                        T.C. Memo. 2004-136



                      UNITED STATES TAX COURT



                CHRISTINE WHITING, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 15090-02L.          Filed June 10, 2004.


     William E. Taggart, Jr., for petitioner.

     Rebecca Duewer-Grenville, for respondent.



                        MEMORANDUM OPINION


     MARVEL, Judge:   Pursuant to section 6330(d),1 petitioner

seeks review of respondent’s determination to proceed with the




     1
      All section references are to the Internal Revenue Code in
effect at all relevant times, and all Rule references are to the
Tax Court Rules of Practice and Procedure.
                                   - 2 -

collection of petitioner’s 1999 and 2000 Federal income tax

liabilities.2

                                Background

       The parties submitted this case fully stipulated under Rule

122.       We incorporate the stipulated facts and accompanying

exhibits into our findings by this reference.       Petitioner resided

in Mill Valley, California, when she filed the petition.

       For the taxable year 1990 through the taxable year 2000,

petitioner failed to pay the amounts of tax shown as due on her

returns.       On February 10, 2002, respondent sent to petitioner a

Final Notice - Notice of Intent to Levy and Notice of Your Right

to a Hearing for the taxable years 1990 through 2000.       On or

about March 11, 2002,3 petitioner submitted Form 12153, Request

for a Collection Due Process Hearing, requesting a hearing under

section 6330 with respect to the taxable years 1990 through 2000.

In pertinent part, petitioner’s Form 12153 stated:

       The taxpayer has prepared, and is prepared to submit,
       an Offer-In-Compromise based on doubt as to liability,
       doubt as to collectability, and effective tax


       2
      The parties agree that petitioner’s income tax liabilities
for the taxable years 1990 through 1998 were discharged in
bankruptcy. Although the parties’ briefs indicate disagreement
as to whether the discharge order applied to petitioner’s 1999
income tax liability, petitioner has not raised the issue before
this Court.
       3
      Although the parties stipulated that petitioner submitted
her Form 12153 on Mar. 11, 2002, both the second page of
petitioner’s Form 12153 and petitioner’s representative’s
signature on the first page are dated Mar. 12, 2002.
                               - 3 -

     administration as soon as the taxpayer’s request for a
     collection due process hearing is placed in the hands
     of a representative of the Internal Revenue Service who
     will consider the taxpayer’s submission.

     On July 11, 2002, petitioner’s authorized representative,

William Taggart, spoke on the telephone with Appeals Officer

Gerry Melick.   On August 13, 2002, Mr. Taggart and Appeals

Officer Melick spoke on the telephone again.   The record is

silent as to the substance of these two telephone conversations.

Neither Mr. Taggart nor petitioner had a face-to-face meeting

with Appeals Officer Melick.

     On August 23, 2002, the Appeals Office issued a “Notice of

Determination Concerning Collection Action Under Section 6330"

(notice of determination) in which it sustained the proposed levy

action.   In pertinent part, the notice of determination provided

the following explanation:

     In Appeals, you were granted a due process hearing by
     an appeals officer who had no prior involvement with
     respect to the tax for the tax periods covered by the
     hearing.

     Relevant issues presented by the taxpayer: In your
     protest you state that an offer in compromise has been
     prepared and will be presented. However, an offer in
     compromise or other alternative to collection action is
     precluded by your chronic non-compliance.

     Balancing efficient collection and intrusiveness:
     * * * Because of your non-compliance and your failure
     to make any effort to pay or otherwise resolve the
     liabilities it is seen that levy action may well be the
     least intrusive means of collection to be in any way
     effective or efficient.
                                - 4 -

     On September 23, 2002, petitioner filed a petition with this

Court contesting respondent’s determination for the taxable years

1990 through 2001.   On October 24, 2002, respondent filed a

motion to dismiss for lack of jurisdiction and to strike as to

the taxable year 2001.    This Court granted respondent’s motion on

January 3, 2003.   In her petition, petitioner alleged that the

Appeals Office failed “to provide Petitioner with a [section

6330] hearing and an opportunity to present an Offer-in-

Compromise * * * in violation of the Internal Revenue Code and

denied Petitioner due process of law.”

     On November 22, 2002, petitioner filed a chapter 7

bankruptcy petition in the United States Bankruptcy Court for the

Northern District of California (the bankruptcy court).     On

February 18, 2003, the bankruptcy court entered an order

discharging petitioner.    At the time of her bankruptcy discharge,

petitioner had no assets.

                             Discussion

     Section 6330(a) provides that no levy may be made on any

property or right to property of any person unless the Secretary

has notified such person in writing of the right to a hearing

before the levy is made.    If the person makes a request for a

hearing, a hearing shall be held by the Internal Revenue Service

Office of Appeals.   Sec. 6330(b)(1).     At the hearing, a taxpayer

may raise any relevant issue, including appropriate spousal
                               - 5 -

defenses; challenges to the appropriateness of the collection

action; and collection alternatives, such as an offer in

compromise.   Sec. 6330(c)(2)(A).   Additionally, at the hearing, a

taxpayer may contest the existence and amount of the underlying

tax liability if the taxpayer did not receive a notice of

deficiency for the tax in question or did not otherwise have an

opportunity to dispute the tax liability.   Sec. 6330(c)(2)(B);

see also Sego v. Commissioner, 114 T.C. 604, 609 (2000).

     Following a hearing, the Appeals Office must make a

determination whether the proposed levy action may proceed.    In

so doing, the Appeals Office is required to take into

consideration the verification presented by the Secretary, the

issues raised by the taxpayer, and whether the proposed levy

action appropriately balances the need for efficient collection

of taxes with the taxpayer’s concerns regarding the intrusiveness

of the proposed levy action.   Sec. 6330(c)(3).   The taxpayer may

petition the Tax Court, or, in limited cases, a Federal District

Court for judicial review of the Appeals Office’s determination.

Sec. 6330(d).

     If the taxpayer files a timely petition for judicial review,

the applicable standard of review depends on whether the

underlying tax liability is at issue.   Where the underlying tax

liability is properly at issue, the Court reviews any

determination regarding the underlying tax liability de novo.
                                  - 6 -

Sego v. Commissioner, supra at 610.       The Court reviews other

administrative determinations regarding the proposed levy action

for abuse of discretion.    Id.

     In the present case, the only issue that petitioner raises

is that respondent failed to provide a section 6330 hearing to

petitioner.   Petitioner does not challenge the existence of the

underlying tax liability.   Accordingly, we review respondent’s

determination to proceed with the levy action for abuse of

discretion.

     Petitioner contends that it was an abuse of discretion for

respondent to treat the two telephone conversations between Mr.

Taggart and Appeals Officer Melick as a section 6330 hearing.       By

failing to provide a section 6330 hearing, petitioner argues,

respondent prevented petitioner from presenting the factual

information and documentation that she had proposed to submit in

support of her offer in compromise.       Petitioner further asserts

that, because respondent did not consider petitioner’s factual

information and documentation, respondent lacked a sufficient

basis for determining that the levy action could proceed.

     In response, respondent contends that telephone conferences

are an acceptable format for section 6330 hearings and that the

two telephone conversations between Mr. Taggart and Appeals

Officer Melick qualified as a section 6330 hearing.      According to

respondent, during the telephone conversations, Mr. Taggart and
                                - 7 -

Appeals Officer Melick “discussed the substance of Petitioner’s

case”.   Petitioner had the opportunity to submit an offer in

compromise or other documentation, respondent argues, but

petitioner chose not to avail herself of that opportunity.

Respondent also points out that hearings cannot continue

indefinitely and that the Appeals office must be able to deal

effectively with “nonresponsive taxpayers”.

     In Katz v. Commissioner, 115 T.C. 329, 338 (2000), we held

that the oral and written communications between the taxpayer and

the Appeals officer constituted a section 6320(b) hearing.4

After the Commissioner received the taxpayer’s request for a

hearing, the Commissioner sent the taxpayer a letter setting a

date for the hearing.   When the taxpayer insisted that the

location of the hearing was unacceptable, the Appeals officer

held a telephone conference with the taxpayer during which they

discussed the taxable year at issue.    Thereafter, the Appeals

officer sent to the taxpayer a letter stating that the Appeals

Office was not inclined to withdraw the notice of Federal tax

lien.    The taxpayer did not respond, and, approximately 3 months

later, the Appeals Office issued a notice of determination.       We

concluded that the telephone conference was the Appeals officer’s

attempt to accommodate the taxpayer, that the taxpayer and the


     4
      Although sec. 6320(b) applies to hearings for Federal tax
lien filings, we extended our holding to sec. 6330 hearings. See
Katz v. Commissioner, 115 T.C. 329, 336 n.11 (2000).
                               - 8 -

Appeals officer “did in fact discuss his case over the telephone

and that the Appeals officer heard and considered * * * [the

taxpayer’s] arguments.”   Id. at 337-338; see also sec. 301.6330-

1(d)(2), Q&A-D6, Proced. & Admin. Regs.

     In the present case, petitioner has not established that

respondent abused his discretion in determining that the two

telephone conversations between Mr. Taggart and Appeals Officer

Melick constituted a section 6330 hearing.    Petitioner offered no

evidence with respect to the content of the two telephone

conversations.5   Without such evidence, we have no basis upon

which to conclude that respondent improperly characterized the

two telephone conversations as a section 6330 hearing.6

     Petitioner bases her arguments in this case solely on her

belief that she was not afforded the hearing that section 6330

requires.   Petitioner does not address what may be the critical

element of respondent’s determination.    Respondent determined

that “an offer in compromise or other alternative to collection


     5
      In this fully stipulated case, the parties did not
stipulate regarding the content of the two telephone
conversations. Although both parties argued on brief regarding
the circumstances of the two telephone conversations, and
respondent argued that the parties “discussed the substance of
petitioner’s case”, the parties did not provide the Court with
any evidence.
     6
      The record in this case is silent regarding the
circumstances surrounding the two telephone calls, and we cannot
conclude that respondent abused his discretion regarding the
determination that a hearing was held without some proof to the
contrary.
                                 - 9 -

action is precluded by [petitioner’s] chronic non-compliance.”

We understand respondent’s determination to mean that

petitioner’s extensive history of noncompliance with the tax law

disqualifies her from eligibility for an offer in compromise or

other collection alternative.    Petitioner offers us no evidence

and no argument regarding this critical part of respondent’s

determination.   Even if petitioner had raised the issue, however,

we simply cannot ascertain from the record that respondent’s

determination regarding petitioner’s eligibility for an offer in

compromise was an abuse of discretion under the circumstances of

this case.

     We have considered the remaining arguments of both parties

for results contrary to those expressed herein and, to the extent

not discussed above, find those arguments to be irrelevant, moot,

or without merit.

     To reflect the foregoing,


                                              Decision will be entered

                                         for respondent.
