David E. and Susana V. Judd - Page 11

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         6330(c)(2)(B), petitioners were entitled to challenge the                    
         existence or amount of the underlying tax liabilities for 1996 at            
         their Appeals Office hearing.  If the validity of those                      
         underlying tax liabilities is properly at issue, the Court                   
         reviews the matter de novo.  Poindexter v. Commissioner, 122 T.C.            
         280, 284 (2004); Sego v. Commissioner, supra at 610.                         
              Petitioners did not address their 1996 tax liability in the             
         hearing or at trial and have failed to aver or prove facts                   
         sufficient to show error in the assessments.  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 decision to sustain the proposed levy was              
         arbitrary, capricious, or without sound basis in fact or law.                
         See Woodral v. Commissioner, 112 T.C. 19, 23 (1999).                         
              During the hearing, petitioners did not challenge the amount            
         of their underlying 1996 tax liability.  They were ineligible for            
         an installment agreement because they were not current in their              
         tax obligations and estimated tax payments.  Petitioners declined            
         to give Ms. Glover any financial information with which she could            
         determine the appropriateness of any other collection                        
         alternatives.                                                                






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