                         T.C. Memo. 2005-44



                       UNITED STATES TAX COURT



                  MICHAEL NORTON, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 2145-02L.               Filed March 7, 2005.


     Michael Norton, pro se.

     Rebecca Duewer-Grenville, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


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

seeks review of respondent’s determination regarding collection

of his 1995 income tax liability.




     1
        Unless otherwise indicated, all section references are to
the Internal Revenue Code, and all Rule references are to the Tax
Court Rules of Practice and Procedure.
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                         FINDINGS OF FACT

     Some of the facts have been stipulated and are so found.

The stipulation of facts and the attached exhibits are

incorporated herein by this reference.   At the time he filed the

petition, petitioner was incarcerated in Sheridan, Oregon.

     On November 6, 1996, petitioner was arrested and his funds

were seized (seized funds).   The seized funds totaled

approximately $4 million, which included $1.3 million that was

repatriated from a Swiss bank account.

     On July 14, 2000, petitioner pled guilty to one count of tax

evasion in violation of section 7201 for 1995 and one count of

wire fraud.   In the written plea agreement, petitioner stated

that he understood that there was a tax deficiency of

$440,041.85, plus interest and penalties, related to 1995.

Petitioner and the Government agreed that, after financial

disclosures by petitioner demonstrating he did not have

sufficient assets to pay the tax, the “principal amount of the

taxes due and owing” for 1995 would be paid from the seized

funds.   Petitioner further stated that he understood and agreed

that any penalties and interest assessed for 1995 would not be

paid out of the seized funds.   Petitioner further agreed that any

and all of the seized funds not used to pay restitution to the

victims of his crimes and not used to pay his tax deficiency for

1995 would be forfeited to the United States and he did not and
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would not claim an interest of any kind in the seized funds.    The

plea agreement concludes with statements acknowledging that

petitioner had adequate time to discuss the case with his

attorneys, his attorneys provided him all the legal advice he

requested, he made the plea voluntarily, no one coerced or

threatened him to enter into the plea agreement, and his

attorneys explained all the rights he had as a criminal defendant

and all the terms of the plea agreement.

     Petitioner was represented during his criminal trial by two

experienced criminal defense attorneys, Penelope Cooper and Ted

Cassman.   Petitioner’s attorneys signed the plea agreement and

stated that petitioner understood all the terms of the plea

agreement, and that petitioner’s decision to plead guilty was

knowing and voluntary.

     On November 14, 2000, petitioner signed a Form 4549, Income

Tax Examination Changes, for 1995.     Petitioner agreed to a

$440,042 deficiency in tax and a $330,031.50 fraud penalty

pursuant to section 6663 for 1995.     The Form 4549 listed

$367,289.70 in interest due as of November 23, 2000.     Above the

signature block Form 4549 states:

     Consent to Assessment and Collection--I do not wish to
     exercise my appeal rights with the Internal Revenue
     Service or to contest in the United States Tax Court
     the findings in this report. Therefore, I give my
     consent to the immediate assessment and collection of
     any increase in tax and penalties, and accept any
     decrease in tax and penalties shown above, plus
     additional interest as provided by law. * * *
                               - 4 -

In 2001, respondent assessed the tax, penalty, and interest for

1995.   During 2001, petitioner’s tax deficiency for 1995 of

$440,042 was paid out of the seized funds.

     On June 28, 2001, respondent filed a notice of Federal tax

lien regarding petitioner’s 1995 tax year (notice of lien).     That

same day, respondent sent petitioner a copy of the notice of

lien.

     On July 25, 2001, petitioner timely filed a Form 12153,

Request for a Collection Due Process Hearing, regarding his 1995

tax year.   In the hearing request, petitioner stated:   “I believe

these taxes were paid from the monies seized by U.S. Customs.”

     On November 8, 2001, respondent mailed petitioner a letter

identifying Appeals Officer Fernando Orozco as assigned to

consider the collection action and to conduct petitioner’s

hearing.

     Petitioner had a correspondence hearing with Appeals.     On

November 25, 2001, petitioner wrote Appeals Officer Orozco a

letter setting forth petitioner’s position regarding his case.

Petitioner claimed that his total tax liability for 1995,

including penalties and interest, had been paid.

     On November 29, 2001, Appeals Officer Orozco prepared an

Appeals transmittal and case memorandum.   Appeals Officer Orozco

noted that petitioner was convicted of tax evasion, and that the

Internal Revenue Service (IRS) had received a payment of
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$440,041.85 for petitioner’s tax deficiency for 1995.   Appeals

Officer Orozco stated that there was no agreement to pay off, or

write off, petitioner’s penalty or interest for 1995.     Appeals

Officer Orozco noted that all required procedures and applicable

law had been followed and petitioner offered no collection

alternatives.

     On November 30, 2001, respondent issued a Notice of

Determination Concerning Collection Action(s) Under Section 6320

and/or 6330 to petitioner regarding his 1995 tax year (notice of

determination).   In the notice of determination, respondent

determined that the filing of the notice of lien was appropriate,

that the assessed interest and penalties were due and owing yet

remained unpaid, and that petitioner had not offered an

alternative to enforced collection action.   The attachment to the

notice of determination stated that petitioner argued solely that

the entire tax liability had been paid from the seized funds, and

noted that the IRS received funds to pay only the tax deficiency

and the current amount owed was for the fraud penalty and

interest.

                              OPINION

     Section 6320 provides that the Secretary will furnish the

person described in section 6321 with written notice (i.e., the

hearing notice) of the filing of a notice of lien under section

6323.   Section 6320 further provides that the taxpayer may
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request administrative review of the matter (in the form of a

hearing) within a 30-day period.   The hearing generally will be

conducted consistent with the procedures set forth in section

6330(c), (d), and (e).   Sec. 6320(c).

     Pursuant to section 6330(c)(2)(A), a taxpayer may raise at

the section 6330 hearing any relevant issue with regard to the

Commissioner’s collection activities, including spousal defenses,

challenges to the appropriateness of the Commissioner’s intended

collection action, and alternative means of collection.       Sego v.

Commissioner, 114 T.C. 604, 609 (2000); Goza v. Commissioner, 114

T.C. 176, 180 (2000).    If a taxpayer received a statutory notice

of deficiency for the years in issue or otherwise had the

opportunity to dispute the underlying tax liability, the taxpayer

is precluded from challenging the existence or amount of the

underlying tax liability.   Sec. 6330(c)(2)(B); Sego v.

Commissioner, supra at 610-611; Goza v. Commissioner, supra at

182-183.

     When the Commissioner issues a determination regarding a

disputed collection action, section 6330(d) permits a taxpayer to

seek judicial review with the Tax Court or a U.S. District Court,

as is appropriate.   If the underlying tax liability is properly

at issue, we review that issue de novo.    Sego v. Commissioner,

supra at 610; Goza v. Commissioner, supra at 181.    If the

validity of the underlying tax liability is not at issue, we
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review the Commissioner’s determination for abuse of discretion.

Sego v. Commissioner, supra at 610.

     Petitioner’s sole claim is that the penalty and interest for

1995 were supposed to be paid or should have been paid out of the

seized funds.   Petitioner’s claim is without merit.

     The plea agreement is clear:   the seized funds could be used

to pay the tax deficiency for 1995, but petitioner agreed that

the seized funds would not be used to pay his penalties or

interest for 1995.   Assistant U.S. Attorney Charles B. Burch, who

prosecuted petitioner, credibly testified that the Government

agreed to pay petitioner’s 1995 tax deficiency out of the seized

funds as the sole amount to be paid out of the seized funds

toward petitioner’s tax obligation for 1995.   Mr. Burch further

testified that the Government never agreed to write off the

penalties and interest or pay the penalties and interest out of

the seized funds.

     Petitioner’s testimony and claims to the contrary are not

credible.   The Court is not required to accept petitioner’s

unsubstantiated, self-interested, and questionable testimony.

See Wood v. Commissioner, 338 F.2d 602, 605 (9th Cir. 1964),

affg. 41 T.C. 593 (1964); Archer v. Commissioner, 227 F.2d 270,

273 (5th Cir. 1955), affg. a Memorandum Opinion of this Court;
                                   - 8 -

Weiss v. Commissioner, 221 F.2d 152, 156 (8th Cir. 1955), affg.

T.C. Memo. 1954-51; Schroeder v. Commissioner, T.C. Memo. 1986-

467.

       We note that petitioner did not call his criminal defense

attorneys as witnesses.    We infer that their testimony would not

have been favorable to petitioner.         See Wichita Terminal Elevator

Co. v. Commissioner, 6 T.C. 1158, 1165 (1946), affd. 162 F.2d 513

(10th Cir. 1947).

       Petitioner has failed to raise a spousal defense, make a

valid challenge to the appropriateness of respondent’s intended

collection action, or offer alternative means of collection.

These issues are now deemed conceded.         See Rule 331(b)(4).

       We conclude that respondent correctly sustained the notice

of lien.    In reaching all of our holdings herein, we have

considered all arguments made by the parties, and to the extent

not mentioned above, we find them to be irrelevant or without

merit.

       To reflect the foregoing,


                                                Decision will be entered

                                           for respondent.
