                  T.C. Summary Opinion 2007-70



                       UNITED STATES TAX COURT



             MARK S. & LOIS A. FREME, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 320-06S.                Filed May 2, 2007.



     Mark S. and Lois A. Freme, pro sese.

     Lisa K. Hunter, for respondent.



     CHIECHI, Judge:    This case is before the Court on respon-

dent’s motion for summary judgment (respondent’s motion).

Petitioners filed the petition in this case pursuant to the

provisions of section 7463 of the Internal Revenue Code in effect

at the time that petition was filed.1    Pursuant to section


     1
      Hereinafter, all section references are to the Internal
Revenue Code in effect at all relevant times. All Rule refer-
                                                   (continued...)
                               - 2 -

7463(b), the decision to be entered is not reviewable by any

other court, and this opinion shall not be treated as precedent

for any other case.

                            Background

     The record establishes and/or the parties do not dispute the

following.

     Petitioners resided in Cedar Rapids, Iowa, at the time they

filed the petition in this case.

     On April 15, 1999, petitioners jointly filed a Federal

income tax (tax) return (return) for their taxable year 1998

(1998 return).   Petitioners’ 1998 return showed tax of $4,226,

withholding credits of $3,201.67, and tax due of $1,024.33.     When

petitioners filed their 1998 return, they did not pay the tax due

shown in that return.

     On May 10, 1999, respondent assessed the tax of $4,226 shown

in petitioners’ 1998 return and interest as provided by law.    On

various dates after May 10, 1999, petitioners made certain

payments with respect to their taxable year 1998.   On May 2,

2005, respondent assessed a $256.09 addition under section

6651(a)(2) to petitioners’ tax for their taxable year 1998 and

interest as provided by law.   (We shall refer to any unpaid

assessed amounts with respect to petitioners’ taxable year 1998,



     1
      (...continued)
ences are to the Tax Court Rules of Practice and Procedure.
                               - 3 -

as well as interest provided by law accrued after May 2, 2005, as

petitioners’ unpaid 1998 liability.)

     Respondent issued to petitioners the notice and demand for

payment required by section 6303(a) with respect to petitioners’

unpaid 1998 liability.

     On April 15, 2000, petitioners jointly filed a return for

their taxable year 1999 (1999 return).   Petitioners’ 1999 return

showed tax of $3,649, withholding credits of $2,188, and tax due

of $1,461.   When petitioners filed their 1999 return, they did

not pay the tax due shown in that return.

     On May 22, 2000, respondent assessed the tax of $3,649 shown

in petitioners’ 1999 return, an addition to tax under section

6651(a)(2) of $10.61, and interest as provided by law.   (We shall

refer to any unpaid assessed amounts with respect to petitioners’

taxable year 1999, as well as interest provided by law accrued

after May 22, 2000, as petitioners’ unpaid 1999 liability.)

     Respondent issued to petitioners the notice and demand for

payment required by section 6303(a) with respect to petitioners’

unpaid 1999 liability.

     On April 13, 2002, petitioners jointly filed a return for

their taxable year 2000 (2000 return).   Petitioners’ 2000 return

showed tax of $3,230, withholding credits of $2,896, and tax due

of $334.   When petitioners filed their 2000 return, they did not

pay the tax due shown in that return.
                               - 4 -

     On May 20, 2002, respondent assessed the tax of $3,230 shown

in petitioners’ 2000 return, additions to tax under section

6651(a)(1) and (2) of $100 and $23.38, respectively, and interest

as provided by law.   (We shall refer to any unpaid assessed

amounts with respect to petitioners’ taxable year 2000, as well

as interest provided by law accrued after May 20, 2002, as

petitioners’ unpaid 2000 liability.)

     Respondent issued to petitioners the notice and demand for

payment required by section 6303(a) with respect to petitioners’

unpaid 2000 liability.

     On April 15, 2002, petitioners jointly filed a return for

their taxable year 2001 (2001 return).   Petitioners’ 2001 return

showed tax of $4,939, withholding credits of $4,732, and tax due

of $207.   When petitioners filed their 2001 return, they did not

pay the tax due shown in that return.

     On May 20, 2002, respondent assessed the tax of $4,939 shown

in petitioners’ 2001 return, an addition to tax under section

6651(a)(2) of $2.07, and interest as provided by law.   (We shall

refer to any unpaid assessed amounts with respect to petitioners’

taxable year 2001, as well as interest provided by law accrued

after May 20, 2002, as petitioners’ unpaid 2001 liability.)

     Respondent issued to petitioners the notice and demand for

payment required by section 6303(a) with respect to petitioners’

unpaid 2001 liability.
                               - 5 -

     On April 4, 2004, petitioners jointly filed a return for

their taxable year 2002 (2002 return).   Petitioners’ 2002 return

showed tax of $6,377, withholding credits of $4,238, and tax due

of $2,139.   When petitioners filed their 2002 return, they did

not pay the tax due shown in that return.

     On July 5, 2004, respondent assessed the tax of $6,377 shown

in petitioners’ 2002 return, additions to tax under sections

6651(a)(1), 6651(a)(2), and 6654 of $481.27, $99.67, and $29,

respectively, and interest as provided by law.   (We shall refer

to any unpaid assessed amounts with respect to petitioners’

taxable year 2002, as well as interest provided by law accrued

after July 5, 2004, as petitioners’ unpaid 2002 liability.)

     Respondent issued to petitioners the notice and demand for

payment required by section 6303(a) with respect to petitioners’

unpaid 2002 liability.

     On April 15, 2004, petitioners jointly filed a return for

their taxable year 2003 (2003 return).   Petitioners’ 2003 return

showed tax of $4,124, withholding credits of $2,642, and tax due

of $1,482.   When petitioners filed their 2003 return, they did

not pay the tax due shown in that return.

     On May 31, 2004, respondent assessed the tax of $4,124 shown

in petitioners’ 2003 return, additions to tax under sections

6651(a)(2) and 6654 of $14.82 and $41, respectively, and interest

as provided by law.   (We shall refer to any unpaid assessed
                               - 6 -

amounts with respect to petitioners’ taxable year 2003, as well

as interest provided by law accrued after May 31, 2004, as

petitioners’ unpaid 2003 liability.)

     Respondent issued to petitioners the notice and demand for

payment required by section 6303(a) with respect to petitioners’

unpaid 2003 liability.

     On June 22, 2005, respondent filed a notice of Federal tax

lien (tax lien filing) with respect to petitioners’ taxable years

1998 through 2003.   That tax lien filing showed, inter alia, no

amount with respect to petitioners’ taxable year 1998 under the

heading “Unpaid Balance of Assessment”.

     On June 23, 2005, respondent issued to petitioners a notice

of Federal tax lien filing and your right to a hearing under IRC

6320 (notice of tax lien) with respect to petitioners’ taxable

years 1998 through 2003.   That notice of tax lien showed, inter

alia, zero dollars with respect to petitioners’ taxable year 1998

under the heading “Amount Owed”.

     On July 11, 2005, in response to the notice of tax lien,

petitioners filed Form 12153, Request for a Collection Due

Process Hearing (petitioners’ Form 12153), and requested a

hearing with respondent’s Appeals Office (Appeals Office).   In

petitioners’ Form 12153, petitioners indicated that they did not

agree with the notice of tax lien, and stated: “payments have

been made have never recieved [sic] accounting.”
                                - 7 -

     On July 14, 2005, a representative of respondent (respon-

dent’s representative) spoke on the telephone with petitioner

Mark Freme (Mr. Freme) regarding petitioners’ Form 12153.     During

that telephone call, Mr. Freme indicated that he wanted an

installment agreement.    On July 14, 2005, respondent’s represen-

tative faxed, inter alia, Form 433-A, Collection Information

Statement for Wage Earners and Self-Employed Individuals (Form

433-A), to petitioners.    Respondent’s representative did not

receive from petitioners completed Form 433-A.      On July 29, 2005,

respondent’s representative forwarded to the Appeals Office

petitioners’ Form 12153.

     On September 13, 2005, an Appeals officer with the Appeals

Office (Appeals officer) sent petitioners a letter.     That letter

stated in pertinent part:

     This letter is in response to your Request for a Col-
     lection Due Process Hearing. The Appeals’ office is
     hereby offering you a hearing by phone, letter, or in-
     person. It is important you contact me by September
     28, 2005 to discuss your hearing.

           *      *        *      *      *      *       *

     If you wish to propose collection alternatives such as
     an installment agreement or an offer in compromise, you
     must submit current financial information. I have
     enclosed a Collection Information Statement for Wage
     Earners and Self-Employed Individuals; Form 433-A, for
     this purpose. Please forward the completed Form 433-A
     to me by September 28, 2005.

           *      *        *      *      *      *       *

     Please note if I don’t hear from you to discuss your
     case, your hearing may consist of a review by Appeals
                               - 8 -

     of the administrative file, including information you
     already provided. We may issue you a determination
     letter based upon that review.

     On September 29, 2005, the Appeals officer and Mr. Freme

spoke on the telephone.   During that telephone call, Mr. Freme

stated that he intended to mail on the next day (i.e., September

30, 2005) to the Appeals officer completed Form 433-A.

     On October 12, 2005, the Appeals officer sent petitioners

another letter (Appeals officer’s October 12, 2005 letter).     That

letter stated in pertinent part:

     On September 13, 2005, I sent you a letter offering you
     a hearing; you have the opportunity for a conference by
     personal interview, correspondence and/or by telephone.
     I also requested some additional information to resolve
     your case. I asked you to contact me by September 28,
     2005 to discuss the Collection Due Process Hearing that
     you requested. On September 29, 2005, we had telephone
     conversation in which you said you would be mailing in
     the Form 433-A on September 30, 2005. As of this date,
     I have not received the information requested.

     As previously stated, if you wish to propose collection
     alternatives such as installment agreement or an offer
     in compromise you must submit current financial infor-
     mation. I have enclosed A Form 433-A for this purpose.

     Please contact me to discuss your hearing, and please
     forward the above requested information. If I don’t
     hear from you by November 3, 2005 your hearing will
     consist of a review by Appeals of the administrative
     file, including information already provided by you. A
     determination letter will be issued to you based upon
     that review. [Reproduced literally.]

     Petitioners did not respond to the Appeals officer’s October

12, 2005 letter.   At no time during the consideration by the

Appeals officer of petitioners’ Form 12153 did petitioners
                                - 9 -

provide Form 433-A or any other documentary evidence relating to

their financial status or their financial situation at and after

the respective times their returns for their taxable years 1998

through 2003 were filed.

     On December 2, 2005, the Appeals Office issued to petition-

ers a notice of determination concerning collection action(s)

under section 6320 and/or 6330 (notice of determination).   That

notice stated in pertinent part:

     Summary of Determination

     We have found that all legal and administrative re-
     quirements for the action taken have been met. We have
     also considered whether the collection action taken or
     proposed balances the need for the efficient collection
     of the taxes with the legitimate concern of the tax-
     payer that any collection action be no more intrusive
     than necessary. At this time, grounds for withdrawal
     of the lien have not been established. The case will
     be returned to the Automated Collection System (ACS)
     for the appropriate actions.

An attachment to the notice of determination stated in pertinent

part with respect to petitioners’ taxable years 1998 through

2003:

                   SUMMARY AND RECOMMENDATION

     The taxpayers did not present any information that
     warrants withdrawal of the filed Notice of Federal Tax
     Lien.

                           BRIEF BACKGROUND

     This Appeals employee has had no prior involvement with
     this taxpayer with respect to these liabilities in
     either Compliance or Appeals.

     In our letter dated September 13, 2005, we asked the
                        - 10 -

taxpayers to contact us to schedule their Collection
Due Process hearing. On September 29, 2005 we received
a message that the taxpayer had called in and requested
we call back. We made an outcall to the taxpayer, who
stated he just found our letter in a stack of work and
called in to let us know that he would be mailing in
his completed Form 433-A, financial statement on Sep-
tember 30, 2005. On October 12, 2005, we sent a
follow-up letter again requesting the taxpayers to
contact our office to schedule their Collection Due
Process hearing or provide their financial information.
Since they did not contact our office, they offered no
alternative to the proposed collection action. There-
fore, we made our decision based upon the information
in their case file and computer transcripts of the
account history.

Verification of Applicable Legal and Administrative
Procedures

To the best of our knowledge, with the information
available to us, we have determined that Compliance
followed all legal and procedural requirements and the
actions taken or proposed were appropriate under the
circumstances.

      *      *      *      *      *      *        *

Issues Raised by the Taxpayer

In their request for a hearing the taxpayers asked for
an installment agreement. They failed to return the
financial statement that we mailed to them.

Challenges to the Existence or Amount of the Liability

The taxpayers’ request for a hearing did not challenge
the existence or the amount of the tax liability.

Challenges to the Appropriateness of the Proposed
Collection Action

The taxpayers did not challenge the proposed collection
action.

Collection Alternatives Offered by the Taxpayer

The taxpayers offered no viable alternative to the
                              - 11 -

     proposed enforcement action. They failed to return the
     financial statement we sent them.

     Balancing Efficient Tax Collection and Intrusiveness

     Per IRC §6330(c)(3)(C), the determination by Appeals
     under this subsection shall take into consideration
     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. In this
     case, the taxpayers’ concern that the actions of the
     Compliance Division are unduly intrusive was weighed
     against the Service’s responsibility to apply the tax
     law fairly to all. Filing a lien or issuance of a levy
     always creates hardship for the taxpayer and is always
     intrusive. Even so, the lien or levy is sometimes
     necessary to collect the tax in the most efficient
     manner and/or to secure the Internal Revenue Service’s
     equity position in assets.

     The Notice of Federal Tax Lien will not be withdrawn.

     In the petition that petitioners filed commencing the

instant case, petitioners stated:

     payments have been made yet no accounting has been
     provided. plaintiffs are currently unable to pay the
     remaining deficiency balance. plaintiffs request that
     the internal revenue service provide an accurate ac-
     counting of payments made and seek relief from interest
     and penalties, that all lien petitions be cancelled.
     [Reproduced literally.]

                            Discussion

     The Court may grant summary judgment where there is no

genuine issue of material fact and a decision may be rendered as

a matter of law.   Rule 121(b); Sundstrand Corp. v. Commissioner,

98 T.C. 518, 520 (1992), affd. 17 F.3d 965 (7th Cir. 1994).    We

conclude that there are no genuine issues of material fact
                              - 12 -

regarding the questions raised in respondent’s motion.2

     A taxpayer may raise challenges to the existence or the

amount of the taxpayer’s underlying tax liability if the taxpayer

did not receive a notice of deficiency or did not otherwise have

an opportunity to dispute the tax liability.    Sec. 6330(c)(2)(B).

Petitioners’ Taxable Year 1998

     According to respondent’s tax lien filing and respondent’s

notice of tax lien, petitioners do not have any unpaid liability

with respect to petitioners’ taxable year 1998.   Respondent’s tax

lien filing showed no amount with respect to petitioners’ taxable

year 1998 under the heading “Unpaid Balance of Assessment” and

respondent’s notice of tax lien showed zero dollars with respect

to that year under the heading “Amount Owed”.   We conclude that

the tax lien filing with respect to petitioners’ taxable year

1998 was not proper.   See sec. 6321.

Petitioners’ Taxable Years 1999 Through 2003

     Petitioners allege in the petition that respondent failed to

account for all of the payments that they made with respect to


     2
      Although the Court ordered petitioners to file a response
to respondent’s motion, petitioners failed to do so. The only
filings that petitioners made in this case are the petition and
the designation of place of trial. The party opposing summary
judgment must set forth specific facts that show a genuine issue
of material fact exists and may not rely merely on allegations or
denials in the pleadings. Grant Creek Water Works, Ltd. v.
Commissioner, 91 T.C. 322, 325 (1988); Casanova Co. v. Commis-
sioner, 87 T.C. 214, 217 (1986). Petitioners may not rely on
their allegations in the petition in order to establish a genuine
issue of material fact.
                                - 13 -

each of their taxable years 1999 through 2003.     Petitioners thus

dispute the amount of the unpaid liability for each of those

years.     We shall review that dispute on a de novo basis.   Sego v.

Commissioner, 114 T.C. 604, 610 (2000); Goza v. Commissioner, 114

T.C. 176, 181-182 (2000).

     Although petitioners allege in the petition that respondent

did not account for all of the payments that they made with

respect to each of their taxable years 1999 through 2003, they do

not identify any such payments.     On the instant record, we are

unable to find that respondent failed to account for all of the

payments that petitioners made for each of those years.

     As we understand it, petitioners advance as an alternative

argument that they should be relieved from paying any addition to

tax and interest with respect to each of their taxable years 1999

through 2003.     We construe that argument as a request to review

respondent’s failure to abate additions to tax and interest under

section 6404.

     We turn first to petitioners’ argument regarding respon-

dent’s failure to abate additions to tax under section 6404.     The

record does not establish that petitioners advanced that argument

at the Appeals Office.     Consequently, we shall not consider that

matter.3    Sec. 301.6320-1(f)(2), Q&A-F5, Proced. & Admin. Regs.;


     3
      Assuming arguendo that the record before us established
that petitioners raised with the Appeals Office respondent’s
                                                   (continued...)
                             - 14 -

see also Washington v. Commissioner, 120 T.C. 114, 123-124

(2003).

     We turn now to petitioners’ argument regarding respondent’s

failure to abate interest under section 6404, which we shall

review for abuse of discretion.   See sec. 6404(h); see also Lee

v. Commissioner, 113 T.C. 145, 149 (1999).   Section 6404(e)

permits respondent to abate interest with respect to an unreason-

able error or delay resulting from managerial and ministerial

acts.

     Although petitioners allege in the petition that they should

be relieved from paying any interest with respect to each of

their taxable years 1999 through 2003, petitioners do not advance

any contentions or arguments in support of that allegation.    On

the record before us, we find that petitioners have failed to

show that respondent abused respondent’s discretion in failing to

abate interest under section 6404 with respect to each of those

years.

     Based upon our examination of the entire record before us,

we reject respondent’s determination in the notice of determina-




     3
      (...continued)
failure to abate additions to tax under sec. 6404, on that
record, we hold that the Court does not have jurisdiction to
review petitioners’ request that we review any such failure. See
sec. 6404(h); see also Washington v. Commissioner, 120 T.C. 114,
124 n.15 (2003); Krugman v. Commissioner, 112 T.C. 230, 237
(1999).
                             - 15 -

tion with respect to petitioners’ taxable year 1998.4    On that

record, we sustain respondent’s determinations in that notice

with respect to petitioners’ taxable years 1999 through 2003.

     We have considered all of the contentions and arguments of

the parties that are not discussed herein, and we find them to be

without merit, irrelevant, and/or moot.

     To reflect the foregoing,


                                      An appropriate order and

                                 decision will be entered.




     4
      We concluded above that the tax lien filing with respect to
petitioners’ taxable year 1998 was not proper.
