                        T.C. Memo. 2008-282



                      UNITED STATES TAX COURT



             STEPHEN AND KAREN MEEH, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 13198-07L.              Filed December 16, 2008.



     Stephen Meeh and Karen Meeh, pro sese.

     Ann L. Darnold, for respondent.



                        MEMORANDUM OPINION


     HAINES, Judge:   The parties submitted this case to the Court

without trial.   See Rule 122.1   Respondent made the determination

to proceed to collect, by levy, petitioners’ 1993, 1994, and 1995



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

outstanding income tax liabilities of $7,687, $31,120, and

$36,500, respectively.   Petitioners, under section 6330, seek

review of respondent’s determination.

     The parties’ controversy poses the following issues for our

consideration:    (1) Whether petitioners are entitled to question

the merits of the underlying income tax liabilities; (2) whether

petitioners are liable for the income tax liabilities; and (3)

whether there was an abuse of discretion in respondent’s

determination to proceed with the collection action.   For all

purposes hereafter, the years at issue shall refer to 1993, 1994,

and 1995.

                             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 petitioners filed their petition, they resided

in Oklahoma.   On April 12, 2000, petitioners jointly filed their

untimely Forms 1040, U.S. Individual Income Tax Return, for the

years at issue.   On August 14, 2000, respondent assessed a tax

with respect to each of the 1994 and 1995 income tax liabilities.

On October 30, 2000, respondent assessed a tax with respect to

the 1993 income tax liability.    Respondent based his assessments

of tax for the years at issue on the amounts reported by

petitioners on their returns.    On December 12, 2005, respondent
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sent petitioners a Form CP-504, Notice Before Levy, stating that

respondent intended to levy on petitioners’ assets for purposes

of collecting the income tax liabilities for the years at issue.

     On January 3, 2006, petitioners submitted a Form 12153,

Request for a Collection Due Process Hearing (section 6330

hearing request).   Petitioners’ section 6330 hearing request

stated that:   (1) Petitioners had already paid the tax; (2) error

was made in the calculation of the assessed liability; (3)

procedural error was made in the providing of the “notice of

assessment”; (4) the opportunity to dispute the assessed

liability was inadequate; and (5) petitioners would offer

collection alternatives.

     On January 23, 2007, Settlement Officer Deborah Conley (Ms.

Conley) sent petitioners a letter indicating that they were

entitled only to a so-called equivalent hearing as their section

6330 hearing request was not timely.2   Ms. Conley scheduled a

telephone hearing for February 27, 2007.   Ms. Conley also

requested that petitioners provide the following items:    (1) A

completed Form 433-A, Collection Information Statement for



     2
      Respondent erroneously believed that he sent petitioners a
notice of intent to levy on Jan. 23, 2001. Thus, respondent
originally concluded that petitioners’ sec. 6330 hearing request
was not timely. Respondent now concedes he cannot establish that
he sent petitioners a notice of intent to levy before Dec. 12,
2005. Accordingly, respondent also concedes that petitioners’
sec. 6330 hearing request was timely and the Court has
jurisdiction over this case. See infra p. 5.
                               - 4 -

Individuals; (2) completed returns for 2001, 2002, and 2005; and

(3) proof that petitioners had made sufficient estimated tax

payments for 2006.   Petitioners failed to call Ms. Conley on the

date of the hearing and failed to provide the requested items.

     On March 14, 2007, Stephen Meeh (Mr. Meeh) sent a fax to Ms.

Conley.   Mr. Meeh’s fax expressed concern that petitioners had

been assigned an equivalent hearing but failed to discuss the

issues raised in petitioners’ section 6330 hearing request.

     On May 12, 2007, respondent issued a Decision Letter

Concerning Equivalent Hearing Under Section 6320 and/or 6330

(decision letter) to petitioners with respect to collection of

their 1993 income tax liabilities.     On May 24, 2007, respondent

issued a decision letter to petitioners with respect to

collection of their 1994 and 1995 income tax liabilities.    In

both decision letters, respondent determined that petitioners had

not presented any information regarding the issues raised in

their section 6330 hearing request.    Respondent also determined

that petitioners failed to offer any collection alternatives.

Accordingly, respondent sustained the collection action.    In

response to these decision letters, petitioners filed their

petition with this Court on June 11, 2007.
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                            Discussion

     Before the Commissioner may levy on any property or property

right of a taxpayer, the taxpayer must be provided written notice

of the right to request a hearing, and the notice must be

provided no less than 30 days before the levy is made.   Sec.

6330(a).   If the taxpayer requests a hearing under section 6330,

an Appeals officer of the Commissioner must hold the hearing.

Sec. 6330(b)(1).   Within 30 days of the issuance of the Appeals

officer’s determination, the taxpayer may seek judicial review of

the determination.   Sec. 6330(d)(1).

     Respondent concedes that petitioners’ section 6330 hearing

request was timely under section 6330(a)(3)(B) and (b)(1).

Accordingly, we will treat the “decisions” reflected in the

decision letters issued to petitioners on May 12 and 24, 2007, as

“determinations” for purposes of section 6330(d)(1).   See Craig

v. Commissioner, 119 T.C. 252 (2002).    We therefore have

jurisdiction to review Ms. Conley’s decisions.

I.   Underlying Tax Liabilities

     A.    Whether Petitioners Are Entitled To Dispute the
           Underlying Liabilities

     Section 6330(c)(2)(B) provides that a person may challenge

the existence or amount of the underlying tax liability if the

person did not receive a notice of deficiency for the relevant

tax period or did not otherwise have an opportunity to dispute

the liability.
                              - 6 -

     Petitioners argue that they were never given the chance to

contest their underlying tax liabilities.   Respondent counters

that petitioners are precluded from raising issues relating to

the merits of the underlying tax liabilities by their failure to

raise such issues in their hearing.   Respondent concedes that it

cannot be determined from the record whether petitioners received

notices of deficiency for the years at issue.

     Respondent is correct that taxpayers may ask the Court to

consider only issues that were initially raised before the

Appeals Office in a section 6330 hearing.    Giamelli v.

Commissioner, 129 T.C. 107 (2007).    However, petitioners clearly

raised the issue of their underlying tax liabilities in their

section 6330 hearing request by stating that “error was made in

the calculation of assessed liability.”   Accordingly, we may

review the merits of the underlying tax liabilities.

     B.   Merits of the Underlying Tax Liabilities

     In situations where the Court will review the merits of the

underlying tax liability, the standard of review is de novo.

Montgomery v. Commissioner, 122 T.C. 1, 9 (2004); Hoffman v.

Commissioner, 119 T.C. 140, 144-145 (2002); Sego v. Commissioner,

114 T.C. 604, 609 (2000).

     Petitioners “self-assessed” their tax liabilities by

reporting such liabilities on their income tax returns.    The

record is devoid of any reason why petitioners’ self-assessed tax
                               - 7 -

is inaccurate.   Ms. Conley offered petitioners ample opportunity

throughout the section 6330 hearing to provide reasons or

documentation to substantiate their position, and petitioners

failed to comply.   Accordingly, we uphold petitioners’ underlying

tax liabilities for the years at issue.

II.   Review of Determinations for Abuse of Discretion

      Following a section 6330 hearing, the Appeals officer must

determine whether the proposed levy action may proceed.    The

Appeals Office is required to take into consideration: (1)

Verification presented by the Secretary that the requirements of

applicable law and administrative procedure have been met, (2)

relevant issues raised by the taxpayer, and (3) whether the

proposed levy action appropriately balances the need for

efficient collection of taxes with a taxpayer’s concerns

regarding the intrusiveness of the proposed levy action.    Sec.

6330(c)(3).

      Section 6330(d)(1) grants this Court jurisdiction to review

the determination made by the Appeals Office in connection with

the section 6330 hearing.   Where the underlying tax liability is

not in dispute, the Court will review the determination of the

Appeals Office for abuse of discretion.   Lunsford v.

Commissioner, 117 T.C. 183, 185 (2001); Sego v. Commissioner,

supra at 610; Goza v. Commissioner, 114 T.C. 176, 182 (2000).      An

abuse of discretion occurs if the Appeals Office exercises its
                                - 8 -

discretion “arbitrarily, capriciously, or without sound basis in

fact or law.”   Woodral v. Commissioner, 112 T.C. 19, 23 (1999).

     We have already examined and upheld the merits of the

underlying tax liabilities for the years at issue.   Accordingly,

we will review respondent’s determinations to proceed with the

levy for abuse of discretion.

     Petitioners argue that respondent abused his discretion by

failing to allow petitioners a section 6330 hearing and by

determining that the method of assessment for the years in

question was adequate.3   We disagree.

     A.   The Equivalent Hearing

     The bulk of petitioners’ correspondence with respondent

during the Appeals hearing process centered around petitioners’

concern that respondent afforded petitioners an equivalent

hearing rather than a section 6330 hearing.   Respondent erred in

originally determining that petitioners’ section 6330 hearing

request was not timely.   However, petitioners’ efforts to

challenge the collection action were not prejudiced by

respondent’s treatment of their hearing as an equivalent hearing.

The key differences between a section 6330 hearing and the


     3
      Respondent argues that petitioners should be barred from
raising the argument that the method of assessment was inadequate
because petitioners did not raise the issue during their Appeals
hearing. See Giamelli v. Commissioner, 129 T.C. 107 (2007).
However, petitioners raised the issue in their sec. 6330 hearing
request by stating that “procedural error was made in the
providing of the notice of assessment”.
                                   - 9 -

equivalent hearing respondent afforded petitioners are that an

equivalent hearing does not allow a taxpayer to seek judicial

review and does not necessarily suspend collection activities

while the hearing is pending.      See sec. 301.6330-1(i), Proced. &

Admin. Regs.     The record indicates that respondent suspended his

collection activities, and petitioners have timely filed a

petition to review respondent’s collection action determinations

in this Court.    Accordingly, we hold that petitioners were

afforded their full right to an Appeals hearing under section

6320(a)(3)(B) and (b)(1), and respondent did not abuse his

discretion in proceeding with the collection action.

     B.     Method of Assessment

     Petitioners contend in their petition, without elaborating,

that respondent’s method of assessment was inadequate.     Section

6330(c)(1) requires Appeals to obtain verification from the

Secretary of the Treasury that the requirements of any applicable

law or administrative procedure have been met.     The record

indicates that to comply with section 6330(c)(1), Ms. Conley

relied on computer transcripts which identified the taxpayer, the

character of the liabilities assessed, the taxable periods, and

the amounts of the assessments.      Computer transcripts that show

this type of information are a valid verification that all

requirements of applicable law or administrative procedure have

been met.    See Roberts v. Commissioner, 118 T.C. 365, 371 n.10
                              - 10 -

(2002), affd. 329 F.3d 1224 (11th Cir. 2003); Schroeder v.

Commissioner, T.C. Memo. 2002-190.     It was not an abuse of

discretion for Ms. Conley to rely on a computer transcript to

verify that legal and procedural requirements were satisfied as

required by section 6330(c)(1) and (3)(A) and section 301.6330-

1(e)(1), Proced. & Admin. Regs.   See Craig v. Commissioner, 119

T.C. at 261-263; Nestor v. Commissioner, 118 T.C. 162, 166

(2002).

     C.    Collection Alternatives

     Petitioners stated in their section 6330 hearing request

that they wanted respondent to consider collection alternatives.

However, petitioners failed to propose or present any information

regarding collection alternatives during their section 6330

hearing.   Accordingly, respondent did not abuse his discretion in

proceeding with the collection action.

     D.    Conclusion

     Petitioners have given no bona fide basis for their claim

that the collection action is inappropriate.    Therefore,

respondent did not abuse his discretion by determining to proceed

with the collection of petitioners’ unpaid Federal income tax

liabilities at issue.

     In reaching our holdings herein, we have considered all

arguments made, and to the extent not mentioned above, we

conclude them to be moot, irrelevant, or without merit.
                        - 11 -

To reflect the foregoing,

                                  Decision will be entered

                             for respondent.
