T.C. Memo. 2007-291



                       UNITED STATES TAX COURT



                  RICHARD M. DOWNING, Petitioner v.
            COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 6452-05L.            Filed September 24, 2007.



     B.J. Hickert and Seamus P. Smith, for petitioner.

     Charles M. Berlau and Michael L. Boman, for respondent.



               MEMORANDUM FINDINGS OF FACT AND OPINION


     THORNTON, Judge:    Pursuant to sections 6320(c) and 6330(d),

petitioner seeks review of respondent’s determination sustaining

the filing of a Federal tax lien with respect to petitioner’s

1995 and 1999 income tax.1


     1
         Unless otherwise indicated, section references are to the
                                                     (continued...)
                                - 2 -

                        FINDINGS OF FACT

     The parties have stipulated some facts, which we incorporate

herein by this reference.   When he petitioned the Court,

petitioner resided in Kansas.

Petitioner’s 1995 Tax Reporting

     On August 5, 1995, petitioner wed Astrid Downing in what was

to prove a short-lived marriage (they divorced in 1997). About 10

days after the wedding, he and Astrid Downing moved to Singapore,

where he was employed as senior vice president for a U.S.

company, Seagate Technology, Inc.

     Petitioner’s and Astrid Downing’s 1995 Federal income tax

reporting, and the IRS’s handling of their accounts, is shrouded

in mystery, confusion, and error.   Although Astrid Downing filed

her 1995 return (prepared by H&R Block) on time, for reasons not

disclosed by the record she erroneously listed her filing status

as “Single”, provided a California address (even though

petitioner claims she then resided in Singapore with him), and

used the name “Astrid M Stevenson”, notwithstanding that her name

(according to petitioner’s testimony) was Astrid Downing.   On her

1995 return, Astrid Downing claimed a $1,940 overpayment.   On May

6, 1996, respondent refunded this amount to her.




     1
      (...continued)
Internal Revenue Code, as amended, and Rule references are to the
Tax Court Rules of Practice and Procedure.
                               - 3 -

      On June 26, 1996, respondent received petitioner’s

application for an extension of time to file his 1995 income tax

return.   Petitioner sought, and respondent granted, an extension

until January 30, 1997, on the ground that his tax home was in a

foreign country and he expected to qualify for special tax

treatment.   Although petitioner represented on the application,

under penalties of perjury, that he was including a $39,500

income tax payment, he actually included only $25,000 (the

$25,000 payment).

     Respondent initially posted the $25,000 payment to

petitioner’s 1995 individual account.   According to respondent’s

records, however, petitioner still had not filed his 1995 return

as of September 29, 1997, when petitioner and Astrid Downing

filed their 1996 joint return, which reflected an underpayment.

Respondent transferred the $25,000 payment to petitioner’s and

Astrid Downing’s 1996 joint account, used a portion of it to

cover the 1996 underpayment, and refunded the $21,612 balance to

petitioner and Astrid Downing, who both endorsed the refund

check.

     In the meantime, petitioner’s accountants, Ernst & Young

L.L.P. (Ernst & Young), had prepared for petitioner various

versions of his 1995 tax return.   One version was a married

filing separate return, which showed total tax of $77,017 for

petitioner individually, with $13,635 owed after giving effect to
                                - 4 -

prior payments, including the $25,000 payment.   Ernst & Young

also prepared a joint return for petitioner and Astrid Downing

(the 1995 joint return), which showed total joint tax of $75,647

for petitioner and Astrid Downing, with $6,087 owed after giving

effect to prior payments, including the $25,000 payment.    At some

point, Ernst & Young also prepared a Form 1040X, Amended U.S.

Individual Income Tax Return, purporting to amend the “Single”

return that Astrid Downing had filed for 1995 and to claim filing

status of married filing joint return for Astrid Downing and

petitioner.   The amounts of income, deductions, credits, taxes,

and payments shown on the Form 1040X are substantially identical

to those shown on the 1995 joint return previously described.    On

line 16, the Form 1040X shows $8,728 as the “Amount of tax paid

with original return plus additional tax paid after it was

filed”.   Petitioner contends that he and Astrid Downing executed

this Form 1040X and filed it sometime in October 1996.

Respondent’s records contain no indication that any 1995 joint

return for petitioner and Astrid Downing was ever filed or

processed.    The record in this case includes no copy of any 1995

joint return that is signed by Astrid Downing.

     On October 30, 1996, respondent received payment of $8,728,

which appears to be made up of the $6,087 tax liability shown on

the 1995 joint return plus $701 of interest and $1,940 in

repayment of Astrid Downing’s May 6, 1996, refund of this same
                                - 5 -

amount.    The payment was accompanied by a payment voucher

indicating that the payment was for Astrid Downing’s and

petitioner’s 1995 joint account.    The payment voucher lists

Astrid Downing as the primary taxpayer and petitioner as spouse.

Respondent’s transcript indicates that the $8,728 payment was

posted to Astrid Downing’s 1995 account as a “PAYMENT WITH

RETURN”.

2001 Correspondence About 1995 Returns

     By notice dated March 12, 2001, and addressed to petitioner,

respondent indicated that petitioner had not filed his 1995

return and requested petitioner to provide information.

Petitioner responded by letter dated April 11, 2001, stating that

he had been living and working in Singapore in 1995 and that

Ernst & Young “was responsible for my tax returns.”    He stated

that “my 1995 return” had been “done and submitted by” Ernst &

Young and that an amended return had also been filed.    The letter

stated that petitioner was enclosing both returns.    Included with

the letter were:    (1) An unsigned copy of the previously

described 1995 married filing separate return for petitioner; and

(2) a copy of the previously described 1995 joint amended return

for petitioner and Astrid Downing, unsigned except for the

signature of petitioner’s tax return preparer, dated October 15,
                               - 6 -

1996.2   In this correspondence, petitioner listed an address in

New Hampshire.

     In response, respondent sent a letter dated October 22,

2001, to petitioner’s New Hampshire address.    The letter was

addressed to petitioner and a former spouse, Ruby L. Downing, but

the heading and caption of the letter referenced only

petitioner’s individual Social Security number.    In the letter,

respondent advised that the IRS had received “your” 1995 Federal

income tax return but that it was not signed.    The letter

requested that an enclosed declaration be signed and returned to

respondent within 20 days so the 1995 return could be processed.

     In a letter to the IRS, dated November 15, 2001, petitioner

responded from the New Hampshire address that he was not signing

the declaration because he and Ruby L. Downing were not married

in 1995 and did not file a return in 1995.   He stated that he had

previously supplied respondent a copy of “my 1995 return”.

Summary Assessment of Petitioner’s 1995 Income Tax

     In the meantime, having received no response from petitioner

within the 20-day deadline stated in respondent’s October 22,

2001, letter, respondent had summarily assessed against

petitioner the $77,017 tax reported on the copy of petitioner’s


     2
       Also included with petitioner’s Apr. 11, 2001, letter was
a copy of Notice CP-515M, Information About Your Return,
completed and signed by petitioner under penalties of perjury.
On the Notice CP-515M, petitioner indicated that his filing
status for 1995 was married filing jointly.
                               - 7 -

1995 married filing separate return included with his April 11,

2001, letter, plus interest and penalties.    By notice dated

November 12, 2001, respondent advised petitioner that, for his

1995 tax year, he had a balance due of $84,254, after giving

credit for previous payments (except for the $25,000 payment,

which, as previously described, had been applied partly to

petitioner’s and Astrid Downing’s 1996 joint tax underpayment,

with the balance having been refunded to petitioner and Astrid

Downing).3

Petitioner’s 1999 Tax Return

     On September 3, 2002, the IRS received petitioner’s

delinquent 1999 Federal income tax return, showing his address as

being in Idaho (the Idaho address).    Petitioner’s 1999 return

showed that he owed $16,508, but no payment was remitted.    The

IRS assessed the tax shown on the return, plus interest and

penalties, and by notice dated November 11, 2002, advised

petitioner that he owed $27,318 on his 1999 account.

First Power of Attorney

     On November 4, 2002, respondent received from petitioner

Form 2848, Power of Attorney and Declaration of Representative,



     3
       On Aug. 30, 2002, petitioner delinquently filed his
Federal income tax returns for 2000 and 2001, showing
overpayments of $11,102 and $14,893, respectively. The record
does not reveal what address petitioner used on these returns.
In September 2002, respondent applied these overpayments against
petitioner’s 1995 liability.
                                 - 8 -

authorizing accountants L. Troy Clayton and Terry L. Roe to

represent petitioner with respect to his 1995 through 2002

Federal income tax.   The Form 2848 lists the New Hampshire

address for petitioner and the Idaho address for these

accountants.   Pursuant to the terms of the Form 2848, original

notices and other written communications were to be sent to

petitioner and copies to Mr. Clayton.

Notice of Intent To Levy and Notice of Levy

     On April 22, 2003, respondent sent to petitioner, by

certified mail to the Idaho address, a final notice of intent to

levy and notice of right to a hearing for taxable years 1995 and

1999.   Petitioner did not receive this notice during 2003.

Neither he nor his accountants responded to this notice.

     On or about February 20, 2004, respondent mailed a notice of

levy for 1995 and 1999 to Charles Schwab & Co. and received in

response $161, which was applied to petitioner’s 1995 liability.

Notice of Federal Tax Lien Filing

     On March 4, 2004, respondent sent to petitioner, by

certified mail to the Idaho address, a notice of Federal tax lien

filing and right to a hearing for taxable years 1995 and 1999.

Petitioner’s Request for Hearing and Second Power of Attorney

     By letter dated March 17, 2004, petitioner responded to the

March 4, 2004, notice of Federal tax lien filing and right to a

hearing, requesting a hearing.    The letter states:   “The taxpayer
                                - 9 -

also received an earlier Notice of Levy against funds on deposit

with Charles Schwab.”    The letter is signed by Certified Public

Accountant Stuart Douthett, with an address in Kansas.    Enclosed

with the letter was a Form 2848, authorizing Stuart Douthett and

Harold Wolgast to represent petitioner.

     Respondent treated this letter as a request for an

equivalent hearing with respect to the notice of levy and as a

timely appeal from the notice of tax lien.

Appeals Office Hearing

     On July 9, 2004, petitioner’s case was received in

respondent’s Appeals Office in Wichita, Kansas.    The case was

initially assigned to Appeals Officer Dee Dugan.

     By letter dated July 14, 2004, and sent to the attention of

Appeals Officer Dugan, Mr. Douthett stated that in August 1996

petitioner had filed a separate 1995 return and that in October

1996 “an amended return was filed (technically amending the

return of Astrid M. Downing) to file a joint return.”

Consequently, the letter asserted, “it appears that the statute

of limitations should have expired prior to the first

notification received by the taxpayer in 2001.”    In addition, the

letter asserted that petitioner had not been given proper credit

for the $25,000 payment that he had included with his request for

a filing extension with respect to his 1995 return.

     Appeals Officer Dugan began investigating this matter but

retired before making any final determination.    In an undated
                                - 10 -

file memorandum addressed to “Greg”, Appeals Officer Dugan stated

that she was “trying to get rid of a really messy CDP [collection

due process case] as I don’t want anybody else to have to spend

time unraveling the mystery.”    In this file memorandum, Appeals

Officer Dugan recounted petitioner’s explanation that in August

1996 he had filed a 1995 married filing separate return that

showed a balance due, but that in October 1996, petitioner and

Astrid Downing had filed an amended return converting their prior

1995 returns to joint filing status and had paid the $8,728

balance shown on this amended joint return.       Appeals Officer

Dugan’s file memo stated:    “I happen to believe the taxpayer.”

The file memo concluded:    “If I post the amended return along

with the payments the taxpayer made, there is no balance due on

1995”.

     In a letter dated November 23, 2004, and addressed to

petitioner’s representative Harold Wolgast, Appeals Officer Dugan

reiterated her belief that petitioner and Astrid Downing had

filed a joint amended 1995 return.       She stated:   “I do not know

what the reason is for the return not being processed, but I will

request that it be input as of 10/30/1996.”

     On December 9, 2004, petitioner’s case was transferred to

Appeals Officer Troy Talbott, who continued to investigate

petitioner’s case and to communicate in writing and by telephone

with petitioner’s representative and with petitioner.       According

to the Appeals Office case activity records, at various times
                              - 11 -

Appeals Officer Talbott requested petitioner to provide

additional information, including a statement from Astrid Downing

that she had intended to file a 1995 joint return with

petitioner.   Insofar as the record reveals, petitioner never

provided such a statement.

     Ultimately, Appeals Officer Talbott determined that no joint

return had been filed.   According to his case activity records,

however, Appeals Officer Talbott offered “to abate the 1995 FTF

[failure to file] penalty, apply the $8,728 from excess

collections and assume that a [married filing separate] return

was filed as of 10/30/96.”   Petitioner rejected this offer.4

Nevertheless, the final notice of determination, dated March 8,

2005, adopted this approach, while sustaining the notice of tax

lien.5   An attachment to the notice of determination, “Attachment

--Letter 3193, Notice of Determination”, states in pertinent

part:

     The administrative file includes a Form 1040 for 1995,
     which was not signed by either the taxpayer or the
     preparer, showing a tax liability of $77,017, claiming


     4
       The parties also continued to disagree over the treatment
of the $25,000 payment that petitioner had submitted with his
1995 filing extension request. Respondent’s records showed that
$21,612 of this payment had been refunded to petitioner and
Astrid Downing in 1996. Petitioner proposed that half this
refund be applied to his 1995 tax. Appeals Officer Talbott
rejected this offer but agreed to abate interest on petitioner’s
1995 tax liability to the extent associated with a $25,000
payment.
     5
       Also on Mar. 8, 2005, respondent issued an “Equivalent
Hearing” decision letter concluding that the levy with respect to
petitioner’s 1995 and 1999 tax was appropriate.
                        - 12 -

* * * a credit of $25,000 that was paid with Form 4868
* * *. The IRS stamped the page one of the Form 1040
as being received on May 17, 2001, and processed the
return without a signature. The Form 1040 shows that
the taxpayer was filing as married filing separate, and
that his spouse was Astrid Downing. * * *

          *    *    *    *    *    *    *

The administrative file includes an amended tax return
which was signed by the taxpayer and the preparer on
October 25, 1996. The amended tax return shows that
the taxpayer is electing to file a joint income tax
return with Astrid Downing, however it was not
processed by the IRS.

          *    *    *    *    *    *    *

All legal and procedural requirements are concluded to
have been met in this case.

          *    *    *    *    *    *    *

The transcripts show that the taxpayer was given credit
for $25,000 on the 1996 tax module, and that a refund
was issued to the taxpayer’s last known address. The
taxpayer has not established that an amended tax return
for 1995 electing to file jointly was filed within
three years of the last date prescribed by law for
filing of the separate return or returns, without
taking into account any extension of time granted to
either spouse.

It is my determination that the IRS allow a credit of
$8,728.00 for 1995, abate the failure to file penalty
for 1995 and abate the interest and failure to pay
penalty associated with the $25,000.00 payment from the
date it was received, June 30, 1996, until the date the
IRS issued a notice of demand for payment for 1995
which was on November 12, 2001.
                               - 13 -

                              OPINION

A.   Statutory Framework

     Section 6321 imposes a lien in favor of the United States on

all property and property rights of a person who is liable for

and fails to pay tax after demand for payment has been made.        The

lien arises when assessment is made and continues until the

assessed liability is paid.   Sec. 6322.     For the lien to be valid

against certain third parties, the Secretary must file a notice

of Federal tax lien; within 5 business days thereafter, the

Secretary must provide written notice to the taxpayer.      Secs.

6320(a), 6323(a).   Within 30 days commencing after the end of the

5 business days, the taxpayer may request an administrative

hearing before an Appeals officer.      Sec. 6320(b)(1); sec.

301.6320-1(c)(1), Proced. & Admin. Regs.

     Similarly, section 6330 provides for notice and opportunity

for a hearing before the IRS may levy upon the property of any

person.   To be entitled to an administrative hearing under

section 6330, the person must request the hearing within the 30-

day period commencing the day after the date of the pre-levy

notice.   Sec. 6330(a)(3)(B); sec. 301.6330-1(b)(1), Proced. &

Admin. Regs.

     Once the Appeals officer issues a notice of determination,

the taxpayer may seek judicial review in this Court.      Secs.

6320(c), 6330(d)(1).   If the validity of the underlying tax
                              - 14 -

liability is properly at issue, we review that issue de novo.

See Sego v. Commissioner, 

, 609-610 (2000).    Other

issues we review for abuse of discretion.

to the Notice of Determination

     Petitioner challenges respondent’s final notice of

determination with respect to the notice of Federal tax lien

filing for his 1995 and 1999 tax years.   Petitioner contends that

respondent’s assessment of his 1995 income tax was time barred

because he and Astrid Downing filed their 1995 joint amended

return in October 1996 but assessment did not occur until 2001,

well beyond the expiration of the 3-year limitations period of

section 6501(a).6   Respondent contends that section 6330(c)(2)(B)

precludes petitioner from raising this issue in this proceeding.

     1.   Limitation on Challenging Underlying Liability

     Section 6330(c)(2) prescribes the matters that a person may

raise at an Appeals Office hearing, including spousal defenses,

challenges to the appropriateness of the Commissioner’s intended


     6
       Petitioner does not dispute the assessment of his 1999
income tax, which was based on amounts reported on but not paid
with his 1999 return. In his petition, petitioner’s prayer for
relief included a request that the Court order respondent to
offset any unpaid balance on his 1999 account by application of
certain amounts that respondent has allegedly collected from
petitioner and to refund certain remaining amounts. Petitioner
has not raised this claim for relief in his trial memorandum or
on brief. We deem petitioner to have abandoned any such claim
for relief. In any event, this Court lacks jurisdiction in a
collection review proceeding to order a refund or credit of tax.
Greene-Thapedi v. Commissioner, 

(2006).
                              - 15 -

collection action, and possible alternative means of collection.

At the hearing, the person may challenge the existence or amount

of the underlying tax liability only if the person did not

receive a notice of deficiency or did not otherwise have an

opportunity to dispute the liability.   Sec. 6330(c)(2)(B); see

Sego v. 

at 609; Goza v. Commissioner, 

, 180-181 (2000).   The regulations define a prior

opportunity to dispute an underlying tax liability to include an

opportunity for a conference with the Appeals Office that was

offered either before or after the assessment of the liability.

Sec. 301.6320-1(e)(3), Q&A-E2, Proced. & Admin. Regs.    A taxpayer

who previously received a notice under section 6330 with respect

to the same tax and tax periods and did not request a hearing

with respect to that earlier notice has already had an

opportunity to challenge the existence or amount of the

underlying liability.   Sec. 301.6320-1(e)(3), Q&A-E7, Proced. &

Admin. Regs.; see Lewis v. Commissioner, 

(2007); Bell

v. Commissioner, 

, 358 (2006).

     Respondent contends, and petitioner does not dispute, that

pursuant to this Court’s precedents, petitioner’s limitations

period argument constitutes a challenge to his underlying 1995
                              - 16 -

liability.7   See Hoffman v. Commissioner, 

, 145

(2002); Boyd v. Commissioner, 

, 130 (2001).

     Petitioner received no notice of deficiency with respect to

his 1995 or 1999 tax.   Respondent contends, however, that

petitioner is not entitled to dispute his underlying liabilities

in this proceeding because petitioner failed to take advantage of

his prior opportunity to do so when, on April 22, 2003,


     7
       While relying upon these precedents, respondent also
expresses disagreement with them, stating:

          It is respondent’s position that the issues raised
     by petitioner’s contentions (involving the expiration
     of statutes of limitations and application of payments
     and credits) are more properly characterized as issues
     relating to the unpaid tax in section 6330(c)(2)(A),
     and should be reviewed for an abuse of discretion.
     Nevertheless, respondent acknowledges that this Court
     has held otherwise.

     The administrative record shows that the Appeals Office not
only considered petitioner’s challenges but actually adjusted
petitioner’s liability downwards in response to the issues he
raised. Nowhere in the administrative record is there any
allusion to the sec. 6330(c)(2)(B) limitation. It would appear
that the administrative hearing was conducted and the notice of
final determination promulgated in adherence to respondent’s
espoused position that the issues petitioner raised were not
properly characterized as challenges to the underlying liability.
In these circumstances, it might be questioned whether respondent
has effectively waived the limitation imposed by sec.
6330(c)(2)(B). Cf. Behling v. Commissioner, 

, 578-
579 (2002) (holding that the Appeals Office’s consideration of
the taxpayer’s challenge to his underlying liability, in a
situation where the taxpayer had received a statutory notice of
deficiency, did not result in a waiver by the Commissioner of the
sec. 6330(c)(2)(B) limitation). Petitioner, however, does not
contend that respondent has waived the sec. 6330(c)(2)(B)
limitation. Accordingly, we give this issue of waiver no further
consideration.
                               - 17 -

respondent sent him a final notice of intent to levy and right to

a hearing for taxable years 1995 and 1999.    Petitioner argues

that he never received the April 22, 2003, notice, because it was

sent to his accountants’ Idaho address “which was not, and never

had been, the petitioner’s address.”    Thus, petitioner argues,

the final notice of intent to levy was invalid and offered him no

prior opportunity to contest his underlying liability.    For the

reasons discussed below, we agree with petitioner.

     2.    Petitioner’s Last Known Address

     Section 6330(a)(1) requires that, before making a levy, the

Secretary notify the taxpayer in writing of the right to a

hearing.    Section 6330(a)(2) provides three options for the time

and method of such a notice.    The notice must be either:   (1)

Given in person; (2) left at the taxpayer’s dwelling or usual

place of business; or (3) sent by certified or registered mail,

return receipt requested, to the taxpayer’s last known address.

Sec. 6330(a)(2).

     Regulations under sections 6330 and 6331 cross-reference

section 301.6212-2, Proced. & Admin. Regs., to define “last known

address”.    Secs. 301.6330-1(a)(1), 301.6331-2(a)(1), Proced. &

Admin. Regs.    As a general rule, a taxpayer’s last known address

is “the address that appears on the taxpayer’s most recently

filed and properly processed Federal tax return, unless the

Internal Revenue Service (IRS) is given clear and concise
                              - 18 -

notification of a different address.”   Sec. 301.6212-2(a),

Proced. & Admin. Regs.

     On September 3, 2002, the IRS received petitioner’s 1999

return, showing his accountants’ Idaho address.   For reasons not

revealed by the record, respondent did not process this return

until November 11, 2002.

     In the meantime, on November 4, 2002, respondent had

received petitioner’s Form 2848, instructing that original

notices and other written communications be sent to petitioner at

the New Hampshire address and copies be sent to his accountant,

Mr. Clayton, at the Idaho address.

     Respondent contends that notwithstanding his receipt of

petitioner’s Form 2848 on November 4, 2002, petitioner’s last

known address was his accountants’ Idaho address as shown on

petitioner’s 1999 return, which was processed on November 11,

2002, because this was the last return that was “filed and

properly processed” before April 22, 2003 (the date on which

respondent sent the notice of intent to levy to the Idaho

address).8   Respondent seems to suggest that respondent’s

processing of petitioner’s 1999 return about a week after


     8
       On brief, respondent observes in a footnote that
petitioner also listed the Idaho address on his timely filed 2002
Federal income tax return. Respondent does not contend, however,
that the address shown on petitioner’s 2002 return should
establish his last known address as of Apr. 22, 2003, ostensibly
because this 2002 return was not processed until May 5, 2003.
Accordingly, we give this issue no further consideration.
                              - 19 -

receiving the Form 2848 caused petitioner’s last known address to

revert to the Idaho address shown on that return.   We disagree.

      In the first instance, respondent has offered no explanation

why petitioner’s 1999 return, which the IRS received on September

3, 2002, was not processed until November 11, 2002.   According to

the Commissioner’s revenue procedure, “a return will be

considered properly processed after a 45-day processing period

which begins the day after the date of receipt of the return by

the Internal Revenue Service Center.”   Rev. Proc. 2001-18, sec.

5.02(1), 2001-1 C.B. 708, 710.   It appears that this 45-day

processing period for petitioner’s 1999 return would have expired

before respondent received the Form 2848.   Hence, pursuant to the

revenue procedure, it would appear that petitioner’s 1999 return

should be considered as having been processed before respondent

received the Form 2848.   Assuming, then, that petitioner’s last

known address before he filed the Form 2848 was the Idaho address

as shown on his 1999 return, Form 2848 provided respondent “clear

and concise” notification of a change of address to the New

Hampshire address.   See Hunter v. Commissioner, T.C. Memo. 2004-

81.   Petitioner’s New Hampshire address thus became his last

known address, notwithstanding respondent’s belated processing of

petitioner’s 1999 return.

      More fundamentally, we reject respondent’s suggestion that

pursuant to section 301.6212-2(a), Proced. & Admin. Regs., “clear
                              - 20 -

and concise notification” of an address different from that

appearing on the taxpayer’s most recently filed and properly

processed Federal tax return is effective only if made after the

tax return is processed.   The relevant question is not whether

the IRS received the change of address notification before or

after the last-filed return was processed.   Rather, “what is of

significance is what respondent knew at the time the * * * notice

was issued * * *, and attributing to respondent information which

respondent knows, or should know, with respect to a taxpayer’s

last known address, through the use of its computer system.”

Abeles v. Commissioner, 

, 1035 (1988).   If the IRS

has become aware of a change of address, it may not rely on the

address listed on the last-filed return but must exercise

“reasonable diligence in ascertaining the taxpayer’s correct

address”.   Pyo v. Commissioner, 

, 636 (1984); see

Buffano v. Commissioner, T.C. Memo. 2007-32.

     Upon receiving petitioner’s Form 2848 on November 4, 2002,

respondent should have known, with the exercise of reasonable

diligence, that the address shown on the Form 2848 superseded the

Idaho address shown on petitioner’s 1999 return, which respondent

had received 2 months earlier.   As we stated in somewhat

analogous circumstances in Hunter v. 

,

“respondent bears the burden of conforming his actions to the

knowledge at his disposal.”   Respondent failed to do so.   We
                                - 21 -

conclude and hold that respondent failed to send the final notice

of intent to levy to petitioner’s last known address and that the

notice was therefore invalid.    See Buffano v. 

.

     3.   Whether To Impute to Petitioner Knowledge of the Notice
          of Intent To Levy

     On reply brief, respondent suggests that it is ultimately

irrelevant whether the final notice of intent to levy was mailed

to petitioner’s last known address because “it was, in fact,

actually received by petitioner’s attorney-in-fact in sufficient

time to meet the deadline for filing a timely appeal with the

Appeals office.”   In support of this contention, respondent cites

St. Joseph Lease Capital Corp. v. Commissioner, 

(4th

Cir. 2000), affg. T.C. Memo. 1996-256, and Estate of Citrino v.

Commissioner, T.C. Memo. 1987-565.       In each of those cases, a

statutory notice of deficiency was held valid even though not

mailed to the taxpayer’s last known address.      In each of those

cases, however, the notice was obtained by the taxpayer or the

attorney, who then filed a timely petition.      By contrast, neither

petitioner nor his accountant ever responded to the final notice

of intent to levy.

     Petitioner testified credibly that he received no copy of

the final notice in 2003 and that if he had received it, he would

have requested a hearing.   Although the evidence suggests that

petitioner’s Idaho accountants received the final notice of
                              - 22 -

intent to levy, there is no evidence that his Idaho accountants

forwarded it to petitioner or discussed it with petitioner during

2003, or that petitioner otherwise actually received notification

of the final notice in time to request a section 6330 hearing.

Pursuant to the Form 2848 that respondent received on November 4,

2002, petitioner’s Idaho accountant, Mr. Clayton, was supposed to

receive only copies of notices; the original notices were

supposed to have been sent directly to petitioner.   Mr. Clayton

might have been justified in thinking that this is what happened.

By the time petitioner requested a hearing in March 2004, he was

being represented by other accountants in Kansas.

     In these circumstances, we decline to impute to petitioner

knowledge of the final notice of intent to levy.    See Calderone

v. Commissioner, T.C. Memo. 2004-240.   We conclude and hold that

petitioner had no prior opportunity to dispute his underlying

income tax liability.   Accordingly, we conclude that section

6330(c)(2)(B) does not preclude petitioner from challenging his

underlying liability in this proceeding.

     4.   Whether Petitioner and Astrid Downing Filed a Joint
          1995 Return

     As previously discussed, petitioner claims that the

assessment of his 1995 tax was made more than 3 years after he

and Astrid Downing filed a joint return in 1996 and consequently

is time barred pursuant to section 6501(a).   For the reasons

described below, we conclude that petitioner never filed his 1995
                                - 23 -

return.   Accordingly, the assessment was not time barred.     See

sec. 6501(c)(3).

     In the final notice of determination, respondent’s Appeals

Office treated petitioner as having filed his 1995 married filing

separate return on October 30, 1996, for purposes of abating

penalties and interest and reallocating certain of petitioner’s

payments to his 1995 account.     Although the notice of

determination does not state the rationale for these downward

adjustments, the administrative record reveals that the Appeals

officer recommended these adjustments on the basis of an

assumption that petitioner had filed his 1995 married filing

separate return in October 1996.

      Notwithstanding any contrary implication that might arise

from this aspect of the final notice of determination, the

parties now agree that petitioner filed no 1995 married filing

separate return in 1996.     Petitioner states on brief (contrary to

his prior representations to the IRS and contrary to his position

at trial) that the 1995 married filing separate return “had never

been filed.”   Instead, petitioner insists that he and Astrid

Downing filed a joint 1995 return in October 1996.

     A tax return is generally invalid unless signed under

penalties of perjury.     Sec. 6065.   Returns are required to be

signed in accordance with forms or regulations prescribed by the

Secretary.   Sec. 6061.   The applicable regulations require:
                                - 24 -

“Each individual * * * shall sign the income tax return required

to be made by him, except that the return may be signed for the

taxpayer by an agent who is duly authorized in accordance with

paragraph (a)(5) or (b) of §1.6012-1 to make such return.”    Sec.

1.6061-1(a), Income Tax Regs.    A judicially crafted exception to

this general rule holds that if an “income tax return is intended

by both spouses as a joint return, the absence of the signature

of one spouse does not prevent their intention from being

realized.”     Estate of Campbell v. Commissioner, 

, 12

(1971); see Olpin v. Commissioner, 

, 1301 (10th Cir.

2001), affg. T.C. Memo. 1999-426.

     There is no indication in respondent’s records that

petitioner and Astrid Downing ever filed any 1995 joint return or

that respondent ever processed any such joint return.    Petitioner

has introduced into evidence copies of two different versions of

a Form 1040X that he alleges he and Astrid Downing jointly filed

in October 1996.9    Neither version bears Astrid Downing’s

signature.10    Although each version shows the signature of a tax


     9
       Petitioner does not contend that he and Astrid Downing
ever filed the original joint return that Ernst & Young prepared
but only the Form 1040X purporting to amend Astrid Downing’s
“Single” 1995 return to claim joint filing status.
     10
       One version is a copy as enclosed in petitioner’s Apr.
11, 2001, letter to the IRS and shows the signature only of the
tax preparer, dated Oct. 15, 1996. The other version, dated Oct.
25, 1996, shows the signatures of both petitioner and the tax
preparer. The two versions are otherwise substantially
identical, although the Oct. 15, 1996, version appears to contain
                                                   (continued...)
                               - 25 -

preparer, petitioner does not contend, and the evidence does not

show, that the preparer’s signature qualifies as the signature of

a duly authorized agent for Astrid Downing pursuant to the

regulations.

       Petitioner’s testimony regarding the circumstances of his

purported filing of his 1995 income tax return was vague and

inconsistent; conspicuously absent from his testimony was any

convincing explanation of how or when Astrid Downing allegedly

signed a joint return.    Petitioner did not call Astrid Downing as

a witness and has otherwise offered no credible evidence to

establish that Astrid Downing ever intended to file a 1995 joint

return with him or that she even tacitly consented to the filing

of a joint return for 1995.    Astrid Downing’s intent in this

regard is made more problematic by the undisputed fact that

before the amended 1995 joint return was purportedly filed, she

had filed a “Single” return for 1995 under a name other than her

married name and listed an address other than petitioner’s

Singapore address.    Petitioner has failed to persuade us that

Astrid Downing ever intended to file a 1995 joint return with

him.



       10
      (...continued)
additional forms and schedules. Petitioner has not adequately
explained how these two versions came about or why he included
the Oct. 15, 1996, version in his Apr. 11, 2001, correspondence
with the IRS but now appears to claim the Oct. 25, 2001, version
as the relevant one.
                                - 26 -

     The copies of the incompletely executed Form 1040X,

purporting to amend Astrid Downing’s single 1995 return and claim

joint filing status for petitioner and Astrid Downing, show

$8,728 as “Amount of tax paid with original return plus

additional tax paid after it was filed”.    Respondent’s records

show that this amount was posted to Astrid Downing’s 1995 account

as a “PAYMENT WITH RETURN”.11    Petitioner relies upon this entry

as establishing that the 1995 return was filed and processed by

the IRS.   We disagree.   At most, this entry might suggest that a

joint return was tendered with payment and that an IRS employee

accepted the payment.     Such action by an IRS employee, however,

would not waive the statutory requirements for a valid return.

See Lucas v. Pilliod Lumber Co., 

(1930); Olpin v.

at 1301; Smart v. Commissioner, T.C. Memo.

1987-279; Wallace v. Commissioner, T.C. Memo. 1975-133.

     Petitioner places great weight on the preliminary

assessments of Appeals Officer Dugan, who first handled

petitioner’s Appeals hearing.     In an undated internal memo and in

a letter to petitioner’s representative Appeals Officer Dugan

stated that she believed, on the basis of her preliminary

investigation, that petitioner and Astrid Downing had filed a




     11
       In the final notice of determination, the Appeals Office
concluded that petitioner should be given credit for the $8,728
payment.
                              - 27 -

joint amended return in October 1996, as petitioner claimed.12

When petitioner’s case was eventually transferred to Appeals

Officer Talbott, however, he was unable, after investigation, to

establish that Astrid Downing had signed or had intended to file

any joint return.   The administrative record indicates that

Appeals Officer Talbott requested petitioner to provide a

statement from Astrid Downing that she had intended to file a

joint return.   Insofar as the record reveals, petitioner never

provided such a statement.   Ultimately, the final determination

reflected Appeals Officer Talbott’s conclusion that petitioner

and Astrid Downing never filed a valid 1995 joint return.   On the




     12
       At trial, respondent objected to admitting these two
documents into evidence on the grounds that “they are hearsay.
They are the opinions of a lower level IRS agent. They are not
the position of the Service and not binding on the Service.” The
Court provisionally admitted the documents into evidence subject
to respondent’s right to renew his objections on brief. On
brief, respondent renews his objections, but on different grounds
than asserted at trial. On brief, respondent does not assert any
hearsay objection; we deem respondent to have waived any such
objection. In any event, as shown by the discussion in the text,
we do not rely upon these documents to prove the truth of the
matters asserted therein; moreover, we do not rely upon Appeals
Officer Dugan’s conclusions expressed in these documents and do
not view them as binding upon the IRS. On brief, respondent also
objects that admission of these documents into evidence is
contrary to Fed. R. Evid. 602 and 701. We disagree. Fed. R.
Evid. 602, which limits admissible testimony to matters as to
which the witness has personal knowledge, is not germane,
inasmuch as the documents in question do not represent testimony
of a witness. Similarly, Fed. R. Evid. 701, which relates to
opinion testimony by lay witnesses, is not germane. Accordingly,
we overrule respondent’s new and renewed evidentiary objections
to Exhibits 31-P and 32-P.
                              - 28 -

basis of all the evidence in the record, we must concur with this

conclusion.

     5.   Summary Assessment of Petitioner’s 1995 Tax

     This does not end the matter, however, for in seeking to

deflect petitioner’s limitations period argument, respondent now

contends, apparently for the first time in this proceeding, that

petitioner filed his 1995 married filing separate return in April

2001, when petitioner included in correspondence to the IRS an

unsigned copy of his 1995 married filing separate return (along

with a copy of a 1995 joint amended return signed only by the

preparer).13

     In response to this argument, petitioner contends that in

his April 2001 correspondence, he admitted only the liability

shown on the copy of his and Astrid Downing’s 1995 amended joint

return included therewith and that he did not admit the liability

shown on the unsigned copy of his 1995 married filing separately

return.   Petitioner contends that respondent improperly assessed

his 1995 tax on the basis of the unsigned copy of his 1995

married filing separate return without first issuing the required

statutory notice of deficiency.   See sec. 6213(a).

     Pursuant to section 6201(a)(1), the Secretary is authorized

to “assess all taxes determined by the taxpayer or by the


     13
       Respondent does not contend, however, that we should
modify those aspects of the final notice of determination that
treated petitioner as having filed a 1995 married filing separate
return in October 1996.
                              - 29 -

Secretary as to which returns * * * are made under this title.”

Respondent cites, and we have discovered, no authority to suggest

that the unsigned copy of petitioner’s 1995 married filing

separate return should be considered a valid return for purposes

of section 6201(a).   Cf. sec. 6065 (generally requiring any

return to contain or be verified by a written declaration that it

is made under penalties of perjury); Dixon v. Commissioner, 

, 348 (1957) (“The respondent does not cite any decision

where * * * it was held that an unsigned and otherwise unverified

duplicate copy of a purported income tax return was held to be

the return required by statute and was to be given effect as

such”).   An unsigned return “is no return at all.”    Vaira v.

Commissioner, 

, 1005 (1969), affd. on this issue,

revd. and remanded on other grounds 

(3d Cir. 1971);

see Borgeson v. United States, 

(10th Cir. 1985).       A

signature on a letter attached to the return cannot be considered

an imputed signature on the return itself.   Richardson v.

Commissioner, 

, 824 (1980).   Moreover, even if we were

to assume, arguendo, that the IRS accepted petitioner’s unsigned

copy of the 1995 married filing separate return and processed it,

such acceptance would not cure an invalid return.     See Olpin v.

; Dixon v. 

at

347.
                              - 30 -

     Pursuant to the deficiency procedures, the Commissioner

generally is precluded from assessing a deficiency until he has

mailed the taxpayer a notice of deficiency and the period for

filing a timely petition in this Court has expired.   See sec.

6213(a).   Respondent issued no notice of deficiency to

petitioner.

     Section 6330(c)(1) requires, in the case of any hearing

conducted with respect to a proposed collection action, that the

Appeals officer “obtain verification from the Secretary that the

requirements of any applicable law or administrative procedure

have been met.”   Pursuant to this provision, the Appeals officer

must verify, among other things, that tax was properly assessed.

Cox v. Commissioner, 

, 255 (2006).   The verification

requirement may be met where the Appeals officer secures formal

or informal transcripts showing that the tax was properly

assessed and that the taxpayer had been properly notified of the

assessment.   See id.; see also Jones v. Commissioner, 

, 466 (5th Cir. 2003) (the verification requirement was

satisfied where an Appeals officer referred to a Form 4340,

Certificate of Assessments, Payments, and Other Specified

Matters, to determine that the IRS had followed legal and

administrative procedures); Roberts v. Commissioner, 

, 1228 (11th Cir. 2003) (Form 4340 provides prima facie
                               - 31 -

evidence that the IRS has complied with its statutory duties),

affg. 

(2002).

     The final notice of determination notes without comment that

the IRS processed a 1995 married filing separate Form 1040, U.S.

Individual Income Tax Return, that was not signed by either

petitioner or the preparer.   The final notice of determination

goes on to state summarily:   “All legal and procedural

requirements are concluded to have been met in this case.”     The

final notice of determination does not, however, reveal the basis

for this statement as it might pertain to the propriety of a

summary assessment made on the basis of the unsigned copy of the

1995 married filing separate return; indeed, the administrative

record does not show that the Appeals officer ever specifically

considered the issue.14   Respondent has offered no reasoned

defense of his summary assessment of petitioner’s 1995 tax.    On


     14
       As previously discussed, the Appeals officer assumed, for
purposes of abating penalties and interest and reallocating
certain payments, that petitioner filed a 1995 married filing
separate return in October 1996. If we were to infer that the
Appeals officer meant to assume that petitioner’s 1995 married
filing separate return was filed in October 1996 for all
purposes, this might explain why the Appeals officer would not
have felt it necessary to address whether summary assessment was
properly made on the basis of the unsigned copy of petitioner’s
1995 married filing separate return that the IRS received in
2001. If we were to indulge the assumption, however, that
petitioner filed a 1995 married filing separate return in October
1996, then we would have to agree with petitioner that the
assessment in 2001 was outside the 3-year limitations period of
sec. 6501(a). As previously discussed, both parties now agree
that petitioner filed no 1995 married filing separate return in
1996.
                               - 32 -

the basis of the record before us, we conclude that petitioner’s

1995 tax was improperly assessed summarily without the issuance

of a statutory notice of deficiency.    Accordingly, we conclude

and hold that the final notice of determination sustaining the

notice of tax lien filing is invalid insofar as it pertains to

petitioner’s 1995 tax year.    See Freije v. Commissioner, 

, 35-36 (2005).

C.   “Equivalent Hearing” Decision Letter

     If a person requests a hearing pursuant to section 6330 but

the request is untimely (i.e., the hearing request is not made

within the 30-day period commencing the day after the date of the

pre-levy notice, see sec. 6330(a)(3)(B); sec. 301.6330-1(b)(1),

Proced. & Admin. Regs.), the person is not entitled to a hearing

but nevertheless may receive a so-called equivalent hearing.      See

Kennedy v. Commissioner, 

, 262 (2001); secs.

301.6320-1(i)(1), 301.6330-1(i)(1), Proced. & Admin. Regs.      At

the conclusion of an “equivalent hearing”, the Appeals Office

does not issue a notice of determination but instead issues a

decision letter, which generally includes the same information as

a notice of determination.    Secs. 301.6320-1(i)(2), Q&A-I5,

301.6330-1(i)(2), Q&A-I5, Proced. & Admin. Regs.

     As previously discussed, petitioner did not timely request a

hearing in response to the final notice of intent to levy, issued

April 22, 2003, because it was not sent to his last known address
                              - 33 -

and he did not receive it.   Petitioner received an “equivalent

hearing” decision letter regarding the levy.   An “equivalent

hearing” decision letter, unlike a notice of determination,

generally does not constitute a “determination” for purposes of

section 6320 or 6330 and so does not provide the requisite basis

for invoking this Court’s jurisdiction under section 6320 or

6330.   See Moorhous v. Commissioner, 

, 269-270

(2001); Kennedy v. 

; cf. Craig v.

Commissioner, 

(2002) (holding that a decision letter

issued in response to a timely request for a hearing provides the

requisite jurisdictional basis under section 6330(d)(1)).

     Petitioner has not properly placed before us any request to

review the “equivalent hearing” decision letter as to the
                              - 34 -

proposed levy upon his property.15   Nevertheless, as previously

discussed, we have held that the final notice of

intent to levy, issued April 22, 2003, was invalid because

respondent did not send it to petitioner’s last known address.16

D.   Conclusion

     Respondent’s final determination sustaining the filing of

the notice of Federal tax lien is not sustained insofar as it

relates to petitioner’s 1995 tax year.




     15
       Petitioner’s original petition, filed Apr. 5, 2005,
broadly challenges respondent’s assessment of his 1995 income tax
and respondent’s accounting for his payments on his 1995 and 1999
account but does not expressly mention either the notice of
determination regarding the Federal tax lien or the decision
letter with respect to the levy. The petition as originally
filed makes no express reference to sec. 6320 or 6330 or any
other statutory basis for this Court’s jurisdiction. Contrary to
Rule 331(b)(8), the petition as originally filed includes no copy
of the notice of determination. At the commencement of the
trial, petitioner amended his petition to assert that he had
requested IRS Appeals Office consideration “in response to a
Notice of Federal Tax lien Filing and Your Right to a Hearing
Under IRS 6320 regarding alleged liabilities for 1995 and 1999”,
and that on Mar. 8, 2005, respondent had issued the notice of
determination concerning the filing of the Federal tax lien.
Attached to the petition thus amended is a copy of said notice of
determination. In his opening brief and reply brief, petitioner
states identically: “This Tax Court proceeding is an appeal from
a CDP Hearing that Petitioner requested in response to a Notice
of Federal Tax Lien Filing issued by Respondent for an alleged
1995 income tax assessment.”
     16
       If petitioner had properly placed in issue any challenge
to the equivalent hearing decision letter, our holding as to the
invalidity of the final notice of intent to levy would have been
relevant in deciding the proper basis for dismissal of this
issue. See Kennedy v. Commissioner, 

, 260-261
(2001); Buffano v. Commissioner, T.C. Memo. 2007-32.
                        - 35 -

To reflect the foregoing,


                                 An appropriate decision

                            will be entered.