                         T.C. Memo. 2003-73



                       UNITED STATES TAX COURT



   JEROME EDWARD BROWN AND MARY L. SMITH BROWN, Petitioners v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 3685-01L.               Filed March 13, 2003.


     Jerome Edward Brown, pro se.1

     Gerard Mackey, for respondent.



              MEMORANDUM FINDINGS OF FACT AND OPINION

     VASQUEZ, Judge:    Pursuant to section 6330(d),2 petitioners

seek review of respondent’s determination to proceed with

collection of their 1995, 1996, and 1997 tax liabilities.


     1
         Petitioner Mary L. Smith Brown did not appear at trial.
     2
        Unless otherwise indicated, all section references are to
the Internal Revenue Code, and all Rule references are to the Tax
Court Rules of Practice and Procedure.
                              - 2 -

                        FINDINGS OF FACT

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

The deemed admissions, the stipulation of facts, and the attached

exhibits are incorporated herein by this reference.3   At the time

they filed the petition, petitioners resided in Pelham, New York.

     During 1995, 1996, and 1997, on his Form W-4, Employee’s

Withholding Allowance Certificate, petitioner Jerome Edward Brown

(Mr. Brown) claimed exemptions exceeding the number petitioners

were entitled to claim on their 1995, 1996, and 1997 tax returns.

Accordingly, insufficient taxes were withheld from his wages.

Mr. Brown did this because he “needed the income” during the

years in issue as he was in school full time, supporting his wife

and three children, and his wife was not working.

     Petitioners did not timely file their 1995, 1996, or 1997

tax returns.

     On July 8, 1998, respondent prepared a substitute for return

for petitioners’ 1996 income taxes.




     3
        Petitioners stipulated and are deemed to have admitted:
(1) They are liable for the addition to tax pursuant to sec.
6651(a)(1) for 1995 and 1997; (2) they are liable for the
addition to tax pursuant to sec. 6651(a)(2) for 1995; (3) they
are liable for the unabated amounts of the additions to tax
pursuant to sec. 6651(a)(1) and (2) for 1996; (4) they are liable
for the unabated amounts of the addition to tax pursuant to sec.
6651(a)(2) for 1997; (5) they are not entitled to an abatement of
interest for 1995; and (6) they are not entitled to any
additional abatement of interest for 1996 or 1997.
                              - 3 -

     On or about October 3, 1998, respondent issued to

petitioners a statutory notice of deficiency with respect to

petitioners’ 1996 income taxes.   Petitioners received this

statutory notice of deficiency.   Petitioners did not petition the

Court regarding the deficiency respondent determined for 1996.

     On April 12, 1999, respondent assessed income tax of $7,382

and additions to tax pursuant to section 6651(a)(1) and (2) and

section 6654 for 1996.

     Subsequent to respondent’s assessment for 1996, respondent

received petitioners’ delinquent tax returns for 1995, 1996, and

1997.

     Petitioners’ 1995 tax return reported $3,064 of tax due.

Petitioners were not entitled to a withholding credit for 1995.

Petitioners did not remit payment when they filed their 1995 tax

return.

     Based on petitioners’ 1996 tax return, respondent:

          (1) Abated $3,831 of petitioners’ income tax
     assessment, a portion of the additions to tax pursuant
     to section 6651(a)(1) and (2), and the addition to tax
     pursuant to section 6654 for 1996;

          (2) allowed petitioners an additional withholding
     credit of $806 for 1996; and

          (3) abated $808 of assessed interest for 1996.

     A withholding credit and payment submitted with petitioners’

1997 tax return fully paid the tax shown on the return.
                               - 4 -

     On October 25, 1999, approximately 1 month after receiving

petitioners’ 1997 return, respondent assessed additions to tax

pursuant to section 6651(a)(1) and (2) for 1997.

     Petitioners timely requested a hearing pursuant to section

6330 with respect to a notice of intent to levy regarding

petitioners’ income tax liabilities for 1995, 1996, and 1997.4

     An Appeals officer and Mr. Brown had a section 6330 hearing

(hearing) via telephone.   At the hearing, petitioners did not

dispute their underlying liabilities.    At the hearing,

petitioners requested that interest be abated and respondent

accept less than the full amount owed (i.e., not seek to collect

the additions to tax and interest).    Petitioners and the Appeals

officer discussed alternatives to collection by levy.

     On February 28, 2001, respondent issued a Notice of

Determination Concerning Collection Action(s) Under Section 6320

and/or 6330 to petitioners regarding their 1995, 1996, and 1997

tax years (notice of determination).    In the notice of

determination, respondent determined petitioners were entitled to

a partial abatement of the assessed section 6651(a)(2) addition

to tax and the associated interest for 1996 and 1997.

Respondent’s determination also provided:

     4
        Neither petitioners’ request for a hearing nor the notice
of intent to levy was made part of the record because
respondent’s files were destroyed along with World Trade Center
Building No. 7 in the Sept. 11, 2001, terrorist attack on the
United States.
                                    - 5 -

     I also reclassified the claim from an Equivalent
     Hearing to a Collection Due Process Hearing. However,
     you did not submit an amended return for 1996, nor did
     you return the Installment Agreement form. These were
     your alternatives to the proposed levy action. Without
     your cooperation, the determination of the ACS function
     is being upheld. The case file will be returned to
     them for all appropriate action.

     After receiving the notice of determination, on the advice

of the Appeals officer, petitioners made payments on their tax

liability to respondent.    Mr. Brown sent respondent seven checks

and one money order totaling $850.

     Petitioners’ balances for the years in issue were:

     Year                 As of             Outstanding Balance

     1995               8/13/2001                $4,127.50
     1996              10/22/2001                 2,773.44
     1997                6/4/2001                   108.17

     When this case was called for trial, petitioners failed to

appear.     The Court set the case for recall during the second week

of the calendar in order to give petitioners an opportunity to

have their day in Court.    Mr. Brown appeared at the recall.

                                  OPINION

     Petitioners do not dispute that the amount of the tax,

additions to tax, and interest assessed are correct.     Pursuant to

the stipulations and deemed admissions, petitioners have conceded

their claim for interest abatement.

     Petitioners argue that respondent should accept less than

the full amount of their liabilities because the additions to tax

and interest are too much for petitioners to pay on Mr. Brown’s
                                - 6 -

salary as he is the sole income earner supporting his wife and

children.   Where the validity of the underlying tax liability is

not properly in issue, we review respondent’s determination for

an abuse of discretion.    Sego v. Commissioner, 114 T.C. 604, 610

(2000).

     Based on petitioners’ late-filed 1996 tax return, respondent

abated a portion of petitioners’ income tax, additions to tax,

and interest for 1996.    As a result of the hearing, respondent

further abated a portion of the section 6651(a)(2) addition to

tax and interest for 1996 and 1997.

     Petitioners simply do not want to pay the additions to tax

and interest associated with their failure to timely file and

failure to timely pay.    Petitioners did not submit an offer-in-

compromise or an installment agreement to respondent.    Respondent

gave due consideration to the collection alternatives raised by

petitioners and accepted them in part (i.e., respondent

determined petitioners were entitled to a partial abatement of

the assessed section 6651(a)(2) addition to tax and the

associated interest for 1996 and 1997).    We conclude that

respondent’s determination was reasonable.

     Petitioners have failed to raise a spousal defense or make a

valid challenge to the appropriateness of respondent’s intended

collection action.   These issues are now deemed conceded.    See

Rule 331(b)(4).   Accordingly, we conclude that respondent did not
                                 - 7 -

abuse his discretion, and we sustain respondent’s determination.5

     To reflect the foregoing,

                                             Decision will be entered

                                         for respondent.




     5
        We note that petitioners claim that their account does
not reflect the $850 of payments Mr. Brown made to respondent
after receiving the notice of determination. Three letters
petitioners received from respondent, dated near to or shortly
after the dates on the last three checks Mr. Brown submitted to
respondent, indicate that respondent applied amounts totaling
$850 to reduce petitioners’ outstanding 1995 and 1996 tax
liabilities.
