                  T.C. Summary Opinion 2004-163



                     UNITED STATES TAX COURT



                MARIA NERIS ZELAYA, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 16148-03S.            Filed December 1, 2004.


     Maria Neris Zelaya, pro se.

     Marty J. Dama, for respondent.



     WOLFE, Special Trial Judge:   This case was heard pursuant to

the provisions of sections 6330(d) and 7463 of the Internal

Revenue Code in effect when the petition was filed.   Unless

otherwise indicated, all subsequent section references are to the

Internal Revenue Code in effect at relevant times.    The decision

to be entered is not reviewable by any other court, and this

opinion should not be cited as authority.
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     Some of the facts have been stipulated, and they are so

found.    The stipulation of facts and the attached exhibits are

incorporated by this reference.    When she filed her petition,

petitioner resided in Plano, Texas.

                             Background

     Petitioner filed a Federal income tax return for taxable

year 1998 on September 21, 2001.    The return showed an

overpayment of $3,810, and petitioner requested a refund of that

amount.    On or about October 22, 2001, respondent mailed to

petitioner a refund check for $3,810 dated October 19, 2001

(refund check).

     When petitioner had not received her refund as promptly as

she anticipated, she contacted respondent to inquire about the

status of the refund.    Upon learning that a refund check had been

mailed several weeks earlier, petitioner filed a lost or stolen

check claim and requested that a replacement check be issued.

     On or about February 22, 2002, petitioner’s apartment

manager notified her that mail was being held for her.     It was

her refund check.1   Petitioner called respondent and reported

that she had located her 1998 refund check.    According to



     1
        At trial, petitioner testified that the refund check was
mailed to her correct street address but was delivered to her
apartment manager because the mailing address did not include her
apartment number. It is unclear why the apartment manager waited
nearly 4 months to notify petitioner that she had mail waiting
for her.
                               - 3 -

petitioner, respondent told her that she could cash the refund

check, which she promptly did on February 26, 2002, at a Bank One

branch where petitioner had an account.

     On or about March 11, 2002, respondent mailed to petitioner

a replacement refund check for $3,810 for 1998 (replacement

check).   Shortly thereafter, respondent notified petitioner that

she owed $3,810 plus interest because she had cashed both the

refund check and the replacement check.   Petitioner denied that

she had cashed the replacement check and informed respondent that

she had moved to a new address in Plano, Texas, around February

28, 2002, and never received a second check for 1998.

     An investigation was conducted by the Taxpayer Advocate

Service (TAS).   The TAS recovered a copy of both the refund check

and the replacement check, which was cashed on March 29, 2002, at

the Mineola Community Bank in Mineola, Texas.   Petitioner

compared the endorsement signatures from the refund check and the

replacement check and told investigators that the signature on

the replacement check was not hers.

     Petitioner is not fluent in English, and she is illiterate.

At trial, she was assisted by an interpreter.   Because she does

not read or write, petitioner signs her name by imitating the

characters.2   On the refund check, petitioner signed her name by


     2
        As petitioner’s trial interpreter stated: “* * * she does
not know how to write. So she just has memorized the letters of
                                                   (continued...)
                               - 4 -

printing her middle and last names (Neris Zelaya).   The print is

in block capital letters, except that the “I” in “Neris” is

printed in lower case and dotted.   The “N” in “Neris” is signed

backwards, as it would appear to a reader seeing its reflection

in a mirror.   There is no discernable space between the words

“Neris” and “Zelaya”.   At trial, petitioner testified that she

always signs her name in the manner described above.

     By comparison, the endorsement signature on the replacement

check consisted of petitioner’s full name of “Maria Neris

Zelaya,” printed completely in nondescriptive block capital

letters.   The “N” in “Neris” was not printed backwards, and there

are clear spaces between the first, middle, and last names.

     In a letter to petitioner in July 2003, the TAS concluded

that she endorsed and cashed both the refund check and the

replacement check.   The letter from the TAS was not part of the

administrative record in this case, but its conclusions are

described in the record.   The extent of the TAS investigation

beyond a comparison of the endorsement signatures is unknown.

     On or about April 15, 2002, respondent withheld a $1,462

refund that petitioner claimed on her 2001 return to offset in

part her 1998 liability.   On or about March 3, 2003, respondent

withheld a $2,495.56 refund that petitioner claimed on her 2002



     2
      (...continued)
her name and she cannot write anything else”.
                                - 5 -

return.    Because respondent withheld petitioner’s 2001 and 2002

refunds, petitioner’s 1998 tax liability from the duplicate

refund checks plus interest was reflected in respondent’s records

as paid in full.

     On January 30, 2003, petitioner received a Final

Notice--Notice of Intent to Levy and Your Notice of a Right to a

Hearing.    Petitioner timely filed a Form 12153, Request for a

Collection Due Process Hearing.

     On August 13, 2003, petitioner and her interpreter met with

an officer from respondent’s Appeals Office (section 6330

officer).    On August 20, 2003, respondent issued to petitioner a

Notice of Determination Concerning Collection Actions(s) Under

Section 6320 and/or 6330.    Respondent determined that the

proposed collection action was appropriate but unnecessary since

petitioner’s 1998 tax liability had already been paid in full

through offsets against her refunds for the taxable years 2001

and 2002.    In reaching this determination, respondent’s section

6330 officer wrote, in pertinent part:

     The Taxpayer Advocates Office investigated and made a
     determination after seeing both signatures that Ms.
     Zelaya cash[ed] both sets of checks. They closed their
     investigation in July 2003.

     I looked at the signatures and they are similar. Ms.
     Zelaya prints her name in capital letters. Both sets
     of checks have printed signatures in capital letters.
     Ms. Zelaya stated she does not ever print her first
     name Maria. The second set of checks had Maria
     printed. The 12153 had Maria printed on it.
                                - 6 -

     It is my opinion Ms. Zelaya cashed both sets of checks.

    Advised Ms. Zelaya since refunds for 2001 and 2002 were
    offset she had the right to file 843 claims for
    refunds. Gave her the forms and instructions.


     Petitioner filed a timely petition for judicial review of

respondent’s section 6330 determination on September 22, 2003.

                            Discussion

     Section 6330 entitles a taxpayer to notice and an

opportunity for a hearing before certain lien and levy actions

are taken by the Commissioner in the process of collecting unpaid

Federal taxes.   Upon request, a taxpayer is entitled to a “fair

hearing” conducted by an impartial officer from the Office of

Appeals.   Sec. 6330(b)(1), (3).    At the hearing, a taxpayer may

challenge the existence or amount of the underlying tax liability

only if he or she has not received a statutory notice of

deficiency for the year in issue or otherwise had an opportunity

to dispute the underlying tax liability.     Sec. 6330(c)(2)(B).

     A taxpayer may appeal the Commissioner’s administrative

determination from a section 6330 hearing to this Court, and we

have jurisdiction with respect to such an appeal so long as we

have jurisdiction over the underlying tax liability.     Sec.

6330(d).   If the underlying tax liability is properly at issue,

we review that issue de novo.      Sego v. Commissioner, 114 T.C.

604, 610 (2000); Goza v. Commissioner, 114 T.C. 176, 181 (2000).

If the validity of the underlying tax liability is not at issue,
                                - 7 -

we review the determination for abuse of discretion.    Sego v.

Commissioner, supra at 610.

     In the present case, we have jurisdiction over petitioner’s

appeal because the underlying tax liability relates to Federal

income taxes.    See sec. 6330(d)(1); Landry v. Commissioner, 116

T.C. 60, 62 (2001).   The underlying tax liability is properly at

issue because petitioner did not receive a statutory notice of

deficiency and did not otherwise have an opportunity to challenge

the underlying tax liability prior to her section 6330 hearing.

Accordingly, we review petitioner’s underlying tax liability on a

de novo basis.

     The sole issue is whether petitioner cashed the replacement

refund check issued by respondent for the taxable year 1998.

Respondent’s determination was based on the conclusion that the

endorsement signatures on both the refund check and the

replacement check were made by petitioner.   As described herein,

the endorsement signatures were not identical.   We think the

simple and nondistinctive characteristics of block capital

lettering impair any meaningful comparison of the endorsement

signatures.   We are not convinced by the view of the section 6330

officer that the signatures appear “similar” or the conclusion of

a TAS investigation that was not part of the record.   Moreover,

as described herein, there are clear and discernible differences
                                 - 8 -

in petitioner’s signature on the refund check and the replacement

check’s endorsement signature.

     There is no evidence that the section 6330 officer or the

TAS investigation adequately considered the issue of whether

petitioner cashed the replacement check aside from comparing the

simple and nondistinctive endorsement signatures from the checks.

Petitioner testified that she relocated prior to the issuance of

the replacement check and that the Mineola Community Bank would

not have cashed a U.S. Treasury check for her because she does

not have any type of relationship with that bank.   The section

6330 officer failed to investigate or consider these relevant

matters.3

     At trial, petitioner’s tax preparer, Idayari Pena (Ms.

Pena), testified that she had inquired about the practices of the

Mineola Community Bank, and ascertained that the bank policy is

that its personnel will not cash any check, including a U.S.

Treasury check, for anyone who does not have an account there.

She also learned that bank records indicate that petitioner never

had an account or relationship with that bank.   We found Ms.

Pena’s testimony to be reasonable and uncontradicted.



     3
        When asked at trial whether he had made a determination
that petitioner signed and cashed both the refund check and the
replacement check, the sec. 6330 officer testified: “Yes, the
taxpayer advocate office had made a ruling on it. They’re the
ones that had sent me copies of this and I showed them to the
petitioner. To me, they looked to be the same signature”.
                                 - 9 -

     Petitioner’s account of the situation is plausible, and her

testimony was reasonable.   Petitioner notified respondent when

she did not received her refund check; she notified respondent

again when her apartment manager had located the check; and she

sought respondent’s permission to cash it.       Petitioner was not

expecting to receive a replacement check and did not provide

respondent with her updated address when she moved.       It took

petitioner’s apartment manager nearly 4 months to notify her that

her refund check had arrived, and it is reasonable to believe

that the replacement check might not have reached her once she

moved out of the apartment complex.       At trial, respondent

continued to rely solely upon the conclusion that two very simple

printed signatures were both made by petitioner.       As previously

explained, petitioner provided more detailed and more persuasive

evidence concerning the circumstances in question.       Accordingly,

we hold that petitioner did not cash the replacement check.         Thus

there is an overpayment of $3,810 due petitioner for the taxable

year 1998.

     Reviewed and adopted as the report of the Small Tax Case

Division.

     To reflect the foregoing,

                                         Decision will be entered for

                                 petitioner.
