                        T.C. Memo. 2009-240



                      UNITED STATES TAX COURT



         DOUGAL C. AND DIANE N. MACDONALD, Petitioners v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 12652-07L.             Filed October 22, 2009.



     William E. Taggart, Jr., for petitioners.

     Jeremy L. McPherson, for respondent.



                        MEMORANDUM OPINION


     MARVEL, Judge:   Pursuant to Rule 53,1 respondent moved to

dismiss the remaining part of this case, which seeks a review of

respondent’s determination under section 6330 to proceed with



     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.
                                 - 2 -

collection regarding petitioners’ unpaid Federal income tax

liability for 1998, on the ground of mootness.    For the reasons

that follow, we shall grant respondent’s motion.

                           Background

     Petitioners petitioned this Court to review a notice of

determination that respondent issued pursuant to section 6330

with respect to petitioners’ income tax liabilities for 1998-2004

and a decision letter concerning an equivalent hearing that

respondent issued with respect to petitioners’ income tax

liabilities for 1996 and 1997.    Respondent filed a motion to

dismiss for lack of jurisdiction that part of the case involving

1996 and 1997 and a motion to dismiss on grounds of mootness that

part of the case involving 1999-2004.    In MacDonald v.

Commissioner, T.C. Memo. 2009-63, we held that respondent’s

motions should be granted, and we issued an appropriate order.2


     2
      MacDonald v. Commissioner, T.C. Memo. 2009-63, was filed on
Mar. 24, 2009. On July 7, 2009, the Court of Appeals for the
Second Circuit issued its opinion in Wright v. Commissioner, 571
F.3d 215 (2d Cir. 2009), vacating and remanding T.C. Memo. 2006-
273, in which we held that we did not have jurisdiction to
consider the taxpayer’s abatement claim under sec. 6404(e) and
that the taxpayer’s sec. 6330 proceeding, insofar as it sought
refund of an overpayment, must be dismissed as moot. The Court
of Appeals liberally construed the pro se taxpayer’s brief on
appeal to assert an issue regarding our jurisdiction to consider
the taxpayer’s abatement claim. It held that we had jurisdiction
to decide the taxpayer’s abatement claim because the taxpayer had
adequately raised the abatement issue during the sec. 6330
hearing before the agency; the notice of determination, which did
not grant the taxpayer an abatement, was “the Secretary’s final
determination not to abate * * * interest” under sec. 6404(h)(1);
                                                   (continued...)
                               - 3 -

The only part of the case that remained at issue following the

issuance of the order involved petitioners’ income tax liability

for 1998.   This Division of the Court retained jurisdiction.

     On April 30, 2009, respondent moved to dismiss the remaining

portion of the case involving petitioners’ income tax liability

for 1998 on the ground of mootness.    Specifically, respondent

asserted that petitioners had paid all of their 1998 income tax

liability (including additions to tax, penalties, and interest

with respect to 1998) after they filed their petition.

Accordingly, respondent argues that there is no remaining case or


     2
      (...continued)
and the taxpayer filed a timely appeal of the determination
within the time required by sec. 6404(h)(1).

     In contrast, in this case respondent issued notices of
intent to levy with respect to 1996 and 1997 on Aug. 30, 1999.
Petitioners did not timely request a sec. 6330 hearing. As a
result, petitioners were not entitled to, nor did they receive, a
sec. 6330 hearing for those years. Respondent provided an
equivalent hearing and issued a decision letter concerning
equivalent hearing upholding the proposed levy with respect to
1996 and 1997. A decision letter concerning equivalent hearing
under sec. 6330 is not a determination under sec. 6330 and does
not confer jurisdiction upon this Court. See Orum v.
Commissioner, 123 T.C. 1 (2004), affd. 412 F.3d 819 (7th Cir.
2005). Petitioners asserted for the first time in a supplemental
opposition to respondent’s motion to dismiss for lack of
jurisdiction that we had jurisdiction under sec. 6404(h)(1) as an
alternative basis for avoiding dismissal with respect to taxable
years 1996 and 1997. However, the record does not establish that
petitioners submitted a claim for abatement of interest pursuant
to sec. 6404(e) with respect to 1996 and 1997 or that respondent
made a determination pursuant to sec. 6404(e) and (h). By reason
of the above, respondent did not make a determination with
respect to 1996 and 1997 within the meaning of sec. 6330 or sec.
6404(e), and the requirements of sec. 6404(h) have not been
satisfied.
                                 - 4 -

controversy with respect to 1998 to sustain this Court’s

jurisdiction and that the petition insofar as related to that

year should be dismissed.   Although petitioners agree that they

do not have an unpaid Federal income tax liability for 1998, they

object to respondent’s motion.

                            Discussion

     Section 6330(a) provides that the Commissioner may not levy

on a taxpayer’s property or rights to property unless he has

first notified the taxpayer in writing of his right to a

collection due process hearing.    If the taxpayer timely requests

a hearing pursuant to section 6330(a), the hearing shall be held

before an impartial officer of the Internal Revenue Service

Office of Appeals (Appeals Office).      Sec. 6330(b).   A taxpayer

may raise any relevant issue during the hearing, including

appropriate spousal defenses, challenges to the appropriateness

of collection actions, and offers of collection alternatives.

Sec. 6330(c)(2)(A).   A taxpayer may also challenge the existence

or amount of the underlying liability, but only if the taxpayer

did not receive a statutory notice of deficiency or did not

otherwise have an opportunity to dispute the liability.       Sec.

6330(c)(2)(B).   Following the collection due process hearing, the

Appeals Office shall issue a determination.      Sec. 301.6330-

1(e)(3), Q&A-E8, Proced. & Admin. Regs.
                               - 5 -

     Section 6330(d)(1) provides that this Court has jurisdiction

to review an Appeals Office determination.   However, the Tax

Court is a court of limited jurisdiction, sec. 7442, and we may

exercise jurisdiction only to the extent expressly authorized by

Congress, Naftel v. Commissioner, 85 T.C. 527, 529 (1985).      In

general, our jurisdiction under section 6330(d)(1) is limited to

reviewing whether the Commissioner’s proposed collection activity

is appropriate.3   Greene-Thapedi v. Commissioner, 126 T.C. 1, 7

(2006).   Ordinarily, once the Commissioner concedes that there is

no unpaid liability for a disputed year upon which a collection

action could be based, a proceeding filed in this Court pursuant

to section 6330 is moot.   Id.; Gerakios v. Commissioner, T.C.

Memo. 2004-203; Chocallo v. Commissioner, T.C. Memo. 2004-152.

     The dismissal of a case for mootness is premised upon a

well-established principle that the exercise of the Federal

judicial power4 is limited to cases and controversies.   Hefti v.

Commissioner, 97 T.C. 180, 191 (1991) (mootness is a


     3
      Our standard of review varies depending on whether the
underlying liability was properly at issue in the collection due
process hearing. Where the underlying liability was properly at
issue, we review the Commissioner’s determination de novo; where
the underlying liability was not properly at issue, we review the
determination for abuse of discretion. Sego v. Commissioner, 114
T.C. 604, 610 (2000).
     4
      Although the Tax Court is an Art. I rather than an Art. III
court, the Supreme Court has held that the Tax Court exercises
judicial power. Freytag v. Commissioner, 501 U.S. 868, 890
(1991).
                               - 6 -

jurisdictional question since Article III, Section 2 of the

Constitution limits the jurisdiction of the Federal judicial

system to cases and controversies), affd. 983 F.2d 868 (8th Cir.

1993); see also County of Los Angeles v. Davis, 440 U.S. 625, 631

(1979) (a case is moot when the issues presented are no longer

“live” or the parties lack a legally cognizable interest in the

outcome); West v. Secy. of the DOT, 206 F.3d 920, 924 (9th Cir.

2000) (a controversy must be real and substantial involving a

claim for specific relief).   For our purposes, a case filed

pursuant to section 6330 is moot if the Federal income tax

liability that the Commissioner is attempting to collect has been

paid in full so that no collection action is appropriate.    See

Greene-Thapedi v. Commissioner, supra.

     In Greene-Thapedi, the Commissioner offset the taxpayer’s

1999 overpayment against the taxpayer’s 1992 liability, resulting

in full payment of the 1992 liability.   Id. at 4.   The taxpayer

moved to amend her petition to include her claim that the

Commissioner incorrectly offset the 1999 overpayment against the

1992 liability and that the Commissioner should refund the 1999

overpayment, but we denied the motion on the ground that we did

not have jurisdiction to review the taxpayer’s refund claim.       Id.

We explained:

          Petitioner’s claim for a refund arises, if at all,
     under section 6330(c)(2), as an outgrowth of her
     challenge to the existence and amount of her underlying
     1992 tax liability. Pursuant to section 6330(c)(2),
                                - 7 -

     however, whatever right petitioner may have to
     challenge the existence and amount of her underlying
     tax liability in this proceeding arises only in
     connection with her challenge to the proposed
     collection action. Inasmuch as the proposed levy is
     moot, petitioner has no independent basis to challenge
     the existence or amount of her underlying tax liability
     in this proceeding. [Id. at 8; fn. ref. omitted.]

We did not, however, categorically rule out the possibility that

we might have to consider in a section 6330 proceeding whether

the taxpayer had paid more than was owed where such a

determination was necessary for a correct and complete

determination of whether the proposed collection action should

proceed.   As we explained:   “Conceivably, there could be a

collection action review proceeding where * * * the proposed

collection action is not moot and where pursuant to sec.

6330(c)(2)(B), the taxpayer is entitled to challenge ‘the

existence or amount of the underlying tax liability’”.     Id. at 11

n.19.

     Petitioners argue this is such a case.    That is, petitioners

argue that since the existence or amount of their 1998 Federal

income tax liability was properly at issue in the collection due

process hearing, we have jurisdiction to determine the existence

or amount of the 1998 liability pursuant to section 6330(c)(2)(B)

and (d).   Petitioners suggest that while payment or collection of

a liability described in section 6330(c)(2) renders moot all

issues relating to the propriety of respondent’s proposed
                               - 8 -

collection action, the question remains whether the liability was

properly assessed.   We disagree.

     Petitioners misread our holdings in Greene-Thapedi v.

Commissioner, supra, Gerakios v. Commissioner, supra, and

Chocallo v. Commissioner, supra.    In each of those cases, we held

that where there was no unpaid liability upon which a levy could

be based, the case was moot.   Even the hypothetical example we

contemplated in Greene-Thapedi v. Commissioner, supra at 11 n.19,

presupposed an unpaid liability with respect to which the

Commissioner could levy.   Where, as here, the Commissioner

concedes there is no unpaid liability for a tax year to collect

by levy or other collection action, there is simply no

justiciable case or controversy, and the case in respect of that

year is moot.5   County of Los Angeles v. Davis, supra at 631;

West v. Secy. of the DOT, supra at 924.

     We recognize that our position may cause hardship and

inefficiency in some circumstances.    Nevertheless, as discussed

above, the Tax Court is a court of limited jurisdiction, and the

Court cannot expand its jurisdiction under section 6330 beyond

what Congress expressly authorized, even where doing so might

lessen taxpayers’ frustration or improve judicial efficiency in

particular cases.



     5
      Petitioners agree that their 1998 tax liability has been
fully paid.
                                 - 9 -

     We have considered the parties’ remaining arguments, and to

the extent not discussed above, we find them to be irrelevant,

moot, or without merit.6

     To reflect the foregoing,


                                         An order of dismissal granting

                                 respondent’s motion will be

                                 entered.




     6
      Petitioners argue that respondent should be sanctioned for
filing the instant motion because the motion was filed
notwithstanding the Court’s instructions to file a status report
before filing any further motions. Petitioners misread our order
of Apr. 10, 2009, in which we ordered the parties to file a
written status report or submit a stipulated decision on or
before June 1, 2009, “or respondent shall file an appropriate
motion before that date.” Respondent’s motion is an appropriate
motion. Thus, we find no merit in petitioners’ argument.
