T.C. Mem o. 2 01 5- 14 8

UNITED STAT ES TAX COURT

NATHANIELHAW THORNE, Peti ti on er v . COMM ISSI ONER OF INTERNAL REVENUE, Resp on de nt

Doc ke t No . 12 62 -1 4L. Fi le d Au gu st10 , 20 15 . Nath an ie l Hawtho rn e, pr o s e. Em ly B. Bernd t, fo r res po nd en t.

MEMORANDUM OPINION GUY, Spec ia l Tri al Ju dg e: The In te rn al Rev enue Serv ic e Offi ce o f App eal s (Ap pe al s Off

ic e) i ss ue d t o p et it io ne r a n ot ic e o f de te rm in at io n d at edDecem be r 19 , 20 13 , up ho ld in g t he fil in g o f a n ot ic e o f a Fed eral tax li eninres pe ctof h is unpa id Fed eral in co m e ta x fo r 20 11 . Peti ti on er i nv ok edth e Co urt’s jur is di ct io n b y fil in g-2 -

[* 2] a ti m el y

pe ti ti on forrev ie w of the li enact io n p ur su an t t o s ect io ns 63 20 an d 63 30 . The s ol e is su e fo r de ci si on is whet he r th e App eal s Off ic e ab us edit s 1 di sc ret io n i n uph ol di ng th e li enact io n. Bac kg ro un d Thi s ca se was s ub m it te d fu ll y st ip ul at edun de r Ru le 12 2. Th e st ip ul at io n o f fact s an d t he acco m

pa nyin g e xh ib it s ar e in co rp or at edhe rei n b y th is refe ren ce. Pet it io ne r res id edinOhi o a t the ti m e th e p et it io n was fil ed . On Oct ob er 1 9, 2 01 2, p et it io ne r fi le d aFed eral in co m e ta x re tu rnfor20 11 rep orti ng tax ab le in co m e o f $1 00 ,50 0 a ndtax du e o f $2 2,1 75 . Peti ti on er d idno t rem itpa ym en t o f th e ta x due with t he return. Re sp on de ntpro m pt ly ass es se d t he ta x t ha t p et it io ne r rep orte d o n t he return a ndsen t t o p et it io ne r a n ot ic e o f th e ta x du e an d d em an d fo r pa ym en t. See sec s. 6 20 1, 6 30 3. On J un e 1 3, 2 01 3, re sp on de ntis su eda Lett er 3 17 2, No ti ce o f Fed eral Tax Lien Fil in g a ndYou r Ri gh t t o aHeari ng . Peti ti on er the n t im el y subm it te d t o res po nd en t a F orm

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 Heari ng . He di d n otdi sp ut e th e am ou ntof h is un de rlyin g t ax li ab il it y for20 11 or 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 (Co de ), ineffe ctat a ll rel ev an t t im es , andall Ru le refe ren ces are t o th e Tax Co urt Ru le s o f Prac ti ce an d P ro cedur e. Mo ne ta ry am ou nt s ar e ro un de d t o th e n eare stdo ll ar.-3 -

[* 3] pr op os e analt ern at iv e to th e li en . Peti ti on er i ns te adass ert edth atres po nd en t ha d i m pr op erl y lev ie d upo n h is So ci al Secu rit y pa ym en ts inth e co ur se of co ll ect in g t ax th athe owedforth e ta xabl e y ear 2 00 2. Pe ti ti on er s ub m it te d aFo rm 43 3- A, Col le ct io n In fo rm at io n S ta te m en ts forW ag e Earn ers an d S el f-Em pl oyed In di vi du al s, re po rti ng th athe own edass et s i n e xc es s o f $2 m il li on . The set tl em en t o ffi cer a ss ig ne d t o p et it io ne r’s cas e subs eque nt ly info rm ed hi m th atth e App eal s Off

ic e adm in is tra ti ve he ari ng wou ldbe li m it edto a di sc us si on of h is unpa idtax for20 11 an d tha t the lev y act io n re la ti ng to hi s 2 00 2 ta x l iabi li ty w ou ldno t b e co ns id ered . Peti ti on er p art ic ip at edinanadm in is tra ti ve he ari ng by tele ph on e o n Dec em be r 12 , 20 13 . Duri ng th e h eari ng he di d n ot di sp ut e h is un de rlyin g t ax li ab il it y or o ffer a co ll ect io n a lt ern at iv e fo r 20 11 . The App eal s Off

ic e is su edto pe ti ti on er a n ot ic e o f de te rm in at io n wh ic h st at edinrel ev an t p artth atall leg al an d p ro cedur al requi rem en ts were m etin res pe ctof t he li enact io n a ndno in fo rm at io n was off eredth atwou ldjus ti fy withd rawal of t he li en . The o nl y is su e th atpe ti ti on er ra is edinhi s p et it io n fo r rev ie w con cern s the pro pr ie ty of th e le vy acti on for20 02 . 2 The Co urt’s jur is di ct io n i n t hi s ca se is li m it edto a rev ie w of the 20 11 li en 2 act io n. Se e se c. 63 31 (d )(1 ). To the ex te ntth atpe ti ti on er s eek s t o c ha ll en ge th e 20 02 lev y act io n, h e m

us t p ur su e th atm at te r in a se pa rat e p et it io n fo r rev ie w un de r se c. 63 30 or p os si bl y ina su itfora refu nd .-4 -

[* 4] D is cu ss io n Sect io n 6 20 1( a)(1 ) pr ov id es inrel ev an t p artth atth e Sec ret ary is au th or iz ed an d re qu ire d t o a ss es s al l t ax es de te rm in edby a taxpay er o r th e Sec ret ary on tax returns m ad e in acco rd an ce wi th th e Co de . The Se cret ary no rm al ly has 10 y ears fro m th e d at e o f as se ss m en t t o c ol le cttax th atis du e. Sec. 6 50 2( a)(1 ). If a p ers on li ab le fora ta x fa il s t o p ay itaft er a d em an d fo r pa ym en t i s m ad e, se e se c. 63 03 , a li enari se s i n fa vo r of th e Uni te d S ta te s upo n a ll pro pe rty and rig ht s t o p ro pe rty bel on gi ng to th atpe rs on forth e unp ai d am ou nt , in cl ud in g in te res t, s ee s ec. 6 32 1. Th e li enim po se d b y sec ti on 63 21 ari se s wh enth e ta x i s as se ss edpu rs ua ntto sec ti on 62 01 an d c on ti nu es un ti l the un de rlyin g l iabi li ty is sa ti sf ie d o r be co m es un en fo rceabl e b y reas on of l ap se of t im e. Sec. 6 32 2. Th e li enim po se d b y sec ti on 63 21 is no t v al idag ai ns t an y pu rch as er, h ol de r of

a se cu rit y in te res t, m ech an ic ’s li en or , or ju dg m en t l ie n c red it or , ho wev er, u nt il th e Secr et ary fil es a no ti ce o f th e li enwhi chm eet s the requi rem en ts of s ect io n 63 23 (f). See sec . 63 23 (a). Sec ti on 63 20 (a) p ro vi de s tha t the Secr et ary sh al l n ot ify th e p ers on de sc rib edinsec ti on 63 21 of t he fil in g o f a n ot ic e o f li enun de r se ct io n 63 23 an d i nf

orm th e p ers on of h is or h er ri gh t t o re qu es t an adm in is tra ti ve he ari ng with t he App eal s Off

ic e.-5 -

[* 5] If the tax pa y er re qu es ts anadm in is tra ti ve he ari ng inres pe ctof ali enact io n, th e h eari ng is to be co nduc te d b y th e App eal s Off

ic e inacco rd an ce wi thth e pr ov is io ns of s ect io n 6 33 0. Se c. 63 20 (b )(1 ), (c). Inren de rin g a n a dm in is tra ti ve de te rm in at io n i n aco ll ect io n re vi ew pr oc eed in g u nd er s ect io n 6 33 0, the App eal s Offi ce m us t v eri fy th atth e requi rem en ts of a ny app li cab le law an d a dm in is tra ti ve pr oc edur e h av e b eenm etinpro ces si ng th e ta xp ay er’s cas e. Sec. 6 33 0( c)(1 ), (3 )(A). The App eal s Off ic e al so m

us t co ns id er an y

is su es rai se d b y

th e ta xp ay er rel at in g t o t he co ll ect io n a ct io n, i nc lu di ng off ers of c ol le ct io n a lt ern at iv es , ap pr op ria te sp ou sa l d efen se s, an d c ha ll en ge s t o t he ap pr op ria te ne ss of t he co ll ect io n a ct io n. Se c. 63 30 (c)( 2) (A), (3 )(B) . A tax pa y er m ay ch al le ng e th e ex is te nc e o r am ou ntof h is or h er u nd erl y in g t ax li ab il ity if the tax pa y er d idno t rece iv e a n ot ic e o f de fic ie nc y or d idno t o th erwi se have anearl ie r op po rtu ni ty to di sp ut e th e ta x l iabi li ty. Sec. 6 33 0( c)(2 )(B) . Fin al ly, th e App eal s Off ic e m us t co ns id er wh ethe r th e co ll ect io n a ct io n b al an ces th e n eedforeffi ci en t co ll ect io n ag ai ns t the tax pa y 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) . Sect io n 6 33 0( d) (1 ) gr an ts th is Co urt juris di ct io n t o re vi ew th e App eal s Offi ce’s adm in is tra ti ve de te rm in at io n. If t he tax pa y er’s u nd erl y in g t ax li ab il it y is pr op erl y indi sp ut e, th e Co urt wi ll rev ie w th e d et erm in at io n d e n ov o. Go za v .-6 -

[* 6] Co m m is si on er, 1 14 T.C. 17 6, 1 81 -1 82 (20 00 ). Whe re the un de rlyin g t ax li ab il it y is no t atis su e, as is th e cas e h ere, we re vi ew th e d et erm in at io n fo r ab us e of di sc ret io n. Id . at 1 82 ; s ee al so Seg o v . Comm is si on er, 1 14 T.C. 60 4, 6 10 (2 00 0) . An ab us e o f di sc ret io n o ccu rs if the App eal s Off ic e ex erci se s i ts di sc ret io n “ arb it rari ly, cap ric io us ly or witho utso un d b as is infactor l aw.” W oo dr al v. Co m

m is si on er, 1 12 T.C. 19 , 23 (19 99 ). The reco rdsh ows th atth e App eal s Off ic e v eri fie d t ha t the requi rem en ts of al l ap pl ic ab le laws an d a dm in is tra ti ve pro cedur es were fo ll owe d i n p ro ces si ng th e li eninth is cas e. The i ss ue s tha t p et it io ne r rai se d i n h is reque stforan adm in is tra ti ve he ari ng an d i n h is pe ti ti on forrev ie w of the no ti ce o f de te rm in at io n are n otrel ev an t t o arev ie w of the li enact io n fo r 20 11 . Peti ti on er p ro po se d n o co ll ect io n a lt ern at iv e, no r di d h e ch al le ng e th e ex is te nc e o r am ou ntof h is un de rlyin g l iabi li ty for 2 01 1. Inth e li gh t o f th e fi na nc ia l i nf orm at io n t ha t pe ti ti on er p ro vi de d, the App eal s Off ic e p ro pe rly bal an cedth e n eedforeffi ci en t co ll ect io n o f ta xe s wi th th e le gi ti m at e co nc ernth atco ll ect io n b e n o m or e in tru si ve th anne ces sa ry . Co ns is te ntwith t he pre ced in g d is cu ss io n, we h ol d t ha t the App eal s Off ic e’s de te rm in at io n uph ol di ng th e li enact io n was no t anab us e o f di sc ret io n.-7 -

[* 7] To re fle ctth e fo reg oi ng , Deci si on wil l b e en te red fo r res po nd en t.