                         T.C. Memo. 2002-317



                      UNITED STATES TAX COURT



     PAUL F. NICHOLS AND ELEANORE M. NICHOLS, Petitioners v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 9793-01L.               Filed December 30, 2002.



     Paul F. Nichols and Eleanore M. Nichols, pro sese.

     Jeremy L. McPherson, for respondent.


                          MEMORANDUM OPINION


     LARO, Judge:   Petitioners, while residing in Fair Oaks,

California, petitioned the Court under sections 6320(c) and

6330(d) to review respondent’s filing of a notice of lien under

section 6323 and his determination as to a proposed levy upon

petitioners’ property.   Respondent filed the lien and proposed
                                 -2-

the levy to collect 1996 Federal income taxes of approximately

$135,024.03.1

     We sustain respondent’s filing of the notice of lien and

respondent’s determination as to the proposed levy.    Unless

otherwise noted, section references are to the applicable

versions of the Internal Revenue Code.    Rule references are to

the Tax Court Rules of Practice and Procedure.

                             Background

     Petitioners filed a joint 1996 Federal income tax return on

October 20, 1997.   Respondent assessed the Federal income tax

liability shown on that return on November 24, 1997.

     On July 25, 2000, respondent sent to petitioners a notice of

deficiency for 1996.    The notice of deficiency determined that

petitioners were liable for a deficiency of $83,521 and an

accuracy-related penalty of $16,704.20 under section 6662(a).

Petitioners did not petition this Court with respect to the

notice of deficiency.    On December 18, 2000, respondent assessed

the amount of the deficiency and accuracy-related penalty shown

in the notice of deficiency.

     On April 12, 2001, respondent mailed to each petitioner an

identical letter, Final Notice - Notice of Intent to Levy and

Notice of Your Right to a Hearing (final levy notice).    The final


     1
       We use the term “approximately” because these amounts were
computed before the present proceeding and have since increased
on account of interest.
                                      -3-

levy notice informed petitioners of their tax liability for 1996.

In addition, the final levy notice informed petitioners of (1)

respondent’s intent to collect that liability through a levy upon

their property pursuant to section 6331 and (2) petitioners’

right under section 6330 to a hearing with respondent’s Office of

Appeals (Appeals) to discuss the proposed levy.       Enclosed with

the final levy notice was a copy of Form 12153, Request for a

Collection Due Process Hearing.

     On April 23, 2001, respondent sent to each petitioner an

identical letter, Notice of Federal Tax Lien Filing and Your

Right to a Hearing Under IRC 6320 (final lien notice) for 1996.

A Form 12153, Request for a Collection Due Process Hearing, was

enclosed with the final lien notice.

     On April 30, 2001, petitioners mailed to respondent a Form

12153 requesting the referenced hearing.        Petitioners attached a

letter “Request for a Collection Due Process Hearing.”        That

letter stated:

           Under IRC Section 6320(a)(3)(B), the individuals
     name above do hereby request a hearing where both sides
     may present lawful evidence to support their position.
     * * *

     *         *         *        *         *     *       *

          Please perform the following and furnish the
     documents requested for the 1996.

          1.       Abate your actions:

          2. Provide me with a copy of the record of
     assessment which is required by section 6203 (this is a
                                 -4-

     demand pursuant to 26 USC 6203 and Trea. Reg. 301-6203-
     1) Include a copy of the Accounting Assessment Journal
     (assessment list) and other supporting documents as
     required by IR Code section 6203 and Reg. 301-6203-1.

          3. Provide me with the record of any proceeding
     of Notice of Assessment which may have been issued to
     me showing the dates of assessment and the date of said
     notices and all records which provide proof that theses
     [sic] required notice were mailed.

          4. Provide me with the record of any proceeding
     or administrative act, upon which the agency has relied
     upon to determine that I am in fact a liable taxpayer
     for the above years. Alternatively, I demanded that
     you provide a hearing so that it may be determined,
     based upon necessary facts, whether or not I am or was
     liable for taxes alleged that year.

     *       *       *       *         *     *       *

     In accordance with IRC Section 6320(c)(1), we request
     that the appeals officer at the hearing obtain
     verification from the secretary that requirements of
     any applicable law or administration procedure have
     been met. We will expect the Secretary to provide us
     with evidence that Internal revenue Regulation (IR
     Regs.) 301.6203-1 has been complied with.

     In accordance with IRC Section 6230(c)(2)(A), we feel
     is [sic] very relevant that the IRS can provide no
     evidence that a procedurally correct lawful assessment
     exist for any of the tax periods * * * therefore, under
     IRC Section (c)(2)(B), we will raise at the hearing
     challenges to the existence and amount of the
     Underlying Tax Liability, Unless the Secretary can
     provide evidence that a procedural correct lawful
     assessment, certified by and assessment officer, is in
     existence * * *

     No hearing was held with petitioners.   Instead, on the basis

of petitioners’ letter and attached document, Appeals issued to

petitioners on July 6, 2001, a Notice of Determination Concerning

Collection Action(s) Under Section 6320 and/or 6330 for 1996.
                                 -5-

This notice reflected the determination of Appeals to sustain the

filing of the notice of lien and the proposed levy on

petitioners’ property.

     The Court tried this case on March 11, 2002.       Before trial,

petitioners received Form 4340, Certificate of Assessments,

Payments, and Other Specified Matters for 1996.       The Form 4340

was dated September 21, 2001.

                              Discussion

     Section 6331(a) provides that if any person liable to pay

any tax neglects or refuses to pay that tax within 10 days after

notice and demand for payment, the Commissioner may collect the

tax by levy on the person’s property.       See also sec.

7701(a)(11)(B) and (12)(A) (reference in statute to “Secretary”

includes reference to Commissioner).       Section 6331(d) provides

that at least 30 days before enforcing collection by levy on the

person’s property, the Commissioner must provide the person with

a final notice of intent to levy, including notice of the

administrative appeals available to the person.       See also sec.

7701(a)(11)(B) and (12)(A).

     Section 6330 generally provides that the Commissioner cannot

proceed with collection by levy until the person has been given

notice and the opportunity for an administrative review of the

matter (in the form of a hearing before Appeals) and, if

dissatisfied, with judicial review of the administrative
                                  -6-

determination.     Davis v. Commissioner, 115 T.C. 35, 37 (2000);

Goza v. Commissioner, 114 T.C. 176, 179 (2000).     In the event of

such a judicial review, the Court’s standard of review depends on

whether the underlying tax liability is at issue.    The Court

reviews a taxpayer’s liability under the de novo standard where

the validity of the underlying tax liability is at issue.    The

Court reviews other administrative determinations for abuse of

discretion.   Sego v. Commissioner, 114 T.C. 604, 610 (2000).      A

taxpayer’s underlying tax liability may be at issue if he or she

“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).

     In order to discern the issues in this case, we focus on

assignments of error set forth in the petition that commenced

this proceeding.    Rule 331(b)(4) (“Any issue not raised in the

assignments of error shall be deemed to be conceded.”)

Petitioners assert in their petition the following 10 allegations

of error in the Appeals officer’s determination:

     (1) Respondents Notice of Determination claims a
     Determination. Petitioner denies having a
     Determination (2) Respondents Notice of Determination
     claims unreported and under reported income.
     Petitioner denies having unreported or under reported
     income. (3) Respondents IRS Form 4549, income tax
     examination changes, claims a tax liability.
     Petitioner denies having a tax liability. (4)
     Respondent has failed to provide petitioner with
     certified assessment information as per Internal
     Revenue Regulation 301.6203-1. (5) Respondent claims a
     Determination, but has failed to provide petitioner
                                -7-

     with the USC Title 26 taxing statute that respondent
     relied on to calculate any claimed Determination. (6)
     Respondent claims a Determination, but has failed to
     provide petitioner with any certified facts or
     evidence. (7) Respondents Notice of Determination is
     null and void as it is based on hearsay facts and
     evidence. (8) Petitioner has been denied a meaningful
     administrative hearing where certified facts or
     evidence from respondent was provided. (9) Statute of
     limitation for tax year 1996 has expired. (10)
     Petitioners declaration, signed under penalty of
     perjury, is attached and made part of this matter.

     We classify petitioners’ arguments in two manners.   The

first category pertains to the existence or validity of the

underlying tax liability.   The second category pertains to the

procedure by which respondent has assessed petitioners’ tax

liability and/or reviewed the validity of it.

     As to the first category, it is indisputable that

petitioners have received a notice of deficiency for 1996 and

that they had an opportunity to dispute in this Court

respondent’s determination set forth in that notice.    They chose

not to dispute those determinations timely.   See sec. 6213(a)

(notices of deficiency addressed to taxpayers inside the United

States may be challenged by those taxpayers generally by filing a

petition with this Court within 90 days after the notice of

deficiency is mailed.).   As a result, we reject this first type

of argument as untimely and advanced improperly.   We hold that

petitioners are precluded from disputing their underlying tax

liability in this proceeding.   Sego v. Commissioner, supra.
                                 -8-

       As to the second category of arguments, each of these

arguments is frivolous and has been previously rejected by this

Court.    E.g., Bartschi v. Commissioner, T.C. Memo. 2002-268, and

cases cited therein; Tolotti v. Commissioner, T.C. Memo. 2002-86.

The Court of Appeals for the Fifth Circuit has remarked: “We

perceive no need to refute these arguments with somber reasoning

and copious citation of precedent; to do so might suggest that

these arguments have some colorable merit.”    Crain v.

Commissioner, 737 F.2d 1417, 1417 (5th Cir. 1984).    Suffice it to

say:

       (1) Petitioners are taxpayers subject to the Federal income

tax, see secs. 1(c), 7701(a)(1), (14);

       (2) compensation for labor or services rendered constitutes

income subject to the Federal income tax, sec. 61(a)(1); United

States v. Romero, 640 F.2d 1014, 1016 (9th Cir. 1981);

       (3) petitioners are required to file an income tax return,

sec. 6012(a)(1); and

       (4) a taxpayer’s failure to report tax on a return does not

prevent the Commissioner from determining a deficiency in that

taxpayer’s income tax, secs. 6211(a), 6212(a); see Monaco v.

Commissioner, T.C. Memo. 1998-284.
                                -9-

     Petitioners have failed to raise any arguments which have

not been previously rejected by this Court.2    Thus,

notwithstanding petitioners’ request to have a “meaningful

hearing” under sections 6320 and 6330, we consider it neither

necessary or productive to remand this case to Appeals to hold a

hearing.   Lunsford v. Commissioner, 117 T.C. 183 (2001).    We

sustain respondent’s notice of a lien filing and respondent’s

determination as to the proposed levy as a permissible exercise

of discretion.

     We have considered all arguments and have found those

arguments not discussed herein to be irrelevant and/or without

merit.   To reflect the foregoing,

                                           Decision will be entered

                                      for respondent.




     2
       We also note that the Form 4340 received by petitioners is
a valid verification that the requirements of any applicable law
or administrative procedure have been met and is sufficient for
the purposes of complying with the requirements of sec.
6330(c)(1). Roberts v. Commissioner, 118 T.C. 365 (2002).
Petitioners have not demonstrated in this proceeding any
irregularity in the assessment procedure that would raise a
question about the validity of the assessment or the information
contained in Form 4340. See Mann v. Commissioner, T.C. Memo.
2002-48.
