T.C. Memo. 2009-178



                      UNITED STATES TAX COURT



       C. MICHAEL AND GWENDOLYN E. WILLOCK, Petitioners v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 22391-07L.              Filed August 3, 2009.



     C. Michael and Gwendolyn E. Willock, pro se.

     Jeanne Gramling, for respondent.



                        MEMORANDUM OPINION


     PARIS, Judge:   This case was submitted to the Court fully

stipulated pursuant to Tax Court Rule 122.

     On August 23, 2007, respondent mailed to petitioners a

Notice of Determination Concerning Collection Action(s) Under
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Section 6320 and/or 63301 (notice of determination) regarding

petitioners’ 2001 income tax liability.    In response to that

notice, and pursuant to sections 6320 and 6330(d), petitioners

timely petitioned this Court for review of respondent’s

determination that a notice of Federal tax lien (NFTL) was an

appropriate method of collection.

     The issue for decision is whether respondent abused his

discretion in upholding the filing of a NFTL.

                             Background

     Respondent mailed to petitioners’ last known address a

statutory notice of deficiency for taxable year 2001 on December

7, 2005.    This notice determined an income tax deficiency for

that year in the amount of $152,270.00, and an accuracy-related

penalty under section 6662 in the amount of $39,454.00.

     Petitioners did not file a petition in this Court seeking a

redetermination of respondent’s notice of deficiency for tax year

2001.    Therefore, after the expiration of the 90-day period

for filing a petition in this Court had passed, respondent

assessed the tax, penalty, and interest, on April 11, 2006.      On

that same date, respondent mailed to petitioners a notice and

demand for payment of the assessed 2001 tax liability.




     1
      Section references are to the Internal Revenue Code of
1986, as amended. Rule references are to the Tax Court Rules of
Practice and Procedure.
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     On January 23, 2007, a NFTL for petitioners’ 2001 unpaid

income tax liability was filed.    On January 30, 2007, respondent

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

Hearing Under IRC 6320 (Letter 3172) to petitioners for their

2001 income tax.

     Petitioners responded to the notice by timely submitting a

request for a collection due process (CDP) hearing on February

26, 2007.    In the request, petitioners stated that they opposed

the filing of the Federal tax lien because the “IRS agent

disallowed legitimate business expenses * * *”.    On July 23,

2007, respondent’s Appeals Office mailed to petitioners a letter

confirming receipt of petitioners’ CDP hearing request, and

scheduling August 14, 2007, as the date for the CDP telephone

hearing.    The letter also advised petitioners that because

petitioners had a prior opportunity to dispute the underlying tax

liability for 2001, they would not be permitted to do so during

the CDP hearing.

     Petitioners did not present any reason why the filing of the

Federal tax lien should not remain in place, nor did petitioners

present any collection alternatives during the hearing.

Respondent’s Appeals Office determined that the recording of the

notice of Federal tax lien was appropriate and that the lien

should not be withdrawn.    The Appeals Office’s conclusions were
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memorialized in the notice of determination mailed to petitioners

on August 23, 2007.

     On October 1, 2007, petitioners, then residing in the State

of North Carolina, filed a petition with this Court requesting

that the Federal tax lien not be sustained.   As grounds for

relief the petition states in its entirety that “[a]

determination letter was issued on the timely request regarding

the filing of a tax lien.   The taxpayers exercise their right to

petition the Tax Court regarding such.” On October 7, 2008,

during the Court’s motion hearing2 in Winston-Salem, North

Carolina, the parties submitted this matter to the Court for

decision without trial under Rule 122.   The stipulated facts and

accompanying exhibits are incorporated herein by this reference.

                            Discussion

     Under section 6321, if a person liable for a tax fails to

pay it after demand, the unpaid amount, including any interest

and penalties, becomes a lien in favor of the United States “upon

all property and rights to property, whether real or personal,


     2
      At the October 7, 2008, hearing, the Court discussed
petitioners’ then-pending motion for summary judgment and amended
motion for summary judgment. Petitioners argued in the motions
that respondent was barred from assessing any tax or penalties
for the tax year at issue because the period for assessment as
described in section 6501 had expired. The Court determined,
however, that petitioners signing of IRS Form 872 before the
period for assessment expired voluntarily extended the period for
assessment under section 6501(c). Therefore, the Court denied
petitioners’ motions on June 18, 2009.
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belonging to such person.”    The lien arises when the tax is

assessed.   Sec. 6322.   Section 6323 explains that the Internal

Revenue Service (IRS) may file a notice of Federal tax lien to

protect its lien against subsequent creditors and purchasers of

the taxpayer’s property.

     A taxpayer may appeal the filing of a notice of tax lien to

the IRS under section 6320 by requesting an administrative

hearing.    The taxpayer is additionally afforded the opportunity

for judicial review of a determination sustaining the notice of

Federal tax lien in the Tax Court pursuant to section 6330(d).

Petitioners have chosen to seek judicial review of respondent’s

determination.

     Petitioners are not contesting the underlying tax liability;

thus, the Court reviews the determination to see whether there

has been an abuse of discretion by respondent’s Appeals Office in

the determination.    See Lunsford v. Commissioner, 

,

185 (2001) (citing Nicklaus v. Commissioner, 

, 120

(2001)).    The Court has described the standard by which the

Commissioner’s determinations in CDP cases are reviewed as an

“abuse of discretion,” meaning “arbitrary, capricious, clearly

unlawful, or without sound basis in fact or law.”    Ewing v.

Commissioner, 

, 39 (2004), rev’d on other grounds, 

(9th Cir. 2006); see also Woodral v. Commissioner, 

, 23 (1999).    Utilizing this standard, this Court does not
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find that respondent’s Appeals Office abused its discretion.

Petitioners offered no collection alternatives or other defenses

to the lien.   Respondent simply used the available methods under

the Internal Revenue Code for protecting the United States’

claims against subsequent creditors.

                            Conclusion

     Based on the record, the Court holds that the Appeals Office

did not abuse its discretion in determining that respondent’s

filing of a NFTL was an appropriate collection action.

     Finally, in reaching the conclusions described herein, the

Court has considered all arguments made, and, to the extent not

mentioned above, finds them to be moot, irrelevant, or without

merit.

     To reflect the foregoing,


                                           Decision will be entered

                                      for respondent.