The foregoing inference is supported by other language in the conference report. Regarding the scope of the section 6330 hearing, the report states: "However, the validity of the tax liability can be challenged only if the taxpayer did not actually receive the statutory notice of deficiency or has not otherwise had an opportunity to dispute the liability.” Id. at 265, 1998-3 C.B. at 1019 (emphasis added). That language suggests that Congress did not intend to allow challenges to the Commissioner's right to collect the unpaid tax liability in those instances in which the taxpayer's nonreceipt of a statutory notice of deficiency is solely attributable to the fact that the Commissioner did not determine a deficiency in the first place. Rather, the reference to "actual" receipt of "the" notice of deficiency suggests that, in the case of taxes subject to the deficiency procedures, such as the income tax, Congress was targeting the situation in which, although the Commissioner determined a deficiency and properly issued a statutory notice of deficiency, the taxpayer did not actually (or constructively, see Sego v. Commissioner, 114 T.C. 604, 611 (2000)) receive that notice17 and therefore did not have a realistic opportunity to challenge the proposed deficiency in the Tax Court.18 That interpretation is consistent with respondent's position that the term "underlying tax liability”, as used in section 6330(c)(2)(B), does not include selfassessed amounts. IV. Conclusion I conclude that section 6330(c)(2)(B), describing the limited circumstances in which a taxpayer may challenge the existence or amount of the underlying tax liability at a section 6330 hearing, does not allow the taxpayer to challenge her obligation to pay any reported but unpaid tax.19 Accordingly, 17 In informal remarks, one Treasury official specifically identified that situation as the proper focus of any expanded appeal rights. See Holmes, "Proposed Taxpayer Rights Changes Questioned by Treasury Attorney Rizek", 74 Daily Tax Rept. at G-3 (Apr. 17, 1998); see also Donmoyer, "Treasury Still Ignoring IRS Reform Bill's Controversial Elements," 78 Tax Notes 411 (describing Associate Tax Legislative Counsel Rizek as "one of Treasury's chief negotiators during the drafting of the IRS reform bill"). 18 A notice of deficiency mailed to a taxpayer's "last known address" is sufficient to commence the usual 90-day period during which the taxpayer may petition the Tax Court for a redetermination of the deficiency, regardless of whether the taxpayer actually receives the notice. See, e.g., Frieling v. Commissioner, 81 T.C. 42, 52 (1983); Tatum v. Commissioner, T.C. Memo. 2003115 n.4; see also sec. 6212(b); sec. 301.6212-2, Proced. & Admin. Regs. 19 I acknowledge that such conclusion is at odds with dicta appearing in prior reports of the Court, which reflect concessions made by the Commissioner. See Craig v. Commissioner, 119 putting aside section 301.6330-1(e)(1), (3), Proced. & Admin. Regs., the reported but unpaid tax here in question is not properly at issue.20 CHIECHI, J., dissenting in part and concurring in part: I dissent from the holding and rationale of the majority opinion. I concur with the majority opinion only to the extent that the majority opinion results in allowing petitioners to challenge the existence or the amount of the tax liability specified in the final notice-notice of intent to levy and notice of your right to a hearing (notice of intent to levy) with respect to their taxable year 2000.1 The foregoing result is the only proper result in the instant case because the following regulations, which bind respondent, require it: (e) Matters considered at CDP hearing-(1) In general. *** The taxpayer also may raise challenges to the existence or amount of the tax liability specified on the CDP Notice for any tax period shown on the CDP Notice if the taxpayer did not receive a statutory notice of deficiency for that tax liability or did not otherwise have an opportunity to dispute that tax liability. *** * (3) Questions and answers. The questions and answers illustrate the provisions of this paragraph (e) as follows: Q-E2. When is a taxpayer entitled to challenge the existence or amount of the tax liability specified in the CDP Notice? A-E2. A taxpayer is entitled to challenge the existence or amount of the tax liability specified in the CDP Notice if the taxpayer did not receive a T.C. 252, 261 (2002) (Commissioner conceded that taxpayer was entitled to dispute self-assessed liability at CDP hearing); Hoffman v. Commissioner, 119 T.C. 140, 145 (2002) (same in the context of interest and penalties attributable to a self-assessed liability). 20 That is not to say that, at a sec. 6330 hearing, a taxpayer may not show that she has no liability (or a reduced liability) for a deficiency properly before the Appeals Office pursuant to sec. 6330(c)(2)(B) on account of erroneous items on her return (or, indeed, items, e.g., overlooked deductions, not on her return). The question is whether, during a sec. 6330 hearing, a taxpayer has the right to challenge her obligation to pay any amount shown on her return but remaining unpaid (she does not). The absence of such a right, however, does not foreclose the taxpayer from submitting an amended return or, upon payment, filing a claim for refund. 1 The notice of intent to levy specified that petitioners had a total tax liability for 2000 of $222,315.34. That liability consisted of the tax due, penalties, and interest thereon, totaling $213,495, which petitioners reported in their Federal income tax return for 2000 that they filed on or about Oct. 18, 2001, and which respondent assessed, plus any penalties as well as interest on the total liability accruing after Oct. 18, 2001, and before Mar. 19, 2002, the date on which respondent issued the notice of intent to levy with respect to petitioners' taxable year 2000. statutory notice of deficiency for such liability or did not otherwise have an opportunity to dispute such liability. *** [Sec. 301.6330-1(e)(1), (3) Q&A-E2, Proced. & Admin. Regs.; emphasis added.] HOLMES, J., agrees with this dissenting in part and concurring in part opinion. GWENDOLYN A. EWING, PETITIONER v. COMMISSIONER Docket No. 1940-01. Filed January 28, 2004. After submitting an application to and receiving an adverse Karen L. Hawkins, for petitioner. COLVIN, Judge: Respondent determined that petitioner is not entitled to relief from joint liability for tax under section 6015(f) for 1995. Petitioner filed a petition under section 6015(e)(1) seeking our determination whether she is entitled to relief under section 6015(f). The issues for decision are:1 (1) Whether, in determining petitioner's eligibility for relief under section 6015(f), we may consider evidence introduced at trial which was not included in the administrative record. We hold that we may; (2) whether petitioner is entitled to relief from joint liability for tax under section 6015(f). We hold that she is. 1 We have previously decided that we have jurisdiction in this case. Ewing v. Commissioner, 118 T.C. 494 (2002). Section references are to the Internal Revenue Code in effect for the applicable years. Rule references are to the Tax Court Rules of Practice and Procedure. FINDINGS OF FACT Some of the facts have been stipulated and are so found. A. Petitioner and Petitioner's Husband 1. Petitioner Petitioner resided in Martinez, California, when she filed her petition. She married Richard Wiwi (Mr. Wiwi) on September 9, 1995. At the time of trial, they were still married and living together. Petitioner is a licensed clinical laboratory scientist. In 1995, she worked full time for the Blood Bank of Alameda/ Contra Costa Counties as a medical technologist and was eligible for various employee benefits (not described further in the record). Later in 1995, the blood bank changed her position to part time. From 1997 to 1999, petitioner was employed in two temporary medical technologist positions, and she received no employee benefits. 2. Petitioner's Husband In 1995, Mr. Wiwi was the sole proprietor of a financial services business. He was licensed to trade securities and sell insurance. Petitioner knew about his business, but she did not know how much he earned. He concealed from her the fact that he had prior financial obligations, including unpaid income tax for 1993 and 1994. 3. Petitioner and Her Husband's 1995 Tax Return Taxes in the amount of $10,862 were withheld from petitioner's wages in 1995. Mr. Wiwi made no estimated tax payments to the United States and was not subject to withholding in 1995. Petitioner and Mr. Wiwi filed a joint Federal income tax return for 1995. On that return, they reported Federal income tax withheld on petitioner's wages of $10,862 and additional tax due of $6,220. However, they paid only $1,620 with their return; petitioner paid $1,069, and Mr. Wiwi paid $551. As a result of withholding and the payment with the return, petitioner paid an amount equal to the tax on her income, but Mr. Wiwi paid less than the tax due on his income. Mr. Wiwi told petitioner (and she reasonably believed) that he would pay the unpaid 1995 tax as provided in a proposed installment agreement that he submitted with their 1995 income tax return. Mr. Wiwi failed to pay the remaining 1995 tax, but he concealed that fact from petitioner until 1998. Early in 1999, he filed an offer in compromise in which he said he could not pay the unpaid tax for 1995. 4. Petitioner's Finances Petitioner and Mr. Wiwi have always kept their finances separate. Petitioner paid her own expenses (including Federal income tax on her income) beginning before they were married and continuing until the time of trial. Petitioner paid at least half of their household expenses from the date they were married until 1997. Mr. Wiwi began having medical problems in 1996. He lost his license to sell securities in 1997, and his income decreased dramatically. Since 1997, petitioner has worked at several temporary jobs and paid all of her and about 80 percent of Mr. Wiwi's expenses. Petitioner's total monthly household expenses on behalf of herself and Mr. Wiwi in 1997 and 1998 (including rent, utilities, transportation, food, clothing, and medical insurance) were about $2,800. Petitioner had about $5,000 in her savings account in 1996 and $13,500 at the time of trial. She received wages of $65,792 in 1997, $65,338 in 1998, $66,315 in 2000, and $79,000 in 2002.2 Mr. Wiwi's medical condition worsened, which prevented him from working in 2000. He had hip replacement surgery in 2000 and 2001. In 2000, petitioner liquidated an individual retirement account (IRA) and used the proceeds (about $20,000) as part of a $33,000 downpayment to buy a $333,000 residence for Mr. Wiwi and herself. The monthly mortgage payment was about the same as their previous rent payments. At the time of trial, petitioner had a section 401(k) retirement account 2 The record does not indicate the amount of petitioner's income for 1999 and 2001. |