"was never provided proof of the amount allegedly owed, neither in direct documentation, nor statements of how rules/ laws and calculations were applied." The Appeals officer scheduled a hearing for October 5, 2002 (2002 hearing). In a letter dated August 30, 2002, the Appeals officer informed petitioner that the underlying tax liability could not be challenged at the 2002 hearing because petitioner had a prior opportunity to dispute the liability. In a letter dated September 5, 2002, the Appeals officer enclosed a copy of the notice of deficiency and reiterated that petitioner could not, at the 2002 hearing, challenge the underlying liability. Petitioner failed to appear at the hearing and did not attempt to schedule another hearing. As a result, on June 9, 2003, respondent issued petitioner a Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330 (2003 notice of determination). The 2003 notice of determination stated that the underlying liability "cannot be considered under this process" and "if you want to dispute this determination in court, you must file a petition with the United States Tax Court for a redetermination within 30 days from the date of this letter." Petitioner did not file a petition with the Court or otherwise dispute respondent's 2003 notice of determination. Respondent, however, did not proceed with the proposed collection action. On September 8, 2004, respondent mailed petitioner a Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320 (2004 NFTL) relating to 1997.1 On October 13, 2004, petitioner timely filed a Form 12153, Request for a Collection Due Process Hearing (2004 request), but he did not set forth any issues relating to his 1997 liability. The settlement officer scheduled a hearing for February 2, 2005 (2005 hearing), but petitioner failed to appear. The 2005 hearing was rescheduled for February 14, 2005. On February 13, 2005, the settlement officer received a letter in which petitioner stated he was withdrawing "[his] collection due process appeal". On February 14, 2005, the settlement officer sent petitioner a Form 12256, Withdrawal of Request for Collection Due Process Hearing, but petitioner refused to sign the form. The settlement officer then rescheduled the 1 The record does not indicate why respondent failed to proceed with the proposed collection action after issuing the 2003 notice of determination or why the 2004 NFTL was necessary. 2005 hearing for March 25, 2005, and, in a letter dated March 18, 2005, informed petitioner that he was "previously provided with an opportunity to challenge this liability *** in 2002 [and] the issue of liability cannot be considered". The 2005 hearing was held via telephone on March 25, 2005, and petitioner was precluded from challenging the underlying liability. On May 3, 2005, respondent issued petitioner a Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330 (2005 notice of determination). On June 7, 2005, petitioner, while residing in London, Ohio, filed his petition with the Court seeking a review of the 2005 notice of determination. On January 4, 2006, the Court filed respondent's motion for summary judgment and on February 27, 2006, denied the motion. Discussion Petitioner contends that he should have been allowed to challenge the underlying tax liability at the 2005 hearing and that respondent abused his discretion. Conversely, respondent contends that he did not abuse his discretion because petitioner had a prior opportunity to challenge the underlying liability and, thus, was precluded from subsequently raising the matter. We agree with respondent. Section 6330(c)(2)(B) 2 allows challenges to the existence or amount of the underlying liability if petitioner did not receive a notice of deficiency or otherwise have an opportunity to dispute the liability. This statutory preclusion is triggered by the opportunity to contest the underlying liability, even if the opportunity is not pursued. Goza v. Commissioner, 114 T.C. 176, 182-183 (2000). The 2003 notice of determination provided petitioner with an opportunity to contest the determination by filing a petition with the Court. Petitioner, had he filed a petition, could have contested the underlying liability. Petitioner, however, did not petition the Court after the 2003 notice of determination was issued. Petitioner also contends that he should have been allowed, at the 2005 hearing, to contest the underlying liability because respondent erroneously precluded him, at the 2002 2 Unless otherwise indicated, all section references are to the Internal Revenue Code in effect for the year in issue. hearing, from doing so. In Heckler v. Cmty. Health Servs., 467 U.S. 51, 63 (1984), the Supreme Court stated that "those who deal with the Government are expected to know the law and may not rely on the conduct of Government agents contrary to law." See Estate of Emerson v. Commissioner, 67 T.C. 612, 617 (1977) (holding that this Court will apply the doctrine of estoppel against the Government with the "utmost caution and restraint"). Despite respondent's error, petitioner was entitled to petition this Court, dispute the determination, and challenge the underlying liability. Petitioner failed to do so and, thus, was precluded from subsequently challenging the underlying liability. Accordingly, respondent did not abuse his discretion and is not estopped from proceeding with the proposed collection action. Contentions we have not addressed are irrelevant, moot, or meritless. To reflect the foregoing, Decision will be entered for respondent. PEOPLE PLACE AUTO HAND CARWASH, LLC, PETITIONER v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT Docket No. 10708-05. Filed June 14, 2006. P is a limited liability company (LLC) owned and operated Larry Conway (a member), for petitioner. OPINION THORNTON, Judge: This is an action for redetermination of employment status pursuant to section 7436 and Rule 291.1 1 Unless otherwise indicated, section references are to the applicable versions of the Internal Continued Petitioner, a limited liability company (LLC), is owned and operated by Larry and Marilyn Conway (the Conways), who have filed chapter 7 bankruptcy petitions. The question presently before us is whether the automatic stay provision of 11 U.S.C. section 362(a)(8) (2000) applies to these proceedings. As discussed below, we conclude that it does not. Background Petitioner is a limited liability company, ostensibly organized under Tennessee law. An LLC is a legal entity with attributes of both a corporation and a partnership, although not formally characterized as either one. Blakemore, "Limited Liability Companies and the Bankruptcy Code: A Technical Review", 13 Am. Bankr. Inst. J. 12 (June 1994). Apparently, the Conways are petitioner's only members. On June 13, 2005, petitioner filed its petition, signed by Larry Conway "for" petitioner.2 The petition states, among other things, that petitioner is "completely out of business with no assets." Attached to the petition is a notice of determination of worker classification, dated March 16, 2005, and addressed to petitioner in Memphis, Tennessee. In the notice of determination, respondent determined that for purposes of Federal employment taxes, 13 specified individuals were to be classified as petitioner's employees, and, as a consequence, petitioner owed $6,207 in additional employment tax, additions to tax, and penalties with respect to calendar year 2000. On January 13, 2006, pursuant to Rule 91(f), respondent filed a motion to show cause why proposed facts and evidence should not be accepted as established. In its response, petitioner stated that the Conways are "the whole owners and personally liable parties for this defunct business and action before the court is now involved in a chapter 7 liquidation case" in the U.S. Bankruptcy Court in Memphis, Tennessee.3 Revenue Code. Rule references are to the Tax Court Rules of Practice and Procedure. 2 Respondent has raised no issue as to whether Larry Conway has authority to represent petitioner in this proceeding. In his Rule 91(f) motion, filed Jan. 13, 2006, respondent identifies Larry Conway as "petitioner's principal". On the record presently before us, it appears that Larry Conway is authorized to represent petitioner in this proceeding. See Rule 24(b) (an “unincorporated association" may be represented by an "authorized member of the association"); cf. Scenic Wonders Gallery, LLC v. Commissioner, T.C. Memo. 2000-64 (holding that an alleged cotrustee of an LLC's tax matters partner failed to establish that he was authorized to act on behalf of the tax matters partner). 3 Petitioner has not alleged that it is a party to the Conways' bankruptcy proceedings or has Petitioner contended that this case should be stayed pursuant to the automatic stay provision of 11 U.S.C. section 362(a). On February 15, 2006, the Court struck this case for trial from the February 27, 2006, Nashville, Tennessee, trial session and calendared its January 18, 2006, order to show cause for hearing at the same trial session. The Court ordered the parties to show cause in writing why the proceedings in this case should not be stayed pursuant to 11 U.S.C. section 362(a)(8). In his response, respondent contended that the automatic stay provisions of 11 U.S.C. section 362(a) are inapplicable because petitioner has filed no petition with the bankruptcy court and is not a debtor therein. Respondent contended alternatively that if the automatic stay is applicable to this proceeding, then the petition was filed in violation of it, and accordingly this case should be dismissed for lack of jurisdiction.4 See, e.g., Thompson v. Commissioner, 84 T.C. 645 (1985). Petitioner filed no response to the Court's February 15, 2006, order to show cause. At the hearing on February 27, 2006, in Nashville, Tennessee, there was no appearance by or on behalf of petitioner. Discussion Title 11 of the U.S. Code provides uniform procedures to promote the effective rehabilitation of the bankrupt debtor and, when necessary, the equitable distribution of the debtor's assets. See H. Rept. 95-595, at 340 (1977). In furtherance of these goals, 11 U.S.C. section 362(a) provides automatic stay protection for the debtor and the bankruptcy estate.5 The automatic stay provisions, as set forth in para itself filed any petition in bankruptcy. 4 Attached as exhibits to respondent's response are copies of PACER Service Center case printouts with respect to 11 U.S.C. ch. 7 petitions filed by Larry and Marilyn Conway on Feb. 26, 2002, and Dec. 18, 2003, respectively. 5 Tit. 11 U.S.C. sec. 362(a) (2000), as in effect for relevant periods, provides: Except as provided in subsection (b) of this section, a petition filed under section 301, 302, or 303 of this title, or an application filed under section 5(a)(3) of the Securities Investor Protection Act of 1970, operates as a stay, applicable to all entities, of— (1) the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before the commencement of the case under this title, or to recover a claim against the debtor that arose before the commencement of the case under this title; Continued |