T.C. Memo. 2012-271 

UNITED STATES TAX COURT

CARL E. HOLT, SR., DECEASED,1 Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 5516-11L. Filed September 24, 2012.

Carl E. Holt, Sr., pro se.

Amber B. Martin, for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

RUWE, Judge: This proceeding was commenced in response to a Notice of

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

The issues for decision are: (1) whether petitioner was entitled to raise the validity

1On August 30, 2012, counsel for respondent filed a status report informing

the Court that petitioner died on August 21, 2012, which was after the trial. By

order dated August 31, 2012, the caption was amended. 
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[*2] of the underlying tax liabilities in the collection due process (CDP) hearing; and

(2) whether the settlement officer abused his discretion in sustaining respondent’s

filing of the tax lien and respondent’s intent to levy.

All section references are to the Internal Revenue Code, and all Rule

references are to the Tax Court Rules of Practice and Procedure, unless otherwise

indicated.

FINDINGS OF FACT

At the time the petition was filed, petitioner resided in Tennessee. 

Petitioner did not timely file Federal income tax returns for the taxable years

1997, 1998, 1999, and 2000 (years at issue). Respondent issued to petitioner a

statutory notice of deficiency for each of the years at issue. Petitioner did not file

petitions to contest the deficiency determinations.

Respondent sent petitioner a Letter 1058, Final Notice of Intent to Levy and

Notice of Your Right to a Hearing, dated September 9, 2009, advising petitioner

that respondent intended to levy to collect his unpaid income tax liabilities for the

years at issue. Petitioner timely submitted a request for a CDP hearing. 

Respondent sent petitioner a Notice of Federal Tax Lien Filing and Your

Right to a Hearing Under IRC 6320, dated October 13, 2009, advising petitioner

that a notice of Federal tax lien (NFTL) had been filed with respect to his unpaid
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[*3] income tax liabilities for the years at issue. Petitioner timely submitted a

request for a CDP hearing. 

A telephonic CDP hearing was held on August 26, 2010. At the time of the

CDP hearing petitioner had not filed his income tax returns for the years at issue and

also had not filed returns for other years. At the CDP hearing petitioner disputed

the underlying liabilities for the years at issue. Petitioner had previously received a

notice of deficiency for each tax year but had not filed timely petitions to contest the

deficiency determinations. Petitioner requested an installment agreement or an

offer-in-compromise. However, petitioner did not provide the settlement officer

with necessary financial information. 

Respondent issued petitioner a Notice of Determination Concerning

Collection Action(s) Under Section 6320 and/or 6330, dated February 9, 2011,

sustaining the NFTL and the proposed levy action. Petitioner timely filed a petition

with this Court. 

OPINION

Section 6331(a) provides that if any person liable to pay any tax neglects or

refuses to pay such tax within 10 days after notice and demand for payment, then

the Secretary is authorized to collect such tax by levy upon the person’s property. 

Section 6331(d) provides that, at least 30 days before enforcing collection by way
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[*4] of a levy on the person’s property, the Secretary is obliged to provide the

person with a final notice of intent to levy, including notice of the administrative

appeals available to the person. 

Section 6321 provides that if any person liable to pay any tax neglects or

refuses to do so after demand, the amount shall be a lien in favor of the United

States upon all property and rights to property, whether real or personal, belonging

to such person. Section 6323 authorizes the Commissioner to file an NFTL. 

Pursuant to section 6320(a) the Commissioner must provide the taxpayer with notice

of and an opportunity for an administrative review of the propriety of the NFTL

filing. See Katz v. Commissioner, 115 T.C. 329, 333 (2000). 

If a taxpayer requests a CDP hearing in response to an NFTL or a notice of

intent to levy, he may raise at that hearing any relevant issue relating to the unpaid

tax, the proposed levy, or the lien. Secs. 6330(c)(2), 6320(c). However, section

6330(c)(2)(B) limits the taxpayer’s ability to challenge the existence or amount of

the underlying tax liability during the hearing. Specifically, the taxpayer may 

“raise at the hearing challenges to the existence or amount of the underlying tax

liability for any tax period if the person 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). This Court has held that taxpayers have
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[*5] had an opportunity to dispute the underlying tax liability when they have

received a notice of deficiency. See Sego v. Commissioner, 114 T.C. 604, 610

(2000); Goza v. Commissioner, 114 T.C. 176, 182-183 (2000). When the taxpayer

declines an opportunity to challenge the underlying liability, section 6330(c)(2)(B)

precludes the taxpayer from subsequently contesting the underlying tax liability

before the Appeals officer. See Sego v. Commissioner, 114 T.C. at 610-611; Goza

v. Commissioner, 114 T.C. at 182-183. 

Petitioner received a statutory notice of deficiency for each year at issue. The

notices of deficiency provided petitioner with an opportunity to challenge his

income tax liabilities. Petitioner failed to petition this Court within the 90-day

period prescribed by section 6213(a). As the validity of petitioner’s underlying tax

liabilities was not properly at issue in the section 6330 hearing, we hold that the

validity of the underlying tax liabilities is not properly before this Court. See Goza

v. Commissioner, 114 T.C. at 182-183. 

The Court reviews administrative determinations by the Commissioner’s

Office of Appeals regarding nonliability issues for abuse of discretion. Hoyle v.

Commissioner, 131 T.C. 197, 200 (2008); Goza v. Commissioner, 114 T.C. at 182. 

The determination of the Office of Appeals must take into consideration: (1) the

verification that the requirements of applicable law and administrative procedure
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[*6] have been met; (2) issues raised by the taxpayer; and (3) whether any proposed

collection action balances the need for the efficient collection of taxes with the

legitimate concern of the person that any collection be no more intrusive than

necessary. Secs. 6330(c)(3), 6320(c); see Lunsford v. Commissioner, 117 T.C.

183, 184 (2001). The settlement officer properly based his determination on the

factors required by section 6330(c)(3). 

Petitioner did not raise in his petition the issue of respondent’s denial of his

requests for collection alternatives as an abuse of discretion. Therefore, the issue is

deemed conceded under Rule 34(b)(4). However, even if petitioner had raised the

issue, the settlement officer’s rejection of petitioner’s request for an installment

agreement or an offer-in-compromise was not an abuse of discretion because

petitioner was not ‘“compliant with his current tax obligations as of the date of the 

* * * [CDP] hearing”’. See Starkman v. Commissioner, T.C. Memo. 2012-236, at

*8-*9 (quoting Pavlica v. Commissioner, T.C. Memo. 2007-163, 2007 Tax Ct.

Memo LEXIS 163, at *4). At the time of trial petitioner did not claim, or produce

any evidence, that the settlement officer had abused his discretion. Accordingly, we

sustain respondent’s filing of the tax lien and respondent’s intent to levy on

petitioner’s property. 
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[*7] In reaching our decision, we have considered all arguments made by the

parties, and to the extent not mentioned or addressed, they are irrelevant or without

merit.

To reflect the foregoing,

Decision will be entered for

respondent.