- 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