                       T.C. Memo. 2005-198



                     UNITED STATES TAX COURT



                MEHDI H. HAJIYANI, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 4008-04L.                Filed August 16, 2005.



     Mehdi H. Hajiyani, pro se.

     Roger W. Bracken, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     GERBER, Chief Judge:   Petitioner, pursuant to section

6330(d),1 seeks review of respondent’s determination to proceed

with collection (by means of levy) of petitioner’s unpaid 1993


     1
      Unless otherwise indicated, all section references are to
the Internal Revenue Code, and all Rule references are to the Tax
Court Rules of Practice and Procedure.
                               - 2 -

and 1994 Federal income tax liabilities.     The issue for our

consideration is whether respondent abused his discretion by

determining to proceed with the proposed levy.

                         FINDINGS OF FACT2

     At the time of the filing of the petition in this case,

petitioner resided in Rockville, Maryland.     On April 11, 2001,

petitioner was provided with the opportunity to contest his 1992,

1993, and 1994 income tax deficiencies in a trial before this

Court.   On December 12, 2001, the Court held in a Summary

Opinion, inter alia, that petitioner was engaged in a money-

lending business for the years 1992 to 1994 and was allowed to

deduct certain expenses associated with that business.     See

Hajiyani v. Commissioner, T.C. Summary Opinion 2001-183.

     In the above-referenced deficiency proceeding, the parties

were required to provide the Court with computations reflecting

the holdings in T.C. Summary Opinion 2001-183 for purposes of

entry of decision.   See Rule 155.   Respondent submitted a

computation, but petitioner did not.    After a time, respondent

moved for an entry of decision in accord with his proposed

computation, which was based on the Court’s Summary Opinion.

     On February 22, 2002, petitioner, through his attorney,

Kenneth Wall, filed an objection to the entry of decision,


     2
      The parties’ stipulation of facts is incorporated by this
reference.
                               - 3 -

alleging that additional information for the year could alter the

decision to be entered.   On February 27, 2002, this Court ordered

petitioner to file an alternative computation by March 25, 2002.

Petitioner failed to file an alternative computation, and on

April 26, 2002, a decision was entered determining deficiencies

in income tax for the taxable years 1993 and 1994 of $9,228 and

$17,369, respectively.

     On January 4, 2003, respondent sent petitioner a Final

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

(levy notice) for petitioner’s 1993 and 1994 taxable years.    The

levy notice reflected an unpaid tax liability (including

interest) of $10,109 for the 1993 taxable year and $33,195 for

the 1994 taxable year.

     On February 2, 2003, respondent received petitioner’s timely

Form 12153, Request for a Collection Due Process Hearing

(request), for taxable years 1992, 1993, and 1994.   As a basis

for his request, petitioner attached documents showing that he

had objected to respondent’s original decision.   Petitioner’s

original section 6330 hearing was scheduled for November 19,

2003, but it was rescheduled for a later date because of

conflicts.   Petitioner failed to appear for the rescheduled

meeting.   On February 4, 2004, respondent mailed petitioner a

Notice of Determination Concerning Collection Action(s) Under

Section 6320 and/or 6330 (final notice) determining that the
                               - 4 -

proposed levy should be sustained.     As of that date petitioner

had not proposed any collection alternatives.     The sole issue

petitioner raised was whether he was liable for the unpaid 1993

and 1994 tax liabilities.   On February 11, 2004, petitioner sent

an offer-in-compromise to respondent, offering to settle the

1992, 1993, and 1994 tax liabilities for $100 on the basis of

doubt as to liability.

                              OPINION

     Petitioner essentially makes three arguments in support of

his position that respondent should not be allowed to proceed

with collection.   First, petitioner argues that the Rule 155

computations in the deficiency proceeding for the 1993 and 1994

tax years are incorrect because they did not account for

petitioner’s claimed loss relating to his money-lending business

in 1992.   Second, petitioner argues that his offer-in-compromise

was not considered.   Finally, petitioner contends that part of

his tax liabilities was satisfied by offsets of tax refunds and

attachment of his bank accounts.

     Section 6331(a) authorizes the Commissioner to levy on

property and property rights of a taxpayer who fails to pay a tax

liability after notice and demand.     Sections 6331(d) and 6330(a),

however, require the Secretary, before proceeding with

collection, to send written notice to the taxpayer of the intent

to levy and of the taxpayer’s right to a hearing.
                                - 5 -

       Section 6330(c)(2)(A) provides that, at the hearing, the

taxpayer may raise “any relevant issue relating to the unpaid tax

or the proposed levy” including spousal defenses, challenges to

the appropriateness of collection actions, and alternatives to

collection.    Section 6330(c)(1) requires that the Appeals officer

obtain verification that the requirements of any applicable law

or administrative procedure have been met.

       When an Appeals officer issues a determination regarding a

disputed collection action, a taxpayer may seek judicial review

with the Tax Court or a District Court, as appropriate.    Sec.

6330(d); see Davis v. Commissioner, 115 T.C. 35, 37 (2000); Goza

v. Commissioner, 114 T.C. 176, 179 (2000).    The underlying tax

liability may be questioned if the taxpayer “did not receive any

statutory notice of deficiency for such tax liability or did not

otherwise have an opportunity to dispute such tax liability.”

Sec. 6330(c)(2)(B).    Where the validity of the underlying tax

liability is properly at issue, the Court will review the matter

de novo.    Sego v. Commissioner, 114 T.C. 604, 610 (2000).   Where

the validity of the underlying tax is not at issue, the Court

will review the Commissioner’s administrative determination for

an abuse of discretion.    Id.; Goza v. Commissioner, supra at 181-

182.    Petitioner had the opportunity to dispute the underlying

tax liabilities and did so in the deficiency proceeding.

Therefore, the validity of the underlying tax liabilities may not
                                - 6 -

be questioned, and we review respondent’s determination under an

abuse of discretion standard.

     The main thrust of petitioner’s challenge concerns the

computations in the deficiency proceeding under Rule 155.

However, as noted, petitioner is not entitled to question the

underlying tax liabilities because he already has been provided

the opportunity to challenge his liabilities.   See sec.

6330(c)(2)(B).   In that regard, petitioner was provided with the

opportunity to submit a computation under Rule 155, but failed to

timely do so. Petitioner contends that Mr. Wall, his attorney,

did not submit a Rule 155 computation.    Petitioner’s contention

with respect to his attorney’s failure does not change the

limitation upon petitioner or the Court with respect to

addressing the underlying merits of his 1993 or 1994 tax

liability.   See sec. 6330(c)(2)(B).

     With respect to petitioner’s second argument, concerning his

attempted offer-in-compromise, our review of the Commissioner’s

determination generally is limited to issues raised at the

section 6330 hearing.   Magana v. Commissioner, 118 T.C. 488, 493

(2002).   Petitioner’s offer-in-compromise was submitted after the

scheduled section 6330 hearing and the issuance of the final

notice.   Accordingly, the offer-in-compromise could not have been

considered at the section 6330 hearing.   There would, therefore,
                                 - 7 -

be no basis for the Court to hold that there was an abuse of

discretion with respect to the offer-in-compromise.3

     Petitioner’s final argument is that a portion of his tax

liabilities had been satisfied through offset and other

collection by respondent.   However, the specific amounts of

petitioner’s tax liabilities that remain unpaid have not been

addressed by him, and there is no evidence that respondent is

attempting to collect more than petitioner’s unpaid balance.

     In summary, before the scheduled section 6330 hearing,

petitioner’s sole defense to the proposed levy was his challenge

to the underlying tax liability.    Petitioner did not attend the

scheduled hearing, and through the time of the final notice he

did not offer spousal defenses, challenges to the appropriateness

of the collection action, or collection alternatives.

     We, accordingly, hold that respondent did not commit error

or abuse his discretion in his determination to proceed with

collection.

     To reflect the foregoing,


                                         Decision will be entered

                                 for respondent.

     3
      It should be noted that petitioner’s offer-in-compromise
was with respect to doubt as to liability, which would address
the merits of the underlying liability. Since petitioner is
precluded from questioning the underlying liabilities, his offer
would not provide him any relief in the setting of this
proceeding.
