                        T.C. Memo. 2002-321



                      UNITED STATES TAX COURT



                FLETCHER H. HYLER, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 11023-01L.            Filed December 30, 2002.



     Fletcher H. Hyler, pro se.

     Thomas R. Mackinson, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     COHEN, Judge:   After conducting a hearing, respondent sent

to petitioner a Notice of Determination Concerning Collection

Actions(s) Under Section 6320 and/or 6330.    The notice of

determination informed petitioner that the Appeals officer

declined to invalidate assessments of Federal income taxes for

petitioner’s 1995 and 1997 taxable years and declined to withdraw
                                - 2 -

the Notice of Federal Tax Lien.    After concessions, the issues

for decision are:   (1) Whether notices of deficiency regarding

petitioner’s tax liabilities for 1995 and 1997 were barred by a

directive from the National Taxpayer Advocate’s office;

(2) whether notices of deficiency for 1995 and 1997 were sent to

petitioner’s last known address; (3) whether petitioner was

denied due process with respect to the notice of lien; and

(4) whether assessment of taxes and penalties for 1995 was barred

by the statute of limitations or otherwise violated applicable

regulations.   Unless otherwise indicated, all section references

are to the Internal Revenue Code, as amended.

                           FINDINGS OF FACT

     Some of the facts have been stipulated, and the stipulated

facts are incorporated in our findings by this reference.

Petitioner resided in Portola Valley, California, at the time he

filed his petition.

     Petitioner holds at least one advanced academic degree and

has lectured at the Stanford School of Business.    During the

years in issue, petitioner and his spouse owned a marketing

corporation, Logical Marketing, Inc.    Petitioner served as its

chief executive officer.

     On or about March 9, 1998, petitioner agreed to a decision

in this Court at docket No. 25288-96 determining a deficiency in

income tax due from him for 1993 in the amount of $57,255 and a
                                - 3 -

penalty under section 6662(a) in the amount of $11,451.     At the

time the notice of lien involved in this case was filed, some

part of the deficiency for 1993 had not been paid.

Petitioner’s 1995 Federal Tax Return

     Petitioner obtained an extension to August 15, 1996, to file

his 1995 Federal income tax return.     On February 17, 1997,

respondent sent to petitioner a delinquency notice requesting

that he file his 1995 return.   The Internal Revenue Service (IRS)

received an unsigned and undated 1995 return for petitioner on

March 31, 1997; the return gave an address for petitioner in

Woodside, California.

     Shortly thereafter, the IRS made a mathematical adjustment

to the 1995 income tax return relating to whether petitioner

should receive credit for $3,800 in estimated tax payments or tax

payments from a prior year against his tax liability of

$3,857.41.   The IRS sent to petitioner a notice of balance due.

On July 25, 1997, the IRS filed a Notice of Federal Tax Lien for

1995 and for taxes outstanding for other periods.     In July 1998,

a payment of $6,748.62 was applied to the 1995 liability.       This

amount included tax of $3,857.41, an estimated tax penalty of

$210.58, a late filing penalty of $867.92, a failure to pay tax

penalty of $771.48, and assessed interest totaling $1,041.23.

After the payment, the IRS abated $250.73 of the previously

assessed failure to pay tax penalty and the entire $867.92 late
                               - 4 -

filing penalty.   The IRS also abated $185.51 of the assessed

interest.   These abatements resulted in a credit of $1,304.16 in

favor of petitioner, which was applied to his outstanding

liabilities for 1993.

     Revenue Agent Brian Rausch (Rausch) began an examination of

other aspects of petitioner’s 1995 income tax return on

December 31, 1997.   Connie Stone (Stone), petitioner’s sister and

a resident of Virginia, represented petitioner.    Stone falsely

represented that she was licensed as a certified public

accountant.   The examination focused on Schedule C, Profit or

Loss From Business, deductions claimed by petitioner.    During the

examination, Stone requested that petitioner’s address be changed

to her address in Henry, Virginia.     The IRS entered this change

into its records during the week of August 16, 1998.    On

August 18, 1998, the IRS received petitioner’s 1997 Federal

income tax return, which was timely filed pursuant to an

extension of time.   This return bore the Woodside address.   Its

receipt caused the IRS again to change its records, during the

week of October 25, 1998, to reflect that petitioner’s address

was once again the Woodside address.

     At the end of November 1998, petitioner moved from the

Woodside address to Portola Valley, California.    He submitted a

mail forwarding request to the U.S. Postal Service reflecting his

move.
                               - 5 -

     Petitioner sold the Woodside property for $1.6 million and

acquired the Portola Valley property for $4 million.    He

estimated that the Portola Valley property was worth $6.5 million

when he bought it and $10 million at the time of trial in May

2002.   He applied available funds to the debt on his Portola

Valley residence rather than to his outstanding tax liabilities

(acknowledged at $67,000) because of the perceived necessity of

maintaining his residence and his lifestyle for business reasons.

     On February 3, 1999, Rausch sent a 30-day letter explaining

proposed deficiencies for 1995.    In response, Stone filed a

timely protest requesting that the proposed deficiency for 1995

be reviewed by the IRS Appeals Division.    Appeals Officer

Lawrence Dorr (Dorr) of the San Francisco Appeals Office

undertook the requested review.    Beginning in April 1999, he sent

at least four contact letters to Stone and spoke with her on the

telephone on at least one occasion.    During the course of their

discussions, Stone did not inform Dorr that petitioner had moved

from the Woodside address shown on his 1997 return.

     Stone did, however, send to Dorr a facsimile cover sheet

requesting more time to submit information.    On June 25, 1999,

Dorr replied in a letter stating that, if his office did not see

some progress on the matter within 2 weeks, it would be necessary

to issue a notice of deficiency.    Stone did not reply to that

letter, and, on August 19, 1999, the San Francisco Appeals Office
                                 - 6 -

sent a notice of deficiency for 1995.    The notice proposed a

deficiency of $65,975 and an addition to tax of $16,494 for late

filing, plus an accuracy-related penalty of $13,195.07.    The

notice was sent by certified mail to petitioner at the Woodside

address, and a copy was sent to Stone in Henry, Virginia.    Stone

received the notice of deficiency but did not inform petitioner,

believing that some contacts she had made with the Office of the

Taxpayer Advocate precluded further action by the IRS.

       Petitioner did not file a petition with this Court with

respect to the 1995 deficiency during the time permitted, which

expired November 17, 1999.    On February 7, 2000, the deficiency

for 1995 was assessed.    The amounts assessed have not been paid.

Petitioner’s 1997 Federal Income Tax Return

       On July 16, 1999, the Philadelphia Service Center sent a

notice of deficiency for 1997 by certified mail to petitioner at

the Woodside address.    That notice contained a mathematical

computation based on failure to calculate the alternative minimum

tax.    Petitioner did not file a petition with this Court seeking

review of the 1997 deficiency.    That deficiency was assessed on

December 20, 1999, and has not been paid.    Petitioner

subsequently submitted an amended 1997 return.

Petitioner’s 1998 Federal Income Tax Return

       Sometime before August 18, 1999, petitioner submitted an

unsigned Form 4868, Application for Automatic Extension of Time
                                - 7 -

To File U.S. Individual Income Tax Return for 1988.   The Form

4868 listed petitioner’s address as the Portola Valley address.

The Form 4868 did not contain petitioner’s Woodside address, nor

did it state that the application was intended as a notification

of a change of address.   The IRS did not receive a 1998 Federal

income tax return from petitioner until May 14, 2001.    This was

the first time that petitioner had submitted a Federal income tax

return that reflected petitioner’s Portola Valley address.

Petitioner’s taxable year 1998 is not otherwise before the Court.

Petitioner’s Suit for Damages

     Petitioner had some complaints about IRS collection

activities.   Petitioner and Stone contacted the Office of the

Taxpayer Advocate concerning petitioner’s complaints.    They

visited that office in Washington, D.C., in February 1999 and

provided the Portola Valley address to Sharese Stevens of that

office.   He filed an administrative claim for damages with the

District Director in Oakland, California, on July 15, 1999.     The

claim listed petitioner’s address as the Portola Valley address.

The claim did not contain petitioner’s Woodside address, nor did

it state that the claim was intended as a notification of a

change of address.

     At the request of the National Taxpayer Advocate,

consideration of petitioner’s administrative claim was

transferred from Oakland, California, to Seattle, Washington.
                               - 8 -

The Office of the Taxpayer Advocate also requested suspension of

collection activities during the consideration of petitioner’s

administrative claim, and the IRS did not undertake collection

activities while petitioner’s claim was pending.

     In the Seattle Appeals Office, petitioner’s claim was

assigned for review to Special Procedures Advisor Jill Pace

(Pace), who received it on August 6, 1999.   On August 11, 1999,

Pace sent to petitioner a form letter regarding the possibility

of third-party contacts; her letter was sent to the Portola

Valley address that was on petitioner’s damages claim.   Pace did

not check IRS records to determine an alternate address for

petitioner, and she was unaware that the address used by

petitioner on the administrative claim was a new address.     During

her review of the administrative claim, Pace met with petitioner

and Stone.   Neither petitioner nor Stone informed Pace of

petitioner’s change of address the previous November.    Petitioner

did, however, provide a Form 2848, Power of Attorney and

Declaration of Representative, appointing Stone as his

representative for multiple income tax periods including 1993,

1995, and 1997.

     On December 28, 1999, the holder of a deed of trust on

petitioner’s residence commenced a nonjudicial foreclosure

proceeding with the filing of a Notice of Default and Election to
                                - 9 -

Sell Under Deed of Trust.    Petitioner did not inform the IRS of

the default or the scheduling of the foreclosure sale.

     On February 18, 2000, the District Director in Seattle,

Pace’s superior, denied petitioner’s administrative claim for

damages.    Petitioner engaged an attorney, Richard R. Sayers

(Sayers), to file a lawsuit in the United States District Court

for the Western District of Virginia, captioned Logical

Marketing, Inc. and Fletcher H. Hyler, III v. United States,

Civil Action No. 7:00295, in which petitioner sought damages for

IRS collection activities.   Petitioner did not authorize Sayers

to represent petitioner before the IRS, and the lawsuit did not

seek to enjoin further efforts to collect petitioner’s tax

liabilities.

Collection Activities

     Petitioner’s collection case was transferred from Virginia

to California and assigned to Revenue Officer David Rosado

(Rosado) in Redwood City, California.   Rosado obtained

petitioner’s Portola Valley address from the IRS computer system,

which had been updated during the 12th week of the year 2000.   At

petitioner’s behest, Rosado spoke to Stone on April 17, 2000, and

informed her that he was considering filing a notice of Federal

tax lien.   Around this time, Stone received transcripts for the

years 1993, 1995, and 1997 for petitioner’s individual accounts.
                              - 10 -

     On April 19, 2000, Rosado wrote to Stone.    His letter noted

that he and Stone had discussed a monthly payment plan for

petitioner’s 1993 income tax liability and asked for copies of a

number of documents relating to petitioner’s financial status.

The letter further indicated that Rosado had enclosed transcripts

of petitioner’s income tax accounts for 1993, 1995, and 1997, as

well as IRS publications relating to preparation of financial

statements, to the IRS collection process, and to "Your Rights as

a Taxpayer".   The letter concluded as follows:

     5.   Notice of Federal Tax Lien. Per our conversation,
          I will delay Filing Notice of Federal Tax Lien
          until May 15, 2000. At that time I will re-
          evaluate the need for filing. We had discussed
          alternatives to filing a Notice of Lien such as
          the posting of a bond. I would expect your
          proposal on this matter no later than 5/15/2000.

     6.   You had indicated that notice of assessment for
          1995 and 1997 was not received. Is this correct?

     7.   For your information I have requested the
          administrative case file for 1995 and 1997, so
          that any issues can be addressed. As soon as I
          receive these files, I will share it with you. I
          also agreed to delay filing Notice of Federal Tax
          Lien for these periods until we can address the
          assessments. If there are no unresolved issues
          regarding assessments, then collection of the
          balance due will be addressed. Will also address
          filing of Notice of Federal Tax Lien.

     8.   During the interim, please advise Mr. Hyler that
          he can begin sending payments of $5000 to my
          office. Please note that penalties and interest
          continue to accrue on any unpaid balance. This is
          not an acceptance of a monthly payment proposal.
          That will be determined at a later time.
                              - 11 -

     Please have the completed Collection Information
     Statement and verification in my office no later than
     May 15, 2000. If you have any concerns or questions,
     you can reach me at the telephone number listed above.
     I am required to advise you that failure to provide the
     above information by the May 15, 2000 [sic] may result
     in enforcement action such as, issuance of Final
     Notice, Issuance of Notice of Levy, serving summons,
     filing Notice of Federal Tax Lien. Once again do not
     hesitate to call. Thank you.

     Stone never sent to Rosado the information that he had

requested in the April 19, 2000, letter.   Stone did, however,

send copies of the letter to petitioner and to Sayers.

     Sayers wrote to Rosado requesting that collection action be

halted until petitioner’s lawsuit against the Government for

damages was resolved.   Rosado received that letter on May 11,

2000, and sought legal advice from IRS counsel regarding whether

to proceed with collection while the lawsuit was pending.    On

June 5, 2000, IRS counsel advised him that collection could be

pursued.

     On June 13, 2000, the IRS sent a Notice of Federal Tax Lien

to the County Recorder in San Mateo, California, for filing,

indicating that petitioner had unpaid Federal income tax

liabilities for 1993, 1995, and 1997.   On June 16, 2000, the IRS

sent to petitioner a Notice of Tax Lien Filing and Your Right to

a Hearing Under I.R.C. 6320 (Notice) for those years.    The notice

of lien was recorded in San Mateo County on June 21, 2000.    On

July 20, 2000, petitioner’s counsel timely filed a request under

section 6320 for a hearing.
                             - 12 -

     At the hearing, petitioner’s then counsel Edward T. Perry

(who represented petitioner through trial of this action but was

permitted to withdraw at the conclusion of the testimony and

before briefs were due) raised the following issues:

     a) the filing of the Notice of Federal Tax Lien created
     a hardship for petitioner;

     b) the filing of the lien was not justified because the
     IRS failed to provide clear notice to petitioner of an
     intention to file a Notice of Federal Tax Lien in
     advance of the lien filing;

     c) the underlying assessment for 1995 was invalid
     because the statute of limitations on assessment had
     expired prior to assessment;

     d) the underlying assessments for 1995 and 1997 were
     invalid because the notices of deficiency were not
     mailed to petitioner’s last known address;

     e) the notice and demand for payment issued for each of
     the tax years 1995 and 1997 were invalid in that such
     notices were not mailed to petitioner’s last known
     address and were issued during a stay of collection
     imposed by the Taxpayer Advocate;

     f) the lien filing was defective in that it included
     the amount of a failure to file penalty for 1995, and
     the IRS had abated a previously assessed delinquency
     penalty; and

     g) the lien filing was defective in that it included
     1997, and petitioner did not recall an examination for
     that period.

     While the Appeals process was in effect, the IRS issued

Certificates of Subordination to permit petitioner to refinance

his residential property on August 14, 2000, and again on

July 31, 2001.
                              - 13 -

     On August 31, 2001, the Appeals office issued an 8-page

determination letter with respect to the matters raised at the

hearing.   It reported Appeals’s determination that petitioner’s

liability for 1993 taxes was not properly at issue, because that

year was the subject of a decision by this Court.    It further

determined that, because petitioner had been provided an

opportunity to challenge the 1995 tax liability in the Appeals

Division prior to assessment, the 1995 tax liability (including

the late filing penalty) was not properly at issue in the

hearing.   Finally, it determined that no relief was available for

either 1995 or 1997 because all administrative requirements had

been met and notices of assessment and demand for payment with

respect to those years had been sent to petitioner.

                              OPINION

Statutory Framework

     Section 6321 imposes a lien in favor of the United States on

all property and rights to property of a person when a demand for

the payment of the person’s taxes has been made and the person

fails to pay those taxes.   Section 6322 provides that such a lien

arises when an assessment is made.     To protect the Government’s

rights to recover its unpaid taxes, section 6323(a) provides that

the IRS may file a notice of Federal tax lien in order to

establish the priority of its claims against the taxpayer’s other

creditors.
                              - 14 -

     In the Internal Revenue Service Restructuring and Reform Act

of 1998 (RRA 1998), Pub. L. 105-206, sec. 3401, 112 Stat. 746,

Congress enacted sections 6320 (pertaining to liens) and 6330

(pertaining to levies) to provide protections for taxpayers in

tax collection matters.   Section 6320 requires that the Secretary

notify a person who has failed to pay a tax liability of the

filing of a notice of lien under section 6323.    The notice

required by section 6320 must be provided not more than 5

business days after the day of the filing of the notice of lien,

pursuant to section 6320(a)(2).    Section 6320 further provides

that the person so notified may request administrative review of

the matter (in the form of a hearing) within 30 days beginning on

the day after the 5-day period.    Under section 6320(c), the

hearing generally is to be conducted consistent with the

procedures set forth in section 6330(c), (d), and (e).    Section

6330(c) permits the person notified to raise collection issues

such as spousal defenses, the appropriateness of the

Commissioner's intended collection action, and possible

alternative means of collection.    Section 6330(c)(2)(B) provides

that the person notified may contest the existence and amount of

the underlying tax liability at a hearing if that person did not

receive a notice of deficiency for the taxes in question or did

not otherwise have a prior opportunity to dispute the tax
                               - 15 -

liability.    See Sego v. Commissioner, 114 T.C. 604, 609 (2000);

Goza v. Commissioner, 114 T.C. 176, 179 (2000).

     Section 6330(d) provides for judicial review of the

administrative determination by this Court or by a Federal

District Court, as may be appropriate.      Where the validity of the

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

review the Commissioner’s administrative determination for abuse

of discretion.    Where, however, the validity of the underlying

tax liability is properly at issue, this Court will review the

matter on a de novo basis.    Sego v. Commissioner, supra at 610;

see H. Conf. Rept. 105-599 at 266 (1998), 1998-3 C.B. 747, 1020.

The Notices of Deficiency Regarding Petitioner’s Tax Liabilities
for 1995 and 1997 Were Not Barred by a Directive From the Office
of the Taxpayer Advocate

     Within the IRS is an Office of the Taxpayer Advocate, headed

by the National Taxpayer Advocate.      Sec. 7803(c).   Among the

functions of the Office of the Taxpayer Advocate is to "assist

taxpayers in resolving problems with the Internal Revenue

Service".    Sec. 7803(c)(2)(A)(i).   A taxpayer seeking such

assistance may file an application with the Office of the

Taxpayer Advocate for a "Taxpayer Assistance Order" (TAO), which

may be issued if the National Taxpayer Advocate determines that

the taxpayer is or is about to incur "a significant hardship as a

result of the manner in which the internal revenue laws are being

administered" by the IRS.    Sec. 7811(a)(1)(A).    The Office of
                               - 16 -

Taxpayer Advocate is not restricted to issuance of TAOs in

carrying out its functions of aiding taxpayers; section 7811(e)

provides that none of the provisions of section 7811 prevents the

National Taxpayer Advocate from taking any action in the absence

of a taxpayer application.

     In this case, the Office of the Taxpayer Advocate actively

assisted petitioner during the time that he had an administrative

claim for damages pending.   These activities included moving the

locus of the dispute from San Francisco to Seattle and requesting

that the IRS cease collection actions until petitioner’s claim

had been considered.

     Section 7811(b)(2)(A) explicitly provides that a TAO may

require cessation of any action with respect to the taxpayer

"under chapter 64 (relating to collection)”.   The issuance of a

notice of deficiency, however, is provided for in chapter 63,

relating to assessments.   Further, with exceptions not applicable

here, a TAO may direct cessation of action under a provision

other than chapter 64 only if that provision is "specifically

described by the National Taxpayer Advocate in such order."    Sec.

7811(b)(2)(D).

     There is no credible support for petitioner’s claim that a

TAO barred the issuance, in July and August 1999, of the

deficiency notices for his 1995 and 1997 income taxes.   No copy

of any TAO is in the record.   Pace testified that the Office of
                                - 17 -

the Taxpayer Advocate had requested a suspension of "the

collection action".   During July and August, there was no

"collection action" related to petitioner’s 1995 and 1997 taxable

years.   Petitioner’s representative, Stone, claims to have been

told in February 1999 that "no action would be taken."    Her

testimony, however, fails to make clear the context in which she

allegedly received this advice.    We do not believe that the

request of the Office of the Taxpayer Advocate extended beyond

collection actions to preclude the issuance of notices of

deficiency for 1995 and 1997.

The Notices of Deficiency for 1995 and 1997 Were Sent to
Petitioner’s Last Known Address

     Absent special circumstances, the IRS may not assess a

deficiency in tax until after a valid notice of deficiency has

been sent to the taxpayer.   For that purpose, mailing a notice of

deficiency to the taxpayer at the taxpayer's "last known address"

is sufficient regardless of actual receipt or nonreceipt.    Sec.

6212(b); see Pietanza v. Commissioner, 92 T.C. 729, 735-736

(1989), affd. without published opinion 935 F.2d 1282 (3d Cir.

1991); Shelton v. Commissioner, 63 T.C. 193 (1974).

     Absent clear and concise notice of a change of address, a

taxpayer's last known address is the address shown on the

taxpayer’s return that was most recently filed at the time that

the notice was issued.   King v. Commissioner, 857 F.2d 676, 681

(9th Cir. 1988), affg. 88 T.C. 1042 (1987); Abeles v.
                              - 18 -

Commissioner, 91 T.C. 1019, 1035 (1988); compare sec. 301.6212-2,

Proced. & Admin. Regs., effective January 29, 2001.   In deciding

whether a notice was mailed to a taxpayer at the taxpayer's last

known address, the relevant inquiry “pertains to * * * [the

Commissioner’s] knowledge rather than to what may in fact be the

taxpayer's most current address.”   Frieling v. Commissioner, 81

T.C. 42, 49 (1983).

     In order to supplant the address shown on the most recent

return, a taxpayer must clearly indicate that the former address

is no longer to be used.   Tadros v. Commissioner, 763 F.2d 89,

91-92 (2d Cir. 1985); Alta Sierra Vista, Inc. v. Commissioner, 62

T.C. 367 (1974), affd. without published opinion 538 F.2d 334

(9th Cir. 1976).   A taxpayer’s use of an address different from

that on the last-filed return in correspondence with officials of

the IRS does not constitute clear and concise notice of a change

of address.   King v. Commissioner, supra at 681.   The acquisition

of a different address by IRS personnel generally fails to

constitute adequate notice of a change of address when those

personnel are not involved in issuing the statutory notices.    In

United States v. Zolla, 724 F.2d 808, 811 (9th Cir. 1984), the

Court of Appeals for the Ninth Circuit explained:

     If we required agents mailing notices of deficiency to
     take into account address information acquired by
     agents in different divisions in the course of
     unrelated investigations, the IRS could ensure that
     notices were validly addressed only by systematically
     recording in a central file all address information
                              - 19 -

     acquired in any fashion. We decline to require the IRS
     to do that. * * * it would impose an unreasonable
     administrative burden on the IRS. * * *

In this case, the notices of deficiency were mailed to the

Woodside address listed on petitioner's 1998 return--the last

return filed by petitioner prior to the mailing of the notices in

July and August 1999.   Consequently, the notices of deficiency

were mailed to petitioner at his last known address, unless

petitioner can show otherwise.

     Petitioner has not demonstrated that, before the 1995 and

1997 notices of deficiency were mailed, he provided the IRS with

clear and concise notice of a change of address.   Nor has he

shown that, prior to the mailing of the notice of deficiency, the

IRS knew of a change in petitioner's address and did not exercise

due diligence in ascertaining petitioner's correct address.     See

Abeles v. Commissioner, supra; Alta Sierra Vista, Inc. v.

Commissioner, supra at 374.

     Petitioner maintains that he provided notification of his

Portola Valley address on several occasions.   None of those

occasions, however, provided the clear and concise notice needed

to charge the IRS in the summer of 1999 with knowledge that

Portola Valley was the last known address.

     Petitioner principally urges that the IRS received clear and

concise notice of an address change when, in 1998, Rausch was

conducting an examination of petitioner’s 1995 return.   During
                              - 20 -

this examination, Stone informed Rausch that petitioner’s address

had changed to Henry, Virginia.   The IRS entered this change into

its records but soon thereafter received petitioner’s 1997

Federal income tax return.   This return bore the Woodside

address.   Its receipt caused the IRS to change its records,

during the week of October 25, 1998, to reflect that petitioner’s

address was once again the Woodside address.   That address

remained unchanged on IRS records until late in 2001, when

petitioner’s 1998 Federal income tax return was filed.    In July

and in August 1999, when the 1995 and 1997 notices of deficiency

were mailed, IRS records indicated that petitioner’s address was

the Woodside address, the one appearing on his last-filed Federal

income tax return.   There is no indication that either notice was

returned to the IRS undelivered, so there was no reason for the

IRS to conduct a further search for petitioner’s address.

(Petitioner speculated at trial that mail may have been stolen

from his mailbox at the Portola Valley residence.   If that were

the case, however, it would not be attributable to any error on

the part of the IRS.)

     In any event, petitioner did not move to Virginia.   The

Virginia address was the address of Stone.   Subsequent

correspondence between Dorr and Stone indicated that petitioner

continued to live in California while Stone lived in Virginia.

Moreover, a copy of the 1995 notice was sent to the Henry,
                                - 21 -

Virginia, address.    Stone neglected to advise petitioner of

receipt of that notice.    Petitioner seeks to disavow some

communications sent to Stone.    His inconsistent positions

concerning her authority and her misrepresentations of her

capacity are not attributable to respondent.    See Lefebvre v.

Commissioner, T.C. Memo. 1984-202, affd. 758 F.2d 1340 (9th Cir.

1985).    Any confusion was created by petitioner and his

representative, and their communications cannot be characterized

as clear and concise.

       We are unpersuaded by petitioner’s contentions that, on

other occasions, he or Stone had provided clear and concise

notification of his new Portola Valley address before the 1995

and 1997 deficiency notices were mailed.    Those occasions

involved persons who were either with the Office of the Taxpayer

Advocate, the Special Procedures Office, or the Collection

Division.    Petitioner’s use of a new address in dealings with

persons who were not involved with the issuing of deficiency

notices did not require them to compare the address petitioner

used to the last known address otherwise on file.    United States

v. Zolla, 724 F.2d at 811; see also Rev. Proc. 90-18, 1990-1 C.B.

491.

       Another notification of a new address, petitioner argues,

came when IRS received an unsigned Form 4868 seeking an automatic

extension of time within which petitioner might file his 1998
                               - 22 -

Federal income tax return.   The Form 4868, which was mailed

sometime prior to August 18, 1999, used the Portola Valley

address.   However, the Form 4868 does not indicate that it is

intended as a notification of a change of address.   Under these

circumstances, the submission of a Form 4868 does not constitute

the requisite notification that the address it contains is a new

address for the taxpayer.    Monge v. Commissioner, 93 T.C. 22, 32

(1989).

     We conclude that petitioner’s haphazard use of his new

address did not constitute "clear and concise written

notification".    He fell short of placing the examination division

on notice that the Woodside address, the address appearing on his

last-filed return, was not his last known address.   We conclude

that the notices of deficiency for 1995 and 1997, which were

mailed to the Woodside address, were valid.

Due Process Was Not Offended by Efforts To Collect Petitioner’s
Tax Liabilities

    The IRS has published a list of policies regarding the

administration of the internal revenue laws in the Internal

Revenue Manual.   One section of the Manual describes the filing

of notices of tax lien, as follows:

         (1) Notices of lien generally filed only after
     taxpayer is contacted in person, by telephone or by
     notice: A notice of lien shall not be filed, except in
     jeopardy assessment cases, until reasonable efforts
     have been made to contact the taxpayer in person, by
     telephone or by a notice sent by mail, delivered in
     person or left at the taxpayer's last known address, to
                               - 23 -

     afford him/her the opportunity to make payment. All
     pertinent facts must be carefully considered as the
     filing of the notice of lien may adversely affect the
     taxpayer's ability to pay and thereby hamper or retard
     the collection process. [1 Administration, Internal
     Revenue Manual (CCH), sec. 1.2.1.5.13, at 3002-3003.]

     Policy statements in the Internal Revenue Manual do not

confer enforceable rights on taxpayers.    Vulcan Oil Tech.

Partners v. Commissioner, 110 T.C. 153, 161 (1998), affd. without

published opinions sub nom. Tucek v. Commissioner, 198 F.3d 259

(10th Cir. 1999), Drake Oil Tech. Partners v. Commissioner, 211

F.3d 1277 (10th Cir. 2000).    In any event, it is apparent to us

that the IRS met the requirements of the policy statement before

filing the notice of lien.    Early in 2000, Rosado contacted

petitioner’s representative, Stone, and discussed with her

payment of amounts owing.    His letter of April 19, 2000, enclosed

transcripts of petitioner’s income tax accounts for 1993, 1995,

and 1997.   It suggested that petitioner begin making payments of

$5,000 monthly to reduce the amount of tax owing and resulting

interest charges.   The letter requested information from

petitioner and explained:

     I am required to advise you that failure to provide the
     above information by the May 15, 2000 [sic] may result
     in enforcement action such as, issuance of Final
     Notice, Issuance of Notice of Levy, serving summons,
     filing Notice of Federal Tax Lien. * * *

This letter, a copy of which Stone forwarded to petitioner,

adequately provided petitioner with the opportunity to make
                               - 24 -

payment of the liabilities specified and warned him of the

consequences of doing nothing.

     Petitioner further argues that respondent was required to

send to him notice of intent to file the notice of tax lien

before the notice was actually filed, but petitioner is

incorrect.    Section 6320 only requires that notice be sent to the

taxpayer within 5 days after the notice of tax lien has been

filed.

     Petitioner argues that respondent violated some procedures

set forth in the Fair Debt Collection Practices Act (FDCPA),

Pub. L. 95-109, 91 Stat. 874 (1977), 15 U.S.C. sec. 1692 (2000).

By its terms, however, that act does not apply to employees of

the Government whose collection activities are part of their

jobs.    See 15 U.S.C. sec. 1692a(6) (2000).   Congress has amended

the Internal Revenue Code to require respondent to observe some

FDCPA procedures.    See sec. 6304 as added by RRA 1998, sec. 3466,

112 Stat. 768; see also H. Conf. Rept. 105-599, at 291 (1998),

1998-3 C.B. 747, 1045.    Petitioner’s reliance upon FDCPA

practices that Congress has not included in the Internal Revenue

Code is unavailing.

     Nor has petitioner convinced us that respondent has deprived

him of constitutional due process by a perceived accumulation of

procedural mistakes.    As we noted at trial, mistakes have been

made by both sides in this dispute.     None of respondent’s
                              - 25 -

mistakes, however, have deprived petitioner of his right to

notice and a fair hearing, either at the administrative level or

before this Court.

The Assessment of Taxes and Penalties for 1995 Was Valid

     Respondent concedes that petitioner did not receive a copy

of the notice of deficiency for 1995 and that the underlying

liability for 1995 is therefore properly considered in this

proceeding.   Whether the limitations period has expired

constitutes a challenge to the underlying tax liability.   Boyd v.

Commissioner, 117 T.C. 127, 130 (2001).

     Petitioner contends that the statute of limitations bars

assessment of his liabilities for 1995 and that the additions to

tax should be abated because of prior administrative action.     He

has not presented any evidence of error in the determination of

taxable income or the calculations of tax liability.   Section

7491(a) does not apply because the examination of petitioner’s

liabilities in issue commenced before the effective date of that

section.

     The Commissioner has 3 years from the time a return is filed

to issue a notice of deficiency with respect to income tax.    See

secs. 6212(a), 6213(a), 6501(a).   Section 7502(a)(1) provides

that, in certain circumstances, a timely mailed return will be

treated as though it were timely filed.   Section 7502(a)(2)

provides that the timely mailing/timely filing rule applies if
                              - 26 -

the postmark date on an envelope falls within the prescribed

period on or before the prescribed date.    To establish that a

return has been timely filed, we require reliable testimony or

other corroborating evidence of the circumstances surrounding the

return's preparation and mailing.    See, e.g., Estate of Wood v.

Commissioner, 92 T.C. 793 (1989), affd. 909 F.2d 1155 (8th Cir.

1990); Mitchell Offset Plate Serv., Inc. v. Commissioner, 53 T.C.

235, 239-240 (1969); see also Schwechter v. Commissioner, T.C.

Memo. 2000-36; Rakosi v. Commissioner, T.C. Memo. 1993-68, affd.

without published opinion 46 F.3d 1144 (9th Cir. 1995).

     Petitioner argues that Stone timely mailed a 1995 return on

his behalf on or before August 15, 1996.    Thus, he concludes,

assessment of his 1995 taxes on February 7, 2000, was beyond the

applicable period of limitations.    There is neither reliable

testimony nor corroborating evidence, however, sufficient to

prove his claim.

     Petitioner entrusted the preparation and filing of his

return to Stone.   Stone and her former office assistant testified

about office procedures in 1996.    Stone testified that she

stamped petitioner’s name on the return.    The assistant testified

that the return would have been hand delivered to a window at the

local post office, but no proof of mailing was obtained.    Stone

claimed that a check was enclosed with the return and never

cleared the bank, but her testimony about the amount of the check
                               - 27 -

was inconsistent with the balance shown on the copy of the return

later produced.   There was no explanation of the failure to

follow up on the uncleared check.   There is no evidence that a

1995 return was received by the IRS before March 31, 1997, when

an unsigned and undated copy was delivered after an inquiry from

the IRS.   The record shows that petitioner was chronically

delinquent in his tax obligations, and we cannot accept these

unpersuasive assertions that a particular return was timely.    We

conclude that the assessment for 1995 was timely.   (We need not,

therefore, address respondent’s contention that the return

described by Stone was invalid for lack of petitioner’s

signature.)

     The addition to tax under section 6651(a) is applicable

unless a taxpayer establishes that the failure to file was due to

reasonable cause and not willful neglect.   Petitioner failed to

exercise ordinary care and prudence in filing his 1995 return.

Stone’s office procedures may have contributed to the failure to

make or to prove a timely filing.   Nevertheless, reliance on an

agent to file a timely return when the due date of the returns

was ascertainable by the taxpayer does not constitute reasonable

cause for excusing the taxpayer from statutory penalties for late

filing.    United States v. Boyle, 469 U.S. 241 (1985).   Petitioner

was aware that he had not signed a return for 1995.   Accordingly,
                              - 28 -

petitioner is liable for the addition to tax under section

6651(a)(1).

     Petitioner argues that earlier administrative actions of the

IRS require a different result.    Petitioner asserts that, because

of previous abatement of $867.92 in late filing penalties,

section 6406 operates to estop respondent from assessing $16,494

in late filing penalties that were subsequently determined in the

notice of deficiency for 1995.    Petitioner is incorrect.   Section

6406 precludes review by "any other administrative or accounting

officer, employee or agent of the United States" (emphasis added)

of a decision of the Secretary or his delegate with respect to a

claim by the taxpayer.   Secs. 6406, 7701(a)(11)(B).   By its

terms, section 6406 does not preclude the Secretary or his

delegate from reviewing prior actions.    As explained in Hacker v.

Commissioner, T.C. Memo. 1993-285, affd. 29 F.3d 632 (9th Cir.

1994):

     The legislative history of section 6406 indicates that
     such section was originally added for the purpose of
     prohibiting review of a decision of the Secretary of
     the Treasury (and his delegates, including the
     Commissioner) by employees of other agencies, such as
     the Comptroller General. See Hearings on H.R. 8245
     Before the Senate Comm. on Finance, 67th Cong., 1st
     Sess. 299-300 (Sept. 1-Oct. 1, 1921); see also Crocker
     v. United States, 323 F. Supp. 718, 724-725 (N.D. Miss.
     1971). Clearly, section 6406 does not estop the
     Commissioner, or his successor, from reviewing his own
     decisions. See E.A. Landreth Co. v. Commissioner, 11
     B.T.A. 1, 23 (1928); see also Burnet v. Porter, 283
     U.S. 230 (1931); McIlhenny v. Commissioner, 39 F.2d 356
     (3d Cir. 1930), affg. 13 B.T.A. 288 (1928); Estate of
     Meyer v. Commissioner, 58 T.C. 69, 71 (1972).
                              - 29 -

     The evidence before us discloses no reason for the original

abatement of $867.92.   On the contrary, the evidence justifies

imposition of the late filing additions.

     Petitioner also contends that respondent conducted an

unauthorized second examination of his books in violation of

section 7605(b).   Petitioner’s error arises from his misreading

of the certificate of assessment and payments.   This document

indicates that the matter of petitioner’s 1995 tax liabilities

was transferred without assessment from the IRS Examination

Division to the IRS Appeals Office and then, when petitioner’s

administrative appeal was unavailing, back to the Examination

Division for the assessment of the taxes in issue.   It does not

show that there was an unauthorized second examination of

petitioner’s books and records with respect to his 1995 taxable

year.

     Our review of the procedures used in assessing and

collecting petitioner’s Federal income tax liabilities supports

the Appeals officer’s determination that the Notice of Federal

Tax Lien should not be withdrawn.   Petitioner has not shown that

respondent erred in declining to invalidate assessments of

Federal income taxes for 1995 or 1997.   The assessments were made

within the applicable period of limitations and were valid.
                             - 30 -

     We have considered petitioner’s other arguments.   Many of

them relate to matters not properly before the Court or not

supported by evidence or authority.   All lack merit.

     To give effect to the foregoing,

                                        Decision with be entered

                                  for respondent.
