                         T.C. Memo. 2015-77



                  UNITED STATES TAX COURT



          DAVID EUGENE YUSKA, Petitioner v.
    COMMISSIONER OF INTERNAL REVENUE, Respondent



Docket No. 26958-14L.                        Filed April 20, 2015.



       On Nov. 19, 2013, R sent P a Notice of Federal Tax Lien Filing
and Your Right to a Hearing with regard to his unpaid Federal income
tax for the taxable years 2005 and 2006. P submitted to R a timely
request for a hearing under I.R.C. secs. 6320 and 6330. After the
request for a hearing, P filed a bankruptcy petition under ch. 13 of the
Bankruptcy Code. While the bankruptcy case remained open, R
issued to P a Notice of Determination Concerning Collection Action
for the taxable years 2005 and 2006. In response to the notice of
determination P filed a petition for review challenging the notice. R
filed a motion to dismiss for lack of jurisdiction on the ground that
the petition was filed in violation of the automatic stay imposed under
11 U.S.C. sec. 362(a)(8) (2012). P filed an objection.

       Held: The notice of determination was issued to P in violation
of the automatic stay imposed by 11 U.S.C. sec. 362(a) and was
invalid and of no effect. See Smith v. Commissioner, 124 T.C. 36
(2005).
                                         -2-

             [*2] Held, further, R’s motion to dismiss for lack of jurisdiction
      will be denied, and this case will be dismissed for lack of jurisdiction
      on the Court’s own motion.



      David Eugene Yuska, pro se.

      Susan K. Bollman, for respondent.



                            MEMORANDUM OPINION


      PANUTHOS, Chief Special Trial Judge: On January 9, 2015, respondent

filed a motion to dismiss for lack of jurisdiction (motion) asserting that the petition

in this case was filed in violation of the automatic stay provisions of 11 U.S.C.

sec. 362(a)(8) (2012). On February 11, 2015, petitioner filed an opposition to

respondent’s motion.

                                     Background

      The sequence of relevant events in this case unfolded as follows: (1) on

November 19, 2013, respondent sent petitioner a Notice of Federal Tax Lien

Filing and Your Right to a Hearing Under I.R.C. 6320 with respect to tax years

2005 and 2006; (2) on December 3, 2013, petitioner submitted to respondent a
                                         -3-

[*3] timely request for administrative review under section 6320;1 (3) on

September 29, 2014, petitioner filed for relief under chapter 13 of the Bankruptcy

Code with the U.S. Bankruptcy Court for the Northern District of Iowa; (4) on

October 7, 2014, respondent issued a Notice of Determination Concerning

Collection Actions for the taxable years 2005 and 2006; and (5) on November 12,

2014, petitioner filed a petition with the Court challenging respondent’s notice.

      At the time the petition was filed, petitioner resided in Waterloo, Iowa.

                                     Discussion

      The jurisdiction of this Court is limited by statute and, in a collection review

proceeding brought pursuant to sections 6320 and 6330, this Court’s jurisdiction

generally depends upon the issuance of a valid notice of determination and a

timely filed petition for review. Prevo v. Commissioner, 123 T.C. 326, 328

(2004). We have jurisdiction to decide whether we have jurisdiction. Brannon’s

of Shawnee, Inc. v. Commissioner, 69 T.C. 999, 1002 (1978). This case must be

dismissed for lack of jurisdiction because the petition was filed in violation of the

automatic stay provisions of 11 U.S.C. sec. 362(a)(8). Prevo v. Commissioner,

123 T.C. at 331. However, where the application of the automatic stay may act as

      1
        All section references are to the Internal Revenue Code, as amended and in
effect at all relevant times, and all Rule references are to the Tax Court Rules of
Practice and Procedure, unless otherwise indicated.
                                         -4-

[*4] an impediment to this Court’s jurisdiction, it is incumbent on the Court to

determine the proper ground for dismissal. Smith v. Commissioner, 124 T.C. 36,

40 (2005). This principle is particularly compelling in the present case where the

Court is confronted with two alternative grounds for dismissal, one of which will

have the effect of denying petitioner the opportunity to obtain review of

respondent’s notice of determination in this Court. See id.

       The automatic stay under 11 U.S.C. sec. 362(a)(1) bars “the commencement

or continuation, including the issuance or employment of process, of a judicial,

administrative, or other action or proceeding against the debtor that was or could

have been commenced before the commencement of the case under this title”. In

Smith v. Commissioner, 124 T.C. at 43, we concluded that the issuance by the

Internal Revenue Service (IRS) of notices of determination sustaining the

appropriateness of proceeding with levy action, after the commencement of the

bankruptcy case, constituted the continuation of administrative collection actions

against the taxpayer within the meaning of 11 U.S.C. sec. 362(a)(1).

      In his motion, respondent asks the Court to distinguish the instant case from

the holding in Smith because the notices of determination in Smith v.

Commissioner, 124 T.C. at 37, were in response to administrative review under

section 6330, in a levy case, whereas the notice of determination in this case is in
                                          -5-

[*5] response to administrative review under section 6320, in a lien case.

Respondent points out that in a lien case, the notice of Federal tax lien is filed

before any administrative review under section 6320 and before a determination by

respondent. Respondent argues that, in a levy case such as Smith, the levy could

not be effected until after a final notice of intent to levy that provided the taxpayer

administrative review rights was issued to the taxpayer. Respondent concludes that

issuance of a notice of determination in a lien filing case differs in that the filing of

the notice of Federal tax lien is complete before the issuance of a notice of Federal

Tax Lien Filing and Your Right to a Hearing Under I.R.C. 6320.

      The notice of determination in Prevo v. Commissioner, 123 T.C. at 327, was

in response to an administrative review under section 6320 in a lien case. In Prevo

v. Commissioner, 123 T.C. at 329-330, we fully described lien filing and the

application of sections 6320 and 6330:

              Section 6321 imposes a lien in favor of the United States on all
      property and rights to property of a person liable for taxes when a
      demand for the payment of the person’s taxes has been made and the
      person fails to pay those taxes. Such a lien arises when an assessment
      is made. Sec. 6322. Section 6323(a) requires the Secretary to file a
      notice of Federal tax lien if the lien is to be valid against any
      purchaser, holder of a security interest, mechanic’s lienor, or judgment
      lien creditor. Lindsay v. Commissioner, T.C. Memo. 2001-285, affd.
      56 Fed. Appx. 800 (9th Cir. 2003). From the taxpayer’s perspective,
      the filing of such a lien may have the negative effects of creating a
      cloud on the taxpayer’s title to property and impairing the taxpayer’s
                                         -6-

      [*6] creditworthiness. See, e.g., Magana v. Commissioner, 118 T.C.
      488 (2002).

             In the Internal Revenue Service Restructuring and Reform Act
      of 1998, Pub. L. 105-206, sec. 3401, 112 Stat. 746, Congress enacted
      new sections 6320 (pertaining to liens) and 6330 (pertaining to levies)
      to provide specified protections for taxpayers in tax collection matters.
      Section 6320 provides that the Secretary shall furnish the person
      described in section 6321 with written notice 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. Sec. 6320(a)(2). Section 6320 further provides that
      the person may request administrative review of the matter (in the
      form of an Appeals Office hearing) within 30 days beginning on the
      day after the 5-day period. Section 6320(c) provides that the Appeals
      Office hearing generally shall be conducted consistent with the
      procedures set forth in section 6330(c), (d), and (e).

      In response to the notice required by section 6320 petitioner requested

administrative review in this case pursuant to section 6330. This administrative

review provided by the statute permits a taxpayer to raise a number of issues

relating to collection. Sec. 6330(c)(2). The administrative review further requires

the IRS to verify that the requirements of applicable law and administrative

procedure have been met and that the need for efficient collection is balanced with

the legitimate concerns that collection action be no more intrusive than necessary.

Sec. 6330(c)(3); Kraft v. Commissioner, 142 T.C. 259, 264 (2014). There is no

doubt that the notice of lien filing and the opportunity for administrative and
                                         -7-

[*7] judicial review are part and parcel of the IRS collection procedures. When

section 6320 was enacted, the House conference report explained:

             The conference agreement generally follows the Senate
      amendment, except that taxpayers would have a right to a hearing after
      the Notice of Lien is filed. The IRS would be required to notify the
      taxpayer that a Notice of Lien had been filed within 5 days after filing.
      During the 30-day period beginning with the mailing or delivery of
      such notification, the taxpayer may demand a hearing before an
      appeals officer who has had no prior involvement with the taxpayer’s
      case. In general, any issue relevant to the appropriateness of the
      proposed collection against the taxpayer can be raised at this hearing.
      * * * [H.R. Conf. Rept. No. 105-599, at 265 (1998), 1998-3 C.B. 747,
      1019; emphasis added.]

This excerpt makes clear that offering an opportunity for administrative review

under section 6320 in a lien case was considered to be an essential step in the IRS

collection procedure.

       We distinguished Smith from Prevo on the basis of the sequence of relevant

events, not on the ground that Smith was a levy case and Prevo was a lien case.

Smith v. Commissioner, 124 T.C. at 39. We noted that in Prevo, “the sequence of

relevant events unfolded as follows: (1) The Commissioner issued to the taxpayer

a notice of determination concerning collection actions; (2) the taxpayer filed a

bankruptcy petition; and (3) the taxpayer filed with the Court a petition for lien or

levy action.” Smith v. Commissioner, 124 T.C. at 39. In contrast in Smith, the

cases developed as follows: (1) the taxpayer filed a bankruptcy petition; (2) the
                                         -8-

[*8] Commissioner issued to the taxpayer notices of determination concerning

collection actions; and (3) the taxpayer filed with the Court petitions for lien or

levy action. Id. Like the taxpayer in Smith, petitioner filed for bankruptcy before

the Commissioner issued a notice of determination concerning collection actions.

      When petitioner filed a petition in bankruptcy (after the request for

administrative review under section 6320), it is clear that the commencement

and/or continuation of collection activity was barred as a result of the stay

provisions in 11 U.S.C. sec. 362(a)(1). Nevertheless, respondent issued the notice

of determination sustaining the IRS collection action during the pending

bankruptcy. We conclude that the notice of determination issued while the

bankruptcy was pending was in violation of the stay and accordingly is invalid.2

      We have considered all of the parties’ arguments, and, to the extent not

addressed herein, we conclude that they are moot, irrelevant, or without merit.




       2
        If we were to hold otherwise, petitioner would lose the right of judicial
review of the lien filing in this Court. We noted in Prevo v. Commissioner, 123
T.C. 326, 330 (2004), that Congress did not include in secs. 6320 and 6330 a
tolling provision comparable to the tolling provision in sec. 6213(f) that would
extend the period for petitioner to file a petition for lien or levy action with this
Court.
                                  -9-

[*9] To reflect the foregoing,


                                        An order of dismissal will be entered

                                 denying respondent’s motion to dismiss for

                                 lack of jurisdiction and dismissing this case

                                 for lack of jurisdiction on the Court’s own

                                 motion.
