T.C. Memo. 2006-197



                      UNITED STATES TAX COURT


       GREGORY T. MAYS and NADINE KING-MAYS, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 14559-04.              Filed September 14, 2006.


     Gregory Mays and Nadine King-Mays, pro se.

     Meredyth Purdy, for respondent.


                        MEMORANDUM OPINION


     HOLMES, Judge:   Gregory Mays and his wife, Nadine, refuse to

use Social Security numbers in claiming dependency exemptions for

their five minor children.   The Commissioner refuses to allow

them those exemptions unless they do.    But the case arrives as a

challenge to the Commissioner’s effort to collect the Mayses’

unpaid taxes, and the Commissioner argues that we don’t have to

settle any arguments about using Social Security numbers because
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the Mayses waited too long to raise the issue.

                             Background

     As one can see from this table, the Mayses only twice filed

their returns on time for the five years at issue in this case:

     Year                Date filed           Assessment date

     1999                11/11/03                1/5/04

     2000                1/17/03                 4/28/03

     2001                1/17/03                 2/24/03

     2002                1/17/03                 4/28/03

     2003                4/15/04                 5/31/04

The Commissioner nevertheless chose not to audit even the tardy

returns, accepting each as filed and assessing the tax shown plus

a failure-to-timely-file addition to tax for the 1999-2002 tax

years.

     For each of these years other than 2003, the Mayses had

underpaid their taxes.   The Commissioner decided to use his

authority to collect those unpaid taxes by using a combination of

liens and levies.   He mailed the required notices, and the Mayses

exercised their right to ask for collection due process (CDP)

hearings for each year--including their 2003 year, for which they

received no collection notice because they owed no unpaid tax.

     The IRS held a consolidated hearing for all the years on

June 30, 2004.   Mr. Mays used the hearing to contest their

liabilities--arguing that he and his wife shouldn’t have to pay
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as much as the IRS said, because they should have received

dependency exemptions for their children.      During the hearing,

Mr. Mays explained that he wanted the IRS to give his children

ITINs--individual taxpayer identification numbers--instead of

having them use Social Security numbers.      The appeals officer

presiding at the hearing demurred; because the Mays children were

eligible for Social Security numbers, he concluded they could not

be issued ITINs.1   The Mayses asked for a final determination at

the hearing so they could petition this Court to decide whether

the Commissioner was right.

     The appeals officer quickly accommodated them.      The Mays,

then as now residents of Texas, timely filed a petition and then

agreed to submit the case for decision on stipulated facts.

                              Discussion

     Once the Commissioner assesses a tax, he is allowed to

collect any unpaid portion of it by filing liens against, and

levying on, a taxpayer’s property.      But first (with some

exceptions that aren’t present here), he has to notify the

taxpayer whose property he wants to take.      He does this with

     1
       Sec. 301.6109-1(a)(1)(ii)(A) and (B), Proced. & Admin.
Regs. The regulations also provide that anyone “who is duly
assigned a social security number or who is entitled to a social
security number will not be issued an IRS individual taxpayer
number.” Sec. 301.6109-1(d)(4), Proced. & Admin. Regs.; see
Miller v. Commissioner, 

, 519 (2000); Cansino v.
Commissioner, T.C. Memo. 2001-134; Davis v. Commissioner, T.C.
Memo. 2000-210.
                                 - 4 -

notices on a standard form--the CDP Notice--telling the taxpayer

that he has filed a Notice of Federal Tax Lien (NFTL) or intends

to issue a Notice of Intent to Levy (NIL).

     The Code gives taxpayers who are sent a CDP Notice a right

to a CDP hearing before the IRS can use a lien or levy to collect

the unpaid taxes.    The timing of a request is important.   Section

6320(a)(2)2 tells the Commissioner to send the CDP Notice warning

of a NFTL “not more than 5 business days after the day of the

filing of the notice of lien.”    Section 6320(a)(3)(B) goes on to

state that the CDP Notice must tell a taxpayer of his right to

request a CDP hearing “during the 30-day period beginning on the

day after the 5-day period described in paragraph (2).”

(Emphasis added.)

     The timing of requests for a hearing after receiving a CDP

Notice warning of an NIL is similar.     Section 6330(a)(2) states

that such a CDP Notice must be mailed “not less than 30 days

before the day of the first levy with respect to the amount of

the unpaid tax for the taxable period.”    The same section then

says that the CDP Notice must tell the taxpayer of his right “to

request a hearing during the 30-day period under paragraph (2).”

Sec. 6330(a)(3)(B) (emphasis added).

     All is not lost for one who fails to meet the deadline for


     2
         All section references are to the Internal Revenue Code.
                                 - 5 -

requesting a CDP hearing.     A tardy taxpayer may still ask for an

“equivalent hearing.”    The IRS considers the same issues at an

equivalent hearing that it would have considered at a CDP

hearing, and follows the same procedures.      But an equivalent

hearing leads to the issuance of a decision letter, not a notice

of determination, and this Court has no jurisdiction to review

decision letters.    See generally Investment Research Assocs.,

Inc. v. Commissioner, 

 (2006); sec. 301.6320-1(i),

Proced. & Admin. Regs.

       Putting the dates of the CDP Notices for NILs and NFTLs, and

the dates that the Mayses made their requests for a hearing, in

tabular form makes the procedural problems in this case easy to

see:

                CDP Notice-    CDP Notice-
       Year        NIL           NFTL            CDP hearing request
       1999        4/3/04        None                 11/2/03
       2000        10/17/03      8/20/03              11/2/03
       2001        5/26/03       8/20/03              11/2/03
       2002        10/17/03      8/20/03              11/2/03
       2003        None          None                 11/2/03

       We begin with the ends of this range.   We lack jurisdiction

over the 2003 tax year because the Mayses owe no taxes for that

year, and the Commissioner has taken no collection action against

them.    See Lister v. Commissioner, T.C. Memo. 2003-17.   We lack

jurisdiction over the 1999 tax year because, as we held in Andre

v. Commissioner, 127 T.C. ___ (2006), premature CDP requests are

ineffective.    They can not lead to the issuance of a valid notice
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of determination, and so we can have no jurisdiction to review

the Commissioner’s determination to issue an NIL for the Mayses’

1999 tax year.

     The Mayses’ requests for CDP hearings for 2000-2002 are also

defective, not because they were too early, but because they were

too late.   For the 2001 tax year, they waited too long before

requesting a CDP hearing--whether one calculates the time from

the date of the CDP Notice warning them of the NIL or the date of

the CDP Notice warning them of the NFTL.   The IRS issued them

only a decision letter, not a notice of determination, and so we

clearly have no jurisdiction.   See Investment Research, 126 T.C.

at 191.

     For each of the remaining years--2000 and 2002--we have

jurisdiction to review the Commissioner’s determination to

sustain his NILs, but the Mayses have another procedural problem.

Their only ground for challenging the Commissioner’s collection

effort was the IRS’s refusal to reduce their taxes by granting

them dependency exemptions for their five children.   In the

jargon of CDP law, they were challenging “the existence or amount

of the underlying liability” for those two tax periods.   Sec.

6330(c)(2)(B).   That law is clear, however, that a taxpayer may

make such a challenge if, but only if, he “did not receive any

statutory notice of deficiency for such tax liability or did not

otherwise have an opportunity to dispute such tax liability.”
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Id.

      The problem for the Mayses is that they had already been

sent CDP Notices that warned them of NFTLs for 2000 and 2002 back

on August 20, 2003.    This was well before November 2, 2003, when

they requested a CDP hearing on the NILs.      The regulation

dictates the result:

           Where the taxpayer previously received a CDP
           Notice under section 6320 [i.e., a NFTL] with
           respect to the same tax and tax period and
           did not request a CDP hearing with respect to
           that earlier CDP Notice, the taxpayer already
           had an opportunity to dispute the existence
           or amount of the underlying tax liability.

Sec. 301.6330-1(e)(3), A-E7, Proced. & Admin. Regs.      By not

timely requesting a CDP hearing after receiving the NFTLs for

2000 and 2002, they lost their right to challenge their tax

liability for those years after receiving the NILs.



                                        An appropriate order in favor

                                of respondent will be entered.