Court Opinion

ID: 6344184
Source: CourtListenerOpinion
Date Created: 2022-05-26 16:01:49.627141+00
Date Added: 2024-06-11T08:46:50.804253
License: Public Domain

United States Tax Court
                                   Washington, DC 20217

Angela M. Hammock,                          )
                                            )
                Petitioner                  )
                                            )
                v.                          )     Docket No. 5290-18L.
                                            )
Commissioner of Internal Revenue,           )
                                            )
                Respondent                  )
                                            )
                                            )

                                     ORDER

      Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is

       ORDERED that the Clerk of the Court shall transmit with this order to
petitioner and respondent a copy of the pages of the transcript of the remote trial in
this case before Judge Ronald L. Buch, where the place of trial was designated as
Tampa, Florida, containing his oral findings of fact and opinion rendered at the
remote trial session at which the case was heard.

      In accordance with the oral findings of fact and opinion, decision will be
entered for respondent.

                                          (Signed) Ronald L. Buch
                                                   Judge

                                  Served 05/26/22
                                                                 3
1    Bench Opinion by Judge Ronald L. Buch

2    April 29, 2022

3    Angela M. Hammock v. Commissioner

4    Docket No. 5290-18L

5               THE COURT:    The following represents the Court's

6    oral findings of fact and opinion.    These oral findings of

7    fact and opinion may not be relied upon as precedent in

8    any other case.   This opinion is in conformity with

9    Internal Revenue Code section 7459(b) and Rule 152(a) of

10   the Tax Court Rules of Practice and Procedure.     Any

11   section references refer to the Internal Revenue Code or

12   the Treasury regulations in effect during the periods at

13   issue, and Rule references are to the Tax Court Rules of

14   Practice and Procedure.

15              This is a collection case brought pursuant to

16   sections 6320 and 6330 challenging a notice of federal tax

17   lien and a notice of intent to levy issued to Angela

18   Hammock.   We are asked to decide whether the Commissioner

19   abused his discretion when issuing a notice of

20   determination sustaining those notices, which relate to

21   penalties under section 6672.

22              Background

23              Through tragic circumstances, Angela Hammock

24   (formerly, Stopanio) inherited Scorpion Performance, Inc.,

25   her family's business.    Her parents, Robert, and Teresa
                                                              4
1    Stopanio, founded Scorpion, an auto parts manufacturer, in

2    the 1990s.     They led the company as chief executive

3    officer and treasurer, respectively, until 2011.        That

4    year, they died in an automobile accident that Ms. Hammock

5    witnessed while traveling in a separate vehicle.        Ms.

6    Hammock, their only child, served as the personal

7    representative of their estate and heir to their interests

8    in Scorpion.

9                Ms. Hammock also inherited a role with Scorpion.

10   At the time of her parents' passing, Scorpion had about 35

11   employees. Ms. Hammock inherited her mom's role and title

12   as treasurer.     A close family friend, Luke Whalen,

13   effectively inherited her father's role in running the

14   day-to-day operations of the business.     Even before the

15   Stopanios' passing, Mr. Whalen had been heavily involved

16   in running the business.     At some point after her parents'

17   passing, Scorpion also hired Richard Lampen as Chief

18   Financial Officer to assist with financial matters.

19               In 2015, Ms. Hammock received a fateful call

20   from Mr. Lampen informing her of financial troubles with

21   Scorpion.    The payroll had grown to roughly 50 employees,

22   although it is not clear that the business had grown

23   correspondingly. Eventually, Ms. Hammock discovered that

24   Mr. Whalen was using Scorpion to hire friends and to pay

25   personal expenses.     Company minutes show that Mr. Whalen
                                                                  5
1    owed Scorpion over $200,000 for personal expenses he had

2    charged to the business.

3                Ms. Hammock's precise role with Scorpion from

4    the time of her parents' death until that fateful call is

5    unclear.    She held stock individually and through her

6    parents' estate.    She was an officer, held the official

7    title of treasurer, and was an authorized signer on

8    Scorpion's bank account.    However, she signed few checks

9    relative to the total checks that were drawn on the

10   account.    The directors held management meetings, some of

11   which Ms. Hammock attended.    She earned wages from

12   Scorpion.

13               While Scorpion had been paying Mr. Whalen's

14   personal expenses, it had not been remitting its

15   employment taxes.    Scorpion first became delinquent in

16   remitting its employment taxes in 2012 and remained

17   delinquent in 2015.    At the end of 2015, Scorpion declared

18   bankruptcy.

19               In July 2016, a revenue officer with the

20   Internal Revenue Service sent Ms. Hammock and others,

21   including Mr. Lampen, a pair of letters regarding the

22   Commissioner's attempts to collect Scorpion's unremitted

23   employment taxes.    In one letter, the revenue officer

24   informed Ms. Hammock that the Commissioner was in the

25   process of determining who might be personally responsible
                                                                 6
1    for some portion of the unpaid tax and that information

2    already obtained by the IRS indicated that Ms. Hammock

3    might be responsible.   The other letter scheduled an in-

4    person meeting to discuss Ms. Hammock's duties and

5    responsibilities as an officer of Scorpion.     These letters

6    began a series of communications and miscommunications

7    that are central to this case.

8               Ms. Hammock sought to have counsel represent her

9    before the IRS.   She postponed the in-person meeting, and

10   on August 8, 2016, her counsel faxed the revenue officer a

11   Form 2848, Power of Attorney and Declaration of

12   Representative.   Upon receipt of the Form 2848, the

13   revenue officer notified one of Ms. Hammock's lawyers that

14   the form was not processible because it was not completed

15   correctly.   The form did not identify the tax form number

16   or tax period for which counsel was representing Ms.

17   Hammock.   In response, Ms. Hammock's lawyers submitted a

18   corrected Form 2848 the following day, but that form was

19   not signed by Ms. Hammock.   Instead, the new form relied

20   on Ms. Hammock's August 3, 2016, signature from the

21   previous Form 2848.   The revenue officer rejected the new

22   Form 2848 for that reason.   The revenue officer's

23   contemporaneous notes from August 11, 2016, indicate that

24   Ms. Hammock's lawyers were still trying to obtain Ms.

25   Hammock's signature on the new form from her.     The record
                                                                   7
1    does not show any further activity regarding securing or

2    submitting a corrected or properly signed Form 2848 for

3    Ms. Hammock until after the revenue officer closed the

4    examination.

5               In the meantime, a parallel process was taking

6    place with respect to Mr. Lampen, the CFO of Scorpion.        He

7    was represented by the same lawyers as Ms. Hammock.     His

8    initial Form 2848 was rejected for similar reasons; but

9    his updated form was accepted.

10              After reviewing the available records, the

11   revenue officer determined that Ms. Hammock was among

12   those responsible for the failure to remit Scorpion's

13   payroll taxes and proposed a trust fund recovery penalty

14   under section 6672 against Ms. Hammock.   On February 10,

15   2017, the revenue officer made the initial determination

16   to assess the section 6672 penalty, and on that same day,

17   the group manager approved that determination.

18              A practical consequence of the failure to

19   perfect the Form 2848 occurred on February 15, 2017.     On

20   that date, the Commissioner mailed a Letter 1153 to Ms.

21   Hammock.   This is the letter that notifies someone that

22   the Commissioner proposes to assess a penalty against them

23   "as a person required to collect, account for, and pay

24   over withheld taxes." In her case activity record, the

25   revenue officer observed that that a corrected Form 2848
                                                                  8
1    had never been received for Ms. Hammock, whereas one had

2    been received for Mr. Lampen.     As a result, the revenue

3    officer sent notices to Ms. Hammock (as to her liability),

4    to Mr. Lampen (as to his liability), and to counsel (only

5    as to Mr. Lampen' liability).     No letter was sent to

6    counsel regarding Ms. Hammock's liability.

7                The revenue officer mailed the Letter 1153

8    informing Ms. Hammock of a proposed trust fund recovery

9    penalty, to Ms. Hammock's last-known address by certified

10   mail.     That letter was delivered on February 18, 2017,

11   when, according to postal service records, it was left

12   with an individual.     The Letter 1153 stated: "If we do not

13   hear from you within 60 days from the date of this letter

14   . . . we will assess the penalty and begin collection

15   action." It also stated: "You may appeal your case to the

16   local Appeals Office" and provided an address to send an

17   appeal.

18               Ms. Hammock claims not to have received the

19   letter in time to file an appeal.     She was out of town

20   attending a rodeo when the letter was delivered.     Although

21   she states that sometimes the postal service leaves her

22   mail on her fence in a plastic bag, that did not happen

23   here.     The Letter 1153 was sent by certified mail, and the

24   postal service tracking information specifically states

25   that it was left with an individual.
                                                                    9
1              Ms. Hammock did not respond within 60 days.        The

2    revenue officer received a protest regarding Mr. Lampen,

3    but not Ms. Hammock.    During a phone call with counsel on

4    April 24, 2017, the revenue officer confirmed receipt of

5    the protest for Mr. Lampen and informed counsel that the

6    revenue officer never received an updated Form 2848 for

7    Ms. Hammock.    The revenue officer informed counsel that

8    they could not discuss Ms. Hammock's case without a valid

9    Form 2848.     See generally, section 6103.   On April 25,

10   2017, the revenue officer received a fax of a valid Form

11   2848 for Ms. Hammock.     On May 12, 2017, more than 60 days

12   after the Letter 1153 was sent to Ms. Hammock, her counsel

13   faxed to the revenue officer a protest for Ms. Hammock.

14   That fax included a copy of the Letter 1153 that had been

15   sent to Ms. Hammock.

16             The revenue officer rejected the protest as

17   untimely, and the Commissioner set about assessing and

18   collecting the liability.    In June 2017, the Commissioner

19   assessed the penalties and mailed Ms. Hammock notice and

20   demand for payment.    After the initial assessment and

21   subsequent abatements, the penalties totaled $579,043.

22   After Ms. Hammock failed to pay, the Commissioner mailed

23   her a notice of federal tax lien and notice of intent to

24   levy.

25             Through counsel, Ms. Hammock requested a
                                                              10
1    collection hearing.   In her request, she stated that she

2    was disputing both notices.   She explained that she "was

3    not the responsible person . . . for the tax periods at

4    issue." In an attached memorandum, her attorney alleged

5    that the notices were defective because they "are not

6    supported by any facts," and that if the Commissioner had

7    fully developed the facts, he "would have learned that Ms.

8    Hammock did not engage in any willful conduct to avoid

9    paying the payroll taxes." In her challenge to the

10   collection notices, Ms. Hammock did not indicate that she

11   would like a collection alternative.

12             A settlement officer from the Commissioner's

13   Independent Office of Appeals was assigned to her case and

14   held a hearing.   During the collection proceedings, her

15   attorney acknowledged that Ms. Hammock received a Letter

16   1153 at some point but argued that the Commissioner

17   violated her due process rights by failing to send a copy

18   of the letter to her attorneys.   After receiving the trust

19   fund recovery penalty file, the settlement officer

20   verified that the Commissioner properly mailed a Form 1153

21   to Ms. Hammock, who filed an untimely protest.   Based on

22   this information, she determined Ms. Hammock was precluded

23   from challenging the penalties.   She verified that the

24   penalties were assessed more than 60 days after the Letter

25   1153 was mailed, downloaded account transcripts, and
                                                                 11
1    secured a Form 4183 confirming supervisory penalty

2    approval.   In a February 2018 notice of determination, the

3    Commissioner sustained the proposed levy and lien.

4                While residing in Florida, Ms. Hammock filed a

5    timely petition with this Court.    In her petition, she

6    alleged that the Commissioner erroneously determined that:

7    (1) "The IRS followed all legal and procedural

8    requirements, including those enumerated in the IRS

9    Manual, and the assessment was properly made for each tax

10   period"; (2) "Ms. Hammock was the responsible person for

11   the payroll liabilities under 6672"; and (3) "Ms. Hammock

12   had an opportunity to challenge [her] status as the

13   responsible person." Although other sections of the

14   petition contained headings that purported to challenge

15   whether procedural requirements were met or whether the

16   assessment was valid, they were, in substance, merely

17   reframed challenges to the underlying liability.

18               While this case has been pending, each of the

19   parties has filed motions for summary judgment, which the

20   Court has denied.    We denied the Commissioner's motion

21   because the record did not show whether the settlement

22   officer verified that the applicable law and

23   administrative procedures were met.    We denied Ms.

24   Hammock's motion because material facts remained in

25   dispute.    The Commissioner filed a motion to remand to
                                                                  12
1    supplement the administrative record, which we granted.

2                The parties subsequently submitted a

3    supplemental notice of determination dated November 13,

4    2019.     In the supplemental notice, the settlement officer

5    described in detail the verification procedures she

6    performed while considering available documents.     She

7    confirmed that the revenue officer adequately informed Ms.

8    Hammock's attorneys of errors in the Forms 2848.     She also

9    confirmed that the Commissioner never received a

10   processible Form 2848 until after the issuance of the

11   Letter 1153.     The notice recites that Ms. Hammock's

12   counsel acknowledged that she received the Letter 1153,

13   but that it was not sent to counsel.     Accordingly, the

14   settlement officer verified the Letter 1153 was properly

15   issued.

16               At trial, the parties' positions were fairly

17   straightforward.     The Commissioner argues that Ms. Hammock

18   is precluded from challenging the underlying liability,

19   and even if she can challenge it, that she is liable under

20   section 6672.     Although framed as a variety of separate

21   arguments, in substance Ms. Hammock argues that she did

22   not have a prior opportunity to challenge the liability

23   and that she is not a responsible person for purposes of

24   the section 6672 penalty.     As stated in her pretrial

25   memorandum, her arguments are:
                                                                13
1                 "(1) Did the IRS properly assess Hammock given

2    it failed to conduct investigation or make factual

3    findings to support the underlying liability

4    determination;

5                 (2) did the IRS provide proper notice of the

6    assessment to Hammock and did she have an opportunity to

7    challenge the liability determination;

8                 (3) if even Hammock had an opportunity to

9    challenge the liability, did the appeals officer abuse her

10   discretion by failing to consider all the evidence and

11   refusing to hear Hammock's challenge to the underlying

12   liability;

13                (4) did the IRS follow the supervisory approval

14   requirement to verify compliance with Section 6330(c)(1)."

15                              Discussion

16                In this collection case, Ms. Hammock is

17   attempting to challenge the underlying liability.        The

18   underlying liability in this case includes only penalties

19   under section 6672, sometimes referred to as a "trust fund

20   recovery penalty" or a "responsible person penalty." An

21   employer has the duty to withhold its employees' share of

22   federal taxes from their wages and remit those taxes, plus

23   the employer's share, over to the federal government.

24   Kazmi v. Commissioner, T.C. Memo 2022-13, at *6.       The

25   amounts withheld are known as "trust fund taxes" because
                                                                14
1    an employer holds them in trust for the government.     Id.

2    Because the government has no recourse against employees

3    if an employer fails to remit the taxes, section 6672(a)

4    provides a tool to collect the liability from those who

5    may have been responsible to withhold and pay them over.

6    Id.

7               Section 6672(a) allows the Commissioner to

8    impose a trust fund recovery penalty on certain people who

9    willfully fail to withhold, account for, and pay over

10   trust fund taxes.   Id. Under section 6671(b), the people

11   who might be liable include officers or employees of a

12   corporation who are under a duty to collect, account for,

13   and pay over the taxes.   Those people are referred to as

14   responsible persons, and who is responsible is defined

15   broadly.   Id., at *7.   Whether someone is a responsible

16   person is "a matter of status, duty and authority, not

17   knowledge." Id. (quoting Mazo v. United States, 591 F.2d

18   1151, 1156 (5th Cir. 1979).

19              The trust fund recovery penalty is an

20   "assessable penalty," meaning it is not subject to

21   deficiency procedures.    Id., at *6-7.   However, section

22   6672(b)(1) requires the Commissioner to provide the

23   taxpayer with notice of the penalty before assessment.

24   Letter 1153 provides a taxpayer with notice and provides

25   the opportunity for an administrative appeal.      Mason v.
                                                                 15
1    Commissioner, 132 T.C. 301, 317 (2009).

2                 Standard of Review

3                 In a collection case, where the underlying

4    liability is properly at issue, we review the

5    Commissioner's determination de novo.        Where the

6    underlying liability is not properly at issue, we review

7    the Commissioner's determination for an abuse of

8    discretion.    Sego v. Commissioner, 114 T.C. 604, 610

9    (2000).   Whether the underlying liability may be raised in

10   a collection proceeding turns on whether the taxpayer

11   received a notice of deficiency or otherwise had a prior

12   opportunity to dispute the liability.        See section

13   6330(c)(2)(B).     Trust fund recovery penalties are not

14   subject to deficiency procedures, so the question here is

15   whether Ms. Hammock had a prior opportunity to dispute the

16   liability.

17                Prior Opportunity

18                In a trust fund recovery penalty case, the

19   Letter 1153 provides a prior opportunity to dispute the

20   liability.    A prior opportunity includes "a prior

21   opportunity for a conference with Appeals that was offered

22   either before or after . . . assessment." Treas. Reg. §

23   301.6330-1(e)(3), Q&A-E2.        The Letter 1153 provides

24   precisely such an opportunity.

25                If someone doesn't receive the relevant letter
                                                             16
1    or notice, however, they won't know to request an appeal.

2    Thus, the taxpayer must receive the Letter 1153 or

3    deliberately refuse it for the letter to have provided a

4    prior opportunity.    Mason, 132 T.C. at 317-318.

5                For the letter to be received, it must first

6    have been properly mailed.    See section 6672(b)(1).    The

7    Commissioner must prove proper mailing of the Letter 1153

8    to the taxpayer's last-known address.    See Mason, 132 T.C.

9    at 318, 322.    The same evidence that establishes that the

10   Commissioner mailed a notice of deficiency is sufficient

11   for purposes of the Letter 1153.    Id.; see sections 6212,

12   6672(b).    The Commissioner has established that a Letter

13   1153 was mailed by certified mail to Ms. Hammock's last

14   known address as required by section 6672(b)(1).      The

15   Commissioner has also established delivery to an

16   individual at that address.    The parties do not dispute

17   mailing and delivery.    However, they dispute actual

18   receipt.

19               We determine whether a taxpayer received a

20   letter or notice based on the preponderance of the

21   evidence.   BM Construction v. Commissioner, T.C. Memo.

22   2021-13, at *12-13.    On the issue of receipt, the

23   Commissioner may be entitled to a presumption of

24   administrative regularity.    Once the Commissioner proves

25   proper mailing of a Letter 1153, it is presumptively
                                                                17
1    delivered to and received by the person to whom it was

2    addressed.   Id. To rebut the presumption of receipt, the

3    taxpayer must present strong evidence of non-receipt.

4    Generally, a taxpayer's testimony of non-receipt, standing

5    alone, is insufficient.   Klingenberg v. Commissioner, T.C.

6    Memo. 2012-292, at *12, aff'd, 670 F. App'x 510 (9th Cir..

7    2016); Kamps, T.C. Memo. 2011-287, 102 T.C.M. (CCH) 580,

8    582; BM Construction, T.C. Memo. 2021-13, at *16-17.

9    Because the Commissioner established proper mailing and

10   delivery, we must determine whether Ms. Hammock rebutted

11   the presumption of receipt.

12              Ms. Hammock did not rebut the presumption of

13   receipt.   The facts clearly establish proper mailing and

14   delivery to an individual at her address.     The only

15   contrary evidence is Ms. Hammock's statement that she does

16   not recall receiving the Letter 1153.   Yet a copy of that

17   notice was eventually attached to her untimely protest,

18   and the record is silent as to how or when that copy of

19   the notice came into her or her counsel's possession.

20   Moreover, during the supplemental hearing, Ms. Hammock's

21   counsel acknowledged that she received the notice.

22              Contrast the evidence here with that in Lepore

23   v. Commissioner, T.C. Memo. 2013-135.   In that case, Mr.

24   Lepore's 23–year–old son received and signed for a Letter

25   1153 addressed to Mr. Lepore.   Id., at *3.   Mr. Lepore
                                                             18
1    "testified that he never saw the Letter 1153 or knew that

2    it had arrived at his home." Id., at *10.   We accepted his

3    testimony for a few reasons: (1) Mr. Lepore credibly

4    testified that he always responded to correspondence from

5    the Commissioner (a point not disputed by the IRS) and

6    that he would have responded had he known; (2) his son

7    testified that he did not give the Letter 1153 to his

8    father personally and instead threw it somewhere in the

9    basement; (3) the basement was a multipurpose office space

10   containing Mr. Lepore's desk, the other son's desk, and at

11   least three defunct businesses' files, such that a letter

12   thrown there could easily get lost; (4) Mr. Lepore

13   received a high volume of mail; and (5) the son who

14   received the Letter 1153 did not live in the house when he

15   received it and did not speak to his father frequently.

16   Id., at *10-11.

17             A more analogous situation can be found in Orian

18   v. Commissioner, T.C. Memo. 2010-234, 100 T.C.M. (CCH)

19   356.   In that case, the Commissioner established that "a

20   proposed assessment was sent by certified mail to Mr.

21   Orian's last known address; that it was not returned; and

22   that, according to the U.S. Postal Service's Web site, it

23   was delivered." Id., at 359.   The taxpayer testified "that

24   he had no memory of receiving the letter and was

25   frequently out of town." Id. Nonetheless, we found that
                                                             19
1    taxpayer failed to meet "the burden of proof requirements

2    to overcome the presumption that he received the [Letter

3    1153]." Id.

4               Ms. Hammock did not establish that she did not

5    receive the Letter 1153.   Because we conclude that Ms.

6    Hammock received the notice, she may not challenge the

7    underlying liability.

8               Abuse of Discretion

9               Because Ms. Hammock's underlying liability is

10   not at issue, our review of the notice of determination is

11   for abuse of discretion.   See Sego, 114 T.C. at 610.     An

12   abuse of discretion occurs if Appeals exercises its

13   discretion "arbitrarily, capriciously, or without sound

14   basis in fact or law." Woodral v. Commissioner, 112 T.C.

15   19, 23 (1999).   To answer the question of whether the

16   settlement officer abused her discretion, we consider

17   whether she: (1) properly verified that the Commissioner

18   met all requirements of applicable law and administrative

19   procedure for collecting the trust fund recovery

20   penalties, (2) considered any relevant issues petitioner

21   raised, and (3) considered whether the proposed collection

22   action is no more intrusive than necessary.   See section

23   6330(c).

24              The main issues raised by Ms. Hammock involve

25   the verification requirement of section 6330(c)(1).      In
                                                               20
1    collection cases for trust fund recovery penalties, the

2    settlement officer must verify that the Commissioner

3    properly mailed a Letter 1153 and that the section 6672

4    penalty was properly approved under the written

5    supervisory approval requirement of section 6751.     See Lee

6    v. Commissioner, 144 T.C. 40, 49 (2015); Chadwick v.

7    Commissioner, 154 T.C. 84, 94-95 (2020).   Section 6330

8    does not require the settlement officer to rely on a

9    particular document, and reliance on standard

10   administrative records is generally acceptable.     Craig v.

11   Commissioner, 119 T.C. 252, 262 (2002); Blackburn v.

12   Commissioner, 150 T.C. 218, 222 (2018); Nestor v.

13   Commissioner, 118 T.C. 162, 166 (2002).    However, when a

14   taxpayer specifically alleges that she never received a

15   Letter 1153, an Appeals officer cannot rely solely on

16   computerized transcripts to verify mailing.     See Hoyle v.

17   Commissioner, 131 T.C. 197, 205 n.7 (2008), supplemented

18   by 136 T.C. 463 (2011).   Instead, the Appeals officer must

19   examine the underlying documents.   Id.

20             The record indicates that the settlement officer

21   complied with procedural requirements and gave due

22   consideration to Ms. Hammock's allegations. The settlement

23   officer verified that the Commissioner had determined that

24   Ms. Hammock was a responsible person and that a supervisor

25   approved in writing the initial determination of the
                                                                21
1    penalty.   The settlement officer also verified that the

2    Letter 1153 was sent by certified mail before the

3    Commissioner assessed the trust fund recovery penalty.

4    Ms. Hammock alleged at trial that she did not recall

5    receiving the Letter 1153.   The administrative record

6    reflects that the settlement officer reviewed the

7    documents in the case file, including the Letter 1153, and

8    determined that the Letter 1153 had been sent to Ms.

9    Hammock's last known address by certified mail.     The

10   record contains a photocopy of the Letter 1153.     The

11   photocopy has the U.S. Postal Service Form 3800, Certified

12   Mail Receipt, attached, indicating that it was sent by

13   certified mail.   The administrative record also includes

14   proof of delivery.   On remand, the settlement officer

15   verified that all requirements of applicable law and

16   administrative procedure were met.

17              Failure to Notify Counsel

18              Ms. Hammock raises as a separate issue the

19   Commissioner's failure to send a copy of the Letter 1153

20   to her counsel.   It is unclear in exactly what context she

21   raises this issue.   Is she raising it as a challenge to

22   the underlying liability itself?     Or is she raising it as

23   a challenge to whether the settlement officer in the

24   collection proceeding confirmed that all proper

25   administrative steps were taken?     Either way, her argument
                                                                22
1    fails.

2                The Commissioner did not mail the notice to Ms.

3    Hammock's attorneys because the IRS did not have a valid

4    Form 2848 on file authorizing anyone to represent her.

5    Her counsel did not submit a valid Form 2848 until after

6    the Letter 1153 was issued.    But even if the Commissioner

7    had a valid Form 2848 on file, the failure would not

8    invalidate the notice or deprive her of the right to

9    timely appeal.    We have repeatedly held in analogous

10   contexts that the failure to send a copy of a notice to a

11   taxpayer's counsel does not invalidate the notice or serve

12   to extend the period of time within which the taxpayer

13   must act.   See, e.g., Allen v. Commissioner, 29 T.C. 113,

14   117 (1957); Houghton v. Commissioner, 48 T.C. 656, 661-62

15   (1967); McDonald v. Commissioner, 76 T.C. 750, 752-53

16   (1981).

17               If Ms. Hammock raises this issue as a basis to

18   claim that the settlement officer did not verify that all

19   administrative steps were taken, that argument must fail.

20   In her supplemental notice of determination, the

21   settlement officer verified that there was no processable

22   Form 2848 on file at the time the Commissioner issued

23   Letter 1153.

24               Ms. Hammock's remaining arguments are merely

25   reframed challenges to the underlying liability.    For
                                                             23
1    example, in her pretrial memorandum, Ms. Hammock questions

2    "did the appeals officer abuse her discretion by failing

3    to consider all the evidence and refusing to hear

4    Hammock's challenge to the underlying liability" or

5    whether "the IRS properly assess[ed] Hammock given it

6    failed to conduct investigation or make factual findings

7    to support the underlying liability determination." These

8    go to the merits of the underlying liability and not the

9    question of whether all administrative steps were taken.

10   We have previously held that "[t]o impose the requirement

11   of a substantive review on the settlement officer would

12   allow the taxpayer to avoid [section 6330's] limitations

13   of pursuing the underlying liability . . . and apply a

14   level of detail in the verification process that has never

15   been previously required." Blackburn, 150 T.C. at 222.

16   The law simply does not require the settlement officer in

17   the collection proceeding to determine whether Ms. Hammock

18   was a responsible person as a condition precedent to

19   verifying procedural compliance.

20             Collection Alternatives

21             Ms. Hammock did not offer any collection

22   alternatives and does not argue that the settlement

23   officer failed to consider any collection alternatives.

24             Conclusion

25             The Commissioner determined that Ms. Hammock was
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1    a responsible person as to the trust fund liabilities of

2    Scorpion.   She did not timely challenge the Commissioner's

3    determination and is precluded from raising the underlying

4    liabilities in this proceeding.      The Commissioner verified

5    that all proper administrative steps were taken.      The

6    Commissioner did not consider collection alternatives

7    because none were offered.    Accordingly, we will sustain

8    the Commissioner's notice of determination.      To reflect

9    the foregoing, an appropriate decision will be entered.

10               (Whereupon, at 10:29 a.m., the above-entitled

11               matter was concluded.)

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