Lunsford v. Comm'r of Internal Revenue, 18071–99L.

• Citation: 117 T.C. 159,117 T.C. No. 16
• Decision Date: 30 November 2001
• Docket Number: No. 18071–99L.,18071–99L.
• Parties: Joseph D. and Wanda S. LUNSFORD, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
• Court: United States Tax Court

117 T.C. 159

117 T.C. No. 16

Joseph D. and Wanda S. LUNSFORD, Petitioners

v.COMMISSIONER OF INTERNAL REVENUE, Respondent

No. 18071–99L.

United States Tax Court.

Nov. 30, 2001.

Taxpayers petitioned for review of IRS' determination to proceed with collection following collection due process (CDP) hearing. The Tax Court, Ruwe, J., held that Tax Court had jurisdiction to review IRS' determination to proceed with collection, overruling Meyer v. Comm., 115 T.C. 417.

Decision for IRS.

Halpern, J., filed concurring opinion, in which Whalen, Beghe, and Thornton, JJ., joined.

Beghe, J., filed concurring opinion, in which Halpern, J., joined.

Foley, J., filed dissenting opinion, in which Chiechi, Laro, Vasquez, and Marvel, JJ., joined.

Vasquez, J., filed dissenting opinion in which, Foley, J., joined. R issued a notice of intent to levy, and Ps requested a hearing before an IRS Appeals officer (A) pursuant to sec. 6330, I.R.C. In their request Ps questioned whether there was a valid summary record of the assessment of the taxes in issue. A sent a letter to Ps that enclosed a Form 4340, Certificate of Assessments and Payments, showing that the assessments were made and invited Ps to raise additional issues, but Ps did not do so. A did not schedule a face-to-face hearing. A issued a notice of determination, and Ps timely petitioned the Tax Court for review.Held: The Tax Court has jurisdiction under sec. 6330(d)(1)(A), I.R.C., based on a valid notice of determination and a timely filed petition. In determining the validity of the notice of determination for jurisdictional purposes, we do not look behind the notice to see whether Ps were afforded an appropriate IRS Appeals hearing. The notice of determination sent to Ps was valid on its face, and we have jurisdiction to review the determination. Meyer v. Commissioner, 115 T.C. 417, 2000 WL 1672623 (2000), is overruled to the extent it requires the Court to look behind the notice of determination to see whether a proper hearing opportunity was given in order to decide whether the notice was valid.Joyce M. Griggs, for petitioners.

Ross M. Greenberg, for respondent.

OPINION

RUWE, J.

This case arises from a petition for judicial review filed under section 6330(d)(1)(A).¹ The issue for decision is whether this Court has jurisdiction to review respondent's determination to proceed with collection by way of levy. At the time petitioners filed their petition, they resided in Asheville, North Carolina. When this case was called for trial, the parties submitted the case fully stipulated. For convenience, we combine the facts, which are not in dispute, with our opinion.

Section 6331(a) authorizes the Commissioner to levy against property and property rights where a taxpayer fails to pay taxes within 10 days after notice and demand for payment is made. Section 6331(d) requires the Secretary to send notice of an intent to levy to the taxpayer, and section 6330(a) requires the Secretary to send a written notice to the taxpayer of his right to a hearing. Section 6330(b) affords taxpayers the right to a “fair hearing” before an “impartial” IRS Appeals officer. Section 6330(c)(1) requires the Appeals officer to obtain verification that the requirements of any applicable law or administrative procedure have been met. Section 6330(c)(2)(A) specifies issues that the taxpayer may raise at the Appeals hearing. The taxpayer is allowed to raise “any relevant issue relating to the unpaid tax or the proposed levy” including spousal defenses, challenges to the appropriateness of collection action, and alternatives to collection. Sec. 6330(c)(2)(A). The taxpayer cannot raise issues relating to the underlying tax liability if the taxpayer received a notice of deficiency or the taxpayer otherwise had an opportunity to dispute the tax liability. Sec. 6330(c)(2)(B).

Section 6330(c)(3), provides that a determination of the Appeals officer shall take into consideration the verification under section 6330(c)(1), the issues raised by the taxpayer, and whether the proposed collection action balances the need for the efficient collection of taxes with the legitimate concern of the person that any collection action be no more intrusive than necessary. Section 6330(d)(1) then provides:

(1) Judicial review of determination.—The person may, within 30 days of a determination under this section, appeal such determination—

(A) to the Tax Court (and the Tax Court shall have jurisdiction with respect to such matter); or

(B) if the Tax Court does not have jurisdiction of the underlying tax liability, to a district court of the United States.

Thus, if we have general jurisdiction over the type of tax involved, a “determination” by Appeals and a timely petition are the only requirements for the exercise of our jurisdiction under section 6330. Temporary regulations promulgated under section 6330 require that the “determination” by Appeals be issued in the form of a “written” notice. Sec. 301.6330–1T(e)(3), Q & A–E7, Temporary Proced. & Admin. Regs, 64 Fed.Reg. 3411–3412 (Jan. 22, 1999). ² Thus, we have held that our jurisdiction under section 6330(d)(1) depends upon the issuance of a valid notice of determination and a timely petition for review. Sarrell v. Commissioner, 117 T.C. 122, 125, (2001); Offiler v. Commissioner, 114 T.C. 492, 498, 2000 WL 777218 (2000); Goza v. Commissioner, 114 T.C. 176, 182, 2000 WL 283864 (2000).

On April 30, 1999, respondent issued a notice of intent to levy to petitioners. The proposed levy was to collect unpaid income taxes of $83,087.85 for the taxable years 1993, 1994, and 1995. On May 24, 1999, petitioners filed a Form 12153, Request for a Collection Due Process Hearing,³ in which they raised the following issue regarding the validity of the assessments made by respondent:

I do not agree with the collection action of levy and notice of intent to levy 4–30–99. The basis of my complaint is what I believe to be the lack of a valid summary record of assessment pursuant to 26 CFR § 301.6203–1. Without a valid assessment there is no liability. Without a liability there can be no levy, no notice of intent to levy, nor any other collection actions.

On September 2, 1999, the Appeals officer wrote a letter to petitioners indicating that the validity of the assessments had been verified and attached a Form 4340, Certificate of Assessments and Payments, which clearly shows that the assessments in question were made and remained unpaid. The Appeals officer concluded the letter stating: “If you wish to discuss other matters, such as resolution of the liability please contact me by September 16, 1999. Otherwise, we will issue a determination”. Petitioners made no response to this letter. No further proceedings or exchange of correspondence occurred prior to the Appeals officer's determination.

On November 3, 1999, a notice of determination was sent to petitioners by the IRS Appeals Office which sustained the proposed levy. The notice of determination included findings that: (1) All procedural, administrative, and statutory requirements were met; (2) the Form 4340 satisfied the requirements of section 6203; ⁴ (3) petitioners failed to present any collection alternatives; and (4) the proposed levy was justified. On December 2, 1999, petitioners filed a timely petition to the Tax Court.

Neither petitioners nor respondent has moved or argued that we lack jurisdiction in this case. However, questions regarding jurisdiction were raised by the trial judge at the time the case was called for trial. The specific jurisdictional question concerned whether petitioners were offered an opportunity for a hearing with an IRS Appeals officer. The trial judge's inquiry was based on our opinion in Meyer v. Commissioner, 115 T.C. 417, 422–423, 2000 WL 1672623 (2000), which held that we lacked jurisdiction under section 6330(d) if the taxpayer was not given an opportunity for an Appeals hearing.

In Meyer v. Commissioner, supra at 422–423, we looked behind the notice of determination to find that the taxpayer was not offered an Appeals hearing. We then found that the notice of determination was invalid and that the Tax Court was without jurisdiction to review the Appeals officer's determination. Id. For the reasons discussed below, we now conclude that our opinion in Meyer was incorrect.

As a preliminary matter, we point out that this Court should not have decided whether the notice of determination was valid in Meyer v. Commissioner, supra, because we did not have subject matter jurisdiction. We have held that we lack jurisdiction under section 6330(d) when the tax in issue is one over which we normally do not have jurisdiction. See Johnson v. Commissioner, 117 T.C. ––––, (2001); Moore v. Commissioner, 114 T.C. 171, 2000 WL 283865 (2000). The tax in Meyer v. Commissioner, supra, was a frivolous return penalty over which we normally have no jurisdiction. We therefore had no subject matter jurisdiction under section 6330(d). Van Es v.. Commissioner, 115 T.C. 324, 2000 WL 1520321 (2000). In that situation, section 6330(d) provides that “If a court determines that the appeal was to an incorrect court, a person shall have 30 days after the court determination to file such appeal with the correct court.” ⁵ Thus, in Meyer v. Commissioner, supra, we decided an issue regarding the adequacy of the hearing opportunity and its ramifications which should have been considered in the first instance by a district court with subject matter jurisdiction.

Secondly, in Meyer v. Commissioner, supra, our holding that the notice of determination was invalid was improperly predicated on facts regarding procedures that were followed prior to the issuance of the notice of determination rather than on the notice of determination itself. Id. at 422–423. Our analysis in Meyer improperly required us to look behind the notice of determination.

In Offiler v. Commissioner, 114 T.C. at 498, we analogized a notice of determination...