Lunsford v. Comm'r

117 T.C. No. 16, 117 T.C. 159, 2001 U.S. Tax Ct. LEXIS 48

Opinions

OPINION

Ruwe, Judge:

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 (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); Goza v. Commissioner, 114 T.C. 176, 182 (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 4r-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), 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. 204 (2001); Moore v. Commissioner, 114 T.C. 171 (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). 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 issued pursuant to section 6330(c)(3) to a notice of deficiency issued pursuant to section 6212 and said that the notice of determination is the jurisdictional “equivalent of a notice of deficiency.”⁶ In the context of a notice of deficiency, we have consistently held that as a general rule we do not look behind the notice to determine its validity. Pietanza v. Commissioner, 92 T.C. 729, 735 (1989), affd. without published opinion 935 F.2d 1282 (3d Cir. 1991); Riland v. Commissioner, 79 T.C. 185, 201 (1982); Estate of Brimm v. Commissioner, 70 T.C. 15, 22 (1978); Greenberg’s Express, Inc. v. Commissioner, 62 T.C. 324, 327 (1974). It is well established that the Tax Court will generally examine only the notice of deficiency to determine whether the notice was valid for jurisdictional purposes. See Sealy Power, Ltd. v. Commissioner, 46 F.3d 382, 388 n.25 (5th Cir. 1995), affg. in part and revg. in part T.C. Memo. 1992-168; Clapp v. Commissioner, 875 F.2d 1396, 1402 (9th Cir. 1989).

We believe the same principles are applicable to a section 6330 determination. Our jurisdiction under section 6330(d)(1)(A) is established when there is a written notice that embodies a determination to proceed with the collection of the taxes in issue, and a timely filed petition. To the extent that Meyer v. Commissioner, 115 T.C. 417 (2000), holds that we must first look behind the determination to see whether a proper hearing was offered in order to have jurisdiction, Meyer is overruled.

We are, of course, cognizant of the role stare decisis plays in this Court and in other Federal courts, especially in the context of statutory construction. See, e.g., Sec. State Bank v. Commissioner, 111 T.C. 210, 213-214 (1998), affd. 214 F.3d 1254 (10th Cir. 2000). Nevertheless, when this Court decided Meyer v. Commissioner, supra, lien and levy cases under section 6330 were just starting to reach this Court. In the nascent stages of our section 6330 jurisprudence, we made a decision limiting our jurisdiction. After almost a year of experience in dealing with lien and levy cases, we have come to the conclusion that the jurisdictional analysis in Meyer was incorrect and has resulted in unjustified delay in the resolution of cases. Whether there was an appropriate hearing opportunity, or whether the hearing was conducted properly, or whether the hearing was fair, or whether it was held by an impartial Appeals officer, or whether any of the other nonjurisdictional provisions of section 6330 were properly followed, will all be factors that we must take into consideration under section 6330 in deciding such cases. But none of these factors should preclude us from exercising our jurisdiction under section 6330(d), in order to resolve the underlying dispute in a fair and expeditious manner.

In the instant case, there is nothing in the notice of determination which leads us to conclude that the determination was invalid. The notice of determination clearly embodies the Appeals officer’s determination that collection by way of levy may proceed. Thus, regardless of whether petitioners were given an appropriate hearing opportunity, there was a valid determination and a timely petition. Those are the only statutory requirements for jurisdiction in section 6330(d)(1)(A). Accordingly, we hold that we have jurisdiction to review the determination in this case.

An appropriate order will be issued.

Reviewed by the Court.

Wells, Cohen, Swift, Gerber, Colvin, Gale, and Thornton, JJ., agree with this majority opinion.

1 Unless otherwise indicated, all section references are to the Internal Revenue Code currently in effect, and all Rule references are to the Tax Court Rules of Practice and Procedure.

2 H. Conf. Rept. 105-599, at 266 (1998), 1998-3 C.B. 747, 1020, states in pertinent part:

Judicial Review

The conferees expect the appeals officer will prepare a written determination addressing the issues presented by the taxpayer and considered at the hearing. * * *

Accord Goza v. Commissioner, 114 T.C. 176, 181 (2000).

3 Various IRS forms refer to the Appeals hearing that is contemplated by sec. 6330(b) as a “collection due process” or “CDP” hearing.

4 Sec. 6203 requires the Secretary to record the liability of the taxpayer and to furnish a copy of the record of assessment to the taxpayer on request. Sec. 301.6203-1, Proced. & Admin. Regs., provides that an assessment officer shall make the assessment and sign the “summary record of assessment. The summary record, through supporting records, shall provide identification of the taxpayer, the character of the liability assessed, the taxable period, if applicable, and the amount of the assessment.”

5 See True v. Commissioner, 108 F. Supp. 2d 1361 (M.D. Fla. 2000), holding that the District Court lacked subject matter jurisdiction over a sec. 6330 case involving income tax and noting that the taxpayer had 30 days to file in the Tax Court. In True, the taxpayer had not been given an opportunity for an Appeals hearing. The District Court properly deferred consideration of that matter to the Tax Court, which had subject matter jurisdiction.

6 In Meyer v. Commissioner, 115 T.C. 417, 421 (2000), we correctly stated the role that a notice of determination and timely petition play in our jurisdiction as follows:

Section 6330(d) imposes certain procedural prerequisites on judicial review of collection matters. Much like the Court’s deficiency jurisdiction, the Court’s jurisdiction under section 6330(d) is dependent upon a valid determination letter and a timely filed petition for review. See Rule 330(b). Like a notice of deficiency under section 6213(a), an Appeals Office determination letter is a taxpayer’s “ticket” to the Tax Court. See Offiler v. Commissioner, 114 T.C. 492, 498 (2000); see also Mulvania v. Commissioner, 81 T.C. 65, 67 (1983); Gati v. Commissioner, 113 T.C. 132, 134 (1999). Moreover, a petition for review under section 6330 must be filed with the appropriate court within 30 days of the mailing of the determination letter. See McCune v. Commissioner, 115 T.C. 114 (2000).