.

Wichita Terminal Elevator Co. v. Commissioner, 6 T.C. 1158, 1165

(1946), affd. 162 F.2d 513 (10th Cir. 1947).    This is true where

the party that does not produce the evidence has the burden of

proof or the other party has established a prima facie case.       Id.

As noted supra, petitioner bears the burden of proof in the

matter before us.    Petitioner repeatedly refused to supply

respondent with any information regarding the account, its
                              - 10 -

status, or its location.5   We therefore conclude that no evidence

in petitioner’s possession would establish that petitioner

transferred the funds in her IRA into an ERISA-qualified pension

plan.

     Additionally, petitioner’s argument that the lien on the IRA

was extinguished when petitioner transferred the funds in the IRA

into an ERISA-qualified pension plan is incorrect.   As respondent

correctly notes:   “The transfer of property subsequent to the

attachment of the lien does not affect the lien, for ‘it is of

the very nature and essence of a lien, that no matter into whose

hands the property goes, it passes cum onere’.”   United States v.

Bess, 357 U.S. 51, 57 (1958) (quoting Burton v. Smith, 38 U.S.

464, 483 (1839)); see also Michigan v. United States, 317 U.S.

338, 340 (1943); United States v. Morrison, 29 U.S. 124 (1830).

     Petitioner also argues that the antialienation provisions of

ERISA prevent respondent from levying against petitioner’s

alleged interest in the ERISA-qualified pension plan.   Numerous

courts--including, on several occasions, the U.S. Court of

Appeals for the Ninth Circuit (to which this case is


     5
        For example, on Mar. 9, 2005, in response to a letter
from respondent requesting information about petitioner’s IRA
funds, petitioner’s counsel, Mr. Preovolos, informed respondent
only that “Currently the asset that you seek to levy is
unavailable.” The record also indicates that Chapters, Inc., the
employer that allegedly administered the ERISA-qualified plan,
was formed in 2004, while petitioner was disputing the liens on
her IRA before respondent. The mailing address for Chapters,
Inc., appears to be petitioner’s personal mailing address.
                                - 11 -

appealable)--have expressly rejected the argument that ERISA

antialienation provisions preclude enforcement of a Federal tax

levy.     See, e.g., United States v. Novak, 476 F.3d 1041 (9th Cir.

2007); United States IRS v. Snyder, 343 F.3d 1171, 1179 (9th Cir.

2003); McIntyre v. United States, 222 F.3d 655, 660 (9th Cir.

2000); Anderson v. United States, 149 Bankr. 591, 595 (B.A.P. 9th

Cir. 1992); see also United States v. Sawaf, 74 F.3d 119 (6th

Cir. 1996); Shanbaum v. United States, 32 F.3d 180 (5th Cir.

1994).

        Finally, petitioner argues that her alleged interest in the

ERISA-qualified plan does not constitute “property [or] rights to

property” for the purpose of section 6321 and thus is not subject

to lien or levy.     We need not pass on the merits of this

argument:     As noted supra, at the section 6330 hearing and at

trial, petitioner failed to introduce any evidence to support her

claim that she transferred the funds in her IRA into an ERISA-

qualified pension plan.     We therefore conclude that no evidence

in petitioner’s control would establish that petitioner’s

interest does not remain subject to the Federal tax liens.     See

Wichita Terminal Elevator Co. v. Commissioner, supra.

        Petitioner has failed to raise a spousal defense, make a

valid challenge to the appropriateness of respondent’s intended

collection, or offer alternative means of collection.     We

therefore uphold respondent’s determination to proceed with

collection of petitioner’s 1997 and 1998 income tax liabilities.
                             - 12 -

     In reaching all of our holdings herein, we have considered

all the parties’ arguments, and, to the extent not herein

discussed, we conclude that they are irrelevant or without merit.

     To reflect the foregoing,



                                        Decision will be entered

                                   for respondent.
