Court has jurisdiction to review equivalent hearings.

The IRS mailed two final notices of intent to levy to P, who timely requested a hearing under Sec. 6330, as to both notices. A, an appeals officer, held an "equivalent hearing" with P under Regs. Sec. 301.6330-1(i). At the hearing, A mistakenly informed P that P was not entitled to a regular hearing because P's hearing request was untimely. A later issued a decision letter to P sustaining the proposed levy and stating that P did not have a right to judicial review of the decision. P petitioned the Tax Court under Sec. 6330(d)(1) to review the determination. The Tax Court must decide as a matter of first impression whether it has jurisdiction under Sec. 6330(d)(1), given that the IRS never issued a notice of determination for a Sec. 6330 hearing.

Analysis

The Tax Court's jurisdiction under Sec. 6330(d)(1) depends on the issuance of a valid determination notice and a timely petition for review; see Goza, 114 TC 176 (2000); Lunsford, 117 TC 159 (2001). Because P's petition was timely filed, the Tax Court must decide whether the IRS has made a "determination" within the meaning of Sec. 6330(d)(1). The IRS acknowledges that P did not have the hearing described in Sec. 6330, but that the decision letter issued to P as to the equivalent hearing reflects a "determination" sufficient to invoke the court's jurisdiction under Sec. 6330(d)(1).

Under Sec. 6330, a taxpayer has a right to a "hearing" with an Appeals officer before a levy on his or her property, provided the hearing request is timely The taxpayer may raise any relevant matter set forth in Sec. 6330(c); the Appeals officer may make a "determination" on those matters. Sec. 6330(d)(1) gives the taxpayer the right to contest the Appeals officer's determination in the appropriate judicial forum, precludes the IRS from proceeding with the proposed levy and suspends the applicable limitation periods.

The rules for an equivalent hearing stem from the statute's legislative history and the regulations implementing Congressional intent; see H. Rep't No. 105-599 (1998), at 266 (if a taxpayer does not timely request a hearing, the Secretary must provide an equivalent hearing if later requested by the taxpayer).

The regulations applying to equivalent hearings generally follow the statutory scheme for regular hearings. Under the regulations, any taxpayer who fails to timely request a hearing may receive an equivalent hearing; Regs. Sec. 301.6330-1(i)(1). The equivalent hearing (like the regular hearing) is held with Appeals; the Appeals officer considers the same issues that he or she would have considered had the equivalent hearing been a hearing. The Appeals officer also generally follows the same procedures at an equivalent hearing that he or she would have followed in a regular hearing.

Although the Appeals officer concludes an equivalent hearing by issuing a decision letter (as opposed to a determination notice), these documents do not differ for Tax Court jurisdiction purposes. The decision letter contains all of the information required by Regs. Sec. 301.6630-1(e)(3) to be included in a determination notice, except that (for most issues) a taxpayer may not seek judicial review of the decision. Thus, the Tax Court concluded that the "decision" reflected in the decision letter issued to P is a "determination" for Sec. 6630(d)(1) purposes and it has jurisdiction to decide this case.

MICHAEL CRAIG, 119 TC NO. 15

REFLECTIONS: Several recent cases have found that a derision letter did not provide jurisdiction for judicial review when the original hearing request was untimely; see Moorhouse, 116 TC 263 (2001); Nelson, TC MEMO 2002-264; Lopez, TC MEMO 2001-228.