Lead Opinion
OPINION
The petition in this case was filed in response to two Notices of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330. Unless otherwise indicated, all section references are to the Internal Revenue Code in effect for the years in issue. The notice of determination sent to Steven Sego set forth
Summary of Determination
The Service should proceed with the proposed levy action.
Matters Considered at your Appeals hearing
The requirements of various apрlicable law or administrative procedures have been met based upon the best information available.
No spousal defenses were raised.
No offers of collection alternatives were made.
Challenges to the existence or amount of liability were raised including additional challenges as to the appropriateness of the collection actions on the basis of moral, religious, political, constitutional, conscientious, or similar grounds.
On August 13, 1997, the Service issued a notice of deficiency to you for taxable years ending December 31, 1993, 1994, and 1995. The notice of deficiency was mailed to your last known address. You failed to petition the Tax Court for redetermination and thus, the notice of deficiency was defaulted and the proposed deficiencies were assessed. The liability as reflected in the notice of deficiency was based upon the community property laws of the State of Idaho and your proportionate share of the community income.
The assessments are deemed correct because you have failed to present any credible evidence to overcome the Commissioner’s presumptiоn of correctness. You have continued to procrastinate with regards to providing additional information or evidence to support your position. You have made numerous arguments based upon moral, religious, political, constitutional, conscientious, or similar grounds which Appeals believes are without merit.
Appeals believes the proposed enforcement action balances the need for the efficient collection of taxes with your concerns as to the intrusiveness of the action to be taken.
The notice of determination sent to Davina Segó set forth the following:
Summary of Determination
The Service should proceed with the proposed levy action.
Matters Considered at your Appeals hearing
The requirements of various applicable law or administrative procedures have been met based upon the best information available.
No return was filed and thus, the spousal defense is not applicable.
No challenges were raised to the appropriateness of the collection actions.
No offers of collection alternatives were made.
You believe the liability is invalid because you either (1) had no sources of income, or (2) had no filing requirements, or (3) did not receive a notice of deficiency.
On August 13, 1997, the Service issued a notice of deficiency to you for taxable years ending December 31, 1993, 1994, and 1995. The notice of deficiency was mailed to your last known address. You failed to accept delivery of said notice of deficiency and you subsequently failed to timely petition the Tax Court for redetermination of the proposed liability. The liability as reflected in the notice of deficiency was based upon the community property laws of the State of Idaho and your proportionate share of the community income.
Appeals believes the proposed enforcement action balances the need for the efficient collection of taxes with your concеrns as to the intrusiveness of the action to be taken.
In the petition, it is alleged that, after a conference conducted with an Internal Revenue Service Appeals officer, petitioners received additional documents relating to disputed gains on sales transactions and that petitioners “found that the IRS had created income to Petitioners based on statistics, and this was unknown to Petitioners until after the conference”. The petition also contains various accusations concerning the. credibility of the statements in the above-quoted notices of determination.
Respondent contends that section 6330(c)(2)(B) precludes petitioners from challenging the existence or amount of their income tax liability for 1993, 1994, and 1995, because petitioners had received statutory notices of deficiency for that liability.
Background
Statutory notices with respect to 1993, 1994, and 1995 were sent to each petitioner on August 13, 1997. Duplicate originals were sent to Steven Sego; one of those was sent by certified mail to an address in Spirit Lake, Idaho, and one was sent by regular mail to the аddress in Rathdrum, Idaho, that is the address used on the petition in this case. The statutory notice sent to Steven Sego in Spirit Lake, Idaho, was returned undelivered by the Postal Service. The statutory notice sent to Steven Sego by regular mail was returned to respondent on October 10, 1997. Handwritten across the first page of the returned statutory notice were the words “This presentmеnt Dishonored at UCC 1-207”. At the time the notice was returned to respondent by Steven Sego, there remained 31 days for Steven Sego to petition the Tax Court. He did not do so.
The record contains other documents that respоndent asserts are indicative of Steven Sego’s “deliberate practice of refusing to accept mail sent by respondent, including (a) the ‘Refusal to Accept Service of Form 668-(Y)(c)’ stated in a document entitled ‘Final Declaration — Form 668(Y)(c) Refused for Cause without Dishonor & Notice of Default’ dated July 12, 1998”. Respondent further alleges:
A document entitled “Witnessed Notice & Refusal” dated July 12, 1998, confirms thаt petitioner Davina Segó shared in her husband’s views and practices with regard to the refusal to accept mail from respondent. In that document Davina Segó referred to her husband’s “Final Declaration — Form 66800(c) Refused for Cause without Dishonor & Notice of Default” of the same date, and requested that it “be deemed as if I had stated it.” * * *
Respondent’s position is that “Thе foregoing evidence leads to the conclusion that petitioner Davina Segó deliberately refused to claim the statutory notice of deficiency mailed to her on August 13, 1997.”
The Postal Service employee responsible for the postal route that includes petitioners’ address testified that she attempted delivery of certified mail to Davina Segó оn August 18, 1997, and left a second notice of attempted delivery on August 25, 1997. By reference to exhibits, she identified the certified mail as the August 13, 1997, statutory notice of deficiency.
Davina Segó testified that “I do not recall ever getting any yellow slips for — and I did not receive a statutory notice.” Her position is: “It’s all — that has all been fabricated. My notice of deficiency, these certificates that the post office was supposed to try to mail me, everything has been fabricated.
Discussion
The statutory background of proceedings such as this one is set forth in Goza v. Commissioner,
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 enactеd 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 arе 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 сase of any hearing conducted under thissection—
(1) Requirement of investigation. — The appeals officer shall at the hearing obtain verification from the Secretary that the requirements of any applicable law or administrative procedure have been met.
(2) Issues at hearing.—
(A) In general. — The person may raise at the hearing any relevant issue relating to the unpaid tax оr the proposed levy, including—
(i) appropriate spousal defenses;
(ii) challenges to the appropriateness of collection actions; and
(iii) offers of collection alternatives, which may include the posting of a bond, the substitution of other assets, an installment agreement, or an offer-in-compromise.
(B) Underlying liability. — The person may also raise at the hearing challenges to the еxistence 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.
(3) Basis for the determination. — The determination by an appeals officer under this subsection shall take into consideration—
(A) the verification presented under paragraph (1);
(B) the issues raised under paragraph (2); and
(C) whether any proрosed 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.
In sum, section 6330(c) provides for an Appeals Office due process hearing to address collection issues such as spousal defenses, the appropriateness of the Commissioner’s intended collection action, and possible alternative means of collection. Section 6330(c)(2)(B) provides that the existence and amount of the underlying tax liability can be contested at an Appeals Office due process hearing only if the taxpayer did not receive a nоtice of deficiency for the taxes in question or did not otherwise have an earlier opportunity to dispute such tax liability.
Section 6330(d) provides for judicial review of respondent’s determination. Although section 6330 does not prescribe the standard of review that the Court is to apply in reviewing the Commissioner’s administrative determinations, the subject is addressed in detаil in the legislative history of the provision. In particular, H. Conf. Rept. 105-599, at 266 (1998), 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. * * * Where the validity of the tax liability was properlyat issue in the hearing, and where thе determination with regard to the tax liability is part of the appeal, no levy may take place during the pend-ency of the appeal. The amount of the tax liability will in such cases be reviewed by the appropriate court on a de novo basis. Where the validity of the tax liability is not properly part of the appeal, the taxpayer mаy challenge the determination of the appeals officer for abuse of discretion. * * *
Accordingly, where the validity of the underlying tax liability is properly at issue, the Court will review the matter on a de novo basis. However, where the validity of the underlying tax liability is not properly at issue, the Court will review the Commissioner’s administrative determination for abuse of discretion.
In Goza v. Commissioner,
Davina Sego did not actually receive a statutory notice of deficiency. She contends that the statutory notice and the notices of attempted delivery of certified mail are “fabricated”, but she also asserts that she would have responded to them in the same manner as her husband. Thus, she has aligned herself with the pattern reflected in the record of rejecting mail from the Internal Revenuе Service, accusing supposed adversaries of false statements and fabrication of documents, and belatedly raising new issues.
The record in this case contains a copy of a notice of deficiency dated August 13, 1997, addressed to Davina Sego; a Form 3877 indicating that the notice was sent on the date it bears; corroborating Postal Service forms and testimony indicating attempted delivery of the statutory notice to Davina Sego at the address acknowledged by petitioners to be their residence; and evidence that Davina Sego would not have petitioned the Court in response to the statutory notice
Davina Segó testified that she “did not recall” receiving the Postal Service notices and asserted that the statutory notice was “fabricated”. Her alleged subjective belief is not evidence, and there is no evidence of irregularity in this case. See also Pietanza v. Commissioner,
The applicable legal principles with respect to Davina Sego are set forth in Erhard v. Commissioner,
The decision in this case will indicate that we sustain resрondent’s administrative determination to proceed with collection against petitioners. Our decision does not serve as a review of respondent’s determination as to petitioners’ underlying tax liability for 1993, 1994, or 1995.
To reflect the foregoing,
Decision will be entered for respondent.
Notes
Petitioners sought to reopen the record by reference to subsequent events allegedly reflecting on the credibility of the Postal Service witness. Petitioners’ proffered evidence and arguments in this regard, however, do not undermine the testimony of the witness as corroborated by the physical exhibits in this case.