William C. Eberhardt, Jr. and Susan A. Eberhardt - Page 13

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                    (2)  Issues at Hearing.--                                         
                    *      *      *      *      *      *      *                       
                         (B) Underlying Liability.--The person may                    
                    also raise at the hearing challenges to the                       
                    existence or amount of the underlying tax                         
                    liability for any tax period if the person did not                
                    receive any statutory notice of deficiency for                    
                    such tax liability or did not otherwise have an                   
                    opportunity to dispute such tax liability.                        
               A taxpayer, however, is precluded from relitigating issues             
          raised and considered in any previous Appeals hearing or any                
          other administrative or judicial proceeding in which the taxpayer           
          meaningfully participated.  Sec. 6330(c)(4); Katz v.                        
          Commissioner, 115 T.C. 329, 339 (2000).                                     
               Petitioners not only received a notice of deficiency for tax           
          year 1995, they also litigated the matter before this Court.                
          Therefore, they are precluded from challenging the existence or             
          amount of their 1995 tax liability in a subsequent section 6330             
          hearing.  Sec. 6330(c)(2)(B).                                               
               Where, as is the case here, the validity of the underlying             
          tax liability is not properly placed at issue, the Court will               
          review the administrative determination of the Appeals Office for           
          abuse of discretion.  Sego v. Commissioner, supra at 610; Goza v.           
          Commissioner, supra at 181-183.  The Court reviews only whether             
          the Appeals officer's refusal to accept petitioners' OIC was                
          arbitrary, capricious, or without sound basis in fact or law.               
          See Woodral v. Commissioner, 112 T.C. 19, 23 (1999).                        






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