T.C. Memo. 2008-229

UNITED STATES TAX COURT

MAXINE SMITH, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 20578-03L. Filed October 8, 2008.

Maxine Smith, pro se.

Linda J. Wise, for respondent.

MEMORANDUM OPINION

WELLS, Judge: Respondent issued petitioner a Notice of

Determination Concerning Collection Action(s) Under Section 6320

and/or 6330 (notice of determination). In response to the notice

of determination, petitioner timely filed a petition pursuant to
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1Unless otherwise indicated, all Rule references are to the

Tax Court Rules of Practice and Procedure, and all section

references are to the Internal Revenue Code, as amended.

section 6330(d).1 The issues to be decided are: (1) Whether

petitioner is precluded from contesting her underlying tax

liabilities for 1996 and 1997; (2) and, if petitioner is not

precluded from contesting the underlying liabilities for 1996 and

1997, whether she is entitled to dependency exemption deductions

for two children for taxable years 1996 and 1997, whether

petitioner qualifies for head of household filing status for 1996

and 1997, and whether petitioner is entitled to earned income tax

credits for 1996 and 1997; and (3) whether respondent may proceed

with collection for the 1996 and 1997 taxable years.

Background

Some of the facts and certain exhibits have been stipulated.

The parties’ stipulations of fact are incorporated in this

opinion by reference and are found as facts in the instant case.

At the time of filing the petition petitioner resided in

Mississippi.

Petitioner filed Forms 1040, U.S. Individual Income Tax

Return, for 1996 and 1997. Petitioner timely filed a return for

1998. A different address is listed on each of the 1996, 1997,

and 1998 returns. 
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On her 1996 return, petitioner claimed head of household

filing status, dependency exemption deductions for two children,

and an earned income tax credit.

On her 1997 return, petitioner claimed head of household

filing status, dependency exemption deductions for two children,

and an earned income tax credit.

On July 23, 1998, respondent mailed petitioner a letter

dated July 22, 1998, proposing adjustments to her 1996 and 1997

returns. The letter, which was sent to the address listed on her

1997 return, was returned to respondent as “Attempted-Not Known.”

Respondent mailed a letter, dated August 7, 1998, to the

address listed on petitioner’s 1997 return informing petitioner

that no response was received regarding the July 22, 1998,

letter. This letter was also returned to respondent as

“Attempted-Not Known.” 

On August 17, 1998, respondent mailed a copy of the July 22

letter to petitioner at the address listed on her 1996 return. 

This letter was also returned to respondent as “Undeliverable as

Addressed-No Forwarding Order on File.” 

On September 1, 1998, respondent mailed to the address

listed on petitioner's 1996 return a letter indicating that

respondent did not receive a response to the communications 

he sent petitioner regarding the proposed adjustments made to

petitioner’s 1996 and 1997 tax years. Respondent submitted to
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the Postmaster in Jackson, Mississippi, a Form 4759, Address

Information Request, to trace petitioner from her last known

address, the address listed on her 1997 return. In response, the

form was returned to respondent stating that petitioner had

“Moved, Left No Forwarding Address.” 

On January 8, 1999, respondent sent by certified mail, to

the address listed on petitioner’s 1997 return, a notice of

deficiency for the 1996 and 1997 tax years. This was returned to

respondent unclaimed. 

Included in the administrative file created by respondent’s

Appeals Office regarding petitioner’s request for a section 6330

hearing (hearing) is an IMFOLT transcript that shows a history of

petitioner’s address changes. The IMFOLT transcript shows that

petitioner’s address was changed during February 1999 to the

address listed on petitioner’s 1998 return. The IMFOLT

transcript shows that petitioner’s address was changed during the

week of December 19, 1999 to an address based on correspondence

with petitioner. 

On May 19, 1999, respondent mailed petitioner a notice of

deficiency for the 1996 and 1997 tax years. The notice, which

was sent to the address listed on petitioner’s 1998 return, was

returned to respondent by the post office on June 4, 1999. The

post office indicated on the envelope that it attempted delivery

on May 24 and May 28, 1999.
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The timeframe during which petitioner resided at the address

listed on her 1998 return is unclear. Nevertheless, even after

she moved from the address listed on her 1998 return,

petitioner’s mail continued to be delivered to that address, and

petitioner’s brother continued to tend to the house and collect

petitioner’s mail. 

On March 22, 2003, respondent issued to petitioner Letter

1058, Final Notice-Notice of Intent to Levy and Your Notice of a

Right to a Hearing, for petitioner’s unpaid tax liabilities for

1996 and 1997. 

On April 18, 2003, petitioner mailed to respondent a Form

12153, Request for a Collection Due Process Hearing. On April

20, 2003, respondent received this form. On Form 12153,

petitioner indicated that she is unmarried, she is the sole

provider for her four children, and that she does not feel that

she owes tax liabilities since she claims not to have received

anything to sign for the 1996 and 1997 audit. 

The hearing was assigned to Settlement Officer Suzanne Magee

(Settlement Officer Magee). Settlement Officer Magee, by letter

dated August 19, 2003, advised petitioner to provide certain

information prior to the scheduled hearing time and advised

petitioner of the date and time of the scheduled hearing. On

September 2, 2003, petitioner telephoned Settlement Officer Magee 
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and informed her that she first learned of the hearing on August

29, 2003, when she checked her post office box. Petitioner

agreed to mail information to Settlement Officer Magee and also

indicated that she wanted to discuss the case by telephone. The

telephone conference was rescheduled for September 9, 2003. 

On September 9, 2003, petitioner faxed information to

Settlement Officer Magee. On September 10, 2003, Settlement

Officer Magee sent a letter to petitioner informing her that

petitioner did not call as arranged and that the faxed

information had been received. In addition, Settlement Officer

Magee advised petitioner that if she did not hear from petitioner

within 10 days she would assume that petitioner did not want a

hearing. The letter also stated that the information petitioner

provided Settlement Officer Magee so far was insufficient to

constitute a reasonable alternative to the proposed levy. 

On October 30, 2003, respondent sent petitioner a notice of

determination. On December 1, 2003, petitioner timely petitioned

this Court.

Discussion

Where the validity of the underlying tax liability is

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

Sego v. Commissioner, 114 T.C. 604, 610 (2000); Goza v.

Commissioner, 114 T.C. 176, 181-182 (2000). Where the validity

of the underlying tax is not properly in issue, however, the
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Court will review the Commissioner's administrative determination

for abuse of discretion. Sego v. Commissioner, supra at 610;

Goza v. Commissioner, supra at 181-182. 

A taxpayer may challenge the existence or amount of the

underlying tax liability if they did not receive a notice of

deficiency for the tax liability or did not otherwise have an

opportunity to dispute the tax liability. Sec. 6330(c)(2)(B);

see also sec. 301.6330-1(e)(3), Q&A-E2, Proced. & Admin. Regs. 

Under section 6330(c)(2)(B), the receipt of a notice of

deficiency is a relevant event. 

If the taxpayer denies receipt of the notice of deficiency,

for purposes of section 6330(c)(2)(B), the Commissioner must

offer evidence of its actual mailing in order for the presumption

of delivery to arise. Sapp v. Commissioner, T.C. Memo. 2006-104. 

Petitioner asserts that she did not timely petition this Court

pursuant to the notice of deficiency for 1996 and 1997 because

she did not receive that notice until 2003. Respondent

introduced evidence of multiple attempts to send the notice of

deficiency for 1996 and 1997 to the addresses listed on

petitioner’s most recent tax returns. Additionally, the record

shows that petitioner failed to notify respondent or the U.S.

Postal Service of her changes in address. 

Nonetheless, we find credible petitioner’s testimony at

trial that she did not actually receive the notice of deficiency. 
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See Tatum v. Commissioner, T.C. Memo. 2003-115. Petitioner

testified that she moved frequently during the time the notice

was sent. Although petitioner was unable to testify about the

exact dates of residence at individual addresses, it seems likely

that neither letter was sent to an address at which she was then

residing. 

Furthermore, we conclude that petitioner’s nonreceipt of the

notice of deficiency is not due to petitioner’s deliberate

refusal of delivery or similar misconduct. Cf. Sego v.

Commissioner, 114 T.C. 604 (2000) (taxpayers refused delivery of

the notice of deficiency); Lehmann v. Commissioner, T.C. Memo.

2005-90 (taxpayer intentionally provided an incorrect address to

respondent’s examining agent). Accordingly, we hold that

petitioner may raise the underlying liabilities. 

Generally, the Commissioner’s determinations are presumed

correct, and the taxpayer bears the burden of proving otherwise. 

Rule 142(a)(1); Welch v. Helvering, 290 U.S. 111, 115 (1933). 

To be entitled to head of household filing status, a

taxpayer must be unmarried and not a surviving spouse at the

close of the tax year and must maintain as their home a household

which constitutes for more than one-half of the year the

principal place of abode, as a member of their household, of a

person for whom the taxpayer is entitled to a deduction for a 
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dependency exemption pursuant to section 151. Sec.

2(b)(1)(A)(ii). A taxpayer is considered as maintaining a

household only if more than half of the cost of maintaining the

household during the taxable year is furnished by the taxpayer. 

Sec. 2(b)(1); Blanco v. Commissioner, 56 T.C. 512, 514-515

(1971). 

As to dependency exemptions, section 151(c)(1) provides that

an exemption is allowed for each person who is a dependent of a

taxpayer if the following requirements are met: (a) The

individual for whom an exemption is claimed is a U.S. citizen or

resident who is a dependent (as defined in section 152), which

includes a son, daughter, stepson, stepdaughter, sibling, parent

or other ancestor, stepparent, niece, nephew, aunt, uncle,

certain relatives-in-law, or an individual other than the

taxpayer’s spouse, who, for the taxable year of the taxpayer, has

as their principal place of abode the home of the taxpayer and is

a member of the taxpayer’s household; (b) over one-half of the

individual’s support for the taxable year is received from the

taxpayer; and (c) the individual’s gross income is less than the

exemption amount or the individual is the taxpayer’s child who is

younger than age 19 or is a student younger than age 24. Secs.

151(c), 152(a) and (b).

Section 152(a)(9) requires that, to be entitled to a

dependency exemption deduction for a person not related to the
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taxpayer, the taxpayer must show that the individual for whom the

dependency exemption deduction is sought has as their principal

place of abode the home of the taxpayer and is a member of the

taxpayer’s household.

For purposes of qualifying for the earned income credit,

section 32(c)(1)(A) provides in part that an “eligible

individual” is an individual who has a qualifying child for the

taxable year. A “qualifying child” is defined as an individual’s

child, stepchild, sibling, step-sibling, a descendant of any of

these, or an eligible foster child (placed with the individual by

an authorized agency) whom the individual cares for as the

individual’s own child; who is under the age of 19; and who has

the same principal place of abode as the individual for more than

one-half of the taxable year. Sec. 32(c)(3).

Petitioner offered some documents to Settlement Officer

Magee, but failed to participate in the telephone hearing. Those

documents are part of the record; however, the documents do not

establish petitioner’s entitlement to head of household status,

or the dependency exemption deductions and earned income tax

credits she claimed on her returns for 1996 and 1997. Petitioner

also testified at trial. However, her unsubstantiated and selfserving testimony lacked sufficient specificity to carry her

burden of proof that she is entitled to head of household status

or the dependency exemption deductions or earned income tax
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credits she claimed on her returns for 1996 and 1997. Fleischer

v. Commissioner, 403 F.2d 403, 406 (2d Cir. 1968), affg. T.C.

Memo. 1967-85; see also Tokarski v. Commissioner, 87 T.C. 74, 77

(1986).

Indeed, in her testimony at trial petitioner admitted that

she received support from the father of the children she claimed

on her returns whenever it was needed. Furthermore, petitioner

failed to establish by the introduction of credible evidence that

any of the children she claimed on her returns with respect to

the dependency exemption deductions and earned income credits

were her children and that the children she claimed resided with

her during the years in issue. She failed to establish the

amount of support she contributed for such children, the total

costs of maintaining the household, and the part of such costs

contributed by her for the years in issue.

Petitioner did not raise any issues relating to appropriate

spousal defenses, challenges to the appropriateness of collection

actions, or collection alternatives. Accordingly, we do not

address those issues. On the basis of the record before us in

the instant case, we hold that respondent’s determination set

forth in the notice of deficiency is correct and respondent may

proceed with collection of the underlying tax.
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We have considered all of the contentions and arguments of

the parties that are not discussed herein, and we find them to be

without merit, irrelevant, or moot. 

To reflect the foregoing,

Decision will be entered

 for respondent.