                  T.C. Summary Opinion 2006-173



                     UNITED STATES TAX COURT



               JOSE R. CHRISTOPHER, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 13555-05S.              Filed October 24, 2006.


     Jose R. Christopher, pro se.

     Monica Miller, for respondent.



     COUVILLION, Special Trial Judge:   This case was heard

pursuant to section 7463 in effect when the petition was filed.1

The decision to be entered is not reviewable by any other court,

and this opinion should not be cited as authority.   Petitioner

seeks a review under section 6320 to the issuance by respondent

of notices of Federal tax lien for unpaid Federal income taxes


     1
      Unless otherwise indicated, subsequent section references
are to the Internal Revenue Code as amended.
                                - 2 -

and additions to tax under section 6651(a)(1) for petitioner’s

1999, 2000, 2001, 2002, and 2003 tax years.     The tax liabilities

arise from the underpayment of taxes shown on income tax returns

for the 5 years.    No notices of deficiency have been issued for

the 5 years, and petitioner does not question the underlying

liabilities.

     Some of the facts were stipulated.    Those facts, with the

exhibits annexed thereto, are so found and made part hereof.

Petitioner’s legal residence at the time the petition was filed

was Orlando, Florida.

     This case arises over the issuance by respondent of a notice

of determination concerning collection actions under section 6320

and/or 6330 with respect to petitioner’s 1999, 2000, 2001, 2002,

and 2003 tax years.    The income tax returns for these years were

not filed timely, and petitioner failed to pay all or some of the

tax shown as due and owing on each of the returns.2    The dispute

in this case arises over respondent’s issuance of a notice of

Federal tax lien.   Petitioner seeks to have that tax lien

withdrawn.   Prior to issuance of the tax lien, respondent had



     2
      At the time the notice of determination was issued,
petitioner’s unpaid taxes were as follows:

                      1999         $15,849.29
                      2000           1,206.91
                      2001           6,118.08
                      2002           4,460.10
                      2003           7,572.86
                                - 3 -

instituted levy proceedings on retirement income petitioner was

receiving from his prior employment as a police officer for the

City of New York.    For the year 2004, petitioner received

$30,979.21 in retirement benefits from the City of New York

retirement system.    During 2004 and since, petitioner has been

employed by the U.S. Department of Transportation, which

petitioner referred to as “Homeland Security”, and his salary for

2004 from that employment was $24,752.63.    Thus, petitioner’s two

sources of income during 2004 totaled $55,771.84.

     Prior to consummation of the levy of petitioner’s retirement

benefits, respondent had issued a notice of intent to levy.

Petitioner consciously did not appeal that notice and allowed the

levy to proceed.    Pursuant to that levy, respondent has been

collecting monthly amounts of $1,392.15 from petitioner’s New

York retirement benefits.    The levy has continued, and, upon

respondent’s issuance of the notice of Federal tax lien,

petitioner requested a hearing and applied for a release and

cancellation of the levy, seeking in place of the levy the

continued payment of $1,392.15 per month toward liquidation of

his past years’ tax liabilities as an installment agreement.

     In connection with the relief sought, petitioner was

required to and did provide a current financial statement to

respondent’s Appeals Office.    Based on the financial data
                               - 4 -

petitioner provided, the Appeals officer concluded in the notice

of determination:


     You submitted requested financial information to Settlement
     Officer Salinger in order for him to determine if the $775
     you offered as a collection alternative was acceptable.

     During the conference Mr. Salinger advised you that based on
     the financial analysis conducted that you had an ability to
     pay a higher amount than the $775 offered. Based on Mr.
     Salinger’s analysis you have the ability to make monthly
     payments in the amount of $1,664 per month. It was further
     explained to you that once your child support obligation is
     paid off within the next year, the installment agreement
     payment would increase by $217 to $1,881 per month.

     You indicated to Mr. Salinger that you cannot afford that
     high of a payment. You further indicated that the Service
     currently has a levy in place against your pension income in
     the amount of $1,392 per month and that you have no problem
     having that levy kept in place. You were advised that this
     levy would stay in place but it would not be considered a
     formal installment agreement.

     No other collection alternatives were offered and no other
     issues were raised.


     Petitioner appealed that determination.   At trial,

petitioner reiterated his desire to continue monthly payments of

$1,392, free of the tax lien, as an installment agreement.

Petitioner contends he is not able to pay $1,881 per month, and

that circumstances have changed in his own life since the hearing

before the Appeals officer.   Petitioner cited as an example the

fact that he was required to move from his apartment because it

was converted to a condominium, and the apartment he moved into

requires a higher monthly rent.
                                - 5 -

     The Court must decide whether petitioner is entitled to

relief from the Appeals officer’s determination.   Where the

underlying tax liability is properly at issue, the Court reviews

that issue de novo.    Where the underlying tax liabilities are not

at issue, as in this case, this Court reviews the determination

under an abuse of discretion standard.    Sego v. Commissioner, 114

T.C. 604 (2000).   An abuse of discretion is defined as any action

that is unreasonable, arbitrary, or capricious, clearly unlawful,

or lacking sound basis in law, taking into account all the facts

and circumstances.    See, e.g., Thor Power Tool Co. v.

Commissioner, 439 U.S. 522, 532-533 (1979); Swanson v.

Commissioner, 121 T.C. 111, 119 (2003).

     The record does not support a finding that there was an

abuse of discretion by the Appeals officer in this case.   The

Appeals officer determined, upon review of petitioner’s financial

situation, that his monthly payment should be increased over the

amount that was currently being levied upon.   The Appeals officer

also declined to release the levy and accept the monthly amounts

as an installment obligation.   Petitioner has not satisfied the

Court that this determination constituted an abuse of discretion.

Consequently, the Appeals officer’s determination is sustained.

     The Court notes, however, petitioner’s contention that

circumstances changed in his financial situation after the

hearing before the Appeals officer, and, because of these changed
                               - 6 -

circumstances, he was entitled to relief.     Section 6330(d)(2)

provides generally that the IRS Office of Appeals shall retain

jurisdiction with respect to any determination made under that

section, including subsequent hearings requested by the person

who requested the original hearing on issues regarding:     (A)

Collection actions taken or proposed with respect to such

determination, and (B) after the person has exhausted all

administrative remedies, a change in circumstances with respect

to such person that affects such determination.     Petitioner’s

contention at trial that his living expenses increased after the

original Appeals hearing appears to come within the parameters of

section 6330(d)(2)(B); consequently, petitioner should be

afforded the opportunity at the Appeals level to establish his

current financial situation.   Accordingly, this case will be

remanded.

     Reviewed and adopted as the report of the Small Tax Case

Division.

                                            An appropriate order

                                       will be issued.
