Goza v. Comm'r of Internal Revenue, No. 15444–99L.
| Decision Date | 17 March 2000 |
| Docket Number | No. 15444–99L. |
| Citation | 114 T.C. No. 12,114 T.C. 176 |
| Parties | Howard GOZA, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent |
| Court | U.S. Tax Court |
OPINION TEXT STARTS HERE
Taxpayer petitioned for review of IRS' determination to proceed with collection for taxable years in which he filed no tax returns. IRS moved to dismiss for failure to state a claim upon which relief could be granted. The Tax Court, Cohen, Chief Judge, adopted the decision of Panuthos, Chief Special Trial J., which held that: (1) Tax Court had jurisdiction to review pre-levy hearing; (2) taxpayer was precluded from contesting underlying tax liability in pre-levy hearing; and (3) Appeals officer satisfied verification requirement at pre-levy hearing.
Motion granted.
Howard Goza, Petitioner, pro se.
Ashton P. Trice and Richard Goldman, for respondent.
R issued a notice of deficiency to P for the taxable years 1994, 1995, and 1996. P returned the notice of deficiency to R marked P did not file a petition for redetermination with the Court. R subsequently issued a notice of intent to levy to P indicating that R intended to collect the taxes due for the taxable years 1994, 1995, and 1996. P requested and received an administrative review of the proposed collection action. R issued a notice of determination to P stating that all applicable laws and administrative procedures had been met and that collection would proceed. R further advised P that challenges to the underlying liability would not be considered since P received a notice of deficiency. P filed a timely petition for review with the Court contesting the notice of determination on the ground that he is not liable for the underlying tax deficiencies, and, therefore, there is no basis for assessment and collection of the tax. R moved to dismiss for failure to state a claim upon which relief can be granted.
Held: The Tax Court has jurisdiction to review a determination pursuant to sec. 6330(c) and (d), I.R.C. Held, further, where P timely received a statutory notice of deficiency, yet he failed to file a petition for redetermination with the Court, P was precluded from contesting the issue of the underlying tax liability during Appeals Office consideration pursuant to sec. 6330(c)(2)(B), I.R.C. Held, further, P's petition for review of R's administrative determination to proceed with collection fails to state a claim upon which relief can be granted. See sec. 6330(d), I.R.C.; Rule 331(b)(4) and (5), Tax Court Rules of Practice and Procedure.
This case was assigned to Chief Special Trial Judge Peter J. Panuthos pursuant to the provisions of section 7443A(b)(4) and Rules 180, 181, and 183. Unless otherwise indicated, section references are to sections of the Internal Revenue Code as amended, and Rule references are to the Tax Court Rules of Practice and Procedure. The Court agrees with and adopts the opinion of the Special Trial Judge, which is set forth below.
This matter is before the Court on respondent's motion to dismiss for failure to state a claim upon which relief can be granted. As discussed in detail below, we shall grant respondent's motion.
On December 17, 1997, respondent issued a notice of deficiency to petitioner determining deficiencies in and additions to his Federal income taxes for the years and in the amounts as follows:
+-----------------------------------------+
¦ ¦ ¦Additions to Tax ¦
+----+----------+-------------------------¦
¦Year¦Deficiency¦Sec. 6651(a)(1)¦Sec. 6654¦
+----+----------+---------------+---------¦
¦1994¦$12,588 ¦$3,147 ¦$649 ¦
+----+----------+---------------+---------¦
¦1995¦12,893 ¦3,223 ¦703 ¦
+----+----------+---------------+---------¦
¦1996¦13,357 ¦3,339 ¦718 ¦
+-----------------------------------------+
Respondent reconstructed petitioner's income for the years in issue by relying on information produced by the Bureau of Labor Statistics.
On February 9, 1998, petitioner mailed the notice of deficiency back to respondent with the following handwritten statement appearing on the first page of the notice: The notice was accompanied by a 15–page “NOTICE OF DEFENSE” in which petitioner asserted that he is not liable for the taxes in question based on a number of frivolous constitutional arguments.
On February 17, 1999, respondent mailed a final notice of intent to levy to petitioner pursuant to section 6331. The notice stated that petitioner owed taxes, penalties, and interest totaling $23,816 .20, $22,653.89, and $21,658.74, for the taxable years 1994, 1995, and 1996, respectively, and that respondent was preparing to collect these amounts. The notice stated that petitioner could request a “Collection Due Process Hearing” with respondent's Appeals Office.
On March 9, 1999, petitioner returned the notice of intent to levy to respondent with the same handwritten statement appearing on the notice of deficiency. On August 24, 1999, respondent's Atlanta Appeals Office issued a notice of determination to petitioner which stated in pertinent part:
We have reviewed the proposed collection action for the periods [1994, 1995, and 1996]. This letter is your legal Notice of Determination as required by law. * * *
* * *
Summary of Determination:
It has been determined that the requirements of all applicable laws and administrative procedures have been met.
As you were advised in our letter dated July 6, 1999, challenges to the underlying liability may only be raised as an issue if you did not receive a statutory notice of deficiency or did not otherwise have an opportunity to dispute the liability. You did receive a statutory notice of deficiency in this case. You were also informed that a hearing is not available for constitutional issues such as those referenced in your reply to the final notice, and you failed to raise any issues that could be considered in a due process hearing pursuant to IRC section 6330.
It is therefore deemed that the proposed collection action balances the need for efficient collection of the taxes with the concern that the collection action be no more intrusive than necessary.
On September 24, 1999, petitioner timely filed with the Court a petition for review of respondent's determination letter. The petition states in pertinent part that petitioner “requests a Redetermination of income taxes allegedly owed to Respondent”. The petition includes allegations that it is unclear: (1) Whether the income tax is a direct or indirect tax, (2) what income is subject to taxation, and (3) who is subject to the Internal Revenue Code. Petitioner concludes, among other things, in his petition:
Respondent is attempting to collect a tax on income not subject to the present income tax system, absent a willingness on the part of Petitioner to voluntarily self-assess himself on such income—which is clearly not the case.
Petitioner reserves all rights under the federal Constitution and common law, the filing of this petition is not intended as a waiver of any of those rights.
As indicated, respondent filed a motion to dismiss asserting that the petition for review fails to state a claim for relief in this collection review proceeding. Respondent maintains that, because petitioner received a notice of deficiency for the years in issue (and therefore was presented with an earlier opportunity to contest his tax liability in this Court) the question of petitioner's liability for the underlying taxes is not an issue that is subject to dispute in this proceeding.
This matter subsequently was called for hearing at the Court's motions session in Washington, D.C. Counsel for respondent appeared at the hearing and presented argument in support of the motion to dismiss. No appearance was made by or on behalf of petitioner at the hearing.
Section 6331(a) provides that, if any person liable to pay any tax neglects or refuses to pay such tax within 10 days after notice and demand for payment, the Secretary is authorized to collect such tax by levy upon property belonging to the taxpayer. Section 6331(d) provides that the Secretary is obliged to provide the taxpayer with notice, including notice of the administrative appeals available to the taxpayer, before proceeding with collection by levy on the taxpayer's property.
In the Internal Revenue Service Restructuring and Reform Act of 1998 (RRA 1998), Pub.L. 105–206, sec. 3401, 112 Stat. 685, 746, Congress enacted new sections 6320 (pertaining to liens) and 6330 (pertaining to levies) to provide due process protections for taxpayers in tax collection matters. Section 6330 generally provides that the Commissioner cannot proceed with the collection of taxes by way of a levy on a taxpayer's property until the taxpayer has been given notice of and the opportunity for an administrative review of the matter (in the form of an Appeals Office due process hearing), and if dissatisfied, with judicial review of the administrative determination. Section 6330(e) generally provides for the suspension of the period of limitations on collection during the period that administrative and judicial proceedings are pending and for 90 days thereafter. Section 6330 is effective with respect to collection actions initiated more than 180 days after July 22, 1998 (January 19, 1999). See RRA 1998 sec. 3401(d), 112 Stat. 750.
Section 6330(c) prescribes the matters that may be raised by a taxpayer at an Appeals Office due process hearing in pertinent part as follows:
SEC. 6330(c). Matters Considered at Hearing.—In the case of any hearing conducted under...
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