T.C. Mem o. 2 01 6- 38

UNITED STAT ES TAX COURT

HAMPTON SOFTWARE DEVEL OPMENT, LLC, Peti ti on er v . COMM ISSI ONER OF INTERNAL REVENUE, Resp on de nt

Doc ke t No . 30 23 1- 13 L. Fi le d M arch 3, 2 01 6.

Zach ary K. Grego ry , forpe ti ti on er. G. Cha d B art on , for

res po nd en t.

MEMORANDUM OPINION
PARIS , Ju dg e: Thi s ca se is be fo re the Co urt o n re sp on de nt ’s m ot io n fo r
su m m ary jud gm en t fi le d u nd er Ru le 12 1. In aNot ic e o f Det erm in at io n 1

Unl es s o th erwi se in di cat ed , all sec ti on refe ren ces are t o the 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.- 2 -

[* 2] Co nc ern in g C ol le ct io n Act io n( s) Und er Se ct io n 6 32 0 and/o r 63 30 , dat ed Nov em be r 26 , 20 13 , res po nd en t d et erm in edto pro ceedwith apro po se d l ev y to
co ll ectpe ti ti on er’s o ut st an di ng em pl oym en t t ax li ab il it ie s fr om Fo rm 94 0, Em pl oyer’s Annua l Fe de ral Unem pl oym en t Tax (FUTA) Return, fo r 20 10 an d Fo rm s 9 41 , Em

pl oyer’s Quarte rly Fede ral Tax R eturn, fo r th e qua rte rly peri od s
en di ng Ju ne 30 , Sep te m

be r 30 , andDecem

be r 31 , 20 09 ; an d M arch 31 , Ju ne 30 , Sep te m be r 30 , andDecem

be r 31 , 20 10 (no ti ce o f de te rm in at io n c on cern in g
co ll ect io n a ct io n)
. The is su e is whet he r se ct io n 6 33 0( c)(2 )(B) pre cl ud es pe ti ti on er fro m ch al le ng in g the un de rlyin g t ax li ab il it ie s atit s co ll ect io n due pro ces s (C DP) he ari ng . The Co urt h ol ds th atitdo es no t. Acco rd in gl y , th e Co urt wi ll de ny
res po nd en t’s m ot io n fo r su m m ary jud gm en t. Bac kg ro un d So m e o f th e fac ts ha ve be enst ip ul at edan d are s o fo un d. Th e st ip ul at io n o f fact s an d the ex hi bi ts att ach edth eret o are i nc or po rat edhe rei n b y

th is refe ren ce.- 3 -

[* 3] Pet it io ne r is anOkl ah om a li m it edli ab il ity co m pa ny whos e m em

be rs in cl ud e Bi ll Ham pt on an d B ren t Ham

pt on . Pet it io ne r’s pr in ci pa l o ffi ce was inOkl ah om a 2 atth e ti m e th e p et it io n was fil ed
. I. Pet it io ne r’s Cl as si fic at io n o f Mai nt en an ce Work er as anInd ep en de nt Co ntract or In20 09 an d 2 01 0 p et it io ne r own edan d o pe rat edanap artm en t co m pl ex in Tul sa , Okl ah om a. Mr. Hern do n, d .b.a. Hernd on Man ag em en t, p erfo rm edge ne ral
m ai nt en an ce wo rkonth e ap artm en t co m pl ex in20 09 an d 2 01 0. Pet it io ne r 3 cl as si fie d M r. Hern do n a s an in de pe nd en t co ntract orforFed eral tax pu rp os es for 20 09 an d 2 01 0. Co ns eque nt ly, pe ti ti on er fi le d aFo rm 10 99 -MI SC, Mi sc el lane ou s In co m e, onMr. Hern do n’s b eh al f fo r 20 10 to rep ort p aym en ts itm ad e to hi m as
no ne m pl oyee co m

pe ns at io n. Al th ou gh th ere i s n othi ng inth e rec or d t o i nd ic at e th atpe ti ti on er fi le d aFo rm 10 99 -MI SC o n M r. Hern do n’s b eh al f fo r 20 09 , pe ti ti on er h as co nt inuo us ly m ai nt ai ne d i ts po si ti on th atitpro pe rly clas si fie d M r. Hern do n a s an in de pe nd en t co ntract orfor20 09 an d thu s h adno ob li ga ti onto pay
em pl oym en t t ax es .
It i s u nc le ar fro m

th e rec or d wh ethe r Bi ll Ham pt on an d B ren t Ham

pt on are 2 pe ti ti on er’s o nl y

m em be rs . Exh ib it s at ta ch edto th e st ip ul at io n o f fac ts in di cat e th atpe ti ti on er 3 co ntract edwith M r. Hern do n, b utth e rec or d d oe s n otin cl ud e th e co ntractit se lf.- 4 -

[* 4] II. Res po nd en t’s Au di t Res po nd en t au di te d p et it io ne r’s returns for 20 09 an d 2 01 0 andon Nov em be r 29 , 20 11 , is su eda Lett er 9 50 -D (3 0- da y let te r) t o p et it io ne r de te rm in in g tha t M r. Hern do n s ho ul d h av e b eencla ss ifi edas an e m pl oyee of pe ti ti on er an d tha t p aym en ts m ad e to Mr. Hern do n dur in g 2 00 9 and20 10 were ta xabl e wag es . Con se qu en tl y , res po nd en t d et erm in edth atpe ti ti on er was li ab le for
em pl oym en t t ax es . The 3 0- da y let te r furth er ex pl ai ne d tha t i f pe ti ti on er d is ag reed with re sp on de nt ’s det erm in at io n, i t co ul d re qu es t a c on fere nc e with the Int ern al Rev enue Serv ic e (IR S) Offi ce o f App eal s (I RS Ap pe al s)
. III. Sep te m

be r 13 , 20 12 , Preas se ss m en t Co nf eren ce With IRS Ap pe al s By let te r da te d Dec em

be r 28 , 20 11 , pet it io ne r pr ot es te d the ex am in at io n fin di ng s i n the 30 -d ay

let te r an d re qu es te d aco nf eren ce wi th IRS Ap pe al s. Inth e pr ot es t l ette r pe ti ti on er ar gu edth atMr. Hern do n was anin de pe nd en t co ntract or , no t i ts em pl oyee. Alte rn at iv el y , pet it io ne r arg ue d tha t i t was en ti tl edto rel ie f
un de r th e Rev enue Act o f 19 78 , Pub . L. No. 95 -6 00 , sec . 53 0( a), 9 2 S ta t. at28 85 , as am en de d (RA ’ 78 sec . 53 0 re li ef). App eal s Off

ic er St ewart(AO Ste wart ) is su edto pe ti ti on er a l ette r da te d Feb ru ary 28 , 20 12 , in fo rm in g i t tha t the ap pe al of the pro po se d e m pl oym en t t ax li ab il it ie s h adbe enass ig ne d t o h im . Mem be r Bre ntHam

pt on , act in g o n b eh al f of- 5 -

[* 5] pe ti ti on er, s ch edul eda co nf eren ce fo r Sep te m

be r 13 , 20 12 , to di sc us s pe ti ti on er’s p ro te stwith AO St ewart . On Se pt em

be r 13 , 20 12 , AO Stewart h el d atel ep ho ne co nf eren ce wi th Bil l Ham pt on an d B ren t Ham

pt on to di sc us s the ex am in at io n fi nd in gs . Duri ng th e
co nf eren ce an d o ve r th e co ur se of the ne xtfew week s the Ham pt on s an d AO St ewarten ga ge d i n s ettl em en t d is cu ss io ns bu t u lt im at el y di d n otreac h an ag reem en t. IV. Not ic e o f Det erm in at io n o f W orke r Cl as si fic at io n On Oct ob er 2 3, 2 01 2, re sp on de ntis su edto pe ti ti on er v iacert ifi edm ai l a Lett er 3 52 3, No ti ce o f Det erm in at io n o f W orke r Cl as si fic at io n (NDWC), wher ei n
res po nd en t d et erm in edth atun de r se ct io n 7 43 6: (1) Mr. Hern do n was an
em pl oyee of pe ti ti on er, n otanin de pe nd en t co ntract or ; (2 ) pe ti ti on er was no t
en ti tl edto RA ’ 78 sec . 53 0 re li ef; an d (3 ) pe ti ti on er o wedad di ti on al em pl oym en t ta xe s an d a dd it io ns to tax for20 09 an d 2 01 0. Am on g the att ach m en ts to res po nd en t’s m ot io n fo r su m m ary jud gm en t i s th e en ve lo pe th atres po nd en t al le ge s co nt ai ne d the NDW C th atwas m ai le d t o pe ti ti on er. The face of the en ve lo pe sh ows a U.S. Pos ta l Se rv ic e labe l s ta m pe d

“ RETURNED TO SENDER” with the “ UNCLAIMED” ch eckbo x b la ck en edin
.- 6 -

[* 6] Pet it io ne r di d n otpe ti ti onth e Co urt fo r red et erm in at io n o f Mr. Hernd on ’s
worke r cl as si fic at io n s tatu s. Pet it io ne r al le ge s tha t i t d idno t p et it io n the Co urt be cau se itdi d n otrece iv e th e NDW C. V. Ass es sm en t On Ap ril 8, 2 01 3, re sp on de ntass es se d p et it io ne r’s Fo rm 94 0 l iabi li ty fo r 20 10 an d F orm

94 1 l iabi li ti es forth e qua rte rly peri od s en di ng Ju ne 30 , Sep te m be r 30 , andDecem

be r 31 , 20 09 ; an d M arch 31 , June 30 , Sep te m be r 30 , and Decem be r 31 , 20 10 (ta x p eri od s atis su e). VI. Not ic e o f Lev y On J ul y 8, 2 01 3, re sp on de ntis su edto pe ti ti on er a CP 29 7A, No ti ce o f Lev y
an d No ti ce o f You r Ri gh t t o aHeari ng , with re sp ectto th e ta x p eri od s atis su e. 4 Res po nd en t re cei ve d p et it io ne r’s 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 Hearin g (C DP reque st ), onJu ly 16, 2 01 3. As anatt ach m en t to it s C DP reque stpe ti ti on er i nc lu de d d oc um en ta ti on to di sp ut e th e und erl y in g
em pl oym en t t ax li ab il it ie s tha t re su lt edfro m res po nd en t’s re cl as si fic at io n o f Mr. Hern do n fr om

anin de pe nd en t co ntract orto anem pl oyee of pe ti ti on er. Alt ern at iv el y , pet it io ne r m ai nt ai ne d tha t i t was en ti tl edto RA ’ 78 sec . 53 0 re li ef. The Cert ifi cat es of As se ss m en t, Paym en ts , andOth er Sp eci fie d M atte rs for 4 th e ta x p eri od s atis su e in di cat e th ata st atut ory no ti ce o f in te ntto lev y

was i ss ue d to pe ti ti on er o n M ay

13 , 20 13 . The rec or d, h owe ve r, do es no t i nc lu de th e n ot ic e.- 7 -

[* 7] VII. CDP Hear in g On No ve m

be r 6, 2 01 3, Se tt le m en t Offi cer C ha m be rs (SO Ch am

be rs ) he lda CDP h eari ng with the Ham pt on s. Durin g the CDP h eari ng th e o nl y is su e pe ti ti on er ra is edwas d oubtas t o the un de rlyin g e m pl oym en t t axli ab il it ie s. SO Ch am be rs ex pl ai ne d t o the Ham pt on s tha t the un de rlyin g e m pl oym en t t ax li ab il it ie s co ul d n otbe rai se d a s an is su e dur in g the CDP h eari ng be cau se pe ti ti on er h adalr eady

ha d an o pp ortuni ty to d is pu te th e und erl y in g e m pl oym en t ta x l iabi li ti es with IR S App eal s dur in g i ts Sep te m be r 13 , 20 12 , con fere nc e with AO Stewart. On No ve m

be r 26 , 20 13 , res po nd en t i ss ue d t o p et it io ne r th e n ot ic e o f de te rm in at io n c on cern in g c ol le ct io n a ct io n. Pe ti ti on er t im el y fil eda pe ti ti on with th e Co urt s eek in g re vi ew of it s u nd erl y in g e m

pl oym en t t ax li ab il it ie s fo r th e ta x pe rio ds at i ss ue . On Apr il 13 , 20 15 , res po nd en t fi le d am ot io n fo r su m m ary jud gm en t. OnJu ne 12 , 20 15 , pet it io ne r fi le d ares po ns e o bjec ti ng to th e g ran ti ng of res po nd en t’s m ot io n fo r su m m ary jud gm en t. Dis cu ss io n The pu rp os e o f su m

m ary jud gm en t i s t o e xp ed it e li ti ga ti on an d a vo id
un ne ces sary

an d e xp en si ve tri al s. Fl a. Peac h C or p. v . Commis si on er, 9 0 T.C. 6 78 , 68 1 (1 98 8) . The Co urt m ay gra ntsu m

m ary jud gm en t wh enth ere i s n o g enui ne- 8 -

[* 8] di sp ut e as to any

m at eri al factan d ade ci si on m ay be ren de redas am atte r of law. Rul e 1 21 (b ); Na fte l v . Comm is si on er, 8 5 T.C. 5 27 , 52 9 (1 98 5) . The m ov in g pa rty bear s the burd enof p ro vi ng th atth ere i s n o g enui ne is su e o f m at eri al fact
an d tha t h e is en ti tl edto jud gm en t as a m atte r of law. Bo ndv. Co m

m is si on er, 1 00 T.C. 32 , 36 (19 93 ). In d eci di ng whet he r to gra ntsu m m ary jud gm en t, the fact s an d th e in fere nc es dra wn fr om th os e fac ts m

us t b e co ns id eredinth e li gh t m os t fav or ab le to th e n on m ov in g p arty . Nafte l v . Comm is si on er, 8 5 T.C. at52 9. Whe re the m ov in g p arty

pro pe rly m ak es an d s up po rts a m ot io n fo r su m m ary jud gm en t, “ anadve rs e p arty m ay no t re stup on th e m ere a ll eg at io ns or d en ia ls of
su chparty’ s p le ad in g” bu t m us t s etforth sp eci fic fact s s ho win g tha t the re i s a ge nu in e d is pu te fortri al . Rul e 1 21 (d ). I. St an dardof R ev ie w Whe re the am ou ntof atax pa y er’s und erl y in g t ax li ab il ity is pro pe rly at is su e in a CDP ca se , th e Co urt re vi ews th e IRS ’ de te rm in at io n d e n ov o. Se e Goz a v. Co m m is si on er, 1 14 T.C. 17 6, 1 81 -1 82 (20 00 ). The C ou rt r ev ie ws the IRS’ de te rm in at io ns reg ard in g n on li ab il ity is su es forab us e o f di sc ret io n. Ho y le v. Co m m is si on er, 1 31 T.C. 19 7, 2 00 (20 08 ); Go za v . Comm is si on er, 1 14 T.C. at 1 82
. Abu se of d is cret io n e xi st s wh ena de te rm in at io n i s arbi tra ry , cap ric io us , or wi th ou t- 9 -

[* 9] so un d b as is infactor l aw. See M ur ph y v. Co m m is si on er, 1 25 T.C. 30 1, 3 20 (2 00 5) , aff’d, 4 69 F.3d27 (1s t Ci r. 20 06 ). II. Pet it io ne r’s Ch al le ng e to th e Und erl y in g Tax Liab il it ie s Sect io n 6 33 0( c) g ov ern s h ow a C DP he ari ng is co nduc te d. Atth e CDP he ari ng th e ta xp ay er m ay rai se an y rel ev an t i ss ue rel at in g t o the unpa idtax or the pr op os edlev y , in cl ud in g app ro pr ia te sp ou sa l d efen se s, ch al le ng es to th e ap pr op ria te ne ss of c ol le ct io n a ct io ns , andoff ers of c ol le ct io n a lt ern at iv es . Sec. 63 30 (c)( 2) (A). Inad di ti on , sec ti on 63 30 (c)( 2) (B) e st ab li sh es th e ci rcu m st an ces
un de r whi cha pe rs on m ay ch al le ng e th e ex is te nc e o r am ou ntof the un de rlyin g li ab il ity . Sect io n 6 33 0( c)(2 )(B) pro vi de s:

SEC. 6 33 0( c). Mat te rs Co ns id eredat Hea rin g.-- Inth e cas e o f an y he ari ng co nduc te d u nd er thi s s ect io n- -

* * * * * * * (2 ) Is su es at h eari ng .-- * * * * * * * (B) Un de rlyin g l iabi li ty.--The p ers onm ay als o rai se at the he ari ng ch al le ng es to th e ex is te nc e o r am ou nt of th e und erl y in g t ax li ab il ity forany tax pe rio d i f th e pe rs on di d n otrece iv e an y st atut ory no ti ce o f de fic ie nc y fo r su chtax li ab il ity

or d idno t o th erwi se ha ve an op po rtu ni ty to d is pu te su chtax li ab il ity .- 10 -

[* 10 ] At p et it io ne r’s CDP h eari ng th e Ham pt on s ch al le ng edth e und erl y in g
em pl oym en t t ax li ab il it ie s tha t re su lt edfro m res po nd en t’s re cl as si fy in g M r. Hern do n a s an em

pl oyee bu t d idno t ra is e an y othe r is su es . Res po nd en t ar gu es th athe is en ti tl edto su m m ary jud gm en t b ecau se pe ti ti on er was pre cl ud edfro m ch al le ng in g the un de rlyin g l iabi li ti es at i ts CDP he ari ng an d d idno t ra is e an y othe r is su es . Res po nd en t as se rts th atpe ti ti on er was pr ecl ud edfro m

ch al le ng in g the un de rlyin g l iabi li ti es be cau se pe ti ti on er’s Sep te m be r 13 , 20 12 , pre as se ss m en t co nf eren ce wi th IRS Ap pe al s co ns ti tu te d a pr io r “ op po rtu ni ty to d is pu te su chtax li ab il ity ” withi n the m ean in g o f se ct io n 63 30 (c)( 2) (B). Pet it io ne r as se rts itne ve r ha d an o pp ortuni ty prio r to th e CDP h eari ng to di sp ut e th e und erl y in g t axli ab il it ie s b ecau se itne ve r rec ei ve d the NDW C, whi ch
wou ldha ve pro vi de d i t wi th th e o pp ortu ni ty to p et it io n the Co urt fo r rev ie w of
res po nd en t’s d et erm in at io n. Se e se c. 74 36 (a).- 11 -

[* 11 ] A. Prea ss es sm en t Co nf eren ce With IRS Ap pe al s The fir stis su e is whet he r pe ti ti on er’s Sep te m be r 13 , 20 12 , con fere nc e with IRS Ap pe al s co ns ti tu te d apri or“ op po rtu ni ty to d is pu te ” th e und erl y in g t ax li ab il it ie s u nd er s ect io n 6 33 0( c)(2 )(B)
. 5 Fo r pu rp os es of s ect io n 6 33 0( c)(2 )(B) , th e reg ul at io ns m ak e a d is ti nc ti on be twee n t ax es th atare s ub ject t o d efi ci en cy

pro cedur es an d t ax es th atare n ot
subjec t t o d efi ci en cy

pro cedur es . See s ec. 3 01 .63 30 -1 (e)( 3) , Q&A-E2, Pr oc ed . & Adm in . Reg s. Fo r ta xe s tha t ar e n otsubjec t t o d efi ci en cy pro cedur es , an

“ op po rtu ni ty to d is pu te th e und erl y in g l iabi li ty inc lu de s a p rio r op po rtu ni ty for a
co nf eren ce wi th App eal s tha t was off eredeithe r be fo re o r aft er the ass es sm en t o f th e li ab il ity .” Id .; s ee al so Lewis v. Co m m is si on er, 1 28 T.C. 48 (20 07 ) (uph ol di ng th e v al id ity

of s ect io n 3 01 .63 30 -1 (e)( 3) , Q&A-E2, Pr oc ed . & Adm in . Reg s.). The Co urt h as he ldth atth e “un de rlyin g t ax li ab il ity ” m ean s the am ount s 5 th atare the subjec t o f th e IRS ’ co ll ect io n a ct iv it ie s. Kat z v . Comm is si on er, 1 15 T.C. 32 9, 3 38 -3 39 (20 00 ); s ee al so Clu es v. Co m m is si on er, T.C. Mem o. 2 01 5- 20 9; Ared e v . Comm is si on er, T.C. Mem o. 2 01 4- 29 . Con te st in g re sp on de nt ’s de te rm in at io n tha t a wo rk er i s an em pl oyee orth ata ta xp ay er i s n oten ti tl edto RA ’78 s ec. 5 30 rel ie f is a ch al le ng e to th e am ountth atis th e subjec t o f th e IRS ’ co ll ect io n a ct iv it ie s. See Tree-Tec h, In c. v. Co m m is si on er, T.C. Mem o. 2 01 1- 16 2, 20 11 W L 27 09 69 4, at*4 (“ [th e ta xp ay er] att em pt s t o c on te stit s u nd erl y in g li ab il ity with re ga rdto work er cl as si fic at io n b efo re thi s C ourt, a ss ert in g tha t i t i s el ig ib le forsec ti on53 0 re li ef. Bec au se * * * [the tax pa y er] di d n otrece iv e a no ti ce o f de fic ie nc y

or o th erwi se ha ve th e o pp ortu ni ty to d is pu te it s t axli ab il ity , it wou ldge ne ral ly be p erm it te d t o c ha ll en ge it s u nd erl y in g l iabi li ty as pa rt o f th e * * * [C DP] heari ng .”).- 12 -

[* 12 ] Howev er, fo r ta xe s tha t ar e subjec t t o d efi ci en cy pro cedur es , an o pp ortu ni ty fo r a co nf eren ce wi thIRS Ap pe al s p rio r to th e as se ss m en t o f th e ta x i s n ota pr io r

“ op po rtu ni ty to d is pu te ” th e und erl y in g t ax li ab il ity forpu rp os es of s ect io n 63 30 (c)( 2) (B). Sec . 30 1.6 33 0- 1( e)(3 ), Q&A-E2 , Pro ced . & Adm in . Reg s. Ra th er, fo r ta xe s s ub

ject t o d efi ci en cy

pro cedur es “ th e rel ev an t, p re-a ss es sm en t ‘pri or op po rtu ni ty’ is th e rec ei ptof the no ti ce o f de fic ie nc y .” T.D. 929 1, 2 00 6- 2 C .B. 88 7, 8 91
. Thu s, fo r ta xe s s ub ject t o d efi ci en cy

pro cedur es , recei ptof the no ti ce 6 of de fic ie nc y

tri gg ers th e ta xp ay er’s p reas se ss m en t p rio r op po rtu ni ty to d is pu te th e
un de rlyin g l iabi li ty. Whe re a t ax pa y er rec ei ve s a n ot ic e o f de fic ie nc y an d d oe s n ot ti m el y pe ti ti on th e Co urt fo r red et erm in at io n, s ect io n 6 33 0( c)(2 )(B) bars th e
T.D. 929 1, 2 00 6- 2 C .B. 88 7, i n re le va ntpart, i nc lu de s co m m en ts reg ard in g 6 am en dm en ts th atwere m ad e to sec . 30 1.6 33 0- 1, Pr oc ed . & Adm in . Reg s. Th es e am en dm en ts be cam e eff

ect iv e o n No ve m

be r 16 , 20 06 . The IR S am en de d s ec. 30 1.6 33 0- 1, Pr oc ed . & Adm in . Reg s., b y ad di ng th e fo ll owi ng st at em en t t o pa rag rap h (e )(3 ), A-E2: “ An o pp ortu ni ty for a co nf eren ce wi th App eal s p rio r to th e as se ss m en t o f a t axsubjec t t o d efi ci en cy pro cedur es is no t a p rio r op po rtu ni ty fo r th is pu rp os e.” The IRS ex pl ai ne d: Fo r ta xe s s ub

ject t o d efi ci en cy

pro cedur es , th e rel ev an t, p reas se ss m en t ‘pri orop po rtu ni ty’ is th e rec ei ptof the no ti ce o f de fic ie nc y . The o fferof an Ap pe al s co nf eren ce p rio r to rece ip t o f th e no ti ce o f de fic ie nc y

do es no t co ns ti tu te anop po rtu ni ty to d is pu te th e li ab il ity un de r se ct io n 6 33 0( c)(2 )(B) . This in te rp ret at io n o f se ct io n 63 30 (c)( 2) (B) h as be enad de d t o p arag rap h (e )(3 ) A-E2 t o re m ov e an y un cert ai nty

ab ou t thi s m atte r. * * * [T.D. 92 91 , 20 06 -2 C.B. at 89 0- 89 1.]- 13 -

[* 13 ] tax pa y er fro m

ch al le ng in g the ex is te nc e o r am ou ntof h is tax li ab il ity ina CDP h eari ng . See Be hl in g v . Comm is si on er, 1 18 T.C. 57 2, 5 76 (20 02 ). Acco rd in gl y , to de te rm in e whe th er p et it io ne r’s Sep te m be r 12 , 20 13 , co nf eren ce wi th IRS Ap pe al s co ns ti tu te d apri or“ op po rtuni ty to d is pu te ” th e
un de rlyin g l iabi li ty, th e Co urt m us t d et erm in e whe th er anNDW C is subjec t t o de fic ie nc y

pro cedur es . Gen eral ly, anNDW C is subjec t t o d efi ci en cy pro cedur es . See s ec. 74 36 (d )(1 ). Sect io n 7 43 6 g ov ern s p ro ceed in gs forde te rm in at io ns of e m pl oym en t st atus . An NDW C is a fo rm al “ de te rm in at io n” of wo rk er cl as si fic at io n m ad e pu rs ua ntto sec ti on 74 36
. Purs uantto sec ti on 74 36 (d )(1 ), th e p rin ci pl es of s ub se ct io ns (a), (b ), (c), (d ),
an d (f ) of sec ti on 62 13 , sec ti on 62 14 (a), an d s ect io n 6 21 5, am on g o th er pr ov is io ns , app ly in the same m an ne r as if an NDWC were a n ot ic e o f de fic ie nc y . Sect io ns 62 13 , 62 14 , and62 15 are al l p artof s ub ti tl e F, ch ap te r 63 , subc hapt er B of th e Co de . Sub ti tl e F, ch ap te r 63 , subc hapt er B o f th e Co de in cl ud es

“ Defi ci en cy

Pro cedur es inth e Cas e o f In co m e, Est at e, Gift , andCert ai n Ex ci se Tax es ”. Thu s, und er s ect io n 7 43 6( d) (1 ), anNDW C is ge ne ral ly sub ject t o- 14 -

[* 14 ] de fic ie nc y

pro cedur es . See Lewi s v . Comm is si on er, 1 28 T.C. at 5 5 (“ Fo r

7 in st an ce, wit h re sp ectto th e Co m m is si on er’s cl as si fic at io n o f in di vi du al s as
em pl oyees fo r pu rp os es of e m pl oym en t t ax es , an e m

pl oyer is affo rd eda pr oc es s ak into th e d efi ci en cy

pro cedur es .”); Cen tra l M ot or pl ex , Inc . v. Co m

m is si on er,

Sec. 7 43 6( d) (1 ) br oa dl y

pro vi de s: “ The pri nc ip le s o f subs ect io ns (a), (b ), 7 (c), (d ), an d (f

) of sec ti on 62 13 , sec ti on 62 14 (a), s ect io n 6 21 5 * * * sh al l ap pl y to pr oc eed in gs bro ug htun de r th is sec ti on inth e sa m e m anne r as if the Secr et ary’ s de te rm in at io n * * * were a n ot ic e o f de fic ie nc y .” It i s, h owe ve r, a b as ic pri nc ip le of st atut ory in te rp ret at io n that wh ere two s tatu te s o ve rlap i n app li cat io n, the m or e sp eci fic pro vi si on tak es pre ced en ce o ve r th e m or e g en eral pro vi si on . Bul ov a W at chCo . v. Un it edSta te s, 3 65 U.S. 75 3, 7 58 (19 61 ); Un it edState s v . Porte r, 74 5 F.3 d 1 03 5, 1 04 9 (1 0th C ir. 2 01 4) ; Win g v . Commis si on er, 8 1 T.C. 1 7, 3 0 n .15 A (1 98 3) . For e xa m

pl e, se c. 74 36 (b )(2 ) sp eci fic al ly im po se s a 9 0- da y

li mitonfil in g a p et it io n wh ere the Co m m is si on er s en ds no ti ce o f a d et erm in at io n b y cert ifi edor reg is te redm ai l b utdo es no t o th erwi se im po se a 90 -d ay

li mit . See SECC Co rp . v. Co m m is si on er, 1 42 T.C. 22 5, 2 39 (20 14 ). One p rin ci pl e o f se c. 62 13 (a)- -ap pl ie d th ro ug h s ec. 7 43 6( d) (1 )--i s tha t a t ax pa y er h as 90 (or15 0) day s af te r th e n ot ic e o f de fic ie nc y

is m ai le d t o fi le a pe ti ti on . See i d. InSECC Co rp ., th e Co urt h el d tha t th is pri nc ip le of s ec. 6 21 3( a) wo ul d n otcau se th e Co urt t o l ackjuri sd ic ti on if a pe ti ti on is fil edm or e th an90 day s af te r a d et erm in at io n wh ere the Co m mis si on er di d n otex erci se hi s ri gh t u nd er s ec. 7 43 6( b) (2 ) to tri gg er the 90 -d ay li m it at io n pe rio d b y sen di ng no ti ce b y

cert ifi edor r eg is te redm ai l. Id . In o th er wo rd s, the Co urt d et erm in edth atsec . 74 36 (b )(2 )--the sp eci fic pro vi si on --tru m ps sec . 74 36 (d )(1 )--the bro adpro vi si on . This is co ns is te ntwith the Co urt’s h ol di ng he re th atde fic ie nc y

pro cedur es ge ne ral ly app ly thro ug h the bro adin co rp or at io n b y sec . 74 36 (d )(1 ) of

th e p rin ci pl es of m an y

de fic ie nc y

pro cedur e p ro vi si on s. If, ho wev er, a s pe ci fic pro vi si on insec . 74 36 co nf li ct s wi th ge ne ral ly app li cab le de fic ie nc y

pro cedur es th atap pl y

to work er cl as si fic at io n d et erm in at io ns un de r se c. 74 36 (d )(1 ), th e sp eci fic pro vi si on co ntro ls . See, e.g ., SECC Co rp . v. Co m m is si on er, 1 42 T.C. 22 5.- 15 -

[* 15 ] T.C. Mem o. 2 01 3- 28 6 (app lying th e p rin ci pl es of s ect io n 6 21 3( a) i n the
sa m e m an ne r as if an NDWC were a n ot ic e o f de fic ie nc y ). Pet it io ne r en ga ge d i n atel ep ho ne co nf eren ce wi th IRS Ap pe al s o n Sep te m be r 13 , 20 12 . Res po nd en t al le ge s tha t the Sep te m be r 13 , 20 12 , con fere nc e
co ns ti tu te d apri orop po rtu ni ty to d is pu te th e und erl y in g l iabi li ty. Res po nd en t is su edto pe ti ti on er v iacert ifi edm ai l an NDW C o n Oct ob er 2 3, 2 01 2. Re sp on de nt
as se ss edth e ta x p eri od s atis su e o n Ap ril 8, 2 01 3. Bec au se anNDW C is ge ne ral ly sub ject t o d efi ci en cy

pro cedur es , a pr eas se ss m en t co nf

eren ce wi th IRS Ap pe al s i s n ota pr io r op po rtu ni ty to d is pu te th e und erl y in g l iabi li ty; rathe r, rece ip t o f th e NDW C is th e rel ev an t, p reas se ss m en t

“pr io r op po rtu ni ty” to di sp ut e th e und erl y in g l iabi li ty. See s ec. 3 01 .63 30 -1 (e)( 3) , Q&A-E2 , Pro ced . & Adm in . Reg s.; T.D. 929 1, 2 00 6- 2 C .B. 88 7. Acco rd in gl y , pe ti ti on er’s Sep te m

be r 13 , 20 12 , pre as se ss m en t co nf eren ce wi th IRS Ap pe al s d id
no t p recl ud e itfro m

ch al le ng in g the un de rlyin g l iabi li ty at it s C DP he ari ng . B. Is su an ce o f th e Not ic e o f Det erm in at io n o f W orke r Cl as si fic at io n The sec on d i ss ue is whet he r res po nd en t’s i ss uanc e o f th e NDW C p recl ud es pe ti ti on er fro m

ch al le ng in g the un de rlyin g l iabi li ty at it s C DP he ari ng un de r
se ct io n 6 33 0( c)(2 )(B)
.- 16 -

[* 16 ] Bec au se anNDW C is ge ne ral ly sub ject t o d efi ci en cy

pro cedur es , th e pr in ci pl es refe ren cedbe lo w app ly in the same m an ne r as if the NDW C were a
no ti ce o f de fic ie nc y . See s ec. 7 43 6( d) ; Ce ntral Mo to rp le x, In c. v. Co m m is si on er, T.C. Mem o. 2 01 3- 28 6. As d is cu ss edsupr a, fo r ta xe s s ub ject t o d efi ci en cy

pro cedur es rece ip t o f th e
no ti ce o f de fic ie nc y

(orNDW C) trig ge rs th e ta xp ay er’s p reas se ss m en t o pp ortu ni ty to di sp ut e th e und erl y in g l iabi li ty. Whe re a t ax pa y er re cei ve s a n ot ic e o f de fic ie nc y

(orNDW C) an d d oe s n otti m el y pe ti ti on th e Co urt fo r red et erm in at io n,
se ct io n 6 33 0( c)(2 )(B) bars th e ta xp ay er fro m ch al le ng in g the ex is te nc e o r am ou nt of hi s t ax li ab il ity

ina CDP h eari ng . See Be hl in g v . Comm is si on er, 1 18 T.C. at 57 6. Pet it io ne r co nt en ds itdi d n otrece iv e th e NDW C an d thu s d idno t h av e a pr io r op po rtu ni ty to d is pu te th e und erl y in g t ax li ab il ity inco urt. Res po nd en t arg ue s tha t ac tu al rece ip t i s i rrel ev an t. Sect io n 6 33 0( c)(2 )(B) requi res actua l re cei ptof the no ti ce o f de fic ie nc y by th e ta xp ay er. See s ec. 3 01 .63 30 -1 (e)( 3) Q&A-E2, Pr oc ed . & Adm in . Reg s.; see

8 As the Co urt n ot es inTatum v. Co m m is si on er, T.C. Mem o. 2 00 3- 11 5, 2 00 3 8 W L 19 18 91 4, at*3 n.4 : “ By co ntras t, fo r pu rp os es of a ss es si ng a de fic ie nc y in ta x, re sp on de ntis au th or iz edto sen d ano ti ce o f de fic ie nc y to th e ta xp ay er. Fo r th atpu rp os e, m ai li ng a no ti ce o f de fic ie nc y to th e ta xp ay er atth e ta xp ay er’s l as t (co nt inue d...)- 17 -

[* 17 ] als o Ku yke nd al l v . Comm is si on er, 1 29 T.C. 77 , 80 (20 07 ) (“ The refo re,
se ct io n 6 33 0( c)(2 )(B) co nt em pl at es actua l re cei ptby the tax pa y er.”) ; Ba rn es v. Co m m is si on er, T.C. Mem o. 2 01 0- 30 , 20 10 W L 61 06 74 (Fo r pu rp os es of de te rm in in g wh ethe r a t ax pa y er m ay rai se at aCDP h eari ng ch al le ng es to th e
ex is te nc e o r am ou ntof the un de rlyin g l iabi li ty, th e ta xp ay er’s rec ei ptof ano ti ce o f de fic ie nc y , no t the no ti ce’s m ai li ng , is th e rel ev an t ev en t); Tatu m v. Co m m is si on er, T.C. Mem o. 2 00 3- 11 5, 2 00 3 WL 19 18 91 4, at*3 (“ It i s the refo re cl ear tha t s ect io n 6 33 0( c)(2 )(B) co nt em pl at es actua l re cei ptof the no ti ce o f de fic ie nc y

by the tax pa y er.”) . A taxpa y er cann otde featactua l re cei pt , ho wev er, by del ib erat el y

refu si ng de li ve ry

of ano ti ce o f de fic ie nc y . See Seg o v . Co m m is si on er, 1 14 T.C. 60 4, 6 11 (20 00 ). A tax pa y er wh o d el ib erat el y refu se s de li ve ry of ano ti ce o f de fic ie nc y is de em edto ha ve rece iv edth e n ot ic e. Id
. Abs en t s uf

fic ie ntev id en ce tha t a t ax pa y er d el ib erat el y refu se d d el iv ery of

th e
no ti ce o f de fic ie nc y , pro of th atth e n ot ic e o f de fic ie nc y was n otactua ll y

rece iv ed wil l b e su ffi ci en t t o e nt it le a ta xp ay er t o d is pu te th e und erl y in g l iabi li ty in a
se ct io n 6 33 0 p ro ceed in g. Barn es v. Co m m is si on er, 2 01 0 WL 61 06 74 , at * 4.

(...co nt inue d) 8 kn ownad dr es s i s s uf

fic ie ntreg ard le ss of r ecei ptor n on rece ip t.”- 18 -

[* 18 ] Res po nd en t at ta ch edto hi s m ot io n aco py of anen ve lo pe th atres po nd en t al le ge s co nt ai ne d the NDW C th atwas m ai le d t o p et it io ne r on Octo be r 23 , 20 12
. The face of the en ve lo pe , ho wev er, s ho ws a U.S. Po st al Serv ic e labe l s ta m pe d

“ RETURNED TO SENDER” with the “ UNCLAIMED” ch eckbo x b la ck en edin
. Thu s, the re i s n o d is pu te th atpe ti ti on er d idno t ac tu al ly recei ve th e NDW C. See, e.g ., id . (“ The face of the en ve lo pe sh ows th atitwas re tu rn edto res po nd en t an d
was st am pe d u nc la im ed . Thu s, the re i s n o d is pu te th at* * * [the tax pay er] di d n ot actua ll y rece iv e th e n ot ic e o f de fic ie nc y .”); Tatu m v. Co m m is si on er, 2 00 3 WL 19 18 91 4, at*3 (“ Here, the en ve lo pe with i ts co nt en ts , i.e., th e n ot ic e o f de fic ie nc y fo r 19 90 an d 1 99 1, was returne d u nc la im edto res po nd en t. Thu s, the re i s n o di sp ut e th at* * * [the tax pay ers ] di d n otactua ll y rece iv e th e n ot ic e o f de fic ie nc y .”). Inhi s m ot io n fo r su m

m ary jud gm en t re sp on de ntdo es no t ar gu e th at pe ti ti on er d el ib erat el y

refu se d d el iv ery of

th e n ot ic e. On the ba si s o f th e rec or d, th e Co urt ca nn otco nc lu de th atpe ti ti on er d el ib erat el y refu se d d el iv ery of

th e NDW C. Thu s, the re i s a g enui ne is su e o f m at eri al factas t o wh ethe r pe ti ti on er de li be rat el y

refu se d d el iv ery of

th e NDW C. Acco rd in gl y , with re sp ectto
res po nd en t’s ar gu m en t tha t s ect io n 6 33 0( c)(2 )(B) pre cl ud edpe ti ti on er fro m- 19 -

[* 19 ] ch al le ng in g the un de rlyin g l iabi li ty dur in g i ts CDP h eari ng , th e Co urt wi ll de ny resp on de nt ’s m ot io n fo r su m m ary jud gm en t. Inreac hi ng th es e h ol di ng s, we h av e co ns id eredall th e p art ie s’ arg um en ts , an d, t o the ex te ntno t ad dr es se d h erei n, we co nc lu de th atth ey are m oo t, i rrel ev an t,
orwitho utm eri t. 9 To re fle ctth e fo reg oi ng , An ap pr op ria te ord er wi ll be is su ed
.

Eve n tho ug h s ec. 6 33 0( c)(2 )(B) sp eci fic al ly addres se s wh ena ta xp ay er 9 m ay ch al le ng e th e und erl y in g l iabi li ty at a CDP h eari ng , res po nd en t al so arg ue s th atsec . 63 30 (c)( 4) pre cl ud edpe ti ti on er fro m ch al le ng in g the un de rlyin g t ax li ab il ity at i ts CDP h eari ng . By

m ak in g thi s ar gu m en t, re sp on de ntis ess en ti al ly st at in g tha t the IRS’ ownreg ul at io ns , sec . 30 1.6 33 0- 1( e)(3 ), Q&A-E2 , Pro ced . & Adm in . Reg s., ad dr es si ng whatco ns ti tu te s a “pr io r op po rtu ni ty” to di sp ut e th e un de rlyin g l iabi li ty und er s ec. 6 33 0( c)(2 )(B) are i rrel ev an t. As d is cu ss edsupr a, se c. 30 1.6 33 0- 1( e)(3 ), Q&A-E2 , Pro ced . & Adm in . Reg s., s pe ci fic al ly pro vi de s th ata pr eas se ss m en t co nf eren ce wi th IRS Ap pe al s d oe s n otco ns ti tu te a pr io r op po rtu ni ty to d is pu te th e und erl y in g l iabi li ty for t ax es subjec t t o d efi ci en cy pr oc edur es . The Co urt h as alr eady up he ldth e v al id ity

of thi s re gu la ti oninLewis v. Co m m is si on er, 1 28 T.C. 48 (20 07 ). In a dd it io n, i n Lewi s the Co urt m ad e sp eci fic refe ren ce t o an NDWC, no ti ng th atanem pl oyer who rece iv es anNDW C is affo rd eda pr oc es s ak into de fic ie nc y pro cedur es , m ean in g tha t an NDW C s erv es as a “ ti ck et ” to th e Co urt. See id . at 5 5. Fo r purp os es of s ec. 6 33 0( c)(2 )(B) th e ta xp ay er m

us t ac tu al ly recei ve th e NDW C to have anop po rtu ni ty to p et it io n the Co urt. Thi s i s an is su e th atth e Co urt h as ad dr es se d s up ra. Fo r th is reas on , res po nd en t’s ar gu m en t tha t s ec. 6 33 0( c)(4 ) pr ecl ud edpe ti ti on er fro m ch al le ng in g th e und erl y in g l iabi li ty becau se pe ti ti on er p art ic ip at edina pr eas se ss m en t co nf eren ce wi th IRS Ap pe al s i s wi th ou t m eri t.