                         T.C. Memo. 2001-191



                       UNITED STATES TAX COURT



          JAMES AND MARGARETTE MCMAHAN, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 14282-99L.                       Filed July 25, 2001.


     Joyce Griggs, for petitioners.

     Ross M. Greenberg, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION



     FOLEY, Judge:    The issues for decision are whether

respondent obtained verification of Federal income tax

assessments and whether petitioners are liable for a section

6673(a)(1) penalty.   All section references are to the Internal

Revenue Code as amended.
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                         FINDINGS OF FACT

    When the petition was filed, petitioners resided in Goliad,

Texas.   On December 11, 1997, respondent issued a notice of

deficiency relating to petitioners’ 1993, 1994, and 1995 Federal

income taxes, but petitioners did not petition for

redetermination of the deficiencies.

     On February 16, 1999, respondent issued each petitioner a

Notice of Intent to Levy and Notice of Your Right to a Hearing.

On March 3, 1999, petitioners filed a Request for a Collection

Due Process Hearing (i.e., Form 12153) and contended that there

was no “valid summary record of assessment”.   On March 31, 1999,

respondent’s Appeals officer obtained Certificates of Assessments

and Payments (i.e., Form 4340) relating to petitioners’ years in

issue.   In a letter dated May 19, 1999, the Appeals officer

responded to petitioners’ request, scheduled a hearing, and typed

the following information at the top right side of the page:

     Date and Time of Conference:
     Thursday, June 10, 1999, at
     9:00AM
     Place:
     IRS Appeals Office
     5835 Callaghan Rd., STE 220
     San Antonio TX 78228

Neither petitioners nor their counsel appeared or rescheduled the

hearing.

     On June 18, 1999, the Appeals officer informed petitioners’

counsel by telephone that he was going to make a determination
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based on the information in respondent’s administrative file.      On

the same date, petitioners’ counsel replied:    “It will be much

better if you and I communicate by letter or fax.”    On June 22,

1999, the Appeals officer sent the Forms 4340 by telecopier to

petitioners’ counsel and requested a call by June 29, 1999, to

schedule a conference.   On June 22, 1999, petitioners’ counsel

acknowledged receipt of the Forms 4340, requested Forms 23 C and

17 (i.e., Notice and Demand), and stated:    “Upon receipt of these

documents we can probably handle the hearing telephonically.”      On

June 23, 1999, the Appeals officer wrote that the Forms 4340 “are

accepted by the Courts in establishing the validity of an

assessment” and “I plan to close out your case in 30 days and

issue a determination letter.”    On August 5, 1999, respondent

issued a Notice of Determination Concerning Collection Action(s)

Under Section 6330, determining that his proposed collection

action was to be sustained.   At trial, on January 8, 2001,

respondent moved for the imposition of the section 6673(a)(1)

penalty.

                              OPINION

     Section 6330(b)(1) provides that if a taxpayer requests a

hearing, “such hearing shall be held by the Internal Revenue

Service Office of Appeals.”   Section 6330(c)(1) states:   “The

appeals officer shall at the hearing obtain verification from the
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Secretary that the requirements of any applicable law or

administrative procedure have been met.”

     Section 6330(d) provides for Tax Court review of the

Commissioner’s administrative determination.   Where the validity

of the underlying liability is properly at issue, the Court will

review the matter de novo.   Davis v. Commissioner, 115 T.C. 35,

39 (2000).   In cases where the validity of the liability is not

properly part of the appeal, the Court reviews the Commissioner’s

administrative determination for abuse of discretion.    See id.;

see also Goza v. Commissioner, 114 T.C. 176, 181-182 (2000).

     Petitioners do not dispute the underlying liabilities, or

the adequacy of the scheduled hearing, but contend that section

6330(c)(1) requires the production of Form 23 C.    This Court

previously has addressed such a contention, holding that “it was

not an abuse of discretion for Appeals to rely on a Form 4340

* * * for the purpose of complying with section 6330(c)(1).”

Davis v. Commissioner, supra at 41.    Accordingly, respondent’s

administrative determination was not an abuse of discretion.

     Respondent contends that petitioners’ position is frivolous

and instituted primarily for delay and that, pursuant to section

6673(a)(1), the Court should impose a penalty on them.     We

conclude, however, that it is not appropriate to impose such a

penalty in this case.
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     Contentions we have not addressed are irrelevant, moot, or

meritless.

     To reflect the foregoing,


                                              An appropriate order and

                                         decision will be entered.
