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The record in this case indicates only one levy on
petitioner’s salary in 1997, and that was in December, in the
amount of $1,186.83. Petitioner, however, must include her wages
for 1997 in gross income, including any portion that was withheld
and paid directly to the IRS for application against her
liability for the years 1990, 1992 and 1993. Old Colony Trust
Co. v. Commissioner, 279 U.S. 716, 729 (1929). Although her
salary was the subject of a levy, that does not mean the levied
amount is excluded from her income for Federal income tax
purposes. Contrary to her belief, the levied amount is
includable in her gross income.
Both of petitioner’s arguments, however, that she is
entitled to additional deductions and that her tax is less than
that assessed because her salary in 1997 is less than that shown
on her Form W-2, are precluded in this action. The parties agree
that the statutory notices of deficiency for the years at issue
were sent by certified mail to petitioner’s then and present
address of record with the Internal Revenue Service. Petitioner
did not argue or present any evidence at trial that she did not
receive the relevant statutory notices of deficiency. Petitioner
is therefore precluded from challenging her underlying tax
liabilities, and those tax liabilities are not properly at issue
here. Sec. 6330(c)(2)(B).
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Last modified: November 10, 2007