                                  T.C. Memo. 2013-150



                            UNITED STATES TAX COURT



                    CESARE GIAQUINTO, Petitioner v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 3757-11L.                           Filed June 12, 2013.



      Suzanne A. Ascher, for petitioner.

      Jessica R. Browde, Gerard Mackey, and Eugene A. Kornel, for respondent.



               MEMORANDUM FINDINGS OF FACT AND OPINION


      MARVEL, Judge: Pursuant to section 6330(d), petitioner seeks review of

respondent’s determination to proceed with the collection by levy of the following

outstanding assessed trust fund recovery penalties under section 6672:1


      1
          Unless otherwise indicated, all section references are to the Internal
                                                                           (continued...)
                                           -2-

                         [*2] Tax period
                              ending             Amount owed1

                               9/30/2006           $11,315.88
                              12/31/2006             6,587.53
                               3/31/2007            17,638.38
                               6/30/2007            22,415.31
                               9/30/2007            24,838.26
                              12/31/2007             1,952.11
                               3/31/2008             7,868.84
                               6/30/2008             2,675.92
                                Total               95,292.23
                          1
                         These amounts include interest accrued
                   pursuant to sec. 6001 through July 30, 2009.

The issues for decision are: (1) whether petitioner is entitled to contest his

underlying liability for the section 6672 trust fund recovery penalties for the

periods at issue; and (2) if petitioner is entitled to contest his underlying liability,

whether petitioner is liable for the section 6672 trust fund recovery penalties.

                                 FINDINGS OF FACT

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

facts and facts drawn from stipulated exhibits are incorporated herein by this

reference. Petitioner resided in New York when he petitioned this Court.




      1
      (...continued)
Revenue Code in effect at all relevant times.
                                           -3-

[*3] I.         Background

          During all relevant periods petitioner resided with his wife and three

children in a single-family home. From 1996-2008 petitioner was employed as a

designer for Salvadeo Associates Architects, P.C. (Salvadeo), a professional

architectural firm in Staten Island, New York. During 2008 petitioner’s wife

worked part time outside the home.

          Salvadeo failed to pay over its withholding taxes to the Internal Revenue

Service (IRS) for the periods at issue. Revenue Officer Anto Toms twice visited

Salvadeo to secure payment of the withholding taxes. Petitioner was present

during both of these visits. The first visit was on October 11, 2007, and the

second visit was on July 30, 2008.

          During the second visit Revenue Officer Toms took an inventory of

Salvadeo’s office equipment and interviewed petitioner regarding the potential

application of the section 6672 trust fund recovery penalties to petitioner. At

Revenue Officer Toms’s direction petitioner completed a Form 4180, Report of

Interview with Individual Relative to Trust Fund Recovery Penalty or Personal

Liability for Excise Taxes. However, after consulting with Salvadeo’s

representative, petitioner refused to complete a Form 433-A, Collection

Information Statement for Wage Earners and Self-Employed Individuals.
                                        -4-

[*4] II.     Respondent’s Efforts To Assess and Collect the Section 6672
             Penalties

       On November 4, 2008, Revenue Officer Toms sent by certified mail to

petitioner’s residence a Letter 11532 and a Form 2751, Proposed Assessment of

Trust Fund Recovery Penalty. A U.S. Postal Service (USPS) employee placed a

“RETURN TO SENDER” sticker on the envelope containing the Letter 1153 and

Form 2751; the sticker was stamped “UNCLAIMED”. The following notations

appear on the envelope: (1) “NL 11/6 Kenny”; (2) “11/17”; and (3) “11/27”.3 The

USPS returned the envelope to respondent on December 4, 2008.

       On May 26, 2009, Revenue Officer Toms sent by certified mail to

petitioner’s residence Forms 3552, Notice of Tax Due on Federal Tax Return

(notices of tax due). A USPS employee placed a “return to sender” sticker on the

envelope containing the notices of tax due; the sticker was stamped

“UNCLAIMED”. The following notation appears on the envelope: “NL 5/27”.

The USPS returned the envelope to respondent on June 16, 2009.




       2
      The Letter 1153 informed petitioner that (1) the IRS proposed to assess sec.
6672 penalties against him and (2) he had the right to appeal this decision to the
IRS Appeals Office.
       3
        The word “Kenny” is partially illegible and the date “11/27” is written over
a different date, possibly “11/22”.
                                        -5-

[*5] On July 30, 2009, Revenue Officer Toms hand delivered to petitioner a

Letter 1058, Final Notice of Intent to Levy and Notice of Your Right to a Hearing.

       On August 13, 2009, respondent sent by certified mail to petitioner’s

residence a Letter 3172, Notice of Federal Tax Lien Filing and Your Right to a

Hearing Under IRC 6320 (lien notice). On August 20, 2009, the mailing was

delivered to petitioner.4

III.   Petitioner’s Section 6330 Hearing

       On August 28, 2009, petitioner timely mailed to respondent a Form 12153,

Request for a Collection Due Process or Equivalent Hearing, seeking relief from

the proposed levy and acceptance of an offer-in-compromise or an installment

agreement as a collection alternative. On November 3, 2010, Settlement Officer

Gilbert Breitberg mailed a letter to petitioner, scheduling a face-to-face conference

with petitioner and petitioner’s counsel. Settlement Officer Breitberg conducted a

face-to-face conference with petitioner and petitioner’s counsel on December 15,

2010, in respondent’s Manhattan Appeals Office. During the conference

petitioner, petitioner’s counsel, and Settlement Officer Breitberg discussed

collection alternatives, but petitioner did not agree to provide a Form 433-A or a

       4
       In his petition and pretrial memorandum petitioner denied receiving the
lien notice. However, petitioner did not pursue this issue at trial or on brief, and
the record shows that the lien notice was in fact delivered to petitioner’s address.
                                         -6-

[*6] Form 433-B, Collection Information Statement for Businesses. Petitioner and

petitioner’s counsel also attempted to dispute petitioner’s underlying liability,

arguing that petitioner had not had a prior opportunity to challenge his underlying

liability.

       On January 14, 2011, respondent mailed to petitioner a Notice of

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

(notice of determination) sustaining the proposed levy. The Appeals Office

attached to the notice of determination a statement that Settlement Officer

Breitberg prepared, explaining that the proposed levy action was sustained

because petitioner (1) had offered no collection alternatives and (2) had had a

prior opportunity to dispute the underlying liability.

                                      OPINION

I.     Section 6672 Trust Fund Recovery Penalties

       Section 6672 imposes a penalty for willfully failing to collect, account for,

and pay over income and employment taxes of employees. Section 6672 penalties

are commonly known as trust fund recovery penalties and are assessed and

collected in the same manner as taxes against a person who is “an officer or

employee of a corporation * * * who as such officer, employee, or member is

under a duty to perform” the duties referred to in section 6672. Sec. 6671(b).
                                          -7-

[*7] Such persons are referred to as “responsible persons”, and the term may be

broadly applied. Mason v. Commissioner, 132 T.C. 301, 321 (2009).

      Petitioner contends that he is not liable for the section 6672 trust fund

recovery penalties because he was not a responsible person who willfully failed to

pay over the withholding taxes of Salvadeo. However, we can reach this issue

only if we decide that petitioner was entitled to contest his liability for the section

6672 penalties during the section 6330 hearing.

II.   Section 6330 Hearings

      The Secretary5 is authorized to collect tax by levy upon the taxpayer’s

property if any taxpayer liable to pay any tax neglects or refuses to pay such tax

within 10 days after notice and demand for payment. Sec. 6331(a). Section

6330(a) requires the Secretary to send written notice to the taxpayer of the

taxpayer’s right to request a section 6330 hearing before a levy is made. If the

taxpayer makes a timely request for a hearing, a hearing shall be held by the IRS

Office of Appeals. Sec. 6330(b).

      At the hearing a taxpayer may raise any relevant issue, including

appropriate spousal defenses, challenges to the appropriateness of the collection


      5
       The term “Secretary” means the Secretary of the Treasury or his delegate.
Sec. 7701(a)(11)(B).
                                         -8-

[*8] action, and collection alternatives, such as an installment agreement. Sec.

6330(c)(2)(A). Additionally, the taxpayer may contest the validity of the

underlying tax liability, but only if the taxpayer did not otherwise have an

opportunity to dispute the tax liability. Sec. 6330(c)(2)(B); Sego v.

Commissioner, 114 T.C. 604, 609 (2000). A taxpayer has the opportunity to

dispute his or her liability for a trust fund recovery penalty when he or she

receives a Letter 1153. Mason v. Commissioner, 132 T.C. at 317-318; see also

Lewis v. Commissioner, 128 T.C. 48, 61 (2007); sec. 301.6330-1(e)(3), Q&A-E2,

Proced. & Admin. Regs. (providing that an opportunity to dispute liability

“includes a prior opportunity for a conference with Appeals”). However, unless

the taxpayer deliberately refuses to accept its delivery, a Letter 1153 will be

considered as having provided a prior opportunity to dispute liability for the

underlying trust fund recovery penalty only if it is actually received. Mason v.

Commissioner, 132 T.C. at 318.

      Following a hearing the Appeals Office must issue a notice of determination

regarding the appropriateness of the proposed levy action. The Appeals Office is

required to take into consideration: (1) verification presented by the Secretary that

the requirements of applicable law and administrative procedure have been met,

(2) relevant issues raised by the taxpayer, and (3) whether the proposed collection
                                        -9-

[*9] action appropriately balances the need for efficient collection of taxes with a

taxpayer’s concerns regarding the intrusiveness of the proposed collection action.

Sec. 6330(c)(3); Wadleigh v. Commissioner, 134 T.C. 280, 287-288 (2010).

      We have jurisdiction to review the Appeals Office’s determination.6 Sec.

6330(d). Where the validity of the underlying tax liability is properly at issue, we

review the determination regarding the underlying tax liability de novo. Sego v.

Commissioner, 114 T.C. at 610; Goza v. Commissioner, 114 T.C. 176, 181-182

(2000). Where the validity of the underlying tax liability is not properly at issue,

we review the Appeals Office’s determination for abuse of discretion. Sego v.

Commissioner, 114 T.C. at 610; Goza v. Commissioner, 114 T.C. at 182.




      6
        Pursuant to the Pension Protection Act of 2006, Pub. L. No. 109-280, sec.
855, 120 Stat. at 1019, which applies to determinations made after October 16,
2006, we have jurisdiction to review the Commissioner’s collection
determinations with respect to any type of underlying tax, including trust fund
recovery penalties. See Ginsberg v. Commissioner, 130 T.C. 88, 91-92 (2008).
Because the determination in this case was made after October 16, 2006, we have
jurisdiction to review respondent’s determination to proceed with the collection of
the trust fund recovery penalties.
                                         - 10 -

[*10] III.    Whether Petitioner Can Contest His Liability for the Section 6672
              Penalties

      Petitioner contends that he was entitled to contest his liability for the section

6672 trust fund recovery penalties during the section 6330 hearing because he

never received the Letter 1153 that Revenue Officer Toms sent to him by certified

mail on November 4, 2008.7

      We have held that, unless the taxpayer deliberately refuses to accept its

delivery, a Letter 1153 will be considered as having provided a prior opportunity

to dispute liability for the underlying trust fund recovery penalty only if it is

actually received. Mason v. Commissioner, 132 T.C. at 318. We must decide,

then, whether petitioner’s failure to claim delivery of the Letter 1153 was

deliberate.




      7
        The Commissioner is required to provide the taxpayer with notice of trust
fund recovery penalties before assessment. Sec. 6672(b)(1). A Letter 1153
provides a taxpayer with sec. 6672(b) notice and the means of protesting a
proposed trust fund recovery penalty assessment administratively with the
Commissioner. Mason v. Commissioner, 132 T.C. 301, 317 (2009). When a
Letter 1153 is mailed, the Commissioner must follow mailing procedures that are
similar to those provided for notices of deficiency in sec. 6212(b). Sec.
6672(b)(1). We have held that the Commissioner can establish that a Letter 1153
was sent to a taxpayer’s last known address, see sec. 6212(b), with documentary
evidence, Mason v. Commissioner, 132 T.C. at 318. Respondent has established
that a Letter 1153 was sent to petitioner’s last known address, as required by sec.
6672(b)(1).
                                        - 11 -

[*11] Paul Philips, a USPS employee, testified with respect to the procedure that

USPS employees follow when they attempt to deliver an article of certified mail

and no one is at the address to receive the article. According to Mr. Philips, the

USPS employee would (1) complete a USPS Form 3849, Delivery

Notice/Reminder/Receipt; (2) place the USPS Form 3849 in the place where the

recipient ordinarily receives his or her regular mail; and (3) bring the article back

to the delivery station where it can be claimed. If the recipient does not claim the

item within five days, a USPS employee would complete another USPS Form

3849 and deliver it with the regular mail. If the recipient fails to claim the item

after another 10 days have passed, the article would be returned to the sender. Mr.

Philips further testified that the notations on the envelope that contained the Letter

1153 indicate that one or more USPS employees (1) attempted to deliver the Letter

1153, and left a USPS Form 3849 for petitioner, on November 6, 2008; (2) left a

second USPS Form 3849 for petitioner on November 17, 2008; and (3) returned
                                       - 12 -

[*12] the article to the IRS on or around November 27, 2008.8 Petitioner testified

that he never received any of the USPS Forms 3849.

      Where the Commissioner has shown that he properly sent the appropriate

notice to a taxpayer by certified mail and that the mail carrier left USPS Forms

3849, we have sometimes found that the taxpayer’s failure to claim delivery of the

certified mail was deliberate. Compare Campbell v. Commissioner, T.C. Memo.

2013-57, at *15, Crain v. Commissioner, T.C. Memo. 2012-97, 103 T.C.M. (CCH)

1533, 1536 (2012), Rivas v. Commissioner, T.C. Memo. 2012-20, 103 T.C.M.

(CCH) 1131, 1134 (2012), and Cyman v. Commissioner, T.C. Memo. 2009-144,

97 T.C.M. (CCH) 1813, 1816-1817 (2009), with Mason v. Commissioner, 132

T.C. at 318-319, Morris v. Commissioner, T.C. Memo. 2012-217, 104 T.C.M.


      8
        It is unclear whether the USPS Forms 3849 identified the sender. Mr.
Philips testified that a USPS Form 3849 does not contain any information
identifying who sent the article of certified mail unless the individual carrier
decides to note the name of sender. Previous versions of the USPS Form 3849
supposedly did not indicate the identity of the sender. See Honts v.
Commissioner, T.C. Memo. 1995-532, 70 T.C.M. (CCH) 1256, 1258 (1995). But
see Wilson v. Commissioner, T.C. Memo. 1997-515, 74 T.C.M. (CCH) 1208,
1209 (1997) (“The [USPS] Form 3849 usually indicates the identification of the
sender.”). However, we recently observed that the current version of the USPS
Form 3849 does indicate the identity of the sender. See Campbell v.
Commissioner, T.C. Memo. 2013-57, at *3 n.2; see also United States Postal
Service, About, Forms, Revised PS Form 3849,
http://about.usps.com/postal-bulletin/2009/pb22268/html/updt1_015.htm (last
visited Mar. 22, 2013) (containing a “Sender’s Name” field).
                                         - 13 -

[*13] (CCH) 125, 126 (2012), and Swanton v. Commissioner, T.C. Memo.

2010-140, 99 T.C.M. (CCH) 1576, 1579 (2010). No single fact or circumstance is

dispositive. Rather, where we have found that the taxpayer’s failure to claim

delivery of the certified mail was deliberate, we have done so because we found

the taxpayer’s account of what happened not to be credible.

      The record shows that petitioner was fully aware that respondent was

considering whether to assert section 6672 trust fund recovery penalties against

him. See Cyman v. Commissioner, 97 T.C.M. (CCH) at 1816 (noting that the

taxpayer knew that his returns were under examination). Petitioner has offered no

plausible explanation for not responding to two USPS Forms 3849 that the mail

carrier presumably left for him with respect to the Letter 1153 that Revenue Office

Toms sent by certified mail to him on November 4, 2008. Cf. Sherer v.

Commissioner, T.C. Memo. 2006-29, 91 T.C.M. (CCH) 759, 761 (2006) (notices

of deficiency not deliberately refused where taxpayer showed that he did not

reside at that address). Petitioner also either ignored or failed to claim at least one,

and possibly two, USPS Forms 3849 that the mail carrier presumably left for him

with respect to the notices of tax due that Revenue Office Toms sent by certified

mail to him on May 26, 2009. Cf. Mason v. Commissioner, 132 T.C. at 318-319

(finding that Letter 1153 was not deliberately refused where the taxpayer, during
                                        - 14 -

[*14] the prolonged course of her dealings with the Commissioner, accepted and

responded to numerous other notices and documents). We, therefore, find that

petitioner’s account of what happened is not credible and that petitioner

deliberately failed to claim delivery of the Letter 1153.9 Accordingly, we

conclude that petitioner was precluded from contesting his liability for the section

6672 trust fund recovery penalties during the section 6330 hearing. See Mason v.

Commissioner, 132 T.C. at 317-318.

      Because we conclude that petitioner was precluded from contesting his

liability for the section 6672 penalties during the section 6330 hearing, we lack

jurisdiction to consider whether petitioner is liable for the section 6672 penalties.

See sec. 6330(c)(2)(B); Sego v. Commissioner, 114 T.C. at 609.

      Petitioner has not advanced any argument or introduced any evidence that

would allow us to conclude that the determination to sustain the levy was

arbitrary, capricious, or without sound basis in fact. Petitioner did not submit a

Form 433-A or any other financial information during the section 6330 hearing,

      9
        Petitioner contends that he had no reason to avoid or refuse any mailing
from the IRS that would have given him the opportunity to contest the sec. 6672
trust fund recovery penalties. Our cases, however, are replete with instances
where taxpayers thought that ignoring or refusing mail from the IRS would make
their tax problems disappear. See, e.g., Sego v. Commissioner, 114 T.C. 604, 609
(2000); Campbell v. Commissioner, T.C. Memo. 2013-57; Crain v. Commissioner,
T.C. Memo. 2012-97; Rivas v. Commissioner, T.C. Memo. 2012-20.
                                        - 15 -

[*15] nor did he offer a reasonable collection alternative. The Appeals Office

determined that the requirements of applicable law and administrative procedure

were met and concluded that the proposed levy appropriately balanced the need

for efficient collection of taxes with petitioner’s concerns regarding the

intrusiveness of the levy action. Accordingly, we hold that the Appeals Office did

not abuse its discretion in upholding the proposed levy action.

         We have considered the parties’ remaining arguments and, to the extent not

discussed above, conclude that those arguments are irrelevant, moot, or without

merit.

         To reflect the foregoing,


                                                       Decision will be entered

                                                 for respondent.
