                  T.C. Summary Opinion 2006-133



                      UNITED STATES TAX COURT



PATRICIA AGNES WILLIAMS, DEBBIE WALES, NEXT FRIEND, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 19402-03S.              Filed August 28, 2006.


     Patricia Agnes Williams, Debbie Wales, Next Friend, pro se.

     Susan Greene, for respondent.



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

the provisions of section 7463 of the Internal Revenue Code in

effect at the time the petition was filed.    Unless otherwise

indicated, subsequent section references are to the Internal

Revenue Code of 1986, as amended.    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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     The petition in this case was filed in response to a Notice

of Determination Concerning Collection Action(s) Under Section

6320 (Notice of Determination).    Pursuant to sections 6320(c) and

6330(d), petitioner seeks review of respondent’s filing of a

Notice of Federal tax lien with respect to her income tax

liability for 1990.   The issue for decision is whether

respondent’s determination to proceed with collection action was

an abuse of discretion.

                             Background

     The stipulation of facts and the exhibits received into

evidence are incorporated herein by reference.    At the time the

petition in this case was filed, petitioner resided in Groves,

Texas.

     On September 6, 1994, the Internal Revenue Service (IRS)

received from petitioner and Ted Williams, her spouse, a Form

1040, U.S. Individual Income Tax Return, for 1990.    Petitioner

and her spouse claimed deductions of $11,217 for various expenses

on Schedule C, Profit or Loss From Business, but reported gross

receipts or sales of zero.   The return claimed a refund of

$1,926.

     The IRS disallowed the claim of petitioner and her spouse as

untimely, and later advised them that their return for 1990 had

been selected for examination.    The case of petitioner and her

spouse was transferred to Austin, Texas, at petitioner’s request.
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Soon after the case was transferred, the IRS requested that

petitioner and her spouse consent to extending the period of

limitations for assessment of the tax due on the 1990 tax return.

When they refused to consent to the extension, the IRS disallowed

their claimed Schedule C expenses due to lack of substantiation.

The disallowance of the Schedule C expenses, which also led to

the disallowance of a small amount of itemized deductions on

Schedule A, resulted in a deficiency of $3,204.

     Respondent prepared a statutory notice of deficiency dated

July 22, 1997, for issuance to petitioner and her spouse for

1990, reflecting a deficiency of $3,204 and additions to tax

under section 6651(a)(1) and (2) and an accuracy-related penalty

under section 6662.   No petition for a redetermination of the

deficiency was filed in this Court, and the IRS assessed the

deficiency, additions, and penalty on December 19, 1997.

     In September of 1999 the IRS sent to petitioner and her

spouse Letter 1058, Final Notice of Intent to Levy and Notice of

Your Right to a Hearing.   The letter notified them that the IRS

intended to levy on their property and rights to property to

collect their unpaid liabilities for 1990, and of their right to

request a hearing with the Appeals Office before execution of the

levy.   Although petitioner received a copy of the notice of

intent to levy and right to a hearing, she did not request a

hearing with Appeals.
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     On December 30, 2002, the IRS sent to petitioner and her

spouse Letter 3172, Notice of Federal Tax Lien Filing and Your

Right to a Hearing Under IRC 6320, for their 1990 Federal income

tax liability.   Petitioner and her spouse, through Debbie Wales,

their authorized representative, timely requested a hearing with

respect to the filing of the notice of Federal tax lien.   In the

request for a hearing, it was alleged that 1991 was audited

before 1990 and was found to be “acceptable”.

     The Appeals officer conducted the collection due process

hearing by telephone and correspondence with petitioner and Ms.

Wales with respect to the notice of lien filing.   Other than the

existence or amount of the underlying liability, petitioner

raised no issues for consideration by the Appeals officer.

Petitioner, however, presented no evidence with respect to the

underlying tax liability.

     The Appeals Office issued the notice of determination in

this case finding the filing of the Notice of Federal Tax lien to

be an appropriate collection method.

                            Discussion

     Section 6320 entitles a taxpayer to notice of his right to

request a hearing with the IRS Office of Appeals after a notice

of lien is filed by the Commissioner in furtherance of the

collection of unpaid Federal taxes.    The taxpayer requesting the

hearing may raise any relevant issue with regard to the
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Commissioner’s intended collection activities, including spousal

defenses, challenges to the appropriateness of the Commissioner’s

intended collection action, and alternative means of collection.

Secs. 6320(b) and (c), 6330(c); see Sego v. Commissioner, 114

T.C. 604, 609 (2000); Goza v. Commissioner, 114 T.C. 176, 180

(2000).

     Where the validity of the tax liability is not properly part

of the appeal, the taxpayer may challenge the determination of

the Appeals officer for abuse of discretion.   Sego v.

Commissioner, supra at 609-610; Goza v. Commissioner, supra at

181-182.

     The taxpayer may raise challenges “to the existence or

amount of the underlying tax liability”, however, only if he “did

not receive any 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).

     At trial, petitioner’s only argument was that she did not

receive the statutory notice of deficiency for the underlying tax

liability and that the IRS could not prove that they had sent it.

Therefore, she argues, the assessment in this case is wrongful.

In making this argument, petitioner attempts to challenge “the

existence or amount of the underlying tax liability”, which is

allowed under the law only if she “did not receive any statutory

notice of deficiency for such tax liability or did not otherwise
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have an opportunity to dispute such tax liability.”   Sec.

6330(c)(2)(B).

     The parties agree that the IRS sent petitioner and her

spouse Letter 1058, Final Notice of Intent to Levy and Notice of

Your Right to a Hearing, that they received a copy of the notice

of intent to levy and right to a hearing, and that they did not

request a hearing with Appeals.

     Petitioner’s failure to request a hearing on the notice of

intent to levy is the deciding factor in this case.   “An

opportunity to dispute a liability includes a prior opportunity

for a conference with Appeals that was offered either before or

after the assessment of the liability.”   Sec. 301.6320-1(e)(3),

Q&A E2, Proced. & Admin. Regs.

     Section 301.6320-1(e)(3), Q&A-E7, Proced. & Admin. Regs.,

further explains that “Where the taxpayer previously received a

CDP Notice under 6330 with respect to the same tax and tax period

and did not request a CDP hearing with respect to that earlier

CDP Notice, the taxpayer already had an opportunity to dispute

the existence or amount of the underlying tax liability.”

     Petitioner could have challenged as improper, due to the

alleged failure of the IRS to mail to her a statutory notice of

deficiency, the assessment for 1990 income taxes at a section

6330 hearing offered in the notice of intent to levy.   Because

petitioner has had an opportunity to dispute the assessment in
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Appeals and, if necessary, to file a petition with the Tax Court

to contest the issue, she is precluded from now attacking the

assessment.    Bell v. Commissioner, 126 T.C. 356 (2006).

     The only issue raised by petitioner addressed the existence

of the underlying tax liability, which issue the Court has

determined she is precluded from raising.   The Court finds,

therefore, that respondent did not abuse his discretion in

determining that the filing of the Notice of Federal Tax Lien was

appropriate.

     Reviewed and adopted as the report of the Small Tax Case

Division.

                                          Decision will be entered

                                     for respondent.
