1 Unless otherwise indicated, section references are to the

Internal Revenue Code, as amended. Rule references are to the

Tax Court Rules of Practice and Procedure.

T.C. Memo. 2004-38

UNITED STATES TAX COURT

LESLIE M. HILTZ, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 14804-02L. Filed February 17, 2004.

Leslie M. Hiltz, pro se.

Jennifer S. McGinty, for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

THORNTON, Judge: Pursuant to sections 6320(c) and 6330(d),

petitioner seeks review of respondent’s determination sustaining

the filing of a Federal tax lien with respect to petitioner’s

1987 income tax.1 
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2 The deficiency resulted from the disallowance of a claimed

loss that petitioner and Carole attempted to carry back from 1990

to 1987. 

FINDINGS OF FACT

The parties have stipulated most of the facts, which we

incorporate herein by this reference. When petitioner filed his

petition, he resided in Bergen, New York. 

A. 1987 Notice of Deficiency

Petitioner and his wife, Carole E. Hiltz (Carole), timely

filed a joint 1987 Federal income tax return. By notice of

deficiency dated December 6, 1993, respondent determined a $5,358

deficiency and a $1,340 section 6661 addition to tax with respect

to petitioner and Carole’s 1987 joint tax.2 Petitioner received

the notice of deficiency but did not petition the Tax Court. 

B. Bankruptcy Proceedings

On August 12, 1992, petitioner and Carole filed a petition

for chapter 11 bankruptcy in the U.S. Bankruptcy Court in the

Western District of New York. On January 11, 1994, the

bankruptcy court entered a final decree dismissing the chapter 11

bankruptcy case. Petitioner and Carole’s 1987 tax liability was

not discharged in the chapter 11 bankruptcy case. 

On March 21, 1995, Carole (alone) filed a petition for

chapter 7 bankruptcy. On July 7, 1995, in the chapter 7 
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proceeding, the bankruptcy court discharged Carole’s 1987 tax

liability. 

C. Notice of Federal Tax Lien

On September 8, 2000, respondent mailed to petitioner and

Carole a Notice of Federal Tax Lien Filing and Your Right to a

Hearing Under I.R.C. § 6320 regarding the 1987 tax liability. 

D. Appeals Office Hearings

On September 25, 2000, petitioner and Carole timely filed a

Form 12153, Request for a Collection Due Process Hearing. On

January 25 and March 19, 2002, petitioner met with Appeals

Officer Ronald Szalkowski (AO Szalkowski) and discussed the 1987 

tax liability and the possibility of entering into an installment

agreement. AO Szalkowski subsequently prepared an installment

agreement and forwarded it to petitioner, who rejected it because

it reflected a greater balance due than he had anticipated. 

E. Notice of Determination

In a Notice of Determination Concerning Collection Action(s)

Under Section 6320 and/or 6330, dated August 16, 2002, respondent

determined that the legal, administrative, and procedural

requirements for proceeding with collection by lien of

petitioner’s and Carole’s 1987 income tax had been met. 

On September 17, 2002, petitioner and Carole timely filed a

petition in this Court. Respondent moved to dismiss this case as 

to Carole because her underlying tax liability had been 
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3 Respondent has released the Federal tax lien as to Carole.

discharged in her chapter 7 bankruptcy proceeding. After a

hearing, this Court granted respondent’s motion.3

OPINION

A. Statutory Framework

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

all property and property rights of a person who is liable for

and fails to pay taxes after demand for payment has been made. 

The lien arises when assessment is made and continues until the

assessed liability is paid. Sec. 6322. For the lien to be valid

against certain third parties, the Secretary must file a notice

of Federal tax lien and, within 5 business days thereafter,

provide written notice to the taxpayer. Secs. 6320(a), 6323(a). 

The taxpayer may then request an administrative hearing before an

Appeals officer. Sec. 6320(b)(1). Once the Appeals officer

issues a determination, the taxpayer may seek judicial review in

the Tax Court or a district court, as appropriate. Secs.

6320(c), 6330(d)(1). 

Section 6330(c)(2) prescribes the matters that a person may

raise at an Appeals Office hearing, including spousal defenses,

challenges to the appropriateness of the Commissioner’s intended

collection action, and possible alternative means of collection. 

The existence or amount of the underlying tax liability may be

contested at an Appeals Office hearing only if the taxpayer did
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4 AO Szalkowski reviewed the underlying 1987 tax liability

despite petitioner’s receipt of the 1987 notice of deficiency. 

This action does not constitute a waiver of the statutory bar and

does not empower this Court to review petitioner’s challenge to

his underlying tax liability. See Behling v. Commissioner, 118

T.C. 572, 577-579 (2002); sec. 301.6320-1(e)(3), Q&A-E11, Proced.

& Admin. Regs.

not receive a notice of deficiency or did not otherwise have an

opportunity to dispute that tax liability. Sec. 6330(c)(2)(B);

see Sego v. Commissioner, 114 T.C. 604, 609 (2000); Goza v.

Commissioner, 114 T.C. 176, 180-181 (2000).

If the validity of the underlying tax liability is properly

at issue, we review that issue de novo. See Sego v.

Commissioner, supra at 609-610. Other issues we review for abuse

of discretion. Id. 

B. Petitioner’s Contentions

1. Underlying Tax Liability

In his petition, petitioner challenges his underlying 1987

tax liability. Because petitioner received a notice of

deficiency for the 1987 tax year, he is not entitled to challenge

the existence or amount of his 1987 tax liability in this

collection proceeding. See secs. 6320(c), 6330(c)(2)(B); Sego v.

Commissioner, supra at 609; Goza v. Commissioner, supra at

180-181.4

2. Installment Agreement

AO Szalkowski considered alternative means of collection and

prepared an installment agreement, which petitioner ultimately
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rejected on the ground that he thought the total installment

payments required were excessive. The record provides no basis

for concluding that the balance due, as reflected in the

installment agreement, exceeded petitioner’s then-current balance

for the 1987 tax, penalties, and interest. To the contrary, the

limited evidence in the record suggests that the difference

between what petitioner believed his 1987 tax liability to be and

the amount shown on the proposed installment agreement was

attributable to the running of interest (which is running yet,

see section 6601(a)). On this record, we conclude that AO

Szalkowski did not abuse his discretion in determining that

collection action may proceed against petitioner. 

C. Conclusion

Petitioner has raised no spousal defense and made no valid 

challenge to the appropriateness of respondent’s intended

collection action. These issues are now deemed conceded. See

Rule 331(b)(4). We hold that respondent did not abuse his

discretion in sustaining the filing of a Federal tax lien with

respect to petitioner’s 1987 income tax. 

To reflect the foregoing, 

Decision will be

entered for respondent.