                       T.C. Memo. 2007-143



                     UNITED STATES TAX COURT



               EDWARD G. CASTLEMAN, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent




     Docket No. 13139-06L.              Filed June 6, 2007.


     Edward G. Castleman, pro se.

     Lynn M. Curry and Sandra Reid, for respondent.



                       MEMORANDUM OPINION


     PANUTHOS, Chief Special Trial Judge:    This proceeding arises

from a petition for judicial review filed in response to a Notice

of Determination Concerning Collection Action(s) Under Section

6320 and/or 6330 (notice of determination) sent to petitioner in
                               - 2 -

June 2006.1   The issue for decision is whether respondent abused

his discretion in sustaining a notice of Federal tax lien filed

against petitioner.

                            Background

     Some of the facts have been stipulated, and they are so

found.   The record consists of the stipulation of facts with

attached exhibits, additional exhibits introduced at trial, and

the testimony of petitioner.   At the time the petition was filed,

petitioner resided in Fort Myers, Florida.

     Petitioner filed tax returns for 1996 and 1997 but did not

pay all the tax reported thereon.   Respondent issued petitioner a

notice of deficiency for the taxable year 1996.   Petitioner did

not file a petition for judicial review, and respondent assessed

the additional tax shown on the notice.   Respondent accepted

petitioner’s return for 1997 and therefore did not issue a notice

of deficiency for that year.

     Respondent issued petitioner a Notice of Intent to Levy and

Notice of Your Right to a Hearing (notice of intent to levy) for

the taxable years 1996 and 1997 on February 23, 2004.   Petitioner

did not request an administrative hearing in response to the

notice of intent to levy.



     1
        Section references are to the Internal Revenue Code and
Rule references are to the Tax Court Rules of Practice and
Procedure.
                                - 3 -

     Respondent filed a notice of Federal tax lien against

petitioner on June 29, 2004, and issued him a Notice of Federal

Tax Lien Filing and Your Right to a Hearing Under IRC 6320 on

June 30, 2004.   Petitioner timely submitted a Form 12153, Request

for a Collection Due Process Hearing.      Petitioner’s case was

assigned to an Appeals officer, who conducted an administrative

hearing with petitioner and petitioner’s representative.

Petitioner did not propose a collection alternative but instead

sought to challenge only the underlying tax liability.      The

Appeals officer refused to consider the issue, however, because

petitioner had received a notice of deficiency for 1996 and a

notice of intent to levy for 1996 and 1997.      After the hearing

was concluded, respondent issued the notice of determination

sustaining the lien filing.

                              Discussion

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

all property and rights to property of a person when a demand for

the payment of the person’s liability for taxes has been made and

the person fails to pay those taxes.       Such a lien arises when an

assessment is made.   Sec. 6322.   Section 6323(a) requires the

Secretary to file a notice of Federal tax lien if the lien is to

be valid against any purchaser, holder of a security interest,

mechanic’s lienor, or judgment lien creditor.       Lindsay v.

Commissioner, T.C. Memo. 2001-285, affd. 56 Fed. Appx. 800 (9th
                                 - 4 -

Cir. 2003).

     Section 6320 provides that a taxpayer shall be notified in

writing by the Secretary of the filing of a notice of Federal tax

lien and provided with an opportunity for an administrative

hearing.   An administrative hearing under section 6320 is

conducted in accordance with the procedural requirements of

section 6330.    Sec. 6320(c).   At the administrative hearing, a

taxpayer is entitled to raise any relevant issue relating to the

unpaid tax, including a spousal defense or collection

alternatives such as an offer-in-compromise or an installment

agreement.    Sec. 6330(b) and (c)(2)(A); sec. 301.6320-1(e)(1),

Proced. & Admin. Regs.    A taxpayer also may challenge the

existence or amount of the underlying tax liability, including a

liability reported on the taxpayer’s original return, if the

taxpayer “did not receive any statutory notice of deficiency for

such tax liability or did not otherwise have an opportunity to

dispute such tax liability.”     Sec. 6330(c)(2)(B); see also Urbano

v. Commissioner, 122 T.C. 384, 389-391 (2004); Montgomery v.

Commissioner, 122 T.C. 1, 9-10 (2004).

     At the conclusion of the hearing, the Appeals officer must

determine whether and how to proceed with collection, taking into

account, among other things, collection alternatives proposed by

the taxpayer and whether any proposed collection action balances

the need for the efficient collection of taxes with the
                               - 5 -

legitimate concern of the taxpayer that the collection action be

no more intrusive than necessary.   See sec. 6330(c)(3).

     Section 6330(d) provides for judicial review of the

administrative determination in the Tax Court or a Federal

District Court, as may be appropriate.   Where the validity of the

underlying tax liability is properly at issue, the Court will

review the matter de novo.   Where the validity of the underlying

tax liability is not properly at issue, however, the Court will

review the Commissioner’s administrative determination for abuse

of discretion.   Goza v. Commissioner, 114 T.C. 176, 181-182

(2000).

     Petitioner seeks to challenge only the underlying tax

liability.   The parties agree, however, that petitioner received

a notice of deficiency for 19962 and a notice of intent to levy

for 1996 and 1997.   The receipt of a notice of deficiency


     2
        Petitioner stipulated that he received the notice of
deficiency, but at trial petitioner was unsure whether he had
received the notice or some other type of correspondence. In
some circumstances, the Court may relieve a party from being
bound by a stipulation where stipulated facts are clearly
contrary to facts disclosed by the record. See Rule 91(e);
Jasionowski v. Commissioner, 66 T.C. 312, 318 (1976). Petitioner
conceded, however, that he may have received a notice of
deficiency. In addition, the notice of determination indicates
the Appeals officer verified that a notice of deficiency had been
issued. While respondent’s failure to produce the notice of
deficiency at trial raises an issue as to whether a notice of
deficiency was in fact issued, we do not conclude that the
stipulated facts clearly contradict the facts disclosed by the
record. See Jasionowski v. Commissioner, supra. Accordingly, we
will not disturb the stipulation executed and filed by the
parties.
                                 - 6 -

constitutes an opportunity to dispute the underlying tax

liability, sec. 6330(c)(2)(B), as does the receipt of a notice of

intent to levy, Miller v. Commissioner, T.C. Memo. 2007-35; sec.

301.6320-1(e)(3), A-E7, Proced. & Admin. Regs.; see also Bell v.

Commissioner, 126 T.C. 356 (2006).       This is true even if the

taxpayer did not request an administrative hearing in response to

the notice of intent to levy.    See Miller v. Commissioner, supra;

sec. 301.6320-1(e)(3), A-E7, Proced. & Admin. Regs.      Accordingly,

petitioner is precluded from challenging the underlying tax

liability.

     On the basis of our review of the record, we conclude that

respondent satisfied the requirements of section 6330(c) and did

not abuse his discretion in sustaining the notice of Federal tax

lien filed against petitioner.    Respondent’s determination

therefore is sustained.

     To reflect the foregoing,


                                             Decision will be entered

                                      for respondent.
