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The Honorable Peter J. Panuthos, Chief Special Trial Judge, United States Tax

Court.

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

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No. 03-3521

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Xavier J. R. Avula; Sulochana D. *

Avula, *

*

Appellants, *

* On Appeal from the United States

v. * Tax Court.

*

Commissioner of Internal Revenue, * [UNPUBLISHED]

*

Appellee. *

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Submitted: July 8, 2004

Filed: July 27, 2004 (Corrected: August 4, 2004)

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Before WOLLMAN, LAY, and MELLOY, Circuit Judges.

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PER CURIAM.

Xavier J.R. Avula and Sulochana D. Avula (“Taxpayers”) appeal the Tax

Court’s1

 order granting summary judgment in favor of the Commissioner of Internal

Revenue (“Commissioner”) and upholding the Commissioner’s determination of

collection action to be taken with respect to income tax assessments against

Taxpayers for the 1991, 1992, 1994, and 1995 tax years. After de novo review of the
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record, we affirm. See Cox v. Comm’r, 121 F.3d 390, 391 (8th Cir. 1997) (standard

of review).

On January 29, 1998, the Commissioner issued Taxpayers a notice of

deficiency for the tax years in question. Taxpayers thereafter petitioned the Tax

Court for a redetermination of the deficiencies. Following a trial on November 13,

1999, the court entered a decision holding Taxpayers liable for deficiencies in

income, additions to tax, and accuracy-related penalties. Taxpayers did not appeal

this decision. The Commissioner then issued a notice of intent to levy followed by

a determination that the proposed levy action should proceed. Taxpayers petitioned

the Tax Court for a collection due process hearing (“CDP”) on the Commissioner’s

decision to proceed with the collection of their income tax liabilities. However,

Taxpayers challenged only their underlying tax liabilities, not the collection actions.

The Tax Court granted summary judgment to the Commissioner, concluding

Taxpayers were not entitled to challenge their underlying tax liabilities in the CDP

hearing.

We find no error in the Tax Court’s decision. The Internal Revenue Code

(“Code”) grants a taxpayer the right to a hearing on a proposed levy action and allows

the taxpayer to raise any relevant issue relating to the unpaid tax or collection actions,

including spousal defenses, challenges to the appropriateness of the intended

collection activities, and possible alternative means of collection. See 26 U.S.C.

§ 6330(a)(3)(B) & (c)(2)(A). However, the Code allows a taxpayer to challenge the

existence or amount of an underlying tax liability only if the taxpayer “did not receive

any statutory notice of deficiency for such tax liability or did not otherwise have an

opportunity to dispute such tax liability.” Id. § 6330(c)(2)(B); see also Katz v.

Comm’r, 115 T.C. 329, 339 (2000). In this case, Taxpayers received a statutory

notice of deficiency for their tax liabilities in 1998 and litigated the merits of their

liabilities in the Tax Court in 1999. At the CDP hearing and on appeal, Taxpayers

challenge only their underlying tax liabilities. Because they are precluded from doing
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so, the Tax Court did not err in granting summary judgment in favor of the

Commissioner.

Accordingly, we affirm the Tax Court’s decision.

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