T.C. Memo. 2009-296

UNITED STATES TAX COURT

MABRIE L. AND MARGARET F. GILMER, Petitioners v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 19981-06L. Filed December 22, 2009.

Mabrie L. Gilmer and Margaret F. Gilmer, pro sese.

Marshall R. Jones, for respondent.

MEMORANDUM OPINION

WELLS, Judge: Respondent sent a Notice of Determination

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

(notice of determination) to petitioners with respect to a notice

of lien filed to collect petitioners’ unpaid Federal income tax

liabilities for tax years 1997 through 2003. In response,
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1Unless otherwise indicated, section references are to the

Internal Revenue Code, as amended. 

2The parties appear to agree that respondent also filed

substitute returns for petitioner Margaret F. Gilmer for those

same years, but those returns are not in the record.

petitioners timely filed a petition pursuant to section 6330(d)1

seeking review of respondent’s determination. The issues to be

decided are: (1) Whether petitioners may raise issues relating

to the underlying tax liabilities for the taxable years in issue;

(2) whether, in refusing to withdraw the notice of Federal tax

lien, respondent’s Appeals officer abused her discretion; and (3)

whether petitioners may raise arguments relating to an abatement

of interest for the taxable years in issue.

Background

Some of the facts and certain exhibits have been stipulated.

The stipulations of fact are incorporated in this opinion and are

found accordingly.

At the time they filed their petition, petitioners resided

in Mississippi.

As of August 16, 2004, petitioners had not filed Federal

income tax returns for tax years 1997 through 2003. 

On August 16, 2004, respondent filed substitute Federal

income tax returns (substitute returns), under section 6020(b),

for tax years 1997 through 2002 for petitioner Mabrie L. Gilmer

(Mr. Gilmer).2
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3It is not clear whether respondent also sent a 30-day

letter to petitioner Margaret F. Gilmer.

On August 24, 2004, respondent sent Mr. Gilmer a Letter 950

(30-day letter) for tax years 1997 through 2002.3

On September 28, 2004, petitioners timely informed

respondent that they did not agree with the adjustments proposed

in respondent’s 30-day letter. 

On January 20, 2005, petitioners filed joint Federal income

tax returns for tax years 1997 through 2002. 

On February 17, 2005, petitioners signed a Form 4549, Income

Tax Examination Changes. 

Petitioners consented to assessment of the following tax

liabilities for the 1997 through 2002 tax years: 

 Form 1040 Form 4549 Form 4549 

Year tax liability tax increase penalty Total 

1997 $17,887 $7,517 $1,879.25 $27,283.25

1998 27,233 23,736 5,933.75 56,902.75

1999 13,288 8,568 2,141.75 23,997.75

2000 9,763 20,484 4,869.50 35,116.50

2001 19,153 3,407 852.00 23,412.00

2002 15,708 (1,256) (314.00) 14,138.00

 Total 103,032 62,456 15,362.25 180,850.25

On March 28, 2005, petitioners filed a joint Federal income

tax return for tax year 2003 and reported a total tax liability

of $19,177. Petitioners’ total agreed tax liability for tax

years 1997 through 2003 (including penalties for tax years 1997

through 2002) was $200,027.25. 
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On August 25, 2005, respondent filed, in Warren County,

Mississippi, a notice of Federal tax lien (NFTL) against

petitioners for tax years 1997 through 2003. On September 1,

2005, respondent sent to petitioners a Notice of Federal Tax Lien

Filing and Your Right to a Hearing Under IRC 6320 (NFTL notice)

with respect to petitioners’ tax liabilities for tax years 1997

through 2003. The NFTL notice listed petitioners’ unpaid tax

liabilities for tax years 1997 through 2003 as $194,867.78. 

On September 30, 2005, petitioners timely submitted a Form

12153, Request for a Collection Due Process Hearing, in which

petitioners disputed the amounts of their tax liabilities for tax

years 1997 through 2003. 

On April 11, 2006, petitioners and respondent participated

in a telephone hearing. During the hearing, petitioners raised

issues concerning the proper amount of their tax liabilities for

tax years 1997 through 2002. Petitioners claimed that the

amounts stated in the NFTL notice were greater than the amounts

of unpaid liabilities set forth in the Form 4549. The settlement

officer’s notes indicate that for tax years 1997 through 2001

respondent’s records erroneously reflected the tax liability

attributed to petitioner Margaret F. Gilmer in the SFR prepared

by respondent rather than reflecting the joint return liability

shown on the Form 4549. The settlement officer subsequently
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corrected petitioners’ outstanding liabilities, including the

associated penalties and interest.

By letter dated September 1, 2006, respondent sent

petitioners a notice of determination upholding the filing of the

NFTL. 

By letter dated September 7, 2007, petitioners requested

that respondent “waive the penalties and interest charged against

us.” 

Discussion

Section 6320(a)(1) requires the Commissioner to give any

person liable to pay tax (hereinafter referred to as a taxpayer)

written notice of the filing of a tax lien upon that taxpayer’s

property. The notice must inform the taxpayer of the right to

request a hearing in the Commissioner’s Appeals Office. Sec.

6320(a)(3)(B) and (b)(1). Section 6330(c), (d), and (e)

generally governs the conduct of a hearing requested under

section 6320. Sec. 6320(c). 

At the hearing, the taxpayer may raise any relevant issues

including appropriate spousal defenses, challenges to the

appropriateness of collection actions, and collection

alternatives. Sec. 6330(c)(2)(A). However, the taxpayer may

challenge the underlying tax liability only if the taxpayer did

not receive a statutory notice of deficiency for the tax

liability and did not otherwise have an opportunity to dispute
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the tax liability. Sec. 6330(c)(2)(B). In addition to

considering issues raised by the taxpayer under section

6330(c)(2), the Appeals officer must also verify that the

requirements of any applicable law or administrative procedure

have been met. Sec. 6330(c)(1), (3).

Generally, this Court will not review issues raised under

section 6330(c)(2) if they were not raised at the Appeals

hearing. Giamelli v. Commissioner, 129 T.C. 107, 115 (2007). 

This Court may, however, consider an issue raised by a taxpayer

under section 6330(c)(1) even if the issue was not raised at the

Appeals hearing. See Hoyle v. Commissioner, 131 T.C. (2008).

Where the validity of the underlying tax liability is

properly in issue, the Court will review the matter de novo.

Where the validity of the underlying tax is not properly in

issue, however, the Court will review the Commissioner’s 

determination for abuse of discretion. Sego v. Commissioner, 114

T.C. 604, 610 (2000); Goza v. Commissioner, 114 T.C. 176, 181-182

(2000). 

Underlying Tax Liability

For purposes of section 6330(c)(2)(B), a taxpayer who has

waived his or her right to challenge the proposed assessments by

signing Form 4549 is deemed to have had the opportunity to

dispute the underlying tax liability and is precluded by such

waiver from challenging the underlying tax liability in the
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4A taxpayer could, however, challenge a liability that was

not reflected on the Form 4549. Urbano v. Commissioner, 122 T.C.

384, 391-392 (2004).

Appeals Office hearing or before this Court.4 Aguirre v.

Commissioner, 117 T.C. 324, 327 (2001). Because petitioners

signed Form 4549, they are deemed to have had the opportunity to

dispute the underlying tax liabilities reported in the Form 4549

for their tax years 1997 through 2002. Id. Accordingly,

petitioners may not dispute their underlying tax liabilities, as

stated on Form 4549, for their tax years 1997 through 2002. 

Petitioners did not raise any issues concerning their Federal

income tax liability for tax year 2003 at the Appeals hearing. 

Petitioners are thereby precluded from disputing their underlying

tax liability, as stated in their Federal income tax return, for

tax year 2003, see Giamelli v. Commissioner, supra at 115, except

insofar as the underlying liability deviates from those reflected

on the Form 4549, see Urbano v. Commissioner, 122 T.C. 384, 391-

392 (2004). 

Determination To Sustain Notice of Federal Tax Lien

Petitioners contend that the NFTL should be withdrawn

because the amount shown on the NFTL is greater than the amount

that petitioners’ owe. Petitioners agreed, by signing Forms

1040, U.S. Individual Income Tax Return, and 4549, that their
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5This includes penalties attributable to the 1997 through

2002 tax years but does not include any penalties attributable to

the 2003 tax year and does not include any accrued interest for

any of the years in issue.

6It is not clear from the record exactly what petitioners’

balance, as decreased by withholdings and other payments and

increased by accrued interest and penalties, was at the time the

NFTL was filed. 

total tax liability5 for tax years 1997 through 2003 was

$200,027.25.6 The NFTL notice indicated a lien amount of

$194,867.78. We conclude that the NFTL, at the time of filing,

was not significantly greater than petitioners’ outstanding

liability for tax years 1997 through 2003. Accordingly, we hold

that respondent’s settlement officer did not abuse her discretion

or err in determining that the NFTL was proper. 

Petitioners also argue that respondent filed two NFTLs, each

totaling $194,867.78, against petitioners for the unpaid Federal

income tax liabilities for tax years 1997 through 2003. 

Petitioners base their assertion on the fact that the lien

appears twice on their credit reports. Petitioners offer no

evidence to indicate that respondent actually filed the NFTL

twice as opposed to there being an error on their credit reports. 

Accordingly, we hold that petitioners have not shown that

respondent filed the NFTL twice for the same tax liability.

Respondent’s settlement officer reviewed computer

transcripts of each of the taxable years in issue and concluded

that all requirements of applicable law were met. Petitioners
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7Petitioners did assert in their posttrial brief that they

never received a notice of deficiency. Petitioners’ tax

liabilities were based on Federal income tax returns they filed 

and amounts shown on Form 4549, which they signed, consenting to

immediate assessment and collection of the amounts shown thereon. 

Accordingly, no notice of deficiency was required before the

assessment of the liabilities in issue, so the mailing of a

notice of deficiency was not a requirement of applicable law. 

See sec. 6201; Manko v. Commissioner, 126 T.C. 195, 200 n.2

(2006); Aguirre v. Commissioner, 117 T.C. 324 (2001).

did not challenge, in their petition to this Court or in their

posttrial brief, the settlement officer’s verification of

compliance with applicable law.7 The settlement officer did not

consider a collection alternative for petitioners because

petitioners had indicated that they planned to submit an 

offer-in-compromise in the future. The settlement officer

concluded that none of the conditions existed that would allow

withdrawal of a lien without full payment pursuant to section

6323(j). For the foregoing reasons, we hold that respondent’s

settlement officer did not abuse her discretion in determining

that respondent could proceed with collection of petitioners’

outstanding liabilities for tax years 1997 through 2003.

Abatement of Interest and Penalties

Petitioners have also requested an abatement of interest and

penalties. Section 6404(e) authorizes the Commissioner to abate

interest assessments that are attributable to errors or delays by

the Internal Revenue Service in performing ministerial or
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8The provision for Tax Court review of interest abatement

determinations was enacted as sec. 6404(g). Taxpayer Bill of

Rights 2 (TBOR 2), Pub. L. 104-168, sec. 302(a), 110 Stat. 1457

(1996). The provision was then redesignated after some of the

years in issue, first as sec. 6404(i) by the Internal Revenue

Service Restructuring and Reform Act of 1998, Pub. L. 105-206,

secs. 3305(a), 3309(a), 112 Stat. 743, 745, and then as sec.

6404(h) by the Victims of Terrorism Tax Relief Act of 2001, Pub.

L. 107-134, sec. 112(d)(1)(B), 115 Stat. 2435 (2002). The

provision as enacted and redesignated applies to requests for

abatement after July 30, 1996. TBOR 2 sec. 302(b), 110 Stat.

1458. To avoid confusion, references herein will be to the

current designation.

9Because petitioners did not raise the issue of abatement

during the Appeals hearing, the instant case is distinguishable

(continued...)

managerial acts. Pursuant to section 6404(h),8 this Court has

jurisdiction to review the Commissioner’s failure to abate

interest (but not penalties) if such an action is brought within

180 days after the mailing of the Commissioner’s final

determination not to abate such interest. The Commissioner’s

final determination “is a prerequisite to the Court’s

jurisdiction and serves as a taxpayer’s ‘ticket’ to the Tax

Court.” Bourekis v. Commissioner, 110 T.C. 20, 26 (1998). 

Petitioners’ request for abatement was sent to respondent in

September 2007, more than a year after respondent issued the

notice of determination that is in issue in the instant

proceeding. Accordingly, that notice of determination could not

possibly have been respondent’s final determination on an

abatement request that respondent had not yet received, and

therefore the abatement issue is not properly before the Court.9
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9(...continued)

from Wright v. Commissioner, 571 F.3d 215 (2d Cir. 2009), revg.

T.C. Memo. 2006-273, which held that a notice of determination

issued after a sec. 6330 hearing may serve as a final

determination for purposes of sec. 6404(h) where abatement was

raised during the hearing. See also MacDonald v. Commissioner,

T.C. Memo. 2009-240.

Giamelli v. Commissioner, 129 T.C. 107 (2007). Petitioners point

to nothing else in the record that could be construed as a final

determination by respondent on petitioners’ request for

abatement. Moreover, respondent’s failure to act on a request

for abatement within a reasonable time does not constitute a

final determination for section 6404(h) purposes. See Ward v.

Commissioner, T.C. Memo. 2007-374; Cho v. Commissioner, T.C.

Memo. 1998-363. Accordingly, we hold that this Court does not

have jurisdiction to consider petitioners’ request for abatement

of interest and penalties. See Giamelli v. Commissioner, supra. 

To reflect the foregoing,

Decision will be entered

for respondent.