The statute and regulation make clear that in this context we do not enjoy the same discretion as the Courts of Appeals to consider issues raised for the first time on appeal. Compare sec. 6330(d) and sec. 301.6320-1(f)(2), Q&A-F5, Proced. & Admin. Regs., with, e.g., Sniado v. Bank Austria AG, 378 F.3d 210">378 F.3d 210, 378 F.3d 210">213 (2d Cir. 2004) (recognizing a Court of Appeals' discretion to entertain arguments raised for the first time on appeal). Accordingly, we shall not review an underlying liability when raised for the first time on appeal of a notice of determination.^{52007 U.S. Tax Ct. LEXIS 33">*48}

We note that our jurisdiction pursuant to section 6330(d) differs from our jurisdiction under section 6213(a). In deficiency cases, taxpayers may raise any issue regarding their tax liability for the period in question regardless of their prior communication of such issues to the Commissioner. Our statutory role in such cases is "for a redetermination of [a] deficiency" and "to determine the amount of [an] overpayment". Secs. 6213(a), 6512(b). ⁶ In contrast, issues under section 6330 must have been raised properly when the Appeals officer made her determination before we can review those issues in the context of an appeal of that determination.

The benefit of encouraging taxpayers to raise liability questions first with the Appeals officer provides further support for the 2007 U.S. Tax Ct. LEXIS 33">*49 approach in the regulation. Allowing the tax liability to be raised initially only after the case has been petitioned to this Court would eliminate the Appeals officer's role and permit liability issues to be litigated without any prior consideration by any level of respondent's organization. Liability issues are likely to arise under section 6330 based 129 T.C. 107">*115 on requests for reconsideration of taxes previously reported on a return. The judicial consideration of such liabilities without some prior review by the Commissioner would frustrate the administrative review process created by section 6330.

This, of course, is not the first time we have addressed the scope or our review of respondent's collection determinations. See Bruce v. Commissioner, T.C. Memo 2007-161; Bourbeau v. Commissioner, T.C. Memo 2003-117; Tabak v. Commissioner, T.C. Memo 2003-4; Miller v. Commissioner, 115 T.C. 582">115 T.C. 582, 115 T.C. 582">589 n.2 (2000), affd. 21 Fed. Appx. 160">21 Fed. Appx. 160 (4th Cir. 2001). Previously, we have left the door open to the possibility that we might consider issues not raised in the administrative hearing. See Magana v. Commissioner, 118 T.C. 488">118 T.C. 488, 118 T.C. 488">493 (2002) ("generally it would be anomalous and improper for us to conclude 2007 U.S. Tax Ct. LEXIS 33">*50 that respondent's Appeals Office abused its discretion under section 6330(c)(3) in failing to grant relief, or in failing to consider arguments, issues, or other matter not raised by taxpayers or not otherwise brought to the attention of respondent's Appeals Office" (emphasis added)). We hold today that we do not have authority to consider section 6330(c)(2) issues that were not raised before the Appeals Office. ⁷

Thus, while the estate now disagrees with the income tax returns, this has no bearing on the limited decision before this Court. Mr. Giamelli submitted a Form 12153, Request for a Collection Due Process Hearing, to respondent. The only issue raised by Mr. Giamelli in the subsequent hearing with respondent's Appeals officer was his desire to enter into an installment agreement to satisfy the 2001 tax liability. Mr. Giamelli, while represented by counsel, did not challenge the underlying liability and the Appeals officer did not consider it. When Mr. Giamelli failed to become compliant 2007 U.S. Tax Ct. LEXIS 33">*51 with his estimated tax obligations, the Appeals officer issued a notice of determination rejecting the proposed installment agreement and sustaining respondent's collection action.

Because the only issue raised with the Appeals officer was the installment agreement, our review is limited to the determination reached by the Appeals officer to reject the proposed 129 T.C. 107">*116 installment agreement because of Mr. Giamelli's noncompliance. The argument that an estate is a separate person and is entitled to its own collection review hearing fails for the same reason. While the estate has cited no authority for this novel argument, and we know of none, such an argument is not timely. As discussed above, our review is limited to the determination issued by respondent's Appeals Office. The estate has presented no evidence to suggest that the Appeals officer abused her discretion, on the facts as they were presented to her by Mr. Giamelli, when she declined to enter into an installment agreement with Mr. Giamelli.

Accordingly, without any evidence to create a question of fact whether respondent's Appeals Office abused its discretion, respondent's motion for summary judgment will be granted.

To reflect the 2007 U.S. Tax Ct. LEXIS 33">*52 foregoing,

An appropriate order and decision will be entered.

Reviewed by the Court.

COHEN, HALPERN, CHIECHI, FOLEY, THORNTON, HAINES, KROUPA, and HOLMES, JJ., agree with this majority opinion.

Although titled "Judicial review of determination" the statutory language in subparagraph (A) that grants our jurisdiction uses the word "matter", not "determination". If Congress intended to limit our authority or our jurisdiction to issues raised in the Appeals Office hearing or contained in the notice of determination, Congress certainly could have said that. But Congress did not -- it granted us jurisdiction over the "matter", clearly a broader term.

Indeed, a broader interpretation is consistent with the legislative history. The legislative history states that where the underlying tax liability is properly at issue the reviewing court shall proceed on a de novo basis, and the legislative history does not preclude review de novo of the underlying 2007 U.S. Tax Ct. LEXIS 33">*61 tax liability where it was not raised at the Appeals Office hearing. Thus, as to issues to be reviewed de novo, the paragraph of the legislative history cited in the majority opinion is inclusive, not exclusive.

The Court's authority or jurisdiction over issues to be reviewed de novo should not be limited to issues raised at the 129 T.C. 107">*121 Appeals Office hearing. For example, our review of a net operating loss (NOL) carryback that arises after a collection Appeals Office hearing should not be precluded on the basis of our lack of authority or jurisdiction. In the context of deficiency cases, the Court often has continued a case in order to allow respondent to audit an NOL carryback that did not arise until after the petition was filed.

The majority opinion could be read to raise a serious question as to our authority or jurisdiction to remand any case for further Appeals Office hearing on an issue that has not been raised at the initial Appeals hearing, in spite of the fact that, in some of our collection cases, respondent's Appeals Office appears to have made a determination where there was no hearing at all. See, e.g., Lunsford v. Commissioner, 117 T.C. 183">117 T.C. 183 (2001).

Magana v. Commissioner, 118 T.C. 488">118 T.C. 488 (2002), 2007 U.S. Tax Ct. LEXIS 33">*62 prudently left open the possibility that we might consider issues not raised at Appeals because unusual situations may arise where it would make little sense not to consider such issues.

The majority opinion, p. 13, states:

We note that our jurisdiction pursuant to section 6330(d) differs from our jurisdiction under section 6213(a).

This and other courts have been heading in this direction for some time now -- distinguishing section 6320 and section 6330 proceedings from deficiency proceedings -- and it calls into question some of our early decisions that described how sections 6320 and 6330 operate. Our early caselaw regarding sections 6320 and 6330 was based on similarities to tax deficiency proceedings, not on differences. For example, in Davis v. Commissioner, 115 T.C. 35">115 T.C. 35, 115 T.C. 35">41-42 (2000), we concluded that Appeals Office collection hearings under sections 6320 and 6330 should be handled in the same manner that traditional Appeals Office hearings involving tax deficiencies have been handled, as follows:

Hearings at the Appeals level have historically been conducted in an informal setting. [Citing sec. 601.106(c), Statement of Procedural Rules.]

* * * * * * *

When Congress enacted section 63302007 U.S. Tax Ct. LEXIS 33">*63 and required that taxpayers be given an opportunity to seek a pre-levy hearing with Appeals, Congress was fully aware of the existing nature and function of Appeals. Nothing 129 T.C. 107">*122 in section 6330 or the legislative history suggests that Congress intended to alter the nature of an Appeals hearing so as to compel the attendance or examination of witnesses. When it enacted section 6330, Congress did not provide either Appeals or taxpayers with statutory authority to subpoena witnesses. The references in section 6330 to a hearing by Appeals indicate that Congress contemplated the type of informal administrative Appeals hearing that has been historically conducted by Appeals and prescribed by section 601.106(c), Statement of Procedural Rules. The nature of the administrative Appeals process does not include the taking of testimony under oath or the compulsory attendance of witnesses. We therefore hold that a hearing before Appeals pursuant to section 6330 does not include the right to subpoena witnesses. [Citations and fn. ref. omitted.]

The regulation on which the majority opinion relies under section 6320 is identical to the regulation under section 6330, and one might argue that the majority's 2007 U.S. Tax Ct. LEXIS 33">*64 holding herein applies equally to section 6330 levy cases. ^{32007 U.S. Tax Ct. LEXIS 33">*65} Our concerns regarding the majority opinion are even more obvious in the context of section 6330 collection cases.

Spousal defenses are specifically mentioned in section 6330(c)(2)(A)(i) as issues that can be raised in both section 6320 lien and section 6330 levy cases. Assume that a petitioner in a section 6330 levy case failed to raise a spousal defense before Appeals but now wishes to raise a spousal defense in the section 6330 Tax Court proceeding. The majority opinion would deny our authority in the section 6330 case to consider the spousal defense.

129 T.C. 107">*123 However, section 6015 would allow the petitioner to file an election for spousal relief under section 6015. ^{42007 U.S. Tax Ct. LEXIS 33">*67} Once the section 6015 election is filed, the restriction 2007 U.S. Tax Ct. LEXIS 33">*66 on respondent's collection action imposed by section 6015(e)(1)(B) would go into effect. Section 6015(e) provides in part as follows:

SEC. 6015(e). Petition for Review by Tax Court. --

(1) In general. -- In the case of an individual against whom a deficiency has been asserted and who elects to have subsection (b) or (c) apply, or in the case of an individual who requests equitable relief under subsection (f) --

* * * * * * *

(B) Restrictions applicable to collection of assessment. --

(i) In general. -- Except as otherwise provided in section 6851 or 6861, no levy or proceeding in court shall be made, begun, or prosecuted against the individual making an election under subsection (b) or (c) or requesting equitable relief under subsection (f) for collection of any assessment to which such election or request relates until the close of the 90th day referred to in subparagraph (A)(ii), or, if a petition has been filed with the Tax Court under subparagraph (A), until the decision of the Tax Court has become final. * * *

The above provision would prohibit any levy until the section 6015 election is finally resolved. Thus, any final decision in the section 6330 case allowing the levy to proceed would be unenforceable against the electing spouse until the section 6015 matter was resolved. This probably would be reason to stay the section 6330 case pending outcome of the section 6015 matter. However, if the section 6330 case were not stayed and we entered a decision authorizing the levy action, the levy still would be prohibited until resolution of the section 6015 election. See sec. 6015(e)(1)(B)(i). Indeed, the section 6015 election might eventually result in a separate section 6015(e) stand-alone case before us, and we might be called upon to enjoin levy action that we previously authorized in the section 6330 case. ⁵ Does this make any sense?

The advantage of the ruling in Magana v. Commissioner, 118 T.C. 488">118 T.C. 488 (2002), is that it gives us the latitude to deal with unusual situations as they arise rather than follow a wooden rule that may produce undesirable 2007 U.S. Tax Ct. LEXIS 33">*68 results.

129 T.C. 107">*124 Lastly, the statutory language of section 6330(d)(2)(B) refers to a "change in circumstances" and makes it clear that, certainly in the context of a levy case, a change in a taxpayer's circumstances may affect an Appeals Office determination and may justify a result different from that reached in the initial Appeals Office determination.

The facts before us in this case involve a significant change in circumstances (i.e., a taxpayer has died and has been replaced as the party in interest by the decedent's estate, which did not exist at the time of the initial Appeals Office hearing and which therefore could not have been present and could not have raised any issue at the hearing).

The majority's holding that we have no authority or jurisdiction even to consider whether the taxpayer's death might be covered by the exception preserved in 118 T.C. 488">Magana v. Commissioner, supra at 494, for "unusual illness or hardship, or other special circumstance" handcuffs this Court from considering and reviewing a change in a taxpayer's circumstance, even though the change of circumstance has occurred after the Appeals Office hearing is final and while the case is pending before us.

The majority opinion 2007 U.S. Tax Ct. LEXIS 33">*69 may force this Court, in such a situation, to proceed -- without any ability to remand the case to respondent's Appeals Office -- and to decide a case based on issues and facts raised in the initial Appeals Office hearing and in complete disregard of the significant change in circumstances. What, for example, if while involved in a pending collection case a taxpayer wins a lottery? Would respondent expect us in deciding the case -- perhaps deciding whether to approve an installment agreement or an offer in compromise -- to ignore the taxpayer's change in financial condition?

I believe it to be unnecessary, inappropriate, and erroneous for us to base our holding herein on lack of authority or jurisdiction and to eliminate the special circumstances exception of 118 T.C. 488">Magana v. Commissioner, supra.

COLVIN, WELLS, LARO, and VASQUEZ, JJ., agree with this dissenting opinion.

129 T.C. 107">*125 VASQUEZ, J., dissenting: As pointed out by Judge Swift, in Davis v. Commissioner, 115 T.C. 35">115 T.C. 35, 115 T.C. 35">41-42 (2000), we created the informal setting and procedures for section 6330 hearings. Subsequent jurisprudence has rendered the holding of Davis obsolete and has eviscerated the Court's section 6330 review function. The current state 2007 U.S. Tax Ct. LEXIS 33">*70 of section 6330 jurisprudence leaves us with two equally unpalatable choices: (1) Overrule Davis and require the IRS to conduct more formal hearings in order to create a record sufficient for the Court to fulfill our review function, or (2) steadily become more handcuffed and less able to meaningfully review section 6330 cases. I believe either of these eventualities is contrary to the purpose of section 6330.

After a year of intensive work, 12 days of public hearings, three field hearings, and hundreds of hours in private sessions with public and private sector experts, academics, and citizens' groups, the Report of the National Commission on Restructuring the Internal Revenue Service: A Vision for a New IRS (IRS Restructuring Report), at v-vi, 43, 67 (1997), concluded that the IRS needed to be more accountable, and that a significant part of improving the system would be taxpayers' ability to seek redress or review of IRS actions in the courts expeditiously. The IRS Restructuring Report was the foundation for the Internal Revenue Service Restructuring and Reform Act of 1998 (RRA 1998), Pub. L. 105-206, 112 Stat. 685. ^{12007 U.S. Tax Ct. LEXIS 33">*71}

During the hearings and deliberations over RRA 1998, many members of Congress spoke of an agency "out of control" and the need for a system of "checks and balances" to oversee the IRS so that the IRS was not acting as "judge and jury" and to ensure the IRS was not abusing taxpayers' rights. ^{22007 U.S. Tax Ct. LEXIS 33">*72} A witness from the U.S. General Accounting Office 129 T.C. 107">*126 (GAO) stated that although the IRS believed that it had adequate checks and balances in place to identify misuse of collection actions, the GAO did not believe adequate checks and balances were in place. ³

Senators heard from the former historian of the IRS, the GAO, and the Acting Commissioner that the IRS did not maintain adequate or any records regarding their collection activities. ⁴ The witness from the GAO further noted that the collection case files were often incomplete or inaccurate. ⁵ The Acting Commissioner even admitted that "there have been records management problems". ^{62007 U.S. Tax Ct. LEXIS 33">*73}

Witnesses, including former Commissioners, both in their own statements and in response to questions by Senators, agreed that judicial review of collection actions was necessary, and specifically recommended the Tax Court as the forum to provide checks and balances (by allowing taxpayers to appeal IRS collection actions to the Tax Court). ⁷ Congressmen and Senators also stated that review of collection actions needed to be done, expeditiously, by an independent judge that is not part of the IRS, and decided on the Tax Court as the forum. ⁸

Although some Senators wanted to pass H.R. 2676, 105th Cong., 1st Sess., the Internal Revenue Service Restructuring and Reform Act of 1997 (H.R. 2007 U.S. Tax Ct. LEXIS 33">*74 2676), as quickly as possible, H.R. 2676 did not contain any provision similar to sections 6320 and 6330. ⁹ Senator Roth, chairman of the Senate Finance Committee and the Senator presiding over hearings to reform the IRS, and other Senators felt that Congress should not rush to pass IRS reform legislation, and one issue that needed to be further addressed was "Insuring that all 129 T.C. 107">*127 taxpayers have due process and that the IRS does not abusively use its liens and seizures authority". ¹⁰ During the Senate hearings, Senator Gramm stated that "before somebody's home or somebody's business can be taken by the IRS, that they get their day in court to make their case, where they are heard, where an independent judgment is rendered." ¹¹ Senator Nickles also stated:

Some people were saying, well, let us just pass the House bill. We can pass that unanimously and it can be signed into law by the bill. But we are adding a provision that came out in Oklahoma, and also the hearings here, that a taxpayer would be given the opportunity for a court hearing before liens, levies, or seizures of his assets. That is a very important provision. It was not in the House bill, but is in the Senate bill. [S. Hrg. 2007 U.S. Tax Ct. LEXIS 33">*75 105-598, IRS Oversight Hearings, at 10.]

Congress knew that proceedings in Tax Court would be conducted de novo. In response to a question from Senator Roth ("what can be done to protect the taxpayers' legitimate interest?"), Michael Saltzman -- an attorney with 33 years of experience, a professor of taxation, and author of a treatise on IRS practice and procedure -- responded that the Tax Court "has ruled and has for years stated that what happens in the Tax Court is a de novo proceeding". ^{122007 U.S. Tax Ct. LEXIS 33">*76} (Emphasis added.)

The legislative history establishes that in section 6330 cases Congress intended there to be a trial de novo in the Tax Court, that we can receive evidence beyond the administrative record, and we may consider issues not raised at the section 6330 hearing. Davis was premised on the idea that we would be able to hear issues and receive evidence beyond those raised or provided at the section 6330 hearing. If our review is limited to those issues raised at the section 6330 hearing (and possibly to the administrative record), Davis is outdated.

129 T.C. 107">*128 In order to fulfill our section 6330 review function, as mandated by Congress2007 U.S. Tax Ct. LEXIS 33">*77 after lengthy and careful deliberation, the Court needs more information than is provided by current section 6330 hearings. This statement is tempered by almost a decade of experience handling section 6330 cases where the IRS consistently has attempted to limit the evidence the Court can review. Frequently the Court is provided virtually no record at all or the scant documents accumulated by Appeals, making meaningful review impossible.

By abandoning our precedent and interpreting the statute in a manner contrary to the intent of Congress, the majority opinion bears striking similarity to the decision in Billings v. Commissioner, 127 T.C. 7">127 T.C. 7 (2006). I hope that Congress moves as expeditiously to correct the jurisprudential errors regarding section 6330 as it did to correct the jurisprudential errors regarding section 6015. ^{132007 U.S. Tax Ct. LEXIS 33">*78}

MARVEL, J., dissenting: This Court continues its struggle with sections 6320 and 6330. In this case the majority holds that Mr. Giamelli's estate (the estate) may not raise any issue before this Court that Mr. Giamelli did not raise at his section 6320 administrative hearing (section 6320 hearing) ¹ before the Internal Revenue Service (IRS) Appeals Office. Because the majority opinion rejects both issues raised by the estate without drawing a distinction between an issue that could have been raised at the administrative hearing and was not and an issue that arises because of a change in circumstances occurring after the administrative hearing was held and the notice of determination was issued, I respectfully dissent.

In this case, Mr. Giamelli and his wife had filed a joint Federal income tax return for 2001 but 2007 U.S. Tax Ct. LEXIS 33">*79 did not pay the tax that was due with the return. After assessing the tax 129 T.C. 107">*129 reported on the return and requesting payment, respondent issued to the Giamellis a Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320. Mr. Giamelli, through counsel, timely requested an administrative hearing under section 6320.

The majority opinion states that Mr. Giamelli informed the Appeals officer to whom his hearing request was assigned that he wished to enter into an installment agreement and that the Appeals officer and Mr. Giamelli discussed the installment agreement request during the ensuing months. The discussions did not result in an installment agreement because Mr. Giamelli was not current with his estimated tax payments for tax years after 2001 as required by existing IRS guidelines.

After respondent issued a notice of determination to the Giamellis sustaining the tax lien filing for 2001, Mr. Giamelli filed a petition with this Court pursuant to sections 6320(c) and 6330(d). The only issue raised by Mr. Giamelli in his petition was his desire to be allowed to enter into an installment agreement to resolve his unpaid tax liability for 2001.

Respondent and Mr. Giamelli subsequently 2007 U.S. Tax Ct. LEXIS 33">*80 reached an agreement regarding an installment agreement. Unfortunately, before a decision document could be executed by the parties, Mr. Giamelli was killed in an automobile accident. The majority opinion indicates that Mr. Giamelli's estate, of which Mrs. Giamelli is the executrix, will be substituted as petitioner.

Mrs. Giamelli, as executrix of the estate, repudiated the installment agreement and notified respondent that she wishes to disclose certain wrongdoings of her deceased husband that she believes will alter the underlying tax liability for 2001. Specifically, she wants to disclose alleged illegal payments that she believes are deductible and will reduce the tax liability reported on the 2001 joint return. Respondent filed a motion for summary judgment in which he alleges that there is no dispute regarding material facts and that respondent is entitled to summary disposition as a matter of law on the question of whether the Appeals Office abused its discretion in upholding respondent's collection action.

The majority opinion identifies two arguments raised by the estate's attorney for the first time after Mr. Giamelli's death. The first argument is that "Mr. Giamelli overstated 2007 U.S. Tax Ct. LEXIS 33">*81 129 T.C. 107">*130 his income tax liability [for 2001] in an effort to conceal fraudulent business dealings, and that consequently the estate is only a partial successor in interest to Mr. Giamelli." Majority op. p. 9. The second argument is that the estate "is a separate person entitled to its own collection review proceeding." Majority op. p. 16. Both arguments focus on an estate's standing to raise issues in a section 6320 proceeding. However, the first argument addresses an issue with respect to Mr. Giamelli's underlying tax liability that, at least in part, could have been raised by Mr. Giamelli at the section 6320 hearing but was not. The second argument addresses an issue that could not have been raised at the section 6320 hearing because Mr. Giamelli was still alive and there was no estate in existence to raise it.

The majority opinion treats both arguments as an untimely attempt on the part of the estate to raise an issue regarding Mr. Giamelli's underlying tax liability for 2001 that Mr. Giamelli could have raised at the section 6320 hearing but did not. The majority opinion concludes as follows:

Because the only issue raised with the Appeals officer was the installment agreement, our review 2007 U.S. Tax Ct. LEXIS 33">*82 is limited to the determination reached by the Appeals officer to reject the proposed installment agreement because of Mr. Giamelli's noncompliance. The argument that an estate is a separate person and is entitled to its own collection review hearing fails for the same reason. While the estate has cited no authority for this novel argument, and we know of none, such an argument is not timely. As discussed above, our review is limited to the determination issued by respondent's Appeals Office. * * *

The majority justifies its summary dismissal of the estate's argument that it is entitled to its own collection review hearing under section 6320 by its conclusion that the argument "is not timely". However, the estate did not exist at any time during the section 6320 hearing process and consequently, could not have raised any issue before the Appeals Office. It is only because of the unexpected death of Mr. Giamelli in an automobile accident after the section 6320 hearing process had been completed and after Mr. Giamelli had filed his petition in this Court that the estate came into being and had any opportunity to raise issues regarding the lien filed with respect to 2007 U.S. Tax Ct. LEXIS 33">*83 Mr. Giamelli's unpaid 2001 tax liability.

The majority appears to assume that the only reason the estate is contending it should receive a separate notice under 129 T.C. 107">*131 section 6320 is to permit the estate to receive a section 6320 hearing at which it could raise an issue about the amount of Mr. Giamelli's 2001 tax liability. Although that may be true, the assumption obscures the fact that the estate has raised a legal issue under section 6320 that should be addressed on its merits before summary judgment is granted. That issue focuses on the standing of an estate to contest an unpaid tax liability of a taxpayer after the taxpayer has died, ² and it is not an issue that could have been raised at the section 6320 hearing by Mr. Giamelli. The majority's conclusion that the issue was not timely raised makes no sense.

COLVIN, SWIFT, LARO, and GALE, JJ., agree 2007 U.S. Tax Ct. LEXIS 33">*84 with this dissenting opinion.