may please the court my name is frank i guess they know mrs rouche appeals from an order of the united states tax court dismissing her action her collection to process action on the grounds of  attached to that tax return and you have an audit of that tax return would you want to have a procedure where you can be audited for schedule a and then we're going to resolve that schedule and then we're going to go to and initial matter but it was always the subject of the audit i mean you may remember we were here before on the husband's case on this saying this case called mellon was the husband based on the in force myth of the information and document requests during the exam the exam has always been about the income tax return that was filed by mrs roo states i mean commissioner vs soon in each year is the origin of a new liability and a separate cause of action rest judicata is about bringing in one five code in the regulations not essentially put the burden on the taxpayer to raise the relevant issues that are being challenged in the due process hearing and if that's the case i mean you're suggesting a rule in essence that notwithstanding whatever claims the taxpayer has put at issue in the process hearing of the commissioner is obliged to basically review the entirety of the tax year no matter how complicated that may be no matter how many potential issues that may be and if they don't the  commissioner had that one shot and that's it that's the system the congress created we have collection due process passed nine hundred and ninety eight dollars created a very comprehensive measure twice  system for both the tax payers and the internal revenue service a section six thousand three hundred and thirty dollars hearing starts with the verification claim that imposes upon the appeals office the know lateral obligation to review the entire file for the year and determine whether or not the i r s has complied with all of the substantive and procedural due process rights of the taxpayer including the taxpayer bill of rights the policy of one stop shopping seventy six dollars o five as we've said in a brief one and that includes penalty and interest as this court said in white there was in right was a pro se taxpayer i mean the court said hey let he asked for dunno review that includes a review of the interest all right so and why is that important to the scheme that congress created because the next part is the collection alternative unless you know what you owe how can you propose how you're going to pay it off and the collection alternative is the key to understanding this because if you incur another liability after either the appeals office of the tax court has approved your collection alternative you're in default so between the part that says verification the part that asks for didn't know review of the liability but the collection alternative and then the right to appeal to the tax court collection due process is to create a comprehensive one stop shopping measure twice once a procedure that applies to tax controversies they even define in terms of hardship incurring additional legal fees so we believe as we've said in our briefs that the iris can not buy for kate these procedures if one tax return one audit one collection return rest or to colorado under soon in applies to those included on the tax return it affects the statue of limitations for the turn it affects the liability that sort of return it affects the penalties that are on the return the government's theory that it's assessed separately is a red herring we're talking about tax liability for a year that each year was before the appeals office that year was before the tax court and the supreme court is recognized we all file our tax returns court marion erickson for the commissioner of internal revenue john sullivan i think that you are on the right track once in a while when you're asking opposing counsel about this how this arose and i just want to know i'm sure you're all familiar with the facts i just want to emphasize that this is a very narrow proceeding a collection due process hearing is held in response to collection action by the i r s in this case the i r s had sent the taxpayer a notice of intent to levy to collect the remaining three hundred and twenty six dollars sixty six cents of her income tax liability for tw timely filed a request for a collection due process or an to review whether or not this levy was an appropriate way of collecting three hundred and twenty six dollars sixty six cents and income tax liability by the time the appeals officer looked at the file and held the hearing that liability had been satisfied she no longer owed any income tax for two thousand and ten therefore the appeals officer determined there would be no levy therefore she won nonetheless she filed a notice of appeal to the tax court in that knows of appeal proceeded to raise a host of other issues that had not been raised in the c d p hearing that had not been considered by the appeals officer and that were not addressed in the notice of determination the tax court correctly held that the case was moot and it had no jurisdiction to consider these other issues and as you pointed out the notice that this penalty had been assessed was not even sent to the taxpayer until several weeks after she filed her tax and i believe you mentioned the judge foreman and in fact that that tax that penalty was assessed in her petition in january and the notice of intent to levy to collect that penalty was not sent to her until april of that year at that point she had the right and she in fact exercised the right to request  separate collection due process hearing to contest the validity of this proposed collection action and in fact that collection due process hearing is ongoing has not been finished  well heering is a term of art in the sense or honor sometimes closely due process hearings are held simply by correspondence or by telephone sometimes they're held her face to face is my understanding this is not on the record but i i did check on this last week it's my understanding that mr august you know has requested a face to face hearing and that the matter has been assigned to an appeals officer here in new york and the that the process is ongoing that's all i can tell you and she not raise the r raise that she could i mean i don't think it's a very strong argument because i think that despite opposing counsel's characterization of the c d p hearing as a one stop shopping comprehensive sort of you know let's look at everything in the universe that has to do with this one tax year that's not actually how it operates it's very specific to the proposed collection action and in fact under the statute in the regs the way this penalty operates under six thousand and thirty eight b yes he's correct that you're supposed to file this form three thousand four hundred and seventy one with your income tax return in this penalty is not a tax it's a penalty for failure to file the form and in fact under the regulations once a taxpayer file tax return the iris looks at it and says hey we think you were supposed to file this form with your tax return but you didn't the service is required to give them ninety days notice to file the form before they even assess the penalty so it's not only in practical it's virtually impossible for these things to be on the same track in terms of consideration assessment and a determination of what her total liability is what is an income tax liability that was the honor our reading of that and the regulation that is underneath that that statute makes it clear is that you get one c p here in this respect to each liability for that period doesn't say you can only have one for one tax section with respect to the unpaid tax specified well that's the way we read the statute it says in the regulation which is page twenty two dollars of our brief says the taxpayer may receive more than one c d p hearing with respect to tax period where the tax involved is a different type of tax for example an employment tax liability where the original hearing was involving income tax liability where the same tax for the same tax payers involved but the amount the unpaid taxes changed as a result of additional  schedule in connection with income tax your honor it relates to an individual's interest in certain foreign corporation that can affect the government interest in that you're correct it can affect their as well i'm saying that can be separate you can get more than one c p hearing if there are separate assessments of separate types of tax as it says in the regs you know a liability for income tax as opposed to some kind of excise tax or something but also if it's a unless the i r s had advised us of it the tax core petition asking for the review of the zero liability was clear that we were asserting the penalty even before the i officially recorded the assessment on its books and records because they advised us that they were going to be asserting the penalty so now it comes down to the statutory construction what do we mean is it the narrow hearing that the government purports or the broader hearing that i'm saying the rules of statutory construction suggest should be there so the irises position suggests that pay perhaps there's ambiguity here so let's go to the rules of statutory construction rule one right plain language the plain language rule is one hearing propitiated what would you infer from the one hearing for period administrative arrest to the cottage but i mean company keeps your client is the one who gets to demand the hearing right and so yes yes is she gets to pick the subject and then you turn around the city i r s is precluded from assessing additional penalties or cla because she didn't raise them as an issue now we don't get a hearing until the i r s decides to send the notice of the the a penalty of the notice of the tax with a form that says number one i don't think you make that argument in your opening brief so why should we consider number two what evidence is there in the record that there was intentional or tactical conduct on the part number three have that matter with respect t think i think it shows the potential abuse if we don't stick with the one hearing per period rule and it ministry of rest to the kata and the commissioner versus soon in version of rest judicata the commissioner decided when to start collecting the tax write usually that decision has moment it gives the taxpayer the right to say hey what's the full bill right we start with verification i rest did you follow all of your procedures or we've done the procedures are one hearing prepare it the procedures are  right to finality in seven thousand eight hundred and three that you can rely on the fact that when the commissioner sends these notices we're done we're only proposing how to pay now the one stop shopping those are all verified it's the entire liability have said when you talk about tax you took about payment of everything the tax the penalty the interest and the plain language is that uses the challenges to the existence of the amount of the liability for the period not that it was left in the notice because collection to process would make no sense because if you didn't know what the entire liability was then you were set yourself up for an immediate default of the collection alternative whether the collection alternative under the statute is the installment agreement or the offer in compromise which is what happened here right we have an agreement that there is no liability then after the hearing that there's no liability they assessed this penalty and we're back in tax court again because based on the collection liability they certified her liability to the state department to try to take away the passport now there's been a voluntary says sation of hostilities in that case right we're we're on pause because you know we've got to know what happened this year but they continued to collect which stop is contrary to the whole purpose of putting the money and putting the money into requesting the hearing going to peel's writing your briefs preparing for the is in the benefit of both taxpayers the government and the courts let's look at every matter once let's define the dispute and let's get one a liability i believe my briefs show you why that that is the right answer for these tax payers and the system as a whole thank you very much reserve