                               T.C. Memo. 2020-90



                         UNITED STATES TAX COURT



                 CARL WILLIAM COSIO, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 23623-17L.                         Filed June 18, 2020.



      Carl William Cosio, pro se.

      A. Gary Begun and Randall B. Childs, for respondent.



                           MEMORANDUM OPINION


      VASQUEZ, Judge: In this collection due process (CDP) case, petitioner

seeks review, pursuant to section 6330(d)(1),1 of the determination by the Internal



      1
       Unless otherwise indicated, all section references are to the Internal
Revenue Code in effect at all relevant times, and all Rule references are to the Tax
Court Rules of Practice and Procedure.
                                        -2-

[*2] Revenue Service (IRS or respondent) to proceed with collection of his unpaid

Federal income tax liabilities for 2012 and 2015.2 The matter is before the Court

on respondent’s motion for summary judgment filed pursuant to Rule 121, to

which petitioner objects. We will deny the motion.

                                    Background

      The following facts are based on the parties’ motion papers and

attachments, including the administrative record from the IRS Appeals Office

(Appeals). See Rule 121(b). These facts are stated solely for the purpose of

disposing of the motion and not as findings of fact in this case. See Rule 1(b);

Fed. R. Civ. P. 52(a); Cook v. Commissioner, 115 T.C. 15, 16 (2000), aff’d, 269

F.3d 854 (7th Cir. 2001). Petitioner resided in Florida when he timely filed his

petition.




      2
         On May 11, 2018, respondent filed a motion to dismiss for lack of
jurisdiction with respect to tax year 2012, to which petitioner objected. Therein
respondent argued that the Court had no jurisdiction to review the decision letter
issued on October 12, 2017, on petitioner’s equivalent hearing. On May 15, 2018,
the Court ordered petitioner to file any objection to respondent’s motion.
Petitioner did not file an objection to respondent’s motion. On July 10, 2018, the
Court granted respondent’s motion and dismissed petitioner’s case as to tax year
2012 for lack of jurisdiction.
                                          -3-

[*3] I.         Respondent’s Collection Efforts

          On November 15, 2016, petitioner filed a Federal income tax return for

2015 that was not accompanied by a payment. On December 26, 2016,

respondent, as to 2015, assessed tax of $34,179 and credited petitioner for tax

withholding payments of $785. Respondent also assessed a section 6651(a)(1)

addition to tax of $7,513, a section 6651(a)(2) addition to tax of $1,502, and

interest of $1,156. On April 7, 2017, respondent issued a Notice of Intent to Levy

and Notice of Your Right to a Hearing (notice of levy), with respect to petitioner’s

2006, 2007, 2008, 2009, 2010, 2011, and 2015 tax years.3 Upon receipt of the

notice of levy, petitioner submitted a Form 12153, Request for a Collection Due

Process or Equivalent Hearing, requesting a CDP hearing for tax years 2006

through 2015.4 On the Form 12153 petitioner checked the “Installment



          3
        The notice of levy in the record does not reference petitioner’s tax liability
with respect to 2012. We infer from the administrative record that petitioner
received a separate notice of levy as to that year.
          4
        We lack jurisdiction to review respondent’s collection activities for tax
years 2006, 2007, 2008, 2009, 2010, 2011, 2013, and 2014 because the petition
commencing this case does not seek to invoke the Court’s jurisdiction to review
any determination as to those years. See Orum v. Commissioner, 123 T.C. 1, 8
(2004) (stating that the Court’s jurisdiction under sec. 6330 depends upon the
issuance of a valid determination letter and the filing of a timely petition
requesting review of the determination in the letter), aff’d, 412 F.3d 819 (7th Cir.
2005).
                                        -4-

[*4] Agreement”, “Offer in Compromise”, and “I Cannot Pay Balance” boxes as

collection alternatives. Under the “Other” section of the form, petitioner stated he

had inherited cash from his brother and alleged that afterwards a broker had used

the cash to buy and sell securities without his consent. For this reason, petitioner

argued that he was not liable for the tax assessed.5 Petitioner did not check the

box indicating he was interested in an equivalent hearing.

      After petitioner submitted his CDP request, Appeals sent him several letters.

One informed him that he was not entitled to a CDP hearing or an equivalent

hearing6 for tax years 2006 through 2009 because his request was untimely as to

those years.7 Another informed him that his request for a CDP hearing was



      5
        Respondent concedes that petitioner’s statement in his CDP request is a
challenge to his underlying tax liability for 2015.
      6
         An equivalent hearing resembles a CDP hearing in that it is held with the
IRS Appeals Office, the settlement officer (SO) considers the same issues that
would have been considered at a CDP hearing, and the SO generally follows the
same procedures. See Craig v. Commissioner, 119 T.C. 252, 258-259 (2002). The
chief differences are that the SO’s decision following an equivalent hearing is
embodied in a “decision letter” as opposed to a “notice of determination” and that
a decision set forth in the former document, unlike a determination set forth in the
latter document, is not subject to judicial review. Id.
      7
         The record does not specify respondent’s basis for concluding that
petitioner’s CDP request was untimely with respect to tax years 2006 through
2009. In any event, we lack jurisdiction to review respondent’s collection activity
for those years. See supra note 4.
                                         -5-

[*5] untimely with respect to tax years 2010, 2011, and 2012. Appeals invited

petitioner to request an equivalent hearing for 2012 by submitting a new Form

12153 within 15 days. Petitioner failed to do so. Nonetheless, Appeals

subsequently sent petitioner a letter granting him an equivalent hearing for 2012

but not for 2010 or 2011.

      Appeals also issued petitioner a letter with respect to his tax liability for

2015. For this tax year Appeals acknowledged timely receipt of the CDP request

and stated that it was forwarding his case to its New York office.

II.   CDP and Equivalent Hearings

      Appeals assigned SO Josephine Stockli to review petitioner’s case. On July

11, 2017, SO Stockli mailed petitioner a letter scheduling a telephone conference

for August 16, 2017. According to SO Stockli’s notes in respondent’s case

activity record, the scheduled telephone conference related to petitioner’s tax

liabilities for 2012 and 2015. However, the July 11, 2017, letter refers only to

petitioner’s equivalent hearing for 2012. The letter does not reference petitioner’s

CDP hearing, and the administrative record contains no letter scheduling a hearing

with respect to tax year 2015. In the July 11, 2017, letter SO Stockli indicated that
                                         -6-

[*6] she attached to the letter a copy of petitioner’s account transcript for 2012,8

Form 433-A, Collection Information Statement for Wage Earners and Self-

Employed Individuals, and Form 656, Offer in Compromise.

      On July 24, 2017, petitioner called SO Stockli. According to respondent’s

case activity report, petitioner told SO Stockli that “he ha[d] an in person

conference with IRS in September and want[ed] to pursue that.” SO Stockli asked

petitioner for further explanation and told him that she would call his authorized

representative, Ron Porat.9 SO Stockli also asked petitioner to complete and

submit Form 433-A and to file amended returns for 2012 and 2015 if he thought

his returns were incorrect. After her telephone conversation with petitioner, SO

Stockli called Mr. Porat and left him a voicemail asking him to return her call, to

which Mr. Porat did not respond.




      8
         The notice of determination issued October 12, 2017, states that SO
Stockli attached to the July 11, 2017, letter copies of petitioner’s account
transcripts for 2012 and 2015. However, in the July 11, 2017, letter, SO Stockli
stated that she was attaching a copy of petitioner’s account transcript for 2012
only. It is unclear from the record whether SO Stockli attached to the July 11,
2017, letter a copy of petitioner’s account transcript for 2015.
      9
        Mr. Porat was petitioner’s authorized representative during the CDP
proceedings. He did not represent petitioner in any of the proceedings before this
Court.
                                        -7-

[*7] On August 16, 2017, SO Stockli called Mr. Porat to hold the scheduled

telephone conference. According to respondent’s case activity record, Mr. Porat

did not answer SO Stockli’s call, and she left him another voicemail. Mr. Porat

returned SO Stockli’s phone call on August 18, 2017, and left her a voicemail. On

August 22, 2017, SO Stockli issued a letter to petitioner informing him that the

scheduled telephone conference was not held because Mr. Porat was unavailable.

SO Stockli informed petitioner that she had not received Form 656 and Form

433-A from him. She gave him 14 additional days to submit any information that

he wanted her to consider before making a determination. Like the previous letter,

SO Stockli’s August 22, 2017, letter, references petitioner’s equivalent hearing for

2012 only. The record contains no similar letter with respect to petitioner’s CDP

hearing for 2015.

      On September 13, 2017, SO Stockli mailed petitioner a letter stating the

following:

      This letter is our acknowledgement [sic] that we received your case
      for consideration in our Appeals Office. However, we realize that
      your circumstances may have changed since you requested an
      Appeals hearing due to the storms that affected certain areas within
      the state of Florida.

SO Stockli ended the September 13, 2017, letter by adding the following:
                                        -8-

[*8] Please contact us within 14 days of this letter to advise on how to
     proceed with your case. * * * If we do not hear from you we will
     make every attempt to contact you as quickly as possible and begin
     the consideration of your case.

      Unlike the previous letters, the September 13, 2017, letter references

petitioner’s tax liabilities for 2012 and 2015. The letter does not mention any

previous communications that occurred among petitioner, Mr. Porat, and SO

Stockli between July 2017 and September 2017.

      Neither petitioner nor Mr. Porat made any further contact with SO Stockli.

Subsequently, SO Stockli closed petitioner’s case and, on October 12, 2017,

issued to petitioner a Notice of Determination Concerning Collection Action(s)

Under Section 6320 and/or 6330 (notice of determination), sustaining the

proposed collection action with respect to 2015. That same day SO Stockli issued

to petitioner a Decision Letter on Equivalent Hearing Under Internal Revenue

Code Sections 6320 and/or 6330 with respect to 2012. Petitioner filed the petition

in this case within 30 days of receiving both documents.

      In the petition, petitioner argued that he was not given proper notice with

respect to his CDP hearing for 2015 and that his July 24, 2017, telephone

conversation with SO Stockli “led [him] to believe that [he] would receive further

communication regarding the [CDP] hearing.”
                                         -9-

[*9] III.    Proceedings Before the Court

       Before this case was calendared for trial, respondent filed a motion for

summary judgment. Respondent contends that petitioner is precluded from

challenging his underlying tax liability in this Court because petitioner failed to

present any evidence to support his arguments even though he was offered the

opportunity to do so during the CDP proceedings. Petitioner filed a timely

response to respondent’s motion. Petitioner alleges that neither he nor his

representative “got notice * * * of pho[ne] meeting with Mrs. Stockli.” The Court

held a hearing on respondent’s motion in Tampa, Florida.

                                      Discussion

I.     Jurisdiction

       The Tax Court is a court of limited jurisdiction, and we must first ascertain

whether a case before us is one that Congress has authorized us to consider. Sec.

7442; Estate of Young v. Commissioner, 81 T.C. 879, 881 (1983). In a CDP case

such as this, our jurisdiction depends on the issuance of a notice of determination

following a timely request for a CDP hearing and the filing of a timely petition for

review. Sec. 6330(d)(1); Orum v. Commissioner, 123 T.C. 1, 8, 11-12 (2004),

aff’d, 412 F.3d 819 (7th Cir. 2005). Respondent issued a notice of determination

to petitioner with respect to tax year 2015, and petitioner filed a timely petition.
                                         - 10 -

[*10] Accordingly, we have jurisdiction to review the notice of determination

sustaining the proposed collection action for 2015.

II.    Summary Judgment

       The purpose of summary judgment is to expedite litigation and avoid costly,

time-consuming, and unnecessary trials. Fla. Peach Corp. v. Commissioner, 90

T.C. 678, 681 (1988). The Court may grant summary judgment when there is no

genuine dispute as to any material fact and a decision may be rendered as a matter

of law. Rule 121(b); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992),

aff’d, 17 F.3d 965 (7th Cir. 1994). In deciding whether to grant summary

judgment, we construe factual materials and inferences drawn from them in the

light most favorable to the nonmoving party. Sundstrand Corp. v. Commissioner,

98 T.C. at 520. Upon careful review of the parties’ filings to date, and viewing the

facts and the inferences drawn from them in the light most favorable to petitioner

as the nonmoving party, we conclude that there are genuine disputes of material

fact that preclude the granting of summary judgment.

III.   Collection Principles

       Section 6331(a) authorizes the Secretary to levy upon property and property

rights of a taxpayer liable for tax if the taxpayer fails to pay the tax within 10 days

after notice and demand for payment is made. Section 6330(a) provides that no
                                        - 11 -

[*11] levy may be made on any property or right to property of any person unless

the Secretary has notified such person in writing of the right to a hearing before

the levy is made.

      If a taxpayer requests a hearing in response to a notice of levy pursuant to

section 6330, a hearing shall be held before an impartial officer or employee of

Appeals. Sec. 6330(b)(1), (3). At the hearing the taxpayer may raise any relevant

issue relating to the unpaid tax or the proposed levy, including appropriate spousal

defenses, challenges to the appropriateness of the collection action, and collection

alternatives. Sec. 6330(c)(2)(A). A taxpayer is precluded from contesting the

existence or amount of the underlying liability unless the taxpayer did not receive

a notice of deficiency for the liability in question or did not otherwise have an

opportunity to dispute the liability. Sec. 6330(c)(2)(B); see also Sego v.

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

      Following a hearing Appeals must determine whether proceeding with the

proposed levy action is appropriate. In making that determination Appeals is

required to take into consideration: (1) verification presented by the Secretary

during the hearing process 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 the
                                        - 12 -

[*12] efficient collection of taxes with the taxpayer’s concerns regarding the

intrusiveness of the proposed collection action. Sec. 6330(c)(3).

IV.   Standard of Review and Analysis

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

determination in connection with a collection hearing. Where the validity of the

underlying tax liability is properly at issue, we review the taxpayer’s liability de

novo. See Sego v. Commissioner, 114 T.C. at 610; Goza v. Commissioner, 114

T.C. 176, 181-182 (2000). Where the underlying tax liability is not properly at

issue, we review the determination for abuse of discretion. Sego v. Commissioner,

114 T.C. at 610; Goza v. Commissioner, 114 T.C. at 182. The parties disagree as

to whether petitioner’s underlying tax liability is at issue and, consequently, the

appropriate standard of review.

      A taxpayer may challenge the underlying liability in a CDP hearing if he did

not receive a notice of deficiency or otherwise have an opportunity to contest the

underlying liability. See sec. 6330(c)(2)(B); see also Sego v. Commissioner, 114

T.C. at 609. This Court considers a taxpayer’s challenge to his underlying liability

in a collection action case only if he properly raised that challenge at his CDP

hearing. See Giamelli v. Commissioner, 129 T.C. 107, 115-116 (2007); sec.

301.6330-1(f)(2), Q&A-F3, Proced. & Admin. Regs. An issue is not properly
                                        - 13 -

[*13] raised at the CDP hearing if the taxpayer fails to request consideration of

that issue by Appeals or if he requests consideration but fails to present any

evidence after being given a reasonable opportunity to do so. Giamelli v.

Commissioner, 129 T.C. at 115-116; sec. 301.6330-1(f)(2), Q&A-F3, Proced. &

Admin. Regs. The taxpayer must also raise the issue in his petition to this Court.

Rule 331(b)(4) (“Any issue not raised in the assignments of error shall be deemed

to be conceded.”).

      Petitioner did not receive a notice of deficiency, and the parties agree that

petitioner was entitled to challenge his underlying tax liability in his CDP hearing.

They disagree, however, as to whether petitioner properly raised the issue during

his CDP hearing.

      Respondent concedes (and we agree) that petitioner requested consideration

of his underlying tax liability in his CDP hearing request. See supra note 5.

However, requesting consideration of an issue during a CDP proceeding is not

enough to preserve the issue for judicial review. The taxpayer must also present

Appeals with “evidence with respect to that issue after being given a reasonable

opportunity” to do so. Sec. 301.6330-1(f)(2), Q&A-F3, Proced. & Admin. Regs.

According to respondent, petitioner failed to clear this threshold hurdle. The

narrative in the notice of determination supports respondent’s contention.
                                        - 14 -

[*14] The notice of determination tells the following story. In the July 11, 2017,

letter, SO Stockli provided notice of the scheduled telephone conference

pertaining to petitioner’s CDP hearing for 2015 and equivalent hearing for 2012.

She requested financial and other information in the letter and followed up with

petitioner and Mr. Porat by telephone. On August 16, 2017, SO Stockli called Mr.

Porat for the scheduled hearing, but he was not available. Mr. Porat did not return

SO Stockli’s call even though she left him a detailed message. Thereafter, SO

Stockli informed petitioner by letter that no one appeared for his hearing and gave

him 14 additional days to forward any documentation that he wanted her to

consider. Finally, on September 13, 2017, taking into account a natural disaster

that had affected the State of Florida, SO Stockli sent a letter to petitioner giving

him 14 additional days and a last chance to contact her. Neither petitioner nor his

representative made any further contact with SO Stockli. Consequently, SO

Stockli sustained the notice of levy.

      If we were to take this narrative at face value, it could establish that: (1) SO

Stockli informed petitioner about the telephone CDP hearing scheduled for August

16, 2017, and gave him several weeks to present evidence supporting his

challenge to his underlying tax liability for 2015 and (2) petitioner failed to do so.

Petitioner, however, disagrees with the facts as presented in the notice of
                                         - 15 -

[*15] determination and alleges that he did not receive proper notice of the

scheduling of his CDP hearing, which in turn deprived him of his right to present

evidence on his behalf as to the subject matter thereof. Having reviewed

petitioner’s response and the administrative record, we find there is a material

dispute of fact as to whether petitioner received a reasonable opportunity to

present his evidence pertaining to his tax liability for 2015.

      The administrative record confirms that on July 11, 2017, SO Stockli issued

a letter to petitioner scheduling a telephone conference for August 16, 2017.

However, the scheduling letter that SO Stockli sent to petitioner refers to

petitioner’s equivalent hearing for 2012 only. The letter makes no mention of

petitioner’s tax liability for 2015, and the record contains no similar letter

scheduling a CDP hearing with respect to that year.

      The same can be said of SO Stockli’s letter to petitioner dated August 22,

2017, which informs petitioner that the telephone conference scheduled for August

16, 2017, was not held because his representative had not been available. In the

letter SO Stockli advised petitioner to provide information (within 14 days from

the date of the letter) that he wanted her to consider before she made a

determination on his case. Once again, however, SO Stockli referenced

petitioner’s 2012 tax year only and did not mention his CDP hearing for 2015.
                                         - 16 -

[*16] The fact that the July 11 and August 22, 2017, letters do not mention

petitioner’s CDP hearing for 2015 indicates that SO Stockli might not have

scheduled petitioner’s CDP hearing with respect to 2015, or that (at the very least)

she might not have given petitioner proper notice of any such scheduled CDP

hearing. In any of these situations, SO Stockli might have abused her discretion

by not giving petitioner a reasonable opportunity to present his evidence with

respect to tax year 2015.

      SO Stockli’s September 13, 2017, letter further supports the inference that

SO Stockli might not have given petitioner a reasonable opportunity to present his

evidence. The administrative record confirms that in her September 13, 2017,

letter, SO Stockli gave petitioner 14 days to inform Appeals if he had been

affected by the severe storms in the State of Florida. However, in the letter, SO

Stockli also stated that if she did not hear from petitioner she “would make every

attempt to contact” him and “begin the consideration of * * * [his] case.”

(Emphasis added.) The case activity report shows that after issuing the September

13, 2017, letter, SO Stockli did not make any further attempt to contact petitioner

or give him another opportunity to submit his evidence. Instead, she closed his

case and sustained the notice of levy.
                                         - 17 -

[*17] Other documents in the record suggest that petitioner was genuinely

confused about the date of his CDP hearing. A few days after SO Stockli issued

the July 11, 2017, letter to petitioner, he contacted her to tell her that he had an in-

person conference scheduled for September with an IRS employee whose name

and title are not specified in the record. Petitioner stated that he wanted to

“pursue” that opportunity. Although the notice of determination states that SO

Stockli informed petitioner that she did not see “any open cases for petitioner” for

September, respondent’s case activity record states that SO Stockli only “asked

* * * [petitioner for] further explanation and told him that she would call his

representative”. This conversation raises questions as to whether SO Stockli had

reason to know that petitioner was confused about the scheduling of his CDP

hearing.10

      The notice of determination is inconsistent with the administrative record in

another material respect. Although the notice of determination states that Mr.

Porat did not return SO Stockli’s August 16, 2017, call, respondent’s case activity

record shows that Mr. Porat returned her call a couple of days later and left her a




      10
         In his petition, petitioner alleges that the July 24, 2017, conversation with
SO Stockli led him to believe that he was going to receive further communication
about the scheduling of his CDP hearing.
                                       - 18 -

[*18] voicemail. This discrepancy raises questions as to the correctness of the

notice of determination.

      On the record before us, we find that there exists a question of disputed

material fact as to whether SO Stockli abused her discretion by failing to provide

petitioner a reasonable opportunity to present evidence with respect to tax year

2015. We will accordingly deny respondent’s motion for summary judgment.

      To implement the foregoing,


                                      An appropriate order will be issued.
