                        T.C. Memo. 2007-221



                      UNITED STATES TAX COURT



       CRAIG I. SMITH AND MARY LOU SMITH, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



    Docket No. 4675-06L.                 Filed August 9, 2007.



    Craig I. Smith and Mary Lou Smith, pro sese.

    Anita A. Gill, for respondent.



                        MEMORANDUM OPINION


     JACOBS, Judge:   This matter is before the Court on

respondent’s motion to dismiss for lack of jurisdiction.

Petitioners filed a timely request for a hearing pursuant to

section 6330 but withdrew it after entering into an installment

agreement with respondent.   The issues for decision are:   (1)

Whether petitioners’ request for a hearing pursuant to section
                                - 2 -

63301 entitled petitioners to a section 6330 hearing upon

respondent’s termination of their installment agreement; and (2)

whether respondent’s decision letter was a “determination” for

purposes of section 6330.

                             Background

     At the time petitioners filed the petition, they resided in

Shaker Heights, Ohio.    Petitioners filed a joint Form 1040, U.S.

Individual Income Tax Return, for 2001 and for 2002, each of

which showed tax due.    Respondent assessed the tax for each year

and demanded payment for the unpaid balance.    When petitioners

failed to pay the balance, respondent determined that enforced

collection action would be required.

     On February 6, 2004, respondent mailed petitioners a Letter

1058, Final Notice of Intent to Levy and Notice of Your Right to

a Hearing, for 2002.    On February 27, 2004, respondent mailed

petitioners a similar form letter for 2001.    We hereinafter refer

to these letters collectively as the first notice of levy.    By

means of Form 12153, Request For a Collection Due Process

Hearing, petitioners, in March 2004, responded to the first

notice of levy by requesting a hearing under section 6330 for

both taxable years.2    We hereinafter refer to these March 2004

     1
      Unless otherwise indicated, all section references are to
the Internal Revenue Code as amended.
     2
      The request for a sec. 6330 hearing for 2002 was made on
Mar. 5, 2004. The request for a sec. 6330 hearing for 2001 was
                                                   (continued...)
                               - 3 -

requests collectively as petitioners’ first request for a section

6330 hearing.

     On March 19, 2004, without involvement of respondent’s

Appeals Office, petitioners and respondent entered into an

installment agreement for the unpaid taxes for 2001 and 2002.

That agreement, among other things, required petitioners to make

90 monthly payments of $420 each and to remain current with

respect to their tax obligations for subsequent years.3

Thereafter, on April 2, 2004, respondent sent petitioners a

letter in response to petitioners’ first request for a section

6330 hearing.   The April 2 letter stated:

     This letter is in response to your Form 12153, Request for a
     Collection Due Process Hearing dated March 5, 2004.

     * * * We have established an installment agreement for you
     for tax periods 2001 & 2002. * * *

     You are entitled to a Collection Due Process Hearing as you
     requested. However, since we have addressed the issue(s) on
     your Request for a Collection Due Process Hearing, you now
     have the option to withdraw your request. To do so, please
     complete the enclosed Form 12256, Withdrawal of Request for
     Collection Due Process Hearing. * * *




     2
      (...continued)
made on Mar. 24, 2004. In the Mar. 24 request, petitioners
requested that the hearings for both taxable years be
consolidated.
     3
      The installment agreement preceded petitioners’ request for
a sec. 6330 hearing for 2001, which was made on Mar. 24. At
trial, petitioner Craig I. Smith (the only witness to be called)
testified that petitioners requested a sec. 6330 hearing for 2001
even though they had already entered into an installment
agreement for 2001 “to preserve my hearing rights.”
                               - 4 -

     Petitioners submitted a completed Form 12256 on April 6,

2004.4   By signing the form, each petitioner acknowledged:

     I’ve received a resolution with the Internal Revenue Service
     regarding the tax and tax period that my hearing request
     concerned and I’m satisfied that I no longer need a hearing
     with Appeals. Therefore, I withdraw my request for a
     Collection due Process (CDP) Hearing under * * * IRC Section
     6330, notice and opportunity for a hearing before a levy
     * * *

     I understand that by withdrawing my request:

     •     I give up my right to a Collection Due Process Hearing
           with the Office of Appeals. I understand that the
           Office of Appeals will not issue a Notice of
           Determination with respect to the tax and tax period
           the hearing request concerned.
     •     I give up my right to seek judicial review, in the Tax
           Court or a U.S. District Court, of the Notice of
           Determination that the Office of Appeals would have
           issued as a result of the Collection Due Process
           Hearing, as the Office of Appeals will not issue a
           Notice of Determination.
     •     I give up my right to have the Office of Appeals retain
           jurisdiction with respect to any determination that it
           would have made as a result of the Collection Due
           Process Hearing.
     •     The suspension of levy action and the suspension of the
           statute of limitations on the period of collection, as
           required under the provisions of IRC Sections 6320 and
           6330, are no longer in effect upon the receipt by
           Internal Revenue Service (IRS) of this withdrawal.
     •     I have the right to request a hearing with the Office
           of Appeals that is equivalent to a Collection Due
           Process Hearing without judicial appeal to the Tax
           Court or a U.S. District court under IRC Section 6320
           or 6330.
     •     I do not give up any other appeal rights that I am
           entitled to, such as an appeal under the Collection
           Appeals Program (CAP).



     4
      The Apr. 6, 2004, Form 12256 pertained to 2002.
Petitioners stipulated that they also executed a Form 12256 for
2001.
                                - 5 -

     Pursuant to their obligations under the installment

agreement, petitioners timely made the required monthly payments

through October 2004, but failed to timely make their November

2004 payment.5    In addition, petitioners failed to make estimated

tax payments relating to tax years after 2001 and 2002 as

required by the terms of the installment agreement.

Consequently, respondent terminated the agreement and demanded

payment in full of petitioners’ uncollected tax liabilities for

2001 and 2002.    On December 13, 2004, respondent mailed

petitioners a Notice CP 523, Notice of Intent to Levy--You

Defaulted On Your Installment Agreement, for 2001.    On the same

day, respondent mailed a similar notice to petitioners for 2002.

We hereinafter refer to these notices collectively as the second

notice of levy.    Each letter stated:

          This is a formal notice of our intent to terminate your
     installment agreement 30 days from the date of this notice.
     You defaulted on your agreement because you didn’t make your
     payments as agreed. The agreement states that we may
     terminate your agreement and collect the entire amount of
     your tax liability if you don’t meet all the conditions.
     This is your notice, as required by Internal Revenue Code
     Section 6331(d), of our intent to levy * * * To prevent
     collection action you must bring your account up to date by
     paying your past due amount, as well as any current payments
     due. * * * If you don’t agree with this decision, you have
     a right to request Appeals consideration by calling the
     number listed below within 30 days from the date the
     agreement is terminated.



     5
      Respondent received and recorded the November payment on
Dec. 6, 2004. The record does not disclose any further payments
made by petitioners.
                                 - 6 -

     Petitioners ignored the December 13, 2004, notices of intent

to levy, believing the notices would be followed by other

“final” notices of intent to levy before any levies would

actually be executed.    However, without further notice, in May of

2005 respondent levied on petitioners’ bank account.    Petitioners

thereupon requested, by means of Form 12153,6 a hearing for each

year under section 6330.   We hereinafter refer to these requests,

which petitioners telefaxed to respondent on May 11, 2005,

collectively as the second request for a section 6330 hearing.

Respondent released the levy on petitioners’ bank account on May

12, 2005.

     Respondent determined that petitioners’ second request for a

section 6330 hearing was untimely and therefore petitioners were

entitled only to an equivalent hearing pursuant to section

301.6330-1(i)(1), Proced. & Admin. Regs.    An equivalent hearing

was held on November 17, 2005.    At that time, petitioners had

still not made estimated tax payments as required by the

installment agreement.   Consequently, the Appeals Office refused

to enter into another installment agreement with petitioners and


     6
      The Commissioner’s Form 12153 instructs taxpayers to “Use
this form to request a hearing with the IRS Office of Appeals
only when you receive a Notice of Federal Tax Lien Filing & Your
Right To A Hearing Under IRC 6320, a Final Notice--Notice Of
Intent to Levy & Your Notice Of a Right To A Hearing, or a Notice
of Jeopardy Levy and Right of Appeal.” The parties treated
petitioners’ May 11, 2005, request for a hearing as a request for
a sec. 6330 hearing in response to a notice of levy, even though
the request was not made in response to the cited notices.
                               - 7 -

on January 27, 2006, issued a decision letter sustaining the levy

action.

     Petitioners timely filed their petition, in which they seek

review of respondent’s decision letter and a determination that

respondent abused his discretion in sustaining the levy action.

Respondent moved to dismiss the petition for lack of

jurisdiction, and a hearing on respondent’s motion to dismiss was

held.

                            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 notice and demand

for payment.   Section 6331(d) provides that the levy authorized

in section 6331(a) may be made with respect to any unpaid tax

only after the Secretary has notified the person in writing of

his intention to make the levy at least 30 days before any levy

action is begun.   Section 6330 elaborates on section 6331 and

provides that upon a timely request a taxpayer is entitled to a

collection hearing before the IRS Office of Appeals.     Sec.

6330(a)(3)(B) and (b)(1).   A request for a collection hearing

must be made within the 30-day period commencing on the day after

the date of the section 6330 notice.     Sec. 6330(a)(3)(B), (2);

sec. 301.6330-1(b)(1), Proced. & Admin. Regs.     Section 6330(a)(1)

requires the Secretary to issue a section 6330 notice only once
                              - 8 -

for the taxable period to which the unpaid tax relates.

Once the Secretary issues a notice of intent to levy and notice

of right to a section 6330 hearing, a subsequent notice, more

than 30 days later, that the IRS intends to levy on property of

the taxpayer for the same tax and tax period as in the initial

notice does not entitle the taxpayer to a section 6330 hearing.

Sec. 301.6330-1(b)(2), Q&A-B2, Proced. & Admin. Regs.7

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

conducted by the Office of Appeals, and, at the hearing, the

Appeals officer conducting it must verify that the requirements

of any applicable law or administrative procedure have been met.


     7
      Sec. 301.6330-1(b)(2), Q&A-B2, Proced. & Admin. Regs.,
provides:

          Q-B2. Is the taxpayer entitled to a CDP hearing when
     the IRS, more than 30 days after issuance of a CDP Notice
     under section 6330 with respect to the unpaid tax and
     period, provides subsequent notice to that taxpayer that the
     IRS intends to levy on property or rights to property of the
     taxpayer for the same tax and tax periods shown on the CDP
     Notice?

          A-B2. No. Under section 6330, only the first pre-levy
     or post-levy CDP Notice with respect to the unpaid tax and
     tax periods entitles the taxpayer to request a CDP hearing.
     If the taxpayer does not timely request a CDP hearing with
     Appeals following that first notification, the taxpayer
     foregoes the right to a CDP hearing with Appeals and
     judicial review of Appeals’ determination with respect to
     levies relating to that tax and tax period. The IRS
     generally provides additional notices or reminders (reminder
     notifications) to the taxpayer of its intent to levy when no
     collection action has occurred within 180 days of a proposed
     levy. Under such circumstances, a taxpayer may request an
     equivalent hearing as described in paragraph (i) of this
     section.
                                - 9 -

Sec. 6330(b)(1), (c)(1).    The taxpayer is entitled to one hearing

with respect to “the taxable period to which the unpaid tax

specified in * * * [the levy notice] relates.”    Sec. 6330(b)(2).

The taxpayer may raise at the hearing “any relevant issue

relating to the unpaid tax or the proposed levy”.    Sec.

6330(c)(2)(A).

     At the conclusion of the hearing, the Appeals officer must

determine whether and how to proceed with collection and take

into account:    (i) The relevant issues raised by the taxpayer,

(ii) challenges to the underlying tax liability by the taxpayer,

where permitted, and (iii) whether any proposed collection action

balances the need for the efficient collection of taxes with the

legitimate concern of the taxpayer that the collection action be

no more intrusive than necessary.    Sec. 6330(c)(3).

     Section 301.6330-1(f)(1), Proced. & Admin. Regs., provides:

     Judicial review of Notice of Determination.--(1) In
     general.--Unless the taxpayer provides the IRS a written
     withdrawal of the request that Appeals conduct a CDP
     hearing, Appeals is required to issue a Notice of
     Determination in all cases where a taxpayer has timely
     requested a CDP hearing. * * * [Emphasis added.]

Pursuant to section 6330(d)(1), within 30 days of the

issuance of a notice of determination, the taxpayer may appeal

the determination to this Court if we have jurisdiction over the

underlying tax liability.

     Section 301.6330-1(i)(1), Proced. & Admin. Regs., provides

that where a taxpayer does not timely request a section 6330
                                - 10 -

hearing, the “taxpayer may nevertheless request an administrative

hearing with Appeals, which is referred to herein as a

‘equivalent hearing.’”   An equivalent hearing (like the section

6330 hearing) is held with Appeals, and the Appeals officer

considers the same issues which he or she would have considered

had the equivalent hearing been a section 6330 hearing.       Sec.

301.6330-1(i)(1), Proced. & Admin. Regs.      The Appeals officer

generally follows the same procedures at an equivalent hearing

which he or she would have followed had the equivalent hearing

been a section 6330 hearing.     Id.   The Appeals officer concludes

an equivalent hearing by issuing a decision letter, as opposed to

a notice of determination.     The decision letter contains all of

the information required by section 301.6330-1(e)(3), Q&A-E8,

Proced. & Admin. Regs., to be included in a notice of

determination but for the fact that the decision letter

ordinarily states in regard to most issues that a taxpayer may

not seek judicial review of the decision.      In general, the

Commissioner’s decision letter issued as a consequence of an

equivalent hearing is not a “determination” for purposes of

section 6330 and therefore does not confer jurisdiction on this

Court.   Nelson v. Commissioner, T.C. Memo. 2002-264; Lopez v.

Commissioner, T.C. Memo. 2001-228.       However, a decision letter

issued as a result of an equivalent hearing when a taxpayer was

entitled to, but not given, a section 6330 hearing may constitute
                                 - 11 -

a “determination” for purposes of section 6330.     See Craig v.

Commissioner, 119 T.C. 252 (2002).

     Section 6159 authorizes the Secretary to enter into

installment agreements and to terminate an installment agreement

where the taxpayer fails to timely pay any installment when it is

due or to pay any other tax liability when it is due.     Sec.

6159(b)(4).    Termination by the Secretary requires notice to the

taxpayer, not later than 30 days before the date of termination,

explaining why the Secretary intends to terminate the installment

agreement.    Sec. 6159(b)(5).   The Secretary is required to

establish procedures for an independent administrative review of

termination of installment agreements for taxpayers who request

such review.    Sec. 6159(d).

     If an installment agreement is terminated by the Secretary,

the Secretary may pursue collection of the unpaid balance of the

tax liability.    Sec. 301.6159-1(e), Proced. & Admin. Regs.     If

the installment agreement is terminated by the Secretary, no levy

can be made for 30 days immediately following the termination.

If within 30 days following the termination by the Secretary of

an installment agreement the taxpayer files an appeal with the

IRS Office of Appeals, no levy can be made while the termination

is being considered by Appeals.     Sec. 6331(k)(2)(D); sec.

301.6331-4(a)(1), Proced. & Admin. Regs.     However, where a

taxpayer receives a Letter 1058, but does not timely request a

hearing, a second notice of intent to levy sent after termination
                                - 12 -

of an installment agreement does not entitle the taxpayer to a

hearing under section 6330.     Orum v. Commissioner, 123 T.C. 1, 11

(2004), affd. 412 F.3d 819 (7th Cir. 2005).

     The parties agree that petitioners’ first request for a

hearing under section 6330 in response to the first notice of

intent to levy was timely.    Petitioners’ timely request did not

result in a section 6330 hearing because shortly after the

request was made the parties entered into an installment

agreement and petitioners therefore withdrew their first request

for a section 6330 hearing.   There is no doubt that petitioners’

second request for a section 6330 hearing (made on May 11, 2005)

was not timely, whether we construe it as a response to

respondent’s first notice of intent to levy (made in February

2004) or as a response to respondent’s second notice of intent to

levy (made in December 2004).    Petitioners do not claim

otherwise.8




     8
      Petitioners, expecting to receive yet another, “final”,
notice before collection by levy, ignored the second notice of
intent to levy. They did so at their peril, because no further
notice was in fact required for the Secretary to proceed with
collection by levy. The Secretary is required to issue a sec.
6330 notice only once for each taxable year, and this was done by
means of the first notice of levy. Petitioners do not claim
otherwise. Even if the Secretary had issued another, “final”
notice of intent to levy, petitioners would not have been
entitled to a sec. 6330 hearing. See Orum v. Commissioner, 123
T.C. 1, 11 (2004), affd. 412 F.3d 819 (7th Cir. 2005); sec.
301.6330-1(b)(2), Q&A-B4, Proced. & Admin. Regs.
                               - 13 -

     Petitioners’ claim that this Court has jurisdiction centers

on the continuing validity, in their view, of their first request

for a section 6330 hearing.    Petitioners posit that they withdrew

their first request for a section 6330 hearing only because they

had obtained an installment agreement with respondent; once

respondent had terminated the installment agreement

(unjustifiably so, according to petitioners), petitioners’ first

request for a section 6330 hearing was revived.    Petitioners then

assert that as they were entitled to a section 6330 hearing but

were instead given an equivalent hearing, respondent’s decision

letter (issued as a consequence of the equivalent hearing) was a

“determination” for purposes of section 6330 and thus this Court

has jurisdiction.

     Respondent’s position is that petitioners’ first request for

a section 6330 hearing, having been withdrawn by petitioners,

became ineffective and was not resuscitated by the termination of

the installment agreement.    Petitioners’ second request for a

section 6330 hearing, according to respondent, constituted a

request for an equivalent hearing (because it was not a timely

request for a section 6330 hearing), which respondent duly

conducted.   Thus, respondent asserts, the equivalent hearing gave

rise to a decision letter, which is not a “determination” under

section 6330.   We agree with respondent.

     The withdrawal of a request for a section 6330 hearing

constitutes an exception to the general rule requiring a hearing
                              - 14 -

in response to a timely request.   Such a hearing is, in turn, a

prerequisite for the Secretary’s issuance of a notice of

determination.   There is no statutory authority for the

proposition that a withdrawn request for a section 6330 hearing

may be automatically reinstated by subsequent events such as the

termination of an installment agreement.   Nor are petitioners

able to point to any provision in the installment agreement (or

in their withdrawal of their request for a section 6330 hearing)

that would lead to that outcome.   Indeed, in their withdrawal

request, petitioners explicitly agreed to give up their right to

seek judicial review of the notice of determination that would

have been issued by the Appeals Office.9   Even though no section

6330 hearing was held, petitioners obtained exactly what the

section 6330 hearing is designed to accomplish, a payment

alternative in the form of an installment agreement.

     Because petitioners withdrew their request for a section

6330 hearing, respondent did not (and was not required to)

conduct a hearing, to be followed by a notice of determination.

See sec. 301.6330-1(f), Proced. & Admin. Regs.   Petitioners’

withdrawing the request for a section 6330 hearing has the same




     9
      See Aguirre v. Commissioner, 117 T.C. 324 (2001), where we
granted summary judgment against taxpayers who signed Form 4549,
Income Tax Examination Changes, in which they waived the right to
contest their tax liability in this Court and consented to the
immediate assessment and collection of tax.
                               - 15 -

effect as did the failure to timely request a section 6330

hearing in Orum v. Commissioner, supra at 11.

     While admitting that their November 2004 payment was not

timely and that they failed to make estimated tax payments as

required by the installment agreement, petitioners contend that

respondent unjustifiably terminated the installment agreement.

Petitioners do not allege that the termination of the installment

agreement was the result of clerical error, misdirected mail, or

the like.   They do not dispute that they received the statutory

notices to which they were entitled, were afforded an equivalent

hearing in response to their second (untimely) request for a

section 6330 hearing, and obtained immediate relief from the levy

on their bank account upon respondent’s receipt of their second

request for a section 6330 hearing.     Petitioners also do not

dispute that at the time of the equivalent hearing in November of

2005, they were not in compliance with their obligations under

the installment agreement.

     Based on the aforesaid, we hold that petitioners were not

entitled to a section 6330 hearing, and respondent was not

required to issue a notice of determination.     Respondent’s

decision letter was not a determination for purposes of section
                                   - 16 -

6330.        Accordingly, this Court does not have jurisdiction to

review respondent’s decision to proceed by levy.10

     To reflect the foregoing,


                                         An appropriate order of

                                    dismissal for lack of jurisdiction

                                    will be entered.




        10
      In view of our holding that we lack jurisdiction, we need
not address the issue of whether, as petitioners argued at trial
and on brief, respondent abused his discretion in proceeding with
collection by levy. However, for the sake of completeness, we
note that we do not find petitioners’ position persuasive.
