Greg A. Bell v. Commissioner ( 2006 )

126 T.C. No. 18UNITED STATES TAX COURT
GREG A. BELL, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 10388-05L. Filed May 22, 2006.
R issued P a notice of intent to levy relating to
P’s 1997 tax liability. P timely requested a hearing
to dispute the underlying tax liability but R informed
P that P’s liability could not be contested. Because P
did not receive a notice of deficiency, however, he was
entitled, pursuant to sec. 6330(c)(2)(B), I.R.C., to
challenge the liability. R mailed P a notice of
determination, but P did not file a petition with the
Court or otherwise challenge the notice of
determination. R mailed P a notice of Federal tax lien
relating to the 1997 liability. P requested another
hearing, and R informed P that the liability could not
be challenged because P had a prior opportunity to
dispute the liability. R then mailed P a second notice
of determination relating to the 1997 liability.
Held: P, after the first notice of determination
was issued, had the opportunity to file a petition with
this Court and dispute the 1997 liability. Thus, R did
not abuse his discretion, and P was precluded from
subsequently challenging the underlying liability.
Sec. 6330(c)(2)(B), I.R.C.
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Greg A. Bell, pro se.
Stephen J. Neubeck, for respondent.
OPINION
FOLEY, Judge: The issue for decision is whether respondent
abused his discretion when he precluded petitioner, at the 2005
hearing, from challenging petitioner’s underlying tax liability
and sustained the Notice of Federal Tax Lien relating to
petitioner’s 1997 liability.
Background
Petitioner failed to file his 1997 Federal income tax
return. By notice dated September 15, 2000, respondent
determined a deficiency in, and additions to, petitioner’s 1997
Federal income tax. Respondent mailed such notice to petitioner,
but petitioner did not receive it.
On April 27, 2002, a Notice of Intent to Levy and Notice of
Your Right to a Hearing relating to 1997 was mailed to
petitioner. On May 22, 2002, petitioner timely filed a Form
12153, Request for a Collection Due Process Hearing (2002
request). In the 2002 request, petitioner contended that he “was
never provided proof of the amount allegedly owed, neither in
direct documentation, nor statements of how rules/laws and
calculations were applied.” The Appeals officer scheduled a
hearing for October 5, 2002 (2002 hearing). In a letter dated
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August 30, 2002, the Appeals officer informed petitioner that the
underlying tax liability could not be challenged at the 2002
hearing because petitioner had a prior opportunity to dispute the
liability. In a letter dated September 5, 2002, the Appeals
officer enclosed a copy of the notice of deficiency and
reiterated that petitioner could not, at the 2002 hearing,
challenge the underlying liability. Petitioner failed to appear
at the hearing and did not attempt to schedule another hearing.
As a result, on June 9, 2003, respondent issued petitioner a
Notice of Determination Concerning Collection Action(s) Under
Section 6320 and/or 6330 (2003 notice of determination).
The 2003 notice of determination stated that the underlying
liability “cannot be considered under this process” and “if you
want to dispute this determination in court, you must file a
petition with the United States Tax Court for a redetermination
within 30 days from the date of this letter.” Petitioner did not
file a petition with the Court or otherwise dispute respondent’s
2003 notice of determination. Respondent, however, did not
proceed with the proposed collection action.
On September 8, 2004, respondent mailed petitioner a Notice
of Federal Tax Lien Filing and Your Right to a Hearing Under IRC
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6320 (2004 NFTL) relating to 1997.1 On October 13, 2004,
petitioner timely filed a Form 12153, Request for a Collection
Due Process Hearing (2004 request), but he did not set forth any
issues relating to his 1997 liability. The settlement officer
scheduled a hearing for February 2, 2005 (2005 hearing), but
petitioner failed to appear. The 2005 hearing was rescheduled
for February 14, 2005. On February 13, 2005, the settlement
officer received a letter in which petitioner stated he was
withdrawing “[his] collection due process appeal”. On February
14, 2005, the settlement officer sent petitioner a Form 12256,
Withdrawal of Request for Collection Due Process Hearing, but
petitioner refused to sign the form. The settlement officer then
rescheduled the 2005 hearing for March 25, 2005, and, in a letter
dated March 18, 2005, informed petitioner that he was “previously
provided with an opportunity to challenge this liability * * * in
2002 [and] the issue of liability cannot be considered”. The
2005 hearing was held via telephone on March 25, 2005, and
petitioner was precluded from challenging the underlying
liability. On May 3, 2005, respondent issued petitioner a Notice
of Determination Concerning Collection Action(s) Under Section
6320 and/or 6330 (2005 notice of determination).
1
The record does not indicate why respondent failed to
proceed with the proposed collection action after issuing the
2003 notice of determination or why the 2004 NFTL was necessary.
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On June 7, 2005, petitioner, while residing in London, Ohio,
filed his petition with the Court seeking a review of the 2005
notice of determination. On January 4, 2006, the Court filed
respondent’s motion for summary judgment and on February 27,
2006, denied the motion.
Discussion
Petitioner contends that he should have been allowed to
challenge the underlying tax liability at the 2005 hearing and
that respondent abused his discretion. Conversely, respondent
contends that he did not abuse his discretion because petitioner
had a prior opportunity to challenge the underlying liability
and, thus, was precluded from subsequently raising the matter.
We agree with respondent.
Section 6330(c)(2)(B)2 allows challenges to the existence or
amount of the underlying liability if petitioner did not receive
a notice of deficiency or otherwise have an opportunity to
dispute the liability. This statutory preclusion is triggered by
the opportunity to contest the underlying liability, even if the
opportunity is not pursued. Goza v. Commissioner, 114 T.C. 176,
182-183 (2000). The 2003 notice of determination provided
petitioner with an opportunity to contest the determination by
filing a petition with the Court. Petitioner, had he filed a
2
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year in issue.
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petition, could have contested the underlying liability.
Petitioner, however, did not petition the Court after the 2003
notice of determination was issued.
Petitioner also contends that he should have been allowed,
at the 2005 hearing, to contest the underlying liability because
respondent erroneously precluded him, at the 2002 hearing, from
doing so. In Heckler v. Cmty. Health Servs., 467 U.S. 51, 63
(1984), the Supreme Court stated that “those who deal with the
Government are expected to know the law and may not rely on the
conduct of Government agents contrary to law.” See Estate of
Emerson v. Commissioner, 67 T.C. 612, 617 (1977) (holding that
this Court will apply the doctrine of estoppel against the
Government with the “utmost caution and restraint”). Despite
respondent’s error, petitioner was entitled to petition this
Court, dispute the determination, and challenge the underlying
liability. Petitioner failed to do so and, thus, was precluded
from subsequently challenging the underlying liability.
Accordingly, respondent did not abuse his discretion and is not
estopped from proceeding with the proposed collection action.
Contentions we have not addressed are irrelevant, moot, or
meritless.
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To reflect the foregoing,
Decision will be entered
for respondent.