Summary
recognizing that "[a]fter a determination has been issued, a taxpayer may seek judicial review of the determination pursuant to § 6330(d) . . ."
Summary of this case from Powers v. Commissioner of Internal Revenue ServiceOpinion
Civil Action No. 04-5336 (KSH).
February 16, 2005
OPINION ORDER
Pro se plaintiff James R. Kupcho ("Kupcho") filed a complaint alleging defendant Jesse Voysest ("Voysest"), an Internal Revenue Service ("IRS") Settlement Officer, deprived him of due process of law under the Fifth Amendment by not granting his request for a face-to-face collection due process hearing. On behalf of Voysest, the United States has filed a motion to dismiss for lack of subject matter jurisdiction. The Government argues that the United States Tax Court, not the district court, has jurisdiction over this matter because 26 U.S.C. § 6330(d)(1)(A) grants the Tax Court exclusive jurisdiction to review determinations involving an underlying income tax liability. The Court agrees.
It should be noted that the Government also raises the argument that Kupcho improperly named Voysest in his individual capacity as the defendant. The Court does not reach whether or not Voysest is a proper party to this proceeding due to its finding that the Court lacks subject matter jurisdiction.
After Kupcho received a "Final Notice of Intent to Levy and Notice of Your Rights to a Hearing" letter from the IRS, he asserts he made a request for an in-person collection due process hearing pursuant to 26 U.S.C. § 6330(b). (Compl. ¶ 13.) Voysest granted him a telephone conference in lieu of a face-to-face hearing, and informed Kupcho that his request was denied based on policy promulgated by the IRS Office of Appeals. (Compl. ¶ 15.) Following the phone conference, Voysest issued a "Notice of Determination," which Kupcho now argues is null and void because the IRS Office of Appeals did not comply with proper procedure, in violation of his due process rights, by denying him a face-to-face hearing.
Neither party disputes that Kupcho was entitled to the protections afforded by 26 U.S.C. 6330. Under this statute, a taxpayer may request a collection due process hearing before a levy determination is made by the IRS. See 26 U.S.C. § 6330(b)(1). The IRS Office of Appeals is responsible for holding these collection due process hearings and issuing levy determinations. See 26 U.S.C. §§ 6330(b)(1), 6330(c)(3). After a determination has been issued, a taxpayer may seek judicial review of the determination pursuant to § 6330(d)(1), which provides, in relevant part:
(d)(1) the person may, within 30 days of a determination under this section, appeal such determination —
(A) to the Tax Court (and the Tax Court shall have jurisdiction to hear such matter); or
(B) if the Tax Court does not have jurisdiction of the underlying tax liability, to a district court of the United States. 26 U.S.C. § 6330(d)(1)(A), (B).
The Government argues that the district court does not have subject matter jurisdiction because Kupcho is seeking judicial review of an IRS determination involving underlying income tax liabilities, thereby invoking § 6330(d)(1), which gives exclusive jurisdiction to the Tax Court. (See United States' Brief in Support of Motion to Dismiss, at 5.) To avoid this conclusion, Kupcho asserts he is not substantively challenging his underlying tax liability, but rather is challenging procedural irregularities, i.e., the denial of an in-person hearing. The Court agrees with the Government that Kupcho, by challenging the process of his collection due process hearing, is in fact seeking review of the determination itself. (See United States' Reply Brief, at 1.)
Nothing in the language of § 6330(d)(1) supports Kupcho's argument that the Tax Court's jurisdiction is limited to substantive review of a levy, while the district court has jurisdiction to hear all procedural challenges. To the contrary, jurisdiction is divided by the type of tax, not the type of claim. Moreover, implicit in the Tax Court's grant of power to make substantive decisions is the authority to hear procedural challenges to matters within the court's jurisdiction. See Crawford v. Commissioner, 266 F.3d 1120, 1123 (9th Cir. 2001) (reiterating Tax Court's jurisdiction to consider constitutional questions in the context of hearing deficiency challenges). The statutory mandate in 26 U.S.C. § 6330(d)(1) vests in the Tax Court exclusive jurisdiction over both procedural and substantive challenges to collection due process hearings, where the underlying tax liability falls within the Court's deficiency jurisdiction. See White v. U.S., 250 F. Supp 2d 919, 922 (M.D. Tenn. 2003).
While Kupcho would have the Court focus on Voysest's denial of a procedural request — for an in-person hearing — the fact remains that when he said no to the in-person hearing, Voysest was making a determination in a collection due process hearing that involved underlying income tax liabilities. Thus under 26 U.S.C. § 6330(d)(1)(A), Kupcho is entitled to judicial review by the Tax Court. It should be noted that Kupcho will not be materially prejudiced by this decision because 26 U.S.C. § 6330(d)(1) allows him to bring his claim in the appropriate court within thirty days of dismissal of this action.
It is not in dispute that income tax liabilities are within the deficiency jurisdiction of the Tax Court.
CONCLUSION
For the foregoing reasons, this Court finds it lacks subject matter jurisdiction to decide this matter and accordingly the United States' motion to dismiss is granted.
SO ORDERED