                       T.C. Memo. 2003-38



                     UNITED STATES TAX COURT



               JEROME GRIGGS BEERY, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 9424-01L.               Filed February 20, 2003.



     Jerome Griggs Beery, pro se.

     Dennis R. Onnen, for respondent.


                       MEMORANDUM OPINION


     COUVILLION, Special Trial Judge: Pursuant to section

6330(d)(1)(A),1 petitioner instituted this proceeding to

judicially review the propriety of respondent's decision to

proceed with collection of Federal income taxes and penalties

     1
          Unless otherwise indicated, subsequent section
references are to the Internal Revenue Code in effect for the
years at issue. Rule references are to the Tax Court Rules of
Practice and Procedure.
                                    - 2 -


against him.     The case originated with respondent's issuance to

petitioner of two final notices of intent to levy.        One notice

dealt with petitioner's 1989, 1990, and 1991 tax years, and the

other notice dealt with petitioner's 1994 tax year.        In both

instances, petitioner responded timely with a Request for a

Collection Due Process Hearing.       A hearing was held with

petitioner by telephone with respect to both requests.

Thereafter, respondent issued separate notices of determination

advising petitioner that respondent would proceed with

collection.    This petition for review followed.

     The Federal income taxes and penalties at issue are based on

two notices of deficiency issued to petitioner and his spouse,

Joyce E. Beery, as follows:2


          Year          Deficiency          Sec. 6662(a) Penalty

          1989            $28,242                $5,648
          1990             24,401                 4,880
          1991              4,624                   --
          1994             21,592                 4,318




     2
          The collection activity was instituted only against
petitioner and not his spouse. One notice of deficiency was for
the years 1989, 1990, and 1991, and the other notice of
deficiency was for the years 1992, 1993, and 1994. The
collection activity at issue is not directed to petitioner's 1992
and 1993 tax liabilities. The record is unclear as to the amount
owing for the 1989, 1990, and 1991 tax years; however, for the
year 1994, the final notice of intent to levy to petitioner
stated a total of taxes, penalties, and interest of $34,447.88.
                              - 3 -


     Both determination notices issued to petitioner after the

appeals hearing stated that petitioner had not offered any

collection alternatives with respect to the liabilities at issue

and noted further, as pointed out to petitioner at the hearing,

that he was "precluded from challenging the merits of the tax

liability since you have already had an opportunity to and in

fact did challenge the liability in Tax Court."   The

determination notices stated that petitioner's position at the

hearing was that there were no valid Tax Court decisions with

respect to his liability and since petitioner had previously

filed for bankruptcy, "the Service could collect from the

bankruptcy trustee".

     At the time the petition for review of respondent's

determination was filed, petitioner's legal residence was Los

Alamos, New Mexico.

     Respondent filed a motion to dismiss for failure to state a

claim upon which relief may be granted under Rule 40.

     A hearing was held on respondent's motion, at which

petitioner appeared and testified.

     The record shows that the two notices of deficiency referred

to earlier were received by petitioner and his spouse.

Petitioner and his spouse filed a petition with this Court, at

docket No. 26995-93, challenging the notice of deficiency

relating to their 1989, 1990, and 1991 tax years.   The case was
                               - 4 -


tried, an opinion was issued, Beery v. Commissioner, T.C. Memo.

1996-464, and a decision was entered on April 24, 1997.

Petitioners thereafter filed a motion to vacate the decision to

enable them to claim the carryforward of a net operating loss

sustained in 1976.   The Court considered that claim as a new

issue, which was not brought up at trial and, accordingly, denied

the motion to vacate.   Petitioner and his spouse also filed a

petition with this Court, at docket No. 8802-96, challenging the

notice of deficiency relating to their 1992, 1993, and 1994 tax

years.   The disposition of that case is noted later.

     On February 25, 1994, while docket No. 26995-93 was pending

before this Court, petitioner filed for bankruptcy in the U.S.

Bankruptcy Court for the State of New Mexico.   On December 17,

1997, petitioner received a discharge in bankruptcy under chapter

7 of the Bankruptcy Code.   The pending bankruptcy proceeding was

never called to this Court's attention until after the decision

was entered in docket No. 26995-93 (relating to petitioner's

1989, 1990, and 1991 tax years).   Because of the automatic stay

provisions of the Bankruptcy Code, which affected docket No.

26995-93, and because this Court had never formally stayed the

proceedings, respondent proceeded in the Bankruptcy Court and

attained an order, which was not opposed by petitioner and was

affirmed by the U.S. District Court for the District of New

Mexico, which retroactively lifted the stay applicable to this
                               - 5 -


Court and validated the decision this Court had entered in docket

No. 26995-93.   The pertinent provisions of that order stated:


          IT IS THEREFORE ORDERED, ADJUDGED AND DECREED that the
     automatic stay imposed under 11 U.S.C. §362 is retroactively
     modified in favor of the United States of America (IRS) to
     permit the United States Tax Court to take all steps
     necessary to enter a Decision in Docket No. 26995-93 and
     conclude its case and to permit the IRS to assess the
     debtor's additional tax liabilities for the years 1989, 1990
     and 1991.


Since this Court had previously entered the decision in docket

No. 26995-93, no further action was taken by this Court in

connection with that case, nor did either respondent or

petitioner institute any action with respect to the decision.      In

due course, petitioner was assessed by respondent.

     With respect to the other petition filed by petitioner and

his spouse in this Court relating to the 1992, 1993, and 1994 tax

years, docket No. 8802-96, the petition in that case was filed

while petitioner's bankruptcy case was pending.    Respondent filed

with this Court a motion to dismiss for lack of jurisdiction as

to petitioner Jerome G. Beery and to change caption on the ground

that petitioner was precluded from commencing an action in this

Court due to his pending bankruptcy proceeding.    That motion was

granted, and petitioner was dismissed from docket No. 8802-96

(which included his 1994 tax year).    After the bankruptcy case

was concluded and he was discharged, petitioner did not petition

this Court with respect to his 1992, 1993, and 1994 tax years.
                                 - 6 -

Respondent later assessed the deficiencies and penalties against

him.3

        At the hearing on the motion to dismiss, with respect to his

1989, 1990, and 1991 tax years, which were decided in docket No.

26995-93, petitioner argued that the decision entered in that

case was invalid because this Court was required to take further

action when the U.S. District Court issued its order lifting the

bankruptcy stay.     Petitioner bases that argument on the wording

of the U.S. District Court's order that required the Tax Court

"to take all steps necessary to enter a decision in Docket No.

26995-93 and conclude its case" against petitioner.    Petitioner

argues that, because this Court took no further action in this

case, the decision is invalid.    The Court rejects that argument.

Petitioner further argues that, had his case been reopened, he

intended to file pleadings with the Court to allow him the

benefit of carryforward of net operating losses he had sustained

in 1975, which remained after his bankruptcy estate filed its

income tax return for the last year he was in bankruptcy.    The

Court also rejects that argument because, in Beery v.

Commissioner, T.C. Memo. 1996-464 involving petitioner's 1989,

        3
          Under sec. 6213(f), the period for filing a petition in
this Court was suspended during the pendency of the bankruptcy
proceeding and for 60 days after the bankruptcy proceeding was
concluded. Since petitioner was discharged in his bankruptcy on
Dec. 17, 1997, he was allowed 60 days from that date to file a
petition in this Court to challenge his 1992, 1993, and 1994 tax
deficiencies, which he failed to do.
                               - 7 -

1990, and 1991 tax years, the Court held that the carryforward

period of petitioner's 1975 net operating loss expired on

December 31, 1980, and the carryforward period was not suspended

during the period petitioner was in bankruptcy.   As to the 1994

tax year, petitioner's position was not entirely clear, claiming

alternatively that no notice of deficiency had been issued to him

for that year or that, if a notice of deficiency had been issued,

the order of the U.S. District Court retroactively lifting the

stay in docket No. 26995-93 was equally applicable to docket No.

8802-96 and, therefore, should have reinstated him as a party

petitioner in that case.   The record shows, however, that

petitioner and his spouse filed the petition at docket No. 8802-

96, and that petitioner received a notice of deficiency that

included not only 1994 but 1992 and 1993 as well.   Moreover,

petitioner does not dispute that his dismissal from the case was

proper because the bankruptcy stay precluded him from filing a

petition in this Court so long as the bankruptcy case was

pending.

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

any tax neglects or refuses to pay the tax within 10 days after

notice and demand for payment, the Commissioner may collect the

tax by levy upon the taxpayer's property.   Section 6331(d)

provides that the Commissioner must provide the taxpayer with

notice, including notice of the administrative appeals available
                               - 8 -

to the taxpayer, before proceeding with collection by such a

levy.

     Section 6330 generally provides that the Commissioner cannot

proceed with the collection of taxes by way of a levy until the

taxpayer has been given notice and an opportunity for

administrative review of the matter in the form of an Appeals

Office hearing.   Judicial review of the administrative

determination is available if the taxpayer petitions this Court

or the appropriate U.S. District Court.   Sec. 6330(d); Davis v.

Commissioner, 115 T.C. 35, 37 (2000); Goza v. Commissioner, 114

T.C. 176, 179 (2000).

     Section 6330(c) prescribes what a taxpayer may raise at an

Appeals Office hearing.   In sum, section 6330(c) provides that

the taxpayer may raise collection issues such as spousal

defenses, the appropriateness of the Commissioner's intended

collection action, and possible alternative means of collection.

Section 6330(c)(2)(B) provides that the existence and amount of

the underlying tax liability can be contested at an Appeals

Office hearing only if the person did not receive a notice of

deficiency for the taxes in question or did not otherwise have an

earlier opportunity to dispute the tax liability.   Sego v.

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

supra.
                                - 9 -

     In this case, notices of deficiency were issued to and were

received by petitioner for all the tax years involved.   Moreover,

petitions were filed in this Court with respect to all the years

involved in this case.   For the years 1989, 1990, and 1991, a

decision was entered by this Court against petitioner, which has

never been modified, vacated, or set aside.   With regard to the

1994 tax year, petitioner also initiated an action in this Court

with his spouse, as to which he was dismissed because of his

pending bankruptcy.   When petitioner was later discharged in the

bankruptcy proceeding, he could have petitioned this Court with

respect to the 1994 tax year.   Petitioner never did that, and he

was subsequently assessed by respondent for the deficiencies and

penalty.   The positions taken by petitioner with respect to

respondent's collection action and this appeal all relate to his

questioning the existence and the amount of his underlying tax

liabilities.   Because petitioner received notices of deficiency

for the taxes in question and did in fact challenge in one case

and attempted to challenge the deficiencies in another case, he

is precluded from again challenging the underlying deficiencies

and penalties in a collection proceeding under section 6330(c).

Since petitioner did not offer any of the available remedies

under section 6330(c), respondent's motion to dismiss this case
                             - 10 -

for failure to state a claim upon which relief can be granted is

proper.



                                    An order granting respondent's

                         motion to dismiss for failure to state a

                         claim upon which relief can be granted

                         and decision for respondent will be

                         entered.
