Offer in compromise in a collection due process hearing. Case where an offer in compromise was given an adverse decision because the IRS did not give adequate time to submit information requested. This is a common "cheap shot" use by the IRS when they have an anti-taxpayer bias.

James R. Rutherford and Linda L. Rutherford v. Commissioner.

Dkt. No. 25729-06L , TC Memo. 2008-227, October 8, 2008.

An IRS Appeals officer did not abuse his discretion when he sent a notice of deficiency to a married couple without giving them more time to submit the required financial information to support an Offer in Compromise. The couple's testimony suggested that the decision not to produce the documents was a deliberate one and for strategic reasons. The couple's argument that they were ineffectively counseled was rejected. Further, the couple had sufficient time to prepare for the hearing, were advised by experienced tax counsel and had previous experience with respect to the financial information requirement. They were merely seeking an opportunity to further delay collection of their liabilities; thus, it was not unreasonable for the Appeals officer to set a deadline. --CCH.





MEMORANDUM FINDINGS OF FACT AND OPINION

COHEN, Judge: This action was commenced in response to a Notice of Determination Concerning Collection Action(s) Under Section 6320 and/or 6330 (notice of determination) with respect to petitioners' 1992, 1993, and 1994 Federal income tax liabilities. The issue for decision is whether it was an abuse of discretion to send a notice of determination without extending the time for petitioners to submit financial information. Unless otherwise indicated, all section references are to the Internal Revenue Code, as amended.


FINDINGS OF FACT

Some of the facts have been stipulated, and the stipulated facts are incorporated in our findings by this reference. Petitioners resided in Texas at the time that their petition was filed.

Petitioners jointly filed Forms 1040, U.S. Individual Income Tax Return, for 1992, 1993, and 1994 reporting taxes due in the amounts of $8,834, $6,966, and $4,121, respectively. Petitioners failed to pay the reported liabilities.

The Internal Revenue Service (IRS) assessed the liabilities shown on petitioners' income tax returns for 1992, 1993, and 1994, on August 13, 1994, May 1, 1995, and May 8, 1995, respectively.

On October 27, 1995, the IRS accepted an offer-in-compromise with respect to petitioners' liabilities for 1986 through 1991 and the taxes shown on the returns filed by petitioners for 1992, 1993, and 1994. Under the terms of the compromise, petitioners were required to pay a total of $41,668 plus interest. Petitioners failed to make the payments. On August 14, 1996, the IRS declared the offer-in-compromise in default.

On December 12, 1997, the IRS filed notices of Federal tax liens for the then-outstanding tax liabilities of petitioners. Petitioners paid the liabilities, and the liens were released on January 20, 1999.

On December 2, 1997, a notice of deficiency was sent to petitioners for 1992, 1993, and 1994, determining deficiencies in tax totaling $293,057 and penalties and additions to tax totaling $130,179 under sections 6651(a)(1) and 6662(a).

Petitioners filed a petition with this Court in response to the December 2, 1997, notice of deficiency. On December 7, 2000, the Court entered a decision, pursuant to the agreement of the parties, determining that petitioners owed: (1) Deficiencies in income taxes for the taxable years 1992, 1993, and 1994 in the amounts of $123,063, $161,648, and $8,346, respectively; (2) additions to tax for the taxable years 1992 and 1993, under the provisions of section 6651(a)(1) in the amounts of $30,979 and $40,579, respectively; and (3) penalties for the taxable years 1992, 1993, and 1994 under the provisions of section 6662 in the amounts of $24,613, $32,330, and $1,669, respectively. On February 6, 2001, the liabilities reflected in the Tax Court decision were assessed.

On June 16, 2006, the IRS filed a notice of Federal tax lien for petitioners' 1992, 1993, and 1994 tax liabilities and sent petitioners a Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320. On June 22, 2006, the IRS sent petitioners a Notice of Intent to Levy and Notice of Your Right to a Hearing with respect to their liabilities for 1992, 1993, and 1994.

Petitioners timely requested a hearing under section 6330. In a letter dated September 18, 2006, the hearing process was explained to them. The hearing was held on October 31, 2006. Petitioner James Rutherford (petitioner) appeared at the hearing with experienced tax counsel. During the hearing, petitioner raised a defense based on the previous offer-in-compromise. The Appeals settlement officer refused to discuss the underlying liabilities because of the prior opportunity to dispute them. The Appeals settlement officer requested that petitioner submit a completed Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, in order to evaluate his financial situation and consider collection alternatives. Petitioner was not prepared to discuss collection alternatives. Petitioner, acting on advice of counsel, had not presented financial information. His counsel told petitioner:

We're not going to present any paperwork, we're not going to do nothing, we're just going to get through this process, through this step, and then we're going to go file a petition and go to federal court and fight the merits and fight the entire case at federal court, not at this level, so at this time we just need to go and do the process and get it past here and get to the federal court.

The Appeals settlement officer told petitioner that he had to provide the financial information that same day as part of the hearing.

On November 9, 2006, the Appeals Office sent the notice of determination to petitioners. The notice summarized the issues raised by the taxpayers and the conclusion reached as follows:

IRC § 6330(c) allows the taxpayer to raise any relevant issues relating to the unpaid tax at the hearing. In the request for a hearing the taxpayer states "Taxes were extinguished by accepted and paid offer in compromise. Taxpayers qualify for alternative collection method."

* * * * * * *

During the face-to-face hearing the taxpayer raised the issue of the accepted offer in compromise. He stated the IRS had accepted the offer, filed a tax lien on the amount of the accepted offer when he was unable to comply with its terms, and released the tax lien when the balance was paid. Once the lien was released, the IRS had no right to assess additional taxes.

* * * * * * *

The taxpayer stated he was not prepared to discuss collection alternatives at the hearing. His issue was the assessment of the additional tax liabilities, which he continues to believe was unfair. He stated he is currently unable to pay the balance due in full and would consider other options. One option he will consider is the filing of an Offer in Compromise. The taxpayer was advised of the new requirements for the processing fee and payment requirements. Another option he will consider is the filing of bankruptcy. This option was not discussed.

The taxpayer raised no other issues during the hearing.


BALANCING THE NEED FOR EFFICIENT COLLECTION WITH THE TAXPAYER'S CONCERN THAT COLLECTION ACTION BE NO MORE INTRUSIVE THAN NECESSARY

IRC Section § 6333(c)(3)(C) [6330(c)(3)(C)] requires that the Settlement Officer determine if the proposed levy action and the filed Notice of Federal Tax Lien balances the need for efficient collection of the taxes with the legitimate concern of the taxpayer that any collection action be no more intrusive than necessary. The tax liabilities are legally due and owing. No financial documents were provided. Therefore, the Settlement Officer had insufficient information to determine if the taxpayer qualified for a collection alternative such as an installment agreement or offer in compromise. Therefore, it is my determination that the levy and the lien balance the need for efficient tax collection with the taxpayer's concern that such action be no more intrusive than necessary. The proposed levy action and the filing of the Notice of Federal Tax Lien are sustained.


OPINION

Petitioners argue that it was an abuse of discretion for the Appeals settlement officer not to recognize that petitioners were receiving ineffective assistance of counsel and not to allow petitioners additional time to submit the required financial information. Petitioners assert:

The record in this case demonstrates that this controversy has been dragging on for over 10 years prior to the CDP hearing. It is manifestly unreasonable and arbitrary and capricious and an abuse of discretion not to allow taxpayers even 1 additional day in which to present the information necessary to resolve this case.

Respondent argues that: (1) It is unreasonable to expect the Appeals settlement officer to assess the adequacy of counsel's advice to a taxpayer; (2) based on their prior experience, petitioners were well aware of the requirement of providing financial information for consideration of an offer-in-compromise; and (3) petitioners failed to provide the information after the deadline passed.

We cannot conclude on this record that petitioners were not adequately advised by counsel. Petitioner's testimony suggests that there were strategic reasons for not producing the financial information at the hearing, and the decision not to produce "paperwork" was a deliberate one. We will not speculate as to the reasons for counsel's advice, and the Appeals settlement officer was certainly not in a position to inquire into the reasons for counsel's advice to petitioners. Neither reason nor authority supports petitioners' arguments based on alleged ineffectiveness of counsel.

Petitioners have invoked our jurisdiction under section 6330(d) to review the notice of determination sent to them with respect to the notice of tax lien filing and the proposed levies to collect their long-outstanding tax liabilities. Petitioners cite relevant authorities, but those authorities do not support their position. As petitioners acknowledge, the notice of determination is reviewed by this Court for abuse of discretion, which is defined as action that was arbitrary, capricious, or without sound basis in fact or law. Woodral v. Commissioner, 112 T.C. 19, 23 (1999). Under section 6320(b)(2), taxpayers are entitled to only one hearing with respect to taxable years in dispute. See sec. 301.6320-1(b)(1) and (2), Proced. & Admin. Regs. Petitioners had sufficient time to prepare for the hearing, were advised by experienced tax counsel, and had experience with respect to the financial information required to support an offer-in-compromise. They appeared at the hearing unprepared and unwilling to discuss collection alternatives. The only argument raised at the hearing was that the prior offer-in-compromise somehow affected the underlying tax liabilities. Petitioners have now abandoned that argument, which appears to have no merit.

Petitioners are seeking an opportunity to reverse course, abandon the strategy that they and their counsel adopted in relation to the hearing, and further delay collection of the liabilities that, as petitioners acknowledge, had accrued over a period in excess of 10 years. Through the time of trial petitioners had not presented the financial information necessary to resolve their tax liabilities without enforced collection. It was not unreasonable for the Appeals settlement officer to set a deadline, and not continuing the hearing cannot be characterized as arbitrary, capricious, or without sound basis in fact or law. In Roman v. Commissioner, T.C. Memo. 2004-20, we stated:

No statutory or regulatory provision requires that taxpayers be afforded an unlimited opportunity to supplement the administrative record. * * * The statute only requires that a taxpayer be given a reasonable chance to be heard prior to the issuance of a notice of determination.

Petitioners had that chance. To reflect the foregoing,

Decision will be entered for respondent.
Hearing procedures. --Notice of Levy and Right to Hearing: Hearing procedures

A taxpayer's claim that he was denied a CDP hearing because the hearing was scheduled "almost an hour away" was denied. The hearing was scheduled to be held at the IRS Appeals Ofice located nearest to the taxpayer's residence. The taxpayer failed to demonstrate why commuting one hour would be unduly burdensome to either himself or his witnesses. Moreover, telephone conversations between the taxpayer and an IRS appeals officer qualified as a collection due process hearing. The taxpayer and the appeals officer discussed the facts and history of the taxpayer's case, and the appeals officer heard and considered the taxpayer's arguments

S.W. Katz, 115 TC 329, Dec. 54,081.

Similarly, face-to-face hearing not required:

G.L. Sanford, CA-11 (unpublished opinion), 2008-2 USTC ¶50,410, aff'g, per curiam, an unreported Tax Court decision.

P.R. Burnett, CA-5 (unpublished opinion), 2007-1 USTC ¶50,433, 227 FedAppx 342 ,aff'g, per curiam, an unreported District Court decision.

B.E. Maynard, CA-9 (unpublished opinion), 2007-2 USTC ¶50,541,233 FedAppx 721, aff'g an unreported Tax Court decision.

W.T. Barry, DC Fla., 2008-1 USTC ¶50,293.

F.G. Martin, DC N.J., 2007-1 USTC ¶50,215. Aff'd, per curiam, CA-3 (unpublished opinion), 2007-1 USTC ¶50,216, 205 FedAppx 94.

G. Priest, DC Ill., 2006-2 USTC ¶50,571.

R.E. Gerhart, DC Pa., 2006-2 USTC ¶50,451.

D. Frese, DC N.J., 2006-1 USTC ¶50,169, 186 FSupp2d 1123.

E.C. Holmes, DC La., 2005-1 USTC ¶50,172.

D. Gardner, DC N.J., 2005-2 USTC ¶50,649.

T.E. Tilley, DC N.C., 2003-2 USTC ¶50,594, 270 FSupp2d 731.

T.S. Loofbourrow, DC Tex., 2002-1 USTC ¶50,465.

B.J. Konkel, DC Fla., 2001-2 USTC ¶50,520.

W.O. Taylor, 95 TCM 1602, Dec. 57,465(M), TC Memo. 2008-151.

G.R. Clark, 95 TCM 1610, Dec. 57,469(M), TC Memo. 2008-155.

L.P. Connolly, 95 TCM 1371, Dec. 57,400(M), TC Memo. 2008-95.

S.A. D'Onofrio, 95 TCM 1106, Dec. 57,328(M), TC Memo. 2008-25.

A. Oropeza, 95 TCM 1367, Dec. 57,399(M), TC Memo. 2008-94.

E. Enax, 95 TCM 1425, Dec. 57,423(M), TC Memo. 2008-116.

P.D. Dahlin, 94 TCM 388, Dec. 57,139(M), TC Memo. 2007-310.

C.E. Davis, 93 TCM 1396, Dec. 56,977(M), TC Memo. 2007-160.

E.W. Clough, 93 TCM 1170, Dec. 56,918(M), TC Memo. 2007-106.

T. Skeriotis, 93 TCM 972, Dec. 56,856(M), TC Memo. 2007-52.

L.P. Mitchell, 92 TCM 402, Dec. 56,669(M), TC Memo. 2006-238.

D.J. Faris, 92 TCM 451, Dec. 56,686(M), TC Memo. 2006-254.

B.W. Bean, 91 TCM 1083, Dec. 56,499(M), TC Memo. 2006-88.

A.T. Ball,, 92 TCM 7, Dec. 56,560(M), TC Memo. 2006-141.

H.D. Summers,, 92 TCM 345, Dec. 56,647(M), TC Memo. 2006-219.

G.W. Kozack, 90 TCM 425, Dec. 56,175(M), TC Memo. 2005-246.

S.A. Brandenburg,, 90 TCM 433, Dec. 56,178(M), TC Memo. 2005-249.

G. Wright, 90 TCM 615, Dec. 56,224(M), TC Memo. 2005-291.

J.H. Leineweber, 87 TCM 824, Dec. 55,518(M), TC Memo. 2004-17.

A. Thomas, 86 TCM 216, Dec. 55,253(M), TC Memo. 2003-231.

G. Gougler, 84 TCM 118, Dec. 54,824(M), TC Memo. 2002-185.

T. Armstrong, 84 TCM 287, Dec. 54,865(M), TC Memo. 2002-224.

An IRS settlement officer's refusal to grant a face-to-face hearing was an abuse of discretion because it had been requested by the taxpayer and it was unclear from the record whether the taxpayer and his attorney were aware that a telephone conversation with the settlement officer would be treated as a formal CDP hearing. Accordingly, the case was remanded to the IRS Appeals Office for a face-to-face hearing.

J. Cavanaugh, DC N.J. (unpublished opinion), 2004-2 USTC ¶50,420.

An Appeals officer's Collection Due Process (CDP) hearing determination to impose the frivolous return penalty was upheld. The individual participated in a telephone conference and was permitted to submit additional arguments in writing after the conference. Therefore, the IRS did not violate his rights by not holding an in-person hearing.

R. Ulloa, DC N.Y., 2008-2 USTC ¶50,547.

An IRS Appeals officer did not err or abuse of his discretion in sustaining the IRS's notice of Federal tax lien or proposed levy action without conducting a telephone interview with the taxpayer. The taxpayer failed to identify any materials that were not duly considered or that would otherwise would have affected the officer's decision.

J.E. Hunter, II, 93 TCM 852, Dec. 56,824(M), TC Memo. 2007-23.

The IRS's erroneous notice of determination that found an individual liable for the frivolous return penalty following an unscheduled telephone hearing with a revenue agent, which served as his Collection Due Process Hearing, was deemed invalid and was vacated. While acknowledging the erroneous statement in the notice, the government sought a remand at which the administrative hearing would be continued. However, it cited no authority under which the court could remand the matter. Moreover, a remand would constitute a judicial sanctification of the procedure used.

D. Montijo, DC Nev., 2002-1 USTC ¶50,321.

An individual who was granted additional time prior to collection of his tax liabilities to seek a private letter ruling as to his employment status, but who instead requested the IRS examination division to review his status, was given a full and fair opportunity to seek an alternative resolution of his tax liabilities. Since collection was delayed at least six months while the taxpayer sought the administrative resolution of his liabilities and the IRS did not impede his efforts to seek an alternative to collection, the IRS did not abuse its discretion in refusing to allow him an additional stay to obtain a private letter ruling.

K.P. Vossbrinck, 83 TCM 1474, Dec. 54,713(M), TC Memo. 2002-96.

An IRS Appeals officer improperly refused to address a taxpayer's challenge to the imposition of frivolous return penalties at his Collection Due Process (CDP) hearing; thus, the issue was remanded to IRS Appeals. Moreover, the Appeals officer declined to consider the taxpayer's conditional alternative to collection.

B.D. Erickson, DC Calif. (unpublished opinion), 2002-1 USTC ¶50,444.

A Collection Due Process (CDP) determination upholding a tax lien imposed against a delinquent taxpayer's property was not an abuse of discretion. The evidence established that she received copies of her transcripts of account for the tax years at issue; thus, the IRS did not abuse its discretion in failing to provide that information to her at the CDP hearing. Also, the IRS properly relied on the transcripts of account to satisfy the Code Sec. 6330(c)(1) verification requirements. Finally, because the taxpayer failed to raise a spousal defense, challenge the appropriateness of the IRS's collection action, or offer alternative means of collection, those issues were deemed conceded.

M. Eiselstein, 85 TCM 794, Dec. 55,025(M), TC Memo. 2003-22.

An individual failed to present evidence establishing the IRS's noncompliance with the administrative collection procedures under Code Sec. 6330(c)(1). The taxpayer's argument that the Collection Due Process hearing was improper because he was not allowed to conduct discovery or to compel the appearance of witnesses was rejected. The IRS was not obligated to provide the documents sought by the taxpayer, who did not have the right to subpoena witnesses.

K.A. Schrems, 85 TCM 801, Dec. 55,029(M), TC Memo. 2003-25.

The refusal of the IRS to afford formal discovery to an individual at his Collection Due Process hearing was not an abuse of its discretion. Moreover, it was not an abuse of discretion for the Appeals officer to refuse to allow the taxpayer's spouse to participate in the hearing. Although the likely reason for the taxpayer's argument was that his spouse held a community property interest in any property of his that might be subject to levy, the taxpayer and his spouse did not file joint returns during the years at issue. Consequently, she was not liable for the unpaid taxes that were the subject of the collection action, and she had no hearing rights.

J. Perez, 84 TCM 501, Dec. 54,924(M), TC Memo. 2002-274.

The government was entitled to dismissal or, in the alternative, summary judgment, with respect to an individual's action challenging frivolous return penalties assessed against her for two tax years. Her arguments under Code Sec. 6330 that the IRS Appeals officer at her Collection Due Process hearing improperly failed to produce various documents or consider her arguments, lacked merit. The court noted that an Appeals officer must verify that applicable laws and administrative procedures have been met; however, such verification need not be sent to the taxpayer.

C. Gregory, DC Ga., 2003-1 USTC ¶50,256.

The IRS did not prematurely close a taxpayer's Collection Due Process (CDP) hearing. There is no statutory or regulatory deadline for closing a hearing and issuing a notice of determination. Moreover, the IRS issued the notice almost three weeks after the hearing and, during that time period, the taxpayer failed to respond to the IRS charge that he had not complied with his current tax obligations.

A. Manjourides, 90 TCM 396, Dec. 56,171(M), TC Memo. 2005-242.

The IRS was entitled to summary judgment with respect to its determination to proceed with the collection of an individual's unpaid taxes, penalties and interest following a Collection Due Process hearing. The taxpayer unsuccessfully contended that the Appeals officer failed to obtain verification from the IRS that legal and administrative requirements under Code Sec. 6330(c)(1) had been satisfied. The Appeals officer had obtained, reviewed and provided the taxpayer with a copy of a transcript of account (Form 4340). Moreover, the notice of balance due that was issued to the taxpayer constituted a notice and demand for payment.

T.R. Smith, 85 TCM 889, Dec. 55,051(M), TC Memo. 2003-45.

Similarly:

G.J. Copeland, 85 TCM 894, Dec. 55,052(M), TC Memo. 2003-46.

M.D. Keown, 85 TCM 1003, Dec. 55,077(M), TC Memo. 2003-69.

D.E. Duncan, 85 TCM 1068, Dec. 55,097(M), TC Memo. 2003-89.

W.A. Swann, 85 TCM 1006, Dec. 55,078(M), TC Memo. 2003-70.

L.A. Cortes, 85 TCM 1036, Dec. 55,088(M), TC Memo. 2003-80.

R. Stoewer, 85 TCM 1009, Dec. 55,079(M), TC Memo. 2003-71.

G.R. Lyman, 85 TCM 1011, Dec. 55,080(M), TC Memo. 2003-72.

R.S. Quigley, DC Pa., 2005-1 USTC ¶50,305, 358 FSupp2d 427.

M.G. Blankenship, DC Tex., 2005-1 USTC ¶50,128.

T.W. Holliday, 90 TCM 390, Dec. 56,169(M), T.C. Memo. 2005-240.

A taxpayer's challenge to the validity of a Collection Due Process (CDP) determination holding him liable for frivolous return penalties was rejected, and his claim for compensatory and punitive damages against the government was dismissed. The IRS officer's failure to present verification that the applicable statutory and administrative procedures were satisfied did not invalidate the determination; although the officer was required to obtain the appropriate verification, he was not required to send or provide that verification to the taxpayer. Further, the IRS was not required to provide documents regarding imposition of the frivolous return penalty before imposing a levy or in connection with a CDP hearing, nor did it have to publish internal delegations of administrative authority in order to enforce the tax laws.

J. Tornichio, DC Ohio, 2003-1 USTC ¶50,285, 263 FSupp2d 1090.

An individual's challenge to two adverse Collection Due Process (CDP) determinations upholding the imposition of the frivolous return penalty for one year and the validity of a federal tax lien for a second year was dismissed for failure to state a justiciable claim because the IRS had properly complied with the applicable procedural requirements. With respect to the tax lien, despite the fact that the taxpayer failed to timely request a CDP hearing, the IRS reviewed the collection action and issued a determination that all procedural requirements had been met and that the assessment was proper. Thus, the taxpayer's challenge to the collection action was invalid.

D.L. Blackstone, DC Ga., 2003-1 USTC ¶50,347.

The issue of a taxpayer's underlying tax liability was not properly at issue in his appeal from an adverse Collection Due Process (CDP) determination; thus, the Tax Court reviewed that determination for an abuse of discretion on the part of the IRS Appeals officer and concluded that no such abuse had occurred. The taxpayer was properly provided with copies of his transcripts of account at, and subsequent to, the CDP hearing. Because he alleged no irregularity in the assessment procedure that would raise a question about the validity of the assessments or the information contained in the transcripts, the verification requirement was satisfied. Also, he was not entitled to summon or cross-examine witnesses, conduct discovery, examine documents, or obtain evidence from the IRS in connection with the informal hearing.

R. Bourbeau, 85 TCM 1205, Dec. 55,127(M), TC Memo. 2003-117.

The IRS issued a valid notice of determination to an individual with respect to his tax liability for one tax year. The signature of the IRS Appeals officer who conducted the taxpayer's Collection Due Process hearing was not required on the notice, which was reviewed, approved, and signed by IRS Appeals team managers in accordance with internal IRS policy. The Tax Court noted that Code Sec. 6330 does not require that a notice of determination be signed.

R.D. Elmore, 85 TCM 1234, Dec. 55,133(M), TC Memo. 2003-123.

An individual was not entitled to subpoena witnesses or documents to rebut evidence presented by the IRS prior to a Collection Due Process (CDP) hearing. As a result, the CDP determination imposing a frivolous return penalty was valid.

W.B. Britton, DC Nev., 2003-1 USTC ¶50,434.

A nonfiling individual's arguments that the IRS failed to properly conduct his Collection Due Process (CDP) hearing and that it unjustifiably imposed the delay penalty were rejected as frivolous. The Tax Court properly found that the IRS could proceed with collection activities for the two tax years at issue. The taxpayer's contention that his CDP hearing was inadequate due to the hearing officer's reliance on an automated Summary Record of Assessments form (RACS report), instead of a signed IRS Form 23C record of assessments, was meritless because the RACS report had replaced Form 23C. Since the taxpayer had requested a telephonic CDP hearing and had copies of pertinent documents, his contention that the hearing officer prevented him from examining documents was also meritless. Finally, the imposition of the delay penalty was not an abuse of discretion because it was justified by the record.

J.W. Hauck, Jr., CA-6 (unpublished opinion), 2003-1 USTC ¶50,445, 64 FedAppx 492.

An IRS Appeals officer did not abuse her discretion in issuing a Collection Due Process (CDP) determination permitting the IRS to proceed to levy against a corporate provider of services for mentally and physically challenged individuals in order to collect delinquent taxes. The Appeals officer verified that all applicable laws and administrative procedures incident to the issuance of a notice of intent to levy had been satisfied.

Community Residential Services, Inc., DC N.C., 2003-1 USTC ¶50,458 .

A Collection Due Process determination approving collection actions against a dentist for his delinquent employment tax liability was upheld. The IRS was entitled to collect the unpaid taxes by levy, and it timely assessed those taxes within three years from the date the applicable tax return was filed. Moreover, Code Sec. 6204(a) authorizes the IRS to make a supplemental assessment upon discovering that any assessment is imperfect or incomplete. Additionally, the dentist failed to raise a genuine issue of material fact as to whether the Form 4340 Certificate of Assessments and Payments was inaccurate.

M. Myers, D.D.S., CA-9 (unpublished opinion), 2003-1 USTC ¶50,467, 61 FedAppx 469.

An IRS Appeals officer's Collection Due Process (CDP) determination was upheld absent a showing that the taxpayer was not afforded a legitimate CDP hearing. He was not entitled to be provided with verification that the legal and procedural requirements were satisfied, and the IRS was authorized to impose levies against taxpayers.

R.B. Henning, DC Ohio, 2003-2 USTC ¶50,538.

A taxpayer was entitled, pursuant to Code Sec. 7521(a)(1), to make an audio recording of his Collection Due Process hearing with the IRS Appeals Office. The Tax Court concluded that the exchange of information between a taxpayer and an Appeals officer during an administrative hearing conducted under Code Sec. 6330 constituted an "in-person interview" within the meaning of that term as used in Code Sec. 7521(a)(1). Further, the court noted that there was nothing in Code Sec. 6330 or in the legislative history of that section to suggest that Congress did not intend to afford taxpayers the right, consistent with Code Sec. 7521(a)(1), to audio record administrative hearings in collections.

C.B. Keene, 121 TC 8, Dec. 55,213.

A taxpayer was not entitled to a second hearing because she was denied the opportunity to record the first hearing. Because she failed to make the recording request prior to the hearing, her argument was rejected.

S. Taylor, 87 TCM 848, Dec. 55,528(M), TC Memo. 2004-25.

The Tax Court rejected married taxpayers' challenge of an adverse Collection Due Process (CDP) determination on the grounds that they were denied the opportunity to make an audio recording of their CDP hearing. Despite the court's ruling in C.B Keene, 121 TC 8, CCH Dec. 55,213, that Code Sec. 7521(a) requires an appeals officer to allow a taxpayer to make an audio recording of the CDP hearing, the court was unwilling to remand the case for another hearing in light of the frivolous arguments raised by the taxpayers, who filed zero-income returns.

V. Brashear, 86 TCM 16, Dec. 55,215(M), TC Memo. 2003-196.

A. Horton, 86 TCM 19, Dec. 55,216(M), TC Memo. 2003-197.

G.R. Kemper, 86 TCM 12, Dec. 55,214(M), TC Memo. 2003-195.

G.L. Frey, 87 TCM 1170, Dec. 55,601(M), TC Memo. 2004-87.

G.E. Boyd, DC N.M., 2004-2 USTC ¶50,297, aff'd CA-10 (unpublished opinion), 2005-1 USTC ¶50,195.

C.C. Carrillo,, 92 TCM 177, Dec. 56,223(M), TC Memo. 2005-290.

G.K.J. Yuen, 92 TCM 1, Dec. 56,557(M), TC Memo. 2006-138.

The IRS's determination to proceed with a levy action against an individual was sustained. The taxpayer's procedural stance regarding the recording of collection hearings was correct because her request to record her hearing was made after the Tax Court's decision in Keene v Commr., 121 T.C. 8, Dec. 55,213 (2003). However, the individual raised only frivolous, tax-protestor type arguments at her trial. Therefore, the Tax Court refused to remand the case to appeals for a new hearing because the propriety of the collection determination could be decided on the record.

T. Taylor, 89 TCM 1017, Dec. 55,984(M), TC Memo. 2005-74.

Failure to provide opportunity to make an audio recording of CDP hearing was harmless error.

T.W. Holliday, 88 TCM 41, Dec. 55,704(M), TC Memo. 2004-172.

Similarly:

W.B. Meyer, 89 TCM 1046, Dec. 55,991(M), TC Memo. 2005-81. Aff'd, on another issue, CA-9 (unpublished opinion), 2006-2 USTC ¶50,539, 200 FedAppx 676.

W.B. Meyer, 89 TCM 1049, Dec. 55,992(M), TC Memo. 2005-82. Aff'd, on another issue, CA-9 (unpublished opinion), 2006-2 USTC ¶50,539, 200 FedAppx 676.

D.B. Malis, CA-9 (unpublished opinion), 2005-1 USTC ¶50,190, aff'g an unreported Tax Court decision.

M.G. Pomeranz, DC Fla., 2004-2 USTC ¶50,353.

J.G. Gilligan, 88 TCM 170, Dec. 55,731(M), TC Memo. 2004-194.

K. Thompson, 88 TCM 219, Dec. 55,741(M), TC Memo. 2004-204.

M.K. Dues, 89 TCM 1253, Dec. 56,022(M), TC Memo. 2005-109.

R. Lee, Jr., 88 TCM 469, Dec. 55,807(M), TC Memo. 2004-264.

N. Cozzens, 89 TCM 1129, Dec. 56,010(M), TC Memo. 2005-98.

R. Holliday, 89 TCM 1408, Dec. 56,049(M), TC Memo. 2005-132. Aff'd, CA-9 (unpublished opinion), 2006-2 USTC ¶50,430, 186 FedAppx 779.

D. Schwersensky, 92 TCM 177, Dec. 56,599(M), TC Memo. 2006-178.

W. Leggett, 92 TCM 551, Dec. 56,712(M), TC Memo. 2006-277.

An individual was not entitled to audio record a Code Sec. 6330 telephone hearing with the IRS Appeals Office. The telephone hearing did not constitute an in-person interview that is allowed to be audio recorded under Code Sec. 7521(a). C.B. Keene, 121 TC 8, Dec. 55,213, which treated a face-to-face hearing as an in-person interview, did not apply to a telephone hearing because the taxpayer and the IRS Appeals officer would not be within each other's physical presence. However, since the taxpayer's decision to reject the IRS's offer of a face-to-face hearing in favor of a telephone hearing was made before the Keene decision was released and before the IRS issued guidance on its post-Keene position, the Tax Court exercised its discretion and remanded the case for further proceedings so that the taxpayer could be given the opportunity to have a face-to-face hearing that could be audio recorded.

D. Calafati, 127 TC 219, Dec. 56,705.

An IRS settlement officer did not abuse his discretion in terminating a telephone hearing with an individual who owed taxes, and deciding that a federal tax lien was appropriately imposed on the taxpayer's property. At some point in the telephone hearing, the taxpayer and his representative confirmed that they were making an audio recording of the hearing without having made an advance request as required by Code Sec. 7521(a)(1). There was no prejudice in not permitting the recording because the taxpayer did not assert that he raised any collection alternatives that were not considered by the settlement officer.

T.O. Maxton, Jr., 93 TCM 1132, Dec. 56,906(M), TC Memo. 2007-95.

Although the Appeals officer had refused to allow a stenographer to record the collection due process hearing, whereupon the individual refused to proceed, the Tax Court declined to remand the case. No purpose would be served by a remand or additional hearings.

D.A. Lehmann, 89 TCM 1084, Dec. 56,001(M), TC Memo. 2005-90.

An IRS Appeals officer's Collection Due Process (CDP) determination upholding the imposition of a frivolous return penalty was sustained, absent proof that the IRS failed to follow proper procedures during the CDP hearing.

M.A. Mayben, Jr., DC Nev., 2003-2 USTC ¶50,567.

Similarly:

P. Christian, DC Pa., 2003-2 USTC ¶50,562.

D. Jones, CA-5, 2003-2 USTC ¶50,584, 338 F3d 463.

G. Newman, DC Nev., 2003-1 USTC ¶50,474.

R.T. Broderick, CA-9, 2004-1 USTC ¶50,147, 83 FedAppx 929.

C.M. Van Gaasbeck, DC Nev., 2004-1 USTC ¶50,185.

L.H. McDonald, DC Tex., 2004-1 USTC ¶50,117.

T.E. Johnson, DC Calif., 2003-2 USTC ¶50,689, 291 FSupp2d 1163.

R.E. Hardy, DC Ala.2003-2 USTC ¶50,542.

H.D. Goltz, CA-52003-2 USTC ¶50,587, 70 FedAppx 212.

M.A. Farenga, DC N.Y., 2004-1 USTC ¶50,240.

J.W. Bunch, DC Nev., 2004-1 USTC ¶50,282.

M.G. Pomeranz, DC Fla., 2004-2 USTC ¶50,353.

K.F. Deyo, Jr., DC Conn., 2007-1 USTC ¶50,152.

B.E. Carrillo, CA-9 (unpublished opinion), 2003-2 USTC ¶50,651, 72 FedAppx 732.

M. Cipolla, DC N.Y., 2003-2 USTC ¶50,722.

L.C. Standifird, CA-9 (unpublished opinion), 2003-2 USTC ¶50,652, 72 FedAppx 729, aff'g 84 TCM 371, Dec. 54,889(M) TC Memo. 2002-245.

W.J. Kubon, 89 TCM 1001, Dec. 55,981(M), TC Memo. 2005-71.

R. Broderick, CA-9 (unpublished), 2005-1 USTC ¶50,200, aff'g unreported Tax Court order.

L.A. Sergio, DC Ga., 2005-1 USTC ¶50,232.

L. Ray, DC Nev., 2003-2 USTC ¶50,657291 FSupp2d 1179.

M. Cipolla, 87 TCM 801, Dec. 55,507(M), TC Memo. 2004-6.

A federal district court properly dismissed an individual's challenge of a collection due process (CDP) determination imposing a frivolous return penalty against the taxpayer for filing a zero-income return. The taxpayer failed to file a meaningful return, and his challenge of the penalty was deemed frivolous.

G.D. Henry, CA-5, 2003-2 USTC ¶50,587, 70 FedAppx 212.

The district court dismissed an individual's challenge to an adverse CDP determination where evidence established that the IRS followed proper hearing procedures. The Appeals officer was not required to provide the taxpayer with a copy of the verification that the requirements of applicable law and administrative procedure had been met. The taxpayer was appropriately prohibited from disputing her underlying tax liability because she received a notice of deficiency and did not contest the liability at that time. Moreover, the Appeals officer was not required to produce documentation of a delegation of authority to impose or collect the frivolous return penalty. Finally, the taxpayer unsuccessfully argued that the IRS improperly denied her a collection alternative after she challenged the Appeals officer to produce a statute or code regulation authorizing the imposition of the frivolous return penalty.

D.J. Barnett, DC Fla., 2003-2 USTC ¶50,612.

The government was granted summary judgment dismissing an individual's challenge to an adverse Collection Due Process (CDP) determination where no genuine issues of material fact remained. The taxpayer failed to establish that the Appeals officer abused his discretion in deciding to proceed with collection without holding a CDP hearing. The taxpayer failed to provide the Appeals officer with a power of attorney form authorizing a law firm to participate in the hearing on his behalf, and failed to return the Appeals officer's telephone calls.

L.A. McLee, 86 TCM 317, Dec. 55,275(M), TC Memo. 2003-252.

The IRS was entitled to summary judgment with respect to an individual's challenge to its Collection Due Process hearing determination to maintain a notice of federal tax lien. The taxpayer raised no legitimate issues regarding his underlying tax liabilities in his request for hearing, during the course of proceedings, or in his Tax Court petition. The requirements of applicable law and administrative procedure were met with respect to his assessment. Moreover, the taxpayer received notice and demand for payment and copies of certified transcripts showing that the assessments were valid. There was no evidence that the Appeals officer abused his discretion during the hearing.

J.M. Young, 85 TCM 739, 55,007(M), TC Memo. 2003-6.

An Appeals officer's Collection Due Process determination permitting the IRS to proceed with collection against an individual who failed to appear for the scheduled conference was not an abuse of discretion.

S. Taylor, 87 TCM 848, Dec. 55,528(M), TC Memo. 2004-25.

The government's motion to dismiss an individual's challenge of an adverse Collection Due Process determination, which imposed a frivolous return penalty, was denied. The administrative record was inadequate in that it did not establish the IRS's compliance with statutory procedure, and did not provide a basis for the imposition of the frivolous return penalty.

D. Muhammad, DC S.C., 2003-2 USTC ¶50,647.

The district court declined to invalidate a Collection Due Process determination made against an individual because no genuine issue of material fact existed regarding the legality of the hearing. The taxpayer submitted Forms 1040 for the tax years at issue with zeros in the income section and, as a result, was subject to frivolous return penalties, the underlying tax liability in the case. The hearing officer verified that all legal and administrative requirements were met and properly considered collection alternatives.

G. K. J. Yuen, DC Nev., 2003-2 USTC ¶50,661, 290 FSupp2d 1220.

An individual taxpayer waived his rights to his Collection Due Process (CDP) hearing by failing to comply with procedural rules prohibiting the tape recording of the CDP hearing. Thus, he could not assert that his rights to due process were denied.

C.N. Henry, DC Md., 2002-2 USTC ¶50,781.

The district court properly ruled in favor of the government in a taxpayer's action seeking to vacate an IRS notice of determination that approved assessments of frivolous return penalties for three tax years. The IRS presented uncontroverted evidence establishing that it provided the taxpayer with adequate notice, and the taxpayer failed to raise a genuine issue of material fact as to whether the Appeals officer abused his discretion in determining, pursuant to Code Sec. Code Sec. 6330(c)(1), that the IRS had met the requirements of applicable law or administrative procedures.

L. Standifird, CA-9 (unpublished opinion), 2002-2 USTC ¶50,584, aff'g unreported district court decision.

An individual's suit against the IRS was dismissed because the taxpayer failed to establish that the notice and hearing procedures followed by IRS agents were improper. The notice of levy signed by the chief of the IRS Automated Collection Branch fulfilled the requirements of Code Sec. 6330, and the underlying tax liability raised by the taxpayer at the Collection Due Process (CDP) hearing was appropriately disregarded. Moreover, the taxpayer's request for IRS documentation, which essentially constituted a request for legal research, exceeded the bounds of the Freedom of Information Act. Also, there was no legal foundation for the taxpayer's claim that IRS Appeals officers failed to provide documentary support for a frivolous return penalty; the IRS had issued the taxpayer two notices indicating an outstanding tax lien and the possibility of a penalty. Finally, the taxpayer's claim that the requirements of Code Sec. 6331had not been met lacked merit because no collection occurred and the CDP hearing was not about the taxpayer's failure to pay taxes.

R.. Cole, DC Mich., 2002-2 USTC ¶50,804, aff'g unreported district court decision.

An individual's suit challenging IRS collection activities was dismissed without leave to amend. The IRS's alleged failure to send the taxpayer verification prior to the issuance of a determination was not in violation of Code Sec. 6330. Furthermore, there was no legal requirement that the IRS produce any of the documents the taxpayer claimed it needed to produce prior to the imposition of a levy or in connection with the Collection Due Process hearing; and there was no requirement of publication of internal delegations of administrative authority to enforce Internal Revenue laws. The taxpayer's remaining allegations failed to state a claim upon which relief could be granted. His allegations did not propose an alternative to collection by levy as described in Code Sec. 6330, but rather proposed a condition to payment of the underlying ability, which was clear as a matter of law and known to the taxpayer.

S. Rennie, DC Calif., 2002-2 USTC ¶50,548, 216 FSupp2d 1078.

Taxpayer failed to establish that the notice and hearing procedures followed by IRS agents were improper. The notice of levy signed by the chief of the IRS Automated Collection Branch fulfilled the requirements of Code Sec. 6330, and the underlying tax liability raised by the taxpayer at the Collection Due Process (CDP) hearing was appropriately disregarded. Moreover, the taxpayer's request for IRS documentation, which essentially constituted a request for legal research, exceeded the bounds of the Freedom of Information Act. Also, there was no legal foundation for the taxpayer's claim that IRS Appeals officers failed to provide documentary support for a frivolous return penalty; the IRS had issued the taxpayer two notices indicating an outstanding tax lien and the possibility of a penalty.

S. Rennie, DC Mich., 2002-2 USTC ¶50,804.

The taxpayer's claim that he was entitled to remand his case to the Appeals Office for further proceedings because the Appeals officer failed to complete the hearing process or take into consideration his request for abatement of interest and penalties was dismissed. Regardless of whether the taxpayer was accorded his right to a hearing pursuant to Code Sec. 6330(b), he was not prejudiced, and it was neither necessary nor productive to remand his case.

B.S. Parikh, 86 TCM 720, Dec. 55,377(M), TC Memo. 2003-341.

An IRS Appeals officer's Collection Due Process (CDP) determination upholding the imposition of a delay penalty was sustained, absent proof that the IRS failed to follow proper procedures during the CDP hearing.

M. Cipolla, 87 TCM 801, Dec. 55,507(M), TC Memo. 2004-6.

No genuine issue of material fact remained with respect to the taxpayer's claim that he did not have a "hearing" within the meaning of Code Secs. 6320(b) or 6330(b). The IRS Appeals officer heard and considered all of the taxpayer's arguments via telephone conference, which satisfied Reg. §301.6320-1(d)(2).

A.J. Dorra, 87 TCM 822, Dec. 55,517(M), TC Memo. 2004-16.

The IRS did not abuse its discretion in issuing married taxpayers notices of determination without conducting a collection due process hearing that they had requested. The taxpayers failed to take advantage of several opportunities to properly request a hearing and engaged in dilatory conduct to postpone collection.

V.S. Pless, 87 TCM 845, Dec. 55,527(M), TC Memo. 2004-24.

An IRS Appeals officer who denied an individual's request for a further postponement of his Collection Due Process (CDP) hearing did not abuse her discretion in determining that the IRS was entitled to proceed with collection. The taxpayer had been granted two prior postponements and had failed to submit an offer in compromise to the Appeals officer, he was deemed to have been afforded a proper opportunity for a hearing.

S.M. Day, 87 TCM 949, Dec. 55,534(M), TC Memo. 2004-30.

An IRS Appeals officer's decision to continue with the CDP hearing despite the fact that the taxpayer had not received tax records he requested from the IRS did not constitute an abuse of discretion. The taxpayer did not ask for an extension of time in order to obtain the records before the hearing.

C.E. Minion, Sr., CA-6, 2004-1 USTC ¶50,161, 79 FedAppx 172.

The Tax Court dismissed an individual's challenge to an adverse Collection Due Process (CDP) determination. The taxpayer was properly prohibited from addressing her underlying tax liability. She received a notice of deficiency and, as a result, had a prior opportunity to dispute the liability. The court rejected the taxpayer's argument that the balance due under a proposed installment agreement was excessive.

L.M. Hiltz, 87 TCM 973, Dec. 55,545(M), TC Memo. 2004-38.

The government was not entitled to a dismissal of an individual's challenge to an adverse Collection Due Process (CDP) determination. The taxpayer provided significant evidence that he made attempts to negotiate collection alternatives to satisfy his outstanding taxes. The parties contemplated further negotiations, even though certain taxpayer correspondence might not have been received by the IRS.

A.G. Cooper, 87 TCM 1033, Dec. 55,559(M), TC Memo. 2004-50.

The IRS was limited to an assessment amount indicated in a settlement agreement it entered into with married taxpayers in connection with one tax year. The settlement agreement was validated by the Tax Court and represented a final and binding resolution.

T.J. Ratke, 87 TCM 1169, Dec. 55,600(M), TC Memo. 2004-86.

The taxpayer did not request redetermination after receiving the deficiency notices; therefore, he could not contest the underlying tax deficiencies.

J.G. Gilligan, 88 TCM 170, Dec. 55,731(M), TC Memo. 2004-194.

An informal hearing between an individual and an IRS Appeals officer to discuss employment taxes owed in connection with the taxpayer's moving company constituted a Collection Due Process (CDP) hearing. The taxpayer was given notice of the relevant tax issue, was informed of the IRS's position, and was given an opportunity to be heard. The Appeals officer already had the necessary documentation at the time of the meeting, and the parties engaged in follow-up telephone conferences. Moreover, there were no factual issues in dispute. The taxpayer conceded that taxes were owed and agreed with the IRS's revised calculations. As such, their review of the taxpayer's file constituted a CDP hearing under the low standard imposed by Reg. §301.6330-1.

S.D. Stewart, DC Pa., 2004-1 USTC ¶50,212.

A taxpayer's request for a collection due process (CDP) hearing under Code Sec. 6330 was met by means of two telephone conversations between the taxpayer's representative and the IRS appeals officer.The taxpayer failed to offer evidence as to the content of the conversations; thus there was, no basis to conclude that the IRS improperly characterized the conversations as CDP hearings.

C. Whiting, 87 TCM 1399, Dec. 55,658(M), TC Memo. 2004-136.

An IRS initiation of collection proceedings was sustained despite numerous allegations by the taxpayer of procedural errors and improper deficiency assessment. The taxpayer claimed (1) IRS notices were invalid because they were not signed under penalties of perjury, (2) the Appeals officer had not met the requirements of Code Sec. 6330, a "procedurally proper" Notice and Demand for Payment was not issued and, (4) they were entitled to an examination interview or administrative appeal. All taxpayer allegations were dismissed.

J.O. Milam Jr., 87 TCM 1214, Dec. 55,609(M), TC Memo. 2004-94.

Taxpayers failed to show they were denied a fair hearing on their appeal of the IRS's determination to levy their property. Although the taxpayers alleged that a CDP hearing was not properly provided, a series of communications, including a telephone conversation, can collectively satisfy the CDP hearing requirement. There is no requirement that a CDP hearing be specifically designated as such by the conducting officer so long as the taxpayers and IRS officers address the issues on the merits during the communications.

Allglass Systems, Inc., DC Pa., 2004-2 USTC ¶50,387, 330 FSupp2d 540.

The IRS's collection action could proceed. The individual never appeared at the scheduled hearing and did not respond to telephone calls from the hearing officer.

T.D. Hiland, 88 TCM 322, Dec. 55,767(M), TC Memo. 2004-225.

The IRS did not abuse its discretion in determining to proceed with collection actions against the taxpayer. In reaching this decision, the Tax Court refused to remand the case to Appeals even if there were an Appeals office closer to where the taxpayer lived than the one where the IRS offered to hold the hearing. While taxpayers must be offered an opportunity for a hearing at the Appeals office closest to their residence, because the taxpayer's arguments were limited to the Code Sec. 6330(c)(1) verification requirements, his presence was not required for the hearing.

M.E. Vierow, 88 TCM 422, Dec. 55,798(M), TC Memo. 2004-255. Aff'd, CA-9 (unpublished opinion), 2006-1 USTC ¶50,133, 158 FedAppx 926.

A levy determination on an individual's property was remanded because the taxpayer and his representative had no prior notice of the date or time of the collection due process (CDP) hearing. The Appeals officer considered two telephone conversations with the taxpayer's representative to be a CDP hearing. However, at no time during the phone calls did the taxpayer's representative have any clear notice that the phone calls constituted the taxpayer's CDP hearing. Since the taxpayer was entitled to at least minimal notice of the hearing, no adequate CDP hearing was provided.

J.W. Cox, DC Okla., 2004-2 USTC ¶50,404, 345 FSupp2d 1218.

While the IRM instructed the hearing be held at the taxpayer's place of business, in this case, failure to do so did not amount to an abuse of discretion by the settlement officer

Reid & Reid, Inc., DC Md., 2005-1 USTC ¶50,266.

The Tax Court found that a taxpayer was entitled to make an audio recording of his Collection Due Process hearing and ordered that the case be remanded to IRS Appeals, but only if the taxpayer intended to make non-frivolous arguments at the remanded hearing. Because the taxpayer continued to forward only frivolous arguments, remand was unnecessary. The collection action was, therefore, allowed to proceed because there was no abuse of discretion and the IRS could determine that collection was appropriate from the evidence it had already compiled.

R.E. Crandall,, 90 TCM 573, Dec. 56,219(M), TC Memo. 2005-286.

The IRS has issued a fact sheet explaining its collection process, suggesting actions for taxpayers who are unable to pay what they owe or who question the accuracy of their tax bills. The IRS also suggests that taxpayers who cannot pay what they owe liquidate assets and/or arrange for a loan, since the cost of a loan may be lower than the combination of interest and penalties imposed by the IRS. The many forms of payment that taxpayers may use to pay outstanding amounts are listed, as are methods of contacting the IRS to discuss possible inaccuracies in bills as well as alternatives for taxpayers who truly are unable to pay. Liens are discussed, as are account delinquencies, seizure of assets and appeal rights. Amongst resources that a taxpayer may turn to are many IRS publications and other information found on the IRS website.

IRS Fact Sheet FS-2006-11, January 3, 2006.

The IRS was entitled to proceed with the collection of unpaid taxes, penalties and interest against an individual who reported zero income on his tax return and attached a statement containing frivolous and groundless tax protestor arguments. The Appeals officer did not abuse his discretion when he determined that a levy was appropriate even though there was no face-to-face hearing. The individual failed to indicate any legitimate issues to be addressed in the hearing, such as spousal defenses, the appropriateness of the intended collection action or possible alternative means of collection or interest abatement. Furthermore, the IRS properly verified that the requirements of applicable law and administrative procedures were met and that it balanced the need for efficient collection of taxes with the legitimate concern that the collection action be no more intrusive than necessary.

R. Ho,, 91 TCM 876, Dec. 56,447(M), TC Memo. 2006-41.

The IRS did not abuse its discretion in refusing to grant an in-person collection due process hearing and not allowing an audio recording. Nor did IRS fail to verify that it had complied with all legal and procedural requirements. In addition, the married taxpayers' request to bar summary judgment was premature and their request to dismiss the Justice Department for failure to produce authorization from the Secretary of Treasury and the Attorney General's office was without foundation in the Code, since there is no Code requirement to produce such internal documents.

R. Dibble, DC Mich., 2006-1 USTC ¶50,254.

An individual taxpayer's complaint of an improperly conducted Collection Due Process (CDP) hearing was unfounded. The individual had no rights to the names, titles and job descriptions of IRS employees because their identities had no relevance as to whether the levy to collect penalties was valid. The IRS was also not required to present oral testimony if authenticated documentation was available.

M. S. Eash, DC Neb., 2006-1 USTC ¶50,186.

The IRS's determination to proceed with a levy against an individual for unpaid liability arising from several years was not an abuse of discretion. The IRS Appeals Office prepared a supplemental notice of determination in response to the individual's Tax Court filing, which was an improper act while the Tax Court retained jurisdiction. Upon remand for a second CDP hearing, a second supplemental notice of determination was prepared. The individual's argument that the impropriety of the initial notice of determination was to an abuse of discretion was dismissed as moot. The Tax Court's remand of the case to Appeals was an appropriate act and the individual had been accorded all pre-levy rights under Code Sec. 6330.

K.A. Sapp, 91 TCM 1177, Dec. 56,519(M), TC Memo. 2006-104.

An individual's claim that he did not receive a proper collection hearing because it was conducted by a settlement officer, rather than an Appeals officer, was without merit. There is no requirement that a collection hearing be conducted by an Appeals officer; the hearing need only be conducted by an officer or employee of the Appeals office, which includes a settlement officer. Further, the settlement officer was under no obligation to provide specific evidence to the individual that statutory and administrative requirements had been met. The settlement officer's reliance on a Form 4340 was sufficient to meet the verification requirements of Code Sec. 6330(c)(1). The individual did not present any evidence that the settlement officer abused his discretion but instead raised frivolous tax protestor arguments. Therefore, the IRS's determination was not an abuse of discretion and the proposed collection could proceed.

W. Reynolds, 92 TCM 260, Dec. 56,617(M), TC Memo. 2006-192.

Taxpayers who had received a timely notice of deficiency could not contest their tax liability under Code Sec. 6330(c)(2)(B) during a collection due process hearing. Although the IRS did not also mail a copy of a deficiency notice to the taxpayers' named representative, such failure did not invalidate the notice of deficiency.

C.H. Bond, 94 TCM 207, Dec. 57,062(M), TC Memo. 2007-240.

A corporate taxpayer was entitled to a new Collection Due Process (CDP) hearing because the IRS Appeals officer originally assigned to the matter participated in an ex parte communication with the revenue agent who issued the levy. Along with the taxpayer's case files, the revenue agent forwarded to the Appeals officer a cover letter describing in detail why the levy should be sustained. The cover letter was precisely the sort of ex parte contact prohibited by Rev. Proc. 2000-43, 2000-2 CB 404. Moreover, the court rejected the Appeals officer's testimony that he was not influenced by the cover letter because of the hostile manner in which he conducted the CDP hearing process. Finally, the taxpayer's request that the Appeals officer review a settlement agreement was not a prohibited attempt to contest the taxpayer's previously litigated tax liability. The taxpayer merely wanted to confirm that the IRS had made the required adjustments to its account.

Industrial Investors, 93 TCM 1126, Dec. 56,904(M), TC Memo. 2007-93.

The IRS did not abuse its discretion in issuing a tax lien against a corporation for nonpayment of corporate income and payroll taxes. The taxpayer's claims that the tax lien was excessive and that it did not receive a fair and impartial Collection Due Process hearing (CDP) were rejected. The IRS officer's written comment in her notes was insufficient to support a finding that the officer was not impartial or that the taxpayer was denied a fair hearing.

C & W Mechanical Contractors, Inc., DC Ga., 2007-1 USTC ¶50,504. Aff'd, per curiam, CA-11 (unpublished opinion), 2008-1 USTC ¶50,313.

An IRS Appeals Officer did not abuse his discretion in declining to await the outcome of an individual's "eleventh-hour" request for audit reconsideration before issuing his determination to sustain a proposed collection action. Pursuant to Reg. §301.6330-1(e)(3), Q&A-E9, the Appeals Officer was to conduct the hearing and issue a determination as expeditiously as possible. In addition, the individual failed to make a valid challenge to the appropriateness of the intended collection action or to offer an alternative means of collection.

O.K. Jones, 93 TCM 1312, Dec. 56,958(M), TC Memo. 2007-142.

The IRS did not abuse its discretion by terminating an individual's Collection Due Process hearing. The individual had been provided with a meaningful opportunity to present arguments why the levy should not be allowed to proceed but had raised no substantive issues and did not provide required financial information. Furthermore, the proper assessments were made and requisite notices had been sent.

R.B. Keenan, 92 TCM 470, Dec. 56,693(M), TC Memo. 2006-260.