                         T.C. Memo. 2003-177



                       UNITED STATES TAX COURT



                  FILOMENA PAHAMOTANG, Petitioner v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 6311-02L.               Filed June 17, 2003.



     Filomena Pahamotang, pro se.

     Hieu C. Nguyen, for respondent.



               MEMORANDUM FINDINGS OF FACT AND OPINION


     GERBER, Judge:    The controversy in this case involves the

question of whether respondent is entitled to go forward with the

collection of petitioner’s outstanding and unpaid 1994 tax

liability.    Respondent moved for summary judgment, and the motion

was set for hearing at the Court’s March 24, 2003, Los Angeles,

California, trial session.    At the hearing, petitioner advised
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the Court that she had no evidence to present and no additional

arguments to add to those presented in her response to

respondent’s motion for summary judgment.

                           FINDINGS OF FACT

     Petitioner and her husband filed their 1994 joint Federal

income tax return on April 15, 1995, wherein petitioner’s

occupation was shown as “registered nurse”.   Attached to the

return were Forms W-2, Wage and Tax Statement, and a Form 1099-R,

Distributions From Pensions Annuities, Retirement or Profit-

Sharing Plans, IRAs, Insurance Contracts, etc., reflecting a

total of $90,017.59 for wages and income payments to petitioner

for the 1994 tax year.   Petitioner and her husband reported total

joint wages of $105,265.   The 1994 joint return contained a

$42,883 claimed loss on Schedule C, Profit or Loss From Business;

a $3,000 capital loss on Schedule D, Capital Gains and Losses; a

$12,821 loss on Schedule E, Supplemental Income and Loss; and

$57,768 of itemized deductions on Schedule A, Itemized

Deductions, resulting in no reported taxable income.   A refund of

$12,067 was claimed, representing a claim for all of the income

tax withheld and excess employment taxes.

     Petitioner’s 1994 return reflected her address as 1500 Adams

Avenue, Apt. 105, Costa Mesa, CA 92626 (Adams Avenue address).

During 1998, respondent was in communication with petitioner and

was provided with a second address--P.O. Box 11774, Costa Mesa,
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CA 92627 (P.O. Box address).    On April 7, 1998, respondent mailed

duplicate statutory notices of deficiency to petitioner--one to

the Adams Avenue address and the other to the P.O. Box address.

In those notices for petitioner’s 1994 tax year, respondent

determined a $53,680 income tax deficiency and a $10,736 penalty

under section 6662(a).1   The deficiency results from respondent’s

determination that petitioner was not entitled to certain claimed

business and itemized deductions.    The notice sent to the Adams

Avenue address was returned to respondent marked “Moved, Left No

Address”.    The notice sent to the P.O. Box address was not

returned to respondent.

     On June 23, 1998, respondent received a letter from

petitioner indicating that she wanted to appeal respondent’s

determinations for 1994 and 1995.    Petitioner’s letter attached a

copy of the first pages of respondent’s notices of deficiency for

1994 and 1995, but only for the notices sent to the P.O. Box

address.    Petitioner’s letter to respondent reflected her then

current address as the P.O. Box address.    Petitioner did not

petition this Court with respect to the 1994 notice, and on

August 31, 1998, respondent assessed the income tax deficiency

and penalty.




     1
       Section references are to the Internal Revenue Code in
effect for the period under consideration.
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     After petitioner failed to pay her 1994 income tax

liability, respondent, by means of certified mail dated April 11,

2000, sent petitioner a Form 1058, Final Notice--Notice of Intent

to Levy and Notice of Your Rights to a Hearing, as required under

section 6330.   Petitioner timely mailed to respondent a Form

12153, Request for a Collection Due Process Hearing, and a Form

8857, Request for Innocent Spouse Relief.   In addition to the

collection hearing, petitioner sought innocent spouse relief in

the amount of $45,617.   Along with the requests for collection

hearing and spousal relief, petitioner submitted an attachment

claiming that she “thought that the statutory period of

limitations for tax assessment is three years from the time the

[1994] tax return was filed.   I never received any tax bill or

assessment with the statutory time period.”

     On January 31, 2002, an Appeals officer issued a Notice of

Determination Concerning Your Request for Relief from Joint and

Several Liability under section 6015 for petitioner’s 1994 tax

year.   In that notice, petitioner was granted $33,378 of partial

relief leaving an unpaid income tax deficiency of $12,239 for

1994.

     On January 29, 2002, another of respondent’s Appeals

officers sent petitioner a letter requesting financial

information in order for respondent to consider collection

alternatives, including an installment payment agreement.
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Petitioner’s hearing before Appeals was conducted via telephone

conversations on February 5 and February 19, 2002, at which times

collection alternatives for the $12,239 balance for 1994 were

discussed.    The Appeals officer also considered and allowed some

itemized deductions for 1994.

     Petitioner advised the Appeals officer during the February

19, 2002, telephonic conversation that she did not wish to

further pursue collection alternatives until she sought review by

the Tax Court of respondent’s partial denial of relief from

liability under section 6015.   Petitioner did not submit her

financial information to the Appeals officer.

     On March 1, 2002, the Appeals office mailed petitioner a

Notice of Determination Concerning Collection Action(s) Under

Section 6320 and/or 6330 concluding that respondent may proceed

with collection of the remainder of petitioner’s 1994 tax

liability.

     On March 19, 2002, petitioner filed a petition with this

Court for review of respondent’s determination to proceed with

collection.   In that petition she generally alleged that she

disputed respondent’s determination.    On April 15, 2002, she

amended her petition and specifically alleged error with respect

to the underlying merits of the $12,239 balance for the 1994

year.   No error was alleged with respect to respondent’s

determination under section 6015 or with respect to the adequacy
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of the hearing with Appeals or the consideration of collection

alternatives.

                              OPINION

     There is no disagreement about any material fact, and the

controverted issue involves a question that is ripe for summary

judgment.   Rule 121(b); Fla. Peach Corp. v. Commissioner, 90 T.C.

678, 681 (1988); Shiosaki v. Commissioner, 61 T.C. 861, 862

(1974).

     Section 6330 provides that, upon request and in the

circumstances described therein, a taxpayer has a right to a

“fair hearing”.   Sec. 6330(b).    A “fair hearing” consists of the

following elements:   (1) An impartial officer will conduct the

hearing; (2) the conducting officer will receive verification

from the Secretary that the requirements of applicable law and

administrative procedure have been met; (3) certain issues may be

heard such as spousal defenses and offers-in-compromise; and (4)

a challenge to the underlying liability may be raised if the

taxpayer did not receive a statutory notice of deficiency or

otherwise receive an opportunity to dispute such liability.    Sec.

6330(c).

     Petitioner, in response to respondent’s motion for summary

judgment, advances three principal contentions.    Her first

contention is that the 3-year period for assessment of the tax

had expired prior to the time (August 1998) that respondent
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assessed the tax.    Petitioner relies on section 6501(a), which

generally provides for assessment within a 3-year period.

Petitioner, however, fails to understand that the April 7, 1998,

mailing of notices of deficiency to her caused the period for

assessment to be suspended and to remain open so as to permit the

assessment.    The statute provides that the mailing of the notice

within the 3-year period suspends the running of the 3-year

period for a minimum of 150 days.    See sec. 6503(a)(1).

     Petitioner’s second contention is that Appeals should have

permitted her to address the underlying merits of respondent’s

deficiency determination for 1994.      In that regard, section

6330(c)(2)(B) provides that a taxpayer may raise issues

concerning the underlying tax liability in a proceeding under

section 6330 where the taxpayer did not receive a notice of

deficiency or otherwise have an opportunity to dispute the tax

liability.    See Sego v. Commissioner, 114 T.C. 604 (2000); Goza

v. Commissioner, 114 T.C. 176 (2000).      Because petitioner

received a notice of deficiency and did not petition this Court

for relief, she was not entitled to contest the merits of the

underlying liability at her section 6330 hearing.

     Even though respondent was not required to consider the

merits of the underlying tax liability for 1994, the Appeals

officer did consider some of the underlying merits of the 1994

liability.    On that point, we have held that permitting a
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taxpayer to offer information concerning the underlying liability

does not constitute a waiver of the section 6330(c)(2)(B)

requirements.    Behling v. Commissioner, 118 T.C. 572, 577-579

(2002).

     In the Behling case, we considered a situation where the

Appeals officer received materials from the taxpayer concerning

the underlying merits of the tax liability.    Ultimately, the

Appeals officer in Behling did not make any adjustments to the

underlying liability.   Under those circumstances, it was held

that respondent did not waive the restrictions of section

6330(c)(2)(B).   Behling v. Commissioner, supra at 579.

     The circumstances in this case are, for all practical

purposes, the same as those in Behling v. Commissioner, supra.

Petitioner provided information that caused the Appeals officer

to allow additional itemized deductions, thereby reducing

petitioner’s 1994 tax liability.   The Appeals officer’s agreement

to consider a part of the merits, even though he was not required

to do so, did not result in a waiver of the restrictions on

petitioner with respect to the underlying merits of the 1994 tax

liability.   Accordingly, petitioner was not entitled to question

the underlying merits of the 1994 liability.

     Thirdly, petitioner contends that this Court should consider

the denial of additional section 6015 relief from the 1994 tax

liability.   The question of whether this Court may review
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petitioner’s claim for relief as an innocent spouse is somewhat

more complicated.   In this case, respondent specifically reviewed

petitioner’s request for relief and granted $33,378 of the

$45,617 in relief requested by petitioner.    Petitioner asks this

Court to review respondent’s failure to grant relief with respect

to the $12,239 balance.

     With respect to petitioner’s separate request for innocent

spouse relief under section 6015, petitioner failed to make in

her original and amended petitions to this Court a specific claim

for relief from that determination.    In that regard petitioner

received two separate notifications from respondent, one advising

that respondent would proceed with collection and the other

granting in part and denying in part petitioner’s request for

relief under section 6015.   In the original petition, petitioner

generally requested review of respondent’s determination without

identifying which of the two determinations was in dispute.    In

an amended petition, however, petitioner specifically limited her

request to review of the section 6330 notice to proceed with

collection.

     Under section 6330(c)(2), however, petitioner is entitled to

raise certain issues, including spousal defenses.    Consideration

of spousal defenses thus was anticipated in the context of a

section 6330 hearing.   Therefore, our review will include
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respondent’s determination to partially grant and deny section

6015 relief to petitioner.

     Petitioner engaged in an extensive dialog with two different

Appeals officers, and she received consideration of all issues

raised, even though some were not as a matter of right under

section 6330(b).   In addition to the assignment of one Appeals

officer to provide a section 6330 hearing, respondent assigned a

second Appeals officer to consider petitioner’s claim for relief

under section 6015.   With respect to a section 6330 hearing, one

Appeals officer granted some relief with respect to the

underlying merits, even though petitioner was not entitled to

question the underlying merits under section 6330.    With respect

to petitioner’s claim for section 6015 relief, she was afforded

$33,378 of the $45,617 in relief she requested.   Petitioner asks

this Court to review respondent’s failure to grant relief with

respect to the $12,239 balance, but she has provided no evidence

or specific argument upon which we could hold that she is

entitled to such relief.   She received a substantial amount of

relief from the outstanding 1994 income tax liability

(approximately 75 percent of the relief she requested).

     Petitioner was also offered a collection alternative in the

form of installment payments, which she declined.    Petitioner

claims that respondent has abused his discretion because he did

not consider additional questions as to the merits of the 1994
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tax liability.   Under the circumstances of this case, petitioner

was provided with a hearing and opportunity to be heard as

contemplated within the meaning of sections 6320 and 6330.

Accordingly, we hold that respondent is entitled to proceed with

enforced collection activity of petitioner’s 1994 income tax

liability.

     To reflect the foregoing,

                                      An order and decision will be

                                 entered granting respondent’s

                                 motion for summary judgment.
