                         T.C. Memo. 2009-30



                       UNITED STATES TAX COURT



                  JAMES D. BABER, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 14606-06L.                Filed February 9, 2009.


     James D. Baber, pro se.

     Douglas S. Polsky, for respondent.



                         MEMORANDUM OPINION


     VASQUEZ, Judge:   Respondent sent a Notice of Determination

Concerning Collection Action(s) Under Section 6320 and/or 6330

(notice of determination) to petitioner with respect to a notice

of Federal tax lien filed to collect petitioner’s unpaid tax

liabilities for 1994, 1995, 1996, and 1997.      In response
                                - 2 -

petitioner timely filed a petition pursuant to section 6330(d)1

seeking review of respondent’s determination.    The issues for

decision are:    (1) Whether Settlement Officer Joella M. Apodaca

was an “Impartial officer” as defined in section 6320(b)(3); and

(2) if the settlement officer was an “impartial officer”, then

whether respondent may proceed with collection of the above-

mentioned unpaid income tax liabilities.

                             Background

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

The stipulation of facts, the supplemental stipulation of facts,

and the attached exhibits are incorporated herein by this

reference.   At the time he filed the petition, petitioner resided

in New Mexico.

     Petitioner filed Federal income tax returns for 1994, 1995,

1996, and 1997.    During 2000 the Internal Revenue Service (IRS)

examined those returns.    On August 9, 2000, petitioner signed

Forms 4549-CG, Income Tax Examination Changes, with respect to

his income tax liabilities for 1994, 1995, 1996, and 1997.

     On July 22 and 28, 2005, respondent sent to petitioner

Notices of Federal Tax Lien Filing and Your Right to a Hearing

Under IRC 6320, with respect to petitioner’s income tax

liabilities for 1994, 1995, 1996, and 1997.     On August 9, 2005,



     1
        Unless otherwise indicated, all section references are to
the Internal Revenue Code.
                                - 3 -

the IRS filed a NFTL with respect to those liabilities with the

County Clerk, Rio Arriba County, Tierra Amarilla, New Mexico.

     Petitioner filed a timely Form 12153, Request for a

Collection Due Process Hearing.    Petitioner and Settlement

Officer Joella M. Apodaca conducted a section 6330 hearing via

correspondence and telephone.    On June 28, 2006, respondent

mailed to petitioner a notice of determination with respect to

petitioner’s income tax liabilities for the taxable years 1994,

1995, 1996, and 1997.    Respondent determined that the filing of

the NFTL was correct.

                             Discussion

     Section 6320 provides that the Secretary shall 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

request administrative review of the matter (in the form of a

hearing) within a 30-day period.    The hearing generally shall 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.
                                - 4 -

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

T.C. 176, 180 (2000).   In addition to considering issues raised

by the taxpayer under section 6330(c)(2), the Appeals officer

must also verify that the requirements of any applicable law or

administrative procedure have been met.   Sec. 6330(c)(1), (3);

Hoyle v. Commissioner, 131 T.C. ___, ___ (2008) (slip op. at 5).

     Petitioner questioned whether Settlement Officer Apodaca was

an impartial officer pursuant to section 6320(b)(3).    The

validity of the underlying tax liability is not at issue;

therefore we review the respondent’s determination for abuse of

discretion.   See Sego v. Commissioner, supra at 610.

Was Settlement Officer Apodaca an Impartial Officer?

     This case is appealable to the U.S. Court of Appeals for the

Tenth Circuit.   Accordingly, with regard to section 6320(b)(3),

we apply the standard for an impartial officer set forth in Cox

v. Commissioner, 514 F.3d 1119, 1124-1128 (10th Cir. 2008), revg.

126 T.C. 237 (2006).    See Golsen v. Commissioner, 54 T.C. 742

(1970), affd. 445 F.2d 985 (10th Cir. 1971).

     Section 6320(b)(3) provides:   “Impartial officer.--The

hearing under this subsection shall be conducted by an officer or

employee who has had no prior involvement with respect to the

unpaid tax specified in subsection (a)(3)(A) before the first

hearing under this section”.   The Internal Revenue Code does not

define the term “no prior involvement”.   See Cox v. Commissioner,
                               - 5 -

supra at 1124.   The Commissioner has promulgated regulations

interpreting the meaning of “no prior involvement”.    See id.;

secs. 301.6320-1(d)(2), 301.6330-1(d)(2), Proced. & Admin. Regs.

The regulations define prior involvement as follows:

          Q-D4. What is considered to be prior involvement
     by an employee or officer of Appeals with respect to
     the unpaid tax and tax period or periods involved in
     the hearing?

          A-D4. Prior involvement by an employee or officer
     of Appeals includes participation or involvement in an
     Appeals hearing (other than a CDP hearing held under
     either section 6320 or section 6330) that the taxpayer
     may have had with respect to the unpaid tax and tax
     periods shown on the NFTL.

Sec. 301.6320-1(d)(2), Q&A-D4, Proced. & Admin. Regs.2

     The U.S. Court of Appeals for the Tenth Circuit interpreted

the statute3 and the regulation as follows:

          The best indicator of a statute’s meaning should
     be the language itself and section 6330(b)(3) clearly
     and unambiguously provides that an appeals officer
     conducting a CDP hearing shall have had “no prior
     involvement” with respect to the unpaid tax specified
     on the CDP Notice.

          The tax court and Commissioner interpret this term
     * * * essentially limiting section 6330’s meaning to


     2
        The version of the regulation in effect before amendment
in 2006 applies to this case. See Cox v. Commissioner, 514 F.3d
1119, 1125 n.7 (10th Cir. 2008), revg. 126 T.C. 237 (2006).
     3
        Although Cox v. Commissioner, supra at 1124 n.6, dealt
with sec. 6330, “Section 6320 is a related provision included in
the RRA that entitles a taxpayer to similar protections after the
IRS issues a notice of lien.” Secs. 6320(b)(3) and 6330(b)(3)
are identical except that the language “under this section or
section 6330” in the former is the reverse of the phrase “under
this section or section 6320” in the latter.
                                 - 6 -

     the language of Treas. Reg. § 301.6330-1(d)(2).
     However, “we assume that in drafting legislation,
     Congress says what it means.”

          An agency may not read ambiguity into a statute in
     order to reach a practical result. While interpreting
     section 6330(b)(3) narrowly makes it less likely that
     appeals officers will have to recuse themselves from
     hearing taxpayers’ cases and easier for Appeals
     Officers to assign officers to CDP hearings, we find no
     legal support for doing so. By using the term
     “involvement,” Congress deliberately implemented a
     broad restriction on IRS appeals officers to ensure
     their impartiality.

          To be sure, Congress never stated any intent to
     narrow the meaning of “prior involvement” to prior
     involvement in a hearing, let alone one specifically
     regarding the tax liability listed on the CDP Notice.

          A review of section 6330(b)(3)’s legislative
     history * * * [confirms] Congress’ broad intent. In
     fact, Congress expressly contemplated only one scenario
     where an appeals officer with prior involvement in the
     taxpayer’s case could conduct a subsequent CDP hearing,
     namely that the same appeals officer can conduct a
     pre-levy CDP hearing pursuant to I.R.C. § 6330 and a
     pre-lien CDP hearing pursuant to I.R.C. § 6320
     regarding the same unpaid liability. Congress did not
     provide for other exceptions, nor did it express any
     intent that additional exceptions could be provided by
     the Commissioner.

Cox v. Commissioner, supra at 1125-1126 (citations and fn. refs.

omitted).   The Court of Appeals also held that its conclusion is

further supported by the purpose of section 6330.     Id. at 1126.

“Central to that purpose is the taxpayer’s fundamental right to

an impartial appeals officer”.    Id. (emphasis added).   Limiting

the definition of “no prior involvement” to section

301.6330-1(d)(2), Proced. & Admin. Regs., impermissibly narrows

that protection.   Cox v. Commissioner, supra at 1126.
                                - 7 -

     Furthermore, it is not relevant whether the officer or

employee of Appeals was biased by his or her prior involvement

with a taxpayer’s liability or liabilities.    Id. at 1127.    All

that is required for recusal is that the employee or officer in

fact did have prior involvement with the taxpayer’s liability or

liabilities.   Id.   If the employee or officer had prior

involvement, the taxpayer is entitled to a new section 6330

hearing before an impartial Appeals officer in accordance with

the statute.   Id.

     During 2000 petitioner submitted an offer-in-compromise

(OIC) to settle his tax liabilities for 1994, 1995, 1996, and

1997 that the IRS rejected.   At the time Settlement Officer

Apodaca worked for the IRS in Albuquerque, New Mexico, in the

Compliance Unit as an OIC specialist.    Settlement Officer Apodaca

mailed petitioner the forms to complete for an OIC to settle his

tax liabilities for 1994, 1995, 1996, and 1997.   Settlement

Officer Apodaca testified that her handwriting was on the

envelope mailed to petitioner in 2000.

     On September 19, 2000, as instructed by Settlement Officer

Apodaca, petitioner wrote a letter to another IRS employee, Patty

Trusty, regarding an OIC to settle his tax liabilities for 1994,

1995, 1996, and 1997.   At the time Settlement Officer Apodaca was

Patty Trusty’s supervisor in the OIC function of the IRS.
                                 - 8 -

     At the time of the section 6330 hearing, Settlement Officer

Apodaca did not recall her prior involvement with petitioner

regarding his tax liabilities for 1994, 1995, 1996, and 1997.

An attachment to the notice of determination states:    “The

Appeals Officer has no prior involvement with respect to the

unpaid tax specified in IRC §6330(a)(3)(A) before the first

hearing under IRC §6330 or IRC §6320 as required by IRC

6330(b)(3) [sic].”

     The attachment to the notice of determination and Settlement

Officer Apodaca’s memory at the time of the section 6330 hearing

were incorrect.    Settlement Officer Apodaca did have prior

involvement with respect to the unpaid tax for the years in issue

before the first hearing pursuant to section 6320.    Accordingly,

petitioner is entitled to a new section 6330 hearing before an

impartial Appeals officer in accordance with the statute.      See

Cox v. Commissioner, 514 F.3d at 1127; Golsen v. Commissioner, 54

T.C. 742 (1970).

     To reflect the foregoing,


                                          An appropriate order will

                                     be issued.
