                        T.C. Memo. 2008-129



                      UNITED STATES TAX COURT



                MICHAEL E. GRAHAM, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 8147-07L.               Filed May 6, 2008.



     Jerry W. Neagle, for petitioner.

     Susan K. Greene, for respondent.



                        MEMORANDUM OPINION


     GOEKE, Judge:   This collection review case is before the

Court on respondent’s motion to dismiss for lack of jurisdiction.

Respondent contends that this Court lacks jurisdiction because

respondent issued no notice of determination to petitioner for

the taxable years 1985, 1986, 1995, 1997, 1998, or 1999 (years in

issue) or with respect to petitioner’s outstanding liabilities
                              - 2 -

for section 66721 trust fund recovery penalties for the tax

periods ending March 30, June 30, or September 30, 2002 (penalty

periods in issue; collectively periods in issue).2   Petitioner

counters that he was improperly denied a collection hearing under

section 6320(b) (collection hearing) and asserts that he is

entitled to a review of respondent’s denial.   Alternatively,

petitioner argues that we should (1) find respondent issued a

valid determination in response to his timely request for a

collection hearing, and (2) deny respondent’s motion to dismiss

for lack of jurisdiction on that ground.

     Because we find that petitioner failed to timely request a

collection hearing after respondent, on or about April 4, 2002,

sent petitioner a section 6320 notice (section 6320 notice) of

Federal tax lien (NFTL) filing under section 6323, we will grant

respondent’s motion as to the unpaid taxes assessed before that

date.

     However, we also find that petitioner timely requested but

was denied a collection hearing in response to a section 6320

notice mailed on or about May 12, 2006, insofar as that section



     1
        All section references are to the Internal Revenue Code,
and all Rule references are to the Tax Court Rules of Practice
and Procedure.
     2
       While the decision letter concerning petitioner’s
equivalent hearing under secs. 6320 and/or 6330 included the year
1996, petitioner did not include 1996 among the years in dispute;
therefore, it is not before us to decide.
                               - 3 -

6320 notice included unpaid tax liabilities assessed after April

4, 2002.   Therefore, we will dismiss this case as to the unpaid

taxes assessed after that date on the ground that respondent

improperly denied petitioner’s collection hearing request and

failed to issue a valid determination on the issues petitioner

raised regarding those unpaid taxes.

                            Background

     At the time he petitioned the Court, petitioner resided in

Houston, Texas.

     Some of the facts pertinent to this case are set forth in

detail in Graham v. Commissioner, docket No. 7298-95 (Graham I)3,

and are recited here insofar as relevant to our disposition of

the instant motion.

     On February 9, 1995, respondent issued a notice of

deficiency to petitioner and his wife, Rosalind L. Graham, for

the years 1984 through 1986.   Petitioner and Ms. Graham timely

filed a petition for redetermination.    On June 17, 2004, the

Court entered an order and decision holding that for the tax year

1985 there was no deficiency and that petitioner and Ms. Graham

had made an overpayment of $80,805.60 because of an amount paid

in 1993 that had been applied to 1985.    However, the Court also



     3
      The decision in Graham v. Commissioner, docket No. 7298-95,
enforced a stipulation of settlement by the parties. Petitioner
later filed a motion to withdraw the stipulation, which was
denied.
                                 - 4 -

determined that petitioner (and, as to one penalty, Ms. Graham

jointly) was liable for additions to tax and/or penalties

totaling $20,722, and an additional penalty of 50 percent of the

statutory interest on $10,285 under section 6653(b).

     For tax year 1986 the Court held that petitioner was jointly

liable with Ms. Graham for a deficiency of $105,082 and an

addition to tax under section 6661 of $24,983.     The Court also

determined that petitioner was individually liable for a

deficiency of $17,382, additions to tax and/or penalties of

$138,076, and an additional penalty of 50 percent of the

statutory interest due on $116,458 under section 6653(b).4

         After an appeal to the Court of Appeals for the Fifth

Circuit, Graham v. Commissioner, 134 Fed. Appx. 704 (5th Cir.

2005), this Court issued a final decision on February 2, 2006,

identical to the order and decision entered on June 17, 2004,

except that Ms. Graham was relieved of joint liability for 1985

(the Graham I decision).

The First Notice (2002)

     On or about April 4, 2002, respondent mailed a section 6320

notice (the first notice) to petitioner via certified mail at his




     4
       Because 1984 is not a year in issue in this case,
references to 1984 in the Graham I decision are omitted.
                                 - 5 -

address on Walden Lane in Houston, Texas (the Walden address).

The first notice showed the following unpaid tax liabilities:5

             Type of Liability              Year
                 Income tax                 1985
                 Income tax                 1986
                 Income tax                 1995
                 Income tax                 1997
                 Income tax                 1998
                 Income tax                 1999

The first notice required petitioner to request a hearing by May

8, 2002.   While petitioner was living at the Walden address at

the time, petitioner has no recollection of receiving the first

notice and did not request a collection hearing in 2002.

     Respondent filed an NFTL with the county clerk of Harris

County, Texas, on April 5, 2002.

The Second Notice (2005)

     On July 20, 2005, respondent mailed a section 6320 notice to

petitioner at an address on Candlewood Park Lane in Katy, Texas

(the Candlewood address).     On the same date, respondent mailed an

identical section 6320 notice to Ms. Graham at the same address,

which was returned as unclaimed (collectively, the second




     5
       For simplicity, any liabilities relating to periods not
addressed in the petition have been omitted from the descriptions
of the sec. 6320 notices and NFTLs because they are not before
the Court.
                                    - 6 -

notice).    The second notice informed petitioner of a second NFTL

filing.

     The second notice showed the following unpaid tax

liabilities:

               Type of Liability              Period
                    Income tax                 1985
                    Income tax                 1986
                    Income tax                 1995
                    Income tax                 1997
                    Income tax                 1998
                    Income tax                 1999
               Sec. 6672 penalty            3/31/2002
               Sec. 6672 penalty            6/30/2002
               Sec. 6672 penalty            9/30/2002

     The second notice required petitioner to request a

collection hearing by August 25, 2005.

     Respondent filed two NFTLs with the county clerk of Fort

Bend County, Texas, on July 26, 2005.       In addition to amounts

that respondent had assessed before issuing the first notice and

filing the NFTL in 2002, the NFTLs included the following

assessments:

  Type of Liability        Period     Date Assessed     Unpaid Balance
           Income           1985        10/22/2004        $86,757.38
           Income           1985        10/22/2004        149,442.86
           Income           1986        10/22/2004        899,909.97
                               - 7 -

  Sec. 6672 penalty    3/31/2002       9/29/2003      25,301.95
  Sec. 6672 penalty    6/30/2002       9/29/2003      30,865.08
  Sec. 6672 penalty    9/30/2002       9/29/2003       6,529.22

     Petitioner moved from the Candlewood address to an address

on Boheme Drive in Houston, Texas (the Boheme address) on or

before May 31, 2005.   He filed a change of address form with the

U.S. Postal Service (USPS) with instructions to begin forwarding

mail from the Candlewood address to the Boheme address on June

27, 2005.

     Petitioner received the second notice on August 30, 2005.

It presumably had been forwarded pursuant to petitioner’s change

of address form.   On August 31, 2005, respondent received a

request for a collection due process hearing from petitioner and

Ms. Graham regarding 1984, 1985, 1986 and the penalty periods in

issue.   This request was not timely.6    After learning from one of

respondent’s revenue officers that the hearing request was not

timely and therefore petitioner and Ms. Graham would not be

entitled to a collection hearing, petitioner withdrew his

request.7




     6
       The parties dispute when the 30 days in sec. 6320(a)(3)(B)
begin to run. However, under either party’s interpretation the
request for a sec. 6320 hearing was not timely.
     7
       Petitioner’s counsel submitted the withdrawal solely on
behalf of petitioner.
                                 - 8 -

The Third Notice (2006)

     On or about May 12, 2006, respondent mailed at least two

section 6320 notices (collectively, the third notice) to

petitioner at the Boheme address notifying him of NFTLs filed

against him regarding the following unpaid tax liabilities:

             Type of Liability            Year
                 Income tax               1985
                 Income tax               1986
                 Income tax               1995
                 Income tax               1997
                 Income tax               1998
                 Income tax               1999

Respondent claims to have sent petitioner on or about the same

date a section 6320 NFTL regarding the penalty periods in issue.

While respondent has not produced a copy of this section 6320

notice, the request for a collection hearing that petitioner

mailed to respondent on June 15, 2006, discussed below, does

include the unpaid section 6672 penalties for the penalty periods

in issue.   Furthermore, petitioner does not claim that he did not

receive a third notice including the section 6672 penalties.

Therefore, for purposes of deciding whether to grant respondent’s

motion, we infer that the third notice included notices of liens

filed for all of the taxes and periods in issue.
                               - 9 -

     About the same time, respondent mailed to petitioner and Ms.

Graham notices of additional Federal tax lien filing regarding

taxes for which respondent had already sent NFTLs.

     On June 12 and 13, 2006, several NFTLs regarding all of the

types of taxes and periods in issue, including the penalty

periods in issue, were recorded in Harris County, Texas.

     The third notice informed petitioner that he was required to

request a collection hearing by June 19, 2006.   On June 15, 2006,

petitioner requested an in-person collection hearing to appeal

the collection actions taken regarding liabilities for all of the

periods in issue.   The hearing request stated that petitioner was

not contesting the Court’s Graham I decision in any way, but he

claimed that respondent’s NFTLs did not conform to the

liabilities listed in the Graham I decision (the nonconformance

issue).

     An Appeals officer scheduled a telephone conference call for

March 1, 2007.   Petitioner did not object to receiving a

telephone conference in lieu of a face-to-face hearing.     Relying

on the June 19, 2006, deadline for requesting a collection

hearing provided in the section 6320 notice that addressed the

income tax liabilities, the Appeals officer notified petitioner

that his request was timely as to his income tax liabilities for

the following years:   1985, 1986, 1995, 1996, 1997, 1998, and

1999.   Therefore, after the collection hearing the Appeals
                              - 10 -

officer intended to issue a determination letter regarding those

years and a decision letter for the penalty periods for which the

hearing request was not timely; i.e., the penalty periods in

issue.

     Petitioner spoke with the Appeals officer at the scheduled

date and time and explained that he disagreed with the

liabilities shown on the NFTLs, but he wished to postpone the

hearing until after respondent’s collection officers had time to

make some adjustments.   According to the case activity record, an

Internal Revenue Service (IRS) employee tried to zero out

petitioner’s account for 1985 as a result of the Graham I

decision but was apparently unsuccessful.8   The Appeals officer

did not make any additional notes in the case activity record

regarding petitioner’s 1985 account.

     Upon researching respondent’s internal records, the Appeals

officer discovered that respondent had previously mailed the

first and second notices, which together covered all of the same

types of liabilities and tax periods as the third notice, to

petitioner in 2002 and 2005, respectively.   Accordingly, the

Appeals officer determined that petitioner was not entitled to a



     8
       The case activity report notes are not clear, but they
indicate that the IRS employee tried to clear petitioner’s
account by posting a code indicating that the time for collection
had expired instead of simply clearing the balance. However,
this was most likely unsuccessful because the time for collection
had not yet expired.
                              - 11 -

collection hearing because he failed to request one in response

to the first or second notice.   The Appeals officer also noted in

the case activity record that petitioner had had a prior

opportunity to raise the nonconformance issue and therefore could

not raise it during an equivalent hearing.   Accordingly, the only

remaining issues the Appeals officer would entertain would be

collection alternatives.

     In a March 12, 2007, letter the Appeals officer explained

that petitioner had had a prior opportunity to raise the

nonconformance issue; therefore he could not raise it during the

equivalent hearing.   The Appeals officer scheduled another

telephone conference for March 28, 2007, to discuss collection

alternatives.   While petitioner never raised the issue of

collection alternatives, the Appeals officer told petitioner that

before the telephone conference he would need to submit copies of

expenses listed on an enclosed Form 433-A, Collection Information

Statement for Wage Earners and Self-Employed Individuals, and

bank statements and corresponding canceled checks for the past 6

months.   The Appeals officer informed petitioner that if he did

not call and/or provide the financial information, the case would

be closed.   Petitioner did not call at the scheduled time or

provide any of the financial information requested.   Petitioner

explained in his pretrial filings that he never sought or wanted

an equivalent hearing.
                             - 12 -

     In an April 4, 2007, decision letter the Appeals officer

stated that while petitioner’s collection hearing request had not

been filed within the time prescribed under section 6320 and/or

6330, she had given him an equivalent hearing.   She concluded

that all legal and procedural requirements had been met regarding

the filing of the NFTLs and that the filing of the NFTLs was

sustained.

     The Appeals officer acknowledged that petitioner had raised

the nonconformance issue and reprinted petitioner’s argument in

the decision letter as follows:

     The taxpayer disputes the amount of the liabilities
     reflected in the Notice(s) of Federal Tax lien * * *.
     The 1986 and 1986 income tax issues are the subject
     matter of the Order and decision entered by the Tax
     Court in Docket # 7298-95 (the decision document). * *
     * The Service has not followed the Decision Document in
     * * * [filing the Notice(s) of Federal Tax Lien].

However, the Appeals officer would not address this argument

because she believed petitioner had had a prior opportunity to

raise the nonconformance issue.

     On April 10, 2007, petitioner filed a petition with the

Court seeking review of respondent’s denial of his requested

relief with respect to the NFTLs.

     On June 1, 2007, respondent filed a motion to dismiss for

lack of jurisdiction on the grounds that (1) no notice of

determination under section 6320 was sent to petitioner, and (2)
                                - 13 -

the Appeals Office never made a determination with respect to any

of the periods in issue.

                              Discussion

     The Tax Court is a court of limited jurisdiction, and we may

exercise that jurisdiction only to the extent authorized by

Congress.   Naftel v. Commissioner, 85 T.C. 527, 529 (1985).       The

Court’s jurisdiction under sections 6320 and 6330 depends upon

the issuance of a valid determination and the filing of a timely

petition for review.   See Orum v. Commissioner, 123 T.C. 1, 8

(2004), affd. 412 F.3d 819 (7th Cir. 2005); Sarrell v.

Commissioner, 117 T.C. 122, 125 (2001); Moorhous v. Commissioner,

116 T.C. 263, 269 (2001); Offiler v. Commissioner, 114 T.C. 492,

498 (2000); see also Rule 330(b).    In the absence of a

determination, this Court lacks jurisdiction.

     Generally, a determination comes in the form of a notice of

determination following a collection hearing.     Offiler v.

Commissioner, supra at 498.    If a taxpayer receives a section

6320 notice and fails to timely request a collection hearing, the

taxpayer generally receives an equivalent hearing that concludes

when an Appeals officer issues a decision letter.     Craig v.

Commissioner, 119 T.C. 252, 258-259 (2002).     While a decision

letter generally includes the same information as a notice of

determination, a taxpayer is usually not entitled to judicial
                               - 14 -

review of a decision letter.    Kennedy v. Commissioner, 116 T.C.

255, 261 (2001); cf. Craig v. Commissioner, supra at 259.

     A predicate for the issuance of a notice of determination

over which we have jurisdiction is the delivery of a section 6320

notice to the taxpayer in accordance with section 6320(a)(2).

See also sec. 6330(a)(2)(C).   Where the Court determines that it

lacks jurisdiction because the taxpayer did not receive a valid

determination, the basis of dismissal may depend on whether the

Secretary mailed a section 6320 notice to the taxpayer’s last

known address or otherwise served the notice in the manner

prescribed by section 6320(a)(2).    Kennedy v. Commissioner, supra

at 261.    If the Secretary fails to mail a section 6320 notice to

the taxpayer at his last known address or otherwise comply with

section 6320(a)(2), we dismiss the case on the ground that the

purported section 6320 notice is invalid.    Id.; Kennedy v.

Commissioner, T.C. Memo. 2008-33; Buffano v. Commissioner, T.C.

Memo. 2007-32.   If the Secretary mails the section 6320 notice to

the taxpayer at the correct address, we dismiss the case on the

ground that the taxpayer failed to timely request a collection

hearing.   Pickell v. Commissioner, T.C. Memo. 2008-60.

     However, where the taxpayer timely requests a collection

hearing but receives an equivalent hearing concluded by a

decision letter, we have held that in certain circumstances the

Court may treat the decision letter as a valid determination and
                               - 15 -

review the decision letter under section 6330(d).     Craig v.

Commissioner, supra at 259.    These circumstances arise where the

Appeals officer, in a mistaken belief that the hearing request

was untimely, conducts an equivalent hearing where she considers

the same issues that she would have considered at a collection

hearing and then issues a decision letter that is similar in

content to a notice of determination but is titled “decision

letter” and contains a statement that the taxpayer is not

entitled to judicial review.    Id.

     When the Secretary mails multiple section 6320 notices to a

taxpayer, the taxpayer’s right to a collection hearing is

generally tied to the first valid section 6320 notice the

taxpayer receives with respect to the taxable period to which the

unpaid tax included on the section 6320 notice relates.     Inv.

Research Associates, Inc. v. Commissioner, 126 T.C. 183, 190

(2006); Pragasam v. Commissioner, T.C. Memo. 2006-86; sec.

301.6320-1(b)(2), A-B1, Proced. & Admin. Regs.    If the first

notice is invalid because it was not mailed to the taxpayer’s

last known address, the next valid section 6320 notice will be

treated as a substitute section 6320 notice and will entitle the

taxpayer to a collection hearing.     See sec. 301.6320-1(a)(2), A-

A12, Proced. & Admin. Regs.    If, after the first valid section

6320 notice is mailed, the Commissioner makes an assessment for a

different type of tax or a different period, or makes an
                               - 16 -

additional assessment of tax of the same type and for the same

period (not including an assessment of accruals of interest or

penalties on a tax previously assessed), the taxpayer is entitled

to a new section 6320 notice and a collection hearing on the new

assessments.   Sec. 301.6320-1(d)(2), A-D1, Proced. & Admin. Regs.

     Respondent argues that the Court lacks jurisdiction because

the Appeals Office never made a determination for purposes of

section 6330(d)(1) with respect to respondent’s lien actions for

any of the periods in issue.   While petitioner received an

equivalent hearing and a decision letter, respondent argues that

the decision letter was not a valid determination.

     Petitioner raises six arguments as to why we should deny

respondent’s motion to dismiss:   (1) All of the NFTLs are invalid

because their accompanying section 6320 notices were mailed

before the NFTLs were recorded; therefore the section 6320

notices associated with those NFTLs are also invalid; (2) some of

the NFTLs are also invalid because they were filed in the wrong

location; therefore the section 6320 notices associated with

those NFTLs are also invalid; (3) assessment of the tax

liabilities for 1985 and 1986 before the Court’s Graham I

decision was final under section 7481(a) was improper; (4) the

assessments of income tax for 1985 and 1986 are inconsistent with

the Court’s Graham I decision; (5) the first and second notices

were not mailed to the correct address; and (6) six of the
                              - 17 -

assessments were made after the first notice was mailed;

therefore, petitioner’s failure to request a collection hearing

after the first notice does not preclude his entitlement to a

collection hearing as to liens arising from those new

assessments.

     Petitioner claims that his first two arguments, the alleged

invalidity of the NFTLs, are relevant to our decision because he

believes that if an NFTL is a nullity for purposes of section

6323, it does not activate the hearing notice provisions of

section 6320(a).   Therefore, petitioner would not be foreclosed

from obtaining a collection hearing because of his failure to

timely request one after receiving the first or second notice

because those section 6320 notices were invalid.9

     As discussed above, the validity of a section 6320 notice

may be relevant to the Court’s determination of the proper

grounds for dismissal of a case over which we lack jurisdiction.

However, nothing in section 6320(a) indicates that the validity

of a section 6320 notice depends upon the validity of the related

NFTL, and petitioner cites no authority to support his position.

     To the extent that petitioner attacks the validity of the

section 6320 notices on the ground that section 6320(a)(2)



     9
       If we were to accept petitioner’s argument, the third sec.
6320 notice would also be invalid. However, because we reject
petitioner’s argument, we need not address any new issues this
would raise.
                              - 18 -

requires a section 6320 notice to be mailed after the NFTL is

recorded, we reject this argument as well.

     Section 6320(a)(2) provides that the Secretary shall notify

the taxpayer of the filing of an NFTL “not more than 5 business

days after the day of the filing of the notice of lien.”      Nothing

in the statute, the accompanying regulations, or the legislative

history indicates that the Secretary is prohibited from notifying

a taxpayer of the filing of an NFTL before the NFTL is actually

recorded.   To the contrary, we rejected this argument in Golub v.

Commissioner, T.C. Memo. 2008-122.     See also Muldavin v.

Commissioner, T.C. Memo. 2002-182.     To read such a requirement

into section 6320(a)(2) would be of no benefit to taxpayers, who

presumably would prefer to be notified as early as possible that

NFTLs have been or will be filed against them.    Such a

requirement would also place an unnecessary administrative burden

on the Secretary to ensure that section 6320 notices are issued

within a particular 5-day window, especially since the Secretary

may not know the exact date that an NFTL will be recorded in the

State and local clerks’ offices.

     Petitioner’s third argument, that respondent assessed the

liabilities for 1985 and 1986 before those liabilities were

finally determined in Graham I, is irrelevant to the question of

the Court’s jurisdiction.   It is a matter that should be raised

during a collection hearing, not a matter that we may consider to
                              - 19 -

determine whether petitioner was entitled to or received a

collection hearing.

     Petitioner’s fourth argument, that the assessments of income

tax for 1985 and 1986 are inconsistent with the Court’s Graham I

decision, is also a matter that should be raised during a

collection hearing, and we may not consider it unless we

determine that petitioner raised the issue at a collection

hearing and received a determination that we have jurisdiction to

review.   Secs. 6320(c), 6330(d)(1); Giamelli v. Commissioner, 129

T.C. 107, 115 (2007); sec. 301.6320-1(e), Proced. & Admin. Regs.

However, we will discuss this argument briefly below for the sole

purpose of determining whether petitioner received, following an

equivalent hearing, a determination over which we have

jurisdiction.   We shall also address petitioner’s remaining

arguments in the context of the section 6320 notices to which

they relate.

The First Notice (2002)

     Petitioner claims that he has no recollection or record of

receiving the first notice, suggesting that he did not receive

the notice that section 6320(a) requires.   However, respondent’s

records show that the first notice was mailed to petitioner at

his last known address, and petitioner has provided us with no

reason to doubt their accuracy.   Petitioner does not claim that

he requested a collection hearing in 2002 in response to the
                              - 20 -

first notice within 30 days as prescribed by section

6320(a)(3)(B).

     We find that respondent complied with the requirement of

section 6320(a) to mail a section 6320 notice to petitioner at

his last known address, and petitioner failed to timely request a

collection hearing.   See Pragasam v. Commissioner, T.C. Memo.

2006-86 (finding that testimony from a taxpayer claiming that he

did not receive section 6320 notices was insufficient to overcome

the Commissioner’s evidence that section 6320 notices were

properly mailed to the taxpayer’s last known address).

Therefore, we will grant respondent’s motion to dismiss as to the

unpaid taxes included on the first notice.

The Second Notice (2005)

     While petitioner is foreclosed from challenging respondent’s

collection activities related to unpaid taxes assessed before

April 4, 2002, the date of the first notice, we still must

consider whether petitioner may challenge respondent’s collection

activities related to the unpaid taxes respondent assessed after

issuing the first notice.   Respondent assessed section 6672

penalties for the penalty periods in issue on September 29, 2003,

and assessed additional unpaid income tax liabilities for 1985

and 1986 on October 22, 2004 (collectively, the new assessments).

     Petitioner was entitled to a new section 6320 notice and

another opportunity to request a collection hearing with respect
                                - 21 -

to the new assessments to the extent they included unpaid taxes

that were not listed on the first notice.    Sec. 6320(b)(2); sec.

301.6230-1(d)(2), A-D1, Proced. & Admin. Regs.    Because

petitioner did not timely request a collection hearing after

receiving the second notice, we must decide whether respondent

mailed the second notice to petitioner’s last known address.

That decision will determine whether petitioner lost his

entitlement to a collection hearing regarding the new

assessments.     See sec. 6320(b)(2); Inv. Research Associates, Inc.

v. Commissioner, 126 T.C. at 190; sec. 301.6320-1(b)(1) and (2),

Proced. & Admin. Regs.      Petitioner argues that the second notice

was not mailed to his last known address because it was mailed on

July 20, 2005, to the Candlewood address, but respondent should

have updated his records to reflect that petitioner was residing

at the Boheme address at that time.10

      Section 6320(a)(2) provides that a section 6320 notice must

be:

           (A)   given in person;

           (B) left at the dwelling or usual place of
      business of such person; or

           (C) sent by certified or registered mail to such
      person’s last known address * * *




      10
       As discussed above, we reject petitioner’s other
challenges to the validity of the second sec. 6320 notice.
                             - 22 -

Section 301.6320-1(a), Proced. & Admin. Regs., cross-references

section 301.6212-2, Proced. & Admin. Regs., for the definition of

a taxpayer’s “last known address”.

     Section 301.6212-2(a), Proced. & Admin. Regs., provides that

a taxpayer’s last known address is generally the address that

appears on his most recently filed and properly processed Federal

income tax return, unless the IRS is given clear and concise

notification of a different address.

     Section 301.6212-2(b)(2)(i), Proced. & Admin. Regs., the

exception to the general rule, provides:

     The IRS will update taxpayer addresses maintained in
     IRS records by referring to data accumulated and
     maintained in the United States Postal Service (USPS)
     National Change of Address database * * *. * * * if the
     taxpayer’s name and last known address in IRS records
     match the taxpayer’s name and old mailing address
     contained in the NCOA database, the new address in the
     NCOA database is the taxpayer’s last known address,
     unless the IRS is given clear and concise notification
     of a different address.

The address obtained from the NCOA database is the taxpayer's

last known address until the taxpayer files a Federal tax return

with a different address or the taxpayer provides the IRS with

clear and concise notification of an address different from the

address obtained from the NCOA database.    Sec. 301.6212-

2(b)(2)(ii), Proced. & Admin. Regs.    The Treasury Decision

accompanying this regulation explains that the IRS will receive

weekly updates of the NCOA database and will update its copy of

the full NCOA database with the most recent changes of address in
                               - 23 -

the weekly update.    T.D. 8939, 2001-1 C.B. 899.   However, there

may be a delay of up to 2 or 3 weeks from the date a taxpayer

notifies the USPS that his or her change of address is effective

and the time the new address is posted to the IRS’s automated

master file. Id.

       In the first example in section 301.6212-2(b)(3), Proced. &

Admin. Regs., where the IRS mails a notice to the taxpayer a

month after the taxpayer has informed the USPS of a new permanent

address and in the interim the IRS has updated its records to

reflect the new address in the NCOA database, the taxpayer’s last

known address is the new address.    But in the second example,

where the IRS mails a notice 6 days after the taxpayer has

informed the USPS of a new permanent address and in the interim

the IRS has not updated its record of the taxpayer’s address,

the taxpayer’s last known address is still the old address.    It

may be inferred that in the second example the IRS would not have

had sufficient time to process and post the new address in its

records.

       In determining whether the Secretary mailed a section 6320

notice to a taxpayer at his last known address, the focus of the

inquiry is the information the Secretary had available to him at

the time the notice was mailed.    See Broomfield v. Commissioner,

T.C. Memo. 2005-148; Sargent v. Commissioner, T.C. Memo. 1992-

373.    The inquiry under section 6212(b)(1) does not depend on the
                                - 24 -

taxpayer’s actual address at that time.     Frieling v.

Commissioner, 81 T.C. 42, 49 (1983).     Therefore, we do not

consider the facts available to respondent after July 20, 2005.

     Petitioner filed a change of address form with the USPS with

instructions to begin forwarding mail from the Candlewood address

to the Boheme address on June 27, 2005.    Respondent mailed the

second notice on July 20, 2005, 23 days after the USPS began to

forward petitioner’s mail.

     We find that respondent had sufficient time to process

petitioner’s new address in his records before mailing the second

notice; therefore, respondent failed to mail the second notice to

petitioner at his last known address.    The Treasury Decision

accompanying section 301.6212-2, Proced. & Admin. Regs., reserved

for the Commissioner up to 3 weeks of delay between the date the

taxpayer notifies the USPS that his new address is effective and

the date the new address is posted to the IRS’s automated master

file.   T.D. 8939, supra.    The regulations provide no guidance

where the IRS issues a notice less than a month but more than 6

days after the taxpayer has informed the USPS of a new permanent

address.   Given the level of sophistication that computer

technology had reached by 2005 (over 4 years after the Treasury

Decision had been issued), we find that there is no reason that

respondent could not have updated his records in 23 days.       See
                              - 25 -

Buffano v. Commissioner, T.C. Memo. 2007-32 (citing section

301.6212-2(b), Proced. & Admin. Regs., approvingly).

The Third Notice (2006)

     Petitioner argues that because the third notice was the

first valid section 6320 notice he received with respect to the

new assessments and he requested a collection hearing within the

30-day limit required by section 6320(a)(3)(B) and (b), his

collection hearing request was timely and therefore the Appeals

officer wrongfully denied his hearing request.   Respondent

conceded at trial that if the first and second notices had not

been valid, petitioner’s hearing request in response to the third

notice would have been timely.   Because we find that the first

notice did not include the new assessments and the second notice

was not mailed to petitioner’s last known address, the third

notice should have been treated as a substitute section 6320

notice entitling petitioner to a collection hearing on the new

assessments; respondent improperly denied petitioner’s request.

See sec. 301.6320-1(a)(2), A-A12, Proced. & Admin. Regs.

     In Craig v. Commissioner, 119 T.C. at 259, the Court stated:

“Under the facts herein, where Appeals issued the decision letter

to petitioner in response to his timely request for a Hearing, we

conclude that the ‘decision’ reflected in the decision letter

issued to petitioner is a ‘determination’ for purposes of section

6330(d)(1).”   The Court reasoned that an equivalent hearing is
                                 - 26 -

essentially the same as a collection hearing because the Appeals

officer considers the same issues and follows the same procedures

in both situations.     Id.   Furthermore, a decision letter is

essentially the same as a notice of determination except for the

difference in labels and in the statements regarding the right to

judicial review.    Id. at 258-259.

       In Craig, the Court found that the taxpayer did in fact

receive a hearing equivalent to a collection hearing and a

decision letter equivalent to a notice of determination.       Id. at

259.    While the Appeals officer erroneously determined that the

taxpayer could not challenge the underlying tax liability for one

of the years in issue at the equivalent hearing, the error was

harmless because the taxpayer’s challenge to the underlying tax

liability for that year was frivolous.      Id. at 261-265.   The

Appeals officer considered the other issues that the taxpayer

raised just as if they had been raised during a collection

hearing.    Id.

       By contrast, petitioner did not receive a hearing equivalent

to a collection hearing, and the decision letter that the Appeals

officer issued to petitioner was not equivalent to a notice of

determination.    The Appeals officer was under the mistaken belief

that petitioner had already received an opportunity to challenge

the new assessments and therefore refused to consider the

nonconformance issue.    Had petitioner received a collection
                              - 27 -

hearing, the Appeals officer would have been required to consider

all of the issues that petitioner raised.    Sec. 6330(c)(2)(A).

The Appeals officer should have considered the nonconformance

issue during the equivalent hearing because it was a challenge to

the accuracy of the assessment and of whether applicable law and

procedures had been followed, which is a review required of the

Appeals officer under section 6330(c)(1), and petitioner could

not have raised the issue during Graham I.    Nevertheless, it is

clear that the Appeals officer did not consider the

nonconformance issue because she mistakenly believed that

petitioner was entitled only to an equivalent hearing.

Presumably the Appeals officer would not have made this mistake

had she known that the second notice was not mailed to

petitioner’s last known address and petitioner had not had a

prior opportunity to raise the nonconformance issue.    Therefore,

the Appeals officer did not in fact consider at the equivalent

hearing the issues she would have considered during a collection

hearing.

     While petitioner had the option to have a second conference

with the Appeals officer, it is clear that the conference would

have been futile.   The Appeals officer told petitioner that she

would not consider the nonconformance issue, and she made it

clear that she anticipated that petitioner would use the second

conference to discuss collection alternatives.    This was not
                              - 28 -

acceptable to petitioner because he had no interest in collection

alternatives and did not want an equivalent hearing.   Petitioner

was well acquainted with the IRS, the Tax Court, and the process

of appealing the decisions of each.    Understandably, he did not

want to settle for an equivalent hearing from which there was no

right to judicial review when he thought he was entitled to a

collection hearing.

     Furthermore, the decision letter issued to petitioner was

not equivalent to a notice of determination because the Appeals

officer did not make a determination as to the nonconformance

issue.   The Appeals officer reprinted in the decision letter

petitioner’s argument that the liens did not accurately reflect

the liabilities listed in the Graham I decision; but instead of

making a determination on this issue, the Appeals officer

reiterated her mistaken belief that petitioner could not raise

this issue.

     This error was not harmless.   The Graham I decision states

that petitioner had no deficiency in 1985 (but actually made an

overpayment), yet it appears that respondent assessed $236,200.24

for unpaid income tax liabilities for 1985 on October 22, 2004.

While it is possible that respondent mistakenly assessed

penalties and labeled them as income tax liabilities, there

appears to be a disparity between the amount of penalties

petitioner owes for 1985, $20,722 plus 50 percent of the
                               - 29 -

statutory interest due on $10,285 under section 6653(b), and the

amount assessed.   Similarly, the new assessments apparently

include an $899,909.97 assessment of income taxes for 1986, but

according to the Graham I decision petitioner was liable for a

deficiency of only $122,464.   Petitioner was also found liable

for penalties of $163,059, plus 50 percent of the statutory

interest due on $116,458 under section 6653(b), but we can only

speculate whether the assessment for 1986 includes these

penalties.   While we do not decide at this time whether

respondent’s collection activities for 1985 and 1986 were

appropriate, this is an issue that the Appeals officer should

have considered during a collection hearing and explained in a

notice of determination.   However, the Appeals officer failed to

do so.

Conclusion

     Because we find that the first notice complied with section

6320(a) and that petitioner failed to timely request a collection

hearing, we will grant respondent’s motion to dismiss as to the

unpaid taxes included on the first notice.

     However, because we find that (1) the second and third

notices contained new assessments not included on the first

notice, (2) the second notice was not mailed to petitioner’s last

known address as required by section 6320(a)(2)(C), (3)

petitioner timely requested a collection hearing after receiving
                             - 30 -

the third notice, and (4) respondent improperly denied

petitioner’s collection hearing request, as to the unpaid

liabilities included in the new assessments we will deny

respondent’s motion to dismiss for lack of jurisdiction on the

ground that respondent asserts; i.e., that petitioner was not

entitled to a determination subject to review by this Court.

Rather, we find we do not have jurisdiction because respondent

improperly denied petitioner a collection hearing to review the

new assessments under section 6320(b).

     To reflect the foregoing,


                                         An appropriate order and

                                   order of dismissal for lack of

                                   jurisdiction will be entered.
