                        T.C. Memo. 2003-205



                      UNITED STATES TAX COURT



         WINSTON O. AND PAULET P. SMITH, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 14601-01L.             Filed July 15, 2003.


     Winston O. and Paulet P. Smith, pro sese.

     Lorianne D. Masano, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     FOLEY, Judge:   The issue for decision is whether respondent

may proceed with his proposed collection activity relating to

petitioners’ 1982, 1983, 1986, and 1987 tax liabilities.

                         FINDINGS OF FACT

     On December 7, 1998, petitioners and respondent executed an

installment agreement, and petitioners signed Form 900, Tax
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Collection Waiver, relating to petitioners’ 1982, 1983, 1986, and

1987 tax liabilities.   The Form 900 extended, until December 31,

2004, the period of limitations relating to collection of

petitioners’ tax liabilities.   On January 1, 2000, petitioners

and respondent executed a second installment agreement.

Petitioners later defaulted on the second agreement.

     On May 8, 2001, petitioners met with Revenue Officer

Shoesmith, with whom they discussed a possible offer-in-

compromise and another installment agreement.   Shoesmith

recommended to her supervisor that respondent reject these

collection alternatives because she believed that, among other

things, petitioners failed to file returns relating to numerous

years, had withheld information relating to their wherewithal to

pay, and were trying to avoid paying their taxes.

     On July 2, 2001, respondent sent petitioners a Notice of

Defaulted Installment Agreement Under IRC 6159(b) and a Notice of

Intent to Levy Under IRC 6331(d) relating to their 1982, 1983,

1986, 1987, and 1999 unpaid tax liabilities.    Petitioners’ 1999

tax liability has been satisfied.

     On July 16, 2001, respondent received petitioners’ Form

12153, Request for a Collection Due Process Hearing, in which

petitioners contended that their outstanding tax liability

relates only to 1999, they have been making installment payments,

they provided updated financial information, respondent’s revenue
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officer acted improperly and maliciously, and they were taking

steps to pay their outstanding tax liabilities.

     By letter dated July 26, 2001, Shoesmith indicated that

petitioners’ case was being sent to respondent’s Appeals Office,

and petitioners had not submitted requested financial

information.   On July 31, 2001, respondent received a letter in

which petitioners contended that they substantially complied with

respondent’s requests for financial information and had

legitimate reasons for their failure to respond more fully.

     By letter dated October 11, 2001, respondent sent

petitioners literal transcripts relating to the years at issue.

The transcripts verified the amount and timely assessment of

petitioners’ tax liabilities relating to all years in issue

(i.e., 1982 on December 8, 1986, 1983 on September 29, 1987, and

1986 and 1987 on July 25, 1988).

     On October 17, 2001, Settlement Officer Salinger and

petitioners participated in a section 63301 hearing.

Petitioners contended that the period of limitation relating to

collection (collection period) expired with respect to

petitioners’ 1982 and 1983 tax liabilities and attempted to

dispute such underlying liabilities (i.e., presentation of

evidence to substantiate entitlement to unspecified deductions).



     1
        Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years in issue.
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Petitioners requested abatement of their 1982 and 1983

liabilities and abatement of penalties and interest relating to

all of their outstanding tax liabilities.   Petitioners further

contended that the proposed collection would be unduly intrusive.

Salinger did not consider any of petitioners’ claims regarding

additional deductions relating to 1982.

     On October 22, 1992, and December 7, 1993, petitioners filed

bankruptcy petitions that were discharged on December 17, 1993,

and July 13, 1994, respectively.   By letter dated October 18,

2001, respondent explained how the filing of petitioners’

bankruptcy petitions and execution of Form 900 extended the

collection period.

     In a letter dated November 9, 2001, petitioners contended

that the collection period relating to their 1982 and 1983

liabilities began to run on September 17 and November 5, 1984,

(i.e., the dates the respective returns were filed), petitioners’

bankruptcy filings extended the collection period by only 180

days, and Form 900 was executed outside the collection period.

Petitioners further asserted that the correct amount of their

liability had yet to be determined.   In a letter dated November

13, 2001, Salinger rejected petitioners’ contentions and urged

petitioners to provide the requested financial information.

Salinger also contended the following:    (1) Respondent correctly

calculated penalties and interest relating to 1982, posted
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credits and payments relating to 1982, and calculated the balance

due at the time the lien was filed; (2) two consecutive

bankruptcy petitions extended the collection period; (3) Form 900

was signed prior to expiration of the collection period; (4) the

installment agreements were not in effect due to petitioners’

default; and (5) the collection periods relating to 1982 and 1983

had not expired.

     By Notice of Determination Concerning Collection Action(s)

Under Section 6320 and/or 6330, dated November 15, 2001,

respondent determined that the collection period relating to

petitioners’ 1982 and 1983 tax liabilities had not expired,

petitioners may not claim additional deductions with respect to

1982 and 1983, petitioners offered no collection alternatives,

and, thus, it was appropriate to proceed with collection.

     On January 25, 2002, petitioners, while residing in Lutz,

Florida, filed an amended petition in which they contend that the

settlement officer improperly refused to consider petitioners’

alleged entitlement to additional deductions relating to 1982 and

1983, petitioners’ consent to an extension of the collection

period was invalid because Form 900 was signed after the

collection period had expired, and respondent miscalculated their

unpaid tax liabilities.
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                              OPINION

     Petitioners contend that respondent erred in not considering

their claim to additional deductions relating to their 1982 tax

assessment.   Petitioners, however, received a statutory notice of

deficiency relating to 1982 and, thus, are precluded from raising

their additional deduction claim in this proceeding.     Sec.

6330(c)(2)(B); see Goza v. Commissioner, 114 T.C. 176 (2000).

     Petitioners further contend that respondent may not collect

petitioners’ 1982 and 1983 tax liabilities because the period for

collection, pursuant to section 6502, expired.     On December 8,

1986, respondent timely assessed petitioners’ 1982 tax liability.

The collection period would have expired on December 8, 1996, had

there been no actions tolling the running of the period.

Petitioners’ 1992 and 1993 bankruptcy petitions, however,

extended the expiration date until at least December 7, 1998, the

date petitioners executed Form 900.     See sec. 6503(h).   Form 900

further extended the collection period to December 31, 2004.

Thus, the collection period relating to petitioners’ 1982 tax

liabilities had not expired as of the date of petitioners’

request for a section 6330 hearing (i.e., July 16, 2001) and is

further extended, pursuant to section 6330(e)(1), during the

hearing and while the appeals are pending.     Similarly, the

collection period relating to petitioners’ 1983 tax liabilities

has not expired.
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     Respondent provided petitioners with transcripts relating to

petitioners’ tax liabilities, took adequate steps to work with

petitioners toward a resolution of such liabilities, gave due

consideration to all of petitioners’ contentions relating to the

unpaid tax, and decided to proceed with the proposed collection

activity.    Accordingly, respondent committed no error and may

proceed with the proposed collection activity.

     Contentions we have not addressed are irrelevant, moot, or

meritless.

     To reflect the foregoing,


                                              Decision will be entered

                                         for respondent.
