Court Opinion

ID: 4334539
Source: CourtListenerOpinion
Date Created: 2018-11-14 01:43:02.323101+00
Date Added: 2024-06-11T14:20:25.455797
License: Public Domain

T.C. Summmary Opinion 2003-111

                     UNITED STATES TAX COURT

              CALVIN EARL HUMPHRIES, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent

     Docket No. 14064-02S.              Filed August 8, 2003.

     Calvin Earl Humphries, pro se.

     John D. Faucher, for respondent.

     COUVILLION, Special Trial Judge:    This case was heard

pursuant to section 7463 in effect when the petition was filed.1

The decision to be entered is not reviewable by any other court,

and this opinion should not be cited as authority.    Petitioner

seeks a review under section 6330(d) of a determination by

respondent's Appeals Office that respondent's action to collect

     1
          Unless otherwise indicated, section references
hereafter are to the Internal Revenue Code as amended.
                                - 2 -

by levy Federal income taxes owing by petitioner for the years

1992 and 1994 should proceed.   That determination was preceded by

respondent's issuance to petitioner of a notice of intent to levy

and of petitioner's right to a hearing in connection with an

assessed balance of income taxes and statutory additions totaling

$8,349.62, $4,717.20, and $2,881.40, respectively, for 1992,

1994, and 1998.   In his petition for review, petitioner did not

challenge respondent's determination to proceed with collection

for the year 1998.

     Some of the facts were stipulated.   Those facts, with the

exhibits annexed thereto, are so found and are made part hereof.

At the time the petition for review was filed, petitioner was a

legal resident of Houston, Texas.

     An attachment to the notice of determination prepared by

respondent's Appeals officer states that, at the hearing,

petitioner "only argues that he did not owe the proposed taxes"

and that, under section 6330(c)(2)(B), "none of the three

disputed liabilities are appropriate for consideration as a part

of the Request for Collection Due Process Hearing".   The

statement also states that "joint liability" was not at issue,

that collection alternatives were not offered, and concludes that

collection activity could proceed.

     As noted earlier, petitioner did not challenge the

determination for the 1998 tax year in his petition to this
                                - 3 -

Court.    As to the 1992 tax year, petitioner alleged he had not

filed a return for that year because he was not employed that

year.    For the 1994 tax year, he alleged "nothing was wrong with

this return", and the refund for overpayment he received for 1994

"was due to me" and "why should I pay it back?"

     In a trial memorandum and at trial, counsel for respondent

advised the Court that petitioner had filed an income tax return

for 1992, and, based on that return, respondent had allowed

petitioner a refund of $4,390, which was composed mostly of

earned income and diesel fuel credits.    Thereafter, respondent

reversed that action and assessed a liability of $5,541.89

against petitioner for 1992.    Counsel acknowledged that

respondent had no record of having issued a notice of deficiency

to petitioner for 1992 to reflect this change.    Counsel agreed

that, since petitioner had never been afforded an opportunity to

challenge respondent's actions for that year, respondent

"concedes the issue with respect to petitioner's 1992 liability

and will abate that amount".    As a result of respondent's

concession, the only remaining year before the Court is

petitioner's 1994 tax year.

     With respect to the 1994 tax year, it appears (and the Court

concludes) that no notice of deficiency was issued to petitioner

for that year.    The parties stipulated into evidence the copy of

Form 4549-CG, Income Tax Examination Changes, relating to
                                - 4 -

petitioner's 1994 tax return.    That form bears petitioner's

signature along with stamped approvals by the Internal Revenue

Service and reflects a balance of $3,055.72 of tax and interest

owing by petitioner for the 1994 tax year.    The Form 4549-CG

provides, just above petitioner's signature, the following:

          Consent to Assessment and Collection - I do not wish to
     exercise my appeal rights with the Internal Revenue Service
     or to contest in United States Tax Court the findings in
     this report. Therefore, I give my consent to the immediate
     assessment and collection of any increase in tax and
     penalties, and accept any decrease in tax and penalties
     shown above, plus additional interest as provided by law.
     It is understood that this report is subject to acceptance
     by the District Director.

     Petitioner acknowledged having signed the Form 4549-CG but

contends he signed the form believing that he would be allowed to

appeal the proposed changes to his 1994 return relating to the

disallowance of two child dependency exemptions claimed on his

1994 return.   He recalled having telephone conversations with a

representative of the Internal Revenue Service and believed that,

by signing the Form 4549-CG, his objection to the proposed

changes would be considered.    Petitioner contends he had no

intention of conceding the proposed changes to his 1994 return.

On this scenario, it is evident to the Court that no notice of

deficiency was issued to petitioner for 1994, and respondent

assessed the amounts conceded by petitioner.

     Section 6331(a) provides that, if any person liable to pay
                               - 5 -

any tax neglects or refuses to pay such tax within 10 days of

notice and demand for payment, the Secretary may collect such tax

by levy upon the taxpayer's property.    Section 6330 generally

provides that the Secretary cannot proceed with the collection of

taxes by way of a levy until the taxpayer has been given notice

and an opportunity for administrative review in the form of an

Appeals Office hearing.   Section 6330(c) provides for an Appeals

Office due process hearing to address collection issues

including, among other things, alternative means of collection.

     In connection with matters to be considered at a collection

due process hearing under section 6330, section 6330(c)(2)(B)

states:

          (B) Underlying liability.-–The person may also raise at
     the hearing challenges to the existence or amount of the
     underlying tax liability for any tax period if the person
     did not receive any statutory notice of deficiency for such
     tax liability or did not otherwise have an opportunity to
     dispute such tax liability.

     It is evident from the above that a notice of deficiency was

never issued to petitioner for 1994; however, it is also evident

that petitioner was otherwise provided an opportunity, before the

assessment, to dispute his 1994 liability.     Aguirre v.

Commissioner, 117 T.C. 324 (2001).     He admitted so in his

testimony.   Even if petitioner was not aware that he had waived

his rights to challenge the determination because of the Form
                                 - 6 -

4549-CG, there is no evidence that petitioner ever protested the

effect of his waiver and agreement to an assessment in subsequent

events, such as responding to collection notices, etc.     Moreover,

there is no indication that this issue was brought up by

petitioner at his hearing before the Appeals officer in

connection with respondent's notice of intent to proceed with

collection under section 6330.    The statement attached to the

Notice of Determination by the Appeals officer provides no

information that petitioner's contention as to the Form 4549-CG

was even raised or considered at the hearing, nor did petitioner

at trial claim that it was raised at his hearing before the

Appeals officer.    The Court, therefore, rejects petitioner's

claim that his prior consent to assessment and collection should

be disregarded.    The validity of the underlying tax liability,

therefore, is not properly at issue.     When, as here, the

underlying liability is not at issue, this Court reviews the

Commissioner's determination for abuse of discretion.     Sego v.

Commissioner, 114 T.C. 604, 610 (2000).     Accordingly, the Court

holds that there was no abuse of discretion by respondent in

determining that collection could proceed with respect to

petitioner's 1994 liability.
                             - 7 -

    Reviewed and adopted as the report of the Small Tax Case

Division.

                                          An appropriate order and

                                     decision will be entered.