Long v. Commissioner
T.C. Memo. 2021-81

On June 30, 2021, the Tax Court issued a Memorandum Opinion in the case of Long v. Commissioner (T.C. Memo. 2021-81). The primary issue presented in Long v. Commissioner was whether the petitioner was entitled to dispute her underlying liabilities when she failed to do so with prior opportunity arising out of a notice of deficiency that was mailed to the petitioner’s last known address—which she did not receive.

Underlying Liability in CDP Case in Long v. Commissioner

A taxpayer’s underlying liability is properly at issue if she did not receive a statutory notice of deficiency or did not otherwise have an opportunity to dispute the liability. IRC § 6330(c)(2)(B); Sego v. Commissioner, 114 T.C. 604, 609 (2000). Generally, a notice of deficiency is valid if it was properly mailed to the taxpayer at her last known address. IRC § 6212(b)(1); Hoyle v. Commissioner, 131 T.C. 197, 200, 203-204 (2008), supplemented by 136 T.C. 463 (2011). A taxpayer’s last known address is generally the address appearing on her “most recently filed and properly processed Federal tax return.” Treas. Reg. § 301.6212-2(a).  The petitioner does not dispute that the notice of deficiency for 2015 was properly mailed to her “last known address.” IRC § 6212(b)(1).

Even if this weren’t the case, however, there is another barrier to her challenging her underlying liability in this Court: A taxpayer is precluded from doing so if she did not properly raise her underlying liability on the merits during the CDP hearing. Thompson v. Commissioner, 140 T.C. 173, 178 (2013); Giamelli v. Commissioner, 129 T.C. 107, 114 (2007). “An issue is not properly raised if the taxpayer fails to present to Appeals any evidence with respect to that issue after being given a reasonable opportunity.” Treas. Reg. § 301.6320-1(f)(2), Q&A-F3; Treas. Reg. § 301.6330-1(f)(2), Q&A-F3; see Giamelli, 129 T.C. at 112-116; Miller v. Commissioner, 115 T.C. 582, 589 n.2 (2000), aff’d, 21 F. App’x 160 (4th Cir. 2001).

In her CDP hearing request petitioner stated that she did not know why she had outstanding tax liabilities, and she repeated that question at the start of the conference call. But after the SO explained the background and summarized the notices of deficiency, petitioner withdrew any challenge to her underlying liabilities. Indeed, she stated that she intended to pay those liabilities in full and asked for an extension of time to do so. At no time did petitioner submit any evidence to the SO regarding her entitlement to a dependency exemption (or any other issue relevant to her 2015 tax liability). See Sullivan v. Commissioner, T.C. Memo. 2019-153; Campbell v. Commissioner, T.C. Memo. 2019-127. Because the petitioner’s underlying liability is not properly before us as to either year in issue, the Tax Court reviewed the IRS’ decision for abuse of discretion.

Abuse of Discretion

Although petitioner in her CDP hearing request checked the box “I Cannot Pay Balance,” she later informed the SO that she intended to pay her liabilities in full. She ultimately requested only an extension of time to pay, and the SO granted that request. Petitioner never returned a completed Form 433-A as the SO had requested. Because petitioner did not supply any financial information, the SO was unable to evaluate her ability to pay or make any determination as to her eligibility for a collection alternative. See Gentile v. Commissioner, T.C. Memo. 2013-175, aff’d, 592 F. App’x 824 (11th Cir. 2014); Treas. Reg. § 301.6330-1(e)(1).

(T.C. Memo. 2021-81) Long v. Commissioner

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