                       T.C. Memo. 2007-159



                     UNITED STATES TAX COURT



                   JOHN BALLARD, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 4307-07L.               Filed June 20, 2007.


          P filed a petition and motion to restrain
     assessment on the same date. As a basis for his motion
     to restrain assessment, P asserts that R instructed P’s
     employer to change the withholding status on P’s Form
     W-4, Employees Withholding Allowance Certificate,
     without providing P a remedy to challenge R’s actions.
     P asserts that R’s instructions to P’s employer
     constitute a collection action and that R failed to
     comply with the provisions of sec. 6330(a), I.R.C.1

          The Court issued an order to show cause why this
     case should not be dismissed for lack of jurisdiction
     on the grounds that no notice of deficiency or notice
     of determination has been sent to petitioner which
     confers jurisdiction on this Court. R asserts that no
     notice of deficiency or notice of determination was


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

     issued to P and therefore the Court is without
     jurisdiction to consider P’s motion to restrain
     assessment.

          Held: Since no notice of deficiency or notice of
     determination was issued in this case, the Court lacks
     jurisdiction.

          Held further, the Court’s order to show cause why
     this case should not be dismissed for lack of
     jurisdiction shall be made absolute.



     John Ballard, pro se.

     Benjamin J. Peeler and Mark Cottrell, for respondent.



                       MEMORANDUM OPINION


     PANUTHOS, Chief Special Trial Judge:   This matter is before

the Court on (1) petitioner’s Motion to Restrain Assessment, and

(2) the Court’s Order to Show Cause why this case should not be

dismissed for lack of jurisdiction on the grounds that no notice

of deficiency or notice of determination has been sent to

petitioner which confers jurisdiction on this Court.

                             Background

     A petition was filed with this Court on February 15, 2007.

Petitioner asserts that respondent instructed his employer to

change the withholding status on his Form W-4, Employee’s

Withholding Allowance Certificate, without providing petitioner

with a remedy to challenge respondent’s actions.   Petitioner

contends that respondent’s proposed change to his withholding
                              - 3 -

status is unlawful2 because such change is a collection action

taken without issuing the required notice under section 6330(a).

Petitioner attached to the petition Internal Revenue Service

(IRS) Letter 2801(CG) (Employee Copy),3 dated September 13, 2005,

which states:

     Why Are We Writing to You?
     We are writing to you because, based on the information
     we have, the amount of income tax withheld from your
     paycheck will not adequately cover your income tax
     liability as required by Internal Revenue Code (IRC)
     Section 3402.




     2
        Employers are required under the Internal Revenue Code to
withhold taxes from employees’ earnings. Secs. 3401 and 3402.
Furthermore, under sec. 31.3402(f)(2)-1T(g)(2), Temporary
Employment Tax Regs., 70 Fed. Reg. 19696 (Apr. 14, 2005), the
Commissioner may review withholding certificates to determine if
the certificates are truthful and valid. The Commissioner has
authority under the regulation: “to review withholding
certificates for compliance with the internal revenue laws and to
declare invalid those certificates found not to be in
compliance.” Stonecipher v. Bray, 653 F.2d 398, 402-403 (9th
Cir. 1981) (interpreting prior version of regulations, but the
premise remains valid); see sec. 31.3402(f)(2)-1T(g)(2),
Temporary Employment Tax Regs., supra. If a person fails to
submit a valid withholding form, the regulations require that
“the employer shall withhold from the employee as from a single
person claiming no exemptions.” Sec. 31.3402(f)(2)-1(e),
Employment Tax Regs. Sec. 31.3402(f)(2)-1T(g)(2), Temporary
Employment Tax Regs., supra, provides procedures whereby the IRS
may implement a reduction in the number of withholding exemptions
permitted to an employee. Sec. 31.3402(f)(2)-1T(g)(2)(vi),
Temporary Employment Tax Regs., supra, provides procedures for an
employee to administratively change his or her withholding.
There is no evidence that petitioner followed these procedures.
     3
        In other situations, the Commissioner has issued IRS
Letter 2800C which is substantially similar to, and is issued for
the same reason as, IRS Letter 2801(CG).
                           - 4 -


What Instructions Did We Give Your Employer?
We instructed your employer to disregard your Form W-4,
Employee’s Withholding Allowance Certificate, and
withhold tax from your paycheck as follows:

          Filing Status:           Single
          Allowances:              0

In addition, we have instructed your employer not to
honor a new Form W-4 from you, unless the filing status
and allowances you claim do not result in less
withholding than the filing status and allowances shown
above.

What Does the Change to Your Filing Status and
Allowances Mean? This change in your filing status and
allowances will mean an increase in the amount withheld
from your paycheck.

What Can You Do If You Disagree?
-    If your circumstances have changed your filing
     status and your number of allowances, you may (1)
     complete the enclosed Form W-4, including the
     worksheet on the back, (2) include a written
     statement and any supporting documentation to
     justify your filing status and your number of
     allowances, and (3) return it to us within 30 days
     from the date of this letter.

-    If you’re claiming exemption from withholding, (1)
     complete the enclosed Form 6450, Questionnaire to
     Determine Exemption from Withholding, (2) return
     it with your completed Form W-4, and (3) include
     your telephone number and the hours we can reach
     you.

-    In either case if we do not hear from you within
     30 days from the date of this letter, your
     employer has been instructed to withhold at the
     rate shown above.

Can My Employer Change My Filing Status or Increase My
Allowances? Your employer cannot change your filing
status or increase your allowances until they receive
written notice from us. The Internal Revenue Code
(IRC) Section 3402 requires employers to withhold tax.
If the statement and documentation that you send to us
                               - 5 -

     justifies the filing status and allowances on your new
     Form W-4, we will instruct your employer to withhold on
     the basis of your new Form W-4.

     What If You Have More Questions?
     If you have any questions, you may call TAX EXAMINER
     ID* 8900000, on weekdays between 7:00 a.m. and 4:30
     p.m. Pacific Standard Time at 1-866-794-0059. This is
     a toll-free telephone number. We’ve enclosed Notice
     853, Form W-4 Privacy Act Notification, for your
     convenience.

     On February 15, 2007, petitioner filed a Motion to Restrain

in which he seeks injunctive relief pursuant to sections 6213(a)4

and 6330(a) by having the Court:   (1) Order respondent to

withdraw the Letter 2801(CG); (2) reinstate petitioner’s filing

status and allowance as shown on his last Form W-4 before

respondent issued the Letter 2801(CG) or allow petitioner to file

a new Form W-4 to correct respondent’s change in petitioner’s

withholding status; and (3) order respondent to reimburse

petitioner for any damages that were unlawfully collected

pursuant to Letter 2801(CG).

     The Court issued an Order setting petitioner’s motion to

restrain assessment for hearing at the Motions Session in

Washington, D.C.   The Court noted that no notice was attached to

the petition which would permit petitioner to invoke the Court’s

jurisdiction.   Accordingly, the Court ordered the parties to show



     4
        Sec. 6213(a) provides for a restriction on assessment in
the event that a notice of deficiency is mailed to a taxpayer.
There is no evidence in this case that a notice of deficiency was
mailed to petitioner.
                                - 6 -

cause in writing why this case should not be dismissed for lack

of jurisdiction on the ground that respondent has not issued to

petitioner a notice of deficiency or notice of determination that

would permit petitioner to invoke the Court’s jurisdiction.

     In his response, respondent stated that a search of

respondent’s records revealed no evidence of a notice of

deficiency or notice of determination being issued to petitioner,

and thus, respondent contends the Court lacks jurisdiction in

this case.   A hearing on petitioner’s motion to restrain was held

in Washington, D.C.    After the hearing the Court received and

filed petitioner’s Response to Respondent’s Response to Order to

Show Cause and Petitioner’s Objection to Respondent’s Objection

to Petitioner’s Motion to Restrain Assessment.

                             Discussion

     This Court can proceed in a case only if it has

jurisdiction, and either party, or the Court sua sponte, can

question jurisdiction at any time.      Stewart v. Commissioner, 127

T.C. 109, 112 (2006); Estate of Young v. Commissioner, 81 T.C.

879, 880-881 (1983).    We must have jurisdiction in order to

consider the substantive merits of petitioner’s motion.     See

Stewart v. Commissioner, supra.    We must decide whether we have

jurisdiction if it appears that we may not have jurisdiction.

Id.; Wheeler’s Peachtree Pharmacy, Inc. v. Commissioner, 35 T.C.
                                 - 7 -

177, 179 (1960).    Thus, the threshold issue for decision is

whether this Court has jurisdiction in this case.

     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).

Petitioner contends that this Court has jurisdiction in this case

to review a collection action under section 6330.

     Section 6330 entitles a taxpayer to notice of the taxpayer’s

right to request a hearing before certain levy actions are taken

by the Commissioner in furtherance of collection from the

taxpayer of unpaid Federal taxes.      If a hearing is requested, the

Appeals officer conducting the hearing must verify that the

requirements of any applicable law or administrative procedure

have been met.     Sec. 6330(c)(1).   The taxpayer requesting the

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

or the proposed levy”.    Sec. 6330(c)(2)(A).    The taxpayer may

raise challenges “to the existence or amount of the underlying

tax liability”, however, only if he “did not receive any

statutory notice of deficiency for such tax liability or did not

otherwise have an opportunity to dispute such tax liability.”

Sec. 6330(c)(2)(B).    Following the hearing, the Appeals officer

must determine whether the collection action is to proceed,

taking into account the verification the Appeals officer has

made, the issues raised by the taxpayer at the hearing, and
                               - 8 -

“whether any proposed collection action balances the need for the

efficient collection of taxes with the legitimate concern of the

* * * [taxpayer] that any collection action be no more intrusive

than necessary.”   Sec. 6330(c)(3).

     The Court’s jurisdiction under section 6330 depends upon the

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

timely petition for review.   Sec. 6330(d)(1); see Orum v.

Commissioner, 123 T.C. 1 (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).

Thus, in the absence of a notice of determination, this Court

lacks jurisdiction.

     Petitioner attached to his petition IRS Letter 2081(CG).

Petitioner contends that IRS Letter 2081(CG) constitutes a valid

notice of determination that confers jurisdiction on this Court

under section 6330.   We disagree because none of the events

described in section 6330 that lead to a determination which we

have jurisdiction to review have occurred.   There has been no

notice of a right to a hearing, no timely request for hearing,

and no determination with respect to the hearing or request for

hearing as required by section 6330.   A description of a notice

of determination is found in section 301.6330-1(e)(3), Q&A-E8(i),

Proced. & Admin. Regs., which provides:
                              - 9 -

     Q-E8. How will Appeals issue its determination?

     A-E8. (i) Taxpayers will be sent a dated Notice of
     Determination by certified or registered mail. The
     Notice of Determination will set forth Appeals’
     findings and decisions. It will state whether the IRS
     met the requirements of any applicable law or
     administrative procedure; it will resolve any issues
     appropriately raised by the taxpayer relating to the
     unpaid tax; it will include a decision on any
     appropriate spousal defenses raised by the taxpayer; it
     will include a decision on any challenges made by the
     taxpayer to the appropriateness of the collection
     action; it will respond to any offers by the taxpayer
     for collection alternatives; and it will address
     whether the proposed collection action represents a
     balance between the need for the efficient collection
     of taxes and the legitimate concern of the taxpayer
     that any collection action be no more intrusive than
     necessary. The Notice of Determination will also set
     forth any agreements that Appeals reached with the
     taxpayer, any relief given the taxpayer, and any
     actions the taxpayer or the IRS are required to take.
     Lastly, the Notice of Determination will advise the
     taxpayer of the taxpayer’s right to seek judicial
     review within 30 days of the date of the Notice of
     Determination.

None of these findings and decisions are set forth in IRS Letter

2081(CG).

     Petitioner contends that application of the protections

provided under section 6330 to withholding of income tax is

clearly implied by Congressional intent.   We disagree.   There is

nothing in the legislative history of the Internal Revenue

Service Restructuring and Reform Act of 1998, Pub. L. 105-206,

112 Stat. 685, that would indicate that Congress intended to

include withholding of income tax as the type of collection

action for which a hearing must be offered to the taxpayer.    We
                             - 10 -

conclude that the IRS Letter 2081(CG) is not a notice of

determination under section 6330(d).   Thus, this Court lacks

jurisdiction.


                                         An appropriate Order

                                   dismissing this case for

                                   lack of jurisdiction will

                                   be entered.
