T.C. Mem o. 2 01 6- 89

UNITED STAT ES TAX COURT
GINN DOOSE a.k.a. VIRGINIA DOOSE, Pet it io ne r v. COMM ISSI ONER OF INTERNAL REVENUE, Resp on de nt

Doc ke t No . 21 99 4- 14 L. Fi le d M ay 4, 2 01 6.
Virg in iaDoo se , pro se. Kim be rly L. Cla rk , for

res po nd en t.

MEMORANDUM FINDINGS OF FACT AND OPINION PUGH, Ju dg e: Thi s ca se was c omm en cedinres po ns e to a Not ic e o f Dete rm in at io n C on cern in g C ol le ct io n Act io n( s) Und er Se ct io n 6 32 0 a nd/o r 63 30 , 1

Unl es s o th erwi se in di cat ed , all sec ti on refe ren ces are t o t he Int ern al 1 Rev enue Co de of 1 98 6, as am en de d a ndineffe ctat a ll rel ev an t t im es .-2
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[* 2] su st ai ni ng res po nd en t’s No ti ce o f In te ntto Levy to c ol le ctpe ti ti on er’s unp ai d Fed eral in co m e ta x l iabi li ti es for20 07 an d 2 00 8. Th e is su es for de ci si on are: (1 ) whe th er p et it io ne r is li ab le forth e und erl y in g t ax li ab il it ie s an d a dd it io ns to tax fo r 20 07 an d 2 00 8; an d (2 ) whe th er the de te rm in at io n t o p ro ceedwith t he
co ll ect io n a ct io n was anab us e o f di sc ret io n. Re sp on de ntha s co nc ed edth at pe ti ti on er i s i n “ Cu rren tl y NotCo ll ect ib le ” st atus , bu t p et it io ne r st il l s ou gh t tria l. FINDINGS OF FACT So m e o f th e fac ts ha ve be enst ip ul at ed , andth e st ip ul at edfact s ar e in co rp or at edinou r fi nd in gs by thi s re fere nc e. Pet it io ne r li ve d i n C al ifo rn iaat t he ti m e h er p et it io n was fil ed
. Pet it io ne r de cl aredba nkrupt cy in19 90 , andhe r ba nkrupt cy was d is ch arg ed in 19 91 . Peti ti on er b el ie ve d tha t the ba nkrupt cy di sc ha rg e rel ie ve d h er o f th e dut y to pa y tax es inth e fu tu re an d h as ch al le ng edpri orco ll ect io n a ct io ns by the In te rn al Rev enue Serv ic e o n thi s b as is . W e reject edth os e arg um en ts inDoo se v. Co m m is si on er, T.C. Mem o. 2 01 0- 18 , 20 10 W L 34 27 96 (su st ai ni ng a no ti ce o f de te rm in at io n fo r co ll ect io n a ct io ns with re sp ectto pe ti ti on er’s t ax li ab il it ie s fo r 20 02 , 20 04 , and20 05 ), aff’d, 4 57 F. App ’x 63 2 (9 th Cir . 20 11 ). Pet it io ne r rem ai ns un de te rred , no w cha ll en gi ng co ll ect io n a ct io ns with re sp ectto he r ta x li ab il it ie s fo r 20 07 an d 2 00 8 o n t he same bas is
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[* 3] Pet it io ne r ti m el y

fil edhe r 20 07 Fed eral in co m e ta x re tu rnsh owi ng tax du e of $2 ,28 3. Sh e fai le d t o p ay th e ta x s ho wn as du e, an d o n J un e 2 , 20 08 , res po nd en t as se ss edin te res t o f $1 7.1 4 andanad di ti on to tax forfai lu re t o p ay ti m el y un de r se ct io n 6 65 1( a)(2 ) of $2 1.7 0, i n a dd it io n t o t he tax pe ti ti on er h ad rep orte d b utdi d n otpa y . Pet it io ne r fai le d t o fi le he r 20 08 Fed eral in co m e ta x re tu rn , andres po nd en t pr ep areda subs ti tu te forreturn u nd er s ect io n 6 02 0( b) . On Oct ob er 1 7, 2 01 1,
res po nd en t m ai le d ano ti ce o f de fic ie nc y to pe ti ti on er’s l as t kno wn ad dr es s (wh ic h is he r cu rren t m ai li ng ad dr es s o n re co rdwith t he Co urt). Pe ti ti on er d idno t fi le a pe ti ti on with thi s C ou rt, andon Feb ru ary 27 , 20 12 , res po nd en t as se ss edtax of $3 48 , in te res t o f $4 8.6 1, an d a dd it io ns to tax of $ 13 5 a nd$5 0.7 5 u nd er s ect io n 66 51 (a)( 1) an d (2 ), res pe ct iv el y . On Oct ob er 1 4, 2 01 3, re sp on de ntis su eda Not ic e o f In te ntto Levy for 2 00 7
an d 2 00 8. OnOcto be r 21 , 20 13 , pet it io ne r ti m el y fil eda Fo rm

12 15 3, Re qu es t fo r a Co ll ect io n Du e Pro ces s o r Equ iv al en t Hea rin g. Set tl em en t Offi cer Th om as Erwin(SO Erwin ) was ass ig ne d t he cas e in Ja nu ary 20 14 . In Fe bruary 20 14 SO Erwinno te d tha t “ itdo es ap pe ar * * * [p et it io ne r] is ra is in g the is su e/ ex is te nc e o f th e li ab il ity .” InApri l 2 01 4 p et it io ne r subm it te d arev is edFo rm 10 40 , U.S. Ind iv idua l In co m e Tax Return, fo r 20 07 in-4
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[* 4] whi chsh e cl ai m eda de du ct io n fr om ad jus te d g ro ss in co m e fo r th e am ou nt s res po nd en t l ev ie d t o p ay

tax es th atpe ti ti on er o wedforpri ory ears . Peti ti on er al so subm it te d aFo rm

10 40 for 20 08 , si m il ar t o the subs ti tu te forreturn t ha t
res po nd en t h adpre pa red , rep orti ng m os t, b utno t al l, o f th e in co m e sh own on th e no ti ce o f de fic ie nc y . InMay 201 4 the cas e was tra ns ferr edto Set tl em en t Offi cer C ha rle s Du ff (SO Duf f), who rev ie wedpe ti ti on er’s cl ai m s an d s etup a face -to -fac e adm in is tra ti ve he ari ng forAug us t 1 4, 2 01 4. Inth e h eari ng pe ti ti on er ag ai n a rg ue d th atas ares ul t o f th e b an krup tc y di sc ha rg e sh e wou ldne ve r owe tax es inth e fu tu re, an d S O Duff i nf

orm edhe r th athe r vi ew was in co rrec t. Durin g t he he ari ng (an d i n the no ti ce o f de te rm in at io n t ha t fo ll owe d) , SO Duff i nd ic at edto pe ti ti on er th athi s d et erm in at io n was to su st ai n the Not ic e o f In te ntto Levy, buthe wou ld pl ace t he cas e in curren tl y no t co ll ect ib le st atus be cau se he r cu rren t fi na nc ia l st at em en ts sh owe d a n i nabi li ty to m ak e p aym en ts on he r cu rren t t ax de bt s. Pet it io ne r ag reedwith thi s al te rn at iv e b utdi d n otwantto waiv e h er o pp ortu ni ty to ch al le ng e th e d et erm in at io n i n Tax Co urt. The App eal s Off

ic e is su edth e n ot ic e o f de te rm in at io n t o p et it io ne r on Sep te m be r 2, 2 01 4. Pe ti ti on er t im el y fil eda pe ti ti on forred et erm in at io n o n Sep te m be r 15 , 20 14 . At tri al pe ti ti on er t es ti fie d t ha t SO Du ff h adask edhe r ab ou t-5
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[* 5] al l the de ta il s o f th e cas e; sh e fu rth er o pi ne d t ha t h e was “ ho ne st ”. Sh e d id
no t ch al le ng e whe th er h e h adve rif ie d t ha t the pro pe r pr oc edur es were fo ll owe d (n ordi d we i de nt ify any irr eg ul ari ti es on ou r rev ie w of the adm in is tra ti ve reco rd ). Rathe r, he r on ly chal le ng e is ba se d o n t he same argu m en ts th atwe reject edin Doo se , as n ot edab ov e. OPINION Sect io n 6 33 1( a) au th or iz es th e Sec ret ary to lev y up onth e p ro pe rty and pr op erty rig ht s o f a t ax pa y er wh o fa il s t o p ay a ta x wi th in 10 da y s af

te r no ti ce an d de m an d fo r pa y

m en t. Bef

or e th e Sec ret ary m ay

lev y up on th e ta xp ay er’s p ro pe rty, th e Sec ret ary m

us t n ot ify the tax pa y er o f th e Sec ret ary’ s i nt en ti on to lev y . Sec. 63 31 (d )(1 ). The Se cret ary al so m us t n ot ify the tax pa y er o f he r ri gh t t o a n adm in is tra ti ve he ari ng . Sec. 6 33 0( a)(1 ). The tax pa y er m ay

reque stanadm in is tra ti ve he ari ng by the App eal s Off ic e. Sec. 6 33 0( b) (1 ). At th e h eari ng th e ta xp ay er m ay rai se any rel ev an t i ss ue rel at in g to th e unp ai d t ax or t he pro po se d c ol le ct io n a ct io n. Se c. 63 30 (c)( 2) (A). A ta xp ay er m ay

ch al le ng e th e ex is te nc e o r am ou ntof h er u nd erl y in g t ax li ab il ity if th e ta xp ay er d idno t re cei ve a no ti ce o f de fic ie nc y or d idno t o th erwi se ha ve an op po rtu ni ty to d is pu te th e ta x l iabi li ty. Sec. 6 33 0( c)(2 )(B) . The Ap pe al s o ffi cer
m us t co ns id er wh ethe r th e p ro po se d c ol le ct io n a ct io n b al an ces th e n eedfor-6
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[* 6] effi ci en t co ll ect io n a ga in stth e ta xp ay er’s co nc ernth atco ll ect io n b e n o m or e in tru si ve th anne ces sa ry . Sec. 6 33 0( c)(3 )(C) . The Ap pe al s o ffi cer a ls o m us t
ve rif y th atth e requi rem en ts of a ny app li cab le law an d a dm in is tra ti ve pro cedur e ha ve be enm et . Sec. 6 33 0( c)(1 ). Once th e se tt le m en t o ffi cer m ak es a de te rm in at io n, the tax pay er m ay ap pe al th e d et erm in at io n t o t hi s C ou rt. Se c. 63 30 (d )(1 ). Whe re the un de rlyin g t ax li ab il ity is pro pe rly at is su e, we rev ie w th e de te rm in at io n d e n ov o. Go za v . Comm is si on er, 1 14 T.C. 17 6, 1 81 -1 82 (20 00 ). If th e ta xp ay er’s und erl y in g t ax li ab il ity is no t p ro pe rly at is su e, we rev ie w th e App eal s o ffi cer’s d et erm in at io n fo r ab us e o f di sc ret io n. Id
. Und erl y in g Li ab il ity Pet it io ne r’s un de rlyin g t ax li ab il ity is pro pe rly at is su e fo r 20 07 . There is
no reco rdof h er h av in g re cei ve d ano ti ce o f de fic ie nc y forth aty ear, an d p et it io ne r rai se d the is su e in th e adm in is tra ti ve he ari ng , pro vi di ng a “rev is ed ” Fo rm 10 40 in whi chsh e cl ai m eda de du ct io n fo r m on ey s l ev ie d t o p ay pri ortax li ab il it ie s. The refo re, we rev ie w de n ov o the un de rlyin g t ax li ab il ity for 20 07
. Pet it io ne r m ak es two arg um en ts insupp ort o f th e d educ ti on : (1 ) he r ba nkrupt cy

di sc ha rg e in 19 91 ab so lv edhe r of futur e ta x p aym en ts ; an d (2 ) inan y ev en t, s he was a ll owe d t o d educ t the am ou ntth atha d b eenlev ie d fr om he r wag es-7
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[* 7] to pa y

he r ou ts tand in g t ax li ab il it ie s fr om pre vi ou s years b ecau se sh e h ad
ne ve r rec ei ve d the m on ey th atha d b eenlev ie d fr om he r wag es . InDoo se , pet it io ne r m ad e th es e sa m e arg um en ts on si m il ar fa ct s. We reject edth es e arg um en ts th en , andwe do so ag ai n fo r th e sa m e rea so ns . Sin ce pe ti ti on er d idno t p res en t an y ne w arg um en ts ab ou t h er 2 00 7 t ax li ab il ity , we su st ai n the 20 07 tax li ab il ity . Pet it io ne r ch al le ng es he r 20 08 tax li ab il ity on a si m il ar b as is an d a rg ue s tha t th e ref un d s he be li ev es sh e is owedfor20 07 sh ou ldbe ap pl ie d t o h er 2 00 8 t ax li ab il ity . Alth ou gh res po nd en t p erm it te d p et it io ne r to ch al le ng e th e 2 00 8 t ax li ab il ity , sh e rec ei ve d ast atut ory no ti ce o f de fic ie nc y

for20 08 , andth atwas h er op po rtu ni ty to ch al le ng e th e ta x l iabi li ty for tha t year. She th eref or e is pre cl ud ed fro m ch al le ng in g the 20 08 tax li ab il ity no w. See s ec. 6 33 0( c)(2 )(B) ; s ec. 30 1.6 33 0- 1( e)(3 ), Q&A-E1 1, Pr oc ed . & Adm in . Reg s. Ev enwere s he pe rm it te d,
we wou ldrejecthe r ch al le ng e fo r th e rea so ns st at edab ov e an d i n Do os e (n am el y , sh e is no t en ti tl edto an y

refu ndfor20 07 ). Abu se of Di sc ret io n To s ho w an abu se of d is cret io n, p et it io ne r m us t es tabl is h t ha t the act io n o f th e App eal s o ffi cer was arb itrary, capri ci ou s, o r witho utfou nd at io n i n fa ctor l aw. See, e.g ., Doo se v. Co m

mis si on er, 2 01 0 WL 34 27 96 , at * 3. Pe ti ti on er o ffer edno-8
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[* 8] ev id en ce tha t SO Du ff’s act io ns were ar bi tra ry , cap ric io us , or unl awfu l. In fact , pet it io ne r te st ifi edth atSO Duff ’s act io ns du rin g t he adm in is tra ti ve he ari ng were fa ir. SO Du ff v eri fie d tha t the requi rem en ts of a ll ap pl ic ab le law an d adm in is tra ti ve pro cedur e were m et , con si de redall is su es th atpe ti ti on er h adrai se d (n am el y , herarg um en ts reg ard in g t he effec t o f he r ba nkrupt cy ), an d c on si de red whe th er the co ll ect io n a ct io n b al an cedth e n eedforeffi ci en t t ax co ll ect io n a ga in st pe ti ti on er’s co nc ernth atth e co ll ect io n b e n o m or e in tru si ve th anne ces sary (p ut ti ng he r cas e incurren tl y no t co ll ect ib le st atus ). Ther efo re, we h ol d t ha t SO Duf f di d n otab us e h is di sc ret io n b y su st ai ni ng th e p ro po se d c ol le ct io n a ct io n. On the ba si s o f th e adm in is tra ti ve reco rdan d t he no ti ce o f de te rm in at io n, we th eref or e su st ai n the pro po se d c ol le ct io n a ct io n. To re fle ctth e fo reg oi ng , Deci si on wil l b e en te redfor
res po nd en t.