T.C. Memo. 2010-227

UNITED STATES TAX COURT

JOSEPH TOTH, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 6274-09L. Filed October 20, 2010.

Joseph Toth, pro se.

Timothy S. Murphy, for respondent.

MEMORANDUM OPINION

PARIS, Judge: On February 20, 2009, respondent mailed to

petitioner a Notice of Determination Concerning Collection

Action(s) Under Section 6320 and/or 6330 which sustained a

proposed levy to collect an assessment of petitioner’s income tax

liability for tax year 2003. Petitioner timely filed a petition

with this Court and argued that respondent abused his discretion
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by denying him a face-to-face hearing where he could challenge

the underlying tax liability for tax year 2003 and by sustaining

a levy on his assets to collect his 2003 tax liability. 

The issues for decision are: (1) Whether petitioner was

entitled to a face-to-face hearing and (2) whether respondent’s

determination to sustain the levy was an abuse of discretion. 

Background

Some of the facts and exhibits have been stipulated and are

incorporated herein by reference. At the time the petition was

filed, petitioner resided and received his mail in Detroit,

Michigan.

Petitioner failed to file income tax returns for tax years

1999 and 2001 through the present.1 Consequently, respondent

filed a substitute for return for petitioner pursuant to section

6020(b)2 for tax year 2003. On May 24, 2005, respondent sent to

petitioner at his last known address a notice of deficiency for

tax year 2003. Petitioner did not respond to the notice, the tax

was assessed, and, pursuant to section 6330, respondent sent

petitioner a notice of intent to levy for that tax year. 

1Petitioner testified at trial that he was unsure of the

last year for which he filed a tax return but he thought it was

either tax year 1999 or 2001. 

2Unless otherwise indicated, all section references are to

the Internal Revenue Code as amended.
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Petitioner timely requested and was granted a collection due

process (CDP) levy hearing for tax year 2003. 

 As part of the CDP hearing, petitioner was assigned a

settlement officer (SO) who corresponded with petitioner

regarding potential collection alternatives. On December 31,

2008, the SO informed petitioner that to qualify for collection

alternatives he would need to file his income tax returns for tax

years 2004, 2005, 2006, and 2007 and submit a Form 433-A,

Collection Information Statement for Wage Earners and SelfEmployed Individuals, to assist the SO in determining feasible

collection alternatives. Petitioner neither filed any of the

income tax returns requested nor provided the SO with the

collection information statement. Instead, on January 6, 2009,

petitioner demanded a face-to-face hearing and requested that an

Appeals officer, not a SO, be assigned to him. Petitioner’s

request for a face-to-face hearing was denied on January 15,

2009. 

During a telephone CDP hearing on February 12, 2009,

petitioner again demanded a face-to-face hearing and explained to

the SO that he would submit the information and arguments

concerning his underlying tax liabilities only at a face-to-face

hearing. Realizing that the parties were at a stalemate, the SO

concluded the hearing and ultimately issued a notice of

determination sustaining the levy on February 20, 2009. 
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Petitioner then filed a timely petition with this Court on March

13, 2009.

Discussion

 Petitioner argues that respondent abused his discretion by

denying petitioner a face-to-face hearing and by sustaining the

levy for tax year 2003.

A. Standard of Review

Under section 6331, if a person liable to pay any tax

neglects or refuses to pay the same within 10 days after notice

and demand, the Internal Revenue Service (IRS), before it may

collect that liability by a levy upon property or rights to

property of that taxpayer, must notify the taxpayer in writing of

its intention to make the levy. The taxpayer may appeal the

notice of intent to levy to the IRS under section 6330 by

requesting an administrative hearing. After the IRS issues its

notice of determination, the taxpayer is afforded the opportunity

for judicial review of that determination in the Tax Court

pursuant to section 6330(d). Petitioner seeks review of

respondent’s determination. Where the validity of the underlying

tax liability is properly at issue, the Court will review the

matter de novo. Davis v. Commissioner, 115 T.C. 35, 39 (2000). 

Where the underlying tax liability is not properly at issue, the

Court will review the Commissioner’s administrative determination
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for abuse of discretion. Sego v. Commissioner, 114 T.C. 604, 610

(2000); Goza v. Commissioner, 114 T.C. 176, 181-182 (2000). 

The Court reviews respondent’s determination for abuse of

discretion. The Court has defined “abuse of discretion”, as

meaning arbitrary, capricious, or without sound basis in fact or

law. Woodral v. Commissioner, 112 T.C. 19, 23 (1999). 

B. Challenging the Underlying Liability

Section 6330(c)(2)(B) provides that at a CDP hearing, a

person may challenge the existence and amount of the underlying

tax liability “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.” Petitioner does not

argue that he never received the notice of deficiency or that he

has not had an opportunity to dispute his tax liability. Rather,

petitioner argues that he has not had an opportunity to dispute

his tax liability in a face-to-face hearing. Therefore, the

Court finds that petitioner may not challenge the underlying

liability.

C. Face-to-Face Hearings

Petitioner contends that he is entitled to a face-to-face

hearing with the appeals office regarding the proposed levy to

collect his tax liability for tax year 2003. The Court

disagrees. Because petitioner failed to take steps necessary to

qualify for collection alternatives, he is not entitled to a
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face-to-face hearing. See Lindberg v. Commissioner, T.C. Memo.

2010-67. There is no abuse of discretion in the IRS’ refusal of

a face-to-face hearing when a taxpayer refuses to present

nonfrivolous arguments, file past-due returns, and submit

financial statements. See Rice v. Commissioner, T.C. Memo. 2009-

169; Moline v. Commissioner, T.C. Memo. 2009-110, affd. 363 Fed.

Appx. 675 (10th Cir. 2010); Summers v. Commissioner, T.C. Memo.

2006-219. Petitioner neither filed an income tax return for 2003

or for any subsequent year nor submitted a Form 433-A; he was

ineligible for collection alternatives. The SO gave petitioner

the opportunity to provide the appropriate information in order

to qualify for a face-to-face hearing; however, petitioner did

not provide the requested information. Consequently, respondent

did not abuse his discretion when he denied petitioner a face-toface hearing.

D. Levy Action

It is not an abuse of discretion for Appeals to reject

collection alternatives where a taxpayer has not complied with

his current tax obligations. Giamelli v. Commissioner, 129 T.C.

107, 111-112 (2007). Respondent based his review on the case

file, including transcripts of petitioner’s account and prior

correspondence with petitioner. Respondent determined that

petitioner failed to file delinquent tax returns, failed to

provide a requested collection information statement, and did not
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qualify for any collection alternatives. Therefore, the Court

finds that respondent did not abuse his discretion when he

sustained the levy. 

We have considered the remaining arguments of both parties,

and to the extent not discussed above, conclude those arguments

are irrelevant, moot, or without merit. 

To reflect the foregoing,

Decision will be entered

for respondent.