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action under certain delineated circumstances. The orders
described in section 7811 and the regulations are remedial in
nature and specifically do not cover the Commissioner’s
determinations with respect to the underlying tax liability.
Sec. 301.7811-1(c)(3), Proced. & Admin. Regs. In this case, the
problem resolution officer directed a reduction in petitioners’
1995 tax liability to reflect the amount of tax that would have
been due if Mr. Anderson had been an employee. That direction
does not change the fact that the 1995 liability was assessed as
self-employment tax under the deficiency procedures.
Accordingly, we hold that at the time of respondent’s
proposed collection activities, petitioners’ “underlying tax
liability” was self-employment tax and that we have jurisdiction
over the 1995 tax year.
III. The Underlying Merits of Petitioner’s 1995, 1996, and 1997
Tax Liabilities
Before the Commissioner may proceed to levy on a taxpayer’s
property or right to property, the taxpayer must be notified, in
writing, of the Commissioner’s intent and of the right to a
hearing. Sec. 6331(d). Section 6330(c) provides that, if a
taxpayer requests a hearing, the conducting officer (1) must
verify that the requirements of applicable law and administrative
procedures have been met and (2) may consider certain issues,
such as spousal defenses, challenges to the appropriateness of
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