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Standard of Review
Where the underlying tax liability is properly at issue, the
Court reviews the determination de novo. See Goza v.
Commissioner, supra at 181-182. Where the underlying tax
liability is not properly at issue, the Court reviews the
determination for abuse of discretion. Id.
Section 6330(c)(2)(B) provides that the existence or the
amount of the underlying tax liability can be contested at an
Appeals Office hearing if the person did not receive a statutory
notice of deficiency or did not otherwise have an earlier
opportunity to dispute such tax liability. Sego v. Commissioner,
supra at 609; Goza v. Commissioner, supra at 180-181.
Because petitioners self-assessed their taxes for all years
at issue, respondent did not issue to petitioners a statutory
notice of deficiency. See sec. 6201(a)(1).
Respondent contends that the appropriate standard of review
for the years at issue is the abuse of discretion standard and
not review de novo. Respondent argues that although a deficiency
notice was not issued, petitioners had a prior opportunity to
dispute those tax liabilities before the bankruptcy court.
The Court agrees with respondent. In Kendricks v.
Commissioner, 124 T.C. 69, 77 (2005), the Court held that when
the IRS submits a proof of claim in a taxpayer’s bankruptcy
action, the taxpayer has an opportunity to dispute the liability
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Last modified: November 10, 2007