                          T.C. Memo. 2011-112



                        UNITED STATES TAX COURT



                    ENOCH LEE, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 11951-08L.                Filed May 25, 2011,



     Enoch Lee, pro se.

     John D. Davis, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     MORRISON, Judge:     This case is an appeal by petitioner Enoch

Lee, pursuant to sections 6320(c) and 6330(d)(1),1 of a

determination of the IRS Office of Appeals.       The determination

concerned the attempt by the IRS to collect, through a levy and


     1
      All section references are to the Internal Revenue Code, as
amended.
                               - 2 -

the filing of a notice of lien, Mr. Lee’s income-tax liabilities

for the taxable years 2001, 2002, and 2003.    For the reasons

explained below, we sustain the determination.

                         FINDINGS OF FACT

     On September 5, 2006, the IRS issued two statutory notices

of deficiency to Lee.   The first notice determined a deficiency

in income tax for the 2002 taxable year.    The second notice

determined deficiencies in income tax for the 2001 and 2003

taxable years.   For all three years, the statutory notices of

deficiency determined that Lee owed additions to tax and

penalties.   Although Lee received the statutory notices of

deficiency, he did not file a Tax Court petition in response.2

Nor did Lee pay the amounts determined in the statutory notices

of deficiency.   The IRS assessed the unpaid amounts.   Within 60

days of the assessment, the IRS demanded payment of the assessed

amounts.

     On October 24, 2007, the IRS mailed Lee a notice that it

intended to levy to collect his income-tax liabilities for the

tax years 2001, 2002, and 2003.   On November 6, 2007, the IRS




     2
      Sec. 6213(a) provides that once a statutory notice of
deficiency has been issued, the taxpayer may file a Tax Court
petition to challenge the determinations in the notice. Lee
testified that he did not file a petition with the Tax Court
because he was ignorant of his rights under the Internal Revenue
Code. We infer from this testimony that he received the notices
of deficiency.
                                - 3 -

filed a notice of tax lien on Lee’s property to collect his

income-tax liabilities for the tax years 2001, 2002, and 2003.3

     Lee requested an administrative hearing regarding both the

proposed levy and the filing of the notice of lien.   As part of

the hearing, the IRS Office of Appeals exchanged correspondence

with Lee.4   The Office of Appeals also scheduled a telephone

conference with Lee to take place on March 6, 2008, but it is

unclear whether the telephone conference actually took place.

The Office of Appeals issued a notice of determination on April

28, 2008.    The Office of Appeals determined that the levy should

be made and that the notice of lien should remain filed.    The

notice of determination stated that the levy and lien actions

were in accordance with legal and procedural requirements.      The

notice listed nine specific requirements that had been met.     As

part of this list, the notice stated:   “Assessment was made on

the applicable CDP notice periods per IRC § 6201”.    The notice of

determination did not specifically state that a notice of

deficiency had been issued.   The notice of determination stated



     3
      Also on this date, the IRS mailed a notice to Lee that it
had filed the notice of tax lien.
     4
      Letters between the taxpayer and the Office of Appeals can
form part of the hearing. See sec. 301.6330-1(d)(2), A-D6,
Proced. & Admin. Regs. (“A CDP hearing may, but is not required
to, consist of a face-to-face meeting, one or more written or
oral communications between an Appeals officer or employee and
the taxpayer or the taxpayer’s representative, or some
combination thereof.”).
                               - 4 -

that during the hearing Lee had failed to raise any specific

challenges to the existence or amounts of his underlying tax

liabilities.5

     Lee filed a petition with the Tax Court to challenge the

notice of determination.   On January 30, 2009, the respondent

(whom we refer to as the IRS) filed a motion to remand the case.

The motion stated that during the collection-review hearing the

Office of Appeals had “determined that petitioner was not

entitled to challenge the underlying liabilities for tax years

2001, 2002, and 2003 in the CDP proceeding, because he had a

previous opportunity to contest these liabilities and had failed

to do so.”6   The motion continued:    “Upon further analysis,

counsel for respondent has determined that there is insufficient

evidence contained in the administrative file for denying the

petitioner an opportunity to challenge the underlying tax

liabilities for the taxable years 2001, 2002, and 2003.”     The

motion stated therefore that “The petitioner should be permitted

a conference with the Office of Appeals, with respect to which



     5
      The notice of determination said: “The taxpayer mentioned
in his correspondence that a person may also raise at the hearing
challenges to the existence or amount of the underlying tax
liability but he did not provide a specific request concerning
his liability.”
     6
      As noted earlier, the notice of determination said that Lee
had failed to specifically challenge the underlying liabilities
at the hearing. The notice did not say whether Lee had had a
previous opportunity to challenge the underlying liabilities.
                               - 5 -

the Office of Appeals will give additional consideration to

petitioner’s challenges of his tax liabilities.”   On February 2,

2009, the Tax Court granted the IRS motion for remand and ordered

that “this case is remanded to respondent’s Office of Appeals for

the purpose of conducting a face-to-face hearing to give

petitioner an opportunity to challenge his underlying tax

liabilities for 2001, 2002, and 2003.”   It further ordered that

the “hearing shall take place at a reasonable and mutually agreed

upon date and time, but no later than May 4, 2009.”

     After the Court issued the remand order, the Office of

Appeals assigned Lee’s collection-review case to Joseph Session

of the Sacramento Office of Appeals.   It fell to Session to hold

the face-to-face hearing the Court’s remand order required.   From

March 3 through May 20, 2009, Session and Lee exchanged at least

ten letters.   The letters covered three basic topics.

     The first topic was Session’s proposal that Lee meet with

the IRS “Compliance Division” before the face-to-face meeting

with the Office of Appeals.   A meeting with the Compliance

Division was necessary, Session claimed, for the following

reason:   “Appeals is not an examination function, so in order to

address the liability issue you raised in your request the

examination issues need to be developed.”   Lee wrote back that he

declined to meet with the Compliance Division.
                                - 6 -

     The second topic of the correspondence was Session’s request

that Lee identify the issues he wished to raise at the hearing.

In response to this request, Lee stated that he would raise all

issues that a taxpayer could raise under section 6330.    However,

Lee stated that he would not raise these issues until the face-

to-face meeting.

     The third topic of the correspondence was Session’s request

for documents in advance of the face-to-face meeting.    Sessions

requested that Lee fill out financial statements and file overdue

tax returns.    The Office of Appeals generally requires these

documents in order to consider alternatives to collection.    See,

e.g., sec. 301.6330-1(e)(1), Proced. & Admin. Regs. (“Taxpayers

will be expected to provide all relevant information requested by

Appeals, including financial statements, for its consideration of

the facts and issues involved in the hearing.”); Giamelli v.

Commissioner, 129 T.C. 107, 111-112 (2007) (“Internal Revenue

Service guidelines require a taxpayer to be current with filing

and payment requirements to qualify for an installment

agreement.”).    Session also requested documents relevant to the

calculation of Lee’s tax liabilities, including those that would

substantiate deductions.    Lee promised he would bring all of the

requested documents with him to the face-to-face meeting.

     Lee and Session finally arranged to meet in person on May

22, 2009.   When Lee arrived at the meeting, he found that Session
                                   - 7 -

was accompanied by another IRS employee that Session introduced

as a “compliance officer”.7      Lee told Session that he would not

meet with the compliance officer.       They argued about this for a

while.       Finally Session asked the compliance officer to leave the

room.       After the compliance officer left, Lee discussed some

administrative errors that he contended the IRS had committed in

the handling of his case.       Lee refused to discuss any other

issues because, he said, he was not satisfied that no

administrative errors had occurred.        Then the meeting concluded.

     On May 28, 2009, the Office of Appeals issued a

determination that was supplemental to the April 28, 2008

determination.       In the supplemental determination the Office of

Appeals stated that the arguments that Lee had presented were

mainly procedural and legal challenges to the liabilities; that

Lee did not present any evidence to challenge the liabilities;

that Lee did not present any acceptable collection alternatives;

and that the levy and lien actions struck the proper balance

between the need for efficient tax collection and Lee’s concern

that the collection actions be no more intrusive than necessary.

The Office of Appeals concluded that the levy and lien actions

were in accordance with legal and procedural requirements.         The


        7
      The “compliance officer” was likely a revenue agent--an IRS
employee who examines tax returns. There is no evidence in the
record that the “compliance officer” who attended the meeting was
the same revenue agent who had conducted the audit of Lee that
had resulted in the statutory notices of deficiency being issued
for 2001, 2002, and 2003.
                                 - 8 -

Office of Appeals did not list any specific requirements that had

been met.   The Office of Appeals stated that Lee’s liabilities

had already been established by statutory notices of deficiency

and that Lee had received these notices.    The levy and lien

actions were sustained in full.

                                OPINION

     The Court generally reviews determinations of the Office of

Appeals for abuse of discretion.     Goza v. Commissioner, 114 T.C.

176, 181-182 (2000).    An abuse of discretion has occurred if the

determination is “arbitrary, capricious, or without sound basis

in fact or law.”     Giamelli v. Commissioner, 129 T.C. 107, 111

(2007).

1.   The Sufficiency of the Hearing on Remand

     Lee argues that his meeting with the IRS Office of Appeals

after the remand failed to qualify as a hearing within the

meaning of section 6330 of the Internal Revenue Code, and that it

also failed to qualify as the “face-to-face” hearing required by

the Tax Court’s remand order.    Lee cites two alleged defects in

the meeting.   First, he argues that Session erred in attempting

to insist that Lee meet with a compliance officer on May 22,

2009.   Second, he argues that Session did not allow him to raise

issues of concern.
                                   - 9 -

     a.     The Temporary Presence of the Compliance Officer

     We first address Lee’s argument that the presence of the

compliance officer prevented him from receiving the hearing

required by the Internal Revenue Code and by the Court’s remand

order.    Section 6330(a)(1) provides that the IRS may not make a

levy on the property of a taxpayer until it notifies the taxpayer

of a right to a “hearing under this section [i.e., section 6330]

before such levy is made”.    If the taxpayer requests the hearing,

the “hearing shall be held by the Internal Revenue Service Office

of Appeals.”    Sec. 6330(b)(1).    Section 6330(b)(3) requires the

hearing to “be conducted by an officer or employee who has had no

prior involvement with respect to the unpaid tax”.     Section

6330(c)(2)(A) requires that the taxpayer be allowed to “raise at

the hearing any relevant issue relating to the unpaid tax or the

proposed levy”.    A similar hearing must be offered after the IRS

files a notice of lien.    Sec. 6320(a)(1); (a)(3)(B); (b)(1);

(b)(3); (c).    Lee contends that the presence of the “compliance

officer” in his meeting with Appeals Officer Session meant that

he did not receive a hearing with the Office of Appeals.     Even

assuming that the presence of the compliance officer prevented

the meeting from qualifying as a hearing “held” and “conducted”

by the Office of Appeals, this disqualification evaporated once

Lee was left alone with Session.
                              - 10 -

     Similarly the presence of the compliance officer at the

meeting did not contravene our remand order of February 2, 2009.

In our order, we directed that “this case be remanded to

respondent’s Office of Appeals for the purpose of conducting a

face-to-face hearing”.   Session met with Lee after the compliance

officer left the room.   Thus Lee had a “face-to-face hearing”

with the Office of Appeals, as we directed.

     b.   Whether Lee Was Allowed To Raise Issues

     We find that Session gave Lee ample opportunity to raise any

issues about the unpaid tax, the proposed levy, and the filing of

the lien notice.   Even before the face-to-face meeting, Session

encouraged Lee to identify the issues that Lee wanted to raise.

Lee refused to describe any issues in written correspondence.     He

stated that he would discuss all the issues he wanted to raise at

the face-to-face meeting.   But at the face-to-face meeting Lee

refused to discuss anything other than administrative errors that

he alleged had occurred in the handling of his case.   Session

then concluded the meeting.   We do not believe Session erred in

his handling of the meeting or the hearing as a whole.     Lee

argues that Session should have verified that no agency errors

had occurred and, once having done that, allowed Lee to raise

issues other than agency errors.   The statute governing

collection-review hearings does not require such a two-stage

procedure.   The statute requires the Office of Appeals to verify
                              - 11 -

that the requirements of applicable law or administrative

procedure have been met “at the hearing”.    Sec. 6330(c)(1).

Similarly, the statute provides that the taxpayer must be given

an opportunity to raise issues “at the hearing”.    Sec.

6330(c)(2)(A).   But the statute does not require that

verification precede the opportunity for the taxpayer to raise

issues.   Because Lee raised no additional issues after being

given an opportunity to do so, Session was not wrong in

sustaining the collection actions.     See Hathaway v. Commissioner,

T.C. Memo. 2004-15, slip. op. at 8 (taxpayer failed to raise

issues regarding tax liability).

2.   The Determination With Respect to the Required Verifications

     During a collection-review hearing, the Office of Appeals

must obtain verification from the IRS that the requirements of

any applicable law or administrative procedure have been met.

See sec. 6330(c)(1).   In both its initial notice of determination

and its supplemental notice of determination on remand, the

Office of Appeals concluded that the requirements of applicable

law and administrative procedure had been met.8    In his petition,


     8
      In its motion to remand, the IRS stated that the
administrative record was insufficient to establish that Lee
should have been denied an opportunity to contest his tax
liabilities. We do not take this as an admission that the
administrative record did not establish that Lee had received a
notice of deficiency. See sec. 6330(c)(2)(B) (generally only
taxpayers who do not receive notices of deficiency may raise the
issue of tax liability at a collection-review hearing). Even if
the administrative record did not show that Lee had received a
                                                   (continued...)
                               - 12 -

Lee did not identify any errors allegedly made by the Office of

Appeals in verifying that applicable legal and procedural

requirements had been met.    He has therefore waived any challenge

based on such errors.   See Tax Court Rule of Practice and

Procedure 331(b)(4).    And although he raised agency errors with

the Office of Appeals during his hearing on remand, his posttrial

briefs did not allege any particular errors made by the Office of

Appeals in obtaining verification from the IRS that the

requirements of any applicable law or administrative procedure

had been met.   See sec. 6330(c)(1).     We limit our review of the

determinations of the Office of Appeals to those errors the

taxpayer identified in this Court.      We therefore find that Lee

has waived any verification-related challenge he may have to the

supplemental determination of the Office of Appeals.      See Med.

Practice Solutions, LLC v. Commissioner, T.C. Memo. 2010-98,

slip. op. at 23 (taxpayer failed to renew argument that Office of

Appeals erred in failing to enter into installment agreement).

3.   The Determination With Respect to Lee’s Underlying Tax
     Liabilities

     At collection-review hearings, the taxpayer is allowed to

challenge the amount and existence of the underlying tax

liability, but only if the taxpayer “did not receive any


     8
      (...continued)
notice or notices of deficiency, it still could have shown that
notices of deficiency had been issued. Thus, the IRS’s motion to
remand does not signify that the Office of Appeals failed to
verify that notices of deficiency had been issued.
                               - 13 -

statutory notice of deficiency for such tax liability or did not

otherwise have an opportunity to dispute such tax liability.”

Sec. 6330(c)(2)(B).   In its determination the Office of Appeals

must consider the underlying tax liability if the taxpayer

properly challenged it.   Sec. 6330(c)(3)(B).   Even though Lee

received the notices of deficiency, and even though section

6330(c)(2)(B) precludes a taxpayer who has received a notice of

deficiency from challenging the amount of tax liability at a

collection-review hearing at the Office of Appeals, the IRS moved

to remand the case to the Office of Appeals to permit Lee to

challenge his underlying tax liabilities.    In the hearing

conducted after the remand, Lee did not present evidence or

argument on why he was not liable for income taxes, additions to

tax, or penalties.    He therefore did not properly raise the issue

of tax liability at the hearing on remand.    Section 301.6330-

1(f)(2), A-F3, Proced. & Admin. Regs., provides:

     In seeking Tax Court review of a Notice of
     Determination, the taxpayer can only ask the court to
     consider an issue, including a challenge to the
     underlying tax liability, that was properly raised in
     the taxpayer’s CDP hearing. An issue is not properly
     raised if the taxpayer fails to request consideration
     of the issue by Appeals, or if consideration is
     requested but the taxpayer fails to present to Appeals
     any evidence with respect to that issue after being
     given a reasonable opportunity to present such
     evidence.

We are barred from reaching the issue of tax liability.9


     9
      We need not reach the IRS’s additional argument that
                                                   (continued...)
                             - 14 -

     All arguments not addressed here are redundant, irrelevant,

or meritless.

     To reflect the foregoing,


                                        Decision will be entered

                                   for respondent.




     9
      (...continued)
because Lee had received the notices of deficiency he was barred
from challenging the tax liabilities.
