                       131 T.C. No. 13



                UNITED STATES TAX COURT



           MARTIN DAVID HOYLE, Petitioner v.
     COMMISSIONER OF INTERNAL REVENUE, Respondent



Docket No. 7217-04L.                Filed December 3, 2008.



     R sent P a notice of Federal tax lien, and P filed
a request for an Appeals hearing pursuant to sec. 6320,
I.R.C. Subsequently, R sent P a notice of
determination upholding the Federal tax lien, and P
petitioned this Court for review of R’s determination.
P asserts that R failed to mail to P a notice of
deficiency before assessing P’s 1993 tax liability. R
contends that P may not raise the issue of whether R
mailed P a notice of deficiency because P did not raise
the issue at the Appeals hearing.

     Held: This Court will review whether R’s Appeals
officer verified compliance with applicable law under
sec. 6330(c)(1), I.R.C., i.e. whether a duly mailed
notice of deficiency preceded the assessment of tax as
required by sec. 6213(a), I.R.C., without regard to
whether P raised the issue at the Appeals hearing.
Giamelli v. Commissioner, 129 T.C. 107 (2007),
distinguished.
                               - 2 -

          Held, further, if no notice of deficiency was
     mailed to P, this Court will not review the underlying
     tax liability de novo. If no notice of deficiency was
     mailed, the assessment of P’s 1993 tax liability is
     invalid, the lien with respect to P’s 1993 tax
     liability is improper, and collection therefore may
     not proceed.

          Held, further, it is unclear what the Appeals
     officer relied on to verify that the assessment of P’s
     1993 tax liability was preceded by a duly mailed notice
     of deficiency. Consequently, we will remand to the
     Appeals Office to clarify the record as to the basis
     for the Appeals officer’s verification that all
     requirements of applicable law were met.



     Martin David Hoyle, pro se.

     Beth Nunnink, for respondent.



                              OPINION


     WELLS, Judge:   Respondent sent a Notice of Determination

Concerning Collection Action(s) Under Section 6320 and/or 6330

(notice of determination) to petitioner with respect to a lien

filed to collect petitioner’s unpaid tax liability for 1993.     In

response, petitioner timely filed a petition pursuant to section

6330(d),1 seeking review of respondent’s determination.   The

issues to be decided are:   (1) Whether petitioner may raise the

issue of whether a notice of deficiency for petitioner’s 1993


     1
      Unless otherwise indicated, all Rule references are to the
Tax Court Rules of Practice and Procedure, and all section
references are to the Internal Revenue Code, as amended.
                                - 3 -

taxable year was mailed to petitioner; (2) if petitioner may

raise that issue, whether respondent’s Appeals officer properly

verified that such a notice was sent; and (3) if the Appeals

officer did not properly verify that such a notice was sent,

whether this Court should review the underlying tax liability de

novo.

                              Background

     Some of the facts and certain exhibits have been stipulated.

The stipulations of fact are incorporated in this Opinion by

reference and are found as facts.

     At the time he filed the petition, petitioner resided in

Louisiana.

     Petitioner and Susan Hoyle timely filed a joint Federal

income tax return for 1993.    The address shown on the return was

in Destrehan, Louisiana.

     In May 1995 petitioner and Ms. Hoyle filed a Form 2848,

Power of Attorney and Declaration of Representative, designating

Wayne Leland as their representative.      The address for petitioner

and Ms. Hoyle shown on the Form 2848 was in Orlando, Florida (the

Orlando address), and the address for Mr. Leland was in Winter

Park, Florida.

     During August 1995 petitioner moved back to Destrehan,

Louisiana.
                              - 4 -

     On April 3, 1996, Mr. Leland sent respondent a letter

revoking his power of attorney and requesting all future notices

be sent to petitioner at the Orlando address.

     On August 26, 1996, respondent assessed against petitioner a

deficiency of $20,495 in his income tax for 1993, an accuracy-

related penalty of $4,099, and interest of $5,631.32.

     On September 12, 2002, respondent issued to petitioner a

Notice of Federal Tax Lien Filing and Your Right to a Hearing

Under IRC 6320 with respect to his unpaid tax liability for 1993.

     Petitioner timely submitted a Form 12153, Request for a

Collection Due Process Hearing.   Petitioner raised his underlying

tax liability and questioned whether offsetting overpayments were

properly reflected in the lien amount.

     By letter dated December 9, 2003, respondent’s Appeals

officer informed petitioner that he was precluded from raising

the underlying tax liability because he had had a previous

opportunity to dispute the underlying tax.

     By letter dated March 31, 2004, respondent sent petitioner a

notice of determination upholding the filing of a Federal tax

lien with respect to petitioner’s 1993 tax liability.   On April

30, 2004, petitioner filed with this Court a timely petition for

review of respondent’s determination.
                                - 5 -

                             Discussion

     Section 6320(a)(1) requires the Commissioner to give any

person liable to pay tax (hereinafter referred to as a taxpayer)

written notice of the filing of a tax lien upon that taxpayer’s

property.   The notice must inform the taxpayer of the right to

request a hearing in the Commissioner’s Appeals Office.        Sec.

6320(a)(3)(B) and (b)(1).    Section 6330(c), (d), and (e) governs

the conduct of a hearing requested under section 6320.        Sec.

6320(c).

     At the hearing, the taxpayer may raise any relevant issues

including appropriate spousal defenses, challenges to the

appropriateness of collection actions, and collection

alternatives.    Sec. 6330(c)(2)(A).    However, the taxpayer may

challenge the underlying tax liability only if the taxpayer did

not receive a statutory notice of deficiency for the tax

liability and did not otherwise have an opportunity to dispute

the tax liability.    Sec. 6330(c)(2)(B).    In addition to

considering issues raised by the taxpayer under section

6330(c)(2), the Appeals officer must also verify that the

requirements of any applicable law or administrative procedure

have been met.    Sec. 6330(c)(1), (3).

     Where the validity of the underlying tax liability is

properly in issue, the Court will review the matter de novo.

Where the validity of the underlying tax is not properly in
                                 - 6 -

issue, however, the Court will review the Commissioner’s

determination for abuse of discretion.     Sego v. Commissioner, 114

T.C. 604, 610 (2000); Goza v. Commissioner, 114 T.C. 176, 181-182

(2000).

I.   Whether Petitioner May Raise the Issue of Whether a Notice
     of Deficiency Was Mailed to Petitioner

     At the Appeals hearing, the Appeals officer “shall” verify

that the requirements of all applicable laws and administrative

procedures have been followed.    Sec. 6330(c)(1).   One requirement

of applicable law is the mandate of section 6213(a) that, with

limited exceptions not relevant here, no deficiency may be

assessed until after a notice of deficiency is mailed to the

taxpayer at his last known address.2     Accordingly, as a general

rule, if the Commissioner has not duly mailed a notice of

deficiency, no collection of an assessment of the deficiency may

proceed.   Manko v. Commissioner, 126 T.C. 195, 200-201 (2006);

Freije v. Commissioner, 125 T.C. 14, 34-37 (2005).

     Petitioner asserts that respondent failed to mail a notice

of deficiency before assessing the tax in issue.     Respondent



     2
      See sec. 6213(a), which restricts the assessment of a
deficiency unless the assessment is duly preceded by the mailing
of a notice of deficiency to the taxpayer’s last known address.
Freije v. Commissioner, 125 T.C. 14, 34-37 (2005); Butti v.
Commissioner, T.C. Memo. 2008-82 (holding that the Commissioner
abused his discretion in determining to proceed with collection
where there was no proof that a notice of deficiency was sent to
the taxpayer before assessment of the tax deficiencies in issue).
                               - 7 -

argues that petitioner did not raise the issue of the mailing of

a notice of deficiency at the hearing and therefore cannot now

raise the issue before this Court.3    There is nothing in the

administrative record indicating that petitioner raised the

notice of deficiency issue during the hearing; however, at the

trial, petitioner testified that he told respondent’s Appeals

officer that he had not received a notice of deficiency.

     In any event, whether petitioner raised the issue of mailing

or receipt of a notice of deficiency with the Appeals officer is

not determinative.   We have held that this Court will not review

issues raised under section 6330(c)(2) if they were not raised at

the Appeals hearing.   Giamelli v. Commissioner, 129 T.C. 107, 115

(2007).   However, our Opinion in Giamelli did not address this

Court’s authority to review issues relating to the Appeals

officer’s verification obligation under section 6330(c)(1).4     We


     3
      Respondent also notes that petitioner did not raise the
issue of receipt of a notice of deficiency in his petition.
However, we note that petitioner raised the issue in response to
a motion for summary judgment previously filed by respondent and
denied by this Court. Additionally, respondent did not object to
petitioner’s testimony at trial on this issue. Moreover,
respondent cross-examined petitioner on this issue at trial and
addressed this issue in his posttrial brief. On the basis of the
foregoing, we deem the pleadings amended to conform to the
evidence in accordance with Rule 41(b).
     4
      In Clough v. Commissioner, T.C. Memo. 2007-106, this Court
did hold that an Appeals officer’s verification under sec.
6330(c)(1) was erroneous as a matter of law where the Appeals
officer explicitly stated that she did not verify the mailing of
a notice of deficiency. In Clough, the Commissioner did not
                                                   (continued...)
                                 - 8 -

consider in the instant case whether issues arising under section

6330(c)(1) may be raised before this Court without regard to

whether they were raised by the taxpayer at the Appeals hearing.

     In Giamelli v. Commissioner, supra at 112, we noted that

this Court’s review in a section 6330(d) proceeding focuses on

the Appeals officer’s section 6330 determination.   We examined

the language and the legislative history of section 6330 and

concluded that both anticipate Tax Court review of a

“determination”.   Id. at 114.   The Appeals Officer must base the

section 6330(c) determination on the verification obtained under

section 6330(c)(1) as well as the issues raised under section

6330(c)(2).   Sec. 6330(c)(3).   If a section 6330(c)(2) issue is

not raised at the hearing, it cannot be part of the Appeals

officer’s determination.   Giamelli v. Commissioner, supra at 113.

In contrast, the Appeals officer must consider compliance with

applicable law in the determination regardless of whether it is

raised by the person challenging the collection action at the

Appeals hearing.   Sec. 6330(c)(1), (3)(A).

     We expressed a concern in Giamelli that the Appeals

officer’s role would be eliminated if we were to allow an issue

to be raised under section 6330(c)(2) after the Appeals hearing


     4
     (...continued)
object to this Court’s consideration of the issue, and
accordingly, our opinion in Clough did not address whether a
taxpayer must raise the sec. 6330(c)(1) verification at the
Appeals hearing.
                                  - 9 -

and if the issue were litigated without any prior consideration

by any level of the Commissioner’s organization.        Giamelli v.

Commissioner, supra at 114-115.      We feared that the lack of

consideration by the Commissioner’s Appeals Office would

frustrate the administrative review process created by section

6330.    Id.   That concern, however, does not arise with respect to

issues raised under section 6330(c)(1).       Because the

Commissioner’s Appeals officer is required to base the

determination, in part, on the verification obtained under

section 6330(c)(1), the Commissioner’s organization is required

by the statute to verify that all legal requirements have been

followed.      Respondent cannot now argue that the Appeals officer

had no opportunity to consider whether respondent met the

requirements of applicable law, including the section 6213(a)

requirement of a duly mailed notice of deficiency.

        In Giamelli v. Commissioner, supra at 113, we also

considered the Commissioner’s interpretive regulation in section

301.6320-1(f)(2), Q&A-F5, Proced. & Admin. Regs.       That regulation

as revised in 2006 indicates that in seeking review of a notice

of determination, a taxpayer “can only ask the court to consider

an issue * * * that was properly raised in the taxpayer’s * * *

[collection due process] hearing.”        Sec. 301.6320-1(f)(2), Q&A-

F3, Proced. & Admin. Regs.     That regulation appears to use the

term “issue” in reference to those issues enumerated in section
                               - 10 -

6330(c)(2) and not in reference to the “verification” required by

section 6330(c)(1).    Moreover, even if that regulation was

intended to apply to the section 6330(c)(1) verification, the

regulation requires only that the issue be raised in the hearing,

not that the taxpayer himself raise it.    Apart from the question

of whether the Commissioner    may issue a regulation purporting to

limit this Court’s review authority, the verification requirement

is raised at every Appeals hearing by section 6330(c)(1).      In any

event, the regulation is consistent with our holding that this

Court has the authority to review an issue arising under section

6330(c)(1) regardless of whether the taxpayer raised it at the

Appeals hearing.

     In sum, the cornerstone of our holding in Giamelli was that

in reviewing an Appeals officer’s determination under section

6330(d), we decline to consider issues that are not a part of

that determination.    Logically, it follows that we may review

those issues that were considered or should, by reason of the

statutory mandate, have been considered by the Appeals officer in

arriving at the determination.    Unlike section 6330(c)(2) issues,

which will be a part of the determination we are reviewing only

if the issues were raised by the taxpayer at the Appeals hearing,

the section 6330(c)(1) verification is required to be a part of

every determination.
                               - 11 -

      Accordingly we hold that this Court will review the Appeals

officer’s verification under section 6330(c)(1) without regard to

whether the taxpayer raised it at the Appeals hearing.

Consequently, the issue of whether respondent’s Appeals officer

verified that a notice of deficiency was sent to petitioner

preceding the assessment, as required by section 6213(a), is

properly before the Court.

II.   Whether the Appeals Officer Verified That a Notice of
      Deficiency Was Mailed to Petitioner

      The record contains two copies of a notice of deficiency

that respondent asserts were mailed on March 28, 1996.   One copy

was addressed to petitioner at the Orlando address, and one copy

was addressed to Mr. Leland at his address in Winter Park,

Florida.5   In the notice of determination the Appeals officer

summarily concluded that “all statutory, regulatory, and

administrative procedures have been followed.”   He also noted

that petitioner’s file contained a copy of a notice of deficiency

“properly sent” to petitioner.   However, the Appeals Officer did

not indicate in the notice of determination what he relied on to

verify that the notice was properly mailed.

      Respondent asserts that in the absence of clear evidence to

the contrary, respondent may rely on a presumption of official


      5
      Because it is not clear that the notice of deficiency was
mailed, we need not reach the question of whether either of these
addresses was petitioner’s last known address for purposes of
sec. 6212(b).
                                - 12 -

regularity.   We have held that exact compliance with Postal

Service Form 3877 mailing procedures raises a presumption of

official regularity in favor of the Commissioner and is

sufficient, absent evidence to the contrary, to establish that

the notice was properly mailed.     Coleman v. Commissioner, 94 T.C.

91 (1990); see also United States v. Zolla, 724 F.2d 808, 810

(9th Cir. 1984).     It may be true that an Appeals officer could

rely on a properly completed Postal Service Form 3877 to meet his

verification obligation under section 6330(c)(1); however, in the

instant case, the administrative record did not contain a Postal

Service Form 3877.    Accordingly, the Appeals officer could not

have based his verification on that form.

     In response to the absence of documentation of proper

mailing in the administrative record, respondent contends that

both petitioner and Mr. Leland actually received the notice of

deficiency.   Respondent suggests that even without proof of

mailing in accordance with section 6212, the notice of deficiency

is valid if it is actually received by the taxpayer or his duly

authorized attorney-in-fact in time to petition this Court for

review.   See Berger v. Commissioner, 404 F.2d 668 (3d Cir. 1968),

affg. 48 T.C. 848 (1967); see also Freiling v. Commissioner, 81

T.C. 42 (1983); Balkissoon v. Commissioner, T.C. Memo. 1992-322,

affd. 995 F.2d 525 (4th Cir. 1993).
                                - 13 -

     Relying on Mr. Leland’s letter dated April 3, 1996, revoking

the power of attorney signed by petitioner, respondent contends

that the revocation letter is proof that Mr. Leland received the

notice of deficiency on petitioner’s behalf.     Respondent asserts

that Mr. Leland’s letter is in response to the notice of

deficiency and further contends that Mr. Leland “acknowledged”

receipt of the notice of deficiency.     However, nothing in the

letter, or elsewhere in the record, for that matter, supports

respondent’s contentions.   The letter from Mr. Leland does not

mention the notice of deficiency, and there is nothing else in

the record that could be construed as an acknowledgment of

receipt of the notice of deficiency by Mr. Leland.

     Respondent also relies on “circumstantial evidence” of

delivery.   Specifically, respondent asserts that the notice of

deficiency that respondent allegedly sent to petitioner was not

returned as undeliverable and that, even if petitioner had moved,

the notice of deficiency should have been forwarded to him by the

United States Postal Service.    Respondent’s arguments are less

than convincing because if the notice was not mailed, it could

have been neither returned to respondent nor forwarded to

petitioner at his new address.

     In sum, it is unclear what the Appeals officer relied on to

verify that the assessment of petitioner’s 1993 tax liability was

preceded by a duly mailed notice of deficiency.     Because it is
                               - 14 -

not clear from the record that respondent sent a notice of

deficiency to petitioner before assessing the deficiencies in

issue, we must decide whether it is appropriate for this Court to

review petitioner’s underlying tax liability de novo or whether

instead we should remand to the Appeals Office for clarification

of the basis for the Appeals officer’s verification that all

requirements of applicable law were met.6

III. Whether This Court Should Review the Underlying Tax
     Liability De Novo

     Respondent asserts that if petitioner did not receive the

notice of deficiency, this Court should review the underlying tax

liability de novo.    However, this Court has held that

“petitioner’s opportunity in a section 6330 proceeding to dispute

the underlying tax liability does not cure an assessment made in

derogation of his right under section 6213(a) to a deficiency

proceeding.”   Freije v. Commissioner, 125 T.C. at 36.     If

respondent’s assessment of petitioner’s 1993 tax liability was

not preceded by a notice of deficiency as required by section

6213(a), the assessment is invalid.     See id.; Bach v.

Commissioner, T.C. Memo. 2008-202 n.4; Butti v. Commissioner,

T.C. Memo. 2008-82.   Under sections 6321 and 6322, a tax lien

arises in favor of the United States at the time an assessment is


     6
      In appropriate circumstances we have remanded cases to the
Appeals Office to clarify the record. See Dalton v.
Commissioner, T.C. Memo. 2008-165; Dailey v. Commissioner, T.C.
Memo. 2008-148; Oman v. Commissioner, T.C. Memo. 2006-231.
                                  - 15 -

made.       If respondent did not validly assess petitioner’s 1993 tax

liability, then no lien would have arisen with respect to that

tax liability and collection could not proceed.      Accordingly, if

the assessment was invalid, the determination to proceed with

collection was error as a matter of law.      For these reasons, we

decline to review petitioner’s underlying tax liability at this

time.

IV.   Conclusion

      On the basis of the foregoing, we are unable to ascertain

the basis for the Appeals officer’s verification that all

requirements of applicable law were met.      Consequently, we will

remand this case to the Appeals Office for it to clarify the

record as to what the Appeals officer relied upon in determining

that the notice of deficiency was properly sent to petitioner.7



        7
      We note that Chief Counsel Notice CC-2006-19 (Aug. 18,
2006) states that an Appeals Officer “may rely on a Form 4340 to
verify the validity of an assessment, unless the taxpayer can
identify an irregularity in the assessment procedure” (emphasis
added) and acknowledges that, where it is alleged that a notice
of deficiency was not mailed, the Appeals officer may be required
“to examine underlying documents in addition to the tax
transcripts, such as the taxpayer’s return, a copy of the notice
of deficiency, and the certified mailing list”. The Chief
Counsel’s advice is consistent with our view that, where a
taxpayer alleges no notice of deficiency was mailed he has (in
the words of the Chief Counsel Notice) “[identified] an
irregularity”, thereby requiring the Appeals officer to do more
than consult the computerized records. We are remanding this
case in order for the Appeals Office to “examine underlying
documents” and make a record of what was relied upon in making
the determination that the notice of deficiency was “properly
sent.”
                             - 16 -

    We have considered all of the contentions and arguments of

the parties that are not discussed herein, and we find them to be

without merit, irrelevant, or moot.

     To reflect the foregoing,


                                           An appropriate order will

                                      be issued.
