                        T.C. Memo. 2008-189



                      UNITED STATES TAX COURT



            ROBERT EMMETT MCARDLE III, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 8933-07L.               Filed August 7, 2008.



     Robert Emmett McArdle III, pro se.

     Susan K. Greene, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     COHEN, Judge:   This action was commenced in response to a

Notice of Determination Concerning Collection Action(s) Under

Section 6320 and/or 6330 (notice of determination) with respect

to petitioner’s 1990, 1991, 1993, 1994, and 1998 Federal income

tax liabilities.   The issue for decision is whether the periods

of limitations on collection for petitioner’s 1990 and 1991 tax
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years have expired, making the imposed notice of Federal tax lien

inappropriate with respect to those years.   Unless otherwise

indicated, all section references are to the Internal Revenue

Code.

                         FINDINGS OF FACT

     Some of the facts have been stipulated, and the stipulated

facts are incorporated in our findings by this reference.

Petitioner resided in Texas at the time his petition was filed.

     Federal income tax liabilities arose because petitioner

failed to pay in full the tax reported on his returns for 1990,

1991, 1994, and 1998.   Petitioner’s 1993 tax return reflected a

refund due.   The Internal Revenue Service (IRS) received

petitioner’s 1990 return on June 12, 1992, and timely assessed

the tax due on July 27, 1992.   The IRS received petitioner’s 1991

return on July 1, 1992, and timely assessed the tax due on August

3, 1992.

     The IRS audited petitioner’s returns for 1990, 1991, and

1993.   Petitioner entered into agreements to extend the periods

of limitations on assessment for these tax years.   In particular,

the 1990 assessment period was extended to September, 20, 1999,

and the 1991 assessment period was extended to October 8, 1999.

The IRS timely assessed the additional tax for 1990 on June 3,

1996, and for 1991 on June 10, 1996.
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     On September 28, 1992, petitioner filed a chapter 13

bankruptcy petition.   On March 15, 1996, the bankruptcy court

entered an order dismissing petitioner’s bankruptcy case.

Petitioner filed a second chapter 13 bankruptcy petition on

September 26, 1996.    An order dismissing this second bankruptcy

case was entered on December 11, 1996.

     The IRS sent a Notice of Federal Tax Lien Filing and Your

Right to a Hearing Under IRC 6320 to petitioner on June 30, 2006.

On July 10, 2006, the IRS filed a notice of Federal tax lien for

petitioner’s outstanding tax liabilities for the years in issue.

Petitioner made a timely request for an administrative hearing

(section 6330 hearing) regarding the lien.

     On January 19, 2007, a settlement officer held a section

6330 hearing with petitioner.   Petitioner argued that:   (1) The

amount of the 1994 tax liability determined by the IRS was

incorrect; (2) the assessment dates for tax years 1990 and 1994

were incorrect; (3) the IRS miscalculated the periods of

limitations on collection and those periods had expired; and (4)

the notice of Federal tax lien should be withdrawn.

     On March 15, 2007, the Appeals Office sent to petitioner the

notice of determination upon which this case is based.    The

notice of determination upheld the tax lien and affirmed that:

(1) The 1994 tax liability, which was determined according to the

return filed by petitioner, was accurate; (2) the assessment
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dates for 1990 and 1994 shown in the IRS records were correct;

(3) the periods of limitations on collection for all tax years

had not passed because the IRS calculations of those periods were

correct; and (4) the notice of Federal tax lien should not be

withdrawn because withdrawal of the lien would neither facilitate

the collection of the tax liability nor be in the best interests

of both the Government and petitioner.     The notice of

determination concluded that the filing of the Federal tax lien

was in conformity with IRS procedures and was necessary to

protect the Government’s interest in petitioner’s assets.

                                OPINION

     Although petitioner raised other arguments at various stages

of the proceedings, his argument at trial and in his posttrial

brief is that the periods of limitations on collection for 1990

and 1991 have expired.     He argues, therefore, that the Federal

tax lien is inappropriate with regard to those years.

     Section 6321 creates a lien in favor of the United States on

all property and rights to property belonging to a person liable

for taxes when payment has been demanded and neglected.     The lien

arises by operation of law when the IRS assesses the amount of

unpaid tax.   Sec. 6322.    The IRS files a notice of Federal tax

lien to preserve priority and put other creditors on notice.     See

sec. 6323.
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     Section 6320 provides that the Secretary shall furnish the

person described in section 6321 with written notice of the

filing of a lien under section 6323.    This notice must be

provided not more than 5 business days after the day the notice

of Federal tax lien is filed and must advise the taxpayer of the

opportunity for an administrative review in the form of a

hearing.   Sec. 6320(a).

     Section 6320 further provides that the taxpayer may request

a section 6330 hearing within the 30-day period beginning on the

day after the 5-day period.   Sec. 6320(a)(3)(B).   The hearing

generally shall be conducted consistent with the procedures set

forth in section 6330(c), (d), and (e).    Sec. 6320(c).   A

taxpayer may raise any relevant issue at the hearing, including

challenges to “the appropriateness of collection actions”.     Sec.

6330(c)(2)(A)(ii).

     The settlement officer must (1) consider issues raised by

the taxpayer, (2) verify that the requirements of applicable law

and administrative procedures have been met, and (3) consider

“whether any proposed collection action balances the need for the

efficient collection of taxes with the legitimate concern of the

person [involved] that any collection action be no more intrusive

than necessary.”   Sec. 6330(c)(3).    The notice of determination

in this case reflects that all the required steps were taken.
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     We have jurisdiction to review the Appeals Office

determination with respect to a section 6330 hearing.     Secs.

6320(c), 6330(d)(1); see Greene-Thapedi v. Commissioner, 126 T.C.

1, 6 (2006).   Petitioner contends that the periods of limitations

for the collection of his 1990 and 1991 Federal income tax

liabilities have expired.    We review this particular matter de

novo.   See Boyd v. Commissioner, 117 T.C. 127, 130 (2001);

MacElvain v. Commissioner, T.C. Memo. 2000-320 (explaining that a

claim that the limitations period has expired constitutes a

challenge to the underlying tax liability).     For reasons

discussed below, we conclude that they did not.

     After a return is filed, the IRS generally is limited to 3

years to assess the amount of tax imposed; i.e., the period of

limitations on assessment.    Sec. 6501(a).   The period of

limitations on assessment may be extended if the IRS and the

taxpayer agree to an extension in writing.     Sec. 6501(c)(4).

Where the assessment of any tax has been properly made within the

period of limitations on assessment, the IRS may collect the tax

within 10 years after the date of the assessment; i.e., the

period of limitations for collection after assessment.     Sec.

6502(a)(1).

     Statutory periods of limitations may be suspended during any

time that the IRS is prohibited from assessing or collecting tax,

such as during the pendency of certain court proceedings, section
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6330 hearings, bankruptcy proceedings, and installment

agreements.   Secs. 6320(c), 6330(e)(1), 6331(k)(3)(B), 6502(a),

6503(a)(1), (h).   The period of limitations on collection is

extended for an additional 6 months after a bankruptcy case is

dismissed or discharged.   Sec. 6503(h)(2).

     Petitioner contends that the 10-year statutory periods of

limitations on collection for his 1990 and 1991 tax years have

expired.   He argues that the settlement officer should have used

a different method of calculation to determine the expiration

dates.   In determining the method of calculation that should be

applied, petitioner relies on a special rule (Restructuring Act

rule) found in section 3461(c)(2) of the Internal Revenue Service

Restructuring and Reform Act of 1998, Pub. L. 105-206, 112 Stat.

764, which provides:

          (2) Prior request.--If, in any request to extend
     the period of limitations made on or before December
     31, 1999, a taxpayer agreed to extend such period
     beyond the 10-year period referred to in section
     6502(a) of the Internal Revenue Code of 1986, such
     extension shall expire on the latest of--

           (A) the last day of such 10-year period;

           (B) December 31, 2002; or

          (C) in the case of an extension in connection with
     an installment agreement, the 90th day after the end of
     the period of such extension.

           [Emphasis added.]

Petitioner asserts that his 1990 and 1991 tax years qualify for

treatment under this Restructuring Act rule because he had
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entered into agreements, before December 31, 1999, to extend the

period of limitations for both years.    Petitioner argues that

subsection (c)(2)(B) or (C) of the Restructuring Act rule applies

and, accordingly, should limit the periods of limitations to

either December 31, 2002, or 90 days after the end of each

extension agreement.

     The Restructuring Act rule, however, applies only to

extensions of periods of limitations on collection.    Petitioner

entered into agreements to extend the periods of limitations on

assessment under section 6501, not on collection under section

6502.   Thus, the Restructuring Act rule does not apply to

petitioner’s case.

     Petitioner’s remaining argument is that the lien should be

withdrawn.   Insofar as the underlying tax liability is not at

issue, we review the findings from the section 6330 hearing using

an abuse of discretion standard.    See Sego v. Commissioner, 114

T.C. 604, 610 (2000); H. Conf. Rept. 105-599, at 266 (1998),

1998-3 C.B. 747, 1020.   For us to conclude that there was an

abuse of discretion in sustaining the lien, petitioner would have

to show that the settlement officer’s determination was

arbitrary, capricious, or without sound basis in fact or law.

See Giamelli v. Commissioner, 129 T.C. 107, 111 (2007); see also

5 U.S.C. sec. 706(2)(A) (2006).    He has not done so here.
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     In reviewing the settlement officers’s calculations of the

relevant periods of limitations on collection, we find no

material errors.    The correct assessment dates for tax years 1990

and 1991 were used as the starting points for the calculations.

The settlement officer took into account the suspensions of the

limitation periods related to bankruptcy proceedings, including

the additional 6-month extensions pursuant to section 6503(h)(2).

     Petitioner presented neither evidence nor argument showing

that the settlement officer’s computation of the periods at issue

was erroneous under the method of calculation used.     We conclude

that the settlement officer properly calculated the periods of

limitations on collection for 1990 and 1991 and that those

periods have not expired.

     Taking into account all the facts and circumstances of this

case, we hold that the settlement officer did not commit an error

in calculating the periods of limitations or abuse his discretion

in sustaining the notice of Federal tax lien.     In reaching our

decision, we have considered all arguments made, and, to the

extent not mentioned, we conclude that they are irrelevant, moot,

or without merit.

     To reflect the foregoing,


                                         Decision will be entered for

                                   respondent.
