OPINION AND ORDER

ECONOMUS, District Judge:

On January 8, 2001 , the plaintiff filed the instant proceeding requesting review of Internal Revenue Service determinations pursuant to 26 U.S.C. §6330. On June 21, 2001 , the United States filed a motion for judgment in the above-captioned proceeding. Plaintiff Herycyk filed a response to this motion on August 6, 2001 .

On September 20, 2001 , the United States filed a motion to remand the case back to the Appeals Office of the Internal Revenue Service for a Collection Due Process hearing on the underlying merits of the 26 U.S.C. §6672 assessment made against the plaintiff.

The taxpayer alleged that he did not receive a notice of right to have his claim considered by appeals and therefore alleged that he did not have a prior opportunity to be heard. The parties stipulated that the United States is unable to prove that the notice of right to an appeals conference which was sent to the taxpayer was actually received by him. Thus it appears that this action should be remanded to the Internal Revenue Service so that the Appeals Officer can consider the taxpayer's claim. The United States moved to have the above-captioned case remanded to the Internal Revenue Service Office of Appeals in order to allow an Appeals Officer to perform a Collection Due Process hearing pursuant to Section 6330 of the Internal Revenue Code at which, the merits of the taxpayer's claim that he is not liable for the taxes at issue will be considered.

Section 6330 (Notice and Opportunity for Hearing Before Levy) was added to the Internal Revenue Code (26 U.S.C.) ("Code") by the Internal Revenue Service Restructuring and Reform Act of 1998, Pub. L. No. 105-206, 112 Stat. 685 ("IRS Restructuring Act"). This section created new procedures to be followed by the Service before collecting a tax by levy. Prior to January 1, 1983 , the IRS was only required to notify a taxpayer of its intent to levy in the case of a proposed levy on salary or wages. As part of the Tax Equity and Responsibility Act of 1982, Section 6331(d) of the Code was amended to require that the IRS give a taxpayer notice of its intention to levy on salary or wages or other property in non-jeopardy situations before any levy was made upon the property of the taxpayer.

As part of the IRS Restructuring Act, new Section 6330 now provides that, except when collection of the tax is in jeopardy or a state tax refund due the taxpayer is being collected, no levy may be made unless the IRS notifies the taxpayer in writing of a right to a Collection Due Process hearing ("CDP") before an IRS Appeals Officer. Except in circumstances not present in the instant case, the IRS is prohibited from levying upon the taxpayer's property until 30 days after notice of a CDP hearing has been provided to the taxpayer. See 26 U.S.C. §6330(a)(1)(2). If the taxpayer requests a CDP hearing, the IRS is, in the absence of jeopardy, prohibited from levying upon the taxpayer's property until the determination reached by the Appeals Officer becomes final. See 26 U.S.C. §6330(e)(1).

During a Collection Due Process hearing, a taxpayer may raise any relevant issue relating to the unpaid tax, including the IRS's proposed collection action and collection alternatives. See Treas. Reg. (26 C.F.R.) §301.6330-1(T)(e)(1). Collection alternatives can include posting a bond, substituting other assets to secure the debt, an offer-in-compromise, or entering into an installment agreement. See 26 C.F.R. §301.6330-1(T)(c)(3) Q&A-ES. Taxpayers are expected to provide relevant information, such as financial statements, to substantiate their proposed collection alternatives. See C.F.R. §301.6330-1(T)(e)(1). In addition, taxpayers are given the opportunity to challenge the underlying liability if the person did not receive any statutory notice of deficiency for such liability or did not otherwise have an opportunity to dispute such tax liability. See 26 U.S.C. §6330(c)(2)(B). A taxpayer is not allowed to challenge the liability if a sufficient opportunity has already been presented to him for dispute of the underlying determination of liability. This opportunity to dispute such liability includes the opportunity to contest the liability in Appeals. See 26 C.F.R. §301.6330-1(T)(e)(3) Q&A-EZ.

Following a CDP hearing, the IRS Appeals Officer will send a Notice of Determination to the taxpayer. The Notice summarizes the matters raised during the CDP hearing, and responds to any offers made by the taxpayer or states any agreements reached during the hearing. See 26 C.F.R. §301.6330-1(T)(e)(3) Q&A-E7. Within thirty (30) days of the Notice of Determination being issued, the taxpayer may appeal the determination to the Tax Court, or, if the Tax Court does not have jurisdiction of the underlying tax liability, to the United States District Court. See 26 U.S.C. §6330(d)(1). The reviewing court can only address matters raised by the taxpayer at the CDP hearing. See 26 C.F.R. §301.6330-1(T)(f)(2) Q&A-F-5. In cases where the taxpayer has had a prior opportunity to challenge the underlying liability, the determination of the Appeals Officer is subject to an abuse of discretion review. ¹

Plaintiff Ludwick Herycyk commenced this action under 26 U.S.C. §6330(d)(1)(B), seeking a review of the Notice of Determination Concerning Collection Actions Under (I.R.C.) Sections 6320 and 6330, issued by the Internal Revenue Service on December 8, 2000 . The Internal Revenue Service issued the Notice of Determination after an IRS appeals officer determined, inter alia, that the plaintiff had a previous opportunity to contest the underlying liability at issue in this case, and that the taxpayer offered no viable collection alternatives during the Collection Due Process hearing.

As grounds for the complaint, the plaintiff alleged that he had not received a statutory notice of deficiency, and that the appeals officer had not appropriately balanced "the need for the efficient collection of taxes with the Plaintiff's concern for the intrusiveness of the proposed assessment."

Defendant United States responded and filed a motion for judgment, arguing that the plaintiff had been sent a notice of the proposed assessment which gave him an opportunity to combat the underlying liability and that Appeals Officer had not abused his discretion in sustaining the proposed levy action. In this motion, the United States argued that the Internal Revenue Service is not required to give "Statutory Notice of Deficiency" for liabilities accrued under Section 6672 of the Internal Revenue Code (26 U.S.C.). ² In addition, the United States argued that the Appeals Officer had adequately considered all collection alternatives. The taxpayer responded to this motion and stated, under oath, that he had not received any notice of the proposed assessment, thereby negating any argument that he had in fact had a prior opportunity to contest the underlying liability pursuant to Section 6330(c)(2)(B). ³

Because the Internal Revenue Service was unable to prove that the taxpayer actually received notice of the proposed liability in the form of a Letter 1153(DO), the Defendant has conceded that the taxpayer is entitled to a remand to the Appeals Office to afford the taxpayer a Collection Due Process hearing in which he may challenge the merits of the underlying tax liability. The taxpayer was not allowed to challenge the merits at his CDP hearing because the Appeals Officer believed that the taxpayer had already had an adequate opportunity to contest the liability, based on the information before the Appeals Officer. This Court's order of remand will allow the Appeals Officer, the person charged by statute with the responsibility for making the determination in the first instance, to make an initial determination as to the allegations made by the taxpayer that he was not a responsible person pursuant to 26 U.S.C. §6672. In the event that the taxpayer is dissatisfied with the Appeals Officer's decision, he can appeal to this court.

This appears to be among the first cases in which the government has conceded that the taxpayer is entitled to a remand. ⁴ Because of the relative adolescence of this statutory provision, this Court must look to other courts for a determination as to the best treatment of efforts by federal agencies to voluntarily remand cases for decision. By statutory edict, Congress has charged the United States Court of Appeals for the District of Columbia Circuit with oversight of most of the agency determinations made by the federal government. In Ethyl Corp. v. Browner, 300 U.S. App. D.C. 330, 989 F.2d 522, 524 (D.C. Cir. 1993), the D.C. Circuit Court of Appeals explained that its inclination toward grant of motions for voluntary remand was premised on the theory that agencies should be allowed to "cure their own mistakes rather than wasting the courts' and the parties' resources reviewing a record that both sides acknowledge to be incorrect or incomplete." ⁵ To grant the Defendant's request for remand allows the entrusted agency to review its procedural mechanisms and compensate for possible oversights made in the initial analysis.

In this case, a determination must be made as to whether the taxpayer was a responsible person pursuant to Section 6672 of the Internal Revenue Code, and the entity best equipped to make that decision in the first instance is the Internal Revenue Service. ⁶ The Internal Revenue Service, charged with the fair and equitable execution of the Internal Revenue Code, is unquestionably in the best position to review the facts as presented in a new CDP hearing and make a determination as to the liability of this taxpayer pursuant 26 U.S.C. §6672. Remanding the case will also give the taxpayer the two possible bites at the apple that Congress intended. For these reasons, the case is remanded to the Appeals Office of the Internal Revenue Service to allow the taxpayer a Collection Due Process hearing in which he may challenge the merits of the underlying tax liability. ⁷

¹ When the amount of the tax liability is not at issue in the CDP hearing, Congress intended that the Court will review the Appeals determination under an "abuse of discretion" standard. See H. Rep. No. 105-299, at 266 (1998). This report provides, in relevant part:

Where the validity of the tax liability is not properly part of the appeal, the taxpayer may challenge the determination of the appeals officer for abuse of discretion. In such cases, the appeals officer's determination as to the appropriateness of collection activity will be reviewed using an abuse of discretion standard of review.

H. Rep. No. 105-299, at 266. This standard is consistent with other statutes that charge the Commissioner with the fair administration of the Internal Revenue Code. For example, the IRS's determination as to whether interest charged a taxpayer should be abated under certain circumstances is also reviewed for abuse of discretion. See 26 U.S.C. §6404(i) (Review of Denial of Request for Abatement of Interest). The same standard of review also applies with respect to an IRS determination (pursuant to 26 U.S.C. §446) regarding whether a taxpayer's accounting method accurately reflects income, or to a reallocation by the IRS (pursuant to 26 U.S.C. §482) of income or deductions among commonly controlled businesses. See Foster v. Commissioner [85-1 USTC ¶9300], 756 F.2d 1430, 1432 (9th Cir. 1985); RCA Corp. v. United States [81-2 USTC ¶9783], 664 F.2d 881, 886 (2nd Cir. 1981). The abuse of discretion standard has been adopted by the courts reviewing IRS determinations under Section 6330. See Sego v. Commissioner [CCH Dec. 53,938], 114 T.C. 604, 610 (2000); MRCA Information Services v. United States, 2000 U.S. Dist. LEXIS 12550, 2000-2 U.S.T.C. 50,683, 2000 WL 1737861, *5 (D. Conn. 2000) ("abuse of discretion standard of review is appropriate when a district court reviews a determination of an IRS Appeals officer's determination pursuant to 26 U.S.C. §6330").

² The Internal Revenue Code does not require the issuance of a Statutory Notice of Deficiency prior to assessing a Trust Fund Recovery Penalty. Instead, Section 6672(b) requires that notice of a pending Trust Fund Recovery Penalty assessment be accomplished pursuant to the requirements of Section 6212(b). To fulfill this requirement, the Service uses Letter 1153(DO), which informs the taxpayer of the proposed TFRP assessment and offers him a right to contest the assessments in Appeals.

³ Prior to this pleading, the taxpayer had only alleged that he had not received a "Statutory Notice of Deficiency," a term of art in tax law referring to a Notice of Deficiency required by Section 6212(a) for income, estate, and certain excise taxes.

⁴ In a recently reported decision by the United States District Court for the District of Oregon, the judge adopted the report and recommendation of the magistrate judge and determined that the Internal Revenue Service's motion for remand should be granted in order to allow the taxpayer to challenge penalties assessed against the taxpayer. See Joling v. United States of America [2001-2 USTC ¶50,771], 2001 U.S. Dist. LEXIS 11546, *1 (D. Or. 2001).

⁵ In the "Handbook of Practice and Internal Procedures of the United States Court of Appeals for the District of Columbia Circuit," the court specifically discusses the concept of "voluntary remand," and states that "parties may file a motion to remand either the case or the record for a number of reasons, including to have the district court or agency reconsider a matter, to adduce additional evidence, to clarify a ruling or to obtain a statement of reasons." Handbook of Practice and Internal Procedures of the United States Court of Appeals for the District of Columbia Circuit, p. 34 (1993).

⁶ Ultimately, if the taxpayer is unhappy with the IRS' determination in this matter, he remains entitled to bring another action pursuant to 26 U.S.C. §6330.

⁷ Some question may be raised as to whether this court would retain jurisdiction over the instant proceeding if the case were remanded to the Internal Revenue Service. Most courts appear to believe that jurisdiction is retained where the "record" is remanded for further development, and the court expressly retains jurisdiction over the underlying proceeding. Jurisdiction is not retained in proceedings where the "case" is remanded. See, e.g., Rule 41(b) of the United States Court of Appeals for the District of Columbia Circuit (U.S. Ct. of App. D.C. Cir. Rule 41(b), 28 U.S.C.A. In this case, because agency reconsideration of its determination will be focused on entirely different grounds than were considered at the first hearing, the court should remand the "case" to the Internal Revenue Service. If, after the hearing, the taxpayer has a statutory basis to contest the resulting determination, he may bring another action as provided for in Section 6330. In addition, if this court chooses, it can waive the payment of court filing fees on any new appeal. We note that the Joling decision dismissed the action "without prejudice to reinstate after the due process hearing without payment of court filing fees." Joling [2001-2 USTC ¶50,771], 2001 U.S. Dist. LEXIS 11546 at *1. Since this would be a remand of the case, and would require a new appeal, the Joling solution may not be appropriate here.

[2002-1 USTC ¶50,422] Evergreen Resources, Inc., a corporation, Plaintiff v. United States of America , Defendant

U.S. District Court, East. Dist. Calif. , CIV. S-01-2149 LKK/PAN, 4/16/2002

[Code Sec. 6330 ]

Assessment and collection: Collection Due Process: Hearing procedures: Abuse of discretion.--The government did not abuse its discretion when it issued a notice of determination to a corporation following a Collection Due Process (CDP) hearing. The taxpayer was precluded from challenging the underlying tax liability in its CDP hearing since an IRS Appeals Officer had previously considered its arguments and evidence with respect to the amount of its tax liability. Thus, the IRS's action in executing a notice of determination, without reconsidering the taxpayer's challenge to the proposed assessments, did not constitute an abuse of discretion.
ORDER AFTER HEARING

KARLTON, Senior District Judge:

Defendant's motion to dismiss came on regularly for hearing on February 15, 2002 , before the Honorable Lawrence K. Karlton, Senior Judge. MICHAEL CASTERTON appeared for plaintiff; TRACI PATTERSON appeared for defendant.

Upon consideration of the pleadings and papers on file herein, and after hearing the argument of counsel, the court announced its disposition of the motion and its reasons therefor into the record as follows:

Plaintiff brings this action against the United States to challenge the Notice of Determination of the Internal Revenue Service's Appeals Office pursuant to 26 U.S.C. §§6320 & 6330. This matter is before the court on defendant's motion to dismiss, the standard for which is well-known and need not be repeated here. See Johnson v. City of Chico , 725 F.Supp. 1097, 1098 (E.D. Cal. 1989).

The court reviews IRS determinations from collection due process (CDP) hearings for abuse of discretion where the amount of tax liability was not properly part of the hearing. TKK Management v. United States, 2000 WL 33122706 (C.D. Cal. 2000) (citing H. Conf. Rept. 105-599, at 266 (1998)). Because plaintiff's allegations and exhibits attached to its complaint reveal that it was afforded "an opportunity to dispute such tax liability" prior to the CDP hearing, the amount of its tax liability was not properly part of the hearing. 26 U.S.C. §6330(c)(2)(B). Accordingly, the court reviews the decision of the Appeals Officer for abuse of discretion.

By the IRS' calculations, plaintiff owes more than $600,000 in back taxes, including penalties and interest. As a result, in 1997 the IRS issued plaintiff a proposed assessment notice regarding back taxes and related penalties for the years 1994 and 1995. Through letters exchanged with an IRS Appeals Officer Dave Smith, plaintiff challenged the proposed assessments. The Appeals Officer, however, found the assessments were correct. In December 2000, the IRS filed federal tax liens against plaintiff for the 1994 and 1995 tax liabilities. Plaintiff requested a Collection Due Process (CDP) hearing, where it raised the same issues it had previously presented to the Appeals Officer. A few days later, the IRS issued a Notice of Determination stating that plaintiff was prohibited from raising the existence or amount of the liability because it had previously appealed those liabilities and those liabilities were sustained.

Plaintiff argues that the defendant abused its discretion by issuing the Notice of Determination without properly considering the issues raised in plaintiff's previous correspondence with the IRS Appeals Officer. I cannot agree.

Under the tax code, a taxpayer is entitled to a fair hearing conducted by an impartial IRS appeals officer. See 26 U.S.C. §§6320(c) & 6330(b). However, section 6330 expressly prohibits a person from raising at the CDP hearing challenges to the existence or amount of the underlying tax liability if that person had a prior "opportunity to dispute such tax liability." See 26 U.S.C. §6330(c)(2)(B). A prior "opportunity to dispute" the liability includes a prior opportunity for a conference with an IRS officer before or after assessment of the tax liability. See Konkel v. C.I.R. [2001-2 USTC ¶50,520] , 2000 WL 1819417 *3, (M.D. Fla. 2000).

Plaintiff admits that it sought to present the same issues at the CDP hearing that the company "previously had an opportunity to present to the IRS." See Opposition Motion at 2:18-20. Indeed, the documents attached to plaintiff's complaint aver that the Appeals Officer examined plaintiff's affidavits and found that they did not dispute the IRS's calculations. See Complaint, Exhs. F&G. Thus, the IRS considered plaintiff's arguments and evidence with respect to the amount of its tax liability prior to the CDP hearing.

Because the IRS did not have to reconsider the amount of plaintiff's tax liability at the CDP hearing, the court finds no basis for concluding that the IRS abused its discretion in the execution of its Notice of Determination. Accordingly, the court GRANTS defendant's motion to dismiss.

IT IS SO ORDERED.

[2003-1 USTC ¶50,114] Don Lindner and Janet V. Lindner, Plaintiffs v. Commissioner of Internal Revenue, Defendant.

U.S. District Court, East. Dist. Mo. , East. Div.; 4:02-CV-1054 CEJ, November 13, 2002 .

[ Code Secs. 6330 and 7482]

District court jurisdiction: Collection Due Process: Review of Tax Court decision. --

A federal district court action filed by married taxpayers who sought to dispute their income tax liabilities following an unfavorable determination at a Collection Due Process (CDP) hearing was dismissed for lack of subject matter jurisdiction. The taxpayers unsuccessfully appealed the CDP determination in the Tax Court, which ruled that the IRS could proceed with collection. Because the Tax Court had clearly reviewed the IRS Appeals Office's determination, that decision could be reviewed only by a U.S. Court of Appeals and not by a federal district court.

MEMORANDUM AND ORDER

JACKSON, District Judge: This matter is before the Court on defendant's motion to dismiss. See Fed.R.Civ.P. 12(b)(1) and 12(b)(6). Plaintiffs filed a response to defendant's motion, and the issues have been fully briefed.

Plaintiffs, Don and Janet Lindner, bring this action against defendant, the Commissioner of Internal Revenue (the "IRS"), disputing their income tax liabilities for the years 1990 and 1992. The IRS asks this Court to dismiss plaintiffs' complaint arguing that the action is barred by the doctrine of res judicata.

I. Background

On July 24, 1996 the IRS mailed notices of deficiency to plaintiffs with respect to their 1990 and 1992 income tax liabilities. The IRS contended that plaintiffs owed $208,723.00 for the 1990 tax year and $2,348.00 for the 1992 tax year. In response to the notice of deficiency issued for 1990, plaintiffs filed a petition contesting the deficiency with the Tax Court on April 29, 1997. That case was dismissed by the Tax Court on July 11, 1997 for lack of jurisdiction due to the untimely filing of the petition. ¹ Plaintiffs did not contest the notice of deficiency for the 1992 tax year.

On April 6, 1998 plaintiffs were granted audit reconsideration for the 1990 tax year. After reviewing additional documents submitted by plaintiffs, the IRS allowed an additional net operating loss adjustment in the amount of $95,002.00 resulting in a tax decrease of $26,600.00 for tax year 1990.

On May 3, 1999 the IRS sent plaintiffs a Notice of Intent to Levy. In that notice, the IRS noted that the levy would be in the amounts of $396,568.58 for the 1990 tax year and $4,502.36 for the 1992 tax year. On May 11, 1999, in response to a Notice of Federal Tax Lien, plaintiffs each filed a separate Form 12153 requesting a collection of due process hearing. ² A telephone conference with plaintiff Don Lindner was scheduled for December 9, 1999, and a telephone conference with plaintiff Janet Lindner was scheduled for December 16, 1999. In the letters setting the conference dates, the IRS stated, "Collection Due Process does not apply to a challenge of the existence or amount of the underlying tax liability, if you received a notice of deficiency." ³

On December 9, 1999 plaintiff Don Lindner had a telephone conference with Settlement/Appeals Officer Helen Latta. Mr. Lindner was given the opportunity to raise collection alternatives but stated that he did not wish to do so because it was his belief that he did not owe the 1990 assessed tax. He did not raise any issues pertaining to the 1992 tax year. In addition, Mr. Lindner offered no spousal defense arguments on behalf of his wife, Janet Lindner. Mrs. Lindner did not participate in the hearing and did not respond to the conference scheduled for her on December 16, 1999.

On February 3, 2000 the IRS issued a Notice of Determination Concerning Collection Action(s) Under Sections 6320 and/or 6330 to plaintiffs. The notice approved the lien action and denied relief to plaintiffs. Within the notice was a summary of the determination of the December 9th due process hearing. It stated,

The Collection Due Process Appeal does not afford the Appeals Office jurisdiction over the assessment of the tax because you previously received the right to due process with the statutory notice of deficiency. Collection is charged with the duty to efficiently collect tax assessed and the Appeals Office is unable to consider less intrusive collection actions without a proposal from you.

On February 8, 2000 plaintiffs filed a petition in the Tax Court asking the Court for judicial review of the administrative hearing. On May 25, 2000 plaintiffs filed an amended petition. But for the introductory paragraphs, the amended petition is identical to the complaint filed in this action.

In the Tax Court, the IRS moved for summary judgment against plaintiffs arguing that the validity of plaintiffs' underlying tax liabilities was not properly at issue in the Tax Court because §6330 of the Internal Revenue Code only provides for a review of the underlying tax liability when the taxpayer did not receive any statutory notice of deficiency or did not otherwise have an opportunity to dispute such tax liability. Thus, the IRS argued that because plaintiffs had received notice of their deficiency, and because plaintiffs would have had the opportunity to dispute the liability if they had filed a timely petition with the Tax Court, review of the taxpayer's liability at this stage was precluded. On June 12, 2002 the Tax Court agreed with the IRS's assertions and granted it summary judgment. The Tax Court further ordered that the IRS "may proceed with the collection action as determined in the notice of determination concerning collection action for petitioners' taxable years 1990 and 1992." Plaintiffs filed the present action in this Court on July 11, 2002 .

II. Legal Standards

The purpose of a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure is to test the legal sufficiency of the complaint. A complaint is not to be dismissed for failure to state a claim for which relief can be granted unless it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim entitling him to relief. Conley v. Gibson, 355 U.S. 41, 45-46 (1957). The factual allegations of a complaint are assumed true and construed in favor of the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). The issue is not whether plaintiff will ultimately prevail, but whether the plaintiff is entitled to present evidence in support of his claim. Id. Thus,

[i]f as a matter of law "it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations," ... a claim must be dismissed, without regard to whether it is based on an outlandish legal theory or on a close but ultimately unavailing one.

Neitzke v. Williams, 490 U.S. 319, 327 (1989) (quoting Hishon v. King & Spalding, 467 U.S. 69, 73 (1984)).

Rule 12(b)(1) of the Federal Rules of Civil Procedure permits party to move for a dismissal based on a court's lack of subject matter jurisdiction to hear the case. Dismissal under Rule 2(b)(1) is appropriate if the issue before the court is whether the plaintiff has failed to satisfy a threshold jurisdictional requirement. See Trimble v. Asarco, Inc., 232 F.3d 946, 955. n.9 (8th Cir. 2000). In order to properly dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), the complaint must be successfully challenged on its face or on the factual truthfulness of its averments. See Titus v. Sullivan, 4 F.3d 590, 593 (8th Cir. 1993). In a facial attack, the court restricts itself to the face of the pleadings, and all of the factual allegations concerning jurisdiction are presumed to be true. Id. However, in a factual challenge, the court considers matters outside of the pleadings, and no presumptive truthfulness attaches to the plaintiff's allegations. See Osborn v. United States, 918 F.2d 724, 729 n.6 (8th Cir. 1990). Furthermore, the existence of disputed material facts does not preclude the trial court from evaluating for itself the merits of jurisdictional claims. Id. at 729. "Because at issue in a factual 12(b)(1) motion is the trial court's jurisdiction --its very power to hear the case --there is substantial authority that the trial court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case." Id. Moreover, the plaintiff has the burden of proof that jurisdiction does in fact exist. Id.

III. Discussion

Defendants asks this Court to dismiss plaintiffs' case under the doctrine of res judicata because the issues raised in this case are identical to the issues raised in the Tax Court. The Court need not decide whether the doctrine of res judicata applies in this case because this Court lacks jurisdiction on other grounds.

Plaintiffs assert that jurisdiction in this case is based on 26 U.S.C. §6330. Section §6330 provides, in part, that "no levy may be made on any property or right to property of any person unless the Secretary has notified such person in writing of their right to a hearing under this section before such levy is made." The record clearly shows that plaintiffs received a hearing before the IRS Office of Appeals. However, the statute provides for judicial review of the Appeals Office's determination. Section 6330(d)(1) states:

(1) Judicial review of determination. --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 with respect to 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 .

Thus, the Tax Court has the power to hear appeals from determinations pursuant to 26 U.S.C. §6330(d)(1)(A). The record is clear that the Tax Court reviewed the Appeals Office's determination when plaintiffs filed a petition in that court on February 8, 2000. Nevertheless, plaintiffs maintain that the district court has jurisdiction because "the Tax Court's opinion was summary, no real judicial guidance was given." Only if the Tax Court does not have jurisdiction over the "underlying tax liability" does a United States District Court have jurisdiction. 26 U.S.C. §6330(d)(1)(B).

The Tax Court is an Article I court and has jurisdiction to rule on deficiencies assessed by the government on taxpayers. 26 U.S.C. §6213; see also Crawford v. Commissioner of Internal Revenue [ 2001-2 USTC ¶50,648], 266 F.3d 1120, 1122 (9th Cir. 2001); Freytag v. Commissioner of Internal Revenue [ 91-2 USTC ¶50,321], 501 U.S. 868, 891 (1991) ("The Tax Court's function and role in the federal judicial scheme closely resemble those of the federal district courts, which indisputably are Courts of Law. Furthermore, the Tax Court exercises its judicial power in much the same way as the federal district courts exercise theirs."). The Tax Court also has jurisdiction over lien or levy actions in relation to income tax liabilities. 26 U.S.C. §6330; see also True v. Commissioner of the Internal Revenue [ 2000-2 USTC ¶50,634], 108 F.Supp.2d 1361, 1364 (M.D. Fla. 2000) (holding that the district court lacked subject matter jurisdiction over a §6330 case involving income taxes as opposed to an employment tax); Treas. Reg. §601.102(b)(1) (identifying income taxes as being within the jurisdiction of the Tax Court). The plaintiffs' claims involve a dispute over a proposed levy by the IRS in response to an alleged income tax liability. Thus, jurisdiction was vested in the Tax Court, not in the district court.

Plaintiffs argue that they are "merely pursuing their legal avenues of appeal" by filing a complaint in this Court. However, if it is review of the Tax Court's decision that plaintiffs are seeking, then they have come to the wrong court. Section 7482 of the Internal Revenue Code provides for review of a decision of the Tax Court by a United States Court of Appeals. 26 U.S.C. §7482(a).

Based on reasons discussed above, this Court must dismiss plaintiffs' complaint for lack of subject matter jurisdiction.

Accordingly,

IT IS HEREBY ORDERED that defendant's motion to dismiss [#5] is granted.

¹ Section 6213(a) of the Internal Revenue Code provides that the petition must be filed with the Tax Court within 90 days of the notice of deficiency being mailed, or 150 days if the notice is addressed to a person outside the United States . 26 U.S.C. §6213(a). Plaintiffs filed their petition 269 days after the mailing of the notice of deficiency. Thus, the Tax Court dismissed plaintiffs' petition for lack of jurisdiction.

² Section 6330 of the Internal Revenue Code provides for notice and opportunity for hearing before levy. 26 U.S.C. §6330. Such a hearing is held by the IRS Office of Appeals. 26 U.S.C. §6330(b)(1).

³ Section 6330 provides that a petitioner may raise at the due process hearing challenges to the existence or amount of the underlying tax liability only if the person did not receive any statutory notice of deficiency for such tax liability or did not otherwise have an opportunity to dispute such tax liability. 26 U.S.C. 6330(c)(2)(B).

[Dec. 55,156(M)] Steven G. Orr v. Commissioner.

Docket No. 8305-02L , T.C. Memo. 2003-141, 85 TCM 1319, Filed May 19, 2003 . [Appealable, barring stipulation to the contrary, to CA-9]

[Code Sec. 6330]

Collection Due Process: Underlying tax liability: Opportunity to dispute.

The IRS's determination to proceed with a collection action against an individual for income tax liabilities was not an abuse of discretion. The merits of the taxpayer's claim of entitlement to itemized deductions had previously been determined; thus, in this action the taxpayer was not entitled to contest the underlying tax liability. Since the taxpayer did not raise any other issues about the conduct of the hearing or verification that administrative procedures had been followed, he did not show any abuse of discretion by the IRS.

Steven G. Orr, pro se. Gary M. Slavett, for the respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

GERBER, Judge: Petitioner appealed to this Court from respondent's determination to go forward with the collection of petitioner's outstanding and unpaid 1995 and 1996 tax liabilities. This case was calendared for trial at the Court's March 24, 2003 , Los Angeles , California , trial session. On March 31, 2003 , the parties appeared, and petitioner provided testimony and argument. Respondent contends and we agree that this Court's review in this case is limited to the question of whether respondent abused his discretion in determining to proceed with collection of petitioner's 1995 and 1996 income tax liabilities. Petitioner argues that he has been denied due process and that his rights have been violated in prior proceedings before this and other courts.

FINDINGS OF FACT

Petitioner's 1995 and 1996 tax years were before this Court (designated Docket No. 9029-99), and after a trial on the merits, a bench opinion was rendered on April 7, 2000 . The bench opinion addressed whether petitioner and his wife were entitled to claim itemized deductions on Schedule A, Itemized Deductions, of their return regarding petitioner's employment and other miscellaneous items. Respondent, in accord with the decision entered pursuant to the holding in the bench opinion, assessed income tax of $4,186 and $2,557 for petitioner's 1995 and 1996 tax years, respectively. Petitioner appealed to the Court of Appeals for the Ninth Circuit and, on April 18, 2001 , this Court's decision was affirmed in an unpublished opinion. Orr v. Commissioner, 87 AFTR 2d 2001-832 (9th Cir. 2001).

On February 9, 2001 , respondent issued a Form 1058, Final Notice of Intent to Levy and Notice of Your Right to a Hearing, to petitioner, and on March 9, 2001 , petitioner submitted a Form 12153, Request for a Collection Due Process Hearing, with respect to his 1995 and 1996 years. After the cancellation of two previously scheduled section 6330¹ hearings, one was held with petitioner on February 22, 2002 . At that hearing, petitioner raised only questions concerning the merits of his underlying tax liabilities, which the Appeals officer advised could not be considered because petitioner had already had that opportunity before the Tax Court. The Appeals officer offered petitioner collection alternatives and provided forms for an offer in compromise. At the hearing petitioner provided the Appeals officer with 10 checks, each in the amount of $20.42, which petitioner had received from the Treasury of the United States (the Treasury) and wished to have applied to his 1995 liability.

Following the conference with Appeals, petitioner supplied completed offer-in-compromise forms, and a determination was made that petitioner had sufficient assets to pay the outstanding 1995 and 1996 tax liabilities in full. Accordingly, a Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330 concluding that respondent may proceed with collection of petitioner's 1995 and 1996 tax liabilities was mailed to petitioner, and he appealed to this Court.

OPINION

Section 6330 provides that, upon request and in the circumstances described therein, a taxpayer has a right to a hearing which consists of the following elements: (1) An impartial officer will conduct the hearing; (2) the conducting officer will receive verification from the Secretary that the requirements of applicable law and administrative procedure have been met; (3) certain issues may be heard such as spousal defenses and offers-in-compromise; and (4) a challenge to the underlying liability may be raised if the taxpayer did not receive a statutory notice of deficiency or otherwise receive an opportunity to dispute the liability. Sec. 6330(c).

Concerning the tax years under consideration, petitioner already had an opportunity, before this Court and the Court of Appeals for the Ninth Circuit, to question the underlying merits of the income tax deficiencies for 1995 and 1996. Accordingly, petitioner is not entitled to contest the underlying merits of his 1995 and 1996 income tax liabilities. See sec. 6330(c)(2)(B); Sego v. Commissioner [Dec. 53,938] 114 T.C. 604 (2000); Goza v. Commissioner [Dec. 53,803], 114 T.C. 176 (2000).

Petitioner has not raised any arguments other than those that question the merits of his liabilities; i.e., he raised no issues about the conduct of the hearing or verification that administrative procedures had been followed, or about collection alternatives. Petitioner submitted voluminous materials, including his testimony concerning his employment by the Department of the Treasury and his claim that he was a "whistle blower". Petitioner contends that the Department of the Treasury has conspired with the Internal Revenue Service to pursue petitioner by harassing him with income tax matters. Petitioner also believes that the Federal court system has participated in some form of Government collusion against him. The provisions of section 6330 do not provide petitioner with a forum in this proceeding to address such matters. Simply, petitioner's allegations, if proven, go to the underlying merits of his 1995 and 1996 tax liabilities, and under section 6330(c)(2)(B), petitioner is precluded from raising the merits where he already had an opportunity to do so.

Respondent has provided petitioner with a section 6330 hearing, and petitioner has not shown an abuse of discretion by respondent. Accordingly, we hold that respondent did not abuse his discretion in determining to proceed with enforced collection of petitioner's 1995 and 1996 income tax liabilities.

To reflect the foregoing,

Decision will be entered permitting respondent to proceed with collection.

¹ All section references are to the Internal Revenue Code in effect for the years in issue.

[2003-2 USTC ¶50,594] Thomas E. Tilley and Iris M. Tilley, Plaintiffs v. United States of America , Defendant.

U.S. District Court, Mid. Dist. N.C.; 1:02CV629, 270 FSupp2d 731, July 11, 2003 .

Related Tax Court decision at Dec. 54,797(M), TC Memo. 2002-161, 83 TCM 1912.

[ Code Sec. 7402]

Refund suits: Discovery: Protective order.

The government was granted a protective order to stay discovery in a refund suit where the taxpayers sought discovery relating to the IRS's administrative procedures that had no bearing on an issue of material fact.

[ Code Sec. 1]

Refund suits: Frivolous arguments: Constitutionality. --

Miscellaneous constitutional claims raised by taxpayers who sought a refund of the taxes collected by the IRS were rejected as frivolous.

[ Code Sec. 6512]

Refund suits: Limitations in case of petition to Tax Court: Refund after Tax Court decision.

Married taxpayers who had previously challenged their tax liability for two years before the Tax Court were barred from subsequently seeking a refund of those taxes by filing suit with a federal district court.

[ Code Sec. 6020]

Refund suits: Returns: Nonfilers: Failure by IRS to file return. --

A deficiency notice issued to nonfilers was not invalid merely because the IRS did not file an involuntary return for the husband. The IRS is authorized, but not required, to file a substitute return if a taxpayer fails to file a return. The deficiency notice submitted by the government set forth an explanation and calculation of the deficiency and apprised the taxpayers of their right to petition the Tax Court for relief prior to the payment of any taxes.

[ Code Sec. 6303]

Refund suits: Notice and demand for tax: Validity. --

An IRS request to a taxpayer asking him to please pay the amount stated satisfied the notice and demand requirements of Code Sec. 6303(a). Even if the letter were insufficient, the IRS also sent the taxpayer and his wife deficiency notices, several notices of determination concerning collection actions, and a notice of intent to levy and right to hearing.

[ Code Sec. 6330]

Refund suits: Collection Due Process hearing: Telephone conference v. person-to-person hearing: Prior hearing: Constitutionality. --

Taxpayers' claim that their taxes were collected improperly because the IRS failed to grant their request for a person-to-person Collection Due Process (CDP) hearing was rejected. In an earlier proceeding, the Tax Court determined that they had received an opportunity for a CDP hearing. Because the husband was given the opportunity for a telephone conference in which he discussed the substance of his case with an IRS Appeals officer, he received due process under Code Sec. 6330 and the U.S. Constitution.

[ Code Sec. 7422]

Refund suits: Summary judgment: Itemized deductions: Burden of proof. --

The government was granted summary judgment with respect to a married couple's entitlement to itemized deductions because the taxpayers failed to provide sufficient evidence to satisfy the burden of clearly showing how their expenses related to their tax liability and the refund due.

ORDER

DIXON , Magistrate Judge: This is an action for refund of taxes, brought by Plaintiffs Thomas E. Tilley and lris M. Tilley ("Tilleys"). Defendant United States of America (" United States ") has filed a motion [Doc. #13] to dismiss and for summary judgment. The United States has also filed a motion [Doc. #19] for protective order pursuant to Rule 26(c) protecting it from having to respond to the Tilleys' discovery requests. The parties have consented to the jurisdiction of a magistrate judge under 28 U.S.C. §636(c). In this posture, the matter is ripe for disposition.

I. Background

In this suit, the Tilleys seek a refund of taxes paid for the tax periods 1991, 1992, 1994 and 1995. The Tilleys timely filed joint returns for the 1991 and 1992 tax periods. By notice of deficiency dated November 14, 1995, the United States determined deficiencies and accuracy-related penalties for 1991 and 1992 totaling $84,858. See Tilley v. Commissioner [ CCH Dec. 52,041(M)], 73 T.C.M. (CCH) 2763, T.C. Memo. 1997-222 (May 12, 1997). The Tilleys filed a petition with the Tax Court challenging their liability to this sum. The Tax Court determined that the Tilleys were liable for the 1991 and 1992 deficiencies. See id.

The Tilleys did not file returns for the 1994 and 1995 tax periods. By notice of deficiency dated November 14, 1996, the United States determined deficiencies and penalties in the tax of Thomas Tilley for the 1994 and 1995 tax periods. The United States calculated that Thomas Tilley had a taxable income of $147,743 in 1994 and $133,458 in 1995, resulting in a tax deficiency of $87,352, and penalties totaling $24,068. (Gov. Ex. 2). Thomas Tilley did not petition the Tax Court concerning the 1994 and 1995 deficiencies.

In 1999, The United States collected the entire amount of the tax and penalties due for the 1991, 1992, 1994 and 1995 tax periods. ( See Compl. ¶VI(b); Gov. Ex. 1). In September 2000, the Tilleys filed an administrative claim for refund, and in November 2001, they filed a supplement to their administrative claim for refund. Receiving no response to their administrative claim for refund, the Tilleys filed suit in this court on August 1, 2002.

In their complaint, the Tilleys argue that they are entitled to a tax refund because:

(1) the statutory notice of deficiency for 1994 and 1995 was invalid, since the IRS failed to file a valid involuntary return for Thomas Tilley;

(2) the IRS failed to issue and serve valid notices of assessments and demands for payments as required by 26 U.S.C. Section 6303(a);

(3) the taxes were unconstitutional, since a tax measured by an individual's so-called income is in the nature of a capitation tax and can only be imposed by apportionment;

(4) the taxes were collected in violation of the Fourth Amendment of the United States Constitution, since an executive warrant was not issued;

(5) the taxes were collected in violation of the Ninth Amendment of the United States Constitution;

(6) the IRS failed to allow business expenses and personal deductions;

(7) a valid assessment does not exist as a matter of law; and

(8) the taxes were collected in violation of 26 U.S.C. Sections 6320 and 6330, because the IRS failed to hold a collection due process hearing as requested.

(Compl. ¶VI(d)).

The parties attended a discovery conference on December 9, 2002, and agreed on a discovery plan. In their joint Rule 26(f) report, the parties indicated that discovery would be needed on only one issue, "whether plaintiffs are entitled to business and personal deductions and if so, the amounts." (Doc. #8, ¶2). On February 19, 2003, the Tilleys mailed to the United States requests for admissions, interrogatories, and requests for production. In this discovery the Tilleys did not seek information on business or personal deductions, but rather sought admissions and information on the administrative procedures of the Internal Revenue Service (IRS) in handling tax filings, deficiencies, assessments and collections in this case and in general. ( See, e.g., Request for Admission #s 13-82; Interrogatory #s 4-20; Request for Production #s 2-14). Many of the requests for admissions also ask the IRS to give legal statements regarding the Internal Revenue Code. ( See, e.g., Request for Admission #89 ("Admit that the term 'individual' is not defined in the Internal Revenue Code"), #93 ("Admit that Section 61(a) of the Internal Revenue Code defines 'gross income' as all income from whatever source derived, but does not define income"), and #94 ("Admit that in the absence of gain, there is no income in the constitutional sense, and thus no 'gross income' under Section 61(a)")).

The United States did not respond to this discovery request, but rather filed a motion to dismiss and for summary judgment on March 21, 2003. The United States moved to dismiss the Tilleys' claims insofar as they relate to the tax years 1991 and 1992, on grounds that the tax liability for this period was previously litigated in Tax Court. The United States also moved for summary judgment on the Tilleys' claim that the IRS failed to conduct a collection due process hearing, on grounds that the Tax Court had already made a determination on this issue. In addition, the United States moved for dismissal of the Tilleys' claims based on constitutional or procedural defects in the collection process, on grounds that these claims are frivolous. Finally, the United States moved for summary judgment on the Tilleys' claim that they are entitled to business and personal deductions for the years 1994 and 1995, on grounds that they failed to show that they are entitled to deductions for these years. ( See United States' Motion to Dismiss and for Summary Judgment, Doc. #13, pp. 1-2; United States' Brief in Support of its Motion to Dismiss and for Summary Judgment, Doc. #14 [hereinafter "Br. in Supp."]).

The Tilleys filed a response, accompanied by a Declaration of Thomas Tilley that includes copies of "receipts for personal deductions and business expenses" for the 1994 and 1995 tax periods. (Doc. #'s 16-17 [hereinafter "Pls' Resp." and "Declaration"]). The United States replied, maintaining that the Tilleys have not met their burden of showing that they are entitled to a refund. (Doc. #18 [hereinafter "Reply"]). The United States also filed, on May 12, 2003, a motion for protective order to protect it from having to respond to the Tilleys' discovery requests.

II. Discussion

A. Protective Order

A protective order under Rule 26(c) to stay discovery pending determination of a dispositive motion is an appropriate exercise of the court's discretion. Chavous v. District of Columbia Financial Resp. and Mgmt. Asst. Auth., 201 F.R.D. 1, 2 (D. D.C. 2001); Simpson v. Specialty Retail Concepts, Inc., 121 F.R.D. 261, 263 ( M.D. N.C. 1988); see FED.R.CIV.P. 26(c). The court should not, however, stay discovery which is necessary to gather facts in defense of the motion. 201 F.R.D. at 3; 121 F.R.D. at 263.

In this case, the United States has filed a motion to dismiss and for summary judgment, which, if granted, would dispose of the case. Thus a stay of discovery is appropriate if the discovery requested by the Tilleys is not relevant to the opposition of the motion. ¹ To determine whether the discovery sought is irrelevant, the court must examine the merits of the United States ' dispositive motion. If the Tilleys' claims fail as a matter of law, or if the discovery sought has no bearing on an issue of material fact, a protective order is proper. For the reasons stated below, the Tilleys' claims fail as a matter of law, and, particularly with regard to the issue of itemized deductions, the discovery sought relating to the IRS's administrative procedures has no bearing on an issue of material fact. Therefore, the United States ' motion for protective order will be granted.

B. Motion to Dismiss and Summary Judgment

i. Standard

A claim is subject to dismissal under Rule 12(b)(6) if, under the facts alleged and under any facts that could be proved consistent with the facts alleged, the claim is legally insufficient. Eastern Shore Mkts., Inc. v. J.D. Assocs. Ltd. P'ship, 213 F.3d 175, 180 (4 ^th Cir. 2000). In other words, a motion to dismiss allows a court to eliminate claims that are "fatally flawed in their legal premises." Parham v. Pepsico, Inc., 927 F.Supp. 177, 178 ( E.D. N.C. 1995). If matters outside the complaint pertaining to the claim are presented to the court, the motion will be treated as one for summary judgment. FED.R.CIV.P. 12(b)(6).

A claim is subject to summary judgment under Rule 56(c), "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED.R.CIV.P. 56(c). A party seeking summary judgment "bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the [record] which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party has met its burden, the non-moving party must then "set forth specific facts showing that there is a genuine issue for trial." Matsushita Elec. Indus. Co. Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986) (quoting FED.R.CIV.P. 56(e)).

In making a determination on a summary judgment motion, the court views the evidence in the light most favorable to the non-moving party, according that party the benefit of all reasonable inferences. Bailey v. Blue Cross & Blue Shield of Virginia , 67 F.3d 53, 56 (4 ^th Cir. 1995). Nevertheless, judges are not "required to submit a question to a jury merely because some evidence has been introduced by the party having the burden of proof, unless the evidence be of such a character that it would warrant the jury in finding a verdict in favor of that party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251 (1986) (citations omitted). Thus, the moving party can bear its burden either by presenting affirmative evidence or by demonstrating that the non-moving party's evidence is insufficient to establish its claim. Celotex, 477 U.S. at 331 (Brennan, J., dissenting). "[A] complete failure of proof concerning an essential element of [a plaintiff's] case necessarily renders all other facts immaterial." Celotex, 477 U.S. at 323.

ii. Frivolous Constitutional Claims

Several of the Tilleys' claims are frivolous and fail as a matter of law. In one claim, the Tilleys argue that "the taxes were unconstitutional, since a tax measured by an individual's so-called income is in the nature of a capitation tax and can only be imposed by apportionment." (Compl. ¶VI(d)(3)). The Sixteenth Amendment puts such an argument to rest, stating:

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

U.S. CONST. amend. XVI (emphasis added). Therefore this claim should be dismissed.

Next, the Tilleys argue that "the taxes were collected in violation of the Fourth Amendment of the United States Constitution, since an executive warrant was not issued," (Compl. ¶VI(d)(4)). In support of this claim, the Tilleys cite Soldal v. Cook County, 506 U.S. 56 n.11 (1992) and G.M. Leasing Corp. v. United States [ 77-1 USTC ¶9140], 429 U.S. 338, 351-52 (1997 [1977]). ( See Pls' Resp., pp. 6-7). While it is true, as Soldal notes, that the Fourth Amendment "fully applies in the civil context," 506 U.S. at n.11, it is also true, as G.M. Leasing states, that no warrant is required by the Fourth Amendment in order to collect taxes by levy under 26 U.S.C. §6331, provided the levy does not otherwise involve an unconstitutional intrusion of privacy. G.M. Leasing Corp. [ 77-1 USTC ¶9140], 429 U.S. at 354; Nelson v. Silverman, 888 F.Supp. 1041, 1046 (S.D. Cal., 1995); see also Bull v. United States [ 35-1 USTC ¶9346], 295 U.S. 247, 260 (1935) (stating that a tax assessment "is given the force of a judgment, and if the amount assessed is not paid when due, administrative officials may seize the debtor's property to satisfy the debt"); Murray's Lessee v. Hoboken Land & Improvement Co., 18 How. (59 U.S. ) 272, 15 L.Ed. 372 (1856) (warrant not required for seizure of debtor's land in satisfaction of a claim of the United States ). Because the IRS collected the Tilleys' taxes in this case by levy, and the Tilleys have made no allegation that, in order to levy upon their property, any revenue officer entered into their home without consent or invaded any area of expected privacy as defined as a matter of constitutional law, no warrant was required. See Nelson, 888 F.Supp. at 1046. Accordingly, the Tilleys' argument is without merit.

Next, the Tilleys argue that "the taxes were collected in violation of the Ninth Amendment of the United States Constitution." (Compl. ¶VI(d)(5)). The Tilleys have not explained in their brief in opposition to the motion to dismiss what aspect of the Ninth Amendment was violated by the collection of taxes in this case. See U.S. CONST. amend. IX (providing that "the enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people"). Thus, it is impossible for the court to evaluate the merits of this claim. In any event, the issue of the constitutionality of the collection process set out in the Internal Revenue Code has long been settled. See Phillips v. Commissioner of Internal Revenue [2 USTC ¶743], 283 U.S. 589, 597 (1931); Baddour, Inc. v. United States [ 86-2 USTC ¶9748], 802 F.2d 801, 807 (5 ^th Cir. 1986); Stites v. United States Government [ 84-2 USTC ¶9954], 746 F.2d 1085, 1086 (5 ^th Cir. 1984); Christensen v. United States [ 90-1 USTC ¶50,219], 733 F.Supp. 844, 850-51 (D. N.J. 1990). Therefore, this claim must be dismissed.

iii. Claims Relating to 1991 and 1992 Tax Liability

Although no single claim by the Tilleys explicitly applies only to the 1991 and 1992 tax periods, several claims can be read, in conjunction with the allegations of the complaint, to challenge tax liability for these years. ( See, e.g., Compl., ¶VI(d)(2), (6), (7) & (8)). The United States correctly points out, and the Tilleys do not dispute, that this court lacks jurisdiction over the Tilleys' claims insofar as they concern their 1991 and 1992 tax liabilities.

The Tilleys previously filed a petition with the Tax Court concerning their 1991 and 1992 income tax liabilities. The Tax Court determined that the income tax liabilities were correct. See Tilley v. Commissioner [ CCH Dec. 52,041(M)], 73 T.C.M. (CCH) 2763; T.C. Memo. 1997-222 (May 12, 1997). Under §6512(a) of the Internal Revenue Code, because the Tilleys previously filed a petition with the Tax Court "no suit by the taxpayer for the recovery of any part of the tax shall be instituted in any court." 26 U.S.C. §6512(a); Solitron Devices v. United States [ 89-1 USTC ¶9114], 862 F.2d 846, 848 (11 ^th Cir. 1989). Therefore, the Tilleys' claims concerning their 1991 and 1992 tax liabilities must be dismissed.

iv. Notice of Deficiency

The Tilleys next argue that "the statutory notice of deficiency for 1994 and 1995 was invalid, since the IRS failed to file a valid involuntary return for Thomas Tilley." (Compl. ¶VI(d)(1)). This claim fails as a matter of law because, even if the IRS did not file a valid involuntary return for Thomas Tilley, this does not render the statutory notice of deficiency for 1994 and 1995 invalid. Contrary to the Tilleys' argument in their brief, §6020(b)(1) authorizes, but does not require, the IRS to file a substitute return if a taxpayer fails to file a return. United States v. Verkuilen [ 82-2 USTC ¶9618], 690 F.2d 648, 657 (7 ^th Cir. 1982). The IRS may issue a notice of deficiency without having to file a formal substitute return on behalf of the taxpayer. Hartman v. Commissioner of Internal Revenue [ CCH Dec. 33,543], 65 T.C. 542, 546 (1975); see Schiff v. United States , Civil No. N-86-354(WWE), 89-2 U.S. Tax Cas. (CCH) ¶9551, 1989 WL 119410, *2, 1989 U.S. Dist. LEXIS 11807, *7 (D. Conn. Sept. 6, 1989) ("A taxpayer's failure to file a return does not bar the determination of a deficiency. When 'a taxpayer files no return, the deficiency can be determined as if a return was made showing the amount of tax to be zero.'") (quoting Hartman [ CCH Dec. 33,543], 65 T.C. at 546) (emphasis added).

The Notice of Deficiency submitted by the United States in this case, ( see Gov. Ex. 2), sets forth in full the explanation and calculation of the deficiency, and gives the Tilleys the right to petition the Tax Court and contest the Commissioner's determination prior to the payment of any taxes. As such, it comports with the statutory requirements for a notice of deficiency. See 26 U.S.C. §6212. Thus, the Tilleys' claim that the Notice of Deficiency for 1994 and 1995 is invalid is without merit and will be dismissed.

v. Notice of Assessment and Demand for Payment

The Tilleys next claim that "the IRS failed to issue and serve valid notices of assessments and demands for payments as required by 26 U.S.C. Section 6303(a)." (Compl. ¶VI(d)(2)). ² Section 6303 provides that "after the making of an assessment of a tax pursuant to section 6203, [the Secretary shall] give notice to each person liable for the unpaid tax, stating the amount and demanding payment thereof." 26 U.S.C. §6203(a) (emphasis added). In support of their claim, the Tilleys note that the United States only sent them a letter "stating an amount [and] requesting the recipient to 'please' pay the amount stated." (Pls' Resp., p.8). ³ They argue that §6303(a) requires more demanding language than "please pay the amount stated" in order to constitute a valid notice and demand for payment.

The Tilleys cite to United States v. Jersey Shore State Bank [ 86-1 USTC ¶9151], 781 F.2d 974, 978 (3 ^rd Cir. 1986) and Toussiant v. Department of the Treasury, Civil Action No. 91-3150, 1991 U.S. Dist. Lexis 11275 *8 (D. N.J. Aug. 2, 1991) in support of their contention that a mere request for payment is insufficient to satisfy the requirements of §6303. In Jersey Shore State Bank, the Third Circuit stated:

A section 6303(a) notice consists of two discrete elements: (i) notice of the amount that has been assessed and (ii) a demand that the individual receiving the notice presently satisfy that assessment. Thus, the plain language of the statute envisions a notice not unlike a typical creditor's dunning letter, providing the individual receiving it with one last opportunity to pay the taxes before the government invokes the full panoply of its administrative collection powers.

[ 86-1 USTC ¶9151], 781 F.2d at 978. Citing Jersey Shore, the court in Toussiant determined that certain language in a purported notice letter would not satisfy the requirements of §6303(a). In particular, the court noted:

On [May 13, 1991] a purported notice and demand for payment was sent. That document clearly does not contain a demand for payment. At most, it notifies Mr. Toussaint [sic] of the amount due and requests that he "please" make payment in a certain manner. While the Court certainly does not criticize the IRS for endeavoring to be polite to a taxpayer, nevertheless, this "notice" does not satisfy the requirements of §6303(a).

1991 U.S. Dist. Lexis 11275 at *8 (emphasis added).

The Tilleys argue that because the demand letter they received included similar language, it, too, does not satisfy the requirements of §6303(a). This court disagrees, and finds, contrary to the interpretation of the statute set forth in Toussiant, that a request to the taxpayer to "please" make a payment of a certain amount is adequate to satisfy the requirements of §6303. Courts have consistently found that the notice and demand for payment may be made in varying forms. For example, in Smith v. Malone, the court found that "the form on which a section 6303(a) notice and demand is provided is irrelevant as long as it adequately informed the taxpayer of his or her tax liability and requested payment." Smith v. Malone, No. C88-340Z, 88-2 U.S. Tax Cas. (CCH) ¶9540, 1988 U.S. Dist. LEXIS 16378 *6, 1988 WL 126524 *2-3 (W.D. Wash. July 15, 1988) (emphasis added). In Hughes v. United States, the Ninth Circuit adopted an equally expansive view of §6303, stating that notices sent by the IRS "satisfied the requirements of §6303(a) by informing the [taxpayers] of the amount owed and by requesting payment." Hughes v. United States [ 92-1 USTC ¶50,086], 953 F.2d 531, 536 (9 ^th Cir. 1992) (emphasis added). Thus, if in this case Mr. Tilley received a letter requesting that he please pay the amount stated, this satisfies the requirements of §6303(a). Whether the IRS adopted a polite tone and used the word "please" before the request or whether the IRS adopted a more threatening tone is irrelevant, so long as a request for payment was made.

Furthermore, even if the court accepts the interpretation of §6303 espoused by the Tilleys and Toussiant, the flaw in the demand letter, alone, does not invalidate the collection. Indeed, the court in Toussiant ultimately found that multiple other notices sent to the taxpayer were adequate to satisfy the requirements of §6303. After finding the initial demand letter inadequate under §6303, the court in Toussiant continued its analysis:

Our inquiry is not ended, however. On or about June 3, 1991 , defendant sent and plaintiff received a Notice of Intent to Levy.... Although this document was sent pursuant to the requirements of §6331(d) as a necessary prerequisite to the Notice of Levy served on plaintiff's employer, this document in fact satisfies all the requirements of §6303(a). Unlike [the previous notice], [the Notice of Intent to Levy] unequivocally demands payment of the full liability asserted and warns the plaintiff of the consequences "if full payment is not received within 10 days ...."

1991 U.S. Dist. Lexis 11275 at *8 (emphasis added). This approach was also followed by the Ninth Circuit, in Hughes. There, the taxpayer did not receive any formal demand letter at all. The taxpayer did, however, receive numerous final notices (notices of intention to levy) as well as notices of deficiencies, notices of liens, a notice of levy, a notice of sealed bid sale, and a notice of garnishment. The Ninth Circuit found that these notices, although not demand letters, satisfied the requirements of §6303(a). The court explained, "these numerous notices were sufficient because the form on which a notice of assessment and demand for payment is made is irrelevant as long as it provides the taxpayer with all the information required under 26 U.S.C. §6303(a)." [ 92-1 USTC ¶50,086], 953 F.2d at 536. ⁴

In this case, in addition to the letter providing notice of assessment and request for payment, the IRS sent the Tilleys notices of deficiency, several notices of determination concerning collection actions, and a notice of intent to levy and right to hearing stating the United States ' intention to proceed with collection by levy. See Tilley v. Commissioner [ CCH Dec. 54,797(M)], 83 T.C.M. (CCH) 1912, T.C. Memo. 2002-161 (June 25, 2002); Gov. Exs. 1 & 2. If the more polite request for payment did not satisfy the §6303(a) requirement, the more urgent notices and demands preceding impending collection actions certainly did. Therefore the court finds that the Tilleys received adequate notice and demand as required by §6303(a).



vi. Collection Due Process Hearing

Next, the Tilleys claim that "the taxes were collected in violation of 26 U.S.C. Sections 6320 and 6330, because the IRS failed to hold a collection due process hearing as requested." (Compl., ¶VI(d)(8)). In seeking dismissal of this claim, the United States points out that the Tilleys have previously litigated this claim in Tax Court, and that the Tax Court properly found that the Tilleys had received the collection hearing due under law.

In Tilley v. Commissioner, the Tax Court examined the issue of whether the Tilleys had received an opportunity for a hearing as required by 26 U.S.C. §6330. [ CCH Dec. 54,797(M)], 83 T.C.M. (CCH) 1912, T.C. Memo. 2002-161, p.3 (June 25, 2002). Section 6330(b) provides:

(b) Right to fair hearing.

(1) In general. If the person requests a hearing under subsection (a)(3)(B), such hearing shall be held by the Internal Revenue Service Office of Appeals.

(2) One hearing per period. A person shall be entitled to only one hearing under this section with respect to the taxable period to which the unpaid tax specified in subsection (a)(3)(A) relates.

26 U.S.C. §6330(b) (emphasis added). In this case, the Tax Court found that on February 3, 1999, the IRS sent to the Tilleys a notice of intent to levy with respect to the taxable years 1991, 1992, 1994 and 1995. Then, on February 22, 1999, the IRS received the Tilleys' request for a Collection Due Process Hearing with respect to those years. On April 15, 1999, an Appeals Officer "held a telephone conference with Mr. Tilley in response to the request for a collection hearing." [ CCH Dec. 54,797(M)], 83 T.C.M. (CCH) 1912, T.C. Memo. 2002-161, p.5. "Both parties discussed the issues in the request," including the issue of whether Mr. Tilley should be entitled to certain deductions and credits. Id.

Mr. Tilley does not dispute these facts, but instead asserts, as he asserted before the Tax Court, that he was not afforded a person-to-person hearing, as he requested in a second written hearing request. ( See Declaration of Thomas Tilley, ¶5). The Tax Court found that, regardless of whether Mr. Tilley had requested a second hearing person-to-person, the requirements of §6330 had been met through the telephone conference. [ CCH Dec. 54,797(M)], 83 T.C.M. (CCH) 1912, T.C. Memo. 2002-161, p.6. This court agrees.

In Katz v. Commissioner [ CCH Dec. 54,081], 115 T.C. 329, 337-38 (2000), the Tax Court specifically found that where the taxpayer and the Appeals Officer had a telephone conference, instead of a face-to-face hearing, in which the taxpayer's arguments were discussed, the taxpayer had received an Appeals hearing as required by law. [ CCH Dec. 54,081], 115 T.C. at 337-38. Neither the Internal Revenue Code nor the Constitution requires a person-to- person hearing before a levy determination is made, and even a hearing by correspondence is sufficient to satisfy due process. See Lunsford v. Commissioner [ CCH Dec. 54,552], 117 T.C. 159, 170-74 (2001) (Halpern J., concurring) (explaining basis for rule in administrative law).

In this case, because Mr. Tilley was given the opportunity for a telephone conference in which he discussed the substance of his case with an Appeals Officer, he received the process due under §6330 and the Constitution. Therefore his claim must be denied as a matter of law.

vii. Failure to Assess Business Expenses and Personal Deductions

Finally, the Tilleys argue that Mr. Tilley ⁵ is due a refund because the IRS failed to allow business expenses and personal deductions when making the tax assessment for Mr. Tilley for the 1994 and 1995 tax period. (Compl., ¶VI(d)(8)). The United States moved for summary judgment on this claim on grounds that the assessments made against Mr. Tilley for 1994 and 1995 are presumptively correct and that Mr. Tilley had not shown how the assessments were incorrect nor what the correct tax liability should be. ( Br. in Supp., p.6). In his Response, Mr. Tilley argues that he is entitled to "personal deductions and business expenses." (Pls' Resp., p.17). In support of this claim, Mr. Tilley filed a sworn Declaration, which includes as attachments "true and correct copies of receipts for personal deductions and business expenses for the tax period[s] 1994 [and 1995]." (Declaration, ¶¶21-22). Mr. Tilley contends that "it is uncontested that the items attached to the declaration of Tilley, which are supported by substantial evidence, are generally deductible." (Pls' Resp., p.17 n.3). In conclusion, Mr. Tilley asserts that "because the IRS did not allow Thomas Tilley to itemize his deductions, this Court must determine the correct amount of his tax liability for 1994 and 1995." ( Id. , p.19).

In its Reply, the United States asserts that Mr. Tilley has not met his burden to overcome summary judgment. The United States argues that the documents produced by Mr. Tilley do not show the amount of deductions Mr. Tilley is entitled to or his correct tax liabilities. In addition, the United States points out that it is up to Mr. Tilley, not this court, to show "the correct amount of [Mr. Tilley's] tax liability for 1994 and 1995." ( See Reply, pp. 4-5).

In a refund suit, the taxpayer not only bears the burden of proving that the IRS's assessment of taxes was erroneous, but also bears the burden of showing the amount he is entitled to recover. United States v. Janis [ 76-2 USTC ¶16,229], 428 U.S. 433, 440-41 (1976); Helvering v. Taylor [ 35-1 USTC ¶9044], 293 U.S. 507, 514 & 515 (1935); Winstead v. United States [ 97-1 USTC ¶50,322], 109 F.3d 989, 993 (4 ^th Cir. 1997); Alvary v. United States [ 62-1 USTC ¶9493], 302 F.2d 790, 795 (2 ^nd Cir. 1962). When the taxpayer seeks a refund on the basis of deductions, the taxpayer must prove the legality and specific amount of each deduction claimed. Great Northern Nekoosa Corp. v. United States [ 83-2 USTC ¶9476], 711 F.2d 473, 475 (1 ^st Cir. 1983); United States v. Pfister [ 53-2 USTC ¶9477], 205 F.2d 538, 542 (8 ^th Cir. 1953); Embry v. Gray [ 57-1 USTC ¶9278], 145 F.Supp. 383, 386 (W.D. Ky. 1956); see Interstate Transit Lines v. Commissioner [ 43-1 USTC ¶9486], 319 U.S. 590, 593 (1943) ("An income tax deduction is a matter of legislative grace and ... the burden of clearly showing the right to the claimed deduction is on the taxpayer."); Niles v. United States [ 83-2 USTC ¶9477], 710 F.2d 1391, 1393 (9 ^th Cir. 1983) ("The taxpayer bears the burden of showing that he comes within the provisions of a specific deduction.").

In this case, the United States does not take issue with Mr. Tilley's assertion that business expenses and personal deductions are generally deductible, even for the taxpayer who does not file a return. ( See Reply; Pls' Resp., p.17 (citing Robertson v. Commissioner [ CCH Dec. 53,813(M)], 79 T.C.M. (CCH) 1725, T.C. Memo 2000-100 (2000); Bagby v. Commissioner [ CCH Dec. 49,772], 102 T.C. 596 (1994))). That much is accepted by this court, without further discussion. The key issue in this case, however, is whether the evidence brought forth by Mr. Tilley, in the Declaration of Thomas Tilley, presents a triable issue as to whether Mr. Tilley is entitled to itemized deductions for the 1994 and 1995 tax years.

Mr. Tilley has attached the following financial documents ⁶ to his Declaration, which he contends shows that he is entitled to a refund in this case:

Exhibit A (1994 financial documents) includes copies of -

DOCUMENT #1

IRS Form 1099-MISC, showing the name and address of Thomas Tilley, and showing $119,920.08 in income as "rents" in 1994.

DOCUMENT #2

A financial statement (7 pages) showing the name and address of "Thomas Tilley" at the top, showing "total expenses," "net operating income," and "cash flow" for what appear to be rental properties at about twenty different locations.

DOCUMENT #3

An itemized statement, with no identifying information, entitled "Schedule B (continued) - year 1994" showing the following information:

          Repairs and maintenance      $ 32,121.-                     

          Insurance                    $ 4,358.-                      

          Fees/licenses Realty Com.    $ 7,195.-                      

          Interest on credit used      $ 98,805.-               

          Other Property taxes         $ 12,352.-                     

          ***                         

          TOTAL OF SCHEDULE B          $ 154,831.-                    

DOCUMENT #4

An "annual information statement" from the Mortgage Company of Virginia, dated 12/30/94 and showing a "tax ID 240-48-0849" and name "Thomas E. Tilley - C/O Jim Willette Kermit manager". The statement indicates "interest paid - 11211.24" and "IRS amt. 11211.24".

DOCUMENT #5

An "annual information statement" from the "Mortgage Company of Virginia ," dated 12/30/94 and showing a "tax ID 560-74-7649" and name "Tilley-six Inc. Thomas Tilley." The statement indicates "interest paid - 19966.56" and "IRS amt. 19966.56".

DOCUMENT #6

A "statement of account" from "North Central Farm Credit ACA," dated 12/31/94 ; showing a customer number ending -0001 and name "Thomas E. Tilley;" and indicating, inter alia, outstanding notes with "interest paid year to date" at $10,628.39 and $1,087.98.

DOCUMENT #7

A "statement of account" from "North Central Farm Credit ACA," dated 12/31/94 ; showing a customer number ending -0002 and name "Thomas E. Tilley;" and indicating, inter alia, an outstanding note with "interest paid year to date" at $15,782.91.

DOCUMENT #8

A statement from "Yadkin Valley Bank & Trust Co," dated December 31, 1994 ; showing a customer name Thomas E. Tilley - social security nbr 240480849;" and showing "interest pd interest refund 3,982.93"

DOCUMENT #9

An "invoice" from "Commercial Equipment, Inc.," dated 09/19/94 ; listing "Tilley, Thomas E. - Tilley Enterprises" as recipient of a "copier" for a total of $352.44.

DOCUMENT #10

An "Acknowledgement of Charitable Contributions" from "Jerry Falwell The Old Time Gospel Hour/LBN, Inc." showing charitable gifts by "Mr. and Mrs. Thomas Tilley" in 1994 in amounts of $180.00 and 129.00, minus "fair market value" of items of $15.00 and $19.00.

DOCUMENT #11

A "receipt" from "Campus Crusade for Christ International" showing charitable gifts by "Mr. and Mrs. Thomas Tilley" in 1994 in the amount of $480.00.

DOCUMENT #12

A "page 3" from a form entitled "charitable contributions tax report for the year 1994" from "Cresset Baptist Church," naming "Iris Tilley" in type, and "Thomas Tilley" in handwriting; and showing a total of $6,262.00 in contributions.

DOCUMENT #13

Copies of 32 checks made to the order of various entities in 1994, including

"Farm Bureau" for "insurance,"

"Moore Co Tax Collector" for "property tax,"

"Internal Revenue Service" for "237-04-8039,"

" Liberty University " for "Contribution,"

"Metro Air Conditioning" for "repairs,"

"Robinson, Bradshaw + Hinson" for "Attorney,"

and indicating "Tilley Enterprises" at the heading of the checks.

Exhibit B (1995 financial documents) includes copies of -

DOCUMENT #14

IRS Form 1099-MISC, showing the name and address of Thomas Tilley, and showing $129,792.19 in income as "rents" in 1995.

DOCUMENT #15

A financial statement (7 pages) showing the name and address of "Thomas Tilley" at the top, showing "total expenses," "net operating income," and "cash flow" for what appear to be rental properties at about twenty different locations.

DOCUMENT #16

An itemized statement, with no identifying information entitled "Schedule B (continued) - year 1995" showing the following information:

          Repairs and maintenance      $ 28,268.-                     

          Insurance                    $ 4,400.-                      

          Fees/licenses Realty Com.    $ 7,787.-                      

          Interest on credit used      $ 87,390.-                     

          Other Property taxes         $ 12,852.-                     

          ***                         

          TOTAL OF SCHEDULE B          $ 140,831.-                    

DOCUMENT #17

A document, dated 9/07/95 , from "Scottsdale Insurance Company - North Carolina Farm Bureau," listing "Tilley, Thomas E." as "insured" and stating "New Annual Premium: 2,534.00."

DOCUMENT #18

A document showing "1995 total interest paid" at $4645.60, showing a partial payment stub apparently from Thomas E. Tilley, but not showing any payee. A different portion of the document showing "the interest paid on this account is $3,203.16" listing "Chemical Financial Management Corporation" and including handwriting showing "Thomas Tilley."

DOCUMENT #19

An "annual information statement" from the Mortgage Company of Virginia, dated 12/29/95 and showing a "tax ID 240-48-0849" and name "Thomas E. Tilley - T Bruce Tilley". The statement indicates "interest paid - 49857.19" and "IRS amt. 49857.19" [sic].

DOCUMENT #20

An "annual information statement" from the "Mortgage Company of Virginia ," dated 12/29/95 and showing a "tax ID 560-74-7649" and name "Tilley-six Inc. Thomas Tilley." The statement indicates "interest paid - 23637.46" and "IRS amt. 23637.46".

DOCUMENT #21

A Statement from "First Community Bank," of " Forest , VA ," listing "Tilley Six Trust" "Tax ID Number 240-48-0849" and "Interest Paid 1,604.60" in the year 1995.

DOCUMENT #22

An "Annual Statement" (two pages) from "BB&T Mortgage" showing "reported [mortgage] interest to the IRS for 1995" for "Mr Thomas E Tilley - Mrs Iris M Tilley" at $2,067.97, and $4,133.17.

DOCUMENT #23

A "1995 year-end giving report" from "Campus Crusade for Christ International" showing charitable gifts by "Mr. and Mrs. Thomas Tilley" in 1995 in the amount of $480.00.

DOCUMENT #24

A "page 4" from a form entitled "charitable contributions tax report for the year 1995" from "Cresset Baptist Church," naming "Iris Tilley" in type, and "Thomas Tilley" in handwritting; and showing a total of $6,213.00 in contributions.

DOCUMENT #25

An undated letter from "The Heritage Foundation" acknowledging a $25.00 contribution from Thomas Tilley.

DOCUMENT #26

An "Acknowledgement of Charitable Contributions" from "Jerry Falwell The Old Time Gospel Hour/LBN, Inc." showing charitable gifts by "Mr. and Mrs. Thomas Tilley" in 1995 amounting to $70.00, minus "fair market value" of items of $15.00.

DOCUMENT #27

Copies of 47 checks made to the order of various entities in 1995, including, for example,

"N.C. Farm Bureau" for "insurance,"

"Ashe Co Tax Collector" for "property tax,"

"1041 Services" for "CPA,"

"Metro Air Conditioning" for "repairs,"

"Robinson, Bradshaw + Hinson" for "Attorney,"

and indicating "Tilley Enterprises" at the heading of the checks.

( See Declaration, ¶21 & 22, Exs. A & B).

The United States points out several shortcomings in these documents which it claims entitles it to summary judgment. First, the United States argues that "the documents contain inadmissable hearsay and thus are not admissible as evidence." (Reply, p.4). In support of this contention, the United States does not explain which documents or portions of documents contain inadmissable hearsay, and merely cites to the case of Williams v. Griffin, 952 F.2d 820, 823 (4 ^th Cir. 1991). Williams, however, does not directly bear on the issue of whether the documents attached to Mr. Tilley's sworn declaration are not admissible as evidence on summary judgment because of hearsay problems. The Fourth Circuit in Williams states:

As a general rule, when one party files a motion for summary judgment, the non-movant cannot merely rely on matters pleaded in the complaint, but must, by factual affidavit or the like, respond to the motion. However, a verified complaint is the equivalent of an opposing affidavit for summary judgment purposes, when the allegations contained therein are based on personal knowledge.

952 F.2d at 823. Here, Mr. Tilley has not "merely rel[ied] on matters pleaded in the complaint," id., but has instead, through documents described in and attached to a sworn declaration, responded to the motion. Thus, the general rule in Williams applies, and the documents attached to the Declaration are not barred from consideration based on Williams. The court is otherwise satisfied that, because the documents are certified in the Declaration as "true and correct copies of receipts for personal deductions and business expenses," (Decl. ¶¶21 & 22), the attached documents are, insofar as they are relevant, not barred from consideration on summary judgment. See FED.R.CIV.P. 56(e) (providing that a declarant shall attach to a declaration any "sworn or certified copies of all papers or parts thereof referred to in [the declaration]").

Next, the United States argues that, even if the documents are admissible evidence, many of the documents concern the entity "Tilley Enterprises" but give no explanation of what Tilley Enterprises is or how it relates to Thomas Tilley's tax liabilities. For instance, Mr. Tilley does not explain what type of entity Tilley Enterprises is, such as whether it is a corporation, sole proprietorship, or Subchapter S entity. Nor does Mr. Tilley explain why he would be entitled to deduct amounts paid by Tilley Enterprises, or what the expenses are for. Similarly, several documents relate to plaintiff Mrs. Iris Tilley, but Mr. Tilley does not explain how financial records relating to Iris Tilley affect deductions for Thomas Tilley. As a result, the United States argues that any documents concerning this entity or Iris Tilley should be disregarded as irrelevant to the tax liabilities of Thomas Tilley.

In addition, the United States argues that the two documents entitled "Schedule B (continued) 1994" and "Schedule B (continued) 1995" are not explained or fully supported by the other documents provided. In particular, the United States notes that these Schedules report $98,805 and $87,390 for "interest on credit used," but that "none of the other documents remotely support these amounts." (Reply, p.5).

The court finds the United States ' points, insofar as they concern the specific documents mentioned, well taken. It is true that Mr. Tilley never explains what "Tilley Enterprises" is, or how expenses incurred or paid by Tilley Enterprises or Mrs. Tilley can qualify as deductions for Thomas Tilley. Nor does Mr. Tilley explain what a certain "Tilley-Six Inc.," appearing in some of the documents, is, or how expenses incurred or paid by Tilley-Six, Inc., can qualify as deductions for Thomas Tilley. Therefore, as the documents are submitted at this stage of the litigation, the court finds records pertaining to "Tilley Enterprises," Mrs. Iris Tilley, or "Tilley-Six Inc." are not sufficient evidence to satisfy the burden of establishing deductible amounts for Thomas Tilley. See Anderson, 477 U.S. at 251 (stating that, on summary judgment, courts are not "required to submit a question to a jury merely because some evidence has been introduced by the party having the burden of proof, unless the evidence be of such a character that it would warrant the jury in finding a verdict in favor of that party"). In particular, this means that the following documents submitted by Thomas Tilley do not satisfy the burden of showing deductible amounts for Thomas Tilley:

Document #5 (statement from Mortgage Company of Virginia )

Document #9 (invoice)

Document #10 (charitable contribution)

Document #11 (charitable contribution)

Document #12 (charitable contribution)

Document #13 (32 checks)

Document #20 (statement from Mortgage Company of Virginia )

Document #21 (statement from First Community Bank)

Document #22 (BB&T Mortgage)

Document #23 (charitable contribution)

Document #24 (charitable contribution)

Document #26 (charitable contribution)

Document #27 (47 checks)

In addition, two of the remaining documents labeled "Schedule B" (Document #s 3 & 16) are not helpful because they do not contain any identifying information. Nor do these documents contain any explanation or cross-reference to other documents which might provide a basis for the numbers indicated on "Schedule B." Nor is there any explanation of why Mr. Tilley has included a page labeled "continued" but has not included the previous pages to this document. Accordingly, the court finds that the documents labeled "Schedule B" (Document #s 3 & 16), as they are in their current form, do not satisfy the burden of establishing deductible amounts for Thomas Tilley.

The remaining documents do not suffer from the same flaws as those described above. For instance, the remaining documents all identify Thomas Tilley as the sole payor of certain expenses or interest incurred during the tax years 1994 and 1995. ( See Document #s 1, 2, 4, 6-8, 14, 15, 17-19, 25). Nevertheless, apart from pointing out faults in individual documents, the United States claims that, by merely attaching receipts and financial records to his Declaration, Mr. Tilley has not met his burden to show exactly what Thomas Tilley's correct liabilities for 1994 and 1995 are. The court agrees.

Although Mr. Tilley has provided some documents that appear to show expenses paid by him in 1994 and 1995, Mr. Tilley has never stated, much less justified in any clearly ordered detail, what his deductions should be for the 1994 and 1995 tax years. Nor has Mr. Tilley shown how these deductions balance out against the rental and other income ( e.g., $119,920 in rental income in 1994 and $26,720 in interest income in 1994) found in the Notice of Deficiency and tax assessments made by the IRS. (Gov. Exs. 1 & 2). ⁷ In turn, Mr. Tilley has not shown what his correct taxable income should be, nor what his corrected tax liability, and resulting refund if any, should be.

The lack of specificity in Mr. Tilley's claim is highlighted by the argument he sets out in his brief in opposition to summary judgment. Mr. Tilley's argument that he is entitled to deductions for 1994 and 1995 spans almost five pages. These five pages, however, are almost entirely taken up by a discussion of why he should, as a general matter, be permitted to make personal deductions even though he did not file a return for 1994 and 1995. (Br. in Resp., pp. 15-19). As the court noted before, this proposition is undisputed. Noticeably lacking, though, is any discussion of which deductions apply to Mr. Tilley in this case, the amounts of each deduction, and which documents support each deduction.

Mr. Tilley makes only one conclusory statement in a footnote regarding the documents attached to the Declaration. In particular he writes:

It is uncontested that the items attached to the declaration of Tilley, which are supported by substantial evidence, are generally deductible. See, e.g., 26 U.S.C. §213(a) (deduction for expenses paid for medical care of the individual, his or her spouse, or a dependent); §164(a)(1) (deduction for real property taxes); §164(a)(2) (deduction for state and local property taxes and ad valorem auto license fee); §162(a) (deduction for all ordinary and necessary expenses incurred in carrying on a trade or business); §163(a) deduction for interest paid or incurred on indebtedness); §163(h)(2)(D) (deduction for interest on a qualified residence); etc.

(Pls' Resp., p.17, n.3). This statement is insufficient to demonstrate the types and amounts of deductions in this case. Notably, Mr. Tilley makes no attempt to show how the statutory deductions listed after "see, e.g.," apply to his case at all. For instance, no document attached to the Declaration pertains to "expenses paid for the medical care" of any Tilley family member. 26 U.S.C. §213(a). Nor does there appear to be any document pertaining to an ad valorem auto license fee. §164(a)(2). Nor is it apparent what other statutory deductions (designated by the "etc." used by Mr. Tilley) apply to Mr. Tilley for the 1994 and 1995 tax period. Furthermore, although some of the documents in the Declaration might apply to one of the other statutory deductions listed, Mr. Tilley has failed to show which documents apply to which deductions and in what amounts. Finally, Mr. Tilley's statement that "the items attached to the declaration ... are generally deductible," (Pls' Resp., p.17, n. 3) (emphasis added), only further emphasizes the flaw in Mr. Tilley's argument, namely that he has not shown that the items attached to the declaration are specifically deductible in this case.

In sum, the court finds that, although some documents submitted by Mr. Tilley appear to relate to business and personal expenses paid by Mr. Tilley during the 1994 and 1995 tax years, Mr. Tilley has failed to provide sufficient evidence to satisfy his burden of clearly showing how these expenses relate to his tax liability and refund due. It is not the role of this court (or the jury) to set out and calculate Mr. Tilley's itemized deductions on his behalf. See Hefti v. Internal Revenue Service [ 93-2 USTC ¶50,591], 8 F.3d 1169, 1173 & 1174 (7 ^th Cir. 1993) (noting that unless the taxpayer files a "detailed statement" providing the grounds for the deductions, as well as documentation substantiating the deductions claimed, no meaningful review of a claim for refund is possible). Accordingly, the United States is entitled to summary judgment as to Mr. Tilley's claim for a refund on the basis of itemized deductions.

III. Conclusion

The Tilleys' claims for a refund fail as a matter of law. Furthermore, the discovery sought has no bearing on the outcome of these claims, both because the claims fail as a matter of law and, especially in the case of the claim for deductions, because the discovery has no relevance to the issue in the claim.

For the forgoing reasons, Defendant's motion [Doc. #19] for protective order is GRANTED and Defendant's motion [Doc. #13] to dismiss and for summary judgment is GRANTED.

A judgment will be entered simultaneously herewith.

So ordered.

¹ In opposition to the protective order, the Tilleys do not argue that the additional discovery is necessary to oppose the summary judgment motion. Rather, the Tilleys argue that the motion for protective order should be denied because it was made after the date set for producing the discovery. (Pls' Resp. to Mot. for Prot. Ord., p.3). It is true that, generally, a motion for protective order must be made prior to the date set for the discovery. Brittain v. Stroh Brewery Co., 136 F.R.D. 408, 414 ( M.D. N.C. 1991). In this case, though, the United States filed a dispositive motion before the time for producing the discovery had expired, on March 21, 2003. Because the dispositive motion has the potential to dispose of the case without the need for further discovery, it falls within the court's discretion to stay discovery pending resolution of the dispositive motion. Chavous, 201 F.R.D. at 2; Simpson, 121 F.R.D. at 263.

² The Tilleys also state in their seventh claim (Compl., ¶VI(d)(7)) that "a valid assessment does not exist as a matter of law." The Tilleys do not, however, provide any explanation or argument in support of this claim in their brief in opposition to summary judgment. ( See, e.g., Pls' Resp., p.2 (not listing this claim as one of the "factual issues in dispute" in this case)). Therefore, the court finds this claim abandoned, or, at most, subsumed into the related claims discussed in the text. ( See Compl., ¶VI(d)(2) & (6)).

³ Neither the Tilleys nor the United States provides the court with a hard-copy of this letter, therefore, the court will assume arguendo that the letter contains the precise wording as represented by the Tilleys in their brief.

⁴ Several additional cases cited by the Tilleys in their brief do not detract from application of this expansive approach. For instance, in Commissioner v. Shapiro [ 76-1 USTC ¶9266], 424 U.S. 614, 622 n.7 (1976), the Supreme Court avoided the issue of whether a proper demand letter was sent, finding instead that a subsequent notice of levy satisfied the statutory demand requirements to make collection valid. See also Martinez v. United States, 669 F.2d 568 (9 ^th Cir. 1981) (providing no rule on what language constitutes a "demand," but merely stating that at a minimum, before levy, the taxpayer must be given notice and an opportunity to fail or refuse to pay the tax") (emphasis added); United States v. Berman [ 87-2 USTC ¶9460], 825 F.2d 1053, 1055-57 (6 ^th Cir. 1987) (providing no rule on what language constitutes a "demand," and finding that notices which had been claimed to have been mailed were not, in fact, mailed).

⁵ Importantly, although Thomas Tilley and his spouse, Iris Tilley, are plaintiffs together in the refund lawsuit, the IRS made assessments only against Thomas Tilley for 1994 and 1995. Iris Tilley was not assessed liabilities for 1994 or 1995. In seeking a refund based on business expenses and personal deductions, the relevant inquiry will thus be whether Mr. Tilley has met his burden of showing the 1994 and 1995 assessments against him are incorrect and that he is entitled to business expenses and personal deductions.

⁶ The documents attached to the declaration are not numbered, nor are page numbers provided for the documents. For ease of reference, the court will label and refer to the documents attached to the Declaration as "DOCUMENT #1, ... DOCUMENT #2, etc.," in the manner as set out in the text.

⁷ The IRS's assessment that Mr. Tilley received income from dividends, interest, patronages, and rents in 1994 and 1995 is entitled to a presumption of correctness, see Helvering v. Taylor [ 35-1 USTC ¶9044], 293 U.S. at 515, and the documents submitted by Mr. Tilley do nothing to rebut this presumption. Indeed, Document #s 1 & 14 go so far as to confirm the rental income assessed in 1994 and 1995.