                               T.C. Memo. 2015-60



                         UNITED STATES TAX COURT



                   OLIN GLENN SMITH, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 31080-12L.                         Filed March 26, 2015.



      William Lance Stodghill, for petitioner.

      Susan Kathy Greene and Gordon P. Sanz, for respondent.



            MEMORANDUM FINDINGS OF FACT AND OPINION


      MORRISON, Judge: This case is before the Court to review respondent’s

Office of Appeals’ December 4, 2012 notice of determination sustaining a

proposed levy to collect from petitioner certain trust-fund-recovery penalties for

taxable periods ending March 31, June 30, and September 30, 2009 (that is, the
                                          -2-

[*2] first, second, and third quarters of 2009). We review this notice of

determination pursuant to section 6330(d)(1). All section references are to the

Internal Revenue Code in effect at all relevant times unless otherwise indicated.

      In that notice of determination respondent’s Office of Appeals refused to

consider petitioner’s arguments that he should not be liable for the penalties,

concluding that in 2010 petitioner had already been afforded an opportunity to

dispute his underlying penalty liabilities. We agree that petitioner had a prior

opportunity. We sustain the notice of determination.

                                FINDINGS OF FACT

      Petitioner resided in Texas when he filed his petition.

      On October 20, 2010, respondent sent a Letter 1153, Trust Funds Recovery

Penalty Letter, by certified mail to petitioner advising him that he “propose[d] to

assess” trust-fund-recovery penalties against petitioner personally for failing to

collect and pay over the employment taxes of employees of Vito’s South Limited

Partnership for the first, second, and third quarters of 2009. That Letter 1153

further told petitioner he had the “right to appeal or protest this action.” It gave

him 60 days to “mail” a “written appeal” to the IRS. The letter directed petitioner

to send the written appeal to “R.T. Redfield” at the address for an office of

respondent on Gulf Freeway in Houston, Texas. At the top of the letter was a
                                         -3-

[*3] heading for “IRS Telephone Number”. Under this appeared the telephone

number “(281) 795-8977”.

      Petitioner received the above Letter 1153 and faxed a copy of it to his

certified public accountant, Douglas Dickey. Dickey was a partner with DRDA, a

certified public accountancy firm with five partners and over 40 staff members.

      On November 11, 2010, Dickey prepared and signed a letter addressed to

“R.T. Redfield”. The inside address (i.e., the recipient’s address) on the letter

which Dickey prepared and signed was the address of respondent’s Houston office

on Gulf Freeway from the Letter 1153. Dickey’s letter stated that petitioner

requested a “conference” regarding “the taxpayer and Vito’s South LPs’ Form

941s, Employer’s Quarterly Federal Tax Return, for the tax periods ended 3/31/09,

6/30/09, and 9/30/09.” The letter asserted that petitioner had withdrawn as a

partner of Vito’s South Limited Partnership as of January 1, 2008, and therefore,

the letter claimed, petitioner “should not be held liable for the payroll taxes and

related penalties incurred after his withdrawal.” Attached to the letter was a copy

of the Letter 1153. Further attached was a form on which petitioner gave Dickey

the authority to represent him before respondent. The form identified the matter

for which Dickey was authorized to represent petitioner as follows:
                                          -4-

[*4]

   Type of Tax (Income,
   Employment, Excise,           Tax Form Number
   etc.) or Civil Penalty       (1040, 941, 720, etc.)      Year(s) or Period(s) ***
             Payroll                      941                         2009

Also attached to the letter was a document entitled “Statement of Fact” signed by

petitioner. The statement said in part: “I withdrew as partner of Vito’s South LP

as of 1/1/08. I should not be liable for any payroll taxes, penalties or interest that

occurred for Vito’s South LP after the date of my withdrawal.” What happened to

the letter after Dickey signed it on November 11, 2010, is in dispute between the

parties and was the subject of the partial trial in this case. Dickey testified that he

gave the letter to a member of his staff at DRDA to mail to the IRS.1

       On April 9, 2012, respondent assessed the trust-fund-recovery penalties

against petitioner for the first, second, and third quarters of 2009. On the same

day, he sent petitioner notices demanding payment of those trust-fund-recovery

penalties.



       1
       As discussed more fully infra part IV.A we conclude Dickey and his firm
did not mail the letter to respondent after Dickey signed the letter on November
11, 2010. Over two years later on November 28, 2012, Dickey’s firm faxed the
Office of Appeals a copy of the November 11, 2010 letter which Dickey had
prepared. See infra p. 7.
                                          -5-

[*5] In response to the notices, Dickey mailed respondent a letter stating that

petitioner had withdrawn from Vito’s South Limited Partnership on December 31,

2007, and that respondent should contact the tax matters partner for the

partnership instead of Dickey.2

      After May 9, 2012, Dickey or his firm attempted to telephone Revenue

Officer Redfield about petitioner’s liability for the trust-fund-recovery penalties.

See infra part IV.B.

      On May 14, 2012, respondent sent petitioner three Notices CP504, Notice of

Intent to Levy, informing petitioner that he had to pay the trust-fund-recovery

penalty liabilities for the first, second, and third quarters of 2009. Each notice

dealt with petitioner’s aforementioned liability for one of the three respective

calendar quarters.

      On May 23, 2012, Dickey wrote a letter to respondent responding to the

three CP504 Notices. In this letter Dickey said:

      We called the IRS on May 9, 2012 and was [sic] told that this case
      has been sent to R.T. Redfield at 281-795-8977. We have tried
      numerous times to contact Ms. Redfield, but she has not returned our
      phone call.

      2
        Petitioner asserts that Dickey mailed this letter on April 2, 2012. Although
the letter was dated April 2, 2012, the text of the letter responds to the notices
dated April 9, 2012. We conclude that the letter was sent to respondent shortly
after petitioner (and Dickey) received the April 9, 2012 notices.
                                          -6-

[*6] Please * * * abate these penalties as * * * [petitioner] was not a
     partner of Vito’s South LP during 2009.

      On July 30, 2012, respondent sent petitioner a notice that he proposed to

levy to collect the trust-fund-recovery penalties for the first, second, and third

quarters of 2009. The notice stated that petitioner could request a collection-

review hearing with the Office of Appeals.

      On July 30, 2012, Dickey sent the Office of Appeals a request for a

collection-review hearing on behalf of petitioner stating that petitioner was not a

partner of Vito’s South Limited Partnership during 2009 and that the penalties

should be abated.

      The Office of Appeals assigned petitioner’s administrative collection-

review hearing to a settlement officer in Fresno, California.

      On October 26, 2012, the settlement officer sent a letter to petitioner stating

that as part of the collection-review hearing she had scheduled a telephone

conference for November 28, 2012. She informed petitioner that because he had

received a Letter 1153 in 2010, he could not raise the issue of the underlying

liabilities for the trust-fund-recovery penalties.

      On November 28, 2012, the settlement officer conducted a telephone

conference with Dickey, who attempted to challenge petitioner’s underlying
                                          -7-

[*7] liabilities for the trust-fund-recovery penalties. However, the settlement

officer determined that petitioner was precluded from challenging the underlying

liabilities because he had had a prior opportunity to do so when he received a

Letter 1153. Because petitioner took the position that he was not liable for the

penalties, he did not ask the settlement officer to consider a collection alternative

to the proposed levy, such as an installment agreement or an offer-in-compromise.

After the conference call with the settlement officer, Dickey’s firm faxed the

settlement officer a copy of the November 11, 2010 letter. The cover page to the

fax stated: “We could not locate the certified mail receipt.”

      On December 4, 2012, the Office of Appeals sent petitioner its notice of

determination upholding the proposed levy.

      Petitioner filed his Tax Court petition challenging the notice of

determination. The parties agree that if the Court determines that petitioner had a

prior opportunity to challenge the penalties under section 6330(c)(2)(B), then the

Court should sustain the notice of determination. The Court held a partial trial on

the issue of whether petitioner had a prior opportunity to challenge the penalties.

                                      OPINION

      Before respondent can collect a tax from a taxpayer through a levy, he must

first assess the tax. See sec. 6502(a). If the taxpayer refuses to pay the
                                          -8-

[*8] assessment, respondent can then seize the taxpayer’s property through his

power of levy. Sec. 6331(a) and (b). Before he can levy, he generally must first

offer the taxpayer a collection-review hearing with his Office of Appeals. Sec.

6330(a)(1).

      The collection-review hearing--and the Office of Appeals’ determination

following the hearing--are governed by section 6330(c). Section 6330(c)

provides:

            SEC. 6330(c). Matters Considered at Hearing. In the case of
      any hearing conducted under this section--

                     (1) Requirement of investigation.--The appeals officer
              shall at the hearing obtain verification from the Secretary [of
              the Treasury] that the requirements of any applicable law or
              administrative procedure have been met.

                    (2) Issues at hearing.--

                          (A) In general.--The person may raise at the
                    hearing any relevant issue relating to the unpaid tax or
                    the proposed levy, including--

                                 (i) appropriate spousal defenses;

                                  (ii) challenges to the appropriateness of
                           collection actions; and

                                  (iii) offers of collection alternatives, which
                           may include the posting of a bond, the substitution
                           of other assets, an installment agreement, or an
                           offer-in-compromise.
                                         -9-

[*9]                       (B) Underlying liability.--The person may also
                   raise at the hearing challenges to the existence or amount of the
                   underlying tax liability for any tax period if the person did not
                   receive any statutory notice of deficiency for such tax liability
                   or did not otherwise have an opportunity to dispute such tax
                   liability.

                   (3) Basis for the determination.--The determination by
             an appeals officer under this subsection shall take into
             consideration--

                          (A) the verification presented under paragraph (1);

                          (B) the issues raised under paragraph (2); and

                          (C) whether any proposed collection action
                   balances the need for the efficient collection of taxes
                   with the legitimate concern of the person that any
                   collection action be no more intrusive than necessary.

Once the Office of Appeals has made the determination contemplated by section

6330(c)(3), a taxpayer can petition the Tax Court for review of the determination.

Sec. 6330(d)(1).

       As shown above, section 6330(c)(2)(B) provides that a taxpayer can

challenge the existence or amount of the underlying tax liability before the Office

of Appeals if the taxpayer did not have a prior opportunity to dispute the liability.

If the taxpayer had such a prior opportunity, the Office of Appeals does not violate

section 6330 by refusing to consider the taxpayer’s challenge to the liability. See

Goza v. Commissioner, 114 T.C. 176, 180-181 (2000). If the taxpayer did not
                                         -10-

[*10] have a prior opportunity to dispute the liability, the Tax Court can review de

novo the taxpayer’s challenge to the underlying liability when it reviews the notice

of determination. See, e.g., Mason v. Commissioner, 132 T.C. 301, 316, 320-321

(2009). Alternatively, the Tax Court can remand the case to the Office of Appeals

for consideration of the taxpayer’s challenge to the underlying liability. See

Kuykendall v. Commissioner, 129 T.C. 77, 82 (2007); Lunsford v. Commissioner,

117 T.C. 183, 189 (2001). The parties agreed that this Court should hold a partial

trial to resolve the issue of whether petitioner had a prior opportunity to dispute

his liabilities for the trust-fund-recovery penalties. They further agreed that if this

Court as a result of that trial concludes that petitioner had a prior opportunity, then

this Court should sustain respondent’s December 4, 2012 notice of determination.

They further agreed that if this Court concludes that petitioner had no prior

opportunity, then the Court should remand this case to the Office of Appeals to

consider petitioner’s underlying liabilities for the penalties. These agreements are

reflected in the following discussion between the Court and the parties a day

before the partial trial:

       THE COURT:                Ms. Greene [counsel for respondent], I
                                 understand both you and Mr. Stodghill
                                 [counsel for petitioner] are in agreement that
                                 the trial should be confined to the issue of
                                 prior opportunity.
                                         -11-

[*11] MS. GREENE:                That’s correct, Your Honor.

      THE COURT:                 Mr. Stodghill?

      MR. STODGHILL:             Yes, Your Honor.

      THE COURT:                 Would the parties agree that if the Court
                                 finds that there was no prior opportunity,
                                 that the Court should remand the case to the
                                 appeals office to evaluate the existence and
                                 amount of tax liability, and if there was
                                 prior opportunity, the Court should sustain
                                 the determination--Ms. Greene?

      MS. GREENE:                Respondent [the Commissioner of Internal
                                 Revenue] agrees with that.

      THE COURT:                 Mr. Stodghill?

      MR. STODGHILL:             Yes, Your Honor.

The next day, the Court held a trial on the issue of whether petitioner had a prior

opportunity to dispute his liability for the trust-fund-recovery penalties. After the

trial, the parties filed respective simultaneous opening briefs. They later filed

respective simultaneous answering briefs. In his opening and answering briefs,

petitioner makes various challenges to the December 4, 2012 notice of

determination upon which this case is based.
                                         -12-

[*12]                                      I.

        We first consider petitioner’s alternative argument that the Office of

Appeals failed to “obtain verification from the Secretary [of the Treasury] that the

requirements of any applicable law or administrative procedure have been met.”

Sec. 6330(c)(1). Specifically, petitioner contends that Redfield, the revenue

officer who handled respondent’s trust-fund-recovery penalty matter against

petitioner, violated the Internal Revenue Manual by failing to interview him. We

will not permit petitioner to make this argument. The partial trial was limited to

the question of whether petitioner had a prior opportunity to dispute his underlying

liabilities for the penalties. It did not concern other possible earlier errors made by

the Office of Appeals--or by Redfield. Before that trial the parties agreed that the

December 4, 2012 notice of determination, upon which this case is based, should

be sustained if we conclude following that trial that petitioner had a prior

opportunity to dispute the underlying liabilities. By so agreeing, petitioner waived

his right to press any other potential errors made by the Office of Appeals,

including his allegation that the Office of Appeals violated the verification

requirement. Furthermore, petitioner waited until his answering brief to make the

verification-requirement argument. The argument is thus untimely and, more

importantly, is precluded by the parties’ pretrial agreement.
                                         -13-

[*13]                                     II.

        Next we consider petitioner’s second alternative argument, that the Office

of Appeals failed to consider all of the issues that he raised at his collection-

review hearing. Petitioner contends that he requested that the penalties be abated

in three different letters written by Dickey (the letter written by Dickey in response

to the April 9, 2012 notices, the letter sent by Dickey on May 23, 2012, and the

letter sent by Dickey on July 30, 2012). He argues that his request for abatement

of the penalties was therefore an “issue” he raised at the hearing that the Office of

Appeals was required to “take into consideration.” Section 6330(c)(2) allows a

person to “raise at the hearing any relevant issue”, and section 6330(c)(3) requires

the Office of Appeals to “take into consideration” the “issues raised under” section

6330(c)(2). However, section 6330(c)(2)(B) provides that a person may “raise at

the hearing challenges to the existence or amount of the underlying tax liability” if

the person did not “have an opportunity to dispute such tax liability.” Petitioner’s

request for abatement of the penalties is a “challenge[] to the existence or amount

of the underlying tax liability.” If petitioner had a prior opportunity to dispute his

liability for the penalties--and respondent argues he did--then the Office of

Appeals was not required to consider his challenge to the existence or amounts of

the penalties. See Pough v. Commissioner, 135 T.C. 344, 349 (2010); Goza v.
                                         -14-

[*14] Commissioner, 114 T.C. at 180-181; Orian v. Commissioner, T.C. Memo.

2010-234, slip op. at 11.

                                         III.

      Next, we consider petitioner’s third alternative argument, that “[t]he

settlement officer abused her discretion in sustaining the levy by failing to

properly balance collection efficiency against the intrusive nature of the levy.”

Specifically, petitioner contends that because of the large amounts of the penalties

sought to be collected (the July 30, 2012 notice of proposed levy stated that

petitioner owed a total of $36,573.67), it was an abuse of discretion for the Office

of Appeals not to first consider petitioner’s request for abatement before

sustaining a collection action. We will not permit petitioner to raise this argument.

The argument is premised on the Office of Appeals’ alleged failure to satisfy its

duty under section 6330(c)(3) to consider “whether any proposed collection action

balances the need for the efficient collection of taxes with the legitimate concern

of the person that any collection action be no more intrusive than necessary.”

Petitioner agreed before trial that the Court should sustain respondent’s notice of

determination if the Court concluded that petitioner had a prior opportunity to

dispute his liability for the penalties. Thus, petitioner has waived the section

6330(c)(3) argument. Furthermore, petitioner did not advance the argument until
                                          -15-

[*15] filing his answering brief. The argument is thus untimely and is precluded

by the parties’ agreement.

                                           IV.

      Finally, we address petitioner’s primary argument, that he did not have a

prior opportunity to challenge his underlying trust-fund-recovery-penalty

liabilities. Unlike petitioner’s alternative arguments in parts I, II, and III of this

opinion, this issue is properly before us and was the subject of the partial trial.

      We have held that a taxpayer who received a Letter 1153, providing him the

opportunity to administratively appeal his liabilities for the trust-fund-recovery

penalty, and who declines to make such an appeal, had an opportunity to dispute

the underlying liability. Pough v. Commissioner, 135 T.C. at 349; Orian v.

Commissioner, slip op. at 13; see also sec. 301.6330-1(e)(3), Q&A-E2, Proced. &

Admin. Regs. (“An opportunity to dispute the underlying liability includes a prior

opportunity for a conference with Appeals that was offered either before or after

the assessment of the liability.”). A Letter 1153 is the method by which

respondent satisfies section 6672(b)(1). Lee v. Commissioner, 144 T.C. ___, ___

(slip op. at 12) (Jan. 21, 2015); Thompson v. Commissioner, T.C. Memo. 2012-87,

slip op. at 7. Section 6672(b)(1) requires him to notify a person in writing before

he can assess a trust-fund-recovery penalty liability against the person. See Mason
                                          -16-

[*16] v. Commissioner, 132 T.C. at 322-323. After sending the Letter 1153, he

allows the person 60 days to administratively appeal the proposed assessment to

the Office of Appeals. See Rev. Proc. 2005-34, sec. 4, 2005-1 C.B. 1233, 1234.

Section 6672(b)(3)(B) provides that if the person makes a “timely protest of the

proposed assessment”, then the limitations period on respondent assessing the

penalty does not expire until 30 days after his final determination regarding the

protest.3

       Petitioner received the October 20, 2010 Letter 1153 offering him a chance

to protest his liabilities for the penalties. Petitioner asserts that his representative,

Dickey, sent a November 11, 2010 letter to Redfield responding to the Letter 1153

and requesting a conference and, therefore, administratively appealed petitioner’s

liabilities for the penalties. He further asserts that Dickey followed up on the

November 11, 2010 letter by attempting to telephone Redfield. Respondent, on

the other hand, denies that such November 11, 2010 letter was sent and that

petitioner made the telephone calls to Redfield shortly thereafter. We will decide

these disputed factual matters as part of our resolution of the issue of whether




       3
     The limitations period is described in general terms in Hickey v.
Commissioner, T.C. Memo. 2009-2, slip op. at 13 n.6.
                                         -17-

[*17] petitioner had a prior opportunity to dispute his underlying liabilities for the

penalties.

                                        IV.A

      In evaluating the question of whether the November 11, 2010 letter was

actually sent in late 2010, we consider Dickey’s testimony that he gave the letter to

his “staff for processing and sending to Treasury.” While this testimony is

relevant, we have little idea of how Dickey’s firm processed Dickey’s outgoing

letter. We did not hear firsthand testimony, for example, from the staff member

who would have handled and effected the mailing of the November 11, 2010

letter. We therefore are not inclined to presume, on the basis of petitioner’s

suggestion of the reliability of Dickey’s firm’s system for processing outgoing

mail, that the November 11, 2010 letter in question was actually deposited into the

U.S. mail for delivery to the addressee. Furthermore, what little evidence there is

about what happened to the letter after Dickey signed it indicates that the letter

was not sent. Dickey testified that no certified or registered mail receipt for the

letter was found in his files at his firm. Had the November 11, 2010 letter been

sent to the IRS as Dickey mentioned, most likely it would have been sent by

certified or registered mail. We infer this from the importance of the letter and

from the fact that Dickey and his firm searched for a copy of a certified or
                                         -18-

[*18] registered mail receipt.4 We further believe that had any certified or

registered mail receipt existed, Dickey would have instructed, and his firm’s staff

would have understood, that this receipt should be retained in Dickey’s files.

Therefore, the lack of such a receipt in Dickey’s files is an indication that the letter

was not mailed.5

      No copy of the November 11, 2010 letter was found in the files of

respondent, the intended recipient. The absence of the letter from his files is of

some probative value to us in determining whether Dickey’s firm sent the letter to


      4
         Dickey testified that when his firm drafts a letter to be sent by certified or
registered mail, it notes such transmission via certified or registered mail on the
letter itself. However, he testified that the firm had no such practice in November
2010 when the letter was drafted and allegedly sent to respondent. Therefore, the
mere absence of such a notation on the letter alone fails to establish that Dickey
did not intend to send it by registered or certified mail.
      5
        If the evidence had shown that Dickey’s firm did not keep the signed
original of the November 11, 2010 letter in its files, that might indicate that the
signed original went somewhere else, i.e., to respondent. However, there is no
such evidence in the record. The only copy of the November 11, 2010 letter in the
record is found in Exhibit 10-J. The parties stipulated that on November 28, 2012,
Dickey’s firm “sent” to the Office of Appeals “an 11-page fax which included the
following: * * * a letter from petitioner’s CPA, Douglas Dickey, dated November
11, 2010, to the Internal Revenue Service ”. The parties further stipulated that
Exhibit 10-J is “a true and correct copy of the * * * fax”. None of these
stipulations address whether the actual papers fed into the fax machine at Dickey’s
firm were the original signed copy of the November 11, 2010 letter, as opposed to
a retained copy of the November 11, 2010 letter. Petitioner did not contend in his
brief that there was any proof that the November 11, 2010 letter faxed by Dickey’s
firm on November 28, 2012, was merely a retained copy.
                                        -19-

[*19] him by late 2010, but it is not dispositive. He searched only the files that he

kept on the trust-fund-recovery penalties asserted against petitioner. He did not

search the file he kept on the employment-tax liabilities of Vito’s South Limited

Partnership and did not explain why he did not do so.6 The two types of liabilities

are related, but they are not the same.7 The Commissioner keeps separate files on


      6
       Petitioner does not contend that respondent’s failure to search his
employment tax files regarding Vito’s South Limited Partnership gives rise to an
adverse inference that the files would show that Dickey’s firm sent the letter. We
therefore make no such inference.
      7
         As an employer, Vito’s South Limited Partnership was required to withhold
Federal Insurance Contributions Act (“FICA”) tax and income tax from its
employees’ wages, hold them in a so-called “trust fund” for the United States, 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 sec. 3101); sec. 3102(b) (employer is liable for paying tax it is
required to withhold under sec. 3102(a)). Vito’s South Limited Partnership 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.
        Sec. 6672(a) imposes a penalty on persons, other than the employer, who
are responsible for withholding taxes. Liability under sec. 6672 is different from
the employer’s liability for payment of the taxes required to be withheld. See
Howard v. United States, 711 F.2d 729, 733 (5th Cir. 1983); United States v.
Pomponio, 635 F.2d 293, 298 (4th Cir. 1980); Monday v. United States, 421 F.2d
1210, 1218 (7th Cir. 1970). Though the two liabilities are separate as a conceptual
matter, the IRS endeavors to collect an amount required to be withheld and paid
over only once--from the employer if possible, and if not, from a responsible
person under sec. 6672. USLIFE Tit. Ins. Co. of Dallas v. Harbison, 784 F.2d
                                                                       (continued...)
                                         -20-

[*20] each type of liability. He acknowledges the possibility that if he, in late

2010, received the November 11, 2010 letter, that letter could have been placed in

his files for the employment-tax liabilities of Vito’s South Limited Partnership

rather than his files for the trust-fund-recovery penalty liabilities asserted against

petitioner. So while of some relevance, the absence of the letter from his trust-

fund-recovery penalty files for petitioner is not dispositive.

      The evidence on whether the November 11, 2010 letter was sent by

Dickey’s firm to respondent in late 2010 is less than satisfactory. Although we

cannot be certain the letter was not sent, we conclude, on the basis of the evidence

presented, that it is more likely than not that the letter was not sent. Therefore, we

find that the letter was not sent. This finding is appropriate because (1) the

preponderance-of-evidence standard is the relevant standard for determining

whether Dickey’s firm sent the letter, see Sego v. Commissioner, 114 T.C. 604,

611 (2000) (holding that the determination of whether a taxpayer has received a

notice of deficiency, so as to preclude a challenge to the underlying tax liability, is

made on a preponderance of the evidence), and (2) the preponderance-of-evidence




      7
        (...continued)
1238, 1243 (5th Cir. 1986); Pomponio, 635 F.2d at 298. Respondent contends that
petitioner is such a responsible person.
                                         -21-

[*21] standard is met if the fact is more likely than not to be true (see United

States v. Barksdale-Contreras, 972 F.2d 111, 115 (5th Cir. 1992)).

                                        IV.B

      We now evaluate petitioner’s contention that Dickey “followed up” the

November 11, 2010 letter with attempts to reach Redfield by telephone concerning

that letter. Petitioner’s use of the words “followed up” suggests that the alleged

attempts took place shortly after the November 11, 2010 letter. Dickey testified

that he attempted to reach Redfield about the November 11, 2010 letter. However,

his testimony does not specify the date or dates on which these telephone calls

were allegedly made. On May 23, 2012, Dickey wrote a letter to the IRS in which

he referred to attempted telephone contacts with Redfield. He wrote: “We called

the IRS on May 9, 2012, and was [sic] told that this case has been sent to R.T.

Redfield at 281-795-8977. We have tried numerous times to contact Ms. Redfield,

but she has not returned our phone call.” Respondent contends that the reference

in Dickey’s letter to a telephone conversation with the IRS on May 9, 2012, in

which he learned that the penalty case was still being handled by Redfield,

followed by a reference to alleged attempts to reach Redfield by telephone,

suggests that Dickey’s attempts to reach Redfield about the November 11, 2010

letter took place after May 9, 2012. In his brief petitioner does not dispute
                                         -22-

[*22] respondent’s interpretation of the May 23, 2012 letter. In his testimony

Dickey did not explain whether this is what he suggested in his May 23, 2012

letter. On the basis of the May 23, 2012 letter, and taking into account the lack of

specificity in Dickey’s testimony, we find that sometime after May 9, 2012,

Dickey attempted to reach Redfield by telephone to dispute petitioner’s liability

for the trust-fund-recovery penalties.

                                         IV.C

      Having resolved the above factual matters in parts IV.A and IV.B, the Court

finds the following facts are established regarding petitioner’s opportunity to

dispute his liability for the trust-fund-recovery penalties:

!     On October 20, 2010, respondent sent petitioner the Letter 1153 giving him

      60 days to appeal the proposed assessment of the trust-fund-recovery

      penalties attributable to the unpaid employment taxes of Vito’s South

      Limited Partnership for the first, second, and third quarters of 2009.

!     On November 11, 2010, petitioner’s representative, Dickey, prepared and

      signed a letter in response to that Letter 1153. However, that November 11,

      2010 letter was not sent to respondent.

!     On April 9, 2012, not having received an appeal of the proposed assessment

      from petitioner, respondent assessed the penalties against petitioner.
                                         -23-

[*23] !      On April 9, 2012, respondent sent petitioner notices that he was liable

             for the penalties.

!     In response, Dickey sent a letter to respondent stating that before 2008

      petitioner had withdrawn from Vito’s South Limited Partnership.

!     After May 9, 2012, Dickey or his firm attempted to reach Redfield by

      telephone about petitioner’s liabilities for the trust-fund-recovery penalties.

!     On May 23, 2012, Dickey wrote a letter to respondent asking him to abate

      the penalties.

!     On July 30, 2012, Dickey requested an administrative collection-review

      hearing as to the proposed levy with the Office of Appeals; during that

      administrative collection-due-process proceeding, respondent’s settlement

      officer took the position that petitioner had had a prior opportunity with the

      Office of Appeals to dispute his liability for the penalties.

      Given the foregoing facts, we agree with respondent that petitioner had a

prior opportunity to dispute his liability for the trust-fund-recovery penalties. In

the Letter 1153 dated October 20, 2010, respondent afforded petitioner an

opportunity to appeal the proposed assessment of the penalties. Petitioner

inadvertently failed to make such an appeal. Although petitioner’s accountant

Dickey prepared a November 11, 2010 letter that was supposedly an appeal,
                                        -24-

[*24] Dickey did not send that November 11, 2010 letter to respondent in Houston

in late 2010. Sometime on or after April 9, 2012, Dickey sent other letters, and

sometime on or after May 9, 2012, he attempted to reach respondent’s employee

Redfield by telephone. But those letters and telephone calls occurred long after

the 60-day period for responding to the Letter 1153 dated October 20, 2010. Thus,

this is not an instance in which a person administratively appealed the trust-fund-

recovery penalty in response to a Letter 1153 and respondent refused to consider

and entertain the protest.

      We need not address respondent’s argument that once a person has received

a Letter 1153, that person should be considered to have had an opportunity to

dispute the trust-fund-recovery penalty liabilities even if the person actually timely

protests the Letter 1153 and the Office of Appeals fails to consider the protest.8 If

correct, the argument would mean that it would not have mattered even if

      8
          Respondent argues:

             The TFRP [trust-fund-recovery penalty] liabilities that
      respondent seeks to collect in this CDP case were the subject of a
      Letter 1153 mailed to petitioner on October 20, 2010, which
      petitioner received. The Letter 1153 provided petitioner a prior
      opportunity for a conference with respondent’s Office of Appeals to
      dispute the proposed TFRPs. Neither the plain language of I.R.C. §
      6330(c)(2)(B) nor the applicable Treasury regulations and case law
      require that a taxpayer exercise his appeal rights or that a taxpayer
      actually receive an appeal to constitute a “prior opportunity.”
                                         -25-

[*25] petitioner had timely administratively appealed the Letter 1153 to the Office

of Appeals, but respondent arbitrarily refused to hear his appeal. On the facts

presented here, we need not adopt nor reject respondent’s argument.

      Respondent also argues that the November 11, 2010 letter should not be

considered an appeal of the proposed penalty assessment because of alleged

“defects”. For example, respondent contends that the letter refers only to the

employment-tax liability of Vito’s South Limited Partnership, not the trust-fund-

recovery penalty liabilities of petitioner, and that therefore the letter could not be

considered an appeal of petitioner’s penalty liabilities. We need not consider

whether the letter was defective in these regards and should not be considered an

appeal of the trust-fund-recovery penalty liabilities asserted against petitioner

because we find that the letter was never sent to respondent in late 2010. Thus, it

does not matter if the letter might not have qualified as an appeal. Respondent

also argues that the alleged defects in the letter show he did not receive it because

he would have responded to a defective appeal letter by asking petitioner to clarify

it. We determine that the letter was not sent by Dickey without having to draw

such a factual inference.

      Respondent takes the position that petitioner has the burden of proof with

respect to all relevant factual matters. We need not resolve the question of
                                         -26-

[*26] whether petitioner has the burden of proof on the issue of whether section

6330(c)(2)(B) precludes him from disputing the underlying liabilities. This is

because our factual findings are supported by the preponderance of the evidence

presented, and we reach the same conclusion regardless of which party bears the

burden of proof. See Estate of Bongard v. Commissioner, 124 T.C. 95, 111

(2005).

      The parties agree that if petitioner had a prior opportunity to dispute his

underlying liabilities then the December 4, 2012 notice of determination upon

which this case is based would generally otherwise have to be reviewed under an

abuse-of-discretion standard. See Goza v. Commissioner, 114 T.C. at 180-182.

However, as discussed above, the parties have further agreed that if the Court

pursuant to the partial trial concludes petitioner received a prior opportunity to

dispute his underlying trust-fund-recovery penalty liabilities, the December 4,

2012 notice of determination should be sustained by the Court.

      In the light of the foregoing and the parties’ agreement concerning the

partial trial, we sustain the notice of determination.
                                   -27-

[*27] To reflect the foregoing,


                                          Decision will be entered for

                                  respondent.
