- 6 -
Discussion
We are asked to decide for the first time whether the
Commissioner is required to issue a deficiency notice before
assessing taxes for years subject to a closing agreement that
covers the treatment of only certain items. Petitioners argue
that respondent may not proceed with collection because
respondent did not issue them a deficiency notice before
respondent assessed their taxes. This failure, petitioners
argue, precluded them from challenging their income tax
liabilities before the assessment and before this levy
proceeding. Respondent, on the other hand, argues that a
deficiency notice is not required before assessment in all
situations. Rather, respondent argues no deficiency notice is
required if the changes to a taxpayer’s return arise solely from
computational adjustments made by applying a closing agreement
covering specific matters to the taxpayer’s return. We find for
petitioners.
We first address our jurisdiction in this case as well as
the standard of review.
I. Jurisdiction and Standard of Review
We have jurisdiction to review a hearing officer’s
determination in a collection action where the underlying tax
liability is of a type over which this Court normally has
jurisdiction. Sec. 6330(d)(1)(B); Katz v. Commissioner, 115 T.C.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011