UNITED STATES TAX COURT



            JOSEPH GIAMELLI, Petitioner v.
     COMMISSIONER OF INTERNAL REVENUE, Respondent



Docket No. 23150-04L.         Filed October 30, 2007.



     P and his wife filed a joint Federal income tax
return for the 2001 tax year reporting a tax due. P
failed to pay the amount due with the joint return. R
accepted the return as filed and assessed the tax
reported therein. Sec. 6201(a)(1), I.R.C. R issued to
P a notice of Federal tax lien, and P filed a request
for a collection review hearing pursuant to sec. 6320,
I.R.C. During the pendency of the collection review
hearing, P and R attempted to negotiate an installment
agreement. R issued a notice of determination
rejecting the proposed installment agreement when P
failed to make estimated tax payments for later tax
years. After filing a petition in this Court for
review of R’s determination, P was killed in an
automobile accident. The estate of P now wishes to be
substituted for P and, for the first time on appeal of
R’s determination, seeks to raise challenges to P’s
underlying liability.
                                - 2 -

          Held: R did not abuse his discretion in rejecting
     the installment agreement when P failed to make
     estimated tax payments.

          Held, further, the estate of P may not raise the
     underlying tax liability on appeal of R’s determination
     when the underlying liability was not properly raised
     during the collection review hearing before R’s Appeals
     Office.



     Erasmo S. Bruno, for petitioner.

     Marc L. Caine, for respondent.



                               OPINION


     GOEKE, Judge:    This case is before the Court for review of a

Notice of Determination Concerning Collection Action(s) Under

Section 6320 and/or 6330 (notice of determination).1   Respondent

has moved to dismiss for lack of prosecution on the grounds that

no party has been substituted for Joseph Giamelli since his

death.    Alternatively, respondent has moved for summary judgment

on the grounds that there is no evidence that the Appeals officer

abused her discretion in sustaining the proposed collection

action.   Because Mrs. Giamelli, as the executrix of Mr.

Giamelli’s estate, has moved to be substituted as the petitioner

in this case, respondent’s motion to dismiss for lack of



     1
      Unless otherwise indicated, all section references are to
the Internal Revenue Code, as amended, and all Rule references
are to the Tax Court Rules of Practice and Procedure.
                               - 3 -

prosecution shall be denied.   Further, because Mrs. Giamelli has

failed to present any evidence to create a genuine question of

fact whether the Appeals officer abused her discretion sustaining

the proposed collection action, respondent’s motion for summary

judgment shall be granted.

                             Background

     Joseph Giamelli and his wife, Joann Giamelli, resided in New

York at the time this petition was filed.   Mr. and Mrs. Giamelli

filed a joint Form 1040, U.S. Individual Income Tax Return, for

the 2001 tax year.   While Mr. and Mrs. Giamelli reported a tax

due, they did not include payment of the tax due with the return.

Respondent then assessed the tax due shown on the return and sent

Mr. and Mrs. Giamelli notice and demand for payment.

     When Mr. and Mrs. Giamelli failed to pay, respondent issued

a Notice of Federal Tax Lien Filing and Your Right to a Hearing

Under IRC 6320 listing an unpaid balance of assessment of

$723,527.01.   Mr. Giamelli, while represented by counsel, then

submitted to respondent Form 12153, Request for a Collection Due

Process Hearing, and, according to Mrs. Giamelli, signed her name

without her knowledge or permission.

     Mr. Giamelli’s request for a collection review hearing was

assigned to one of respondent’s Appeals officers.   Mr. Giamelli

informed the Appeals officer that he wished to enter into an

installment agreement in which he would pay $14,300 on a monthly
                               - 4 -

basis to satisfy the 2001 tax liability.   During the ensuing

months, as Mr. Giamelli and the Appeals officer were discussing

the installment agreement, Mr. Giamelli continued to send monthly

checks of $14,300 to respondent in partial payment of the 2001

tax liability.

     On October 5, 2004, the Appeals officer informed Mr.

Giamelli that, under Internal Revenue Service (IRS) guidelines,

the installment agreement could not be processed if he was not

compliant with his estimated tax payments for tax years after

2001.   Mr. Giamelli did not become compliant with his estimated

tax payments.

     On November 15, 2004, respondent issued to Mr. and Mrs.

Giamelli the notice of determination sustaining the proposed

collection action for the 2001 tax liability.   On December 3,

2004, Mr. Giamelli, without Mrs. Giamelli’s knowledge or

signature, filed a petition for lien or levy action under section

6320(c).   The only issue raised by Mr. Giamelli in his petition

was his desire to be allowed to enter into an installment

agreement with respondent for the 2001 tax year.   After the

petition was filed, Mr. Giamelli and respondent agreed to an

installment agreement to resolve the outstanding 2001 tax

liability, and Mr. Giamelli agreed to sign the necessary decision

document to submit to the Court.
                               - 5 -

     In July 2005, before the decision document was executed, Mr.

Giamelli was killed in an automobile accident.   Subsequently,

respondent received a telephone call from Erasmo Bruno, informing

respondent of Mr. Giamelli’s death and that Mrs. Giamelli had

been named the executrix of his estate.   Mr. Bruno further

informed respondent that he was now counsel for Mrs. Giamelli and

the estate and indicated to respondent that Mrs. Giamelli was

withdrawing from the installment agreement.

     At a hearing before this Court on respondent’s motions, Mr.

Bruno filed a motion to substitute the Estate of Joseph Giamelli,

Deceased, Joann Giamelli, Executrix, as the petitioner in this

case.   Mr. Bruno represented to the Court that Mrs. Giamelli had

received letters to administer her husband’s estate.   Mr. Bruno

further informed the Court that Mrs. Giamelli, in her personal

capacity, had no knowledge of the outstanding tax liability and

had not authorized or signed the petition filed with this Court

by Mr. Giamelli.   Accordingly, the Court dismissed the portion of

this case relating to Mrs. Giamelli in her personal capacity for

lack of jurisdiction.

     Mrs. Giamelli, as executrix of the estate, now wishes to

disclose certain wrongdoings of her husband that she believes

would alter the underlying tax liability for 2001.   The estate

has suggested to the Court that Mr. Giamelli was involved in a

fraudulent scheme whereby certain bribes were paid by Mr.
                               - 6 -

Giamelli which were not disclosed on the income tax return in

order to conceal this illegal activity.   The estate would like to

disclose this alleged fraudulent scheme in order to deduct the

alleged illegal payments and thereby show that the tax due should

be less than originally reported.

                            Discussion

I.   Motion To Dismiss for Lack of Prosecution

     Respondent first moves for dismissal for lack of prosecution

because no party has been substituted for Mr. Giamelli since his

death in July of 2005.

     Under Rule 63(a), “If a petitioner dies, the Court, on

motion of a party or the decedent’s successor or representative

or on its own initiative, may order substitution of the proper

parties.”   Under Rule 60(c), the capacity of an individual to be

substituted is determined by local law.   Under New York law, “A

personal representative is a person who has received letters to

administer the estate of a decedent.”    N.Y. Est. Powers & Trusts

Law sec. 1-2.13 (McKinney 1998).

     At a hearing before this Court on respondent’s motion to

dismiss, counsel for Mrs. Giamelli filed a motion to substitute

as the petitioner, the Estate of Joseph Giamelli, Deceased, Joann

Giamelli, Executrix, in the place of Joseph Giamelli.   Counsel

represented to the Court that Mrs. Giamelli had received letters

to administer her husband’s estate.    While Mrs. Giamelli’s motion
                               - 7 -

did not include a copy of the letters to administer the estate,

we are satisfied on counsel’s representation that Mrs. Giamelli

has been appointed the executrix of her husband’s estate and that

she wishes to continue with his petition in that capacity.

      Accordingly, because we find that Mrs. Giamelli wishes to be

substituted for Mr. Giamelli, in her capacity as the executrix of

Mr. Giamelli’s estate, an appropriate order will be entered

amending the caption of this case.     Further, respondent’s motion

to dismiss for lack of prosecution will be denied.

II.   Motion for Summary Judgment

      Respondent has also filed a motion for summary judgment

pursuant to Rule 121(a).   Respondent argues for summary judgment

on the grounds that the Appeals officer properly exercised her

discretion in rejecting the proposed installment agreement and

sustaining the proposed collection action because Mr. Giamelli

was not in compliance with his current tax obligations.

      Summary judgment is intended to expedite litigation and

avoid unnecessary and expensive trials.    Fla. Peach Corp. v.

Commissioner, 

, 681 (1988).    Summary judgment may be

granted where there is no genuine issue of any material fact and

a decision may be rendered as a matter of law.   Rule 121(a) and

(b); see Sundstrand Corp. v. Commissioner, 

, 520

(1992), affd. 

(7th Cir. 1994).   The moving party

bears the burden of proving that there is no genuine issue of
                                - 8 -

material fact, and factual inferences will be read in a manner

most favorable to the party opposing summary judgment.    Dahlstrom

v. Commissioner, 

, 821 (1985).

     This collection review proceeding was filed pursuant to

section 6320, which provides for Tax Court review of respondent’s

administrative determinations to proceed with the collection of

tax liabilities via liens.    Where the validity of the underlying

tax liability is at issue in a collection review proceeding, the

Court will review the matter de novo.    Davis v. Commissioner, 

, 39 (2000).   However, where the underlying liability is

not at issue, we review the Appeals officer’s determinations

regarding the collection action for an abuse of discretion.     Goza

v. Commissioner, 

(2000).    Mr. Giamelli did not

challenge the validity of the underlying tax liability, and thus

this Court would pursuant to precedent review respondent's

administrative determinations for abuse of discretion; that is,

whether the determinations were arbitrary, capricious, or without

sound basis in fact or law.   See Sego v. Commissioner, 

, 610 (2000); Woodral v. Commissioner, 

, 23 (1999).

     Internal Revenue Service guidelines require a taxpayer to be

current with filing and payment requirements to qualify for an

installment agreement.   2 Administration, Internal Revenue Manual

(CCH), sec. 5.14.1.2(9)(e), at 17,504.   The Appeals officer, in

reliance on the IRS guidelines, rejected Mr. Giamelli’s proposed
                               - 9 -

installment agreement because he was not in compliance with his

estimated tax payments for tax years after 2001.    Reliance on a

failure to pay current taxes in rejecting a collection

alternative does not constitute an abuse of discretion.    See Orum

v. Commissioner, 

, 4, 13 (2004), affd. 

(7th Cir. 2005).

     The estate has not presented any evidence to suggest the

Appeals officer abused her discretion in rejecting Mr. Giamelli’s

proposed installment agreement.   Accordingly, without any

evidence to the contrary, we find that respondent’s Appeals

Office did not abuse its discretion in sustaining the proposed

collection action based on the record before it.

     We now turn to arguments raised by the estate’s new counsel

for the first time after Mr. Giamelli’s death.2    The estate now

argues that Mr. Giamelli overstated his income tax liability in

an effort to conceal fraudulent business dealings, and that

consequently the estate is only a partial successor in interest

to Mr. Giamelli.   The estate reasons that because the estate has

an interest in conflict with Mr. Giamelli, it should be allowed



     2
      The estate’s new arguments were not raised in the petition
by the former counsel for Mr. Giamelli. Accordingly, were this
case to survive summary judgment, the estate would be required to
seek leave to amend the petition. By informal agreement, the
parties have argued respondent’s motion for summary judgment
presuming the estate would be permitted to raise these new
arguments, and respondent argues for summary judgment even if
these new arguments were accepted as true.
                                - 10 -

to challenge the underlying liability.    Alternatively, the estate

asserts that it is a separate person entitled to its own

collection review proceeding.

     The estate’s arguments imply that we may consider arguments

about the underlying tax liability never raised before in the

administrative collection review proceedings.     This Court’s

jurisdiction in a collection review proceeding under sections

6320 and 6330 is dependent on the issuance of a valid notice of

determination by respondent’s Appeals Office and the timely

filing of a petition for review.    Sec. 6330(d); see also Smith v.

Commissioner, 

, 38 (2005).    The focus of any review in

this Court under section 6330(d) is the determination of

respondent’s Appeals Office under section 6330(c).      Offiler v.

Commissioner, 

, 498 (2000).

     Under section 6330(c)(3), the determination of the Appeals

officer shall take into consideration “the issues raised under

paragraph (2)”.3    Section 6330(c)(2)(A) permits the taxpayer to


     3
         Sec. 6330(c)(2) provides as follows:


     (2) Issues at hearing.--

          (A) In general.--The person may raise at the
     hearing any relevant issue relating to the unpaid tax
     or the proposed levy, including--

            (i) appropriate spousal defenses;

            (ii) challenges to the appropriateness of
                                                        (continued...)
                              - 11 -

“raise at the hearing any relevant issue relating to the unpaid

tax” or the proposed collection action.   Section 6330(c)(2)(B)

permits a taxpayer to “raise at the hearing challenges to the

existence or amount of the underlying tax liability” under

certain circumstances.   The statute contemplates consideration of

issues “raised” by the taxpayer at the hearing.   Thus, if an

issue is never raised at the hearing, it cannot be a part of the

Appeals officer’s determination.

     Respondent’s interpretive regulation addressing the scope of

an appeal to the Tax Court of a determination by an Appeals

officer is consistent with this statutory language.   Sec.

301.6320-1(f)(2), Q&A-F5, Proced. & Admin. Regs.4 (“In seeking


     3
      (...continued)
          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 existence 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.


     4
      The revised regulations, effective Nov. 16, 2006, now
state: “In seeking Tax Court review of a Notice of Determination,
the taxpayer can only ask the court to consider an issue,
including a challenge to the underlying liability, that was
properly raised in the taxpayer’s CDP hearing.” Sec. 301.6320-
                                                   (continued...)
                               - 12 -

Tax Court * * * review of Appeals’ Notice of Determination, the

taxpayer can only request that the court consider an issue that

was raised in the taxpayer's CDP hearing.”).

     While we think the statute is clear, the legislative history

of sections 6320 and 6330 further confirms our reading.

     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. The determination of the appeals officer may
     be appealed to Tax Court * * * Where the validity of
     the tax liability was properly at issue in the hearing,
     and where the determination with regard to the tax
     liability is a part of the appeal, no levy may take
     place during the pendency of the appeal. The amount of
     the tax liability will in such cases be reviewed by the
     appropriate court on a de novo basis. * * *

H. Conf. Rept. 105-599, at 266 (1998), 1998-3 C.B. 747, 1020.

The history further states: “It is the responsibility of the

taxpayer to raise all relevant issues at the time of the pre-levy

hearing.”   

conferees’ description of a tax

liability which was “properly at issue” could be read as broader

than matters actually raised with the Appeals officer, the

statutory language and conferees also anticipate Tax Court review

of a “determination” regarding the tax liability.   Sec.

6330(d)(1); H. Conf. Rept. 105-599, supra at 266, 1998-3 C.B. at




     4
      (...continued)
1(f)(2), Q&A-F3, Proced. & Admin. Regs.
                               - 13 -

1020.    If the tax liability is not raised with the Appeals

officer, the determination would not have addressed it.

     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, 

, 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.5

     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”.


     5
      We do not address here the question of whether a taxpayer,
having raised one issue with respect to his or her underlying
liability in a collection review hearing, may then raise new and
different issues with respect to the underlying liability for the
first time on appeal of respondent’s determination before this
Court. In this case, Mr. Giamelli did not raise any questions
with respect to his underlying liability and the Appeals officer
did not consider the underlying liability in making her
determination.
                              - 14 -

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 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 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, 

, 589 n.2



     6
      In Greene-Thapedi v. Commissioner, 

, 8-13 (2006),
we held that our jurisdiction under sec. 6330(d)(1) is more
limited than in the deficiency context and does not include the
authority to determine an overpayment or to order a refund.
                                - 15 -

(2000), affd. 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, 

, 493 (2002) (“generally it would be

anomalous and improper for us to conclude 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.



     7
      This case does not involve an issue regarding the accuracy
or completeness of the administrative record. See Murphy v.
Commissioner, 

, 311 (2005), affd. 

(1st
Cir. 2006).
                               - 16 -

When Mr. Giamelli failed to become compliant 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 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.
                              - 17 -

     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 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.
                               - 18 -

     WHERRY, J., concurring:   The majority opinion does not

expressly overrule Magana v. Commission, 

(2002), a

choice of action with which I agree.    The instant case and Magana

raise different issues.   This case is a question of jurisdiction

to consider a new issue (underlying tax liability, which was not

raised at the Appeals Office level) under section 6330(c)(2)(B).

Magana was a question of whether to consider a new matter

(hardship, which was not raised at the Appeals Office level) in

an abuse of discretion case under section 6330(d)(1).   There is

no discretion, much less an abuse of discretion, in deciding

whether we have jurisdiction over a section 6330(c)(2)(B) matter.

Either we have jurisdiction to consider the issue, or we do not.

Given this difference, and the potential issue of an Appeals

Office hearing record’s accuracy, I believe there are at least

two circumstances where the rule in Magana (potentially

permitting the consideration of arguments, issues, or other

matters, which the record indicates were not brought to the

Appeals Office’s attention before the determination letter was

sent) may continue to apply.

     First, in my view, the “record” in a section 6320 and/or

section 6330 case is not sacrosanct.    Initially, it is prepared

by respondent as a part of the stipulation of facts, or on

occasion as an exhibit to the answer, or a motion for summary

judgment, which document is then filed with the Court and then
                                - 19 -

incorporated by the clerk’s office in the Court’s case record.

Respondent now prepares the record presumably in accordance with

section 301.6330-1(f), Q&A-F4, Proced. & Admin. Regs., which

clarified Office of Chief Counsel Notice CC-2006-019 (Aug. 18,

2006).     That Office of Chief Counsel Notice had incorporated and

superseded Office of Chief Counsel Notice CC-2006-008 (Dec. 27,

2005), and updated and replaced Office of Chief Counsel Notice

CC-2003-016 (May 29, 2003).     Errors in the record will

inevitably occur from time to time, given the large number of

records, their complexity, and the number of people participating

in the various stages of the collection due process (CDP)

procedures.

     Where the accuracy of the administrative record is

challenged by a party, it is ultimately up to the Court to

determine the accuracy and completeness of the administrative

record.1    To make this determination the Court may hold an

evidentiary hearing to explore and document whether relevant

material below was excluded from the record and/or the record was

inappropriately augmented after the Appeals Office hearing and



     1
       Fla. Power & Light Co. v. Lorion, 

, 744
(1985); Franklin Sav. Association v. Dir., Office of Thrift
Supervision, 

, 1137 (10th Cir. 1991); Thompson v.
U.S. Dept. of Labor, 

, 555-556 (9th Cir. 1989);
Murphy v. Commissioner, 

, 311 (2005), affd. 

(1st Cir. 2006); ITT Fed. Servs. Corp. v. United States, 

, 185 (1999); O’Toole v. U.S. Secy. of Agric.; 471 F.
Supp. 2d 1323, 1328-1329 (Ct. Intl. Trade 2007).
                                - 20 -

the issuance of the determination letter.    The majority opinion

does not disagree with this conclusion.    See majority op. n.7.

     Second, Appeals Office hearings are informal.    See Katz v.

Commissioner, 

, 337 (2000); Davis v. Commissioner,

, 41 (2000); sec. 301.6330-1(d)(2), Q&A-D6, Proced. &

Admin. Regs.   There exists no right to subpoena witnesses or

documents in connection with a section 6330 Appeals Office

hearing.   See Roberts v. Commissioner, 

, 372 (2002)

affd. 

(11th Cir. 2003); Nestor v. Commissioner, 

, 166-167 (2002); Davis v. 

at 41-42;

sec. 301.6330-1(d)(2), Q&A-D6, Proced. & Admin. Regs.

     While taxpayers must raise all pertinent issues at the

Appeals Office hearing and make a timely good faith effort to

produce evidence in support of those issues, they may be unable

to provide sufficient evidence to convince a skeptical Appeals

Office employee.    This is particularly true where the supporting

evidence includes the testimony or documents of uncooperative

third parties.    In such circumstances the taxpayer may seek to

provide additional evidence at the section 6330(d)(1) trial

utilizing the Tax Court’s Rule 147 subpoena power or the threat

thereof.   In such cases, in determining whether the Appeals

Office abused its discretion, the taking of additional evidence

at trial with respect to a previously raised issue may be

appropriate.     Robinette v. Commissioner, 

, 95 (2004),
                                - 21 -

revd. 

(8th Cir. 2006).

     Congress enacted section 6330 as a part of remedial

legislation, the Internal Revenue Service Restructuring and

Reform Act of 1998, Pub. L. 105-206, 112 Stat. 685, to ensure

taxpayer rights against alleged Internal Revenue Service

mistreatment by affording taxpayers “formal procedures designed

to ensure due process where the IRS seeks to collect taxes by

levy (including by seizure).”    S. Rept. 105-174, at 67 (1998),

1998-3 C.B. 537, 603.   Because I believe that due process in

formal judicial actions may need to include the right to call

witnesses where that right was not previously afforded and facts

are in dispute, I continue to believe that Robinette was

correctly decided.

     HAINES, J., agrees with this concurring opinion.
                               - 22 -

     SWIFT, J., respectfully dissenting.      In the past 7-plus

years, we have dealt with new issues raised in collection cases

efficiently and summarily (generally via summary judgment), and

we have done so without limiting our authority or our

jurisdiction.   The door that Magana v. Commissioner, 

, 493-494 (2002), left only slightly open for issues involving

unusual situations and spousal defenses has not in any way

impeded our summary disposition post Magana of a large majority

of collection cases.    Indeed, it is estimated that approximately

8 out of 10 collection cases already are disposed of by this

Court via summary proceedings.

     The Magana rule that section 6330(c)(2) issues not raised

with respondent’s Appeals Office generally will not be considered

by this Court was based on a judicially crafted standard of

review (namely, abuse of discretion) and on the simple logic that

Appeals Office discretion could not have been involved (let alone

an abuse of that discretion) where an issue was not raised at the

Appeals Office collection hearing.      This abuse of discretion

standard of review is not set forth in the statutory language of

section 6320 or 6330.   Rather this standard of review is based on

one sentence in the legislative history.1


     1
       In Sego v. Commissioner, 

, 609-610 (2000), and
Goza v. Commissioner, 

, 181-182 (2000), in first
adopting the abuse of discretion standard, we relied on H. Conf.
Rept. 105-599, at 266 (1998), 1993-3 C.B. 747, 1020, which
                                                   (continued...)
                              - 23 -

     The Treasury regulations on which the majority opinion

relies do not speak in terms of our authority or jurisdiction,

and the Commissioner by regulation cannot add to or restrict our

authority or our jurisdiction.

     No appellate court or other Federal trial court has

criticized our Magana opinion, and neither party in this case

expressly asks us to overrule or to modify Magana.

     The Tax Court has been given a mandate from Congress, indeed

recently an exclusive one,2 to review respondent’s collection

procedures.   We have taken this mandate seriously and, where the

occasion has demanded it, either put a stop to the collection



     1
      (...continued)
provided as follows:

          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 properly at issue in the hearing, and where the
     determination with regard to the tax liability is part
     of the appeal, no levy may take place during the
     pendency 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 may challenge the
     determination of the appeals officer for abuse of
     discretion. * * *
     2
       Sec. 6330(d)(1) was amended by the Pension Protection Act
of 2006, Pub. L. 109-280, sec. 855(a) and (b), 120 Stat. 1019, to
give this Court exclusive jurisdiction to hear appeals from
respondent’s Appeals Office notices of determination in
collection matters issued after Oct. 16, 2006.
                               - 24 -

process altogether or remanded the matter for further review by

respondent’s Appeals Office.   By its reading of section 301.6320-

1(f)(2), Q&A-F5, Proced. & Admin. Regs., the majority opinion

effectively places on us a jurisdictional restriction (i.e., that

we have no authority to consider an issue unless the issue was

first raised during the Appeals Office collection hearing).

     We must be reminded of what we said in Minahan v.

Commissioner, 

, 505 (1987):   “When the regulation

interpreting a statute is written by the very agency whose

‘abusive actions or overreaching’ were intended to be deterred by

that statute, we must be especially vigilant to insure that the

regulation ‘harmonizes with the plain language of the statute,

its origins, and its purpose.’”

     The majority’s interpretation of the statutory provisions

and of respondent’s regulations is particularly unfortunate here

where it is clear that we would have “de novo” review over the

“matter” that the estate now seeks to raise (namely, the

underlying tax liability).

     Emphasis on the word “matter” is appropriate because that is

what the statute governing our jurisdiction says.   Section

6330(d)(1)(A) provides as follows:


     SEC. 6330(d).   Proceeding After Hearing.--

          (1) Judicial review of determination.--The person
     may, within 30 days of a determination under this
     section, appeal such determination--
                              - 25 -

               (A) to the Tax Court (and the Tax Court shall
          have jurisdiction with respect to such
          matter)[emphasis supplied] * * *.


     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 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

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
                              - 26 -

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, 

(2001).

     Magana v. Commissioner, 

(2002), 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
                                - 27 -

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, 

, 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 6330 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 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,
                             - 28 -

and one might argue that the majority’s holding herein applies

equally to section 6330 levy cases.3   Our concerns regarding the

majority opinion are even more obvious in the context of section

6330 collection cases.



     3
       Sec. 301.6320-1(f)(2), Q&A-F5 and sec. 301.6330-1(f)(2),
Q&A-F5, Proced. & Admin. Regs., in effect for the year in issue
in the instant case, contain identical language, as follows:

     Q-F5. What issue or issues may the taxpayer raise
     before the Tax Court or before a district court if the
     taxpayer disagrees with the Notice of Determination?

     A-F5. In seeking Tax Court or district court review of
     Appeals' Notice of Determination, the taxpayer can only
     request that the court consider an issue that was
     raised in the taxpayer's CDP hearing.

     Consistent with the Pension Protection Act of 2006, Pub. L.
109-280, sec. 855(a), 120 Stat. 1019, giving the Tax Court
exclusive jurisdiction over both sec. 6320 and sec. 6330
collection cases, the above regulations have been updated and the
language of former Q&A-F5 has been moved to Q&A-F3. Current sec.
301.6320-1(f)(2), Q&A-F3 and sec. 301.6330-1(f)(2), Q&A-F3,
Proced. & Admin. Regs., contain identical language, as follows:

     Q-F3. What issue or issues may the taxpayer raise
     before the Tax Court if the taxpayer disagrees with the
     Notice of Determination?

     A-F3. In seeking Tax Court review of a Notice of
     Determination, the taxpayer can only ask the court to
     consider an issue, including a challenge to the
     underlying tax liability, that was properly raised in
     the taxpayer's CDP hearing. An issue is not properly
     raised if the taxpayer fails to request consideration
     of the issue by Appeals, or if consideration is
     requested but the taxpayer fails to present to Appeals
     any evidence with respect to that issue after being
     given a reasonable opportunity to present such
     evidence.
                               - 29 -

     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.

     However, section 6015 would allow the petitioner to file an

election for spousal relief under section 6015.4       Once the

section 6015 election is filed, the restriction 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.--




     4
       The election can be made not later than 2 years after
respondent has begun collection activity. Sec. 6015(b)(1)(E),
(c)(3)(B). A notice of intent to levy is considered the
initiation of a collection activity. Sec. 1.6015-5(b), Income
Tax Regs.
                               - 30 -

                      (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?


     5
       The Court’s authority to enjoin a levy is provided in sec.
6015(e)(1)(B)(ii).
                                - 31 -

     The advantage of the ruling in Magana v. Commissioner, 

(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 results.

     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 Magana v. 

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.
                              - 32 -

     The majority opinion 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 Magana v. 

.

     COLVIN, WELLS, LARO, and VASQUEZ, JJ., agree with this
dissenting opinion.
                                - 33 -

     VASQUEZ, J., dissenting:    As pointed out by Judge Swift, in

Davis v. Commissioner, 

, 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 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
                             - 34 -

Service Restructuring and Reform Act of 1998 (RRA 1998), Pub. L.

105-206, 112 Stat. 685.1

     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.2   A witness from the U.S.

General Accounting Office (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


     1
        144 Cong. Rec. S4400 (daily ed. May 6, 1998); S4521
(daily ed. May 7, 1998); 144 Cong. Rec. H5354 (daily ed. June 25,
1998).
     2
        Practices and Procedures of the Internal Revenue Service:
Hearings Before the S. Comm. on Finance, 105th Cong., 1st Sess.
16, 135, 195, 221, 223, 231 (1997) (S. Hrg. 105-190, First
Hearing); 143 Cong. Rec. S9992-S9993 (daily ed. Sept. 26, 1997),
S11584-S11591, S11594 (daily ed. Nov. 3, 1997); 143 Cong. Rec.
H10004, H10024, H10042 (daily ed. Nov. 5, 1997); IRS
Restructuring: Hearings on H.R. 2676 Before the S. Comm. on
Finance, 105th Cong., 2d Sess. 7 (1998) (S. Hrg. 105-529, IRS
Restructuring Hearings); IRS Oversight: Hearings Before the S.
Comm. on Finance, 105th Cong., 2d Sess. 165, 169, 211, 243 (1998)
(S. Hrg. 105-598, IRS Oversight Hearings); 144 Cong. Rec. S4028,
S4031 (daily ed. May 1, 1998), S4184, S4191 (daily ed. May 4,
1998), S4407, S4415 (daily ed. May 6, 1998), S4472, S4478, S4490,
S4495, S4499 (daily ed. May 7, 1998), S7629 (daily ed. Sept. 14,
1998), S7718 (daily ed. Sept. 15, 1998); 144 Cong. Rec. H5359
(daily ed. June 25, 1998).
     3
        S. Hrg. 105-190, First Hearing, at 236, 334-335, 338.
The U.S. General Accounting Office is now called the U.S.
Government Accountability Office. See Qwest Commcns. Intl. Inc.
                                                   (continued...)
                              - 35 -

     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”.6

     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,


     3
      (...continued)
v. FCC, 

, 1230 n.3 (10th Cir. 2005); S.K.J. &
Associates, Inc. v. United States, 

, 219 (2005).
     4
        S. Hrg. 105-190, First Hearing, at 35, 45, 216, 245-246,
259, 334-338.
     5
         S. Hrg. 105-190, First Hearing, at 246, 251, 337.
     6
         S. Hrg. 105-190, First Hearing, at 282.
     7
        S. Hrg. 105-190, First Hearing, at 40-41, 46-47, 58-59,
69; S. Hrg. 105-529, IRS Restructuring Hearings, at 74, 100-102,
126, 136, 224, 254, 281, 351, 374-376, 386.
                             - 36 -

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. 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 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



     8
        S. Hrg. 105-190, First Hearing, 232; 143 Cong. Rec.
S9992-S9993 (daily ed. Sept. 26, 1997); 143 Cong. Rec. H10031
(daily ed. Nov. 5, 1997); S. Hrg. 105-529, IRS Restructuring
Hearings, at 7, 12, 43-44, 51, 75; 144 Cong. Rec. S4031 (daily
ed. May 1, 1998), S4184, S4191 (daily ed. May 4, 1998), S4490,
S4494, S4508 (daily ed. May 7, 1998).
     9
        143 Cong. Rec. H10006-10022 (daily ed. Nov. 9, 1997); 144
Cong. Rec. S4508 (daily ed. May 7, 1998); H. Conf. Rept. 105-599,
at 263 (1998), 1998-3 C.B. 747, 1017.
     10
        143 Cong. Rec. S11913-S11914 (daily ed. Nov. 7, 1998),
S12100 (daily ed. Nov. 8, 1998); S. Hrg. 105-529, IRS
Restructuring Hearings, at 7, 16.
                               - 37 -

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. 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”.12   (Emphasis added.)


     11
          S. Hrg. 105-529, IRS Restructuring Hearings, at 7.
     12
        S. Hrg. 105-529, IRS Restructuring Hearings, at 126,
132, 133. As Judges Halpern and Holmes aptly wrote: “it is
important to distinguish between two concepts--‘scope of review’
and ‘standard of review’--that delimit judicial review of agency
action.” Ewing v. Commissioner, 

, 56-67 (2004)
(Halpern and Holmes, JJ., dissenting), vacated 

(9th
Cir. 2006). Citing Franklin Sav. Association v. Office of Thrift
Supervision, 

, 1136 (10th Cir. 1991), they
explained: “The scope of judicial review refers merely to the
evidence the reviewing court will examine in reviewing an agency
decision. The standard of judicial review refers to how the
reviewing court will examine that evidence.” 

I
                                                   (continued...)
                               - 38 -

     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.

     In order to fulfill our section 6330 review function, as

mandated by Congress 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



     12
      (...continued)
believe it is incorrect to conclude that when the standard of
review is abuse of discretion that a fortiori the scope of our
review is limited to the administrative record.
                             - 39 -

a manner contrary to the intent of Congress, the majority opinion

bears striking similarity to the decision in Billings v.

Commissioner, 

(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 6015.13




     13
        See Tax Relief and Health Care Act of 2006, Pub. L.
109-432, div. C, sec. 408, 120 Stat. 3061 (within a matter of
months, Congress reinstated our jurisdiction to review the
Commissioner’s determinations under sec. 6015(f) as we originally
had held in Ewing v. Commissioner, 

(2002), revd. 

(9th Cir. 2006); Billings v. Commissioner, 

(2006) (abandoning Ewing); Bartman v. Commissioner, 

,
787 (8th Cir. 2006), affg. in part and vacating in part T.C.
Memo. 2004-93; Commissioner v. Ewing, 

(9th Cir.
2006), revg. 

(2002) and vacating 

(2004).
                               - 40 -

     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 did not pay the tax that

was due with the return.   After assessing the tax 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



     1
      A hearing requested under sec. 6320 is conducted in
accordance with sec. 6330(c), (d) (other than par. (2)(B)
thereof), and (e).
                              - 41 -

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 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
                              - 42 -

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 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
                              - 43 -

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 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. * * *

Majority op. p. 16.

     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 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

section 6320 is to permit the estate to receive a section 6320
                                - 44 -

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 with this
dissenting opinion.




     2
      Under Federal tax law, an estate is a separate taxable
entity that may have an obligation to file both an estate tax
return, see sec. 6018, and income tax returns, see sec.
6012(a)(3). Under State law, an estate typically has obligations
regarding the payment of a decedent’s debts and the distribution
of decedent’s assets to beneficiaries.