Court Opinion

ID: 3065210
Source: CourtListenerOpinion
Date Created: 2015-10-14 22:29:48.073023+00
Date Added: 2024-06-11T15:48:47.272503
License: Public Domain

FOR PUBLICATION
 UNITED STATES COURT OF APPEALS
      FOR THE NINTH CIRCUIT

SHERYL L. ULRICH; JUDSON L.          
ULRICH,
                                          No. 08-70718
                      Petitioners,
               v.                         Tax Ct. No.
                                            7738-06L
COMMISSIONER OF INTERNAL
                                           OPINION
REVENUE,
                      Respondent.
                                     
              Appeal from a Decision of the
                United States Tax Court

                 Argued and Submitted
      September 17, 2009—San Francisco, California

                 Filed November 3, 2009

    Before: Mary M. Schroeder, Stephen Reinhardt and
             Carlos T. Bea, Circuit Judges.

                   Per Curiam Opinion

                          14809
                         ULRICH v. CIR                    14811

                          COUNSEL

Joe Alfred Izen, Jr., Bellaire, Texas, for the petitioners.

Nathan J. Hochman, Assistant Attorney General, and Steven
W. Parks and Ivan C. Dale, Attorneys, Tax Division, Depart-
ment of Justice, Washington, D.C., for the respondent.

                          OPINION

PER CURIAM:

   Judson and Sheryl Ulrich appeal a decision of the United
States Tax Court denying their appeal from a Collection Due
Process Hearing in which the Internal Revenue Service (IRS)
Appeals Office determined that the IRS could proceed with
collection of the Ulrichs’ 1999, 2000, and 2001 taxes. We
have jurisdiction pursuant to 26 U.S.C. § 7482(a)(1). We
affirm.
14812                   ULRICH v. CIR
   At the conclusion of an audit of the Ulrichs’ 1999, 2000,
and 2001 tax returns, the Ulrichs and the IRS Tax Examiner
signed IRS Income Tax Examination Changes Form 4549 (the
Form), which reflected a revised calculation of the Ulrichs’
tax liability for those years. The Form included the following
clause:

    Consent to Assessment and Collection — I do not
    wish to exercise my appeal rights with the Internal
    Revenue Service or to contest in the 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 Area Director, Area Manager or Director of
    Field Operations.

   The Ulrichs did not receive any notice that the Form had
been accepted by the “Area Director, Area Manager or Direc-
tor of Field Operations.” However, they did receive tax bills
that were consistent with the Form. The Ulrichs did not pay
the bills. On April 30, 2005, the IRS sent the Ulrichs a Final
Notice of Intent to Levy, which stated that the IRS planned to
place a levy on the Ulrich’s property in order to satisfy their
tax obligations for 1999, 2000 and 2001.

   The Ulrichs requested a hearing to appeal the levy. See 26
U.S.C. § 6330. In their request for a hearing, the Ulrichs
stated that they disagreed with the liability amount claimed by
the IRS. However, at the hearing the Ulrichs failed to intro-
duce any evidence, and the IRS Appeals Office determined
that the IRS could proceed with the levy. The Ulrichs
appealed that decision to the U.S. Tax Court. In Tax Court,
the Ulrichs argued that they had no tax liability for 1999,
2000, or 2001 because the IRS had failed to issue a notice of
deficiency for those years. See 26 U.S.C. § 6213(a); Hoyle v.
                         ULRICH v. CIR                     14813
Comm’r, 131 T.C. No. 13 (2008) (stating that an assessment
of tax liability is invalid if it is not preceded by the issuance
of a notice of deficiency). The Ulrichs further argued that the
Form in which they consented to immediate assessment was
a nullity because it was never accepted by the appropriate IRS
official.

   The Tax Court rejected the Ulrichs’ arguments. It found
that, by signing the Form 4549, the Ulrichs had waived their
right to receive a notice of deficiency and to raise challenges
to the liability set forth on the Form. It further held that the
IRS had accepted the Form by performing in accordance with
its terms.

   [1] We review the Tax Court’s legal conclusions de novo.
Boyd Gaming Corp. v. Comm’r, 177 F.3d 1096, 1098 (9th
Cir. 1999). We hold that when the Ulrichs signed the Form,
which indicated their consent to “immediate assessment and
collection of any increase in tax and penalties . . . shown [on
the Form],” they waived their right to receive a notice of defi-
ciency prior to collection of the amount listed on the Form
and to raise pre-collection objections to that amount. This
conclusion follows from the plain language of the Form and
is in accordance with the interpretations of the Form made by
the United States Tax Court and the Second Circuit. See
Deutsch v. Comm’r, 478 F.3d 450, 452 (2d Cir. 2007), cert.
denied, 128 S. Ct. 314 (2007); Aguirre v. Comm’r, 117 T.C.
324, 327 (2001).

   [2] We also hold that, contrary to the Ulrichs’ contention,
their waiver did not require acceptance by the IRS to become
effective. Normally, the IRS must issue a notice of deficiency
and wait 90 days before initiating collection proceedings
against a taxpayer. 26 U.S.C. § 6213(a). During this time,
interest accrues on the taxpayer’s liability. 26 U.S.C. § 6601.
However, the Tax Code allows a taxpayer to waive the right
to receive a notice of deficiency and to contest liability prior
to collection unilaterally by filing a signed writing with the
14814                    ULRICH v. CIR
IRS. See 26 U.S.C. § 6213(d). If a taxpayer files a waiver, the
IRS does not have to wait before initiating collection, and the
taxpayer does not have to pay the interest that would other-
wise accrue during the waiting period. 26 U.S.C. § 6601(c);
see also United States v. Price, 361 U.S. 304, 307-09 (1960)
(noting that the purpose of the waiver provision is to allow a
taxpayer who does not wish to contest the underlying liability
to avoid accruing interest).

   [3] No acceptance by the IRS is required to make a taxpay-
er’s waiver of the right to receive a notice of deficiency and
contest liability effective. See 26 U.S.C. §§ 6601(c), 6213(d).
Once the IRS assesses taxes in accordance with the terms of
the waiver, the waiver becomes irrevocable. 26 C.F.R.
§ 301.6213-1(d). The waiver the Ulrichs signed as part of the
Form constituted a waiver of the right to receive a notice of
deficiency and to contest liability, as contemplated by
§ 6213(d). As such, it relieved the Ulrichs of the obligation to
pay interest that otherwise might have accrued and did not
require acceptance by the IRS.

   [4] We note that, by signing Form 4549, the Ulrichs have
waived only their pre-collection right to contest their liability.
Once the Ulrichs have paid the amounts assessed in the Form,
they are free to challenge their liability in the District Court.
See 26 C.F.R. § 601.105(b)(4).

  AFFIRMED.