                  T.C. Summary Opinion 2007-160



                     UNITED STATES TAX COURT



                 JOHN HAYNES, JR., Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 20509-05S.              Filed September 10, 2007.



     John Haynes, Jr., pro se.

     Dennis R. Onnen, for respondent.


     GOLDBERG, Special Trial Judge:     This case was heard pursuant

to the provisions of section 74631 of the Internal Revenue Code

in effect at the time of filing.   Pursuant to section 7463(b),

the decision to be entered is not reviewable by any other court,

and this opinion shall not be treated as precedent for any other


     1
       Unless otherwise indicated, all Rule references are to the
Tax Courts Rules of Practice and Procedure, and all section
references are to the Internal Revenue Code, as amended.
                               - 2 -

case.   This case is before the Court on respondent’s Motion for

Summary Judgment pursuant to Rule 121.

                            Background

     This case was commenced in response to a Notice of

Determination Concerning Collection Action(s) Under Section 6320

and/or 6330, sustaining the filing of a Notice of Federal Tax

Lien in order to collect petitioner’s unpaid Federal income taxes

for 1999 and 2000.

     Petitioner filed his income tax return for 1999 and received

a refund of $24,228.   For the 2000 taxable year, petitioner filed

his Federal income tax return and received refunds of $16,733 and

$500, respectively.

     An audit occurred on January 7, 2003, and subsequently

respondent mailed a notice of deficiency to petitioner in which

respondent determined deficiencies in petitioner’s Federal income

taxes for taxable years 1999 and 2000 in the amounts of $20,764

and $24,532, respectively, together with accuracy-related

penalties pursuant to section 6662 for 1999 and 2000 in the

amounts of $4,152.80 and $4,906.40, respectively.

     The notice of deficiency was mailed to petitioner at the

following addresses: 11705 Fishing River Road, Liberty, Missouri,

64068, and Post Office Box 100, Liberty, Missouri, 64069.    Copies

of the notice of deficiency were also sent to petitioner’s

authorized representative, Richard T. Jones, at the following
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address: Post Office Box 1465, Rolla, Missouri, 65401.   The

aforementioned Liberty, Missouri, address is the same address

stated on petitioner’s Federal income tax returns for taxable

years 1999 and 2000.

     Petitioner failed to file a petition to this Court in

response to the notice of deficiency.   Accordingly, respondent

assessed the deficiencies determined for taxable years 1999 and

2000, together with the penalties and interest applicable

thereon, on May 26, 2006.

     On July 9, 2004, respondent mailed a Notice of Federal Tax

Lien Filing and Your Right to a Hearing Under IRC 6320 (CDP

Notice) that informed petitioner that a Notice of Federal Tax

Lien had been filed because there were unpaid tax liabilities for

taxable years 1999 and 2000, in the amounts of $7,114.94 and

$32,851.20, respectively.   The CDP Notice informed petitioner of

his right to a hearing to appeal the collection action and to

discuss payment method options.   Publication 1660, Collection

Appeal Rights, together with Form 12153, Request for a Collection

Due Process Hearing, Form 12153 was enclosed with the CDP Notice.

     Petitioner timely mailed a Form 12153.   Petitioner’s case

was then referred to the Internal Revenue Service (IRS) Appeals

Office in Kansas City and assigned to James C. Callanan.    The

Appeals officer (Mr. Callanan) mailed an acknowledgement letter

to petitioner’s representative, Leonard G. Goldammer (Mr.
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Goldammer), on October 25, 2004.   In the letter, Mr. Callanan

scheduled a CDP hearing by telephone on November 15, 2004, and

also offered Mr. Goldammer an opportunity to have either a face-

to-face conference or a hearing by correspondence.   The November

15, 2004, hearing was continued until December 16, 2004.

     Petitioner requested a face-to-face conference, which was

held on December 16, 2004, with petitioner, Mr. Callanan, and Mr.

Goldammer in attendance.   A second face-to-face conference

occurred between Mr. Callanan and Mr. Goldammer on February 4,

2005.

     At the December 16, 2004, conference, petitioner

acknowledged that he had received the notice of deficiency but

had relied on his representative at that time to file a petition

with the Court.   Petitioner acknowledged that it was his

responsibility to assure that a petition was filed with this

Court and that he had failed in this duty.   After this admission,

Mr. Callanan explained to petitioner that because he had received

a notice of deficiency, the merits of the underlying deficiencies

could not be raised as part of the CDP hearing.   The parties then

discussed the appropriateness of the collection action, the

filing of the Notice of Federal Tax Lien, and possible collection

alternatives.

     With respect to the collection alternatives discussed at the

December 16, 2004, CDP hearing, petitioner requested that any
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collections action be rescinded on the grounds that the

outstanding liabilities from taxable years 1999 and 2000 would

ultimately be satisfied by one of two ways: (1) through a refund

petitioner anticipated as a result of his yet-to-be-filed amended

returns for taxable years 1999 and 2000; or (2) through a refund

petitioner anticipated from his yet-to-be-filed Federal income

tax return for taxable year 2004.    Mr. Callanan rejected

petitioner’s proposal on the basis that petitioner had yet to

file any of the returns proposed, and because any refund would,

at that point, be purely speculative, there would be no way to

assure that refunds would repay the liabilities owed.    In the

alternative, Mr. Callanan raised the possibility that petitioner

might be able to enter into an installment agreement.

Petitioner, however, stated that he would not be financially able

to accept such an arrangement.    The CDP hearing concluded without

further mention of collection alternatives.

     On February 4, 2005, Mr. Callanan met with Mr. Goldammer to

review petitioner’s financial statement.    At this meeting, Mr.

Goldammer protested that such a review was not necessary as the

refunds that petitioner anticipated receiving would cover his

outstanding liabilities owed.

     On February 14, 2005, Mr. Goldammer left a voicemail message

on Mr. Callahan’s voicemail system, reiterating petitioner’s

position that the collection action should be abandoned in the
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light of the refunds that petitioner anticipated he was to

receive from the filing of amended returns for taxable years 1999

and 2000, and his Federal income tax return for 2004.    Mr.

Callanan contacted Mr. Goldammer and reiterated that petitioner’s

proposal was still unacceptable.   In that same conversation, Mr.

Callanan informed Mr. Goldammer that despite his continuing

rejection of petitioner’s proposal, he would “work on

petitioner’s financial statement” and get back to him.

     On July 6, 2005, Mr. Callanan contacted Mr. Goldammer and

informed him that because the outstanding liability owed was

below $25,000--$18,277.54, to be precise--he could accept an

installment agreement.   Mr. Callanan then proposed that

petitioner agree to make monthly payments of $375.   Petitioner

rejected this offer.

     The record in this case includes petitioner’s Federal income

tax return for the taxable year 2003.   On that return, petitioner

reported wages, salaries, and tips in the amount of $125,979.

Petitioner also reported rental income from six residential and

commercial properties that he owns, including a banquet hall.     As

of the time the present motion was filed, petitioner had filed

neither his Federal income tax return for taxable year 2004, nor

any amended returns for 1999 or 2000.
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                            Discussion

   With respect to the pending motion, petitioner was permitted

to file a response but elected not to file one.

   Summary judgment is appropriate “if the pleadings, answers

to interrogatories, depositions, admissions, and any other

acceptable materials, together with the affidavits, if any, show

that there is no genuine issue as to any material fact and that a

decision may be rendered as a matter of law.”   Rule 121(b).

Summary judgment is intended to expedite litigation and avoid

unnecessary and expensive trials.   See Fla. Peach Corp. v.

Commissioner, 90 T.C. 678, 681 (1988).

     Section 6320 generally provides that the IRS cannot proceed

with the collection of taxes by way of the filing of a notice of

Federal tax lien with respect to a taxpayer’s property until the

taxpayer has been given notice of and the opportunity for an

administrative review of the proposed filing (in the form of an

IRS Office of Appeals hearing).   Section 6330(c)(1) provides that

the Appeals officer shall obtain verification that the

requirements of any applicable law or administrative procedure

have been met.   Section 6330(c)(2)(A) provides that the taxpayer

may raise any relevant issue relating to the unpaid tax including

spousal defenses, challenges to the appropriateness of collection

actions, and alternatives to collection.   The taxpayer may also

raise challenges to the existence or amount of the underlying tax
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liability if he or she did not receive a statutory notice of

deficiency with respect to the underlying tax liability or did

not otherwise have an opportunity to dispute that liability.

Sec. 6330(c)(2)(B).

     Section 6330(c)(3) provides that the determination of the

Appeals officer shall take into consideration the verification

under section 6330(c)(1), the issues raised by the taxpayer, and

whether the proposed collection action balances the need for the

efficient collection of taxes with the legitimate concern of the

taxpayer that any collection action be no more intrusive than

necessary.   If the taxpayer is dissatisfied with the

determination made after the hearing, judicial review of the

determination, such as that sought in this case, is available.

See generally Goza v. Commissioner, 114 T.C. 176, 179-181 (2000).

     Where the validity of the underlying tax liability is at

issue, the Court will review the matter de novo.   Davis v.

Commissioner, 115 T.C. 35, 39 (2000).   Where the taxpayer

challenges the assessment procedures of the case, the Court will

review the matter for abuse of discretion.   Sego v. Commissioner,

114 T.C. 604, 610 (2000); Goza v. Commissioner, supra.    In order

to prevail under abuse of discretion, a taxpayer must prove that

the Commissioner exercised this discretion arbitrarily,

capriciously, or without sound basis in fact or law.    Woodral v.

Commissioner, 112 T.C. 19, 23 (1999).
                               - 9 -

     Petitioner’s position is twofold; he challenges both the

underlying liability, as well as respondent’s assessment

procedures with respect to his case.   With respect to the first

prong, however, because petitioner received a notice of

deficiency for taxable years 1999 and 2000, but did not file a

petition with this Court, we cannot consider the underlying

liability.   Therefore, our inquiry rests solely with the question

of whether respondent’s assessment procedures and, in particular,

his rejection of petitioner’s collection alternative, were done

arbitrarily, and without sound basis in fact or law.   Id.

     Petitioner’s argument that respondent should rescind or

abandon the collection action based on the amount of money he

anticipated receiving from refunds claimed on Federal income tax

returns is, at best, speculatively optimistic.   Mr. Callanan

reasonably explained to petitioner on more than one occasion that

it would be impossible for him to rescind the collection action

based on petitioner’s proposal, especially where petitioner had

not yet filed any amended returns for taxable years 1999 or 2000,

and where his return for taxable year 2004 was not even due for

another 4 months.   Petitioner presented no additional evidence,

aside from his assertion that refunds would be due to him from

the aforementioned returns, in support of his proposal.

     Despite his assertion that he was unable to remit the amount

of liabilities owed, petitioner did not present any evidence that
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he was financially unable to make payments.    While the record is

silent as to petitioner’s income at the time that the present

motion was filed, we note that neither petitioner nor his

representative offered evidence showing that petitioner did not

still possess the assets or maintain the income level as

reflected on his Federal income tax return for 2003.

     Mr. Callanan, however, gave full consideration to

petitioner’s situation, repeatedly offering petitioner the

alternative of installment payments.    In fact, Mr. Callanan

revisited petitioner’s financial statement and determined that

because the amount of liabilities owed was $18,277.54, petitioner

could request an installment payment option.    Mr. Callanan then

proposed an installment payment whereby petitioner would pay $375

per month.   When Mr. Callanan presented this installment payment-

option to petitioner, it was summarily rejected.

     The record is replete with examples of how Mr. Callanan was

more than accommodating to petitioner throughout his dealings

with him.    In sum, we are convinced that Mr. Callanan verified

that applicable law and administrative procedures had been met,

and determined that the proposed collection action balanced the

need for the efficient collection of taxes with the legitimate

concern of the taxpayer that any collection action be no more

intrusive than necessary.
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       For his part, petitioner has offered no credible evidence

showing that respondent’s determination was arbitrary,

capricious, or without sound basis in law.     We therefore conclude

that these is no genuine issue of material fact and that

respondent is entitled to an entry of decision as a matter of

law.

       Based upon our review of the relevant evidence and law in

this case, we sustain the determination of respondent to proceed

with the proposed collection action to collect petitioner’s

unpaid income tax liabilities for taxable years 1999 and 2000.

       To reflect the foregoing,


                                            An appropriate order and

                                        decision will be entered for

                                        respondent.
