                  T.C. Summary Opinion 2005-74



                     UNITED STATES TAX COURT



              IRENE LUCILLE GRIFFEN, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 8098-04S.          Filed June 7, 2005.



     Irene Lucille Griffen, pro se.

     Miriam C. Dillard, for respondent.



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

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

Revenue Code in effect at the time that the petition was filed.

Unless otherwise indicated, subsequent section references are to

the Internal Revenue Code in effect at relevant times.   The

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

this opinion should not be cited as authority.
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     The petition in this case was filed in response to a Notice

of Determination Concerning Collection Action(s) Under Section

6320 and/or 6330 (notice of determination).    Pursuant to section

6330(d), petitioner seeks review of respondent’s determination to

proceed with collection of her tax liability of $1,837.02 for

1998.   The issue for decision is whether the Appeals officer

abused her discretion in sustaining a proposed levy to collect

petitioner’s unpaid income tax liability.

     The stipulation of facts and the exhibits received into

evidence are incorporated herein by reference.    Petitioner

resided in Bristol, Virginia, at the time the petition was filed.

                            Background

A.   Petitioner’s 1998 Tax Return

     Petitioner timely filed her Form 1040, U.S. Individual

Income Tax Return, for 1998 as a head of household.    On that

return, she claimed four dependency exemptions and an earned

income credit for two qualifying children.    Respondent issued

petitioner a refund of $3,528.

     Respondent later notified petitioner that her 1998 return

was being examined because another individual had claimed the

same children.   Respondent requested documentation to verify

petitioner’s claimed exemptions and credit.

     Petitioner submitted a copy of her daughter’s driver’s

license, Social Security card, and birth certificate.    She also
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submitted copies of her two granddaughters’ Social Security cards

and hospital birth records.

     On November 29, 2000, respondent issued to petitioner a

notice of deficiency by certified mail in which respondent

determined that petitioner is not entitled to head of household

filing status, dependency exemptions, or the earned income

credit.    The IRS subsequently sent other correspondence

concerning petitioner’s case to the same address, 13750 S.E. 26th

Street, Morriston, Florida, 32668, which petitioner received.

     Petitioner submitted canceled checks and utility statements

in an attempt to obtain reconsideration of the deficiency.

Respondent reviewed the documentation and notified petitioner of

respondent’s refusal to change the determinations set forth in

the notice of deficiency.

B.   Respondent’s Collection Actions

     Respondent withheld petitioner’s 2000 Federal income tax

refund and applied it toward the outstanding tax liability for

1998.   Respondent also withheld petitioner’s 2001 and 2002

Federal income tax refunds and applied them toward her 1998

balance.

     On September 1, 2003, respondent issued to petitioner a

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

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

Collection Due Process Hearing (hearing), in which she asserted
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that she did not owe the taxes because the liability had been

discharged in a Chapter 7 bankruptcy proceeding in 2002.

C.   Petitioner’s Appeals Hearing

     During the telephonic hearing, petitioner told Appeals

Officer Carolyn Jackson (Ms. Jackson) that she had previously

given the auditor all of the information requested.    She stated

that as soon as she received the notice of deficiency, she gave

the auditor additional information to verify the earned income

credit, dependency exemptions, and head of household filing

status.   Petitioner said she never heard from the auditor again

regarding her consideration of the additional information.     She

also stated that she had filed for bankruptcy and had been told

that her slate had been wiped clean.

     Ms. Jackson discussed with petitioner installment agreements

and the possibility of placing her account in “currently not

collectible” status.   When petitioner indicated that she wanted

to discuss the options in greater detail at a later date, Ms.

Jackson set up a telephonic conference for March 1, 2004.     On

that date, petitioner called and indicated she would not be able

to participate because her daughter was ill.    Ms. Jackson

rescheduled the conference to March 15, 2004.    On that date, Ms.

Jackson was unable to contact petitioner, and petitioner did not

contact her to reschedule or to discuss the case.    On June 16,

2004, Ms. Jackson sent petitioner a notice of determination
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sustaining respondent’s proposed levy as the appropriate means of

collecting petitioner’s unpaid liability for the 1998 tax year.

                            Discussion

     Section 6330(c) prescribes the matters that a person may

raise at an Appeals Office hearing.    Section 6330(c)(2)(A)

provides that a person may raise collection issues such as

spousal defenses, the appropriateness of the Commissioner's

intended collection action, and possible alternative means of

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

Goza v. Commissioner, 114 T.C. 176, 180 (2000).    In addition,

section 6330(c)(2)(B) establishes the circumstances under which a

person may challenge the existence or amount of his or her

underlying tax liability.   Section 6330(c)(2)(B) provides:

          (2) Issues at hearing.--
          *      *      *      *      *      *       *
               (B) Underlying liability.--The person may
          also raise at the hearing challenges to the
          existence or amount of the underlying tax
          liability for any tax period if the person did not
          receive any statutory notice of deficiency for
          such tax liability or did not otherwise have an
          opportunity to dispute such tax liability.

     On November 29, 2000, respondent sent a notice of deficiency

to petitioner’s S.E. 26th Street address.    The notice was sent by

certified mail, but petitioner contends that she does not recall

receiving a notice of deficiency, and no petition for

redetermination was filed with this Court.

     Petitioner received mail subsequently sent to that address.
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The notice of determination indicates that at the Appeals

conference on February 26, 2004, petitioner admitted receiving

the notice of deficiency and that her address had not changed.

     Petitioner’s only evidence on the issue is that she does not

recall receiving the notice of deficiency.   The Court concludes

that petitioner received the notice of deficiency.

     Because petitioner received the notice of deficiency and

failed to file a petition with this Court, petitioner was not

able to challenge her underlying 1998 tax liability in the

Appeals Office hearing.   Assuming, arguendo, that petitioner were

permitted to challenge the underlying liability, she has failed

to present sufficient evidence to support her position.

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

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

review the administrative determination of the Appeals Office for

abuse of discretion.   Sego v. Commissioner, supra at 610; Goza v.

Commissioner, supra at 181-183.   The Court reviews only whether

the Appeals officer’s refusal to accept petitioner’s OIC was

arbitrary, capricious, or without sound basis in fact or law.

See Woodral v. Commissioner, 112 T.C. 19, 23 (1999).

     Petitioner alleges that her tax liability was discharged in

her Chapter 7 bankruptcy proceeding.   The Supreme Court has

stated in Young v. United States, 535 U.S. 43, 44 (2002), that “A

discharge under the Bankruptcy Code does not extinguish certain
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tax liabilities for which a return was due within three years

before the filing of an individual debtor’s petition.”    11 U.S.C.

secs. 523(a)(1)(A), 507(a)(8)(A)(i) (2000).    Or to put it another

way, an income tax is a nondischargeable priority claim against

the estate if it relates to a tax return whose due date,

including extensions, was within 3 years of the commencement of

the bankruptcy case.   11 U.S.C. sec. 507(a)(8)(A)(i).

     Petitioner filed a bankruptcy petition on January 15, 2002,

which was discharged on December 13, 2002.    The 1998 tax

liability is, therefore, nondischargeable because it relates to a

tax return the due date of which, including extensions, was

within 3 years of the date the bankruptcy petition was filed.     11

U.S.C. secs. 523(a)(1), 507(a)(8)(A).

     Petitioner did not pursue her opportunities to discuss

collection alternatives with Ms. Jackson.    She also failed to

submit any financial information for Ms. Jackson to consider.

Having reviewed the entire record, the Court cannot find that the

determination sustaining respondent’s proposed levy was an abuse

of discretion.   Accordingly, collection by levy of petitioner’s
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unpaid 1998 tax liability reflected in the notice of

determination may proceed.

     Reviewed and adopted as the report of the Small Tax Case

Division.


                                      Decision will be entered

                              for respondent.
