T.C. Summary Opinion 2004-35

UNITED STATES TAX COURT

RANDOLPH E. LUNA, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 4554-02S. Filed March 18, 2004.

Randolph E. Luna, pro se.

Lorraine Wu, for respondent.

PAJAK, Special Trial Judge: This case was heard pursuant to

the provisions of section 7463 of the Internal Revenue Code in

effect at the time the petition was filed. Unless otherwise

indicated, section references are to the Internal Revenue Code in

effect for the year in issue, and all Rule references are to the

Tax Court Rules of Practice and Procedure. The decision to be

entered is not reviewable by any other court, and this opinion

should not be cited as authority.
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Respondent issued to petitioner a Notice of Determination

Concerning Collection Action(s) Under Sections 6320 And/Or 6330

(notice of determination). This Court must decide whether

respondent abused his discretion in determining that the filing

of the Notice of Federal Tax Lien was appropriate.

Some of the facts in this case have been stipulated and are

so found. Petitioner resided in West Covina, California, at the

time he filed his petition.

On February 9, 1999, respondent issued to petitioner a

notice of deficiency for taxable year 1996. The notice of

deficiency was sent to petitioner via certified mail, but it was

returned to sender unclaimed.

On November 8, 2000, respondent sent to petitioner a Notice

of Federal Tax Lien Filing and Your Right to a Hearing Under IRC

6320 (notice of lien).

On December 12, 2000, respondent received petitioner’s

Request for a Collection Due Process Hearing (Appeals Office

hearing), in response to the notice of lien.

On July 16, 2001, petitioner met with an Appeals officer for

petitioner’s Appeals Office hearing. At the Appeals Office

hearing, petitioner claimed that he did not receive the notice of

deficiency. The Appeals officer granted petitioner an audit

reconsideration to discuss his 1996 income tax liability. 

On July 26, 2001, an examiner mailed to petitioner a letter
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stating that the Appeals Office had assigned petitioner’s 1996

tax return to the Examination Division. The letter requested

that petitioner provide certain documents and invoices to

substantiate the adjustments made to his 1996 tax return. The

letter further requested that petitioner bring the requested

items to an appointment scheduled for August 9, 2001.

On August 17, 2001, petitioner met with the examiner to

discuss his 1996 liability during the audit reconsideration. 

Petitioner failed to bring any documentation to substantiate his

entitlement to the deductions, dependency exemptions, filing

status, and child care credit disallowed in the notice of

deficiency.

On January 8, 2002, respondent mailed to petitioner the

notice of determination at issue here. Respondent determined

that all legal and administrative procedures were met, that

petitioner failed to present any collection alternatives, and

that the proposed lien was appropriate. Petitioner had an

opportunity for audit reconsideration but failed to provide any

evidence other than his own oral testimony. 

Section 7491 is not applicable in this case because

examination of petitioner’s 1996 tax return commenced prior to

July 22, 1998, the effective date of section 7491. The burden of

proof is on petitioner. Rule 142(a).

Section 6321 imposes a lien in favor of the United States on
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all property and rights to property of a person when demand for

payment of that person’s liability for taxes has been made and

the person fails to pay those taxes. The lien arises when the

assessment is made. Sec. 6322. Section 6323(a) requires the

Secretary to file notice of Federal tax lien if such lien is to

be valid against any purchaser, holder of a security interest,

mechanic’s lienor, or judgment lien creditor. Lindsay v.

Commissioner, T.C. Memo. 2001-285, affd. 56 Fed. Appx. 800 (9th

Cir. 2003).

Section 6320 provides that the Secretary shall furnish the

person described in section 6321 with written notice of the

filing of a notice of lien under section 6323. The notice

required by section 6320 must be provided not more than 5

business days after the day the notice of lien is filed. Sec.

6320(a)(2). Section 6320(a)(3) further provides that the person

may request administrative review of the matter (in the form of

an Appeals Office hearing) within the 30-day period beginning on

the day after the 5-day period described above. Section 6320(c)

provides that the Appeals Office hearing generally shall be

conducted consistent with the procedures set forth in section

6330(c), (d), and (e).

Section 6330(c) provides for review with respect to

collection issues such as spousal defenses, the appropriateness

of the Commissioner’s intended collection action, and possible
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alternative means of collection. Section 6330(c)(2)(B) provides

that the existence or amount of the underlying tax liability may

be contested at an Appeals Office hearing if the taxpayer did not

receive a notice of deficiency for the taxes in question or did

not otherwise have an earlier opportunity to dispute such tax

liability. Sego v. Commissioner, 114 T.C. 604, 609 (2000); Goza

v. Commissioner, 114 T.C. 176, 180-181 (2000). Section 6330(d)

provides for judicial review of the administrative determination

in the Tax Court or a United States District Court.

We find that petitioner did “otherwise have an opportunity

to dispute such tax liability” at his audit reconsideration. At

his audit reconsideration, petitioner failed to offer any

evidence that would substantiate the items in issue on his 1996

tax return. Petitioner has failed to raise a spousal defense,

make a valid challenge to the appropriateness of respondent’s

intended collection action, or offer alternative means of

collection. These issues are now deemed conceded. Rule

331(b)(4).

On this record, we conclude that respondent did not abuse

his discretion with respect to the notice of determination.

Reviewed and adopted as the report of the Small Tax Case

Division.

Decision will be entered

for respondent.