                        T.C. Memo. 2009-127



                       UNITED STATES TAX COURT



         HASSEL FAMILY CHIROPRACTIC, DC, PC, Petitioner v.
            COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 3768-08L.              Filed June 3, 2009.



     Vincent Hassel (an officer), for petitioner.

     Lisa Kathryn Hunter, for respondent.



                         MEMORANDUM OPINION


     CHIECHI, Judge:    This case is before the Court on respon-

dent’s motion for summary judgment (respondent’s motion).    We

shall grant respondent’s motion.1



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

                             Background

     The record establishes and/or the parties do not dispute the

following.

     Petitioner’s address shown in the petition in this case was

in Iowa.

     Petitioner filed Form 941, Employer’s Quarterly Federal Tax

Return, for each of the quarters ended March 31, June 30, Septem-

ber 30, and December 31, 2002, and March 31, June 30, September

30, and December 31, 2003.   (We shall refer collectively to the

respective Forms 941 that petitioner filed for the quarters ended

March 31, June 30, September 30, and December 31, 2002, and March

31, June 30, September 30, and December 31, 2003, as petitioner’s

Forms 941.)

     Petitioner filed Form 945, Annual Return of Withheld Federal

Income Tax, for each of its taxable years 2002 and 2003.   (We

shall refer collectively to the respective Forms 945 that peti-

tioner filed for its taxable years 2002 and 2003 as petitioner’s

Forms 945.)

     Respondent conducted an examination of petitioner’s Forms

941 and petitioner’s Forms 945.   On August 22, 2006, respondent

sent petitioner a so-called 30-day letter (August 22, 2006 30-day

letter) in which respondent notified petitioner that respondent

was proposing adjustments to (1) the Federal taxes that peti-

tioner showed in each of petitioner’s Forms 941 (petitioner’s
                                 - 3 -

Form 941 taxes) and (2) the Federal tax that petitioner showed in

each of petitioner’s Forms 945 (petitioner’s Form 945 tax).       The

August 22, 2006 30-day letter stated in pertinent part:       “Please

tell us whether you agree or disagree with the proposed changes

by * * * [September 21, 2006].    This letter (known as a 30-day

letter) notifies you of your rights to appeal the proposed

changes within 30 days.”

     Respondent attached to the August 22, 2006 30-day letter

Form 4668, Employment Tax Examination Changes Report (Form 4668).

In that form, respondent proposed for the quarters indicated the

following increases in petitioner’s Form 941 taxes:

          Quarter Ended                  Increase in Form 941 Taxes
              3/31/02                            $20,602.52
              6/30/02                             19,563.79
              9/30/02                             24,755.50
             12/31/02                             22,322.80
              3/31/03                             27,869.57
              6/30/03                             17,773.67
              9/30/03                             31,076.95
             12/31/03                             28,071.19

In Form 4668, respondent also proposed an increase in peti-

tioner’s Form 945 tax of (1) $1,120.50 for petitioner’s taxable

year 2002 and (2) $1,305.36 for petitioner’s taxable year 2003.

     Petitioner timely submitted to respondent’s Appeals Office

(Appeals Office) a written protest (petitioner’s protest) with

respect to the proposed adjustments in the August 22, 2006 30-day

letter.   In that protest, petitioner set forth the reasons for
                                 - 4 -

its disagreement with those proposed adjustments and requested a

conference with the Appeals Office.

     By letter dated January 17, 2007, an Appeals officer with

the Appeals Office who was assigned petitioner’s protest (first

Appeals officer) notified petitioner that a conference with the

Appeals Office had been scheduled for 9 a.m. on January 26, 2007.

At the request of petitioner, the first Appeals officer resched-

uled that conference to February 26, 2007.

     On February 26, 2007, the first Appeals officer held a

conference (February 26, 2007 conference) with respect to the

proposed adjustments in the August 22, 2006 30-day letter.

     With respect to petitioner’s Form 941 taxes for each of the

quarters ended March 31, June 30, September 30, and December 31,

2002, and March 31, September 30, and December 31, 2003, the

first Appeals officer determined that petitioner is liable for an

increase in petitioner’s Form 941 taxes in an amount that was

less than the increase proposed for each of those quarters in the

August 22, 2006 30-day letter.    With respect to the quarter ended

June 30, 2003, the first Appeals officer determined that peti-

tioner is liable for an increase in petitioner’s Form 941 taxes

in an amount that was greater than the increase proposed for that

quarter in the August 22, 2006 30-day letter.   The first Appeals

officer determined that petitioner is liable for the quarters
                               - 5 -

indicated for the following increases in petitioner’s Form 941

taxes:

          Quarter Ended                Increase in Form 941 Taxes
              3/31/02                          $18,702.29
              6/30/02                           18,702.29
              9/30/02                           18,702.29
             12/31/02                           18,702.29
              3/31/03                           27,455.58
              6/30/03                           27,455.58
              9/30/03                           27,455.58
             12/31/03                           27,455.58

     On a date not disclosed by the record after February 26,

2007, the first Appeals officer sent petitioner a letter that

pertained to:   “Tax Period(s) Ended:    03/2002 06/2002 09/2002

12/2002 03/2003 06/2003 09/2003 12/2003”.2    That letter stated in

pertinent part:   “We are sorry that we couldn’t reach a satisfac-

tory agreement with you about the proposed additional employment

taxes.   We are assessing the additional employment taxes in

full.”

     On June 25, 2007, respondent assessed the following in-

creases in petitioner’s Form 941 taxes and interest as provided

by law for the quarters ended March 31, June 30, and September




     2
      The record does not disclose whether the references in the
first Appeals officer’s letter to the tax periods ended “12/2002”
and “12/2003” pertain to (1) the quarters ended Dec. 31, 2002,
and Dec. 31, 2003, (2) petitioner’s taxable years 2002 and 2003,
or (3) both.
                                - 6 -

30, 2002, and March 31, June 30, September 30, and December 31,

2003:3

 Quarter Ended      Increase in Form 941 Taxes        Interest
     3/31/02                $18,702.29               $6,705.21
     6/30/02                 18,702.29                6,323.87
     9/30/02                 18,702.29                5,948.29
     3/31/03                 27,455.58                7,787.18
     6/30/03                 27,455.58                7,345.82
     9/30/03                 27,455.58                6,939.20
    12/31/03                 27,455.58                6,594.53

     On June 25, 2007, respondent issued to petitioner a separate

notice of balance due regarding any unpaid assessed amounts with

respect to petitioner’s Form 941 taxes for each of the quarters

ended March 31, June 30, and September 30, 2002, and March 31,

June 30, September 30, and December 31, 2003.

     Petitioner’s authorized representative, Mark Eldridge (Mr.

Eldridge), sent respondent a letter dated July 3, 2007 (July 3,

2007 letter).    That letter stated in pertinent part:

     We do not understand why we got the enclosed 941 and
     940 bills for 2002 and 2003.[4] These started as an
     employment tax audit by Paul Horn out of Des Moines,
     Iowa and then went to Janna Renner out of Kansas City,
     Missouri. We disagreed with her findings, so the audit
     went to * * * [the Appeals officer] out of Milwaukee,


     3
      The record does not disclose whether respondent assessed an
increase in petitioner’s Form 941 taxes and interest as provided
by law for the quarter ended Dec. 31, 2002. See infra note 5.
     4
      The record does not explain why Mr. Eldridge referred in
the July 3, 2007 letter to Form 940, Employer’s Annual Federal
Unemployment (FUTA) Tax Return, for each of petitioner’s taxable
years 2002 and 2003. In any event, that form is not involved in
this case.
                               - 7 -

     Wisconsin. In a telephone conference the first part of
     Feb. 2007, * * * [the Appeals officer] said we had 30
     days to agree to the tax and then the penalty and
     interest of $60,000 would be waived. If we didn’t
     agree, the case would then go to tax court. We called
     * * * [the Appeals officer] and said we did not want to
     settle and asked if he was going to send us something
     in writing so we could reject the offer. We heard
     nothing, until the enclosed bills came. We want to
     appeal the employment audit, but have not been given
     the chance. Therefore, we strongly disagree with the
     enclosed 940 and 941 bills.

     In response to the July 3, 2007 letter, the first Appeals

officer sent to Mr. Eldridge a letter dated July 11, 2007 (July

11, 2007 letter).   That letter stated in pertinent part:

          In response to your letter dated July 3, 2007
     regarding your client Hassel Family Chiropractic em-
     ployment tax assessments, you had your Appeals Confer-
     ence with me in February of 2007 regarding this matter.
     Your client decided he did not want to agree to the
     additional employment taxes and wanted to proceed to
     Court to contest the additional taxes proposed.

          At that time you wanted to proceed to the United
     States Tax Court. Our District Counsel determined that
     the issue in your client’s case was not under the
     jurisdiction of the Tax Court and that you would have
     to proceed to the Court of Claims if you wanted to
     contest the taxes in Court. That is why the taxes were
     directly assessed against your client.

          Your course of action would be to file a claim for
     refund. When that claim is denied you then can peti-
     tion the Court of Claims for their consideration. My
     understanding of how the procedure works in order to
     petition the Court of Claims is that your client needs
     to pay the tax for one employee for one quarter and
     then file the claim for refund in order to start the
     Court process. I would suggest your client consult
     with an attorney in order to follow the correct proce-
     dures in order to go to Court on this issue.
                               - 8 -

     On July 19, 2007, respondent assessed the following in-

creases in petitioner’s Form 945 tax and interest as provided by

law for petitioner’s taxable years 2002 and 2003:

     Year         Increase in Form 945 Tax          Interest
     2002              $1,120.50                    $343.12
     2003               1,305.36                     322.07

     On July 19, 2007, respondent issued to petitioner a separate

notice of balance due regarding any unpaid assessed amounts with

respect to petitioner’s Form 945 tax for each of petitioner’s

taxable years 2002 and 2003.

     By letter dated August 7, 2007 (August 7, 2007 letter), Mr.

Eldridge informed respondent that petitioner was making a payment

of $11,486.84 “for one worker Jaci Sterk for employment tax for

one period.”   Mr. Eldridge enclosed with that letter petitioner’s

check in that amount that was payable to the United States

Treasurer.   Respondent applied that payment to petitioner’s

account with respect to the quarter ended March 31, 2002.

     In the August 7, 2007 letter, Mr. Eldridge also informed

respondent that pursuant to the first Appeals officer’s July 11,

2007 letter petitioner was requesting a refund.   On August 7,

2007, petitioner submitted to respondent Form 843, Claim for

Refund and Request for Abatement (petitioner’s refund claim),

with respect to petitioner’s Form 941 taxes for the “tax period

From 1/1/02 to 12/31/02”.   In that form, petitioner requested

that respondent issue to petitioner a refund of $11,486.84.
                               - 9 -

     On October 1, 2007, respondent issued to petitioner a final

notice of intent to levy and notice of your right to a hearing

(notice of intent to levy) regarding any unpaid assessed amounts

with respect to petitioner’s Form 941 taxes for each of the

quarters ended March 31, June 30, and September 30, 2002, and

March 31, June 30, September 30, and December 31, 2003.5

     On October 19, 2007, petitioner timely submitted to respon-

dent petitioner’s Form 12153 with respect to the notice of intent

to levy.   In that form, petitioner indicated its disagreement

with the notice of intent to levy and requested a hearing with

the Appeals Office.   In petitioner’s Form 12153, petitioner

indicated that its disagreement with the notice of intent to levy

pertained only to petitioner’s Form 941 taxes for each of the



     5
      The notice of intent to levy is not included as part of the
record in this case. Respondent does not contend that that
notice pertained to petitioner’s Form 941 taxes for the quarter
ended Dec. 31, 2002, and petitioner’s Form 945 taxes for its
taxable years 2002 and 2003. Indeed, with respect to peti-
tioner’s Form 941 taxes for the quarter ended Dec. 31, 2002,
respondent acknowledges that the notice of intent to levy did not
pertain to that quarter and that “Because the quarter was not
included in the Final Notice, the petitioner still has its CDP
rights with respect to this quarter.” Moreover, the notice of
determination concerning collection action(s) under sec. 6320
and/or 6330 (notice of determination) upon which this case is
based stated, and petitioner does not dispute, that as of the
date on which petitioner submitted to respondent Form 12153,
Request for a Collection Due Process or Equivalent Hearing
(petitioner’s Form 12153), respondent had not issued to peti-
tioner a notice of intent to levy with respect to petitioner’s
Form 941 taxes for the quarter ended Dec. 31, 2002, and peti-
tioner’s Form 945 tax for each of its taxable years 2002 and
2003.
                               - 10 -

quarters ended March 31, June 30, and September 30, 2002, and

March 31, June 30, September 30, and December 31, 2003.6   In

petitioner’s Form 12153, petitioner stated in pertinent part:

“We believe there should be no levy as we are awaiting response

on our claim per IRS papers.   We believe the levy would not be

proper as we might not owe anything.”

     By letter dated October 22, 2007 (October 22, 2007 letter),

respondent acknowledged receipt of petitioner’s Form 12153.     That

letter stated in pertinent part:

     We are forwarding your case to the Fresno, CA Appeals
     Office; they will be in contact with you within 60 days
     from the day of this letter. Please take all documen-
     tation that is pertinent to your case with you to your
     hearing.

     The total amount you owe [with respect to petitioner’s
     Form 941 taxes] on the tax years shown above [the
     quarters ended March 31, 2002, June 30, 2002, September
     30, 2002, March 31, 2003, June 30, 2003, September 30,
     2003, and December 31, 2003] is $241,841.79, which
     includes penalty and interest figured to November 21,
     2007. The total amount you owe on Form 945 tax year
     Dec. 2002 and Dec. 2003 is $3,267.34 and for Form 1120
     tax year Dec. 2005 is $505.29, which includes penalty




     6
      Petitioner attached to petitioner’s Form 12153, inter alia,
the notice of balance due that respondent issued to it with
respect to petitioner’s Form 945 tax for each of its taxable
years 2002 and 2003. The record does not explain why petitioner
attached those notices to petitioner’s Form 12153 when petitioner
indicated in that form that its disagreement with the notice of
intent to levy pertained only to petitioner’s Form 941 taxes with
respect to each of the quarters ended Mar. 31, June 30, and Sept.
30, 2002, and Mar. 31, June 30, Sept. 30, and Dec. 31, 2003. See
supra note 5.
                              - 11 -

     and interest figured to December 15, 2007.[7] Penalties
     and interest will continue to accrue until the amount
     you owe is paid in full.

     In response to respondent’s October 22, 2007 letter, Mr.

Eldridge sent respondent a letter dated October 26, 2007.   That

letter stated in pertinent part:

     We are in receipt of your letter dated October 22, 2007
     * * *. At the top, you show that our Request for a
     Collection Due Process Hearing is regarding Form 941,
     Tax Period: Mar 2002, June 2002, Sept 2002, Mar 2003,
     June 2003, Sept 2003, and Dec 2003.

     Form 941, Tax Period Dec 2002 should also be included
     in this hearing. In addition, Form 945, Tax Year: Dec
     2002 and Dec 2003 should also be included in this
     hearing. All of this information was included in all
     the correspondence throughout this process.

     We need these Forms and Tax Periods added to the hear-
     ing, as they should have been included from the begin-
     ning. Please let us know how we add these, if they are
     not already included. * * *

     The Appeals officer who had been assigned petitioner’s Form

12153 (second Appeals officer) sent to another authorized repre-

sentative of petitioner, Paul Mixdorf (Mr. Mixdorf), a letter

dated December 7, 2007.   That letter stated in pertinent part:

     I also understand that you filed a claim for refund so
     you can proceed to District Court on the matter of the


     7
      As discussed above, petitioner indicated in petitioner’s
Form 12153 that its disagreement with the notice of intent to
levy pertained only to petitioner’s Form 941 taxes with respect
to each of the quarters ended Mar. 31, June 30, and Sept. 30,
2002, and Mar. 31, June 30, Sept. 30, and Dec. 31, 2003. The
record does not explain why respondent referred in the October
22, 2007 letter to petitioner’s Form 945 tax for each of its
taxable years 2002 and 2003 and petitioner’s Federal income tax
for its taxable year 2005. See supra note 6.
                              - 12 -

     underlying liability. Please understand that if you
     file suit for refund the collection action will cease
     while you are in litigation. Please also understand
     that you cannot argue the underlying liability in
     Appeals since you previously had an appeal.

     On a date not disclosed by the record in December 2007, the

second Appeals officer held a telephonic conference (December

2007 telephonic conference) with Mr. Mixdorf.   During that

telephonic conference, the second Appeals officer explained to

Mr. Mixdorf that petitioner was not entitled to challenge its

liabilities with respect to petitioner’s Form 941 taxes for each

of the quarters ended March 31, June 30, and September 30, 2002,

and March 31, June 30, September 30, and December 31, 2003,

because it already had had the opportunity to challenge those

liabilities during the February 26, 2007 conference with the

first Appeals officer.

     During the December 2007 telephonic conference, Mr. Mixdorf

informed the second Appeals officer (1) that petitioner intended

to file a suit for refund in a United States District Court and

(2) that, before filing such a lawsuit, petitioner was waiting

for respondent to disallow petitioner’s refund claim or six

months to pass from the date on which petitioner had filed that

claim.   The second Appeals officer agreed to suspend until March

31, 2008, any levy action regarding petitioner’s liabilities with

respect to petitioner’s Form 941 taxes for each of the quarters

ended March 31, June 30, and September 30, 2002, and March 31,
                             - 13 -

June 30, September 30, and December 31, 2003, in order to allow

petitioner sufficient time to file a suit for refund.

     On January 10, 2008, the Appeals Office issued to petitioner

a notice of determination that, like the notice of intent to

levy,8 pertained only to petitioner’s Form 941 taxes for each of

the quarters ended March 31, June 30, and September 30, 2002, and

March 31, June 30, September 30, and December 31, 2003.9   That

notice stated in pertinent part:

     Summary of Determination
     You requested a hearing in Appeals regarding a notice
     of intent to levy. You questioned the underlying
     liability. You paid a portion of the liability and
     filed a claim for refund before the Collection Due
     Process notice so you could file suit in District
     Court.

     We held a telephone conference with your representa-
     tive. We explained that you cannot argue with the
     underlying liability after you were given such rights
     in a prior appeal with the IRS Appeals office.

     We determined that levy action should be suspended
     until March 31, 2008. We recognize that no levy action
     can be taken once you begin litigation regarding the
     underlying liability. This should give adequate time
     to file suit in District Court regarding your claim for
     refund and the related employment tax liability. This
     also approximates the waiting period for filing suit if
     the Service has not disallowed your claim in writing.

     We recommend collection be suspended under this collec-
     tion due process case until after March 31, 2008. Any


     8
      See supra note 5.
     9
      The notice of determination indicated that it pertained to:
“Tax Type/Form Number: Employment Tax/Form 941 * * * Tax Pe-
riod(s) Ended: 03/2002 06/2002 09/2002 03/2003 06/2003 09/2003
12/2003”.
                                  - 14 -

     further suspension will depend on your filing suit in
     District Court or filing a petition with the Tax Court.

     The notice of determination included an attachment that

stated in pertinent part:

                                     TYPE OF
     TAXPAYER                          TAX         PERIODS
     Hassel Family Chiropractic   Employment Tax   200203 through 200209,
      DC PC                                        200303 through 200312

     Notice of intent to levy was sent to the taxpayer on
     10-01-2007. The taxpayer timely requested a hearing
     and TC 520 cc 77 was input on the accounts to suspend
     collection and the collection statute. The 200212
     period for 941’s and the 200212 and 200312 period for
     form 945 annual return for withholding were requested
     to be added to the CDP case but no notice has been
     issued on those accounts by the time of the CDP hearing
     request.

                      SUMMARY OF THE ISSUES
     The taxpayer argued with the levy action and their
     underlying liability as they are waiting for IRS action
     on their claim.

     A hearing was held and the taxpayer wants to pursue
     refund litigation in court to continue their argument
     over the assessed liabilities. They are still waiting
     for the Service to disallow their claim, or six months,
     so they can file suit for a refund of their payment.

     We agreed that Appeals should issue a notice of deter-
     mination, recommending that levy action be suspended
     until March 31, 2008, to allow sufficient time to file
     their refund litigation suit. This suspension period
     approximates the time period the Service should act on
     their claim before they can file suit for refund with-
     out a claim disallowance notice.

                          RECOMMENDATION
     Levy action should be suspended until March 31, 2008.
     If the taxpayer files for a refund suit in court,
     collection will be suspended while in that litigation.
     If the taxpayer petitions the Tax Court in regard to
     this CDP case, collection action will be suspended
     until it is resolved in Tax Court.
                        - 15 -

                    BRIEF BACKGROUND
Examination determinations were made in October of 2006
and they were timely appealed. A prior Appeals Officer
and office sustained the examination determination and
the assessments were made on the above accounts in June
of 2007. These assessments constituted notice and
demand. The accounts were not paid in full and no
arrangements were made for payment so notice of intent
to levy was sent to the taxpayer.

The prior Appeals Officer advised how to make a partial
payment and file a claim so the taxpayer could file for
refund litigation. The taxpayer made the partial
payment [on] August 13, 2007 according to transcripts
and filed a claim for refund on September 14, 2007
according to the copy in the file.

Normal procedures under claims would be for the tax-
payer to wait six months before filing suit in court
for refund, to give adequate time for the Service to
issue a claim disallowance notice. Appeals is not sure
when the claim was received by the Service as we don’t
have the original information in the file.

In the telephone conference there were no disagreements
over the collection action in this case, outside of the
argument that no levy action should be taken because of
the claim action.

This Appeals Officer has not had other dealings with
the taxpayer outside of this CDP case.

                 DISCUSSION AND ANALYSIS
      APPLICABLE LAW AND ADMINISTRATIVE PROCEDURES
Section 6331(a) provides that if any person liable to
pay any tax neglects or refuses to pay such tax within
10 days after notice and demand for payment, the Secre-
tary is authorized to collection [sic] such tax by levy
upon property belonging to the taxpayer. Section
6331(d) provides that the Secretary is obligated to
provide the taxpayer with notice, including notice of
the administrative appeals available to the taxpayer,
before proceeding with collection by levy on the tax-
payer’s property.

Section 6330 generally provides that the Commissioner
cannot proceed with the collection of taxes by way of a
levy on a taxpayer’s property until the taxpayer has
                             - 16 -

     been given notice of, and the opportunity for, an
     administrative review of the matter in the form of an
     Appeals Office hearing, and, if dissatisfied, given an
     opportunity for judicial review of the administrative
     determination. * * *

     Section 6330(c) prescribes the matters that may be
     raised by a taxpayer at an Appeals hearing. In sum-
     mary, section 6330(c) provides that a taxpayer may
     raise collection issues such as spousal defenses and
     the appropriateness of the Commissioner’s intended
     collection action.

     In review of the file and transcripts, it appears that
     all manual and legal procedures have been properly
     followed. This Appeals Officer hasn’t had prior in-
     volvement with the taxpayer.

     The taxpayer argues with the underlying liability but
     understands that they cannot carry such argument to
     Appeals after being given a prior appeal. The taxpayer
     merely wants the Service to suspend collection or levy
     action while they pursue refund litigation regarding
     the underlying liability. Appeals finds that agreeable
     and determined a period of time in which levy action
     should be suspended until the taxpayer starts refund
     litigation, which will continue to suspend collection
     until resolved in court.

            RELEVANT ISSUES PRESENTED BY THE TAXPAYER
     The relevant issues were addressed and noted above.

         BALANCING EFFICIENT COLLECTION AND INTRUSIVENESS
     Levy action partially balances an efficient method of
     collection with the taxpayer’s legitimate concerns that
     it be no more intrusive than necessary.

     Levy action should be suspended until March 31, 2008,
     to give adequate time for the taxpayer to file for
     refund litigation. Collection enforcement will con-
     tinue to suspend if the taxpayer files suit for refund
     litigation[10] or petitions Tax Court under this CDP
     case.


     10
      The record does not disclose whether petitioner commenced
refund litigation with respect to petitioner’s refund claim after
respondent issued the notice of determination.
                              - 17 -

                            Discussion

     The Court may grant summary judgment where there is no

genuine issue of 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), affd. 17 F.3d 965 (7th Cir. 1994).    We

conclude that there are no genuine issues of material fact

regarding the questions raised in respondent’s motion.

     In the petition and in petitioner’s response to respondent’s

motion, petitioner advances arguments in support of its position

that it is entitled to challenge the existence and/or the amounts

of its respective underlying liabilities with respect to

(1) petitioner’s Form 941 taxes for each of the quarters ended

March 31, June 30, September 30, and December 30, 2002, and March

31, June 30, September 30, and December 31, 2003, and

(2) petitioner’s Form 945 taxes for each of its taxable years

2002 and 2003.

     We turn first to petitioner’s arguments regarding peti-

tioner’s Form 941 taxes for the quarter ended December 31, 2002,

and petitioner’s Form 945 tax for each of its taxable years 2002

and 2003.   The record establishes, and petitioner does not

dispute, that the notice of determination pertained only to

petitioner’s Form 941 taxes for each of the quarters ended March

31, June 30, and September 30, 2002, and March 31, June 30,

September 30, and December 31, 2003, and not to petitioner’s Form
                                 - 18 -

941 taxes for the quarter ended December 31, 2002, and peti-

tioner’s Form 945 tax for each of its taxable years 2002 and

2003.11     We hold that we do not have jurisdiction under section

6330(d)(1) over petitioner’s Form 941 taxes for the quarter ended

December 31, 2002, and petitioner’s Form 945 tax for each of

petitioner’s taxable years 2002 and 2003.

     We turn now to petitioner’s arguments regarding petitioner’s

Form 941 taxes for each of the quarters ended March 31, June 30,

and September 30, 2002, and March 31, June 30, September 30, and

December 31, 2003.     A taxpayer may raise challenges to the

existence or the amount of the taxpayer’s underlying tax liabil-

ity if the taxpayer did not receive a notice of deficiency or did

not otherwise have an opportunity to dispute the tax liability.

Sec. 6330(c)(2)(B).     As pertinent here, section 301.6330-1(e)(3),

Q&A-E2, Proced. & Admin. Regs., provides:

          Q-E2. When is a taxpayer entitled to challenge
     the existence or amount of the tax liability specified
     in the CDP Notice?

          A-E2. A taxpayer is entitled to challenge the
     existence or amount of the underlying liability for any
     tax period specified on the CDP Notice if the taxpayer
     did not receive a statutory notice of deficiency for
     such liability or did not otherwise have an opportunity
     to dispute such liability. * * * An opportunity to
     dispute the underlying liability includes a prior
     opportunity for a conference with Appeals that was
     offered either before or after the assessment of the
     liability. An opportunity for a conference with Ap-
     peals prior to the assessment of a tax subject to


     11
          See supra note 5.
                                - 19 -

     deficiency procedures is not a prior opportunity for
     this purpose.[12]

See Lewis v. Commissioner, 128 T.C. 48 (2007) (upholding the

validity of section 301.6330-1(e)(3), Q&A-E2, Proced. & Admin.

Regs.).

     As pertinent here, the August 22, 2006 30-day letter noti-

fied petitioner that respondent was proposing adjustments to

petitioner’s Form 941 taxes for each of the quarters ended March

31, June 30, and September 30, 2002, and March 31, June 30,

September 30, and December 31, 2003.     Petitioner timely submitted

to respondent a protest with respect to those adjustments and

requested a conference with the Appeals Office.    On February 26,

2007, the Appeals Office held a conference with respect to

respondent’s proposed adjustments to petitioner’s Form 941 taxes

for each of the quarters ended March 31, June 30, and September

30, 2002, and March 31, June 30, September 30, and December 31,

2003.     On the record before us, we find that petitioner may not

challenge the existence or the amounts of its respective underly-

ing liabilities with respect to those taxes for each of those

quarters.

     Where, as is the case here, the validity of the underlying

tax liability is not properly placed at issue, the Court will


     12
      Petitioner does not dispute that respondent’s proposed
adjustments to petitioner’s Form 941 taxes for each of the
quarters at issue are not subject to the deficiency procedures
under secs. 6212 and 6213.
                              - 20 -

review the determination of the Commissioner of Internal Revenue

for abuse of discretion.   Sego v. Commissioner, 114 T.C. 604, 610

(2000); Goza v. Commissioner, 114 T.C. 176, 181-182 (2000).

     Based upon our examination of the entire record before us,

we find that respondent did not abuse respondent’s discretion in

making the determinations in the notice of determination with

respect to petitioner’s Form 941 taxes for each of the quarters

ended March 31, June 30, and September 30, 2002, and March 31,

June 30, September 30, and December 31, 2003.

     We have considered all of the contentions and arguments of

the parties that are not discussed herein, and we find them to be

without merit, irrelevant, and/or moot.

     On the record before us, we shall grant respondent’s motion.

     To reflect the foregoing,


                                      An order granting respondent’s

                                 motion and decision for respondent

                                 will be entered.
