                        T.C. Memo. 2011-38



                     UNITED STATES TAX COURT



             ELIJAH B. FREEMAN, JR., Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 18302-08L.           Filed February 9, 2011.



     Elijah B. Freeman, pro se.

     Steven M. Webster, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     MORRISON, Judge:   The petitioner, Elijah B. Freeman, Jr.,

filed a petition pursuant to sections 6320(c) and 6330(d)1 to

challenge a determination and a supplemental determination of the

IRS Appeals Office sustaining the filing of a notice of federal


     1
      All section references are to sections of the Internal
Revenue Code of 1986, as amended.
                                  2

tax lien to collect section 6672 trust fund recovery penalties

from Freeman.   The penalties relate to withholdings of payroll

taxes for periods ended December 31, 2003; December 31, 2004;

March 31, 2005; June 30, 2005; September 30, 2005; December 31,

2005; and March 31, 2006 (the periods at issue).    We find that

the Appeals Office did not abuse its discretion in sustaining the

filing of the notice of federal tax lien.

                           FINDINGS OF FACT

     This case was tried.    The parties submitted a stipulation of

facts, which the Court hereby incorporates into its findings of

fact.   Freeman resided in North Carolina when he filed the

petition.

     Freeman is the president of Dulatown Outreach Center, a

charitable organization based in Caldwell County, North Carolina.

Dulatown Outreach Center was unable to pay its quarterly payroll

tax liabilities in full.    In May 2007, Freeman was assessed

section 6672 trust fund recovery penalties as a responsible

officer of Dulatown Outreach Center.

     Freeman and his spouse filed a joint income tax return for

the tax year 2006.   On June 4, 2007, the IRS assessed the tax

liability reported on the return, as well as penalties.

     On September 17, 2007, the IRS filed two notices of federal

tax lien on Freeman’s property in Guilford County, North

Carolina.   The first notice was filed to collect section 6672
                                  3

trust fund recovery penalties for the periods at issue.      The

second notice was filed to collect the Freemans’ joint income tax

liability for 2006.    On September 18, 2007, the IRS sent two

letters to Freeman notifying him of the filing of the two notices

of federal tax lien.    Freeman was entitled to request an

administrative hearing under section 6320(b)(1).     He requested

such a hearing, and he indicated on his request form that he

wished to discuss an installment agreement.     He also indicated

that he sought innocent-spouse relief.

     After he requested the hearing, Freeman paid the 2006 joint

income tax liability.   Freeman withdrew his request for a hearing

with respect to the notice of federal tax lien to collect the

income tax liability.   The IRS released the notice.    During a

telephone conference on May 5, 2008, Freeman urged the Appeals

Office to withdraw the remaining notice of federal tax lien (the

notice to collect the section 6672 trust fund recovery penalties)

because the notice was damaging his credit.     The Appeals Office

determined that Freeman’s monthly disposable income was $1,060

and that in September 2008 his mortgage would be fully paid and

his monthly disposable income would increase to $1,860.      It

offered an installment agreement under which Freeman would pay

$500 per month for one year and $1,200 per month after that.

Freeman rejected the offer.    On June 24, 2008, the Appeals Office

issued a notice of determination.     It stated that Freeman had
                                  4

claimed that his “business also had an installment agreement for

the payroll tax liability.”    The Appeals Office stated that

Freeman did not submit an acceptable collection alternative.     It

determined that the criteria for withdrawing a notice of federal

tax lien under section 6323(j) were not met.    It also stated the

notice of federal tax lien was necessary to establish the federal

government’s priority against other creditors even though it may

have adversely affected Freeman’s credit.

     To challenge the determination, Freeman filed a Tax Court

petition.    The petition states that Freeman had entered into an

installment agreement.   As the attorneys for the Commissioner

prepared the case for trial, they determined that the Appeals

Office had erred in computing Freeman’s monthly disposable income

as $1,060.   The Commissioner moved to remand the case.   On April

17, 2009, the Court granted the motion and remanded the case to

the Appeals Office for the purpose of reconsidering the terms of

an installment agreement.   On remand, the Appeals Office

determined that Freeman’s monthly disposable income was $919.     It

offered to enter into an installment agreement under which

Freeman would make payments of $919 per month to resolve his

liability for section 6672 penalties.    Freeman did not respond to

the offer.   On June 30, 2009, the Appeals Office issued a

supplemental determination under section 6320 sustaining the

notice of federal tax lien.
                                 5

                              OPINION

     When the IRS makes an assessment of unpaid taxes, a tax lien

arises against all the property of the taxpayer.     Sec. 6322.

The lien is perfected against subsequent creditors once the IRS

files a notice of federal tax lien with the appropriate local

government.   Sec. 6323(a), (f)(1).   The IRS may withdraw the

notice of federal tax lien if “the taxpayer has entered into an

agreement under section 6159 to satisfy the tax liability for

which the lien was imposed by means of installment payments,

unless such agreement provides otherwise”.     Sec. 6323(j)(1).

     At an Appeals Office hearing after the issuance of a notice

of federal tax lien, the taxpayer may raise any issue related to

the notice of federal tax lien, including challenges to the

appropriateness of the notice of federal tax lien and offers of

installment agreements.   Secs. 6330(c)(2)(A), 6320(c).    The

Appeals Office must consider the issues raised by the taxpayer in

making its determination.   Sec. 6330(c)(3).    The determination of

the Appeals Office is reviewed by this Court for abuse of

discretion when, as here, the amount of the underlying liability

is not at issue.   Hoyle v. Commissioner, 131 T.C. 197, 200

(2008).

     Freeman contends that he signed an installment agreement.

Therefore, he argues, the Appeals Office erred in sustaining the

notice of federal tax lien.   Freeman introduced the installment
                                   6

agreement at trial.     The agreement was signed by Freeman on

behalf of Dulatown Outreach Center to settle its “Form 941”

liability.   As an employer, Dulatown Outreach Center was required

to withhold Federal Insurance Contributions Act (FICA) tax and

income taxes from its employees’ wages and pay them over to the

United States.   See sec. 3402(a)(1) (requiring employer to

withhold income tax from wages); sec. 3403 (employer is liable

for paying income tax it is required to withhold); sec. 3101

(imposing FICA tax on wage earners); sec. 3102(a) (requiring

employer to withhold from wages the amount of the tax imposed by

section 3101); sec. 3102(b) (employer is liable for paying tax it

is required to withhold under section 3102(a)).      Dulatown

Outreach Center was also liable for the employer’s share of FICA

taxes.   See sec. 3111(a) and (b).     All these liabilities are

reported on Form 941, Employer’s Quarterly Federal Tax Return.

     Section 6672(a) imposes a penalty on persons, other than the

employer, who are responsible for withholding taxes.      Liability

under section 6672 is different from the employer’s liability for

payment of tax required to be withheld.      See United States v.

Pomponio, 635 F.2d 293, 298 (4th Cir. 1980) (“Their individual

liability under the statute is separate and distinct from that of

the corporations”.).2    The installment agreement concerns the


     2
      While the liabilities are separate as a conceptual matter,
the IRS endeavors to collect a trust fund tax only once--from the
                                                   (continued...)
                               - 7 -

liability of Dulatown Outreach Center for failing to pay taxes it

was required to withhold, not the section 6672 penalty liability

of Freeman.   Therefore the installment agreement did not justify

the release of the notice of federal tax lien to collect

Freeman’s section 6672 penalty liability.

     Freeman also argues on brief that the Appeals Office failed

to consider that the notice of federal tax lien impaired

Freeman’s credit.   However, the determination notice itself

reflects that this was considered.     The record does not show that

the Appeals Office abused its discretion in its consideration of

the effect on Freeman’s credit.   See sec. 6330(c)(2)(A)(ii),

(3)(B).

     Freeman also argues on brief that he is entitled to

innocent-spouse relief because the notice of federal tax lien

concerns Dulatown Outreach Center, and his spouse is not

connected with that organization.    The record does not show that

the Appeals Office abused its discretion in (1) treating

Freeman’s innocent-spouse claim as a request that he be relieved

of his 2006 income tax liability and (2) determining that he had

withdrawn that request when that liability was paid.

     Freeman also argues on brief that the assessment was

incorrectly calculated.   However, the determination notice


     2
      (...continued)
employer if possible, and if not, from a responsible party.
United States v. Pomponio, 635 F.2d 293, 298 (4th Cir. 1980).
                                 - 8 -

reflects that Freeman did not dispute the amount of his liability

at the hearing, and he does not contend otherwise.      See sec.

301.6320-1(f)(2), A-F3, Proced. & Admin. Regs. (the taxpayer can

ask the Tax Court to consider only issues that were raised at the

hearing).    Nor does his petition dispute the amount of his

liability.    Rule 34(b)(4), Tax Court Rules of Practice and

Procedure (petition must clearly and concisely specify the errors

made by the IRS).    He is therefore barred from disputing the

liability at trial.

     The determination and supplemental determination of the

Appeals Office were not an abuse of discretion.

     To reflect the foregoing,




                                           Decision will be entered

                                      for respondent.
