No. 40



                UNITED STATES TAX COURT



           CLIFFORD W. MILLER, Petitioner v.
     COMMISSIONER OF INTERNAL REVENUE, Respondent



Docket No. 10563-99L.                 Filed December 21, 2000.



     Held: Sec. 6015, I.R.C., has no application to,
and does not govern, (1) the request of P’s former
spouse for relief from joint and several liability
under sec. 6013(e), I.R.C. (former sec. 6013(e)), which
was repealed effective July 22, 1998, and (2) the
administrative proceedings conducted by R that ulti-
mately resulted in R’s granting that relief to her
prior to July 22, 1998. Held, further, P did not have
the right to be notified of or to participate in the
administrative proceedings relating to the request of
P’s former spouse for relief from joint and several
liability under former sec. 6013(e). Held, further, P
lacks standing to challenge respondent’s determination
to grant P’s former spouse relief from joint and sev-
eral liability under former sec. 6013(e). Held, fur-
ther, respondent did not abuse respondent’s discretion
with respect to any of the determinations in the notice
of determination concerning collection action under
sec. 6320 and/or 6330, I.R.C.
                               - 2 -



     Clifford W. Miller, pro se.

     William L. Blagg, for respondent.



                              OPINION


     CHIECHI, Judge:   This case is before the Court on respon-

dent’s motion for judgment on the pleadings which was filed on

June 12, 2000, and which, pursuant to Rule 120(b),1 the Court

shall treat as respondent's motion for summary judgment under

Rule 121 (respondent’s motion).    On July 10, 2000, petitioner

filed a response to respondent’s motion, and on August 1, 2000,

respondent filed a reply to petitioner’s response.    On September

11, 2000, the Court held a hearing on respondent’s motion.    As

directed by the Court, respondent filed a supplement to respon-

dent’s motion on October 2, 2000, in which respondent provided

additional information regarding that motion.    On October 24,

2000, petitioner filed a response to respondent’s supplement.

                            Background

     In the various filings by the parties with respect to

respondent’s motion, the parties do not dispute the following

facts.



     1
      All Rule references are to the Tax Court Rules of Practice
and Procedure. All section references are to the Internal
Revenue Code (Code) in effect at the times indicated.
                               - 3 -

     Petitioner resided in Arden, North Carolina, at the time the

petition was filed.

     Sometime in January 1990, petitioner withdrew $37,095.52

from an annuity contract that he had with Metropolitan Life

Insurance Company (1990 annuity withdrawal).   The joint Federal

income tax (tax) return for 1990 (1990 joint return) filed by

petitioner and his then spouse, who is now known as Florencie G.

Bacon (Ms. Bacon), failed to include as income $14,758 of the

1990 annuity withdrawal.

     Petitioner and Ms. Bacon divorced sometime after they filed

the 1990 joint return.   On January 8, 1992, in connection with

their divorce, petitioner and Ms. Bacon executed an agreement in

which they agreed, inter alia, to be jointly responsible for any

additional taxes determined by respondent to be due for 1990 with

respect to any annuity contracts held by petitioner.

     At a time not disclosed by the record, respondent determined

a deficiency of $5,691 for taxable year 1990 (1990 tax defi-

ciency) against petitioner and Ms. Bacon.   The 1990 tax defi-

ciency was attributable solely to the failure of the 1990 joint

return to include as income $14,758 of the 1990 annuity with-

drawal.   Respondent did not determine any penalties against

petitioner and Ms. Bacon for 1990.

     Sometime prior to October 1993, Ms. Bacon requested respon-

dent to grant her relief from joint and several liability (relief
                                - 4 -

from joint and several liability) with respect to the 1990 tax

deficiency.    Around October 1993, respondent informed Ms. Bacon

that respondent had decided to grant that relief to her.   None-

theless, on March 7, 1994, respondent assessed the 1990 tax

deficiency (assessed 1990 tax deficiency) against petitioner and

Ms. Bacon.

     For reasons not disclosed by the record, respondent inadver-

tently and erroneously failed to adjust the joint account that

respondent maintained for petitioner and Ms. Bacon (joint ac-

count) in order to reflect the determination that respondent made

around October 1993 to grant Ms. Bacon relief from joint and

several liability.    Respondent ultimately became aware of respon-

dent’s failure to adjust the joint account in order to reflect

that determination.   On May 29, 1998, a so-called 2-Way Memo was

prepared in which respondent’s personnel responsible for making

changes to the joint account were instructed to transfer the

assessed 1990 tax deficiency and interest thereon from the joint

account to a nonmaster file (NMF) account to be established only

in petitioner’s name (petitioner’s NMF account).   On June 18,

1998, the assessed 1990 tax deficiency and interest thereon

reflected in the joint account were transferred to petitioner’s

NMF account.   At no time throughout the period during which

respondent was considering and taking action with respect to Ms.

Bacon’s request for relief from joint and several liability was
                               - 5 -

petitioner notified of that request and respondent’s

consideration thereof or given an opportunity to participate in

any of the administrative proceedings relating thereto.

     Sometime after January 19, 1999, respondent notified peti-

tioner of his right to a hearing (Appeals Office hearing) at

which he would be able to contest a proposed collection action

against him with respect to the unpaid portion of the assessed

1990 tax deficiency.

     On May 24, 1999, after the North-South Carolina Appeals

Office of the Internal Revenue Service (Appeals Office) held the

Appeals Office hearing that petitioner had requested, the Appeals

Office issued to petitioner a “NOTICE OF DETERMINATION CONCERNING

COLLECTION ACTION(S) UNDER SECTION 6320 and/or 6330" (notice of

determination).   The notice of determination contained the

following summary of the matters that were considered at peti-

tioner’s Appeals Office hearing:

     Matters Considered

     The requirements of law and administrative procedures:
     whether the Service met its statutory and administra-
     tive requirements prior to levy.

     The relevant issues: whether Mr. Miller’s claim for
     “innocent spouse” relief could now be considered.

     The intrusiveness of the collection action or the
     proposed collection action: whether Mr. Miller’s situa-
     tion warranted forbearance of the collection action
     until his claim could be considered.

The matter considered by the Appeals Office relating to “Mr.
                                 - 6 -

Miller’s claim for ‘innocent spouse’ relief” included peti-

tioner’s claim that respondent erroneously granted relief from

joint and several liability to Ms. Bacon with respect to the

assessed 1990 tax deficiency and that he should have received

notice of and an opportunity to contest Ms. Bacon’s application

for such relief.   The notice of determination contained the

following summary of the determinations that were made by the

Appeals Office with respect to the matters that were considered

at petitioner’s Appeals Office hearing:

     Summary of Determination:

     The statutory and procedural notice requirements prior
     to levy were met by the Service. Therefore, levy is
     permissible. Further, under Mr. Miller’s circum-
     stances, the proposed levy balances the need to collect
     the revenue with the intrusiveness of the proposed
     action.

     No collection alternatives were offered because Mr.
     Miller challenged the liability.

     Mr. Miller’s claim for innocent spouse relief was
     considered and found to be meritless.

     In the amended petition for lien or levy action under

section 6320(c) or 6330(d), petitioner alleged the following

errors of the Appeals Office in making the determinations summa-

rized in the notice of determination:

     5.   Alleged errors in determination:

               1. Innocent spouse relief granted to my ex-
          wife without me being notified.

               2. Ex-wife signed divorce decree acknowledg-
          ing her tax responsibilities for tax years ‘89 &
                                - 7 -

           ‘90 concerning annuities.

                3. I.R.S. granted ex-wife inn. spouse relief
           on or about 9-28-93. I.R.S. Rep. wrote me on
           2-14-95 informing me they were still trying
           to collect from ex, when this was not true.
           IRS verbally informed me of granting inn.
           spouse relief to my ex in Dec. ‘98. This was
           the first I was notified of this.

                4. The annuity in question was cashed in in
           early 1990 & benifited ex-spouse.

                5. 1990 return was a joint return & ex is
           equally liable.

                6. Clifford W Miller has paid $1683.00 to
           date on this 1990 return.

     6.    In the event the court does not rule favorably on
           the petitioner’s request, petitioner prayerfully
           requests that his liability be limited to the
           unpaid portion of the $2691.00 original tax with
           no penalties or fines included. [Reproduced lit-
           erally.]

     In the answer to the amended petition, respondent alleged,

inter alia, that “on or about May 29, 1998, respondent determined

that Ms. Bacon qualified as an innocent spouse, under the provi-

sions of I.R.C. § 6013(e), with respect to the 1990 income tax

deficiency”.

                             Discussion

     A summary adjudication may be made that disposes of all of

the issues in controversy if, inter alia, it is shown that there

is no genuine issue as to any material fact with respect to those

issues.   See Rule 121(b).   We conclude that there is no genuine

issue as to any material fact regarding the issues raised with
                                - 8 -

respect to respondent’s motion.

     The validity of the underlying tax liability for 1990 is not

at issue here.   Consequently, we shall review the determinations

set forth in the notice of determination under an abuse-of-

discretion standard.   See Sego v. Commissioner, 

, 610

(2000).

     In support of his position that the Appeals Office erred in

determining that respondent may proceed to collect from him the

unpaid portion of the assessed 1990 tax deficiency, petitioner

argues that respondent should have given him notice of and an

opportunity to participate in the administrative proceedings

regarding Ms. Bacon’s application for relief from joint and

several liability with respect to that deficiency and that

respondent should not have granted such relief to Ms. Bacon.

     In respondent’s motion, respondent counters:

          7. Petitioner does not have standing to challenge
     respondent’s determination that his former wife is an
     innocent spouse. See Estate of Ravetti v. United
     States, 

 (9th Cir. 1994) and Garvey v.
     Commissioner, T.C. Memo. * * * [1993-354].

                  *    *    *     *     *   *   *

          10. In the instant case, * * * the Commissioner
     granted innocent spouse relief to petitioner’s former
     wife before the enactment of the Internal Revenue
     Restructuring and Reform Act of 1998. Thus, peti-
     tioner’s former wife never made an election under
     I.R.C. § 6015(b) or (c), section 6015(e)(4) does not
     apply to this case, and the pre-1998 Act precedent of
     Estate of Ravetti and Garvey, supra, forecloses peti-
     tioner’s challenge to his former wife’s innocent spouse
     status.
                                - 9 -

                  *    *    *    *      *    *    *

          16. In addition, respondent is not bound by any
     provisions relating to the 1990 tax liability contained
     in petitioner’s divorce decree. See Pesch v. Commis-
     sioner, 

, 128-29 (1982) (respondent not
     bound by agreement to which he is not a party).

     The parties do not dispute that respondent granted Ms. Bacon

relief from joint and several liability with respect to the

assessed 1990 tax deficiency prior to July 22, 1998, the date on

which Congress (1) repealed section 6013(e) that was in effect

before that date (former section 6013(e)) and (2) enacted section

6015 relating to relief from joint and several liability.    See

Internal Revenue Service Restructuring and Reform Act of 1998

(RRA 1998), Pub. L. 105-206, sec. 3201(a), (e)(1), (g)(1), 112

Stat. 685, 734, 740.   Section 6015 generally applies to any

liability for tax arising after July 22, 1998, and any liability

for tax arising on or before such date but remaining unpaid as of

such date.   See id. sec. 3201(g)(1).    Read in the context of

section 6015, the liability for tax referred to in the foregoing

effective-date provision refers to the liability for tax of the

taxpayer claiming relief from joint and several liability.

     Respondent alleges in the answer, and we find, (1) that

respondent must have granted Ms. Bacon relief from joint and

several liability pursuant to former section 6013(e) which was in

effect prior to July 22, 1998, when respondent granted Ms. Bacon

that relief, and (2) that respondent did not grant such relief
                                - 10 -

pursuant to section 6015 which was not in effect until July 22,

1998.     At no time on or after July 22, 1998, was Ms. Bacon

claiming, or will she be claiming, relief from joint and several

liability under section 6015 either in an administrative proceed-

ing before respondent or in a judicial proceeding before us.

Once respondent granted Ms. Bacon relief from joint and several

liability pursuant to former section 6013(e) prior to July 22,

1998, she had no liability for the assessed 1990 tax deficiency

on any date thereafter, including July 22, 1998.     Ms. Bacon did

not have, and could not have had, any liability for the assessed

1990 tax deficiency which arose on or before July 22, 1998, when

Congress enacted section 6015, and which remained unpaid as of

that date.     See id.

        We conclude that section 6015 has no application to, and

does not govern, Ms. Bacon’s request for relief from joint and

several liability under former section 6013(e) and the adminis-

trative proceedings conducted by respondent that ultimately

resulted in respondent’s granting that relief to her prior to

July 22, 1998.     Cf. King v Commissioner, 

 (2000)

(section 6015 applies where spouse had a liability for tax

arising on or before July 22, 1998, which remained unpaid as of

that date and claimed relief from joint and several liability

under that section); Corson v. Commissioner, 

 (2000)

(same).     We further conclude (1) that petitioner did not have the
                              - 11 -

right to be notified of or to participate in the administrative

proceedings relating to Ms. Bacon’s application for relief from

joint and several liability under former section 6013(e) and

(2) that petitioner lacks standing to challenge respondent’s

determination to grant Ms. Bacon such relief under former section

6013(e).   See 26 U.S.C. sec. 6013(e) (1994); Estate of Ravetti v.

United States, 

, 1395-1396 (9th Cir. 1994).

     Petitioner requests in the alternative that the Court waive

any (1) interest imposed by section 6601 on the assessed 1990 tax

deficiency during the period February 14, 1995, through December

31, 1998, and (2) penalties assessed by respondent with respect

to the assessed 1990 tax deficiency.

     With respect to petitioner’s alternative request that the

Court waive any interest with respect to the assessed 1990 tax

deficiency imposed by section 6601 that respondent assessed

against him, the record does not establish whether petitioner

raised at his Appeals Office hearing that interest should not

have accrued on the assessed 1990 tax deficiency during the

period February 14, 1995, through December 31, 1998.   Assuming

arguendo (1) that the record before us had established that

petitioner raised at his Appeals Office hearing that interest

should not have accrued on the assessed 1990 tax deficiency

during that period, (2) that we considered petitioner’s alterna-

tive request regarding interest to be a request for abatement of
                                  - 12 -

interest under section 6404, and (3) that we concluded that we

have jurisdiction under section 6404(i) to consider that request,

see Katz v. Commissioner, 

,   (2000) (slip op. at

20), on the record before us, we find that petitioner has not

established, or even alleged, a ministerial error within the

meaning of section 6404(e) requiring an abatement of such inter-

est.       See Katz v. Commissioner, supra at __ (slip op. at 20-21).

       With respect to petitioner’s alternative request that the

Court waive any penalties assessed against him for 1990, respon-

dent claims, and petitioner does not dispute, that no penalties

were assessed against petitioner for 1990.      Consequently, that

request is moot.2

       We hold that there is no basis in the record to conclude

that respondent abused respondent’s discretion with respect to

any of the determinations set forth in the notice of determina-

tion.

       To reflect the foregoing,




       2
      Assuming arguendo that the record before us had established
that respondent assessed penalties against petitioner for 1990,
we would not consider petitioner’s alternative request that the
Court waive those penalties. That is because the record does not
establish that he raised that issue at his Appeals Office
hearing. See secs. 6320(c), 6330(d)(1); sec. 301.6320-1T(f)(2),
Q&A-F5, Temporary Proced. & Admin Regs., 64 Fed. Reg. 3398, 3404
(Jan. 22, 1999); sec. 301.6330-1T(f)(2), Q&A-F5, Temporary
Proced. & Admin. Regs., 64 Fed. Reg. 3405, 3412 (Jan. 22, 1999).
- 13 -

     An order treating respondent’s

motion for judgment on the

pleadings, as supplemented, as

respondent’s motion for summary

judgment and granting it, and

decision that respondent may

proceed with the collection action

as determined in the notice of

determination concerning the

collection action for the taxable

year 1990 upon which this case is

based, will be entered.